Tuesday, 24 November 2009

Tuesday, 24 November 2009

Tuesday, 24 November 2009

Mr Speaker took the Chair at 2 p.m.

Prayers.

Motions

New Zealand Defence Force—Death of Air Force Flight Sergeant Andrew Forster

Hon GERRY BROWNLEE (Leader of the House): I seek leave to move a motion without notice on the death of a member of the armed forces.

Mr SPEAKER: Is there any objection to that course being followed? There is none.

Hon GERRY BROWNLEE: I move, That this House express its sorrow at the death of serving Royal New Zealand Air Force Flight Sergeant Andrew Bruce Forster. On behalf of the Government, and on behalf of this House, I offer our deepest sympathies to the family of Flight Sergeant Forster—his wife, Karen, and their three children—as well as to his squadron, colleagues, and friends.

Flight Sergeant Forster lost his life on Thursday last week while conducting his duties as a bomb disposal expert for the New Zealand Explosive Ordnance Disposal Squadron. He had served our Royal New Zealand Air Force for more than 27 years, and earlier this year completed a 6-month deployment to Afghanistan as part of New Zealand’s provincial reconstruction team. His was a career of service: service to the New Zealand Defence Force and service to his country. Flight Sergeant Forster loved his work and he was respected by his colleagues as a consummate professional. He had been recognised with medals for long service and good conduct, and for his service in Afghanistan operations.

His tragic death serves to remind us of the risks and sacrifice that members of our armed forces routinely undertake on our behalf. We are grateful for their bravery, their dedication, and their efforts on behalf of all New Zealanders. We stand alongside them as they mourn this tragic loss today, and we offer them our support and condolences at this most difficult time.

Hon PHIL GOFF (Leader of the Opposition): I join the Leader of the House in expressing, on behalf of my colleagues in the New Zealand Labour Party, our deepest sympathy to Flight Sergeant Andrew Forster’s wife, Karen, and his three children, Candice, Mitchell, and Ashlee. We give them our deepest sympathy for their tragic loss. Our condolences go also to members of the New Zealand Defence Force. As a former Minister of Defence, I know that the Defence Force is very much a family, and his colleagues within the force will be grieving his loss at this time.

Sergeant Andrew Forster had served with the New Zealand Defence Force for 27 years. He was extremely well regarded. He was respected for the job he did, and he was much liked by those whom he worked with. According to one friend, he was always there for his friends and his colleagues. Any loss of life in these circumstances is tragic, but it is all the more so when we consider that Sergeant Forster had just returned from a rotation in Afghanistan. It was in Afghanistan that we would have expected him to be most at risk. Of course, in serving his time there he was separated for 6 months from his wife and children.

Working in the disposal of live ammunition is a dangerous job wherever one does it, but Andrew Forster accepted that risk. He was an experienced armaments specialist, and he was enjoying his new role with the Explosive Ordnance Disposal Squadron in Trentham, which I had privilege of opening last year. Accidents of this nature are fortunately rare—only one has happened in the last 5 years—but the New Zealand Defence Force will be conducting an inquiry into the accident to see what lessons can be learnt from it.

Sergeant Forster’s funeral will take place at Ōhākea air force base just a few minutes from now. Our thoughts are with his family, his friends, and the New Zealand Defence Force at this extremely sad time.

Dr RUSSEL NORMAN (Co-Leader—Green): The Green Party rises today to express its condolences to the family, friends, and colleagues of Flight Sergeant Andrew Forster, and particularly to Andrew’s wife, Karen, and their three teenage children. Prior to his tragic death in Waiōuru last week, Sergeant Forster had been involved in defusing bombs in Afghanistan. The work of defusing munitions in conflict zones is vital to allow civilians to get on with their lives and essential to maintain civil society in conflict zones.

New Zealanders are proud of the work done by people such as Flight Sergeant Forster. New Zealand has sent teams of brave individuals like Sergeant Forster all over the world. In recent years we have sent bomb disposal experts to countries such as Lebanon and Cambodia to assist in clearing these conflict zones of thousands of munitions, which each year kill and maim scores of innocent people.

I cannot imagine how dangerous the work that Sergeant Forster involved himself in was. The work of Sergeant Forster and his colleagues overseas will have saved many people from death and injury. It takes a special sort of person to put him or herself in harm’s way so that others may lead normal lives. The Green Party is proud to stand in Parliament today and pay tribute to Andrew Forster for the brave work he did in the interests of making the world a safer place.

Hon RODNEY HIDE (Leader—ACT): I rise on behalf of the ACT Party, and also on behalf of the Acting Minister of Defence, Heather Roy, to mark the passing of Royal New Zealand Air Force Flight Sergeant Andrew Forster, who was killed earlier this week in the course of his duty, at Waiōuru. The Hon Heather Roy is unable to be here as she is attending Flight Sergeant Forster’s funeral at Ōhākea.

Flight Sergeant Forster served his country for close to three decades, having joined the Royal New Zealand Air Force in 1982. In that time he was posted to No. 14 Squadron RNZAF, Tech Wing Ōhākea, No. 75 Squadron RNZAF, the Ōhākea gun bay, the Ōhākea armament maintenance workshops, the directorate of aeronautical configuration, and the New Zealand Explosive Ordnance Disposal Squadron. Flight Sergeant Forster was involved in exercises in both Australia and Singapore. His first operational deployment came in 2005, when he was deployed to the Gulf, to the United Arab Emirates. This was followed by deployment to Afghanistan’s Bamian Province with the explosive ordnance disposal team, from which he returned only in April. As others have remarked, this was dangerous work, and, clearly, Flight Sergeant Forster was a very brave and courageous man.

Flight Sergeant Forster was a consummate professional in everything he did. This is reflected in his service history and the honours and awards that he received: the Long Service and Good Conduct Medal, the New Zealand Operational Service Medal, the New Zealand General Service Medal (Afghanistan), and the NATO Medal for the Non - Article 5 International Security Assistance Force Operation in Afghanistan.

He was also a well-liked and respected mentor of those who worked with, and for, him. He was patient with subordinates, and always worked hard to help them to be the best that they could be. Andrew Forster communicated well across the ranks, and was held in the very highest esteem by both his superiors and his peers.

He was careful to balance his work with his commitments to his family: his wife, Karen, and their three children, Candice, Mitchell, and Ashlee. Our thoughts today are with them. Times like this remind us it is not just our servicemen and servicewomen who serve our country; it is their families, as well.

Andrew Forster’s death is a reminder of the dangers faced by our New Zealand Defence Force personnel every day, no matter where they are serving. He will be deeply missed by his friends at Ōhākea, throughout the Royal New Zealand Air Force, and across the wider New Zealand Defence Force. Our condolences and deepest sympathies go out to Flight Sergeant Forster’s family, his friends, and his colleagues.

Hon Dr PITA SHARPLES (Co-Leader—Māori Party): The Māori Party stands to convey our respects to the bereaved family and the community at the loss of Flight Sergeant Andrew Forster. The impact of this tragedy will have spread from Waiōuru, across Manawatū, right through to Bamian province in Afghanistan—all the areas where Sergeant Forster was respected and very well liked. But the shock of his death is even more pointed in that he was killed in the line of duty, carrying out a routine process to mark an unexploded bomb when the shell exploded, killing him and injuring another Defence Force member. I also have a close association with Waiōuru Military Camp. I served there as a cadet in my younger days, and I also helped to establish tikanga Māori at Waiōuru and the marae at Rongomaraeroa o ngā hau e whā i reira.

So I have been proud to be associated with the soldiers of Te Taua o Tūmatauenga. Flight Sergeant Andrew Forster had just returned from active service in Afghanistan. He had served with the Air Force for 27 years, and ultimately he lost his life in the line of duty for a country that he was proud to serve. We too are proud to honour him and all those soldiers within Ngāti Tūmatauenga who display such extraordinary courage in their commitment to Aotearoa.

As is our custom in respecting the dead, I must also acknowledge the passing of a young Māori leader, Hāwea Vercoe, a dynamic leader who, sadly, has also been taken from us. Nā reira, kōrua Flight Sergeant Andrew Forster, Hāwea Vercoe, haere kōrua ki te okioki, hai aha? Hai whāriki mā mātou, haere, haere rā.

[So to you two, Flight Sergeant Andrew Forster and Hāwea Vercoe, depart to the resting place; and for what purpose? To be a cover for us, depart, farewell.]

Hon PETER DUNNE (Leader—United Future): On behalf of United Future I join with the other speakers in paying a tribute and extending condolences to the family of the late Flight Sergeant Andrew Forster, who so tragically lost his life last week. It is hard enough to comprehend the loss of life in an active military situation, but it is even worse in a situation such as the one that befell Flight Sergeant Forster, when, to all intents and purposes, he was back on safe ground in New Zealand, reunited with his family after his stint overseas in Afghanistan and, I suspect, probably looking forward to a more tranquil lifestyle for at least the foreseeable future. His work was dangerous, but I still think he probably imagined that this would be a slightly more relaxed period of life than he had recently endured. All of that makes the loss of him that much more difficult for his family and his friends. They had endured the hard times, or so they thought, and now, when they were back together again, this tragedy has struck.

In this House this week we will be engaging ourselves in a range of important business to get ready for the Christmas period that is soon to befall us. Around the country people are starting to plan what their holidays might bring and what things they need to bring to a conclusion before the end of this year. For Flight Sergeant Forster’s family, there will be a special emptiness. This time will be a time of great sadness, with a great feeling of loss. I just hope—and I am sure it will happen—that all his friends in the New Zealand Defence Force and people in the wider community who have been so shocked by the circumstances of his death will bind around his family now, to provide them with the strength and the comfort that they will need, not only in these immediate, difficult days but also in the more difficult days ahead.

As others have said, this was a man of exceptional courage, working for a defence force that prides itself on its commitment, its integrity, its professionalism, and its dedication. In many senses, this is loss for the entire New Zealand Defence Force as well as for the Forster family. Our hearts go out to all of them in this time of tragedy. Our hope is that they can draw comfort from the strength and support of each other, and that the memories that are positive outweigh in the long term the sense of loss they are now enduring.

Motion agreed to.

Questions for Oral Answer

Questions to Ministers

Emissions Trading Scheme—Costs to Taxpayers

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he stand by his comment that Treasury estimates that the Government’s emissions trading scheme could cost taxpayers $110 billion are “nonsense”; if so, what is a more accurate estimate?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Prime Minister: Yes; a more accurate estimate is that the Government’s emissions trading scheme will be broadly fiscally neutral.

Hon Phil Goff: Why was Treasury’s advice not “nonsense” when Cabinet relied on its figures in a Cabinet paper to approve the legislation before this House, but wrong when exactly the same people revised those figures, acknowledged that they had got it wrong, and told him that the scheme would actually impose a debt on New Zealand of $110 billion and on each and every New Zealand family of $92,000?

Hon GERRY BROWNLEE: Although I will not take the House’s time to dispute what are arguable points raised as facts in the question from the Leader of the Opposition, the fact is that whatever figure one might like to strike is entirely dependent on the price of carbon. In the case of the $110 billion, it was because Treasury chose at that time to raise the price from NZ$25 per tonne of carbon to NZ$50 per tonne; that is very imprecise economics. We can tell members that the Government’s emissions trading scheme will be, broadly speaking, fiscally neutral.

Hon Phil Goff: What is the Prime Minister’s response to his former chief of staff Richard Long’s comments this morning that the legislation was a “dog of a bill” and that he should “pull the plug” on it; and when his friends are saying that as well as his opponents, is it not time that he started to listen to them?

Hon GERRY BROWNLEE: The response to Mr Long’s comments and to the question of the Leader of the Opposition is to ask him to come in and we will talk about it.

Hon Phil Goff: Why does he disagree with respected economics commentators like Brian Fallow when they state strongly that the message of this legislation to polluters is “Go for your life … Don’t worry about the cost of those emissions. Someone else will pay for almost all of it.”?

Hon GERRY BROWNLEE: All of the assumptions around the future cost of the emissions trading scheme depend on the price of carbon. It is very important that New Zealand has a system that puts a price on carbon in the first place. The Leader of the Opposition would, of course, react negatively to the suggestion that if we stuck with the Labour law that is there at the moment, jobs will be exported from exactly those people to other countries where there are less pernicious regimes. We do not think shutting the New Zealand economy down is the way to go. We think a fair balance, which this bill achieves, will be good for New Zealand, and will keep us on a growth agenda—something Labour agreed to.

Hon Phil Goff: In rejecting the advice of Helen Aikman QC, the foremost expert in this area, to the Crown Law Office, that “there is no evidence of a breach of the Crown’s obligations under the deed of settlement”, what legal advice did he rely on when he decided to offer millions of dollars from the taxpayer to five iwi incorporations in order to obtain Māori Party votes to pass this legislation?

Hon GERRY BROWNLEE: I ask the Leader of the Opposition what is wrong with an arrangement that recognises the good-faith aspect of Treaty settlements. No one could have known some years out exactly what an emissions trading scheme was going to do to the value of iwi assets. I think we should be acknowledging the relative generosity of iwi in accepting that they will take over responsibility for planting indigenous forests on otherwise vacant conservation land.

Hon Phil Goff: Can the Prime Minister confirm that the figure on the cost of carbon emissions that was relied upon to reach the settlement with the iwi corporations was exactly the same figure given by Treasury that he rejected in a question a moment ago?

Hon GERRY BROWNLEE: No.

Hon Phil Goff: What are the cost estimates that he has received for the concessions made to the iwi corporations over the lifetime of those concessions in order to get Māori Party support for this legislation?

Hon GERRY BROWNLEE: Let us be very, very clear about this. The life of this particular project is 70 years. Anyone who expects to make an accurate prediction over 70 years is seriously deluded. The experience of the previous Labour Government is that it could not predict the deficit from one year to the next, so I do not think that the call for accuracy is in any way reasonable. I tell the member that in today’s dollars, whatever those might end up becoming, it is $25 million.

Emissions Trading Scheme—Amendments

2. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Climate Change Issues: Does he agree with Dr Rhys Jones of Ngāti Kahungunu, a senior lecturer at Auckland University, who stated yesterday that the proposed emissions trading scheme will “do nothing to incentivise reductions in emissions, but will instead give powerful and vocal corporate emitters a licence to threaten the future for our tamariki and mokopuna.”; if not, why not?

Hon Dr NICK SMITH (Minister for Climate Change Issues): No, I do not. The scheme will incentivise emissions reductions with a price on carbon from 1 July next year across the industrial, transport, and energy sectors. I also think it is quite misleading to refer to the allocations under the scheme as “a licence for vocal corporate emitters to pollute” when, in fact, 80 percent of the allocations are for farmers. A disproportionate amount of our farm land is owned by Māori, and we should be concerned about the economic as well as the environmental future of our mokopuna.

Dr Russel Norman: Is it not the case that his changes to the emissions trading scheme will result in a lower price for greenhouse emissions, and is he of the view that a lower price for greenhouse emissions will result in more emissions or fewer?

Hon Dr NICK SMITH: This scheme is a balance between price and how much progress we want to make on climate change. We have made a decision that a 10 percent increase in power price next year is too much. We have made a decision that a $400 million extra cost on business next year would result in a loss of jobs. We are saying that we will halve the cost in the transition. The contradiction I find from members opposite is that only on the weekend a Labour MP was saying that he was concerned about power price increases. If so, he should vote for our bill.

Dr Russel Norman: The question was quite specific.

Mr SPEAKER: Is this a point of order?

Dr Russel Norman: The point of order is that the Minister did not address the question, which was about whether it would result in more emissions or fewer. It is a simple question.

Mr SPEAKER: The thing is that with a question like that there might not be a simple yes or no answer. I think the Minister reasonably comprehensively attempted to answer the member’s question. If that is the crucial matter, the member has a number of further supplementary questions with which to pursue it further.

Metiria Turei: Does the Minister share the concerns of Dr Jones that the impact of this deeply flawed legislation will be felt most sharply by Māori communities, and the concerns of OraTaiao: New Zealand Climate and Health that the proposed emissions trading scheme will threaten funding for critical health and social services that are relied on by Māori communities, which are the most vulnerable?

Hon Dr NICK SMITH: There is absolutely no doubt in my mind that the amendments we are making and the sensible emissions trading scheme we are putting in place recognise that for Māori, as for other New Zealanders, we need to carefully balance our economic and environmental policies. That is what this scheme does. The great difficulty is that if we want to go ahead and impose higher costs on New Zealanders, we will add substantially to the incentive for industries to be exported, taking jobs with them, and doing absolutely nothing for the important challenge around climate change.

Aaron Gilmore: What advice has the Minister received on the claim by some that “this deal will cost Kiwi families $110 billion in payments to big corporate polluters”?

Hon Dr NICK SMITH: That statement is a gross distortion of officials’ advice, in three respects. First, these numbers are based on the existing emissions trading scheme’s generating surplus profits of $50 billion between 2018 and 2050. We campaigned on amending the emissions trading scheme to make it fiscally neutral. These changes mean a loss of revenue to Government, rather than a cost to families. Second, $60 billion is added to this figure by assuming the super-profits of about $2 billion each year are invested and earn compound interest. This assumption contradicts the previous Government’s policy that the revenues would be spent on other climate change initiatives. We cannot both earn interest and spend the money at the same time. The last point I make is that, far from being big corporate polluters, 80 percent of this figure is with regard to farmers—

Mr SPEAKER: I apologise to the honourable member. I cannot hear the Minister’s answer. Members have asked a number of questions around this particular issue of the $110 billion figure. The Minister is giving the House some information on it. I think the House might be interested. I want to hear the rest of the Minister’s answer.

Hon Dr NICK SMITH: The third distortion is claims of big corporate polluters in respect of the $50 billion. I say that 80 percent of this figure is derived from farmers. Members opposite are really saying that they would take $40 billion more from farmers—New Zealand’s most important export industry.

Dr Kennedy Graham: Does the Minister share the concerns of respected economic commentator Brian Fallow that his proposed emissions trading scheme “pretty much guarantees that the peak in emissions will be higher and come later than would otherwise be the case.” under the existing legislation?

Hon Dr NICK SMITH: That question comes to the core issue of balance. It is this Government’s view that the existing emissions trading scheme bears too big a cost relative to New Zealand’s fair share. National campaigned on a policy not of New Zealand being a world leader—

Mr SPEAKER: I supported the Minister a moment ago when he was giving a clear answer to a question. The member just asked a very specific question about whether the Minister agreed with Mr Brian Fallow about when the peak in carbon emissions might arise, given the legislation that the Minister is promoting. The Minister is ignoring the question, and is explaining why he believes his legislation is good. I ask him to actually answer the question that he has been asked.

Hon Dr NICK SMITH: It is true that there is a direct link between the costs that we impose and how much incentive there is to reduce emissions.

Dr Russel Norman: Still not giving a clear answer.

Hon Dr NICK SMITH: Let me finish.

Dr Russel Norman: How about “Yes.”?

Hon Dr NICK SMITH: No, because the answer is not yes. I do not agree, and I will tell members why. Over the first 10 years of the scheme, to 2018, the costs that are being imposed under this scheme are actually about the same as those of the existing scheme.

John Boscawen: Was the Minister of Māori Affairs correct when he told the Wellington chamber of commerce breakfast this morning that the Treaty clause was agreed on just 18 minutes before the deal was announced; if not, how many minutes was it?

Hon Dr NICK SMITH: I have always made it quite clear that there are ongoing discussions with the Māori Party. We have been working on alternative Treaty clauses for several weeks, and I believe that the Treaty clause we have agreed on with the Māori Party provides an appropriate balance.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I was sitting between the Minister and the member who asked the question. Because of the noise I could not hear the answer on whether 18 minutes was right. I ask your permission for the Minister to answer the question without the noise.

Mr SPEAKER: The member has made a perfectly fair point of order; I could not hear the Minister’s answer, either. I ask the Minister please to answer the question.

Hon Dr NICK SMITH: The Māori Party put a proposition to us. We sought Crown Law advice. We finally came back to the Māori Party after receiving Crown Law advice to agree on the Treaty clause that is included in the Māori Party’s Supplementary Order Paper.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I have now heard the answer, and it is very clear that the Minister has not addressed the question. He said that there was a negotiation and they had an agreement, but the specific question asked whether the Minister of Māori Affairs was correct when he said that the Treaty clause was agreed on 18 minutes before it was made public.

Hon Dr NICK SMITH: Mr Speaker—

Mr SPEAKER: Is the Minister speaking to the point of order?

Hon Dr NICK SMITH: I am happy to clarify.

Mr SPEAKER: I think a fair question has been asked, and I accept that the Minister did not actually answer the question. It may be the Minister’s judgment that it is not in the public interest, but it is up to the Minister to answer the question.

Hon Dr NICK SMITH: I understand that the agreement was reached at about 1 o’clock. The Treaty clause was not released publicly until this morning.

Jeanette Fitzsimons: Why did he misinform New Zealanders on Checkpoint yesterday, claiming that the Warm Up New Zealand: Heat Smart home insulation scheme is not reaching enough low-income families, when the latest statistics released last week by Minister Brownlee indicate that some 75 percent of the money spent so far has gone to community services cardholders, which means that the extra $24 million in this package will make no difference, at all, to the rate at which low-income homes can be insulated? [Interruption]

Mr SPEAKER: Before I call the Minister, I say that I accept that all these questions are in the general area of the emissions trading scheme, but this question is an awfully long stretch from the primary question. However, in the interests of advancing question time, I am happy for the Minister to answer it.

Hon Dr NICK SMITH: This will be the very first time in the House that I have heard the Green Party argue that spending an extra $24 million—

Metiria Turei: It’s the same money!

Hon Dr NICK SMITH: No, it is not. I assure the Green Party that this is an additional appropriation over and above the $323 million, which will see an additional 8,000 low-income households insulated. I am surprised the Green Party would be against that.

John Boscawen: Can he confirm as correct the Minister of Māori Affairs’ statement to the Wellington Regional Chamber of Commerce that the Treaty clause was important to the Māori Party because most of the detail for the deal with Māori is to be implemented through regulation rather than the bill, and therefore is still up in the air and not subject to any parliamentary or public scrutiny?

Hon Dr NICK SMITH: The agreement—[Interruption]

Mr SPEAKER: I apologise to the Minister, but I want to hear the answer. I ask for interjections to be reasonable.

Hon Dr NICK SMITH: National agreed to a Treaty clause being included in the legislation at the time of the first reading of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. The legislation has processes for regulations for all New Zealanders that require consultation. It is true that some of the most important decisions on the emissions trading scheme are in those regulations. This Government has committed to consulting Māori on those regulations; that is right and proper.

Dr Russel Norman: Will the proposed changes to the emissions trading scheme result in New Zealand’s greenhouse emissions increasing or decreasing between now and 2050?

Hon Dr NICK SMITH: This Government has a target of reducing our net emissions to 50 percent of our 1990 levels by 2050. This emissions trading scheme will contribute to that important objective. I note, though, that reducing emissions is incredibly challenging, given that in the 9 years of the previous Government, which was supported by the Green Party, emissions went up every single year.

Dr Russel Norman: I raise a point of order, Mr Speaker. You asked me to ask a very direct question. I asked as direct a question as one could possibly imagine, but the Minister has not answered it. He talked about the target, which is fine, but I asked whether the changes to the emissions trading scheme would increase or decrease emissions.

Mr SPEAKER: I hear the honourable member. His question was, commendably, to the point. He asked whether the changes to the emissions trading scheme would likely result in an increase or decrease of emissions to 2050. That was the question, and the Minister did not actually answer it.

Hon Dr NICK SMITH: The emissions trading scheme will see New Zealand’s emissions reduce over time. The advice that I have received applies only as far as 2020. My advice is that by 2020 the emissions trading scheme will result in New Zealand’s net emissions being 10 million tonne less than they would be without the emissions trading scheme.

Dr Russel Norman: I raise a point of order, Mr Speaker. My question was very specific. It asked about the proposed changes to the emissions trading scheme. The Minister is trying to avoid the question by talking about just the emissions trading scheme. That was not the question.

Mr SPEAKER: I hear the honourable member. He is absolutely correct. The question asked about whether the proposed changes to the emissions trading scheme that is currently in law will result in an increase or a decrease in estimated emissions through to 2050. That was the question asked, and I think the member asking the question has a reasonable right to have an answer.

Hon Dr NICK SMITH: For the period that can reasonably be projected, the amended emissions trading scheme will make as much progress in reducing emissions as the existing scheme.

Charles Chauvel: Has the Minister seen the opinion piece in the Sunday Star-Times from Rod Oram entitled “A costly exercise in hypocrisy”; if so, is the endangered species referred to in the caption the panda or him?

Hon Dr NICK SMITH: I simply note that this Parliament has been arguing for 15 years trying to get a pricing tool to make New Zealand’s climate change policy credible. I have worked hard to introduce a carbon price next year. I will be the first climate change Minister to achieve that, and it will be a substantive step forward.

Hon David Parker: I raise a point of order, Mr Speaker. The Speaker will have heard reference in question No. 2 to a Treaty clause in the emissions trading scheme legislation, which we will move on to immediately after question time. I have looked again at all of the Supplementary Order Papers from both sides of the House, and I cannot see that amendment. I was wondering whether I could be informed as to whether one has been tabled.

Mr SPEAKER: That is not a valid point of order for question time. I am sure the matter will be dealt with in due course.

Emissions Trading Scheme—Amendments

3. CRAIG FOSS (National—Tukituki) to the Minister for Climate Change Issues: What reports has he received in respect of the amended emissions trading scheme?

Hon Dr NICK SMITH (Minister for Climate Change Issues): I have heard reports from the Greens that the amended scheme is insufficient to protect the environment, and reports from ACT that it would wreck the economy. The criticisms made by commentators are about equal in both directions, suggesting that we have got the balance about right. National campaigned on a balanced approach, and that is exactly what we are delivering.

Craig Foss: What was the provision in the contract with Ngāi Tahu and other iwi that has led the Government to reach an agreement on carbon farming on the conservation estate?

Hon Dr NICK SMITH: The contract provision in the Ngāi Tahu settlement specifically required the disclosure of any information that would have a material effect on the properties selected. I reject the Opposition parties’ claims that the amended scheme is showing preferential treatment for Māori parties. Let us say that any forest or any other Crown property had been sold to a corporate—nothing to do with the Treaty—with the same disclosure requirements and a subsequent loss of value of between $70 million and $120 million. I do not think a member of this House would be so naive as to not expect that corporate to take, or consider taking, legal action against the Crown.

Craig Foss: Is it correct that “Crown Law advice suggests ‘there is no evidence of a breach of the Crown’s obligations.’ ”, as claimed in Phil Goff’s press release yesterday?

Hon Dr NICK SMITH: No, that is not correct. The official advice was, and let me read it out directly: “Crown Law has advised that it cannot rule out the risk that there may have been a failure by the Crown to disclose relevant information as part of the property selection process. The disclosure provisions in the deed of settlement could have been breached.” It is on this basis that the previous Government agreed to try to negotiate a resolution of this issue with Ngāi Tahu, and it is a bit opportunistic for Labour to now criticise us for doing just that.

Hon David Parker: I raise a point of order, Mr Speaker. I just want to clarify—were the last two sentences from Dr Smith a quote from Crown Law?

Mr SPEAKER: The member will resume his seat immediately. The member will sit down immediately. I ask the member how he thinks it assists the order of the House for him to not resume his seat when I am on my feet calling for order. I invite the member to reflect, or he will be taking an early shower. I warn him that the abuse of the point of order system is something I will not tolerate.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I am reluctant to intervene after you have ruled on my colleague, but I think there was accidental confusion from the Minister—

Mr SPEAKER: The member will now resume his seat. I realise he has been away from the House for a few days—[Interruption]

Hon Trevor Mallard: That is out of order, too.

Mr SPEAKER: I am on my feet. The reason why I chose to do that is that I do not appreciate members, even the Hon Trevor Mallard, thinking he can get away with that when I have made it very clear that the point of order process cannot be used in that way. He will not get away with that. That is the end of matter. I have ruled on it. I make it very clear, and if someone wants to leave the Chamber, it will be fine.

Hon Phil Goff: Why did the Minister just make the claim that he did in answer to last question, when it is very clear from the Crown Law opinion that “Firstly, there is, however, no evidence that any material information on the emissions trading scheme was withheld from Ngāi Tahu.”, and when the concluding paragraph makes it absolutely clear: “conclude that there is no evidence of a breach of the Crown’s obligations under the deed of settlement.”?

Hon Dr NICK SMITH: There are different views from the QC—not Crown Law; the QC who was commissioned by the previous Government. I say to the member opposite that the quote that I read—and I will read it again—is the official advice to the Government, and I will read it for the House’s benefit: “Crown Law has advised that it cannot rule out a risk that there may have been a failure by the Crown to disclose relevant information as part of the property selection process. The disclosure provisions in the deed of settlement could have been breached.”

Charles Chauvel: I raise a point of order, Mr Speaker. If the Minister is quoting from the official document, might it be tabled please?

Mr SPEAKER: Indeed, if the Minister was quoting from an official document. It is requested that that document be tabled if it is an official document.

Hon Dr NICK SMITH: I raise a point of order, Mr Speaker.

Mr SPEAKER: To clarify whether it is official.

Hon Dr NICK SMITH: Yes, just to clarify the situation. The quote I have came from a Cabinet paper. I do not have the Cabinet paper with me. I have the quote that was taken from the Cabinet paper. I am happy to table the piece of paper that I have in the House, if that is your wish.

Mr SPEAKER: An interesting issue has arisen. The Standing Orders, as I understand them—and I stand to be corrected here—actually require a document that is being quoted to be tabled; not just a passage from the document. Unless I am challenged, I ask the Minister to table the paper from which the quote is taken, when it is available.

Hon Dr NICK SMITH: I raise a point of order, Mr Speaker. Yes, it is available. There is a difficulty, and I want to be very up front with the House. The normal convention in the release of such advice of Cabinet papers is that the Opposition first be consulted. I am assuming that members opposite are relaxed about the release of that Cabinet paper.

Hon David Parker: Mr Speaker—

Mr SPEAKER: Since it is an interesting issue, I will hear from the Hon David Parker.

Hon David Parker: I was the relevant Minister at the time, and I would consent to that being released.

Mr SPEAKER: It appears, as I understand the Standing Orders, that the paper should be tabled when the Minister can get it.

Hon Dr NICK SMITH: I raise a point of order, Mr Speaker. I just need to check this point, because it is important: the Crown has reached an agreement in principle with Ngāi Tahu—

Hon Clayton Cosgrove: That’s a debating point.

Hon Dr NICK SMITH: No, it is not; it is an important point. There is legal advice—not in that paragraph but in other parts of that document; not in that quote, but other parts of that document—that might be prejudicial to the Crown’s interests. Mr Speaker, are you requiring that even those passages in that document, which may be prejudicial to the Crown’s interests, must be tabled in the House?

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I think it is highly desirable that this whole issue gets taken off-line and dealt with—[Interruption] Let us be clear. The convention is that one Government’s Cabinet papers—[Interruption] That is quite right—the Standing Orders do make some provisions about documents that the Minister has in the House with him. The difficulty here is that the quote was from a document clearly from a previous Cabinet, and the member will know well the convention is that documents like that are released only with the permission of the previous Cabinet. The former Minister has said that he is comfortable with releasing that. I think it would be wise if all parties have a look at the entire document before we proceed down this particular track. I want to add further that I do not think the Standing Orders were ever put in place to defeat some of the principles that enable executive Government to operate in a country like this.

Charles Chauvel: I raise a point of order, Mr Speaker. The points raised by the Leader of the House are actually red herrings. Standing Order 367 is very clear. It states: “Whenever a Minister quotes from a document relating to public affairs a member may, on a point of order, require the Minister to table the document. …” There is only one exception in the Standing Order and that is if the document is confidential. We have heard the genesis of the document. It is a Cabinet paper from the previous administration. The previous Minister consents to tabling it, so does the Opposition spokesperson. There is simply no objection or practical reason why the Minister’s offer to table the document should not be accepted.

Hon Dr NICK SMITH: I raise a point of order, Mr Speaker. Standing Order 367 also states—and it is very important—that “unless it is of a confidential nature.”

Hon Member: We just heard that.

Hon Dr NICK SMITH: That is right; let me finish the point. In respect of confidentiality, we would normally use the test of the Official Information Act. The Official Information Act makes it quite plain that those documents that would pose risk to the Crown by their release should not be released.

