Tuesday, 27 October 2009

Tuesday, 27 October 2009

Tuesday, 27 October 2009

Mr Speaker took the Chair at 2 p.m.

Prayers.

Questions for Oral Answer

Questions to Ministers

Economy—Reports

1. CRAIG FOSS (National—Tukituki) to the Minister of Finance: What reports has he received on the New Zealand economy?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Minister of Finance: Mr Speaker—[Interruption] Although my name is not Bill and I will never pretend to be Bill, nor am I changing my name by deed poll to Datacom, I reply that the Minister has seen reports that our economy is performing well relative to the economies of most other developed economies. Our unemployment is lower, our banking sector is stable, Government debt is lower, and we have a clear plan to bring public spending growth under control. However, one perverse effect of that strong performance is a higher than expected dollar, particularly against currencies where the economy is weak, like the US and the UK. As the Minister has said several times, the Government is concerned about the impact that this is having on exporters and local producers, and it is doing what it can to ensure that its actions do not add to the pressure on the dollar.

Craig Foss: What actions is the Government taking to help exporters to remain competitive?

Hon GERRY BROWNLEE: We are focused on lifting New Zealand’s trading performance. In the 5 years before we took office, our imports had grown at twice the rate of our exports, despite the world economy booming. This was simply the result of mismanagement. Competitiveness covers all aspects of the economy. The Government is busy improving regulation, boosting State sector efficiency, and providing the country with adequate infrastructure. In addition, we have a clear plan to control public spending and debt. This reduces pressure on the exchange rate and allows the rest of the economy to prosper.

Craig Foss: Has the Minister seen any reports on the level of the New Zealand dollar?

Hon GERRY BROWNLEE: Yes, the Minister has seen comments from Federated Farmers, stating that the Government should immediately cut its spending to ease pressure on the dollar. The Government understands farmers’ concerns. We have adopted a considered approach to spending decisions, in order to provide a level of certainty around public services and entitlements in a recession. At the same time, we have told Government departments to expect little or no extra money in future years. That is in marked contrast to reports we have seen of Labour’s plans to borrow an extra $6 billion a year. There is no doubt that that kind of reckless borrowing would push the dollar up further.

Dr Russel Norman: How will the Government’s changes to the emissions trading scheme, which will result in an increase in Government debt, according to Treasury, of 6 to 8 percent by 2050, reduce Government borrowing?

Hon GERRY BROWNLEE: Although I will not enter into any discussions about the veracity of those figures, I will say that if New Zealand did not have an emissions trading scheme, the opportunities for our traders to trade successfully, to lift our exports and do better for this country’s economy, would be significantly reduced.

Accident Compensation—Opening Scheme to Competition

2. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Are his statements last week on private sector competition in ACC consistent with the Government’s earlier promise to investigate opening only the work account to competition?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Prime Minister: Yes.

Hon Phil Goff: I seek leave to table an article dated 23 October that totally contradicts the Prime Minister’s answer. It is from the New Zealand Herald.

Mr SPEAKER: Leave is sought to table an article from the New Zealand Herald of 23 October. Is there any objection? There is objection.

Hon Phil Goff: Why is the National Government considering turning over the work account to private insurers when the Treasury advice that the Prime Minister tabled last week suggested that there may be little benefit from that change, because accident compensation levies are not excessive?

Hon GERRY BROWNLEE: There has been no decision about the future shape of accident compensation. There is a discussion taking place, and there is consideration of how the future of accident compensation may be delivered for the betterment of all New Zealanders. I point out to Labour members that it was previous Labour Governments that, in the last 9 years, successively introduced private sector involvement into accident compensation—yet somehow, to Labour, that seems OK. Unfortunately, the other mismanagement by Labour Governments has left the entire scheme in a most perilous position.

Hon Phil Goff: Why is the National Government considering opening up the work account to the private sector when Treasury’s explicit advice is that this would have very little effect on cost pressures?

Hon GERRY BROWNLEE: The member who asks that question chooses a very, very narrow part of Treasury advice. It is evident that the Accident Compensation Corporation (ACC) is an organisation under stress, and that its ability to continue serving New Zealanders has been impeded considerably by the neglect of the previous Government. We are looking at how it may be preserved for the future.

Hon Phil Goff: I seek leave of the House to table the Treasury comment that says that work account contestability would have little effect on the scheme’s cost pressures.

Mr SPEAKER: Is leave sought to table the document?

Hon Phil Goff: That is right.

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

Hon Rodney Hide: I raise a point of order, Mr Speaker. I objected, and I now ask for clarification. Is that the document that has already been tabled?

Mr SPEAKER: That is not strictly a point of order. I dealt with the seeking of leave to table the document. Leave was not granted.

Chris Tremain: What other reports has the Prime Minister received about the benefits of competition?

Hon GERRY BROWNLEE: The Prime Minister has seen a report that talks about “the fresh air of competition, choice, opportunity, and innovation. It has put the nation on the road to real sustainable growth that, over time, means a better life for everyone.” The Prime Minister has seen another report that states “The consumer had everything to gain from the cut-throat competition the Labour Government deregulation of the financial sector had brought about.” Those were comments from Phil Goff, who now seems to think that competition is not appropriate.

Hon Phil Goff: Why does the National Government intend to open up the work account to the private sector when the major report done by PricewaterhouseCoopers estimates that privatisation would add 10 percent to administrative costs and increase charges to ordinary hard-working New Zealanders who would have to pay that expense?

Hon GERRY BROWNLEE: There are two PricewaterhouseCoopers reports in the system. One report was released in 2008 based on figures from 4 years prior to that. The most recent report is the actuarial assessment of the accident compensation scheme’s current position, which paints a very dire picture. The Opposition cannot have it both ways.

Hon Phil Goff: Why is it a good idea to add to the bill that ordinary New Zealanders face in paying their levies the estimated $200 million in net profit that Merrill Lynch says the big Australian insurance companies would make out of privatising the work account?

Hon GERRY BROWNLEE: In 2000 the Hon Michael Cullen raised the residual claims levy from 31c to 35c, claiming that that would see the accounts of the accident compensation scheme fully funded by 2014. Although the Labour Government successively put up the amount of the residual claim levies, Labour never achieved that. Rather, Labour opened it up to a whole lot of extra claims that have left the system in a parlous position.

Mr SPEAKER: The question asked was about the competition in Australia, the profits made in Australia, and how opening up to competition in New Zealand would not lead to similar profits, or something to that effect. The Minister has not really answered that in any shape or form. It would be helpful if the Minister were to—

Hon GERRY BROWNLEE: Perhaps the Leader of the Opposition could ask the question again, with all due respect.

Mr SPEAKER: I accept that totally. I invite the Leader of the Opposition to do that.

Hon Phil Goff: Why was it a good idea to add to the bill that ordinary Kiwis have to pay for accident compensation $200 million in net profit that Merrill Lynch says the big Australian companies would make out of privatising the New Zealand work account of the accident compensation scheme?

Hon GERRY BROWNLEE: The question asked was dealt with last week. However, the point is that the question supposes that that would be an outcome. This Government is not afraid of investigating competition, because we know that the scheme is in a dreadful state at the moment and needs a lot of work. We are considering the best way forward.

Hon Phil Goff: Why did the Prime Minister tell the House last week that the failed experiment in privatising the scheme last time was effective, when PricewaterhouseCoopers, Treasury, and employers have all said that a period of dropping the levies to capture market share would be followed by a large rise in premium income by those insurance companies? Why did he say that, when doctors have said that for them the privatised system was a nightmare?

Hon GERRY BROWNLEE: The suppositions in the Leader of the Opposition’s question are just that. To answer them as if they were fact would be quite wrong. The reality is, though, that during the short period that the scheme was open to competition, it was a very successful time for all involved.

Hon Phil Goff: Why has the Prime Minister broken his pre-election promise that any consideration of privatising would be related only to the work account, when he has now made it clear that he intends consideration for privatisation to go across the whole area, and why did the Minister for ACC, Dr Nick Smith, constantly mislead the House up until 10 days ago—

Mr SPEAKER: The member knows he cannot make an allegation, when asking a question, that another member has misled the House.

Hon Phil Goff: I will rephrase it. Why did Nick Smith constantly tell the House up until 10 days ago that the stocktake would not involve investigation of privatising the work account, because that was not a priority?

Hon GERRY BROWNLEE: Firstly, I dispute the interpretation that the Leader of the Opposition has put on to the statements made prior to the election. But also neither the Prime Minister nor any of the Cabinet had any idea what a dreadful state accident compensation was in prior to the election. We had a loss in that scheme of $2.4 billion in 2008, and every account is in an utter mess. This Government is attempting to fix it.

Hon Phil Goff: I raise a point of order, Mr Speaker. Is it necessary for a Minister to authenticate a comment such as that, when 10 days ago Nick Smith was—

Mr SPEAKER: The member knows he cannot litigate an answer like that. I apologise for the fact that he cannot do it, but he cannot.

Climate Change—Australian Scheme

3. DAVID GARRETT (ACT) to the Minister for Climate Change Issues: Which is true: his statement to the House of 21 October “in respect of Australia, there is a complete ban on any deforestation of pre-1990 forests”, or his statement to the House of 22 October “In Australia each state requires by law that the deforestation of pre-1990 forests be notified”?

Hon Dr NICK SMITH (Minister for Climate Change Issues): Both. The Australian Government has noted that it has not included deforestation in its emissions trading scheme because of the regulatory controls that have been imposed since 1990. For instance, in New South Wales the new Native Vegetation Act and regulations that commenced in 2005 severely constrain land clearance, with only 2,060 hectares approved last year. All of it is subject to offsetting or rather strict environmental requirements. In Queensland, its Act also severely restricts vegetation clearance and also requires offsets. The exact provisions vary from state to state, but they have resulted in very little deforestation in Australia in recent years.

David Garrett: I raise a point of order, Mr Speaker. If I heard the answer correctly, the first answer was both. Logically, that simply cannot be true—

Mr SPEAKER: The member cannot argue about the quality of an answer by way of a point of order. He has a supplementary question in which to further question the Minister about his answer, or about what he might have said, but he cannot do it by way of a point of order.

David Garrett: How can the country have any confidence that New Zealand’s emissions trading scheme will match up with Australia’s, as promised, when the Minister responsible has not even got the basic facts about its scheme right?

Hon Dr NICK SMITH: Firstly, this Government campaigned and is now delivering on harmonising our emissions trading scheme more closely with Australia’s. We think that makes good sense, given the CER relationship. We have never said the two schemes would be identical in every respect. There are differences between New Zealand and Australia in areas such as forestry and agriculture. We need to be pragmatic and recognise that.

Louise Upston: Why is the inclusion of deforestation important in the context of the New Zealand emissions trading scheme?

Hon Dr NICK SMITH: Firstly, deforestation makes up a pretty large proportion of New Zealand’s emissions. For instance, in 2007 it made up 8 million tonnes, or 13 percent, of New Zealand’s emissions. For most developed countries, including Australia, it is a pretty small contributor. Secondly, it would be very unfair for us to say that those foresters who have credits under Kyoto are able to claim them but those who deforest are responsible for any debits. That would be illogical, and that is why the Government’s policy is the way that it is.

Rahui Katene: What is New Zealand’s current position regarding the relationship between deforestation liability and afforestation?

Hon Dr NICK SMITH: It is Government policy that foresters should be able to earn credits for afforestation and, equally, liabilities should apply for deforestation. That is in accord with the Kyoto rules. The Government is looking to further improve those Kyoto rules, on which I want to acknowledge the good work of both the iwi leadership group and the Māori Party. Priorities for change include provision for offsets, carbon embedded in wood products, and continuation of the credit liability rules for existing forests.

David Garrett: What is the Government’s policy on climate change: to be a world leader or a fast follower?

Hon Dr NICK SMITH: At the last election National very clearly campaigned on a policy of New Zealand doing its fair share as a developed country in respect of climate change. That is exactly what we will be doing in the international negotiations in Copenhagen, and those are exactly the policy parameters on which we have designed our emissions trading scheme.

Charles Chauvel: Is it true that under the Minister’s proposed changes to the emissions trading scheme, made in the name of harmonisation with Australia, hard-working New Zealand taxpayers will be required to subsidise Rio Tinto to the value of $225,000 per worker per year, as the select committee heard last week, and how is it fair to enact provision for that sort of subsidy while reducing support for New Zealanders by cutting effective accident compensation prevention programmes in order to reduce costs?

Hon Dr NICK SMITH: I find the member opposite’s approach around the emissions trading scheme and the smelter interesting, because in the very scheme that the previous Government put on the law books, the reality was a very substantial allocation. In fact, during the period from—

Charles Chauvel: 12 years!

Hon Dr NICK SMITH: What the member opposite said is interesting, because when I was involved in negotiations with the Labour Party about the phase-out over the 12 years, he said Labour recognised that 12 years was unrealistic and was very relaxed about it being extended further.

Charles Chauvel: Unfortunately, I cannot use this supplementary question to deal with that misrepresentation, but—

Mr SPEAKER: I ask members to discontinue this exchange, because I cannot hear the supplementary question. I ask the member to ask his supplementary question.

Charles Chauvel: Is it true that under his proposed legislation, made in the name of harmonisation with Australia, carbon credits will be freely allocated for ever, as the select committee was told by the Parliamentary Commissioner for the Environment, and is it fair to increase taxpayer subsidies for large polluters at the same time as he plans to privatise some of the activities of the accident compensation scheme to foreign-owned insurance companies, at the expense of support and protection for New Zealanders?

Hon Dr NICK SMITH: I raise a point of order, Mr Speaker. I am very happy to answer the member’s supplementary questions as he succeeds the spokesperson on accident compensation, but the substantive question was about climate change. I think the member should be required to confine his questions to that issue.

Charles Chauvel: Speaking to the—

Mr SPEAKER: I do not think I need to hear further on the matter. I realise that the member, in asking his supplementary question, compared climate change policy with accident compensation policy, but I do not see that as being totally out of order. I think the Minister is perfectly capable of answering it. The fundamental part of the supplementary question relates to the emissions trading scheme.

Hon Dr NICK SMITH: Just as we said, the Government’s emissions trading scheme strikes a very good balance between making sure we get this economy growing again by providing jobs for New Zealanders, and doing our fair share in respect of the huge challenge associated with greenhouse gas emissions and climate change. I challenge members opposite as to why they criticise a scheme that is very similar to the schemes being proposed in Australia and in most other developed countries as a good balance between sensible economics and environmental responsibility.

Charles Chauvel: I seek leave to table a supplementary submission tabled and released by the Finance and Expenditure Committee last week, showing that the subsidy per job to Rio Tinto under the Minister’s changes to the emissions trading scheme is worth $225,000 per annum.

Mr SPEAKER: Is this document available and already released by the select committee?

Charles Chauvel: It is.

Mr SPEAKER: I do not see why I should waste the House’s time on that, because the document is already publicly available to members. The recommendations of the Standing Orders Committee, which are published in the Standing Orders, are very clear that leave should not be sought for the tabling of such documents. I make it clear that I intend to make sure that the power to seek leave is not abused, because I do not see how it assists members at all if the document is readily available to them.

Hon Darren Hughes: I raise a point of order, Mr Speaker. Previously you have advised the House about your views on this matter, particularly citing that particular report of the Standing Orders Committee, and I say that although that matter is noted in the report, it was not a recommendation of the committee that the Standing Orders be changed in respect of the ability of a member to seek leave. That is the primary purpose of what my colleague is doing; he is seeking leave under the Standing Orders to undertake an action. Until such time as the Standing Orders are changed in that respect, the words that you are quoting are the views of that select committee but were not felt strongly enough for it to recommend that changes be made to the Standing Orders.

Charles Chauvel: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will hear the members, because, OK, I have obviously annoyed them by what I have just done. But I make it very clear that there are also Speakers’ rulings that indicate that where information is readily available to members, it is not the purpose of the power to seek leave to table documents that members should seek to table documents that are already readily available to members.

Charles Chauvel: Thank you, Mr Speaker. I just want to make the point that I am not seeking to trifle with you or the House by asking for this leave. The material was tabled by a submitter at the select committee. Yes, it is technically available, but it is not by any means readily available—for example, to the media or to other members who do not sit on the committee. In my submission the document contains very important information about the amendments to the accident compensation scheme, and I am simply, I suppose, asking that you consider the matter carefully, because the document is something that I think the House should see.

Mr SPEAKER: I hear the member. On this occasion I will seek leave, but I make it clear that I will seek further advice on this issue in terms of situations where documents are tabled at select committees—they are released immediately, and they are available from the select committees; they are already available to Parliament, if you like—because I think there should be guidance on that matter. On this occasion I will seek—

Hon Peter Dunne: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will hear the Hon Peter Dunne.

Hon Peter Dunne: Before you seek leave, I draw your attention to Speaker’s ruling 142/2 by Mr Speaker Tapsell: “Leave should only be sought to table papers that are not readily available from other sources.” The practice that has developed in recent years has been that members seek to table a range of documents, but, as Mr Tapsell’s ruling points out: “The tabling of a document is not an occasion to make a point; it is an opportunity to produce for the House a paper that other members may not see or may not have seen.” I submit to you that papers that have been released by a select committee, or papers that are in other ways put on the Table of this House or released in the public arena, conform with Speaker Tapsell’s ruling, and that you were right in your initial assessment not to seek leave in this instance.

Hon Darren Hughes: Mr Speaker—

Mr SPEAKER: I do not want to take up any more time of the House at the moment. I appreciate the point made by the Hon Peter Dunne. He is quite correct, of course, in quoting Speaker Tapsell. I was aware of that particular Speaker’s ruling; I just did not want to take too much time over the issue. On this occasion I will seek leave, and members can make their own judgment about the document. But I make it clear that in future I do not intend to seek leave; I intend to uphold the practice of the past, whereby seeking leave to table a document was to provide information for the House, not to make a political point. In recent times greater emphasis has gone on to seeking leave to table documents in order to score a political point, and that is not the purpose of such leave. The power under a point of order to seek leave to table a document is a very significant power, and it should not be abused. But on this occasion, because I have not given prior warning of that, I will seek leave for the submission to the select committee to be tabled. Is there any objection? There is objection.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. My point goes with the ruling you have just given. I happen to agree with your perspective on what should be tabled and what should not, but, unfortunately, this matter was considered by the Standing Orders Committee. Effectively, it considered whether discretion should be given to the Speaker to decide whether to put leave to the House, and decided to leave it as a recommendation to members that they should not seek leave—that it is not an appropriate thing to do. I think we would probably agree that the Standing Orders Committee, at the time when it considered this, did not go far enough. I suggest that before you go further than the report that has been adopted by the House from the Standing Orders Committee—because there were a lot of other matters there—it might be a good idea to call that committee together again. I know, as I say this, that I am not universally supported by members on my side of the House. But I think the matter would be worth considering, because I have had some experience on the other side of the House, and I know that from that perspective at least, as well as from yours, seeking leave to table such documents can be seen as trifling. It is not so in this particular case, but I think it is something where the House should support you in a new ruling. I think it is appropriate that the Standing Orders Committee consider the matter first.

Mr SPEAKER: I hear the honourable member, and we will not take further time on this today. I will come back to the House on the matter.

Finance, Minister—Statements

4. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he stand by all his recent statements?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Minister of Finance: Yes.

Hon David Cunliffe: Did he use his influence as shareholding Minister to promote himself and the views of the National Government in an advertisement that ran during prime time on Television New Zealand (TVNZ)?

Hon GERRY BROWNLEE: No. TVNZ invited him to appear, and the promotion clearly plays on his name—“in plain English”. He assumes that the company invited him to be on the programme and to front it because he is considered to be almost as economically literate as the Prime Minister, and, most likely, almost as good looking as him, as well. He is sure that if the—

Mr SPEAKER: I have called the Hon David Cunliffe. I think we have heard sufficient.

Hon David Cunliffe: Can he confirm whether TVNZ approached him or his office regarding this self-promotion “in plain English”, or did he or his office approach TVNZ?

Hon GERRY BROWNLEE: I suggest that the question is inappropriately asked, because it talks about who approached whom over self-promotion. I made it very clear in the first answer that TVNZ had invited the Minister to appear. It is their initiative, it is their programme, and it is their format. The Minister has simply said that, yes, he will participate. I am sure that if the Labour Party had had something important to say, it would have been equally welcome to participate.

Hon David Cunliffe: Has the Minister or his staff had any input into the preparation, scripting, or editing of this promotion, at any time?

Hon GERRY BROWNLEE: As I said before, it is a TVNZ initiative. Their invitation was issued to the office of the Minister of Finance, and—

Hon David Cunliffe: I raise a point of order, Mr Speaker. The question was a different question from the previous supplementary question. The previous supplementary question, to be fair to the Minister, asked who had approached whom, and the Minister answered that question. The second supplementary question asked whether the Minister or his staff had had any input into, or involvement in the preparation of—any involvement of any kind—the production of that promotion. It is not—

Mr SPEAKER: I think the member has made his point. I ask the Minister to come to the answer.

Hon GERRY BROWNLEE: Of course his office has not been involved in matters relating to the production of the programme, nor has his office been involved in promoting the programme. But his office most certainly has been concerned to ensure the accuracy of the script. Of course, I am sure that one or two of his advisers advised him on how he should appear on the programme. None of that would be unusual.

Hon David Cunliffe: In taking advice from TVNZ as to the accuracy of the script or what he should wear, did the Minister or his office discuss any aspect of this self-promotion with the Prime Minister, or with anyone from his office or department, including the Cabinet Office, given the requirements of the Cabinet Manual relating to perceived conflicts of interest?

Hon GERRY BROWNLEE: The member clearly misheard the answer to the previous question. The Minister’s office—naturally, with the Minister—was concerned as to the accuracy of the scripts, not TVNZ itself. As to the other matters, communications within the Government are going along just well and fine, thank you very much.

Hon David Cunliffe: Does he think it is “a good look” for him as a shareholding Minister in TVNZ to be spending taxpayers’ money on a broadcast promoting his own views called “in plain English”, when that title mimics the title of his own political National Party email newsletter?

Hon GERRY BROWNLEE: I simply say that sometimes one cannot help good luck.

Hon Trevor Mallard: Did the invitation from TVNZ come before or after he used a seven-letter word beginning with “f”, followed by a four-letter word beginning with “c”, in a conversation with the person in charge of editorial policy for TVNZ?

Hon Rodney Hide: I raise a point of order, Mr Speaker. I do not believe that question is within the Standing Orders; it certainly is not within the decorum of this House, and I struggle to see what possible point Trevor Mallard MP could be trying to make.

Mr SPEAKER: I do not need to hear further on the point of order. I waited to see how members of the House would react to that particular question, because it was patently obvious to anyone who heard it what was meant. It certainly, in my view, was right on the boundaries of whether it should be allowed in this House, and that a member objected to it is, I think, grounds to invite the member to reword his question. I do not want him to lose a supplementary question, but I think we cannot allow that language to stand in the House when a member has objected to it. If the member could reword his question, so that its language does not offend.

Hon Trevor Mallard: Did the invitation to appear on the programme come before or after he swore at the person in charge of TVNZ editorial policy and thereby put pressure on a company that he is an ownership Minister of?

Hon GERRY BROWNLEE: I doubt that question would meet many of the requirements of the Standing Orders, given that it was so full of assumption and assertion. But what I can say is that, in order for an accurate answer to be given, I suggest the member put the question down as a written question, so that all members can know exactly on what date what took place.

United Nations Human Development Report—New Zealand Results

5. Dr KENNEDY GRAHAM (Green) to the Minister of Foreign Affairs: Has he received advice on the UN Development Programme’s Human Development Report 2009; and is he concerned that it positions New Zealand as having the sixth-biggest gap between rich and poor among countries with very high human development, with a similar inequality score to India and Russia?

Hon CHRISTOPHER FINLAYSON (Attorney-General) on behalf of the Minister of Foreign Affairs: No. The Minister is advised that NZAID, Treasury, and the Ministry of Social Development have not yet seen the report, and the Government cannot comment about the content of a report it has not received. However, I can advise the member that an electronic version of the executive summary, which was sent in advance of the report’s release, has been received. I understand that this summary says nothing about the inequality scores the member referred to in his question.

Dr Kennedy Graham: Given that this report has been completely available for the past week, has Cabinet discussed the findings of British researchers Wilkinson and Pickett that “Almost every modern social and environmental problem—ill-health, lack of community life, violence, drugs, obesity, mental illness, long working hours, big prison populations—is more likely to occur in a less equal society.”?

Hon CHRISTOPHER FINLAYSON: No.

Dr Kennedy Graham: Is he concerned that the same research shows that violence is higher and more people are imprisoned in more unequal countries; if so, what is his Government doing to improve New Zealand’s inequality ranking from that reported by the United Nations Development Programme?

Hon CHRISTOPHER FINLAYSON: The Government would need to study the report in detail before it could comment on the methodology used or the reliability of the data. I understand that methodology and data are often contentious aspects of such reports.

Dr Kennedy Graham: Given that the methodology of the United Nations Development Programme’s Human Development Report is now 17 years old, and that this particular ranking is taken from the Gini coefficient ratio, which is well known to researchers and policy makers, is he concerned that more people suffer from mental illness in more unequal countries; if so, what is his Government doing to improve New Zealand’s inequality ranking from that recorded by the United Nations Development Programme?

Hon CHRISTOPHER FINLAYSON: The Minister cannot be concerned or unconcerned until the report has been read and the methodology data has been studied.

Dr Kennedy Graham: Working on the assumption that the report will no doubt be read by the Government in due course, at its leisure, is his Government’s policy of tax cuts for the rich and cutting weekly accident compensation entitlements for casual and seasonal workers likely to increase or decrease inequality in New Zealand?

Hon CHRISTOPHER FINLAYSON: I can assure the member that when the report is received it will be read.

Accident Compensation—Opening Scheme to Competition

6. Hon DAVID PARKER (Labour) to the Minister for ACC: Has he received the Treasury memo to the Hon Bill English entitled “Work Account Contestability”, which states it is “Not clear that levies are excessive—competition in 1998 did reduce levies but could have been firms loss-leading to establish market share”?

Hon Dr NICK SMITH (Minister for ACC): Yes. But the memo also states that contestability has advantages, with gains through innovation, the sharing of gains between purchasers and providers, the removal of politics from the levy setting, and the use of market mechanisms to improve the accident compensation scheme’s performance. Treasury concluded that contestability was worth exploring further.

Hon David Parker: Does he agree with the architect of accident compensation, Sir Owen Woodhouse, who when asked whether private insurers will be able to provide the same cover for lower premiums than those of the scheme administered by the Accident Compensation Corporation (ACC) said: “I’m not merely a sceptic, … It cannot happen.”?

Hon Dr NICK SMITH: The Government has committed to exploring the option of the private sector being able to provide services in the work account. I am very surprised that members opposite are so close-minded that they will not allow even a stocktake, led by one of their former colleagues, David Caygill, to do work in this important area.

Hon David Parker: Why does the Minister continue undermining the accident compensation scheme when he ought to be honouring the social contract that is its foundation, rather than grooming it for sale to foreign insurance companies and leading New Zealand down the path of an American-style medical misadventure system?

Hon Dr NICK SMITH: Both I and the Prime Minister have made it abundantly plain that ACC will remain a publicly owned provider of services. The debate here is whether employers should be able to take out accident insurance with other companies, and I am surprised that members opposite have become so opposed to that notion.

Aaron Gilmore: Does the existing accident compensation system enable private sector participation, and profits by overseas companies from accident management?

Hon Dr NICK SMITH: It may come as a surprise to members opposite, but, yes, it does. Twenty-three percent of employees in New Zealand are covered under accredited employer schemes that are run by companies like Southern Cross, Gallagher Bassett, Aon, and Wellnz, which are both American and Australian - owned. I am also surprised that Labour now considers profit to be some sort of dirty word. I fear for the New Zealand economy if Labour ever gets on the Treasury benches again.

Hon David Parker: Does the Minister think ordinary New Zealanders, like motorcyclists, will believe him or Sir Owen Woodhouse, who says that accident compensation is not in a crisis, given that what was collected last year in levies was $1 billion more than was spent, and it also has $11 billion of assets?

Hon Dr NICK SMITH: It may be that for members opposite an organisation that lost $4.8 billion in the last year, $2.4 billion in the year before—

Hon Members: No!

Hon Dr NICK SMITH: Members opposite say “No!”. Whose signature is on those annual accounts? Hon Peter Neilson, the deputy chairman of ACC. Are members opposite saying that accounts that have been approved by the auditors in the Audit Office, by PricewaterhouseCoopers, and by Infinity, are all wrong? What they show is that accident compensation is in a serious financial pickle, and this Government is having to clean up an awful mess arising from the financial mismanagement of accident compensation by members opposite.

Hon David Parker: Why does he not tell New Zealanders that under his plan services will be cut, losses socialised, and profits privatised, to the advantage of foreign-owned insurance firms?

Hon Dr NICK SMITH: The member should listen to my answers, because the truth is that already we have Southern Cross, Aon, Gallagher Bassett, and Wellnz, all companies that are in it not because they love New Zealand but because they make a profit under a scheme that was approved by members opposite. That might be news to them, but we are saying that we think there are further opportunities for the private sector to make a contribution to efficient and fair accident compensation in New Zealand.

Hon David Parker: I raise a point of order, Mr Speaker. I am not sure whether the Minister was quoting from an official document when he said there were some private insurers in New Zealand providing insurance; if he was, I ask him to table the document, because I have never—

Mr SPEAKER: The member has made a fair point of order. Was the Minister quoting from an official document? He was not.

Question No. 5 to Minister

Dr KENNEDY GRAHAM (Green): I seek leave to table four documents, if I may.

Mr SPEAKER: What are they?

Dr KENNEDY GRAHAM: The first document is table M from the United Nations Development Programme’s Human Development Report of 2009, which gives New Zealand an inequality ranking similar to those of India and Russia.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Dr KENNEDY GRAHAM: The second document is page 148 of the book The Spirit Level by Richard Wilkinson and Kate Pickett, showing that more people are imprisoned in more unequal countries.

Mr SPEAKER: What was the document published in?

Dr KENNEDY GRAHAM: It is from a book called The Spirit Level by researchers Wilkinson and Pickett.

Mr SPEAKER: I am sorry. Leave is sought to table that document. Is there any objection? There is objection.

Dr KENNEDY GRAHAM: Perhaps members might relent on page 67—[Interruption]

Mr SPEAKER: I apologise to the honourable member for interrupting, but I say to the front benches on both sides of the Chamber that we are hearing a point of order, and it will be heard in silence.

Dr KENNEDY GRAHAM: I am seeking leave of the House to relent with regard to page 67 of the research, which shows that more people suffer—

Mr SPEAKER: Is this the same document that the member—

Dr KENNEDY GRAHAM: Yes. It is the same book, but a different page.

Mr SPEAKER: Leave is sought to table a separate page from the same book. Is there any objection? There is objection.

Dr KENNEDY GRAHAM: The fourth document is a list of the top 11 “Countries with the Biggest Gaps Between Rich and Poor”, which appeared on www.businessweek.com on 16 October.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Herceptin—Subsidisation

7. NICKY WAGNER (National) to the Minister for ACC: What reports has he received on the implementation of the Government’s policy in relation to Herceptin?

Hon TONY RYALL (Minister of Health): Within weeks of last year’s general election, the Government, as part of keeping its election promise, announced it would be fully subsidising a 12-month course of Herceptin for women suffering from HER2 positive breast cancer. I am pleased to be able to report to members that, according to the latest available information, 191 women with HER2 positive breast cancer were receiving the Government’s fully funded 12-month course of Herceptin at the end of September.

Nicky Wagner: What other progress is being made with subsidised medicines in addition to Herceptin?

Hon TONY RYALL: The new Government has provided an extra $40 million for subsidised medicines this year, including the 12-month Herceptin course. In addition to women receiving the fully subsidised 12-month course of Herceptin, people suffering from cystic fibrosis, hepatitis B, leukaemia, and autoimmune disorders will receive more treatment as a result of the extra medicines funding. At this time of economic restraint, the Government is working to achieve better access to medicines for New Zealanders.

Accident Compensation—Sensitive Claims and Sexual Abuse Victims

8. LYNNE PILLAY (Labour) to the Minister for ACC: Is he satisfied new sexual abuse clinical guidelines will not further injure sexual abuse victims?

Hon Dr NICK SMITH (Minister for ACC): Yes, because the guidelines have been put together by skilled clinicians. I have noted members’ concern, and I have invited MPs to a briefing by Dr Peter Jansen, senior medical adviser in the clinical services directorate of the Accident Compensation Corporation (ACC), to brief members on the care that ACC is taking in the sensitive claims area. I am surprised that the member who has raised these questions has not accepted my invitation to be briefed by those clinicians.

Lynne Pillay: Does the Minister realise that the majority of the 4,000 petitioners calling for a halt to the new guidelines are the professionals who provide counselling, including the researchers who took part in the Massey guidelines upon which it is claimed the new ACC sensitive claims process is based?

Hon Dr NICK SMITH: I have been hesitant to interfere in what is clinical best practice. I acknowledge that there has been some professional debate between the view of counsellors and psychotherapists, and the view of psychiatrists and psychologists. I acknowledge that difference, but, as a politician, I simply say that we should be hesitant to interfere in clinical decisions.

Michael Woodhouse: What trend has there been since 2000 in the acceptance rates by ACC of sensitive claims?

Hon Dr NICK SMITH: It is very interesting, given all the noise that has come from the Opposition, that 5 percent of sensitive claims were declined in 2000, but this figure grew in every single year that Labour was in Government, to the point where 40.5 percent of sensitive claims were declined last year. In fact, last year, 2,378 sensitive claims were rejected by the previous Government. These facts show how the Opposition has crudely used this sensitive issue for political gain.

Lynne Pillay: Can the Minister explain the blowout in the number of pending claims and the rising proportion of declined claims with regard to the sensitive claims unit—for example, in Auckland in December 2008, of 114 claims, fewer than four were awaiting a decision, and in August 2009, of 110 claims, 103 are awaiting a decision?

Hon Dr NICK SMITH: I would note that during the period from 2000 to 2008, when that member was a member of the previous Government, the number of claims that were declined grew from 5 percent to 40 percent—an eightfold increase. That is why I ask members opposite to please not make politics out of people who are the victims of sexual abuse.

Lynne Pillay: I raise a point of order, Mr Speaker. My question was very, very specific. The Minister has made no attempt whatsoever to answer it.

Mr SPEAKER: The dilemma I have with the member’s question relates to the fact that she made a very major assertion in her question. If I recollect correctly, she cited figures relating to certain cases in front of ACC that were waiting to be decided in a certain year compared with cases in another year. Strictly speaking, members cannot make that kind of assertion when they ask questions, because members are meant to ask a question. They could ask the Minister whether the figures are correct. But to make the bulk of the question an assertion like that leaves me with little opportunity to be able to ask the Minister to give any particular kind of answer, because the Minister can, if he chooses to, just dispute the figures. I do not see how I can assist the member on this occasion. I will briefly hear the member further.

Lynne Pillay: I raise a point of order, Mr Speaker. I think you may be able to assist me. I was seeking to table a response to my written question from the Minister—

Mr SPEAKER: Is the member seeking leave to table a document?

Lynne Pillay: Yes. I can quote from the document.

Mr SPEAKER: Hang on a moment. I just want to find something out. If the member is now seeking leave to table a document, I need to know what the document is.

Lynne Pillay: It is a response from the Minister to a written question, showing that the increases—

Mr SPEAKER: We get to the same difficulty. There are plenty of Speakers’ rulings that make it very clear that answers to questions for written answer are outside the kind of material that should be tabled in this House, because they are already available to all members. I presume the member wishes to seek leave to table this document to make a political point. That is not the purpose of seeking leave to table a document. The purpose is to provide information for the House that the House does not have available to it. In this case the House has that information available to it, unless the question was lodged several years ago and it was something particularly unusual. But if it was lodged in the last few months, it clearly is totally outside the Standing Orders.

Lynne Pillay: I raise a point of order, Mr Speaker. I am sorry. I may not have been clear. What I want to table is the exact figures that I have just asked in my question.

Mr SPEAKER: Forgive me. If the figures are from an answer to a written question, I will not put the seeking of leave to table that document, because it absolutely wastes the time of Parliament. Parliament has that information. If the figures are from a different source, I apologise to the member, and I will be very happy to put the leave. But if they are from information that has been provided through an answer to a written question, I will not take the time of the House for that. The House has that information. There is no way it can be within the Standing Orders to seek leave to table material that the House already has available to it.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. First of all, I say “ibid.” to my previous comments as to your moving the rulings without the support of the Standing Orders Committee. I think there is an additional point in this particular case. You said you would not follow up on the question because of a lack of authentication. Now, I am a realist. I do not expect you to follow every question for written answer or to keep all those facts and figures in your head. But the figures are before the House—

Mr SPEAKER: The member will resume his seat, because he cannot use a point of order to debate that. If Ms Pillay wants to go back to the Standing Orders, she will see that I could have ruled the question out. A member cannot ask a question in that manner. The member can ask the Minister about the figures on cases and the decisions that are waiting to be made on them in a certain year and a certain other year. It is fine to ask that question, but to make an allegation of information into a question is not the purpose of question time. If the member is looking puzzled, I suggest that she reads the relevant Standing Order. It is not very difficult. It spells it out very clearly. Now, I do not normally enforce that Standing Order, because it wastes too much time of the House to do so. Where I will draw the line is where members seek leave to table documents that are answers to written questions. Members have that information. If the member is seeking leave to table information that members already have, that is out of order. That is clearly out of order, and that is why I am not putting the seeking of leave.

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

Mr SPEAKER: I have made a decision on the matter. If the member wishes to challenge me, there will be consequences, but I will hear the Hon Trevor Mallard.

Hon Trevor Mallard: I can understand that you will not be happy, but I want to take you back through your argument. You ruled something out for not being authenticated. My submission to you—

Mr SPEAKER: I will not listen to—[Interruption] The member will resume his seat right now. Supplementary questions do not require authentication, because they are meant to ask questions. They should not inject new material. I do not think I can put it in any more simple words than that. The Standing Orders require supplementary questions to ask questions. They should not inject new material at all. We do allow them, but when members put in new material, they cannot object when Ministers do not answer the question in the way members might wish. Arguing that material that might be before the House—[Interruption] I can hear that the member is muttering, which he should not be doing. Arguing that material has been provided by way of written question is still no excuse for seeking to inject material into a supplementary question that is not in front of the House either as part of an answer that a Minister has given to previous supplementary questions, or contained in the original question, because the original question has been authenticated. When members seek to inject new information by way of a supplementary question, I allow it, because I do not want to be ruling members out, but members cannot be too precise about the way Ministers handle such questions. I apologise to the member, but I will not permit leave being sought to table an answer to a written question when the House has that information. That is the end of the matter.

Lynne Pillay: Given that National MPs Nicky Wagner and Michael Woodhouse have today committed on the Minister’s behalf to listen to clinicians’ concerns, will he now delay the implementation of the guidelines due to come into effect today?

Hon Dr NICK SMITH: I have made it plain to this House that I am satisfied that ACC is using the best of clinical expertise in the development of policy in this sensitive area, and that I as a politician do not intend to interfere in clinical decisions.

Michael Woodhouse: What steps has the Minister taken to reassure New Zealanders that the clinical decisions in this area are in the best interests of those who have been victims of sexual abuse?

Hon Dr NICK SMITH: I acknowledge the concern from a number of genuine professionals around the sensitive claims area and the changes being made to the scheme. For that reason I have asked ACC to consider an independent clinical review of the new policy. I am pleased to advise the House that ACC has agreed to do that, and it will be done in 6 months’ time, to ensure that what is being done in this area is putting to the forefront the needs of those people who have been victims of sexual abuse.

Lynne Pillay: I seek leave to table the copy of the petition to delay the implementation of changes to the accident compensation sensitive claims schemes, signed by 3,973 petitioners, as presented to National MPs today.

Hon Dr NICK SMITH: I raise a point of order, Mr Speaker. I seek clarification. There is a normal process for dealing with petitions that are tabled by the Clerk’s Office, which is in respect of every petition that is presented to this House. It seems to be a strange mechanism for us to be asserting that through the mechanism of tabling a document. I want clarification as to whether the process that member is adopting will usurp the normal process for dealing with a petition before the House.

Mr SPEAKER: Before I take this matter any further, I will seek advice from the Clerk as to whether this document has already been tabled in the House. We are not aware that this petition has been tabled.

Lynne Pillay: This petition is not to the House of Representatives, but to the Minister for ACC, Dr Nick Smith.

Mr SPEAKER: I understand. The member has sought leave to table this document. This is a genuine document. It is a petition. Leave is sought to table it. Is there any objection to that course of action? There is no objection.

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

Hon Dr NICK SMITH: I seek leave to table the official figures from ACC showing that the percentage of claims that have been declined has grown from 5 percent in 2000 to 40 percent in 2008.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Hon Trevor Mallard: I raise a point of order, Mr Speaker. When you ask members about documents they wish to table, I ask that you are consistent and that you ask Ministers as well as members on this side of the House as to whether documents are already publicly available. That document apparently was.

Mr SPEAKER: I do not need an argument on this matter. I say to members that where Ministers seek leave to be helpful by tabling official documents, or documents from officials, I believe that is helpful to the House. Now if a mistake is made and a document may already have been made public or tabled, members can object. It is perfectly within their right to object. But I believe that the whole process to table documents is to make more information available to members of this House. In respect of official documents, members normally go to a great deal of effort to try to require them under the Official Information Act. I thought it would have been helpful for members, where leave is sought, to provide those documents without that hassle.

Asia—Malaysia Free-trade Agreement

9. JACQUI DEAN (National—Waitaki) to the Minister of Trade: What steps has the Government recently taken to enhance New Zealand’s trade opportunities in Asia?

Hon CHRISTOPHER FINLAYSON (Acting Minister of Trade): The National-led Government last night signed a free-trade agreement with Malaysia. Malaysia is New Zealand’s eighth-largest export market, accounting for almost $1 billion worth of exports in 2008. This free-trade agreement further deepens our ties and strengthens our relationship with a key partner, underlining New Zealand’s commitment to this rapidly integrating region. The free-trade agreement supplements the existing 12-country ASEAN-Australia-New Zealand Free Trade Agreement, signed earlier this year, and is another contribution towards the goal of a possible free-trade agreement in the Asia-Pacific region.

Jacqui Dean: What specific benefits will the Malaysia - New Zealand Free Trade Agreement provide for New Zealand?

Hon CHRISTOPHER FINLAYSON: This agreement provides exporters, service providers, and investors with new opportunities and greater certainty while doing business in Malaysia. It will eliminate tariffs on 99.5 percent of New Zealand’s exports. Key export industries will benefit from measures including duty-free access for kiwifruit by 2012; binding our existing duty-free access for meat, wool, dairy, fish, and forestry products; and early elimination of tariffs on manufactured products like certain steel, paint, and plastic products.

Hon Annette King: Can he confirm that the act of signing a free-trade agreement with Malaysia by the Prime Minister is the final part of a 3-year - plus process, in whose success the Hon Phil Goff, as former Minister of Trade, had a large part to play?

Hon CHRISTOPHER FINLAYSON: I can confirm that there has been a bipartisan approach to this trade agreement, and that the former Minister of Trade played his part. He was an energetic Minister of Trade; it is a shame he did not show that energy as leader of the Labour Party.

Hon Annette King: I raise a point of order, Mr Speaker. My question was a very straight question. The answer from the Acting Minister was a very good answer until he had to be nasty at the end. You have ruled against him doing this on nearly every question he answers. I think it is time that it stopped. [Interruption]

Mr SPEAKER: I am listening to a point of order; let us have some silence while I am doing so. I think the member’s point is fairly made: it was a fair question. It obviously had political overtones, but it was a fair question. To add a nasty phrase at the end of the answer was totally unnecessary. I think members should cease that, and I ask the Minister not to do that again.

Education, National Standards—Evidence

10. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Education: My question asks—

Hon Gerry Brownlee: Duck Mallard!

Hon TREVOR MALLARD: Oh, there goes the loser again.

Mr SPEAKER: I am on my feet, and members will be silent all around the House. Clearly, normally I would deal with that very severely, but how can I deal with that very severely when the Minister did something very similar with an open microphone just a few seconds ago. It shows the problem we get into when members use an open microphone to put down other members of this House. It is a practice that, I think, should not be continued. I would rather see members be noisy and passionate about policies, and not make nasty comments about other members of this House. That goes for both sides.

Hon TREVOR MALLARD: What evidence does she have that national standards in literacy and numeracy improve the quality of teaching and learning?

Hon ANNE TOLLEY (Minister of Education): The national standards provide reference points that describe the achievement in reading, writing, and mathematics that will enable students to meet the demands of the New Zealand curriculum. They will help teachers to make judgments about their students’ progress so that the students, their teachers, and their families can agree on the next learning goals. Research evidence such as the work of Paul Black and Dylan Wiliam in their book Inside the Black Box shows that when students are clear about their goals and what to do next, their achievement and learning improve.

Hon Trevor Mallard: Has she read the Cambridge group report on 11 years of testing in the United Kingdom that found, amongst other things, “if breadth is attained, so are standards; if breadth is sacrificed, so are standards”; if so, did she take that into account before cutting out the advice for science and the arts in primary schools?

Hon ANNE TOLLEY: What we are doing here in New Zealand is very different from what is done in the UK and the USA, where a national test is used and where the system is underpinned by high-stakes testing and assessment for accountability. We are doing neither of those things. We made a conscious decision to move away from this and to favour a policy where schools can make choices about the assessment activities, tools, and processes that they use. It is a very different one from the one that is used in the UK and the USA. Therefore, I say to the member that he needs to be very careful that he is actually comparing apples with apples.

Allan Peachey: What reports has she received of members supporting literacy and numeracy standards?

Hon ANNE TOLLEY: I have seen a report from one member that states: “Let’s make it clear, I support the standards. I support better information for parents, I support looking at class and school results to identify teacher and school strengths and weaknesses so they can be built and worked on.” I am very glad that that member, the Hon Trevor Mallard, supports standards in literacy and numeracy. I look forward to him dropping his hysterical statements about national standards and supporting this Government’s drive to lift literacy and numeracy achievement for New Zealand students.

Hon Trevor Mallard: What does “School Leadership and Student Outcomes, Identifying What Works and Why: Best Evidence”, which she is about to launch, say about the role of assessment in improving student outcomes and national standards in particular?

Hon ANNE TOLLEY: I do not have that document in front of me. As the member said himself, it is yet to be launched. But the use of formative assessment is well-known to be successful in informing better teaching and learning, and that is an important part of the use of national standards.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a very specific question about a very specific document, which the Minister must have read, because she is about to launch it. This is an area of interest—

Mr SPEAKER: The member will resume his seat. The Minister made it very clear that she did not have the document and could not be more specific in relation to that. That is the difficulty when the member asks a fairly general primary question and then gets specific in asking a supplementary question. The member has further supplementary questions if he wishes to use them.

Hon Trevor Mallard: I seek leave to table the Cambridge study I referred to in my original question.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Hon Trevor Mallard: I seek leave to table the invitation, from the Minister, to the launch of the document I referred to in my second supplementary question.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Hon Trevor Mallard: I seek leave to table a Public Agenda article “Teaching for a Living: How Teachers See the Profession Today”. I downloaded it from a public international website.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Hon Trevor Mallard: I seek leave to table an article called “Social Class and Education Achievement: Beyond Ideology” by Ivan Snook from Massey University.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Hon Trevor Mallard: I seek leave to table an article by Kate Gainsford, which indicates that political pressures are the main reasons that worthwhile changes in education—

Mr SPEAKER: What is the document?

Hon Trevor Mallard: It is the New Zealand Post Primary Teachers Association (PPTA) newsletter. Kate Gainsford is the president.

Mr SPEAKER: Leave is sought to table an article from the PPTA newsletter. Is there any objection? There is objection.

Education, National Standards—Policy

11. ALLAN PEACHEY (National—Tāmaki) to the Minister of Education: What recent announcements has the Government made about the national standards policy?

Hon ANNE TOLLEY (Minister of Education): On Friday morning the Prime Minister and I launched the final version of the national standards policy at Glen Taylor School in Glendowie. The standards to be introduced in English medium primary and intermediate schools next year support the New Zealand curriculum by setting clear, consistent expectations of student achievements from years 1 to 8 in reading, writing, and mathematics.

Allan Peachey: What was the basis on which the national standards were set?

Hon ANNE TOLLEY: The standards were deliberately developed so that students achieving the standard are on track to obtain at least National Certificate of Educational Achievement (NCEA) level 2. NCEA level 2 is the minimum requirement for entry into industry training options such as Modern Apprenticeships. I acknowledge that it is a high standard when just under 30 percent of our students currently leave school without NCEA level 2, but it is also a minimum level of achievement that our young New Zealanders need so that when they leave the education system they have a qualification that gives them the options that they deserve.

Aorangi School—Proposed Closure

12. Hon LIANNE DALZIEL (Labour—Christchurch East) to the Minister of Education: Is she satisfied with the quality of the reports she has received on the proposal to close Aorangi School; if so, why?

Hon ANNE TOLLEY (Minister of Education): Yes, I have received reports from the Ministry of Education, from the school, and from an independent facilitator, and they have all provided useful information.

Hon Lianne Dalziel: Has she received professional accounting advice to confirm the costings of the closure option, in light of the significant errors that have been identified in the ministry briefings; if not, will she undertake to obtain this independent analysis before making her decision final?

Hon ANNE TOLLEY: No. I say to the member that the net saving from closing the school against the cost of rebuilding it is an estimated $1.468 million, but we are not able to predict exactly where the children will go, and, therefore, what the cost of any extra buildings might be.

Catherine Delahunty: Tēnā koe, Mr Speaker. Tēnā koutou katoa. Is she satisfied that the education of tamariki learning te reo Māori at Aorangi School will be protected if the school is closed, given the complete absence of bilingual units in neighbouring schools, and the long-term and particular relationship that the school has developed with Ngāi Tahu?

Hon ANNE TOLLEY: I have made it clear in all the discussions that I have had with the board of trustees and the community that should Aorangi School close, I intend to pursue bilingual provision in that community area.

Hon Lianne Dalziel: Is the Minister aware that the ministry’s briefings have failed to include its own roll growth projections for the network, both in terms of the costs and in terms of the capacity of the network to absorb the students from Aorangi School should it close, and, therefore, that the figure she just gave the House is patently wrong; and will she review her decision?

Hon ANNE TOLLEY: As I said to that member in a previous supplementary answer, that is an estimated amount; it is impossible to tell what the exact amount might be until we know exactly where those children go and what arrangements we have to make to take care of them.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou. Has she seen the advice from the Ministry of Education that proposes—without explicit consultation with affected schools—that the bilingual unit could be moved to another school in the area; and in its experience, what is the closure rate of bilingual units when they are opened without community support?

Hon ANNE TOLLEY: Yes, I have seen that advice. Yes, I am confident that should Aorangi School close, a new bilingual unit could be established. The ministry will work with local schools and Ngāi Tahu to ensure the continuity of bilingual provision in the area.

Hon Lianne Dalziel: In light of the Minister’s comments before, will she agree that the school could remain open if it is established that it is less costly to rebuild it than to close it, that there is insufficient network capacity to absorb the students over a 10-year period, that the roll has grown this year, not fallen, and that the school can build within budget now that it has accurate figures from the ministry?

Hon ANNE TOLLEY: The reasons for my decision to close Aorangi School have always been the cost of the rebuild, that it is a small school whose roll has fallen, and that there are four other schools in a 1.5 kilometre radius.

Hon Lianne Dalziel: I seek leave to table a transcript from a Newstalk ZB programme where the Minister stated “that the decision I had to make isn’t about buildings and figures so much as about what’s in the best interests of the children.”

Mr SPEAKER: What is the date of this transcript?

Hon Lianne Dalziel: I do not know.

Mr SPEAKER: Leave is sought to table a radio transcript of unknown date. Is there any objection? There is objection.

Urgent Debates Declined

Accident Compensation—Opening Scheme to Competition

Mr SPEAKER: I have received a letter from the Leader of the Opposition seeking to debate under Standing Order 380 the Government’s decision to work on opening up the accident compensation scheme’s work account to competition. This is a particular case of recent occurrence involving ministerial responsibility. The Government has introduced legislation and agreed that a stocktake group will look at the accident compensation scheme’s structure and will consider the possibility of opening up the work account to competition. This is an important matter, but there must be an element of urgency for it to take precedence over other business. The time to consider the work of the stocktake group will be when it reports. The setting up of a review rarely justifies an urgent debate.

Furthermore, in considering whether a matter requires the urgent attention of the House, it is relevant to consider whether another parliamentary means of debating it is available. The Injury Prevention, Rehabilitation, and Compensation Amendment Bill, introduced last Thursday, aims to improve flexibility in the accident compensation scheme and includes changes to the work account. Its first reading will be debated today. In these circumstances, I am not persuaded that the business of the House should be set aside today. The matter can be considered over a longer time frame. Therefore, the application is declined.

Bills

Injury Prevention, Rehabilitation, and Compensation Amendment Bill

First Reading

Hon Dr NICK SMITH (Minister for ACC): I move, That the Injury Prevention, Rehabilitation, and Compensation Amendment Bill be now read a first time. At the appropriate time I intend to move that the bill be referred to the Transport and Industrial Relations Committee, with an instruction that the committee report finally to the House on or before 12 February 2010, and that the committee have the authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House, on a Friday in a week in which there has been a sitting of the House, and to meet outside the Wellington region during a sitting of the House, despite Standing Orders 187, 189, and 190(1)(b) and (c).

Accident compensation has become financially unsustainable, and reform is required to secure its future for New Zealanders. The 2008-09 annual report of the Accident Compensation Corporation (ACC) showed a loss of $4.8 billion, on top of a $2.4 billion loss for the previous year. Over the past 4 years the unfunded liabilities of the accident compensation scheme—for example, the difference between its liabilities and its assets—have grown from $4 billion to $13 billion. This is a significant and serious problem that cannot be ignored. The underlying issue is the steep rise in accident compensation claim costs, up by 59 percent in the last 4 years, or rising at five times the rate of inflation. The accident compensation scheme cannot sustain the ongoing huge increases in claim costs arising from greater claim numbers, deteriorating rehabilitation rates, and unfunded extensions to the scheme. The underlying problem is that ACC has drifted from being a State insurer to being an extension of the welfare State. Changes in the accident compensation scheme are needed to make it affordable, to make it sustainable, and to make it fair.

The changes in this bill are part of a wider reform of accident compensation that began with the changes that I made to the ACC board in March, the stocktake that has been announced, and other regulatory and operational improvements. The Government’s objective with this bill, in that wider package, is to make savings of $2 billion in the scheme’s liabilities. The first amendment in the bill will extend the full funding date for residual claim liabilities from 2014 to 2019. This is done by setting a final valuation of the residual claims liabilities as valued at 30 June 2009, and folding those residual liabilities into the main accounts. Some people have presented this as a panacea for the scheme’s financial woes. Shifting the full funding date does not actually save levy payers a dollar; it simply changes when they pay. Delaying payment actually increases the costs and it also increases the Crown’s net debt in the intervening years.

There are 10 amendments in this bill that deliver cost savings, most of which are reversals of scheme extensions made by the previous Labour Government. Over recent months with colleagues and officials, I have been reviewing each of the add-ons that the previous Government made to the scheme. I note that not all have been reversed but a number have, because of the financial problems. The first change relates to enhancing the rehabilitation rates of the scheme, which have been declining over the last 5 years. The previous Government made it a mandatory consideration for a person’s pre-injury earnings to be considered. This means that a person who previously had a very high income did not have to return to work unless a job would provide a similar level of earnings. This is too tough a test, and adds to the costs for accident compensation. This bill reverses that consideration.

The second change reverses the changes to the vocational independence test in order to bring it better in line with what was there previously and with the standard definition that is used both by Work and Income New Zealand and by Statistics New Zealand—that is, 30 hours of work per week. The third reform is to reverse the changes in respect of the three-part test for gradual workplace injury, infection, or disease. It will be simpler to apply and it removes the presumption that the accident compensation scheme should automatically provide cover.

The next four changes in the bill relate to the way weekly compensation is calculated, and return the scheme to the principle that accident compensation provides 80 percent of earnings for the first 4 weeks, based on a person’s average earnings for the previous 4 weeks, and then after that earnings compensation is based on income over the past 12 months. One of these changes reverses the decision to increase compensation for the loss of potential earnings—back from 100 percent to the standard 80 percent.

Changes are also being made to the calculation for longer-term compensation for casual or seasonal workers. Our concern about the change that Labour made was that standard seasonal workers who were injured in the long term would find themselves better off on accident compensation than they would be in their normal pattern of seasonal work. We are also reversing the change around part-time workers so that their compensation, again, is based on those same averaging principles that go all the way back to the Woodhouse report.

The eighth change around cost saving is to reverse the decision of the previous Government to include suicide and self-inflicted injuries within the accident compensation scheme. I acknowledge this is a sensitive area, but the Woodhouse report never intended to include such injuries. Suicide is a tragedy but it is not an accident. I also want to make plain that in respect of these five amendments around entitlements, the bill affects only future claimants; no existing person receiving compensation will receive a reduction.

The bill contains two further cost-saving measures. The first is to introduce a hearing-loss threshold of 6 percent, a provision that is in many of the Australian state schemes and is used in the United Kingdom. Hearing-loss claims have risen at a very strong pace in recent years. We are effectively concluding that the cost of hearing aids for low levels of hearing loss is not justified by the benefits.

The last change is to strengthen the disentitlements for criminals. The proposal is that people who commit a crime that has a maximum sentence of 2 years or more, and who are sentenced to imprisonment, should automatically be disentitled from receiving compensation. The claimant will continue to get the emergency treatment that is required, and the treatment that is required to restore function.

The Government also wants to improve the incentives for safety, so this bill makes provision for experience-rating or risk sharing in the work account, and provides for no-claim bonuses, higher or lower levies, and claim thresholds to be set. It also enables risk rating in the motor vehicle account for vehicles and for vehicle owners, to link safety to levy payments. Those are enabling provisions, and the really important work will be in the regulations to make these practical and workable, albeit the principle is important. The Government and ACC should be better rewarding those motorists and employers who have better safety records.

A further amendment in this bill gives the Government greater flexibility to be able to use the petrol levy for residual claims in the motor vehicle account. A further provision allows self-employed shareholders to buy extra entitlements under the scheme. That is a programme that I think is actually quite useful for self-employed people, who can voluntarily have the security of a higher level of income by paying a higher level of levy.

The bill removes two statutory advisory committees. Ministers can establish advisory committees as is required, relative to the particular challenges that exist for accident compensation at the time, without them being enshrined in statute. A further provision enables information sharing between ACC and the Inland Revenue Department. There is also provision in this bill to link accident compensation with other parts of the Government’s programme. The Minister of Justice has done some very good work on increasing support for victims of crime, and this bill will enable the accident compensation scheme to deliver some of those services.

The last important amendment ensures that the accident compensation scheme does not again end up in this level of financial difficulty. That is why this bill provides for improved financial accountability for the scheme by requiring a financial condition report to be produced by ACC and tabled in this Parliament. This provision is similar to that which is best practice for insurance companies internationally, in the wake of a number of high-profile collapses. I note, for instance, that in 2006 ACC’s actuaries noted with concern the very optimistic assumptions about investment returns, but such information did not make it into the annual report. This additional check on the scheme’s finances is part of recognising that thousands of New Zealanders rely on accident compensation for their well-being, and that they need the security of knowing that the institution is financially robust.

I conclude by making plain that this Government is committed to the core concept of ACC being a 24/7 no-fault insurer for New Zealanders at work, at play, and on the road. There is not a person on the Government benches, despite the rhetoric from members opposite, who wants to return to the days of suing, and the uncertainty that goes with it. What Government members say, though, is that to secure the accident compensation scheme’s future, it needs to be affordable and financially sustainable, and that is what this bill seeks to achieve.

Hon DAVID PARKER (Labour): New Zealanders should make no mistake: this year has seen already an unprecedented attack on our accident compensation system by the Government, which has been exaggerating the degree of seriousness of problems in the accident compensation scheme in order to justify fundamental changes to accident compensation that are not necessary.

New Zealand has long been proud of our world-leading accident compensation and rehabilitation system. Indeed, many commentators in this country and many politicians in this House, especially on this side of the House, believe most strongly that we have the best accident compensation and rehabilitation scheme in the world—in the world, bar none. It is second to none. It achieves that and is affordable in New Zealand because of its core principles, which are that we should have no-fault rehabilitation and compensation for 24 hours a day, 365 days a year, whether people’s accidents are at work, on the sports field, in a motor car, or in the home when they fall over. Wherever their accidents occur, they should have no-fault accident compensation and rehabilitation.

We have heard from the Government again today, saying effectively that the accident compensation system is fundamentally broken, therefore justifying the fundamental changes the Government has on the way. They are changes not just to the scope of cover but also to whoever will provide the social insurance under the accident compensation scheme, which currently can be only the State or a large employer that self-insures. Contrary to what Dr Smith said in the House today, not one private insurer in New Zealand is providing insurance cover at the moment, because currently it is illegal under the accident compensation legislation.

We heard Dr Smith say a $4.8 billion loss has been made in the accident compensation scheme this year. He said it again in the speech that he just gave. I say to Dr Smith that that is not correct. The Accident Compensation Corporation (ACC) takes great care to describe what has happened this year. There has been a $4.8 billion increase in the liabilities of accident compensation, but there has not been a $4.8 billion operating loss by the corporation. Indeed, page 72 of ACC’s annual report shows there was a $1 billion excess of levy income over claims expenditure this year. In other words, the corporation took in $1 billion dollars more than it spent. But the National Government says that the scheme has made a $4.8 billion loss. Well, it is true that the scheme’s liabilities have increased from where they were last year, but that is not the same thing as an operating loss. This year the scheme took in $1 billion more—as shown on page 72 of the report—than it spent. Even if we look at the whole-of-life cost of the claims that were made last year, the corporation still collected more revenue than was the cost.

We can take the case of the person who was in a terrible car accident last year and became a tetraplegic. By the time we fully fund that claim to the end of that person’s life—because he or she will be on the system until death—and even if we fully cost all of those whole-of life-claims for every claim laid last year, the scheme still collected more in levy income last year than the whole-of-life claims of every claim made last year.

What have increased are the scheme’s liabilities. Dr Smith continues to misrepresent the increase in liabilities as being a loss made by the scheme in the one year, which somehow points to the scheme being fundamentally flawed when it is not. What have increased are the corporation’s liabilities. What is the cause of that increase in the liabilities? Well, one and a half billion dollars of it relates to economic factors—this is from page 34 of the annual report, for those who want to have a look at the detail of how the liabilities have increased from $9.3 billion to $23.7 billion since 2004. Of that, $1.4 billion relates to economic factors. That is the decreasing rate of return that ACC now expects the scheme to earn on its investments as a consequence of the recession and a long-term decrease in the expected rate of return on investments around the world, a factor that is affecting not only ACC but every other insurance company in the world.

Even more, a liability of $2.6 billion arises from a change in accounting standards. Liabilities used to have to be reported based on the probability that investment funds would be able to cover those future liabilities. The probability to be assured was 50 percent, but those setting the accounting standards said “No, we’re going to change that. You’ve got to have enough money in the bank so that we are 75 percent sure that you will have enough money.” That change in accounting standards has caused $2.6 billion of change in liabilities.

There have been some other undeniable changes in cost drivers. It is true that we now pay nurses and doctors more, and that there has been inflation in the health sector that has run ahead of general inflation for some years. Those were changes that were made by the previous Government, because New Zealand was losing too many doctors and nurses to Australia and overseas. At the time National members supported those changes, because they knew that that was a real problem that we faced. So it is true that health inflation has increased at higher than the general rate of inflation, but I say that that trend will not continue to the same extent in the future.

It is also true that people survive accidents that they used to die from. Medical advances mean that many people who used to die in serious motor vehicle accidents now live, but that they have long-term care costs and needs that are higher. That is a cost driver that is unavoidable.

It is also true that our population is ageing, and as people age more of them are falling over in their homes, breaking their hip, needing care at home, and needing orthopaedic interventions. Again, that is a real cost increase. But even when we take into account those cost increases, and they are unavoidable cost increases, the cost of the New Zealand accident compensation scheme is cheaper than the Australian equivalent. The National Government is forever saying that New Zealand needs to model itself on Australia because it is doing better than us, but in the area of accident compensation New Zealand is already doing better than Australia. Our scheme has more scope. A New Zealander’s decision to play sport is not based on whether he or she can afford to pay the fees to cover insurance premiums. We do not have that problem. We have a broad scope of cover, but lower costs than the Australian scheme.

Where is the case for fundamental changes to the scope of the accident compensation scheme? John Key said, a couple of weeks ago, that there is a need for an honest conversation with New Zealanders about the trade-off between levies and the scope of cover. That is a very proper conversation to have in New Zealand. But we should have the conversation before we cut the scope of cover, not after we have done it. That is why the Labour Opposition said that it would have backed parts of this bill. It would have backed the extension of the date for full funding. That is not the total panacea to all issues of accident compensation; I acknowledge that. But it is a big part of it.

One of the things that the Government has been scaremongering about is an increase in car registration fees. It has said that unless it passes this bill, registration fees will go up by $130 a year. But the actual increase the Government promoted, after that scaremongering, is $30 a year. It is less than a quarter. The Government was scaring people with levy increases four times more than were necessary. What is responsible for the vast majority of the difference between a $30 a year increase and a $130 a year increase? It is the extension of the date for full funding. We said to the Government: “We agree with you that full funding all of those historic claims by 2014 is too tough. It drives levies too high in too short a period of time. We will back that date extension.” Then let us have the honest conversation with New Zealanders about the scope of cover. Let us see whether this is truly affordable.

I think we will find that most New Zealanders will agree that the date extension will cure much of the problem, when they realise that most of these cost increases for the likes of the motor vehicle levy can be avoided by pushing out the date for full funding, so that we catch up on those costs by 2019 rather than 2014.

Hon Dr Nick Smith: Not true.

Hon DAVID PARKER: Dr Nick Smith shouts out that that is not true; he cannot help himself. It is true. We know, from the briefing to incoming Minister, that more than $80 is knocked off the increase in registration fees by the extension to the date of full funding. The Minister has still refused to answer in this House the exact breakdown, but we know that the majority of savings comes from that.

Privatisation is next. We will see socialisation of losses and privatisation of profits in accident compensation as it is being fundamentally undermined.

Hon PANSY WONG (Associate Minister for ACC): In the year 2000 the Labour finance Minister, Dr Michael Cullen, said he would recommend that the House accept a 31c residual claims account levy, and promised with that that the accident compensation scheme liability would be fully funded in 5 years’ time. In fact, he went one better. He asked why the House should not take the increase to 35c, so that the liability should be fully funded 2 or 3 years earlier. From my quick calculation, the previous Labour Government had promised that the liability would be fully funded by 2014 or earlier. But here we are today, in the House once again, and the front-bench Opposition spokesperson on accident compensation, the Hon David Parker, is asking what the problem is and saying that all we have to do is push out the funding date for another 5 years. We can choose just to ignore those statements.

In 1972 the 24-hour, comprehensive, no-fault accident compensation scheme was introduced into the House by a National Government. National is very proud of introducing that 24-hour, comprehensive, no-fault scheme, but the problem is that every time Labour is in Government, its ill-disciplined tax-and-spend mismanagement of the accident compensation scheme consistently wrecks the scheme and puts it under risk.

I will focus on only three areas, to demonstrate why our hard-working, dedicated Minister for ACC, Dr Nick Smith, has been forced to bring into the House dramatic measures to ensure that the accident compensation scheme brought in by the National Government will continue to be sustained for a very, very long time, for the benefit of New Zealanders. First of all, in 1999 the National Government opened up the work account to competition for 1 year. At that stage, the Accident Compensation Corporation (ACC) was charging the levy for the work account at the rate of $1.47 per $100. Under the 1-year period of competition, the amount dropped immediately to $1.20. Then the Labour Government took over, ruined all the good work, and chucked back the account to the ACC monopoly. But through this exercise ACC became disciplined, so the levy amount continued to track downwards to $1.12, 91c, and 90c. Unfortunately, today, after 9 long years of ill-discipline and mismanagement by Labour, we are staring at an increase that will put the levy back to the 1999 level. So I welcome the investigation into competition for the work account, because that 1 year of competition introduced good discipline and showed the corporation that it could have managed the account much better.

The other area I will touch on concerns fairness. As Associate Minister for ACC, I have the delegated responsibility of answering individual complaints. Many good, law-abiding New Zealanders have been totally frustrated with people who have incurred an injury during the committing of a crime and who have then gone on to claim all sorts of compensation. I remember that 2 years ago we heard a case about a burglar who demanded to have cosmetic surgery because a small part of his ear had been bitten off during a burglary attempt. The then Labour Minister for ACC came out and said: “Well, he’s entitled to it.”, and all that nonsense. But from this side of the House Dr Smith has brought in changes to say that if the injury is incurred during the committing of an offence that will incur 2 years’ imprisonment, no compensation will be payable. It is about time that the accident compensation scheme answered to the needs of law-abiding New Zealanders. We will not squander compensation on people who are injured while committing a crime.

The third issue I want to put on the table is the reason why the Labour Party is never going to be trusted again. Last year, after the general election, both the Minister for ACC and I were summoned to an urgent meeting with officials. There was an urgent request to inject $300 million into the earners account. We are supposed to operate on a no-surprises policy, so this type of bad news set ACC off to a very bad start.

The last point is that apart from this legislation, the good Minister, Dr Nick Smith, has also set out to change the culture in accident compensation. I think that everyone in the House and out there will remember the extravagant $5 million Covered campaign run by ACC on television, etc. That campaign was challenged by the Advertising Standards Authority for being misleading. We can contrast that time with this year, when ACC ran a 1-week home safety campaign. It was very well-covered and effective, and it cost only $500,000. I congratulate the Minister for ACC on making the tough call to ensure that the accident compensation scheme that was proudly introduced into this House by the second National Government will continue to exist to protect and benefit New Zealanders.

LYNNE PILLAY (Labour): It saddens me that it is necessary to take a call on this bill in the House. This bill is an absolute sham. It is based on a campaign of scaremongering that the accident compensation scheme is financially unsustainable. That is what we heard Pansy Wong say. She said, effectively, that it was broken, but we know that that is absolutely not true. This is about promoting the idea that accident compensation is in crisis, and it is about talking up National’s true agenda, which is not a surprise—it is a return to privatisation. It is nothing new; what did we see in the 1990s? Is this new? This is an absolute rehash of the 1990s, but worse. Again, what did we see? In the 1990s we were told that accident compensation was unaffordable, and that is when we saw the axing of lump-sum payments under a National Government.

Hon John Carter: Really?

LYNNE PILLAY: Yes, really, Mr Carter. You have a short memory if you cannot remember it.

Mr SPEAKER: The member will not use “you”.

LYNNE PILLAY: I am sorry, Mr Speaker, although I am sure that you can remember it, too. It was the National Government that scaremongered and tried to convince the public that the scheme was unaffordable.

Hon John Carter: What happened?

LYNNE PILLAY: What happened is that many, many people in New Zealand—many victims of horrendous accidents—received no lump-sum payment whatsoever under the National Government. I put it to this House that this legislation is the first of many changes, and probably the axing of those payments is what is next on the agenda. But I think the Government thinks that perhaps it is just a little bit unpalatable at the moment, so it will bring in this measure—

Hon Dr Nick Smith: What’s your position on the bill?

LYNNE PILLAY: My position on the bill is that we oppose it. We know that our accident compensation scheme is the envy of the world. I heard Pansy Wong refer to the introduction of the accident compensation system in 1974.

Hon John Carter: It’s not a welfare system; it’s an insurance system.

LYNNE PILLAY: It is a social insurance system; there is a difference. Let us talk about that. Let us talk about the difference between social insurance or social compensation, where there is no-fault, 24-hour coverage, and where the principle is to provide the support, etc., that is necessary, as opposed to National’s agenda, which is the shipping of accident compensation out to the insurance industry. I heard the leader of the National Party, our Prime Minister, say there is no difference.

I say to members opposite that they have said that the scheme is broken and that it is running at a loss. Yet in the last financial year it had a $1 billion operating surplus—$1 billion—and a return on investment that was performing very well, comparatively. I am sure that the National leader, John Key, who was in that industry, will accept that the Accident Compensation Corporation has performed very well, given the recession and given the challenges. I see the Minister nodding, but still the scaremongering goes on that the scheme is broken, and that despite the $1 billion surplus we have to cut costs.

The costings have been done for all long-term liabilities—they go out 40 years. We can make all the worst assumptions—and be really conservative amongst the scaremongering agenda—such as low return on investments, high inflation, and the most expensive cost-management scenario of all the cases. I note that the Government has changed its mind in terms of full funding, but this is not bad from a Government that has no commitment whatsoever to putting money aside for the Superannuation Fund. The Government is having a rush of blood and it is scaremongering about the dangers of accident compensation and the funding deluge there, yet it is not making any commitment whatsoever to funding superannuation into the future. Where is the logic in that? I hope that someone from the National Party will explain the logic in that. It is an absolute indictment.

As I said before, our accident compensation scheme is the most comprehensive compensation system anywhere in the world. It is more effective than Australia’s system.

Hon Dr Nick Smith: Is it financially sound?

LYNNE PILLAY: It is financially sound. Labour members are asking whether we have to look at going into the future and keeping the scheme financially viable. Of course we do. We will do it through consultation; we will do it through working with people; and, most important of all, we will do it through investing in schemes that prevent accidents. But what are we seeing under this Government? We are seeing those schemes being axed. The very things that prevent accidents, and that encourage the good behaviour that does not lead to accidents, are being axed by this Government.

Hon Dr Nick Smith: If they worked, why are accidents still going up?

LYNNE PILLAY: That is the Minister’s argument: if something does not seem to have worked, then let us axe it. For the Minister for ACC to sit there and claim that preventive schemes that educate—

Hon John Carter: No, he never said that.

LYNNE PILLAY: The Minister did say that. The best investment we can make in the accident compensation system is in accident prevention.

Hon Dr Nick Smith: Even if it doesn’t work?

LYNNE PILLAY: It does work. Again, the Minister is scaremongering by saying that it does not work.

I also want to talk about the cuts, and they are cuts. Let us not misinform people by pretending that these cuts are here to help victims. In terms of the sensitive claims—

Hon Dr Nick Smith: Do you support self-inflicted claims?

LYNNE PILLAY: Never mind trying to change the subject! Every time members on this side of the House talk about sensitive claims—[Interruption] Let us talk about the cuts in counselling compensation for victims and survivors of sexual assault. Let us talk about a Government that argues that it will implement guidelines no matter how many professionals are opposed to them, no matter how many people meet or ask to meet the Minister about them, and no matter how many people sign petitions. This Government says that guidelines are in the victims’ interests. That is simply just not true. I put it to this House that that is the biggest, most offensive insult of all. At least with other groups, such as motorcyclists etc., although there is a degree of untruth in it, the Government is saying that it wants to cut costs. The most offensive thing to victims of sexual assault is that this Government is saying: “We are here to help you. That is why we are going to move the goalposts, so it is even harder to access the counselling that you need and deserve. That is how we are going to help you.”