Hon Member: You were—

Hon Dr NICK SMITH: No; let me make it plain. I commit to releasing the part of the Cabinet paper that I quoted. I will check with Crown Law as to whether there are any other parts of the document that would not be released normally under the Official Information Act as per the provision in Standing Order 367. [Interruption]

Mr SPEAKER: I do not need any further assistance on this matter. I thank members, because it is an interesting issue that has arisen. I kick myself for not having been quite as familiar with some Speakers’ rulings as perhaps I should have been. Three Speakers have addressed this issue previously: Speaker Harrison in 1979, Speaker Kidd in 1998, and Speaker Hunt in 2000. Speaker’s ruling 138/1 argues that in fact if the Minister has the entire document and quotes from it the Minister can be required to table the entire document. However, the Speaker’s ruling states: “If an extract or portion of an official document is quoted, the Minister can be required to table that extract or portion only and does not have to go away and procure the whole document for tabling in the House.” I blame myself for not having picked up on that earlier, and that would seem, I must say, to show my earlier ruling was not valid; it was incorrect. What the Minister should be required to table is the document from which he quoted today. I ask the Minister to do that. I think the discussion has been an interesting one, and I thank members who have contributed to that worthwhile point of order.

Document laid on the Table of the House.

Craig Foss: What advice has the Minister received on the valuation of the agreement with some iwi, and how does that compare with statements made by Charles Chauvel on Sunday that it will cost taxpayers $50 million per year, that that is a very conservative estimate, and that it adds another $2 billion to the cost of National’s emissions trading scheme amendments?

Hon Dr NICK SMITH: Officials advise a total value of $25 million, compared to the valuation of Ngāi Tahu’s loss and claim, undertaken by the previous Government, of between $70 million and $130 million. This $25 million value is sensitive to the price of carbon and is based on $25 per tonne until 2013, and $50 per tonne thereafter. The $2 billion claim by Mr Chauvel is almost 100 times the official advice, and for him to describe the claim as very conservative makes Labour look hysterical and financially illiterate.

Charles Chauvel: Has the Minister seen Brian Fallow’s conclusion that his changes to the emissions trading scheme tell polluters not to worry about the cost of emissions because someone else will pay for almost all of it; and how is it fair to make taxpayers carry 84 percent of the cost of his emissions trading scheme, as the Sustainability Council calculates?

Hon Dr NICK SMITH: No, I do no agree with that analysis. I point out to the House that the scheme we are implementing in New Zealand is very close to that of Australia. I say to commentators like Mr Fallow and the members opposite that if they want to make those criticisms of this Government’s scheme, they must make all the same criticisms of the scheme that is being put in place in Australia.

Youth Unemployment—Job Ops and Community Max Schemes

4. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister for Social Development and Employment: Does she stand by all her statements on youth unemployment?

Hon PAULA BENNETT (Minister for Social Development and Employment): Yes.

Hon Annette King: Last week she claimed that more than 4,000 places had been created under Job Ops and Community Max; how many of the places created have actually been filled by young unemployed people?

Hon PAULA BENNETT: Yes, I did talk about over 4,000 places having been created. It is quite simple to understand, really. I am talking about Jobs Ops; I am talking about real opportunities for young people from real employers and real jobs.

Hon Ruth Dyson: How many?

Hon PAULA BENNETT: We have created over 2,048 Job Ops places; of those, 1,847 have been filled. There are 1,743 places on Community Max, of which 981 have already been filled. In fact, it takes an average of 6 days to fill a Job Ops place, and I for one think that is pretty impressive.

Hon Annette King: Why does she continue to say that since Job Ops and Community Max were launched in August, those programmes alone have created more than 4,000 employment opportunities, when barely half of that number of positions have been filled; and does not this sort of disingenuous representation of statistics belittle the real impact that unemployment is having on our young people?

Hon PAULA BENNETT: I would not agree with “barely half”. We are talking about 1,847 positions already filled under Job Ops, and 981 places already filled under the other scheme. As I said, it takes 6 days on average to fill a Jobs Op place, which I think is pretty impressive. The Opposition might not like to hear it, but for 8 weeks we have had the number of young people on the unemployment benefit going down; there are more coming off than going on, and that is a good-news story.

Tim Macindoe: What is the Government doing to help students find work over the summer?

Hon PAULA BENNETT: The other announcement I made today is that there will be up to $1 million worth of funding for Student Job Search. Over 160,000 students are already registered with Student Job Search. We believe that investing in this campaign will increase opportunities for those students. We want to get every single job we can for our students, who are competing for jobs in a very tight market at the moment.

Hon Annette King: Why is she claiming that Job Ops has been successful in stabilising youth unemployment, when only around 1,600 young people have actually filled such positions, and the number of youth on the unemployment benefit has gone up by over 8,000 in 7 months?

Hon PAULA BENNETT: I know that the Opposition obviously has pre-done its questions, but let me give the House that number again: 1,847 places have been filled, not 1,600 like the member mentioned. To be clear, for 8 weeks in a row we have seen the number of those aged under 24 on the unemployment benefit going down. That tells us that what we are doing is working.

Hon Annette King: Did she advise the Prime Minister before he flew into Katikati on a New Zealand Air Force helicopter that the business he was using for a publicity shot had laid off five young people aged between 17 and 19 just weeks before, and had paid them each $500 in what has been described as hush money; and has she been assured by the Ministry of Social Development that it will ensure that no young person is re-employed by that company using Job Ops?

Hon PAULA BENNETT: What I did hear about the Prime Minister’s visit to Katikati is that it helped promote job opportunities in that area. Employers stepped up and were very pleased to hear him tell them how the economy is going, and to hear more about this Government’s initiatives, which are incredibly positive and going down very well.

Youth Unemployment—Job Ops and Community Max Schemes

5. KATRINA SHANKS (National) to the Minister for Social Development and Employment: What is the Government doing to help young people into work?

Hon PAULA BENNETT (Minister for Social Development and Employment): Today we announced 2,000 new places on our highly successful Job Ops scheme. This is on top of the 4,000 places that we announced in August. With Community Max this Government has created 9,000 opportunities for our young people since August. We are proud that businesses all over the country are stepping up to take advantage of the scheme.

Katrina Shanks: Why is the Minister extending the Job Ops scheme for young unemployed people?

Hon PAULA BENNETT: It has been so successful that we expect all the places will have been filled by early next year. Employers are stepping up and giving thousands of young people an opportunity to get work experience and skills that would not otherwise have been available in the recession. This Government is putting more money into a scheme to make an extra 2,000 places available for young New Zealanders.

Jacinda Ardern: Does she acknowledge that it is misleading to measure unemployment rates by benefit numbers alone, as she continues to do, when tens of thousands of young people are not eligible but, according to letters and comments that we have received, they are struggling to find work to fund further training or education; or will she continue to write them off as just people “at school who would like to have a paper run”?

Hon PAULA BENNETT: I think what the member does not understand is that this is a complex bunch of young people who are doing a lot of different things, so we do have some who are looking for only an hour’s worth of work a week. They are counted in the household labour force survey. I am happy to send some information over to the member if it will help her to get a better picture of what those young people are like and what they are looking for.

Finance, Minister—Treasury Advice

6. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he stand by his statement: “Advice we disagree with is bad advice; advice we agree with is good advice.”?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: Yes. By way of illustration, if I may, there is one organisation from which we have received consistently bad advice for the last 12 months, and that organisation, of course, is the Labour Opposition.

Hon David Cunliffe: How can he consider the Treasury’s emissions trading scheme cost estimate of $110 billion to be bad advice, when the Prime Minister agrees with it enough to use the same advice to justify including farmers in the scheme?

Hon STEVEN JOYCE: The extra debt by 2050 suggested by Treasury only applies when compared against Labour’s heavy-handed scheme—a scheme that would drive New Zealand businesses and jobs overseas. As the Prime Minister has said, the figure is essentially nonsense, as it is impossible to accurately measure the effects of the emissions trading scheme 40 years into the future when so many variables are involved.

Hon David Cunliffe: Can he explain why he is willing to accept advice from Treasury on the costs of securing Māori Party support for the emissions trading scheme, but will not accept Treasury’s advice on the cost of a scheme to the taxpayer, when both assessments are based on exactly the same assumption of a carbon price of $25 a tonne to 2013 and of $50 a tonne thereafter?

Hon STEVEN JOYCE: I point out that the longer-term things are harder to measure. For example, the previous Government spent most of its time congratulating itself on being an excellent economic manager, but when it left office it left us with a decade of deficits, which just goes to show that sometimes when we look into the future we see different things.

Hon Darren Hughes: I raise a point of order, Mr Speaker. The Opposition argues that the Minister’s answer was fairly gratuitous in its nature. The Opposition spokesman on finance put to him a very simple proposition using figures, using specific year periods, and asking how the Government could use one set of figures in one category and then ignore exactly the same set of figures in another. All we had was a very political response from the Minister.

Hon Gerry Brownlee: The member got a perfectly reasonable answer. It set out to illustrate that although people may want to ask a question based on assumptions, it is reasonable for an answer to say that assumptions do not always give one the answer one wants to hear.

Hon David Cunliffe: I raise a point of order, Mr Speaker—

Mr SPEAKER: I do not need to hear further; I do not want to be litigating the question by way of point of order. I think that the point raised by the Hon Darren Hughes is a fair enough point: the answers to questions that did not contain political statements have been overly gratuitous. I invite the Hon David Cunliffe to repeat his last question, and I am sure that the House will be interested in hearing the Minister’s answer.

Hon David Cunliffe: Thank you, Mr Speaker. I will read it slowly and carefully. Can the Minister explain why he is willing to accept advice from Treasury on the costs of securing Māori Party support for the emissions trading scheme, but will not accept Treasury’s advice on the cost of the scheme to taxpayers, when the carbon price in both assessments is identical, at $25 a tonne until 2013 and $50 a tonne thereafter?

Hon STEVEN JOYCE: Because other variables involved in both assessments are different.

Hon David Cunliffe: Further to the previous supplementary question, what advice, if any, has he received that refutes the fundamental problem with the emissions trading scheme legislation that the deal with the Māori Party is just one concession in a bill that contains billions of dollars of concessions for polluters and passes the mounting cost on to our children?

Hon STEVEN JOYCE: The member does not seem to understand that any emissions trading scheme has to balance economic opportunities and environmental responsibilities. We have taken a deliberate decision to moderate the emissions trading scheme to keep jobs in New Zealand. When will the Labour Opposition work out that without businesses, we do not have jobs and we do not have taxpayers?

Emissions Trading Scheme—Effect on Environment

7. RAHUI KATENE (Māori Party—Te Tai Tonga) to the Minister for Climate Change Issues: Does he agree with the Māori Party that the revised ETS has a focus on whenua and increasing environmental sustainability; and how will the intention to provide better protection for the environment be realised?

Hon Dr NICK SMITH (Minister for Climate Change Issues): Yes. The revised scheme and changes negotiated by the Māori Party address both the issue of costs to low-income families and the importance of Papatūānuku, or the natural environment. It also makes significant new commitments around the protection of the environment, on which I am looking forward to working with the Māori Party.

Rahui Katene: How will Enviroschools, or Kura Taiao, contribute to the goal of enhancing environmental outcomes consistent with the kaitiakitanga our people are responsible for discharging over their whenua?

Hon Dr NICK SMITH: It is true that the Māori Party has brought to the negotiations the issue of Enviroschools. The Government has had concerns about the effectiveness of that programme, so we have agreed to extend funding for 6 months, and then to work on refocusing Enviroschools to make sure it is practically effective. I am looking forward to working with the Māori Party on doing just that.

Rahui Katene: What commitment is there to support further environmental restoration initiatives, in partnership with iwi?

Hon Dr NICK SMITH: There are a number of measures across the 12 specific agreements with the Māori Party. They include a very important national policy statement on biodiversity. They also involve work on afforestation. I think the Māori Party made the very good point that the planting of indigenous trees in many areas of New Zealand is one of the lowest-cost ways that New Zealand can both improve the environment and reduce our greenhouse gas emissions.

Charles Chauvel: Has the Minister seen Brian Fallow’s conclusion that his Government’s changes to the emissions trading scheme weaken the incentive to reduce emissions in those sectors responsible for the lion’s share of them, and pretty much guarantee that the peak in emissions will be higher; if he has, how does enabling increased emissions provide for increased environmental sustainability or provide better environmental protection?

Hon Dr NICK SMITH: I agree with Brian Fallow on this point: the greater the cost of carbon and the more broadly that it is based over the economy, the more there will be a reduction in emissions. I note that over the first 10 years of the scheme, the costs are the same as under the Labour scheme—actually slightly more under the National scheme. That is why I draw the conclusion that the emissions reductions that we can achieve under this scheme over the first 10 years are very similar to those under Labour’s scheme. Beyond the 10 years, the key issue is the phase-out rate. That is regularly reviewed. We have chosen a 1.3 percent rate, which is the same as Australia’s. Members opposite want to argue for 8 percent. That would be a very big cost for industry and would risk simply exporting our industries offshore.

Climate Change Issues, Minister—Long-term Estimates

8. CHARLES CHAUVEL (Labour) to the Minister for Climate Change Issues: Does he stand by his statement that “I have always said that figures out beyond a decade are very uncertain”?

Hon Dr NICK SMITH (Minister for Climate Change Issues): Yes, I do. There is uncertainty about the international rules, about the price of carbon, and, in the long term, about what technologies and growth rates there will be. I recall a previous Government promising a $1 billion surplus from Kyoto, and only 2 years later having to accept that it was a $1 billion debt.

Charles Chauvel: If figures beyond a decade are “very uncertain”, is he confident that the Government will be able to meet its “50 percent by 2050” emissions reduction target 40 years into the future; if so, how can he be confident in a target for emissions reductions in 2050 but dismiss Treasury predictions for the same year as “nonsense”?

Hon Dr NICK SMITH: I am a lot more confident that this Government will meet its “50 by 2050” target than I am in believing the claims of carbon neutrality from the previous Government, when in every single year it was in Government, emissions went up, and went up faster than emissions in any other developed country. How the Opposition does not like the truth about its record!

David Bennett: What is the Government’s long-term policy on the 1.3 percent per year phase-out rate, noting that the Act provides for it to be reviewed every 5 years?

Hon Dr NICK SMITH: These allocations are being provided because sectors are emissions intensive and they are trade exposed. The 1.3 percent phase-out rate is similar to schemes in both the European Union and Australia. We are not rigidly fixed to the 1.3 percent rate in the long term, but we want to keep it roughly in line with our trade competitors, so as not to disadvantage industries that may simply move offshore and cost Kiwis jobs.

Charles Chauvel: Why did the Minister tell the House, and the Prime Minister tell Federated Farmers, that Treasury estimates the cost of the emissions trading scheme by 2030 to each farmer at $3,000 per year, if they both believe Treasury to be so unreliable, and figures beyond a decade to be “so uncertain”?

Hon Dr NICK SMITH: Because it is certainly true that for the farming sector the 8 percent phase-out rate in the current law would put very large costs on to the farming industry. If members opposite want to talk about large losses of revenue to the Crown from our changes, they should also be honest with farmers and say that they will impose very large costs on them.

David Bennett: Has the Minister read any commentary from Charles Chauvel that says it is foolish to align the New Zealand scheme—

Mr SPEAKER: I am not sure how the Minister can possibly be responsible for any comment by Charles Chauvel. The member might like to reword his question, but I do not see how the Minister is responsible for that.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I understood that the member asked the Minister whether he had read the comments. That is a reasonable question.

Mr SPEAKER: What troubles me about the question is where it is clearly leading. I would find it totally unacceptable if the Minister were to launch into a criticism of an Opposition spokesperson, because that is not his responsibility, unless the Opposition spokesperson asked a question that provokes such an answer. I think it is stretching the Standing Orders a fair distance to ask the Minister about comments that another member of the House has made. I am sure the member can reword his question and make it more reasonable.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I think your ruling is not consistent, because we have had questions such as whether the Minister has seen the comments by well-noted, marvellous reporter Brian Fallow, or the glorious Rod Oram, etc., all afternoon. If we can ask questions about the comments of these highly intelligent and insightful commentators, surely we can ask whether they have seen the comments of Charles Chauvel.

Mr SPEAKER: I hear the point the member is making. I will reverse my objection to the question. But I want to be clear that I do not want it to be used as an excuse to abuse another member of this House. I accept the point the Hon Rodney Hide has made, but if I allow this question I do not want to regret it in a few minutes’ time.

David Bennett: Has the Minister read any commentary from Charles Chauvel that it is foolish to align the New Zealand scheme with Australia’s, as it will never get through its Senate; if so, has he received any updated reports on progress across the Tasman?

Hon Dr NICK SMITH: Mr Chauvel, again, is wrong. An announcement has been made today that an agreement has been reached to enable the Carbon Pollution Reduction Scheme legislation to be passed through the Senate this week. I note that the amendments have only just been tabled today by the Australian Labor Government. Its intention is to pass it through the Senate this week.

Charles Chauvel: Does the Minister understand the difference between the shadow Cabinet of the Liberal Party of Australia agreeing in principle to some amendments proposed by the Australian Labor Party, and the difficulty that the Liberal Party will still face in getting those amendments through the party room and through the Senate?

Hon Dr NICK SMITH: Yes, there are some differences of view within the Liberal Party of Australia, in the same way that I have noted here. I have heard one member from Labour saying that the agreement with the Māori Party is a sell-out by Māori, and another spokesperson from the Labour Party said exactly the opposite—

Hon Darren Hughes: Who was that?

Hon Dr NICK SMITH: Would the member like me to table the statements from the various members?

Charles Chauvel: I raise a point of order, Mr Speaker. I think that the question was a relatively confined one relating to the Minister’s understanding of the Australian political environment. The answer seems to have strayed very wide of the mark.

Mr SPEAKER: That was a point of order, and one would never know that from the noise in the House. But I think that is a reflection of the fact that the House is not too impressed by the member’s point of order. The question was an awfully long way from the primary question, so I do not think that too precise an answer can be expected.

Charles Chauvel: If Treasury’s projections should be disregarded, in part because allocation decisions are to be reviewed every 5 years, why should New Zealanders have any confidence that any review of allocations done under this Minister will not simply do what his amendment does, which is to heavily favour polluters and circumvent public opinion?

Hon Dr NICK SMITH: I do not think it does. If I look at my emails, there are some people who are emailing me very heavily saying that this scheme does not go far enough to protect the environment. I receive a large number of other emails and commentary saying that it is too hard on the economy. I think this Government has the balance right. [Interruption] I say to the members opposite that for 9 years they made no progress on climate change. This Government will.

I seek leave of the House to table the papers released in Australia this afternoon outlining the agreement and the changes to the Carbon Pollution Reduction Scheme on that side of the Tasman.

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.

Charles Chauvel: I seek leave to table a document that you may feel comes close to a ruling that you made earlier. But I think it is in the public interest to seek leave to table a report from the Sydney Morning Herald online from about an hour and a half ago indicating that the changes to the Carbon Pollution Reduction Scheme in Australia are by no means a done deal as far as the Liberal Party of Australia is concerned.

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.

Public Transport, Auckland—Progress on Projects

9. Dr JACKIE BLUE (National) to the Minister of Transport: What progress has been made on improving public transport infrastructure in Auckland?

Hon STEVEN JOYCE (Minister of Transport): I am pleased to report to the House that Cabinet has approved $500 million for the purchase of new electric trains for Auckland. This is a very significant milestone on the way to delivering Auckland a modern and more reliable rail network. The upgrade and electrification of the Auckland rail network will provide for more frequent, smart, and modern trains at peak times and will help to meet future passenger demands.

Dr Jackie Blue: What is the next step in securing this improvement in rail services for Aucklanders?

Hon STEVEN JOYCE: The confirmation of this funding—without a regional fuel tax for Auckland—will see KiwiRail and its client the Auckland Regional Transport Authority re-engage with the market very early next year for the supply of new trains. I expect the first electric trains to be on the ground and operational from 2013. Work with the Auckland Regional Transport Authority and the New Zealand Transport Agency will continue to ensure that these new and increased levels of services can operate sustainably and with reasonable levels of passenger transport subsidy. I expect that work to be completed within the next 6 months, and I can report that the trains are currently running to time.

Hon Darren Hughes: How can 2009 be seen as anything other than a waste for Auckland rail when the Government is today re-announcing the same amounts of money that Labour had set aside for this project—

Hon Dr Nick Smith: Where was the money?

Hon Darren Hughes: —from the regional fuel tax, and when the months and months of dithering by him as Minister has interfered with the tendering process, meaning that Auckland now stands to be able to buy fewer trains with exactly the same amount of money?

Hon STEVEN JOYCE: I point out to the member opposite that the Government is achieving, by good fiscal management, the full roll-out of the Auckland trains without the 9.5c extra regional fuel tax that the previous Government was going to place on Auckland motorists.

Injury Prevention, Rehabilitation, and Compensation Amendment Bill—Hearing Loss

10. Hon DAVID PARKER (Labour) to the Minister for ACC: Do any of his Cabinet papers relating to the Injury Prevention, Rehabilitation, and Compensation Amendment Bill expressly advise Cabinet that the effect of the bill is to restore the right of employees to sue their employer for hearing loss of up to 6 percent; if so, what is the date and title of the Cabinet paper and the paragraph number where that warning is to be found?

Hon Dr NICK SMITH (Minister for ACC): No.

Hon David Parker: Does he think public confidence and, indeed, Cabinet confidence in his competence will be undermined or enhanced by his failure to advise Cabinet that the bill reverses the compensation for injury principle of accident compensation, and, in doing so, restores the right to sue for some workplace hearing loss?

Hon Dr NICK SMITH: Thresholds exist in terms of hearing in the United States, the UK, and Australia. Also, there already are thresholds for entitlements in the existing accident compensation scheme. But let me make plain to the member that it is not the intention of this Government to restore the right to sue. It is our policy to have a 24/7, no-fault scheme. The advice that I have received to date—

Hon Maryan Street: You’ve broken the social contract.

Hon Dr NICK SMITH: Well, Maryan Street broke the bank. Maryan Street broke the bank!

Hon Maryan Street: What about the advice?

Hon Dr NICK SMITH: If Maryan Street had not left $2.4 billion of losses in accident compensation, of course this Government would not require a bill to reform the scheme.

Hon Maryan Street: Bring it on, Nick! Let’s have a public debate about it, Nick.

Hon Dr NICK SMITH: Explain your losses; you left it in a mess.

Darien Fenton: Does the Minister agree that employer costs for Australian worker compensation are already higher than New Zealand accident compensation levies for employers; if so, how does he justify his major cuts to compensation for New Zealand workers?

Hon Dr NICK SMITH: It is easier to have—

Hon Darren Hughes: No wonder he’s going to get sacked.

Hon Dr NICK SMITH: Mr Speaker, every time I have got to my feet to answer a question, even before I have been able to answer it there has been a barrage of abuse from members opposite.

Hon Members: Oh!

Mr SPEAKER: There will be silence, because I am on my feet. I think the interjections have been a little unreasonable, but I have to say that the Minister would have noticed that I allowed him to respond fairly forcefully to an interjection. It is in the House’s hands. If members interject, Ministers are perfectly free to launch back into them—within reason. I do not think the Minister needs much protection. I think he is pretty capable.

Hon Dr NICK SMITH: There are two problems with the comparison with the Australian scheme. The first is that it is easier to have lower levies when a scheme is losing $2.4 billion last year and $4.8 billion this year—

Hon Annette King: Rubbish!

Hon Dr NICK SMITH: Annette King says that is rubbish. If it is, why did Maryan Street sign the annual report for the 2007-08 year, which recorded a loss of $2.4 billion? The second point is that we need to be careful in the comparison of employer levies, because in Australia motor vehicle accidents are incorporated in the employer levy, whereas in New Zealand they are allocated separately to motor vehicle levies.

Michael Woodhouse: What reports has the Minister received about the Injury Prevention, Rehabilitation, and Compensation Amendment Bill and whether it would affect the accident compensation entitlement of a person like Jan Molenaar, who, after going on a shooting rampage, killed himself? Why was the law changed to allow such entitlements in the first place?

Hon Dr NICK SMITH: Yes, I noted in the New Zealand Herald that Jan Molenaar’s partner got $10,000 for his—

Mr SPEAKER: I apologise to the Minister. I say to the Labour front bench—on this occasion it was the Labour front bench—that I simply cannot hear the Minister’s answer. Those members may have their views about the question, but we must be able to hear the answer.

Hon Dr NICK SMITH: Yes, I noted in the New Zealand Herald that Jan Molenaar’s partner got $10,000 in compensation from the Accident Compensation Corporation. Although I have sympathy for any person who loses a loved one, the injustice is that every day many law-abiding New Zealanders die of cancer, heart disease, and other illnesses, but their families get nothing. This entitlement extension arose from changes made by the Labour Government in 2008, but that Government made no provision to budget for it; it made no provision to increase the levies to fund those extensions of entitlements.

Hon David Parker: Is it not time for the Minister to admit major mistakes in how he has dealt with both his accident compensation and emissions trading scheme responsibilities, or will he try to brush off New Zealanders’ being stopped from getting a hearing aid, and the money being given to lawyers instead, as inconsequential, as he has tried to do with his emissions trading scheme fiasco?

Hon Dr NICK SMITH: I note that in states of Australia—where I note there are Labor administrations—there is a threshold for entitlements to hearing aids. I note that is also the case in the UK, where there is a Labour Government. It is for the select committee to carefully consider submissions. Talking about mistakes, I am yet to hear an apology from Maryan Street or Labour for its leaving huge losses, and for breaching the Public Finance Act in not disclosing the extent to which accident compensation was in financial difficulty.

Pig Farming—Code of Welfare

11. SUE KEDGLEY (Green) to the Minister of Agriculture: Does he stand by his statement of 20 May 2009 “I would like to be able to issue a new code of welfare for pigs by the end of this year”; and is he confident this will be achieved?

Hon DAVID CARTER (Minister of Agriculture): Yes, I am confident. The National Animal Welfare Advisory Committee is on course to release the code at some stage next month.

Sue Kedgley: I raise a point of order, Mr Speaker. I very carefully worded my question to say “to issue a new code of welfare”. All that the Minister talked about was issuing a code for consultation. It will take another 6 months to get the new code. That was the question.

Mr SPEAKER: There is a limit to how much I can judge the quality of Ministers’ answers. From my hearing of the Minister’s answer he said, in response to the member’s question, “yes”. If she is not convinced that his “yes” was exactly the “yes” she was after, my advice to her would be to drill further down into that with her supplementary question.

Sue Kedgley: I raise a point of order, Mr Speaker. There is a lot of interest in whether the Minister’s promise to have the code completed this year will be met. This is a completely different issue.

Mr SPEAKER: I can easily think of a supplementary question, following the Minister’s answer, that would assist the member to get exactly the information she wants. I cannot, for the life of me, work out why she does not ask that question. The member has a supplementary question available.

Sue Kedgley: How can New Zealanders believe that this Government is serious about animal welfare, when the Minister cannot even keep his promise to have the pig code completely reviewed and a new one issued by the end of this year, with the result that 20,000 sows will spend their Christmas locked up in cages where they cannot turn round?

Hon DAVID CARTER: I have, on many occasions, patiently tried to explain to the member that there is a process under the Act by which the National Animal Welfare Advisory Committee develops the code and releases it for submission, and once the submissions have been heard the committee finalises the code and presents it to me. That is the law that must be adhered to. I am not about to ride roughshod over that law.

Sue Kedgley: I raise a point of order, Mr Speaker. I would like to table a document, because I think it is in the public interest. It is a press release, and it is where—

Mr SPEAKER: From what publication?

Sue Kedgley: It is from the New Zealand Herald of 10 November 2009.

Mr SPEAKER: The member will resume her seat. That is totally contrary to the ruling I made just a few days ago. The document is from a mainstream newspaper of recent days, and therefore I will not be seeking leave. The member will not use the point of order process to try to make her political point.

Sue Kedgley: Mr Speaker, does your ruling apply even when one believes that the article contains very significant information that contradicts what the Minister has just said?

Mr SPEAKER: The reason why the ruling was made is that articles from the New Zealand Herald are readily available to members. If members are interested in this matter, I am sure they will have followed it through the New Zealand Herald.

Passports—Introduction of New E-passports

12. JACQUI DEAN (National—Waitaki) to the Minister of Internal Affairs: Why is the Government introducing a new style of passport?

Hon NATHAN GUY (Minister of Internal Affairs): We need to regularly update our passport, to keep up with new technology and keep ahead of fraudsters. This new passport has more than 50 new security features, which makes it harder to forge. It also has a new design and artwork that tells the story of New Zealand’s history, through the themes of navigation and travel.

Jacqui Dean: What reaction has he had from the public to the new e-passport?

Hon NATHAN GUY: I am very pleased with the feedback we have had on this new passport. People seem to like the new design, which now has a unique New Zealand flavour about it. Every page has different artwork on it, which makes it harder to forge. Indeed, I am very pleased that we have managed to keep the price of the new passport the same, at $150.

Urgency

Urgency

Hon GERRY BROWNLEE (Leader of the House): I move, That urgency be accorded the second reading and passing through its remaining stages of the Climate Change Response (Moderated Emissions Trading) Amendment Bill; the introduction and passing of a Government bill; the passing through their remaining stages of the Corrections (Contract Management of Prisons) Amendment Bill, the Border (Customs, Excise, and Tariff) Processing Bill, and the Taxation (Consequential Rate Alignment and Remedial Matters) Bill, and any bills into which any of those bills may be divided; the introduction and passing of a Government bill; and the passing through of their remaining stages of the Crimes (Provocation Repeal) Amendment Bill, the Remuneration Authority Amendment Bill, and the Biosecurity Amendment Bill, and any bills into which any of those bills may be divided.

This is a time of year when the legislative programme starts to cramp up quite considerably. There are a number of crucial dates that the Government needs to have legislation aligned for; the first of these is 1 January next year. In fact, if the emissions trading scheme amendment is not passed in good time, then the current emissions trading scheme provisions will prevail. We believe they would be bad for the economy. Therefore, we are making the amendments today.

The other bills, in some cases, deal with the sorts of general arrangements that the prison service may have to make over the Christmas period, and also with the way it might progress in the long term. Getting clarity about that will be useful. The Taxation (Consequential Rate Alignment and Remedial Matters) Bill deals with issues like pensions, superannuation rates, and various other things, and it is important that the House also deals with that bill well before the questioned time. No one, I am sure, will be surprised that the Government wishes to put in place legislation that makes it clear that the Remuneration Authority can take consideration of the general economic conditions when it is making its determinations. The Biosecurity Amendment Bill is a bill that should be passed in a timely fashion, in order that we can further protect New Zealand’s borders. For those reasons, the Government has taken urgency today.

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

Ayes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; 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 question time at 2 p.m. on Wednesday, 25 November and Thursday, 26 November, and for questions to be lodged in the normal manner, pursuant to Standing Order 372.

Mr SPEAKER: Is there any objection to that course of action being followed? There is none.

Bills

Climate Change Response (Moderated Emissions Trading) Amendment Bill

Procedure

Hon GERRY BROWNLEE (Leader of the House): I seek leave that for the Committee stage of the Climate Change Response (Moderated Emissions Trading) Amendment Bill members have unlimited numbers of speeches of 5 minutes each but no more than two consecutive speeches on each part or provision in the bill.

Mr SPEAKER: Is there any objection to that course of action being followed? There is none.

Hon DARREN HUGHES (Senior Whip—Labour): I raise a point of order, Mr Speaker. I have deliberately waited until this point to raise this point of order with you. Ordinarily, I would have raised it at question time, but I did not want you to think we were trying to delay matters. My point goes to the interaction you have with other presiding officers when we are in urgency and considering a big bill, as we will be during the Committee of the whole House stage, where there are substantial Supplementary Order Papers that have not had the chance for select committee scrutiny, or for a decent amount of time for the Opposition to look at them, propose amendments, and line them up with the existing bill if there is no revised-tracked version of the bill. I inquire, Mr Speaker, as to your liaison with the three members who service the Committee of the whole House, to ensure that the Opposition gets a fair run to be able to speak in the Committee stage on those parts, given that they have been so heavily amended and there has been no chance for scrutiny before that. I am seeking your protection for the minority, in that respect, and signalling that to you at this stage.

Hon TREVOR MALLARD (Labour—Hutt South): With all respect to the point of order that my colleague has just raised, I think we have just agreed that there not be a limit to the number of speeches that members can make in Committee. Therefore, of course, any concerns that he might have about closure disappear at that point.

Mr SPEAKER: I appreciate the point the honourable members have made, and I think it is incumbent on the presiding officers to make sure that on important legislation such as this, the debate is thoroughly heard. The honourable member also makes a perfectly valid point that where there are significant changes to the bill, and where there are significant numbers of Supplementary Order Papers, then there is obviously a need to make sure that those are properly considered and debated by the Committee. I think that the leave that the House has just given should give some comfort to members that reasonable debate will be enabled on these important measures.

Hon Dr NICK SMITH (Minister for Climate Change Issues): I think it is worthwhile for the House to note that this morning I provided copies of the Supplementary Order Papers—both from me and from the Māori Party—and a briefing with officials to all members of the House in order to ensure that they could be informed on those events.