Hon Dr Nick Smith: That’s your law.

LYNNE PILLAY: That might be our law, but I have just seen a press release that states the Minister is going to review the sensitive claims unit. Mind you, it will take 6 months, but the Minister will review that unit. I urge the Minister to delay the implementation of the guidelines until the review is complete. There is evidence from every professional spoken to, from every victim of sexual assault and survivor of sexual assault who has the courage to speak out about this—

Hon Dr Nick Smith: Not true.

LYNNE PILLAY: The Minister should listen to them and say: “Right, we have said we got it wrong. We will carry out the review. But until that time happens, we will not implement these Draconian changes that will only serve to re-victimise victims.” That is what I urge the Minister to do. I can see that he is considering that very carefully. I thank him for doing that.

Hon Dr Nick Smith: I am not going to interfere with clinicians.

LYNNE PILLAY: The Minister says he is not going to interfere. That is really rich coming from him. I urge him to talk to the professionals.

Hon Dr Nick Smith: What’s your qualification to make clinical decisions in this area?

LYNNE PILLAY: I am not pretending to make them. I listen to the professionals.

Hon Dr Nick Smith: Why won’t you come to the briefing with the clinicians?

LYNNE PILLAY: I am coming to Mr Smith’s briefing, actually, and I do listen to the professionals. At the risk of sounding a little big-headed, I, coming from a nursing background, probably have at least some understanding. But my claim to any knowledge about this comes from listening to counsellors, psychotherapists, victims and survivors of sexual assaults in New Zealand who have said to us: “Please don’t try to re-victimise the victims.”

SUE BRADFORD (Green): The Green Party will oppose the Injury Prevention, Rehabilitation, and Compensation Amendment Bill at every step of the way. I am really sorry that National has chosen to stick to its ideological guns and once again begin the process of readying the accident compensation scheme for privatisation by cutting back entitlements and raising some levies unreasonably.

In almost every respect this bill is a shocker, and I hope all affected individuals and organisations will feel moved to make clear, strong submissions to the select committee. Some of those impacted by the Government’s attacks on the accident compensation scheme, notably sexual abuse survivors and those who work with them, and also motorcyclists, are very effectively filling MPs’ in-boxes and holding rallies already. But many more people are and will be affected than the people in those two sectors. Accident compensation is something most of us prefer not to think about until we are in a situation where we have had an accident or injury ourselves. Then, suddenly, it becomes a serious business, in terms of whether we are eligible for cover and support, and, if so, for how long, and in which ways. Slashing people’s entitlements and making changes in the way that vocational rehabilitation works will have insidious impacts that will undermine the health and well-being of many New Zealanders for a long time to come.

The fundamental problem with the bill in front of us today is that it is based on a false premise. The National Government has deliberately manufactured a crisis, and even before the time of the shift to the new board chairmanship early this year National was cooking up this diabolical brew. All through 2009, and with accelerating intent, National has been creating the notion that the accident compensation scheme has an impossibly huge deficit, that its liabilities have blown out, and that the only things that will save us all from impossibly huge levy rises are measures like those contained in this bill and the readying of the accident compensation scheme for partial or full privatisation. The major reason for the so-called liability blowout is not costs, although there is no question that costs are continuing to rise, but rather it is the change in the assumptions underlying the accounting and forecasting practices of the Accident Compensation Corporation (ACC).

The big mistake that Labour made was to push for the full funding of potential liabilities by 2014. That was the first step on this slippery road. The one thing that National is doing that we do support is pushing out the date for fully funding the residual claims liability to 2019, although the Greens actually believe that if we are to have an honest conversation about accident compensation, as the Prime Minister proposes, we should look seriously at the possibility of returning completely to a “pay as you go” system. Full funding ahead traps the scheme and the Government in a private insurance accounting model. On top of that, the ACC board had changed some of its other accounting methodologies. For example, $1.3 billion has been added through claims experience and modelling changes, $1.3 billion for revised economic assumptions, $500 million for adding more safety to the risk margin, and $1.3 billion for the cost of “future Cabinet and regulated rate increases”, whatever that means. I thank last week’s excellent New Zealand Listener editorial for that compilation of figures.

At the same time as the ACC board and the Government continue to push the line that the scheme is impossibly in the red, in fact this year its revenues were $4.5 billion, which is $1.5 billion more than it spent on claims. As some experts keep saying—sadly, like voices lost in the wilderness—ACC is a mature organisation with enough reserves to pay for around 3½ years of claims. That is the highest level of reserves the scheme has ever held. Sir Owen Woodhouse, famous for the principles on which our current accident compensation scheme is founded, has stated clearly that he did not intend it to be pre-funded, and that the latest Government moves are beginning to undermine its very heart.

The report of the Woodhouse commission recommended a 24-hour-a-day, no-fault compensation scheme that covered people whether they were injured at work, at home, at play, or on the roads. The underpinning Woodhouse principles are community responsibility, comprehensive entitlement, complete rehabilitation, real compensation paid at 80 percent of previous earnings for as long as a person is incapacitated, and administrative efficiency. An injury prevention, rehabilitation, and compensation scheme that at least strives to live up to those principles is what is at stake here today. The bill in front of us hacks into those fundamentals in a variety of ways, only some of which I have time to mention here.

One of the most pernicious changes is in relation to vocational independence assessments. They are used by ACC to decide whether a claimant who is receiving compensation is fit to return to work. Once people are considered to be ready to go back to suitable employment, their weekly compensation is stopped within 3 months, or sooner, of course, if they start a job. The bill removes the requirement that the vocational assessment takes into account what a person earned or did before the injury, and reduces to 30 hours the minimum number of hours that the person can be assessed as being able to work per week. That means in practice that someone who was earning, say, $1,500 a week before an accident will lose his or her weekly compensation if he or she is found to be able to do a job for 30 hours a week for the minimum wage—that is, $375 a week. It does not matter that the job might be to do something far below the person’s experience, education, or capability.

The broader impact of lowering the bar in this way is that, overall, people will be pushed out of the system a lot more quickly. For a number of them, that does not mean necessarily that they will get a job, but simply means that they will be forced into the benefit system or, in the worst-case scenario, which happens quite often, they will end up with no work and no income, because their partner is in paid employment.

A second major area of concern for us is, of course, the many disentitlements that the bill contains. The cuts to sexual abuse counselling are one of the meanest attacks on people’s well-being, and are deeply ironic, when one considers National’s and ACT’s rhetoric about providing support for the victims of crime. That change in accident compensation policy is a deliberate reinterpretation of the law, aimed at ensuring that only those sexual abuse survivors who are diagnosed as having a mental illness will receive financial assistance from the scheme. That will mean that many people who until now have had support will no longer get it. Many sexual abuse survivors simply will not seek cover and counselling, for fear of the stigma of being labelled as being mentally ill. Others will go through the process and will find that they do not receive cover anyway, which in some cases will actually increase the likelihood that they will go on to develop severe mental illness, or even end up committing suicide in the future.

On the subject of suicide, I say this bill also goes as far as to end accident compensation entitlements relating to wilfully inflicted self-injury and suicide. That means that in future a suicide victim’s family will receive entitlements in only the very narrow circumstances of the victim’s mental injury being caused by sexual abuse or as a result of a physical injury, or by a traumatic event in the workplace. The suicide victim will also need to have already gone through the process of having his or her claim for mental injury approved under the accident compensation scheme before his or her family can get any entitlement. It will not matter whether the victim was incapable of forming a rational intent, or whether the suicide was caused by some abject failure of the mental health services to provide appropriate care and treatment. This law change will impact deeply on affected families, especially low-income family and whānau, at a time when they are most desperately in need of support.

These disentitlements and others are why I simply cannot understand the Māori Party’s support for this legislation. Cutting back on who receives accident compensation and on how long people receive it for, and lifting motorcycle levies by monstrously huge amounts will, in different ways, have a very damaging impact on people on low wages and benefits—a population among which, sadly, Māori are disproportionately represented.

Instead of raising levies and cutting back on a whole range of entitlements, we should be having the honest conversation that Mr Key referred to. For example, let us talk seriously about a “pay as you go” scheme. If we reverted to that, levies could be reduced in the short term, because the accident compensation scheme would no longer have to add to its investment. In moving to full funding, the Government is effectively borrowing in order to invest, with the inherent risk of further losses being caused by investing, as happened last year when the global financial meltdown added about $1.6 billion to the scheme’s liabilities. Reverting to a “pay as you go” scheme would simply mean that we would go back to seeing the scheme as being part of the functioning of the Government, just as we do the provision of benefits and pensions, health care, and education. The reserves that have already been built up could be used to smooth out future levy increases.

Hon Sir ROGER DOUGLAS (ACT): ACT will be voting for the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. Unlike Sue Bradford, the member who has just spoken, ACT takes an opposite view. The member who has just spoken said that this legislation was too harsh, but ACT believes that it does not go far enough. However, the legislation makes improvements, and we will, therefore, be supporting it.

This bill does not reform the accident compensation scheme. This bill keeps the scheme largely in its current form. It continues to fund the scheme through compulsory levies, and it does not apply any ongoing commercial pressure to the scheme’s operation. All it does, in fact, is manage the pay-out system a little differently. It stops those who harm themselves on purpose from getting payouts. It stops criminals who injure themselves breaking into someone’s house from getting payouts.

In reality, there is nothing of great substance in this bill. There is the same kind of management of the scheme that Labour undertook, except that this bill, rather than expanding entitlements, reduces them in a number of ways. Nothing in this bill deals with the fact that from the scheme’s inception, it was a flawed Ponzi pyramid scheme. In the beginning it operated on a “pay as you go” basis. That meant that for many years it seemed to be cheap. The full costs were not apparent, because the scheme had not fully matured. All those people with long-term injuries were not in the claims system in those early years. Unfortunately, those years of low costs saw the range of entitlements expand, so that by the time the system had reached maturity and had absorbed all those with long-term injuries and covered the expanded entitlements, the scheme no longer looked cheap. It looked as if it cost an awful lot.

These problems are set to get worse. We have in New Zealand an ageing society. An ageing society implies not only payouts but also a lower proportion of people paying levies to cover the non-earners account. Because the scheme was essentially a Ponzi scheme in the beginning, it required an ever-increasing number of people who were working to pay levies or substantial rate increases.

To Labour’s credit, it realised that that was a problem. It realised that operating the scheme as a “pay as you go” scheme was not viable when we have an ageing population. That is why, I believe, Labour announced that the scheme would be fully funded by 2014. Unfortunately, Labour also undertook a massive expansion of entitlements under the scheme, meaning that despite its promises to have the scheme fully funded, the unfunded liability expanded.

The scheme’s unfunded liability now stands at around $13 billion, up $5 billion in the past year. If any private insurance company had the books that the scheme has, it would be declared bankrupt. The only reason that the scheme still exists is that it has the capacity to increase its levies. In essence, it is solvent only because it can force people to cover its costs and has the Government standing behind it.

In these circumstances, the only viable way to ensure that the scheme delivers results for reasonable prices is to open it up to competition. If people can get cheaper rates elsewhere, then they should be allowed to leave. If that means that risky workplaces start paying higher premiums, then so be it. It will encourage them to improve workplace safety.

The benefits of competition become apparent if one listens to the nonsense peddled by Labour in its opposition to it. The first thing Labour will tell us—and its members said so today—is that costs will increase because we now have to pay the profit margins of private companies. The facts speak otherwise. The last time that competition was introduced, premiums declined by around 30 percent. The argument that profit margins lead to higher prices is simply absurd. By that logic, Labour would nationalise everything.

The second thing that Labour has said is that premiums were lower only because private companies offered cheap rates as loss-leaders. Well, that is very interesting. A private insurance company has to have its books signed off by an actuary. That actuary has to say that the income the company received in that year takes into account not only its costs in terms of what it wrote out in cheques during that year but also whether sufficient funds are left over to put into an account that would meet its future liability. Labour, on the other hand, oversaw a scheme that was meant to be moving towards being fully funded, yet its funding liability moved in the other direction and actually expanded.

The system needs to be fully funded, but, in my view and in ACT’s view, it should also be opened to competition. We can look at it this way. Every single monopoly, be it the post office, Telecom, or coal has always delivered more for less when it has been opened up to competition. Three things happened: prices went down, the quality of their services went up, and there was more variety in the products offered. I believe that that would happen if the accident compensation scheme was opened to competition. In other words, there is no reason to think that the scheme would be any different from the post office or Telecom. In fact, it is even more important in some ways to open up the scheme to competition.

Currently, the scheme sets a flat-rate levy based on the risk in an industry. Those employers that have a safe environment subsidise those that have an unsafe environment. There is little commercial incentive to create safer workplaces. Private competition would ensure that that happened. By keeping the scheme as a monopoly and not properly allowing risk pricing to emerge, we are increasing the number of workplace accidents.

In the private market, we have insurance excesses. We have no-claim bonuses. We have risk-based insurance. The private market is all about mitigating risk. The scheme, on the other hand, is about forcing good employers to subsidise bad ones. That is why the last time the scheme was opened to competition, not only did costs decrease but also we saw a decline in the number of accidents. Those who oppose competition in the scheme are not just wasting taxpayers’ money. They are also ensuring that more people suffer accidents in the workplace than is necessary.

RAHUI KATENE (Māori Party—Te Tai Tonga): When Sir Owen Woodhouse presented the results of the 1967 royal commission report on workers’ compensation, he summed them up by concluding: “Injury arising from accident demands an attack on three fronts. The most important is obviously prevention. Next in importance is the obligation to rehabilitate the injured. Thirdly, there is the duty to compensate them for their losses.” They were simple goals arising out of an admirable commitment to principles such as community responsibility, comprehensive entitlement, complete rehabilitation, meaningful compensation, and administrative efficiency. The important challenge before Parliament now, some four decades and more later, is to assess whether these goals are still relevant, whether they have been achieved, and how successful the scheme has been in following them.

Seven years after the Woodhouse report, the Government of the day created the Accident Compensation Corporation (ACC), introducing what would later be described as a revolutionary model for cost-effective rehabilitation and compensation. The essence of the exchange negotiated by the State was that, in return for giving up the right to sue, all New Zealanders had the right to a new, universal, 24-hour, no-fault coverage against injury, along with associated rehabilitation and compensation services. For the last 35 years New Zealanders have been contributing to injury accounts that variously cover employers, the self-employed, earners, non-earners, and motor vehicle and medical misadventure.

Part of the process of change introduced by the Injury Prevention, Rehabilitation, and Compensation Amendment Bill is the proposed increase to three of the levies: the work account levy, the earners levy, and the motor vehicle account levy. The justification is apparently an increase in the number of claims and rising health costs. Yet conflicting information seems to question why these levy changes need to occur. The recent ACC annual report suggests that claims have stabilised. In fact, there was a 7 percent decrease in the last financial year. The annual report also points out progress in the rehabilitation of workers. The goal was to have an 88.5 percent rehabilitation rate 9 months after injury. The achieved rate was 87.5 percent. One percentage point hardly seems worth making a fuss about. Why would we want to review a scheme that has been lauded as a world leader, on the basis of a one percent difference? What could be the rationale for a bill reforming accident compensation?

The Māori Party has raised one major issue before in this House and consistently throughout the term of the previous Government and the current Government, and it demands reform. That issue is the significant difference in the rate at which Māori and the general population claim for accident compensation services. This difference appears to be most marked for non-earners, the young, and the elderly, who are arguably the most vulnerable New Zealanders. The difference in rates is even more inexplicable, given that Māori are overrepresented in injury statistics across all ages and in all areas. In fact, injury is the leading cause of death for Māori aged 30 and under, and most of those deaths are preventable. The March 2008 report of Statistics New Zealand revealed that Māori have significantly higher injury rates by occupation, with 155 injuries per 1000 fulltime-equivalent workers, compared with 111 for Pākehā. It is higher particularly in occupations such as agriculture, fisheries, manufacturing, and trades. There are also significantly more injuries in lower-paid occupations, where Māori are overrepresented.

Meanwhile, ACC figures continue to show that Māori make fewer claims to accident compensation and are less likely to receive compensation entitlements. ACC has tried to do something about this by establishing formal channels such as the Māori advisory board, Te Roopu Manawa Mai, to exchange valuable ideas and information. It also introduced a Code of ACC Claimants’ Rights, which contains eight rights encouraging positive relationships between claimants and ACC as they work together for the claimant’s recovery. Although ACC undertook initiatives to improve access through information programmes and better engagement with Māori communities, these programmes have not demonstrated significant success in closing the delivery gap. Access for Māori has been consistently lower than for other groups. The data that is available demonstrates that Māori receive treatment at a lower level than non-Māori, and where services are accessed, they are accessed later, and claimants exit programmes earlier. A similar record applies in the area of injury prevention.

If any amendments are to be made to the Injury Prevention, Rehabilitation, and Compensation Act 2001 to reduce levies and Crown costs, one would think that the broader question of eligibility for accident compensation support would be high on the change agenda. The absence of data around the business significance of Māori claimants could be something the corporation addresses as a priority going into the future. For example, if we were to plan for a given level of improvement in access for Māori, such analysis might estimate what the impact might be on ACC’s bottom line. Before we even begin this exercise, we know intuitively that because Māori are a small population group and constitute a small group of claimants, it is unlikely that Māori will be considered a high-value market segment to provide a financial incentive for private insurers to develop Māori-responsive business strategies, such as the use of rongoā Māori or mirimiri treatments in the context of a rehabilitation regime.

The Minister for ACC, Nick Smith, promoted the context for the changes outlined in this bill as the need to return to a position where accident compensation is both affordable and fair. The goal of being affordable and fair sets up a spectrum ranging from institutional racism at one end to cultural competency at the other. Under the bill, Māori in high-risk occupations will pay higher levies. High-risk occupational areas have significant numbers of Māori workers, and the bill provides for a matching of risk environments with levy rates, so the cost of cover can be expected to increase. Across the board, a possible result will be employers structuring employment relations to shift responsibility for risk to employees, along the lines of the independent contractor model. There is reason to expect that this model would eventually apply across the board. Preliminary analysis of the changes also reveals that they will disproportionately impact on vulnerable workers and low-income families, as the bill decreases access to cover and decreases the level of compensation to these claimants.

At the other end of the spectrum is a scenario in which the accident compensation scheme values cultural competence. Professor Mason Durie describes cultural competence as being “about the acquisition of skills to achieve a better understanding of members of other cultures”. Culturally competent care involves practitioners establishing and maintaining positive relationships through improving their understanding of tikanga Māori and effective communication. The end goal, of course, is to achieve better health care outcomes for Māori. Cultural competence is a major focus for the Māori Party. We campaigned on it. We have consistently spoken of it across the health and social sectors, and this bill is no different.

There is another dimension to our decision to vote for this bill’s being referred to select committee to let the people have a say on accident compensation, and that is the potential for Māori entrepreneurship and enterprise to rise to the opportunity for innovation. In 2007 ACC undertook a risk-profile review with groups within the Ngāi Tahu umbrella, resulting in a considerable annual levy reduction. The Federation of Māori Authorities has also been interested in pursuing dialogue around levy rates and the possibility of a Māori consortium leading a corporate arrangement with ACC, possibly focusing initially on specific industry sectors such as forestry, fishing, construction, and farming.

For all of these reasons—and for more reasons that will, no doubt, arise from submissions—we agreed to support the introduction of the bill and its referral to a select committee so that people can express their views. We want to hear about people’s experience with the scheme. Among others, we want to hear from workers and their whānau who have suffered an injury, health workers, and providers of rehabilitation services. We do this so that the accident compensation scheme can once again be a world leader; so that it can be affordable, fair, and culturally competent; and so that it can remember always to focus on the best interests of the community.

ALLAN PEACHEY (National—Tāmaki): Thank you for the opportunity to speak in the first reading debate of the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. There is no better place to start in making a contribution to this debate than to go back to the words of the chair of the New Zealand Medical Association, Peter Foley: “Along with the rest of New Zealand, we are stunned at the situation ACC finds itself in.” That was Dr Foley, chair of the New Zealand Medical Association. I listened with care to the contributions of the two Labour members who spoke, Mr Parker and Ms Pillay. Both of them seriously missed the point. There is only one thing that New Zealanders want to hear from Labour on the subject of accident compensation, and that is three simple words: “We are sorry.”

Of course, Labour has a major problem with the scheme. It has a major problem with the scheme, I say for the benefit of Ms Pillay. It was not Labour’s idea. It was an example of far-reaching social legislation introduced by a National Government nearly 40 years ago. The National Government now finds itself trying to rescue the scheme from its mismanagement under 9 years of the previous Labour Government. I ask Mr Goff to say sorry. It is time for Mr Goff to say sorry to New Zealanders in respect of the scheme. They were so badly let down by the Labour Government that he was a part of.

Members should look at the figures that Labour is in denial over. On 9 October the 2008-09 annual report of the Accident Compensation Corporation (ACC) was released, reporting a loss of $4.8 billion. I invite the next Labour speaker to get to his or her feet and deny the accuracy of that figure. We know that it is true. That comes on top of a $2.4 billion loss for the year before. It tells the current Government that this scheme, as it currently stands, is unsustainable. The primary purpose of this bill is to save the scheme. It is too late for the crocodile tears on the other side of the House. It is too late to pretend that things are not as bad as that, because they are as bad as that. Mr Goff should say sorry. That is what the people of New Zealand want to hear from him.

The primary purpose of this bill is to reduce the scheme’s ongoing costs to make it more affordable for current and future generations of New Zealanders. The changes contained in this bill will make the scheme more affordable, more sustainable, and fair. It will improve financial reporting and accountability, and will provide for closer working relationships between Government agencies and ACC.

To sum up, this bill will save the accident compensation scheme. This bill will rescue it from the mismanagement of the previous Labour Government. Mr Goff should say sorry. It is time to say sorry.

Hon RUTH DYSON (Labour—Port Hills): There certainly is a lot to be sorry about, as the House considers this legislation. I feel sorry for seasonal workers and their families. I feel sorry for people who have a work-related hearing loss. I feel more sorry, than for anyone else, for people who have attempted or committed suicide, and for the loss their families have to endure not only because of the loss of their loved one but also because of the further insult that the Minister for ACC dished out to them in a pre-determined, calculated way. Further, they have to suffer because of their disentitlement in this legislation.

Allan Peachey, the member who just resumed his seat, quoted Peter Foley, the chair of the New Zealand Medical Association. Although Peter Foley welcomed this announcement of the privatisation of accident compensation, his predecessor, Dr Pippa McKay, who is an obstetrics and gynaecology specialist from Canterbury, said that when she heard the announcement of privatisation on the radio, it made her groan and gave her a sense of déjà vu. She said that the last time the scheme was privatised, during which time she was leading the doctors, it was just a nightmare. She knows what she is talking about. She has been through this crazy experiment in the past, and she has described it, from a general practitioner’s point of view, as a nightmare.

This bill is very easy to summarise. It says that New Zealanders will pay more and get less. They will pay higher levies to the scheme or to their private insurance companies, and they will get a lower level of entitlement. The legacy that Dr Nick Smith as Minister for ACC will leave New Zealand is this: pay more, get less. It was only in March this year, and it is not even November yet, that Dr Nick Smith was adamantly denying any interest in introducing competition—any interest, at all, in opening the work account to private insurers. He said that would happen only if it were in the best interests of taxpayers, business, and workers. But he had one meeting with Rodney Hide and he said he would forget about that, and forget about John Key’s commitment to having an honest and open conversation about how much people will want to pay and what their level of entitlement will be.

In this bill Nick Smith has delivered what he wanted to do. He wanted to spend 6 months scaremongering around the country, telling us that the accident compensation scheme was insolvent, that it needed fixing, and that it was totally broken. He wanted to do exactly the same thing that Bill Birch wanted to do. He wanted New Zealanders to pay more money into the scheme but to get a lower level of entitlement. This is part of Nick Smith’s reforms to ensure that people get less.

The National Government knows from its polling that New Zealanders are allergic to the words “privatisation”, and “private insurers”, so it has been parading up and down the country talking about opening up the scheme to competition. Well, New Zealanders fell for that in 1998 but they will not fall for it again. We know that this is not about more efficiency, fairer entitlement, better access to rehabilitation, and an easier return to work. We know that this is about having private insurers come in, and about having New Zealanders pay more money and get a lower level of entitlement. That is all that this is about.

Some specific areas in this legislation are described quite accurately in the explanatory note of the bill. I was very interested in the comments in the section on “workplace gradual process, disease, or infection”, which reinstates a three-part rule in order to get cover. It quite specifically says that this will reduce the number of people who receive cover. It quite specifically says that it does not matter whether someone has an injury. It does not matter any more to Dr Nick Smith and his National Government colleagues whether someone is so badly injured in his or her workplace that he or she cannot work any more. It does not matter that that person is in pain. To the National Government, it matters only that that person is costing the country money, and costing that person’s employer money if it is a workplace injury. That is not acceptable to the Government. It does not matter to Dr Nick Smith if a person has been injured at work and is so badly injured that he or she cannot even go to work any more. Under this legislation, quite explicitly it says that this will reduce the number of people receiving cover. Does this legislation fix the injury? Does it make the injury go away? Does it suddenly restore a person to wellness? Does this legislation get people access to the treatment and to the rehabilitation they need to be able to work and support their families? No, it does not. This bill states that it has upped the bar and increased the threshold. So even though that person still has exactly the same injury as he or she had last year—tough! That is what Nick Smith says to injured people. He says “Tough!”. They are injured but they will no longer get cover.

This is the same approach as that for hearing loss. People who suffer hearing loss in their workplace currently get accident compensation cover. They have done so for a long time, but that cover is out the door now. People with hearing loss now have a 6 percent threshold to reach before they are entitled to receive cover. So if someone has lost only 5 percent of his or her hearing in the workplace and wants some help to hear fully again, what will Nick Smith say to that person? He will tell that person to sod off. That is basically what the Minister will say. He will say that, yes, he knows the person has a 5.9 percent hearing loss, but the National Party does not care about that because that person is costing his or her employer money. Well, in my view, if employers allow a workplace to be so noisy that people lose part of their hearing, then those employers should front up and bear the responsibility and the cost for the hearing loss their workers have suffered. That is an employer’s responsibility.

This bill says “Tough!” to the people who have not reached that magical 6 percent threshold, but the worse insult, in my view, is to the people who were so callously insulted by the Minister, Nick Smith, last week. That was when he said that under accident compensation legislation, people get such great money if they kill themselves that if he had a terminal illness and his doctor said that in 30 days’ time he would die, he would wait till the 29th day and then throw himself under a train so that his family would be better off. Not only was that a highly offensive comment about the state that people are in when they injure themselves or commit suicide but it is deeply offensive and hurtful to the families who have lost loved ones through suicide. Today in the House Dr Smith said that suicide was not an accident so it should not be covered. Well, a lot of injuries are not accidents. A lot of injuries occur to people who know full well that they have a very high risk of having an injury. In my view, if people are so unwell and so distressed that they attempt to do harm to themselves, even to the point of killing themselves, their families deserves all the support that we can give. If it is good enough for the accident compensation scheme to offer financial support to and cover the injuries of those who go hang gliding and then crash and do serious damage to themselves, to those who go mountain climbing, to those who play sport, or to those who drive a car, when all those people know full well the risks they are taking, then, in my view, people who are so unwell that they harm themselves or commit suicide deserve to have their injuries covered, as well. I think that the Minister made a highly offensive contribution.

This legislation is a winding back of entitlements that New Zealanders signed up to in a social contract. We gave up the right to sue, but under Nick Smith we are paying more and getting less.

MICHAEL WOODHOUSE (National): I begin by affirming my party’s commitment to the principles in the royal commission report, so well articulated by the member Rahui Katene, but also to the Accident Compensation Corporation (ACC) itself, and its goal of ensuring a fast and lasting return to work or independence for New Zealanders. But having said that, an awful lot has changed in the 42 years since the Woodhouse report was published. It is important to periodically review whether the scheme continues to deliver value for New Zealanders; and if ever that review was necessary, it is right now.

I congratulate the Ministers on their timely and carefully considered amendments, as set out in the bill. It is a bit surreal to have to defend the changes being proposed by this bill, in the face of the accident compensation scheme’s recent financial performance. I think the public have been a bit numbed into disbelief by the scale of the numbers, such as $2.4 billion 2 years ago, and $4.8 billion in the last year. The first of those reports, of course, was signed off as correct by the previous Labour Minister, Maryan Street. She had no problem doing so, but now is part of a party that continues to deny that a problem even exists. Frankly, it strikes me that Labour members are either completely ignorant of the way the scheme works, or deliberately evasive about their role in the parlous financial state that it has found itself in. That is no real surprise, given Labour’s contribution to the situation. Even Labour’s finance spokesman, Mr Cunliffe, adds to the chorus of people who think that because there was a cash surplus, everything is all right in the scheme. It beggars belief that that is the extent of Labour’s financial literacy. But it does seem to be the theme of the previous administration, which believed honestly that it left office with everything all right. It is a bit like saying somebody had jumped out of a plane without a parachute and is OK 50 metres above the ground.

Members opposite might not think that the accounting result is real, but the proposed levy increases that are the consequence of that are very real. The earners levy, for example, will have doubled in 2 years under the proposed levy increases, if nothing happens. I certainly do not need to remind the House about the response that the motor vehicle levy increase has. At least, the Green member who spoke was honest in her party’s preference that it wants to go back to a “pay as you go” system. In contrast, the Labour Party does not oppose full funding, but does not want to pay for it. Well, it cannot have it both ways.

Contributing to that confusion was Labour Party President Andrew Little, who attacked just about everybody involved in the preparation of that financial report: the accounting staff, the auditors, the actuaries, the independent overseers, and even the Minister’s office. As a chartered accountant, I am frankly insulted at the accusation that the report, which was prepared absolutely in accordance with financial reporting standards, should somehow have been made to look worse for political ends, particularly when that accusation comes from the president of the party that is the main reason for the state that the accident compensation scheme finds itself in.

Mr Parker would have us believe that the performance of the scheme is down to negative investment returns. It is true that it has suffered in the downturn, albeit ahead of the rest of the market, and it should pick up. But two things are not being said by Mr Parker. Firstly, the projected upturn is already built into the projections; and, secondly, the increases in the scheme’s unfunded liability started 4 years ago, which was well before the economic downturn. But even when it was apparent, what was Labour’s response? It continued to widen the entitlement base, and allow ACC to take its eye off the rehabilitation ball, even though working to exit claimants is not only good for claimants but a legal requirement, and then refused to accept ACC’s recommendations for levy increases that more accurately reflected the cost of those changes. In a nutshell, when it should have been applying greater levy increases, and at least holding entitlements, it was doing the opposite on both fronts.

When the financial chickens come home to roost, what happens? We had the debacle of the failure to disclose the true state of the scheme, particularly in the non-earners account. On several occasions in the lead-up to the pre-election fiscal update, Labour had a chance to disclose what was going on and chose not to. Despite being in clear breach of the Public Finance Act, the Opposition used a minor comment in the Jenkins report to lump complete responsibility for that on to Treasury in an attempt to remove itself entirely from any blame. So much for loyalty to Government staff, or the ownership of one’s actions!

Well, the Opposition can blame Treasury officials all it likes. But I think Dr Cullen, a very experienced Minister of Finance, the previous Minister Maryan Street, and the Cabinet knew exactly what they were doing. I think they made that decision not to include ACC’s parlous financial state in the Pre-election Economic and Fiscal Update, and the responsibility should lie firmly at Labour’s feet.

I come to some accusations that the Opposition levelled. It said that the changes in this bill are somehow against the stated intention of the original royal commission report. Members opposite would do well to familiarise themselves with that report, because they quote it a lot, but there are a number of changes that are entirely consistent with the Woodhouse report. The first has been mentioned; it is self-inflicted injury. The report recommended that it “should not be the subject of compensation”, nor should the majority of sickness or disease. It said “the general basis for protection should be bodily injury by accident which is … unexpected”, but to “the exclusion of incapacities arising from sickness or disease”.

Another matter is the importance of using classification systems like ICD or DSM-IV—systems that have been very recently much criticised by the Opposition. All of this underscores the fact that the scope of compensation has been an issue that has challenged successive Governments since 1974, and it is not appropriate to say that remedying the nonsense that went on over the last 9 years by the previous administration is somehow in breach of the underlying principles of the scheme.

I shall touch on comments by Labour spokesperson Mr Parker about whether changes to the scheme mean widespread cuts to entitlements and that the only way to save money in Vote ACC is by cutting those entitlements. It is absolute nonsense. The best way—

Carol Beaumont: Then why are you doing it?

MICHAEL WOODHOUSE: I tell that member to listen up and I will tell her. The best way to reduce expenditure is to reduce the rate of injury and to rehabilitate people in a more timely manner. It is as simple as that, and, frankly, one of the more disappointing aspects of the changes being made to accident compensation by the previous administration was the way in which ACC was tacitly encouraged to take its eye off the ball in rehabilitation. It was a kind of “come one, come all” approach. It meant that to get people back to work or to full fitness sooner than they otherwise might be is a bad thing, or that they are being kicked off the scheme. It simply is not the case.

The legislation requires ACC to work as hard as it can to ensure a return to work or independence. Not only that, but we owe it to the claimants to do that, even when the challenge of getting back to work after time off is pretty daunting for them. In fact, that is when they need the most support. It is also when ACC should not shirk its responsibilities in that regard. Unfortunately, rehabilitation rates have been declining significantly over the last few years, and I do not think that is down to a change in the population base, or an ageing population. It has to do with the way we approach the rehabilitation of our claimants.

The bill extends the time for full funding of pre-1999 claims, and I am sure the Opposition will not be opposing this, because Mr Parker even had a member’s bill to that effect. We have a widening gap between the present value of the future cost of residual claims and the asset base to support them. Extending the time for fully funding on its own will not take pressure off levy payers in the long term, so we need to ratchet up our rehabilitation for those claimants. Some who have been on income compensation for years will be a challenge to be rehabilitated, but I support and encourage ACC’s efforts in that regard.

One of the philosophical things to establish is whether accident compensation is an extension of the welfare system, or an insurance scheme. There is no doubt in my mind that accident compensation is an insurance scheme. When premiums are being set according to pools of risk, and when the premiums go up and down according to the claims rate and claims duration, which is the key cost driver, it is an insurance scheme. There is absolutely no doubt about that.

I conclude by congratulating the Minister on his efforts to bring the public’s attention to this very important financial risk to the Crown, and on involving me in some of the policy discussions on the amending legislation, but mostly on his courage in doing the right thing by New Zealanders, by ACC, and by its stakeholders in the face of considerable hostility from the Labour Opposition and its union supporters. I congratulate the Minister and I commend the bill to the House.

CAROL BEAUMONT (Labour): If the previous speaker, Michael Woodhouse, thinks that is hostility, he has not seen anything yet. I rise proudly to speak against the Injury Prevention, Rehabilitation, and Compensation Amendment Bill, and to confirm that Labour will be opposing this legislation. The bill is another example of a Government that does not care about the needs of ordinary New Zealanders.

The changes being proposed in this bill, and the other changes being mooted in the area of accident compensation, will, no doubt, increase costs, reduce entitlements, and move further to an insurance model—I think that the previous speaker made that pretty clear—and away from the principles of our world-class accident compensation scheme. During tough times, that will put costs back on to ordinary New Zealanders. It is a cost-shifting exercise, and it will be New Zealanders who pay. The costs do not go away; they are merely shifted to the injured person.

I want to talk about some of the history of accident compensation, because a number of people, including Mr Peachey, have talked about that. I quote Sir Owen Woodhouse, who said that accident compensation changes being mooted by the Government were uncaring and predatory, and that they breached the principles of the scheme he authored as head of a royal commission in 1967.

The accident compensation scheme, implemented in 1974, was the first comprehensive, no-fault accident compensation scheme introduced in any country using the British legal system, and it did some very important things. In particular, it ended costly legal battles to force employers to pay compensation for work injuries. It also cut administrative costs from about 30 percent in private insurance schemes to 10 percent. There was a very good comment by Tapu Misa in the New Zealand Herald recently. She talked about the fact that it is easy forget how revolutionary our accident compensation scheme was and how visionary its architect, Sir Owen Woodhouse, was.

It is easy to forget what life was like before April 1974 when the accident compensation scheme was introduced. It was not introduced just by National. It was introduced under a National Government, certainly—the Holyoake Government—but it was bipartisan cooperation that led to the introduction of the accident compensation scheme. Sir Owen described the pre-1974 situation as constant litigation and arguments about how an accident should be defined and whether it had arisen in the course of employment. He said that the benefits were “meagre and limited in duration.”, and that the process could be very long, expensive, uncertain, and unfair—for example, before 1967 only one negligence claim in every 100 was even partially successful.

I think it is important to recognise that background, because I do not believe that the changes in this bill go anywhere near what we will see from this Government. It will do a great deal more than this. So members opposite, including the Minister, can introduce this bill and say: “We had no choice but to make these changes, and anyway they are quite specific and that is it.”, but New Zealanders know that that is not it.

I remind people of the Woodhouse principles, because, again, we have referred to them in this debate. They are very important, and I think the real conversation should be about a scheme that meets those principles of community responsibility. It was felt, as a matter of national obligation and interest, that the community must protect all its citizens. In other words, we all reap the benefits of a modern, fast-paced, industrial society, and we should be prepared to pay for the detriments and not leave those who are inevitably injured to struggle on alone. The second principle was comprehensive entitlement—that it should be financed on a uniform method of assessment regardless of the cause that gave rise to the injuries. Complete rehabilitation was another principle, and none of us would argue about proper rehabilitation despite the comments from across the House that somehow Labour does not agree with or support rehabilitation. The next principle was that compensation needs to be real compensation.

Those are very important principles, and I want to know what, at this stage, the Government is doing to justify its moves to privatise, increase costs, and reduce entitlements. If we look at this bill and the things that have been said since the Government was elected, we see a cynical manipulation. It is absolute scaremongering.

Hon Dr Nick Smith: Oh yeah, we made up the $2.4 billion last year!

CAROL BEAUMONT: Let me give the Minister some examples. He talked about a very significant blowout in liabilities, and that the accident compensation scheme is technically insolvent and going down the gurgler. Let us talk about that a little bit more. What is the definition of insolvency? Insolvency is the inability to pay one’s debts as they fall due. But Dr Nick Smith’s definition of insolvency is “unless the future cost of all existing claims is fully funded by investments set aside for that purpose, it is insolvent”. Of course, by his definition the accident compensation scheme has been insolvent since the day it started. So the member’s words are a nonsense.

However, Nick Smith is right in saying that Labour agrees with the extension of the period to fully fund residual claims from 2014 to 2019. That is the one thing in this bill that actually makes sense, and, actually, that extension was proposed by the previous Labour Government. We said that it needed to happen. People are not being sucked in by the member’s comments. People are nervous about what is going on, and they are starting to get very, very angry.

I quote a couple of media commentators who have been looking at what the Government has said. In the New Zealand Herald Brian Fallow writes: “For the Government to wrap legitimate concerns about slippage in ACC’s performance in a whole lot of shrill scaremongering and scapegoating is gratuitous. Indeed it is downright irresponsible when talking about the scheme to use terms like ‘insolvent’ and ‘going down the gurgler’—even if the context is counterfactual—because there are people who are dependent on it to keep body and soul together and will do so for the rest of their days.”

In the Dominion Post Vernon Small writes: “costs are increasing, investment returns are down, the unfunded liability is swelling, and some changes are necessary. But is ACC critically injured? Labour has called the assault on the state injury insurer—an assault coming from everyone in the government from the Prime Minister John Key down—a manufactured crisis, and Labour is right.”

Sadly, as I said, people are worried and they are asking questions. They are worried about what the Government is proposing to do, and there is mounting anger. Over the course of the long weekend, I went to a number of events, and at every single one of them a range of people asked me what you were doing with accident compensation.

Mr DEPUTY SPEAKER: Order!

CAROL BEAUMONT: Sorry, Mr Deputy Speaker, not you. Well, actually, you too, but the Government—

Mr DEPUTY SPEAKER: Just stick to the point, thank you.

CAROL BEAUMONT: People are concerned about what the Government is doing. People do not trust this Government when it denies its real agenda with accident compensation. The Minister, in his first reading speech on this bill, said that the Government had no choice and that a small number of specific changes were being made. Sir Roger Douglas said that the bill is just about managing the payout system a little differently.

But what is the Government really planning? There have been so many flip-flops and changes of mind—it is almost unbelievable. On 8 March, for instance, Nick Smith said that 2011 was the earliest date the Government would allow private insurers to compete with the Government in this area. On 2 July, in response to a question from me, he said that it is not intended that the stocktake group will do an investigation into introducing competition into the work account because, quite frankly, it is not a priority. He said that it is not the area where the scheme needs attention. Today Gerry Brownlee said that every account is in an utter mess. Well, which of these is it?

In relation to the privatisation of accident compensation the Government is talking about competition in the work account. Well, that does not fool people any more. People understand that that is code for privatisation. Clearly, this bill is the first step to full privatisation and an insurance model. We have all heard about some of the possibilities being considered, such as people being required to pay excesses before they get any compensation. It is a slippery slope when we start setting up one group of New Zealanders against another. Now it is motorcyclists. What about extreme sports people or kids playing sport? In Australia children are being denied the right to play sport because their parents cannot afford the levies. Where is the honest conversation with Kiwis over these changes?

JO GOODHEW (National—Rangitata): It gives me great pleasure to stand and support the Injury Prevention, Rehabilitation, and Compensation Amendment Bill. This bill brings the House to the stage where we begin debating how the National-led Government will preserve and protect our 24/7, no-fault accident insurance programme. Quite frankly, after the debate over previous weeks it is time that we refine exactly what is going to happen. We need to get it out there, get it debated, and—I must say, after years of neglect—get the accident compensation scheme back on track. It gives me great pleasure to support the first reading of this bill.

A party vote was called for on the question, That the Injury Prevention, Rehabilitation, and Compensation Amendment Bill be now read a first time.

Ayes 69

New Zealand National 58; ACT New Zealand 5; Māori Party 5; United Future 1.

Noes 53

New Zealand Labour 43; Green Party 9; Progressive 1.

Bill read a first time.

Hon Dr NICK SMITH (Minister for ACC): I move, That the Transport and Industrial Relations Committee consider the Injury Prevention, Rehabilitation, and Compensation Amendment Bill, that the committee report finally to the House on or before 12 February 2010, and that the committee have the authority to meet at any time while the House is sitting (except during questions for oral answer), and during any evening on a day on which there has been a sitting of the House, and on a Friday in which there has been a sitting of the House, and to meet outside the Wellington region during a sitting of the House, despite Standing Orders 187, 189, 190(1)(b) and (c).

A party vote was called for on the question, That the Injury Prevention, Rehabilitation, and Compensation Amendment Bill be referred to the Transport and Industrial Relations Committee.

Ayes 69

New Zealand National 58; ACT New Zealand 5; Māori Party 5; United Future 1.

Noes 53

New Zealand Labour 43; Green Party 9; Progressive 1.

Motion agreed to.

Bills

Electoral (Administration) Amendment Bill

First Reading

Hon NATHAN GUY (Associate Minister of Justice) on behalf of the Minister of Justice: I move, That the Electoral (Administration) Amendment Bill be now read a first time. At the appropriate time I intend to move that the bill be referred to the Justice and Electoral Committee for consideration.

The State agencies responsible for the administration of our parliamentary electoral system are a central component of New Zealand’s democracy. Those agencies facilitate both the right of New Zealanders to vote and their opportunity to be elected into this Parliament. They also undertake a challenging operational task. The general election commands a considerable budget and, at its height, it involves approximately 17,000 staff. Therefore, our electoral administration must be designed to provide first-class electoral services to New Zealanders and to safeguard the public’s continuing confidence in the administration of our electoral system.

Three electoral agencies are responsible for our existing system. First, the Chief Electoral Officer, as part of the Ministry of Justice, has responsibility for conducting general elections, by-elections, and referenda. The officer also administers the electoral finance regime for constituency candidates and supervises compliance with it. Second, the current Electoral Commission has a number of functions relating to political parties including registration, allocating broadcasting time, and funding prior to the election. It supervises parties’ compliance with the electoral finance regime. It also supervises compliance with the electoral broadcasting rules, and conducts public education and research on electoral matters. Third, the Chief Registrar of Electors, acting through the Electoral Enrolment Centre and New Zealand Post Ltd, is responsible for the electoral roll and enrolment.

The three-agency structure, although generally effective, has created some problems including duplication and increased costs and complexity for people dealing with the three agencies. As a result, there has been disjointed decision-making on electoral matters. Fragmentation has also become an obstacle to achieving any strategic overview of the sector’s performance and its priorities, and may limit technological development for use in future elections. There has been longstanding support for a better integrated form of electoral administration that includes the findings of the Election Framework Taskforce in 2001 and of the Justice and Electoral Committee, which has been recommending better integration since at least the 1999 election. More recently, the issue re-emerged during consultation with other political parties on the current review of electoral finance law.

Therefore, the Electoral (Administration) Amendment Bill establishes an independent electoral agency that will be given overarching responsibility for electoral administration—a new Electoral Commission. This new commission will be an independent Crown entity, placed at arm’s length from an executive Government, with a statutory responsibility to act independently when performing its statutory duties and functions. The measures in this bill have been the subject of consultation with all of the parliamentary parties, which is a longstanding convention for significant electoral reform. The new Electoral Commission will provide improved access to electoral services, as well as a more integrated, efficient, and strategic approach to electoral administration. Reform of the electoral agencies will be in stages.

The Electoral (Administration) Amendment Bill takes the most significant step in the reform exercise by creating the new Electoral Commission that will take on the functions of the current Chief Electoral Officer and the Electoral Commissioner. If the bill is passed by the middle of 2010, the new Electoral Commission will begin operating on 1 October 2010 and will be ready to administer the 2011 general election. The second stage of the reform, a transfer of the responsibility for the electoral roll to the new Electoral Commission, will be dealt with in a separate bill. Enrolment will continue to be the responsibility of the Chief Registrar of Electors until October 2012. In addition to its status as an independent Crown entity, the new Electoral Commission is also assured by a specific statutory duty of acting independently in performing its statutory duties and functions and in exercising its powers.

The new Electoral Commission will be governed by a three-member board comprising the chairperson, the Chief Electoral Officer, who will also be the chief executive, and one other person. Electoral commissioners will be appointed by the Governor-General for a term of up to 5 years, on the recommendation of the Minister of Justice. To enhance the independence of these appointments, the bill requires the Minister to consult the leaders of all political parties represented in the House before making the appointment recommendations. This requirement was added following consultation with other political parties over the shape of the proposed bill, and the Minister of Justice, the Hon Simon Power, wishes to thank all parties in the House for engaging on these matters. The new commission will also be subject to the usual Crown entity reporting mechanisms in order to monitor the performance of electoral services and the expenditure of taxpayers’ dollars during the 3-year electoral cycle. The bill also provides certainty and consistency for the staff of the current Electoral Commission and the Chief Electoral Office during the transition to the new arrangements by transferring them directly to the new Electoral Commission on terms and conditions no less favourable than those they currently enjoy.

This bill is an important step in reforming the way in which our elections are administered. I would like to commend the current electoral agencies for the high calibre of their work to date and for their valuable advice during the development of this bill. Their assistance will be even more valuable during the transition to ensure minimum risk to ongoing electoral administration. It is their professionalism that has already contributed to New Zealand’s reputation as a country with effective, independent, and impartial electoral management. The Government is confident that this bill will create more efficient and accessible electoral services for New Zealanders as they exercise their democratic rights. I commend this bill to the House.

Hon DAVID PARKER (Labour): The Labour Opposition will be supporting the Electoral (Administration) Amendment Bill. I thank the Minister of Justice for the consultative process that has surrounded this bill. He has properly engaged with Labour, as, indeed, I am sure he has with other parties in this House in the preparation of this bill. As a consequence of that, Labour members are happy to support it in its reference to a select committee.

Initially, the Electoral Commission, which is a new body set up by this bill and not the current Electoral Commission, was to include the Secretary for Justice as a member. Labour and, I understand, some other parties said that would not be right. Of course, the Secretary for Justice is the head of a Government department, so it would not be appropriate for that office holder to hold a role on the new Electoral Commission. The Minister agreed with that, so the commission will now be fully independent, and we agree that that is appropriate. I think there is still a question as to how the commission should be appointed. I have heard some people suggest that the commission ought to be appointed by Parliament, rather than by the Minister as part of the Government. I think that some people may submit on that issue to the select committee. We in Labour would be interested to hear from submitters and be informed by them on that matter.

We agree that the new entity—which, as the previous speaker, Nathan Guy, speaking on behalf of the Minister of Justice, has said, merges the functions of the current Chief Electoral Officer and the current Electoral Commission—will provide an improvement in the way in which elections are run in New Zealand. New Zealand has a proud history of having non-corrupt elections. One of the reasons why we have those is our tradition of having strongly independent regulatory bodies to enforce the rules that surround elections, so that the public can have faith that they have an uncorrupted, honest, and transparent election process. That means they can trust the election result. That, in turn, means that people, because they think that our elections are open and honest, are more likely to participate in them. If we had a cloud over the transparency of our electoral processes, some people would be turned off from the electoral process and would not vote. That, of itself, would undermine people’s faith in democracy, because in the minds of some people it would be seen to be less representative of their interests than it currently is. They would not participate in the voting process, nor would they value the democratic institutions that we are endeavouring to protect. So Labour members agree with this legislation, and we will be supporting it.

I will make one negative comment, which is that this bill does not clean up the problem that we have in New Zealand about the lack of transparency of donations. It is all very well for the Government to say it wants to have agreement on issues relating to electoral law, but when agreement on issues relating to electoral law cannot be obtained because the Government refuses to move on its positions, then I say that is self-serving on the part of the Government. The Government could improve the degree of transparency around donations to political parties.

Paul Quinn: I can’t believe this.

Hon DAVID PARKER: Mr Quinn, who says he cannot believe this, sat on the Justice and Electoral Committee inquiry into the 2008 general election. After every election in New Zealand, we have an inquiry. It is part of the normal processes of Government; it happens every time that there is a general election. We look at the things that can be improved, and in that way we have a gradual improvement in our electoral system and it is updated to take account of recent events. This year’s inquiry, amongst other things, looked at whether we had transparency around donations. Mr Dave Henry, who is the chief executive of the Electoral Commission, gave evidence at the inquiry into the 2008 general election, and in particular he answered questions about donations.

In the select committee report back to Parliament, which I have before me, there is a record of the spending on the electoral process that was declared by the different parties. For example, the Labour Party disclosed expenditure of about $2.2 million, and the National Party’s expenditure was about the same. Other parties spent less than that: the Green Party spent $1.4 million, and the ACT Party spent $1.1 million. If there was transparency around donations, we would expect that for the majority of that expenditure corresponding donations would be recorded, for which we would know the source. But the only donations that we have transparency on were those to the Labour Party—a total of $422,000 of donations. There was $2.2 million of expenditure, but we knew the source of only $422,000 of donations. That is not transparent enough. If we think that was not good enough, I say transparency in relation to donations to the National Party was even worse. National disclosed far less than 10 percent of its sources of funds. It spent $2.2 million and disclosed the source of only $130,000 of donations. The provision of transparency about donations is one of the ambitions of our electoral laws, but they are not working when the source of less than 10 percent of the donations that came to the National Party was disclosed. In fact, that figure was very close to 5 percent; it was closer to 5 percent than to 10 percent. Between 90 and 95 percent of National’s donations were secret, and that is wrong in principle.

We ought to have transparency around donations. No one is calling for there to be transparency around donations of $5, $10, or $100; we do not need to have that kind of level of transparency. But we do need to have transparency in terms of larger donations. The amount that, at least in theory, we are supposed to make transparent as to the source of donations at a constituency level is $1,000. The Labour Party says that is what the figure should be in respect of donations to parties, as well. Without that kind of transparency, public confidence in our electoral system is undermined. We never know what policy is for sale.

Before the election, Merrill Lynch Australia said that if accident compensation was privatised—and National’s euphemism for that is “opening the work account to competition”—there would be $2 billion of accident compensation levy revenue up for grabs and $200 million of additional profit would be earned by Australian insurers. That is not in a report from me; that is in a report from Merrill Lynch Australia, in June 2008. We all know that private insurers stand to gain from the privatisation of accident compensation; there is no doubt about that. But what we do not know is whether those same private insurers were contributing to the National Party. I can never prove that they were, but it is wrong for our democracy to be tainted by that accusation. It is wrong for it to happen—and it may have happened; I cannot prove it—but it is also wrong, even if it did not happen, for our election process to be tainted by the implication that it might have happened. That, in itself, undermines public confidence in our electoral processes.

There is nothing wrong with people making donations to political parties. We rely upon donations to go about the business of democracy. But we should have transparency about who is making those donations, so that people can assess whether politicians are too accountable or whether they owe too much, if you like, to their donors in a way that reflects on a policy outcome. That is not fixed by this legislation. The Government says that is because there is no consensus around the issue of donations. But that is because the Government refuses to be part of the consensus. It is a self-fulfilling outcome, which National refuses to fix. I think there is a glaring problem with our electoral system: we do not have transparency around donations. This legislation does not fix that problem.

CHESTER BORROWS (National—Whanganui): As I am sure the previous speaker, David Parker, will agree, the Justice and Electoral Committee is looking forward to having the Electoral (Administration) Amendment Bill come before it. The committee has a great mix of wise and sage counsel, and youthful vibrancy and enthusiasm from members such as Paul Quinn, Kennedy Graham, and Simon Bridges—I do not know which pigeon-hole he fits into. The committee is looking forward to having this legislation before it. It will be interesting, too, to be part of a consultative process in respect of electoral matters, which is a novel approach. It is something that we did not experience so much under the previous administration. I can give an indication to the committee and to Parliament at large that it will not be a case of the chair saying: “We’ve got the numbers, so we’ll just stick it to the vote and we won’t have any further discussion on it.” Committee members will enter into a debate around the table and with the submitters who come before us.

It is true to say that the threefold electoral process watchdogs that we have within our electoral system at the moment have been messy to deal with. It has been suggested for many years—in fact, for about 25 years—that they should be amalgamated into one. Although that task has been put off by successive Governments, it is good to see that the three agencies will be brought together as a result of the suggestions of the 2001 Election Framework Taskforce. It conducted a comprehensive review of the arrangements and recommended a single agency.

The taskforce recognised four basic flaws. The public, candidates, and parties were confused, and remain confused, over where and how to access electoral information services and advice, and this contributes to additional compliance costs. There is no natural coordination of effort in the system, and it succeeds only through the considerable time and work the three agencies put into coordinating their activities. But so often they overlap, and there is an expense to the taxpayer. Thirdly, there is the difficulty of coordinating decision making, which hinders organisational development, including the use of technology. In our review of the 2008 election, there appeared to be the opportunity to use technology in many ways in coming years that will see ease of use for the average voter, especially for those New Zealanders who are overseas, and a much quicker ability to get election results. Fourthly, there was no overview of the electoral sector’s performance and priorities. Although, for instance, the Justice and Electoral Committee is charged with, and always has been, reviewing elections in the year following a general election, those reviews tend to be a little staccato in that three different organisations come before the committee. There needs to be a far more coordinated approach.

Those issues will be addressed in a single agency that is being created—the new Electoral Commission. This body will have significant responsibility, performing all the functions of the Chief Electoral Officer and the Electoral Commission. It will be an independent Crown entity to ensure independence, accountability, effective discharge of duties, organisation capacity, cost effectiveness, and easy implementation. The board will have three members who will be appointed by the Governor-General, on the recommendation of the Minister of Justice, following consultation with the leaders of the political parties represented in Parliament.

The previous speaker made a lot about campaign donations and transparency. This Government is happy for transparency in those issues, and we are pleased to be supported by Her Majesty’s loyal Opposition now that Labour members find themselves sitting on that side of the House. We would like to have a lot more transparency, and that was what National was pushing for when it was in Opposition several months ago. I commend the bill to the House.

Hon LIANNE DALZIEL (Labour—Christchurch East): I too rise to support the Electoral (Administration) Amendment Bill. I was pleased to listen to my colleague the Hon David Parker advising the House of a consultative process that involved engagement with the Opposition, and I thank the Government for that process. I think it is important that we discuss matters such as electoral law reform as far as we can in order to obtain agreement. As the previous speaker, Chester Borrows, said, this matter has been the subject of review at select committee for a number of years now, and a merging of the functions of the three agencies—or three arms, as it were—that are now involved in our electoral system has been recommended.

In saying that we support this bill I want to make it absolutely clear that it is no reflection on the three agencies that will form the new Electoral Commission, nor, indeed, on the individuals who have shown incredible leadership in those areas over a large number of years. In fact, New Zealand has been very well served by all three agencies in terms of integrity and also dedication to the oversight of free and fair elections. I think in a place like New Zealand we sometimes take for granted the holding of free and fair elections. In other countries people are prepared to die for the right to vote. That probably would not be seen in any aspect of elections in New Zealand. I think some people find it hard to get out of bed and drag themselves down to the polling booth on election day, whereas in other countries people have fought for the right to vote and to have those votes freely and fairly given and counted. As my colleague the Hon David Parker has said, we have a well-deserved reputation in New Zealand for holding corruption-free elections, and this goes to public confidence in the process. When people go to vote they know that their vote will be received in confidence and that they can have confidence that the result will be a fair reflection of the votes cast on the day. What happens after the votes are cast and the count is done, when the various machinations occur for the forming of a new Government, may not necessarily go to public confidence in the process, but I think the process produces a much fairer system than any other system we have had in this country before.

When I look around this Parliament and I see people representing different ethnicities, I often reflect that when I first came to Parliament in 1990 there was not one MP from another ethnicity in this Parliament. We had Māori MPs and European MPs. I think one Pasifika MP made it into Parliament prior to the 1996 election—Taito Phillip Field in 1993—and that was it. There was no one else. Now we have two Chinese MPs, a Korean MP, and two Indian MPs, one of Sikh origin and one from Fiji, which is a tremendous advance. We also have a Muslim MP from Pakistan, so we have tremendous diversity in this Parliament under MMP that we simply did not have before. The number of women in Parliament has increased since we have had MMP, from a quarter of the Parliament to a third of the Parliament. However, sadly, with the loss of Sue Bradford tomorrow, I think we slip to just below a third, hopefully for a very short period of time. I think it is important that we have a system that reflects the integrity of the vote; we have that not only with our electoral system but also with MMP, as well.

Obviously there are benefits to be obtained from merging the three functions into a single agency. I quite like the way in which the Government has adopted this merger as a two-tier approach. The bill we are discussing today sets up the commission with two of the agencies before the next election, so by the time we get to the 2011 election the two agencies, the Electoral Commission and the Chief Electoral Office, will be merged into a single Electoral Commission, which will be in place to conduct the next general election. After that election the Electoral Enrolment Centre will come into the commission, as well. I think that that stepped approach is quite sensible because it gives the different agencies an opportunity to establish themselves in their roles before they are called upon to perform their function under the new regime. So I am very, very pleased with the approach that has been adopted.

I also commend the Government. I do not do this very often, so I will make this point, because I have criticised regulatory impact statements on many occasions since National was elected. Here is the regulatory impact statement—

Paul Quinn: Did you produce one? I can’t recall you producing one.

Hon LIANNE DALZIEL: I congratulate the Government on an excellent regulatory impact statement.

Paul Quinn: Oh, leadership! Excellent.

Hon LIANNE DALZIEL: I am happy for the member to interject across the House to say that the Government is showing leadership in this regard. It is about time. It has had a Minister for Regulatory Reform since the general election, yet here is one of the very few regulatory impact statements that meets my standard—that meets the test I want it to meet.

The Government has measured the status quo against two other alternatives. One was a new Electoral Commissioner within the Ministry of Justice, and the other was a new Electoral Commissioner created as an Officer of Parliament. Going through the regulatory impact analysis process, which I think is excellent, the Government has managed to identify the concerns and the benefits around each of those alternatives. I commend the Government for this very, very good process. The reason the status quo is not preferred—and I think it is important to place this on the record—is that, firstly, it would continue the unnecessary overlap of roles and duplication of administrative costs; secondly, it would provide for disjointed decision-making on electoral matters; and, thirdly, it would limit technological development for use in future elections. I think the third bullet point is the most important, because I am sure we will see a change in the way we vote in the future as technology develops. It will enable us to utilise different technologies that exist now and will exist in a better form in the future. Those technologies will not only ensure the integrity of the vote but also will enable us to ensure greater convenience. That is one thing I would like to see, because I get frustrated when I see people who think they have cast a valid vote—they have actually gone down to the ballot box on election day—but who discover afterwards that their vote did not count because they were not enrolled on the electoral roll the day before that vote was cast. I like to think that we will have the technology to enable somebody to enrol and vote on the same day. In my view, there is absolutely no barrier to that occurring, and the sooner we can put that technology in place the better it will be. I do not think we have to have an absolute prohibition on enrolling on election day, as we do at the moment with the roll closing the day before the general election. So I am very, very pleased to see that something is put in place to ensure that we can take advantage of technological development.

The last point I make is to comment on the points made by my colleague the Hon David Parker about the need for the transparency of donations to political parties. In the last inquiry into the 2008 general election, questions were put to Mr Henry, and I think it is worth remembering them. He was asked: “do you think there is a need for transparency of donations to political parties?”; he replied: “Yes.” He was asked: “Do you think we need to do better in respect of the transparency of donations?”; he replied: “Yes, I do. I think that in the new regime we need to look very carefully at how we might look through to the true donors.” That is what this bill is about. The public has a right to know who is funding the election campaigns. It is very, very important that we address the issues raised in these reports as they come up. With that one exception I commend the bill to the House.

METIRIA TUREI (Co-Leader—Green): I do not intend to take a long call on the Electoral (Administration) Amendment Bill. The Green Party will support its first reading to get it before the select committee. We look forward to submissions by the public on the bill.

We think that the overall purpose of the bill is very good. The bill establishes a new Electoral Commission. The commission will combine the functions of the current Chief Electoral Officer and the Electoral Commission, and it will eventually also have oversight over the electoral roll, which, as my colleague Lianne Dalziel explained, will be transferred by a second bill at a later stage. The intention of this legislation is to provide integrated, efficient, and consistent oversight of, and decision making in, electoral administration, and to have those measures in place well before the next election. So there are quite reasonable intentions behind the bill. It is fundamentally important that the oversight of our electoral system is run by an independent and impartial body that has the power to make fair and effective decisions about the running of our democracy. It is a crucially important part of our democratic process.

The bill is an improvement on the existing three-agency arrangements, which create, we agree, unnecessary duplication and potential confusion. The independence of the Chief Electoral Office, which is located as part of the Ministry of Justice, causes some problems, in our view, under the current arrangement. So this bill is an improvement, as it moves that office, to some extent, and therefore we support it going to a select committee.

The bill is by no means perfect, and we are interested in the submissions on how it can be improved. When the National Government consulted the Greens on the proposal, we suggested from the outset that an Officer of Parliament - type body should be established, that it would be preferable to ensure that the new agency is absolutely and fully independent of the Government, and does not report to a Minister. The Officer of Parliament model is used here in Aotearoa with the Parliamentary Commissioner for the Environment, for example. It is also used in Canada for their electoral organisation and management. It places the oversight of the body with Parliament, as opposed to a ministry of the Government managed by one particular political interest. It reinforces its role to oversee and enable free and fair elections, which is a core concern of the House of Representatives and of Parliament. Certainly an Officer of Parliament model would be perceived by the public as more truly independent and would have more ability to comment on how the electoral process is operating, because it would not report to a particular Minister in the executive.

I note that in the regulatory impact statement there is a comment that the Officer of Parliament model provides a high level of independence because of the institutional separation of that body from the executive branch of Government, which is what we would like to see. But then the statement goes on to describe why that would not be appropriate, and it refers to criteria that were established by the Finance and Expenditure Committee in 1989, saying that the proposal does not meet the criteria. On my reading of those criteria, it does. The criteria state: “an Office of Parliament must only be created to provide a check on the arbitrary use of power by the Executive;”. But the role of the new commission would be to manage New Zealand’s elections, including referenda, for the public as a whole. That includes all of the electoral tools that the public have to decide who is in their House of Representatives. It is absolutely crucial that power over those issues is not held by the executive, and that there is a body that is fully independent from any potential arbitrary use of power by the executive.

There have been arguments about that in the not too distant past, saying that Governments and politicians have long had their sticky fingers in the business of electoral issues. The Electoral Finance Act was one. There was a lot of criticism from the public about that. The best way to deal with that criticism is to take those issues out of the hands of politicians, particularly those in the executive, and to put them in the hands of an independent agency.

The criteria further state: “an Office of Parliament must only be created to discharge functions that the House of Representatives itself … might carry out;”. I am not 100 percent sure—I have been here only 7 years, which is not quite long enough yet to work out all of the functions that the House of Representatives might carry out—but it seems to me that the integrity of Aotearoa New Zealand’s electoral system is a core concern of the House of Representatives, and that therefore the issues that the electoral body would be concerned with are sufficiently significant that the House itself would choose that an independent agency would have control and management of those.

We would still continue to argue that an Officer of Parliament model is the best model for the management of those issues, and that that discussion should continue through in the select committee. We will be very interested to see what the public thinks about whether higher levels of independence and accountability of that agency to the voters through their House of Representatives would be gained by the agency that this bill implements, or by an Officer of Parliament.

We would also like to see the new agency tasked with providing guidance and advice on electoral finance rules. That is another area where we do not want politicians’ sticky fingers in the business. We want there to be an independent assessment of those rules, and a great deal of clarity for the public and for political players so that they understand what those rules are and how they are applied.

We do not agree that the board of the new Electoral Commission should be appointed by the Minister. There is consultation in the process, with the Minister talking with other political parties, but it is a decision that is made by a recommendation by the Minister to the Governor-General, and we think that that power, again, could be taken out of the hands of the Minister, so that there is no imprint of any one particular political force on the board, and there is a greater sense of independence and separation of the agency.

That is one reason why we continue to advocate strongly for an independent agency to continue now with the process of the electoral system referendum that was proposed by National. Now that the timetable has been set, in our view it is crucial that the Government of the day takes its hands off the issue and allows for an independent agency to manage the questions—how those questions are set and how they are decided on.

There is a really interesting issue around whether a preferential system like single transferable vote (STV) should be used in Part B of the first questions of that referendum as to which is the most preferred system. The Electoral Commission, as it is established at present, could do that work, particularly around the establishment of the questions and how they would be managed. This bill and the agency that it establishes would not come into effect until 1 October 2010, and that is quite a long time away. Nonetheless, that new agency could certainly be charged with the responsibility for informing and educating the public about the different options that the Electoral Commission is proposing, on the issues around MMP, for example, and other kinds of proportional or first-past-the-post systems, such as supplementary-member representation. Despite the fact that the agency will not be set up until October of next year it is quite possible for the whole referendum issue to be transferred to the Electoral Commission at this stage, and then, from there to the new agency after October 2010, in time for the referendum in 2011.

The public do not want their electoral systems to be fixed for the benefit of any one particular political interest. Since this Government has clearly expressed a preference for a particular system—that is, the first-past-the-post system, supplementary-member representation—the issue is now tainted in the minds of the public. So it is important that the Government takes its hands off, because we must ensure that the questions that are put to the public on the electoral system are such that they believe that decisions are being made in their best interests, and not in the best interests of particular political players, particularly of the Government, which has the most power in these circumstances.

We support the bill, as far as it goes. We will continue to argue for a truly independent agency through an Office of Parliament. We look forward to the submissions on that issue, and to the continuing discussion that the country is having around the nature of elections, election finance, electoral donations, and electoral agencies. It is a very important discussion for the public to be having, and we hope that it will be managed in a careful and independent way, where political interests, such as those of the National Government, are not promoted. Thank you.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe, Mr Deputy Speaker. Kia ora anō tātou katoa. Parliament is one of the very few structures in our society that is inhabited by people who truly believe that elections, in and of themselves, make a crucial differences in our lives. I am reminded of a comment made by a person by the name of James Freeman Clarke. He said: “A politician thinks of the next election. A statesman, of the next generation.” The Māori Party supports the latter school of thought—that the future of our people can be greatly improved by the opportunity we can provide for them to participate in our democracy.

We come to this Electoral (Administration) Amendment Bill and we consider how the various legislative amendments to be introduced will impact positively on the future prospects of New Zealanders. We absolutely welcome the move to get the electoral shop in order, to reduce the duplication of functions, and to get rid of the confusion regarding costs and complexities for political parties, candidates, and the general public. We do so for reasons that come from very recent history. Administrative issues arose on election day in 2005 for voters on the Māori roll. Those issues arose in 2008, as well. The issues included an insufficient number of Māori roll voting papers and a lack of Māori roll data at some polling booths. Both issues would have been extremely easy to rectify, yet a lack of information had the immediate and adverse impact of compromising the rights of individual Māori to vote.

In the inquiry into the 2005 elections, the Justice and Electoral Committee drew attention to the issues raised by the Māori Party. The select committee concluded that, although the problems outlined were isolated, they should have been avoided. We tabled three major issues with the committee. Firstly, there was a lack of, or an inadequate supply of, ballot papers. In the Te Tai Tokerau electorate, voting papers ran out in several polling places by mid-afternoon on polling day. In the Tāmaki Makaurau electorate, voting papers were not available in some polling places in the South Auckland area until about 10.30 or 11 a.m. I recall that one of the worst-affected areas in the north had a problem as a result of a large influx of people being in the area to attend a tangihanga. Those people had every right to be able to register their vote, yet many were turned away due to the lack of papers. They chose not to return and take up their voting entitlement, because of the lengthy delays experienced in waiting for the new ballot papers to become available.

The second issue was to do with reports that Māori electoral rolls were unavailable in some polling places in the Manurewa area in the Tāmaki Makaurau electorate until midway through the morning. That is another issue that needs some attention. The third issue was that electorate votes were disallowed because incorrect voting papers were issued. In some cases, the electorate vote was disallowed and only the party vote was counted. In addition to these issues, concerns were raised about others such as the incorrect pronunciation of Māori names by issuing officers in polling places and reported incidents of voters being confused about whether they were on the Māori roll or the general roll. It is well known that those administrative errors were not large enough to have an impact on the voting outcomes. In Tāmaki Makaurau and Te Tai Tokerau, Dr Pita Sharples and Hone Harawira achieved resounding victories despite the problems with the paperwork, but the issues give a particular edge to the need for the Government to review its organisation and resourcing of polling places.

We believe that all polling places must have sufficient supplies and trained staff to cope with the demands that they may face on polling day, and this is of particular importance for voters on the Māori roll. In thinking of the bigger picture, outside that one election day in 2005, we are concerned that the democratic entitlement of some Māori constituents was compromised and, therefore, future voting practices may be affected. We believe that the overhaul of both the Electoral Act 1993 and the electoral administrative regime is both timely and in the long-term interests of the nation. It is also in line with our policy position, which supports the call for a single administrative body for elections. Reviews have indicated there a need for the creation of a single administrative body for elections and the benefits that would come from having such a body. As the House has already heard, the responsibility for electoral administration is currently split between the Chief Electoral Officer, who works under the Ministry of Justice, the Electoral Commission, which is an independent Crown entity, and the Chief Registrar of Electors, who works through the enrolment centre, a business unit of New Zealand Post Ltd. Although the distinctions between the roles are clear, the overriding public perception is that this is an overly complex and complicated way of allowing the voting process to take place.

This proposal, which is intended to provide a better service to voters, candidates, and parties, is an idea that has been some years in the making. In 2001 the Election Framework Taskforce conducted a comprehensive review of the electoral agency arrangements and recommended that a single electoral agency be given overarching responsibility for electoral administration, along with mandated statutory independence. Therefore, we are extremely supportive of the intention to amend the Electoral Act 1993 and the Crown Entities Act 2004 in order to create a new, independent Crown entity and Electoral Commission. We are interested in how we can ensure that long-term outcomes will be achieved through the efficient operations of the electoral administration functions of the Chief Electoral Officer and the current Electoral Commission.

I will share with the House a particular matter of relevance, not just for the Māori Party but, more broadly, for the representation of Māori throughout this nation. In structural terms, the bill merges the Chief Electoral Office and the current Electoral Commission, with a projected cost saving to the Government of 3.19 percent expected from the bill. This is all very positive and we welcome the views of the public through the select committee process. However, we do not want the review to focus on the administration and structures of our political system without considering a far more comprehensive look into electoral law. Any reform of electoral law should be preceded by consultation with the public.

For the Māori Party, the focus is on increasing Māori electoral participation, including a review of the Māori electoral option and, in particular, timing constraints. We believe that electoral representation in a democracy not only is a basic human right but also enables our nation to move forward together. Some of the issues that we consider to be useful for public feedback are particularly located around the issue of Māori electoral participation. We would be interested in the views of New Zealanders about the decisions to be identified on either the general roll or the Māori roll. We believe that all New Zealanders should be automatically entered on to the general roll at 18 years of age, or, if Māori, entered on to the Māori roll with the option to transfer to the general roll. We are interested in the views of whānau, hapū, and iwi on whether electoral rolls should also identify constituents on the basis of iwi and hapū. Such a process could assist tribal development, planning, and the maintenance of identity.

We welcome the feedback of Māori as to whether the Government should also extend the provision in the census for people to identify tribally to electoral roll, where tribal affiliations are also stated. Finally, but not insignificantly, we will be interested in the feedback about a proposal to amend section 45 of the Electoral Act in order for it to be consistent with section 35 of that Act, meaning that no Māori electoral district shall be situated partially in the North Island and partially in the South Island. This has particular relevance for my colleague Rahui Katene as it will mean in effect that the voters on the Māori roll would be treated equally with voters on the general roll, in that voters living in the South Island would not need to be merged with voters living in the North Island.

Those are just a few of the issues that we look forward to hearing from the public on during the select committee process. We recognise that a move to a single body will be an enormous task, and it will not be easily achieved without the risk of some disruption to elections. We also acknowledge the high quality of the advice from the officials and the outcomes that have been evident in the current arrangements. As we move our eyes to the next generation, we say that it is about time to review the current system. Therefore, we support this bill at its very first reading.

SIMON BRIDGES (National—Tauranga): It is good to take a call on the Electoral (Administration) Amendment Bill. This legislation amends the Electoral Act 1993, which is a constitutional statute in our country.

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

SIMON BRIDGES: As I was just saying, it is good to rise to take a call on the Electoral (Administration) Amendment Bill. I was warming to the theme that this Government legislation is in keeping with a theme of the National-led Government of removing waste, duplication, complexity, unnecessary cost, and confusion. We are moving from a multiplicity of electoral agencies to a single one. That is very important.

I come back to confusion, because we can well imagine situations where it would be easy to be confused with a number of bodies—

Hon Gerry Brownlee: Yes, of course. Sometimes if your name’s Rick you might call yourself Phil.

SIMON BRIDGES: Exactly. It would be easy to be confused when there are a number of bodies. Look at the Labour Party and its situation. I think Labour members found it very confusing as to whom to go to, and whether to use genuine or made-up names. Here we are narrowing those electoral bodies down into one body, so it will not be so confusing. I know others might have rather more unparliamentary ways of describing what the Labour Party did, but I think it was just general unabashed confusion by the Labour Party. It did not know what to do. [Interruption] Exactly. Labour members were not really sure whether they should use real names or fake ones. We are doing away with some of the confusion. Of course, the Labour Party will still find other things to be confused about.

As I said, by going from a number of agencies to one we are doing a good thing. We are removing waste, duplication, complexity, unnecessary cost, and confusion. We are providing consistency and efficiency so that Darren Hughes, Rick Barker, and other Labour members will know where to go to get their answers on these significant issues.

Hon Nathan Guy: Darren might have been Rick, and Rick might have been Darren.

SIMON BRIDGES: Exactly. This bill reduces several bodies to a single agency. That is a recommendation that has been made a number of times by the royal commission and the Election Framework Taskforce. There are a lot of flaws in the current system that we are doing something about. In its first reading, I commend this bill to the House.

CHARLES CHAUVEL (Labour): What a pleasure it is to rise to speak—

Simon Bridges: A pleasure to hear you.

CHARLES CHAUVEL: Thank you. It is indeed a pleasure to speak on the Electoral (Administration) Amendment Bill.

Paul Quinn: Charles Bronson!

CHARLES CHAUVEL: It is nice to have the customary acclaim from the Government on this matter.

An electoral management body takes various forms around the world. It is the body charged in a nation with administering the electoral process. These bodies typically take one of four forms. They can be independent, mixed, judicial, or governmental, and it often happens that they carry out different functions depending on what model is adopted. Obviously, in federated states there may be bodies that serve the federal jurisdiction and the states or provinces as well. In jurisdictions where there are very large cities, like New York City in the United States with its population of 8.2 million, or Los Angeles County with just under 10 million, there are municipalities that have very specialised bodies to perform their electoral administration. As we have just mentioned the New York example, it is interesting to note in passing that apparently the body that supervises New York City’s administration of elections is a real model when it comes to looking at the adoption of new technology like the Internet, and at continuous disclosure requirements and obligations—for example, donations.

Hon Maurice Williamson: The Internet’s nearly outdated.

CHARLES CHAUVEL: Mr Williamson tells us that the Internet is nearly outdated; no doubt he will reveal what will come next. I look forward to saying “Gee, Maurice, do you remember the Internet?”.

Let us consider the various models that could be adopted for an electoral management body. We have the mixed model, where perhaps we might have an independent board for determining the policy to apply to elections, but where implementation of that policy can be a matter for the executive, with varying degrees of supervision by the independent board. If we are looking for democracies that operate that model and that have some relevance to New Zealand, we might look to France, Spain, or Germany, or, if we wanted to look to our own Asia-Pacific region, to Japan, which also operates that model. Other Commonwealth countries include Jamaica.

Then we have the possibility of the straight-out Government model, where we have the Minister or Secretary of State operating within the executive, and where, directed by a Cabinet Minister, the department itself conducts the election. That is the sort of model that has been adopted in countries like the United States, Denmark, Singapore, Sweden, and Switzerland, and in some other jurisdictions around the world.

Then we have the possibility of a judicial model. This model is very much the vogue in Latin American countries. Because of the time at which they developed their constitutions, those countries thought that the way to go was to have elections closely supervised by, and ultimately responsible to, an electoral court. Countries that operate that model include Argentina, Brazil, and Mexico.

We also have the independent model. Typically under this model we have an electoral commission that is autonomous and independent of the executive, and that has and manages its own budget. Interestingly, this is the model that is operated in the jurisdiction with which we most like to compare ourselves—Australia. It is also the model in Canada—federally—in India, and in South Africa. From the point of view of our region, it is again interesting that this model is used in Timor-Leste, as well, a new country with a new constitution. The South African constitution has made permanent provision for this independent model, because the South Africans, on independence, decided that it was important constitutionally to do so.

The New Zealand model is the classic mixed model, but it is a bit of a mishmash. It contains five different bodies. There is the Chief Electoral Officer, who happens to be a senior employee of the Ministry of Justice but who is autonomous as far as the electoral function is concerned. That person is responsible for the conduct of general elections, by-elections, and referenda. He or she employs returning officers for the 70 electorates, receives donations and election expenses from parliamentary candidates, and provides information on electoral events to voters, candidates, and parties. That is one of the five bodies that are currently charged with our electoral administration in New Zealand.

Then we have the Electoral Commission. An independent Crown entity, the commission has four functions. It has to register political parties, allocate broadcasting funding, supervise financial declarations, and conduct public education. That is the second body. The commission is fairly independent of the executive. It must be headed by a retired judge, and the executive does not get an enormous amount of choice as to which retired judge is to be appointed. Generally speaking, the nomination tends to be that of the Chief Justice, and the Minister of Justice chooses from a relatively narrow range of people who can chair that body.

The third body that has a role in our system at the moment, funnily enough, is the chief executive of a State-owned enterprise, New Zealand Post. That person is responsible, via the Electoral Enrolment Centre, to maintain the electoral rolls and to conduct the Māori electoral option. When one drills down into that, one sees that a chief executive of a State-owned company is conducting this function, by contract with the Ministry of Justice, as one of the outputs that the Minister requires of the ministry. It is a very convoluted arrangement.

Those are the three bodies that are mentioned in the explanatory note of the bill, but at least two other bodies have a role in the system. The Representation Commission draws the boundaries. Often in overseas regimes the Representation Commission is included within the structures that are required to organise and conduct elections. There is also the police, and I will speak a little bit about their function, because the police are the enforcement body as far as our electoral law is concerned.

Although Labour supports this bill being read a first time, we believe that the bill does not address the issue of the enforcement machinery when there is a breach of electoral law. I suggest that that might be something the select committee looks at. The problem that the police always have, of course, is that electoral offences never go to the top of the queue. The police will always be concerned with crimes against the person, and with dealing particularly with violent crime. They will never be able to prioritise electoral matters, nor will they necessarily have the forensic expertise to do so. These days those questions require skills in dealing with tracking donations and financial disclosures, and so on, which call for quite sophisticated levels of skill that are probably more properly found in organisations like the Serious Fraud Office rather than the police. It might well be that with the forensic skills that are required, it would be useful to think about having an enforcement function under this new independent Crown entity rather than the police being responsible for that function, if we are truly interested in bringing all the functions together in an expert body that has the resources and the time to deal with the questions before it.

The final point I make is that if one has a look at the explanatory note, one sees that one of the options canvassed was to have an Officer of Parliament for this function. Personally, I think that would have been the most compelling option to go for. The explanatory note suggests there was not enough time to get that sort of apparatus going before the next election. But if we really want a truly independent body, charged with the conduct of elections in an honest and serious way, then, given the conduct of our other Officers of Parliament, in whom we have enormous faith, then that seems to me to be the best way to go.

PAUL QUINN (National): I followed the exegesis of the previous speaker, Charles Chauvel, and all it demonstrated was that he was able to read his Political Science 101 notes to explain this bill.

The simple fact is that the Electoral (Administration) Amendment Bill is very simple. It brings order to chaos. It combines two bodies—administration is currently undertaken by the Chief Electoral Officer and the Electoral Commission—and enables them to bring the transparency and honesty that members have spoken of on both sides of the House. On this side of the House, we strongly recommend it to members and to this Parliament.

LYNNE PILLAY (Labour): I am surprised that Paul Quinn took such a short call. I nearly was not ready to take my call.

Chris Hipkins: It was all he was capable of!

LYNNE PILLAY: I find that Paul Quinn usually has quite a bit to say, so it was a bit disappointing that he took such a short call.

In opening, I want to recognise and talk about what Lianne Dalziel referred to in her speech, and that is the diversity of our Parliament. A decade ago—it was even more so two decades ago—our communities were not reflected in Parliament. It is fair to say that Parliament is now far more representative of the diverse communities we have in New Zealand—although I have to acknowledge that some of those members are not sitting on our side of the House.

It is also important to acknowledge our democracy. Many MPs in this House have assisted in elections—I do not know whether Gerry Brownlee has—in a number of other countries where democracy is not so open, accessible, or safe.

Hon Gerry Brownlee: I’ve never been one for a junket.

LYNNE PILLAY: I find that to be a very flippant remark. That member should be ashamed of himself. That was a very flippant thing to say.

In New Zealand we have the ability for all New Zealanders to freely engage in elections without fear of retribution and without fear for one’s life. We can all recall—Mr Brownlee might be flippant about it, but this side of the House certainly is not—that it was empowering and wonderful to see the indigenous people of South Africa attain their right to vote. Many voters walked tens of kilometres in order to celebrate having that right. That is something that we in New Zealand hold dear, and it is something we should celebrate.

When I attend a citizenship ceremony, I know that many new citizens from other countries find it very empowering. One of the first things they say to me as new citizens or as permanent residents is that it is great to have the right to vote. It is indeed the right of all permanent residents, as long as they have lived here for the right amount of time, to vote in New Zealand, and it saddens me when people do not use that right. When we are out and about in communities we find many people who say they did not participate in the previous election. They did not participate—and indeed they are not happy with the outcome.

I want to speak about some of the new initiatives, and I will acknowledge some of the agencies in terms of the 2009 New Zealand Effective Advertising Award. I have the document here to show to members of the House. Most members probably received it only a day or two ago. It tells us about the award for excellent advertising throughout New Zealand—obviously before the “plain English”, airbrushed Bill English advertisement came on. This document covers 2009. Members opposite are probably thinking about what this has to do—

Simon Bridges: We are.

LYNNE PILLAY: I dare say that the Assistant Speaker is as well. Let me enlighten members.

I note that that the electoral enrolment campaign attained a silver award for the campaign about easy voting. We all remember the little orange man on our television screens. He encouraged people to vote, and showed people the easy ways to vote. That campaign won an award. I congratulate the Electoral Enrolment Centre, because it owned that campaign in terms of making sure that those advertisements were on air. I hasten to add—and I know that Paul Quinn will find this extraordinary—that it achieved a higher award and was on a par with a number of others, such as the Saatchi and Saatchi “Irresistible to Men since 1889” campaign, which related to the DB Breweries advertisement with the women and the blokes and all that sort of thing. That is more in Paul Quinn’s line.

Paul Quinn: Commonly known as the Tui ad.

LYNNE PILLAY: No, it was not known as the Tui ad; it was the DB ad. But I want to say that promoting a very serious subject to attain a silver award is quite an achievement, so I say “Well done!” to the Electoral Enrolment Centre.

I return to the purpose of the bill, and in doing so I recognised the Electoral Enrolment Centre. The bill is about establishing a new, independent Crown entity. I congratulate the Government, because this was, as David Parker said earlier in the House today, done in consultation with the Labour Party, and, indeed, with other parties in the House—I would hope—to ensure a smooth transition. I will talk Justice and Electoral Committee, which will be chaired by Chester Borrows, later in my speech.

I know that the three agencies—the Chief Electoral Officer, the Electoral Commission, and the Chief Registrar of Electors—came to the Justice and Electoral Committee before the last election and talked about a process to amalgamate the three agencies, so that a far more user-friendly service would be delivered and so that issues could be worked through. As, I think, Lianne Dalziel said, we do not often get the opportunity to do this. I congratulate the Government on this bill, because it does do that and it does so in quite a sensible way by doing it in two stages.

When the amalgamation of these three agencies has been looked at, we have seen that there is some complexity around it. It is really important to do it in such a way that it does not disrupt democracy and so that at the end of the process we have a transparent, effective, independent agency.

I note that the new body will be called the Electoral Commission again, and that could create a little bit of confusion, but we can look at that in the Justice and Electoral Committee, and I dare say there will be some submissions on that. Bringing together two of the agencies in the first year will bring some stability in the first instance. Then, the following year, the third agency can be brought in.

We again need to stress that the new agency will be independent. As I said before, democracy is something we all celebrate in this country. It is something that is a right, but, indeed, if we compare ourselves with other countries not too far away we see that it is also a privilege that many, many citizens in other countries do not enjoy. Democracy is something we should all hold dear.

I am very happy—and we are often not as happy as this in Opposition—to support this bill. I look forward to it coming to the Justice and Electoral Committee, where I know we will have excellent submissions on it. I know that we will devote appropriate time to considering the bill very carefully, and we will return some very good recommendations to this House. Thank you very much.

KANWALJIT SINGH BAKSHI (National): Lynne Pillay was just talking about diversity in this Parliament. I am proud to be a member of the National Party, which has brought diversity to Parliament. As the first member from the ethnic community, Pansy Wong came to Parliament through the National Party. The Hon Pansy Wong was the first ethnic Cabinet Minister as Minister for Ethnic Affairs, a position given to her by National. So diversity came through the National Party. Labour is always talking about it, but it did nothing about it.

I stand to support the Electoral (Administration) Amendment Bill in its first reading. This bill will establish a new independent Crown entity to manage the electoral system, and will provide the best balance of high independence with good accountability and the ability to administer electoral functions to high standards. In 1986 the report from the Royal Commission on the Electoral System recommended that Parliament’s electoral administration be merged into a single independent Crown entity. They found that the current multi-agency structure did not provide the best service to the stakeholders or a sound platform for future development. The bill also provides for the new Electoral Commission to carry out the functions of the current Chief Electoral Office and Electoral Commission. Under this legislation, the new Electoral Commission will come into existence on 1 October 2010. I commend this bill to the House. Thank you.

Bill read a first time.

Bill referred to the Justice and Electoral Committee.

Urgency

Urgency

Hon GERRY BROWNLEE (Leader of the House): I move, That urgency be accorded the passing through their remaining stages of the Criminal Investigations (Bodily Samples) Amendment Bill, the Gangs and Organised Crimes Bill, the Whakarewarewa and Roto-a-Tamaheke Vesting Bill, and any bills into which any of those bills may be divided; the introduction and first reading of the Dairy Industry Restructuring (Raw Milk Pricing Methods) Amendment Bill; the second reading of the Settlement Systems, Futures, and Emissions Units Bill; the second reading of the Biosecurity Amendment Bill; and the introduction and first reading of Government bills.

Mr DEPUTY SPEAKER: You mentioned the second reading of the Settlement Systems, Futures, and Emissions Units Bill; what about the Committee of the whole House?

Hon GERRY BROWNLEE: No. The second reading of the Settlement Systems, Futures, and Emissions Units Bill, and the second reading of the Biosecurity Amendment Bill—those were the two points I made there.

The Government is taking the opportunity to gain some extra hours to work on its business. It is largely driven by the fact that tomorrow should be a members’ day, but those in the House will remember that a few weeks ago we had a members’ day that concluded very, very early. That was largely because a number of bills had been postponed. When we look at the Order Paper and at the business to be carried out, we see that it is all time-weighted, so the postponement of bills means that the House finishes somewhat earlier. At the moment, there are no fewer than six postponed bills on the members’ part of the Order Paper. So we are in a bit of dire situation, in my opinion. Members have the opportunity to debate their own bills on a particular day, but members’ own actions are preventing that course of action from taking place. So the Government is happy to step in and fill the void.

To formalise that, I say that urgency is being moved in order to gain extra sitting hours so as to enable a range of Government business to be dealt with by the House before rising for a short adjournment.

Hon DARREN HUGHES (Senior Whip—Labour): I raise a point of order, Mr Speaker. The Leader of the House had previously signalled the bills that were going to be part of his motion, but I notice he said the first readings of any other Government bills that were introduced. I wonder whether he could give the House an explanation of that before we move to the vote.

Hon GERRY BROWNLEE (Leader of the House): That is there as a standard precaution. It goes on the end of most urgency motions. I think the member is well aware of what the Government’s intentions are, and I would hope that the member understood that when the Government’s intentions have been previously signalled—

Mr DEPUTY SPEAKER: I am happy with that understanding.

JEANETTE FITZSIMONS (Green): I raise a point of order, Mr Speaker. I wonder whether the Leader of the House could assure the House that the Government has enough business to keep us going through urgency, and that it will not do as it did on the previous occasion and raise the House at 8.05 p.m., when we had thought we were here till midnight.

Mr DEPUTY SPEAKER: This is not a debating point.

Jeanette Fitzsimons: It is a question.

Mr DEPUTY SPEAKER: It is a question. Well, I will ask the Hon Gerry Brownlee to respond to the member.

Hon GERRY BROWNLEE (Leader of the House): I think that really does indicate the dilemma that the Government has. The Government has no desire to have people cooped up in Parliament for all hours, debating a range of bills that, although we certainly want them to be sped through the House, ordinarily might not meet the criteria that the Government itself chooses to set down. However, last week we picked up an extra 4 hours on the Wednesday morning. Although the House did rise around 8 p.m., which facilitated a number of members of this House attending various important functions that they were obliged to attend, might I say that had we had members’ day we would not have had those 4 hours in the morning but we would likely still have lifted at around 5.55 p.m. on that particular Wednesday. All we are saying is that if members themselves wish to organise the Order Paper in a way that means that the House will not take advantage of the time set aside for members’ day, then the Government will fill the void.

A party vote was called for on the question, That urgency be accorded.

Ayes 69

New Zealand National 58; ACT New Zealand 5; Māori Party 5; United Future 1.

Noes 53

New Zealand Labour 43; Green Party 9; Progressive 1.

Motion agreed to.

Business of the House

Business of the House

Hon GERRY BROWNLEE (Leader of the House): I seek leave for there to be a question time at 2 p.m. on Wednesday, 28 October, and for questions to be lodged in the normal manner pursuant to Standing Order 372.

Mr DEPUTY SPEAKER: Is there any objection to that course of action being followed? There is none. Before I ask the Clerk of the House to read out the next Government order of the day, I require the assistance of a Temporary Speaker. I have asked the Hon Darren Hughes to fill that role.

Hon GERRY BROWNLEE (Leader of the House): I raise a point of order, Mr Speaker. I was wondering whether, in the brief interregnum that you are in the Chair, Mr Temporary Speaker, there was any particular ruling you would require us to require of you in order for you to be recorded in Hansard as having made a ruling. Regardless of what that ruling might be, I think we would be prepared to support you in that. I suppose—

The TEMPORARY SPEAKER (Hon DARREN HUGHES): I ask the honourable Minister to resume his seat. That is not a point of order. If he continues to trifle with the Chair, there will be serious consequences for him.

Bills

Criminal Investigations (Bodily Samples) Amendment Bill

In Committee

Debate resumed from 15 October.

Part 2 Extension of authority to take and retain bodily samples

Hon NATHAN GUY (Associate Minister of Justice): Part 2 implements the second stage of the Criminal Investigations (Bodily Samples) Amendment Bill by extending the provisions in Part 1 that apply to those adults suspected of committing a relevant offence to those suspected of committing any imprisonable offence. This part also makes the District Court the court to which applications under the Criminal Investigations (Bodily Samples) Act are made, rather than the High Court, and provides for a mandatory retention period of 10 years for DNA profiles from adults who are convicted for imprisonable offences that are not relevant offences. This staged approach is to allow police the time to develop guidelines and train staff, and will also assist the Institute of Environmental Science and Research to cater for the increased workload.

As a result of the Justice and Electoral Committee’s input, Part 2 of the bill has undergone three notable changes. I would like to make some comments on those. The first is that the range of offences for which it is possible to collect DNA from a young person will not be expanded to include all imprisonable offences, as for adults. As it applies to young people, the new power will be available only where the young person is suspected of a relevant offence to ensure that only the most serious young offenders are subject to the new power.

Secondly, the select committee made a number of important amendments throughout Part 2, one of which was to include the relevant offences listed in the schedule of the Act. For example, peeping or peering is a relevant offence in the schedule but it does not carry a sentence of imprisonment. As originally drafted, this meant that DNA samples could not have been collected from persons suspected of committing that offence under Part 2, but could under the first phase.

The third point I wish to make is that a new definition of “District Court” has been inserted to clarify that when judicial functions are transferred to the District Court, they can equally be exercised by the Youth Court in cases where it has jurisdiction.

In respect of Mr Chauvel’s amendment to require a review of the provisions in 5 years’ time, members will be aware that, as expressed in the explanatory note of the bill, the Ministry of Justice will review the entire Act by August 2011. That review will look at the broader operation of the Act and will include how the provisions are operating and whether they should be amended. That review will be completed before the second stage of the bill is implemented.

CHARLES CHAUVEL (Labour): In the Committee stage on Part 1 of the Criminal Investigations (Bodily Samples) Amendment Bill, the Government used its majority to vote down an amendment in my name that required a warrant to be obtained prior to the exercise of the novel powers that Parliament intends to give to the State through this bill. Now, under urgency, we are debating Part 2 of this bill in Committee, and I think it pays for Parliament to think about the novel power that we propose to confer through this legislation: to “allow the Police to collect, without prior judicial approval, a bodily sample from any person whom they ‘intend to charge’ with certain specified offences.”, which is later to be expanded to “allow the Police to collect a bodily sample from any person whom they intended to charge with an imprisonable offence.”

As the Minister in the chair, the Associate Minister of Justice, the Hon Nathan Guy, correctly recorded, I have put forward another amendment, which is designed to require a select committee of this Parliament to conduct after 5 years a review of the operation of the new power that we intend to give to the State. Given that we are now sitting in urgency—and given the Committee’s decision to reject the requirement for a warrant the last time this bill was discussed, when we were debating Part 1—I suggest that the review is even more important. A power of literal, physical compulsion will be conferred under urgency with no judicial supervision whatsoever intended. The Associate Minister said that the ministry would conduct a review of the operation of the legislation by August 2011. But, of course, that review is intended to satisfy the State that it can move satisfactorily to Part 2 of the bill, which extends the powers contained in the legislation from the specified offences it deals with to all imprisonable offences. This is a very different sort of review to the one my amendment proposes. I suggest that this Parliament takes a long, hard look at whether it has, overall, been a good idea to extend the powers of the State, without judicial supervision, under urgency in this way. I submit that a select committee would be well suited to report back to the Parliament after hearing all the evidence. It would not be in an election year—as August 2011 is, which is the deadline for the ministry’s review—but after 5 years of operation when we have a track record, when the police and their actions can be looked at in an objective fashion, and when we can properly work out whether this legislation has made the contribution that we all think it will to overall law and order.

I hope that the Associate Minister will take another call at some point during the debate, and that there will be a reconsideration of what appears to be the Government’s initial decision to reject the idea of a more independent review, given that the State intends to take a very new power to itself. The State is proposing that an organ of the Crown will review the exercise of that power after a very short period of time—in an election year—for the purpose deciding whether that power should be extended. My proposed review is an entirely different beast: it seeks to consider the exercise of the new powers in the round to help us decide whether we have made a wise choice in extending the powers of the State the way that the bill is intended to do, without judicial supervision. I have to say that if Parliament thinks about this carefully, it will determine that the review that is set out in my amendment is a much better mechanism than the substitute offered by the Minister.

MOANA MACKEY (Labour): I am happy to stand in the Committee stage to speak on Part 2 of the Criminal Investigations (Bodily Samples) Amendment Bill and to perhaps seek some reassurance from the Minister in the chair, the Hon Nathan Guy, regarding this part. As he said in his brief words to the Committee of the whole House, this part of the bill dramatically extends the workload of the Institute of Environmental Science and Research. From the Opposition’s perspective, I think we would like some reassurance from the Minister that that will come with adequate funding. The bill gives the State far greater power in this respect than it has had before, and there is a real danger of a miscarriage of justice if these new powers are not backed up by adequate funding for the police and the Institute of Environmental Science and Research, which will be doing the data analysis.

I hope that the Minister for Research, Science and Technology, who I think is with us, although he does look tired, might take a call on adequate funding for the institute. We have to look beyond simply how much a DNA sample costs and multiplying it by a factor of how many more one expects to be doing. The kind of reassurance that we would like to see is that there will be adequate money for the extra reagents, for the extra equipment, for the extra work area the institute may need to carry out all these extra analyses, and for the extra staff. But, as I said in the second reading of this bill, one of the most important things is that we need to make sure that the administration of this bill is adequately funded. I know that the Government does not like bureaucrats. I know it does not like people who are not front-line staff, but the fact is that the chain of custody is just about the most important thing that one can have in a laboratory. If the institute is not adequately funded, we are in real danger of seeing a miscarriage of justice.

I would like to seek reassurance from the Minister in the chair that that will be adequately funded. I assume that he must have had those figures done. I cannot believe that the Government would pass legislation where it has not had advice from officials about what the fiscal impact will be and what the needs of the institute will be in terms of this extra funding. This is particularly so around the administration of samples—where the sample is collected by the police, where it is labelled appropriately, where it is sent to the Institute of Environmental Science and Research, where it is logged in, where from then on through the process the correct sample is logged next to the correct results. I do not need to tell the Committee that if that is not done properly—if the institute is put in a position where it is understaffed and under-resourced, and where it is having to do all this without adequate funding—then those extra powers suddenly become very dangerous. I am sure the Government has done this work. I would really appreciate the Minister taking a call to let us know what those fiscal costs to the Crown are, and giving us the reassurance that that money will be there.

My colleague Charles Chauvel talked earlier about a review period in the law. That review would have been incredibly important when one considers these extra powers. We need to make sure that the system is working right. If the Institute of Environmental Science and Research, or any other Crown agency, is not on track to be able to do this work properly, then it should not be put in the position of having to do the work. Frankly, the cost to the citizens of New Zealand of having an agency in the position of doing the work when it is not ready is too great to even contemplate. So I hope the Minister will take a call.

This is not an issue that I am trying to be trite about; this is an issue that I am genuinely concerned about, having worked for the Institute of Environmental Science and Research and knowing the kinds of pressures that Crown research institutes are under. To be fair, I say to the Minister that they now have to provide a 9 percent dividend to the Government, and that money will have to come from somewhere. I want to know that these extra powers that we are giving will be properly funded, so that we can avoid any kind of suggestion that there may be a miscarriage of justice.

I note that Labour put up amendments to Part 1 where we wanted people to be able to question the process, as well as the actual charge. That is important when one is doing this. I note that when we look at comments from forensics professors from the United Kingdom, we see that they said there is a real risk, when one moves down this path, of opening up the possibility of miscarriages of justice. That risk is from having so many more samples in a DNA databank. It is especially so if institutes are not funded properly, and if protections are not put in place for someone to challenge that process and the way that those Crown entities deal with those samples, not just the charges that are against them. I hope that the Minister will take a call on this, as it is a very, very serious issue.

The CHAIRPERSON (Lindsay Tisch): I call Chester Borrows.

Hon Trevor Mallard: Most popular chairperson in Parliament!

CHESTER BORROWS (National—Whanganui): Fair enough! It was interesting to hear the comments from the previous speaker, Moana Mackey. She will recall, from her time spent sitting on the Justice and Electoral Committee and hearing from the officials in respect of the recovery of DNA samples and the processing of them, that the costs were given to the committee. She will recall that they had been calculated on the basis of an expectation that the numbers coming through the system would build up over time, of the requirement to maintain the chain of evidence, and of the costs of collating and storing the information. Those costs were given. She also made a comment about the ability to challenge the charge, and the issue of the recovery of the DNA or the sample that had been given. Of course, the samples will not be profiled until a conviction has been entered. So it is not the case that every sample that is taken will move through the process.

But it is important not to lose sight of one particular thing, which is that of all the bills that have been passed through the House in recent years and that are anticipated to be passed in the near future, this Criminal Investigations (Bodily Samples) Amendment Bill is the one that will save more victims than anything else has saved or will save. This legislation will identify offenders very, very early in the piece, based on their early offending. The offences contained in the schedule are a number of precursor offences. We know that offending by way of home invasions and sexual offences—offences against the person—can be predicted by the sort of behaviour that is reflected in the offences that are listed in this bill. In the same way, we know that those people who go on to commit tragic offences against the person, whom we particularly want to be able to identify by DNA evidence—for instance, offenders like the “Parnell Panther”—start off their offending at a very low level, with offences against what we now call the Summary Offences Act. So having their DNA on record very early in the piece would identify them as soon as they left traceable bodily evidence at the scene of a crime or on a victim. They would be able to be caught a lot earlier than they are caught at present. They would not be able to go on to commit a hundred more home invasions or rapes before they were caught.

I go back to the point I made just a few seconds ago that this legislation has the ability to save more victims than any other legislation has. That is not a reason to give carte blanche to any infringement of people’s rights that the State may want to impose, but we have to look at what we are doing here. The ability to obtain a DNA sample through the use of a cheek swab is fairly simple and straightforward. There are issues raised by the process of maintaining the chain of evidence and doing a test on that sample, because the DNA test is much more extreme and requires more resources than, say, testing a blood sample. At the same time the Institute of Environmental Science and Research specialists have been doing that with blood alcohol samples for years and years. Their processes along the chain of evidence are simple and very streamlined. There is no reason why that will not apply here.

The evidence given at the select committee hearing by officials from the Institute of Environmental Science and Research and from the Ministry of Justice as to funding and resources was very plain. I am sure that given her understanding of what is involved here, the previous speaker, Moana Mackey, will know very well that there is no risk there.

Moana Mackey: I just want a guarantee from the Minister.

CHESTER BORROWS: She calls upon the Minister, so the Minister in the chair, the Hon Nathan Guy, can get to his feet and tell her exactly what she has already heard within the select committee. No doubt he is able to do that. However, Moana Mackey made her decision early in the piece that she was going to support this legislation because of what it will do. I commend her for that. I do not see any point in trampling over ground that she already knows very well.

CARMEL SEPULONI (Labour): I will talk a little bit about what Charles has been saying, and also Moana, with regard to extending the permission of the State without judicial evidence. One thing that has not come up as much across the duration of the debates and the discussion over this issue is the cultural implications of the Criminal Investigations (Bodily Samples) Amendment Bill. Labour is not opposed to DNA testing. In fact, Labour members were leaders with regard to the legislation around DNA testing in New Zealand. We have very much kept up with the technology that has taken place. We do support this bill, but we do have some reservations.

This, perhaps, is one of those reservations. It was a conversation that some colleagues and I were having about the cultural implications of this bill with regard to what DNA testing means for Māori, and for some Pacific groups, also. Even just now I was looking at one of the district health board websites and saw there that it encourages staff with Māori patients to give them back any hair, toenails, fingernails, or bodily tissues that had been collected from them, because of the fact that those items are seen as tapu.

One of the reservations that have come from Māori and Pasifika is the ownership over the information that is contained in our DNA. One thing that seems of concern is the fact that that information can be gathered from people when they have not been charged with any particular crime—when there is the intention to charge but the suspect has not been found guilty of any crime. It seems a worry, and it is something that will come up with those particular groups. Given that someone has not been found guilty of any crime, and that he or she has not necessarily done anything wrong, to have that information taken will be a concern to those particular groups because that information is seen as tapu. It is held in those parts of the body, whether it be in hair, fingernails, or even in parts of the skin that a sample has been gathered from. I do think it is something that needs to be mentioned. Some thought needs to be given to that, perhaps, because in this country we regard those cultures as being of importance, so we need to take into consideration their viewpoints on such things.

One of the things that Moana has also made very clear is the fact that DNA testing is not foolproof. A concern that she has put out there, as a scientist and as someone who has a background in this—in fact, I think she is the only person in the Chamber who has a background on this subject—is that DNA testing has been held up very high and is perceived by many as being foolproof. But the concern arises where jurors and others may look at DNA tests and decide that that evidence is it. That is what it proves, therefore that must be 100 percent the truth. Scientists have said, and Moana has said—

The CHAIRPERSON (Lindsay Tisch): The member must use full names, not members’ first names. That is the third time, so I ask the member just to remember that.

CARMEL SEPULONI: I apologise, Mr Chairperson, and I apologise to Moana Mackey. Moana Mackey has said that no scientist would say that DNA testing is foolproof. I think that is something that we need to take into consideration when we look at this bill, because we do not want to put out the impression that DNA testing is 100-percent fact, and that jurors can take this information and believe that it is all the evidence that they need.

Moana Mackey also raised the fact—and this is something that has come up in the US and in other places—that there are more and more cases of people planting evidence with regard to DNA, so getting other people charged with crimes and convicted of crimes when in fact the evidence was planted. That is something we need to be very cautious of as we go down the road of putting out DNA testing as the test. We have to make sure that we do not put it out to be foolproof.

Before I end, I want to talk about the evidence involved and how much the cost will be. That is something that keeps coming up with regard to this bill. It does not seem that the Government has looked into how much it will cost with regard to storing the DNA and collecting the DNA. We have a Government that says that money and resourcing is everything at the moment, and that it needs to be very tight on the money that it spends.

KELVIN DAVIS (Labour): I agree with what my colleague Carmel Sepuloni has outlined in terms of cultural safety in the Criminal Investigations (Bodily Samples) Amendment Bill. It is really important, I think, that people understand the Māori perspective on the collection of bodily samples. I make it clear that I support legislation that makes it easier for us to identify and apprehend offenders. I think that DNA is the new fingerprint and it will be very useful in apprehending offenders. But I think we need to be mindful of the cultural side of things.

I will use three examples from my own background to illustrate how Māori feel about bodily samples. Some people may think that I am being a bit silly about it, but I tell them that those beliefs are very real to Māori. The first one is a very simple example. At our family homestead in the sleepy hollow of Taumārere there is a plum tree that produces the greatest plums, but nobody is allowed to eat them. The reason is that, traditionally, that is where my grandfather, great-grandfather, and all my great-great-uncles had their hair cut, and the hair would be buried under that plum tree. Hair is treated as tapu, as Carmel Sepuloni said. It was buried under that plum tree, so nobody was allowed to go near the plum tree or touch the plums.

Another example is the cutting of fingernails or any other sort of—what is the word?

Hon Darren Hughes: Bodily functions.

KELVIN DAVIS: —intimate articles that belong to a person. It does not have to be only bodily samples; it could be someone’s possessions that are intimate or close to that person. If somebody was able to get hold of them, they could do some sort of harm to the person. In Māori terms we would call that a mākutu. We are always mindful that when we cut our hair or fingernails, we never just dispose of them where people can get hold of them, in case they get hold of them and create some harm for us. That is the basis for why Māori are particularly concerned about what happens to bodily samples such as DNA.

To make it clear, I believe that if someone is guilty and he or she has DNA or bodily samples taken from him or her, then, quite frankly, I am quite glad that that is happening, and I am not precious about it, at all. We have to make sure that New Zealand is a safe place. We need to be able to identify and apprehend offenders. But we need to be cognisant of the cultural aspect of taking body parts or body samples from people—Māori and Pacific Islanders in particular.

Another example I would like to give occurred earlier this year. About 6 weeks ago, a baby passed away and an autopsy was held. The samples taken from the organs were very small—about the size of a fingernail—yet they were not returned in a culturally appropriate way to the family, and it caused a lot of angst. The coroner had a heck of a lot of explaining to do. The coroner, being Māori, had spent a lot of time and effort trying to make sure that the processes that the Coronial Services went through were culturally sensitive. However, they were let down at this time, and a lot of rebuilding had to be done.

Those are just small examples of how, when we take bodily samples from people, we have to treat those samples in a culturally sensitive way. But I express my belief that this bill will be good for New Zealand. It will help to apprehend offenders and identify them, and that is good for New Zealand. Labour supports this bill, but it is really important that the Māori perspective—the Māori aspect—is taken into account.

STUART NASH (Labour): I rise to take a call in support of the Criminal Investigations (Bodily Samples) Amendment Bill. Labour supports this bill for a number of reasons, but the main reason is that the people who elected us have a reasonable level of expectation around the support we will give to victims. I believe that this bill does that. First and foremost, the main expectation of a person going to trial is that the case will be wound up as soon as possible. Any early resolution to a case, or anything that helps to achieve an early resolution, has to be good for victims’ rights and for society in general. A classic case would be this: we all know the dreadful statistics around the number of women who come forward after they have been sexually violated, abused, and raped. The number is incredibly low. The trials are incredibly traumatic, for a whole lot of reasons. Often what happens is that it appears as though the woman herself is on trial, and the perpetrator of the crime gets off the charge or sits there while the woman’s history is denigrated. I think that this bill will help in achieving a speedy resolution to a lot of those trials. But I also hope it will ensure that a lot more women who have been victims of sexual crimes will come forward in the knowledge that DNA samples will help to achieve a speedy resolution to any trial. I hope this will encourage women to come forward.

Clauses 31 to 46 in Part 2 of the bill as introduced extend the authority to obtain a DNA sample from suspected persons. Primarily these clauses would permit a sample to be taken from a person suspected of committing an imprisonable offence and allow a compulsion order application to be made to the District Court to allow a sample to be taken from a person suspected of committing an imprisonable offence who had refused to consent to the taking of a bodily sample. As we know, there are fundamental human rights issues around this. The Human Rights Commission has expressed concerns that the proposed changes may go a little too far. The bill allows the police to take DNA from anyone charged with an imprisonable offence, whereas the current law has a much higher threshold—for example, for serious offences punishable by more than 7 years in prison.

The Human Rights Commissioner stated: “The bill infringes the right to freedom from unreasonable search and seizure, but also creates the possibility of discrimination on the grounds of race, family status, and impacts disproportionately on youth.” Perhaps, but I would also argue that the rights of the victim and the rights of society in general have to be weighed up against individual rights. I think it is time that people started taking individual responsibility for their actions. If they have done nothing wrong, they have nothing whatsoever to fear from this. However, if they have committed a crime or if they do have something to fear, then they have to take responsibility for that, and they will be caught.

This bill sends a very strong message to the criminal classes of New Zealand that this Parliament will not tolerate the level of crime that we are beginning to see these days. It is simply not acceptable. Labour demands that people start taking individual responsibility for their actions, and I think this is what this bill does. The Privacy Commissioner has expressed concerns that the changes proposed jeopardise the value of the existing criminal DNA databank in detecting and preventing crime, by undermining public trust in the police and the Government. I would argue quite the opposite. If the people of New Zealand know that the police have these sorts of tools in their tool kit to solve crimes, my personal view is that that will increase the confidence in the police’s ability to solve crimes in a quick, clear, and decisive manner. Again, this brings me back to the point that there are a lot of women out there who have been victims of sexual crimes but are too afraid to come forward because of the distress that a trial will put them through. I think this bill will help to send a message that we will not tolerate this at all.

There is one other issue I am slightly concerned about, and my colleague Ms Moana Mackey alluded to this. I have read the regulatory impact statement and I do not see any costing anywhere at all for administering the consequences of this bill, the cost of storing the DNA, the collecting of the DNA, or anything around that. It is my personal view that any regulatory impact statement should have a cost-benefit analysis in it. What I am not saying is that we can put a cost on the price of justice. However, I think that provision should be included in this bill. Thank you very much.

LYNNE PILLAY (Labour): I am happy to stand and take a call on the Criminal Investigations (Bodily Samples) Amendment Bill. In doing so I acknowledge the previous speakers from this side of the Chamber who, I believe, gave really measured speeches on this bill. In particular I acknowledge my good friend and colleague Moana Mackey, who, with her background in science, has been able to give a little bit more information on the bill. I publicly congratulate Moana Mackey on that contribution.

Labour members agree with the use of DNA profiling. We accept that it is a tool that will be an advantage in mainstream policing. But in saying that, I explain to the Committee that Labour when in Government had already amended legislation to significantly extend DNA testing and its effectiveness. I acknowledge what Carmel Sepuloni said about our concern in terms of the added costs. The added costs under National’s regime come from the proposal that all who are arrested are tested, not just those who have been charged. One would ask about this proposal, I hope, in terms of getting the best bang for the buck. Testing a large number of people who are arrested but not charged means that the tests and all the expense that goes with attaining them under the proposed system would be thrown out. That would result in, effectively, an added cost, or even a waste of money and police resources.

I also acknowledge that Chris Finlayson, the Attorney-General, had reported after scrutiny some inconsistencies with the New Zealand Bill of Rights Act. It would have been far better if the Government had supported Charles Chauvel’s amendment, which went a long way towards addressing those concerns. It is really unfortunate that that amendment was voted down. I would be very interested to hear from Government members why that happened. I think that supporting his amendment would have gone a long way towards addressing not only Labour’s concerns, but also the Attorney-General’s concerns about inconsistency with the New Zealand Bill of Rights Act. That is very disappointing, but it is what must be.

I also note that the Privacy Commissioner expressed concern that the changes could jeopardise the value of the existing criminal DNA data bank in preventing crime by undermining public trust. As I said, if there had been some clarity and some certainty around this bill’s complying with the New Zealand Bill of Rights Act, putting the mind of the public at ease on those concerns, then I believe that the bill would deliver more. It would deliver what was intended, rather than the things we have some concerns about. When concerns are present that the bill does not comply with the New Zealand Bill of Rights Act, and when the public is concerned about privacy, there is not confidence in the system.

The Justice and Electoral Committee spent considerable time considering the bill. Of course, at this stage I would not go past acknowledging the chairperson, Chester Borrows, who I can see looks flattered by that acknowledgment. It is a select committee that works well. As well as the staff of the Justice and Electoral Committee, I also thank the officials, because I know there were some robust discussions about the intent of the bill, its consequences, and, perhaps, its unintended consequences. I believe that the participation by officials was very valuable, and it certainly gave more clarity to our deliberations. Thank you.

STUART NASH (Labour): As mentioned, Labour does agree with this measure. We are not opposed to further DNA testing. But, alluding to what Ms Moana Mackey talked about, it is unclear whether the legislation will have a significant impact on serious crime, compared with the many significant changes the Labour Government made in important areas of the law and order debate.

National is proposing to test all of those who are arrested, not just those who are charged. The reason there is a slight problem with that is that a large number of people are arrested but not many are charged, which means that under National’s proposed system many tests may well be thrown out, resulting in poor use of money and police resources. I suppose that is why Treasury has stated that a lack of clarity around the problems with the current DNA testing regime, along with the anecdotal and empirical evidence to support that, is an issue with this bill.

I would like to talk about two very high-profile cases in the area I come from, which is Napier. A woman called Kirsa Jensen was found murdered on a beach in Napier. She was last seen riding her horse. The killer of Kirsa Jensen was never ever found. This was a case of national significance. It was widely profiled. The police believed that they knew who did it, but they could never prove it, because they did not have the evidence. This case tore apart families and in some cases it tore apart communities. It was a dreadful case and a dastardly crime. I believe that with the sorts of tools we have today the Kirsa Jensen case probably would have been solved. Her family would not have been spared their anguish, but at least there would have been some closure. There was no closure for that family whatsoever, and the case is still a festering sore in Hawke’s Bay.

The other case is that of Teresa Cormack. We often hear about stranger danger. The one case in the last 20 years of a young girl being raped and murdered by a stranger was actually that of Teresa Cormack. It was a dreadful case of a young girl, I think she was aged only 7, who was snatched on the streets of Napier and raped and buried. Again, it was a dastardly crime. It was the sort of crime that does not bear thinking about. I believe that her killer was caught in the end, many years later, through DNA profiling.

One of the big benefits of this legislation is that it may well help solve a lot of crimes that have gone unsolved. I can imagine nothing worse for the family of a victim than not knowing what happened or why, and, certainly, not having anyone to answer for the crime perpetrated against a family member, a friend, or a person in the community. As I said, I believe that the Kirsa Jensen case probably would have been solved with the use of DNA profiling and collection. The police believed they knew who the person who did it was, but they did not have the evidence. With DNA profiling and DNA collection, they probably would have had the evidence to enable them to catch Kirsa Jensen’s killer. Therefore, a very, very dangerous man would have been taken off our streets, taken out of our community, and put where he belonged. We know of other dastardly, high-profile cases that are unsolved at the moment that could well be solved due to DNA profiling.

One of my Labour colleagues, who spoke very well on this bill, Moana Mackey, alluded to the fact that this bill will not allow repeat offenders, like the “Parnell Panther”, to continue offending. He went for months raping woman after woman, creating fear in communities and fear amongst the female population. That insidious creep went around communities committing the most heinous of crimes. With this sort of DNA profiling, that sort of monster may well be caught a lot earlier. The technology did not exist back then, and therefore he was able to go on and on, but he was finally caught.

This bill provides a very valuable tool in the police tool box that I think will make a big difference. It not only sends a very important message to the criminal element that this offending will not be tolerated but also sends a very important message to the people of New Zealand that we are prepared to go out there and protect their rights and put in place laws that will ensure that crimes are solved as soon as they possibly can be. As mentioned, there are the rights of the individual, but I firmly believe that the rights of the community and the rights of the country must come first. We must get these monsters off the street, and if this bill helps then that is fantastic.

The question was put that the following amendment in the name of Charles Chauvel to Part 2 be agreed to:

to insert the following clause:

48 Independent review of changes

The following new section is inserted after section 84:

“85 Review of operation of certain provisions of this Act

“(1) This section applies to the provisions of this Act inserted by the Criminal Investigations (Bodily Samples) Amendment Act 2009 (the provisions).

“(2) The House of Representatives must, as soon as practicable after 1 December 2014, refer to a select committee for consideration the following matters:

“(a) the operation of the provisions since the date of the commencement of this section:

“(b) whether the provisions should be retained or repealed:

“(c) if they should be retained, whether any further statutory amendments are necessary or desirable.

“(3) The select committee to which these matters are referred must report its view on them to the House of Representatives before 1 December 2015.”

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

Ayes 57

New Zealand Labour 43; Green Party 8; Māori Party 5; Progressive 1.

Noes 64

New Zealand National 58; ACT New Zealand 5; United Future 1.

Amendment not agreed to.

A party vote was called for on the question, That Part 2 be agreed to.

Ayes 108

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1.

Noes 13

Green Party 8; Māori Party 5.

Part 2 agreed to.

Schedule

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

Ayes 108

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1.

Noes 13

Green Party 8; Māori Party 5.

Schedule agreed to.

Clauses 1 to 3

Hon NATHAN GUY (Associate Minister of Justice): Although it may not be apparent from its title, the Criminal Investigations (Bodily Samples) Amendment Bill expands the ability of police to collect and use DNA samples to help solve and prevent more crime, which is a big focus of the National Government. This is because in many cases DNA technology provides more possibilities to obtain evidence from crime scenes than traditional fingerprint searches.

The bill will be brought into effect in two phases. The first phase will allow a DNA sample to be taken when the police intend to charge a person with a relevant offence as defined in the Criminal Investigations (Bodily Samples) Act 1995. The relevant offences will be expanded to include minor offences that have a link to more serious offending, and offences where DNA is often left at the crime scene. This phase will be brought into effect in July 2010 to allow time for the police to finalise operational guidelines and train their officers, and also to assist the Institute of Environmental Science and Research to prepare to manage their increased workload.

In the second phase the power to take a DNA sample will be extended for adults to all imprisonable offences. This will be brought into effect by Order in Council following a broad review of the operation of the Act and the new power. It is my intention that full implementation will be achieved by the end of 2011.

MOANA MACKEY (Labour): I am happy to speak on the title and commencement clauses of the Criminal Investigations (Bodily Samples) Amendment Bill. To respond to the comments of the Minister in the chair, Nathan Guy, I say that I am very disappointed that he did not confirm that the funding that is needed by the Institute of Environmental Science and Research to ensure that the testing will be carried out properly will be there. I acknowledge the comments that were made by the chair of the Justice and Electoral Committee, Chester Borrows, in the debate on Part 2, but the most important part of the question that I put to the Minister in the chair—the part that he has not answered yet, and that I hope he will—is whether he will guarantee the money that is needed by the Police and by the Institute of Environmental Science and Research to ensure that this process—

Hon Nathan Guy: It’s all in here.

MOANA MACKEY: No, will he guarantee it? He should stand up and tell me that the money that the institute needs will be there. He should not tell me that he has a bit of paper that gives the figures that the institute needs; he should tell me that the Government will give it that money, and that there is no question that it will get the money that it needs to ensure that there is no risk of a miscarriage of justice. That is what we are talking about here.

I was a little bit concerned to hear the chair of the committee say that the Institute of Environmental Science and Research already does chain of custody, and it does it very well. He is right, but I have worked in a laboratory, and I can tell members that when one suddenly gets thousands of extra samples and there is not the funding for more staff, more space, a computer system to put them on, or whatever might be needed, there is a real risk. I am not saying this to be smart, to be tricky, or to try to create problems; I am genuinely asking. The officials may well have come to the committee and said that everything is hunky-dory, but they know what they would get if they crossed the Government at this stage. I know people who work at the Institute of Environmental Science and Research who do this job, and they are concerned. They are worried, particularly with the financial pressures on the Crown research institutes at the moment. They have to look overseas for work to be able to pay a 9 percent dividend to the Government, which was not required of them under the last Government, because that money was able to be reinvested. A 9 percent return? Yes. A dividend back to the Government to pay for things like private schools and national standards? No. I want the Minister in the chair to tell me that the Institute of Environmental Science and Research will have the money that it needs in order to ensure that we do not run any risk of a miscarriage of justice.

I also want to go back to the Minister’s discussion of the power of this technology. He is absolutely right: this is incredibly powerful technology. It is being improved all the time. I cannot remember who said this—I think it might have been Spider-Man, although he might have been quoting someone—but with great power comes great responsibility. The responsibility on this Committee is to get it right, because this is powerful technology. I feel like I sound a bit like a DNA denier, which I am not. I am a realist. I want this Committee to accept that there is a danger, when it comes to juries, around the fallibility of DNA. DNA, like any technology, is not infallible. There could be human error or deliberate planting. It is not infallible, but it is an incredibly powerful tool. People who go before a jury with DNA evidence against them are not in a very good position.

Stuart Nash: Toast!

MOANA MACKEY: Yes. The fact is that we need to be aware of this fallibility if we are to increase our use of this technology, and if we are not sure that the funding will be there to ensure that we have all the proper safeguards for this very powerful technology. We need to make sure that the general public understand that, as I said in my second reading speech on this bill, unlike taking an entire fingerprint, DNA is tested at only a limited number of loci. We do not test the entire DNA profile of someone. We do not get someone’s entire genetic profile. Although DNA is one of the best technologies that we have, that fact needs to be understood. There needs to be education of the public around that, so when people serve on juries, they understand how the technology works, and they do not think that just because someone has DNA evidence against them, it means 100 percent, absolutely, and unquestionably that it has to be that person. That needs to be understood.

I come back to this matter again, and I say to the Minister in the chair—he waved a bit of paper at me, and I am not sure what is on it—that he should get up and tell us that the money will be there. He should tell the people who work for the Police and the Institute of Environmental Science and Research that they will be properly funded to do this testing. The Minister might think this is funny, but we run a real risk of a miscarriage of justice if the money is not guaranteed to the organisations that are to be collecting, testing, and storing the samples. When those organisations are put under significant financial pressure and workload pressure, and they are not given adequate resources to look after and protect this incredibly powerful technology, we really run the risk of unintended consequences.

Labour supports this bill, but we just want to hear from the Minister in the chair—or from the Minister of Research, Science and Technology, who is responsible for Crown research institutes, and who is sitting across the Chamber and has not taken a call yet—that the money will be there for the Institute of Environmental Science and Research.

Hon Dr Wayne Mapp: Contract. It’s contract-based.

The CHAIRPERSON (Lindsay Tisch): The question is, that clause 1 stand part. I call Moana Mackey.

MOANA MACKEY: The Minister just yelled something out to me, and I feel I need to respond.

Chris Tremain: I raise a point of order, Mr Chairperson. The question had already been put, and I ask—

The CHAIRPERSON (Lindsay Tisch): I am the sole determiner of that. I have called Moana Mackey.

MOANA MACKEY: I thank the senior Government whip for trying to shut me down on this very important issue, which is clearly causing the Government embarrassment.

Hon Member: It was a serious point of order.

MOANA MACKEY: That is right; that is true.

The Minister in charge of Crown research institutes has just washed his hands of the institute. This man is meant to be in charge of the organisation that will be given a huge increase in workload.

Simon Bridges: DNA expert? Body language reader?

MOANA MACKEY: What?

Simon Bridges: Well, how did he wipe his hands of it? What did he do to wipe his hands of it?

MOANA MACKEY: Oh, for God’s sake!

Simon Bridges: No, you’re saying it. Tell me what he did.

MOANA MACKEY: If Mr Bridges just listened, instead of sitting up there, chipping away constantly, and never actually listening to anything other than his own voice, he might hear. The Minister of Research, Science and Technology, Wayne Mapp, interjected across the Chamber.

Simon Bridges: What did he say?

MOANA MACKEY: He said that it will just be on contract, so it does not matter. I would like the Minister to take a call, because the people who work at the Institute of Environmental Science and Research are concerned about what will be a long-term increase in their workload. I ask whether the Minister will guarantee that within the contract for the institute for this increase in workload, it will get not only the funding that the select committee was told it would need, but also funding that goes beyond the testing of the samples to the chain of custody—the administration. I know that the Government does not like talking about administration, because that is bureaucrats; it is not front-line staff. But it cannot work if the administration—

Hon Dr Wayne Mapp: Obviously you haven’t looked at their contracts.

MOANA MACKEY: Well, I ask why the Minister Dr Wayne Mapp does not get up and take a call. Rather than just sitting there like a dried arrangement, I ask why he does not get up, take a call, and speak on his portfolio area of responsibility. I know that he did not want the job. I know that he does not like it. He keeps going out to people in the Crown research institute community and telling them that he never wanted the job, which does not exactly instil confidence in their new Minister. I know that he was trying to lower expectations considerably, and I say to the Minister that it is a job well done, but he might want to get up in the Chamber and answer this question. I say to the Minister that I am not trying to be difficult and I am not trying to be argumentative or problematic. I have worked for this Crown research institute and I have worked in other similar areas. I know how often the chain of custody does not get picked up in the administration side.

Chris Tremain: This debate is on the title and commencement.

MOANA MACKEY: It should be called the “Criminal Investigations (Bodily Samples) Pay Them Properly Bill”. Does that make the Government whip happy? The chair of the select committee got up and said that the Institute of Environmental Science and Research already had a great chain of custody process. Well, that said to me that the institute would not get any more money for doing chain of custody. I am sure that the Minister will agree, because he has been around and he has looked, that that is one of the most important parts. There is no integrity in the entire process if one is not absolutely 100 percent sure that from the moment that sample is taken, the process is sound. It is transported, it arrives at the Institute of Environmental Science and Research, and it is logged in. It is stored, because it will not be tested yet, and then it goes through the laboratory process. It is then analysed—a person does data analysis on it. Those results are then logged back against the person. Finally, the sample, whether it is a DNA data sample or a DNA physical sample, is stored. I ask how all of that process will be properly funded—it is not expected to come out of the baseline funding of Institute of Environmental Science and Research—given that the Minister now expects the institute to pay a dividend to the Government to pay for private school funding increases rather than that money going back into science. The Crown research institutes are under financial pressure; I am sure that the Minister would acknowledge that. I do not think it is too much to ask for the Minister in charge of this portfolio area—who has sat there the entire time I have been speaking and has been chipping away, but he will not get up and take a call on his portfolio area—to say to the Institute of Environmental Science and Research and this Committee that the funding will be there and that the Government will make sure that the contract includes all this extra area. I do not know why that is such a difficult thing for him to do. If he does not want to be the Minister for this portfolio, then he should give it to someone who does want to be the Minister. That is all I would say about it.

Hon Darren Hughes: He only got three out of 10 in the Dominion Post.

MOANA MACKEY: Three out of 10. If the Minister does not want to do it, then he should not do it. He should step aside and give the job to someone like Dr Paul Hutchison, who understands how the Crown research institute sector works, who works really hard with those people, and who knows the importance of funding the administration of sample collection and sample chain of custody care.

Hon Dr Wayne Mapp: Why don’t you look at the latest results for all of them?

MOANA MACKEY: Well, the Minister should get up and take a call. I am happy to sit down now so that the Minister of Research, Science and Technology, who is responsible for Crown research institutes, can stand up and give the Committee the guarantee that it needs that this bill will be properly funded so that we do not run the risk of any kinds of miscarriages of justice.

Hon LIANNE DALZIEL (Labour—Christchurch East): I am pleased to be able to take a call on this section of the Criminal Investigations (Bodily Samples) Amendment Bill. As my colleague Moana Mackey said, it could have a new name. Its new name could be the “Criminal Investigations (Are You Going to Pay Them Properly) Bodily Samples Amendment Bill”. But I think there are some very serious issues apart from the payment. I will come back to that aspect, because it is part of the reason why I have taken this call. The Government needs to take account of how much it will cost. I think that an assumption is being made here that once a sample has been taken, it somehow identifies itself and it does not have to go for analysis to a Crown research institute that is already under pressure. That analysis will provide the basis for evidence, but it is not evidence in itself of anything other than the presence of somebody who is more likely to be that person than anyone else.

Unfortunately—and I think my colleague has raised an extremely good point here—the police are up against it as far as this issue goes. Any police officer will tell us today that the programmes they hate the most on TV are CSI, Cold Case, and anything that deals with DNA in any way, shape, or form, because there is almost an assumption that if the police do not turn up with a DNA sample from a crime scene, then somehow they do not have sufficient evidence to convict somebody who may be guilty of an offence. I think we do a great disservice to the criminal justice system when we put all of our eggs in one basket, and when we try to rely on a single technology and assume that, because facts fall in a particular way, that then results in certain conclusions being able to be drawn.

But that is not my only concern around this legislation. The cost is a significant part of it. DNA does not analyse itself. The sample does not analyse itself. The process needs to be properly resourced, and consideration has to be given to the effects of having such a large volume of material available. I sat in a police station once, Christchurch Central Police Station, where they—

Hon Trevor Mallard: I’ve done that, too.

Hon LIANNE DALZIEL: Well, I was not there for the same reason as that member! I was there as a visiting member of Parliament, not as a person under an inquiry. So, there we go. The police let me do a database search of a fingerprint, which was quite an exciting thing to do, but they had already arranged for it to produce a match so that I could see how the match came up on the computer system. But otherwise, even the process of matching takes hours. It generates hours of computer time to find the exact match, or the closest possible match in terms of—

Hon Trevor Mallard: It doesn’t do that on CSI.

Hon LIANNE DALZIEL: Well, the thing about CSI is that young women are led to believe that they can go on to a crime scene wearing lipstick, fingernail polish, and high-heeled shoes, so there we go. A lot of the things about those programmes are not really real, I say to Mr Mallard. I am sorry to disappoint him. But the point is that an incredible amount of pressure is put on the whole string of the process that has to be put in place in order to bring that evidence in front of a court at some future stage. It is not just a matter of taking a swab and then the swab looks after itself. A lot of work has to be done after that.

The second point I would make is that Treasury says that this legislation does not stack up in terms of its regulatory impact statement. I was involved in the original decision-making when I was on the select committee that looked at the original extension of DNA testing in this particular framework. This bill takes it a step further from the legislation that our Government introduced. We highlighted at the time that there were considerable links between certain types of crime and other types of crime. For example, there was a very strong association between previous convictions for burglary, and a rape conviction. The reason that there was a strong correlation was the opportunistic element involved with finding somebody at home when a burglary either was in process or was perpetrated when somebody was at home unexpectedly.

That is certainly a correlation between types of offences where one would think that DNA would be a useful source of information, and a useful correlation could be made. Gathering DNA from people convicted of burglary offences had a very distinct purpose when one looked at trying to find people associated with rapes later on, where the person was not caught immediately. I think that in those circumstances, the regulatory impact analysis, the cost-benefit analysis, stacked up. It made good sense to target those particular offences because of that strong correlation.

Here, all of that whole cost-benefit analysis has just gone out of the window. There is no cost-benefit analysis to substantiate the broad sweep, as it were, in terms of the collection of DNA in these circumstances for those charged with imprisonable offences without any judicial oversight whatsoever.

The second point is that even the Human Rights Commission has said that this has gone too far and has the real risk that allowing this to be used in this way will undermine public confidence in the system. The Privacy Commissioner also expressed concern that the value of the existing criminal DNA data bank would undermine public trust in the police and the Government. These things are of concern. But apparently we are not concerned that Treasury thinks there is a lack of clarity around the nature of the problems with the current DNA testing regime, that the Privacy Commissioner has expressed real concerns about undermining public trust in the police, that the Human Rights Commissioner is concerned that the proposed changes go too far, and that even the Attorney-General has tabled a report showing the inconsistency with the New Zealand Bill of Rights Act.

Charles Chauvel: That well-known civil libertarian.

Hon LIANNE DALZIEL: That well-known civil libertarian, as has been highlighted! The point I am making is that, given all of those things, and the fact that we have not taken the opportunity for this bill to be remedied by the very good amendment that my colleague put up, first of all, to make the judicial oversight—

Charles Chauvel: What’s his name?

Hon LIANNE DALZIEL: My good friend, the soon-to-be Hon Charles Chauvel. He put up two amendments. One amendment was to address the question of judicial oversight. The second one, which I think was also important, addressed the question of a review after the legislation had been in place. It is all very well for the Minister to stand up in the debate on this particular aspect of the bill and to say that the bill will be given a “once over lightly” before it is implemented. Actually, he will just implement the bill, and the “once over lightly” will not be the detailed analysis that I think Treasury, the Privacy Commissioner, the Human Rights Commissioner, and, I would assume, the Attorney-General would expect. With those defects sitting around this issue, there is, indeed, a sense of disquiet on this side of the Chamber about where this legislation has taken us. It would be helpful if the Minister would simply stand and provide my colleague Moana Mackey with the information she has requested, which is very simply that if the extent of the pressure that will be put on the Institute of Environmental Science and Research is not remedied in advance by a commitment to the funding that is required to meet that pressure, we will, in fact, create a greater problem than we have today with this legislation, instead of going anywhere near to resolving the issue.

As Treasury has said, the Government has not even provided clarity around the nature of the problems with the current DNA testing regime. There is a little bit of a sense of smoke and mirrors here, and a sense that this bill might be showing that the Government is doing something, but may not be achieving that, without the kind of commitment that we have been seeking here tonight.

KELVIN DAVIS (Labour): I will take just a short call to talk about the title of the Criminal Investigations (Bodily Samples) Amendment Bill. I will talk a little bit more on cultural sensitivity and, in particular, the sensitivities that the police will need to demonstrate when they apprehend suspects, as I guess we could call them. The question I have for the Minister is whether the police will receive training in cultural awareness and training on how to deal with Māori offenders, in particular. I can think of a number of people up north, unfortunately, some of whom are my relations, friends, and people I have played rugby with, who have had cause to be apprehended. If the police were not careful in the way they dealt with them in requesting a bodily sample, I could understand that there would be quite a bit of concern. The reaction of the person who was being apprehended might not be the best.

I think it is really important that the police have training on how to deal with Māori in this situation. I recall watching on television one of those police programmes in which the TV cameras tag along with a police unit at night. I recall a situation where a young Pākeha policeman dealt with a Māori offender, and just the language that this policeman used when talking to this person created a lot of confusion. In fact, even for me watching the programme there was a lot of confusion. The way that the policeman dealt with this person inflamed the situation, and in the end this person was arrested for quite a minor offence. I would hate to see the situation where the police were trying to get a bodily sample from a person and were not particularly sensitive in the way they went about it, and that inflamed the situation. It could mean that the person was charged with another offence.

I see in the bill that the police are to provide suspects with some sort of written description of what is being requested. They are also meant to ask for bodily samples in plain language that suspects can understand, so that they know what is going on. As a teacher, I have had experience of trying to talk to people, and I know that even though people might nod and say “Yes”, that does not necessarily mean that they understand what is going on. It is really important that the police are able to get the information across in a sensitive manner so that they do not inflame the situation in terms of taking a bodily sample in the form of a mouth swab or whatever. It is important that the situation is not made worse and that everybody’s needs are respected, bearing in mind, as I said earlier, that in the case of those people who are guilty of an offence, I have no problems whatsoever with bodily samples being taken from them.

It is important that we use DNA testing, as my colleague Stuart Nash said earlier, where people have been traumatised, sexually abused, or assaulted. Mr Nash brought up a situation in Napier where, if DNA testing had been available at the time, the murder of a girl could have been solved.

It is important that there is cultural training for the police when they collect these samples. I know that means more funding, and already my colleague Moana Mackey has asked the Minister of Research, Science and Technology about more funding. The more samples that are brought in, the more funding will be necessary to support the testing of samples. Another question that I have for the Minister is whether the police will be funded so that they have some training in cultural sensitivity.

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

Ayes 108

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1.

Noes 13

Green Party 8; Māori Party 5.

Clause 1 agreed to.

A party vote was called for on the question, That clause 2 be agreed to.

Ayes 108

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1.

Noes 13

Green Party 8; Māori Party 5.

Clause 2 agreed to.

A party vote was called for on the question, That clause 3 be agreed to.

Ayes 108

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1.

Noes 13

Green Party 8; Māori Party 5.

Clause 3 agreed to.

House resumed.

Bill reported without amendment.

The CHAIRPERSON (Lindsay Tisch): I move, That the report be adopted.

A party vote was called for on the question, That the report be adopted.

Ayes 108

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1.

Noes 13

Green Party 8; Māori Party 5.

Report adopted.

Third Reading

Hon NATHAN GUY (Associate Minister of Justice) on behalf of the Minister of Justice: I move, That the Criminal Investigations (Bodily Samples) Amendment Bill be now read a third time. This bill amends the Criminal Investigations (Bodily Samples) Act 1995 to expand police powers to collect DNA profiles. It recognises the value of DNA technology and empowers police to use the modern-day fingerprint to solve more crime. The bill implements the Government’s post-election action plan to require DNA testing for every person arrested for an imprisonable offence. I am proud to see another of National’s 100-day commitments being passed into law, hopefully today.

New Zealand’s pioneering DNA database, which is only the second created in the world, achieved its milestone 100,000th entry last month. The foresight of police in carefully storing genetic information, even before the technology was available to fully utilise it, has paid off. Serious cases of rape, abduction, sexual assault, home invasion, arson, and burglary—some of which have been cold for decades—have been solved only as a result of the availability of stored DNA material. However, over 8,000 of those 100,000 profiles stored on the database relate to unsolved cases.

In order to take full advantage of the DNA profile database as an effective weapon against crime and to help clear the backlog of unsolved cases, it is important to increase the database’s size by adding more identified DNA profiles. This bill will facilitate the growth of the database and the resolution of unsolved crime by allowing police to collect DNA from anyone whom they intend to charge with an imprisonable offence, without the need to obtain their consent or prior judicial approval. The bill will also expand the range of offences for which it is possible to collect DNA, and remove the requirement that the police must wait for a conviction before matching a charged person’s DNA against samples taken from unsolved crime scenes.

This bill has been enhanced by the contributions made by the Justice and Electoral Committee and I acknowledge the good work of that committee, chaired by Chester Borrows, in respect of the provisions relating to young people in particular. As a result of the committee’s input, the range of offences for which it is possible to collect DNA from a young person will not be expanded to the same extent as for adults, and greater consistency has been achieved with the Children, Young Persons, and Their Families Act 1989.

Members will be aware that in the select committee’s report to the House the Attorney-General, as well as various submitters on the bill, raised a concern under section 7 of the New Zealand Bill of Rights Act about the absence of prior judicial approval before a DNA sample is taken. Prior judicial approval was not included in the bill for a number of reasons. For example, there are a number of measures in the bill to minimise its intrusion into individuals’ rights. Taking a DNA sample is a minimal physical intrusion, and prior judicial approval does not add huge benefits to the process. Operational guidelines have been developed to avoid the arbitrary application of the power, and requiring prior judicial approval for the estimated 16,000 samples in the first year would come at a significant cost to the courts in processing that many applications.

We recognise that immediate full implementation of these changes although optimal is not completely practical. Police will need time to develop guidelines and train staff. Phased implementation will also assist the Institute of Environmental Science and Research to absorb the increased workload. Accordingly, the bill will be introduced in two stages. Initially, police will be allowed to collect DNA from anyone whom they intend to charge with serious offences or offences that indicate a propensity for future serious offending, such as peeping and peering. It is my intention that full implementation will be achieved in 2011. This Government has made public safety its top priority in the law and order portfolio. This bill will be a crucial tool in the fight against violent crime, and I commend it to the House.

CHARLES CHAUVEL (Labour): This Criminal Investigations (Bodily Samples) Amendment Bill confers a novel power. The police may collect without prior judicial approval a bodily sample from any person whom they intend to charge with the offences specified in the legislation. As we have just heard from the Associate Minister of Justice, this measure is very likely to be expanded at a point not too far in the future, to allow for the collection of such a sample from any person whom the police intend to charge with an imprisonable offence.

At all times, the House has known that in legislating in this way, we are breaching our own human rights standard, the New Zealand Bill of Rights Act 1990. We have an Attorney-General’s report, which is a certificate that tells us this. The basis for the Attorney General’s certificate—it is not just a comment, as the Minister put it, but an important safeguard in our legislative process—was this: on the basis of US, European Union, and Canadian authority, a failure to include judicial oversight of the power of literal physical compulsion is a breach of the human rights standards to which we subscribe. We have known that that is the case at all stages of this bill. We could have fixed the problem very easily by simply requiring that the police obtain a warrant before they exercise the powers conferred in the bill, as they currently do with regard to the power to enter premises.

The reason that the Attorney-General could so confidently issue his certificate under the New Zealand Bill of Rights Act, and the reason that the House knows that it is legislating against our humans rights standard, is exemplified by a case from the European Court of Human Rights that is less than a year old: S and Marper v The United Kingdom. The judgment was given in December 2008. One of the facts of that case was that legislation very similar to the bill we are considering now was passed by the Westminster Parliament. Under that legislation, the South Yorkshire Police took the DNA samples and fingerprints of two men. Neither of the men had been convicted, but because they had been arrested for a recordable offence in England, Wales, or Northern Ireland, their DNA profiles were kept on a database, regardless of whether they were charged or convicted. This practice, by the way, meant that at the time of the European Court of Human Rights judgment, the details of around 4.5 million people were held in England, Wales, and Northern Ireland, one in five of whom have no criminal record whatsoever.

The European Court of Human Rights, comprising 17 senior judges from across Europe, found that the police’s actions violated article 8 of the European Convention on Human Rights, which deals with the right to respect for private and family life. The court stated that it was “struck by the blanket and indiscriminate nature of the power of the retention” in England and Wales. It also ruled that the retention of the men’s DNA “fails to strike a fair balance between the competing public and private interests”, and that the Government of the United Kingdom “has overstepped any acceptable margin of appreciation in this regard.” Finally, the court ruled that the retention constituted a “disproportionate interference with the applicants’ right to respect for private life and cannot be regarded as necessary in a democratic society.”

Decisions similar to this one exist, and they come from the Supreme Court of Canada and the United States Supreme Court. That is because the European Convention on Human Rights comes from the same juridical stable as the initial amendments to the United States Constitution that became the US Bill of Rights, the International Covenant on Civil and Political Rights, the Canadian Charter of Rights and Freedoms, and, most recently for our purposes, the New Zealand Bill of Rights Act 1990.

What is the practical effect of this House’s refusal to be mindful of the Attorney-General’s section 7 certificate and the amendment to Part 1 in my name that would have made this legislation compliant with the New Zealand Bill of Rights Act? New Zealand has ratified the International Covenant on Civil and Political Rights and its optional protocols. One of those optional protocols entitles people in New Zealand to bring a complaint to the United Nations Human Rights Committee in New York as to a breach of their rights under the International Covenant on Civil and Political Rights.

Inevitably, as a result of our passing this legislation in its current form, the police will arrest, or will intend to arrest, an innocent person. Under the provisions of this bill, that person’s bodily sample will be retained even where an arrest does not proceed, or, if an arrest does proceed, where the charges are dropped or a conviction does not result from those charges. That person will ask, as someone who is innocent, that the State not retain his or her bodily sample. The State will refuse.

The person will have no further domestic remedies to exhaust, except maybe to make an application for a judicial review of the decision, which is unlikely to be granted. If that remedy is not granted, then that person will complain under the optional protocol to the International Covenant on Civil and Political Rights. On the overwhelming case law in the face of which we are legislating, the person will succeed in that complaint. When that happens, New Zealand will be in breach of international law, and this issue will be fairly and squarely back in the lap of this Parliament.

How the Government thinks that it is responsible, fiscally or otherwise, to legislate in this fashion without the simple insertion of the judicial safeguard that would make this legislation compliant with our entire human rights tradition is beyond me. It leads one to the conclusion that the failure to so legislate means that this bill is yet another example of window dressing on law and order by this Government. How ACT, the so-called liberal party, could vote against the amendment that would have added the requirement of judicial oversight and also a real review of the legislation is also beyond me.

I will mention my second amendment for a moment. It has not succeeded as far as this third reading of the legislation. That amendment would have recognised that we are conferring a novel and new power upon the State with this bill. It is an intrusive power. It is a power, it is true—as other speakers have said—that could have a potentially great benefit in the struggle for law and order, but it is also capable of being greatly abused if we are not careful about how it is exercised. It is all the more capable of being greatly abused because of the failure to include a judicial oversight provision.

In my amendment was a proposal that after 5 years of the legislation’s operation there should be a review. The legislation would have been reviewed by a select committee comprised of members of Parliament, so it would have been a political review, but at least the select committee would have been able to hear evidence in public. The select committee would have been able to call for experts to give it a view as to the operation of the legislation after 5 years. That is a period of time after which we would have had the initial stage of operation, as we have heard from the Minister of Justice.

We have also heard of the Minister’s proposed extension, which, judging from his speech, is virtually automatic anyway, notwithstanding the outcome of the administrative review that he proposes. That administrative review will be conducted by the Ministry of Justice. Its major end will be to satisfy the Minister that it is timely to proceed to the second stage of this legislation—that is, that the law should provide for the taking of bodily samples in respect of any imprisonable offence. As we heard from the Minister, that move is virtually a fait accompli. The review will occur by August 2011, and it is likely to occur in the heat of an election campaign. This country does not do well in the sober consideration of law and order issues at that sort of time. It is just the wrong time to be reviewing whether we have proceeded in the right fashion by legislating in this way.

This bill is much worse than it could be or should be. As I tried to show in my speech, it will inevitably result in uncertainty and litigation against New Zealand at an international level, so it will not be our final consideration of it on this occasion tonight. With the simple addition of some judicial oversight, we could have had finality. Thanks to the Government, we have none.

CHESTER BORROWS (National—Whanganui): I am pleased to stand and take a call in the third reading of the Criminal Investigations (Bodily Samples) Amendment Bill. As I have said before, this bill, more than any other legislation that has been before the House for a long time or will be before it in the future, will prevent more people from being victimised.

Apart from the scenario outlined by the previous speaker, Charles Chauvel, what will happen hundreds, if not thousands, of times over and over again is that a different scenario will be played out. I do not undermine what he said, but I think we need to take cognisance of the balance here. For example, a young man seen hanging around premises late at night, looking in some windows, will be caught unlawfully in an enclosed yard and will be arrested for peeping and peering. He will be taken back to the police station, his fingerprints will be taken, his photograph will be taken, he will be handed a cotton bud Q-tip and told to put it in his mouth, he will take a cheek swab, and it will be put into a plastic bag. At some stage after that he will probably plead guilty to the offences outlined, because to him they are nothing. At that stage, he does not realise the criminal he will go on to become. Later on, through a number of things that will probably impact on his life, he will become a sex offender and will go on to commit further crimes against the person that are far more horrific than he or those who were around him at the time—probably the constable who first arrested him for peeping and peering—ever contemplated.

After the offender commits what was likely to be his first offence and leaves a bodily sample at the scene, whether it be blood, semen, spittle, hair, a piece of skin on a broken window, or whatever, he will have the DNA compared with whatever sample he left behind at the scene and there will be a match. He will be identified very, very early in the piece as a sex offender and a conviction will probably emanate from that. Although we cannot say with 100 percent certainty that any DNA sample belongs to any particular person, the good scientists from the Institute of Environmental Science and Research can come before the court and say: “The likelihood of another person being the provider of this DNA sample is 29 million to one.” The jury, in the knowledge that there are only about 4.2 million of us living in this country, quite rightly will convict.