Mr SPEAKER: That action is appreciated.

Second Reading

Hon Dr NICK SMITH (Minister for Climate Change Issues): I move, That the Climate Change Response (Moderated Emissions Trading) Amendment Bill be now read a second time. This bill is about implementing for New Zealand a workable, affordable emissions trading scheme, which will enable New Zealand to make progress on the hugely complex and difficult issues that confront all nations over climate change. The revised emissions trading scheme is consistent with National’s pre-election commitments. It will align our scheme more closely with Australia’s. It will provide incentives for industry to reduce emissions without encouraging an exodus overseas of industry and its skilled staff. It will amend the scheme so that households, farms, and businesses will not be funding multibillion dollar windfall gains to the Government.

In broad terms, this bill is about New Zealand doing its fair share rather than taking a position that had New Zealand way out ahead of any other country. I am very pleased to have been able to work with the Māori Party to secure an agreement that ensures it can join us in supporting this bill. The agreement reached with the Māori Party strikes the right balance between protecting the future of our economy and protecting our environment. The revised emissions trading scheme will be good both for iwi and for New Zealand as a whole. It will halve the initial cost increases of the scheme for households, and it is workable for business while ensuring that New Zealand does its fair share to combat climate change.

Some people are questioning the merits of the Government’s ambition to try to pass, with the support of the Māori and United Future parties, our amendments by Christmas. However, if the bill is not passed, the existing scheme comes into effect on 1 January. This would increase power prices from that date by 10 percent, and it would put $400 million a year on to the costs on industry, without allocation plans. There are also a number of serious errors in the existing legislation that would have cost New Zealanders jobs.

The bill makes a number of important changes to the scheme. Firstly, it makes critical adjustments to entry dates. Under the bill the industrial, energy, and transport sectors will enter the emissions trading scheme on 1 July next year, and agriculture will enter the scheme in 2015. There will be a transition phase for the first 2½ years, with a half obligation and a fixed-price option of $25 a tonne. These changes will halve the increase for electricity and fuel for both consumers and business.

The bill also makes changes to support for trade-exposed emissions-intensive industry and the agriculture sector. It is broadly accepted that without these measures all we would do is export emissions-intensive industries offshore, which would cost New Zealanders jobs and result in the emissions occurring from some other country. The first change is that a high and medium-intensity threshold is specified. Secondly, the allocations will be based on an industry-average basis, not just on 2005 levels. This will ensure that we do not reward those with higher emissions and punish those who invested early in improving their efficiency.

Thirdly, the allocations will be production-based. If companies and farmers cut their production, their allocations will drop; if their production grows, their allocations will increase. This is about the very important issue confronting all nations designing an emissions trading scheme, and that is the issue of leakage. This Government is not about exporting jobs offshore; we are about incentivising more efficient production here in New Zealand. Fourthly, the phase-out of support after 2013 is being changed. The existing scheme leaves it flat, out to 2018, and then reduces it at 8 percent per year. This bill provides for a reduction in that allocation support of 1.3 percent per annum, though I think it is very important to note that this will be reviewed each 5 years, and, as I said in the House earlier, the broad principle that it should apply to that phase-out rate is that it is similar to our trading partners. Finally, we have introduced flexibility to the point of obligation in the agricultural sector, commencing at processor level with the option to move it to the farm gate.

The bill also makes further technical changes to make the scheme more workable. A good example is removing the liability associated with nitrogen curing of cabling, which would have actually cost New Zealanders their jobs in places like New Plymouth if we had left the existing scheme in place.

This bill was referred to the Finance and Expenditure Committee. It was my preference to refer it to the special climate change committee, but members opposite objected to that. We then agreed with them that we would send it to the Finance and Expenditure Committee, and as a sign of just how much bad faith there is from members opposite they then voted against the motion for it to go to that committee. The committee received 379 written submissions on the bill, and heard a total of 125 oral submissions. It is disappointing that the committee was unable to reach agreement on amendments to the bill, because there was actually very broad agreement on many of the changes contained in the amendments to make this bill work.

The Government will be putting forward Supplementary Order Paper 98 to address a number of the issues that arose from the submissions and from the legal review by officials. As part of the agreement reached with the Māori Party, the Māori Party will be putting forward an amendment that recognises the Treaty of Waitangi. This provision will specifically set out the ongoing decisions on which the Government or Crown has an obligation to consult with Māori. Most of the changes contained in the Government’s Supplementary Order Paper are refinements of policies that are already in the bill, or simply technical amendments. In relation to pre-1990 forestry, amendments are made so that changes in the legal title after 2002 do not unfairly disadvantage landowners when beneficial ownership has not changed. Without these changes, some forest owners might unfairly receive a lower allocation. We have also clarified that, subject to clear criteria, forest owners managing wilding pines from planted source should be eligible to apply for a tree weed exemption. This will help to ensure that important efforts to control tree weeds in a number of areas like the Marlborough Sounds and in Southland are not disadvantaged by the emissions trading scheme.

In addition, the Government has also made a decision to exclude the combustion of solid biofuels from the emissions trading scheme. Given that this is a very small source of emissions, and given the Government’s commitment to encourage fuel switching in this area, we have made a pragmatic decision to exclude emissions from this local-cost clean energy source from the emissions trading scheme. The cost of that provision is very small and the emissions are approximately 25,000 tonnes per year.

Supplementary Order Paper 98 provides for the exclusion of solid biofuels from the emissions trading scheme. That Government Supplementary Order Paper also contains a number of technical changes in response to submissions. For example, in response to concerns regarding the earlier date of entry for liquid fuels, a shorter registration period has been provided for large users of such fuels. A number of further amendments are included in the Supplementary Order Paper to improve the effective operation of the bill, but they do not make any substantive policy changes to it.

I note that in the United States Congress there is a vigorous debate about putting in place an emissions trading scheme, and I note that the same thing is going on across the Tasman in Australia. In every one of those countries the issue has been fractious, it has been divisive, and it has been hotly debated. That is proper: this legislation is probably the most significant change and reform, of a financial nature, since the introduction of GST. But I note that there were public submissions in 2007, there was a select committee process in 2008, there was another inquiry in 2009, and there have been four rounds of submissions. On an issue like climate change there comes a point where it is important to make progress, and in my view this bill does a very good job of balancing New Zealand’s environmental and economic interests while ensuring that we do our fair share as a responsible country around this huge challenge of climate change.

CHARLES CHAUVEL (Labour): The Government has made a mockery of Parliament’s processes by the way it is dealing with the Climate Change Response (Moderated Emissions Trading) Amendment Bill. The amendment itself is flawed on multiple levels. It will make us poorer, our economy weaker, and our emissions increase. The tragedy is that none of that needed to happen. We could have instead achieved something enduring through good-faith discussions, but that is not something the Minister for Climate Change Issues is capable of. By the end of this week every part of Parliament’s consideration of this bill will have been rushed and inadequate, particularly given the immense economic, social, and environmental outcomes at stake.

At the Finance and Expenditure Committee, submitters, experts, and officials were all given impossibly abbreviated time frames in which to contribute effectively. The committee was given less than 2 months to scrutinise extremely substantial amendments and to consider 379 written submissions. Oral submitters were given only 10 minutes to speak—if they could do so, given the short notice they were provided with. Our independent expert, Dr Suzi Kerr, was not able to provide information until the final day of deliberation. As such, her advice was not able to be incorporated into departmental reports, which were likewise unable to be provided until the final couple of days of deliberation. The Parliamentary Counsel Office could provide only an untested draft of revision-tracked amendments on the day of deliberation itself. There was a fundamental lack of robust supporting information available to assist the committee and submitters in evaluating the rationale for, and costs associated with, the amendments.

The bill was roundly and publicly condemned by Treasury. Treasury said that the level and quality of the analysis available were just not up to the significance of the proposals, and that the analysis did not provide an adequate basis for informed decision-making. Treasury is right: there is no analysis of what drives the key changes in this legislation, and, throughout, the Minister has obstructed attempts to obtain background information that might assist the committee or the public to assess the bill—just like his selective quoting of documents in question time today. This includes key documents such as Treasury’s long-term analysis of fiscal costs.

The committee and submitters were completely unable to scrutinise the forthcoming amendments foreshadowed prior to the first reading of the bill; they comprise 121 pages, and were tabled in the House at 2 o’clock today. They include changes that were settled on only yesterday in exchange for the support of the Māori Party—apparently, as the proxy for the Iwi Leadership Group. The impacts, fiscal and otherwise, of these backroom deals will never receive proper parliamentary scrutiny.

How can the process I have described give anyone confidence in the end-policy outcome? Given the shambolic process that the bill has been subjected to, it is no surprise to find that it is fundamentally flawed, but the magnitude of the policy incoherence is breathtaking on many different levels. It will make New Zealanders poorer, our economy weaker, and our emissions higher.

The worst area of the bill concerns the level, duration, and model of the allocation of units—in other words, the way that it gives emitters ongoing rights to pollute. The bill puts in place an uncapped, intensity-based allocation model. This allows the overall level of allocation, and therefore emissions themselves, to actually increase. In other words, there is no cap in this “cap and trade” scheme. The lack of a cap obviates the whole point of an emissions trading scheme, which is to reduce emissions over time at least cost. It should do this by allowing the trading of permits under a cap, and then reducing the cap over time. If production of emissions-intensive trade-exposed activities increases by more than 1.3 percent a year, as it almost certainly will in many years, then absolute levels of allocation will actually increase. So, therefore, will emissions. The Parliamentary Commissioner for the Environment rightly advised us that a cap is vital to create the right incentives to reduce fiscal risk, and to create policy certainty for business. The intensity-based nature of the allocation model does not support emissions reductions appropriately, and it does not provide the incentive of the full emissions price at the margin.

The level and duration of allocation here is overly generous and too slow. Both the Parliamentary Commissioner for the Environment and the independent expert, Dr Kerr, say this. The phase-out rate of 1.3 percent for at least 80 years defies any common-sense notion of transition, and, as with any protection or subsidy, future Governments will find it very difficult to reduce previously promised protection levels. The bill makes it very difficult to alter levels of allocation, with additional 5-yearly reviews following any change recommended. If levels of allocation are no longer appropriate, surely they should be altered promptly. It is unfair to the taxpayer to do otherwise. Indeed, the Institute of Policy Studies sums up this point up. It told the select committee: “the bill [is] designed more to tie future Governments’ hands with red tape rather than to enable flexible and effective policy …”. Also problematic is the proposed transitional period, which provides a half-obligation and a fixed $25 per tonne price to the energy, transport, and industrial processes sectors until the end of 2012. This shifts more than half the costs of emissions until 2012 from the polluter to the taxpayer, and reduces incentives for appropriate levels of emissions-reducing investment and behaviour.

A further concern is the delay in the inclusion of agriculture from 2013 to 2015. The Parliamentary Commissioner for the Environment notes “there is insufficient evidence to justify delaying the entry of agriculture to the [ETS].” It will keep the costs of emissions with the taxpayer until 2015, and will delay appropriate levels of emissions-reducing investment and behaviour in this sector.

So why are these changes being made? In reading through the regulatory impact statement it appears that the primary official reason is to prevent “carbon leakage”, especially to Australia. And there is not much more analysis than that. Just how much economic activity will move in the absence of this bill? How many jobs would be lost? How does the value of these losses compare with the value of the subsidies provided? None of this most basic information has been made available. It may exist; it may have been withheld by the Minister, along with much other vital information. We, as a Parliament, will never know. Treasury itself concluded that there is no clear analytical basis to align with the currently proposed Australian Carbon Pollution Reduction Scheme, given New Zealand’s and Australia’s unique emissions profiles and industrial structures. The fact that the Australian scheme is still proposed only and could be subject to further revision—assuming that it survives the Liberal Party caucus room in 3 or 4 minutes, when its meeting finishes—only adds to the incoherence of the proposal to harmonise.

Dr Suzi Kerr advises that free allocation should be phased out relatively quickly, irrespective of our competitors’ behaviours. She says that this is for the same reasons that we do not subsidise agriculture, even though the US and the EU still do. In her words: “The benefits to the protected activities are vastly outweighed by the costs to the economy as a whole.” She considers that the phase-out of free allocation in the current Act, at 8 percent ending at 2030, was probably already too slow on economic grounds. It is proposed to be replaced by a phase-out of allocation at 1.3 percent for the next 80 years. This bill would make highly undesirable changes in order to achieve objectives that Treasury, the Parliamentary Commissioner for the Environment, a leading independent expert, and others tell us are without any clear analytical basis.

The tragedy here is that Parliament could instead be assembled today to debate a politically sustainable scheme. It is a matter of public record that early this year Labour offered talks to National as to what amendments might be needed to reach enduring certainty over climate change policy. When National walked out on those negotiations in favour of advancing the amendments contained in the bill, there were only three issues outstanding. The first was the entry date of agriculture; the second was the transition period, half-obligation, and fixed price; and the third was the allocation model, level, and phase-out rate. We were prepared to compromise on these in order to achieve an enduring emissions trading scheme. We would likely have agreed to a compromise agriculture entry date of 2014. We would likely have accepted the transitional price cap and half-obligation. We would likely have accepted an intensity-based allocation within a cap, subject to reasonable phase-out rules. All were less than ideal compromises but we were prepared to make them in the interests of achieving an enduring emissions trading scheme.

We negotiated in good faith and we could see no reason for National not to do so, as it appeared that the only significant issue for it to compromise on was the issue of the cap on free allocation in agriculture. If National had done that, an enduring and effective emissions trading scheme could have been achieved. We forgot whom we were dealing with. Instead, we have a bill that will make New Zealanders poorer, our economy weaker, and our emissions higher. If Parliament passes the bill in anything like its current form, a priority for Labour will be its repeal and its replacement with legislation providing for a robust emissions trading scheme and fit-for-purpose complementary measures.

CRAIG FOSS (National—Tukituki): I thank members for the applause! I am speaking on the second reading of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. I am the chairman of the Finance and Expenditure Committee, which the bill was referred to. The Minister for Climate Change Issues noted that the original preference was to send it to a specialised committee or to renew the previous climate change committee. But having said that, I tell the Minister that the committee welcomed it with open arms when it arrived.

It would be courteous and correct of me to acknowledge the members of the committee. The process we went through was somewhat unusual—but I have been here for only 4 years. On the whole, with some exceptions, the contribution of members was valued, of course. I particularly acknowledge the officials, advisers, and anyone and everyone who participated in getting the bill at least to its second reading. Politics aside, there were some tensions, stresses, and strains around the bill. Sometimes I think the officials, in some of the goings-on, very unfairly bore the brunt of some members’ frustrations. I need to give my personal thanks to the officials for their work. Actually, some of them are almost old friends, because this was the third time that many of them had sat down at the end of a committee table to look at the emissions trading scheme. The Minister alluded to the 2007 committee and the review committee earlier this year. We must have had well over 1,500 submissions on the policy.

The Finance and Expenditure Committee normally operates quite well. Members acknowledge their policy positions, there is good, robust debate, and we go on quite well. I reiterate my personal aim, and what I like to uphold, which is that all members at all times treat all people as they themselves would like to be treated: with respect. Acknowledging the various positions, I say that of course there is going to be disagreement. I acknowledge some members’ frustration at the tight time frame for the bill, but the Minister in his first reading speech explained why that was. It was always a given that the bill would come back to the House on 16 November or earlier.

There has been a lot of comment about the process of the bill as it went through the select committee. Some of the comment in the media has been criticism of me and of the committee. I have remained silent on that criticism, because some of the allegations were made in the committee, and I will not go outside of that. But, in terms of some of the points that were raised, I was on the other two committees, and a 5-minute submission time for many speakers was quite the norm. I recall that in 2007 four submitters had 15 minutes to share amongst themselves, that submitters were grouped, etc. I want to point that out, because some of the criticism of the process and of our committee is not quite fair. Sure, there is politics involved, but I do not think the criticism is quite fair.

I point out that many members were actually asked for lists of those whom they thought the committee should hear. Virtually without fail those names were asked to submit, without problem. At no time did this chair actually say that all submissions should be heard on one night in a period of 5 hours—which has been alleged, I think. That was what was available to us in our first opportunity to hear submitters, to hear evidence.

I also point out to some of those who have criticised the process—knowing that the timetable for the bill was always tight, knowing that November 16 was always the report-back date—that something that tightened the process was that some members wanted to spend some time away from these precincts. It is fair enough for members to want to spend time with their families, and I encourage that at all times. I do not disregard it, at all; I think it is quite fair. But we have to acknowledge that all the decisions are decisions of the committee. Perhaps some wanted to go on holiday. To criticise me for an allegedly fast process or an abuse of process, when members were choosing not to be in the precincts in order to go on holiday, is somewhat cute. I think it is very curious that some of those members have chosen to criticise me.

To those who wanted to hear absolutely every submitter, I say that I find it somewhat curious that during the proceedings some members complained about the committee hearing so many submitters, when earlier they had asked to hear every single submitter. As was noted earlier, all submitters have a right to be heard, but many wrote submissions. Some submissions, in fact, had party crests on the bottom of them.

Members will note from the commentary that the committee came out 6 all; it was not able to reach a majority. It is disappointing that the committee could not get to the stage where technical amendments to the existing scheme were able to be passed, or issues that I think the whole committee generally agreed on. I acknowledge that there is a Supplementary Order Paper covering tree weeds, such as wilding pines, etc.

I have two points. I have a quick note for my friends in the ACT Party. They believe in the market, they believe in market instruments, they believe in supply meeting demand, and I know and acknowledge that some of them do not think that climate change is going on, do not believe in the science, etc. That is absolutely fine, but the point I raise is that if that is correct, if that turns out to be true, then the price of carbon units will actually be zip—zero. If it turns out not to be correct that human-induced climate change is going on, the price of carbon—which everyone talks about right now at being $25 or $50 a tonne—would fall to zero, and the scheme would fall apart.

I will touch on the mythical figure of $110 billion, which I am sure members will speak to over the next wee while. It was an interesting time in the committee, to be fair, when that misunderstanding, shall we say, came about. The bottom line is that there is no such amount as $110 billion; the amount is actually $50 billion to $55 billion. But let us turn it on its head and take the number that members on the other side are talking about. What they are saying is that they are very disappointed that their original scheme would have taken $110 billion out of the economy; that is what they are saying. This scheme is not taking out $110 billion. It is simple compounding up. It is simple maths. I think those members actually acknowledge that, although I think they need to sit down with their leader and discuss it, because he raised the point again today. It is fair enough to have a discussion of the $50 billion to $55 billion amount, even though it is full of variables for Africa, but the figure of $110 billion is a mythical number. It is used just because it sounds big. For anyone in this debate to use that figure dilutes and undermines his or her integrity.

This bill set outs and follows the principles that National laid out before the electorate before the election last year. The electorate endorsed those policies and principles. Most of this bill concerns technical amendments and small fix-ups, which I think the other side generally acknowledges, to the existing legislation. The substantive issues are emissions intensity without a cap, and an open or closed economy. I look forward to further debate on this bill.

Hon DAVID PARKER (Labour): “Sometimes a picture paints a thousand words” is the saying, and this Climate Change Response (Moderated Emissions Trading) Amendment Bill is no exception to that. There have been some wonderful cartoons in the paper in the last few weeks on this issue. My particular favourite is one of Tom Scott’s a few weeks ago. In it there is a great big, very overweight industrialist sitting in very plush surroundings in his gentlemen’s club. He is saying to himself, in the little bubble of his speech: “Oh, New Zealand is a great country—all those punters paying for my greenhouse gas emissions.” Then he looks around at the waiter, who is over in the corner and is drawn like Manuel out of Fawlty Towers, and he says “Waiter, another gin and tonic please, and make sure it is an organic lemon. We all have to do our bit for the environment.”

Well, that is it exactly, is it not? What has happened here is that the punters out there, the taxpayers, the mums and dads and their children, are to pay for the emissions of the big emitters. They are to pay $50 billion more for emissions under this new scheme than under the current one. The effect of that by 2050 is that Government debt will go up by $110 billion. That is what Treasury says, and it is correct: $50 billion excluding interest; $110 billion including interest.

These numbers are so astronomically large that people find them hard to comprehend, but there is a very good comparison to be made between the long-term effects of this policy and those of some of the mistakes that have been made by earlier National Governments that have populated this place. One of those mistake was introducing supplementary minimum prices. There was a fiction in New Zealand that supplementary minimum prices were affordable, that the subsidy to the agriculture sector could be sustained, and that New Zealand would be wealthier as a consequence of that subsidy to agriculture. Of course, we all know how that ended. It ended in tears, because the country could not afford it. Government debt got too high, and, as a consequence, the subsidy was withdrawn. That is what will eventually happen under this new scheme in agriculture; it has to, because this is unsustainable, with $50 billion of emission allocation rights and $110 billion of debt. Farm prices will go down by a large amount, and a lot of people who have invested their money in the intervening period will lose money, because they have been given the wrong signal by the economy.

Climate change is a very, very serious problem, but at its heart the way to cure it is obvious. There is only one solution: we have to reduce our greenhouse gas emissions. We sometimes lose sight of that. We know that the pricing of emissions is absolutely fundamental to causing businesses to have a financial interest in reducing emissions. Otherwise, it is in their financial interest to make as much money as they can by increasing emissions. So the objective of an emissions trading scheme, or of a carbon tax if one goes down that route, is to reduce emissions by giving a financial incentive to do so to those that produce the emissions.

We have heard the Government try to justify its changes by saying it is aligning the scheme with Australia’s. Well, the first reality is that it is not in our interest to do so. Australia’s economy is fundamentally different from New Zealand’s when it comes to emissions. More than half of Australia’s emissions come from coal; half of our emissions come from agriculture. Would it make sense for the Australian emissions trading scheme, which is called the Carbon Pollution Reduction Scheme, to exclude coal? Of course it would not. Has it excluded coal? No, it has not. Should New Zealand exclude agriculture because we would be aligning ourselves with Australia? That is a ridiculous suggestion. It is as stupid for New Zealand to exclude agriculture as it would be stupid for Australia to exclude coal. The suggestion that we should align our scheme with Australia’s makes no sense. And anyway, we are not doing that, because eventually we are including agriculture. We are just not doing it properly, and we are doing it too late. So we are not having a real alignment with Australia, but the alignment that we are having is not in our interests.

I am not the only one who says that. The Parliamentary Commissioner for the Environment has said it. The specialist adviser to the Finance and Expenditure Committee said it. I want to mention her—Dr Suzi Kerr. Where is Dr Suzi Kerr at the moment? She is a world expert. She is currently a visiting professor of economics at Stanford University in the United States, one of the United States’ leading universities, and, indeed, one of the leading universities in the world. Dr Suzi Kerr from New Zealand is currently lecturing there in emissions pricing. We had the benefit of one of the world’s leading experts on emissions pricing giving advice to the select committee. Could we take into account her advice properly? No, because the process was so fast that we got her advice only on the last day. Notwithstanding the fact that on the last day it turned out that the cost, in terms of Government debt, had gone up to $110 billion, the National Government would still not slow down the process to enable us to properly consider the implications of that. So we could not consider Dr Kerr’s advice properly.

Dr Kerr said the phase-out under the existing scheme, which phases out the free allocation to major industries at 8 percent per annum, was, if anything, too slow and would lead to economically inefficient outcomes for our economy. So what do members think she thought of a 1.3 percent abatement of free allocations, which is so slow as to virtually not happen? She thought that it was nonsense. She thought that it would make New Zealand poorer, not wealthier. She thought that we were setting up a system that will encourage an increase in emissions in New Zealand rather than a decrease—a scheme that will do the opposite of what it is meant to do.

I want to mention also that the media are on to it. Editorials, from Auckland to the bottom of New Zealand, are now saying that the proposed changes to the scheme are wrong. So are the commentators. We have heard the borax being poked at some of New Zealand’s leading commentators. We have had criticisms of Brian Fallow today; we have had people writing off Rod Oram as a sycophant or non-entity. In addition to those people, we have had Richard Long, former chief of staff for National, being highly critical of the changes. He has been written off. We have had Fran O’Sullivan being very critical of what is being done, and no doubt National will write off her criticisms, as well. That is on top of Treasury criticising the changes, the Parliamentary Commissioner for the Environment criticising them, and the Ministry of Economic Development, another arm of the Government, saying the phase-out of the free allocation is far too slow and not warranted.

Still the Government proceeds remorselessly on. As a consequence, our country will get poorer. Our economy will not adjust. We will not take advantage of the opportunities that will arise for those who move into this new world with appropriate speed.

I also want to touch on the deal that has been done with the Māori Party. Only a matter of months ago the Māori Party said the existing emissions trading scheme was too weak, and, if anything, it should be strengthened, and it would prefer to go down a carbon tax route rather than an emissions trading route. The Māori Party is here today to vote for the opposite of that. It is voting for an emissions trading scheme that no longer works, that will increase emissions, and that does the opposite of what Rahui Katene, in her minority report, said at the Emissions Trading Scheme Review Committee some months ago should not be done.

Further than that, a fundamental principle is being breached by the deal that is being done. The Māori Party and the National Government might like to characterise some of the criticisms that are coming from lots of people as coming from a race agenda. It is not. Once people receive a Treaty settlement, so long as there has been no withholding of information and no misrepresentation by the Crown, then those assets are in the same position as any other assets owned by any other group in New Zealand. The owners must be bound by the same laws, whether it is the Resource Management Act, the Income Tax Act, or the emissions trading scheme legislation. There is no basis for having separate rules. The New Zealand Herald put it very well in its editorial, saying there are things that we do not know when we enter into a Treaty settlement; there is an upside and there is a downside. It pointed out that at the time of the Treaty settlement with Ngāi Tahu, the boom in prices that would be occasioned by the free-trade agreement with China had not been thought of. Should the Crown go back and take value off Ngāi Tahu as a consequence of not predicting that, or not disclosing that? Of course it should not. Conversely, Ngāi Tahu should not expect to receive some additional compensation over and above what is being paid to other owners in society for emissions pricing. There is no justification for that. It actually undermines the principle of full and final settlement, and it creates different asset classes in New Zealand according to the ethnicity of their owners, which is wrong.

Dr RUSSEL NORMAN (Co-Leader—Green): I stand to speak on the second reading of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. This bill is fundamentally about climate change, and it seems that not a day goes past when the evidence around climate change does not get more alarming. In fact, we would think that if we read the evidence and followed the debate around the science of climate change, then, if that was what drove us, we would become increasingly concerned and would want to make our response to climate change stronger and stronger over time.

Just today, for example, when I was scanning the papers, I saw that the Antarctic ice sheet is melting faster than previously thought—for example, the West Antarctic ice sheet is currently dumping about 132 billion tonnes of ice per year. One hundred and thirty-two billion tonnes of ice per year is being dumped by the West Antarctic ice sheet into the sea, which is more than we had previously thought. The East Antarctic ice sheet, which we thought might be accumulating ice because of the increased precipitation of snow on the surface, actually appears to be dumping about 57 billion tonnes of ice per year. We are losing that ice from the East Antarctic ice sheet. The reason why this is so significant is that these ice sheets have a dramatic impact on global sea levels. The West Antarctic ice sheet by itself would result in a 5-metre sea-level rise if it were to disintegrate.

It is against this background that we are considering a bill that will weaken New Zealand’s response to climate change. It is really quite hard to fathom that in a world where the evidence that we are changing the planet itself is increasing and strengthening, and in which the science is becoming more and more compelling, the New Zealand Parliament looks as if it is passing a bill today that weakens the New Zealand Government’s response to climate change. It is hard to fathom. People in future years will look back on this debate, scratch their heads, and wonder that at the very time when the evidence around the acceleration of human-caused climate change is gathering, and when we are in the run-up to perhaps the most important conference in the history of humankind—the UN Climate Change Conference in Copenhagen—the New Zealand Parliament should choose to weaken the response of the New Zealand Government and the New Zealand people.

This is a time when we should be more concerned, because, of course, the Intergovernmental Panel on Climate Change had a very modest prediction about sea-level rise—18 to 59 centimetres by 2100—but that was premised on the basis that we could not predict what would happen with the big ice sheets in Greenland and Antarctica. But we know now that those ice sheets appear to be losing a lot more ice than we thought previously, and they appear to be warming more quickly. We would think that in the face of science and evidence, the New Zealand Parliament would look at the science, strengthen its response, and aim to have a more considered and stronger response on climate change. Instead, the bill in front of us today is a bill to weaken our response to climate change. It is a shameful day to be a member of the New Zealand Parliament and to watch the New Zealand Parliament passing this legislation.

It is important to remember that during the last Eemian period—128,000 years ago—greenhouse gas concentrations were at about the same level as they are today but sea levels were from 5 to 7 metres higher, because there is a lag in our system. There is a lag between the time we increase levels of greenhouse gases and the time we see sea levels rise. What we are looking at right now is an increase in greenhouse gases in the atmosphere, but we are yet to see the full impact of that increase in terms of melting in Antarctica, sea-level rise, and more extreme weather events—although already we have seen very significant extreme weather events.

In the face of the fact that we know we have yet to see the full impact of climate change, the New Zealand Parliament’s response—and it would appear to be the New Zealand Government’s response—is to weaken the ability of the New Zealand economy to reduce its greenhouse emissions. In fact, we are introducing a system today where we take the “cap” out of “cap and trade”. Someone one day came up with the idea of “cap and trade” as a way to cap emissions and then allow for the most economically efficient way to reduce those emissions under that cap. But the Government has decided today to take away the cap so that we do not have a “cap and trade” system any more, and to take away the fundamental driver of the price. Of course, the result is that the New Zealand economy will respond by increasing greenhouse emissions.

In New Zealand we have already increased greenhouse emissions very, very significantly. Our increases are in the order of 22 percent, or more, since 1990, and over the course of the previous Government, greenhouse emissions increased by about 14 percent. In spite of the Green Party’s efforts to constantly call on that Government to address climate change, only towards the end of its term was that Government willing to address climate change to some degree. The emissions trading scheme that was brought in by Labour and the Greens in the last Parliament, which was not a perfect scheme but which made some progress towards introducing a “cap and trade” system, is the very scheme that we are dismantling today by taking away the cap in the “cap and trade”.

It is hard to get our heads around the idea that this is what human beings, who have spent many millions of years developing a consciousness and an ability to understand the world, would do. It is hard to comprehend that the majority of members in this House today are going to vote for a system that will increase New Zealand’s greenhouse gas emissions at a time when the science and the evidence around the impact of climate change is building all the time. It is in fact a suicide note. What this Parliament, and Parliaments in a similar situation all around the world, are doing is writing a collective suicide note to future generations. We all talk about what might happen in 2100, but there are children born today who will be alive in 2100, and they will look back and curse us. They will curse the members of this Parliament, and they will curse this Government for weakening our ability to reduce our greenhouse emissions.

This is a Government that will walk into negotiations in Copenhagen with the objective of weakening the global agreement there. That is what this is all about. That is why the Government wants to get this bill in place—so it can walk into Copenhagen and try to undermine the agreement to reduce global greenhouse emissions. It is hard to get our heads around the idea that at a time when the evidence that we need to reduce our greenhouse emissions is becoming more compelling, a Government would bring a bill into the House that will increase our greenhouse emissions. It is hard to understand that human beings who so value their intelligence, their consciousness, their science, and the evidence would bring a bill into the New Zealand House of Representatives that will increase our greenhouse emissions—which is what this bill does. It is a very hard thing to understand.

There are ethical issues associated with what we are doing today. It is the wrong thing to do to future generations. It is the wrong thing to do to children, and to the people who will come after us. It is also an incredibly stupid thing to do from an economic point of view. If New Zealand wishes to be prosperous, it must make the transition to a low-carbon economy. There is no other form of prosperity for New Zealand in the future. To anyone who sits here and thinks that this will all go away—which is, of course, what this bill hopes—and who thinks that New Zealand can somehow have a prosperous future with a high-carbon or carbon-intensive economy, I say that there is no such thing. Either we have a low-carbon economy, which gives us the opportunity to have a prosperous economy, or we have a high-carbon economy, which means we will not be prosperous. This bill will lock in investments that lock in a high-carbon economy; there is no way that we can have a prosperous economy if we lock New Zealand into a carbon-intensive economy. But this bill locks in that high-carbon economy.

We can only hope that it is not too long before we get rid of this stupid bill. We can only hope that it is not too long before we have a carbon trading system that plays a part in putting a price on greenhouse emissions so that we can reduce our greenhouse emissions. That is the only way we can send a price signal through our economy in order to move it toward a low-carbon economy. We also need the complementary measures of State regulation and State incentives to reduce emissions. We also need all the education and individual action. But if we undermine the price signal, which is what this bill does, we undermine our ability to reduce our greenhouse emissions, and we lumber future generations with a huge debt and a huge increase in greenhouse emissions. It is a shameful bill.