Although the points the previous speaker laid out before the House could well happen in the future, if we look on the balance of public interest in this matter we have to concede that the vast weight of public interest is following the line that I have just outlined. That is why this legislation is so good. Yes, there are costs involved. Bearing in mind the thousands and thousands of people who are arrested every year, going to a judge to obtain a warrant to retain a DNA sample, even before the conviction is entered, would incur a pointless cost. For instance, bearing in mind that the reason why a judicial oversight was required in the initial stages of recovering DNA was that it involved taking a blood sample, this is merely a cheek swab that the offender takes himself or herself. That is a very, very important point to remember, because the science has moved on, the intrusive nature of recovering DNA is far less than it ever was before, and the law needs to reflect that fact. It has been said many times in the course of this debate that DNA is the modern fingerprint, and yes, it is. If scientists were mad enough to hare off down the track and try to identify a number of other profiles within any DNA sample, then they could find out all sorts of things. But I am sure that no one in this House really subscribes to the Big Brother conspiracy theory.

As outlined by previous speakers, costs have been covered in the Committee stage. We know what those costs are and what we are setting ourselves up for. We also know that the call for more explicit guarantees comes from the side of the House that only last year gave us a Budget that promised hundreds of millions of dollars in spending entitlements and provisions that were never there to spend. Those members demand that level of accountancy from the current National Government, and it has explored and costed this very worthwhile election promise. We are very pleased to see that at the end of this third reading it will come into form. We look forward to not seeing the offenders of so many thousands and thousands of victims appearing before the court, and not seeing those young men and women enduring the pain of being the victims of such offenders.

CARMEL SEPULONI (Labour): I want to address something that the previous speaker, Mr Borrows, spoke about. He talked about a scenario where a young boy is caught peeping and peering through a window, he is taken to the police station, and gives a swab. Mr Borrows said that further down the line that boy would go on to commit a sexual offence, and that at that point the police would have his DNA on file. What this National Government has failed to do, and I think it is clearly outlined by what Mr Borrows said, is to look at the interventions so that the young boy does not get to the point where he commits a sexual offence. I think that is one of the major flaws of the National Government. The problem for the victim is that, yes, the DNA sample may be on file, and, yes, the police may be able to catch the perpetrator, but the problem for the victim is that the crime has already been committed, and the National Government would have done nothing to stop the crime from being committed. That is the issue, I think.

One of the major concerns we have with a lot of the law and order and justice legislation that is coming through from the National Government, and that we have seen go through the select committee process, is that it is all “ambulance at the bottom of the cliff” stuff, and this bill is no exception. Members on this side of the House have said that we agree with DNA testing. The previous Labour Government undertook measures to ensure that New Zealand was keeping up with the technology and that we were doing all that we could with regard to DNA testing. The issue is not the DNA testing necessarily, but the extent to which the National Government is going in that regard. It is also the fact that the sole focus is on the ambulance at the bottom of the cliff, and not on the stuff in the middle or on the stuff at the beginning, to stop the crimes from being committed in the first place. The example from the previous speaker, Mr Chester Borrows, was a good example of one of the reservations that this side of the House has about the legislation that is going through.

Before discussing the contents of the bill, it is important for me to put this into context again. I said earlier that Labour is not opposed to DNA testing. We have some reservations around it, but I point out that the previous Labour Government took legislation as far as it could in previous years. I want to go back and discuss some of the things that Labour has done previously, so that people understand that this National Government is not starting from scratch with regard to legislation around DNA. There was a solid foundation to start from.

In 2003 the previous Labour Government passed legislation to amend the Criminal Investigations (Bodily Samples) Act 1995, which significantly increased the scope for the DNA testing of suspects. Under that Act burglary suspects can be compelled to provide a DNA sample, including in the circumstances where a crime scene sample is matched with a known offender’s DNA profile held on the police data bank. Prior to that legislation, crime scene samples could not be used in evidence unless a fresh DNA sample was taken, and an alleged offender could refuse to give that sample. Under the 2003 legislation, which was, as I say, passed by the previous Labour Government, the offences for which someone may be compelled to give a sample have been significantly extended to cover crimes punishable by at least 7 years’ jail, such as motor vehicle conversion and some offences of receiving stolen goods, or any attempt to conspire to commit such a crime.

Under that legislation DNA samples can be obtained by compulsion from prison inmates who were convicted of serious offences prior to the commencement of the Criminal Investigations (Bodily Samples) Act 1995. The police no longer need a court order to obtain a sample from a convicted person. However, a judicial hearing can be requested by people who believe that they are not liable to provide such a sample. Buccal swabs, or mouth swabs, which are cheaper and less invasive, and just as accurate as blood samples, can now be given as an alternative.

Another significant part of the Criminal Investigations (Bodily Samples) Amendment Act 2003 passed by Labour is the ability to obtain DNA samples from inmates currently in prison who were convicted prior to 12 August 1996 when DNA testing was first introduced. Adding those inmates’ DNA profiles to the police data bank was intended to help the police solve some historic cases. Prior to those amendments, the legislation gave police the authorisation to seek a compulsion order only to obtain DNA samples for the police database from a person already convicted of burglary. That led to the ridiculous situation that when police found DNA material at the burglary scene, and matched it to a profile on the data bank, they were prohibited from using that match in criminal proceedings against the suspect.

The problem with DNA testing, which must be taken into consideration by both sides of the House, is that it is not foolproof. Our colleague Moana Mackey has raised this point, has discussed it, and has spoken expertly on it because she does know this stuff. It is not foolproof. My colleague Moana Mackey described the scientific aura that exists around DNA, that it is perceived as somehow foolproof and incontrovertible. Moana Mackey highlighted how jurors often hold that perception. The reality is that not one single DNA scientist would say that it is 100 percent certain. But the problem is the technology has such a powerful reputation that the possibility of miscarriages of justice is introduced. Labour is supporting this bill, but the fact that DNA testing is not foolproof needs to be absolutely understood if this bill is not to create problems that could be avoided.

Another concern that has not been raised enough, and a concern that I brought up and that Kelvin Davis went on to discuss in more detail, is the cultural repercussions of this bill. No one would disagree that a possible consequence for anyone who has committed a crime and been found guilty is that his or her DNA is taken, it is put on file, and in future it can be looked up. If that person reoffends, then at least he or she can be tracked to that crime. The issue is if the person has not been found guilty of committing a crime, and if the person has not even been charged, that information is collected. Given the cultural tapu around some of those issues and the information that the DNA holds, we need to be a little bit sensitive about this. The things that Kelvin Davis and I both talked about earlier with regard to the way in which many Pacific groups and Māori collect their hair—and even that is tapu, because they do not leave it lying around for someone else to pick up—can be deemed indicative of the fact that they understood, even prior to the science that we have now, that it contained information, and that the information was sacred. They understood that that knowledge perhaps existed before we had the science that came along. So that is something we need to consider, especially given the fact that when the sample is taken those people have not been found guilty of any particular crime. I ask where that sample will be kept.

Many of my colleagues have raised the fact that not enough work has been done on the costings of storing the DNA. As the data banks may not have the capacity to hold all of the information that it is expected they will hold, there will be scope for mistakes and muddles to be made in respect of an excessive increase in the number of DNA samples that will be pushed through those data banks. We do need to be concerned about all of this. It is not just the possibility of the information becoming lost or messed up; it is actually people’s lives that are at stake here, with regard to whether they are found guilty of a crime they may not have committed.

Something that needs further exploration, and that has not been explored fully enough, is the cost of increasing the capacity of data banks so that the incredibly significant increase in DNA samples can be held, and also the systematic way in which data banks will be set up so that they can hold these samples without there being any possibility or scope for a mix-up or muddle. At the end of the day, people’s lives will be at stake in respect of whether they are found guilty of a crime.

That point takes us back to whether DNA evidence is foolproof, which we need to discuss. As the technology is improving and as more courts around the world are taking DNA testing much more seriously, we are finding that jurors, courts, and the public in general see DNA tests as being 100 percent certain. We know that that is not the case, and our scientists know that that is not the case.

RAHUI KATENE (Māori Party—Te Tai Tonga): Four years ago the Māori Party was approached about the Genographic Project, a huge project in which DNA samples were to be extracted from 100,000 indigenous volunteers. That is right—the blood and genetic codes of indigenous peoples were to be suddenly available in the global DNA bank. Perhaps it could be used to construct what a Chicago museum has apparently labelled as the perfect human specimen: Māori, of course. But the risk that the unique DNA of indigenous peoples might be used for other, less honourable means was always there. At the time we felt duty-bound by both legal codes and ethical standards to draw attention to the proposed DNA research, stipulating that informed consent and ethical approval should be obtained before any such research could proceed. We did so on the basis of our firm belief that whakapapa is a taonga tuku iho, to be protected no matter what happens.

We rolled on 2 years from the Genographic Project, and this time we were dealing with a police practice note, updated in 2007 and published in the police journal Ten-One. To be fair, the practice note made it clear that children under the age of 10 years should be fingerprinted only for the purpose of eliminating them from a police inquiry, and that children aged 10 to 13 years could not be fingerprinted without the written approval of the Youth Aid section of the police. But the note also encouraged members of the New Zealand Police to promote the fact that it was in the best interests of children and young persons to voluntarily agree to be fingerprinted. In reality, voluntarily given fingerprints provide the police with a tool that will greatly increase the likelihood of those children and young persons being identified in future police investigations.

This Criminal Investigations (Bodily Samples) Amendment Bill is a case of third time lucky for some people. The bill introduces the ability to take DNA from any person, including a young person, whom the police intend to charge with any imprisonable offence. In 2011 this will be widened to any person or young person whom the police intend to charge with a “relevant offence’ as defined in the legislation. Ostensibly, the bill has a straightforward goal: to assist with the conviction of people who are arrested for an imprisonable offence. But is it really as simple as that? In reality, many low-level offences carry a penalty of short-term imprisonment as a maximum sentence, so it turns out that a very large pool of offenders could be required to undergo DNA testing. As we have become aware, the criteria will become broader in the future, capturing a wider group of suspects. Over time, for example, low-level and youth offenders, those arrested but not convicted, or even those who are merely suspected of offending, might all fall prey to this scheme.

The Māori Party has always believed that if DNA tests have to be employed as a means of identifying offenders, a more stringent test could be found to better target high-end offenders and that some other approaches should be adopted for the lower-end offenders. YouthLaw Tino Rangatiratanga Taitamariki considered that the offence thresholds should be targeted at the more serious end of the criminal offending scale, as is currently the case, and should not be opened up to encapsulate the range of offences that Part 2 intends. This was also the view of the Privacy Commissioner, who was greatly concerned that Part 2 would bring all imprisonable offences, whether serious or trivial, within the ambit of the DNA collection regime. This would greatly increase the number of samples collected. The commissioner’s view is that the law enforcement benefit of such a sweeping change would be outweighed by costs to privacy, public trust, and the smooth functioning of the programme. As a consequence, the commissioner recommends that Part 2 should be removed from the bill.

There are simply too many unknowns about and too much variability in the potential use and collection of DNA. For a start, there are a host of ethical and human rights concerns, particularly to do with the existing police bias against and over-scrutiny of the Māori population, including the use of ethnic profiling. Human rights concerns have been raised in the United Kingdom that a DNA database breaches international human rights laws and standards. In fact, in these days when Parliament has been considering the value that referenda bring, it may be useful to consider the call in the United Kingdom for a citizens’ inquiry sponsored by the Human Genetics Commission, which is a Government advisory body. That inquiry suggested that people who are deemed to be innocent should have their details deleted from the National DNA Database. Britain has the largest DNA database in the world, including an estimated 100,000 profiles of children. The commission found widespread public distrust of this system, which collects and keeps genetic material from anyone who is arrested, even if that person is not convicted of a crime. If anyone was ever wondering what was meant by ethnic profiling, he or she might start by considering the British experience. More than three in four young black men in the United Kingdom experience having their DNA included on the database, but only 22 percent of young white men do.

The Justice and Electoral Committee had the benefit of guidance from Michael Rowe.

Debate interrupted.

Sitting suspended from 10 p.m. to 9 a.m. (Wednesday)

Tuesday, 27 October 2009

(continued on Wednesday, 28 October 2009)

Bills

Criminal Investigations (Bodily Samples) Amendment Bill

Third Reading

Debate resumed.

RAHUI KATENE (Māori Party—Te Tai Tonga): The Justice and Electoral Committee had the benefit of receiving guidance from Michael Rowe of the criminology department at Victoria University. Mr Rowe was able to share his experience of the British DNA database, a system that was meant to include samples of only convicted criminals but that was slowly ratcheted up to include samples of all those who had been arrested. He also noted that courts in Britain have agreed that the keeping of DNA records in databases breaches human rights legislation. This is information that the Māori Party simply could not ignore. Research from other countries, whether it relates to efficacy or matters of accuracy, indicates that such records are not a hugely useful tool.

I will go back to the topic of ethnic differences in the database. Our concern is that there is the risk of unethical use of the DNA database to conduct research and to make population statements about certain groups having a criminal gene. This was a particular concern of Dr Papaarangi Reid, the tumuaki at the faculty of health and medical sciences, Auckland University. It was her view that there was much to cause us alarm in the setting of appropriate parameters on the use of a DNA police database, which would make statements about whole populations and not just individual offenders. As we know too well, recent genetic inquiry has sought to discover genetic causes of behaviour—do members remember the warrior gene—so there is a risk that such a database could be accessed for research into a criminal gene. Such research, even though unethical, has been able to be conducted in the absence of proper ethical controls.

Dr Reid had a number of concerns that the Māori Party has taken seriously. It was her view that the positive benefits of convicting serious offenders sit alongside a host of issues of great concern. The general question of ethics and human rights suggests that DNA testing will affect Māori disproportionately, given the existing police bias and the over-scrutiny of Māori. It will create a level of truth, summed up best as “Crime will be found where it is most looked for.” Another concern is that DNA testing has implications for whānau as well as individuals, because first and second-degree relatives can be identified through genetic testing, thereby allowing the authorities to build up a family history. DNA testing would enable the police to create a DNA profile of the wider Māori population.

Finally, trust issues are involved when the police hold such information, and when we ask whether the rules about who is tested and how the information is used will change over time. As we saw with the Taser gun trial, the police function independently from parliamentary or ministerial scrutiny on operational matters, so we have considerable concern whenever discretion is to be applied. We are, as I said earlier, absolutely committed to the protection of the sacred genetic make-up inherent in whakapapa, and, as such, we cannot support this bill. There are simply other approaches that we should use, rather than tamper with DNA.

KANWALJIT SINGH BAKSHI (National): I am pleased to take a call on the third reading of the Criminal Investigations (Bodily Samples) Amendment Bill. The first priority of this Government has been to improve law and order and public safety. The bill contributes to that goal by giving the police tools to resolve more crimes and catch more offenders. It accompanies other important law enforcement initiatives, such as the Gangs and Organised Crime Bill, the Search and Surveillance Bill, the recently passed Criminal Proceeds (Recovery) Act 2009, and many more. This bill is one of the many steps this Government has swiftly taken, following the election, to fulfil its promise to the public of New Zealand.

The Justice and Electoral Committee made a number of useful amendments to the bill, particularly around improving the process of taking DNA samples from young people. One of the changes is to limit the range of offences for which a sample can be taken from a young person to more serious relevant offences specified in the bill. That will ensure that only the most serious young offenders are subject to this law. In addition, the criteria for taking DNA samples from a young person have been significantly simplified. The Justice and Electoral Committee concluded that the criteria for taking samples from young people repeated the protection that already exists in the Children, Young Persons, and Their Families Act, specifically in section 208. As such, the bill has been amended to provide that section 208 of the Act will apply and will provide adequate protection for young people in custody.

DNA carries a unique genetic code for an individual. Current technology allows bodily samples like blood, saliva, and semen to be processed and reassembled in a form of barcode that can be matched with the other samples taken from a crime scene. This procedure is an important investigative tool, resulting in virtually conclusive proof of identity. It may be used to pinpoint an offender, as well as to clear an innocent suspect.

The bill will allow the police to collect DNA from a person whom they intend to charge with an offence, and, prior to that person’s conviction or acquittal, the police will be able to match that person’s DNA against the profile from the scene of the crime in unresolved cases. Offenders who go on to commit serious offences in the future will be identified a lot earlier, because their DNA will have been kept after they committed an offence in the very, very early stages of their criminal offending.

Over this year the Government has proudly brought before the Parliament a number of measures that impact squarely on the victims for the better. This legislation is one of them. It will save more victims than probably any other legislation that we have seen before this Parliament in a very long time. I commend this bill to the House.

METIRIA TUREI (Co-Leader—Green): I shall take a short call on the Criminal Investigations (Bodily Samples) Amendment Bill. It is opposed by the Green Party. It has been opposed by the Green Party the whole way. The fact that this bill is contrary to the New Zealand Bill of Rights Act, and the Attorney-General’s report states that it has significant human rights abuses, is of extremely serious concern to the Greens and should be to Parliament as a whole. The forcible taking of DNA samples where the police only intend to charge a person—the person has not been convicted of any offence—is a gross assault on that person. Under any other circumstances but for it being authorised in law, that would constitute an assault against that person. The Green Party does not believe that the law should be authorising assaults against a person simply because the police say they intend to charge that person with a crime, where there is no evidence to suggest that that person will be convicted of that crime.

I would like to reiterate the point, or support the points, made by Charles Chauvel about the serious concern that there will be no judicial oversight of the forcible taking of these bodily samples from citizens of this country. He set out a very clear description of the importance of judicial oversight in this matter, the fact that the law provides for that already, and that there does not seem to be any reason why that should change; it is obviously working currently. It does raise a concern for me, too, as to why Labour is supporting this legislation, despite the very clear concerns by Labour, and by Labour members, for the breach of human rights, the lack of judicial oversight, and, in regard to young people, and to Māori, and to others of other ethnic minorities, the risk of abuse by the police against those communities. I would urge Labour members to rescind their view and to oppose this legislation for all of the good reasons that Labour itself has put out in the debate over the last day or so.

Another concern of mine is around systemic bias, racism, that exists within the legal system. At least two good studies, one produced by the Department of Corrections and the other by the Christchurch medical school, I think in 2003, clearly showed that the legal system contains bias against Māori and that that bias leads to an overrepresentation of Māori in various parts of the legal system. The Department of Corrections study looked at a number of factors. Despite all the other social indicators, it concluded that there is a degree of overrepresentation related solely to the ethnicity of Māori at key points in the legal system. Although at each of those key points the overrepresentation might be small, none the less the cumulative effect of that bias is exacerbated over time.

One of those areas is arrests. This was proven by the subsequent Christchurch study, which looked at cannabis arrests and convictions. It found that despite all other risk factors such as a person’s being known to the police, Māori men are still more likely than anyone else to be stopped, arrested, and convicted of cannabis offences. That is despite all other risk factors, including frequency of use, for example. It shows that the police are more likely to stop Māori men. It proves that. Now, with this bill, there will be no need for a conviction before a DNA sample is taken. The police have been trying to do some good work on the issue of systemic bias and to deal with it internally, but they have not fixed it. Systemic bias within the police still occurs in various parts of the legal system. With this bill, the police are able to take a DNA sample based simply on an intention to charge. Māori will be proportionally more likely to suffer from that forcible assault than others in the community.

This legislation is a form of enactment of systemic racism against Māori communities. Cam Calder can sit there and wave his hands about and think that that is perfectly fine, but what he cannot do is find the evidence to the contrary, because the evidence proves that such systemic racism and bias is in the system. It may be small, but for the individuals and whānau who suffer from it, the effects are considerable. It cannot be denied by anyone in this House that those families suffer as a result.

The changes in this bill also undermine the protections of young people, in particular. I am especially disturbed to see that the police will be able to nominate a person to come and support a young person from whom a bodily sample is to be forcibly taken. It should not be for the police to decide who a support person for a young person in that circumstance should be. It is for the young person and for his or her whānau to decide, yet the police will be given the power to make that decision in this bill.

I also highlight the other changes in the process around law enforcement that exacerbate the concerns I have about this bill. One is the concept of mobile justice units, which was proposed in September of this year, I think. Police will be able to not only arrest and charge people but also convict people on the street from the back of their cop car, and they will be able to take various pieces of evidence from people. Presumably now they will also be able to take bodily samples from people as a means of managing what is called mobile justice. This gives the police an extraordinary power. Not only do the police have the power to stop people and to arrest and charge them—and it is reasonable that enforcement agencies are able to do that kind of work—but also the police will now have a judicial role, as they will be able to decide whether to convict people and they will be able to fine them or otherwise punish them for that crime. This bill continues to increase the powers of the police by enabling them to have a mobile justice unit in the back of cop cars, and now the police can forcibly assault people and take bodily samples while only intending to charge them. The power of the police in these circumstances is enormous. It is incredible.

Last night I heard some National members going on about extreme cases, and that is fine. But we are talking here about perfectly ordinary citizens who have not committed a crime, who find themselves in a situation where the police might, for some reason or another, want to talk with them because of a concern around a crime, forcibly assault them, take bodily samples from them, and never charge them. Perfectly ordinary New Zealanders who are going about their lawful business, and who might just have been in the wrong place at the wrong time, will find themselves being assaulted by the police. That is the consequence of this legislation. There is no doubt that the taking of bodily samples, DNA, from those who have been charged—for example, where there is real concern about the possibility of their being involved in other crimes—might be the way to resolve some of those issues. There is an argument that can be made there, but not when the police are simply allowed, by this legislation, to roam around the country, finding people with whom perhaps they have a problem, or perhaps finding ordinary law-abiding citizens who have never been in trouble but have found themselves in the wrong place at the wrong time, and who are forcibly assaulted by the cops, who have no intention of charging them but who can use the measures in this bill as a way of getting through it.

Many of our police do a fine job and are working to improve the culture of the police, but it is not improved yet; it is not fixed yet. Until it is, giving the police these kinds of powers is an abuse of their power, and it is an abuse of citizens. It puts the majority of citizens at risk of the abuse of this power. This bill provides no protection for those people. It is clearly a breach of human rights, and enacts systemic racism into our system. Thank you.

KELVIN DAVIS (Labour): Tēnā koe, Mr Speaker. Tēnā koutou katoa i tēnei rangi paki. I join with my Labour colleagues in supporting the Criminal Investigations (Bodily Samples) Amendment Bill at its third reading. I support it because hard-working New Zealanders need protection from those in our community who wish them harm, and, in particular, I speak for our women and children who need protection from those who have no respect for others. I want to play my part in making New Zealand a safer place, where those who wish harm on our women and children are identified and apprehended as quickly as possible, so that the harm those people cause is minimised.

A number of very salient points were made by colleagues last night, and I will touch on a few of them. Firstly, as was said last night, this bill creates great power. But with great power there is also great responsibility, and it is our duty to hard-working New Zealanders that we do not create injustices as we attempt to eliminate other injustices. When we hear the Attorney-General himself report that this legislation has inconsistencies with the New Zealand Bill of Rights Act, then we need to tread carefully. The Hon Chris Finlayson said that the DNA plan appears to be inconsistent with the New Zealand Bill of Rights Act, because it would give police the power to take DNA from those whom they intend to charge with an imprisonable offence without the safeguard of judicial or other independent approval. The Hon Chris Finlayson said that such safeguards were required in jurisdictions that use the comparable DNA scheme, including New South Wales, Victoria, Canada, the United States, Germany, Japan, and the Netherlands. He said that he could not see any special circumstances in New Zealand to justify not having statutory safeguards.

Charles Chauvel last night described in some detail the circuitous route that may see this legislation challenged, and New Zealand being judged to be acting contrary to the New Zealand Bill of Rights Act. So we may find ourselves here again, ironing out those inconsistencies in months to come. Charles Chauvel also proposed a Supplementary Order Paper that would have avoided this, but unfortunately it was voted down.

As my colleague Moana Mackey described in the second reading, it is incredibly important that we ensure that the process of taking a sample and putting it through a laboratory can be tested in court. People who are facing a lifetime in prison for crimes they say they did not commit must be able to challenge not just the results but the process of storage and the testing of samples. There must be effective procedures that guarantee against the contamination of samples. It is hugely important to ensure the integrity of samples, and of their transmission, storage, testing, reportage, and preservation, and that this can stand the scrutiny of independent experts. We have created the situation whereby the police can arrest and “intend to charge” someone, and take a DNA sample from a person. There are questions around what happens to DNA samples that are taken and eventually no charges are laid against the person, or when charges are laid but the person is not convicted—in other words, when the person is innocent. That raises questions about the destruction of DNA samples and profiles. How can people who have had samples taken be really sure that in the event of their being totally exonerated, all traces of their DNA samples and profiles will be destroyed? I guess they have to take the system at its word.

I was involved in a very small way in a case where an autopsy was performed on a baby’s body, and some months after the funeral very small samples of tissue were returned to the family. The family members, who believed that they had buried all of the baby at once were, understandably, very upset. It illustrates the fact that at times the system does let people down. I note the concerns that the Māori Party and the Green Party have with institutional racism. In the instance of this baby, there was no intention to let the family down, but the story illustrates how issues may arise and cause a lot of angst and grief when people have put trust in the system. I also ask: once one’s information is on the computer, how can it ever be totally deleted? We just have to put our faith in the system but, as I have said, at times the system fails.

As most people have come to accept, DNA has become the 21st century equivalent of taking fingerprints. Others disagree, and I note that the Green Party is concerned about the intrusion on people’s bodies. As a Māori, I know there is a whole cultural side to the sanctity of parts of a person’s body, although I acknowledge that the persons from whom these bodily samples are taken, as a generalisation, have probably failed to respect the sanctity of another person’s body. So I have little sympathy for those people; it is the person who has had a sample taken and is either not charged in the end or exonerated for whom I have empathy.

I have described the way in which Māori, traditionally, have jealously guarded personal possessions—not just body parts like hair and fingernails but other personal items that come into contact with a person’s body, such as clothes and hairbrushes, etc. This is because of the belief that if we physically take a part of a person, then we also capture a part of the person’s wairua, and we can then use that to cause misfortune to the person. We call it mākutu. In fact, the ultimate insult in days gone by was to consume one’s enemy after battle. We can say that Māori collected their enemy’s DNA by eating it; I have been told that the hands and feet were particularly juicy.

In no way do I want to be seen to be creating special treatment for Māori offenders. If someone has done the crime, then, as my colleague Stuart Nash said last night, they need to take responsibility for what they have done. The Labour Party believes that we all need to take personal responsibility for our actions. If we have stuffed up, there will be consequences. This goes for all New Zealanders. We just need to be cognisant of the fact that even if people are to be charged, I presume they are still innocent until proven guilty. Therefore, there needs to be a large measure of respect and sensitivity around the collection of DNA samples.

I understand that the police have developed procedures to deal with cultural issues, but that in the past when there was a higher threshold for collecting samples, the police were dealing with higher-level criminals. Because the threshold has dropped, the police may be dealing with less seasoned suspects who are unfamiliar with the system and who are not so sure about what has been asked of them. I would hate to see a relatively minor procedure escalate into something bigger, which could mean that the alleged offender was charged with other offences, such as assaulting a police officer, especially if that person was innocent of the initial offence.

I note that when taking a sample, a constable has to hand to the person a written notice containing the particulars specified, as well as inform the person, “in a manner and in a language that the person is likely to understand”, what the triggering offence is and the effect of certain sections in the Act—that the sample will be analysed, and that the DNA profile derived from the sample cannot be used as evidence in criminal proceedings, etc. On the face of it, all this seems pretty straightforward: a written explanation in plain language, and a plain language verbal explanation as to what is going to happen. This all seems well and good until we factor in the human elements. As I said last night, as a teacher I know that just because a clear explanation is given, and just because people are nodding their heads and saying yes, it does not necessarily mean they understand what is going on. That is a mistaken belief.

Labour supports this bill, and we note that it complements work the previous Labour Government did by passing the Criminal Investigations (Bodily Samples) Act. That Act significantly increased the scope for DNA testing of suspects—for example, burglary suspects could be compelled to provide a DNA sample. It provided that DNA samples could be obtained by compulsion from prison inmates convicted of serious offences before the 1995 Criminal Investigations (Blood Samples) Act, and that police no longer needed a court order to obtain a sample from a convicted person. It also brought in the use of mouth swabs, which are cheaper, less invasive, and just as accurate as blood samples, and other provisions.

In summary, I hope this legislation succeeds in making Kiwis, and in particular our women and children, safer. I hope there is sensitivity towards the cultural side of collecting DNA samples, and that we will not be sitting here again in a few months, ironing out the bill’s inconsistencies with the New Zealand Bill of Rights Act. Thank you.

DAVID GARRETT (ACT): I rise on behalf of the ACT Party to support the Criminal Investigations (Bodily Samples) Amendment Bill, but with considerable reservations. I am glad to see the Green Party co-leader is sitting down, because I think I will probably cause her some shock later in my speech.

The ACT Party, as everyone knows, proclaims itself proudly to be the party of freedom. I notice Kelvin Davis quoted one of our founding principles, that one must take the consequences of one’s actions. That is typical of the thoughtful speeches made by that member that I have heard in the short time I have been in Parliament. There are divisions in our party because of our founding doctrine of freedom—freedom of the individual. Others in our party say that we should take a DNA sample from everyone. Everyone who is a decent citizen should volunteer and if they do not, a sample should just be taken. No one who is not criminally minded has anything to fear. That is one argument, and it has much to commend it. Others in our party say this is yet another unwarranted intrusion by the State, especially when we are talking about persons who have not even been charged, much less convicted. That causes me concern, personally, and it causes concern to many of our members.

I am personally in that uncomfortable place of straddling the fence on this one, but we cannot do that in this House. We have to make a call, and collectively ACT has made a call to support the bill. The Green Party speaker talked about systemic racism in the police. I personally do not believe that is the case. However, it is undoubtedly true, sadly, that the offence that the Americans call “driving while black”, which here is “driving while brown”, is indeed a reason, in the absence of anything else, for the police to pull Māori people over. Again, some will say that that is justified because Māori are overrepresented in the criminal population. That is simply a fact, whatever the reason for it. But to say that our police are completely colour-blind would be to deny reality.

The other day I was reviewing the case in Whakatāne where four policemen, over an extended period, pepper sprayed a Māori man who was helpless in a cell. They were charged and acquitted by a jury, which I found astounding having looked at the video tapes of what occurred. So to say that the police are entirely free of racist attitudes would be wrong, and I will not stand here and say that.

This is not an easy speech to make, because it is a very difficult question. As Kelvin Davis has touched on, I too share concerns about samples being taken where someone is intended to be charged, but no charge ever follows. I have concerns, and have had concerns. I am old enough, as probably now only a minority of members are, to remember the Arthur Alan Thomas case. I have read the 1981 royal commission report on the Thomas case, and it is a shocking read. I am prepared to bet that nobody else in this House has read it, but I can tell members that from that day on, blind trust in the police was misplaced. So I share Kelvin Davis’ concern, and I share Metiria Turei’s concern, in that regard.

But the argument is finely balanced. We have become a much more violent society than we once were; there is no doubt of that. To anyone who tends to argue otherwise, whether he or she wants to split hairs about domestic violence, or whatever, I say that that is simply a fact. At this point I will depart from the Greens, who use the usual hyperbole when talking about anything to do with law and order, on the issue of grievous assaults when taking samples. Well, I have just assaulted my colleague Rahui Katene when I touched her. I remember studying torts 20 years ago. I got a D in the mid-sessional exam but got an A in the final exam because I swotted. I can remember the exact phrase “Even the slightest touching is an assault”. So I have just assaulted Rahui Katene—although I am cheating, because she gave me her consent first. To say that taking a sample is a grievous assault is silly; it is just silly. The worst that could possibly happen to people who refuse to give a sample would be to have their head held and a swab stuck in their mouth. That cannot be called a grievous assault, or even a serious assault.

This is a finely balanced exercise. I share the concerns of other speakers about the intrusions—the human rights concerns—and I do not have blind faith in the police. However, as I said at the beginning of my speech, sitting on the fence in this House is not what we are sent here to do. The ACT Party, with some reservation, will support this bill. Thank you.

SIMON BRIDGES (National—Tauranga): I have spoken in both the first and the second readings, so I will not take all of my allocated time. But I will talk about the—

Chris Hipkins: Oh, go on. Don’t let us down.

SIMON BRIDGES: I could, but I will not. I will talk about just three things. I will talk about the technology involved and some of the advances there. I will speak about the increase in the number of rightful convictions and the decrease in the number of wrongful ones that this bill will bring, which is something that I see as being very important. Finally, I will note something that Chester Borrows said.

I have said at every stage of this bill that the technological increases and advances in this area are quite amazing. We have gone from the days not a very long time ago when large blobs of DNA were required to get a sample to the situation where a mere trace of DNA is all that is required. Often it is something not even visible to the human eye. The power of the technology has been amazing. Moana Mackey, who knows a lot about this, may be able to correct me, but I do not believe we are yet at the stage where a mere breath is enough. We would still need physical contact.

We have not gone down a much more controversial road, either. Members will remember the Court of Appeal case regarding David Bain, where there were issues to do with whether voice recognition, and whether we could recognise what someone had said in a phone call, could be admissible. It was not admissible in the Bain case. The inquiry went to whether there were words or merely heavy breathing.

We could not say, for example, in a court case whether a person talking on the phone was David or Davina Hughes, particularly if he or she was using a wrong name, as Labour members sometimes do. We have powerful technology, but we are not yet at the point where breath can be included. Certainly, voice recognition is very controversial, so we will not be able to tell which Labour members were making certain phone calls at certain times.

Secondly, I say that the number of rightful convictions will increase as a result of this bill. I think that is absolutely correct. It will also see innocent people vindicated, as we saw with David Dougherty.

I say to the Green member that I take seriously the point she makes about Māori and the justice system. I think that the overrepresentation of Māori in our justice system is of concern, and I believe that it is also of concern to the Minister of Justice, the Hon Simon Power. But I disagree with the Green member in relation to her concerns with this bill, which I think will be a friend, not a foe. It is simply a factual position to say that DNA sampling will see people rightfully convicted or rightfully acquitted. Therefore, it is not racially biased in any way; I do not think that Māori in this country should have anything to fear.

Finally, I agree with something Chester Borrows said yesterday in a fine contribution. When we look at the whole arsenal of laws in the law and order area, this bill is one of the finest, and it is more likely to create fewer victims than any of the other bills passed to date. Thank you.

MOANA MACKEY (Labour): I am happy to stand and take a call on the third reading of this important legislation. Labour will be supporting the Criminal Investigations (Bodily Samples) Amendment Bill. As has been said in previous readings of the bill, Labour did a lot of work in the area of DNA databases, further enabling the police and the courts to use DNA as a powerful tool when it comes to gaining convictions for serious crimes. This bill extends that work a lot further.

Although members have spoken at length about the advantages of this technology and the opportunities it will bring, I once again will talk, as I did in my other speeches, about some of the safeguards that need to be put around this legislation. I make it clear that Labour supports this legislation. I believe that this technology can be used in an appropriate and safe way. I am concerned that none of the Government speakers seem to have taken our concern on board. I spoke about it in the second reading, I spoke about it at the Committee stage, and I am about to speak about it again in the third reading. I think one final Government member—

Paul Quinn: Repetition!

MOANA MACKEY: It is because no one in Mr Quinn’s party has even addressed any of the concerns I have raised. Mr Quinn is about to stand up and give a speech on this bill. I look to the final Government speaker on this legislation to address these issues, because they have not been addressed. That is the reason why I repeat myself. Mr Bridges gave a speech where he made a joke that was not even funny—one should not make jokes if they are not funny—when he should really have been taking the bill a little bit more seriously, and addressing some of the issues I raised.

As I said in the other readings of this bill and in the Committee stage, we have to understand that DNA technology is not foolproof. It is not infallible. It is very, very powerful. The powerful aura that exists around it is one of the reasons why we need to make sure there are safeguards. If we walk in to a court and there is DNA evidence against us, then we are toast. Let us face it: we are likely to go down for that conviction. We need to ensure that juries and the people of New Zealand on whose behalf we are passing this legislation understand that it is not infallible technology. DNA sequencing for criminal purposes is not the same as full genome sequencing. We test about 0.001 percent of DNA when we do a DNA sequence for criminal purposes. Professor Ian Shaw, who runs the forensic science course at the University of Central Lancashire, and who is viewed as an expert on this matter, says that the results are never 100 percent certain. We need to be aware of this, because we have to put safeguards in place if this technology is to be used appropriately. Professor Shaw says: “The problem is that we will never really know how many people we’ve locked in prison using DNA matches are not guilty.” He said that although the chances of that happening were remote, the more samples we get—and this bill will dramatically increase the number of samples we take—the greater the chance that we find two samples that look the same but are not actually from the same person. I do not say that to undermine this technology; I say it because we need to be aware of it. It really concerns me that no Government member has got up and spoken about this issue, or has even acknowledged that there are limitations. They have all got up and told us that DNA testing will free the innocent and condemn the guilty. They have given it superhero status in crime fighting. Yes, it is very, very powerful. But with such powerful technology, safeguards become even more important, because evidence against a person will almost always result in a conviction.

One of the issues that I have been particularly concerned about is the funding of the testing. That is probably one of my biggest concerns. The Minister of Research, Science and Technology, who is responsible for Crown research institutes, was in the Chamber last night, and he refused to confirm that the Institute of Environmental Science and Research would get the funding required to implement this bill safely. He refused to confirm that. He said it was a contract. He knew how much it costs, so why would he not guarantee that the Institute of Environmental Science and Research will get the money? It is not just for the extra testing, the staff, the equipment, and all the reagents that come with it, but also for the chain of custody: for the administration, the storing, the transfer, and the reporting of the samples. If the institute does not have the money for those things, there is no point in doing it.

I refer to an incident that members may remember. Last night members were dismissing this issue as if, somehow, it would never happen. Members may remember a case in New Zealand not very long ago where, due to cross-contaminations between samples, a Christchurch assault victim spent 4 months under investigation for double murder. The only reason that he got off was that he had an airtight alibi: he was being assaulted in Christchurch at the time. His DNA was taken because he was an assault victim, and, because of cross-contamination, he spent 4 months under investigation. That is why the funding has to be there. I am not making this up to be difficult or argumentative; it is a genuine concern. I have friends who work at the Institute of Environmental Science and Research; I used to work there. Those friends have said that they are concerned. They are already under enormous pressure in terms of their DNA testing. All they want to know is that the money will be there for this bill to be implemented safely.

On top of that is the fact that this Government now requires Crown research institutes to return a 9 percent dividend to Government, so suddenly that financial pressure becomes all the more pressing. If people are working in situations where they are overworked, understaffed, and under-resourced, we get mistakes. We cannot afford mistakes in this area, because mistakes in this area send innocent people to prison. We should all regard that as completely and entirely unacceptable. All I am asking is for just one Government member to please get up and guarantee to the House that the money that the Institute of Environmental Science and Research needs for this technology and for this increase—[Interruption] Well, Jo Goodhew can sneer at me, but I am actually quite serious about this. The money must be there, otherwise we run the risk of a miscarriage of justice.

Paul Quinn: Why did you buy KiwiRail?

MOANA MACKEY: The Government’s answer to this very serious problem is: “Why did you buy KiwiRail?”. Apparently Paul Quinn is now telling us that the money for the Institute of Environmental Science and Research will not be there, because we have purchased KiwiRail. Mr Quinn might like to take this issue a little more seriously. He is the next Government speaker, and I expect him to address this issue. It is important.

I come back to my point that DNA testing is not a fingerprint, and we need to be very careful about it. A very interesting paper was given to the New South Wales Parliament when it went through a similar process. It pointed out that if all of New South Wales’ 8,000 prisoners—as there were at that time—were tested against the 15,000 profiles currently in the New South Wales police database, simple chance indicated that around 120 false positives would be found. Again, I say that we can have safeguards around it. But if we are not aware of the issue, and if the Government members regard it as just a joke because all they want to do is go out there and say they are tough on crime, without putting adequate safeguards around the technology, we need to be careful.

Labour tried to put up an amendment, which the Government voted down, requiring judicial oversight of the taking of samples. I think that issue will come back to the House, because I do not see why any Government would have a problem with judicial oversight over the taking of a sample that can convict someone. My colleague Carmel Sepuloni made a very good point when the member David Garrett was talking about the sample being taken. If a person did not commit a crime, but is suddenly dragged in to give a DNA sample, that person might get really upset, especially if it is someone who has been hassled a lot by the police and knows he or she did not do it. People do not always act rationally, particularly if they are accused of something that they did not do and they feel that they are being subjected to harassment. We need to be aware of that, and that is why the judicial oversight clause was really important. I think Labour will bring that issue back to the House.

I also want to come back briefly to the issue of funding and errors. A study was done in the United States where an external DNA proficiency test conducted by the California Association of Crime Laboratory Directors found a 1 percent error rate in DNA testing in those reviewed laboratories. We have to be very careful. That error rate is not mentioned in court. When we are given the statistical probability of someone having committed a crime, that laboratory error rate is not included, as far as I am aware, in New Zealand. I know it is not given overseas. We need to fund the Institute of Environmental Science and Research properly, because if the error rate is getting up to one in a hundred, statistical odds of one in a million suddenly do not mean a lot.

Again, I do not say that to undermine the technology. These are safeguards on the fringes. In large part this technology is very powerful and accurate, but we need to be aware of its shortcomings. We should not mystify DNA testing or put it on a pedestal and suggest it is all-seeing and all-knowing. DNA testing tells us that someone’s DNA was there. It does not necessarily tell us that that person committed a crime; it tells us that someone’s DNA was found at a scene and that it was positively identified to a certain probability. We as politicians need to be very careful about talking this technology up. My colleague Lianne Dalziel made a very good point last night. The flip side is that just because there is no DNA evidence, that does not mean that someone did not commit a crime. Programmes like CSI drive me absolutely nuts, but I will not get started on that programme, because that would be another whole speech. The fact is that police find it very difficult because juries now think that if we do not have DNA evidence, the person cannot possibly have committed the crime. That is the flip side of this argument.

PAUL QUINN (National): As my very good friend and colleague “Rusty Robertson” might say, it is great to be up on my hind legs. I will focus on a couple of points in concluding this debate on the Criminal Investigations (Bodily Samples) Amendment Bill. I will talk about judicial oversight and a wee bit about the cultural aspects that have been raised during the course of this debate, and then I will wrap up by recommending the bill be given the Royal assent.

There has been a lot of discussion during the course of this debate about judicial oversight, the Bill of Rights Act, and so on. The fact of the matter is that this legislation will be implemented in two parts. The first part sets out that the taking of a swab on the inside of the cheek will be implemented in the first round according to new Part 3 of the schedule. Swabs will be able to be taken on that basis. Once procedures have been established that comply with the New Zealand Bill of Rights Act, we will go to a second round of implementation, which is where a swab can be taken in the case of an offence that is punishable by imprisonment. There seems to have been a lack of understanding by members opposite about how this system is supposed to work. I think it is very important that we understand the system in the first instance.

The second issue I raise is that, although I agree with members opposite that we cannot legislate against stupidity or against the situation where people want to break the law, the simple reality is that members on this side of the House believe that there are sufficient safeguards in this legislation to protect people and provide a proper mechanism for implementation.

The final point I comment on is the issue of cultural impact, to which a number of speakers have referred. I am happy to defer to my teina because of his much greater experience and understanding in these areas. But I know that I have expectorated on the rugby field any number of times, and I am sure that when any of us have been driving trucks or working in the freezing works we have done the same. I cannot understand the objection to taking a swab from the inside of a cheek to be put into storage.

With those few concluding remarks, it gives me great pleasure to recommend to the House that this legislation now proceed to the Governor-General to receive the Royal assent. Thank you.

A party vote was called for on the question, That the Criminal Investigations (Bodily Samples) Amendment Bill be now read a third time.

Ayes 108

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1.

Noes 14

Green Party 9; Māori Party 5.

Bill read a third time.

The result corrected after originally being announced as Ayes 108, Noes 13.

Bills

Gangs and Organised Crime Bill

In Committee

Part 1 Amendments to Crimes Act 1961

Hon NATHAN GUY (Associate Minister of Justice): It is great to take a call on the Gangs and Organised Crime Bill. Part 1 proposes amendments to the Crimes Act 1961 that will provide the police with more powers to investigate and disrupt organised criminal activity and assist the prosecution of those involved. Clause 4 increases the penalty for participation in an organised criminal group in section 98A of the Act from a maximum of 5 years’ imprisonment to a maximum of 10 years’ imprisonment. This better reflects a range of culpability caught by offending under section 98A and offending by those who organise serious criminal activity such as methamphetamine manufacturing but who do not themselves directly offend.

Part 1 also clarifies the evidential burden in section 98A necessary to prove participation in an organised criminal group. Section 98A contains a number of criteria including knowledge requirements that must be proved before the offence of participation in an organised criminal group is made out. The amendments in this part make interpretation of the section clearer and should improve its effectiveness as a law enforcement tool.

The Law and Order Committee proposed an amendment to section 98A to align the penalty for serious violent offences committed by organised criminal groups with the penalty threshold for such offences for the purpose of obtaining an interception warrant. This amendment will expand the range of serious violent offences that will be captured by section 98A to include perverting the course of justice with a violent component, certain firearms offences, and certain wounding and injury offences.

Part 1 also amends the sections relating to obtaining interception warrants in Part 11A of the Crimes Act 1961. It provides the police with the authority to apply for an interception warrant to investigate those who participate in an organised criminal group. It also amends the definition of a “specified offence” for which police may apply for interception warrants, expanding it to “an offence punishable by a period of imprisonment for a term of 7 years or more:” rather than “10 years or more:”.

The select committee proposed additional amendments to this part by requiring that there be reasonable grounds to believe that a person has committed or is committing an offence under section 98A(1) in order for an interception warrant to be obtained. That amendment reflects more accurately the actual circumstances that may lead to the police applying for a warrant to intercept private communications.

Hon CLAYTON COSGROVE (Labour—Waimakariri): As we have said throughout the previous stages of the Gangs and Organised Crime Bill, Labour will be supporting this legislation. It builds on a large amount of work that Labour did when in Government. In supporting Part 1, I will raise a couple of issues with the Minister in the chair, the Hon Nathan Guy. I agree with the powers being given to the police in respect of attempts to disrupt crime and to disrupt those who participate in organised criminal groups, especially gangs.

The issue I raise, which I have raised in respect of a number of other law enforcement bills that this Government has put up, concerns resources for enforcement. I think the powers that are put forward here in terms of interception are appropriate. I think the recommendations that the select committee made in respect of reasonableness are appropriate, as are the amendments to the definitions in section 98A of the Crimes Act on offences that are committed by participating in an organised criminal group. But I raise the following point with the Minister. Again, as with other legislation the Government has proposed in order to empower police, the measures are only as good as the resources that are provided to police to implement that legislation.

Today we saw an interesting announcement by the New Zealand Police in my home town of Christchurch. Following the loss, as the district commander himself has advised me, of 32 police vehicles—and a number of those vehicles were from the front line, when we were told they would not be—today there was an announcement, which I have some support for, that the police had gained four bicycles. So there was an announcement today that we will have police on four bicycles running around the four avenues in Christchurch. I have to say, in all seriousness, that in itself that is not a bad thing. A police press statement, which rattled off the objective of this measure, noted that the police laughed heartily at some particular issue. It was an interesting press release.

We want police in our communities, we want police within our suburbs, and we want them visible. That is all true. But I just wonder whether it is a net gain for Cantabrians when they have lost 32 police vehicles—

Paul Quinn: And the Ranfurly Shield!

Hon CLAYTON COSGROVE: —and they have gained four bikes. Mr Quinn makes another so-called useful contribution.

The point I make to the Minister is that criminals, as we know, do not adhere to the ethical rules of law enforcement. For instance, criminals will not say that because the cops are on bicycles, they will not use cars but bikes. What is next? Horses? Donkeys, possibly—and there are one or two donkeys opposite. Criminals do not adhere to the ethical rules of cricket. Just because the law enforcement men and women in blue are on a bicycle, criminals will not decide to rob the bank or department store, or shoplift or carry out an assault, and then get away on a bike. They tend to use whatever means they can to circumvent the law and the law enforcement agencies.

I say to the Minister that we are supportive of this bill. But, again, it comes down to the credibility of the resource packages through the Budget that are put up to implement these measures. We know, for instance, that 340 police vehicles have been taken from the police fleet. We know, because the Minister Judith Collins is fond of telling us, that she gave Counties-Manukau 43 new vehicles in the Budget. Yet, as we look at Part 1 and the resourcing issues around it, we see that we have to ask why the Minister of Police took 340 vehicles away from the police fleet. We know that $21 million has been required to be taken out of the police budget. Part of that budget related to dealing with organised crime, and part of it was to deal with implementing this legislation.

In all seriousness I make the point, as I think I did with the Minister’s colleague, that we are supportive of this legislation, because gang and organised crime activity is insidious—and it is tragic. Some very interesting but tragic points were made on a show that I could watch when it aired last night on TV about the spouses of those in prison, and about gangs and organised crime and their impact on families in our community. But this piece of paper is only as good as the resources that are given to the men and women in the blue and black uniforms to actually make it work. So I simply ask the Minister in the chair, the Hon Nathan Guy, whether he will consider giving us some reassurances around the resource implications of the bill.

CARMEL SEPULONI (Labour): Labour will be supporting the Gangs and Organised Crime Bill. We on this side of the Chamber agree with the Government that some of the most insidious crime in our society is perpetrated by gangs and organised crime. Some of us in this Committee have had family members who have been traumatised by gangs or lured into involvement in gangs. The more we can do to take away the power of gangs and other organised crime units the better, as far as we on this side of the Chamber are concerned.

It is important to mention that the previous Labour Government had legislation similar to this bill before the Law and Order Committee when the National Government came into power. Had the National Government genuinely wanted to expedite this measure at a faster pace, perhaps even within its first 100 days of action, all the Minister of Justice needed to do was to support, and possibly amend, the bill that Labour had before the committee. Despite the fact that this Government decided to ignore that bill and start from scratch for the simple sake of political point-scoring, Labour supports this bill and the intention behind it.

Part 1 amends the Crimes Act 1961. It makes it easier for people to be charged with involvement in a gang. Its provisions cover the nature of participation in an organised crime gang, and involvement in a crime where three or more people share one objective, even if the person in question does not share this objective but merely knows that the three people do. It also broadens the scope of offences that are punishable and changes some penalties from 10 or more years’ imprisonment to 7 or more years’ imprisonment. The legislation also changes provisions on warrants. If a person is believed to be in a gang, authorisation to intercept a private communication will be easier for the police to obtain.

The Minister of Justice was right when he said that some concern about the bill was expressed to the Law and Order Committee. Some of the 11 submissions that were put forward were opposed to the bill because submitters were concerned that the proposals would impinge on the right to freedom of association, freedom of expression, or freedom from discrimination. Other submitters were concerned that it would infringe the rule against double jeopardy. Some submitters conveyed support for this bill while suggesting further proposals. Labour did not believe that those concerns were sufficient to propel us to oppose the bill; therefore, we support it.

Although we support this bill, it is important to point out a slight contradiction or irony. It would be fair to say that the Ministry of Justice cannot work in isolation from some of the other Government departments. In fact, it needs to work coherently alongside other departments like the New Zealand Police. Unfortunately, the reality is that as we move to put this bill into place the police budget has been cut. That is something that Mr Cosgrove talked about earlier, and it is concerning.

It is concerning that, as the Law and Order Committee is aware, as we are putting through this legislation there has been a 10 percent cut in police vehicles, a cut in police firearms training, and a $21 million cut in the police budget. All of these things will limit the ability of the police to do their job well. We as New Zealanders know that if we intend to do something better, as this bill purports to do, and if we are asked to increase the workload, our chances of being able to do so are minimal when funding is cut, and when the expectation is that more can be achieved on a much smaller budget with much tighter resourcing levels. The Government cannot say it is backing the police to deal with issues like organised crime while it pulls away the resources that are necessary for police to do their job.

Labour supports this bill because we are committed to removing criminal gangs from our society. We are prepared to work in a bipartisan way to tackle the scourge of gang crime and drug trafficking in our communities. We on this side of the Chamber recognise crime as a serious and growing problem. We also recognise the complexities that are involved in crime, particularly, and this is something that has not been raised often, in respect of low socio-economic circumstances and high levels of unemployment, and the impact that those two factors have on levels of crime. Those are two factors that the Government must address if it is serious about cutting crime levels. It is estimated that up to 30 percent of prisoners currently identify as gang members or affiliates, and that figure paints a thousand words.

SANDRA GOUDIE (National—Coromandel): I am delighted to rise to speak to the Gangs and Organised Crime Bill. This bill is another great step forward by National in dealing with the law and order issues of New Zealand, and making sure that people are safe in their homes and on the streets.

I take up a couple of comments made by the previous speaker, Carmel Sepuloni, talking about the rights and freedoms of people who are involved in criminal activity and associated with gangs. Quite frankly, when we think about their record of violence, intimidation, and theft perpetrated, and the increase in the use of P, why should anybody think that gang members have any rights and freedoms? We are not interested in their rights and freedoms. If they have done the crime, they need to do the time. We will also make sure they pay for it. With the Criminal Proceeds (Recovery) Act they will pay for it. We will strip them of their assets and proceeds of crime.

This bill, including Part 1, “Amendments to the Crimes Act 1961”, is just a series of tools we will give the police in dealing with gangs and organised crimes. Gangs have infiltrated our communities in such a way that they are now virtually indistinguishable from other community groups, and purport to do community work with the community’s interest at heart. Gangs infiltrate our communities to give them a sense of reasonableness to the community, when, in actual fact, their primary occupation is the perpetration of violence, intimidation, theft, and the use of methamphetamine, or P, in our communities. These sorts of actions should have been taken long before now, and I am delighted that we are doing this now. National is making a difference on the law and order front, and this is just another step in making that difference.

Hon SHANE JONES (Labour): Kia ora, Mr Chairperson. Without a sliver of doubt, I will enjoy supporting the Gangs and Organised Crime Bill. Unfortunately, it is said too rarely that some of the greatest victims of gangs in my part of the world are the very people who are related to members of gangs.

Although we have to be mindful that the police have to respect the bounds of the law—we have to have confidence, for example, in the ability of a judge to ascertain that the information being put before him or her is satisfactory—we should be under no illusion: when looking at gangs we see the worst of human nature. They are hugely well resourced and well organised. To those people who suffer some anxiety from time to time as to whether, in our pursuit of gang criminality, we are turning parts of our system into something that is aping a police State, I say that if they were to fall into the clutches of a gang, they would find that it made the police State look like a kindergarten. Gangs know no bounds. If people move into their business and threaten their existence, then not only will they menace and threaten them and their children but also they will kill them. If members have any doubts, then they should talk to the grieving families in Murupara.

Let us take the gloves off here. This measure is the way that the deep, menacing forces behind the dunderheads who run around wearing jackets and blazers with “Black Power” and other filth written on their backs can be dealt to. Interception warrants, which at the end of the day presumably have to pass muster with a judge who is seized of all the information, are not a bad thing. It is unfortunate that Dr Sharples is not here, because when we deal with crimes associated with gangs, we are dealing with organisations. We are not dealing with random events. We are not dealing with people who have had a wee bit too much to drink or who have been smoking dope or popping pills. We are dealing with well-oiled, highly armed organisations. They have not one iota of respect for Parliament. They giggle, mock, and laugh if one ever asks them to contribute something to honour the legacy of the men and women who are memorialised in this Chamber.

We need to get with the game plan. Gang members do not want to be a part of civil society. That is why I have not a sliver of doubt about the wisdom of supporting legislation that gives better powers and forces to those whom we trust to keep us safe, because, rest assured, gangs do not want people to be safe. Gangs want people to be scared, they want them to be fearful, they want them to be constantly coughing up dough through their kids being addicted, and they want their women to be afraid. People become so indifferent to life that they start slowly but surely to give up, until such time when they are forced to begin to arm themselves to make themselves feel safe. That is the reality in large parts of the north, which is where I come from.

That is why I am sad that Dr Sharples is not here today. For those of us who are of Māori descent, this bill is important. Not all gangs are Māori, but they are disproportionately full of our young people, and some of our people who are old, fat, and corpulent, but still very violent. Dr Sharples has to stop believing that simply by holding wānanga and hui we will get those people to change their lifestyles. Those leopards have deep-etched spots that ain’t going to change. The only way that those people will change is when they putrefy in the earth. Let us hope that not too many victims go through that process before we put the gang members where they belong: out of our sight and out of our lives.

If this expansion of powers causes that to come to pass, a poll taken tomorrow would show that a vast number of New Zealanders would be happy about it—although they might not feel proud that it is a feature of our modern society. People in gangs are driven by forces that are well fuelled and well funded. They do not want to join with the rest of us in terms of looking for markets, jobs, and new growth opportunities. They want to get rich on Easy Street, and they want to come north, and they do. That is why Part 1—and I acknowledge the sensibilities of some members of the Committee in relation to expansion of the State’s powers—needs to be supported.

CHRIS HIPKINS (Labour—Rimutaka): I am happy to take a call on the Gangs and Organised Crime Bill. Much like Mr Jones, the previous speaker, I have come across a number of gang members in my electorate, and I am very familiar with the impact that some of their activities have on communities, on the people who live in those communities, and on many innocent victims, including the families of the gang members concerned. Gangs are repugnant. Their activities are repugnant. The negative impact that they have on families, young people, and innocent members of the community absolutely must be dealt with.

The Labour Party will support this bill to go through the Committee stage. We want to provide the police, in particular, who have to deal with gangs and organised crime, with all of the resources that we possibly can, so that they can do that effectively. If this bill contributes, and adds a little bit more, to their arsenal, then that has to be a good thing.

These are weighty issues and there are no easy solutions to them. They need to be dealt with properly. That is one of the reasons why at the last election the Labour Party pledged to establish a commission of inquiry into organised criminal gangs. It was part of our manifesto at the last election. We need to draw on evidence and research not only from within New Zealand but also internationally. Although I would like to stand here and say that I think this bill will be the silver bullet to magically cure all of the problems relating to gangs, I am realistic enough to know that it will not be. In fact, a whole heap of issues this bill does not address need to be dealt with. They need to be aired and we have to draw on evidence to be able to do that. I know that that is something that the National Government—

Sandra Goudie: Ha, ha!

CHRIS HIPKINS: Sandra Goudie in particular gets very bored when evidence is involved, because it involves a bit of reading, a bit of listening, and a bit of thinking. I do not think that she is really engaged in that level of detail. I understand that she finds evidence-based policy and decision making quite frustrating—

Hon Clayton Cosgrove: She can’t spell it.

CHRIS HIPKINS: —because she cannot spell it, but it does work and it is worth thinking about.

I will talk about a couple of things related to the things that drive gangs. I will go back to one of the pieces of legislation related to this one, which we discussed earlier in the term of this Parliament, and which was about choking off the supply of money to gangs—the criminal proceeds—and giving the police much greater powers in that respect. If we really want to go after gangs, I think we have to go after two things. We have to go after the money, and we have to go after the supply of recruits to the gangs.

The supply of recruits for gangs is something we need to think quite carefully about. If we go to the prisons, for example, where 30 percent of prisoners currently identify as gang members and affiliates, we will find a couple of common characteristics amongst the prison population—illiteracy and innumeracy being two of the key ones. Coming from a lower socio-economic area is another characteristic of prisoners, as is being victims themselves of child abuse or family violence at some point, quite often in their childhood, and being totally disconnected from society. The reason those prisoners relate to gangs is that they are the people gangs prey on in order to gain gang membership. Gangs prey on the same people, who end up in prisons, and that is how they draw their members. If we really want to go after gangs, we will go after the gang recruits. We would choke off the supply of recruits by dealing with those issues—by dealing with illiteracy and innumeracy, and by dealing with the massive socio-economic gap that exists in our society, which gets bigger every year.

We would also deal with domestic abuse, child abuse, and domestic violence. People who have been victims are much more likely to end up being offenders themselves. It is absolutely true. Those are the sorts of things that could be canvassed if we had a commission of inquiry into organised criminal gangs. But unfortunately this Government has not picked up a proposal put forward by the previous Labour Government, and I think that is a bit of a shame.

Finally, I want to pick up a theme from my colleague Clayton Cosgrove, which is that all of the things in this bill may be worthy, but if the police are not adequately resourced to use the powers they are being granted in this bill, then it all amounts to very little. In my own area, the police have had to give back the police cars they previously had access to; they have had to give them back. There are significantly fewer police cars on the streets in the Hutt Valley today than there were before the election.

MOANA MACKEY (Labour): I am happy to stand and take a call in the Committee stage of the Gangs and Organised Crime Bill. I endorse the comments made by my colleagues earlier. Labour takes this issue very seriously. We believe that we need to listen—

Sandra Goudie: How come they did nothing about it for 9 long years?

MOANA MACKEY: Sandra Goudie should get up and make another speech.

Hon Members: No, no.

MOANA MACKEY: I know that it may pain us, but I think the public need to see the depth of talent on the Government benches. I think they need to see the extent of its thinking about this important legislation.

Sandra Goudie: Marvellous, marvellous!

MOANA MACKEY: The member says: “Marvellous, marvellous”. I think the public needs to see the future front-bencher and future Minister of Finance, Sandra Goudie, and get to know her before her promotion comes.

This is a very important bill. It extends work that Labour did when in Government to try to give police the tools to be able to deal with organised crime effectively. This is not an easy area of legislation. Parliamentarians constantly walk a fine line between ensuring that the rights of innocent citizens are protected and ensuring that our police are able to use whatever powers we can give them to bring criminals to justice. We need to do whatever we can to break down the organised crime that exists in New Zealand. This issue is not peculiar to New Zealand. Many countries grapple with how to deal with organised crime; New Zealand is not alone in that regard.

The bill increases the penalty for participating in an organised criminal group from 5 years’ imprisonment to a maximum of 10 years’ imprisonment, and it clarifies the evidential requirements under section 98A of the Crimes Act, which will help to improve the rate of successful prosecutions. If the police are not able to get successful prosecutions, then it will all come to nothing. The bill requires the sentencing judge to take into account any offending that is committed due to involvement with an organised criminal group as a specific aggravating factor. That is also another important aspect of this legislation.

I endorse what my colleague Chris Hipkins said, on two fronts. The first relates to resourcing, which is an issue that I raised in the debate on the previous bill. If we do not resource this issue properly, then all the legislation in the world will not mean a thing. I really endorse what Chris Hipkins said about evidence-based policy-making. It is crucially important, especially in the area of law and order, that we, as parliamentarians, are able to challenge our very strongly held views on law and order, and stack them up against the evidence. When it comes down to a choice between doing what is popular and what works, we should do what works, every single time. We need to be prepared to challenge ourselves to say that something that we—

Sandra Goudie: Ha, ha!

MOANA MACKEY: Sandra Goudie thinks that is a joke. She does not think we should do what works. Sandra Goudie might want to look at the evidence about boot camps. I think that a reason why this Government does not want to go down an evidence-based approach, which is very relevant to this bill before me, is that if we look across the law and order spectrum, we see that sometimes what we believe might not actually be what will work and help us to reduce organised crime in this country.

One of the strongest pieces of evidence about what works in terms of reducing crime and organised crime is visible policing. It is having the police properly resourced to be out there—not to have cars taken away from them, as we have heard is happening in Rimutaka and in Christchurch, but to be out there. If we do not resource our police properly, this bill will not do anything.

Sandra Goudie: Try telling us about the bill. Have you even read it?

MOANA MACKEY: Yes, I have read it, I say to Mrs Goudie; I have read it. If the member had been listening to me, she would know that I told her what it was for. The bill will increase the maximum sentence from 5 years to 10 years. It will require the sentencing judge to take into consideration involvement in a criminal organisation as an aggravating factor at sentencing. Does the member want me to go on? I know what the bill does. What I am saying is that it means nothing if our police are not resourced. All the nice words in the world do not put a police car on the road. Money puts a police car on the road. This Government has been cutting funding to the police. Labour’s point is that this legislation does not matter. We can keep passing law and order bills under urgency, but they will not work if we are not adequately resourcing the police. That goes for the previous bill, which was on DNA testing, as well.

The other point my colleague Chris Hipkins made—and it concerns the evidence-based approach to crime, as well—is that we need a commission of inquiry into organised crime. I do not think that any one member of this House truly understands the range of organised crime that exists in New Zealand and how to deal with it. Do we know why people enter gangs? Do we know what stops them leaving gangs, which is a very important point? Do we know the range of activities they are involved in? If we do not know the enemy, how will we combat it? I say that we do not fully understand the extent of organised crime in New Zealand. I urge the Government, as well as passing legislation like this, to pick up that suggestion and say that we will go out there and find those things out. It might be scary for us to do that, it might be intimidating, and I guarantee that we will not like what we find, but if we do not know what we are dealing with, how can we as parliamentarians comes up with the adequate legislative tools to combat it? How can we give the police the tools they need if we do not know what we are dealing with? If we are serious about an evidence-based approach to policy in this area—and I know that Sandra Goudie is not; she has made that quite clear—then we need to be prepared to go out and find the evidence. We have very, very good professionals and experts in New Zealand who can do this and who would be very happy to be funded to do this properly, alongside the Government, and I know that Labour would—

Sandra Goudie: The evidence is that she’s being specious with the facts and specious with what’s been said in the House.

MOANA MACKEY: I have been what? I have been “specious with the facts”? I do not even know what that means, but that is all right. The other thing that this legislation does is expand the ability of the police to undertake surveillance—

Sandra Goudie: There’s a dictionary in the foyer.

MOANA MACKEY: Thank you very much. I do not need the dictionary; that is fine.

This bill expands the ability of the police to undertake surveillance of gangs by allowing the offence of participation in a criminal organisation to be used as a basis for an interception warrant. I know there are people who are concerned about the extension of powers in this area in particular. I come back to the point I made earlier, which is that, as parliamentarians, we walk a fine line all the time. We want to be able to give the police tools, and we know that this is an area in which they can reap great results when it comes to dealing with organised crime. I say again that we need to make sure that our police are resourced properly, so that they are trained properly to know when it is appropriate to use this power and when it is not. We have a lot of trust in our police, and they do a great job, but there is potential for great abuse if this legislation does not have the proper safeguards put around it and it is not funded properly.

Sandra Goudie: If she can’t understand the word “specious”, how would she understand evidence?

MOANA MACKEY: I tell Sandra Goudie that I know what evidence is. Seriously, oh my God—

Chris Hipkins: There’s plenty of evidence on you, Sandra!

MOANA MACKEY: I know. Sandra Goudie might actually want to listen, because, although she seems to think that this is some kind of big joke, the fact is that we are greatly extending the powers of surveillance that the police are allowed to use when they are dealing with people who are involved in a criminal organisation. There are people in this country who want to know that parliamentarians take this seriously, that this is not just something they do so that they can go out and say: “Rah, rah! We’re really tough on law and order.”, whilst at the same time putting into place a lot of policies that will undermine law and order in this country, and that do not do anything about helping people into jobs and lifting children out of poverty. They want to know we are dealing with the causes of crime, which is just as important as dealing with people once they are criminals—in fact, it is more important. I think that people would prefer that we did not have criminals in this country rather than just having tougher laws to deal with the ones we already have. I urge the Government to take that part of the equation seriously, as well.

I reiterate, because I do not think that the Government is listening—I know that the chairperson of the Law and Order Committee has made it clear that she thinks this is funny and a bit of a joke—that the public of New Zealand wants to know that these decisions and policies are being based on evidence internationally and domestically, and that they will work. We believe that we are giving the police some useful tools here, but we say to the Government—

Sandra Goudie: Oh, she does!

MOANA MACKEY: I said that earlier, if Mrs Goudie was listening. I know that she cannot listen and talk at the same time, so why does she not try listening for a bit instead of talking?

Sandra Goudie: You’re so contradictory in your comments.

MOANA MACKEY: So contradictory? We are not allowed to talk about the safeguards that need to be put around these extensions of power. We are not allowed to say that the Government needs to fund our police properly, and that we support giving extra powers to the police, but when our police are undermined by their police cars being taken away, by their funding being cut—

Sandra Goudie: The only people undermining the police are her and her colleagues.

MOANA MACKEY: I am undermining the police by saying that they need to be resourced properly?

Sandra Goudie: Absolutely, when she’s being specious with the facts.

MOANA MACKEY: I am being “specious with the facts” and undermining the police by saying that I think they should be resourced properly! I think that sums up that member.

Hon CLAYTON COSGROVE (Labour—Waimakariri): I have to say that the exchange between my colleague Moana Mackey and Sandra Goudie was interesting. For those who do not know, Sandra Goudie is actually the chairperson of the Law and Order Committee, and was charged with shepherding the Gangs and Organised Crime Bill through the process of reporting back to this House. I say to Ms Goudie that this is actually very serious legislation. That is the last time I will bother addressing that member in a speech, because it is a waste of time.

I want to raise a very serious issue. In terms of the resourcing issues that other colleagues have talked about, an issue that I think is of great concern, certainly to the Police Association, and that will go to the heart of how this bill is implemented, is how the police protect themselves in respect of dealing with gang members and organised crime. The evidence that Ms Mackey and others speak of, and that some on the other side of the Chamber might want to look at, is very, very clear in terms of the violence that is put upon our communities, family members, and others, especially by gangs and organised crime. Yet for the first time in history, to my knowledge, firearms training for the police force is being rationed. An allegation was put up by the Minister of Police that the police have always reviewed firearms training, and that reviews occurred under our Government, or whatever. That is true, because the police are independent and they are charged with reviewing their own operational requirements. But in 9 years of a Labour Government, no requirement was put on the police to ration firearms training.

We are not talking about some sort of gung-ho attitude here; we are talking about incidents such as the tragedy in Napier, when Senior Constable Len Snee was killed and two other officers were critically wounded. The first responder was not the armed offenders squad; it was a Youth Aid officer. In that case—and it is very germane to this bill—it was not organised crime, although there were organised crime connections. We now know a lot of drug cultivation and drug selling was going on, but there was no intelligence that that day would be a problem for the police. There was no intelligence inside the police. That is not a comment on them; it simply was not anticipated. No one knew. There was no evidence. There was no one from the public to say that something strange was going on at this person’s residence. There was no evidence in respect of firearms use. It was a routine drug warrant. The first responder was a Youth Aid officer, and then we had a tragedy. So when it comes to resourcing, if the Minister of Police, Judith Collins, wanted to, she could communicate very, very clearly to the Commissioner of Police that the pressure is off in terms of resources. She could communicate that he is not required to cut cars, to ration firearms training, or to find $21 million in the Police vote because this Government says it is committed to implementing this and other law enforcement legislation. The Minister of Police and the Minister of Justice could pick up the phone and say to Commissioner Broad that it is OK and that he is exempt from the razor gang requirements that are going through Government agencies, because they believe that if they require him to protect our community there is a requirement on them to allow police officers to have the tools to protect themselves.

There is a lot of hot air about this bill. We support the bill, but I am concerned about the man or woman in the blue uniform. We know from our communities that there is an expectation from people wearing the blue uniform. It does not matter if that person is a police educator, driving a desk, a front-line police officer, a Youth Aid officer, or whatever. When it hits the fan, our communities assume that if a police officer is wearing the blue uniform he or she will have the skills to intervene at any time and at any level, at least as first responders until specialists like the armed offenders squad and others can come to finish the job, as it were. The problem we will have implementing this legislation is that there will be police officers—people in the Criminal Investigation Branch (CIB) and all sorts of folk—who will have their firearms training rationed, or who will not get firearms training at all, and will not renew their skills every year, or every second year, as they are required to. My challenge to the Minister of Justice is to guarantee that when a man or a woman in a police uniform is going around dealing with people who are involved in organised crime and gang violence, they will not be required to use firearms, because they will not have the training to execute that job.

JONATHAN YOUNG (National—New Plymouth): I move, That the question be now put.

Motion agreed to.

Part 1 agreed to.

Part 2 Amendment to Local Government Act 2002

Hon NATHAN GUY (Associate Minister of Justice): This is a very short part of the Gangs and Organised Crime Bill and it amends the Local Government Act 2002. Section 216(a) of the Local Government Act 2002 currently provides that a District Court may grant a removal order if the court is satisfied that the property is occupied or regularly used by known or probable offenders. Section 216(b) provides that a District Court may grant a removal order if a fence, structure, or vegetation is either facilitating or contributing to the concealment, avoidance, or commission of crime, or is intended to injure a person. Part 2 proposes that an additional ground for the District Court to make a removal order is if it is satisfied that a fence, structure, or vegetation may reasonably be regarded as intimidating. This proposal will provide the police with an additional tool to have fortifications pulled down on properties used by known or probable offenders, but it also acknowledges the impact of gang forts on their direct neighbourhood.

Hon SHANE JONES (Labour): Anything that causes local government to act expeditiously and aid the cause of the local community wanting to rid its neighbourhoods and suburbs of this walking, criminalised cancer known as gangs ought to be supported. I am no fan of much of what local government has done in relation to the Building Act—an area that I have some experience in. I found local government to be sluggish. The place was riddled with building inspectors who found things to justify their jobs but little to justify delivering the service. This is why, when I had the brief opportunity to promote a bill as a part of former Prime Minister Helen Clark’s team, it was rapidly embraced by members on the opposite side of the Chamber. I filled a void. Those members came with great promise but precious little results. But that matter is for another time. It is for the historians to write up the great things that the Helen Clark Government did, which will grow in stature as time moves on. The gangs, unfortunately, grow while we are distracted.

When New Zealanders move into a suburb or a neighbourhood, they create a home for their kiddies. They start to invest time and energy in schools and they look to beautify the localities where they live. Then all of a sudden a plague of locusts—or, as the Māori say, a tātarakihi—descends upon the area, and just as in biblical times the locusts sucked out the livelihood of the people by destroying the crops, these people begin to crop. They move into an area and choose dwellings or neighbourhoods where the trees, fences, or other accoutrements give them the privacy to carry on their criminality. Ordinary Kiwis do not know much about gangs, but they know when they are working in “Strugglers’ Gully”. When their TV, car, kid’s bike, or other taongas that they have amassed over a bit of time from dough that has been saved to actually afford those things start to get ripped off, they want those people out of their faces. That sort of behaviour not only lessens the value and the safety of their property but, most important, it lessens the security of where they live. So if the Gangs and Organised Crime Bill is to empower local government by allowing the court to remove gang fortifications, then we should all support it.

Of course, this is an obligation on the courts. We can imagine that District Court judges, not unlike their senior colleagues in the High Court, will be preyed upon by a different form of locust, known as the legal profession. Legal professionals go out of their way—unwisely, in my view—to represent many of these gang characters. They try to allow them to escape the full reach of the law when they have been peddling drugs and ruining the lives of young people. To illustrate my point, in Kaitāia the gangs that I am predominantly concerned about hurt their own the most. I read the local newspaper and gagged through an article to do with my senior National Party colleague John Carter, but that is another story. Then I found that the Tribesmen gang—if ever there was destruction of a proud word and the notion of a tribe, there it is—are now using dope, marijuana, cannabis to reward juvenile criminality. Boys aged 10, 11, 12, and 13—around that tender age—are running away from the whānau, etc. and being rewarded with marijuana if they go out and steal things. The people providing it belong to the gang. So when the parents go and find out who the hell is giving their young fella dope, they are confronted by a fortification. They are confronted by the intimidating presence of that gang culture. It could be someone who is ripe for a heart attack. In fact, I hope that everyone who is involved in Tribesmen criminality has heart attacks by the end of this week. They will get not one sliver of sympathy from me. They are taking young, dislocated boys and giving them dope so they will go around Kaitāia and other parts of the north and tāhae—rip things off. That is the role model that they are growing into. It will give my neighbour Wayne Brown something more useful to do: after he has stopped irking most of the local ratepayers, he can start assaulting, with the full force of the law, the gangs. He is likely to grow in our Māori estimation. Kia ora tātou.

Hon CLAYTON COSGROVE (Labour—Waimakariri): Part 2 is a practical measure. Labour supports it. I know that my colleague Clare Curran, a Dunedin member of Parliament, recently has had representations from a local school, I believe, where down the road, quite literally, there is a gang headquarters. I have not seen it myself, but I am told that it is relatively fortified—or, if it is not, that it will be. These structures put a level of intimidation upon communities.

There are those in this place who say that gangs form part of the culture and fabric of our country. I think Dr Sharples has been heard to say that from time to time. I tend to disagree, respectfully, with him. I think there are basic community norms. We are not talking about the height of pot plants, what colour we can paint our house, whether we can wash our car out the front, or have a barbeque, or park. We are talking about a high degree of intimidation. Gangs set up in communities, and often, as in the Dunedin example, not far from schools. As my colleague Shane Jones has said, they set up there for quite deliberate, nefarious reasons—so that they can prey on communities, particularly the young, and entice them, as he said, with dope and other things.

So suddenly a quiet community, which is law abiding and includes a local school, has some sort of great edifice that has been fortified far in excess of what we would expect for a bank, police station, or, in some respects, an army base. Those fortifications are generally ugly—ugly in an aesthetic way, and ugly in terms of what goes on inside and around them. They become magnets for other activity, sometimes from rival gangs, as we know, because we saw a year or so ago in Wanganui what can happen, and it happens in other places. Reprisals and turf wars take place. Who is sitting nearby, next door or three doors down, a block away or three blocks away? It is communities and often local schools.

We think Part 2 is a very practical measure. Their eminences in the court, the judges, as Shane Jones said, will have all sorts of interesting arguments presented to them to err on the side of being conservative and not to provide the means with which we can rip, tear, and destroy these fortifications. I think part of destroying them is exposing what is going on inside and around those headquarters. Indeed, that may provide some motivation for the gangs to move on. Sadly, it will be to another community, but if this measure goes through—and I assume it will—there will be universal pressure to deal with gang headquarters. We support the part.

Part 2 agreed to.

Part 3 Amendment to Sentencing Act 2002

Hon NATHAN GUY (Associate Minister of Justice): Part 3 creates a new aggravating factor for consideration at sentencing. The Gangs and Organised Crime Bill originally proposed that the courts take into account that the offender committed the offence wholly or partly because of his or her participation in an organised criminal group, or involvement in any form of organised criminal association, as an aggravating factor at sentencing. That was amended by the Justice and Electoral Committee so that the court can take into account the nature and extent of any connection between the offending and the offender’s participation in an organised criminal group, or involvement in any other form of organised criminal association, as an aggravating factor at sentencing. This amendment removes the potentially onerous requirement on the prosecution to prove the motivations of an offender. Although Section 9(4)(a) of the Sentencing Act allows any aggravating or mitigating factor not specified in the Act to be taken into account, it is appropriate that gang and organised criminal connections be made a statutory factor to ensure that these are taken into account in all relevant cases.

Hon SHANE JONES (Labour): I thought I would make another very moderate contribution on the scourge known as gang criminal culture in my part of Aotearoa, known as Tai Tokerau. Of course I can see, unfortunately, the burden upon the judge when this new provision in the Gangs and Organised Crime Bill finally washes up and laps at his or her magisterial feet. Lawyers, unfortunately, are no doubt going to test these notions of both association and connection. It is unavoidable, unfortunately, that when we do change law, it takes a while for jurisprudence to emerge. But if we strip away all the verbiage, we see that at the guts of the issue is the question of whether this is a way of testing people’s motives and getting them to justify how they have acquired their lucre, or why they are doing what they are doing in association with obvious gang offenders, etc.

If the provision actually simplifies the task of the police, and of those of us who are other civic leaders, in being able to amplify the dangers of being indifferent to, or indulgent about, gang culture, then it will be a very useful provision. Admittedly, a test will be required for judging at what point a person is fatally involved in a criminal organisation. I see no other way, unfortunately, for the various lawyers to say that, no doubt at great cost, although Dame Margaret Bazley has a great deal to say about that. She, fortunately, is going to focus on the lawyers, some but not all of whom are ill-equipped to stand before the bench, unlike the majority of we parliamentarians as we stand before Mr Chairperson, but that is another matter. So I think that this is a small provision that is very useful.

But, as I said, let us not get away from the underlying problem. We must seize every device and seize every opportunity to prevent the normalisation of gang culture and of gang membership, so that more New Zealanders shun those families and those people who want to maintain that culture. If, God forbid, there was an element that came to Aotearoa with that Middle Eastern style of deep animus that shows itself in wanton violence, etc., we would shun that as a part of our tolerant society. But it is sad that, growing year by year, there is a hardened element. I fear over a longer period of time the attitudes of Kiwis towards this gang thing—given that we have been through indulgence, we have been through indifference, we have been through aspiration, we have been through anger, and we are going now in some cases into fury. What will happen in areas such as where I come from is that people slowly but surely will continue to take the law into their own hands, because they are genuinely frightened and scared of those people. I already said earlier that that fright is a massive weapon in the hands of gang criminals; having people frightened is at least 80 percent of the way. It might be said, as it often is by Dr Sharples and his colleagues, that this is hyperbole and rhetoric that does not actually advance the cause of understanding the underlying reasons for gang criminality and helping people move on. The only place I want them to move on to is a new wing at Ngāwha prison.

I am not interested one iota in normalising or enabling people to think—under the cloak of Māori culture and by using a few Māori words—that somehow we are going to weaken our resolve to marginalise those people and to have them face the full cost of their criminality. It is a very divisive issue. For those of us who are in the Māori world, it takes up a large part of our time. In Parliament we do not stay just in any world. We do not necessarily stay in a Pākehā world or a Māori world; we are there for all New Zealanders. But the place I come from in the North is a hugely strong Māori area, and it has a different culture. It has a different political culture. But, as lonely as it is, and although this approach of supporting legislation like this bill and supporting the ability of the police to be more penetrative and perhaps even more unforgiving, does cause us to be assailed in the Māori world as being anti-Māori, I think this provision is very important.

Hon CLAYTON COSGROVE (Labour—Waimakariri): Labour supports this provision. I think the Minister made a good point when he noted that it changes the burden on the prosecution to prove motivation in respect of an offender. We know from current jurisprudence that from time to time that has been a very onerous requirement on the prosecution. Of course, as Mr Jones has said, the people involved in those sorts of offences and their legal counsellors will find very interesting and sophisticated ways to try to circumvent the court processes and try to prove that their motivation is other than how a prosecutor would argue it.

Not being a lawyer myself I will not go from there into the intricacies of that argument. Suffice to say, as other colleagues have, that if there are other devices like this that can be used to get to, and deal with, organised crimes and criminal gangs, then they should be supported and implemented. Again, I simply raise the question of resourcing, not so much in respect of the police in this issue but more in respect of the Crown prosecutors and the justice budget—those who are charged with resourcing the prosecutors to implement this bill. Again, we would like some reassurance that resources will be available to implement what I think is a positive provision within this bill.

CARMEL SEPULONI (Labour): I refer to Part 3 of the Gangs and Organised Crime Bill, which amends the Sentencing Act 2002. I will continue on from some of the things that Mr Jones said. Largely, the focus of this bill, in respect of gangs and organised crime, has been on the larger gangs, like Black Power and other such gangs. One factor that has not really been taken into consideration is what we call, in Auckland at least, the “ABC” gangs, which are many of our youth gangs. They often name themselves after the street they live on. Say they live on Smith Drive; they would then call themselves the Smith Drive Boys, or whatever.

One thing we appreciate about this bill is the fact that, as Mr Jones said, it prevents the normalisation of gang culture. Many of the “ABC” youth gangs initially do not have the same intentions as some of the larger, more established gangs, but the issue with those smaller “ABC” gangs is that they often base their structure and what they intend to do on American gang culture. They are enticed by it and see it as something they can identify with, and then they go ahead and set up their own gangs. The other issue that comes into play with the “ABC” gangs is that they are often preyed on by much larger gangs, and by much older gang members and people in general, who use those youth who are just setting out in the gang lifestyle to do a lot of the groundwork in respect of selling their drugs and committing what can start as small crimes but can end up as something quite serious.

Labour supports this legislation. We support preventing the normalisation of gang culture. The more that we can do to take power away from gangs, the better it is for our youth. We need to take any opportunity possible to ensure that the gang culture does not become an avenue for our youth to go down, that it does not become attractive to them, and that it is no longer a possibility that they can get involved. I think it is very important to mention this issue relating to youth gangs—perhaps not in relation to the larger, more institutionalised gangs that we know of, which have been around for many years—that continue to emerge and plague the communities in which they are set. Thank you.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe, Mr Chairperson. Kia ora tātou i tēnei rā. I am aware that time is moving on and I will take only a brief call. I find myself stuck with the Gangs and Organised Crime Bill. I tend to agree with many of the statements made by my colleague Shane Jones, because of the loss of two lives in Murupara, in my electorate. A young boy, Jordan Herewini, from Te Kura Kaupapa Motuhake o Tāwhiuau, was killed earlier this year. Another young man, Kaine Lewis, was killed about 5 or 6 weeks ago. Again, he was involved in a gang confrontation in Murupara. These deaths resulted in a hīkoi through the town.

If members do not know Murupara, it is a rural community way out in the middle of the bush. Once upon a time it was a thriving community. The vast majority of the people who live there are Māori. At this point in time many of them are unemployed. Basically, two gangs are involved in that town right now. The first is the Tribesmen, which has become established there. For all intents and purposes, that gang is made up of many people from the iwi of Ngāti Manawa and Ngāti Whare. The Mongrel Mob has also moved into town. The two altercations that resulted in the deaths of those two boys came out of gang confrontations and the use of colours, which is being discussed today. Having been associated with the young boy Jordan—we had travelled together on various trips—his death really hit home to me, and it certainly made me feel really angry in respect of the way that gang culture has developed in Aotearoa.

In reflecting on this bill, I wonder whether we will ever get rid of the whole notion of gangs in Aotearoa, but I tend to believe that we will not, because overseas experience overseas tells us so. No matter what strategies have been employed thus far throughout the world, it seems that there still remains a culture of “ganghood”, if you like, and that is the difficulty. No matter what we try to do with gang members—lock them up and throw away the key, or work with them—there still remains the whole notion of gang culture. Yet there have been some examples where working with them has produced positive results. Not that I am the expert on gangs, but I think back to the work that Sir Robert Muldoon sort of started and that others have picked up in terms of moving towards employment schemes and so on.

The strange thing about this experience is that in Murupara the people decided to take the bull by the horns and come back to our own tikanga. I am talking only about this particular situation, not other gangs. I am talking only about these two gangs, which we might call Māori gangs. They have basically called a rāhui, which is a prohibition on violence in their town. It seems to be taking off and working. It means that there is a lot of dialogue and a lot of talk between the people involved.

The Māori Party has been talking a lot about this issue. In particular we have been saying that we have to do something, but we ask what the something is that would produce the best results against the context of the fact that gangs will stay with us. Sure, some measures might happen to be on the side, but one of the things we are absolutely confident about is the need for us to empower communities to allow them to get on and deal with the issues within their own environment.

Since the time that the rāhui has been imposed, it has even got to the point that Ngāti Manawa have basically banned patches from their marae. I am not exactly sure of all the circumstances, but the following example could be a real situation. Imagine that a gang member has died in Wellington, and his family say that they want his body to go back to Murupara for burial, but the people back in Murupara say no. They say that he cannot come back. They say that if he chose that life, then he should stay down in Wellington. He cannot go back and be buried amongst his people in Murupara. The Murupara community will not even allow him to go to their marae. If his body was to go back to Murupara, first, the family needs to find a place for him to lie, and, second, the family need to have the people there agree that he can lie in the same urupā, the same cemetery, as all the ancestors. That is happening right now, today. If it is not today, then it was yesterday; I have spoken to the people about it. That situation is the sort of thing that can happen.

I am caught with the whole notion of having to do something, but, at the end, having discussed the issue in our caucus, we struggle with the notion of simply keeping on locking those people up. It might satisfy our minds right now, but we are looking for some other solutions on top of that. There is no doubt that those who commit those crimes should serve the time; I have no problem with that. But we have to do something about rehabilitation to try to get these people back into society. If it comes at a hard cost, like not being allowed to go back to be buried amongst one’s people, then that is a big call.

Mr Jones will know that not being allowed to be buried amongst one’s own people is a very, very big call. In fact, not even being allowed to go on to one’s marae to grieve over one’s relations is a big call. Just 2 weeks ago, there was a tangi in Murupara for a kuia who was about 90 years old. Her children are teachers. As soon as the rāhui came in and Ngāti Manawa banned the patches, the Tribesmen could not go on to their marae. It got a little bit dicey there, I am told, but in the end the gang members respected it. Further, they tried to go down to the urupā to bury her, and women stood on the road. Kuia and koroua stood on the road and said that they were to get the patches off or else they would not be going in there. They could choose one or the other and take their leave.

Serious efforts are being made on the part of our communities to take back our communities, and I use Murupara as just one example. The hope would be that the notion of using our own tikanga spreads. I do not know whether it would work in Kaitāia, Kaikohe, or elsewhere, but I am confident, based on what has happened in Murupara, that we can change the mindset.

While this bill is before us, I want the House to understand that our vote is about looking at other solutions. Although we do not support this particular bill as such, we understand the reasons for it, but we also want to look at the bigger picture. The solution might come not just from the law and order field or the justice field; it might come from the bigger picture. I wanted to raise those points, just in case other speakers from the Māori Party have not yet put that view. It will be a part of the picture painted with our vote later on in the other stages.

DAVID GARRETT (ACT): I feel privileged—and I say this without a trace of sarcasm or insincerity—to have just heard that speech by Te Ururoa Flavell. It was a fantastic speech. I am aware of the case that occurred a couple of weeks ago, but I was not aware of yesterday’s case that he referred to. I say at the outset that I do not claim to be an expert on Māoritanga; it would be absolutely arrogant and ignorant of me to do so. But I know a little bit about it. What struck me about the case 2 weeks ago—and I am very sorry to have to point this out to my colleague—was that on the previous day it was revealed that his co-leader Dr Pita Sharples had met with gang leaders, in part to find out whether they were getting enough entitlements from the social welfare system. The next day the kuia whom Te Ururoa just referred to stood up and said that if gang members were going to dress like that, they should go away. I imagine the words might have been a bit stronger than that. Ordinary Māori people recognise those scum for what they are: scum and criminals. I think that speech was fantastic, and obviously that attitude towards gang members is a part of the solution to this problem.

It has been said by Te Ururoa and others that gangs will always be with us, and we just have to give up and accept that in some way. Not so! Not so! Dr Jennifer Walsh, a criminologist, was here to give evidence on the Sentencing and Parole Reform Bill earlier this year. I rang her the other day; we stayed in close contact. I just happened to say we do not hear as much as we used to about drive-by gang shootings in South Los Angeles, and she said they almost never happen now. I asked why that was, and she said it was because the gang leaders were all in jail—they were locked up. So the issue of gangs can be tackled. Yes, a multidisciplinary and multifaceted approach is needed, but the first step is to take the brave step that those kuia did on that marae in the Bay of Plenty two weeks ago, and to have a clear understanding that the gangs are criminal organisations that will not be tolerated.

Hon SHANE JONES (Labour): Thank you, Mr Chairperson, for providing me with the opportunity to make a short contribution on the Gangs and Organised Crime Bill. I really enjoyed hearing my colleague Te Ururoa Flavell speak about the Murupara experience, but for me it reveals a deep ambiguity about where those Māori politicians in this Chamber stand in relation to gangs.

I agree with a community that binds together and seeks to censure or exclude criminals—because that is what the gangs are. Members should stop calling them “our people”. They are not our people. Our people do not go to jail for killing teenage boys. Our people do not go to jail for raping and for selling P, and celebrating that as a mark of distinction and success. They are not our people. In fact, they are not people. We have a word for that kind of thing in Māori. It is “taurekareka”. They are the slaves that, before Christianity, would have been dispatched without a sliver of a doubt—because that is how they are treating those teenagers in Murupara.

If communities believe that by relying exclusively on those proud, noble traditions that define us as Māori, such as rāhui, we will penetrate that fog of criminality, I have news for them. Those people will understand only one thing: ringa kaha, the full force of the law. It will offend a number of us in this Chamber to think that we as New Zealanders will have to embrace that level of harshness, but if we do not, those of us who are condemned to live with those taurekarekas have to worry when our daughters, our sons, our mokos, and our families go about their lawful duties and activities. Will they fall prey to those locusts?

So yes, there is a small glimmer of hope in Murupara. I was at a tangi where I heard a Mr Goldsmith of Murupara, an elder who lived and worked with my Ngāpuhi relations in South Auckland. He explained very vividly the dilemma. How can they continue to live in Murupara without full access or recourse to the police? They do not want to take the law into their own hands. He gave a very good account.

I say to every marae and every Māori community that if they are not prepared to shun those people, they will infiltrate their communities and ruin their lives. It may not happen in the more leafy suburbs of Auckland, although Paul Holmes can give an account that would suggest something slightly different. Those of us who live in the provinces and see how those people live on a regular basis should mark my words. We need to take a very staunch approach to them and stop regarding them as our people. To me, that not only corrupts the notion that we as Māori want to celebrate kinship but it provides them with a new level of cover and camouflage.

Members of the Māori Party must step away from the moral ambiguity they have over this. They will not support this bill. I say: “Shame on them!” They should not come to this Chamber and give us lectures about how kaumātua and kuia are showing courage in the face of killers—because within those gangs are the killers of those teenage children—when they do not have the boldness or courage to support this bill. That is why I hope that the moral ambiguity the Māori Party has is fatal in a political sense. Kia ora tātau.

The CHAIRPERSON (Eric Roy): Before I call the Hon Clayton Cosgrove, I say that these are fine speeches, but I am trying to connect them to Part 3 of the Gangs and Organised Crime Bill.

Hon Shane Jones: It’s gangs.

The CHAIRPERSON (Eric Roy): I know that. I have shown a great degree of tolerance and leniency in every part of the bill, but I ask members to address Part 3 at this stage in the debate.

Hon CLAYTON COSGROVE (Labour—Waimakariri): I commend you, Mr Chairperson, on your tolerance, and on the way in which I think you have let this debate flow somewhat more widely than being simply on Part 3, which deals with aggravating factors at sentencing. Items have of course been brought to the debate that I think require answers. Mr Jones, Mr Flavell, and Mr Garrett, I think, have made points that are relevant, as we deal holistically with the insidious nature of gangs.

I am taking a short call to address, as my colleague Mr Jones did, Mr Flavell’s speech. It was full of emotion, and quite rightly so. Although he talked about the aggravating factors that had occurred in Murupara, where communities had been put upon, and where fatalities had occurred, I must say, in addressing what he said, that he told the Chamber that he would not be supporting this bill—and, I assume, this part, Part 3, which deals with aggravating factors. Mr Flavell is essentially saying that it is OK for those on the marae to lead the charge, as he rightly pointed out. But he is also saying, I think, and as Mr Garrett alluded to, that it is OK for his leader to meet with gangs and somehow put gang leaders on a platform. There has been a lot of debate about that, of course, in the community: is it a good thing or is it a bad thing to see them eye to eye and to spend $6,500 of taxpayers’ money doing it? It is OK, of course, to have gangs expunged from the marae and shunned from it, and to have those good people in our communities take that fight to the gangs, but the Māori Party is not prepared to support this legislation, and Part 3 particularly, and in supporting this legislation to support their own communities—the kaumātua, the kuia, and the others who are out there on the front line, as Mr Flavell quite rightly points out, doing their bit. They do not have to spend $6,500 of taxpayers’ money doing it, but they are telling people to get off the marae. My colleague Shane Jones leant across and said to me that in terms of expunging gangs from the marae, up in his part of the world that was tried 20 years ago, yet we are no further ahead.

I say to the Māori Party that I would like a reason why it will not support this bill, why it will not support Part 3, and why that party thinks it is appropriate to posture here in the Chamber and leave the fight back home out there. This issue is cross-cultural. This is not just a Māori problem; there are predominantly white gangs. We can have a look at the Christchurch Press this morning and read about them in the Dominion Post. This is not about culture. Like Mr Jones, whether they be brown, white, or any other colour or creed, I do not consider members of gangs “our people”, our citizenry, or part of our community. They are thugs, murderers, and rapists; they are those who do immense harm to our community. So I would be grateful if, at least for the Māori Party’s own constituency, Mr Flavell could get up and tell us why the kuia, the kaumātua, and our communities are left to take the battle against the gangs back in the home patch and on the marae, and why, hang on, the Māori Party, which purports to represent all Māori—I think wrongly, because that is ridiculous—will not stand up and support a bill that I think has most, if not all, parties’ support to crack down on the insidious nature of gang activity.

I mean, how many young people have to be killed, young women raped, or young people put into a life of crime and enticed by drugs, alcohol, and the other things that are peddled by these gangs? What will it take for the Māori Party to get the message right and consistent, instead of giving the strong message in here but the weak message out there? That Māori Party leader cannot meet with gangs, have lunch with them, spend six and a half grand on them, and then go around telling everyone that it was a great cultural experience and part of giving the message to gangs. That happened in June, and Mr Garrett and other members have spoken of the fatalities that have happened since then. The gang activity has rolled on.

I believe we should not give gangs a platform of equal status to anyone—not just to politicians but to anyone in our community—because in doing so it is recognised that somehow and in some way gangs are legitimate. Whether gangs be white, Māori, Pacific Island, Asian, or whatever, their activities are insidious, they are not part of our culture or community, and they should never be recognised. I invite the Māori Party to respond.

Dr CAM CALDER (National): I move, That the question be now put.

Motion agreed to.

Part 3 agreed to.

Clauses 1 and 2

Hon NATHAN GUY (Associate Minister of Justice): It is great to take a call on the title of the Gangs and Organised Crime Bill. I understand that there was some debate on the title when the bill was before the Law and Order Committee. There was some confusion amongst certain members of the committee about the fact that although gangs that offend are one type of organised criminal group, as the term is used in section 98A of the Crimes Act 1961, organised crime is, indeed, a wider concept.

The bill has application to organised criminal groups, including gangs, but the legislation is drafted with sufficient breadth to capture white-collar corporate fraudsters, and, indeed, any group of three or more people with a specified common unlawful criminal objective. Any person who participates in or with such a group will be criminally liable and will face a term of imprisonment of up to 10 years.

The title of the bill also recognises the strong link between gangs and organised crime in this country. For example, just under 75 percent of the clandestine drug laboratories discovered by police in 2007 were identified as being linked to recognised criminal gangs.

This bill was part of the Government’s first 100 days, and this has been a very busy Government under the leadership of Prime Minister John Key. It is my desire that this bill be brought into force this year in order to provide police with greater tools to combat gangs and organised crime in New Zealand.

Hon CLAYTON COSGROVE (Labour—Waimakariri): I will not take too much of the Committee’s time over what is a pretty simple debate on the title clause of the Gangs and Organised Crime Bill. I think the title is germane. The only question I would raise with the Minister in the chair, the Associate Minister of Justice, Nathan Guy, who has failed throughout the Committee stage to address this question at all, is one of resources. I ask whether this legislation should be called the “Gangs and Organised Crime (But Do the Police Have the Resources to Do It?) Bill”. Equally, one could ask the Māori Party whether it has dropped the ball on this legislation. As I said in my speech a few moments ago, I fail to see how anyone can preach in this place about “taking the fight” out to the communities, then sell out the communities by saying it is up to them to get the gangs off the marae and out of the square, and to take the patches off the gangs, without backing the communities through legislation. The question before the Māori Party is why it is voting against this legislation.

The Associate Minister makes a good point in that the debate has centred around gangs. They are the most visible, if you will, element of organised crime in our communities. They wear the patches and are pretty naked in terms of their criminal ambition, but we know that there are criminals who wear expensive suits. There are criminals who shun any disinfectant in terms of the light of the law that might be put upon them. They do not want the profile; they want to get on with their activities. In fact, I am told by some law enforcement officers that those criminals deal to anybody who might go off in a maverick way and commit violence. They deal to them quite heavily because they do not want the profile. They do not want the police taking any notice of them. They want to appear to be low profile and unthreatening. They do not have the huge gang fortifications. In some places, I am told, they live in some of the most posh suburbs of New Zealand. They do not want law enforcement having its eyes on them. There are tools within this legislation that will give the police and law enforcement eyes or ears on those criminals in terms of surveillance.

It is worth noting, as others have, that organised crime is not confined just to what we might see when Television New Zealand does the “smash, bash, and crash” exposé, as it does from time to time when something tragic happens, because it is gang stuff. What we do not hear about, because it does not have the graphic violence that can be splashed on the 6 o’clock news, is the gang member or organised criminal in the suit who works behind the scenes but who is equally insidious because he or she is peddling drugs in a more sophisticated way. Those criminals do not have barbed wire up on the front fence. They may live in the leafy suburbs and we may not know exactly who they are, but they are as insidious and despicable as anyone who wears a physical patch and tattoos, whether they be white, brown, or any other colour or creed, and who goes around in a physically menacing way and is visible around our communities. So we support this title. We hope the bill will be backed up by appropriate resources.

We again ask why the Māori Party waves the white flag of surrender in here, leaving it up to the folks back home to lead the charge against organised crime, and does not support a bill that gives those communities the tools, through law enforcement, they need to back the kaumātua, kuia, and the organisations that are standing up and saying “Taihoa. We do not want these individuals here.” The question is why it is a case of lion in here and lamb out there. Why will the Māori Party not stand up and support this bill? Is it because the Māori Party has some sort of bizarre view, as Mr Flavell has said and Mr Jones pointed out, that these gang members and organised criminals are somehow “our people.”? Like hell they are. They are not our people, and they should be run out of town. They should be run out of town by the Parliament. We should not leave it to the kaumatua, kuia, and others to do our bidding for us.

The CHAIRPERSON (Eric Roy): I just make a comment here. I have been extremely tolerant. This is the debate on the title and commencement. The member went well beyond that, and, in a way, he has incited responses. But this is the title and commencement debate.

TE URUROA FLAVELL (Māori Party—Waiariki): I raise a point of order, Mr Chairperson. I do not want to debate the title and commencement. I had two shots and I have had two responses from two Labour members who have asked for a response. I want to make some comments in respect of the terminology—I definitely want to do that—but I want the chance to respond, if I could, and I will leave it at that.

The CHAIRPERSON (Eric Roy): I gave some tolerance to members on the Labour side of Chamber; I have no option but to give the member some tolerance. But I will conclude the debate on those matters, and any subsequent efforts will be on title and commencement.

TE URUROA FLAVELL (Māori Party—Waiariki): Kei te pai. Thank you very much, Mr Chair. Firstly, I will speak with regard to the terminology. If we ask most New Zealanders about the word “gang”, the notion that would come to the mind of most New Zealanders would be that of Black Power, the Mongrel Mob, maybe some bikie gangs, people on motorcycles, and that is about it. Carmel Sepuloni raised the issue of colours, and after talking with some people in this particular area I say that those people do not seem to be classed as gangs, in a sense. So I want to check with the Minister in the chair, the Hon Nathan Guy, about what he said a little bit earlier, by raising the point about the definition of gangs, how far and how wide that particular definition goes. Mr Cosgrove has raised the point of whether white collar crime fits into the notion of gangs, and there might be some catches. It might fit under the other part of the title of the bill—“organised crime”, and so be it. But I make the point that the connotation of “gangs” is around the notion of Māori gangs or those that, let us say, affiliate to those Māori gangs. That is the first point.

Mr Cosgrove raised the notion of the cost in finding solutions. I raise the point again that I had talked about at least one community taking an opportunity and that I supported them on that particular notion. That is what the Māori Party says.

Hon Clayton Cosgrove: Six and a half thousand bucks!

TE URUROA FLAVELL: I will come to the $6,500 shortly. If there was support to allow those communities to get on with those solutions, then we would be happy because that at least is dealing with the problem and will get away from going to the next part, which is the $6,500. Mr Cosgrove talks about the cost to the taxpayer, yet the end result of this bill will be to lock up more people, no doubt; therefore, there is a contradiction in what he is talking about in that regard.

The third point I would make is that already now in law there are opportunities for the police to move in on gangs. We know that, because that is exactly what happened in a number of scenarios that people will be well aware of. Sure, this bill might harden up the legislation and, sure, it extends certain terms, but the law as it stands at the moment is able to deal with those issues. I respond by saying that that is one line. The law is already there that can take care of those issues, so what do we do to deal with the situation afterwards? We are just breeding more and more and more of it.

The Māori Party approach is that we need to look at alternatives. That is not to say that we should not throw them into jail; I told the Chamber before that those who do the crime should do the time. There is no doubt about that. We do not have a problem with that. But we are saying that we should look at other solutions. At least one community has put its hands up over the issue and we hope that that spreads. It is not to say that Murupara has all the answers. It does not, but at least it is right for people there. Other places will have different solutions. The point about back-up, too, is exactly right. We hope that rather than put $6,000, or whatever, into sending a person to jail, we put $6,000 on issues of rehabilitation. That would be helpful; that would be really helpful.

Hon Shane Jones: Mr Chair.

The CHAIRPERSON (Eric Roy): Just before I call the member I say to members that my tolerance has been—

Hon Member: Exhausted.

The CHAIRPERSON (Eric Roy): —exhausted and I will terminate the speech of any member not speaking now on the title and commencement. I say to members who want to continue this debate that this is a fine debate. The third reading is forthwith. I ask members to bear that in mind. If Mr Jones wants to make a contribution it must be on title and commencement.

CHRIS HIPKINS (Labour—Rimutaka): I raise a point of order, Mr Chairperson. I draw your attention to Speaker’s ruling 110/7, which states “When debating the preliminary clauses at the end, members should have some latitude to summarise, and make concluding remarks about, the issues they have raised during the committee’s consideration of the bill.” I do not want to challenge your ruling, because I think you have done very well in providing some latitude for members in the debate. I just want to ensure that members are actually given the opportunity in this to summarise comments and to respond to comments that have been made through the debate.

The CHAIRPERSON (Eric Roy): The member is actually challenging me, but in a gentle way, and I am going to stand firm on what I have said. It is title and commencement from now on. I think we have got to the stage where both sides have been put, and we are having a third reading forthwith.

Hon SHANE JONES (Labour): Thank you, Mr Chairperson, for observing some latitude; it was an impassioned issue. I would also like to acknowledge Te Ururoa Flavell. Both he and I are entitled to have our views recorded in the Chamber, and I respect the direction that he is coming from. I want that to be known because those of us who share common roots need to be of a common mind.

This is the Gangs and Organised Crime Bill, but I cannot resist the option of leaving the member with the feeling that the bill ought to be renamed. It ought to be renamed the “Māori Party Talks the Politics but Does Not Walk the Politics Bill”. The title reveals that the bill is not just about an ethnic problem; the problem, as we are warned, is how we respond as a legislature to organisations. The title of the bill contains the word “organised”; that requires a sophisticated response. We are also required to deal with the word “gangs”. Gang members want to have rights but not obligations, and that is probably where we differ from them. Unfortunately, I am unlikely to persuade a suitable number of people in the Chamber that the bill should have a new title. Therefore, as Labour is supporting the bill, we will tolerate the bill going forward with its current name, although we know that probably it could have been given a far more fitting moniker, given the contributions of some members of the Chamber.

Clause 1 agreed to.

Clause 2 agreed to.

The Committee divided the bill into the Crimes Amendment Bill, the Local Government Amendment Bill, and the Sentencing Amendment Bill (No 3), pursuant to Supplementary Order Paper 51.

Bill reported without amendment.

Report adopted.

Bills

Crimes Amendment Bill

Local Government Amendment Bill

Sentencing Amendment Bill (No 3)

Third Readings

Hon NATHAN GUY (Associate Minister of Justice) on behalf of the Minister of Justice: I move, That the Crimes Amendment Bill, the Local Government Amendment Bill, and the Sentencing Amendment Bill (No 3) be now read a third time. These bills are an important step towards addressing the serious problem of organised crime. They increase the range and effectiveness of the tools available to police for investigating and disrupting organised criminal activity, and for prosecuting and penalising those involved. As these bills represent another of this Government’s initiative within its very busy first 100 days, I am especially proud to see them passing into law today.

Gangs and organised criminal groups are heavily involved in violent, drug-related, and property crime in New Zealand. They are also involved in more entrepreneurial types of offending. A significant proportion of the importation, manufacture, and supply of illicit drugs in this country can be attributed to organised criminal groups. At a local level, inter-gang violence and fortified premises intimidate communities right across New Zealand. Indeed, I experienced that as I was growing up in Horowhenua. Clamping down on gangs is part of the Government’s priority to improve public safety.

The Gangs and Organised Crime Bill has now, pursuant to Supplementary Order Paper 51, been divided into three bills amending the Crimes Act 1961, the Local Government Act 2002, and the Sentencing Act 2002.

The Crimes Amendment Bill provides the police with a broader and more effective range of tools for intercepting the criminal activities of organised criminal groups. The bill allows police to apply for an interception warrant to investigate participation in an organised criminal group, which is an offence under Section 98A of the Crimes Act. It doubles the maximum penalty for participation in an organised criminal group from 5 years’ imprisonment to 10 years’ imprisonment.

The bill clarifies the evidential requirements to prove that offence, with the aim of securing more successful prosecutions of those who participate in an organised criminal group. It expands police surveillance powers in respect of gang communications by lowering the general threshold for a specified offence for interception warrant purposes from 10 years’ imprisonment to 7 years’ imprisonment. This will enable police to better investigate a wider range of organised criminal activity.

The Crimes Act will also be amended through recommendations made by the Law and Order Committee. These include clarifying that people who contribute to the illegal activities of an organised criminal group from overseas will not escape prosecution under section 98A, and increasing the range of offences that, if undertaken or planned by a group, qualifies that group as criminal.

The Sentencing Amendment Bill (No 3) makes participation in organised criminal groups or other criminal association an aggravating factor at sentencing. I would like to especially thank members of the Law and Order Committee, led by Sandra Goudie, for their particular attention to this provision by removing the potentially onerous requirement on the prosecution to prove the motivation of an offender.

The Local Government Amendment Bill enables the police and territorial authorities to seek a removal order against gang structures that are intimidating in nature. The combined effort of these measures is to give police a wider array of tools to combat the problem we have with gangs and organised criminal activity in New Zealand. I commend this legislation to the House.

Hon CLAYTON COSGROVE (Labour—Waimakariri): As we have said throughout this debate, the Labour Opposition will support the legislation. We believe that the provisions of the legislation will go some way to combating gangs and organised crime and limiting their activities in New Zealand. We do note, though, that if National had wanted to act far more swiftly, it could have actually picked up the Organised Crime (Penalties and Sentencing) Bill, which had gone through the Justice and Electoral Committee and sat on the Table of this House during the interregnum. The Government could have picked up that bill—it was a Labour Government bill—and dealt with those issues in a far more efficient way than sitting under urgency as we do today.

I raise a couple of points that we have raised throughout the debate. The first is that we support any measures to crack down on the insidious nature of gangs, because we know about the violence they put upon communities and the intimidation they put upon people, especially young people, and the infection and disease they spread in the form of pedalling drugs, preying on young people, using them as drones, and effectively destroying people’s lives for profit and personal gain. Of course we support this legislation. Equally, those not so visible gangs—whose members, as I said before, wear suits rather than patches, do not have tattoos, and live in some of the leafier suburbs around New Zealand—have to be focused on with the same amount of vim and vigour as the more visible elements like the Mongrel Mob, Black Power, and those white gangs throughout New Zealand—

David Garrett: Hell’s Angels.

Hon CLAYTON COSGROVE: Hell’s Angels, the Tribesmen, and others.

The issue I will focus on is this: although we support the legislation, and it will rattle through the House, and the Governor-General will put his signature on it, the rubber will then hit the road. Then it is up to agencies like the police to implement the legislation—to put it into practice and to use the powers that Parliament has given it. For those powers to be used effectively, and for this legislation to implemented appropriately, and for it to have the positive effect on our communities—and negative effect on the gangs—that this Parliament would want, there is a need for something called resources, monetary resources. I find it difficult: we have done customs legislation, and there is the war on P—and we have asked the Customs Service and the police to do more in those areas—but the resources have not followed.

Again, we have law and order legislation, as good and positive as it is, but the resources are not flowing. We are asking our police to put themselves in greater danger. We are asking our police to step up to the plate and do more, yet we know that there is a requirement from the Minister of Police and her Cabinet—in the John Key Government—to take $21 million out of the police budget. Yet the Minister has the audacity to stand up here and deny that that cut is happening. It is like denying that daylight follows dark, as it were. This is actually happening, and as evidence of that, 340 police cars have gone from the fleet. Parliament was told that front-line vehicles would not go—one would think police were sitting around in unmarked Holdens, and the police station car parks were awash with cars that had never done a patrol in their lives. This is simply not true. We know that highway patrol cars have gone, we know that front-line vehicles have gone. Youth Aid, which often deals with the consequences of where gangs have moved in and impacted on young people, is gone.

We now know that Canterbury has lost 32 cars, or 10 percent, of its vehicle fleet, and today there is a grand announcement that it has gained resources in the form of four bicycles—four bicycles. This is true. It came from a press statement put out and trumpeted by the Minister. So we have lost 32 police cars. In Kaiapoi the Youth Aid officer’s car is gone. In Rangiora the community police officer’s car is gone. Thirty other vehicles have gone from the Canterbury policing district, but it has gained four bicycles! Although we agree with visibility and having police out in the community, I just wonder about the gang members, as the policeman cycles up to the gang headquarters to knock on the door and say “Hang on, there’s some bad stuff going around here.” As the gang members rip out the back door of the gang headquarters and jump into their vehicles, I wonder how that policeman will cope as he cycles after them on his penny farthing, or something like that. I do not know. Although we may make light of it, it is a very serious issue.

Secondly, we now know that for the first time in history—and this is very serious and very dangerous—because of this Government’s requirement to cut money out of the police budget, firearms training to our police force will be rationed. There will be officers in our police force in the blue uniform, and in plain clothes, who now do not receive the mandatory ongoing training, because they are deemed to somehow not be front-line officers. If that logic is correct, then it could affect a Youth Aid officer knocking on the door of gang members or the parents of gang members who were being administered to by a Youth Aid officer. It could have affected the constable in the Len Snee tragedy in Napier, who was a Youth Aid officer. No notice was given and no warnings were sounded, because there was no evidence that there would be a problem in Napier. The first responder was a Youth Aid officer, and we know the consequences of that. Len Snee was gunned down and two other officers were critically wounded. It could have been even worse than the tragedy it was.

If staff knock on the door of a house, and gang members are there or organised crime activity is going on, and those in the house want to protect their patch or what they are doing, and there is no hint of violence, there is no hint of tragic circumstances, or no hint of firearms being presented, a tragedy could happen. The Minister of Justice will never guarantee that it cannot happen. If that firearms training and those resources are not provided, then who is impacted on, who dies? Well, it is likely to be a police officer, God forbid, and/or it is likely to be members of the community whom that police officer is sworn to protect, and who will, whether man or woman, do everything to protect the community. But if, for the first time in history, the police do not have the training, if they do not have the resources, and if they do not have the firearms capability to deal with that, even though the community expectation is that if they wear that uniform they can save members of the community and protect them, there is a gap between the rhetoric in this legislation and the community expectation and the political expectation that Government members have put on it.

Labour supports the legislation, but we have some real concerns about the protection of our police force in that its members will not be adequately resourced to protect themselves or the community that they serve when they implement the tools that have been given to them in respect of organised crime and gangs, because we know that gangs and organised criminals do not adhere to the protocols. They do not say that because the police are on bicycles they will only bike and do the crime on bikes. No, they do not. That might seem a bit spurious or silly, but it is a fact that they will use any means they can to circumvent the law.

The other point I make comes back to what has transpired at the tail end of this debate. We had a very eloquent speech from Mr Flavell on behalf of the Māori Party, and I say that with respect because, like Mr Garrett, I think he made some very, very solid points in that speech, talking about his own experience and his community experience. But then we got to the nub of it. The Māori Party seems to think that it is OK to meet with gang leaders, and spend $6,500 having lunch with them—and that is not $6,500 to lock them up; it is to meet with them—and that it is OK to have the kaumātua and the kuia in our communities deal with them, but it is not OK to support this legislation and give those communities and the police that reside in those communities the weaponry and the tools they need to deal with this.

What is the alibi for that stance, which I cannot understand? I think Mr Jones may be able to counsel me, but I think it is in respect of trying to say that these gang members are part of our people, our community, and our culture. Well, this issue is cross-cultural. When somebody gets raped or murdered or preyed upon by organised crime or gangs, it is not about culture; it is about insidious crime at its basic level. I do not care what culture people are. That should never be recognised. Members of gangs or organised criminals who have committed those crimes should never be put on an equal footing with people in our communities, politicians, or anybody else. They should be run out of town. But it should not be left to our communities to run these people out of town and deal with them; Parliament is set up to give our communities, through the police and other law enforcement agencies, the tools and weapons they need to do it for them.

I say to Mr Flavell that a great thing is happening in his community with his elders. It is a great thing, but those elders have the respect and the right to be backed by Parliament and he should change his vote. He should support this legislation, because one cannot be a lion in here and a lamb out there.

SHANE ARDERN (National—Taranaki - King Country): I rise in support of the Gangs and Organised Crime Bill, which has now been divided into three separate bills, as the Minister said, to amend the Crimes Act 1961, the Sentencing Act 2002, and the Local Government Act 2002. I thank members on the Opposition benches for their passionate, heartfelt speeches against what can only be described as a group of thugs who wreak havoc on our society. Whatever we can do as a Parliament to bring these thugs to heel, so be it. That is the reason why I support this legislation.

But I was reminded of one simple thing when I listened to the passionate speeches from the Hon Shane Jones and the Hon Clayton Cosgrove and it is that they are honourable gentlemen, which means that for 9 years they were in Government; for 9 years we had a Labour Government. It was quite interesting to listen to them launch their attack on the Māori Party. Our colleagues in the Māori Party said that they talk tough, but they do not actually do anything; the rubber does not hit the road. Well, after 9 long years of a Labour Government we are, at this moment, right now, addressing this issue. I have to ask the question. I know that the Hon Shane Jones has a strong political career ahead of him, and I know that some time in the future, probably four or five Parliaments away, he will be back in Government, and that the Hansard record will still be there. It will be interesting to know what they may do in respect of law and order when their time comes again.

But in the debate in the House today we are dealing with this group of people, and, as the Minister said, it is not necessarily Māori who wear patches. They are worn by all sorts of people. Some of these people wear suits, but they are just as insidious. As one who represents the electorate of Taranaki - King Country, which has 17 small towns right across it with very low socio-economics—places like Kāwhia, Te Anga, Kinohaku, and Bennydale, where socio-economics are very, very low—one knows the havoc these individuals cause, the type of activity they get involved in, and the damage it does to the community. So anything we can do in Parliament that will assist our law officers, that will assist in the investigations, and that will assist in any way at all to bring these people to heel, we should do with the utmost vigour that we can apply to it.

The issue of resourcing is an interesting debate. There is a finite amount that we can put into any particular social issue at any one time. What I resent most of all about the constant reference to resourcing of the police, or any other type of resourcing, is that under 9 years of Labour we had the best economic times that we have experienced in a generation. What happened during that time? We squandered that opportunity on a scale that this country has never experienced. That is exactly what happened. So when it came to funding police cars, when it came to funding law and order, when it came to funding our courts—the whole arm—the third and very important leg of Government, what happened under 9 years of Labour? We saw decline. We never saw the growth that we should have seen. We did not see the opportunities that this great little country had. We saw them squandered. We saw industries that could be double the size they are now, taxed into non-existence.

We saw the Australians thrash us in the commercial world; they absolutely thrashed us. The mantra we constantly hear about Australia having minerals and digging them up is absolute nonsense. This country has more minerals per capita than Australia. We have more opportunity than Australia, because of our abundance in agriculture. We are better than our Australian counterparts in every single way, in terms of our opportunities in the commercial world going forward. I tell Mr Jones that that growth would fund police cars and fund the law and order and social standards that he would like to see. Those kinds of things are important to New Zealanders.

We are debating in the third reading of this legislation today the issues the Government confronts concerning the way to deal with this insidious group of individuals who come from all backgrounds, all walks of life, all social groups, and all cultural groups. They come into our society from overseas and from within New Zealand. The proposals put forward by the Law and Order Committee—a good committee with good cross-party support, most of the time—enhance the legislation, and I can see nothing but good coming from its passing and receiving the Royal assent in the near future. Thank you.

Hon SHANE JONES (Labour): Tēnā tātou katoa. This has been a spirited discussion. The opportunity was afforded us during the Committee stage, as we considered the provisions of the Gangs and Organised Crime Bill, to range quite widely. That ignited various exchanges that actually brought honour to the Chamber. It was not a tepid set of exchanges, where well-rehearsed lines were trotted out. Of course, that pattern was not followed by Shane Ardern, the previous speaker. He lapsed into a set of very hackneyed phrases inversely related to the truth, and then would have had us believe that the gangs he had in mind are the people currently fossicking around the conservation estate on the West Coast, sniffing coal gas and wearing their high-visibility vests. Fortunately, at the very end of the speech, he recalled what he was told to do by Mr Tremain, the chief Government whip, which was to talk about the legislation before Parliament. It was a rare sensation for that particular member.

The bills focus on whether the machinery of the State is adequate to curb the criminality that we know exists within the gang environment. We always have to be mindful that for every additional power of investigation or seizure that we attach to the police, we have to be very confident that the bulwark of the judiciary is up to the task, because at the end of the day, after the police have carried out their investigations, they have to lay down the information in front of a judge. That judge has to have the confidence, and not so much the professionalism but the wisdom, to test in his or her own mind whether we are going too far in our zest to rid ourselves of this excessive criminality in so far as drugs are concerned. We know that certain levels of criminal behaviour will never ever be completely swiped away, whether it is driving on the wrong side of the road or being dangerous while drunk and carrying on like that. But there is a big duty on the judiciary.

I come back to some of the elements that were taken up during the Committee stage. I challenged Mr Flavell on the wisdom of regarding gang members as being “our people”. At a personal level, I find that expression almost offensive, because I think that when we belong to a people we are willing to embrace duties and obligations. I cannot detect any sign of that willingness within the gang culture that we are trying to break here. When I speak of the gang culture, I mean the shadowy forces that import drugs, spreading around their filthy lucre in a way that might avoid detection, as well as the deluded young teenagers wandering around with smelly, soiled bandanas. Both groups share a common problem: an unwillingness to take on board the burden of an obligation. We cannot manage a civil society nor have the quality of life that we in this House want to continue to promote in our communities unless families are confident that the people who live around them are obliged to observe a certain level or threshold of decency, honesty, fairness, and respect.

How do we, as a Parliament, using legislation like this, further entrench recognition of that obligation and our desire to embrace it? Naturally, those of us who have raised children and who are still raising children try to entrench it in the way in which we send our kids to school, teach them their table manners, and teach them the ritenga and tikanga of how one treats one’s brothers and sisters, one’s parents, one’s tūpuna, and one’s friends and neighbours. But this legislation is designed to deal with people who obviously either did not have that experience of upbringing, or had it but realised that it is far too cumbersome to maintain if what they want out of life is a quick buck at someone else’s expense.

It then falls back to us. Mr Flavell made the very good point that I, as a Māori MP, cannot repudiate that the jails are overflowing with our young men. Although we have a different approach in relation to how staunch we should be in terms of our antagonism towards gangs, his point is beyond cavil: we as a society are watching that tidemark grow higher and higher. It is a New Zealand problem, but it is a particularly Māori difficulty to deal with as a Māori MP. Obviously the focus has to be on what we are doing in our communities to ensure that we can help our children. These children may not be our blood relatives, but they will bloody us with their crimes if we are not able to cause them to change their ways.

That is probably one of the unspoken lessons of today: as impassioned as someone like me gets about the excessive levels of criminality, we must never overlook the rangatahi and the potential of the darling eyes belonging to the kōhungahunga—the young girls and the young boys—and their mothers. I would be the first to state—based on personal experience and, possibly, a provincial upbringing, moderated by a stint overseas and study—that I take a pretty hard line about these things, because I get very, very emotional when I look at the squandered potential in the young faces I am talking about.

There were a number of references during this morning’s set of speeches to questions about what communities can do. Members asked whether communities can be staunch and whether we, as parliamentarians, will be able to support the police to stand with communities. I salute the community leaders from Murupara who have taken a very, very strong stance after the death of two teenagers. I cannot begin to imagine the pain and anguish of the close family members as they watched the lives of those two young teenagers snuffed out, knowing that it was worthless. There was no virtue, there was no justification, and there was nothing that we could say that represented a progressive, modern, celebratory attitude towards life in terms of what we saw go down for those two boys. I give full marks to the kaumātua and the kuia.

We as parliamentarians have a slightly larger burden to bear than the kuia and the kaumātua on the marae, which is what I was saying to Mr Flavell earlier. We have a privilege while we are here as MPs that is occasionally undervalued. When we speak in this House we are able to point out which societal norms ought to be upheld, and we have the chance to state on behalf of the communities that we come from that we recoil from the type of lifestyle, conduct, hatred, hostility, and animus that is associated with the gang way of life. E Te Ururoa, mehemea e whai tuarā ana wērā kaumātua, wērā kuia ki te whakaparahako i ngā kēnge, horekau wā rātou pū, māripi, taiaha engari ko te aroha o te ngākau me te kaha o te ārero, he aha oti te take te mahi pēnaka ai koutou i roto i tēnei Whare?

[Te Ururoa, if those elders and elderly womenfolk had the fortitude to stand up to those gangs without guns, knives, or taiaha, but with the love of the heart and the might of eloquence, why are you collectively not taking that stance in this House?]

If it was good enough for those people, without arms or weapons but with only the strength of character and hearts and the strength of verbal skill, to step up to the plate and stare down those gangs, then it is good enough for our colleagues from the Māori Party to abandon their ambiguous stance in relation to gangs and to stop the indulgence and the indifference. Kia ora tātou.

KEVIN HAGUE (Green): I will take just a short call to explain in brief why the Green Party will continue to oppose the Crimes Amendment Bill, the Local Government Amendment Bill, and the Sentencing Amendment Bill (No 3). The Green Party has no love at all for the criminal activities of gangs. These are organisations that rob young people of their souls and of their futures, let alone the victims of their many crimes.

Since at least the 1960s, pretty well every Government has come into power with a promise of being tough on gangs. The approach has been: “Let us get harder and harder, and let us increase the powers of the State against gangs and wind them up further and further.” That approach has completely failed to deal with the problem, not only in New Zealand but also in those countries that have adopted the same approach.

David Garrett: Wrong!

KEVIN HAGUE: I am aware that David Garrett from the ACT Party is likely to speak next, and I believe that he sincerely believes that this legislation will provide the police and other authorities with powers that will assist in curbing the problems associated with criminal gangs. But I am aware that other parties, National and Labour in particular, will be voting for this legislation and I do not believe that the members of those parties believe it will help. Instead, those parties are playing to the gallery. These measures are entirely tokenistic, and those parties are supporting the legislation out of a belief that the public seeks simplistic answers to these complex problems. Rather than suppressing these problems, I believe that the main impacts of the legislation will be to feed the sense of alienation and grievance upon which criminal gangs thrive. Just as the war on terror breeds more terrorists, this legislation will strengthen the hand of the gangs.

What would we do? The Green Party supports the types of solutions that my colleague Te Ururoa Flavell spoke about in the House today. Complex problems almost always require complex answers, and the answers here are for this House and for this Government to support the actions of communities, strengthen the hand of communities in dealing with these problems, and, at the same time, take serious and effective action on those social and economic circumstances that drive young people into the hands of the gangs in the first place.

Finally, I want to pick up on a comment of Clayton Cosgrove in this third reading debate. He suggested that this suite of bills will deal with not just so-called Māori gangs. I do not believe for one moment that Clayton Cosgrove was speaking without his tongue very firmly in his cheek. I do not believe that this House will see these powers used against, for example, those organised criminals behind several of the finance company collapses that we have seen, or any of those other white-collar criminal conspiracies that would meet the definition here. This suite of bills is intended for a particular kind of gang, and that is the only kind of gang that we will see them used against. This legislation is reprehensible because it is window dressing, it is more tokenism, and it is more talk of being tough on crime, without a willingness to address the factors that fuel crime. The Green Party will continue to oppose this legislation.

DAVID GARRETT (ACT): As the last speaker predicted, not surprisingly, I rise to speak on behalf of the ACT Party in support of the three bills that have come out of the Gangs and Organised Crime Bill. I will start by respectfully differing slightly from my colleague Shane Ardern, who used the word “thugs”, which I also used in earlier speeches in the House on the original bill. That is an accurate word, but a better word would be “outlaws”. These people are outlaws, in the literal sense of that word. They shun the law, they shun ordinary people, and they make a gesture to ordinary people that was used by my generation and has now altered to an American version.

I was talking to a judge of my acquaintance on a plane the other day. He told me about the evidence in a trial he had conducted of bugged conversations in which the gang members concerned laughed on the phone about how they were not going to work like the dupes out there in society, and about how they would all be millionaires by the end of the year. They have contempt for everyone up there, in here, and outside this building. Gang members are outlaws. They are not our people, whether they be brown, white, or whatever colour they may be, and to make the claim that they are is simply silly and naive.

This legislation brings in a number of measures that are long overdue. The previous Government had 9 years in which to do something about the gang problem in this country, and Mr Hague was correct when he said that for 20 years, or probably 30 years, Governments have talked about being tough on gangs but have never done very much about that. This National-led Government has not even had 12 months in office, and it has done plenty. We have given Wanganui the power to say “No more” to the gangs who terrorise people there by their simple appearance. Again, I say to anyone who is silly and naive enough—and there are some in our party, I have to say—to say gang members are only wearing their clothing, and we should wait until they commit a crime, that he or she should go to Wanganui and review the footage I have seen of a vicious beating that occurred at the local Work and Income office. That beating occurred just because two scum who were wearing different patches happened to encounter each other, and under their ridiculous and deadly code that is what they were obliged to do. Clothing can and does directly lead to violence.

ACT’s “three strikes” policy, as part of the Sentencing and Parole Reform Bill, will lock away those who do the greatest harm to society. These people are proud of their actions and proud to be members of the gangs with whom many of them associate. As I said in my speech earlier today, in California the gang problem is very, very much reduced. Anyone who is listening to this debate will recall reading about drive-by shootings in South Los Angeles. We are more likely to read about a drive-by shooting in Palmerston North now, and the reason is that the gang leaders, under the “three strikes” law in California, are all in jail. That is why violent crime there has dropped by 62 percent since 1994.

In an ideal world we would outlaw the gangs. I mentioned in my first reading speech that non-association laws have been passed and enforced in Germany against Fascist parties, and in Ireland against the IRA. But apparently doing that will not work here, because it is against people’s human rights. Forget the victims! It is more important to some members in this House to protect the rights of those whom we could only charitably and theoretically refer to as being human. I will say again, more carefully, what I said outside the House: the human rights that matter to me and to the members of our party are those of victims and potential victims. Those people’s human rights are more important than the right of scum to strut about, whether they be wearing a Mongrel Mob patch, or a laundered patch if they are Hell’s Angels.

In the meantime, if we cannot outlaw the gangs, what we can do is to increase the jail time for these thugs, these outlaws, and keep the victims and potential victims amongst us safer for longer. This legislation doubles the maximum sentence for a conviction for involvement in organised criminal activity, from 5 years to 10 years, and that is long overdue. Why did someone not think of doing that earlier? Well, people did, but it is only now, with a new Government, that it is happening.

Those who say that locking up criminals for longer periods is not the answer should try to tell that to the family of Fitzgerald Risati, the Samoan choirboy I referred to in my second reading speech—and, yes, that is what he was; he was a choirboy—who was killed by Charlie Karaka because he looked like the guy who had stolen his gang patch earlier in the day. Being dumb, in itself, is not a crime, but we are dealing with stupid, dangerous people with idiotic, dangerous customs that often result in senseless outcomes, like the killing of Fitz Risati. Charlie Karaka’s gang, like all the others, has a code that if a member loses the gang patch, that member must find and punish, and if necessary, kill, the guy who took it. It does not matter whether the gang member gets it wrong, as happened in that case. That is why an innocent man, who was out celebrating his 24th birthday, was killed in cold blood.

To think there are some people here who say that the answer is to reason with these people! Gang members are as easy to reason with as the gangs that disguise themselves in nice clothes and hide in nice neighbourhoods, as Mr Cosgrove referred to, peddling P to their customers. The Hell’s Angels are still outlaws, only they look and smell nicer than some other gangs. They still need to be dealt with, not reasoned with.

Some members in this House think that the answer is to fly gang leaders at taxpayers’ expense to a hui, to ask them to please be nicer and stop hurting people, to congratulate them on keeping their heads down a bit, and also to ask them whether they are receiving all of their entitlements from the social welfare system. I say to Dr Sharples that if that approach worked, then Rob Muldoon would have solved the gang problem 25 years ago. What we got from that approach were fences that we could put up for $5,000 today, but that we paid $100,000 for. That is what happened as a result of Rob Muldoon saying we should talk to the Mongrel Mob and Black Power, reason with them, and give them jobs. Mr Muldoon did not solve the problem; instead, it has escalated into a crisis only marginally less significant than the economic one that that gentleman left us with in 1984.

Dr Sharples, whom I respect, and other members must realise that for the P sellers, hurting people is their livelihood. They are not going to just stop doing that. Group hugs will not make them less antisocial; giving them work schemes will not make them less antisocial. Gangs are not legitimate organisations. ACT knows this. The people of New Zealand know this. We are proud to support any legislation that further reinforces that reality.

Finally, I will say again how impressed I was with the eloquent speech made by my colleague to my left, Te Ururoa Flavell. The Māori Party, unless its members have changed their minds in the last hour or so, will vote against the bill. I do not want to go too far into the reasons for that, but it seems to me that the Māori Party members are torn, for cultural reasons, as to just what to do. From the little that I know about Māori culture—and it is a little—I have some understanding of their dilemma. But the Greens have no such excuse. When I came to this place I learnt that the term for them was “Watermelon Greens”—green on the outside, red on the inside. The situation is actually worse than that. The Greens are criminal sympathisers; that is what they are. They have voted against every single law and order bill in this Parliament—every single one. Mr Locke tried to claim the other day that the Greens had opposed a couple of laws because they are opposed to imprisonment as a response to offending. Superficially that is fair enough, and it is not an uncommon view. The problem is that those particular bills did not carry an offence provision providing for imprisonment. So I say “Shame on the Green Party! Shame on the criminal sympathisers!”. ACT is happy to support these bills.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe, Mr Assistant Speaker. Kia ora anō tātou katoa. In order to put my comments in some sort of context I just wanted to advise the House that today is an extremely important day for Aotearoa. For those who do not know, on this day in 1835 He Wakaputanga o Te Rangatiratanga o Nu Tireni—the Declaration of Independence of New Zealand—was signed. The declaration bears the signature of 52 rangatira and is commonly perceived as the document that demonstrated British recognition of an independent Māori nation. Indeed, that declaration in 1835 has become the symbol for many Māori of an assertion of autonomous rights or mana motuhake.

Within the context of such a profound event, I am pleased to bring to the House a very recent example of mana motuhake as it relates to the legislation from the Gangs and Organised Crime Bill. Late last evening I was sent the resolutions agreed to by consensus at a hui held at Te Rangatahi Marae in Murupara exactly 1 week ago. The hui was held by a community that had had enough of living in fear of the brutal violence and murders that had been going on there. They wanted it to stop. Their key message is that they seek to unite to fight the violence, not the gangs, believing that actually it is the gangs that can stop this violence.

The first recommendation endorses the decision of all iwi at that hui—namely, Ngāti Whare, Tūhoe, Ngāti Haku Patuheuheu, Tūwharetoa, Te Whakatōhea, Te Whānau-a-Apanui, and Ngāti Awa—individually and collectively to publicly endorse the rāhui to ban gang violence in the entire rohe. The other motion read that all who are members of the iwi amongst the Tribesmen and Mongrel Mob will take every step possible to ensure that gang members comply with that rāhui, declare an immediate truce, a ceasefire, and sign up to a peace pact in the presence of the iwi concerned on Rangatahi Marae within the next fortnight.

I raised the concept of the rāhui throughout the Committee stage of the Gangs and Organised Crime Bill, as I think it is an excellent example of communities being empowered to determine their own solutions. I talked about the practical application of this rāhui as it was expressed at a local tangihanga where a number of kuia stood out and placed themselves in the extremely distressing position of preventing their own kin, their own whānau members, from attending a tangi, as a result of a gang confrontation. There is probably nothing more profound in Te Ao Māori than being removed from the process of allowing whānau to grieve at the side of their loved ones and to pay their final respects. That is cutting; it is really hard for that to happen.

We are talking about initiatives with extreme and severe consequences for Māori communities. These are bold and courageous moves and I fully commend those iwi for their initiative in this respect. So how does what is happening in Murupara deal with the types of amendments and proposals being entrenched in law today? I want to say for the record that the Māori Party is proud of our reputation for confronting violence and understanding how best to address these issues of huge moral significance for the development of our communities. I say to Mr Jones that there is no moral ambiguity at all when it comes to issues of lawlessness and injustice, but there is moral ambiguity in the very notion of targeting one group of the population over and above all others, and targeting a range of enforcement tools and penalties to respond to that group.

Our concern has always been about the retributive nature of this legislation, and its narrow focus on gangs, and not the wider context of organised crime, such as corporate fraud and international criminal networks. The Māori Party has continually advocated that there are more effective restorative ways to deal with gangs and their offending than by enforcement, suppression, and imprisonment.

Mr Cosgrove made constant references to meetings with gangs—funny, that! The meeting with my colleague Dr Sharples that was referred to actually builds on approaches that other Governments have introduced from both sides of the House. So let us be clear: everybody has had a turn.

One of the more effective approaches was that taken in 1981. The committee on gangs acknowledged the social causes of gangs with a Community Education Initiative Scheme established in 1981, and the Group Employment Liaison Scheme the following year. The schemes sought to reduce youth gang recruitment through responding positively to the needs of underachieving students who had difficulty moving from school to employment. It also provided children and young people with constructive recreational and sporting activities outside of school. The main goal of the Group Employment Liaison Scheme programme was to encourage disadvantaged groups, including gangs, into various Government-funded schemes.

In 1987, the Committee of Inquiry into Violent Offending concluded that many of the schemes “had positive results in reducing the offending and anti-social behaviour of those who participated in them”. As for the rest of the hostile rhetoric espoused by Mr Cosgrove this morning, that supporting social justice efforts is akin to throwing up the white flag in defeat, perhaps he might benefit from talking with some of his colleagues about their involvement in working with gangs. He might, for instance, talk with Mr Parekura Horomia about the initiative supported under his leadership of the community-led employment group; or to Mr Chauvel, perhaps, about his recent discussions with gang members in Farmer Crescent.

There is nothing wrong with talking with communities and learning from the local people about solutions that work on the ground. This is the heartfelt call from the Māori Party. Rather than simply locking up gangs and throwing away the key, we need to respond on the basis of a long-term goal, rather than of the emotions of short-term hysterics. If we are to invest in the long-term health and well-being of our nation, we need to acknowledge, I say to Mr Cosgrove, that we cannot just kick gangs out of town and lock the city gates. Gang members come from families. They have children, their children have children, and they go to schools. They go down to the shopping centre. So we must have creative courage to think of intergenerational solutions.

We know that different strategies with regard to gangs produce very different results. In essence, there are two schools of thought. One is elimination through enforcement—for example, the Los Angeles approach. The second one is ensuring public safety through gang and community engagement—namely, the New York approach. In Los Angeles, the strategy of suppression and punishment has led to a huge increase in the number of gangs and gang crimes. The policy has resulted in thousands of young people killed in gang conflicts. Billions have been spent on policing and surveillance, and the databases and the long prison terms. Spending on gangs has far outpaced spending on preventive programmes or community development.

What is the great outcome of such a massive enforcement programme? Zip—very little. Los Angeles is home to six times the number of gangs, and at least double the members, while across the United States, in New York City, a strategy of community development, educational attainment, opportunities, and urban renewal has led to a decrease in gangs to a point where the total gang population is estimated to be around 500 people. Investment in job training, mentoring after-school activities, and recreational programmes has made significant dents in gang violence. We are calling for investment in communities to restore balance to the debate, not just to overload the prison cells with yet another punitive approach. We are calling for an even-handed approach to policing and justice, a balance between enforcement and restoration.

Despite the talk in principle, the practice as enforced in this legislation has been the overwhelmingly prioritisation of enforcement. We are too hasty to call for the rule book to slam down laws and enforcement, to punish and to sentence without understanding that the solution might be as simple as a work scheme, or in supporting communities to determine their own approaches, such as that put forward by Murupara.

The Māori Party recognises that one of the keys to dignity and respect and the reduction of reoffending has to do with the right to work. We want to encourage that. Instead of locking away the problem, the Māori Party calls for this House to face its fears—to provide opportunities for communities and individuals to address confrontational behaviour, and to focus on solutions. It would be really helpful, sometimes, if some of the people who talk about gangs and our gang problem could go and talk with those people, go and walk the streets with those people who have to tangi for their mate. Then they would know about some of the issues and have a little bit more of a closer connection.

SANDRA GOUDIE (National—Coromandel): I am proud to speak to the gangs and organised crime legislation, particularly as the bills go through their last stage before they are enacted. I acknowledge and thank the members of the Law and Order Committee. They worked to progress this bill in a timely manner, and I thank them for their contribution and the work they did in this regard.

The Gangs and Organised Crime Bill—which has now been divided into three bills—is a small bill, but it packs a mighty punch. People throughout the country spoke loud and clear about the need for change and the need to address law and order issues. But, at the same time, we are addressing many of those other issues referred to by the previous speaker, Te Ururoa Flavell. He is quite right—it is a two-pronged approach. This legislation is just one of the steps we are taking to give the police the tools to deal with the current criminal issues in relation to gangs.

National listened, and this legislation is one of the many changes we have made to keep people safe in their homes and on the streets. This legislation is gang-buster legislation, and whether the gangs wear leather jackets, bandanas, or white collars—and I want to emphasis the white-collar aspect; I will make reference to that again shortly—it will deal with gangs across the spectrum.

So what does the legislation do? It is about interception warrants for police, lower thresholds for a specified offence for interception warrants, reduced evidential burden to prove participation in an organised criminal group, increased penalties, removal orders, and criminal association as an aggravating factor at sentencing. These are the tools that are the arsenal of this gang-buster bill. Police need those tools. They need that support.

If we look back in history, we see that we had the bookies in the 1940s and 1950s, we had cannabis in the 1960s and the 1970s, and we also had heroin in the 1970s and the 1980s. Now we have methamphetamine, otherwise known as P. As the face of criminal offending has changed, so too has the face of gangs. Gangs now exist to make money and exert power over others, and that is with several thousand patched gang members and many more associates. Opposing gangs will even get together to further their primary interest—that is, their business interests—for making money and exerting that dominance over others, using violence, fear, and intimidation.

Gangs have shown that they are not above committing murder. Members of the House can tell us firsthand of incidents where gangs have shown that murder is an activity that they are not above indulging in. Gangs can be as innovative and crafty as anyone else. They keep up to speed with technological changes and use those changes to best effect.

There is a growing blurring of the lines between what we all know as gangs—gangs whose members wear hoodies, with leathers, tattoos, bandanas, and the like—and a much a sleeker, well-dressed, business-savvy professional who is fully comfortable in a white collar. Gangs have accountants. They have lawyers. In some cases they even have media advisers. Gangs will partner with legitimate business such as finance, transport, private security, entertainment, real estate, and the like, all the while running their real business of violence, extortion, drug dealing and money-laundering. If people get in the way, they will deal to them, as has been said quite clearly in this House.

Gangs now operate with a new level of sophistication and involvement in communities in order to give the appearance that they are harmless and to show that they are groups with a strong community spirit. Well, other members might like to get lulled into thinking that, but the next minute the gangs will be dealing out the back door to one of their kids. Then what do members say to that? There is nothing they would like more than being able to get our kids hooked on P. That is totally devastating to our communities. We all know how bad that it is, and it could not get any worse. So we have no tolerance of that in terms of what we can do to provide police with the tools to deal to it.

I ask members to consider a gang called the Killer Beez. It has its own hip-hop record label called Colourway Records. What does it do? It makes music videos—recruitment advertisements for gangs, thinly disguised as music videos, that are played on mainstream TV. Do we like that? Do we think that is a good thing? Do we think that is great? They have websites. They use Facebook, and they have branded franchises. This is what gangs today have. They have become a little more sophisticated than what we knew of the gangs in the 1950s, 1960s, 1970s, and 1980s. They are much more technologically aware than they used to be.

Gangs indulge in violence and intimidation, and in creating their own brand of misery with methamphetamine while they are stuffing their back pockets and their bank balances, and building up their assets. Well, we are going to deal to them through their assets. We will take their assets and their money every time we catch them and convict them for criminal offending. We will use that money to make sure we deal to other gangs for dealing in that same area of criminal activity. That is covered in the Criminal Proceeds (Recovery) Act, which was also a great step in the right direction.

Let us hit them where it hurts, and that is in the pocket. Let us give the police the tools to pick them up. That is what this legislation will do. It will give police the tools to delve further into gangs, and into people associated with gangs, so that they cannot escape that oversight. We have only to look to see how easy it is for gangs to lure our young people. I think that this is where the other actions we have taken, in other portfolios across the whole of the Government, are addressing the concerns raised by the previous speaker, Te Ururoa Flavell.

This legislation, along with many other changes, deals with gangs, as announced by the Prime Minister, John Key, and championed by Judith Collins, the Minister of Police and the Minister of Corrections. We will take gangs’ assets, we will take their money, and we will bust their trade. We could not do anything better than that. This legislation is gang-buster legislation. We will hit them where it hurts—in the pocket.

I am delighted that this legislation about gangs and organised crime is another step in the right direction for dealing to gangs, their associates, and the criminal activity they indulge in, which threatens our communities and our young people and makes life a misery for many, many families. I am delighted to be able to progress this legislation.

CARMEL SEPULONI (Labour): I am very happy to rise and speak on the Crimes Amendment Bill, the Local Government Amendment Bill, and the Sentencing Amendment Bill (No 3). One thing that has come to light is that, across this House, I do not think that any party would disagree that some of the most insidious crime in our society is perpetuated by gangs and organised crime. I think that is one thing we can all agree on. There are some things that have been raised by other members across the House that I will address. Something we share is wanting to see the crimes committed by those gangs and by organised crime diminish, but I guess our views about how that can happen differ across the House, as do our views on whether this legislation will be effective in helping to do that.

We just heard from Sandra Goudie, who addressed something that was said by Māori Party members. She said that the Government is addressing the issues identified by the Māori Party. I think some of the issues that Māori Party members raised concerned the actual causes of crimes and the reasons why people get involved in gangs in the first place. I do not believe that the National Government is addressing that, and I think that is very serious. It is something that the Government continues to ignore. It is all about punitive measures; it is all about the ambulance at the bottom of the cliff. Although we support this legislation, we do not support the narrow focus that the National Government continues to take. At the end of the day there will be victims of the crimes that are committed, but the perpetrators of the crimes will not be stopped from perpetrating them if the Government does not put something in place at the top of the cliff. That is one of the issues that has been raised, and I believe that it is a serious issue, which the National Government needs to address.

Earlier on Mr Garrett basically said that the punitive measures to punish criminals are the most important thing in regard to gaining justice for the victims, and that that is the most important issue. But that is not the most important issue. The most important issue is actually making sure that crimes are not committed in the first place, so that we do not have those victims. Unfortunately, that is something that the ACT Party continues to overlook.

We also had Mr Ardern earlier asking at the beginning of his speech what the previous Labour Government had done for 9 long years. That member knows that the previous Labour Government had legislation similar to this legislation before the Law and Order Committee when this National Government came to power. Had the National Government genuinely wanted to expedite this measure at a faster pace, perhaps even within the period of its 100 days of action, all that the Minister of Justice needed to do was to support Labour’s legislation, and possibly, if the Government had wanted to, amend it. But instead of doing that, for the sake of political point-scoring the Government canned that altogether and started again, so that it could take ownership over all this legislation. At the end of the day, Labour is supportive of the legislation. We already had it in a select committee; it was something that we were already addressing. So for Mr Ardern to say that the previous Labour Government did nothing over the 9 years that it was in Government is absolute rubbish, actually.

One thing we have been discussing that has come up across the course of this very robust debate on this legislation is the types of gangs that we are looking at. The gangs that I am very interested in—because I think that we need to differentiate between some of the gangs and the organised crime that is taking place—are the youth gangs out there. The Labour Government was very good at compiling evidence about things that it wanted to put into place before it decided on the legislation it might put through. A report that I recently looked at was commissioned by the Labour Government and put out by the Ministry of Social Development. It looked at youth gangs. It was a research report called From Wannabes to Youth Offenders: Youth Gangs in Counties Manukau. If we are to understand this issue and put forward legislation that actually works, it is important that we have the evidence base to work from. I find it interesting because there has been much debate over whether those gang members are “our people”, and the horrendous scenarios and situations that those gang members are putting people through. I find what is happening with our youth gangs interesting.

Shane Jones mentioned earlier—and this is one of the reasons why I think it is very important that the House supports this legislation—that one of the purposes of the legislation and one of the things it does is prevent the normalisation of gang culture and gang membership. If we are going to deal with some of the issues that have arisen with our youth who have been getting involved with youth gangs, then we have to prevent the normalisation of gangs by saying that that is not acceptable. When we look at the report that was put out by the Ministry of Social Development, we see that it puts youth gangs into different categories. The wannabes are those who want to be associated with a gang, and who are not really committing much crime, but it is a kind of identity for them to be part of that gang. The “territorial gangs” are those who protect their patch. Often we call them the ABC gangs. I said earlier that sometimes if they live on, for example, Smith Drive, then they would be called something like the Smith Drive Boys. We call them the ABC gangs. Then there are the ones who are entering into the more serious areas, and those are called the “criminal youth gangs”. The issue with the “wannabes” and “territorials” gangs is that most of their members will end up leaving those gangs unscathed, without a criminal record, and with it being a passing phase in their lives. But we can compare being part of a gang to marijuana being a gateway drug, resulting in an avenue to try a harder substance. I think that those gangs are gateway gangs; that is the issue.