Hon RODNEY HIDE (Leader—ACT): Let me be clear about a number of things. First up, we have a very, very good Government. Certainly, we have an excellent Government compared with the Government we had for the previous 9 years. But even a very good Government can make bad policy. Even a good Government can make bad policy, and with this Climate Change Response (Moderated Emissions Trading) Amendment Bill we have a very good Government making atrocious policy. Not only do we have a very good Government making atrocious policy, but we also have a good Government following an atrocious process. The Ministers of this Government who are voting for this bill and for this process have to accept that responsibility, and so does every member of Parliament who is voting for this legislation today and confirming the process that has been followed.

Let me also make it plain that the ACT Party totally opposes having an emissions trading scheme for New Zealand. An emissions trading scheme for New Zealand will hike the costs to business, to farmers, and to hard-working New Zealanders right at the time when we can least afford it. There is no doubt about it: an emissions trading scheme will put up the cost of basic goods and services for ordinary New Zealand families. That is what this bill will do to New Zealanders, that is what an emissions trading scheme will do, and that is why the ACT Party is the only party prepared to stand up in this House to oppose having an emissions trading scheme.

Following the election we had a difficult situation with regard to the emissions trading scheme, because we had National committed to the emissions trading scheme and the ACT Party implacably opposed to it. We agreed to have a comprehensive review through a select committee. What we wanted—in fact, what the select committee was supposed to do—was to do the rational thing for the country: to look at the options and to provide the costs and the benefits. It never happened. To this day this Parliament and the public of New Zealand still have no idea of the cost of this scheme. They have no idea of the cost of an alternative, such as a low-level carbon tax, or indeed of the cost of having a simple delay for a couple of years. They know nothing.

Then we discovered that the Government had done a deal with the Māori Party, in order to put the changes through the select committee that National wanted to make to Labour’s emissions trading scheme.

Charles Chauvel: Disgraceful.

Hon RODNEY HIDE: Well, that was not disgraceful; what was disgraceful was what happened next. That was the true disgrace. At that point, on behalf of the ACT Party I said to the Prime Minister and National that we understood they did not have the Māori Party’s vote on taking the legislation all the way through, and that if there was any difficulty with the vote they should come and talk to the ACT Party. I said that, yes, we opposed the emissions trading scheme, but that we were prepared to help the National Government for the good of the country and, indeed, we were even prepared to swallow a dead rat. We were prepared to swallow a dead rat in order to get a better result for New Zealand.

But National never ever came to the ACT Party in order to discuss the options for the reform or the delay of the emissions trading scheme. National made a decision to commit to the Māori Party and so to lose any negotiating power that it might have had. I accept that it is the prerogative of Nick Smith and the Prime Minister to do that. They are the ones with the votes. They are the leaders of this Parliament and this Government, but I say that the result was bad policy. It was atrocious policy and an atrocious process, and New Zealanders were sold out.

What have we discovered? We have discovered that all of this had to be done in a great rush, ahead of the rest of the world, in order to be done before the talks in Copenhagen. We had to be ahead of every other country. We discovered today at question time that this deal with the Treaty clause in it was concluded, according to the Minister, only after 1 o’clock yesterday, which was a couple of hours before it was announced. We know from the Minister of Māori Affairs that the deal was concluded only at 12 minutes past 3—presumably that was when he was told that it had been accepted at Cabinet—which was 18 minutes ahead of the time the deal was made public. The deal with these five iwi and with the Treaty clause will now be passed under urgency, with no proper parliamentary scrutiny and no public input. The deal was agreed to only yesterday, and it will be passed into law today.

Hon Dr Nick Smith: Tomorrow.

Hon RODNEY HIDE: Oh well, it will be passed into law tomorrow, but I say to Dr Smith that we are in urgency, thanks to him.

I will read that Treaty clause to members: “In order to recognise and respect the Crown’s responsibility to give effect to the principles of the Treaty of Waitangi,”. I challenge the Minister for Climate Change Issues and the Māori Party to stand up in this House and put on record in Parliament what the principles of the Treaty of Waitangi are. If we are to have Parliament giving effect to something, then I think it is quite reasonable to ask what we are giving effect to, in this Parliament. We are not giving effect to the Treaty—actually, if we were giving effect to the Treaty, then we would not be having an emissions trading scheme—but we are giving effect to the principles of the Treaty.

I remind the great National Party, our support party, of National’s position in 2005. It is our job to remind National of its principles, its position, its philosophy, and its policy. Its policy in 2005 was that the principles of the Treaty of Waitangi were to be expunged from all legislation. Why? According to Dr Don Brash, who was the National leader at the time, the principles of the Treaty were undefined and unnecessary. This is what Don Brash said in 2005, an election year: “This process”—that is, the process of inserting the principles of the Treaty every which way—“is becoming deeply corrupt, with some requirements for consultation resulting in substantial payments in a system that looks like nothing other than stand-over tactics.”

I am sorry to say this, but the National Government, the Prime Minister, and the Minister for Climate Change Issues have allowed themselves to sell out their voters and their supporters by inserting in legislation the principles of the Treaty that they were opposed to and by cobbling together this deal in the last few minutes before going public. They are ramming through under urgency, with no parliamentary scrutiny or public input, a deal for consultation in order that the principles be given effect to, and for regulations down the track to be passed. I say that Don Brash was right when he said that this process is becoming deeply corrupt, with some requirements for consultation resulting in substantial payments in a system that looks like nothing other than stand-over tactics. I say “Shame on National and shame on the Māori Party.”

RAHUI KATENE (Māori Party—Te Tai Tonga): May I say it is a joy to work with a party that is not tied down in “Hide-bound” ideas.

In speaking to the announcement made yesterday of the proposals to reduce emissions in order to meet the Kyoto Protocol, Ngāi Tahu kaiwhakahaere, Mark Solomon, made a key statement. He said: “It is a day where the ledger is made even.” Mr Solomon was referring to the fact that relevant information was withheld from Ngāi Tahu when they bought forestry land for conversion to farming. Ngāi Tahu’s case was that the Crown did not meet its information disclosure requirements of their Treaty settlement in respect of the likely impact of an emissions trading scheme on pre-1990 forest land. Similar issues were raised by Waikato-Tainui, Te Uri o Hau, Ngāti Awa, and Ngāti Tūwharetoa. Yesterday’s announcement made the ledger even, in that it covers the cost of the loss the iwi will experience under the scheme. It was an announcement that recognised the constructive engagement that has taken place between the iwi and the Crown to try to address a situation in which they had been unknowingly disadvantaged. It was an announcement that reflected the generosity of spirit entered into between the Crown and the Treaty partner.

The question of balance is an appropriate one to be considering as we debate the Climate Change Response (Moderated Emissions Trading) Amendment Bill today. The Māori Party has worked relentlessly to try to achieve outcomes that can work in the best interests of the nation. As a nation dependent on a favourable climate for our heavy involvement in primary production, climate change represents a significant risk to the quality of our everyday life. Climate change will have profound implications for Aotearoa over the long term, and potentially significant levels of costs. So there is no dispute: collective responsibility for environmental and social outcomes is the only way to respond to climate change. The way in which we have been able to mobilise this collective effort is through compliance with the targets of the Kyoto Protocol. We know that there is no single piece of legislation that can be the catch-all, comprehensive answer to climate change. The real answers can only come from people as whānau, communities, and enterprises deciding to change how we live and interact with the environment.

This bill is only a small part of the change that is needed. But what is so important about this bill is that it aims to reduce the total greenhouse gas emissions by encouraging all New Zealanders to take responsibility. We have all known that New Zealand’s emissions are increasing, with greenhouse gas emissions in 2007 about 22 percent higher than they were in 1990. In fact, if we did nothing at all to reduce our emissions, our total emissions could total well over 30 percent higher by 2012. The Māori Party believes that it is high time that we as a nation stopped the years of lobbying Parliament on how the emissions trading scheme should be structured, and focused on the real challenge of addressing our collective responsibilities for carbon emissions. The Māori Party is standing up for four outcomes that we believe are in the best interests of our people and the nation: our whānau, our whenua, the Treaty of Waitangi, and the Māori economy.

I want to raise a concern about the criticism suggested by the Leader of the Opposition that the so-called special treatment of some tribes will do little to help Māori households. At the risk of pointing out the obvious, hapū and iwi are built upon the very foundations of whānau; there can be no iwi without whānau. The key stakeholders for Te Rūnanga o Ngāti Porou, for example, are the descendants of Porourangi. As a descendant of Kai Tahu, I remind the House that the broad mission of Te Rūnanga o Ngāi Tahu is to promote and enhance the social, cultural, and economic well-being of Ngāi Tahu whānui. So when Mr Goff talks about preferential treatment or special deals for iwi, he needs to be very careful that he knows what he is talking about.

It has been very clear to us that paramount in the concerns of the iwi leadership has been the need to support Māori households. I read this morning the views of Rāwiri Te Whare, the General Manager of Te Pūmautanga o Te Arawa. In referring to the attempts of some politicians to polarise the issue as a race-based one, Rāwiri Te Whare said: “The criticism is unhelpful and simplifies what is actually a complex issue. Iwi leaders do not seek special treatment for Māori, we are seeking fairness on a proposal that will have a disproportionate impact on our businesses—and therefore our ability to assist to lift the social, cultural and economic aspirations of our people.” The question of fairness, of balance, has been uppermost on our minds as we tried to negotiate concessions that would support our more vulnerable families along with our fledgling iwi enterprises in fishing, farming, and forestry.

A key win for all of our whānau and all lower-income households is that they will be better supported to insulate their homes to decrease the cost of electricity. We also know that warmer homes mean better health outcomes and a better quality of life. Insulation leads to lower power costs and better health. Our priority was to ensure that the funding available gets to those homes most in need. So we are really thrilled that the new money, the additional $24 million we were able to negotiate, will mean that an extra 2,000 houses of community services card holders will be insulated every year from now up to 2013. We pushed hard for this, as well as halving petrol and power prices, in order to cushion the blow on low-income families. A major emphasis for the Māori Party was on doing all that we could to ensure our whenua will be sustainable and healthy for our mokopuna.

The package includes a range of environmental outcomes, from working with iwi to invest in indigenous forestry to recognising the importance of biodiversity to all people, so that future generations inherit a country that is a better version of the clean, green Aotearoa we inhabit today. Our negotiations have been critical in recognising that iwi are the key drivers behind the Māori economy, which contributes some $16 billion to the economy of this nation. It is our view that any legislation passed in this country must support the Māori economy to reach its full potential. Our people are heavily involved in fishing, farming, and forestry, all of which are affected by the scheme. We worked hard to make sure that our people’s businesses are not the hardest hit by the scheme, so that the outcomes are fair and our economy can grow.

And, finally, I want to bring to the House the significance of the Treaty of Waitangi to this debate. We entered negotiations understanding that the Treaty must be provided for in the scheme so that it is fair for our people, no matter what future changes are made along the way, and so that Treaty settlements are respected. The Treaty is about joint responsibility and working together. This bill reflects our role in responding to the shared challenge of climate change. The agreement allows for more Crown-iwi partnerships in tree planting on conservation and Māori land. It makes a commitment to the Treaty relationship through the highest level of input on agricultural, forestry, and fishing issues. To this end, I will be tabling a very important amendment during the Committee stage to ensure that the emissions trading scheme gives effect to Treaty principles.

The scheme is not perfect by any means. But we believe that it balances the concerns of whānau and businesses with the need to ensure we protect our environment for future generations. Ultimately, it is those mokopuna whom we must think of as we make our vote today. Kia ora.

AMY ADAMS (National—Selwyn): I rise to take a call in this debate. A little more than 10 years ago, New Zealand entered into the Kyoto Protocol. New Zealand committed itself to Kyoto, and this Government is committed to follow through on those obligations. Living in a carbon-constrained world is a legal, economic, and environmental reality. It is something that all New Zealanders have to grasp as part of this debate. As well as that, it is a trade imperative to now be seen to be doing our part around our carbon obligations as set out in Kyoto. New Zealanders need to understand that whatever they may think of the debate, from a matter of trade we need to do our bit under Kyoto. We need to be seen to be playing our part. Under the Climate Change Response (Moderated Emissions Trading) Amendment Bill, we are.

There is one other starting point that New Zealanders need to grasp if they are listening to this debate and when they think about this debate. They need to understand that on 1 January, without this bill masses of cost will come into play. The power bills of households will go up by 10 percent, and it is Kiwi mums and dads who will bear that cost. As well as that, if we do not change the legislation, the jobs of thousands of New Zealanders will be put at risk. The Labour Opposition talks about jobs, but if its scheme comes into force on 1 January of next year, which it will do if we do not pass this legislation, not only will the costs of households go up dramatically, but New Zealand jobs will be at risk. This bill is about getting that balance right between those two things. It is about getting the balance right between what we must do to play our part in terms of the environmental, economic, and legal realities as set out in the Kyoto Protocol, and ensuring that in doing so we do not sacrifice the New Zealand economy, the jobs of New Zealanders, and the wealth of every citizen in this country, as well as future generations, as Rahui Katene referred to in her speech. This bill does that well. Politics aside, we have a workable solution that balances our international obligations, our environmental obligations, and the fiscal realities.

When this Government was elected, we talked, in regard to emissions trading, about a couple of things. We talked about the need to be aligned with Australia as much as we could. We talked about the fact that Australia is our major trading partner, so it would make sense to put our industry on a similar footing to that in Australia. We talked about the fact that to National, an emissions trading scheme should not be a tax-generating mechanism. That is what it was going to be under the Labour scheme. It was setting itself up to suck another $2 billion a year out of the economy to put into its war chest. We do not see the emissions trading scheme as revenue gathering for the Crown. We see the emissions trading scheme as about protecting the environment and protecting jobs. We set out to design a scheme that was fiscally neutral, and that is what we have done in this bill. We do it without risking our key industries.

Let us be really clear that under this bill the cost on New Zealand households will halve—it will halve. That is what we are talking about. We are not talking about big business. We are talking about cutting in half the cost that the Labour Opposition wanted to put on Kiwi households. This bill will not impose that cost.

I shall spend a moment talking about agriculture, because that is an area of great importance to my Selwyn electorate. Agriculture is a crucial industry to this country. It always has been and it always will be. We are not prepared to see agriculture sacrificed but we must deal with it within the emissions trading scheme. The reason we must deal with it is that it is almost half of our emissions profile. I know that other countries have decided to exclude agriculture, and if it were possible, that would be great. But when, in New Zealand, half of our emissions profile is agriculture, we must include it in an emissions trading scheme, and it has stayed in our system. But—and it is a big but—we will ensure that we will do it in a way that does not see farmers go into bankruptcy in their thousands, as would previously have been the case. We have deferred the introduction of agriculture for a further 2 years to enable time to look into better ways for farmers to adapt and to reduce their emissions so they are not just fed to the wolves.

We are not here to put people out of business. We are not here to kill off industry. We are not here to see New Zealand continue to sink further and further down the OECD rankings, and that is what would happen if we did not stand up for agriculture. So we must include it. But the Minister has worked very hard, as have officials, to ensure that it can be included in a way that enables our farmers and our agriculture industries to survive. That is through a deferral of 2 years. That is through the reduced phase-out rate. Instead of losing their allocations at 8 percent a year, our farmers will see a phase-out rate of 1.3 percent a year, starting in 2016.

Hon David Cunliffe: We’ve been saving 1.5 percent since 1990.

AMY ADAMS: As Mr Cunliffe said—for once in his life managing to say something that is remotely accurate—they are getting phased out a lesser rate now than they have already been working to reduce their emissions. So we are saying to them that that is great. It is fantastic. That is the point. The point is if they are already reducing their emissions, we support them. This is a carrot and a stick.

Hon David Cunliffe: Yeah, with no stick.

AMY ADAMS: If they reduce their emissions, they will not have a bill. If they do not reduce their emissions, they will have a bill, I say to Mr Cunliffe. I do not know why he finds that so hard to grasp. But we cannot in this country simply ignore it. The way Kyoto works is that we have to account for our entire domestic emissions profile. In this country, if we were to leave agriculture out, all of that burden would fall on the rest of the economy. In Australia, the emissions profile of agriculture is 13 percent. They may find that workable, although I suspect we will find that there will be considerable cost there in agriculture, albeit that may be achieved through other mechanisms apart from those directly in the scheme.

The bill we have before us does, in my view, strike the right balance with our environmental obligations, with the trade realities of needing to show the rest of the world that New Zealand is doing its bit between meeting our Kyoto legal obligations and the need to ensure that we do not walk away from Kiwi jobs and do not put the income of more Kiwi households at risk. We do not want to see big cost increases on Kiwi households that do not need to be there. This bill will halve those increases. It will protect those jobs, and it will do our bit for the environment. I am very pleased to support it.

Hon DAVID CUNLIFFE (Labour—New Lynn): I thank Amy Adams, the member who has just resumed her seat, for clarifying several things. The Climate Change Response (Moderated Emissions Trading) Amendment Bill is putting on New Zealand households—on hard-working New Zealanders and their children—a debit equivalent to $92,000 a household. By the Government’s own numbers, even if we take the most favourable assumptions and leave out the compounding cost, it will be $50 billion a year by 2050. This is based on a carbon price of $25 a tonne in 2013, going up to $50 a tonne thereafter. The Government’s own number is $50 billion by 2050. If we put in the cost of capital, we see that it will be $110 billion, yet those members have the gall to say that Labour wants to impose costs on New Zealand households.

The member who just resumed her seat is from an agricultural constituency and she did agree with the point that agriculture has been reducing its emissions by 1.5 percent per year, on average, since 1990. But the obligation this Government is bringing on the sector is for 1.3 percent—less than that—going forward. Analysis presented to the Finance and Expenditure Committee said that the first 5 million tonnes of agricultural carbon emissions reduction will be at a profit, but the Government will write the sector a cheque as well, anyway.

But the saddest thing was not Miss Adams’ speech; it was the previous one by Rahui Katene. She is a member I do respect, but I ask her whether, unlike Ngāi Tahu, other iwi like Tainui got Department of Conservation lands in their settlement, or whether those other iwi who participated in the Crown Forestry Rental Trust will have access to the last-minute deal that the Māori Party has brokered for its benefactors. Members should make no mistake: this is not a deal for the average Māori up and down the motu. This is a deal for a very small number of people—wealthy interests at the “Browntable”—and that is not kaitiakitanga and it is not whanaungatanga in any understanding that we possess.

But let us put ourselves in the shoes of our children. No member of this House, whatever party they come from, can honestly look their children in the eye and say to them that they will be better off in the future as a result of this bill, and that their future will be brighter than ours. Let us cast our minds back a little and think about the place that this baby-boom generation has occupied in our history—the children of the Second World War who vowed to build a better world. Here we stand today at the cusp between their era and the era that our children and our grandchildren will inherit, but what do the latter have to look forward to?

The thing that worries young people today is not the global financial crisis—that is just a blip—it is not the end of the American empire or the rise of East Asia, but it is the threat of a changing climate. That is why we go to see movies like The Day After Tomorrow, 2012, and even Twilight. We go to them because this civilisation, our young people feel, is entering its twilight. Our young people are no longer optimistic that their future will be better than this generation’s past, but what is the National Government doing about it?

This Government is imposing on the young people of New Zealand, and on our grandchildren, a bill that will put liabilities on the credit card for generations to come, in order to subsidise the big polluters of today: the powerful interests that support the National Party. It is as cheap and as dirty as that. If smirking members opposite doubt me, I say let us cast our minds back to when the man who is now Prime Minister said climate change was a hoax. Then, just before the election, when he worked out that young people vote, he said that, no, he had always believed in it. Now he has returned to type, because this bill is hype; it is a hoax and it is a nonsense.

Why should we be surprised? The process that has been used by the “Minister for Shambles” was exactly that. It was a travesty. There is a telephone book of amendments laid on the Table that this Parliament has not seen before today. I appreciate the Minister inviting some of us in this morning, but those Supplementary Order Papers have not had the benefit of a select committee process. Even those parts of the bill that did go to a select committee had to be considered in the absence of material that that Minister withheld under the Official Information Act. Although 379 submitters said they wanted to be heard, the chairman of the committee felt there was time for only 30. We finally insisted on 127, but most of them got called the same day and were told “Pony up, or lose the chance. This is it.” Yet that National Party had the gall to say of last year’s bill that Labour’s emissions trading scheme was rushed. Labour spent a whole year on a select committee process; National has allowed 1 day for submissions and tabled those amendments in the House. There is a word for it—I cannot use it—it starts with “h”. Members opposite know which word I mean. National has one set of standards in Opposition, but runs right over them when it gets into Government. I say to those guys opposite that the issue with that is that a party like that does not stay on the Treasury benches for long, because New Zealanders know the difference.

I ask what our young people want. Our young people want responsible leadership. They want leadership that can see into the future and help to bring the present to that better place. Our young people know that they are being cheated today, and that they are being presented with a huge bill for a scheme that is badly designed and that has not been properly considered. It is a scheme, according to Treasury’s regulatory impact assessment unit, that could not stand scrutiny because the analysis it was built on was flawed—or words to that effect. It is a bill that did not have even a departmental clause-by-clause report. Officials could not produce one because there was not time. It is a bill for which the Parliamentary Counsel Office could not produce a revision-tracked set of amendments for the committee to consider in the normal way, because there was not time.

What is the rush? Is it to allow a Minister and his leader to grandstand in Copenhagen? I pity them, because Charles Chauvel will be there telling people the truth about the sham that is being driven through this Parliament today, and the world will know that the Government is “100% Pure”—“100% Pure Nonsense”. [Interruption] I have two minutes left before the next member’s call, I say to Ms Wagner, and I hope she will enjoy my speech, because I am so far from finished with this bill!

We have a long few days ahead of us on this bill. I am looking forward to the Committee stage—to counting every subsidy, to unmasking every dirty deal, and to showing out every craven emitter who has come to the door of the Minister, where God knows what has been exchanged for a $110 billion cheque. How ludicrous is this: a “cap and trade” system with no cap? It would be like a carbon tax with no tax—

Charles Chauvel: And no carbon.

Hon DAVID CUNLIFFE: —and no carbon. The idea of emissions trading, for the general public, is that New Zealand gets to adapt to a low-carbon future at the lowest economic cost, but it only works if we actually have to trade, and that only happens if we actually have a cap. Treasury and the Parliamentary Commissioner for the Environment agree that this bill will reduce emissions by up to less than 1 percent only. So what do we get—and, hey, let us be generous—for our $50 billion? What do we get for that? According to the independent authorities, we get less than 1 percent of emissions reduction for at least $50 billion on the Government’s debt by 2050.

Is that anybody’s idea of a good deal? Is it anybody’s idea of a good design? Is it anybody’s idea of a good process, or a good future for our children? If I feel upset about this bill, it is because I have kids, and I cannot look them in the eye and say that today we as a House are making their future brighter.

NICKY WAGNER (National): I support the Climate Change Response (Moderated Emissions Trading) Amendment Bill. I support it because it is a moderate, common-sense response to an enormously difficult problem. It has been really interesting to listen to David Cunliffe today. He spent a heap of time in the Finance and Expenditure Committee bleating that he did not understand the bill, in order to make political points, but his speech today proves the point: he truly does not understand it at all. His speech was full of emotive rhetoric and there was no intelligent comment.

Everywhere around the world, Governments and people are struggling with the concept of climate change. It is a fiendishly difficult problem. As the Australian professor Ross Garnaut said: “It is harder than any other issue of high importance that has come before our polity in living memory.” But around the world there is general agreement that this is a truly global issue and it has to be tackled. Every country has to deal with the problem, every country needs to be involved, and Governments around the world have accepted that fact. Indeed, I cannot think of any country that has declared it will do nothing. It is a fiendishly difficult problem, and it comes at the worst possible time: a time when the world is also struggling with a hugely challenging financial situation, a time of great economic turmoil and international uncertainty. This bill is a first step, a sensible, pragmatic, responsible response to both environmental and economic conditions. It includes a series of reviews, starting in 2011, which will allow us to tweak the legislation as the global situation clarifies.

The process of getting to this point has been agonising. There is general agreement that New Zealand needs to have an emissions trading scheme, but little agreement about how it should be formulated. The devil is always in the detail. Way back in the late 1990s, National began advocating for an emissions trading scheme, but between then and now—and a Labour Government—we have had a failed tax proposal, an unsuccessful industrial scheme, and an unrealistic Act. Now, finally, we have a reasonable and rational scheme that allows New Zealand to do its fair share for global climate change without destroying our economy or the quality of life that it delivers.

Over the last decade we have seen lots of energy, angst, and good intentions to tackle the issue of climate change, but it has all come to nothing. It is very, very unfortunate that politicians have not been able to work in concert to deal with an unprecedented, important, and difficult issue. National highlighted in its Bluegreens discussion document, coming up to the last election, that long-term environmental issues should be treated in a far more bipartisan way. We believe that the environment is too important to be squabbled over. Environmental decisions have long-term consequences, and therefore need more than a 3-year, a 6-year, or even a 9-year focus. We will still be dealing with the issue of climate change in 2020 and 2050. If ever there was an issue on which parliamentarians should have worked well together to get the best possible outcome for this country, this is it. I agree with Charles Chauvel, who said Parliament has a golden opportunity to reach a broad consensus and take New Zealand’s emissions trading scheme design off the political battlefield once and for all.

After two previous select committee processes to consider the issue, including an in-depth and pretty intelligent review of the present emissions trading scheme and related matters, we should have been able to deal with this new legislation efficiently and effectively. An enormous amount of research and information has been available in the public domain, and the people of New Zealand want us to sort this issue out once and for all. It is therefore absolutely disappointing that although Opposition members continue to state how important this legislation is, they were not prepared to knuckle down and get the best possible result for the country. Their uncooperative squabbling and childish behaviour reflects badly on them, and it undermines any professed commitment to a better environmental future for New Zealand. Political grandstanding, stupid party politicking, and half-truths were the order of the day. The fact that we could get no agreement was an enormous waste of time and money, and a waste of the best intentions of submitters who will be affected by this bill. On principle, the Opposition would not even agree with uncontested technical amendments. So much for Labour’s claim that we cannot afford to delay our emissions trading scheme!

After listening to Labour speakers, I remind everyone that despite Labour’s rhetoric, until 2018 there is very little difference between the allocations under this bill and those under the existing legislation. I also reflect that this is high-profile legislation that affects all of us. But it is a hugely complex process, and most New Zealanders do not understand all the issues. Everyone is affected differently. Therefore, many people are partly informed, some are uninformed, and some are misinformed. Opinion is polarised. Labour can quote plenty of criticism that suits its purposes; ACT can do the same—although I must say they make strange bedfellows. The Government’s job is to walk the knife-edge between conflicting opinions and produce rational, sensible legislation. This bill is about implementing a workable and affordable emissions trading scheme. The legislation includes provision for regular reviews in order to give us enough flexibility to manage our responsibilities intelligently as the world grapples with the ongoing issue of climate change. I support this bill.

MOANA MACKEY (Labour): I am very happy to follow the “Let them eat cake.” speech made by Nicky Wagner, which bore absolutely no resemblance to the bill before us, the Climate Change Response (Moderated Emissions Trading) Amendment Bill, or the process it went through. The gall of that member to stand up and chastise other countries for not doing enough to deal with climate change, when we are sitting here, under urgency, considering legislation that had only 6 weeks at the Finance and Expenditure Committee—only 6 weeks at the select committee. Submitters were rung and told that they had to come in and give their submissions 4 hours later that night, after we had heard that the National Government wanted to limit the number of people coming in to only 20 of the hundreds who had submitted. The officials made mistakes in the process because they did not have enough time to prepare the papers. Our deadline did not give us enough time to even do the departmental report properly. We could not get a clause by clause analysis. We could not get a revision-tracked version of the bill. And that member has the gall to stand up in this House and say that Labour was being difficult!

Labour members were being difficult because all we wanted—and we put a motion before the select committee—was an extension of time so that we could have time to consider the technical amendments that that member just accused us of not being prepared to consider. Well, how did that member vote on the motion that Labour put forward asking for another week to properly consider the bill? [Interruption] She voted against it. I tell Nicky Wagner not to stand in this House and chastise members of the Labour Party for being difficult. Why could we not have had another week in which to consider at least the technical amendments?

Nicky Wagner: You could have done it if you’d just got on with it.

MOANA MACKEY: I do not know whether Nicky Wagner has discovered the power of time travel, but it was simply not possible to do it in the time that we had. This bill is an incredibly important bill, and it had 6 weeks—

Nicky Wagner: For God’s sake, Moana.

MOANA MACKEY: Oh my God! Seriously? It had 6 weeks at the select committee, I say to Nicky Wagner. It should have had 6 months at the least. When Labour’s scheme took 8 months, National members said it was being forced through. When Labour heard 60 hours of submissions on our emissions trading scheme, they said it was not enough. But National allows only 20 submissions on this bill, and that member sits there and chastises us for complaining that the process is being rushed. Unbelievable! And that was from a member who claims to have blue-green credentials. She should be standing up in this House and saying stop the madness, slow this down, and let us have some proper discussion about legislation that will shift $110 billion worth of liabilities away from polluters and on to the taxpayers of New Zealand.

I heard earlier that the Hon Dr Nick Smith said that my colleague Charles Chauvel was just being ridiculous when he said that the Carbon Pollution Reduction Scheme legislation was not going to pass in Australia, and that he was scaremongering. I am sure the Minister knows by now that Andrew Robb, who is the climate change spokesperson for the Liberals, spoke against the legislation in their caucus. They had 15 speakers for, and 13 against, and they have had to hold an emergency meeting. I think the Hon Dr Nick Smith ought to calm down his rhetoric a little.

While we are talking about the Hon Dr Nick Smith, I want to talk about the process that we went through. He has been chipping away at me across the House, and, to be fair, I have been chipping back at him. But the fact is that Labour did not disengage from this process. We absolutely believe that it is critical that we get bipartisan agreement on an emissions trading scheme; we absolutely believe that.

Hon Dr Nick Smith: Where were you this morning?

MOANA MACKEY: I was at a tangi this morning, I say to Dr Smith, and I have only just got back, so I am sorry about that. I would like to pay my respects to the family of Hāwea Vercoe, who tragically died over the weekend. I was at a tangi, and that was why I could not come to Dr Smith’s meeting.

The fact is we had a very, very good meeting. We had a great meeting with the Minister for Climate Change. We laid out what we thought the areas of agreement were, where we thought we could go from here, and the things we were not going to agree on that we thought could be put aside because they were not critical to getting agreement on an emissions trading scheme. Then we went away. Over the weekend Labour had its annual conference, so we were busy. My colleague Charles Chauvel emailed—I was copied into the email—a copy of Labour’s response, with a “Where to from here?”, a draft memorandum of understanding. I then got off a plane in Wellington to hear that National had done a deal with the Māori Party. So when the Hon Dr Nick Smith says that Labour walked away, that is absolutely not true. He then invented a conversation that he had had with my colleague David Parker, saying that he had said to David Parker: “Oh, you need to get back to me by Friday.”, and David Parker had said that he would. That conversation never happened. The only conversation David Parker had with the Hon Dr Nick Smith was about the Resource Management Act amendment bill that was going through that week. That is not true, and the Minister knows it. Does he have to start inventing conversations that never happened? There were three Labour members in the room, and none of us told the Minister that we would get back to him by Friday. None of us were under the—

Hon Dr Nick Smith: Ask George.

MOANA MACKEY: The member says to ask George, ask his adviser. I guess the public will have to go by that member’s record. We did not give that undertaking; if we had, why would my colleague have spent all weekend drafting a very comprehensive response, which he emailed to the Minister before he went to Cabinet on that Monday, before the decision was announced? Then the Minister could not even pick up the phone to ring Charles Chauvel, our spokesperson, to say to him: “Look, we’ve done a deal with the Māori Party.” We heard about it on the news, along with everyone else. So when the Minister accuses Labour members of disengaging from the process, I say that that is absolutely unbelievable. We did not walk away; there was nothing to walk away from. By the time we had heard on the news that a deal had been done and that we had been excluded—

Hon Dr Nick Smith: Why not more deals? Why can’t we include the Māori Party?

MOANA MACKEY: Because Labour will not support an intensity of emissions approach without a cap, I say to Dr Smith, and we will not support 200 years of subsidies, as we were told, to the biggest polluters.

Hon Member: 200 now.

MOANA MACKEY: That is what we were told by some of the submitters. To be fair, David Carter said only 90 years, so I will go with what the Minister of Agriculture said; he is promising subsidies for only 90 years. But the fact remains that Nicky Wagner, who got up to say how shameful it was that we were not able to get bipartisan agreement, needs to walk down to the front bench of her own party and tell her Minister, who walked away from Labour in negotiations, who then made up stories about—

Hon Dr Nick Smith: No, I didn’t. The door’s still open.

MOANA MACKEY: We are in urgency, this bill is being forced through the House, and the Minister says the door is still open. That is what negotiation means to National—it is take it or leave it. I want to tell members what happened here. When we had meetings with the Hon Dr Nick Smith earlier in the process, he was very reasonable on a whole number of things. He said that agriculture was not a bottom line for him, and that if we thought it had to come into the scheme in 2013, then that was fine, and he would not have an issue with it. I remember thinking that that seemed very strange, because I had been meeting Federated Farmers groups who had told me that the Hon David Carter had promised them that agriculture would never come into the emissions trading scheme and have to face the full cost of its emissions.

Hon Dr Nick Smith: Not true!

MOANA MACKEY: You know, in this instance, I think I believe Federated Farmers, I say to Dr Smith.

Hon Member: Everybody’s lying except Nick Smith!

MOANA MACKEY: That is right. Here we are in a situation where everyone is lying except the Hon Dr Nick Smith.

Mr DEPUTY SPEAKER: You cannot use the word “lie”.

MOANA MACKEY: I apologise. I withdraw that comment. Everyone else is wrong and only the Hon Dr Nick Smith is right; that is the situation we are in at the moment. Well, Federated Farmers members said before the election that agriculture would not come under the emissions trading scheme, because David Carter had told them that it would never come under it and that farmers would never have to face the full cost of their emissions.

Hon Dr Nick Smith: He never said that. David Carter never said that.

MOANA MACKEY: I say to Dr Smith that all I am saying is what Federated Farmers told me, and if we look at this legislation we see that they are absolutely right: National has delayed agriculture coming in for another 2 years, farmers are not going to have to face the full cost of their emissions for God knows how long after that, and there will be review periods and review periods so that the time frame can be pushed out even further and even further—and I firmly believe that it will be pushed out even further and even further.

To be fair to the Hon Dr Nick Smith, I actually think he does believe we need to do something about agriculture, but he was rolled by his caucus. I think he went back to his caucus and told it what the deal was, and his caucus said that, no, the bottom line for it was that agriculture should not have to face the full cost of its emissions. He had made promises—well, they were not promises; they were indications—to Labour members that he would be prepared to move on some things, and all of a sudden they were off the table. All of a sudden, we came back and found out that there would be an intensity of emissions approach without a cap, which basically means that we are going to pay polluters to pollute more.

In fact, polluters would do better to lift their greenhouse gas emissions, because then they would get more free allocation. That is what this approach means. I do not know why the Minister thinks that is a good policy for reducing greenhouse gas emissions. One would think that the point of having an emissions trading scheme would be to reduce our emissions; otherwise, what is the point? This emissions trading scheme amendment bill does not do that. What it does is provide incentives for some of our biggest polluters to pollute more, because they get more free allocation for doing that.

What it does most, and the worst thing about is, is that it turns the existing emissions trading scheme, which is a polluter-pays model, into a pay-the-polluter model. Who is going to pay the polluter? The New Zealand taxpayer.

Hon Dr Nick Smith: You don’t believe that.

MOANA MACKEY: Well, where is the $110 billion going to come from?

Hon Dr Nick Smith: You don’t even believe what you are saying!

MOANA MACKEY: I do believe it, because that $110 billion has to come from somewhere. It ain’t going to come from private schools; we have already seen that National is happy to take money off adult and community education to give it to private schools. It will come from health, it will come from education, it will come from social services, and it will come from the public sector. It has to come from somewhere.

Hon Dr Jonathan Coleman: Tell the truth!

Mr DEPUTY SPEAKER: You cannot use that phrase.

MOANA MACKEY: Jonathan Coleman can scream out that I am not telling the truth, but I look forward to his telling me where the $110 billion will come from. Where will it come from, I ask Dr Coleman. It will come from the taxpayers of New Zealand. This is a disgrace.

AARON GILMORE (National): It is my pleasure to speak last in the second reading of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. The previous speaker, Moana Mackey, was talking—apparently—about this bill, but members would not know that from the rhetoric that came from her. They would know that nothing that came out of her mouth made any sense whatsoever—either she cannot count or cannot read, or both. But we will find out about that.

This bill provides a step along the path towards meeting our climate change needs, a future for my children and my future grandchildren, and the ability, whether members believe in climate change or not—like some of our friends over there in the ACT Party—for New Zealand producers to get their goods into overseas markets while we are doing our fair share. Some will say the bill does not do enough; some will say it does far too much. But this bill will provide some comfort to mums and dads out there who may be listening to this debate today, in that the cost of this scheme will be half what the Labour scheme would have cost.

Moana Mackey: What a load of rubbish!

AARON GILMORE: I ask the member to read the bill. That member is proving that she has not even read the bill.

This bill went to the Finance and Expenditure Committee, and I must say that sitting through that committee while it considered this bill was an experience. We have heard about all the sorts of behaviour that occurred on that committee. I do not want to go into that, but I must say that I will recall that behaviour for years to come.

I want to talk a little about the so-called cost to New Zealand of this emissions trading scheme—Mr Cunliffe’s $110 billion; the so-called huge cost for taxpayers. There is no $110 billion cost to New Zealand. We have heard that New Zealand will have to pay a large amount of money, and that there will be $110 billion of debt for this emissions trading scheme. Climate change is complex, but if those members who are making that claim about $110 billion had read the bill or knew how to count, or both, we would not have this misunderstanding. What is that mythical figure—the supposed $110 billion debt that will occur? What it is is that instead of taxing the good people of New Zealand by $2 billion per annum, the Government is giving back $2 billion to people to allow them to have a transition to a sustainable climate change position.

We campaigned on providing a fiscally neutral emissions trading scheme, and this bill helps to deliver that. We believe in jobs and in our communities. So we believe that the best thing to do is not to have the Government gain $2 billion from taxing people but to use that money to mitigate the transition path to a better position for our communities out there. This scheme has been designed so that over the next decade there is only a small net gain for the Government, rather than it raising billions of dollars from communities out there. Jobs that would have gone from thousands of factories and businesses up and down the country under the Labour scheme will be kept. We care about jobs, and we care about communities.

Finally, contemporaneously with this bill we have announced a suite of measures, which other people have not spoken about, to add to the transitional part of the legislation. There is $323 million for home insulation and a further $24 million for low-income households. In my maiden speech I spoke about living in a State house that was uninsulated and that my family could not afford to heat. I am proud to be part of a Government that has introduced a housing scheme that gives people in State housing the ability to have their homes heated and insulated properly, so that other little kids out there listening to this debate today can grow up in a warm and healthy home. What else have we done? We have introduced $36 million for bio-diesel, we have introduced funding for a centre of research excellence for agriculture, we have introduced some changes to the Resource Management Act to streamline renewable energy projects, and there are many more measures. We have also resolved the legal dilemma that existed with regard to iwi, who had been so easily brushed aside by the previous Labour Government. That is something that we inherited.

We will hear plenty more over the next day or two on this bill, and I look forward to contributing to the debate. I support this bill.

A party vote was called for on the question, That the Climate Change Response (Moderated Emissions Trading) Amendment Bill be now read a second time.

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Bill read a second time.

In Committee

Part 1 Amendments to Climate Change Response Act 2002

Hon Dr NICK SMITH (Minister for Climate Change Issues): I am in no doubt that we are about to start a pretty important debate for New Zealand about how it responds to the challenge of climate change.

The first point I make, having been a member of Parliament now for 19 years, is that the debate about a pricing instrument to constrain emissions has gone round and round in circles. I will just recite the history. Back in the time of the previous National Government we originally proposed a low-level carbon tax. A Cabinet decision was made in 1999 that we should get officials to work on an emissions trading scheme. The last Labour Government came to office in 1999 and said that it did not want to do an emissions trading scheme; it wanted to do a carbon tax. We had officials beavering away for 5 or 6 years on a carbon tax and then they came back to a conclusion of an emissions trading scheme. So my first point is that this debate has gone on for a very long time. There have been over eight different public consultation documents. There have been three rounds of select committee hearings. There have been over 2,000 submissions. I say to the Committee that there comes a point, on an issue as big as climate change, where we need to make progress.

At the last general election National had a very comprehensive policy around emissions trading. I will go through what we said to the electorate. First we said to the electorate that we wanted to align New Zealand’s emissions trading scheme more closely with Australia’s scheme. Every member of this Committee would know that New Zealand and Australia have very closely integrated economies, and that it makes good sense, on a global issue like climate change, for us to work closely with Australia. I challenge those members who have been quite strong with their rhetoric around the weaknesses that they see in this modified emissions trading scheme. Every single criticism they make they can make also of their Australian Labor Party colleagues, who are putting a bill through their Parliament that is actually slightly softer than this one.

So if members want to make criticisms of this bill—for instance, to argue that it does nothing for climate change—they need to argue that the Australian scheme also does nothing for climate change. If they want to argue that it costs billions of dollars, they need equally to say that that cost would apply to Australia. I think that point just exposes the extreme rhetoric that we have heard from Labour members over this bill. We said to the electorate that we would align the scheme more closely with Australia’s, and we are doing just that.

Moana Mackey: Jesus!

Hon Dr NICK SMITH: Oh, excuse me! I raise a point of order, Mr Chairperson. I am more than happy to tolerate interjections but I think swear words of that sort are quite inappropriate, and I ask you to take some action.

The CHAIRPERSON (Eric Roy): I have to say that I did not hear what the member said, but—

Moana Mackey: I withdraw and apologise.

Hon Dr NICK SMITH: First we said we would align the scheme more closely with Australia’s, and we are doing that.

The second thing we said, in respect of our changes to the scheme, is that we did not see an emissions trading scheme as some means for the Government to grab great wealth from the private sector, and from families and homes. We said we wanted a scheme that would provide a financial incentive for fewer emissions but would not simply export industry offshore. So in aligning this bill with Australia’s scheme, we are saying we want to do our fair share on climate change. It is true that the changes we are making do not result in the Government’s making billions of dollars. That is true. Does it involve a cost to the taxpayer? No, it does not.

Hon Pete Hodgson: Yes, it does.

Hon Dr NICK SMITH: Mr Hodgson claims that it does. Let us be clear about Treasury’s projections. I know that members opposite have become very excited about the $110 billion figure. Let us be clear, though, and honest with the public about what Labour is saying. First up, Treasury is saying that $50 billion more revenue would come to the Government under the previous Labour Government’s emissions trading scheme to 2050 than under National’s scheme. Well, that is true, but it relies on a faster abatement rate than that of our proposal to align with Australia’s scheme. So if members opposite want to get up and say that our scheme would take $50 billion more from New Zealanders than Labour’s scheme would have done, they are right and they should be upfront about that. But that is quite different to describing a cost.

How do they get to that $110 billion? They say that every year—

Hon Pete Hodgson: We looked at Treasury’s projections.

Hon Dr NICK SMITH: I say to Mr Hodgson that it is about being honest about what Treasury is saying, not misinterpreting it.

The second point members opposite make is that if we invest the money from the emissions trading scheme—those super-profits—and compound the interest, we can add that up to $110 billion. Well, hang on a moment! When the previous Labour Government announced its emissions trading scheme it said that the Government would not bank the super-profits of the scheme but would reinvest them in climate change policy. So my response to members opposite is that they cannot say, on the one hand, that Labour would spend that money on climate change and, on the other hand, that it would claim the interest at the same time. That is not consistent.

The members opposite are misleading on a third point. With their rhetoric they say that this is a big subsidy for those big ugly international corporates. Do members opposite know that the advice is that 80 percent of the allocation that we are debating is those big ugly corporates—those 32,000 New Zealand farmers? Why not call them what they are? Members opposite are really saying that they want to incur on New Zealand farmers $40 billion more in costs. That is what they are really saying, and they should be honest with the electorate and say that that was the advice. But this Government is saying that we do not want to make those super-profits from an emissions trading scheme.

We said a third thing to the electorate, and we were quite upfront about it in our policy. We said that we wanted to take an intensity-based approach. This is very interesting. The Emissions Trading Scheme Review Committee sought advice from two of New Zealand’s most important economic analysts—that is, Infometrics and the New Zealand Institute of Economic Research. How many times have I heard those two firms, and their advice, quoted in this Parliament? In my career here I would say I have heard it hundreds if not thousands of times. I have heard the Opposition quote both those firms over and over again. What did the New Zealand Institute of Economic Research and Infometrics advise the special select committee? The first thing they said is that in the short term it was actually a pretty even argument between a carbon tax and an emissions trading scheme but, on balance, they thought we were best to progress with an emissions trading scheme. The second thing they said was that the best way to avoid the problems of carbon leakage—that is, just exporting industries offshore—was to take an intensity-based approach. The intensity-based approach is what is in the Carbon Pollution Reduction Scheme in Australia, and that is another strong reason for that approach.

These amendments are a sensible way forward for New Zealand on one of the most complex areas of public policy.

Moana Mackey: Then why is it so rushed?

Hon Dr NICK SMITH: The member interjects about the process. First I point out that a year ago, when Labour had its climate change legislation before the House, it introduced not just one Supplementary Order Paper—I have introduced one—but four Supplementary Order Papers. No briefing was provided, as I provided to members on mine, and they were passed into law on the same day.

Moana Mackey: So long as it’s been at the select committee.

Hon Dr NICK SMITH: I put an issue to the member who is interjecting. I invite her to remember that when I was having discussions with the Labour Opposition about an agreement that we might be able to reach, I said to them that I was running into a real deadline. I needed to get an amendment bill through the House before 1 January because there were problems with the legislation that would come into effect. I said to them that we really needed to conclude those discussions quickly because I was running out of legislative time and the bill had to go to the select committee. Do members of the Committee know what Labour members said to me? They said that if I agreed with them, they would support the bill not needing to go to the select committee.

Hon Members: Shame!

Hon Dr NICK SMITH: Let us be clear. If we get an agreement with the Labour Party, the bill does not have to go to the select committee, but if we get an agreement with the Māori Party, the Labour Party has a completely different standard! That is why I say to Labour members that I will test them on their rhetoric every way in this debate, because in this bill we have a sensible way forward on climate change.

The last point I make is that we accepted an agreement reached in good faith with the Māori Party, and the moment that agreement was announced I said that I remained as committed as I was the day before I reached agreement with the Māori Party to continuing discussions with Labour, because it is my view that for all the rhetoric that will occur in the Chamber over the next couple of days, there is actually a very high level of agreement about the sensible way forward. There is a very high level of agreement. We agree that an emissions trading scheme is the best way forward. We agree that we need to have allocations. We agree that we need to have transitional measures. We agree that the science is such that we need to take action. So it is my view that this bill is the responsible and right thing to do on this complex issue.

I am really looking forward to a detailed debate in this Chamber. We might get away with sound bites, rhetoric, and spinning outside, but in this Chamber we will scrutinise every single one of the false claims that are being made by Labour on this scheme. The scheme is the sensible way forward, and I am looking forward to that debate.

CHARLES CHAUVEL (Labour): It falls to me to begin the debate on behalf of Labour in the Committee stage on this legislation. I want to speak to one of the Supplementary Order Papers that has been lodged in my name, Supplementary Order Paper 94. If the Minister for Climate Change Issues truly wants the debate that he has called for—and I have to say that history belies that intention, but let us give him the benefit of the doubt for the moment—then we will have a proper consideration of the Supplementary Order Papers that lie on the table. The Supplementary Order Papers that have been tabled by the Greens and Labour reflect, by and large, the recommendations from independent authorities such as the Parliamentary Commissioner for the Environment and other independent experts who appeared before the Finance and Expenditure Committee, and who gave us the benefit of their advice about how we could improve what is a bill that is lacking in general analytical integrity.

Supplementary Order Paper 94 does two things: it deals with national targets and it deals with the advisory committee on climate change that we are keen to see. In relation to national targets, it is clear that we are obliged under our Kyoto obligations to make a nationally appropriate contribution to international efforts to reduce greenhouse gas concentrations in the atmosphere. That is a treaty obligation to avoid the worst consequence of human-induced climate change. In the current round of negotiations, as members of the House will know, New Zealand under the National Government has made a conditional offer of what is called a responsibility target. The greenhouse gas emissions reductions that that target calls for are between 10 and 20 percent below 1990 levels by 2020, if there is a comprehensive global agreement at Copenhagen. New Zealand has also made a unilateral unconditional offer of a 50 percent reduction in emissions to below 1990 levels by 2050.

Labour has reflected on those targets. It does not think that they are bold enough. They should be considerably stronger. But having said that, I say that Labour does not want the targets to simply be statements of good intention. So the first thing that this Supplementary Order Paper does is enshrine the targets in the law, and it requires the Minister to take steps to ensure that those targets are met.

The second key substantive thing this Supplementary Order Paper would do, if the Committee supported it, would be to try to avoid some of the controversy in the development of climate change policy that the Minister alluded to in his speech just now. It is true that there is not a cross-party consensus as there is in Europe on some of the key issues at stake. We have all experienced hearing from the many stakeholders in the debate about the insufficient level of independent analysis of the costs and benefits of climate change policy initiatives. I found myself in the rare position in the second reading debate of agreeing with everything that Rodney Hide said on that topic in his speech, which was a good one.

Jo Goodhew: You want an emissions trading scheme, and he doesn’t. How does that stack up?

CHARLES CHAUVEL: But the select committee process—which Jo Goodhew did not appear in at all, I think, but other members opposite did—that we have just been through shows how important it is that we should have this proper independent level of analysis. It shows that complaints about its absence are quite justified.

The other part of this Supplementary Order Paper would establish an advisory committee on climate change. It would be an independent Crown entity, it would provide advice to Ministers, and it would promote an informed public debate on the public policy response to climate change. The committee would be required to consult all affected parties before it tendered its advice to the Minister. If the Minister is serious about the pious words that he uttered while on his feet earlier, he will have his party consider this Supplementary Order Paper with great care, and determine the position that National ought to take on it. It is my submission that this is the sort of legislation that we ought to see in this area if we are serious about wanting a consensus in this country.

I will now talk to the structure of the Supplementary Order Paper. It would make two changes to the existing administrative provisions of the principal Act, the Climate Change Response Act, to increase transparency in policy making. First of all, there would be a requirement on the chief executive of the Ministry for the Environment, which is the inventory agency under the legislation, to produce an annual long-term forecast of emissions and removals of greenhouse gases. The suggestion in the Supplementary Order Paper is for a 50-year range of projections. The Supplementary Order Paper would provide that in preparing that forecast, the chief executive would have to act independently from the Minister and apply his or her best professional judgment to the task.

Just to make sure that the process was transparent, the chief executive would be required to consult with the advisory committee, which would be set up under the second part of the Supplementary Order Paper, on the methodology that he or she proposed to use, and then publish the committee’s views as a result of that consultative process. Then, the Supplementary Order Paper would require the Minister and the chief executive to seek and consider the advice of the advisory committee before any regulations or Orders in Council were made under the legislation. Again, for the sake of transparency, all that advice would be laid on the table of the House of Representatives; all members would be able to see it. If regulations or orders were made that contained provisions different from the advice, the Minister would be required to present a statement to the House setting out the Minister’s reasons for not agreeing with the advice. Those are the two things that I am hoping to see.

As far as targets are concerned, the Supplementary Order Paper would insert a new part 6 into the principal Act. It would set national greenhouse gas emissions reductions targets. The proposal is that we would aim in the legislation for a 50 percent reduction in net emissions from 1990 levels by 2050. I have deliberately put the National Government’s target in there, because I want to test whether National is serious about this sort of legislation. If Labour were in office, it would be bolder. But in the hope that the Government might support the amendment if it actually puts in place its own target, I have left that one there. Let us see whether the Government is willing to stand by that target by agreeing to legislate it.

To provide greater certainty for the pathway toward the target, the Supplementary Order Paper would also require the Governor-General in Council to set a series of intermediate targets, which would apply for 5-yearly periods, commencing in 2013. Although the amendment would allow for some flexibility around the intermediate targets, the suggestion is that the intermediate target for one period must not be higher than the target in the immediately preceding period. Net emissions in 2020 must be at least 10 percent lower than the 1990 baseline. Net emissions in 2050 would have to be 50 percent lower than the 1990 baseline. To increase the possibility of political consensus, the Supplementary Order Paper would require any order setting a target to be confirmed by an Act of Parliament by 1 July in the year after it was made.

We are trying to set in place a transparent process of consultation. Under the Supplementary Order Paper, the Minister would have to publish a draft target together with a statement explaining why that particular target had been chosen. Public submissions would be made to the expert advisory committee. It would have to consider the Minister’s reasons in any submissions received, and report back to the Minister before the target was set. The committee’s advice would then be presented to the House. If the target that was finally set contained provisions that were different from the advice in the committee, the Minister—again in a mirror provision to the provision on expert advice—would have to explain to the House in a statement why it was that that difference occurred.

As well as setting national targets, the Supplementary Order Paper would require the Minister to develop proposals and policies that the Minister considered would enable the targets to be met. We would not just have those figures plucked out of the air; we would have genuine, open, transparent processes by which we would see what policies would achieve the emissions reduction targets that the Government adopted. Whenever a new target was set on an intermediate basis, the Minister for Climate Change would have to present a report to the House on the proposals about how to reach those intermediate targets and also how they would contribute to the ultimate reaching of the final 2050 target.

I mentioned earlier that the Supplementary Order Paper also aims to establish an advisory committee on climate change. It would be an independent Crown entity. Its principal objectives would be to provide independent advice to the Minister on matters relating to the public policy response to climate change and to increase the effectiveness of public participation in the making of policies and laws in this area. One of the problems we have in this whole policy area is that it is all too hard. People’s eyes glaze over when we talk about emissions trading. We would try to have an open expert body proceeding in a way that contributed—[Interruption] I will finish the call shortly—

The CHAIRPERSON (Eric Roy): I know that I have given the member the call, but I think the House has taken an instruction that no member will take more than two consecutive calls.

CHARLES CHAUVEL: I thought that under the leave provided that requirement had been waived for this debate. Am I wrong in that?

Hon Dr Nick Smith: The Government would be happy for the member to seek leave just for this individual call.

The CHAIRPERSON (Eric Roy): My mistake. We had better do this properly. Will you seek leave?

CHARLES CHAUVEL: Yes.

The CHAIRPERSON (Eric Roy): Leave is sought. Is there anyone opposed to that course of action? There is not. Leave has been granted just for this one call.

CHARLES CHAUVEL: I appreciate the indulgence. I will try to conclude in relatively short order. I was just making the point that the committee would help to increase public involvement in the debate, which is something that I think we all agree is needed if we are going to have enduring climate change policy.

In relation to its advice, the committee would have to report to the Minister by 1 December 2011 on whether the national emissions reduction target of 50 percent in net emissions below 1990 baselines needed to be altered. This report would be timed to allow the committee to have regard to the outcome of the current round of international negotiations on climate change. The committee would be required to provide advice to the Minister on the intermediate target to apply in every 5-year period commencing in 2013. Before providing advice the committee would have to consult with affected parties in an open and transparent manner. There would be annual reporting by the committee on the progress being made in meeting New Zealand’s emissions reduction targets.

In conclusion, as it is currently worded, the principal Act requires the Minister to establish a panel anyway, to review the emissions trading scheme established by the Act. The Minister has to do that every 5 years. My Supplementary Order Paper would amend those provisions to require that review to be conducted by this expert standing committee. The committee would be given more independence than the panel in setting its terms of reference in respect of any review, although the Minister would be empowered to require that the committee would have to consider specified matters as they arose in the international negotiations or otherwise. The bill would require the committee to consult with the public during its review. Once the review was completed the Minister would be required to present the committee’s report and the Minister’s response to the House.

This Supplementary Order Paper is an attempt to set up a transparent process for reaching targets, enshrine the Government’s own 2050 target into law, and put in place structures designed to facilitate a national consensus around climate change policy that is badly needed. I hope it receives the support of the Committee.

Hon DAVID PARKER (Labour): I will talk about the ridiculous rate and length of time that free allocation is given to major emitters under this Climate Change Response (Moderated Emissions Trading) Amendment Bill. The legislation that we currently have in New Zealand is already generous in its allocation to major emitters. There is good reason for that. If major emitters are exposed to competition in countries that are not pricing emissions, and we were to force upon them the cost of all of their emissions, overnight, then that would break some of those businesses. They would move offshore in the short term and probably never come back, yet in the medium term, when other countries were properly pricing emissions, they would be able to compete. So that is why we have free allocation. That is why we say to a company like Rio Tinto, which produces aluminium in Bluff, that we will pay for a lot of its carbon emissions for a transitional period.

But that does not come cheaply. In the case of Rio Tinto, the calculation that was relied upon by the Parliamentary Commissioner for the Environment showed that the cost per employee, per annum, of that free allocation is $100,000. The cost of its free allocation of carbon emission rights is $100,000 per worker, per year. Another submitter said that that amount is an under-estimate, and that it is closer to $200,000 per annum; in my speech I will accept for the purposes of this argument that $100,000 per annum is the right figure. It is notable that we had no advice to the select committee that disproved those figures. The only advice we had, in terms of cost in the case of Rio Tinto, was that of about $100,000 per annum, which came from the Parliamentary Commissioner for the Environment, and which was relying on a study that had been done for the Climate Change Leadership Forum last year, in consultation with Government officials, including officials from Treasury. So $100,000 is a good estimate.

But a $100,000 cost per annum, per worker, is something that we cannot continue forever, because it comes at enormous cost to other things that we could do with that money. We could pay for an Inland Revenue Department tax credit. We could retire debt. We could actually reduce New Zealand’s Government debt very significantly—by $100,000 per Rio Tinto worker per annum—if we did not have that free allocation.

The Government has changed that free allocation, from being phased out completely by 2030 to phasing out at 1.3 percent per annum. Under the current legislation—and we do have a good emissions trading scheme already in law in New Zealand—[Interruption] We do, and indeed the free allocation under that existing legislation has already been criticised by Dr Suzi Kerr as being too generous. She says that it is already too generous at an 8 percent per annum phase-out after 2018. We gave people 10 years, from the start of the scheme, when they would have a free allocation of 90 percent of 2005 emissions, and that rate would not abate at all until after 2018—10 years later—which is when we said it would abate at 8 percent per annum. An economist like Dr Suzi Kerr says that, if anything, that is too generous to emitters because it comes at too high a cost to the economy: other taxpayers, effectively, are paying that cost. If anything, the existing framework is too generous.

In respect of the National Government’s changes here, I say that the Government is phasing the free allocations out on the never-never. They will virtually never be phased out. In 2050 major emitters will still get more than one half of that figure—that is, $50,000 per employee, per annum, subsidy. That rate of $50,000 per annum by 2050 is plainly unsustainable for our economy. That is why Treasury warned us that by 2050 Government debt will go up by $110 billion, compared with the status quo under the existing legislation. Government members might decry those figures now because they do not suit them, but that is the forecast from Treasury. The reality is that if those free emission charges were being auctioned to emitters, that money would come back to the Crown, and the Crown would have $50 billion extra, plus interest, which would make $110 billion by 2050.

We heard Dr Smith say that what the Labour Party had proposed was ridiculous. Well, I tell Dr Smith to look at the minority report, and look at the graph there, which is reproduced from the United States legislation, the Waxman-Markey Bill. I have a copy of it here, which I will seek leave to table at the end of this contribution. It shows a rate of phase-out of free allocation. It is very close to what is in the current Labour legislation, which is already good law in New Zealand. It is very, very similar. It has most free allocation being phased out by 2030. By then, free allocation will be down by about 66 percent, according to that graph, whereas in New Zealand we will get out to 2050 and major emitters will still get free allocation of more than half of their emission rights. It will be free to them, but it is not free to the country; it is paid by other taxpayers. Other businesses that are not getting free allocation will pick up the bill.

Dr Smith said in the House today that most of the free allocation will be going to agriculture, as if that is a sufficient answer. Why? The theory that underlies free allocation is that without it we would lose production, which would go overseas.

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

Hon DAVID PARKER: Before the dinner adjournment I was describing how the level of free permit allocation is so excessive and lasts too long. I explained that under the existing Labour Party scheme, which is already in law, major emitters get a very generous rate of free allocation, which is capped at 90 percent of the rate of their 2005 emissions. They get that free for 10 years, then after that 10-year period their free allocation abates at the rate of 8 percent per annum, so that by 2030 they have to pay for their emission rights, just as all other members of the public have to pay for their emission rights, their electricity, and their petrol. At least by 2030, then, we would have equality across the economy, and by that time companies would have had 18 years to adjust to emission pricing, which seems a pretty fair transitional period.

In contrast, the National Party scheme has an uncapped allocation, so that emissions can grow. Indeed, I challenge the Minister to answer the questions that Brian Fallow posed in the New Zealand Herald, which the Minister refused to answer at question time. The questions are: because there is so much more generous free allocation, how much do emissions go up? How much later do they peak? How much extra is the bill as a consequence? Anyway, we came down from the general proposition to an example, in respect of Rio Tinto, of the annual cost of a subsidy estimated by the Parliamentary Commissioner for the Environment—in the only study that has had the involvement of Treasury; I think it was involved in a study for the Climate Change Leadership Forum—to be $100,000 per employee, per annum.

The other example I will use is one that we referred to in our minority report; it is Methanex. Methanex uses gas to convert it into methanol. The company has come to New Zealand because New Zealand’s gas price, even now, is lower than the average gas price around the world. Before Methanex came to reopen its factory in New Zealand, it came to the then Minister responsible for Climate Change Issues and Minister of Energy and asked what the effect would be on emissions pricing. I happen to know very well what happened at that meeting, because at the time I held those portfolios. I told Methanex that under our emissions trading scheme it would face the cost for its increasing emissions. Methanex understood that, and it invested on that basis. Its free allocation under the model we had, which is currently the law, gave it $9.5 million worth of free allocation under the existing scheme. As of tonight, that will increase to a minimum of $15.1 million per annum and possibly go as high as $80 million, which is an increase of over $70 million per annum.

The question I have for the Minister is why New Zealand has not seen one bit of analysis as to why that increase is justified. We have not seen how much that will cost per employee. If it goes to $80.9 million per annum, the cost may well be close to $1 million per employee per annum, and it is just not wise. We have not seen one bit of analysis from the Government, on the part of Treasury or anyone else, that analyses why that is necessary. In reality, if that were not given to Methanex, it would do as it would otherwise have done: it would pay for gas, and it would probably share the cost of emissions with the gas producer. It would continue in business, but the taxpayer would not be poorer to the tune of up to $80 million per annum, which could well be a subsidy per job of close to $1 million per employee per annum. That is just absolute nonsense.

Dr RUSSEL NORMAN (Co-Leader—Green): For those who are listening from outside this Chamber, I say that tonight we are debating the Government’s proposed changes to the emissions trading scheme. The Government’s proposed changes to the emissions trading scheme are, fundamentally, about weakening the emissions trading scheme and reducing the price signal that the emissions trading scheme sends through to the economy. I think it is an extraordinary night to be discussing the Climate Change Response (Moderated Emissions Trading) Amendment Bill, given the news that has come through tonight that the Liberal Party in Australia is currently tucked away in a caucus meeting of all of its MPs, who are looking at some proposals from the Australian Labor Party to give $8 billion to greenhouse gas polluters in Australia. The Australian Labor Party Government—the Federal Government—has put a proposal to the Australian Liberal Party that would dramatically weaken its scheme. Tonight we are also looking at a proposal from the Government to weaken the price signal and emissions trading scheme dramatically in New Zealand.

It is an amazing night for another reason. Only today we were looking at a study in Nature Geoscience that looked at what is happening in Antarctica at the moment. One of the issues around climate change is sea level rise. Sea level rise is driven in part by the melting of ice sheets, particularly in Greenland and Antarctica. For quite some time there has been concern about the West Antarctic ice sheet. At the moment it looks like the West Antarctic ice sheet is dumping about 132 billion tonnes of ice per year, on average, into the ocean as a result of human-induced climate change and global warming, which is warming the ocean around Antarctica and resulting in a warming in Antarctica. At the same time as we are looking at a significant shift in our knowledge about what is happening with the Antarctic ice sheet, in this bill tonight we are looking at a proposal to weaken the price signal around greenhouse gases so that greenhouse emissions coming out of New Zealand will increase. It is extraordinary that on the very night that we discover that the evidence around human-induced climate change is building, we have a Government proposal to weaken the emissions trading scheme even further.

I will also talk about a few Supplementary Order Papers. The Green Party is putting up a number of different Supplementary Order Papers, or amendments, to this bill tonight. A series of those amendments are in relation to increased transparency. Those amendments are important because under the Government’s proposed changes there will be a dramatic increase in the free allocations given away to big polluters. There will be a very significant increase in the allocations given to big polluters so that they can produce greenhouse gases for free and the taxpayer picks up the bill. Within the Kyoto framework New Zealand is responsible for the increase in emissions and will have to buy carbon credits internationally, so any increase in emissions coming out of New Zealand will result in the New Zealand taxpayer being liable to buy those carbon credits.