Young people start off in a wannabe gang, but some go on to much more criminally minded gangs, or perhaps to the criminal youth gangs. The research shows us that there is an affiliation between the youth gangs and some of the more established gangs. The research shows that the Killer Beez, who are seen as a criminal youth gang, are connected to the Tribesmen; the Black Power Youth are connected to Black Power; the Juvanyle Crip Boys are connected to Black Power; and the Bloods are connected to Black Power, the Mongrel Mob, and the King Cobras. The issue is, as I said before, that we need to prevent the normalisation of gang membership and gang culture. This legislation, to a large extent, does some of that.

Labour supports the legislation; it is something that we were trying to put through ourselves. But this Government decided that the legislation was more about political point-scoring by taking ownership of the legislation and putting out there that it had nothing to do with Labour, and that Labour did nothing for law and order over the previous 9 years. That is the perception that the National Government wants to put out there. It wants to put the perception out there that this side of the House does not care about victims and does not care about law and order. I find that very hard to swallow, because it is very difficult for members on this side to listen to members opposite and hear them say that we have no social conscience whatsoever, that we do not care about law and order, and that we do not care about victims. I say, from this side of the House, that the one thing we all share across this House is that we care about law and order, we care about victims of crime, and we all want to do something to make sure that we can lessen the effects of what is happening, cut down on crimes being committed, and protect ordinary, everyday New Zealanders out there from having some of those crimes committed against them. That is largely what I wanted to talk about.

Labour supports this legislation, but I think it is important that it is noted that Labour was doing something in respect of this matter. It was the National Government that decided to point-score instead of doing anything else. I want to acknowledge that one of the main reasons it is important that we support this bill is that it prevents the normalisation of gang culture and gang membership. As Shane Jones said, it is important for our rangatahi. We know, as Māori and Pacific people, that those getting involved in the youth gangs are Māori and Pacific youth. We want to protect them. We want them to realise that this is not the type of activity that they should be involved in. We want to take the power away from the gangs to recruit those young people, and that is why we support this bill.

JONATHAN YOUNG (National—New Plymouth): I commend Carmel Sepuloni, the previous speaker, for her comments regarding the commitment not to see the perpetuation of gang culture and not to see gang culture become normalised in our society. Perhaps she has a stronger conviction than her leader, who last year said: “We are targeting not gangs per se but their criminal activities. Anyone in New Zealand has the right to come together in a group and call or label themselves whatever they will—that is not the issue.” I think that the acquiescence that comment suggests is one of the reasons why New Zealanders on 8 November last year decided they wanted to have a National Government. It is not a matter of walking softly amongst these issues; it is a matter of having some very strong convictions about it. We understand that the previous Government was going to do a stocktake on the level of organised criminal activity, but we need to understand that stocktakes do not address the issue where it counts.

We need to understand that in New Zealand we have a war on P—not just a war on P but a war on the perpetuators of that drugged infusion into the minds and lives of New Zealanders, and particularly of young New Zealanders. The Police Association says that the gang environment in New Zealand has changed. Let me read a comment that the Police Association made in its submission to the Law and Order Committee: “The New Zealand gang environment is now much more complex and serious. The ‘old’ face of gangs still exists, especially in provincial and rural areas … But the old gangs are also now engaged in true organised crime. They are dealing higher value drugs such as methamphetamine, and coordinated supply and distribution syndicates have replaced many of the old inter-gang rivalries.” There is a certain amount of cooperation amongst gangs in our society regarding the drug trade, as gangs select, prepare and distribute patches—not those on their backs but geographical areas in our cities that belong to certain groups.

The submission goes on: “Modern gangs are organised with one aim—to make money. Cash flows and illegally-funded lifestyles are now at levels gang members in the 1980s could not even have dreamed of: the methamphetamine trade is currently estimated to be worth up to $1.5 billion a year in New Zealand, of which Association members estimate at least 75% is controlled by gangs. To put that in perspective, that is double the annual value of New Zealand’s entire wine exports.” Wine is a trade in which we are world leaders. What a tragedy that New Zealand is a world leader in the trading of methamphetamine.

The political positions we have heard in the House today are varied. The Green Party reviewed the series of amendments to various Acts and called them window dressing. The Māori Party looked for other solutions. Labour suggested a stocktake on the level of organised crime, although we do appreciate that party’s support for this legislation. We are at war. It is an insidious war; it is clandestine. It destroys the lives of people on the front line, like Sergeant Don Wilkinson. He was a casualty of that war.

National has drawn the line by using legislation to put more power in the hands of police, local authorities, and the judiciary. The solution that we propose is to face up to the issues, and to have the political will and leadership to address those issues strongly in our society. We cannot propose soft options when the people we are dealing with have no respect or regard for any authority, and when they will not engage in reasonableness because their intent is to take our money and to destroy our society. If someone gets in the road of their intentions, as the Hon Shane Jones so well articulated, they will kill that person. This is what we face in our nation.

It is important to realise that many of our communities are terribly inflicted with the plague of criminality that comes through gangs and drugs. One community in Porirua has stated that it has had a serious gang problem since the early 1970s, when the Mongrel Mob and their associates moved into their community and began recruiting support from amongst the youth of the area. How many heartbroken mothers and fathers in our nation have seen their young people, full of potential, ability, dreams, and intelligence, get drawn in by the lure of inclusion and identity, and by the prospect of working through some echelon and coming into some easy money? How many have seen their young people drawn into those gangs? The community in Porirua said that “The gang has established fortified headquarters, which have long been the focal point of rapes, murders, and a vast array of other serious criminal offending. The gang’s central philosophy is a commitment to antisocial and criminal behaviour.” These are not my comments; they are the comments of New Zealanders who have experienced the presence of a gang, with its criminal activity, in their community. They went on to say that the gang “is involved in most of the drug dealing in our community, and it exists as an imminent and ever-present threat to those who live in our city. The significant financial returns gained from crime and drug dealing make it an attractive option for disaffected youth in our community.”

Although we understand the benefit of having law like this legislation in place, it does not address the cause of the problem. But it will make belonging to a gang that is based on criminal activity not only a breach of the law but also increasingly difficult and unattractive, in order to dilute the power of gangs in our communities. The solution that society is looking for is accountability. We want to see responsibility come into people’s choices, so we see today that there will be an increased penalty for associating in a group of people with the intent of committing criminal activity. The sentence time will rise from 5 years to 10 years.

We know there are major issues in New Zealand. We know that over the decades there has been the enculturation of the presence of gangs in New Zealand, but we should never accept that gangs are part of the Kiwi way of life. We must never lose our ground and be intimidated simply by their presence. We know that the issue for many gang members is a lack of education, which leads to failure and causes gang options to become more attractive. We need to address that issue, and to be multi-faceted in all of our attempts to build a healthy and good society. We know that young people search for identity, and that if they are rejected by others they will quickly cling to those who give them some form of affirmation. There is much that needs to be addressed in the parenting of our young people in New Zealand. We know that many members of gangs are victims themselves, who get involved in the perpetuation of further victimisation. Although all these issues are understandable, the outcomes are never acceptable, nor should they be excusable.

As I come to a close, I say that I believe that the National Government has grasped the nettle in having the political courage and leadership to address the hard issues in our society. I commend this legislation to the House.

CHRIS HIPKINS (Labour—Rimutaka): The rhetoric is easy, and I can do “hard on crime” just as well as any other member in the House. Gangs are insidious. They prey on people, and they intimidate, bully, and break the law. That is the rhetoric, and I agree with it—I do. I do not have any time for gangs or gang members. But when listening to members opposite, one would think that once the Gangs and Organised Crime Bill is passed, we will all march arm in arm to a happier future and gangs will disappear overnight. The fortifications will go, the gang members will all be locked up, and everything will be wonderful. If it was that easy, it would have happened by now.

Although Government members said that we had 9 years of a Labour Government where nothing happened, I point out that we had 9 years of a National Government before that, 4 years of a Labour Government before that, and 9 years of a National Government before that. If we go back and read what Rob Muldoon said about gangs in the 1970s, we probably would not find that much difference in the rhetoric that came out of the National Party then as comes out of it today. The rhetoric is the easy bit; the solutions are the hard bit. We on the Labour side of the House support this bill, because it gives the police some more powers. But we are realistic. We know that it does not mean gangs will just disappear overnight or that somehow all gang-related crime will vanish, because it will not. Sandra Goudie called it the “Gang-buster Bill”. It is not. It is another set of tools in the arsenal for the police, but it is not a magic bullet or an instant solution.

I will pick up a couple of the comments that Te Ururoa Flavell made. I agreed with quite a lot of what he said in the Committee stage and in his third reading speech. However, there were a few things that I did not agree with him on. I did not agree with him when he said that the gangs were part of the solution to stopping violence. I absolutely disagree with that. The gangs are often the problem. They are not the solution.

Mr Flavell talked about Farmer Crescent in Pōmare, and I am disappointed that Māori Party members have had little to say about the actions of their National Government colleagues there. The Government is not evicting the gang members from their State houses in Pōmare; it is evicting the women and children. That will do nothing to stem the gang-related problems in that community. All that will do is punish the innocent victims. I am surprised that Te Ururoa Flavell raised that matter in this House given the Māori Party’s shameful silence on the actions of the National Government against that community, which will do nothing to stem gang-related problems in that community. All it is doing is picking on the victims. I think that if Māori Party members want to raise that matter in this House, they should at least have the courage of their convictions to stand up and say that they condemn the actions of the National Government.

The ASSISTANT SPEAKER (Eric Roy): The member cannot imply that a member or a party in the House lacks courage.

CHRIS HIPKINS: Thank you, Mr Assistant Speaker.

Coming back to the points I raised earlier in this debate, the Labour Party said at the last election that we would have a commission of inquiry into gangs and sophisticated crime, and I absolutely agree with that. As I have already said, whatever we do, the solutions are not easy. It is the rhetoric that is easy. In order to come up with solutions that work, we need to look at the evidence of what works not only here but also around the world. We need to get people to talk about it. We have one of the highest incarceration rates in the developed world, and this bill increases the number of people who will be locked up and the amount of time they will be locked up for. That may make us all feel better, but we are doing more of the same and that means we will be getting more of the same. We need to take a look at the evidence of what works if we are really serious about cracking down on gang-related crime. We need to go right back to the beginning. We need to go right back to day one, because those gang members were not born wanting to be that way. They were not born gang members and they were not born wanting to be criminals. I ask members what happened along the way that has made them what they are now.

I tell members that if they go to Rimutaka Prison, they will see that 30-plus percent of people there have some sort of gang-related affiliation. I can tell members the common characteristics of people in the Rimutaka Prison. First of all, most of them cannot read and write.

Paul Quinn: That’s why we have a literacy programme going!

CHRIS HIPKINS: They cannot read and write, and I will tell the member what else: most of them come from low socioeconomic areas. The gap between the rich and the poor in New Zealand is continuing to grow—it grew under Labour and it continues to grow under National. If we want to choke off the supply of gang members and gang recruits, then we have to do something about poverty in this country. The fact is that gangs prey on the poor and the desperate, and that is where they get their new members from.

If we want to be really tough about gangs, we need to go back to day one, to when those kids are first born. We need to ask what it is that compels them to get into gangs in the first place. Gang members who are already in the gangs are picking on the easy targets: the poor kids, the kids who cannot read and write, and—yes, tragically—the kids who themselves have been victims of domestic violence and sexual abuse. They are the ones who are more likely to end up in gangs, so let us go after that situation as the root cause of the problem. This legislation adds some useful things for the police. It gives them some useful new powers, but it will not solve gang-related crime. If we are really serious about gang-related crime, we need to go back to the cause.

For this legislation to be effective, it needs to be adequately resourced. As my colleague Clayton Cosgrove said, it is all very well to give police extra powers, but when the Government is cutting 340 police cars out of the police force and cutting firearms training, I ask how the police will have the resources or the skills, in the case of firearms training, to adequately deal with these types of issues. The sum of $21 million has been cut from the police budget under National’s “tough-on-crime Budget”. It can pass all the laws it likes, but if it does not give the police the resources to implement them then those laws are pretty meaningless.

It is a contrast to the National Party’s pre-election rhetoric, which was tough on crime. National said it was going to put extra police on the beat and it was going to make sure they were properly resourced, yet in its very first Budget it stripped $21 million out of the police budget. To highlight what that means, in Christchurch, where more than 30 cars have been cut out of the police’s vehicle fleet, the National Government gave the police there four bicycles to replace those 30 cars. In Christchurch, Mr Brownlee’s home town, his Government has taken away 30 police cars and given the police four bicycles. So when the police go round to the gang fortifications to insist that gang members take them down, they will go there on their bicycles. As the gang members get in their cars and speed away, the police will pedal as fast as they possibly can to try to catch the gang members in Mr Brownlee’s home town of Christchurch. I think that is absolutely disgraceful. If the Government is serious about getting tough on crime, it should make sure the police have the resources they need to enforce the laws that it is passing.

Dr CAM CALDER (National): John Key’s National-led Government is principled, pragmatic, and inclusive. During last year’s election campaign we made promises about what we would do should we be privileged to form the Government. We have that privilege and we are keeping our promises.

Debate interrupted.

Sitting suspended from 1 p.m. to 2 p.m.

Questions for Oral Answer

Questions to Ministers

Education—Support Staff

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his statement “Let’s have teachers taking less of a pay rise so it can be put toward education support staff”?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Prime Minister: I think it is worth noting that the comment was made by the Prime Minister in a circumstance where he was being—

Hon Member: Who is the Prime Minister today?

Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker. I am answering on behalf of the Prime Minister—[Interruption] Is this a point of order or not?

Mr SPEAKER: I apologise to the honourable member. The Hon David Cunliffe will be a little careful. He not only interjected loudly during a point of order but has continued to interject while I am on my feet. I accept that the member apologises for that.

Hon Bill English: I raise a point of order, Mr Speaker. Just so the member can relax, I was delayed—[Interruption]

Mr SPEAKER: I thought that a point of order was being raised by the Hon Bill English. I have accepted a point of order, and it will be heard in silence.

Hon Bill English: I was delayed by answering questions from the media in relation to an issue the member raised yesterday in the House.

Hon GERRY BROWNLEE: I think it is a fair point, and we have raised it a number of times. I do not want to use the word “ambush”, but sometimes it is very difficult to meet the obligations of talking to the media and being in the House on time. I was in the House about 7 minutes before question time began, and I had passed Mr English, who was in discussion with the media at that time. It is not as though there was not an attempt to get here. That is why I was answering initially.

Mr SPEAKER: This is not strictly a point of order, at all. I must make it very clear to Ministers that this House takes absolute priority. Talking to the media is absolutely no reason whatsoever to be late if Ministers wish to be able to answer their own questions. I would like the Government to sort out who is answering this question. It has been asked by the honourable Leader of the Opposition to the Prime Minister, and I will call whoever wishes to take the call.

Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker. You cannot remove yourself from the circumstances entirely, because you are in charge of the parliamentary complex. It is unreasonable to suggest that a Minister being held up by the media on his way to the House is not your concern. I raised a matter, which I think we need to sort out over a period of time, by way of an explanation of why I was answering for the Prime Minister today. I suggest that the way forward might be to invite the Leader of the Opposition to ask his question again.

Mr SPEAKER: I do not need any further assistance on this matter. Let me make it very clear: as I observe what goes on outside the Chamber, as members seek to come to this Parliament, there is absolutely no physical barrier to members coming here. If they choose to continue to talk to the media, that is their decision. It is also, equally, the Government’s decision as to who answers any question. The honourable Leader of the Opposition has asked his question. Maybe to ensure that members have not forgotten the question he asked, I invite the honourable Leader of the Opposition to ask his question again.

Hon Gerry Brownlee: Is it Rick? Is it Darren?

Hon Phil Goff: If the person who was going to answer the question would shut up—

Mr SPEAKER: No, I will not tolerate any more of this, at all. I call the honourable Leader of the Opposition to ask his question, but if he does that again, he will lose it.

Hon Phil Goff: Does he stand by his statement “Let’s have teachers taking less of a pay rise so it can be put toward education support staff”?

Hon BILL ENGLISH (Acting Prime Minister): Yes, and the Prime Minister also pointed out that these staff, who are regarded as being low paid, find themselves in that position after 9 years under Labour, where teachers had significant pay increases and education support staff did not.

Hon Phil Goff: Why is the Prime Minister advising teachers to take a cut in their real incomes when he has been absolutely silent about chief executives taking huge bonuses while laying off their workers, often without any redundancy payments?

Hon BILL ENGLISH: If the member is referring to chief executives in the public sector, I can absolutely assure him that the bonuses and pay rates of the chief executives are entirely due to the actions of the previous Labour Government.

Hon Phil Goff: Does he agree with the statement made by his Minister of Finance that workers in the public sector should have zero wage increases for 5 years—a comment that the Minister of Finance made while accepting a huge increase in his own housing allowance?

Hon BILL ENGLISH: No, because the Minister of Finance did not say that. What the Minister of Finance said was that because of the extravagance of the previous Government we have to contain Government spending, and that public services should not expect new money for the next 3 to 5 years.

Hon Phil Goff: Is the Prime Minister expecting ordinary, hard-working Kiwis to take cuts to their incomes through imposing demands on State-owned enterprises to increase their dividends, thus increasing power prices, so that the Government could take another half a billion dollars a year in those dividends out of the pockets of ordinary New Zealanders?

Mr SPEAKER: Before I call the honourable member, I say that the question is getting a fair way away from the primary question, but if the Hon Bill English feels capable of answering it, that is fine.

Hon BILL ENGLISH: That is a bit rich coming from Labour, which, when in Government, extracted record dividends from State-owned enterprises, along with consistently record power price increases. In fact, under Labour power prices went up at something like 6 or 7 percent a year for the last 4 or 5 years.

Hon Phil Goff: Is the Prime Minister therefore saying that the letter from the Minister for State Owned Enterprises to the State-owned enterprises in order to get a better return for the Government, and therefore push power prices up, was right or wrong?

Hon BILL ENGLISH: The member should not confuse price with performance. These organisations have suffered for the last 10 years under the Labour Government. They became fat and lazy, and we have had to sort out their performance.

Te Ururoa Flavell: Kia ora—[Interruption]

Mr SPEAKER: The House will come to a little order. I have called Te Ururoa Flavell, and I would appreciate it if he were shown some courtesy.

Te Ururoa Flavell: Kia ora, Mr Speaker. What is being done to invest in key support staff such as those focused on improving levels of literacy and numeracy, which is one of the Māori Party policy priorities attached to the confidence and supply agreement with National?

Hon BILL ENGLISH: The Government supports the view of the Māori Party that we should focus on literacy and numeracy and on improving the levels of achievement among our children. In that respect, the Government has committed about $36 million over the next few years to assist schools in delivering national standards and, most important, in assisting those children who need more help in order to achieve at adequate levels.

Recession—Position of New Zealand Economy

2. AARON GILMORE (National) to the Minister of Finance: What reports has he received on how the New Zealand economy is placed coming out of the recession?

Hon BILL ENGLISH (Minister of Finance): New Zealand is reasonably well placed coming out of the recession, after we inherited an economy that had been mismanaged for the last 9 years by the Labour Government. Both business and consumer confidence have risen significantly in recent months. We have yet to see whether real economic activity follows this improvement in the leading indicators.

Aaron Gilmore: What factors account for the lift in confidence?

Hon BILL ENGLISH: I think one of the significant factors is having a Government that stays focused on the big picture of lifting economic performance and providing New Zealanders with jobs. Many New Zealanders have lost their jobs or are worried about losing them. We are taking every step that we can to ensure there is investment and employment, so that people can have secure jobs.

Aaron Gilmore: How credible is the consumer confidence survey?

Hon BILL ENGLISH: The most recent consumer confidence survey was the ANZ-Roy Morgan survey. I understand that when it rings up to ask people their opinion it, actually says where the inquiry is from, unlike the Labour Party’s pollsters. Clearly, that survey did not use Rick Barker’s volunteers, who apparently have now been totally disowned by the current leadership.

Hon Sir Roger Douglas: Why has the Minister decided that the best way to deal with the fiscal problem he faces is to simply take on $40 billion of debt over the next 4 years, and heaven knows how much thereafter?

Hon BILL ENGLISH: The Government is taking a balanced approach to dealing with the Government’s very significant fiscal problems. We are borrowing money because we believe that throughout the recession it is better to maintain entitlements and public services, and to keep the economy ticking over. But we are now taking steps to make sure that public debt does not grow out of control.

John Boscawen: Can the Minister explain how the continued ownership of KiwiRail, Television New Zealand, Learning Media, and the telecommunications company Orcon will lead to the future prosperity of New Zealand, rather than the disposal of those liabilities and the paying off of debt?

Hon BILL ENGLISH: The Government has made an undertaking to maintain the ownership of all significant current Government assets. However, there is a huge clean-up job to do with regard to those assets, because under the previous Government there were too many political appointments to boards, and they lost their focus on financial performance. We are going through the process of fixing them.

Finance, Minister—“In Plain English” Promotion

3. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he stand by all his recent statements?

Hon BILL ENGLISH (Minister of Finance): Yes.

Hon David Cunliffe: In which capacity did he make the statements on the TVNZ 7 “in plain English” promotional video—as Minister of Finance or as Bill English in his private capacity?

Hon BILL ENGLISH: I am a bit more modest than that member, and I have to say that if I were not the Minister of Finance, I would not have been on the programme.

Hon David Cunliffe: Can he confirm that he or his office corrected inaccuracies in the script; if so, what were those inaccuracies, what was corrected, and by whom?

Hon BILL ENGLISH: My understanding is that the journalists involved were taking what they regarded as abstract economic concepts and trying to turn them into plain English. I am advised that they got some of it wrong, so the scripts were checked for economic accuracy.

Hon David Cunliffe: Does the Minister—

Hon Gerry Brownlee: Smile at the camera; you might be discovered!

Hon David Cunliffe: The member might be in the—

Mr SPEAKER: If the House would just settle down, I ask the Hon David Cunliffe to ask his supplementary question.

Hon David Cunliffe: Does the real Minister of Finance stand by his statement that the advertisement looked “quite good”, or will he concede that it was not a good look for a shareholding Minister to take hundreds of thousands of dollars of free advertising from a State broadcaster?

Hon BILL ENGLISH: All decisions about putting together the promotion and the use of it are being made by Television New Zealand (TVNZ), as I understand it. That is the normal relationship that politicians have with TVNZ. It could, of course, have chosen that member to front it, but it did not. It could have chosen Mr Goff to front it, but it did not. I think the reasons are pretty obvious.

Mr SPEAKER: The Hon David Cunliffe—[Interruption] I have called the Hon David Cunliffe. [Interruption] Would the members please show some courtesy to their own front-bench colleague.

Hon David Cunliffe: Is he satisfied that he avoided any perception of a conflict of interest, as required by the Cabinet Manual, after previously abusing TVNZ management over unfavourable double-dipping coverage, only to receive hundreds of thousands of dollars worth of free advertising shortly after?

Hon BILL ENGLISH: That is a ridiculous allegation. Of course I am satisfied.

Mr SPEAKER: I call question No. 4; Metiria Turei.

Hon David Cunliffe: Does the Minister think—

Mr SPEAKER: I have called question No. 4.

Hon David Cunliffe: Mr Speaker, I ask for a supplementary question on question No. 3.

Mr SPEAKER: I looked around the Chamber and I could see no one seeking the call, so I called question No. 4. Maybe the member thought I was going on too fast, so I will come back to him. But I make the point that if members wish to ask supplementary questions, they must seek the call. I cannot read their minds, and I had gone on to question No. 4. But I will come back to a supplementary question from the Hon David Cunliffe. [Interruption] Please, I have called the honourable member.

Hon David Cunliffe: Does he think it is a good look that he is continually embroiled in controversies over his personal judgment, when he should be focused on making life better for ordinary New Zealanders?

Hon BILL ENGLISH: I reassure that member that the amount of time I spend on the controversies generated by the Labour Party would be about 0.5 percent of my time, and the rest of the time I am focused on serious issues, like the 45 people who lost their jobs in my electorate today. Those people are getting my full attention; that party is not getting my full attention.

Mr SPEAKER: I call question No. 4; Metiria Turei. [Interruption] I say to the Government members that they have expressed their views with their applause, and I ask them to please not continue to interject, because we have gone on to the next issue. I have called Metiria Turei.

United Nations Human Development Report—New Zealand Results

4. METIRIA TUREI (Co-Leader—Green) to the Minister for Social Development and Employment: What is her response to New Zealand’s inequality ranking in the United Nations Development Programme’s Human Development Report 2009?

Hon PAULA BENNETT (Minister for Social Development and Employment): I agree with one of the report’s findings—that people will move to better-off countries. That is why we are following an economic programme that is designed to narrow the income gap with Australia.

Metiria Turei: I seek leave, at this early stage, to table the United Nations Human Development Report 2009, which was published by the United Nations Development Programme on 16 October 2009.

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

Metiria Turei: Is the Minister aware that Social Report 2009, published by her Ministry of Social Development, uses the same measure as that of the United Nations Development Programme report to compare New Zealand’s inequality score with other countries and notes that New Zealand ranks 23rd out of 30 OECD countries for inequality?

Hon PAULA BENNETT: What I am also aware of is the report that has just come through today—

Mr SPEAKER: The Minister will resume her seat. The Minister may be aware of all sorts of things but she has actually just been asked a question that related, very directly, to the primary question. The Minister being “also aware” of something else was not what she was questioned about. Where a member asks a question absolutely directly related to the primary question, and although the Minister may be intending to get to that matter, her answer should indicate that she is answering the question and not going on to something else. The Minister started: “I am also aware of” something else. That cannot be the way to start answering that perfectly fair question.

Hon PAULA BENNETT: I was heading toward discussing the OECD rankings in the social report that the member brought up. I am also aware that the report that was in the original question has New Zealand ranked at 20 out of 182 countries. That was the answer to the member’s question. She had a question about a certain ranking within an OECD report. The original had us ranked 20th for inequality out of 182 countries.

Metiria Turei: I seek leave to table table M from the United Nations Human Development Report, which, while listing New Zealand in the table at No. 20, when using the Gini index for inequality clearly shows New Zealand is ranked sixth worst for inequality.

Mr SPEAKER: Leave is sought to table that table from the named document. Is there any objection to that? There is no objection.

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

Hon Trevor Mallard: I raise a point of order, Mr Speaker. During that point of order, which was a reasonable one and went as quickly as someone could to the tabling of the document, there was an interjection from the Leader of the House, which was loud. My view, Mr Speaker, is that you had drawn the line on that behaviour earlier in the day and your ruling should be consistent.

Mr SPEAKER: I was concentrating so much on what the honourable member Metiria Turei was saying that I did not even notice the interjection. But I would ask the member, Gerry Brownlee, to cease from interjection when a point of order is being heard.

Dr Kennedy Graham: Has she discussed with her Cabinet colleagues the findings of British researchers, Wilkinson and Pickett, authors of The Spirit Level: Why More Equal Societies Almost Always Do Better, that more unequal societies are bad for almost everyone within them, the well-off as well as the poor?

Hon PAULA BENNETT: No.

Sue Kedgley: Is she concerned that the same research shows teenage birth rates and infant mortality are higher in more unequal countries, with New Zealand above the average; if so, what is the Government doing to improve New Zealand’s inequality ranking from that reported by the United Nations Development Programme?

Hon PAULA BENNETT: This Government is certainly concerned about teenage birth rates, and the support that we put around teenage parents. A programme of work is going on around that at the moment. It includes focus groups for teen parents and a range of other initiatives.

Catherine Delahunty: Does she think her policy of cuts to the training incentive allowance, which prevents people on low incomes from accessing further education to increase their earning power, will increase or decrease the gap between rich and poor in Aotearoa New Zealand?

Hon PAULA BENNETT: I do not agree that those changes will prevent people from going on to further education. What they are doing is putting resources into those people who are going to Level 3 or higher, so I do not agree.

Dr Russel Norman: Does she think that her Government’s policy of tax cuts for high-income earners will increase or decrease the gap between rich and poor in Aotearoa New Zealand?

Hon PAULA BENNETT: I saw tax incentives and tax cuts for all New Zealanders, which I know are being spent wisely, and which those people desperately need.

Metiria Turei: Does the Minister think that salary increases for chief executives at the same time as there are wage freezes for ordinary workers at State-owned enterprises like Television New Zealand will increase or decrease the gap between the rich and the poor in Aotearoa New Zealand?

Hon PAULA BENNETT: I am not responsible for salary increases for chief executives.

Metiria Turei: I seek leave of the House to table a section of the Social Report 2009 pertaining to income and equality in Aotearoa New Zealand.

Mr SPEAKER: Leave is sought to table that portion of the document. Is there any objection? There is no objection.

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

Metiria Turei: I seek leave of the House to table a graph showing that teenage birth rates are higher in more unequal countries, with New Zealand above the average.

Mr SPEAKER: Is the graph from that same document?

Metiria Turei: The graph was published in a book called The Spirit Level in 2009.

Mr SPEAKER: Leave is sought to table that page from the document The Spirit Level. Is there any objection to that being tabled? There is no objection.

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

Metiria Turei: I seek leave of the House to table a graph showing that infant mortality is higher in more unequal countries, with Aotearoa New Zealand above the average, published in The Spirit Level, 2009.

Mr SPEAKER: Leave is sought to table that graph from the book The Spirit Level. Is there any objection to that being tabled? There is none.

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

Metiria Turei: I seek leave to table a graph showing that more people are in prisons in more unequal societies, with New Zealand above the average, published in The Spirit Level, 2009.

Mr SPEAKER: Leave is sought to table that graph from The Spirit Level, 2009. Is there any objection? There is no objection.

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

Metiria Turei: I seek leave to table a graph showing that people suffer from mental illness in more unequal societies, with New Zealand above the average, published in The Spirit Level, 2009.

Mr SPEAKER: Leave is sought to table that graph from The Spirit Level, 2009. Is there any objection? There is no objection.

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

Metiria Turei: I seek leave to table a graph showing that more adults are obese and more children are overweight in more unequal countries, published in The Spirit Level, 2009.

Mr SPEAKER: Leave is sought to table that graph from The Spirit Level, 2009. Is there any objection? Did I hear objection? There is objection.

Metiria Turei: Finally, I seek leave to table a graph showing the educational outcomes are lower, and educational performance is lower, in more unequal countries.

Mr SPEAKER: Leave is sought to table that graph. I take it that it is from The Spirit Level, 2009. Leave is sought to table that graph from the book The Spirit Level, 2009. Is there any objection? There is no objection.

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

Accident Compensation—Investment in Programmes

5. Hon RUTH DYSON (Labour—Port Hills) to the Minister for ACC: Does he stand by his statement “The board is saying we need to invest in cost-effective programmes for injury prevention and not just in any old programmes.”?

Hon Dr NICK SMITH (Minister for ACC): Yes, I do. This was in response to a question about the Accident Compensation Corporation (ACC) board’s decision to discontinue t’ai chi, an older person’s exercise programme, started under the previous Government, that cost millions. A recent return on investment calculation shows for each dollar spent there is a return of only 77c. Section 263 of the Injury Prevention, Rehabilitation, and Compensation Act, passed by Labour, requires that levy money can be spent only on programmes that result in a reduction in levies, and this does not meet the legal test.

Hon Ruth Dyson: How does he view the research from the University of British Columbia, which found that for every dollar invested in the New Zealand falls prevention programme, $2 was saved?

Hon Dr NICK SMITH: If that were true, then, perhaps, having had the programme going for 6 years, I would not, as Minister for ACC, be facing losses of billions of dollars in the accident compensation scheme.

Michael Woodhouse: Is the Minister aware of any policy initiatives aimed at reducing costs that had the opposite effect for the scheme?

Hon Dr NICK SMITH: Yes. In 2004 Cabinet approved a free physiotherapy policy on the basis that it would cost $9 million per year but save money by improving rehabilitation rates. The policy is actually costing an extra $66 million per year. There are no signs of any improvements in rehabilitation rates. In fact, in 2004 rehabilitation rates have been in decline. I note that Labour’s spokesperson on accident compensation, David Parker, has acknowledged that the policy was a mistake, but it has cost the levy payers $244 million. The architect of that failed policy was Ruth Dyson.

Hon Ruth Dyson: Will he advise ACC that it is flawed accounting for it to say that for every dollar invested in the falls prevention programme it gets only a 77c return, and that the reason the corporation’s advice to him differs from the research from the University of British Columbia is that the corporation is not including either the cost or the savings to Vote Health or to individuals?

Hon Dr NICK SMITH: I would ask that member to reflect, because she and her Government passed section 263 of the Injury Prevention, Rehabilitation, and Compensation Act, which states that levy money can be spent only on programmes that result in a reduction in accident compensation levies, and this does not meet the legal test passed by that member.

Mr SPEAKER: I struggled a little with the question that was asked of the Minister and with the answer the Minister has been giving, interesting though it might be. I invite the Hon Ruth Dyson to ask her question again—she will not lose a supplementary question—just to make sure that the House is getting an answer to it.

Hon Ruth Dyson: Will he advise ACC that it is flawed accounting for it to say that for every dollar invested in the falls prevention programme it gets only a 77c return, and that the reason ACC’s advice to him differs from the research from the University of British Columbia is that ACC does not count either the cost or the savings to Vote Health and to individuals?

Hon Dr NICK SMITH: My answer is that the very Act that that member passed requires that the ACC board can take into account only savings to levy payers. That is the law that members opposite passed. This is a decision that has been made by the ACC board under an Act passed by those members.

Hon Ruth Dyson: Why does he say that he knows better than academics, better than researchers, and better than physiotherapists like Jacqui Bath who have proven the benefit of the falls prevention programme and who know that scrapping this programme will shift huge costs and pain on to Vote Health and to individuals and their families?

Hon Dr NICK SMITH: The member opposite claimed in her question that I had made the decision. I had not. The decision has been made by the ACC board. Members opposite are the same members who last week were complaining that I was interfering in the board’s decisions. They should make up their minds.

Michael Woodhouse: If the corporation is going to fund exercise programmes on the basis that they are good for people’s health, why would it not also fund bowls, croquet, walking groups, golf, rest home Olympics, and all sorts of other activities that are good for old people’s physical well-being?

Hon Dr NICK SMITH: The member makes a very good point. If ACC is going to fund t’ai chi, what else is it going to fund? The truth is that there are all sorts of activities. My colleague the Minister of Health is a keen cyclist, and it keeps him fit and beautiful. Does that mean the Government should fund his cycling? If we are going to fund every single activity that does some good, there is no end to what ACC would fund.

Hon Ruth Dyson: I seek leave to table the University of British Columbia research showing that for every dollar invested in the falls prevention programme, New Zealand saves $2.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is no objection.

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

Hon Dr NICK SMITH: I seek the leave of the House to table the report from ACC about the disastrous policy of free physio as it was advanced by that member, which has cost ACC—

Mr SPEAKER: That is sufficient description. Leave is sought to table that document. Is there any objection? There is. Leave is not granted.

Hon Ruth Dyson: I seek leave to table an email from Jacqui Bath to the Nine to Noon programme expressing dismay at ACC’s decision to cut the falls prevention programme.

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

Environment Canterbury—Ministerial Investigation

6. JO GOODHEW (National—Rangitata) to the Minister for the Environment: Will he use his powers under section 24A of the Resource Management Act 1991 to investigate the poor performance of Environment Canterbury?

Hon Dr NICK SMITH (Minister for the Environment): Today I have announced a formal investigation into Environment Canterbury under section 24A, and in parallel with action by my colleague the Minister of Local Government. Environment Canterbury performed 84th out of 84 councils in processing resource consents and has not performed well in developing plans for managing Canterbury’s natural resources. The Government has received strong submissions from Canterbury MPs and mayors, including the member, for intervention. The powers have previously not been used, but are necessary to get Environment Canterbury back on track.

Jo Goodhew: What consultation has the Minister undertaken with Environment Canterbury regarding the intervention, and what has been its response?

Hon Dr NICK SMITH: Back in June, I wrote to the eight worst-performing councils in respect of non-compliance with the Resource Management Act. I received a constructive response from Environment Canterbury, and met with it to further discuss these issues. I, along with my colleague Rodney Hide, met again yesterday with the chair and the chief executive of Environment Canterbury to consult on the terms of reference for the investigation. I am encouraged that it has welcomed the review, accepts that it has problems, and is committed to working with the Government to put things right at Environment Canterbury.

Hon Shane Jones: Will this review consider the disestablishment of the regional council or the removal of some its current resource management functions?

Hon Dr NICK SMITH: No. I would be happy to table the terms of reference. This Government is committed to working with Environment Canterbury to ensure that it is able to meet its statutory and important functions under both the Local Government Act and the Resource Management Act.

Amy Adams: What submissions has the Minister received from other Canterbury councils on problems with Environment Canterbury, and has he considered their perspective in the terms of reference for this investigation?

Hon Dr NICK SMITH: The Minister of Local Government and I received a letter on 18 September from Canterbury mayors concerning pressure points between them and Environment Canterbury. Mr Hide and I have subsequently met with the Canterbury mayors. The Canterbury mayors’ concerns are reflected in the Minister of Local Government asking the Department of Internal Affairs to conduct a non-statutory assessment of the council to look at the wider issues. We are looking forward to receiving the review report in February next year.

Hon Shane Jones: Does he agree with David Carter that irrigating the Canterbury Plains is a significant issue, and that there was “more to infrastructure than just Auckland roads”; and how will this review simplify the process of water allocation, which is an issue obviously vexing MPs in the National Party with associations with Canterbury?

Hon Dr NICK SMITH: It is this Government’s view that irrigation and water management are huge strategic issues for Canterbury. The problems within Environment Canterbury have been a barrier and a problem in developing proper plans for the management of water resources, from both an environmental and a development perspective. It is our view that Environment Canterbury getting its act together is an important part of enabling Canterbury to get the very best from those important natural resources.

Jacqui Dean: What advice has the Minister for the Environment given him on the performance of other local authorities, and is he taking any action in respect of other councils to improve delivery of the Resource Management Act?

Hon Dr NICK SMITH: The Ministry for the Environment survey on local government performance identified eight councils that were performing poorly. I wrote to those councils requesting that they identify what they were going to do to improve their performance. Following these responses, the Ministry for the Environment has recommended that in addition to investigating Environment Canterbury, I also investigate the Far North District Council under section 24A of the Resource Management Act. Today I notified the Far North District Council of that decision. I note that that investigation is constrained to the Resource Management Act issues, and does not involve a more formal review of the Local Government Act functions, which are the responsibility of Rodney Hide.

John Boscawen: In terms of his working with his colleague the Hon Rodney Hide on this investigation, how are the Minister of Local Government and the Minister for the Environment coordinating efforts to ensure that Environment Canterbury lifts its game?

Hon Dr NICK SMITH: Rodney Hide and I have been working closely on this issue, as have our officials. The investigation is a joint effort, covering both the Resource Management Act and the Local Government Act functions. The Minister of Local Government and I share a view that this council is underperforming and is holding Canterbury back. We consider that interventions such as this undertaking, as well as the broader reforms that the Minister of Local Government is advancing, are needed to lift the performance of this important sector.

ACC, Minister—Statements

7. Hon DAVID PARKER (Labour) to the Minister for ACC: Does he stand by all his statements on ACC?

Hon Dr NICK SMITH (Minister for ACC): Yes.

Hon David Parker: Does the Minister stand by his statement that proposes a $500 fee increase for motorbikes, and is this in accordance with the accident compensation scheme’s principle of fairness?

Hon Dr NICK SMITH: The proposal for the increase in motorcycle levies is one made by the Accident Compensation Corporation board. The board then comes back, after a process of public consultation, with recommendations to the Minister, which I expect to receive in December. Then they will go to Cabinet for a final decision. I do think the increases that are being proposed by the board are quite steep, and I was taken aback by the scale of those increases. I also have to say I was taken aback by just how expensive motorcycle accidents are for New Zealand.

Hon David Parker: Does the Minister stand by his statement that drivers of cars with a higher safety rating could pay lower accident compensation levies, while most Kiwis, who cannot afford the latest and safest cars, pay more?

Hon Dr NICK SMITH: Firstly, the operative word is “could”, and then the member has put his own interpretation on it. Let me make plain that it is my view that we need to provide—and it is in the bill I introduced to the House yesterday—stronger financial incentives for both employers and motorists to display safer behaviour. I make no apologies about this Government wanting to improve safety, and using incentives and no-claim bonuses as instruments for improving safety.

Michael Woodhouse: Has the Minister received any reports of statements on accident compensation?

Mr SPEAKER: I think it would be helpful—there was a fair bit of noise going on—if Michael Woodhouse would repeat the question. I ask the House to be a little quieter when a member is asking a question from the backbenches.

Michael Woodhouse: Has the Minister received any reports of statements on accident compensation?

Hon Dr NICK SMITH: Yes, I have. Mr Goff said yesterday: “It was just not good enough that sexual abuse claimants had to show a mental illness to be eligible for ACC support.” That is surprising, because Labour’s 2001 Act requires just that, in section 27. It is not good enough that Mr Goff is misleading the public of New Zealand.

Hon David Parker: Is the Minister pleased—

Hon Dr NICK SMITH: I seek leave of the House to table section 27 of the Injury Prevention, Rehabilitation, and Compensation Act, which was passed by the previous Government and requires just that.

Mr SPEAKER: This is a point of order, but I am again troubled by leave being sort to table something that is freely available to members of the House. I will be dealing with this matter in the future. I did not put leave for a Labour member yesterday when I thought the document was readily available to the House. To be even-handed, I am not going to put that leave, either.

Hon David Parker: I raise a point of order, Mr Speaker. With respect, I think that the Minister should be able to make that point of order. The House is free to decline leave.

Mr SPEAKER: I have ruled as Speaker. The member will resume his seat. The Minister sought leave to table some legislation that is freely available to all members of the House. There is absolutely no value, in terms of adding information for members of this House, in leave being sought for that purpose. I did not put leave for a Labour member who sought leave yesterday to table an answer to a written question, and I am not going to put this leave today. As I say, I will be dealing with the matter more fully in the future. I am not going to put leave today for a member seeking leave to table a piece of legislation that is freely available to members of this House.

Hon David Parker: When the Speaker comes down with that formal—

Mr SPEAKER: Is this a point of order?

Hon David Parker: Yes, it is—sorry, Mr Speaker. I raise a point of order, Mr Speaker. I urge the Speaker to consider the knock-on effect that that will have if the Speaker takes a particular course of action. We have seen today that Metiria Turei, acting within the Standing Orders, was able to table a long list of documents, which delayed the House more than your letting the House flow with short points of order that sometimes have political connotations.

Mr SPEAKER: The member may recollect that the member Metiria Turei sought leave, if I recollect correctly, to table the entire document. That leave was denied by the House. She then sought leave to table graphs from—[Interruption] Oh, I beg your pardon. They were from a different document. I beg your pardon; I am not correct on that. I hear what the member says, but the information that Metiria Turei was seeking leave to table was information that members would not automatically have available to them—

Hon Lianne Dalziel: I’ve got the book here.

Mr SPEAKER: One member has the book, but the information was something that could inform the House. The Standing Order does not provide for the leave process to be used to make political points. Previous Speakers have pointed out that it does not provide for that, and it will not be used for that purpose in the future. It is to provide information that is not normally available to members of the House. Does the Hon David Parker have a further supplementary question?

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I apologise for adding to something that you have ruled on, but my reading of those rulings from previous Speakers was that they were recommending to the House—that they were, if you like, editorialising, rather than refusing members’ right to seek leave. I think that is something quite important. The right to seek the leave of the House to do anything is something pretty well established right through the Westminster tradition. If one looks back to Erskine May, if one goes to the British House of Commons, one sees that unless there is a specific Standing Order that forbids the seeking of leave in a particular area, my view is that the Speaker has an obligation to put the leave. I do not think that is right; I—

Mr SPEAKER: I hear the point the member makes. There is a specific Standing Order that was recently introduced to cover the tabling of documents. It is Standing Order 368. There is also Standing Order 2, which gives the Speaker responsibility to handle questions that arise as to the interpretation or application of a Standing Order. That is up to the Speaker. I will be making some rulings in respect of the application of Standing Order 368.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I have just looked at Standing Order 200; it relates to select committees.

Mr SPEAKER: No, Standing Order 2.

Hon David Parker: Is the Minister pleased with the decrease in workplace accidents in 2007 and 2008 as announced by Statistics New Zealand today, or will he be spinning it to assert mismanagement of accident compensation by the previous Government, to justify cuts to accident compensation cover, and to justify privatisation?

Hon Dr NICK SMITH: Of course. Every member of this House would be pleased with any reduction in accidents. The reality is—

Hon David Parker: Where’s the case for privatisation?

Hon Dr NICK SMITH: The member asks where the case is for choice in competition—I think that is the term he should use. You see, for every single issue—it does not matter whether it is any sort of issue, or whether it is my colleague Anne Tolley or me—the only word Labour knows in opposition is “privatisation”, which is not on the Government’s agenda.

Michael Woodhouse: What other reports has the Minister received of inaccurate statements on accident compensation?

Hon Dr NICK SMITH: Yesterday a press release claimed that the Government’s accident compensation reform bill repealed provisions in the scheme to provide assistance for superannuitants and for those who suffered a mental injury at work. Both these statements are wrong. There is no change in the bill to those provisions. Mr Parker should apologise for unnecessarily causing concern and unease to New Zealanders.

Hon David Parker: I seek leave to table a release from Statistics New Zealand showing a decline in work-related injury claims in 2007 and 2008.

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

Benefits, Invalids and Sickness—Management

8. KATRINA SHANKS (National) to the Minister for Social Development and Employment: What recent reports has she received on the management of sickness and invalids benefits?

Hon PAULA BENNETT (Minister for Social Development and Employment): The Auditor-General has released a report that looks at changes attempted by the Labour Government. These changes were supposed to actively help and encourage sickness and invalids beneficiaries back into work. The report says that Labour simply did not do enough. Clearly Labour did not, with the increase we saw in invalids benefits and sickness benefits under the previous Government.

Katrina Shanks: What recommendations did the Auditor-General’s report make?

Hon PAULA BENNETT: The report confirms that the changes we committed to before the election are firmly heading in the right direction. The recommendations focused on improving the determination of eligibility, providing more comprehensive case management, and extending the monitoring and evaluation, as National campaigned for.

Hon Annette King: Where in the audit report does it state that the case management of sickness and invalids beneficiaries is a failed programme, as she claimed last week; and is it not true that the audit report actually said: “The Ministry … has a challenging task in managing large numbers of … beneficiaries”, and encouraged the department “to build on the progress that it has made so far.”?

Hon PAULA BENNETT: The numbers speak for themselves. Since 1999 there has been a 73.9 percent increase in those on the sickness benefit, and a 65.9 percent increase of those on the invalids benefit. Unlike Labour, we have high expectations for those people. We think we can help get them back into work, and that is what we will do.

Hon Annette King: If the changes she claims her Government has made “are … heading in the right direction”, why are sickness benefit and invalids benefit numbers soaring to the highest level we have seen in 5 years?

Hon PAULA BENNETT: Those changes are to be introduced via legislation next year. At the moment we are still operating on the obviously failing policies of the previous Government, and we see that the mechanisms that are implemented through Work and Income are not working. We will actually be making changes that mean positives for those who are on those benefits.

Television New Zealand—Cost of Advertisement for Spotlight on the Economy

9. BRENDON BURNS (Labour—Christchurch Central) to the Minister of Broadcasting: What reports, if any, has he received from the board of TVNZ on the estimated market value of the airtime for the advertisement featuring the Hon Bill English promoting TVNZ 7’s Spotlight on the Economy series that is being run 130 times on TV One, 2, 6 and 7?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Minister of Broadcasting: He has not received any reports and does not expect to receive any.

Brendon Burns: Is the Minister satisfied with the processes at Television New Zealand (TVNZ) that have seen airtime valued in the hundreds of thousands of dollars given over to the “in plain English” promotion involving the State broadcaster’s shareholding Minister?

Hon GERRY BROWNLEE: Yes.

Brendon Burns: Is he satisfied that TVNZ news managers were not consulted during the internal vetting of the “in plain English” promo, given today’s Dominion Post reports that news staff expressed “strong concerns” about the promotion.

Hon GERRY BROWNLEE: The Minister of Broadcasting does not involve himself in the internal workings of any broadcast agency in this country.

Brendon Burns: Is the Minister aware of any proposals by TVNZ to extend its new-found interest in promoting politicians in difficulties, and will we soon be seeing a helicopter view of education, with 135 trailers for “Plain Tolley”, and “ACC Cuts Made Simple” promoting “Plain Smith”?

Hon GERRY BROWNLEE: He has no idea what the programming future might hold for TVNZ, but I suggest that if the member wishes to advance those ideas, he talks to the broadcaster directly himself. They seem very good ideas to me.

Aged Residential Care—Improvements

10. NICKY WAGNER (National) to the Minister of Health: What reports has he received in relation to improving residential care for the aged?

Hon TONY RYALL (Minister of Health): There has been mounting public concern about poor care in rest homes for the elderly, and the Government has taken steps to address it. We have injected an extra $18 million in this year’s Budget to improve nursing quality and supervision in rest homes, and from 1 January next year we are launching a new spot auditing regime for aged residential care, whereby rest homes will not know when the auditors are coming. We are currently in the middle of a 2-month pilot of the tool to do that, and I understand that it is going very well. We will be making adjustments in the run-up to 1 January.

Nicky Wagner: What other decisions have been made in order to improve care for the elderly?

Hon TONY RYALL: The elderly and their families need to have greater confidence in the monitoring of residential care services, and to have an opportunity to understand the various results of audits. That is why the Government has, for the first time, required a summary of the various audits of rest homes to be made available on the Ministry of Health website. The summary has an easy-to-read colour coding, ranging from blue, which means a very good performance, through the spectrum to red, and the red means significant action is needed to achieve the required levels of performance.

Hon Luamanuvao Winnie Laban: Has the Minister seen any reports from his colleague Nick Smith, who has just slashed a programme to prevent over-80s from falling, whether they choose to live at home or in a rest home?

Hon TONY RYALL: I am aware of those reports, having read some of them in the news media. I have to say, having sat through question time today, I think the decisions and announcements that are being made are entirely defendable and make sense.

Rahui Katene: Does the Minister agree with the Māori Party, when it said in its policy statement He Aha Te Mea Nui?, that the aged-care workforce is underpaid, understaffed, and too often does not receive the training it requires in order to deliver the best care, and what will he be doing to address these concerns?

Hon TONY RYALL: There is no doubt that many of the people who work in the aged-care sector think of themselves as being underpaid. It is very hard work, and that is one of the reasons why the Government has increased the subsidy for the provision of aged residential care by 5 percent this year.

Rest and Meal Breaks—Proposed Legislative Change

11. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Labour: What has happened since compulsory rest and meal breaks for employees came into effect this year, which has led to her proposing changes to that legislation?

Hon CHRISTOPHER FINLAYSON (Acting Minister of Labour): From complaints received by the Minister it has become clear, if it was not already, that not everyone has a cup of tea at 10 a.m. and 3 p.m. and stops for lunch precisely at 1 p.m., except possibly Parliament when it is in urgency and, on most occasions, the courts. The changes are aimed at ensuring flexibility in the workplace by allowing employers and employees to time their breaks in a way that does not disrupt their work. The Government does not believe it should restrict the rights of employees to ask their employer if they can skip afternoon tea and go home a little earlier than usual in order to pick up their children from sports practice.

Hon Trevor Mallard: Is the Minister asserting that the legislation requires breaks to be taken for tea at 10 a.m. and lunch at 1 p.m.?

Hon CHRISTOPHER FINLAYSON: I am sorry but, because of the interjections, I could not hear that. Would the member—and, of course, it is one law for all of us—

Mr SPEAKER: I will ask the member to repeat his question, because it was hard to hear it. I ask members to be a little quieter, please.

Hon Trevor Mallard: Is the Minister asserting that the legislation requires breaks to be taken for tea at 10 a.m. and lunch at 1 p.m.?

Hon CHRISTOPHER FINLAYSON: What the Minister is asserting is that the current legislation has unnecessary inflexibility. The proposal aims to restore flexibility to the workplace.

Hon Trevor Mallard: Why did the Minister vote for the legislation?

Hon CHRISTOPHER FINLAYSON: She and the National Party voted for the legislation at the first reading and, indeed, I spoke on it in the first reading and said it should go to a select committee, because it raised important issues that needed to be looked at. We voted against the legislation in the Committee stage because there were some concerns about flexibility, but, in the overall mix, we voted for it at the third reading.

Hon Darren Hughes: What a shambles!

Hon CHRISTOPHER FINLAYSON: I cannot see where the shambles was in doing that and then seeking to improve the legislation when the opportunity arose.

Hon Trevor Mallard: Will the Minister assure the House that she will not move to foreshorten the length of the select committee process?

Hon CHRISTOPHER FINLAYSON: I can say that the bill that was passed last year went through a select committee process, which was very thorough. The current bill is in the nature of a tidying-up.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a very—

Mr SPEAKER: Is this a point of order?

Hon Trevor Mallard: Yes, it is a point of order. It was a very specific question, seeking an assurance that the Minister would not move to foreshorten the select committee process. An assurance was not given. No answer was given to that question; there was a repetition of what happened last year. There was reference to this legislation being tidied up, but the actual question was not addressed.

Hon CHRISTOPHER FINLAYSON: I will try to help the member. The issue is what “foreshorten” means.

Mr SPEAKER: The Minister has made it clear that he was not sure what the member meant in his question by asking about the process being foreshortened. If the member wants to—[Interruption] If it will assist the House to get the information, I invite the member to reword his question.

Hon Trevor Mallard: Will the Minister give the House an assurance that she will not move, as part of the referral motion to a select committee, that the bill have a shortened period for the report back?

Hon CHRISTOPHER FINLAYSON: I am no expert in parliamentary procedure, but I would have thought that was a matter for the House.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Again, that was a very specific question about whether the Minister would move a motion. That motion is not a matter for the House; it is a matter for the Minister. The Minister makes a decision on that motion. How the House votes is a matter for the House to decide, but is there an assurance that the Government will not move to cut workers out of their rightful—

Mr SPEAKER: That is not acceptable in a point of order. It would seem that what is happening here is that a hypothetical question is being asked about what the Minister may or may not do. The Minister has pointed out, in answering the question, that, finally, that is a matter for the House. That is, as I understand it, a fair answer to the question. If the Minister believes that helpful information can be added to assist the House, I am happy for the Minister to do that, but he would need to do that now if he wishes to do so.

Hon CHRISTOPHER FINLAYSON: No.

Mr SPEAKER: I believe that under the circumstances, given that it is a hypothetical question, I cannot insist on a clearer answer than that. The Minister answered the question by saying it was a matter for the House at the end of the day, and that is a fair answer to the question.

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

Mr SPEAKER: I fear the member is about to litigate the quality of an answer—

Hon Trevor Mallard: I know that I am sailing slightly close to the wind. It is not a matter, though, for the House as to whether a Minister moves something; that is something for a Minister to do. A Minister must, at the end of the first reading of the bill, which is currently sitting on the Table and will soon be up for its first reading, move a motion. The movement of that is not a matter for the House, and the detail as to whether there is a short select committee process is something for the Minister to include in the motion, not for the House.

Mr SPEAKER: Before I take the matter any further, I say my dilemma is that it is a hypothetical question. When a Minister moves that motion at the end of the first reading, the Minister will not necessarily spell out the report-back time at all; the Minister will spell out the committee to which the bill is to be referred. This is a hypothetical question because the Minister is not required to specify that matter when the motion is moved, so I believe that I cannot force the Minister to answer it in that kind of detail. The Minister has, in my view, given an adequate answer by pointing out that, at the end of the day, that is a matter for the House.

Government Procurement—Reform

12. PAUL QUINN (National) to the Minister for Economic Development: What is the Government doing to achieve better value for money in Government procurement?

Hon GERRY BROWNLEE (Minister for Economic Development): In June this year the Government launched a 4-year Government procurement reform agenda. The major reform is the establishment of new centres of expertise. These will be specialist teams to negotiate all Government contracts, particularly where Government agencies duplicate their spending decisions. In other jurisdictions an all-of-Government approach to procurement has returned on average between 5 and 10 percent savings.

Paul Quinn: What are the aims of the Government procurement reform agenda?

Hon GERRY BROWNLEE: There are a number of aims to the Government procurement reform agenda, including cost savings, the building of procurement capability and capacity, enhancing the opportunity for New Zealand businesses to participate in Government procurement, and improving governance, oversight, and, of course, accountability as well. New centres of expertise will be focused mainly on driving cost savings in the first year but in the future will also support procurement capability to build and manage supplier relationships across the key purchase areas for Government expenditure.

Voting

Correction—Criminal Investigations (Bodily Samples) Amendment Bill

Mr SPEAKER: The result of the vote on the question that the Criminal Investigations (Bodily Samples) Amendment Bill be now read a third time was incorrectly announced. The correct result is Ayes 108, Noes 14.

Bills

Crimes Amendment Bill

Local Government Amendment Bill

Sentencing Amendment Bill (No 3)

Third Readings

Debate resumed.

Dr CAM CALDER (National): John Key’s National-led Government is principled, pragmatic, and inclusive. During last year’s election campaign we made promises about what we would do, should we be privileged to form the Government.

Hon Member: And we made them in our own name.

Dr CAM CALDER: That is a very good point. We have that privilege, and we are keeping our promises. We are working—a concept alien to others in the House—to find a solution to multiple challenges that have accumulated after years and years of ineptitude from an administration bereft of ideas, where creativity was a distant dream and the concept of action a barely recoverable memory from a cobwebbed cerebral closet, where the default position was inaction, apart from the occasional languid wave from a legislative limp wrist, a limp wrist on a leaden hand, a leaden hand that stifled innovation and fresh thinking and formed a cloying embrace from a nanny seduced by the conviction that consideration of process equated action.

Not surprising, after year after year of this muddled mugwumpery, when National formed a Government we found there was much to do. There was much to do in all portfolios, and much to do in law and order.

National’s principled, pragmatic approach, which is focused on finding solutions, has led to a comprehensive quiver of measures to fight the scourge of crime, gangs, and drugs. Measures to date include the Criminal Proceeds (Recovery) Act and the Sentencing Act, and they are supported by the Search and Surveillance Bill and the Anti-Money Laundering and Countering Financing of Terrorism Bill. A significant weapon in the quiver is the gangs and organised crime legislation. It is thoughtful legislation.

We do not have a magic wand and we cannot change things overnight, but we are committed to making a difference. Gangs are a complex problem that requires reshaping of the mesh in a number of areas and at different levels. This legislation will hit participation in gangs, allow police to gain intelligence on gang activities by increased surveillance, and remove the ability of gangs to cower and hide behind high walls and fortifications. I commend the legislation to the House.

A party vote was called for on the question, That the Crimes Amendment Bill, the Local Government Amendment Bill, and the Sentencing Amendment Bill (No 3) be now read a third time.

Ayes 108

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Progressive 1; United Future 1.

Noes 14

Green Party 9; Māori Party 5.

Bills read a third time.

Bills

Whakarewarewa and Roto-a-Tamaheke Vesting Bill

Instruction to Committee

Hon GERRY BROWNLEE (Leader of the House): I seek leave for this bill to have its Committee of the whole House stage heard as one debate across all parts of the bill, with one question at the conclusion of this stage.

The ASSISTANT SPEAKER (Eric Roy): Leave is sought for that purpose. Is there any objection to that course of action? There appears to be none.

In Committee

Preamble, clauses 1 and 2, Parts 1 to 3, and schedules 1 and 2

Hon MITA RIRINUI (Labour): I thank the Leader of the House for agreeing to have the Whakarewarewa and Roto-a-Tamaheke Vesting Bill debated as one question in the Committee stage. I also briefly acknowledge the contribution of the current Minister of Māori Affairs, the Hon Dr Pita Sharples. The fact that he decided to remain in support of the bill is quite significant. Having said that, I think that most of the acknowledgment needs to go to the previous Minister of Māori Affairs, the Hon Parekura Horomia, who took responsibility for this major project outside the Treaty settlements process and agreed to have these longstanding issues with Te Arawa and the Crown resolved. To that end, the Māori Affairs Committee also did a very, very good job in ensuring that this bill was subjected to considerable scrutiny. It ensured that everyone with an interest in the bill had the opportunity to make submissions and have their say.

The transfer of such assets is quite significant, but the assets have been held in Crown ownership for many decades. As a result, the shape of the bill required to transfer these assets is quite technical, given that the assets were held under the Reserves Act 1977. Because of that, we find a lot of technical recommendations, and technical language and discussion, around the transfer. We also have to acknowledge that for some considerable period of time, the iwi of Te Arawa have constantly protested to the Crown for a lot of their assets, or taonga, that were removed by consecutive Governments to be not only reinstated but also acknowledged in law. This is seen to be a proper move.

To that end, my contribution to this part of the debate will be around the bill’s history and the decision of the previous Labour-led Government to do the right thing and have these assets transferred back to their rightful owners. Having said that, I declare that I have a vested interest in this particular bill, and I will let other members sitting across the Chamber make their own declarations in terms of their interests in it.

Once again, I congratulate the current Minister of Māori Affairs on having the fortitude to support this bill. I understand that he has submitted Supplementary Order Paper 82 to the Committee, but members on this side of the Chamber are not concerned about the implications of that Supplementary Order Paper, because we understand that it is a necessary move—as I said before, it is a technical move—to clarify the transfer and the manner in which the reserves will be held.

We also need to acknowledge the commitment of the Te Pūmautanga o Te Arawa Trust. In the first instance, it will be responsible for the management of the assets that are to be transferred. I have no doubt that it will fulfil all the obligations that are required of it, even though the bill refers to it in only a very, very—I would not say ambiguous—low-key manner. Its role in terms of the ongoing management, and eventual subdivision, of these assets, should it decide to do that, will be a huge undertaking. I am sure that those who have a beneficial interest entitlement in the transfer of the assets will be watching those decisions very closely and also the debate on the lead-up to the decisions.

As I said, the Committee is dealing with the bill as one debate across all parts. It is not often we do that, but today it is a very good move. Members on this side are very happy with the outcome of the entire process.

I acknowledge the contribution of the previous Minister of Māori Affairs under the previous Labour-led Government—

Paul Quinn: Who was that?

Hon MITA RIRINUI:—and the current Minister of Māori Affairs, and all the support that this bill had on the Māori Affairs Committee, including from those members who continue to interject in the Committee stage although they made no substantial contribution to the consideration of this bill in the select committee. I say that the Government has a new head of wisdom in the member for Tauranga, Simon Bridges, and I am sure that with his track record he will lead them in the right direction.

Hon Dr PITA SHARPLES (Minister of Māori Affairs): I will take an early call just to explain the relationship between the parties involved in the Whakarewarewa and Roto-a-Tamaheke Vesting Bill. First of all, I say I agree with the previous speaker, Mr Mita Ririnui, that it is good to take the bill through its remaining stages as one debate.

Hon Mita Ririnui: The honourable!

Hon Dr PITA SHARPLES: I agree with the very Hon Mita Ririnui. Two of the three reserves that are being vested through this bill, the Whakarewarewa Thermal Springs Reserve and the Roto-a-Tamaheke Reserve, were originally part of the affiliate Te Arawa iwi and hapū Treaty settlement. It was decided that Ngāti Whakauē should also receive these reserves. In order to allow that process to occur, it was decided to remove the land from any Treaty settlement.

The return of the land to the iwi is part of the ongoing initiative to strengthen the relationships between central North Island iwi and the Crown. The Whakarewarewa Thermal Springs Reserve and the Roto-a-Tamaheke Reserve were originally offered to Te Pūmautanga o Te Arawa as part of its Treaty settlement, as it represented the collective interests of Tūhourangi Ngāti Wāhiao. The Waitangi Tribunal recommended that Ngāti Whakauē should be included, given its interests in the Whakarewarewa Valley land. Ngāti Whakauē was not affiliated to Te Pūmautanga o Te Arawa, so an agreement was reached with Te Pūmautanga o Te Arawa to take the two reserves out of the affiliate Te Arawa iwi and hapū settlement and, together with the Southern Arikikapakapa Reserve, vest all three reserves in a joint trust.

That is the background to the bill that we have before us. In order for Te Pūmautanga o Te Arawa to fulfil its responsibilities to its affiliate members, it asked that the Whakarewarewa Thermal Springs Reserve and the Roto-a-Tamaheke Reserve still be vested in it through the affiliate Te Arawa legislation, and then immediately on-vested in the joint trust. The agreement of Te Pūmautanga o Te Arawa was thus required for the vesting deed in this bill. So the issue of these reserves has had a long journey. It is no longer part of a claim, but is now simply part of this vesting bill.

KELVIN DAVIS (Labour): It gives me pleasure to speak in the Committee stage of the Whakarewarewa and Roto-a-Tamaheke Vesting Bill. This bill brings together a number of parcels of Māori land that had been under Crown control for a number of years, and it consolidates the land, as it rightfully should, into Māori ownership.

As my colleague Mita Ririnui did, I acknowledge the efforts of the Minister in the chair, the Hon Dr Pita Sharples, as well as the previous Labour Minister of Māori Affairs, the Hon Parekura Horomia. They have progressed the bill through to the Committee stage. I acknowledge the other members of the Māori Affairs Committee, led by Tau Henare, and also Paul Quinn and Simon Bridges. I also acknowledge these tribes that are involved: Ngāti Whakaue, Tūhourangi Ngāti Wāhiao, and Te Pūmautanga o Te Arawa. As Mita Ririnui said, this is a technical bill. It has involved a lot of discussion and talk in getting it to the Committee stage. It is a pleasure that we are almost at the point of finalising this bill and moving it into law.

For me, it is really important that not only the parcels of land we are talking about in Rotorua but also all Māori parcels of land that have been in disparate ownership are brought together so that they can be of use to their rightful owners. As I said in my second reading speech, it is important to bring this closure so that those tribes can make progress and move forward for the benefit of their people. It is also important to note that the lease of the land to Te Puia will remain in reserve status. That piece of land has significance to all of New Zealand. It is a wonderful tourist attraction and it is a showcase for Māori talent. In particular, there is a weaving institute, a Māori carving school, and the adjacent geysers.

Again, I acknowledge all the work that has been done to bring this bill to where we are at for the benefit of those tribes that we have spoken about. Thank you.

Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti): E tika ana ki te mihi atu i a koutou i tae ake ki te tautoko, otirā, i a koutou ngā mea pakeke o Te Arawa whānui. Tēnā koutou.

[It is appropriate that I acknowledge you, the elders of Te Arawa at large who have arrived in support. Greetings to you.]

Most that has needed to be said has already been said by my two colleagues. I commend the Minister of Māori Affairs for continuing with the journey and ensuring that Te Arawa people, and those iwi and hapū involved, reach the point they want to reach. Certainly, the fee simple estate is something those people will relish. It is nothing new; this has been a long, long argument and disagreement with the Crown, and putting it to rest in this fashion is most encouraging. There are issues around the arts and culture establishment Te Puia, but what needs to be commended is the way in which these have been taken forward. There were early tensions. There still is some tension, if we are honest about it, but that is for the people to fix up and put right.

The joint trust that has been established for the purpose of administering these lands is something that will have a lot of influence—that is, influence that the people did not have before. Some things related to the Conservation Act and those issues deemed to involve the periphery of the lakes and the forestry, are in a category where they cannot be put asunder, but—members should make no bones about it—this bill will give the trust and the organisation the right to determine and define what happens for their people. That is something that has been long lost. The village has always been in Māori ownership, but it is certainly important to ensure that the people have the right to have their say, and that they are not overrun by antiquated laws invoked by the local authority and the Crown.

The bill, of course, represents more than a simple land transfer from the Crown to Māori. Subject to the provisions of the Reserves Act 1977, the wider motivation for the Crown and iwi negotiators included an agreement to vest the fee simple estate in those reserved lands outside the Treaty settlement process, as the Minister himself said. By so doing, the mana of the land of the people of Ngāti Whakauē, Tūhourangi, and Ngāti Wāhiao will be recognised with a stronger relationship, which can be continued and built on.

I especially want to mention Te Pūmautanga o Te Arawa, who made a choice to mediate, and to be in the first instance the iwi to whom these lands were unloaded, but the lands will go on immediately. There is not much more that I can say about that, but it is certainly encouraging. I commend the present Minister of Māori Affairs for taking the bill through, and I thank the previous Minister of Māori Affairs very much! Kia ora tātou.

The question was put that the amendment set out on Supplementary Order Paper 82 in the name of the Hon Dr Pita Sharples to schedule 1 be agreed to.

Amendment agreed to.

Preamble, clauses 1 and 2, Parts 1 to 3, and schedules 1 and 2, as amended, agreed to.

Bill reported with amendment.

Report adopted.

Third Reading

Hon Dr PITA SHARPLES (Minister of Māori Affairs): I move, That the Whakarewarewa and Roto-a-Tamaheke Vesting Bill be now read a third time. Tēnā koe, Mr Assistant Speaker Roy. Tēnā tātou katoa e te Whare. Tēnā koutou e ngā uri o Te Arawa waka kua hara mai nei ki te tautoko i te whakaturetanga o te pire nei. Nā reira, nau mai, hara mai rā koutou.

[Thank you, Mr Assistant Speaker Roy, and to us all in the House. Greetings to you, descendants of the Te Arawa canoe, who have come in support of the passing of this bill into law. And so welcome, welcome.]

This bill gives effect to the deed entered into by Ngāti Whakauē, Tūhourangi Ngāti Wāhiao, and Te Pūmautanga o Te Arawa trustees and the Crown to transfer the Southern Arikikapakapa Reserve, the Whakarewarewa Thermal Springs Reserve, and the Roto-a-Tamaheke Reserve to Ngāti Whakauē, Tūhourangi, and the koromatua o Ngāti Wāhiao.

We often say: “Ko Papatūānuku te matua o te tangata.” That literally means: “The land is the parent of the human race.” Our love for our whenua is likened to the love we have for our mothers. At birth, our whenua is returned to her; at death we are reunited with her soil. Therefore, it is only fitting to reflect on two who have so recently returned to the soils of their whenua. I am referring to Arapeta Tāhana, the former chair of Te Arawa Lakes Trust board, and Sir Howard Morrison of Ngāti Whakauē. The legacy of these two leaders will continue to be felt in this bill, and it is only right that we honour their vision and their unique contributions as we mark this historic third reading today. Haere rā kōrua, otirā, ngā mate katoa o Te Arawa waka, o te motu whānui. Moe mai rā koutou i ngā manaakitanga o te wāhi ngāro.

[Farewell indeed to you two, and to all of the deaths of the Te Arawa canoe and of the nation at large. Sleep there in the care of the place of the departed.]

I say from the outset that at the heart of this bill is a special connection to the land: mana whenua. As we know, mana over whenua can come to people through succession, through the spilling of blood, to cement relationships, even through the spirit of generosity, or as a sincere act of compassion or aroha. Then there are the courts, but we do not want to go there. The Whakarewarewa and Roto-a-Tamaheke Vesting Bill reflects a unique milestone, in that all parties have agreed to initiate a process after the bill becomes law that will allow iwi to determine the allocation of mana whenua interests in the land. The bill itself does not specify how this process should occur. It is a matter for iwi and hapū parties to determine, and the process will be undertaken in accordance with tikanga. A key principle we have respected is that mandate and management issues are always the domain of iwi and hapū to sort out in accordance with their tikanga.

I place on record from the outset my heartfelt appreciation of everyone who has travelled here today to witness this distinctive agreement to transfer these special lands to the iwi of Tūhourangi, Ngāti Wāhiao, and Ngāti Whakauē. Reaching the third reading of this bill has required considerable dedication to the task from all of the parties involved. I acknowledge the commitment of Ngāti Whakauē. The bill has benefited from the leadership of Pīhopa Kīngi and the trustees of the Pukeroa-Ōruawhata Trust: Malcolm Short, Alec Wilson, and also Rāwiri Rangitauira. I acknowledge too their dedication in wanting to exercise the tribal responsibility to uphold the expression of manaakitanga to others across the rohe. I thank the representatives of Te Kotahitanga o Ngāti Whakauē—Kiri Mitchell, George and Eddie Mutu, Ānaru Te Amo, and Hāmuera Mitchell—for their patience while they endured the process of passing the bill into law. I thank the representatives of Tūhourangi Ngāti Wāhiao—Ānaru Rangiheuea, Rangipuawhe Maika, and John Maaka—for their role in allowing what was once perceived as an impasse in the Treaty settlement process to become a bridge to unity between the iwi and hapū. I mihi too to Te Maru o Ngāti Wāhiao, who have advocated so passionately over the ever-enduring concerns of participation, representation, and involvement.

If the House will permit, I will spend some time on an issue raised frequently at the Māori Affairs Committee and in numerous representations to me. We understand how the issue of land cuts to the very heart of the people. This is recognised in the bill, which allows for a mana whenua determination process to take place after enactment. This process will allow the iwi an opportunity to sit together and determine who will have the final ownership of which pieces of land. As with the central North Island forest lands, this will be done through agreements, mediation, or, if required, adjudication. I am optimistic that in the case of Tūhourangi Ngāti Wāhiao the process of the four koromatua whakapapa lines will be a foundation of the mana whenua discussion, and they will determine their pathway forward at their own pace and under their own process. Furthermore, I am pleased that facilitated discussion provided a guide for that process to happen.

Implementation of this bill must be in the domain of iwi. It is not for elected representatives of Government to determine how that process plays out. That is the realm of tino rangatiratanga. Some have said we should let the courts decide. I have preferred to leave that to the people. It was the processes and the decisions of the courts that resulted in iwi losing their lands in the first place. There is a history of problems with judicial involvement, and determinations over the land that failed to resolve contested rights and led to the alienation of lands to the Crown. I acknowledge the efforts of Te Pūmautanga o Te Arawa—Eru George, Rāwiri Te Whare, and the iwi leadership within their realms—in seeing this bill come through to fruition, and we recognise their commitment to working through a process that will respect the roles and responsibilities of mana whenua. I have received written communication from the chairman of Te Pūmautanga o Te Arawa, Eru George, that all the respective claimant groups will be actively involved in the process of moving forward. I understand that a hui-ā-iwi will be held in the Wāhiao whare in Whakarewarewa Village this Saturday to elect a fourth trustee for Tūhourangi Ngāti Wāhiao to the joint trust. This will make a total of four trustees for Tūhourangi Ngāti Wāhiao and four trustees for Ngāti Whakauē, which is represented by the Pukeroa-Ōruawhata Trust and Te Kotahitanga o Ngāti Whakauē. I understand that anyone from Tūhourangi Ngāti Wāhiao can participate in the hui-ā-iwi, which will elect a fourth trustee for Tūhourangi Ngāti Wāhiao following their own process.

I thank everyone who got us to this point, recognising that although there were difficulties to resolve, the final formula, nevertheless, and the process of dissent through koromatua could be the positive mechanism to move forward. I remain confident that all iwi and mana whenua interests in the reserves will be able to participate in the arrangements for their management and allocation in the future. I address the people of Te Arawa who are gathered here today. Ka nui taku hari koa kua eke tātou ki tēnei rā e whakahoki nei i te mana o ēnei whenua ki ngā uri o ngā kaumātua hai whenua tūturu mō koutou mō ake tonu atu.

[There is much joy within me that we have arrived at this day whereby the autonomy of these lands is returned to the descendants of the old people, thereby ensuring that the lands remain yours for ever.]