It will be a very significant increase. Of the Treasury estimates that were given to the select committee—there were various Treasury estimates; they changed rapidly because Treasury did not have enough time to prepare properly—one estimate was that Government debt would increase by $110 billion by 2050 as a result of the changes in this emissions trading scheme. That is, the increase in emissions would be so significant, and hence also would be the increase in carbon credits allocated to big polluters, that the taxpayer would have to cover the difference, and the difference by 2050, including interest, would be around $110 billion. Obviously that would add a significant amount of money to Government debt. Of course, this was from a Government that tells us day and night that there is not enough money to spend on the different kinds of social and environmental programmes that are essential to our country, but at the same time was willing to take on a massive increase in debt, according to Treasury, in order to weaken the emissions trading scheme, increase our greenhouse emissions, and increase our total debt on the Government.

The problem is that, as part of the allocation of these free emissions, nobody really knows exactly whom these credits are going to. One of the changes the Government is making is decreasing the transparency around the allocation of all these free carbon credits. So it is giving away our money—around $110 billion of it by mid-century—to its mates, who are the big polluters, in the form of free carbon allocations, but it wants to decrease the transparency around the allocation of this taxpayer money. That is what the bill does. It makes those changes, so the Green Party is putting forward a series of amendments in order to increase transparency.

When we think about it, we see that it is interesting that at the same time as we are proposing in this bill to decrease transparency around the allocation of taxpayers’ money to big polluters, we have a system of donations to political parties that is fundamentally not transparent. Basically, it is very difficult to know who is funding political parties. On the one hand, big polluters will be making large donations to political parties that will, at some point or another, occupy Government benches. At the same time we are pulling the cloak over the allocation of free carbon credits from the Government to big polluters. There is clearly a transparency risk in these two things combined. It is unacceptable in our country that we do not know which big polluters will be making donations to governing parties at the same time as those governing parties have control over the allocation of free carbon credits to big polluters. We are setting up a strategic risk of corruption.

The Green Party thinks that there is no reason to set up this fundamental risk of corruption. Why should we? New Zealand currently rates as the No. 1 least corrupt country in the world, and that is a great thing and something that we should be proud of. Why would we put in legislation a set of rules that opens us up to the risk of corruption when there is no need to? In fact, why do we not have a set of rules so that there is transparency in donations to political parties and, in this bill, make sure that there is transparency of allocation to polluters? If one is receiving support from the Government in the form of free allocations—and this legislation allows it, as did the previous legislation—then one should be transparent about it. What is wrong with having transparency around allocations? For that reason, the Green Party is moving a series of amendments in order to increase transparency around the allocation to big polluters of what is effectively taxpayer money. We think that if we are to have this terrible scheme of subsidising pollution, which this bill exaggerates even more than the last one did, then the public has a right to know who is being subsidised. To us, that seems a fundamental principle, and for that reason we will be moving a series of amendments around transparency.

Finally, I touch on the process around all of this legislation coming together. The Minister in the chair, the Hon Dr Nick Smith, has made the comment that that $110 billion should not be relied on, and there is some contest as to what the $110 billion really means. I point out that in the select committee Treasury officials were so confused about the real impacts of this bill that we had to take a 20-minute break in proceedings so that they could go away and try to figure out whether they were wrong by $50 billion. We had to face a $50 billion mistake in the select committee. The bill had been so rushed through and had had so little proper consideration that Treasury officials had to request a 20-minute break from the select committee so that they could go and figure out whether they were out by $50 billion. My question is whether this is an acceptable way to make Government policy. I ask whether this could possibly be an acceptable way to make Government policy, and the answer, of course, is no. That is why the Government should take this bill away and get the work done properly, rather than rely on 20-minute consultations between Treasury officials and others to figure out whether they have made a $50 billion mistake, increasing liability on the taxpayer.

I ask the Government to support our amendments to increase transparency in order to protect the reputation of the New Zealand Government as a non-corrupt Government. I ask the Government to consider the true fiscal and environmental implications of this bill.

CRAIG FOSS (National—Tukituki): Firstly, I am quite offended by the implication and insinuation from the previous speaker, Dr Russel Norman, who said that this House may be opening itself up for corruption if this Climate Change Response (Moderated Emissions Trading) Amendment Bill is passed. I think that all members should take offence at that. I note that he was trying to word it carefully, but the implication was quite obvious. It might make good headlines, but I for one was quite offended by it. However, I let the member speak.

There is another point to note while we are talking about independent analysis, which a member opposite recently questioned in his speech. The Finance and Expenditure Committee—and any member of this Parliament, actually—has access to all the analysis, studies, submissions, and whatever one likes from the two select committees that looked at this issue previously. In 2007 the Finance and Expenditure Committee examined the emissions trading scheme bill, and a special committee reviewed the legislation earlier this year. In terms of the latter committee, the New Zealand Institute of Economic Research and Infometrics did some substantial, in-depth work on most of the issues that are before us right now. If members want to take a static snapshot of where we are now, then I guess they are technically correct—at least, the previous speaker was—but actually all the information is available. As we said constantly during the select committee process, this bill rests on the work of the members of those other committees and their advisers.

I shall now touch base on the allocation. The words “free allocation” were used by Dr Norman, and he talked about people’s money being given away as part of it. We have to remind ourselves that there is a whole lot of free allocation under the existing legislation. That message is getting a bit lost, with some members trying to put the word out there that some vast cheques are going to be written. It was interesting that during the select committee process some Labour members were getting up to speed on their own existing legislation, although they must have seen the Cabinet papers when they were in the previous administration.

We have to ask why the previous administration even considered and brought in free allocation, and why the current administration is continuing it. The arguments were about the execution of it, its timing, and some other points that other members have raised, to be fair. It is quite simply because, as an exporting nation, New Zealand is very exposed. We are trade-exposed, job-exposed, credit-exposed, or whatever one likes. Yes, the previous administration had ambitions to be carbon neutral and all sorts of things, and other members have canvassed those issues, but the point was to put in a framework to get New Zealand out of the starting blocks. We wanted to have in place a framework and a scheme, to have in place a price for carbon emissions—be it the marginal price, the full price, or whatever it is. Yes, we will be arguing for a wee while about the speed of it, but that is actually it. But the risks were also acknowledged. The risks were, quite simply, that if New Zealand was to do it without having some kind of compensation, or if the Crown was to keep all the units allocated to New Zealand, then if our major industries, our major employers, our major processing industries did not pack up and leave by the dozen, they would at least drive down or kill off their production lines. That is simple economics. Quite simply—and the previous administration also acknowledged this—we compete with Australia, mostly, with regard to most of what we produce, and if our competitors are not facing the same cost inputs that we are, they will be able to penetrate and sell to our markets at a lower price, or to take larger profits than we can. At the end of the day, who would be the loser? It would be “New Zealand Inc.” What is “New Zealand Inc.”? It is the Crown and the private sector, and, therefore, jobs would be lost.

The whole argument that we have heard today, and I am sure we will hear it again tonight, we will be quite—

Hon Maryan Street: This is too simplistic for words.

CRAIG FOSS: Quite simplistic? It will not be as simplistic as that member’s history as a Minister, but we will not go there at the moment. I cannot recall seeing that member at the select committee; maybe she was there.

Why is the free allocation there? We have got the 1.3 percent per annum phase-out rate in this bill. We must remember that agriculture alone has had an efficiency gain of about 1.5 percent per annum for the last 10 to 15 years, or maybe for even longer. People in the sector are doing it anyway.

My point is, quite simply, that we should acknowledge what is in place already. Yes, there are these crazy headlines that other members are talking about, but the free allocation is about saving New Zealand jobs, holding on to what we have, and growing our economy. It is as simple as that. I cannot quite see why other members get up to try to argue that point. I am yet to be convinced. Let us have a debate about what this particular bill is putting in place, without, as some members are doing, ignoring what is in place now. Thank you.

Hon DAVID CUNLIFFE (Labour—New Lynn): I want to use this call to look more closely at some of the fiscal assumptions in the Climate Change Response (Moderated Emissions Trading) Amendment Bill. They are both huge and very much open to debate. Already in this debate tonight we have touched on some numbers that would boggle the minds of most New Zealanders and cause a great deal of concern and anxiety, because for every New Zealand man, woman, and child we are looking at thousands and thousands of dollars of potential tax liability arising from the change between the scheme proposed by the previous Government and the current scheme.

In respect of this part of the bill I will take a couple of minutes to examine some of the assumptions behind that argument. To some degree, I want to take the Government at its word and run some “even if” arguments—even if one accepts some of its presumptions, where does one get to?

The Government contends that the value of the carbon subsidies in this bill is only $50 billion.

Hon David Parker: Only?

Hon DAVID CUNLIFFE: My colleague remarks: “Only”, because that is a 50 with a lot of zeroes after it—$50 thousand million by 2050. The Government has, as recently as this morning, reconfirmed one of the two great assumptions upon which that mid-range Treasury estimate stands, and there is now consensus in this House on the price path for carbon that the Government is using as the basis for its estimates. There is now a shared understanding that that price is $25 a tonne until 2013, and $50 a tonne thereafter, which is fairly parallel to the estimates made by the Australian Government. Of course, this Government is giving, in addition to the $25 short-term price, a two-for-one, 50 percent, “buy now, get one free” discount, which is kind of like Noel Leeming on steroids, but I leave that aside.

The key difference between the $50 billion, or 6 to 8 percent of GDP debt that was in the Cabinet paper of 21 September—which was the basis for the Government’s decision to proceed with this bill—and the $110 billion, or 14 to 17 percent of GDP that Treasury and the climate change working group officials briefed the Finance and Expenditure Committee on, is not in respect of the price path but in respect of whether it is fair to include the compounding effects of the charge. That is something akin to the time value of money, allowing a cost of capital, and, of course, there is a broad precedent for doing so in the Government accounts.

Every Government entity that has a capital asset pays a capital charge on that asset. It varies by premium on the Government’s cost of capital. It is in the range of 8 to 11 percent, depending on the entity. It is charged every year. It is an expense on that entity’s income statement, and it can be capitalised as a debt on the entity’s capital account. So that is part of Government accounting. I see no reason why we should depart from the process of including in the forward cost estimates some reasonable assumption around the cost of capital. Treasury’s version of that, as disclosed to the select committee, was that it gets the figure to around $110 billion cumulatively, including those capital charges or interest charges by 2050.

We are happy to have a reasonable debate about whether the result is $120 billion, $80 billion, or $90 billion, depending on what interest rate is used. Of course there will be variability, and that is why we asked the officials, when they were before the select committee, to show us the bell curve—the distribution of those costs depending on the various modelling assumptions that they had put into their analytics—but they could not. Both Treasury and the climate change working group could not explain what sensitivity testing, if any, they had done around those humungous estimates. That was of great concern around the committee table, although some were too polite to say. There is to this day, as far as we can tell, no bell curve of simulated probability distribution for those costs. We know that there are different variables that can be assumed. As Treasury’s regulatory impact assessment unit said, the bottom line is that the quality of the analysis here is just not appropriate for a bill of this magnitude. I mean no offence to officials, who have had an extremely difficult job and have been working under extreme time pressure to get this bill through.

So we are left with taking a most generous position. Let us assume away any need for sensitivity testing. Let us take the Government at its word that it will be only $50 thousand million by 2050 to ordinary Kiwis on their net tax position, not $110 thousand million by 2050. Let us give that one, for now, for the sake of argument, to the Government. What next? It is now common ground that the Cabinet paper of 21 September, the crucial Cabinet paper, was wrong. There was a typographical error in the text. It was not 6 to 8 percent of GDP but 14 to 17 percent of GDP equivalent. I hear people in TV-land or radioland asking themselves: “Does this matter?”. Let me put it in context. When the Government changed at the last election, the total amount of net Crown debt was a couple of percent. The total amount of gross Crown debt—that is, all the debt the Government owed around the world—was equal to about 18 percent of GDP. It had been down to 17 percent but it came up to around 18 percent before the election.

So what the Government is essentially buying into here is a doubling of the current level of gross Crown debt in terms of relative impact on the Government balance sheet. That is a big number. It gives the lie to the Government’s protestations that it cannot afford adult and community education, because that cost $13 million, not $50 thousand million. It puts the lie to the supposed blow-out on accident compensation, a supposed deficit of around $2 billion that is actually running at a cash surplus of around $1 billion positive. But, either way, that cannot matter so much, because the Government has just spent $50 thousand million of taxpayer money subsidising big polluters.

But even then, for the sake of argument, let us give the Government the benefit of the doubt. The next stage of the Government’s argument is this: it is not really real money. It is just play money—think Monopoly. There is a problem with that argument, because New Zealand, the Crown, has ratified an internationally binding treaty obligation under the Kyoto Protocol. We all, collectively, owe it to the United Nations if we run short of net carbon credits—period. Therefore, we will have a liability—

Hon Dr Nick Smith: You don’t understand it.

Hon DAVID CUNLIFFE: I said “net”, I say to the Minister in the chair. The Minister is welcome to explain that; I hope he will take two or three calls.

But even if it were Monopoly money, then the final stage of the Government’s argument is this: because this will not necessarily be negative from a zero-tax position, we do not necessarily “owe” it, but it might instead mean we are not spending it on something else, and there are two problems with that. Firstly, one cannot say in public accounting that this tax dollar goes to that expenditure. It all goes into one central pot, and it is incontrovertible, whether the number is $50 billion or $110 billion, that it goes out of that pot, and our net position will be that much worse off relative to where we would have been under the existing scheme.

It is then a second order discussion in terms of where we start from with our other fiscal assumptions. Any Government by 2050 will face hard choices. It will have a lot of retired people to support. It will have a huge need to invest in environmental technology and climate remediation and adaptation. All of that will have to be paid for, and that is part of the reason that we need fiscal flexibility at that point. That is very, very important.

So this is real money. It is a real trade-off. It is at least $50 thousand million by 2050, which is tens of thousands of dollars, at least, per man, woman, and child. It really matters, and it buys us—what? It buys us less than a 1 percent reduction in net emissions from agriculture and heavy industry—less than 1 percent.

The Parliamentary Commissioner for the Environment said that based on the analysis and the numbers, there is no way these provisions will achieve even the Government’s own paltry target. Even on the Government’s own analysis, even on the Government’s own design, even on the Government’s own target, by several independent authorities, it cannot and does not work. So why are we here on the eve of Copenhagen with great uncertainty still about Australia? Why are we passing this bill in urgency when it is a complete fiscal shambles? I will talk again later. The process has been a shambles.

Hon Dr NICK SMITH (Minister for Climate Change Issues): I want to expose for the Committee some of the double standards in the contributions that have been made by members. I start with Mr Cunliffe, who said that the allocations to industry are a subsidy. Did I hear him correctly?

Hon David Cunliffe: Oh, indeed, they are.

Hon Dr NICK SMITH: Well, that is very interesting. Let us go back a year. Just 12 months ago the Green Party was criticising the previous Labour Government for the amount of allocation it was making to industry. Do members know what the then Minister, Mr Parker, said? He said that these allocations are not a subsidy. Well, that is interesting. I have the numbers here of just how many units are allocated under the existing law, so when Labour allocates 654 million units of carbon—that is what its law does—that is not a subsidy. But when a change of Government occurs and we do an allocation then it is a subsidy. I want a member to explain why it was that when Labour’s legislation provided for an allocation, Mr Parker very specifically said to the Greens that it was not a subsidy, but now it is. I think Labour members have to explain that.

The second point is that members have said there has been no analysis. Those were the specific words that Mr Cunliffe used. Well, I have a report from 20 May 2009 by the New Zealand Institute of Economic Research and Infometrics. This joint report very specifically recommends that the most economically efficient way to deal with the issue of leakage is a production or intensity basis. In all the debates around the economy that I have heard in my 20 years, I have heard those two firms quoted more often than any. In fact, we said that there was some contrary advice. Last year we had one report from the New Zealand Institute of Economic Research saying one thing and we had Infometrics saying another. We said that this was an important call and a really big decision. We wanted to get the best advice possible so we sought a joint report. So when members say that there has been no analysis, I say that they have to look at the detail of that report, which recommends exactly the approach that is being taken in this bill.

The third point is around the issue of allocation. The first point to understand is this: the costs, no matter what way we cut them, for the first 10 years of the emissions trading scheme under the existing scheme and the new scheme are no different. Let me go through this very specifically. We have a softer transition regime. The Government said that there is a recession and the last thing we want to do is for an emissions trading scheme to snuff out the fragile recovery. We said that in those first few years we do want to take a softer approach. That means that New Zealander’s petrol bills will go up by half the amount, rather than a bit over 7c a litre. It will be a bit over 3c or 3.5c a litre. In respect of power prices, rather than the price going up by 10 percent it goes up by 5 percent. There is a cost involved; that is quite true. The analysis shows that the cost of the change is $400 million.

For the next period from 2013 to 2018 this revised scheme costs less. Let me explain why. The members were very keen to quote Comalco earlier. When they talk about the phase-out rate, we should remember that in the current scheme there is zero percent phase-out of industry support from 2013 to 2018. So why is zero percent OK but suddenly then it is 8 percent? This scheme starts the phase-out at 1.3 percent per year and that does result in some savings. So over the first 10 years of the scheme there is absolutely no difference in terms of the balance.

The thing I find most interesting is this: I am pretty confident that this John Key - led Government will be in office for 10 years.

Hon Members: What?

Hon Dr NICK SMITH: I am quite confident of that.

Hon David Carter: It will be more than that.

Hon Dr NICK SMITH: My colleague Mr Carter says it will be more than that. But it is interesting that the most controversial point in this bill is not about what the rules are for the next 10 years but what they are after that period. There is not much controversy about the next 10 years. Where are all the members’ debates about what we are doing incorrect in that first 10 years? [Interruption] Mr Chairman?

The CHAIRPERSON (Eric Roy): No. The Minister has had two consecutive calls. You get only one opportunity for that.

CHRIS TREMAIN (Senior Whip—National): I raise a point of order, Mr Chairperson. Speaking to your decision, my understanding about the ruling on consecutive calls was that it was about consecutive calls in a row. So any member in the House may take two calls in a row, and may have a number of two consecutive calls following that, down the track.

The CHAIRPERSON (Eric Roy): No. Let me read to you the leave that was sought. Well, the salient point is that members have an unlimited number of speeches of 5 minutes each, but not more than two consecutive speeches on each part or provision.

Hon David Cunliffe: Consecutive.

The CHAIRPERSON (Eric Roy): Yes, on each part. So on the next part the slate is clean for members.

Hon DAVID CUNLIFFE (Labour—New Lynn): I raise a point of order, Mr Chairperson. I seek your clarification. It is the understanding of the Labour Opposition that members may take more than two calls per part, but may not take more than two consecutive calls per part. Is that correct?

The CHAIRPERSON (Eric Roy): That is what the leave that was granted states.

Hon DAVID CUNLIFFE: So, for example, you correctly ignored my plea for a third consecutive call during my last intervention, but that does not preclude me from taking a subsequent call during this part.

The CHAIRPERSON (Eric Roy): That is correct. I just make another point here. The Minister in the chair, Dr Nick Smith, has raised the point that normally these rules do not apply to Ministers in the chair, because they are able to take an unlimited number of calls to provide explanations. But I am bound by the leave granted, which is in front of me—

Hon Dr Nick Smith: But that was never intended to do that.

The CHAIRPERSON (Eric Roy): What I need, then, to clarify this issue, is for some member to seek leave that the Minister have more calls—if that is the understanding.

CHRIS TREMAIN (Senior Whip—National): I raise a point of order, Mr Chairperson. There is a clear ruling, which we need to abide by because the Leader of the House put it in place. I want to be clear about the Minister in the chair: by your ruling, has he had two lots of two consecutive calls?

The CHAIRPERSON (Eric Roy): No, he has had one. I am abiding my interpretation of the leave, which is in front me. I had no part in passing it or even in its construction, so I am trying to interpret it. He had two calls initially, and because I do not have any other instruction I have applied a blanket interpretation.

CHRIS TREMAIN (Senior Whip—National): I raise a point of order, Mr Chairperson. Taking up what the Hon David Cunliffe said, I think it is the understanding of both sides of the House—[Interruption] Well, Mr Cunliffe just said that speakers are allowed two consecutive calls, and, after that, additional calls, but only one call at a time.

The CHAIRPERSON (Eric Roy): That is correct. Members can take unlimited calls but they can have two consecutive calls only once per part.

Hon Dr NICK SMITH (Minister for Climate Change Issues): I raise a point of order, Mr Chairperson. I am one who likes to engage in the debate in order to answer members’ questions. It has always been the convention that the Minister in the chair can take more than one call. When leave was sought by the Leader of the House, it was to allow other members to be able to have more calls in the debate. We want to have a really good, open debate about the bill. I find it a quite extraordinary ruling that when the House has granted leave to broaden the scope of members’ participation in the debate, you interpret it as overruling and constraining the convention about Ministers taking more than one call. When leave is sought, it is to extend the general rules that are there. I think it is a quite unusual ruling for you to imply that the attempt by the Government to extend the debating opportunities for members of the House also meant that the Minister’s speaking time was going to be constrained. If that was going to be the unusual interpretation, quite clearly, the Government would have not have agreed to leave on such a measure.

CHARLES CHAUVEL (Labour): I just want to make it clear that, following a discussion internally amongst Labour members, we, with respect, think you have got the ruling right. I am not saying that because I am trying to make any sort of petty point against the Minister; I am saying it because I think the Minister, in his explanation of why you ought to take a different course, has misunderstood the reason for which leave was sought and granted. Leave was sought and granted for a relaxation of the rules in this case because there was recognition that there had not been proper scrutiny at the select committee of a big bill, that a big Supplementary Order Paper had been tabled on the day that—

The CHAIRPERSON (Eric Roy): I do not need to go into that stuff.

Charles Chauvel: I am just saying we support your ruling.

The CHAIRPERSON (Eric Roy): Thank you for that, but I do not actually need it. I have in front of me some words, and I am making my best possible attempt to interpret them. Can I just say to the Committee that leave was sought to depart from the convention. All I can operate from is what is in front of me. I am simply interpreting verbatim what is in front of me. Members may need to consider that on future occasions, but I have an instruction from the House.

JOHN BOSCAWEN (ACT): I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Eric Roy): I do not know that I need any further assistance. I have made a ruling based on my interpretation of the leave. Does the member have new material?

JOHN BOSCAWEN: I do have new material. I was interested in that leave, as well, so I took the trouble of visiting the Clerk, Mary Harris, in her office late this afternoon. She advised me that the leave meant that members had unlimited calls, but, subject to the ruling of the Chair, the Chair would allow no more than two calls taken together. In essence, she was saying that we could give as many 10-minute speeches as we wanted and as the Chair would allow. We were not restricted to one double call or two double calls. As long as we had new material, and it was a useful debate, and the Chair allowed the debate to continue, we could take as many double calls as we wanted, and the Minister could take as many double calls as he chose. That was from Mary Harris, the Clerk of the House, this afternoon.

The CHAIRPERSON (Eric Roy): With respect, that is not what the leave says, and I have interpreted it as clearly as I can. I am doing my best. I will take a further call from some other member.

Hon DAVID CUNLIFFE (Labour—New Lynn): I raise a point of order, Mr Chairperson. I understand that you want to advance the debate, and I wonder whether you might, to clarify what is clearly a range of understandings of your ruling, be kind enough to read out the words again and repeat your interpretation so that we can all be of common mind.

The CHAIRPERSON (Eric Roy): That is fine. I am happy to do that. The Leader of the House sought leave: “I seek leave that for the Committee stage of the Climate Change Response (Moderated Emissions Trading) Amendment Bill members have unlimited number of speeches of 5 minutes each but not more than two consecutive speeches on each part or provision in the provision.” Members may be aware that I have a little system here in which I record down the side of this paper when members have taken two calls, because I am trying to obey the leave that was granted. I am doing my best.

John Boscawen: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Eric Roy): No, I have ruled on this. I will take a call.

MOANA MACKEY (Labour): I am happy to take my first of what I hope will be many calls in this very important Committee stage. I endorse the question that was put to the Minister in the chair, the Hon Nick Smith, by my colleague, and I also look forward to the Minister engaging in this debate. We appreciate the engagement that the Minister shows the Committee in this debate.

I will raise one issue first, because it is an issue about which we had a number of questions at the select committee. It might be seen to concern one of the less high-profile matters within this emissions trading scheme amendment bill, but it is about the changes for allocations to the fisheries sector. Members who were involved during the last Parliament in the emissions trading scheme that the previous Labour Government put through, will remember—[Interruption] That is right; for some of us this is the third iteration of this debate. At the select committee we were swayed by arguments from the fisheries sector that despite the fact that no other sector would be compensated for liquid fossil fuel use, and because of the trade-exposed nature of the industry and the situation it was in, the industry was looking for the kind of assistance that other industries were receiving. The select committee listened to that argument; when the bill was eventually passed, there was provision for the fisheries sector.

Under the existing emissions trading scheme legislation, which the Labour Government passed, that allocation was given to vessel operators. That is to say, the allocation was given to the people who ran the fishing vessels, the fishermen and fisherwomen who were facing up front the costs of liquid fossil fuels and any increases that an emissions trading scheme might be imposing upon them. That seemed to be sensible. Indeed, from my recollection—and I could stand to be corrected—that is what most of the sector were arguing for. It seemed to be the easiest and most sensible way to arrange it. No one came to us or lobbied us after the fact to say that they believed that to be a bad way or the wrong way to do things. So we went ahead and did that.

Under the deal with the Māori Party, we note that the allocation to the fisheries sector has increased. But the big change—and this is the matter on which I would really appreciate some response from the Minister—is that the allocation now no longer goes to the vessel operators; it goes to the quota holders. That is a significant change for a number of reasons. I know there are pros and cons on both sides, but I am concerned about this change for a number of reasons. Firstly, not every person who fishes in New Zealand waters is under the quota management system. That means that if someone is fishing a stock that exists outside the quota management system, that fisher now gets nothing.

Hon David Carter: What’s this got to do with the emissions trading scheme?

MOANA MACKEY: David Carter has just asked what this has to do with the emissions trading scheme. That is unbelievable. The Minister of Agriculture does not know that we are changing, under this legislation, the way we provide free allocation to the fishing sector.

Hon David Carter: That’s not what you’re talking about.

MOANA MACKEY: That is what I am talking about. I ask Mr Carter, please, to listen.

Hon David Carter: Well, make it plain and clear.

MOANA MACKEY: Oh, dear Lord! Someone who did not even realise that this provision is part of the emissions trading scheme might do well to listen, rather than yell at me across the Chamber.

The fact is that under the legislation there is a change by which the free allocation goes from the vessel operator to the quota holder. If fishers fish a stock that is not in the quota management system, they now get nothing. Under the previous legislation they did get compensation. I ask Mr Carter whether that is fair. That is fair? So if someone fishes a stock—

Hon David Parker: It’s fairer for the big end of town.

MOANA MACKEY: That is right. For the big end of town it is fair, I say to Mr Carter. Fishers who are fishing something that is not in the quota management system face the same emissions trading scheme cost on their liquid fossil fuels as someone who fishes inside the quota management system, but they get nothing. Yet the person working inside the quota management system gets free allocation.

It is not only that, but aquaculture gets nothing. I ask Mr Carter whether that is fair. There we go—Mr Carter thinks that is fair. Not only that—

Hon David Carter: Aquaculture got nothing out of that Government. You did nothing about it. Nine years of nothing.

MOANA MACKEY: I ask Mr Carter to listen, because this is an important fact. Quota holders do not have even to fish their quotas to get the free allocation. So here is a free allocation that has been given to compensate those operators for an upfront cost of liquid fossil fuels, but if that quota is not fished and that cost is not even incurred, they still get the money. Oh, members opposite have gone very quiet now—Mr Carter is now reading a very important document that he has in front of him—because that is indefensible. If we believe that the fisheries sector needs free allocation, is trade-exposed, and deserves that free allocation, why would we not give it to the vessel operator, the person who is facing the upfront costs?

The argument we heard was that it damages the quota value. That was the reason to give it to the quota holder. But we can also address that by giving that subsidy for the liquid fossil fuel up front and thereby protecting the quota value. We can do that either way, and the officials told us that—that it was one way or the other. But the way the Government has chosen excludes people who fish outside the quota management system, including those in aquaculture. I do not understand why the Government is giving it to people regardless of whether they fish their quota. They are not facing a cost, yet they get the money. I really want an explanation from the Minister on this matter. I believe it is much fairer to give that money to the person who is facing that cost, because that it is what it is for. It is there to compensate for any increase in liquid fossil fuels that the vessel operator may face, so why is it not given to them? It can be said that it will be passed on, but there is no guarantee that it will be passed on. I know a whole lot of people in the fishing industry who would say: “You’re dreaming if you think this is going to be passed on to us.”

In some cases the quota holder and the fishing vessel operator are the same person, so that will not be such a big issue. But if this is a deal that the Minister had to do just to get support, then he should just tell us that, and I will sit down and never mention it again, because I know that this is not about defending one argument or another. I do give that promise; I say to Mr Carter that I will not mention it again. But if that is what it was, he should just tell me.

Hon Dr Nick Smith: Yeah, right!

MOANA MACKEY: Yeah, right—that is probably true. I cannot understand why the free allocation would not be given to the people facing the upfront costs, which also protects that quota value. We do everything that the officials told us they were trying to achieve in giving it to the quota holder, but it seems to me that this protects the big end of town; this does not protect the little single-operator fisherman who is trying to keep afloat, and who was facing a cost with the emissions trading scheme under the previous bill—

Hon David Cunliffe: Leasing of quota.

MOANA MACKEY: Yes, that is right—leasing of quota. He thought he was going to get some help under the previous bill. To be fair, that was put in late in the piece, and we acknowledge that. We were very much swayed by the very good submissions we heard at the Finance and Expenditure Committee—and the Minister responded.

Hon Dr Nick Smith: Yeah, right!

MOANA MACKEY: No, we were. Why would it not be given to them? We heard some very impassioned submissions at the select committee from people who could just not understand. Everything the Minister wants to achieve could be achieved by giving the free allocation to vessel operators, and then everyone would be included. Then we would not shut out aquaculture, and we would not shut out people fishing non - quota management system stocks. More than that, it would be given to people who are facing the upfront costs. We are actually paying for a cost, as opposed to just handing over a cheque for millions of dollars with absolutely no requirement for quota holders even to fish those quotas. This is a genuine question, and I would appreciate the Minister’s response.

Hon Dr NICK SMITH (Minister for Climate Change Issues): In the spirit of the debate I want to respond to the points raised by Moana Mackey. The first thing that is amusing is the sudden love Labour has for the fishing industry. Let us just remember, when Labour introduced its emissions trading scheme bill, how much support it provided for the fishing industry. It was absolutely zip; absolutely zero—not for the quota holders, not for the vessel operators.

Hon David Cunliffe: Where did the 50 percent come from?

Hon Dr NICK SMITH: That is a very good question. The news release from New Zealand First said that in its negotiations with Labour it secured 50 percent allocation for the fishing industry. Is not that interesting? When Labour does agreements with other parties, as it did with New Zealand First to provide the 50 percent for the fishing industry, that is just what one does in Government! But now Labour is in Opposition, there have been all sorts of quite appalling accusations, and that illustrates the double standards.

We now come to the second question. My colleagues and I campaigned on a policy of increasing the allocation to 90 percent. The debate is whether it should go to quota holders or to vessel operators. The advice we had is that it is a relatively balanced call. Let me tell members the strong view of the Māori Party. The Māori Party did contribute to the debate. They said that in New Zealand about 50 percent of the fish are caught by foreign fishing vessels. The Māori Party had a strong nationalistic view—I think that would be a fair way to express it, I say to Mr Te Ururoa Flavell—that to give half of this allocation to fishers who come and catch that fish, mainly annual catch entitlement coming in, was not the support that the Māori Party wanted to provide, and it did make that strong submission.

There is also quite a strong and more principled argument beyond just that issue. The compensation for fishers is around a loss of asset value. I will tell members why. There is no choice about whether the fish is caught in New Zealand’s exclusive economic zone. It is not like an issue like aluminium, which might be manufactured offshore. It is not like the issue of New Zealand Steel, where it might be offshore and there are competitive, at-risk issues. What we have here is an issue where the fish can be caught only in New Zealand areas. It is a loss of that property right, so in my view that is quite a sensible provision in this bill. But I just say again that it is a bit rich of Labour to be arguing about the level of support to the fishing industry—

Hon David Cunliffe: You can’t argue it both ways.

Hon Dr NICK SMITH: —when the record, I say to Mr Cunliffe, is that Labour was proposing in its bill to provide absolutely zip, zero, for the fishing industry.