This bill is straightforward in its intent. It deals with the technical processes required to transfer ownership of the three reserves in the Whakarewarewa Thermal Valley to the iwi of the area. However, behind the bill, as I have alluded to, lies a plethora of complex issues related to the Treaty settlement process, iwi relationships on the ground, and Crown-Māori relationships. We acknowledge that the bill represents a compromise by all involved in respect of the greater interests of the iwi. I was always aware that issues of fairness and justice would prevail in considering issues of ownership. To address concerns, I instigated a facilitation process to assure parties that the process was fair and inclusive of all. I acknowledge the assistance of my colleague Te Ururoa Flavell and the guidance of John Clarke in these discussions.

There is one other matter outstanding—that is, the aspiration of Ngāti Whakauē and Tūhourangi Ngāti Wāhiao to own the New Zealand Māori Arts and Crafts Institute, Te Puia, which is commonly referred to as the jewel in the crown of New Zealand tourism. Now that we have transferred the lands on which this institute sits to iwi, it is surely time to continue discussions on this matter. Finally I say that I join with the people of Tūhourangi Ngāti Wāhiao and Ngāti Whakauē in marking this historic occasion of the return of their treasured land. Tēnā koutou.

Hon MITA RIRINUI (Labour): Otirā, hei tuatahi māku. Te Arawa waka, nā koutou rā i haere tawhiti mai i runga anō i te karanga i karangahia nā e koutou i oti ai te huarahi i para nei e koutou mai i ngā rā ki muri, ā, tae noa mai ki tēnei hāora. Tēnā hoki koutou i te āhuatanga o ā tātou mate huhua. E kore taea te wareware tēnā tangata teitei rā, a Tauhauata me taku tuakana i hinga nei i te wiki kua pahemo ake, a Arapeta. Koia tētahi nā i tautohetohengia ki te Karauna kia tika ai te whakaaro o te Karauna, kia tika te hoki mai o ngā taonga ā Te Arawa nā te Karauna i riro i ngā rā kua taha ake nei. Nō reira, nā runga i tēnā, tēnā koutou, tēnā koutou, tēnā koutou.

[Indeed, the first thing for me to do is extend greetings to you, the canoe of Te Arawa, who have travelled here from a distance, on a call made by you, to bring to a conclusion the path that you set out on in days gone, to this hour. I greet you also in respect of our many deaths. Howard, that person of immense stature, will not be forgotten, and neither will my elder kindred Albert, who passed away just recently. He was one who persisted with the Crown to get its thinking right and to ensure that the treasures it took from Te Arawa in former times are rightfully returned. So on that I acknowledge you three times over.]

I take the opportunity to acknowledge in the House today the representatives of Te Arawa. It is important that I do that, because for them this has been a very long journey, a journey that has been very difficult for them. Although the third reading is usually about the legislation before us, I want to take this opportunity to speak about the people who brought it to us and brought about this opportunity to return to the people of Te Arawa their ancient taonga.

As we have heard from the Minister of Māori Affairs, the bill in itself is quite complex. I thank him for highlighting the complexities of this particular bill, and for acknowledging the difficulties in the process, particularly for those representatives of Te Arawa. I do not intend to take a long call, because I think this time is their time to hear from as many people in this House as possible.

I make mention of those who have passed on, and there have been many throughout this process. But in recent weeks and recent days it is important that I acknowledge the passing of the son of Te Arawa, Sir Howard Morrison, and the legacy he left to his descendents and to future generations of Te Arawa.

I also acknowledge his efforts in ensuring that Māori are recognised on the international stage. That is no small achievement. When we take a look at the bottom of the Pacific Basin, see a little iwi called iwi Māori, and see what he did for our presence, particularly in arts and culture throughout the world, and for many of those who followed after him, we see that it was quite a significant achievement. There is not much I can say about this very, very important person, except that he was one of those who believed that the assets of Te Arawa should be returned, sooner rather than later.

I also want to acknowledge the passing of a very good friend, my tuakana from Ngāti Pikiao, and of many other iwi of Te Arawa, who passed away recently, Arapeta Tāhana. He was a former chair of Te Arawa Māori Trust Board, the chair of Poutiri Trust, the Māori health provider network, and also the chair of many land trusts throughout Te Arawa. His passing was certainly a big loss to us. Although he is not mentioned in this legislation, I take this opportunity to mention him in this debate.

We acknowledge today the representatives of Te Arawa, and in particular the journey they have been on for not just decades but very many generations. I am sure that those who started out on this incredible journey—some would say it is an impossible journey—are today resting in peace, finally.

Once again, I acknowledge the contribution made by the current Minister of Māori Affairs to the completion of the very, very important project, or transfer, should I say. I also acknowledge the former Minister of Māori Affairs and his Cabinet colleagues, who thought it was very, very important that the Labour-led Government during its time did the right thing by the people of Te Arawa and gave back their taonga outside of the Treaty settlement process. As we say, although we do have a Treaty settlement process, some matters can be resolved outside of that, simply because it is the proper thing to do.

Once again I congratulate—this is probably the last time I will do so during this discussion—the representatives of Te Arawa; and they are here. I heard the Minister of Māori Affairs mention many names of those in Te Arawa who rightly should be acknowledged, but the people I want to acknowledge are here in the gallery today. They are the ones who took responsibility for leading Te Arawa down this pathway. They are the ones who have been severely criticised. They are the ones who have been intimidated in their own rohe. They are also the ones who said that they would not walk away from this, because not only have past generations transferred this responsibility to them but future generations expect them to complete it now rather than later. Ki ngā pakeke, koroua, kuia, tuākana, tuāhine mai i te rohe o Te Arawa, mai i Maketū ki te Tonga, tēnei nā te mihi ake ki a koutou, nā koutou nei i whakaoti tēnei kaupapa whakahirahira i mahue ake nei i wā tātou tūpuna i te wā i ā rātou. Nō reira, nā runga i tēnā, tēnā koutou, tēnā koutou, tēnā koutou katoa.

[To the elders, male and female, older kin, and sisters of the region of Te Arawa, from Maketū to the south, I acknowledge you. You have completed this great legacy left and created by our ancestors when they were alive. So because of that I salute you all. Well done.]

Hon TAU HENARE (National): Ā, kia ora, Mr Assistant Speaker Barker. Te Arawa waka, tēnā koutou. Ā, tēnā koutou me ō koutou whawhai mō ō koutou whenua i roto i te rohe pōtae o Te Arawa. Nō reira, tēnā koutou katoa.

[Thank you, Mr Assistant Speaker Barker, and greetings to you, the canoe of Te Arawa. I acknowledge your battles over your lands in the region of Te Arawa. So greetings to you all.]

I will not take too long. The Minister, Pita Sharples, and the speaker before me, Mita Ririnui, have outlined what is not very complex: they have got their land back. But I want to concentrate on an issue that needs some thought put into it. Although the Minister of Māori Affairs is right in saying that we should not intervene in what is, to put it in my South Auckland words, a whānau scrap, it is sort of the easy way out. We were elected here to make some of the hard decisions to see whether we could find a way through.

On one hand I am very happy that a wrong has been righted, that whenua has been returned, but on the other hand I am disappointed that there is a group of people who are and should be part of the bill and who are and should be part of the celebration of the return of whenua, but have somehow found themselves to be outside. We can argue until the cows come home as to who is right; the sad thing is that there is a group of people outside of this who feel aggrieved. Letters have been flying back and forth, as the case is these days. One of those letters, to the Minister of Māori Affairs, assures the other side that some way down the track there will definitely be a coming together. All I can say is that I am hopeful that that will take place.

I cannot bring myself to say Tūhourangi Ngāti Wāhiao, but I can bring myself to say Tūhourangi and Ngāti Wāhiao, and this is no disrespect to Te Arawa waka in general. It is because I am one of those who believes in this vision of development. We are not in a time warp. We are not based in 1840. Something and some things may have developed since then, if given the opportunity to develop. I know that in my own homeland there was some feeling on those tracks.

I want to read some paragraphs from the report of the Māori Affairs Committee to the House, which I think are very, very important: “Some submitters requested that Tūhourangi and Ngāti Wāhiao not be coupled together and be represented separately. They felt that their mana whenua and rangatiratanga status over the Whakarewarewa Valley land were quite separate. The reference to the Tūhourangi Ngāti Wāhiao affiliate of Te Pūmautanga is well established, and has been accepted by the Crown throughout the various mandating processes managed by the Kaihautu Executive Council and Te Pūmautanga since 2003.

In addition, the bill provides for an on-vesting of the Whakarewarewa Thermal Springs Reserve and Roto-a-Tamaheke Reserve from Te Pūmautanga o Te Arawa Trust, established under the Affiliate Te Arawa Iwi and Hapū Claims Settlement Act 2008, to the joint trust. The trust deed establishing the joint trust sets out the Beneficial Entitlement Determination Procedure, and provides for the possible transfer of some or all of those lands following the determination. This mana whenua determination procedure allows the reserve land to be vested separately in the three hapū of Ngāti Wāhiao and the iwi of Tūhourangi in the future.

While the bill could be amended to reflect a decoupling of Tūhourangi Ngāti Wāhiao, this would properly address the concerns of submitters, and would affect the underlying relationships between the Crown and Te Pūmautanga, and between Te Pūmautanga and its affiliates.

An amendment to the trust deed to allow decoupling would require a unanimous resolution of the trustees, a general meeting of the beneficiaries to approve the trustees’ resolution, and an approval resolution passed by a majority of each of Ngāti Whakaue and Tūhourangi Ngāti Wāhiao present at that meeting. We do not consider it appropriate to use legislation to provide for separate representation in relation to the bill, because the decision of Tūhourangi Ngāti Wāhiao to form a single affiliate of the joint trust, Te Pūmautanga, was made by iwi members through a mandating process.”

In conclusion I can say only that at the meeting on the weekend there is a golden opportunity for people to stand and deliver, to deliver to everybody, including those who find themselves on the outside. That opportunity must be taken on the weekend; if not, I am fearful that the opportunity will be lost for a while. We have done all that we can, and I think the House has done a pretty good job—

Hon Mita Ririnui: A very good job.

Hon TAU HENARE: —a very good job, given the tools that we had—

Paul Quinn: The cards we were dealt.

Hon TAU HENARE: —and given the cards we were dealt. But there is the ace in the hole, and the ace in the hole is the meeting on the weekend. I am not trying to say how to run that meeting or even the decision—

Hon Mita Ririnui: But you’re going to, anyway.

Hon TAU HENARE:—but as my colleague said, I will, anyway. The decision on the weekend must include a Ngati Wāhiao representative. I am sure a lot of people have come to that determination, as well. I can see some people rustling around, thinking “How dare you.” I have been there before, and I will be there again. I am not trying to make controversy out of this, but it is a fact that when we are faced with these issues, there will always be people on the outside, who for whatever reason find themselves on the outside. We should be big enough and bold enough to include them as part of the whole, instead of seeing them as some sort of group knocking on the door from the outside. At the end of the day, they are all Te Arawa people, and they are all after the same thing. It is about a bit of representation and it is about mana, and it is about ensuring that the return of land is done expeditiously and without too much of a problem.

Again, I congratulate the Minister of Maori Affairs, Dr Pita Sharples, the previous Minister of Maori Affairs, Parekura Horomia, the last Government, this Government, and also those at home in Te Arawa, as well. I think it is important to recognise that what we do, although it may not affect us personally, does affect the people at home. Nō reira, Te Arawa tēnā koutou. Tēnā anō koutou i roto i ngā whawhaitanga mō ō koutou whenua. Kia ora.

[So congratulations, Te Arawa. You were wonderful as well in the battle for your lands. Well done.]

Hon SHANE JONES (Labour): Otirā, hei tīmatanga me mihi atu ahau ki ēnei mātua o te ao Māori mai i a Arawa waka kua tatū mai ki roto i tēnei Whare. E kara, e Ānaru tēnā koe. Tēnā koe me tō iwi o te hia rānei roa wēnei take e whakataratara ana i a koutou, kātahi ka whakapaua te kaha, nā, kua tutuki. Te rahi o ngā take i whakaritea hei whai mā koutou. Nō reira, tēnā koutou. E kare, e Rāwiri, i te tuatahi taku kitenga atu i a koe te wā i tūtaki tahi ai ahau, a koe, he tamariki koe. I nāianei kua pae mai te tohoraha ki uta kua rite koe ki tētahi o ngā kaumātua, hinahina te mātenga, ngoikore te tinana engari, tū tonu ana koe. Nā reira, tēnā koe. E kara e Rangi, ngā mihi nunui ki a koutou. Taku hoa e Hamu, koutou katoa, wāhine mā, tēnā koutou, tēnā koutou.

[So as a beginning I must acknowledge these father figures of Māoridom from the canoe of Te Arawa who have arrived here in this House. Friend Andrew, greetings to you and your people. How long and irritable these issues must have been for you! But through the efforts expended it has been accomplished. The issues you had to consider were enormous. But well done. Friend David, you were a young person when we first met, but with the whale coming to the beach, you are now much like one of the elders: hair on the head is grey and body is listless, but you remain staunch. Greetings to you. To you as well, Rangi, the friend. To Hamu, my old mate, and to all of you and the womenfolk, much greetings.]

I briefly say that I acknowledge the leading elders of Te Arawa who are here today, and their supporters, as we witness the passage of this piece of legislation. We on this side of the House probably could have done more over 9 years to expedite the process of settling claims, but because it is an area that neither of the large parties should find room for dissension on, we stand shoulder to shoulder with our Māori colleagues in particular, and indeed with the Minister and all the Parliamentarians who are supportive of the Whakarewarewa and Roto-a-Tamaheke Vesting Bill. That is so that we can expedite the passage of this part of our nation’s history and go forward, turning the ihu of the waka to a new horizon.

Mr Tau Henare made reference to some unfinished business in relation to the ascertainment and determination of entitlement in these reserves, but the word that is used in the legislation is “may”, not “must”. I think that any iwi looking at determination, carving up, and ascertaining interests and entitlement, need look no further than the many millions of dollars and the many years that exhausted Māoridom through the Fisheries Commission allocation process. I ask the people of Te Arawa to please be very certain that the value and profit they might achieve through having an allocation is worth the inevitable rancour, tension, and legal fees. But it is, of course, up to them as to how that might happen. The land will remain as a reserve, and although there is an ambition to take on the role of running the Māori Arts and Crafts Institute, otherwise known as Te Puia, such ventures should not be entered into wistfully. They will require a great deal of skill, an appetite for debt, and an understanding of working capital and markets, which are too rarely seen in Te Ao Māori.

This is a large day of celebration for us as MPs, but the larger tasks rest with the stewards of the people. They now need to take this endowment forward and generate a perpetual flow of goods and services to create a dividend to keep the people together. As I have said before in this House, grievances could always cause people, by and large, to work together in the face of a common adversary. But once the whale was landed, kātahi ka marara ngā whanaunga. [then the relatives scattered about.]

Along with the Minister, I am sure that Dr Cullen would share the sentiments put forward by speakers on this side of the House. Each settlement that is completed represents a chance for the next chapter of our nation’s development, and for those who have come today from Rotorua, with the shadow of Sir Howard Morrison’s and Arapeta Tāhana’s recent passing, perhaps the baton is changing to a new generation. That generation will have to show the skills honed of its time. Those skills will not show the same attributes or expertise that earlier generations had. We wish for Te Arawa not only great luck but also the confidence to rely on the new generation’s skills and expertise.

We look forward to visiting the reserves in the future, and to seeing harmony and prosperity. When that day arrives, all I will say is this: Arawa, e Ānaru, ki te puta mātou o roto o Te Tai Tokerau, māua ko taku tuakana a Tau Hēnare ki konā, kātahi ngā gumdiggers ka mihi atu ki ngā kairuku kapa. Nā reira, tēnā koutou, tēnā tātou, kia ora tātou katoa.

[Arawa and Andrew, should we, my elder kin Tau Henare and I of the north, appear there, we gumdiggers will then acknowledge you penny divers. Greetings to you, us, and everyone.]

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe, Mr Assistant Speaker Barker. Kia ora tātau katoa e hui nei i roto i tēnei Whare, te Whare Pāremata. Koutou kua hara mai i te kāinga, tēnā koutou. Kua kōrerohia te āhuatanga o ngā mate o te kāinga, ko Tā Hauata tērā, ko Arapeta tērā. Nō reira, waiho ake mā te motu rāua e tangi. Ka mutu, ko Frank tērā me te hunga noa atu kua ngaro atu i te tirohanga kanohi. Waiho rātou kia moe. Ko tātau ngā uri, ngā tamariki, ngā urupā o rātau mā haere mai me te āhuatanga o ngā mate; tēnā koutou, nau mai, hara mai ki te Whare Pāremata.

[Thank you, Mr Assistant Speaker Barker, and greetings to us all seated here in this House of Parliament. To you who have come from home, greetings. The deaths at home have been referred to—namely, those of Sir Howard and Albert. The nation will mourn their passing. I mention Frank’s death here as well as a host of others who are lost from view. Allow them to rest there. To us—the descendants, the children, the charnel house of departed ones—welcome with our deaths in mind and welcome to the House of Parliament.]

A day when we get land back for our people is a day of celebration and a time to be remembered because it does not happen too often. However, the settlement process is moving us in that direction. Thank goodness for that! The land brings us mana; our mana is our land. I acknowledge the previous Minister of Maori Affairs, Parekura Horomia, for his initiative in putting this bill forward prior to the election, with the help of Dr Cullen, and also the Hon Mita Ririnui, who, I am sure, was behind the scenes promoting this particular bill. I acknowledge them all and all their efforts to move this particular bill forward to enable land to come back, in this case, to the people at home.

While I am standing, I also want to acknowledge Mr John Clarke, Jonathan Easthope, Tom White, and Dr John Tamahōri, who were involved with me in a process I will outline shortly. But I wanted first to acknowledge all the work that was done from our team. I thought we did pretty well—not quite there but pretty well.

As the Minister has outlined, today is an awesome day for Ngāti Whakaue, for those involved with the Pukeroa-Ōruawhata, Tūhourangi and ngā koromatua o Ngāti Wāhiao. Of course, the bill has some beginnings in the Pūmautanga bill, and we need to acknowledge that someone had the foresight to make sure that it got in there to ensure that it got captured, I suppose, in the net of settlements. Even though it is not purely a settlement, it at least got in on the table. So I acknowledge those who were able to set that out.

There is no doubt that from the very beginnings of this bill, even back to the discussions around the Te Arawa Lakes bill as well as the Te Pūmautanga bill, one particularly important issue has been raised by submitters during the select committee process and, as the Minister outlined, in a number of submissions to him. It has actually resulted in issues of protest, and I understand that there is a protest on as we sit here today. The issue is to do with the whole notion about finding a space for those of what could be loosely termed the kaumātua of Ngāti Wāhiao.

That was signalled throughout the select committee process; it is not new. The Minister heard the discussions, and those members on the Māori Affairs Committee last year, as well as this year, heard about that concern. So it is not new; I am not talking out of shop. To deal with that concern, the Minister of Māori Affairs, Dr Pita Sharples, sent Mr John Clarke, a member of the Waitangi Tribunal, and me to go and see whether we could facilitate a process to bring the parties together. It was under and against the background of some personal flack and also some votes of no confidence—I suppose we could put it that way—that we went up. I am pleased to say that we were able to engage the parties.

The key issue there—with no disrespect to those involved with Ngāti Whakaue, because no discussion came through the select committee—seemed to be finding a space for Ngāti Wāhiao on two parts: first, Wāhiao on a holding trust, which will get the asset once it has passed over to Pūmautanga; and, second, finding a space for those groups to determine that issue of mana whenua. How will the land, once it has gone back, be divvied up?

The great thing was that those parties agreed at least to come to the table, so I acknowledge them in the first instance, because it could have been seen as a little bit of interference. Happily enough, though, they did come to the table and we were able to engage over a period of about 3 to 4 months.

It was great—and I will talk only about the issues of the facilitation process I was involved with—that certain principles were accepted. Firstly, it was accepted by all the parties involved that the land should go back to Tūhourangi, Ngāti Huarere, Ngāti Tūkiterangi, and Ngāti Hinganoa. It was really clear that everyone knew that they were the landowners. That is important. Secondly, it was agreed to have a new register, because, of course, the registering of people to be able to vote in the processes, for whatever reason, was an issue.

It was also agreed that the registry would be based on whakapapa. It was agreed to have check-offs of those whakapapa, such that any two or four koeke o te kāinga could sign off the process. It was great that there was an acknowledgment of whakapapa being a part of the process, and that people were also agreeing to check-offs.

It was agreed that there would be a hui ā-iwi at Wāhiao to work out one of the trustees—because there are four associated with, let us say, the Tūhourangi Ngāti Wāhiao group as well as Ngāti Whakaue. So, again, there was a commitment and acknowledgment of that; the Minister has just talked about that, as did the Hon Tau Henare. That hui is to take place this weekend. That is great.

The next question was how we would find four people to negotiate on behalf of Tūhourangi, Hinganoa, Tūkiterangi, and Huarere. The answer was easy enough: get a new register. Of course, the thought was that Te Puni Kōkiri might assist in facilitation of that great new register, and those people can get involved. The next question was how they would vote. One group said, and theirs was the first problem—one person, one vote. The other group said it should be multiple votes—if we put down three whakapapa lines, we should have three votes.

We got to that point and asked how we should decide. That was easy—the answer was to take it back to the people. Let the people decide. So the thought was to call another hui; all of those who are registered could come together, have a korero, and whatever was the outcome of that hui, that is it. In other words, if the hui decides one person for one vote, that is it. If they decide to have multiple votes, koi rā, the process could carry on. That was agreed to, in a sense.

The next stage, having got all that sorted with the help of Te Puni Kōkiri, other independent facilitators, and so on, was to call for nominations and get on and vote. Those koromatua and hapū will have their own voice to be able to negotiate their pieces of land. That was important. Why? Because all the parties said right from the very start that that was important. So that was all achieved, and, as I say, I thank all of those involved.

We went to the select committee, and advised that we were there—we had an agreement. The select committee considered that request. Indeed, the select committee reported: “We are aware that a facilitation process has been used during 2009 to seek assurance that Ngāti Wāhiao may participate in the structures set up to receive the Whakarewarewa Valley lands (the Whakarewarewa Joint Trust), and that Ngāti Wāhiao are appropriately represented in the Beneficial Entitlement Determination Procedure that will follow from the enactment of the bill.”

The report continues: “We understand that Tūhourangi Ngāti Wāhiao trustees on the joint trust and the members of Ngāti Wāhiao who have engaged in the facilitation process have discussed the details of a process to elect four representatives, one of each from three Ngāti Wāhiao hapū and the iwi of Tūhourangi, who will discuss mana whenua entitlements under the Beneficial Entitlement Determination Process with Ngāti Whakaue. We understand that the details of the voting process will be decided at a hui-a-iwi by the people of Tūhourangi and Ngāti Wāhiao.”

So the select committee process happened. The committee reported back to the Minister, and basically the bill was able to advance, on those agreements. As I say, it is always something to celebrate when land comes back to the people. Having achieved this process of setting out how we might determine this land’s coming back to the people, the Minister is absolutely convinced and assured that the process we have talked about is something that will stand the people in good stead in respect of determining the process.

In closing, I say that my only hope is that, in having given some time to that, we do get the land back to the right people. I have outlined the background because most people may not necessarily know the full background over a period of discussions. The good thing about it is that it will now be resting on the record of this Parliament as a record of history. We can say: “He mana anō tō te kupu.”; that what people say is actually their bond, their word.

The goal in terms of my role, and that of Mr John Clarke I am sure, was always honourable. It was to facilitate the bringing together of a people. Whether or not people believe that, that is what I say. My only hope is that having set that high goal—and what followed was a process that certainly had integrity and honesty to it—in the end we tried our very best to facilitate that process, and we have reported to the Minister accordingly.

The Minister believes that that process will be followed to ensure that that land does go back to those people who belong to that land. As he said, mana whenua is a very, very important concept amongst our people. I hope, as I am sure he does, that, in the end, our process will set the scene and mean the bringing together again of our people at home, such that we get rid of protest, get rid of litigation, and finally make sure that the land falls back to the descendents of those who belong to that land. Nō reira, koi nei te mihi atu ki a tātau katoa i tae mai i tēnei rangi. Huri noa i tō tātau Whare, tēnā koutou. Kia ora tātau.

PAUL QUINN (National): I join with the previous speakers in welcoming members from Te Arawa. I turn to say hello to, and acknowledge, my Uncle Ānaru Rangiheuea, Rāwiri Te Whare, and Hāmuera Mitchell, and to acknowledge kuia and kaumātua: tēnā koutou katoa.

I think it is important firstly to pick up on something a previous speaker, Shane Jones, said. He said there is no doubt that both sides of the House are very keen on and particularly committed to going forward, to resolve Treaty grievances as expeditiously as possible. In that vein, the current Minister is working very hard to do just that.

In terms of this particular settlement I think it is important to canvas where the bill was at when this Parliament began, because it provides and puts into perspective the contribution from my friend and colleague in the Māori Party, Te Ururoa Flavell. When the 48th Parliament convened, this bill was before the select committee, which was about to hear submissions. The big issue, for which Te Ururoa has provided the outcome, was the issue of mana whenua. This issue taxed the select committee and proved challenging, mainly because given that the trust deed had already been approved, and signed, sealed, and delivered, if the new Parliament was to try to encompass the issues that arose during the course of the Māori Affairs Committee in a formal process, it would mean that the Government would have to go back and, quite simply, renegotiate the arrangement. Because we did not think that that was the best course of action, as we have just heard, it was felt a better way of advancing the issue was to try to allow the Minister time to try to resolve the matter.

The outcome of that task is what we have just heard from the honourable member Te Ururoa Flavell. I think it is important the record note that the understanding the select committee received at the end of that consultation process was that in respect of the agreement—the gentlemen’s agreement, a handshake—there will be a process relating to what is termed in the documentation as the beneficial entitlement determination procedure, and all the parties have agreed that the whakapapa will be determined by four koroua who are well versed in these issues and who, as it was reported to the select committee, have been named. From this point on, the process will start, as I understand it, this weekend.

So it is really against that background, and the comfort that the select committee was given around that process, that the committee was happy to allow the bill to come to the floor of Parliament for its second reading and Committee stage, and now to the third reading. It is therefore with great pleasure that I join members on both sides of the House to recommend that this bill move swiftly to receive the Royal assent, so that the beneficiaries are able to get on with the task and the challenge that now face them, in taking responsibility for their own land and their own assets. Thank you.

SIMON BRIDGES (National—Tauranga): Tēnā koe, Mr Assistant Speaker Roy. Tēnā koutou e te Whare. It is good that I take what will be a very short call, because I was not present at the select committee hearings. But having listened to other speakers and contributors to this debate, I accept that there are issues between the relevant iwi and hapū that will live on, potentially, past this bill. That should not, in my view, and in the view of everyone who has spoken in this House, obscure what is otherwise a very positive day of celebration in the passing of this bill into law. The bill gives effect to the deed signed between the Crown and iwi in relation to the Whakarewarewa Valley land and the Roto-a-Tamaheke Reserve.

I will very briefly make some acknowledgments and talk about what the bill does. I think it is important that we acknowledge the representatives of iwi who are here today, and that we recognise and acknowledge, as well, that this bill puts into law an agreement that was inspired and initiated by iwi leaders. They brought their proposal to the Crown and asked that the Whakarewarewa Thermal Springs Reserve and the Roto-a-Tamaheke Reserve land, on transfer from the Te Arawa settlement legislation, together with the adjacent Southern Arikikapakapa Reserve, be vested in a joint trust of the iwi partners. As I have said, the bill transfers ownership of three areas of reserve land. The fee simple for these lands will be vested in a Whakarewarewa joint trust. The reserves have the status of recreation reserves and are at present administered by the Ministry of Tourism under the Reserves Act 1977.

The lands are home to the renowned Pōhutu Geyser, they accommodate Te Puia, formerly known as the New Zealand Māori Arts and Crafts Institute, and they are situated around the Whakarewarewa Village. The Whakarewarewa reserve land is very well known to many New Zealanders, who are not necessarily part of the relevant iwi, and to those who may be watching this on television. It is an important historical, cultural, and spiritual part of our nation.

This is a positive bill. It is a day for celebration. With those few comments, I conclude.

HEKIA PARATA (National): Tēnā koe e Te Mana Whakawā, otirā, huri noa i tō tātou Whare, tēnā tātou katoa. E tū ana ahau i te whakaiti, i te hōnore hoki ki te mihi atu ki a Te Arawa waka i tō mai nei i tēnei rā i runga i tēnei kaupapa o te pire whakamana o Te Whakarewarewa me te Roto a Tamaheke. Nā reira, tēnā koutou, tēnā koutou, tēnā koutou katoa.

[Thank you, Mr Assistant Speaker Roy. Indeed, greetings to all of us throughout the House. It is with humility and honour at the same time that I rise to extend salutations to the canoe of Te Arawa, which has drawn here today for the passing of the Whakarewarewa and Roto-a-Tamaheke Vesting Bill. So greetings to you collectively and to us all.]

I should also like to acknowledge the passing of Sir Howard Morrison, whose tangi I was privileged to participate in. I pay tribute to the farewell that Ngāti Whakauē and Te Arawa whānui paid him in the celebration of his life, to the manaakitanga extended to those of us who went on to the marae, and to the elegance and respect that was obvious in all that was done in farewelling not only a son of Te Arawa but also a son of Aotearoa New Zealand. I am sorry that I was not able to get to the passing of, but I pay my respects to, Arapeta Tāhana, as well.

Coming back to the purpose of our gathering here today, I will take a short call and congratulate both Ministers who have been responsible for seeing through the passage of this legislation. To the former Minister of Māori Affairs, the Hon Parekura Horomia, I commend him for the work that he did during the last administration, and I particularly congratulate the current Minister of Māori Affairs, the Hon Dr Pita Sharples, on picking up this bill and ensuring that it could pass through all its stages, together with the support of my colleague Te Ururoa Flavell.

It is not an easy task to see through legislation that was started in one administration and passed through to the next, and which is characterised by some ruffled waters. Nevertheless, I acknowledge that ministerial leadership, and also the support of many officials, and some, in particular, who go through the piki and the heke of all the challenges of sewing together ministerial instructions, arbitrary select committee questions, the people with whom they have been working, and, with most difficulty, keeping the State sector on course and behind what needs to be done. So I also acknowledge and congratulate the officials. I also congratulate the chair of the Māori Affairs Committee, the Hon Tau Henare, and the members, both those opposite and on this side of the House, who have together seen through the last stages of this legislation.

It has been remarked on already by colleagues on both sides of the House that this legislation is not a Treaty settlement. I think that is both remarkable and positive, because it is important to recognise that the relationship between the Crown and iwi is not simply about Treaty grievances, but it can also be about rectifying relationships of a much more general nature, and the restoration of lands that properly belong with their original owners. So it is appropriate that we acknowledge this as a milestone in an ever-increasing relationship between the Crown and iwi, and that both the Crown and iwi benefit from the strengthening of that relationship.

The challenge that is before us as a result of the passing of this bill into law is the management of relationships. Ironically, those between the Crown and iwi are relatively easy, because, as my colleague the Hon Shane Jones remarked earlier, it is sometimes much easier to combine against an adversary than it is to work on the relationships within and between those most familiar and intimate to us. There are important relationships within and between Te Arawa. Those of Whakaue, Tūhourangi, and Wāhiao are represented in this bill. It is easy to develop a habit of blaming external parties, and it is much harder to look within and to work on internal relationships, but it is so much more worthwhile and so valuable.

Governments come and go, but our whakapapa, our relationships with one another, endure and go on into succeeding generations. That common whakapapa, those common traditions, and those common his and her-stories are the ones that we have to keep alive and honour, not only in the rhetoric that trips so easily from our lips but also in the actions of today, so that we may secure those relationships for future generations.

That future must be characterised by all those concepts that our rhetoric so easily articulates: whanaungatanga, kaitiakitanga, mana, mana whenua, manaakitanga, and, of course, kotahitanga. The challenge is to ensure that the decisions of today can be elaborated and developed for real and meaningful opportunities for all kin of the three iwi, and that in developing, managing, and governing that whenua and those taonga, it is done in ways that strengthen the links between those iwi, so that their descendants can together go forward to a stronger future. I wish Whakaue, Tūhourangi, and Wāhiao the rich blessings of their whenua and a generous practice of their tino rangatiratanga. Nō reira tēnā koutou, tēnā koutou, tēnā koutou katoa. Thank you.

Bill read a third time.

Bills

Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill

First Reading

Hon GERRY BROWNLEE (Acting Minister of Agriculture): I move, That the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill be now read a first time. At the appropriate time I intend to move that the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill be considered by the Primary Production Committee, that the committee present its final report on or before 2 March 2010, and that the committee have the authority to meet at any time while the House is sitting, except during oral questions and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).

This Government is committed to delivering growth in order to ensure prosperity for all New Zealanders. Part of delivering on this commitment is ensuring a fair and competitive business environment. To this end, the Minister of Agriculture, the Hon David Carter, announced in September the Government’s decision to introduce a bill to amend the Dairy Industry Restructuring Act 2001 in order to replace the current regulated price formula for raw milk. The Dairy Industry Restructuring Act provided the authorisation that permitted the merger of the New Zealand Dairy Board, Kiwi Co-operative Dairies Ltd, and the New Zealand Dairy Group, to form the Fonterra Cooperative Group Ltd.

The Act promotes the efficient operation of dairy markets in New Zealand, and it does that by regulating the activities of Fonterra, thereby ensuring that the market for dairy goods and services is contestable. The contestability is achieved by a suite of pro-competitive measures, which include permitting the Minister of Agriculture to make regulations that compel Fonterra to supply up to 5 percent of its raw milk to independent processors at a regulated price. Raw milk is the milk collected from the farms before it undergoes any processing. The Minister may also specify the price, the method for determining the price, and other items and conditions.

The Act is also the empowering legislation for the Dairy Industry Restructuring (Raw Milk) Regulations, which we seek to amend with this new bill. The review of the raw milk regulations in 2008 identified that Fonterra was forced to sell the raw milk at a price much less than what it paid farmers for the supply of the raw milk, due to the formula being used. That was never the intent of the regulations. This bill proposes to replace the current regulated price formula for raw milk with the Fonterra farm-gate milk price, plus 10c per kilogram of milksolids, for the 2010-11 dairy season. The Fonterra farm-gate price is the milk component of the Fonterra payout, and represents the average price Fonterra pays its farmers for raw milk across the season. The 10c margin addresses the fact that independent processors can access a square or uniform milk supply, rather than a seasonal supply—a much more desirable result for all parties. Given that the uniform supply is considerably more valuable to processors than a seasonal one, the Government considers it fair that the regulations permit a margin to reflect just that.

The price change addresses the immediate underpricing of raw milk. The change is needed to ensure that independent dairy processors that buy raw milk under the regulations pay the same price for raw milk that Fonterra pays its farmers for the supply of that raw milk. The price change also provides independent dairy processors with the right economic incentives to source raw milk directly from farmers where practicable, rather than under the regulations. This better promotes the objective of the Dairy Industry Restructuring Act—that is, to create a contestable market for farmers’ raw milk and to ensure that the market operates efficiently and fairly.

To achieve this price change, the Act must be amended to allow the Fonterra farm-gate price to be incorporated in regulations through reference to an external document. In this case, it is the report of Fonterra’s annual accounts, as contained in its annual report for the respective season. The bill introduces a provision to allow external documents to be incorporated by reference in any regulations made under the Dairy Industry Restructuring Act. An option would provide for a more efficient method of pricing and allocation of raw milk amongst competing processors’ demands, and is one possible long-term solution to a regulated milk price. The bill permits the introduction of an option for the raw milk by regulation, and includes provisions for the Minister of Agriculture to specify the details of how such an option might function. The amendment future-proofs the Act by allowing the Minister of Agriculture to introduce an option in the future for amending regulations rather than further amending the Act. Since the Minister of Agriculture announced his intention to introduce this bill, he has received strong support for it from the primary sector, at both the processor and farmer level; no one should be surprised by that.

The Minister of Agriculture has asked me to inform the House that the review of the raw milk regulations in 2008 also identified considerable industry uncertainty regarding the end of Fonterra’s regulatory obligations to supply raw milk to independent processors. Currently, the relevant regulations will expire once a certain amount of competition for farmers’ raw milk has been reached in each of the North and South Islands. However, there is no mechanism available to industry participants for assessing when this obligation might cease, and no provisions for a phase-down or phase-out period. The Minister of Agriculture has announced his intention to conduct a consultation process on this issue to commence in this calendar year.

On behalf of the Minister of Agriculture, the Hon David Carter, I commend this bill to the House, but I add that it is very much a progressive bill and part of the Government’s overall programme to lift the economic performance of this country. There is no doubt that dairying is a significant contributor to the country’s export receipts, and people can rest assured that the opportunity to encourage growth in this industry at any level lies behind this particular bill.

I know that the Labour Opposition is likely to oppose this legislation, because it will lead to a lot more competition for the milk that is produced at the farm gate. Ultimately, I think that will lead to better prices for farmers. It will lead to the sort of investment that we have seen from the Open Country Cheese Co., and from Synlait, and that we know is planned by others around the country. It will facilitate the sort of stand-alone opportunities taken by farmers who supported their own cooperative on the West Coast, where they have had good prices for their product over a period of years.

In the end, New Zealand needs to be able to sell more produce overseas if we are to start getting the lift in export performance that we want. This enabling legislation will mean that there can be more creative thinking about the sorts of products that may be derived from raw milk. As many people in the House will know, a raft of things can be developed, further manufactured, or enhanced from raw milk.

Hon Parekura Horomia: What’s this joker talking about?

Hon GERRY BROWNLEE: The member opposite asks whether I know what I am talking about. I tell him that I do know what I am talking about. The quality of New Zealand milk is served a great testament by one look at him! He once described sheep as “nothing more than smelly sods.” I will not refer to him in such a way, but I will say that the fleece on his head looks as if it could contribute to New Zealand’s export receipts in a way that would be quite substantial.

With those comments I conclude my remarks. This is a very good bill, it is a progressive bill, and it is the sort of bill that people can expect to see more of from the National Government as we free up the economy, and as we free up those entrepreneurs in it who are committed to making our targets of better incomes for New Zealanders a reality.

Hon DAMIEN O’CONNOR (Labour): I will not take too long to speak on the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill, other than to say that Labour will support it. This is an evolution of the Dairy Industry Restructuring Act that was passed under a Labour Government, and it is a natural evolution following a review that was carried out by the previous Labour Government to move forward on some of the problems identified in the supply of milk into the domestic market.

One thing I will say is that this bill should have been in the House some time ago. The National Government has seen fit to privatise the prison system and to do many other things before it moved on this vital area of economic growth for the country. The Government let the dairy industry remain in a period of uncertainty until it finally introduced this bill. I say shame on the Government and on the Minister of Agriculture for not having this bill in the House within the first 100 days. None the less, Labour will support the legislation.

Mr Brownlee has outlined what the bill does. It makes some technical changes to the Dairy Industry Restructuring Act. It allows, ultimately, for an auction system to be put in place. The previous Minister of Agriculture, Jim Anderton, had conducted the review and put to Cabinet a recommendation for an auction system. That would have proceeded, but the National Government, of course, sat on its hands and discovered in June of this year that there was insufficient time to put such a system in place. So the Government has had to introduce this new legislation into the House.

I think the bill is fair. It addresses the concerns that farmers have had for some time in the industry that independent processors were getting cheap milk—that is, milk that was collected by Fonterra tankers and delivered to independent processors at a cost less than the cost of the production, transporting, and coordination. At the same time, Fonterra had to build, I guess, for the possibility of taking all that milk, processing it, and turning it into something. So there was a potential cost there that was not taken into account in the original formula for working out the cost of milk. I think officials should take note that in the original Act they miscalculated a number of things. Their thoughts that there would be no major processors in this country competing with Fonterra have been proved wrong. There are now a number of potential processors, such as Russian companies, Synlait—and no doubt Ruth Richardson will sell that off to the Singaporeans or to anyone who will pay her a price—and other processors, as well.

I ask, however, what bill will be before this House next, and that is a very important question. This legislation is a natural development of the Dairy Industry Restructuring Act; the next bill about capital restructuring, dare I suggest, will be far more important. I hope that the National Government will pay more attention to that next bill than it has done to this one, because this issue should have been addressed back in January. The uncertainty has meant that an auction system cannot be put in place, and an auction system is the only fair way of long-term price establishment for raw milk. In the interim, the raw milk price, which is the price that farmers receive up and down the country for their raw milk less the value-added component that will be paid through their milk cheque payment, is that price plus 10c per kilogram of milksolids. That is a small premium to allow for the uncertainty that Fonterra faces as it has to collect the milk and manage its distribution through the independent processors.

There were some genuine concerns from businesses, like Cadbury’s and other high-value dairy industry processors, that were seeing the potential competition—competition that would mean they would not be able to access the volumes of milk they required for the certainty of their businesses. But we have now moved to a situation where up to 600 million litres of milk can be collected by Fonterra tankers and delivered to independent processors. That is a privilege, I suggest, for those independent processors in both setting up and running their businesses, but they will pay 10c over and above the raw milk price.

Labour will support the legislation, but we issue a warning to the Government that it should show more respect for the dairy industry, and process legislation in a more timely fashion. It will also have to pay careful attention to the next bill that no doubt will be before this House on the issue of capital restructuring. Thank you.

SHANE ARDERN (National—Taranaki - King Country): I rise in support of the Dairy Industry (Restructuring Raw Milk Pricing Methods) Amendment Bill. But before I speak, in accordance with the Standing Orders, I need to declare that I am a supplying shareholder of Fonterra, the largest company that this legislation affects.

I will give a little history to the background of this bill, as did the Hon Gerry Brownlee, the Acting Minister of Agriculture, in his opening comments. This regulation came about as a result of much concern about the merger of the New Zealand Dairy Board, Kiwi Cooperative Dairies Ltd, and the New Zealand Dairy Group, which brought together one entity that was going to control at that time about 96 percent of all milk production in New Zealand. The Commerce Commission had major concerns about what would happen if small competitors in the industry tried to set up and Fonterra used its size to price milk in such a way that those competing interests would not get access to milk. That is basically the background to why the regulation was put in place in the first place.

What does this legislation do? It requires Fonterra to make available 600 million litres of its milk—of the milk of the shareholders of Fonterra, who now number about 10,000 farmers up and down New Zealand—to its competitors, the small companies that compete with it, at the price that is regulated. That, on the surface, sounds pretty heavy-handed, but the genesis of the idea was to allow for those small competing companies to get started. Over time, small companies have started up—a number of them have been mentioned—and there are now a large number of small companies in New Zealand. Some of them that compete with Fonterra are not so small, and they have been able to get access to prescribed litreages of that total of 600 million litres of raw milk. Also over time it has been discovered that the price the regulated framework prescribed was less than what Fonterra was having to pay its farmer-shareholders at the farm gate. So the proposal—the compromise, if you like—that has been reached is a sound step forward.

The farm-gate price plus 10c takes into account recognition of the fact that milk is not produced for 365 days a year in a uniform way; in fact, production is very seasonal. If we look at grass growth graphs, we can see that grass grows at a much higher rate in November than it does in July. In fact, in Taranaki in September we were growing 100 kilograms of dry matter per hectare a day, which is a record growth rate, I understand, for the area. Grass does not grow evenly, therefore milk cannot be produced evenly. There are the so-called shoulders, which are the periods in the season when milk production is less than it is at other times in the season. For that reason, the processing side of the industry invests a lot of money in stainless steel—in plants, separators, cheese-processing facilities, tankers, and that type of stuff—to cater for peak milk. There is a lot more capital required for peak milk times than there is for the shoulder parts of the season or the lower producing times of the season.

The 10c premium is in recognition of the fact that not all prices are even and not all production is even. I think it is a reasonable stab; I suspect it is still on the low side but I think it is a reasonable compromise. Fonterra is happy with that. Competing companies are grizzling about the fact that they have to pay a bit more but, by and large, to my understanding they are reasonably comfortable with it. It does reflect the investment that Fonterra has made in the substantial capital required there.

There is a larger issue coming, and the Acting Minister touched on it—that is, when is a small, competing, start-up company no longer a small, competing, start-up company? Some of these companies have been operating now for some time; in fact, some were operating before Fonterra was. So at what point should they no longer have access to milk that is arguably still subsidised by the large company Fonterra? The philosophical debate will go on for ever, and members are well aware of it, about whether one company in New Zealand should be the dominant force, and what percentage of the industry should belong to other companies. That debate, in my view, has been totally debunked over the time that I have been in this Parliament, in the sense that if we talk to any of the other primary industries, or to any other export and manufacturing industries, the one thing they all say to us is that having a dominant or large presence in the markets where we compete is the No. 1 driving factor to price, back in New Zealand. Because of Fonterra’s single focus on international markets and the structure that has allowed that to happen, we are very competitive internationally in the dairy industry—hence, the growth in the dairy industry.

I have listened recently to commentators talk about how Fonterra has been a poor performer, but a 5.8 percent growth year on year since the company was formed makes it difficult for me to understand what they mean by that, especially when I compare Fonterra with other companies, such as Carter Holt Harvey, for example, or any type of company members want to mention in New Zealand that is dealing primarily in the export of products that have to be developed from raw commodities that have a perishable life. We can take any companies—we can go through all the rest of the primary industries—and we can name the lot, but none of them competes with that level of growth. Those who suggest that Fonterra or the dairy industry should emulate the structures that some of those other companies employ need to look at what has actually been the end result of Fonterra and its single marketing structure, which has allowed that company to export to 150 countries around the world, and to have, as I said, those kinds of growth rates.

This legislation about the restructuring of raw milk pricing methods is fundamental to that concept, because if we decide that the company should be broken up, that the industry should fragment, or that we should have 15, 20, 40, or even 50 percent of whatever figure we pick of the total amount of milk produced in New Zealand go to companies other than Fonterra, then we are actually suggesting that that single focus on international markets is not the endgame. That is the ultimate thing. Of course all of these debates come about when we start talking about the further capital required for developing markets such as China, where there is huge opportunity, with which New Zealand has a free-trade agreement, and where the dairy industry has a strong presence and will continue to have a strong and growing presence.

So there is a debate, and there must be a balance in what will be the best in terms of how the industry can develop going forward, where it will secure its capital, and how many competing small companies there are in New Zealand. Surely it is healthy to have some small competing companies in New Zealand; I agree with that concept. Certainly some of the innovation that comes out of our small companies is healthy. But to suggest that Fonterra should be broken up or in some way fragmented, or that its dominance in the market place is unhealthy, is very much a bury-the-head-in-the sand approach that does not look at the history of the other organisations and companies, primary producers, or exporters that have adopted that approach. In fact, all of the other industries that I am aware of are trying to emulate a more focused market structure internationally. Obviously there is a lot of debate about size in the meat industry, and about how that industry and various other industries can achieve Fonterra’s kind of single-focus marketing. You know, they are looking to Fonterra for leadership.

I am happy to support this bill. I know it is a step forward. I look forward with some enthusiasm to the next round of debate. Certainly, this is a good move for the Government and for New Zealand today. Thank you.

DAVID SHEARER (Labour—Mt Albert): I rise to speak in support of the Dairy Industry Restructuring (Raw Milk Pricing Methods) Amendment Bill. As my colleague Damien O’Conner mentioned, this bill came about through a review of the dairy industry. That review was conducted under a Labour Government and it identified three key issues that needed to be addressed. Firstly, the current wholesale price of the regulated pricing formula systematically underpriced regulated raw milk to independent processors. Secondly, there was no system for managing the excess demand for regulated raw milk by independent processors. Thirdly, there was unmanaged transition risk associated with the ending of the statutory obligation on Fonterra to supply regulated raw milk. There needed to be an addressing of these issues.

One of the ways in which that was proposed was to introduce an auction process for raw milk in the 2010-2011 season. Unfortunately, although this review was done in 2008, the bill has not entered the House until the end of 2009. That means that the auction process will not be ready for the season as envisaged. The interim solution being proposed in this bill is to amend the regulated price to the Fonterra farm-gate milk price and add a price adjustment of 10c a kilogram to the price of milksolids. That seems a reasonable suggestion, given that the auction process will not be in place in time. That will remove the irritant to farmers of underpricing milk to independent milk processors in the time it takes for the auction price to come into being. The principle underlying this bill is also to ensure that adequate competition is maintained without favouring one group over another. I think it is very important that we acknowledge that independent processors can take New Zealand milk and turn it into high-value products. This part of the scheme should be maintained and we need to acknowledge the value that these independent processors are able to bring.

Applying science and innovation to our primary product is where New Zealand’s real benefit comes from. Of course, we can continue to ship large amounts of raw milksolids abroad, as we do, and it is the major component of our exports and our income in our dairy industry. Over time, I suggest that countries like Chile and China may well be big markets for our products, but they will also be major producers of such products. Indeed, we are sending our scientists over to Chile and China to help them develop their dairy industries. They will become not only consumers but also competitive producers of dairy products. Our ability to stay ahead is, therefore, very much dependent on how we use our brains, our science, and our innovation in the production of our dairy industry. As Rutherford once stated: “We haven’t got the money, so we’ve got to think!”. He was dead right. We are rich in natural resources, but we need to apply our brains to keep us ahead. That will enable us to remain economically viable.

The importance of small processing companies is in contrast to Fonterra itself. Although I do not disagree with my colleague across the House Shane Ardern about Fonterra and the need to ensure that it maintains its market place, we have to note that Fonterra receives 92 percent of New Zealand’s milk. However, its investment to add value has not been particularly successful in Fonterra’s case. Last year its bumper price was a $7.90 per kilogram payout, but only 31c of that was value-added. Fonterra is a great exporter of ingredients that go overseas. These then get turned into products that are sold at higher value by other companies abroad. That needs to change. As the New Zealand Herald noted: “The need to lift Fonterra’s products beyond bulk cheese blocks and milk powder has never been more urgent. Last year, the company cited opportunities in medical nutrition, cheese slices for McDonald’s worldwide, pizza toppings in 30 countries and pharmaceutical grade protein, among others. Eight years ago when Fonterra was founded, these were the sort of sophisticated products envisaged. The medical and pharmaceutical uses chimed well with the Labour Government’s “knowledge wave” of its early days. Now they are close to the heart of a new Prime Minister with ambitions to lift the country’s economy to a higher level of value.” These were the promises that we wanted from Fonterra, but we are not yet getting there.

I argue that our ability to add real value to New Zealand is also our ability to ask Fonterra to consider not just what it gets over the farm gate—and this comes back to the question of its shareholders—but also what real value it can add to the New Zealand economy. It is for that reason that I find the Government’s decision to ditch the Fast Forward scheme so reprehensible. Putting up, as the Labour Government did, $700 million for research and development funding seemed a pretty good deal, and that was going to be matched with private funding that would enable certainty in innovation and in the abilities of our scientists to know where they were going. It would have built partnerships between the private sector and public sector—as we have seen in the case of Fonterra, so desperately needed—and encouraged innovation. Unfortunately, it was ditched. In its place, the Government’s Primary Growth Partnership is a rather cheap and nasty alternative. It offers only a fraction of the advantages that the Fast Forward scheme did. It shows that this Government knows the price of everything but the value of nothing.

Interestingly enough, just to add to that general theme, we recently had a situation where the chief executive officer of AgResearch in Hamilton, Andrew West, was bemoaning that he had to send his scientists to places like Chile to help those countries with their farming industries in order to generate the 9 percent return that this Government insists on. I have absolutely no problems with a Crown research institute being able to wash its own face to, in a sense, not cost the taxpayer money. Under the previous Labour Government, although we set the figure at 9 percent, anything that was produced by the Crown research institutes was turned back and put into research, not, as this Government is doing, put into the deep, dark recesses of the consolidated account. I believe that this Government does not understand that every $1 invested in a Crown research institute could lead to $10 or $100 return by our New Zealand farmers. Instead, it is focusing on the 9 percent return that the Crown research institutes are producing—a rather short-sighted policy.

In conclusion, we support this bill in its first reading. We believe that it addresses some of the anomalies and the difficulties that are apparent and were highlighted in the review that the Labour Government conducted in 2008, and for that reason we support this bill in its first reading. Thank you.

Dr RUSSEL NORMAN (Co-Leader—Green): The Green Party will be supporting the referral of the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill through to the select committee, and there we will have a bit more of a look at it. The Green Party, I think, has an interesting relationship with Fonterra. On the one hand, the Greens have been extremely critical of Fonterra’s performance in terms of its environmental impacts. Although some of the programmes that Fonterra has been running have been good, overall we know that the intensification of agriculture has been driving the deterioration in water quality in our lowland rivers, and now in our groundwater. That intensification is a major problem. On the other hand, the Green Party also has tremendous sympathy for the cooperative structure of Fonterra. The Green Party is a big supporter of cooperative structures. We think that a producer cooperative is actually a very good model, and it is most extraordinary that the largest enterprise in the New Zealand economy is, in fact, a producer cooperative. That is completely at odds with the laissez faire ideology that has dominated New Zealand since the mid-1980s. Fonterra has proven that the laissez faire, neo-liberal ideology is wrong, time and time again.

It has been interesting for us to watch as National has attacked Fonterra time and again. Currently, we see the attack on Fonterra from Open Country Cheese. That company threatens the New Zealand ownership of the dairy industry. The idea of Open Country Cheese, and of a series of other companies like it, is to break into the New Zealand dairy production sector and break up Fonterra. The reason that the Greens have a problem with this is that aside from the fact that Open Country Cheese is basically the “National Party Inc.”—Wyatt Creech and John Luxton were involved in setting up the company—we think that it undermines the cooperative structure whereby the producers own the industry. We are big supporters of the producers owning the industry in the dairy sector; that is tremendously important. Open Country Cheese also threatens the New Zealand ownership of the dairy sector. The cooperative structure of Fonterra means that it is very difficult for foreigners to take advantage of our almost non-existent foreign ownership laws in order to get control of one of our most important sectors. The Greens support the role of Fonterra in protecting a critical part of the New Zealand economy.

So although we have some disagreements with Fonterra, particularly around water-quality issues and agricultural intensification, we are interested to make sure that this bill, and other bills like it, do not fundamentally threaten the cooperative structure of our dairy industry. That is why we will follow the submissions to the select committee. The cooperative structure of the industry is one of the key ways to protect New Zealand ownership. It has also been one of the key ways that we have built the dairy sector into such a productive sector of our economy. If we had not continued to support the cooperative structure, and if we had just allowed a laissez faire approach to be taken, which has been the ideology of both National and Labour Governments for much of the last couple of decades, then we simply would not have a cooperative like Fonterra today. We would have a bunch of competing, foreign-owned corporations that would not be adding much to the New Zealand economy, whatsoever. The Wyatt Creech model, which the National Government supports—Open Country Cheese—has been in conflict with Fonterra. It has been interesting to watch that, and particularly to watch the latest labour relations episode up north. Of course, lots of the local farmers had tremendous sympathy with the workers at Open Country Cheese. Local farmers have no sympathy for the Open Country Cheese corporation, because it fundamentally threatens the cooperative structure of the industry. Most dairy farmers who are part of the cooperative understand that Open Country Cheese is part of the problem, and have no sympathy for it whatsoever, even though the National Party is in donkey deep with Open Country Cheese.

One of the other things that I think has been quite interesting about Fonterra has been the growth of the organic milk sector. Some players that are independent of Fonterra have played an interesting role, but we have also seen Fonterra play an important role in the development of the organic milk sector, and in the increase in production out of organic milk. There is still a really long way to go, and we certainly do not want this bill to threaten that, but so far Fonterra has played a significant role in the emergence of the organic milk sector. We think that it could play a much bigger role than it does currently, and we look forward to seeing Fonterra embrace the organic sector even more, but none the less it has played a really important role.

For those reasons, and with those brief introductory comments, I will leave it there. The only other thing I would say, as the bill touches on the issue of water quality and Fonterra’s role in the agricultural sector, is that it has been quite worrying to watch the Government going after water conservation orders, attacking Fish and Game New Zealand, and now attacking Environment Canterbury as an attempt to protect dirty dairying. The Government is basically acting in the best interests of the big irrigators, rather than standing alongside the other parts of the industry. Lots of farmers inside Fonterra care deeply about water quality and are trying to do something about it, to improve it, whereas the Government is purely on the side of the irrigators and is trying to break water conservation orders, trying to break Fish and Game New Zealand, and now trying to break Environment Canterbury because it dares to stand up against the irrigators and dirty dairying.

I think that most of the shareholders of Fonterra would like the Government to actually protect our clean, green reputation, which, in the long run, will be one of the key ways that we add value to dairy produce. By having a brand of integrity, a brand that respects animal welfare, and a brand that respects environmental performance as well as labour standards, in the long run the value added by the dairy sector will be much higher than if New Zealand milk products are not seen as a brand of integrity. We will not have a brand of integrity if the Government of the day backs dirty dairying instead of clean dairying, which is, of course, the policy of the current Government. In the long run that will undermine New Zealand’s image of being “100% pure and clean and green”. To me it seems quite important to support those elements in Fonterra who have a genuine interest in cleaning up the dairy sector and making sure that, in the long run, we have a brand of integrity, with clean and green milk products coming out of New Zealand. Fonterra can play a key role in that. So the Greens will be looking at the submissions on this bill as they come into the select committee, and we will be watching the issue closely. We will support the referral of the bill to the select committee.

DAVID GARRETT (ACT): I rise very briefly on behalf of the ACT Party to support the Dairy Industry Restructuring (Raw Milk Pricing Methods) Amendment Bill.

When I arrived in this place I was told many things, as new MPs are. One of those things was in relation to the Greens—that with Dr Norman it all comes back to water and with the other one it all comes back to trees. We have just seen a wonderful example of that. I despair for the radio audience at home, and I see in relation to the live audience that most of them have more sense than to be in here on such a nice day listening to us rabbit on at length about something that needs very little said.

The bill promotes competition and gives farmers a choice about whom to sell their milk to. That is a very good idea, and we support it, and I do not intend to take up any more of the House’s time.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe, Mr Deputy Speaker. Kia ora anō tātou katoa. Over the course of this urgency we have dealt with issues relating to DNA and identity, the impact of gangs and organised crime, and, most recently, the Whakarewarewa and Roto-a-Tamaheke Vesting Bill. I want to say that those are very important issues for the Māori Party. They are issues that obviously strike at our heart as a people. In the space of one brief morning we have traversed issues relating to our whenua, to the exercise of kaitiakitanga, the relationships experienced by mana whenua, the protection of whakapapa, and the pursuit of whānau ora. In the context of these hefty matters of State it is somewhat humbling to now rise to make a contribution to this debate about the price of raw milk!

The bill sets in place, as I understand it, a process to make new regulations for the auctioning of raw milk at a regulated price to independent processors. The thinking behind the legislation is to ensure that excess demand for regulated raw milk is managed efficiently. There will be a fair and efficient price, and industry uncertainty will be removed.

So what relevance does that have to the Māori Party and, even more so, to the constituents of Waiariki? Well, we know that Māori are the largest natural grouping of pastoral farmers in Aotearoa. We farm an area of some 720,000 hectares, worth an estimated $7.5 billion. If that is not compelling enough, Māori dairy owners own an estimated 100 million shares in Fonterra, so roughly one in 12 Fonterra shares is sourced to Māori. The level of complexity and sophistication of the Māori farming business sector is such that some 19 of the 23 corporations in the Waiariki Māori Land Court district—that is 83 percent—have engaged a consultant. Further research found that every member of the Te Arawa Dairy Group, a collection of Māori dairy incorporations and trusts, employed a farm management consultant or other technical adviser. So what are we doing here today? We hope we will make those farmers’ jobs easier by introducing some consistency to the regulations around raw milk prices.

There is much more than just putting up the price of milk at stake here. Looking at the 2006 census, we see there were some 1,323 Māori—

Hon Darren Hughes: Speak from the heart, man.

TE URUROA FLAVELL: —I am trying—dairy cattle farmers and another 372 Māori dairy cattle farm workers. I pulled these statistics out particularly for Mr Darren Hughes. In essence, the bill permits the current regulated wholesale milk price to be replaced with the Fonterra farm-gate milk price. On top of that, a price adjustment of 10c per kilogram of milk solids will be introduced from the 2010-11 dairy season, and I am sure that will rock the socks off Mr Hughes again. Up to this point, the wholesale raw milk price has underpriced regulated raw milk, I tell Mr Hughes, by between 10 and 35 cents per kilogram of milk solids.

Hon Darren Hughes: That’s not right.

TE URUROA FLAVELL: OK. If that does not sound like much, it adds up to a difference in price of between $5 million and $17 million per year.

Hon Darren Hughes: Auē!

TE URUROA FLAVELL: Ai, taukiri e. Consultation was undertaken throughout the industry over the last 2 years, and apparently there was widespread concern about Fonterra’s ability to manipulate the price of regulated milk. I am told that more consultation over the future of the regulated milk supply is planned by the end of next year.

At this point, the Māori Party is happy to let this bill go on to the select committee, and mooove on—

Hon Member: That was an ad lib.

TE URUROA FLAVELL: Just let it mooove on—

Iain Lees-Galloway: Don’t milk it.

TE URUROA FLAVELL: —I never would—particularly so that people can have a say, and not bleat on too much, as it moves through the House and share their knowledge and wisdom about this particular bill, which we hope will be able to progress rather rapidly. Kia ora tātou.

COLIN KING (National—Kaikōura): It is a pleasure to rise and speak on the first reading of the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill. I think it is worth acknowledging some of the other speakers who have spoken before us and addressed some of these statements. This bill is hugely important to the nation’s economy and needs to be seen in the light that it deserves to be seen in.

It is interesting to go back to the first Labour speaker, Damien O’Connor, who accused the Government of sitting on its hands. I would accuse the previous Labour Government of disregarding farmers, because that member came into the House only due to the retirement of another member. That is where farming is measured, in the minds of the Labour Party. Farmers are so far down the party list that they do not make it into the House unless somebody retires. From that point of view, I think it is a bit lame and limp to accuse the Government of sitting on its hands when Labour did nothing to promote farming in its 9 long years in Government.

Another point that is worth making is that Fonterra has been wearing this inequity for 7 years, and the best that Labour could do when in Government was to just do a report. It has effectively been left up to a John Key - National-led Government to do something about it. Those are two points that I would like to make and put back to Labour—that it has sold farmers down the drain.

With regard to the second speaker, who spoke about primary growth partnerships, we are very positive about that initiative. It will put $140 million per year into research and development, and I am sure that it will satisfy the thirst of Andy West, if Andy would only stay on the same verandah for more than 5 minutes.

I turn to the comments from the Greens. They were advocating support for the cooperative model one minute, then bashing up farming for every other reason in the next. I point out that it was Fonterra that initiated the Dairying and Clean Streams Accord. It has been hugely successful and is something that we want to celebrate. At this time I also take the opportunity to acknowledge Barbara Stuart on the release of her book My Valley, My River: The Rai Area and the efforts of Landcare Trust, especially in my own electorate of Kaikōura, and in the Rai Valley where it has done tremendous work in making sure that it develops best practice and improves on it.

I will touch on the cooperative model for a moment. Having come from the meat industry, I look at it with a high level of admiration. I have given it a lot of thought, and, in my mind, the single answer for why there is a high level of cooperation within the dairy industry is that it is dealing with such a perishable product. If the industry did not cooperate, within 4 days the product would be history. If we stop and think about the meat and wool industries, we see that the meat industry shipped its first shipment of frozen meat from Port Chalmers in 1882 and it took months to get to its market, and then it was sold. Meat is not as perishable as milk. When we look at wool, we see that it is not uncommon for farmers to sit on their wool when prices are low. Today we are seeing a brave attempt by the Minister of Agriculture to work towards a position where we can lock in some gains for producers so that they do cooperate.

I will now move on to the bill because it is very important. To give some context, Fonterra is 90 percent of the industry, but that is 90 percent with conditions. I sometimes lament the watchful eye of the Commerce Commission when it tries to make sure that all the competition rules are in place. When Fonterra was formed, it had to pick up all the milk supplies. That meant that it had to pick up the milk supplies over in Tākaka, way out there in Golden Bay. It had to pick up milk in places where it was not economically viable.

Shane Ardern: And paid the same price.

COLIN KING: As my learned friend Shane Ardern mentions, Fonterra had to pay the same price. There is no level playing field for Fonterra.

When we look at it in the context of competition, we can see competition sprouting up in the areas where there is low apple production and fewer opportunities. The second Labour speaker also mentioned that we are not seeing innovation. I say to that member, and to the rest of the Opposition, that we are certainly not seeing innovation from the competition. In actual fact, if you look at the commercial disciplines around being successful, you produce the cheapest, simplest product—

Grant Robertson: I’m sure the Speaker doesn’t.

COLIN KING:—and I was not referring to you, Mr Speaker. I apologise. We go about making a product as efficiently and as cheaply as possible, and we do not take risks in adding value. If we look at where the value is being added, we see the innovative way that Fonterra has been able to market its products into 140 to 150 other countries, overcoming trade tariffs, and overcoming tariff barriers of up to 70 percent. I think it is cruel to an extreme to point the finger at Fonterra and say it is not innovative. If there is one fault with Fonterra, it is that it has become too good too soon. As my friend Shane Ardern mentioned, it has had year-on-year growth of 5.8 percent. If our economy had risen to that level we would be back to where we should be aiming—in the top half of the OECD.

We have 600 million litres of milk available. That is quite interesting because the way the restructuring Act of 2001 was worded, the Minister of Agriculture may require a new cooperative, which was Fonterra, to supply up to 5 percent of its New Zealand milk supply to independent processors at a regulated price. So that is what we are actually talking about. It is all very good, but we are right on that threshold already.

This bill will be referred to the Primary Production Committee, which we will be ably chaired by my learned friend Shane Ardern from Taranaki - King Country, and it will be dealt with in a very professional manner. We will deal with it in such a way that there is the best outcome possible for Fonterra, because we are very, very proud of Fonterra. It has the critical mass, it has an international brand, and on that basis we can celebrate it internationally. It is the only international company, in this land mass of some 4.5 million people, and is a shining light of direction to many of our much older pastoral sector industries, such as the meat industry and the dairy industry.

It gives me great pleasure to commend this bill to the House, and I look forward to the opportunity of casting our eye over it at the select committee. Thank you very much.

SANDRA GOUDIE (National—Coromandel): I am delighted to speak to the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill. Agriculture is the life blood of this country and should never be forgotten. Whenever agriculture takes a setback the effect is felt right throughout the rest of New Zealand over a period of time. The cities feel the very negative effect of the setbacks that happen in agriculture. I do not think people in our cities understand enough the importance of agriculture to our economy.

In agriculture, dairy has its rightful place. Fonterra is an outstanding example of an industry that has taken itself to the international stage and has been one of the leading performers. The dairy farmers of Fonterra work pretty hard. It is a hard life, but it is a good life. They are prepared to do the hard yards, and if people understood what they actually did on the farm they would probably have a much greater appreciation of the time and effort that goes into our milk industry. Why should the dairy farmers of Fonterra put all that effort in just for the results of that hard work to go into somebody else’s pocket? It is great to see the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill going through this process to make sure it is much fairer and more equitable for the farmers who are doing the hard graft to produce that milk, and that they can do so with the least interference. There should be as minimal interference as possible in the industry, while also making sure that it is fair and equitable.

It came to my attention that Mr Anderton did not consider the arrangements that were in place as a subsidy. That clearly shows that he does not fully understand the issues. On the flip side, the Greens considered that it was a subsidy, and liked it because it was. That is typical of the Greens. They want what others have got, or they expect others to pay for what they want. That is the typical Greens scenario. I also point out that Fonterra supplies organic milk. In actual fact, Fonterra is the biggest supplier of organic milk. So instead of bagging it all the time, maybe it is about time the Greens gave it some bouquets and told it what a great job it is doing in terms of organic milk. Fonterra is actually calling for more suppliers of organic milk. However, it is up to farmers to choose whether they want to take up the opportunity to provide organic milk or continue with the standard milk supply. Over time, the market demand might change, which might change the minds of farmers. It is quite clear that in the United States the market demand for organics is on the increase. There are ever-growing market opportunities for organic products.

One of the continuing problems for the agricultural sector is the on-farm costs. They are the costs that keep building year on year. The worst of those on-farm costs is rates—council rates. Everybody thinks they can clip the ticket whenever a farmer purchases something or has to pay for something. Everybody has the till out and they are clipping the ticket for as much as they can get out of the farming sector. At some point that has to change.

Mr DEPUTY SPEAKER: Sorry to interrupt the member. The noise level is too loud. I am having difficulty hearing the member.

SANDRA GOUDIE: At least in the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill we are getting somewhere and stepping in the right direction. I am delighted that National is taking this initiative.

CHRIS AUCHINVOLE (National—West Coast - Tasman): I would like to acknowledge some of the speakers who have gone before. I could not quite follow the logic of the Green Party speaker and his assertions—[Interruption] Well, I was keen to try—over the cooperative model.

Just for the record, the export dairy industry was initially founded in the 1800s by an immigrant to Taranaki from China, a Mr Chew Chong. He bought fungus from Taranaki farmers, which was sent overseas for bird’s nest soup and that sort of thing. On occasions he also bought dairy products, and, in particular, salted butter. He was a speculative individual and an enterprising person. He sent a barrel of salted butter to the UK and had it immediately sent back again to New Zealand to check the quality. It returned in perfect condition, and that started the beginning of export products to the UK from the dairy industry. However, unfortunately for Mr Chong, as his business grew—I think he was at Eltham—the industry developed into some proprietary production companies and some cooperatives, a referendum was held, and the industry determined to establish itself as a cooperative industry. That has been repeated, I think twice, since then. It is not an accident that dairy farmers work in a cooperative. It was a deliberate, considered intention.

Also, price management is not new to the dairy industry. Indeed, when I was involved in that particular industry, I well recall there were limits. I think my colleagues here will be able to help me out. I think any price for a new season could be only 10 percent above the price of the previous season, and it could be only 5 percent below the price of the previous season. [Interruption] An equalisator was not necessarily, in economic terms, the best way to run an industry, because what happened, I think it was in the 1980s, was that the Dairy Board carried a full year’s value of cash equivalent so that it could pay farmers out on that basis. But I would have thought Labour would be singing more joyfully about the whole thing, even though it has been very good in supporting it, because Labour Governments of the past have certainly been fundamental to the development and growth of the dairy industry, and Labour should be able to share in the parliamentary pride. I think it was 1936 when the Labour Government responded to industry calls for assistance, and introduced a minimum price for milkfat of—I do not know, someone might be able to help me again—I think it was a shilling a pound. Again, it provided stability. It provided certainty. The Dairy Industry Restructuring (Raw Milk Pricing Methods) Amendment Bill does the same thing. We are enacting procedures that have a historical part to play in the industry. The dairy industry is a very, very strong part of the New Zealand economy.

Jo Goodhew: Say it again.

CHRIS AUCHINVOLE: I certainly will say it again. The dairy industry is a very, very strong part of the New Zealand economy.

Shane Ardern: How strong?

CHRIS AUCHINVOLE: It is extraordinarily strong.

The National-led Government is committed to delivering growth to ensure prosperity for all New Zealanders. Part of this commitment is ensuring a fair and competitive business environment. The bill provides that for the farming and dairy sectors. The interesting thing is—and I am sure my colleagues on the other side of the House will forgive me and indulge me—

Hon Darren Hughes: We’re always forgiving the member!

CHRIS AUCHINVOLE: I am sure they will indulge me if I point out that I have not heard any comments from that side of the House on the real value of independent cooperatives operating within New Zealand. The second-largest dairy company in New Zealand is the Westland Cooperative Dairy Co. It declined to join with Fonterra and it has had a very successful time since the amalgamation, and it will continue to do so. It works in harmony with the rest of the industry.

Shane Ardern: Plus the local member.

CHRIS AUCHINVOLE: Thank you. It would be wrong of me, as the local member, not to mention the excellent efforts made by Westland, and by Tatua Co-operative Dairy Co., which I think would be the third-largest company in New Zealand. It has been known for a very, very long time for the way in which it has developed. I think it started with frozen creams and aerosol creams. There is certainly no lack of initiative, no lack of enterprise, and no lack of good management within the New Zealand dairy industry.

I will just finish by acknowledging the contribution that you, Mr Deputy Speaker, have made to the dairy industry in a previous career. It was a time that I shared with you at the Dairy Board, and I would like to acknowledge the time we had together. [Interruption] No, it was not a load of bull. I was involved not only in artificial breeding but also in dairy products themselves. Thank you.

Bill read a first time.

Hon NATHAN GUY (Minister of Internal Affairs) on behalf of the Minister of Agriculture: I move, That the Primary Production Committee consider the Dairy Industry Restructuring (Raw Milk Pricing Methods) Bill, that the committee report finally to the House on or before 2 March 2010, and that the committee have authority to meet at any time while the House is sitting (except during questions for oral answer), and during an evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).

Motion agreed to.

Bills

Settlement Systems, Futures, and Emissions Units Bill

Second Reading

Hon NATHAN GUY (Minister of Internal Affairs) on behalf of the Minister of Commerce: I move, That the Settlement Systems, Futures, and Emissions Units Bill be now read a second time. The Settlement Systems, Futures, and Emissions Units Bill proposes three main amendments. The first is to allow for trade in securities and other products to be cleared and settled through designated systems that meet the expectations of international and domestic participants in New Zealand’s financial sector. The second is to align the regulation and exchanges seeking to operate in both securities and futures markets, and to provide that a person approved by the operator of an authorised futures exchange is an authorised futures dealer. The third is to clarify the regulatory treatment of emissions units.

The Commerce Committee made a number of useful changes to ensure that the legislation better achieves those objectives. The definition of “insolvency” was deleted and replaced with a new definition relating to when a participant becomes subject to an insolvency event, on the date and time when an insolvency officer is appointed in respect of the participant. It is critical that the moment at which a participant becomes subject to an insolvency event is clear, since new section 156S removes the finality protection in respect of a participant’s settlements 24 hours after the participant becomes subject to a specified insolvency event.

Several amendments were also made to avoid potential problems in the event that a participant in a settlement transaction was declared insolvent while the settlement was only partly completed. The bill provides that the finality protection extends for 24 hours after the commencement of an insolvency, to complete any settlement that was already in progress. In addition, a further amendment means that an insolvent participant could regain finality protection if his or her transactions were duly authorised by the relevant insolvency officer appointed upon insolvency. Additional changes of a technical nature were made to ensure effective alignment between the bill and other relevant legislation, including the Companies Act 1993, the Insolvency Act 2006, and the Insolvency (Cross-border) Act 2006. For example, the amendments clarify which legislation applies to netting under the rules of a designated system, and to netted balances, as defined by the Companies Act and the Insolvency Act. This means that for any transactions subject to netting under the rules of a designated settlement system, the general setting-off provisions in section 310 of the Companies Act, or section 254 of the Insolvency Act, would apply to the resulting balance and any transactions between the parties that were not netted.