JOHN BOSCAWEN (ACT): It is a pleasure to take ACT’s first call in the Committee stage debate. I suspect that this debate will continue for many, many hours. This is a very sad day for New Zealand. The Climate Change Response (Moderated Emissions Trading) Amendment Bill has implications for all New Zealanders, and it imposes a tax on all New Zealanders. The previous Labour Government passed its own emissions trading scheme last year, just before the general election, and that imposed massive new taxes on everyone in New Zealand. The National Government has an opportunity to amend that, to reverse the damage that it did. Although it has moved partially in that direction, it has lost a huge opportunity. The ACT Party strongly opposes this bill and will be voting against it.

I said that I expect this to be a long debate, and I hope to take many calls, subject to the Chair’s indulgence. I hope to talk about the fishing industry and the impact on that industry. I wish to talk about agriculture and farmers, and the impact on that industry. I want to talk about the impact on small and medium sized enterprises, which are the backbone of employers in this country. They get absolutely zilch, zero, nothing. There is no free allocation whatsoever for them. I wish to talk about the impact on heavy industry. I want to talk about the impact on families.

The ACT Party spoke widely earlier this year on New Zealand being a place of no second-class citizens—the haves and the have-nots. This bill will impose a cost of 10 percent extra on the electricity bill of every New Zealander. [Interruption] That is right. We are hearing 5 percent, absolutely. Labour was 10 percent. On 1 January 2013 the price of electricity will rise by 10 percent. Under this bill, National is putting up electricity by 10 percent. People have the audacity to come into this Chamber and talk about subsidies. Who are we subsidising? We are subsidising the owner of Genesis, we are subsidising the owner of Meridian Energy, we are subsidising the shareholders in TrustPower, and we are subsidising the shareholders in Contact Energy. From 1 January 2013 every single New Zealander will be paying 10 percent more for his or her electricity. If we want to talk about subsidies, we should talk about the cost to ordinary New Zealanders. We should talk about the people who are underprivileged; we should talk about the have-nots.

It is interesting that there has been discussion about Hone Harawira and whether he will rejoin the Māori Party. If Hone Harawira did not have an excuse to part company from the Māori Party previously, he has it with this bill. What do the people of Tai Tokerau get out of the Māori Party’s support? They get absolutely nothing. Ngāi Tahu walk away with 30,000 hectares of conservation land to plant trees on, and good on them. They are obviously very smart negotiators. But the people of Tai Tokerau, with the deepest respect, get absolutely nothing.

In subsequent speeches I want to talk about industry-based allocation. I want to talk about New Zealand’s potential emissions reduction target of 50 percent by 2050, and how flawed that is with our unique emissions profile. We have heard a lot from Mr Cunliffe this evening about the submission of the Parliamentary Commissioner for the Environment, and I want to talk about her submission. I want to talk about the science on which this bill is supposedly based. I want to talk about the level of inept regulatory investigation—the fact that there was no proper study. There are many issues that the ACT Party wishes to talk about, and I hope we are still talking about those issues this time tomorrow.

But before I proceed further I feel I need to remark on two comments made by the Minister. Mr Smith asked a rhetorical question of the Greens 15 minutes ago. He asked when was a subsidy not a subsidy—when Mr Parker can stand up and say what the Labour Government was doing was not a subsidy, but the Labour Party has the audacity to say it is a subsidy now. I say to Mr Smith that there is actually a difference. There is a difference between the Labour scheme and the National scheme, and he knows it well. Under the Labour scheme the free allocation reduced to 2030, and from 2030 the emissions trading scheme became a massive tax grab. There was no free allocation beyond 2030. National talks about its scheme being fiscally neutral and it talks about the value given to big emitters. We will talk about emitting, pollution, and carbon dioxide—and how I am polluting right now, it would seem, with carbon dioxide. Under the National scheme the big emitters essentially, we have been told, are fiscally neutral. So it is good enough for the fishers to go out with allocations from 2030, it is good enough for every single New Zealander to pay more for electricity, and the scheme is fiscally neutral. If we are taking from ordinary working families and we are fiscally neutral, I ask Mr Smith who we are we giving it to.

Hon Dr Nick Smith: Forestry.

JOHN BOSCAWEN: Mr Smith says that we are giving it to forestry. Is that not interesting, because the Federation of Māori Authorities came to the select committee and said that the emissions trading scheme represents the biggest confiscation of Māori wealth since the 1800s. [Interruption] Shame—exactly.

Let us talk about the fishing industry; Mr Smith took a query on the fishing industry. He talked about the fact that Labour members were johnny-come-latelys to the fishing industry and that the industry was not going to have any subsidy whatsoever, and that is absolutely true. I understand that at the select committee for the last bill the decision to put in a 50 percent allocation was a last-minute decision, and the fishing industry was to get a 50 percent allocation for the 3 years up to 1 January 2013. National has trumped that with a 90 percent allocation. What happens on 1 January 2013? It goes to zero.

Let us have a look at what the National minority report said on Labour’s emissions trading scheme last year—and I am told it was written by the current Minister. If that is so, the Minister wrote, on page 6: “New Zealand’s fishing industry exports 92 percent of its output, earning $1.3 billion per annum.” It is an energy-intensive sector, I say to Mr Smith, with fuel making around 40 percent of the operating costs of vehicles. The bill provides an allocation of units to sectors such as meat, dairy, cement, steel, forest, and aluminium but excludes the fishing industry. This arbitrary exclusion does not seem well justified.

I wonder what Mr Smith says to his constituents in Nelson. I was in Nelson last Friday, as he very well knows, and I saw the Sealord factory. I saw that it employs 400 people. I was told that the processing that the factory does could just as easily be shipped off to China, as has happened at so many other processing factories that have been closed down, and he has the audacity to stand up here and say that this is an issue of property values. It is actually an issue of keeping the people employed at that Sealord factory.

But I move on, because I have allowed myself to be distracted in responding to Mr Smith’s comments. I would like to pay a special tribute to two people on the select committee, and I hope they hear my comments. The first person is the committee chair, Mr Craig Foss, because Mr Foss was given a hospital pass. He was given the job of doing the Minister’s bidding and I feel very sorry for Mr Foss because I suspect I caused him a few problems. But Mr Foss was given his riding instructions and he was told to have this bill back in the House on 16 November, come what may, and that it did not matter if the committee report was not ready, or if the revision-tracked bill had turned up. I know that Mr Foss will hear my comments, so I pay tribute to him because he was given a hospital pass.

The other person I pay tribute to is Rahui Katene, because I would suggest that, probably, the overwhelming amount of what I know about this emissions trading scheme I have learnt in the last 6 weeks. It was interesting that the Hon David Cunliffe and Amy Adams both acknowledged that they had not previously sat on select committees. The reason I acknowledge Rahui Katene is that she had the courage and the wisdom to vote with the Labour Party, the Green Party, and me to allow submissions to be heard. Jeanette Fitzsimons is nodding her head. Jeanette Fitzsimons stood in on that select committee.

The CHAIRPERSON (Eric Roy): Before I call the next speaker I say that although I did not break up the member’s speech while he was speaking, we pay attention to try to get titles as correct as we can. It is Dr Smith, not Mr Smith. I did not break up the member’s speech. The next speaker will be Dr Hutchison.

Dr PAUL HUTCHISON (National—Hunua): That is a great choice, Mr Chairperson. I too, like Mr John Boscawen, take great pleasure in speaking on this Climate Change Response (Moderated Emissions Trading) Amendment Bill—

Chris Hipkins: Why?

Dr PAUL HUTCHISON: —and he asks why. It is because, indeed, it is exactly that. It is a very, very practical response to the previous Labour Government’s legislation, which was totally impractical and out of this world.

It was a little rich to hear the Hon David Cunliffe going on about Treasury’s prediction of $100 billion. He was trying to verify that figure in as many ways as he could, twisting and turning and thinking that people would believe him. That is a bit rich, because it was the previous Labour Government that, back in 2005 and 2006, campaigned and said a billion dollars would come New Zealand’s way if we took on its emissions trading system. What happened? We were a billion dollars in deficit. Labour’s track record is one of that sort of predictability.

Hon David Cunliffe: Weren’t you out by just 60 times?

Dr PAUL HUTCHISON: Mr Cunliffe knows very, very well that this scheme will be reviewed at 5-yearly intervals and will be constantly monitored. He knows very well that there will be changes internationally that we cannot predict right now.

In this excellent Part 1, which we are debating today, we are introducing the absolutely practical and appropriate amendments that have come on Supplementary Order Paper 98 in the name of the Hon Nick Smith, and the amendments introduced by Rahui Katene of the Māori Party. I say to Mr John Boscawen that he was right; Craig Foss made an excellent job of chairing the Finance and Expenditure Committee, under very, very difficult conditions. Indeed, he was right to say Rahui Katene and the Māori Party have been quite appropriate in their response to ensure that New Zealand ends up with a practical and realistic emissions trading system.

Earlier on this afternoon I recall that the Hon David Cunliffe made a comment that was a bit appalling. He said something about this generation of New Zealand’s children entering its twilight phase. That epitomises the pessimism of the Labour Party under this scenario; it absolutely epitomises the conspiracy theories that Labour members are manufacturing and say might occur. Those theories are similar to the $110 billion figure, which is just absolutely unrealistic. The other thing that he said, which worried me greatly, when he was talking about Copenhagen is that Mr Charles Chauvel will be there as well, undermining the extraordinary leadership we have from the Hon Tim Groser in putting New Zealand’s position. He will be there undermining and sabotaging it, and that is totally, totally unpatriotic to New Zealand.

There is no doubt that Part 1 implements exactly what the Hon Nick Smith mentioned earlier this afternoon: a workable, affordable emissions trading system. It will align New Zealand’s scheme with the Australian scheme. I challenge Charles Chauvel, the Hon David Cunliffe, and the Hon Pete Hodgson to come into my electorate of Hunua, which I very proudly represent, to speak to my farmers, my growers, the people who work in glasshouses, the people in New Zealand Steel who employ a thousand workers, and to tell them how the previous Labour Government’s emissions trading scheme would affect them. Those people are the backbone of the New Zealand economy. I challenge those members to come into the electorate that I very proudly represent and find out for themselves how unrealistic the Labour emissions trading scheme is. Those members would be thrown out on their ears. Those people in my electorate work for New Zealand and are the backbone of our economy, yet the Labour scheme would cut them off at the knees. Those Labour members do not go out of their urban safety and security to find out what it is really like for those people, and to find out how small, medium, and large businesses would be affected by Labour’s emissions trading scheme.

There is no doubt that we can be very, very proud of National’s emissions trading scheme, which we will progress in the next few hours, because it does indeed balance New Zealand’s environmental responsibilities with the economic realities of the day. I see a snide smile on the face of David Cunliffe, and again I say to him that he should come into my electorate and tell my constituents that Labour would double the expenses for their businesses. That is totally unacceptable. A little while ago I was over in Canada, and we see the situation there where that country is just not prepared to introduce an emissions trading system, yet here in New Zealand, under a National Government and its coalition partner, the Māori Party, we are bringing in a highly realistic scheme. It is excellent that Part 1 balances things that will be acceptable to the majority of New Zealanders, and will keep viable the majority of New Zealanders’ businesses. Indeed our scheme will be a leader over in Copenhagen, as New Zealand becomes only the second country that has actually implemented an emissions trading system—second to Europe.

JACINDA ARDERN (Labour): I am quite happy and pleased to follow on from the previous Government speaker, Paul Hutchison, and point out that he used two quite contradictory statements in his message to the Committee. On the one hand he had the audacity to refer to the Climate Change Response (Moderated Emissions Trading) Amendment Bill and the idea of environmental responsibility in the same breath. On the other hand, he said that the presence of Charles Chauvel at the talks in Copenhagen would undermine the Government’s position on its emissions trading scheme. That suggestion is ludicrous. If anything would undermine the Government’s position, it is the bill itself and the attempt it makes to address our environmental responsibilities as set out under the Kyoto Protocol.

In the same way, Craig Foss tried to say that we would potentially expose New Zealand industry if we did not get this scheme right. To a certain extent I accept that that is true, but I do not think that the Government, in pulling together this legislation, has taken seriously enough the other requirements that were put upon the Government to address our environmental obligations. In fact, this shambles has left New Zealand exposed as a whole—in particular, our reputation is exposed. That has been a cumulative process. I do not lay responsibility for our reputation solely at the feet of the Government or of the Minister for Climate Change Issues, and I do not say that our reputation has been undermined solely by this legislation. In fact, it began as soon as the Government was elected. In its first 100 days we saw not only its about-face on Labour’s emissions trading scheme but also the lifting of the moratorium on the production of any new coal-fired power stations and the removal of renewable preferences that the previous Labour Government had put in place. We saw the scrapping of Labour’s Biofuel Bill. That caused a loss of jobs that would have been generated in Waharoa, yet this Government claims to be all about generating jobs. Finally, we saw the removal of Labour’s emissions trading scheme. I hear Government members claiming their emissions trading scheme was the mandate that National was elected on. I would like to hear how many young people the National Party told that this bill was the one National would be presenting, and that it would be the landmark legislation on New Zealand’s response to climate change. I suggest that the Government has no mandate for this legislation from the next generation of voters.

But it does not stop there; it is not just about legislation. The next battle to come is the Government’s review of the Crown Minerals Act, and its complete opening up of schedule 4. But that is a debate for another day.

Hon David Cunliffe: And the petroleum strategy.

JACINDA ARDERN: And there is the petroleum strategy, as my colleague rightly points out.

All of that would be fine and good if the impact was isolated to the Government alone, and if this shambles reflected just on Cabinet, but it is not. The impact of this bill, which is primarily set out in Part 1, will affect two key areas. The first is New Zealand households and Kiwi families, whom this Government claims to protect via this legislation. The second is, ultimately, the environment. In every point that I have looked at, the legislation comes out on the negative on those two key areas.

Let me break it down for members. We have heard a lot of debate about whether we trust the figure of $110 billion that we estimate this bill will cost. If we translate that into a percentage of GDP we are looking at 15 to 17 percent of GDP by 2050. This is a crucial point of differentiation between Labour’s scheme and National’s scheme. Ultimately, Kiwis will pay. Kiwi households will pay and Kiwi families will pay, and they will be subsidising heavy polluters because of a lack of a cap and because of the ongoing subsidisation of those heavy polluters. Those are key points of differentiation between the two schemes. Does any of that matter? If we are ticking the boxes that were apparently set out for us as part of our obligations, does any of that matter? I think it is a very cynical view that says that the idea of our overall emissions and our overall contribution to climate change does not matter. Well, it does. This is not just about ticking boxes.

We have had clear indications not only from the New Zealand Labour Party but also from the Greens that this scheme creates no incentive for polluters to reduce their emissions. In fact, the New Zealand Business Council for Sustainable Development stated: “Overall, this proposed policy appears to greatly reduce incentives to heavy emitters to reduce emissions, increase costs of subsidies to them, slows down the timetable for reducing emissions and allows them to be increased in the meantime, by allowing production to rise (at a set carbon content per unit) without any clear cap on this.” Again, that is a key point of difference. “The more production rises, the more the taxpayer must step in to pay for the additional emissions.” Where is the incentive? Not only that, but where is the signal that New Zealand is taking its obligations seriously and not merely ticking the boxes? Those boxes are expensive and ultimately they will come back to haunt us.

Who exactly will they come back to haunt? This point has been mentioned briefly. Who exactly will the 15 to 17 percent of GDP that we are talking about by 2050 fall on? In 2050 who exactly will pay the 55 percent of emissions from high-emissions-intensive industries that the Government will be subsiding, and the 37 percent from medium-emissions-intensive industries that the Government will be subsiding? Ultimately, it will not be Mr Foss and it will not be Dr Nick Smith. In fact, it will not be any of us in this House. I am the youngest member of this Parliament, and in 2050 I will be 70 years of age. I most certainly will not be here. I will not be here, but our country will still be paying the bill. The tab will be picked up not by us but by our children and our grandchildren.

Amy Adams: You’ve got children, have you? How old are your children?

JACINDA ARDERN: I am quite willing to make a hypothetical point because to me, the fact that I am not a parent does not mean that I will neglect the responsibility that this House has to the generations who are not here yet. Members on the other side of the Chamber may trivialise that point, but I challenge them to go out and talk to the younger people who will come through, and who will one day be their constituents. They will surpass them one day, but they will ultimately pick up the tab that those members are leaving. This system is not a user-pays system; it is a vote now, pay later system. It is cynical. The fact that I am willing to take into account those who are not voting yet does not mean that the argument is any less valid.

Hon Dr NICK SMITH (Minister for Climate Change Issues): The member who has just spoken, Jacinda Ardern, ended her speech by saying the word “cynical”. Let me tell her what cynical is, and talk about the sorts of double standards that she exhibited in her speech. The first thing she said was that this scheme is awful because it has no cap. Well, that is very interesting. I have searched all the way through Labour’s emissions trading scheme, and did it have a cap?

Hon David Parker: Yes, it did.

Hon Dr NICK SMITH: No, it did not. It did not. I can quote Jeanette Fitzsimons’ repeated criticisms of the previous Government’s scheme for not having a cap.

The second double standard is really interesting. It again illustrates the double standards and cynicism of Labour. Labour members say that this scheme provides big subsidies for industry, right? In this bill they are termed allocations, and all the way through the debate Labour has been calling them a subsidy. I am pleased that Mr Parker is to contribute to the debate, because when Jeanette Fitzsimons challenged him on the amount of allocations in his bill, she referred to them as a subsidy. She said that Mr Parker’s bill—the previous Government’s bill—which provided 654 million tonnes of allocations, had a subsidy. The Minister Responsible for Climate Change Issues at the time, Mr David Parker, said that it was not a subsidy; it was an allocation. My question for Mr Parker is why, when he is in Government and he makes an allocation, it is not a subsidy, but when National makes an allocation, it is a subsidy? That sounds a tad cynical to me, to quote Jacinda Ardern.

Then Jacinda Ardern said that this Government had done nothing practical about climate change. Let me give her a couple of examples. Over the course of the previous Labour Government, which was 9 long years, let us look at how many homes it managed to insulate during that period. Do members know that in one brief year we have insulated more homes—10 times as many homes in 1 year—as did Labour in 9 years? Is that not an extraordinary, positive, practical achievement by this Government?

I can give another example of a practical area, in respect of solar water heating. I think that it is a good thing; I have a solar water heater in my home. Do members know how many solar water heaters have been installed during the first 12 months of this Government compared with the number installed during the 9 years of the previous Government? It is eight times the number. Hang on, eight times the number of solar water heaters have been installed in 12 months under National compared with what Labour achieved in 9 years, yet Labour members come down to the Chamber and say that the Government is not making any practical effort on climate change. I challenge Jacinda Ardern to a debate anywhere in New Zealand to talk about the positive things that this Government has done.

Let me take another area of cynicism. She said that the National Government, as per its commitments, removed the thermal ban, and that that would put up emissions.

Chris Hipkins: That’s right.

Hon Dr NICK SMITH: That is right. So I went to the officials and asked them for an estimate of the consequences of removing the thermal ban, and I asked how much that would change New Zealand’s emissions profile. Do members know what the officials said?

Aaron Gilmore: What did they say?

Hon Dr NICK SMITH: They said that it would not make any difference at all, because it was so ineffective, so conditionalised. Again, we see that sort of cynicism from members opposite.

The last point I will make is about biofuels. Again, it shows the cynicism of Jacinda Ardern, because on most things Labour members tell only half the truth. They tell only half the truth. The bit she got right is that this Government removed the compulsion for fuel companies to provide biofuels. However, we replaced it with an excise advantage so that we could encourage biofuels. But Jacinda Ardern refused to pick that up, and right at this very moment, a new biofuel plant is being built in Auckland because of that scheme.

Chris Hipkins: How much is being paid out?

Hon Dr NICK SMITH: The member asked how much. Well, let us ask this question: how many litres of biofuel were provided for in Labour’s 9 years?

JEANETTE FITZSIMONS (Green): In my first contribution on this bill, the Climate Change Response (Moderated Emissions Trading) Amendment Bill, which will weaken—in fact, largely destroy—New Zealand’s existing emissions trading scheme, I begin by running through a little bit of the fundamental logic.

The science tells us that climate change is accelerating at a rate so frightening that we need to take urgent action. The only thing that will prevent accelerated climate change is a reduction in emissions. The whole purpose of a price on carbon is to provide an economic incentive to reduce emissions; otherwise we would not do it. Therefore, it follows, surely without contest, that if we reduce that price we will produce more emissions, and that if we increase that price, we will produce fewer emissions.

This bill significantly reduces the price, initially for 2½ years, with the two-for-one and the price cap. For agriculture it removes it completely for a further 2 years, and, in the long term, it abates free allocation so slowly that no one will face the full marginal cost of emissions within the lifetime of anybody who lives today. I am therefore very puzzled and deeply disappointed that the Māori Party, which would not support last year’s emissions trading scheme because it was too weak—and that was a defensible position; we just about went there ourselves, but in the end we did not—is now prepared to support a scheme that will raise New Zealand’s emissions.

I am struggling to understand how that could come about. I will quote from some of the reports to this House, and some of the statements made in this House by my colleagues in the Māori Party. First of all, I will quote from their minority report on the review of the emissions trading scheme and related matters, which was reported a short time ago: “At a fundamental level, there was opposition to an ETS which allows sectors to pollute and trade up to the Kyoto target, but which does not include incremental emissions reduction targets in its design.”. Well, that is a description of this bill.

The Māori Party’s minority view mentions “the subsidisation of the nation’s largest polluters at the cost of households and small-medium businesses.” But that describes this bill. The view goes on to state: “The Māori Party continues to oppose the introduction of an ETS on these grounds, and would do so more strongly if a replacement scheme were to be less effective”. Well, that describes this bill. It goes on: “We remain deeply concerned about protections in the form of intensity-based allocations and subsidies, which again distort the market model by allowing protected businesses to increase their emissions without penalty, and to be rewarded for it.” Well, that is the distinguishing feature of this bill. It continues: “the nation urgently needs to grapple with the notion of sustainability and the increasing challenge posed by a changing climate system and pending peak oil to think and live differently; to live sustainably.” Kia ora. It states: “The resources of Papatuanuku are finite.” Kia ora. It also states: “we need to be focused on decreasing domestic emissions.”

I now move on a few weeks to the first reading of this bill, and to a speech made by a member of the Māori Party. It states: “The Māori Party has consistently raised our call for an emissions trading scheme to be effective, fair, and transparent.”, and “no sectors will receive more free units than necessary”. It goes on: “We do not support subsidisation of the nation’s largest polluters at the cost of householders and small to medium businesses.”, and “its purpose must be to transform the economy”. It also states: “The nation urgently needs to grapple with the notion of sustainability and the increasing challenge made by a changing climate system and pending peak oil to think and live differently.” The Green Party strongly endorses all those statements by the Māori Party, and that is why we are puzzled and deeply saddened—we cannot figure out what changed their minds.

There is not a single measure in this bill that improves environmental outcomes, compared with the existing law, or that leads to lower emissions. There are a number of ways—three principal ways—in which this bill will lead to higher emissions. The first and most serious way is the intensity-based allocations, which means that no industry with any amount of free allocation will ever face the full marginal cost of carbon as it grows its business. The second reason is that the price cap for 2½ years and the two-for-one deal significantly reduces the cost and, therefore, will lead to higher emissions. The third reason is the much slower phase-out. We accept that it starts earlier, which is a good thing, but over the long term it is a very slow phase-out. We could argue a fourth reason—that agriculture is protected 100 percent for a further 2 years before it faces anything at all.

There is nothing in the bill that compensates for this environmental harm. So I looked at the agreement between the parties to see whether there was anything there to compensate for this environmental harm. There are four matters, but they are trivial compared with the harm that this bill does. There is another $24 million for the insulation of low-income houses, and that is great, but the existing insulation scheme has seen 75 percent of the money, so far, go into low-income, community service - card houses, and there is plenty more in the ring-fenced fund. So that $24 million will not make any difference to the number of the low-income houses insulated until year 4. In year 4 it will add to the total of $323 million, but in year 4 there will be another Budget appropriation anyway. So I think the Māori Party got a bit duped over that one.

The second thing is the partnership to plant forests. That is a great idea. The Green Party is working on a slightly expanded version of that idea, which will be announced shortly. It is an excellent idea to plant more native forests on conservation land, but we do not have to destroy the emissions trading scheme to do it, surely—it is a good idea anyway.

Thirdly, there is a national policy statement on biodiversity. What was it that the Green Party negotiated—and it was gazetted—last year with Labour as part of the emissions trading scheme agreement? It was a finite date for a national policy statement on biodiversity to be in place by—I ask Mr Parker whether it was February 2010 or February 2011. Anyway, I say to National that it is already gazetted.

The current Minister has said that he does not intend to do that. Now he does; now he has a new agreement that he will do it. That is good, but it is not progress. That is going back to the status quo—it is anti. Finally, there is a 6-month delay in the abolition of the funding for environmental education. Well, I do not think that will employ many teachers or train very many kids for very long.

For some years Green Party members have believed that we have common ground with the Māori Party in our commitment to Papatūanuku. So I am deeply sad that all these goals, all these fine words in the House, and all these fine words in the reports of select committees have been traded away for 30 pieces of silver and many promises of consultation.

HEKIA PARATA (National): Tēnā koe e te Heamana, tēnā tātou huri noa i tō tātou Whare e hui komiti nei i tēnei wā. Good evening. I am delighted to take a call to speak on Part 1 of the Climate Change Response (Moderated Emissions Trading) Amendment Bill, and, in particular, in contrast to the previous speaker, Jeannette Fitzsimons, I would like to commend the Māori Party. I would like to congratulate and thank the Māori Party for being prepared to see that it needed to negotiate an outcome that was in the best long-term interests of Aotearoa New Zealand; that it was able to see that a balance needed to be struck between the environment and the economy, and that it understands that being in Government is a hard and difficult task and that we do have to negotiate the best possible outcomes out of a range of many difficult and complicated choices. So I congratulate the Māori Party, because it has been prepared to engage with the hard issues. It has been prepared to be open to a wider constituency, to listen to those people who voted it into Parliament, to hear what they have to say, and to represent those issues in its negotiations with the Government, which is what its responsibility as a coalition partner is.

The Māori Party has been far from race based. It has been concerned with the implications for all New Zealanders while taking particular account of concerns raised with them by iwi and Māori organisations. It is committed to the growth of the independent wealth of iwi and hapū, and, far from being interested in seeing the tax burden grow, the Māori Party wants to see iwi grow their own wealth so that they can contribute to the well-being of their own whānau and hapū. It is not prepared, as perhaps those on the other side of this Chamber are, to condemn Māori to perpetual dependency on the State. So, yes, the Māori Party has been prepared to step up. It has been prepared to see the long-term possibilities for iwi and Māori organisations to be engaged with the Government in making—

Iain Lees-Galloway: It’s a sell-out, and you know it!

HEKIA PARATA: No, actually. I do not know it, I say to Mr Lees-Galloway. I do not stand up here and talk nonsense. I talk from having a thorough and deep background with the very people who have been in negotiation with this Government, and I am proud of this Government’s willingness to do more than talk and patronise, as the previous Labour Government did for 9 long years, condemning Māori people to be dependent on the State for ever and a day. This Government is not prepared to do it, and its coalition partner is not prepared to do it, so you can sit there and make snide and smug remarks about a people in a community—

H V Ross Robertson: I raise a point of order, Mr Chairperson. I am sorry to interrupt the member in full flight, because she was quite passionate in her speech, but she brought you into the debate, and as you well know that is not acceptable in the Chamber. She needs to refer to members on the other side by their full name or their title.

The CHAIRPERSON (Lindsay Tisch): I thank the member for those comments and he is correct. It was a free-flowing debate and I did not take exception, but I ask the member to refrain from bringing the Chair into the debate.

HEKIA PARATA: My apologies to the Committee and to yourself for doing that.

I move on from congratulating the general courage of the Māori Party to the particular and specific contribution that the honourable member Rahui Katene has made in tabling an amendment that would add new clause 5B to Part 1. I congratulate her because the amendment reflects a very detailed and considered approach. It advances the development of Treaty clauses that we have hitherto seen, in its specificity and in its application to particular parts of this legislation. It reflects the commitment moreover of iwi to work with the Government to ensure that the law can be fairly applied. So rather than talk about iwi involvement, this Government, together with its coalition partner, has been prepared to legislate for iwi involvement, to see the value that they have to contribute, and to understand that they want to be included partners in the designing and negotiating of what is best for our country, and not to be left, as the previous Government often left them, in litigious situations, arguing to the Government that their case be heard. So I congratulate Rahui Katene on that amendment and on the other amendments she has tabled.

The member’s amendments also provide for the involvement of iwi and Māori organisations where they are likely to have an interest. Those interests range from the developing of Orders in Council to consulting on the pre-1990 forest land allocation plan to the fishing allocation plan. The amendments describe how a review panel is constituted and provide for membership by someone who is knowledgable about, and experienced in, the application of tikanga and the Treaty of Waitangi. They talk about the need for the terms of reference for those reviews also to pay heed to the Treaty of Waitangi. They talk about regulation-making powers in relation to eligible agricultural activities. Iwi and Māori organisations have an interest in all of those issues. They are committed to developing their own wealth, as I was saying previously, before I was stopped in the full flow of my passion for this endeavour on behalf of iwi and Māori.

The legislation generally, and these amendments in particular, pave the way for something new in New Zealand. They pave the way for the possibility of having an authentic Aotearoa New Zealand, in that these provisions allow for iwi and Māori to be involved in the application of regulations and legislation to the particular activities that give iwi and Māori the potential of having a base that will, in turn, allow them to look after their own people.

Finally, I reiterate that this legislation, and these amendments in particular, reflect this Government’s willingness to work with its coalition partner. Ngā mihi ki te Pāti Māori, ki a koutou katoa, e tū tautoko ana, e whai kaha ana ngā tikanga e pā ana ki a tātou te iwi Māori, arā, ngā iwi Māori. I thank the Māori Party for being prepared to support iwi and Māori in having their voice heard, in being participants in the making of laws that seek to put the best process and advice in place, that in turn, we believe, will lead to the best outcomes, and that recognise that iwi and Māori have a part to play in the navigation of this country and are not simply passengers and victims. We are interested in navigation, and we will continue to oppose the Opposition, which does not see that as being a valuable and viable part for iwi and Māori to play. Hoi anō rā, tēnā koutou, kia ora tātou katoa.

Hon Dr NICK SMITH (Minister for Climate Change Issues): Firstly, I commend my colleague Hekia Parata as a new member of Parliament who has made a great contribution not just in this debate but in terms of getting her head around one of the most complex issues within Parliament.

I have long had a deep respect for Jeanette Fitzsimons. She is a person who is well informed around this issue, and I owe it to her to respond to some of the points that she raised in the debate. I say to Jeanette Fitzsimons that I have for many years enjoyed her input and debate around these issues. However, I will challenge the member, who prides herself on accuracy and understanding such issues, on a number of claims that she made. The first thing to address is the comment that there is not a single measure in this bill that will improve environmental outcomes. Let me just quickly, in the short 5 minutes I have, take her through a number. First, transport will be entering the sector 6 months earlier than the existing scheme—that is, on 1 July next year. But I take the view that the benefits of the reduction in emissions are directly proportional to the price. So that is the first example of where there is a benefit.

The second one, and this is important, is that under the modified emissions trading scheme a significant number of industries get fewer allocations or no allocations under the more principled, in my view, approach to the allocation. Let me explain why. Under the existing scheme it just says “90 percent of 2005”, and then there is a threshold that was proposed.

Hon David Parker: The cap.

Hon Dr NICK SMITH: No, let us be clear. To get an allocation one had to meet the competitiveness test that one is industry-exposed, and one had an absolute to meet. A number of companies that were expecting to receive an allocation under the existing scheme whose intensity—that figure of 800 tonnes per $1 million and 1,600 tonnes—meets neither of those, and that under the existing scheme would get an allocation, would not get one under this scheme. It is also true that a number of companies—a substantial number—that would have got a 90 percent allocation under the existing scheme will get 60 percent under this scheme.

Jeanette Fitzsimons: They’ve been lobbying you.

Hon Dr NICK SMITH: They have been lobbying me very, very heavily to try to get in. In fact, the actual number of allocations, according to the estimates determined by our officials, is actually the total allocations to industry and are less under this scheme than what they are in the existing scheme.

The fourth point I would make is with regard to the issue of tree weeds. I think we have made in this bill an improvement for the environment by not discouraging the removal of tree weeds.

Hon David Parker: We agree.

Hon Dr NICK SMITH: Well, the member said there is not a single provision in this bill that is good for the environment. That provision is good for the environment, and that absolute statement is not true.