The intention of the bill is that those provisions prevail over the Insolvency (Cross-border) Act in regard to settlements made in accordance with the rules of a designated settlement system. The bill as it stands maintains various penalties for offences relating to a designated settlement system, ranging from fines and imprisonment to revocation of designation. One change was made to bring the maximum fine for a body corporate into line with other jurisdictions. A number of changes were also made to the matters to be considered by regulators. New sections were inserted to expressly include the adequacy of a settlement system. Financial resources are among the factors that may be considered by the regulators in deciding whether to grant, vary, or revoke a designation. In the light of recent financial market failures, this addition is a worthwhile precaution, in conjunction with the existing general reference to considering the capability and capacity of the system operators. Another factor that regulators may consider in decisions regarding a designation is the impact on participant creditors of specifying that a settlement systems operator’s interest in property transferred to the operator by a participant, or in which the participant has granted a security interest to the operator, has priority over security interests in the property under new section 103A of the Personal Property Securities Act 1999.

The final change I note is the change to the period within which the joint regulators, the Reserve Bank and the Securities Commission, could disallow a proposed amendment to the rules of a designated settlement system, which is to be reduced from 40 working days to 20 working days. Should the regulators not disallow an amendment, a provision was also made to enable them to notify the contact person of the designated settlement system, and to allow the amendment to come into effect earlier than the end of the 20 working days.

I want to record my appreciation of the participation of many members of the financial sector through the select committee process, along with the work of the officials, and, indeed, the Commerce Committee itself. It did some fantastic work. I appreciate that other parties in the House are keen to see this bill progress as part of an overarching commitment to building a sound and effective regulatory environment. I commend the bill to the House.

Debate interrupted.

Valedictory Statement

Valedictory Statement

SUE BRADFORD (Green): Kia ora koutou. E mihi nui ana au ki a koutou e ngā iwi, tātou katoa o tēnei wāhi, te Whare Pāremata. Tēnā koutou katoa.

[I acknowledge you immensely, people—all of us of this place, Parliament House. Greetings to you all.]

It is 10 years, minus a month, since I first entered this place. This is a short time compared with the contribution of lifers like Helen Clark and Michael Cullen, whose valedictories we heard so recently. Little did I realise then that I would be next. Although 10 years is not much compared with the time served by many members in this House, it is long enough in the scale of a lifetime. Over the 4 months following my loss of the Green co-leadership election in May, it became clear to me that my heart was no longer really in this job, and that it was time for me to move on, despite the fact that so much remains to be done.

I never expected to become an MP. Some members may remember the run-up to the 1999 election, when Nandor Tanczos and I were on the receiving end of some fairly vicious attacks. I will never forget Helen Clark standing up publicly for me at that time in the media. Nor will I forget the Green Party for having the courage to support putting both Nandor and me in high places on the party list, despite our backgrounds in radical and street politics, and despite lots of criminal convictions in my case; I will not speak for Nandor. I tried to repay the confidence shown by my party by doing the best job that I could every day of my time here, even in the period since I lost a portion of my usually innate hope and enthusiasm earlier this year.

I know that it is an enormous privilege to be elected as a member of Parliament and to be paid a high salary to represent the parties and voters that put us here. I have always taken this privilege very seriously, remaining acutely aware that many hundreds of thousands of people in this country are living on wages or benefits way below what it costs to maintain even a remotely quality standard of living. Every time that MPs’ salaries have been lifted, it has been deeply embarrassing that there is no mechanism whereby, for example, our pay could go up only if the minimum wage was to be lifted to certain levels at the same time.

We all have an obligation in this House to do the best job we can. I think most of us here take that pretty seriously, no matter which party we are from. It continues to sadden me that so many people, particularly in the world out there of the blogs and talkback, so casually dismiss we New Zealand MPs as being corrupt, lazy, or incompetent, or all those things simultaneously. Although there are and have been a few exceptions, and I have noted a few in my time here, I believe that most MPs put their hearts into the job to the best of their ability. Those citizens who so easily condemn us would do well, I think, to contemplate what it would be like if we did not have a parliamentary democracy in this country but were subject to governance through the machete and the gun, as still happens, sadly, in so many other parts of the world. What we hold here is very precious.

In the last few weeks people have kept asking me what I think I have achieved in this place. Although I think it is far more appropriate for others to pass judgment on this, I will just make a few comments. First, I think there is no question that my member’s bill amending section 59 of the Crimes Act and removing the defence of reasonable force for the purpose of correction is the most significant thing that I have been able to accomplish here, and it will be what I go down for in history, whether I like it or not. I am deeply grateful that, with huge support from non-governmental organisations outside Parliament and from 113 MPs inside, we were able, in 2007, to pass a law that now means children are entitled to the same legal protection that we adults enjoy. I also commend John Key and the National Government for sticking to their principles on this issue in the face of huge pressure from the proponents of the recent referendum, the results of which were deeply flawed as a result of the confused proposition on which it was based.

I realise that the section 59 controversy is an issue that has not gone away. The debate is not over, and many New Zealanders continue to believe, sadly, that a parent’s right to physically discipline his or her child supersedes a child’s right to grow up free from violence. However, it is my firm belief—and research is beginning to demonstrate this—that ever since the child discipline debate began seriously, there has been a steady and growing change in thinking on this issue, with more and more people coming to believe that bringing up children without violence is better, not only for the children and babies involved but also for families, communities, and society as a whole. One day I believe that people will look back and wonder why on earth our country tore itself apart over whether there should be a legal defence for assaulting children. Meanwhile there is a job for all of us to do in working for a society in which all children and young people are treated as being worthy of innate respect, rather than as being the property of their parents.

Last week I was in a car-parking building in Auckland when a young woman approached me tentatively, in that way that most members will know, when strangers come up and are not quite sure who we are or whether they want to talk to us. She said: “Oh, you’re that lady”. I stopped, expecting her to say something positive or negative about section 59, and then she went on to say: “Oh, you’re that lady who got us proper wages. I took my school out on that demo we had in support of your bill.” That was a lovely moment, knowing that for some people that is what I will be remembered for. I sincerely hope that no Government will in future turn back the clock on the youth minimum wage.

I also welcome the support that came from every single party in this House for my member’s bill extending the time that some mothers can keep their babies with them in prison. I hope that this small but significant reform will help underpin further much-needed changes in the way that we deal with mothers and children who are caught up in the prison system.

I had a brief brush with Government too, in my one-term tenure as spokesperson on Buy Kiwi Made. Jeanette Fitzsimons and I shared the unique constitutional innovation of being Government spokespeople under the previous Government. Although, of course, the experience did not come near to the genuine participation in Cabinet to which both of us aspired, I learnt a little more of the inner workings of Government—perhaps I will not go into that here—and I was honoured to do what I could to help nurture New Zealand manufacturing, a sector of our economy that deserves a lot more recognition and support than it often gets.

Finally, I think the achievement that counts the most for me is that from the perspective of my own personal and political core values and those of the Green Party, I have never sold out. Before I went to Parliament, I talked with a number of close friends and colleagues, and asked them to let me know right away if they ever saw me forgetting where I came from or whose side I was on. They promised to let me know if I deviated, and if that ever happened, then I knew I would either have to change my position or leave. Happily, neither Parliament nor the Green Party has ever put me in the position of having to make that kind of choice.

I will now return to the Parliament of the streets, and I leave behind nine colleagues to carry forward our collective kaupapa as strongly and as clearly as I have always endeavoured to do. Kia ora.

The moment has come when I must make a few acknowledgments, with apologies to the many people whom I will not be able to mention due to a lack of time. First and foremost, I pay tribute to Jeanette Fitzsimons and the late Rod Donald for their inspirational leadership of our first generation of Green MPs and for their personal support for me, especially in those early years before there was much acceptance of the fact that I might actually be up to this job. I also thank all my fellow Green MPs over the years and Green Party members for their support and friendship, and for the fact that I think we were the first political party in Parliament ever to send MPs to officially take part in demonstrations overseas, when Nandor Tanczos and I represented the Green Party at the World Economic Forum actions in Melbourne in 2000.

I also thank former Speaker Jonathan Hunt for the kindly mentoring role that he took with me in my early years here. I acknowledge not only Jonathan but also Dr Paul Hutchison and David Parker for the friendships we formed on that rather memorable Speaker’s tour—those are other stories that I will not tell here.

Looking up at the gallery today, I am touched by how many people are here from the various community, church, and union organisations that I have worked with in the last 10 years. I would have achieved nothing in this place without the close working relationships that I have had with those people, and with other key people in sector groups across all my multifarious portfolios. From the beneficiary advocacy groups, I particularly thank people like Kaye Brereton, Tony McGurk, Quentin Jukes, Graham Howell, and Paul Blair for the way in which they have kept in touch with me, and have supported and advised me on how best to take the struggle for jobs and a living wage forward in this place of power.

Of the non-governmental organisation representatives involved in the huge task of amending section 59 of the Crimes Act, I particularly acknowledge today Beth Wood, Mike Coleman, Ian Hassall, Deborah Morris Travers, Robert Ludbrooke, Sonya Hogan, Murray Edridge, and there are so many more of them. The reasonable force defence was removed only because of their hard work and commitment over many years. The children of our country thank all of them.

I also acknowledge all my union friends, including the late Luci Highfield, for their support and encouragement in our collective endeavours to defend and improve wages and conditions for the working people of this country. From the racing portfolio—and I do not even know how many people knew I had the racing portfolio—I will just make a special mention of Dr Murray Blue of the Stratford Racing Club in Taranaki. He has always stood ready to assist with sound advice and a deep commitment to the welfare and well-being of the small clubs that make up the backbone of racing in the industry’s neglected heartlands.

I also acknowledge the many friends I have made across this House—again, I cannot mention all of them—from people like Katherine Rich, Chester Borrows, and Simon Power in National, who became unusual allies at times—eh, Chester—to the many Labour Party people, and there are so many of them I cannot name them; the Māori Party friends; and even members of other parties like ACT. I hope that the genuine friendships I have with some of those members will continue long after I leave this place.

I must take a moment to also mention the amazing staff who work to support us in our jobs here, from all the executive assistants who have worked with me over the years, the out-of-Parliament staff in Auckland and the Wellington-based Green staff here in the office, through to the Parliamentary Counsel Office staff, select committee officials, security guards and messengers, library staff, and so many others, without whom none of our work would get done.

Finally, I will take a moment to return to politics. There is a Leonard Cohen song that many members will know—being of my generation—that starts “They sentenced me to 20 years of boredom for trying to change the system from within”. That song has been a bit of a theme tune for me in the last 10 years, but I have to say that the 10 years I have spent in the maw of the system have not been at all boring. However, I am really looking forward to returning to politics on the outside.

We are living in a time of economic and environmental crisis. There appears to be no real willingness from either Labour-led Governments or National-led Governments to take real leadership on issues like dealing with the impacts of climate change or seriously reducing the deepening gap between rich and poor. Until we are prepared to take a long, hard look at our economic system, at how it works, and in whose interests it operates, we are all on a hiding to nowhere. Capitalism is not providing the answers that we need in order to find a way forward, and some of us at least must be brave enough to seek out viable democratic and peaceful alternatives.

People elected to Parliament are expected to lead, but doing the same things that do not work over and over again is not leading. Unless we are willing to challenge the status quo, to examine power relationships and inequality, and to do something about addressing core issues, nothing will change for the better for those who have the least, or for the natural world our species is so bent on destroying. There will be no safe and secure future as long as we have a system that supports and encourages inequality rather than seriously addresses the causes of poverty. Anyone who thinks that we are not heading for an economic crash is, I think, quite deluded. We had a big warning, we pretended for a moment that we would deal with it, and then we kept doing the same things all over again, believing in the meanwhile all that nonsense about green shoots.

If people in communities, learning institutions, marae, and workplaces around the country want things to change structurally for the better, we will need to be committed to working for change ourselves, without expecting politicians to do it for us or to come up with all the answers. The chances are that politicians will not take the leadership needed, not unless they are really pressed. I am going back out into the world, determined to contribute what I can to raising people’s awareness of the power that we hold in our hands if we really do want to change the world, and to help as best I can with the never-ending task of working to help to make our country a better place for all of us to live in, not just some of us.

Once again, I thank all my family, my friends, my colleagues, and my comrades for their love and support over the last 10 years. I look forward to continuing our collective mahi in the days, months, and years ahead. Kia ora koutou.

Waiata

Sittings of the House

Sittings of the House

Hon GERRY BROWNLEE (Leader of the House): We are about 2 minutes away from the dinner break, and the House is clearly a little distracted from its current business. Accordingly, I seek leave for the House to rise for the dinner break at this point.

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

Sitting suspended from 5:58 p.m. to 7 p.m.

Bills

Settlement Systems, Futures, and Emissions Units Bill

Second Reading

Debate resumed.

CHARLES CHAUVEL (Labour): The Settlement Systems, Futures, and Emissions Units Bill is designed to help facilitate trading in emissions units through the development of carbon markets. It will apply regardless of whether the units are issued by the New Zealand Government, via international protocols, or by other Governments. The bill allows for a broadening of how an emissions unit is defined—this is very important given that carbon trading is still in its infancy, particularly in this part of the world. The bill also provides a basis for establishing the legal title to emissions units, much like the title surrounding, for example, tradable shares. Participants in the carbon trading system—which is voluntary—who wish to become designated and then maintain that status must ensure that their operating rules meet certain standards, including international standards and those of the joint regulators, the Reserve Bank and the Securities Commission. This provision concerning joint regulation is the result of a change recommended by the Commerce Committee.

This bill would help—but is no means vital—to set up and implement the emissions trading scheme. The bill was before the House last year, because it was introduced by the previous Labour Government in September 2008, but since then we have had a change of Government and seen a drastic shift in policy surrounding climate change and emissions trading. It has not been a shift to the country’s benefit. Because of this Government’s lack of direction on climate change, we have missed out on—but could have had—a world-leading carbon market. That could have placed us at the forefront of environmental and climate change policy and reinforced our place as a role model in the international community. However, the Government’s lack of direction on climate change has limited the possibility of our making any gains on the environmental and emissions trading front. We have seen dithering from this Government in the areas of climate change policy and emissions trading.

To begin with, the Government’s delaying of the emissions trading scheme has already caused our emerging carbon markets to grind to a halt. The forestry sector has suffered hugely from this, due to a documented lack of international investment. Foresters remain unsure of whether to sell their credits, trade them, or just sit on them—assuming they took an allocation of credits when the allocation became available. The dithering over forestry, combined with the repeal of the preference for renewable electricity generation, the removal of the biofuels obligation, the replacement of the New Zealand Energy Efficiency and Conservation Strategy—for which there is still no alternative—and the confusion in generation policy, caused by the confusion evinced by the Minister of Energy and Resources, Gerry Brownlee, over the existence, or not, of the 90 percent renewables target, has left New Zealand well down the order when it comes to climate change initiatives. So this bill is important and needs to be brought forward quickly in order to allow us to salvage what we can out of the carbon trading space. It is a real shame that it was not brought forward much more quickly. This is just another example of how this Government is mucking around in the important area of climate change.

Katrina Shanks: Nine long years.

CHARLES CHAUVEL: I welcome Ms Shanks back from Europe. I am sure she would have heard much criticism of New Zealand’s backsliding when she was there. This bill provides us with yet more evidence of that backsliding. I do not know what the Government thinks that it will get by way of a welcome at Copenhagen—[Interruption]—apart from the “Fossil of the Year” award, perhaps, as my colleague Moana Mackey just said. It certainly will not be a warm welcome, and it certainly will not accord with the Government’s wish to get policy concessions in important areas like forestry and land use. That is certain, given the reputation we seem to have garnered in the last year of not taking this area seriously.

The other disappointment is that this bill has not been given higher priority on the Order Paper—even though the House, I might add, has been under urgency for the last 6 parliamentary weeks. This is a concern, because the bill should have been treated with more urgency. It is one of the few in the urgency motion that actually merits its place. The Government is intending to ram through an undermined emissions trading scheme, yet it is dragging its feet on implementing the necessary regulatory framework to create a sound environment for the emissions trading scheme to operate in—namely, this bill. If the Government’s attitude to consultation over the emissions trading scheme—which has been to avoid consultation and democracy, as we have seen over the last couple of weeks in the select committee—is carried over to bills such as this one, which supports an emissions trading scheme, then we should be seriously worried that, in setting up such a framework, stakeholders may not be able to have as much input as would be desirable and beneficial.

We are fortunate that the financial sector has been helpful in making submissions on this legislation to the Commerce Committee, which is so ably chaired by my friend and colleague Lianne Dalziel. I hope that it will continue to make that sort of constructive input, because the Government’s attitude to input so far really does not offer much encouragement. If the passing of this bill had been expedited and there had not been the dilly-dallying over climate change policy that we have seen over the last year, New Zealand would by now have a leading carbon registry. National could have taken up the previous Labour Government’s initiative on the emissions trading scheme and pushed through supporting legislation such as this.

Let us look at what this has cost us, apart from the forestry example I gave earlier. TZ1 could have been the prototype of an international carbon registry. It could have given us a huge competitive advantage, given where we were moving in climate change policy and our geographical advantage. Mr Lotu-Iiga knows about this, because he has experience in this sector. Given our time zone, it could have been of great advantage to us to have a leading international carbon registry. But now that has been sold to overseas interests. Perhaps the outcome reflects the Government’s lack of confidence in managing things, or perhaps it reveals, more worryingly, the fact that it really does not care about implementing sound climate change policy. The tragic truth is that it is probably a bit of both.

Labour will continue to support the progress of this bill through the House, but with reservations in regard to the Government’s treatment of it and the issues that surround it. We reflect with regret on the consequences I have outlined—the loss of a chance to be an outstanding and forward-thinking international citizen and the loss of the opportunity, through TZ1, to be a global leader in carbon registries. It is important to record, here and now, that the blame for those two issues lies fairly and squarely at the feet of the National Government, supported on this shameful occasion by the Māori Party.

PESETA SAM LOTU-IIGA (National—Maungakiekie): I am pleased to take a call in the second reading of the Settlement Systems, Futures, and Emissions Units Bill. I acknowledge the sponsor of the bill, the Minister of Commerce, the Hon Simon Power, and also the chair of the Commerce Committee and the previous Minister of Commerce, the Hon Lianne Dalziel, who introduced this bill in September 2008. The Commerce Committee, of which I am a member, received and considered 12 submissions, and reported on 22 June this year on the bill.

The bill is designed to align New Zealand’s clearing and settlement system with international best practice. It is also designed to facilitate trading in futures and emissions units. Firstly, it provides that trades in securities and other products can be cleared and settled through designated systems that meet the expectations of international and domestic participants in New Zealand’s financial markets. Secondly, it aligns the regulatory environment for exchanges seeking to operate in both the securities and futures markets. Thirdly, it allows market participants who are approved by an authorised futures exchange to be deemed to be authorised to deal in futures contracts. Finally, it clarifies the regulatory treatment of emissions units, to support the development of the market for emissions units.

The bill provides settlement systems operating in New Zealand with the option of applying for designation. Designation provides additional legal protections to support the integrity of the system in the case of a participant’s insolvency or default. Specifically, it provides the operators of a designated settlement system with priority under the Personal Property Securities Act 1999. At present New Zealand’s legislation provides for the designation of payment systems under Part VC of the Reserve Bank of New Zealand Act 1989. As has been stated by the two previous speakers, the bill aligns the regulation of exchanges that are seeking to operate in both the securities and futures markets. The Securities Markets Act 1988 currently provides one process for registering a securities exchange, and a separate process for authorising a futures exchange. The bill amends the Securities Markets Act so that an exchange registered under Part 2B of that Act may be registered either in respect of securities markets or futures markets only, or in respect of both securities markets and futures markets. The choice is open to those who are seeking such registration.

The bill also provides that market participants who have been approved by an authorised futures exchange under its operating rules are authorised to deal in futures contracts on any futures markets operated by the authorised futures exchange. That does not affect the ability of the Securities Commission to authorise futures dealers more generally, but codifies the existing class authorisations granted by the Securities Commission and makes them available to any authorised futures exchange.

The previous speaker touched on emissions units, and I want to comment briefly on them. The Finance and Expenditure Committee is doing good work on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. But this bill clarifies the regulatory treatment of emissions units, to support the development of the market for emissions units. This applies, as Mr Chauvel has stated, to both units issued as part of a statutory scheme and units issued in the voluntary market. It does take into account the Kyoto Protocol. It gives effect to the policy through technical amendments to existing legislation. For example, the bill clarifies that emissions units will be treated like other forms of property under the Securities Act 1978. As a result, trading in emissions units will not need to meet the requirements of the regulatory regime for offers of securities or the relevant provisions of the Securities Markets Act until they are part of an investment scheme.

I was a member of the Commerce Committee, which sat and listened to submissions on the bill. The key recommendation from the committee to replace the definition of insolvency with a new definition of “becomes subject to an insolvency event”. This is critical because it is the moment at which a participant becomes subject to an insolvency event, and it is much clearer. The committee proposed several amendments, to avoid potential problems in the event that a participant in a settlement transaction became subject to an insolvency event while the settlement was only partly completed. Although such a situation is unlikely, it is wise to close any gap in the difference in timing between those two events, especially in the current global financial climate. The bill as introduced provides that the finality protection extends until the earlier of 24 hours after the commencement of the insolvency, or the time when the designated settlement systems contact person has notice, or ought to have notice, of the insolvency. The committee’s recommendation that finality protection would extend for 24 hours after the commencement of insolvency is regardless of when the contact person has such notice. This would remove any uncertainty over the receipt of notice, while maintaining a 24-hour window after the commencement of an insolvency in which to complete any settlements that were already in progress.

I will now touch on penalties. The bill proposes various penalties for offences relating to designated settlement systems, ranging from fines and imprisonment to the revocation of designation. It was submitted that the revocation of designation was the only necessary and effective penalty. But the committee concluded that a range of penalties is more appropriate, as revocation is an extreme measure under any circumstance. Without lesser penalties, minor or even moderate offences that did not warrant revocation might go unpunished, and that would inevitably undermine the system. There is also a need for penalties against individuals, as the committee believes the possibility of employees being held personally accountable would greatly increase the incentive to comply. After comparing those penalties with penalties in other jurisdictions, the committee proposed one change to the level of penalty for corporate bodies. It recommended that the maximum fine for a body corporate should be reduced from $1 million to $750,000, bringing it into line with fines in other jurisdictions.

I have given a summary of the key issues that were involved within the committee in bringing this bill to its second reading, and I commend the bill to the House. Thank you.

MOANA MACKEY (Labour): I am very pleased to be able to stand and take a call on the second reading of the Settlement Systems, Futures, and Emissions Units Bill. I acknowledge the work that was done by the Commerce Committee on this bill.

Todd McClay: A very orange speech.

MOANA MACKEY: I thank Mr McClay. I also acknowledge the work of the Hon Lianne Dalziel, who was the Minister who brought this legislation into Parliament. As my colleague Charles Chauvel has said, this bill has a very complicated title and is technical in its substance, but it is very important. It helps us to facilitate trading in emissions units, through the development of carbon markets. As has been said, it does so regardless of whether those units are issued by the New Zealand Government or issued internationally.

I am also pleased to see the broadening of the definition of “emissions units”, which allows for the innovation and development of what will inevitably happen in a carbon-trading market that is in its infancy. The bill provides the basis for establishing a legal title for emissions units, which will be important as we move forward and as carbon markets become far more important, both domestically and around the world. The system is voluntary, and those who want to become part of it become designated, and to maintain that status must ensure that they meet certain rules and standards. Although this bill is obviously very important to the emissions trading scheme, that scheme does not rely on it for its implementation.

I come back to some comments that were made by my colleague Charles Chauvel. This bill was introduced into the House last year. It was reported back from the Commerce Committee in June and has languished on the Order Paper while other legislation, which in all honesty would be deemed to be far less important, was progressed through the House. The fact that the Government has allowed this bill to languish is an indication of how seriously it takes emissions trading schemes. This is a very important bill for our international credibility, and I think the Government did this while being well aware that it was going to dither and faff around on emissions trading, so there really was no reason—

Aaron Gilmore: How do you spell that?

MOANA MACKEY: It is f-a-f-f. It is a technical term. It is a word Mr Gilmore did not invent, which is hard to believe! I come back to the bill. I endorse the comments my colleague Charles Chauvel made. I am currently a member of the Finance and Expenditure Committee, which is looking at the legislation to amend Labour’s emissions trading scheme. That legislation is being pushed through with unnecessary haste, after no action since this Government came into power.

The committee members are in the position that we do not have time to do the work that we are meant to do as a service to this House and as elected members of Parliament. We do not have time to consider departmental reports and revision-tracked legislation. I have never been on a select committee that has been under such ridiculous time pressure—ridiculous. When that committee reports back and members of the public can see what went on at that committee, and see what members may or may not have done to try to get more time, I think it will be quite clear that this Government does not take emissions trading seriously at all. I say that with great regret, because there are missed opportunities as a result of this legislation and the emissions trading scheme being delayed.

One missed opportunity was the chance to have a world-leading carbon registry based here in New Zealand. It was from an organisation that wanted to look for a country that was in the time zone New Zealand is in. It wanted a country on the opposite side of the world, so that when people in that organisation were asleep, New Zealand was awake. It would have been a 24-hour service. That organisation looked and it found a country that was not the first in the world to have an emissions trading scheme, but it was certainly taking it seriously and putting in place a scheme that had environmental and economic credibility. It was a country that would have been perfect for establishing a carbon—[Interruption] I tell Dr Mapp to wake up. OK, clearly my speech is as enthralling as that. His colleague might like to wake him up.

We had the opportunity to have a carbon registry in New Zealand that would be world leading. It would have provided jobs and wealth to New Zealand, and we lost it. We lost it, because of this Government’s actions on the emissions trading scheme. The Government should be ashamed of that. Labour supports this legislation. We brought this legislation into the House. We brought it in at the time when we had a functioning emissions trading scheme and the possibility of having an active carbon market in New Zealand. That has been shot to bits by this Government. People in the forestry sector do not know where they are. They do not know whether to get the credits, and they do not know whether they can sell them or sit on them. They do not know what to do, because no one knows. We do not have any certainty around this emissions trading scheme.

The only certainty we have is that generations of New Zealand taxpayers will be paying billions of dollars—billions of dollars—to prop up the heaviest emitters in New Zealand. That is not fair, and it should not be happening.

Hon David Parker: What’s the subsidy per employee?

MOANA MACKEY: The subsidy per employee at Rio Tinto, interestingly enough, is about $200,000 a year. It is $200,000 per employee per year, and subsidies are going to Rio Tinto. It might have been cheaper if that employer had—

Aaron Gilmore: The member needs to get a calculator and learn some literacy and numeracy lessons, so she can actually count.

MOANA MACKEY: That employer would probably just want the $200,000, because I bet that the employees are not being paid $200,000. Mr Gilmore is going very red in the face at the moment now. I realise that he was instrumental in setting up the Kyoto Protocol, and we need to show him respect for doing that. In fact, I think he defined the terms “global warming” and “climate change”, and I bow before his greater knowledge. I look forward to his speech, when he will regale us with the way that he has worked largely in this area and has developed a system around the world.

But the fact is that the scheme we have now has no economic credibility and no environmental credibility. We are setting up a carbon registry system that we will not even be able to use properly, because we have legislation that will not work.

KEVIN HAGUE (Green): I will take just a short call to outline a few points behind the Green Party’s decision to support the Settlement Systems, Futures, and Emissions Units Bill at its second reading, as we did at its first reading.

First of all I state that the Green Party shares absolutely Labour’s critique of the Government’s climate change policies, but we note that the regulatory framework that this bill sets up will be necessary for the development of a viable emissions trading scheme and carbon trading market in the future. Who knows? Possibly even the groundswell of public opinion and, indeed, the international opprobrium that the Government will encounter in Copenhagen may be sufficient to change this Government’s policies on climate change, and we may find the regulatory framework to be of use sooner than we thought.

In general I will make about four points. The first is that it is important that New Zealand’s regulation of settlements is brought up to date and is in line with world best practice. The Green Party supports the bill from that perspective. Secondly, the bill goes a long way towards clarifying how settlements are made and the mechanisms for resolving issues when disputes arise. That is very important in order to avoid unnecessary litigation, and it will give participants a lot more certainty on how they manage their risk. Thirdly, clarifying who carries the risk at what stage of a transaction is vital if our stock market is to function competitively. We support the bill for that reason also. There is inherent risk in the Reserve Bank being both a regulator and a participant. The Commerce Committee has made some adjustments, and it has retained the Commerce Commission as a co-regulator. That may well address the issue adequately, but we must remain vigilant and monitor that particular aspect.

In finishing—I did say that this would be a short call—I am struck by the contrast between the debate we are having on this bill and the speech the House heard from my friend and colleague Sue Bradford immediately prior to the dinner break. I remind the House that Sue spoke about the warning we have been given over, I guess, the last 18 months of a collapse in the global economy that is inherent in the way it is structured. That economy has acted as a huge imposition on the real economy. When we examine the factors that have been implicated in the warning that we have been given by the crisis that we have faced over the last 18 months, we see that the speculative economy has played a very great role. It is clear from most of the world’s Governments and international organisations that part of the formula for remedying that problem is to have greater regulation of the speculative economy. Members of this House would be familiar with the Green Party’s policy of trying to redirect investment away from the speculative economy and into the real economy, and aware of our proposals for various measures to achieve that: transaction taxes, a capital gains tax, and limitations on losses that could be attributed to loss attributing qualifying companies. All of those measures will be important. Fundamental regulatory change to the way that we handle the speculative economy will be necessary.

In some ways, the adjustments that we are making to the regulatory framework today seem like tidying up rather than rearranging the deckchairs on the Titanic. A much greater reform of that framework will be required, and the Green Party remains committed to holding the House to that obligation. But, that said, the changes the bill makes to the regulatory framework are necessary, and the Green Party will continue to support this bill.

KATRINA SHANKS (National): It is my pleasure to take a call and speak in favour of the Settlement Systems, Futures, and Emissions Units Bill this evening. This bill was first brought into Parliament in September last year by Lianne Dalziel, who was then the Minister of Commerce. The current Minister of Commerce, the Hon Simon Power, is now in charge of it for its second reading and its Committee of the whole House stage.

This bill addresses three areas. The first is to do with settlement systems. The Reserve Bank of New Zealand Act 1989 is amended to provide for the designation of systems that clear and settle products, not just payments. The second area is futures. The Securities Markets Act 1988 is amended to align the regulatory environment for exchanges seeking to operate in both securities and futures markets, and to provide that market participants approved by an authorised futures exchange are deemed to be authorised to deal in future contracts. The third area is emissions units. The Securities Act 1978, the Securities Markets Act 1988, and the Personal Property Securities Act 1999 are amended in order to clarify the legal treatment of emissions units.

This bill had some quite complex issues attached to it, so I take this opportunity to thank the officials. They gave us some fantastic advice and kept on simplifying these complex issues so that we understood them properly and understood the impact that this legislation will have on the sector. I also thank the submitters, who made some very complex, detailed submissions to the Commerce Committee. I acknowledge the NZX for its submission; it was very detailed and very informative for the committee. Our officials used that submission a lot when we were formulating decisions as to what changes we would make to this bill before it was brought back to the House. So I take this opportunity to thank officials for their work.

In 2007 the New Zealand Exchange requested that the Government urgently provide legislation to support an upgrade of its existing clearing and settlement system, and the expansion of its exchange-traded products to include futures and emissions units. In response, Cabinet approved the introduction of this bill, which we saw at the end of last year. A robust market mechanism is necessary to facilitate improved risk management and functioning of New Zealand’s capital markets, to develop the products that exist in the market, including preserving the ability for businesses, and to develop carbon and other derivatives and over-the-counter markets that offer a regulated and authorised clearance of settlements function. If we are serious about getting our economy going, we must be serious about the capital markets as well.

I would like to talk particularly to the emissions units part of the bill. The bill clarifies the regulatory treatment of emissions units to support the development of the market for emission units. This applies both to units issued as part of a statutory scheme, such as the Kyoto Protocol, and to units issued in the voluntary market. It gives effect to this policy through technical amendments to existing legislation. For example, the bill clarifies that the emissions units are to be treated like other forms of property in the Securities Act 1978. As a result, trading in emissions units will not need to meet the requirements of the regulatory regime for offers of securities or the relevant provisions of the Securities Markets Act unless they are part of an investment scheme. The bill also amends the Personal Property Securities Act 1999 to enable persons to take possession of, and security interests over, both statutory and voluntary emissions units.

The select committee made some recommendations in relation to the definition of “emissions units”. It recommended that clauses 27, 33, and 36—covering the definition of “emissions units” to be inserted into the Securities Act, the Securities Markets Act, and the Personal Properties Act—be amended to include units in accordance with any enactment of a jurisdiction within another country, or any international treaty or protocol. That is very important. These clauses should also be amended to include the storage of greenhouse gases in the definition. The carbon market is still quite new, so the definition of “emissions units” should be broadened to allow for the evolution of this market, and the changes that we will see in the future. This might involve technological developments in the way carbon is managed and stored, and developments in the sources of carbon credits. Regarding sources, for example, the committee noted that “increasingly carbon credits are being issued by state or local governments, under international treaties and protocols, and through legal or contractual arrangements, in addition to being issued by central governments.” The definition specified in the bill needs to be wide enough to cover all potential sources of credits so that this bill stays relevant for a period of time.

The bill is designed to align New Zealand’s clearing and settlement system with international best practice and to facilitate trading in futures and emissions units. It provides that trades in securities and other products can be cleared and settled through designated systems that meet the expectations of international and domestic participants in New Zealand’s financial sector. It aligns the regulatory environment for exchanges seeking to operate in both securities and futures markets, and provides that market participants in approved and authorised futures exchange are deemed to be authorised to deal in all these future contracts. This bill clarifies the regulatory treatment of the emissions units to support the development of the market for emissions units. That is just one part of the changes that we made in this bill. I will leave my colleagues to expand on the other two parts. It is my pleasure to support this bill tonight. Thank you.

Hon DAVID PARKER (Labour): I thank the previous speaker on the Settlement Systems, Futures, and Emissions Units Bill, Katrina Shanks. I thought her contribution was thoughtful and useful in terms of the way in which carbon markets could evolve. I agreed with the comments she made.

I think it is probably timely to reflect on why we are creating carbon units in New Zealand. The world has to reduce carbon emissions if we are to avoid some of the catastrophic changes that are predicted by many scientists to occur if carbon dioxide and other greenhouse gases continue to build up in the atmosphere. We have changes in temperature, rising sea levels, changes in patterns of food production, acidification of oceans, loss of reefs, and loss of species in the sea that produce calcium for shells—they will not be able to produce that calcium because of higher levels of acidity in the ocean. These are very serious matters. The theory that lies between the creation of carbon rights and emissions pricing is that we need to create an economic incentive for the businesses that produce the goods we all consume, so that businesses are encouraged to produce goods and services for us to buy that do not cause carbon emissions, and to make it more profitable for them to produce a different product where those carbon emissions are absent.

We do that by charging emitters for the cost of their emissions. We put a price on carbon dioxide, methane, and other greenhouse gas emissions, and that price is avoided by those who produce goods and services in a way that does not produce carbon dioxide and other emissions. So those emitters that are going down the clean route have a price advantage, compared with those that are producing carbon emissions and then suffering a price disadvantage. In that way we bring forward renewable electricity instead of coal-fired electricity. We change lots of little decisions in society. It becomes cheaper to run a light car, so an aluminium car becomes more viable compared with a heavier steel car, because the aluminium car uses less fossil fuel and therefore has lower carbon emissions. All of these complex pricing decisions, which we will never notice, happen because we price emissions. This bill sets up some of the regulatory framework to make sure that those carbon obligations can be dealt with in commerce in the way that other securities can, so this bill is worthy.

The bill was introduced by the previous Government over a year ago, and it has taken a year for this Government to get it back from the Commerce Committee, which is a bit long. Why did the New Zealand Exchange, as the previous speaker said, come to the Government with a sense of urgency a year and a half ago to get this legislation progressed? The answer to that is that at that time there was an opportunity for New Zealand to lead in this way, given that emissions pricing was clearly on the way in New Zealand and around the world. Given that that was going to happen, our stock exchange figured that it might as well take advantage of the commercial opportunities that arose in any way that it could. It spent quite a bit of money on developing a business plan to take advantage of the fact that New Zealand was leading in this arena, so that it could take advantage of the service industry opportunities that would arise from New Zealand being at the forefront of developing this new market.

That did not mean that New Zealand was going to slay the economic interests of emitters. We were not going to cause aluminium smelters to shut down or farming to go broke. We were not going to cause the steel mill to go broke, or anything like that. But we were going to start pricing emissions, because since the start of 2008 New Zealand has already had to face the cost for increasing emissions. It was important that that reality was reflected in the economy, and that we sent the signal to emitters in New Zealand to stop producing increases in emissions at a cost to the country. We do that by making them pay for some of their emissions.

Unfortunately, in the last year since we have had a change in Government the impetus has been lost. Nowhere is this clearer than in respect of what has happened with the New Zealand Exchange. It has now effectively abandoned its efforts to be a leader in this field. It has given up on the business opportunity that had arisen as a consequence of the previous Government’s actions. That has had a real economic effect on New Zealand: instead of New Zealand having an additional profit centre as a consequence of our leadership in this area, New Zealand has a Government saying that somehow we should not lead in this area, despite the enormity of the environmental challenge. It says that we should just sit back and be a follower of the rest of the world. One of the prices of being a follower, rather than a leader, is that we cede the economic opportunities of being the advanced guard in running the related service industries for other jurisdictions. Instead of New Zealand having that economic opportunity, it is falling instead to other countries around the world, including Australia. It is with sadness that I reflect on the fact that although this bill is still necessary, it does not provide the point of advantage it would have had for the New Zealand Exchange and the service industry, because New Zealand has lost both its moral authority in this area and the business advantage it accrued from the fact that the previous Government was treating these issues responsibly.

I do not think there is much more to say than that. Fewer units will be traded than would have been the case, because of course the softening of the emissions trading scheme on major emitters is such that billions of dollars of units will now be paid for by taxpayers over the years rather than by emitters. They will have to buy fewer emissions units in the market, therefore, there is less of a need for this bill than would otherwise have been the case. That is another reason why the business opportunity will not be as great for the service industry. With those comments, I say that the Labour Party is happy to support the bill, but I feel that it is sad that the business opportunities that surrounded the service industry have been lost to New Zealand because of the short-sighted measures the National Government has taken. Thank you.

JONATHAN YOUNG (National—New Plymouth): It is my pleasure to stand and speak in support of the Settlement Systems, Futures, and Emissions Units Bill. I believe that our Government has brought changes to the emissions trading scheme because we are seeking to bring a better balance between our economic opportunities and our environmental responsibilities. We felt that the advantages that the previous speaker, the Hon David Parker, spoke of would bring very strong disadvantages to other sectors of our community, so we believe that our more measured approach is far more sustainable.

This bill, which was introduced by the Hon Lianne Dalziel towards the end of last year, was reinstated in the 49th Parliament in December because it is essential legislation, particularly with regard to emissions trading in the global sense. Putting regulation in place for that to happen is very important. The member in charge of this bill is the Hon Simon Power, the Minister of Commerce. It returned from the Commerce Committee in June this year.

There are a number of issues that this bill addresses. It is a very complex bill. Most New Zealanders probably will not understand it, but people in the foreign exchange, securities, and futures area of work and interest will be very interested in this bill. One of the areas that was discussed in the select committee was the choice of a regulator for designated settlement systems. Several submissions questioned the efficiency of appointing joint regulators for the designation of settlement systems. However, we recommend the joint regulator model be retained because it is effective, without compromising administrative efficiency.

We considered these two potential models of regulator: the Reserve Bank of New Zealand as a sole regulator with a duty to consult with the Securities Commission, and the Securities Commission and the Reserve Bank as joint regulators. It has been suggested that the oversight of settlement systems is primarily a matter of prudential regulation, and, as such, the Reserve Bank is best placed to perform that role. However, the settlement of transactions per se is primarily a regulatory matter for the Securities Commission. Thus, both the Securities Commission and the Reserve Bank have a legitimate interest in the operation of settlement systems in the financial sector. To provide for a sole regulator with a duty to consult, the bill would need to be amended to provide protocols around the duty to consult the other party, its role in the process, and the extent to which the views of the other party need to be taken into account. That would be less flexible than providing for joint regulators that may coordinate internally and more seamlessly.

The assessment of an application for designation is a complex task. The work of preparing guidelines in assessing an application is split between two regulators under the joint regulator model. Such work can be allocated according to the expertise of the agency and its particular interest in settlement systems. In this regard, the joint regulator model is underpinned by provisions in the bill that allow the joint regulators to share information and have regard to, and rely upon, any relevant information, work, or matters held or produced by the other joint regulator. There are expected to be only a handful of applications for designation during the life of the legislation. Potential opportunities for both the applicants and the regulators to refine procedures and reduce costs over time are, therefore, low. One application will likely come from the Reserve Bank in its role as operator of Austraclear. As a joint regulator, the Securities Commission can be a witness to the separation between the Reserve Bank’s role of settlement system regulator and operator. The joint regulator model does not require applicants and designated settlement systems to duplicate effort across two regulators. The applicants are able to choose which regulator to lodge their application with.

As I mentioned, this is a complex bill and a complex matter. I thank the officials, who have put in a tremendous amount of work in preparing a bill that has this level of importance for securities, settlements, and emissions trading in our country. Thank you.

JOHN BOSCAWEN (ACT): It is a pleasure to take a call in this debate on the Settlement Systems, Futures, and Emissions Units Bill. This bill is designed to align New Zealand’s clearing and settlement system with international best practice and to facilitate trading in futures and emissions units. The bill contains various technical amendments to existing legislation, and Katrina Shanks listed the three Acts that are being amended. The bill is designed to facilitate the development of markets for emission units.

The Hon Nathan Guy, Sam Lotu-Iiga, and Katrina Shanks have already outlined in some detail the inner workings of this particular bill. I do not wish to repeat what they said, other than that I would like to acknowledge the work of the officials who diligently attended the Commerce Committee, of which I am a member. In particular, I thank submitters to that committee, because although there were not a large number of them, they brought a lot of expertise. However, I have to say that in respect of some of them I could not help thinking that they were there out of self-interest. I also acknowledge the work of the chair, the Hon Lianne Dalziel.

I would like to spend the bulk of my speech responding to the comments of Charles Chauvel and David Parker. They used this opportunity to open up the debate to the whole wider issue of the emissions trading scheme. I cannot leave some of the comments of Mr Parker and Mr Chauvel unchallenged. However, let me start by saying that certainly in one respect I totally agree with Mr Chauvel. I think it is a disgrace that the legislation to amend the emissions trading scheme is being rushed through this Parliament with such undue haste. It is the role of Parliament to question and investigate the work of the executive and the bills it puts up. Submissions closed on the amendments to the emissions trading scheme on 13 October, and the Finance and Expenditure Committee is due to report back by 15 November. In the space of just a month, we have to analyse some 380 submissions, hear the views of the officials, listen to the recommendations, and debate those recommendations.

As a matter of public record, certainly in the early stage, there were a number of submitters who had less than 24 hours’ notice. Labour members on the Finance and Expenditure Committee regularly asked the submitters to the committee when they had received the advice that they were required to attend. Some of them had been given 12 hours’ notice, some even 15 hours’ notice. I think the record was probably 4 hours’ notice. One gentleman took a phone call at 4 o’clock on a Thursday afternoon and was before the committee at 8 p.m. that evening.

I raise those points because I think the bill to amend the emissions trading scheme is being done in undue haste. Why is that? We all know that New Zealand is a signatory to the Kyoto Protocol, and the world community is looking to extend the protocol at the upcoming meeting in Copenhagen. It seems that New Zealand is hell-bent on pushing through its amendments to the scheme before that Copenhagen meeting. But those amendments are based, in substantial part, on the proposed scheme for Australia. I say “proposed scheme”, because the scheme is not legislated for in Australia; it has not been passed. The United States does not have emissions trading legislation.

Earlier this afternoon Mr Phil Goff, in seeking to embarrass the Government, made a point about an increase in power prices. He accused the National Government of pushing up power prices. Well, nothing will do more to push up power prices, which will result in subsidies and huge massive profits, than the emissions trading scheme. As Mr Parker said in his speech earlier, the emissions trading scheme seeks to put a price on carbon. It seeks to increase the price of energy, and therefore every single New Zealander will pay a higher price for electricity. It is already legislated for; the scheme is there. It currently takes effect on 1 January next year. The National Government’s solution is to delay its introduction and to reduce, somewhat, the costs for the first 2½ years, but we will all pay a higher price for electricity.

But it is worse than that. The generators that generate electricity from hydro sources and from other renewable sources will get windfall profits. So TrustPower, which owns a suite of hydro dams and is a company in private ownership, along with Genesis and the Meridian Energy, which are both companies that are State-owned enterprises and also have a suite of hydro generation and renewable electricity, will all have windfall profits. The emissions trading scheme, the one that is currently on the books and the one that is in the process of being amended, will result in a higher price of electricity. Those generators of electricity that generate at a hydro dam, or through a geothermal field, will not pay that price of carbon. They will receive a higher price for their electricity and they will make windfall profits.

The Green Party member commented on Sue Bradford’s valedictory statement made this afternoon, when Sue Bradford talked about wanting to be known for more than the amendments to section 59 of the Crimes Act. She referred, in part, to her desire to reduce the deepening gap between rich and poor. I suggest that nothing will do more to make that gap wider than raising the price of the most basic commodity—electricity.

I wish this were just an issue of looking to protect the environment—we have signed the Kyoto Protocol—but it is not. We heard from a number of submitters who have forestry interests. In particular, we heard from Te Arawa Group Holdings, which is owned by a number of iwi who own in excess of some 30,000 hectares of central North Island forest. This forest is capable of being converted into pastoral farm for dairying to create wealth and employment for New Zealanders. But Te Arawa Group Holdings is not able to convert that forestry into pastoral land to create wealth for New Zealanders. To do so would require the company to surrender some 800 emissions units at a current market price of $25 a unit or $20,000 a hectare. Te Arawa Group Holdings estimated that the cost to it of the current emissions trading scheme on the books is some $600 million. What will the National Government’s amendments to the scheme do? They will increase that cost by a further $30 million. So Te Arawa Group Holdings was up for a cost of $600 million, but it will now cost $630 million.

It would not be so bad if Te Arawa Group Holdings were in a position where it could chop the trees down on the land that was good for dairy conversion and replant those trees on other land. The company would like to do that; it has offered to do that. New Zealand has much terrain that is mountainous and is not suitable for pastoral and intensive farming. The company would like to replant those trees, so that in time those trees in their new location would sequester as much carbon as they do right now. Under the terms of the treaty that we signed up to, the company cannot do that. If it chops those trees down, it is up for a charge of $20,000 a hectare.

I understand that New Zealand is going into the Copenhagen round in the hope of negotiating an offset so that Te Arawa Group Holdings, and others—like Wairākei Pastoral—can replace those forests on other land. But there is no guarantee that they will be able to. It is quite likely that many billions of dollars will be taken from Māori in terms of a diminution in the value of land that they have been given for Treaty settlements. Why the rush on this bill? In 5 weeks’ time we will know the outcome of the Copenhagen round. Why the rush? I say to Sue Bradford that she has every right to be concerned about the deepening gap between rich and poor. New Zealand is not a rich country. We are a heavily indebted country, yet those 30,000 hectares in the central North Island could be converted to dairying and could earn overseas exchange for New Zealand, but we have signed up to a treaty that denies those people, and others like them, the opportunity to do that.

I could go on to talk about the fact that although amendments are being made to allow an offset, or allow a phase-in period—Mr Chauvel was very keen on his scheme—it would put New Zealand industry at a massive disadvantage, and would cause huge additional costs and job losses. Thank you.

AARON GILMORE (National): I will talk a little bit about the Settlement Systems, Futures, and Emissions Units Bill. It represents another step along the way of our putting in place a sustainable emissions trading scheme. This bill concerns emissions units and futures trading.

I will also fisk a bit. A bit of fisking was going on in prior speeches, particularly from the other side of the House. We heard from Mr Chauvel that we are in danger of becoming the fossil in Copenhagen. Well, under his Government’s emissions trading scheme, the only thing in danger of becoming a fossil was the New Zealand economy. Thousands of New Zealanders would have been put out of work, and for what? So that Labour could go to some international convention somewhere and say: “Look at us; aren’t we so clever?”. Well, we thought this through a bit more and we think that jobs are important. In the worst recession that this country has had for over 60 years we think that helping industry through the transition of introducing an emissions trading scheme is incredibly important. That is a good thing to do. People who have jobs in trade-exposed industries will thank us, but I tell members that they will not be thanking Labour.

This bill, along with our other emissions trading bill—the Climate Change Response (Moderated Emissions Trading) Amendment Bill; the greater, parent bill—is a good step in the right direction. It clarifies the regulatory treatment in support of, and develops the market for, emissions trading, and that is a good thing.

A party vote was called for on the question, That the Settlement Systems, Futures, and Emissions Units Bill be now read a second time.

Ayes 115

New Zealand National 58; New Zealand Labour 43; Green Party 7; Māori Party 5; Progressive 1; United Future 1.

Noes 5

ACT New Zealand 5.

Bill read a second time.

Bills

Biosecurity Amendment Bill

Second Reading

Hon GERRY BROWNLEE (Acting Minister for Biosecurity): I move, That the Biosecurity Amendment Bill be now read a second time. The bill was referred to the Primary Production Committee in early September, and although no public submissions were received by the closing date of 22 September, the committee has done a thorough job in examining whether the bill will achieve its purpose, and has recommended it should be passed with some amendments.

Before I outline those amendments to the House, the Hon David Carter, the Minister for Biosecurity, wished to thank the committee for its work. The committee’s meetings have been notable for the sense of common purpose with which members from both sides of the House have come together to review this bill. The Minister appreciates their involvement, including that of the Green Party, which attended the committee meetings in a non-voting capacity. Every member of the committee shared the main aim of ensuring that our biosecurity systems are soundly based and deliver a high level of protection to this country. That protection goes beyond recognising the importance of agriculture to our economy. Improving biosecurity protection also safeguards our health—the health of human beings and the unique plants and animals that feature in New Zealand’s environment.

In fact, the committee’s concern about ensuring high levels of biosecurity protection extended beyond the measures outlined in this bill. In its commentary as reported to the House, the committee has noted that more needs to be done to manage biosecurity at international airports. I agree. The scope of this bill affects only a small and very specific part of biosecurity law. Let me make it clear that this short bill is about increasing the penalties for international passengers who offend against the law, either by mistake or by carelessness, when they are asked to declare whether they are carrying any risky items such as food. As the Minister for Biosecurity stated to the House during the first reading of this bill, it is only one part of a package of measures to improve biosecurity at the border. Many of the changes under way are operational issues, so they do not need any law change to make them happen.

It might be helpful for the House if I briefly go over that ground again. The Government has consistently stressed a need for the Public Service to constantly re-evaluate the way it does things, and to be innovative in improving the quality of its services. In biosecurity, as in so many other areas, it makes sense to focus effort in the areas where risk is higher. This bill will support moves to improve our handling of the risks posed by international travellers coming to this country.

In the future, arriving passengers will be profiled, and our efforts will be directed primarily at those who are considered to be high risk. Low-risk passengers will be allowed to pass through with less scrutiny, but they will still receive attention and will be subject to the higher penalties that this bill enables. The better targeting of biosecurity risk at the borders is not just about risk-profiling work; it includes a whole package of measures, including better targeting of, and translated, publicity material, and closer cooperation between border agencies both in New Zealand and Australia, including information sharing between our two countries.

There is no doubt that the great majority of international travellers are happy to comply with the law once they are properly informed. Targeting communications to specific groups of people will help that message get through in the most effective way. We will make travel much less restrictive for low-risk trans-Tasman passengers who comply, but those people who fail to comply with the requirements will be hit with the stick of higher penalties.

The committee has been rigorous in examining this bill and the range of improvements to biosecurity risk targeting that lie behind it. I am pleased to note that there was no objection to increasing the penalties for travellers who carelessly make an incorrect declaration about some of the goods that they are carrying. In fact, the committee felt that the bill did not go far enough. In its original form, the bill would have increased the maximum penalty on court conviction for this offence from $400 to $800, but the committee felt that a higher penalty was called for, and recommended that the upper limit be raised to $1,000 to more accurately reflect the serious harm that could be done to our economy, environment, or human health as a result of biosecurity breaches. I am sure that figure will ratchet up over the years, as there is a need to ensure that court fines keep pace with rising costs, and, therefore, the pernicious aspect of the penalty on those who choose to offend will also rise.

The committee also carefully examined a number of other points in the bill. As originally drafted, the bill was to take effect through a separate Order in Council. It was drafted in that way because the bill moves the existing infringement offence out of the Biosecurity Act into regulations. That means supporting regulations must come into force at the same time as the amendments are made to the Act, otherwise there would be a gap after the infringement scheme had been removed and before it was re-enacted by the new regulations.

When the bill was passed by the Regulations Review Committee, the committee recommended fixed commencement dates. As a result, the bill has been reported back to the House with amendments so that it will come into force no later than 12 months after the Royal assent. It can still be brought into force earlier, through an Order in Council, if all operational details such as printing and distributing the new infringement forms and pre-printed publicity material are ready to go before the 12 months are up.

The committee has also recommended a change to the wording of one clause in the bill for the sake of clarity. Clause 8 is about setting the regulations I have already referred to. At present, two offences under the Act may be dealt with by issuing an infringement fee or instant fine. When passed, the bill will make it possible to extend the scope of the infringement scheme to apply to other offences. The committee has recommended a change to the wording to clarify that the infringement scheme can be applied only to offences already set out in the Act, just in case someone was under the impression that entirely new offences could be created arbitrarily, without the scrutiny of Parliament. I think that is a sensible move, although I would say that, quite without the scrutiny of Parliament, there are any number of people who wish ill in this regard who are quite capable of devising new offences themselves.

In any event, I thank the Primary Production Committee on behalf of the Minister for Biosecurity, and I thank the Regulations Review Committee for its work. I am confident that the bill being reported back to the House is stronger for the committees’ considerations.

Hon DAMIEN O’CONNOR (Labour): The Labour Opposition will be supporting the Biosecurity Amendment Bill. It is, as the Minister Gerry Brownlee says, one more step in trying to uphold the highest standards of biosecurity for people and goods coming into this country. It is, in fact, a bigger stick to wave around at the people who come across our borders. The Primary Production Committee, in its wisdom, has endorsed that. In fact, it made a move in the direction of increasing the size of the stick by saying that the maximum penalty could be up to $1,000, whereas the bill originally recommended $800. That acknowledges the importance of the issue.

However, I put on the record that the Government’s making this change at the same time as it is cutting the biosecurity budget raises concerns for the Opposition. It is important that we uphold the highest standards. It is important that we indicate to people who knowingly or unknowingly bring into this country unwanted goods or organisms that they will be penalised, and that that penalty is appropriate. It is important that we make sure we give the appropriate warnings to those people; the bill has been amended to make sure that we can print the correct material in order to align it with the incoming regulations and the enforcement of the Act. That is great; again, that was due to the wisdom of the select committee. But we have to make sure that we warn people in a way that is clear and that can be understood. I put on record the fact that many of the forms are confusing for people coming into New Zealand, particularly those for whom English is a second language. So in supporting the passage through the House of this bill, which is a larger stick, I say there is an obligation on the Government to make sure that the information supplied to people before they hop on the plane, while they are on the plane, and before they pass through our borders is clearly understood, and that they understand they will be caught, prosecuted, and fined for bringing into this country illegal or unwanted goods and organisms.

Many of those organisms threaten our biological economy. I read a statement from Federated Farmers that pointed out that, should foot-and-mouth disease ever come into this country, it would cost our economy $6 billion in the first year. Those potential harms to our economy are significant. That is why we have to have legislation like this.

I refer the House again to the collective wisdom of the select committee, Government members included. It said in the report back in this bill that there is some concern, as the committee remains unconvinced that sufficient work is being done in regard to biosecurity risk profiling at airports. The Prime Minister’s enthusiasm as Minister of Tourism has to be welcomed for encouraging as many Australians into New Zealand as possible, but in lowering the barriers we cannot risk compromising our biosecurity status. The select committee pointed to problems that still have to be resolved prior to implementing the changes allowing easier passage for Australians into this country.

Labour supports the bill. We urge all Government members to read the report back from the select committee. We expect the Government to get on and address the points raised by the committee.

SHANE ARDERN (National—Taranaki - King Country): The Government enthusiastically supports the passage of the Biosecurity Amendment Bill. There was a lot of discussion about it in the Primary Production Committee, as the previous two speakers have alluded to. The issue that was of concern to the select committee was that in the interests of streamlining our borders with Australia, in particular, but also of streamlining our borders full stop, there is an element of risk. It is always a debating point about how much risk is too much and how much is not enough. The debate on that point took place with some enthusiasm, and the issues that concerned the committee that are still unresolved are those regarding the digital transfer of images from Australia to New Zealand.

The proposal under this bill is that in streamlining the processing of a business person who flies from Australia, say from Sydney, to Auckland in the morning and then flies back in the afternoon, carrying nothing more than a briefcase, that traveller should be exposed to exactly the same X-ray scrutiny as someone who is travelling from further afield or who had been away from home for longer. The rationale is that that person could have an apple in his or her briefcase that carries fruit fly or the like, which could have a devastating effect on New Zealand. The proposal is, of course, that his or her briefcase will be X-rayed in Australia, and the image will be transferred to New Zealand for investigation, for inspection, prior to the traveller arriving in New Zealand. That sounds as though it is perfectly rational, with modern technology. But there are some property rights issues about who owns that image, and whether our biosecurity personnel and customs personnel will have access to it. Those issues have to be resolved.

The moving of the regulatory powers with regard to penalties from the legislation to regulations seems very sensible, in the sense that we do not know until we have tried using a penalty whether it has the desired effect. Our instant fine until now has been $200. Most people will acknowledge the comments made by the previous speaker, Damien O’Connor, that the potential risk to our biodiversity and our economy through something like fruit fly or foot-and-mouth disease are not worth contemplating, in the sense that it would bring New Zealand’s economy back to Third World status in a very short time. So at one level we have to be very vigilant about how we handle these things, and at another level we have to be practical about ensuring the free flow of people in and out of our country. Clearly a $200 fine has not been a strong-enough deterrent. When we look at the extent of biosecurity incursions over the last few years, we see that, in fact, in a year 8 tonnes of meat—a big truckload—was intercepted at our borders, either in people’s personal hand luggage or on their person. That was 8 tonnes of meat!

We have to ask these questions: how would foot-and-mouth get into New Zealand, and how much risk should we take? We know that people tried to import that meat into New Zealand illegally, because we intercepted it. That means that our biosecurity staff are doing a superb job, and they deserve a bouquet for that. But we also know, because of their own research, that as much as 10 percent of illegal imports get through. Allowing that level of risk can only be described as creating the potential for there to be a devastating effect on our economy. We are looking very closely at what can be done to enhance our surveillance—at the amount that gets through and the amount that does not get through—and at the penalties that we should put in place to prevent illegal imports from happening or to deter people from trying to make them.

The issues around the $200 instant fine have been well debated. There was some argument—and probably with some credibility; it is very hard to say, but we will know over time—about whether, if the fine is increased to $400 or to a higher amount, people would then make the call to pay the instant fine on the spot or would decide to take it to the next level. People are allowed 14 days in which to pay the instant fine, and if they do not, they go though a court process. The argument put up against imposing too high an instant fine is that too many people will take matters to the next level, and at that point it would become a huge cost not only to the State but also to the court system—that it would become a fairly complicated process. It was argued that despite the fact that people could potentially end up with a criminal record, they would still argue the toss, particularly over what could be described as a minor offence, like having an apple in a briefcase, which could bring in fruit fly, and take it to the next level. So the committee looked at whether the earliest penalty, or the minimum penalty, that could be imposed at the border was high enough. At $800 it decided no, and that the amount should be lifted to $1,000 in order to act as a greater deterrent.

I am pleased to say that the Government has accepted those recommendations. There was a unanimous vote in the select committee, and that was almost the case in the House, I hasten to add, which is an unusual set of circumstances in the parliamentary process. Clearly, the bill has the will of the majority, and I look forward to its passage.

SU’A WILLIAM SIO (Labour—Māngere): Thank you, Mr Chairman, for the opportunity to speak and make a contribution on the Biosecurity Amendment Bill. When I listened to the speech of the chairman of the Primary Production Committee, Shane Ardern, I got a sense that this bill does not convey what he was trying to convey in his speech. He was trying to convey the sense that the Government was doing something, but the reality is that I do not get that sense at all. There was a lack of ambition in the rhetoric that we just heard. When we look at the bill, we see that it only talks about increasing the penalty from $400 to $1,000 for the poor soul who comes through our borders, who perhaps may speak a different language and not be able to fully understand English. That is what this bill is about. It is a shame that although he talked about what we could have done as a country, that is not what the bill does.

As the member for Māngere, where Auckland Airport is located—we call that place the gateway to New Zealand, the gateway where New Zealand touches the rest of the world—I know that biosecurity is important to the constituents there. It is about protecting our borders and being able to ensure that our economy, our environment, and human health get the best resources in order to ensure that they are protected. I follow my colleague the Hon Damien O’Conner in saying that Labour supports this bill. It is not the kind of work we ought to be doing in order to secure our borders. The sad thing is—

Shane Ardern: There’s more to come.

SU’A WILLIAM SIO: Let us just wait and see. Biosecurity is important in order to protect our border and our interests. It is particularly important in this day and age because of the growing international relationships we now have as we sign up—first under Labour, and now under this Government—to a lot of trading agreements with our major trading partners. It is also important because we are seeing a lot of interaction between New Zealand and other countries around this world, and, of course, more recently continual climate change.

The sad thing about this whole bill is that we are tinkering around the edges but at the same time the Government has cut $2 million from the biosecurity budget, and 56 people have lost their jobs. The kind of work we are talking about in biosecurity is labour-intensive. We need people on the ground. We need people to be monitoring our systems. We need people to engage with similar countries and to share intelligence before biosecurity risks arrive at our borders. Then we need people to conduct the work that needs to be done after these things have come through our borders. That will be particularly important as we get closer to 2011, when we expect about 60,000-plus people to come through our borders.

The other sad thing is that we are spending a lot of time talking about this when the more important thing we should be talking about is job security. Obviously, the sacking of 56 people means that that is not a priority for this Government. We need to talk about why this Government will be raising accident compensation levies for motorcyclists. I do not know whether other members have received emails from a range of people across this country who are very, very unhappy about that. We need to be talking about why this Government has cut 80 percent of the funding that goes into adult and community education, and, in particular, education that is needed as we build the skills base of our population as we head into the future. When we come out of this recession it will be important that we have a skilled workforce that is prepared to take up future opportunities.

I do not want to prolong this debate, because, as Labour members have said, it is a shame that this bill has been introduced at this time. It is minor tinkering. We support the bill, but we should be doing a lot more than what this bill entails.

KEVIN HAGUE (Green): The Green Party supported the Biosecurity Amendment Bill in its first reading and will continue to support it in its second reading.

Biosecurity seems to have four different phases. One is prevention of biosecurity risks occurring in the first place; the second is detection of those risks, typically at or around the border; the third is stamping out incursions where they have got through our detection process; and the fourth is mitigation, where the incursion cannot be stamped out and we are, instead, looking to ameliorate the worst effects. It is obvious that, just as in my field of health, where we look at exactly those same phases in trying to intervene in a person’s disease progression, our emphasis must be on the first phase—on prevention. So we do everything that we can to prevent the biosecurity risk in the first place; if that fails, we then throw as much resource as we possibly can into the detection process.

This bill deals largely with the detection process, but the Government believes that the increased fines that the bill provides are an important element in the prevention process. It is really those first two phases of the biosecurity process that I want to focus on tonight.

In relation to prevention of biosecurity risks, I begin by giving praise to MAF Biosecurity. I had the privilege of being able to join the Primary Production Committee—and I thank Shane Ardern and the members of the committee for the opportunity to do so—during the consideration of this bill. During that time we heard from MAF Biosecurity about the processes it uses to educate travellers about biosecurity risks. I was impressed by the lengths to which MAF Biosecurity is going in that regard.

Travellers coming into the country are just one aspect of the biosecurity risk that we face. There is a very much larger risk that we face around goods and freight coming into the country through shipping containers and shipping holds. It is much more difficult to prevent biosecurity risks in that regard, because many of the operators have commercial incentives to skimp on the processes that might be used to reduce or eliminate biosecurity risks to this country.

I point out the unnecessary risk we often pose to ourselves by our needless importation of goods into this country. I have spoken in the House several times about our importation of palm kernel. It is a classic example of a product that we have absolutely no need to import into New Zealand. The biosecurity risks that we import with that product are substantial. I have spoken in the House, as has Damien O’Connor, about the risks in relation to insect infestations of palm kernel shipments that arrive here. I have also spoken about the risk of foot-and-mouth disease from palm kernel. We are importing this stuff from a region of the world where foot-and-mouth disease is endemic. The stuff is coming into the country and being fed out, and farmers are reporting soil contamination. That soil contamination can occur only after the point in the process where the palm kernel is exposed to heat. In other words, the contamination is occurring after the only process that might have done something about foot-and-mouth disease. We know that foot-and-mouth disease is viable in soil and water for extended periods of time. This is a massive risk that we are taking, and we are taking it entirely needlessly.

This is the kind of madness that can result in particular from free-trade agreements. I raise the topic because it is timely. We have just signed another free-trade agreement, with Malaysia, which is, incidentally, a country in which foot-and-mouth disease is endemic. Free-trade agreements encourage the import of goods to contribute to a consumption-led economy, the very kind of economy we do not need; the kneecapping of local industries—in the case of palm kernel, the grain farmers of New Zealand, who are suffering very badly as a result of this trade—and the taking of entirely unnecessary biosecurity risks. In the prevention phase there is a whole bunch of risks that we are taking that we do not need to take.

In relation to detection, these increased fines are effectively a trade-off that the Minister for Biosecurity proposes. They are proposed as a disincentive for travellers to bring in with them biosecurity risks, on the basis that travellers will pay closer attention to their luggage and weed out those risks. We are making this trade-off because the Prime Minister wants the travelling time from Australia to New Zealand to be 8 minutes shorter. The goal is the saving of 8 minutes on a trip of multiple hours. For that, we are sacrificing our approach of universal screening to one that is based on risk profiling.

I want to raise in the House some figures that the Primary Production Committee heard from MAF Biosecurity about that issue. I hesitate before doing so to point out that the select committee itself, as Shane Ardern has noted, and I thank him for that, has indicated to this House that it is not convinced by the risk-profiling approach. More work needs to be done on that and the select committee is absolutely right. MAF Biosecurity found in its trial of the risk-profiling approach that those passengers who were deemed to be low risk and went through the low-risk trial lane nonetheless yielded some 51 items of biosecurity risk. So out of the 1,186 seizures of biosecurity risks, most of them were from passengers deemed high risk, but 51 came from passengers deemed low risk. If we screened only those passengers deemed to be high risk, those 51 risk items would have entered New Zealand. Of those 51 items—I will not run through the whole analysis—some 17 of them, for example, were fruit fly host material. Well, I have spoken in the House before, in my first reading speech, about the catastrophic impact of a fruit fly infestation in the Bay of Plenty in just the first year.

Another 18 of those 51 risks were around footwear that had not been properly cleaned. What is the risk around improperly cleaned footwear? Well, it is the importation of soil, which can contain pathogens. I have spoken about the risk of foot-and-mouth disease from soil, but also in the news in this last week or so I have talked about the risk to our iconic kauri species from another soil-based pathogen.

These are risks that the Government proposes to take in return for saving 8 minutes. I have spoken in the public domain in the last week about the Government being asleep at the wheel on biosecurity. The Minister for Biosecurity has accused me of being alarmist. Well, I am alarmed. I am alarmed at the risk, and so should this House be and all New Zealanders. This is a massive risk; we do not need to take it. The Green Party will support the bill.

COLIN KING (National—Kaikōura): It is a pleasure to be speaking in the second reading debate on the Biosecurity Amendment Bill. I would like to start by saying that it is a bit rich when the Opposition talks about the Government sitting on its hands and cutting the budget, when over the 9 years that members opposite were in Government there were 333 incursions. We had the painted apple moth, didymo, the varroa bee mite, and Didendum, to name a few. To be honest, if we were going to get foot-and-mouth disease, we would have got it under that Labour Government. If we were going to get bovine spongiform encephalopathy, we would have got it under that Government. It is a bit rich, and probably an indication that Labour members are out of touch with the farming community, when the backbenchers parrot away about things they do not know much about. They just read off a sheet of paper, with no real passion or anything like that.

I tell the shadow spokesperson for agriculture and biosecurity that it was very interesting to research the reduction in the biosecurity budget. It actually related to two particular programmes of eradication. One programme, which related to the red fire ant from the Whirinaki area, has come to an end. It has been declared successful as of 4 p.m. on Wednesday, 22 April 2009. The second programme is close to eradicating the southern salt marsh mosquito, which was found in a number of salt marshes around New Zealand, but is holding on in one area, down in Marlborough at the mouth of the Wairau. The outcome is looking very good, but the programme will carry on for another 12 months when traps will be checked to make sure that that mosquito is eradicated.

I congratulate MAF Biosecurity New Zealand. Those two eradication programmes and costs within the budget are no longer required. I put that on the record so that the erroneous comments on the other side of the House are put into context. They were two individual programmes that have been successful, unlike a lot of the failures made by members opposite when in Government.

We stop and think about the varroa bee mite when we look at the second reading of the Biosecurity Amendment Bill. Procrastination by the previous Labour Government allowed the varroa bee mite to get down in the South Island, and there was no coordination whatever under that Government. We can see why those members are in Opposition, which is where they should be.

But back to the bill. It is always good to see the Primary Production Committee working collegially. There are a couple of things that the two main parties in this country do agree on; one is trade and the other is biosecurity. It is on record now that we want to see a lot more rigour in resolving the tension that exists between tourism and our primary sector export industries.

When we look at the issue in context we see that New Zealanders and Australians do very well. They are the lowest offenders. But 4,700 infringement notices were handed out, which makes this bill very, very relevant. Of those notices, 1,361 were given to New Zealanders. It is important that we toughen up the procedures. Giving people 14 days’ leeway to pay their $400 instant fine is very reasonable. The select committee was informed that setting a fine at $200 led to a compliance percent rate in the high 90s. However, if memory serves me correctly, a person who featured on Border Patrol the other night held out for the maximum number of days before paying the fine. That is why the select committee was of the view that a $1,000 fine was quite reasonable and appropriate. That is not the whole cost—there are court and conviction costs—so the $1,000 figure needs to be seen in that light.

Let us look at the cost of some of the incursions that have happened. Didymo is projected to cost this country $285 million, and the varroa bee mite, which has decimated clover legumes in the South Island, is projected to cost $300 million. In the long term, those costs affect our pastoral industries.

This bill is particularly tight and is targeted at ports and points of first arrival—ports being both airports and seaports such as those in Auckland where international cruise liners come in. We can never understate the importance of this issue. Although I become agitated at some of the piousness and self-righteousness that emanates from the other side of the House, we cannot let our guard down. Thousands upon thousands of farmers risk incredible amounts of investment. To ensure that the Government does its bit, we must reinforce our biosecurity laws. I have great pleasure in recommending this bill to the House.

DAVID SHEARER (Labour—Mt Albert): As other speakers have said, Labour supports the second reading of the Biosecurity Amendment Bill. First of all, I will comment on the reference by the previous speaker, Colin King, to, I assume, Su’a William Sio. Mr King criticised him for being a backbencher and not a farmer, and therefore for supposedly knowing nothing about biosecurity. That is a bit like saying one needs to be a tree in order to understand forests. Su’a William Sio’s point was that he was passionate about biosecurity, and that he lived in an electorate that was the gateway to Auckland. As a result of that, he said this bill did not go far enough and he wanted it to go further. I totally agree with him on those points.

This bill, as has been mentioned by a number of speakers, increases the maximum fine. I think that will serve as a deterrent against people bringing in goods that could risk New Zealand’s biosecurity. But I think there is a point at which a deterrent could actually become a liability in terms of its transaction costs, as Shane Ardern mentioned. I agree with him on that. I think, to the credit of the Primary Production Committee, that it has got the balance pretty much right in this bill. All the changes to the bill make good sense.

I will reinforce another of the points that Su’a William Sio mentioned, as well: the point about language. We have people from about 180 ethnic groups coming into the Auckland region, and obviously speaking many, many different languages. We need to get across to those people the biosecurity protection rules and deterrents, and in order to communicate with them it is very important to write as clearly and as simply as possible, and in a language that they can understand. It is all very well fining them and deterring them afterwards, but if they did not understand the rules when they first came in, then it is somewhat too late to fine them for breaching the rules.

Labour believes that having an effective biosecurity regime is vital in order to protect New Zealand’s interests. But obviously, that is not just about increasing the fines and penalties. As my colleague Damien O’Connor mentioned, the Government, at the same time as it is trying to increase biosecurity by increasing the penalties for biosecurity breaches, is also cutting $2 million from the biosecurity budget and cutting 56 front-line jobs. That seems to me to be a backwards step. I think that the whole point of the discussion about the front line, which comes through in our discussions on the police, the public health system, or on whatever else it may be, is an important one. But although the Government says it is supports front-line jobs and is cutting administrative staff, the cutting of administrative staff means that front-line staff will have to do administrative work. That defeats the purpose of the goals of biosecurity, law and order, etc.

I remember living out in west Auckland, so I remind the House of the plague of the painted apple moth when it came into New Zealand, probably by means of a container imported from Australia, and of the millions of dollars that we had to spend on aerial spraying in order to get rid of that pest. It is much better to have a policy of deterrence, as the Green Party was mentioning, than to try to pick up the pieces and repair the damage later on.

I do not want to talk any further on this bill. We have broad agreement on it in the House. I think the bill is incredibly important for the New Zealand economy. The Reserve Bank mentioned, for example, that an outbreak of foot-and-mouth disease in New Zealand—and Kevin Hague also mentioned this—would be devastating. The bank put the cost of an outbreak at about $10 billion. That would be a devastating loss for New Zealand. Mr Hague also mentioned the palm kernel imports, which this Government continues to allow into the country even though at least 50 known pests are associated with that product. It would be a smart idea not to bring palm kernel in as a food for livestock, and instead to use the alternative foods that we have here in New Zealand. That would be good for the economy and good for biosecurity, as well. I will stop there, but once again I commend the select committee for coming to an agreement on this bill, and I also commend our front-line biosecurity staff—those who are left—for their efforts to defend New Zealand’s best interests. Thank you.

SANDRA GOUDIE (National—Coromandel): I am delighted to speak to the Biosecurity Amendment Bill. It is fantastic that we are actually moving pretty quickly to raise the fines for people who bring in any foreign goods or food goods into New Zealand, and who cross our borders with items they should not have on their person or in their baggage. I think the bill is fantastic. In actual fact I am probably more of the tendency to put up those fines even further. I think it is fantastic that we are now getting through this process.

This legislation cannot come soon enough. The sooner we enact this bill and start imposing realistic fines on people for bringing unwanted goods into our country and threatening our biosecurity, the better. I think that the select committee has done a great job across the House to progress this bill, and I say “Well done!” to everybody. The legislation cannot come soon enough. Let us hit offenders in the pockets so that they know they cannot keep contravening our biosecurity rules.

Bill read a second time.

The House adjourned at 8.45 p.m. (Wednesday)