I also make a point to the member on the issue of the national policy statement on biodiversity. It is an interesting history. Labour promised it in 1999, but did not deliver. It promised it in 2002, but did not deliver. It promised it again in 2005, but did not deliver. So for Ms Fitzsimons to be saying that Labour agreed, in the dying days of its Government, to a national policy statement on biodiversity is, I am sorry to say, a bit weak. We have been in Government for over 12 months. The very specific agreement we have with the Māori Party is that we will have a Cabinet paper to set up a formal process for establishing that national policy statement in March of next year.

The last point I want to respond to Jeanette Fitzsimons on is the statement that Cabinet voting an additional $24 million for home insulation makes no difference. Well, I really think that is unfair and untrue. Let me explain exactly what the Government has done in its agreement with the Māori Party. The problem that the Minister in charge of the Energy Efficiency and Conservation Authority, Gerry Brownlee, has at the moment is that the uptake of the scheme is far faster than anybody projected. That is a good thing. We are getting more homes insulated earlier. But the difficulty is that at the moment we have fixed-year appropriations—the $323 million is a fixed amount per year. So the decision we made in Cabinet was to change that, so to have a fixed amount over 4 years—and with the agreement with the Māori Party—a further $24 million will be put into that fund over those 4 years. That is a commitment to an extra 8,000 homes, and I say that every member of this House should thank the Māori Party for that initiative.

Hon PETE HODGSON (Labour—Dunedin North): Let me take the Minister for Climate Change Issues back to his remarks before the dinner break as we began the Committee stage of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. The Minister took us through the brief history of climate policy in New Zealand. I will not do that because it is a long history and it has already been done, but he did say that we have had a very long debate and there comes a point in a country’s history where we need to make progress. I agree with him on that. We have had a long debate and there comes a point where we need to make progress; it is just that that point is not now. This is not progress, as I will spell out in a few more minutes.

The one thing that needs to come out of the very long debate is the fact that this Parliament has not yet reached anything resembling consensus on climate change. It took us 20 years to reach consensus on superannuation and it took us quite a long time on other issues that are difficult matters to resolve. We have not done it on climate change. So I say to the Minister in the chair, the Hon Dr Nick Smith, that it would be good style if he were to get up and give his response to the Supplementary Order Paper in the name of my colleague the honourable Charles Chauvel. It sets forward a process by which we might alter legislation and alter targets through an independent body as the years go by. That might be a way that we can move towards something resembling a collective agreement. While we are at it, the Minister for Climate Change Issues ought to also respond to the Green Party Supplementary Order Paper that specifically asks for transparency around allocation. If there is not transparency around allocation and we do not end up with transparency around electoral donations, then it is too easy to draw the conclusion that an allocation has been made as a consideration for a donation. That would be a really sad time.

I thank the Minister for his introductory remarks. I suggest that if we are ever in the future to move towards a more bipartisan approach—and we certainly have not got there yet—to climate change than we have been able to achieve, for whatever reason, between 1997 and today, then a response to the Supplementary Order Paper in the name of Charles Chauvel, which he mentioned in his first speech—

Craig Foss: He said you’d repeal this bill.

Hon PETE HODGSON: Oh, indeed—that is our position. The point I am trying to make is that we do not have agreement across the House. I will spend the rest of the debate explaining why that is, but I am saying now that my colleague the honourable Charles Chauvel has put forward an idea that I think the Committee should look at. It is an idea that I think the Minister may want to respond to tonight, tomorrow, or whenever it might be, and while he is at it he might also want to respond to the Supplementary Order Paper in the name of the Greens regarding transparency of allocations.

The other comment that the Minister made in his introductory remarks, and he has made a lot of play about this, is that New Zealand is now a little closer to Australia on climate change issues than we used to be, and that as we speak Australia is contemplating putting legislation through the Senate, etc., that, the Minister said, is a little weaker than the New Zealand legislation that he has put in front of the House. The Minister challenged Labour members to say what they thought about that, given that that legislation is in the name of the Australian Labor Party. He asked whether we would dare criticise it. Well, we most certainly do, and here is the history behind that.

In the last decade Australia has been governed by a centre-right Government and New Zealand has been governed by a centre-left Government, which has had the Greens at its flank right through that time. As a result of that, after many, many attempts to get the numbers in the House, we finally got legislation through in the name of the Hon David Parker. It was an emissions trading scheme that was much stronger than the one we have now. I used to be involved in climate change negotiations internationally through the 1990s, and, without telling too many secrets or stories, I can tell members that what happened in the 1990s was that New Zealand was way ahead of Australia—way ahead. Australia is catching up from a low position. The Rudd Government is progressive, whereas this Government is moving back from a more advanced position and is, therefore, regressive. We are still ahead of Australia, but only just. That is a shame. What is more, because Australia negotiated a better deal at Kyoto in 1997, it is, in fact, not behind in its emissions record; we are. We have some things to do, and the reason why the Parker emissions trading scheme should remain on the books is that it comes into play earlier.

I acknowledge that the Minister has a problem, and I will read it out. The problem is a quote in Hansard from Rodney Hide about a year ago, and it goes like this: “that is, that the entire climate change and global warming hypothesis is a hoax, that the data and the hypothesis do not hold together, that Al Gore is a phoney and a fraud on this issue, and that the emissions trading scheme is a worldwide scam and a swindle.” That is from National’s coalition partner, that is why the Minister has been delayed by months because of the select committee process, and that is what drove the Minister into the arms of the Māori Party. I am sorry that there was not room between National and Labour to get a deal. We assert afresh that we negotiated in good faith. We were certainly prepared to move, but we were certainly not prepared to move as far as the legislation we have in front of us now.

However, I think there is agreement that the emissions trading scheme as a tool is the best way forward, and that is a point of agreement. That comes from someone who introduced a carbon tax into the policy mix en route to an emissions trading scheme, I would assert. That did not get the numbers finally in 2005, and I think that much of it might be something that is pretty much set in stone. From here on, however, things get bad. I will not have time to lay them out in the remainder of my 10-minute introductory remarks, but I will say that the one thing that disappoints me perhaps more than anything else about this legislation is that this Government has no confidence in our economy. It has no confidence in New Zealand business, it has no confidence in our renewable energy industries, it has no confidence in the innovation of our agritech sector, and it has no confidence in the high-tech end of the New Zealand economy. It is as if we must freeze our economy here and now in 2009, and tourism and dairying will do it for us. Well, they will not be sufficient.

The Kyoto Protocol is a significant driver for economic advantage. It is a significant driver for a phrase that the Government does not like, but here it is: economic transformation. We have taken the driver off. Michael Porter would say: “Don’t do that.” and many other growth economists would ask whether we were nuts, but we have done that. We have taken the driver off some of the smartest people in our country, and they are aghast because they were ready to take advantage of a tougher, bigger, better emissions trading scheme. It is not a point of view that is shared by the ACT Party. I acknowledge that, and I acknowledge those members’ consistency. I say, and it is not a one-liner that I trot out too often, that I think that ACT is consistently wrong. But I say to National, which does understand economic development, that it is making a very serious mistake because it is freeze-framing us. In my view, it is freeze-framing us in a way that I just do not think is tolerable.

In the case of agriculture, if we are improving our intensity by 1.5 percent without any drivers, why are we saying that just 1.3 percent from now on will do? I ask whether it is lost on National members that we have the finest agritech sector in the world. We know more about plant and animal breeding than any other country I know, with the possible exception of Australia, and we already had an ability to make those changes without any drivers. Yet, somehow or another, we are saying to people in the agriculture sector that they can forget about it. We are saying that it is fine and dandy and they can put the money in their pocket if they want to do it for productivity or food conversion efficiency reasons, but they should not worry about the environmental stuff.

That is not a tolerable position—1.3 percent is derisory. Making it 1.3 percent is saying to agriculture that it should just go backwards a little bit and that will be OK, but it is not. It is not OK for productivity reasons, it is not OK for environmental reasons, and it is not OK for reputational reasons. The food miles debate is not going away. Other countries will catch up with us sooner or later, and we will say that the emissions trading scheme that was passed in 2009 was part of the problem because it allowed us to take the pedal off the metal. That should never be allowed to happen. This country depends on primary production, good downstream processing, and selling into international markets.

CHRIS TREMAIN (Senior Whip—National): I move, That the question be now put.

TE URUROA FLAVELL (Māori Party—Waiariki): Kia ora tātou katoa e te Whare. I rise to take a call on behalf of the Māori Party basically to address our Supplementary Order Paper to amend Supplementary Order Paper 98. I do so on behalf of my colleague Rahui Katene, who did much of the work.

I also acknowledge the passing of Hāwea Vercoe in my electorate over the weekend. I am sure that in the spirit of this particular amendment he was a very strong advocate for the Treaty. As we hold this particular discussion today, I think about his family and his people, and I think about him lying at his marae at Tūteao i tēnei pō. Nō reira, kai taku rangatira moe mai.

[So rest there, my chiefly one.]

It is with a huge amount of pride that I stand before the Committee, knowing that through the efforts of the Māori Party we will recognise Te Tiriti o Waitangi and specifically set out the ongoing decisions on the Crown, which has an obligation to consult as we move forward in this particular debate. In recognising Te Tiriti o Waitangi I do so in the knowledge that the Treaty was effectively absent from

New Zealand legislation for over 135 years.

Chris Hipkins: Did he write his own speech?

TE URUROA FLAVELL: You will find out shortly, as long as you listen. Koinā te mate o te kore whakarongo.

[That is the problem with not listening.]

In 1975, the Treaty of Waitangi Act effectively incorporated Te Tiriti—

Hon David Parker: I raise a point of order, Mr Chairperson. I would like an interpretation of that comment please.

[An interpretation in English was given to the House.]

TE URUROA FLAVELL: In 1975 the Treaty of Waitangi Act effectively incorporated the Treaty—

Hon David Parker: I raise a point of order, Mr Chairperson. It is absolutely inappropriate for that member to say to you, Mr Chairman: “That is the point. You do not listen.”

The CHAIRPERSON (Lindsay Tisch): No. The member asked for an interpretation. We have received the interpretation. I was comfortable with that, and I have asked the member to continue.

Hon David Parker: I raise a point of order, Mr Chairperson. Is the Chairman saying that it is appropriate to include the Chairman in the debate if it is done in Māori, but not in English? That is the effect of your ruling.

The CHAIRPERSON (Lindsay Tisch): I have made a ruling. I want this debate to continue and to flow. I am allowing Te Ururoa Flavell to continue.

TE URUROA FLAVELL: In 1975 the Treaty of Waitangi Act effectively incorporated the Treaty into legislation and delegated a role to the tribunal to determine the meaning of the Treaty and Treaty principles. Since that time, Parliament has included legislative references to the Treaty and provided some legislative guidance on the Treaty’s meaning. Our Supplementary Order Paper provides a key statement, and this is important, which states: “In order to recognise and respect the Crown’s responsibility to give effect to the principles of the Treaty of Waitangi.” I say again that our Supplementary Order Paper states: “In order to recognise and respect the Crown’s responsibility to give effect to the principles of the Treaty of Waitangi.” In doing so, it falls into the category classified by Matthew Palmer as the “recognise and respect category”, reflecting provisions that are often used in statute to ensure the Treaty is treated with the highest level of attention.

There is another element to our Supplementary Order Paper that leads us on to further discussion, and that is to do with the wording “to give effect”. Those in the House with a good knowledge of statute would be aware that this is found in section 4 of the Conservation Act, which states: “this Act shall be interpreted and administered as to give effect to the principles of the Treaty of Waitangi.” If members were to wander through legislation, they would see a huge colourful menu of clauses that effectively incorporate the Treaty. One objective of the Royal New Zealand Foundation of the Blind Act is the need “to give particular recognition to the Treaty principles”. The Resource Management Act asks that we take account of the Treaty principles. The Environment Act requires us to ensure full and balanced account of the Treaty principles, and the Crown Minerals Act recommends that we have regard for Treaty principles. Basically, there is a huge archive of legislative activity in relation to the Treaty that has helped to guide the appropriate interpretation of Treaty clauses in legislation.

Within this context it is somewhat bizarre to think that some parties still question the need for a Treaty clause, or that they are overly concerned about the fact that we were working on the Treaty provisions right up until the hours leading up to the announcement yesterday. We understand there is a wide spectrum of knowledge around this Chamber about what the Treaty means in practice. That is clear from the many debates in this Chamber.

For the National Party and the Māori Party, the requirement to provide due cognisance of the Treaty analysis and interpretation is something that we both value to the extent that it is one of the first statements in our relationship agreement. Our agreement stipulates that “both the National Party and the Māori Party will act in accordance with Te Tiriti o Waitangi, the Treaty of Waitangi.” It has to be said that it has been a little bit disappointing that the National Party had some difficulty prior to this bill to living up to the clear aspiration to act in accordance with the Treaty. If there is ever an issue to which the Treaty principles should have been applied it would be the Local Government (Tamaki Makaurau Reorganisation) Act. The reorganisation of Auckland governance would have been an entirely appropriate mechanism to enhance Treaty responsiveness. The Government did not use the opportunity, and that certainly brassed us off. But that is another story.

The Climate Change Response (Moderated Emissions Training) Amendment Bill is a chance to set the record straight, to pursue an honourable course of Treaty jurisprudence. I want to make it clear that our intention in drafting the Treaty clause is to provide for the ongoing engagement of tangata whenua in the scheme, and to ensure that the distinct situation of iwi Māori, including rights and interest under the Treaty, is fairly accommodated in the implementation of the scheme.

I want to return to the notion of the Treaty principles and provide a lesson to all members across the Chamber, including some who might want to listen to this. In case there is any doubt, the Court of Appeal defines these principles as a relationship of fiduciary nature that reflects a partnership imposing a duty to act responsibly, reasonably, honourably, and in good faith. Secondly, the Government should make informed decisions. The Crown should remedy past grievances. There should be active protection of Māori interest by the Crown. The Crown has the right to govern. Māori retain rangatiratanga over their resources and taonga, and all of the rights and privileges of citizenship. If members are still unsure, they should consult the Waitangi Tribunal, which gives further clarity to the principles as partnership, fiduciary duties, reciprocity, the cession of Māori sovereignty in exchange for the protection of rangatiratanga, and mutual benefit leading to the duty to act reasonably, honourably, and in good faith. There should be redress for past grievances, and equal status for the Treaty parties. The Crown cannot evade its obligations by conferring authority to another body. There should be active protection of Māori interests by the Crown. There should be options, and there is the principle of choice.

I have gone on about some of these particular things, but if they are still not enough, there are always the principles proposed by the executive. They are the Government’s right to govern, the right of iwi to the self-management of their resources, redress for past grievances, equality—all New Zealanders are equal before the law—and reasonable cooperation by both parties.

I have gone to a bit of trouble to spell out these legislative references and descriptions of the Treaty principles, because it appears that some members in this House are still not aware of the meaning. The truth is that we have come a long way from 1878 and the case of Wi Parata v The Bishop of Wellington, which suggested that the Treaty was a simple nullity because Māori tribes were incapable of performing the basic rights of citizenship. We are in a new enlightened time—times that reflect the strength and survival of iwi who have advanced so significantly the debate on Treaty rights.

The Māori Party is extremely proud to have brought to this debate the crucial significance of the Treaty for emissions trading, and in particular the Treaty clauses about recognising our founding document and recognising that the Treaty is about joint responsibility and working together. The scheme also relies on regulations for much of its implementation. The Treaty clause will ensure that iwi and Māori are able to participate in the development of those rules. The amendments we have put forward clarify how the rights and interests of iwi under Te Tiriti o Waitangi, the Treaty of Waitangi, are to be incorporated in this legislation. They provide for consultation with iwi on matters under the Act. In closing, I point out that they breathe life into this legislation in terms of enacting the responsibilities of the Crown to incorporate the Treaty into legislation.

I thank my colleague Hekia Parata for her comments earlier with regard to the part played by the Māori Party. I thank the Minister for working with the Māori Party, and, indeed, my colleague Rahui Katene as we have attempted to forward our proposals specifically around the Treaty clause in the best interests of the nation.

CHARLES CHAUVEL (Labour): I will speak on three more amendments that stand in my name. They are Supplementary Order Papers 95 and 96 and a typescript amendment that does not have a number.

Supplementary Order Paper 95 would remove from the Climate Change Response (Moderated Emissions Trading) Amendment Bill the 50 percent discount during the 2010 to 2012 transitional period and raise the price gap from $25 to $100 a tonne, turning it into a true safety valve rather than a day-to-day subsidy, which is, frankly, what it is at the moment. On this side of the Chamber, we think that price caps are undesirable because they distort the response to the emissions trading scheme. The Kyoto-compliant market is already large. Participants in the emissions trading scheme, mainly companies worth billions of dollars, can already hedge their risk against substantial rises in the cost of carbon until at least 2012 by buying units on that market. So the transitional measure proposed in the amendments from the Minister for Climate Change Issues requiring only one emissions unit to be remitted for every 2 tonnes of emissions in the electricity sector would not necessarily reduce the impact on electricity prices, as the Minister says time and time again that it will. In fact, the European experience demonstrates that the long-term marginal cost of new generation does not change. So electricity generators will charge consumers the same amount, and effectively pocket the value of the emissions units they do not have to remit, at cost to the taxpayer. In principle, if the market is not trusted, then the Government should have pursued a carbon tax rather than an emissions trading scheme. But a cap at less than the market price results in a further subsidy from taxpayers to emitters and reduces the incentives the emissions trading scheme is meant to create to reduce emissions. Supplementary Order Paper 95 would remedy that position.

Supplementary Order Paper 96 would cap free allocation. As we said in our minority report, we uphold the strong criticism that we heard of the approach in the bill of combining an intensity-based allocation that has no effective cap on either total or sectoral emissions with a very, very slow phase-out of free allocations. The Parliamentary Commissioner for the Environment told us that this will lead to a significant increase in emissions, thus increasing the number of carbon credits the Government and, therefore, taxpayers will have to purchase. An alternative favoured by many of the submitters we heard is an overall cap on emissions. The lack of that cap will be a problem. We want to do away with the problem, which is what this Supplementary Order Paper will do. The absence of the cap weakens the incentive for emitters to move to being less carbon intensive. As my colleague Pete Hodgson said earlier, it is a sign of a lack of ambition on the part of the Government. We do not want to see this highly distorted mechanism retained in the legislation.

I am keen to hear the Minister speak on the Government’s attitude to the Supplementary Order Paper to put the cap in place on free allocation, the Supplementary Order Paper to end the discount, and, finally, the amendment to prohibit the banking of non-forest New Zealand units during the transitional period. Dr Suzi Kerr suggested this amendment would be a good idea. It would prevent any New Zealand units issued during the transition period from being surrendered, converted, or transferred after 31 December when the price cap comes off. This will prevent people from collecting credits while the price of carbon is low and then selling them at a higher price once the cap is removed. As I said, Dr Kerr advised of the possibility that banking and trading free allocated credits taken with price caps could result in a positive incentive to increase emissions, or else could increase windfall gains to polluters. Surely, neither of those are goals that the Minister wants to see.

These amendments taken as a package—removing the 50 percent discount, putting a cap on free allocation, and prohibiting the banking of the non-forest New Zealand units during the transitional period—are a neat solution to the problems that have been identified. I really hope that the amendments will be given due consideration, because they will undoubtedly, according to the expert independent advice that we received, result in a much better scheme.

Hon Dr NICK SMITH (Minister for Climate Change Issues): I am starting to enjoy this debate on the Climate Change Response (Moderated Emissions Trading) Amendment Bill because we are starting to get to the crux of the issue. We have just heard in Charles Chauvel’s contribution that Labour has moved a Supplementary Order Paper to basically increase the price of petrol and power for consumers. Let us be very clear: if we remove the two-for-one-option and the price cap, the result is a higher power price.

Chris Hipkins: As opposed to tax; he would rather tax them.

Hon Dr NICK SMITH: I have just heard an interjection from Mr Chris Hipkins. Members will be interested in this. On Sunday Mr Chris Hipkins put out a press release saying that New Zealanders were paying too much for their power, and that we needed to do things to reduce the power price. That is what he said on Sunday. Then Labour members come to the Chamber to debate this emissions trading legislation and move a Supplementary Order Paper that will put the price of power up even more. That is the problem with the Labour Party: it is all over the place. It is a shambles. We do not know what Labour members stand for. They cannot have Chris Hipkins say on Sunday that power prices are too high and must go down, and on Tuesday introduce a Supplementary Order Paper that will actually put the power price up. At least Mr Chauvel is honest about that fact. That shows the sort of nonsense that we have heard in the Chamber. Mr Chauvel is more thoughtful than Mr Hipkins. I suggest that he is a bit cross about the press release that Mr Hipkins put out on Sunday, which is an embarrassment for the Labour Party in the very week we are debating emissions trading legislation.

Why has the Government said we need to soften the impact of the emissions trading scheme? It is very simple. In case members have not noticed, we are part of the biggest economic downturn since the Great Depression. This Government has gone to a huge amount of work to try to get us back on to a growth path. The last thing we want to do is to snuff out that recovery with an overly ambitious emissions trading scheme, so we have made quite a pragmatic decision not to introduce it in one hit, and instead to stage it to soften the impact on households. I say to Mr Hipkins that the advice from officials is very clear. The advice is that to vote for Mr Chauvel’s Supplementary Order Paper is to vote for a higher petrol price and a higher power price. Every member on the Government side of the Chamber will be watching the way Mr Chris Hipkins votes, because if he believes in his press statement of Sunday, he will vote against his own colleague’s Supplementary Order Paper.

KEVIN HAGUE (Green): It is a pleasure to take my first call on Part 1 of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. I begin by noting that the Leader of the House, when he sought leave relating to the rules of this debate earlier today, sought leave for members to be able to make an unlimited number of contributions. I give notice of my intention to take advantage of that, and certainly to take a subsequent call to discuss specifically the Supplementary Order Papers that are before the Committee.

I begin this first contribution, however, by quoting from this issue I am holding of the New Scientist of 28 February, which talks about the fact that the world is clearly failing to reduce emissions. It says in its editorial: “Despite the numerous warnings about extreme weather, rising sea levels and mass extinctions, one message seems to have got lost in the debate about the impact of climate change. A warmer world won’t just be inconvenient. Huge swathes of it, including most of Europe, the US and Australia as well as all of Africa and China will actually be uninhabitable—too hot, dry or stormy to sustain a human population. This is no mirage. It could materialise if the world warms by an average of just 4°C, which some scientists fear could happen as soon as 2050. This is the world our children and grandchildren are going to have to live in. So what are we going to do about it?”. This issue of New Scientist goes on to describe a world in which glaciers have dried up, a world that is desertified, and a world with its human population of just 1 billion—because that is all that that kind of world would be able to support—concentrated in high-rise cities close to the North and South Poles and in countries like New Zealand.

Since February there have been two main shifts in the evidence before us. One is that it is extremely apparent that change is happening faster than had been predicted. It is now very clear that the world is tracking close to the worst scenario contemplated by the Intergovernmental Panel on Climate Change. Antarctic ice shelves are melting at faster rates, the world’s glaciers are in rapid retreat, we have the hottest November on record in Australia, and the list goes on. It is also clearer and clearer that the Copenhagen conference, which has been described by one of my colleagues as possibly the most important gathering in human history, seems less and less likely to achieve the necessary step change in carbon emissions that we need, given the timidity of countries like New Zealand. In other words, the 4 degrees Celsius of warming that the New Scientist warns of is progressively becoming more and more likely.

On Friday night of last week I attended the annual Cawthron Institute address by Dr David Wratt, who is the principal climate scientist of the National Institute of Water and Atmospheric Research, along with the Minister for Climate Change Issues, Dr Smith. It was a masterful contribution from Dr Wratt. It was a great summary of science, possibly the best I have ever heard, and it was delivered in terms that any normal person would be able to understand. He stressed the importance of keeping warming below 2 degrees Celsius if it was at all possible. It is not a precise science to know exactly what concentration of carbon the atmosphere can tolerate in order to achieve that goal, but he presented evidence to suggest that we are already at the lower end of the band of concentrations that are required to keep warming to 2 degrees Celsius. In other words, 2 degrees Celsius of warming may already be locked in. It is clear that we cannot just turn off the tap. The advice is to stop emissions as quickly as possible, and certainly no later than 2015.

Throughout all the cautious, scientific language of Dr Wratt, there rang a clarion call. This is a massive and unprecedented challenge in human history, but we can prevent or limit the worst effects if we act strongly and urgently enough, and we need to do this. As all of the world’s developed economies involve high carbon use and emissions, and are dependent on continued growth, reducing emissions at all requires a fundamental change to the way that we do business. Sadly, the years since 1990 have been characterised by dithering and wasted opportunities. While northern European countries, for example, simply got on with the job after 1990 and transformed their economies, our Governments played pass the parcel. Our Governments have been desperate to find a formula to give the appearance of doing something about the problem, without actually requiring businesses to change anything that they do. Ironic congratulations are due to this Government on finding its Holy Grail. This scandalous bill before us represents the zenith of this ambition. This bill not only will fail to reduce emissions but will actually increase them.

The bill’s failings are many and manifest. The point of an emissions trading scheme is to have a cap, and preferably one that sinks over time. There is none here. It is inevitable that the carbon price signal made by this bill will be incredibly weak, and when that is coupled with the intensity-based targets in the bill, the most likely result will be increased emissions. The time that this bill takes to phase out subsidies to the big polluters will take most of this century. We will still be subsidising the big polluters when the Ganges has run dry, when our Pacific neighbours are inundated with sea-level rise, and when the world’s population has collapsed. When Greenland and Antarctica are performing the role of the world’s breadbasket, New Zealand will still be subsidising big polluters.

There is also the sleight of hand, which has been referred to by a number of others in this debate, that sees the Government cynically pretending it has saved consumers money on their petrol and power bills. New Zealanders will pay for emissions one way or another: either through taxes and reduced Government services, or through prices. One of these methods creates a disincentive for emissions and will force emitters to reduce them. Unfortunately, the Government has chosen the other path.

I refer to the fact that a number of Government speakers in this debate, including the Minister, have once again raised the false dichotomy of the economy and the environment. They say we cannot have both, and must have one or the other. The Green Party has, on numerous occasions in this House, pointed to the fact that it is possible to achieve both. It is possible to achieve positive outcomes for our economy, while also protecting the environment and reducing emissions. It is sad that this Government has chosen not to do so.

There are some good parts in the bill. It is a good thing to be planting more indigenous forestry on conservation land. It is just a shame that it is so limited. The Green Party will be announcing our next package of Green New Deal measures next week, including an extensive proposed forestry programme.

I want to talk about the fact that both of the parties that will be voting for this bill—the National Party and the Māori Party—

Hon Dr Nick Smith: United Future.

KEVIN HAGUE: I am sorry; I forgot United Future. Those parties have effectively become hostage to the interests of big business, hostage to the interests of those whose planning horizon is no further than the immediate future. It is a planning horizon that sells our children and our grandchildren down the river. I will refer to the speech of Tariana Turia from 28 August 2008 on the emissions trading scheme bill of that year. She said: “how this nation curbs greenhouse gas emissions will define this moment in our history. Meeting our obligations under the Kyoto Protocol to reduce greenhouse gases is vitally important, but this issue is much more than one of compliance with the United Nations goals to cut emissions and to stabilise the climate system. It is far more simple than that. Reducing our emissions is about honouring our commitment to those who have passed on that we will leave this planet in a better state … for those who come after us.” In addition she said: “We are of the view that what is needed is a radical rethink of the whole approach. We are opposed to the concept of paying the polluters, of rewarding the corporate lobbyists with huge exemptions, and of the very nature of trading, rather than reducing, emissions.” She also said: “The last thing we want to suggest is that we are the authority on the emissions trading scheme”—I guess we would agree with that—“because clearly we are not. But we do care passionately about leaving this world in a better state”.

NICKY WAGNER (National): This Climate Change Response (Moderated Emissions Trading) Amendment Bill leads the world in covering all sectors and all gases, and New Zealand will be the first country internationally to include agriculture in its emissions trading scheme. This bill will ensure that New Zealand will do its fair share in the global fight against climate change. The Government has amended Labour’s climate change legislation to make it a more workable, a more affordable, and a more practical emissions trading scheme.

Right now, the Government does not want to add a bill for an extra $400 million on to the people of New Zealand. Our fragile economy cannot afford these extra costs; we are only just beginning to turn round our economy and only just beginning to see a drop in the rate of unemployment. We want to continue this trend. We want to make sure that we do not destroy our businesses and that we do not decimate jobs.

Chris Hipkins: This is just embarrassing.

NICKY WAGNER: It is interesting that Mr Hipkins over there scoffs about jobs, but the key issue for New Zealanders right now is to make sure that they keep working.

Although New Zealanders are very aware of, and love, their natural environment, many of them have little capacity to financially contribute to managing climate change. Also, unlike Labour, we do not believe that the Government should profit at the expense of the people of New Zealand trying to do the right thing by the environment.

The new legislation will be fiscally neutral and absolutely focused on dealing with climate change. We will not be screwing windfall profits out of the ordinary New Zealander. For the first 3 years, the bill will halve the costs for businesses and households. Labour’s scheme put a price on households at approximately $6 per week; National’s scheme will cost householders about $3 per week. But, of course, the long-term motivation is to encourage all New Zealanders to embrace a low-carbon lifestyle and to modify their behaviour accordingly.

Debate interrupted.

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

Tuesday, 24 November 2009

(continued on Wednesday, 25 November 2009)

Bills

Climate Change Response (Moderated Emissions Trading) Amendment Bill

In Committee

Debate resumed.

Part 1 Amendments to Climate Change Response Act 2002 (continued)

NICKY WAGNER (National): Today I will talk about Supplementary Order Paper 98, in the name of the Minister for Climate Change Issues, but before I do so I need to clarify some important issues. Yesterday I spoke about the complexity of the emissions trading scheme legislation and about the problems that people have in interpreting the issue. I spoke about the lack of information, partial information, and misinformation. This morning, after watching Phil Goff on the Breakfast television programme, I want to bust a few myths that have been swirling around this legislation, and I will expose some of the misinformation.

Myth No. 1 is that this measure is a limp-wristed, pathetic response to climate change. It is a bill,. like Labour’s, that covers “all gases, all sectors”, and we are the first country in the world to include agriculture. The Rio Tinto smelter in Bluff will be the first aluminium smelter in the world to be under an emissions trading scheme. It is a reasonable, rational response to a difficult issue.

Myth No. 2 is that the public will be subsidising big business. In fact, with the exception of the first 2½ years and the half-priced transition to the system under National to protect our fragile economy post-recession, until 2018 the Labour and the National schemes are very similar. Until 2018 the costs are about the same. After 2018 the schemes diverge. National’s scheme has a much more gentle phase-out than Labour’s scheme.

But the difference between Labour’s and National’s schemes is how they deal with the free international carbon credits allocated to New Zealand. They are allocated to New Zealand because we have committed to a carbon price and we have committed to making changes to our economy. Under National, they will continue to be passed on to our trade-exposed and emissions-intensive companies, to ensure that they and their jobs survive. That is the reason those credits are allocated to us, and that is what this Government will do. In contrast, under Labour’s scheme they would be seized, and the money would be put into the Government’s coffers. So there is no subsidisation; there is only a passing on of allocated carbon credits, and Labour knows that. David Parker himself, when talking about the allocation of international carbon credits in relation to Labour’s emissions trading scheme, refuted the concept, but all the Labour members are talking subsidisation now. The Minister has also made it very clear that the National Government will not be purchasing credits to allocate. Our scheme will be fiscally neutral.

Myth No. 3 is that there is a $110 billion debt for the people of New Zealand. I repeat: there is no $110 billion debt for the people of New Zealand. I thought we had sorted this out. I thought even the most illiterate financial manager could understand this issue, but I saw Phil Goff on Breakfast this morning trotting out the same old misinformation. It is scaremongering at its very worst. Let me explain. The $110 billion figure was obtained by crystal-gazing to 2050. It would apply only if, firstly, Labour’s emissions trading scheme went ahead, and, secondly, if Labour seized the free carbon credits and did not pass them on. That would have produced, maybe, a $23 billion profit at the expense of the people of New Zealand. Thirdly, it would apply only if Labour did not spend the seized credits. We must remember that once the public realised that Labour was making a profit at their expense, it promised to spend them; it said it would spend them on low-carbon initiatives. So they would have been gone. It would apply only if, fourthly, Labour invested the money it had already spent, and had compounded the interest. That is a whole lot of ifs and a whole lot of impossible buts, and this, members should remember, is in the year 2050. People can be assured that there never was and there never will be a $110 billion debt. It was a computer-generated what-if scenario that cannot happen. Besides, there will be regular reviews, starting in 2011, to monitor the process and to make sure that any decisions are for the good of New Zealand.

Now that I have explained that misinformation I want to talk about the Minister’s Supplementary Order Paper 98 and the two policy changes within it. The changes have come out of the submissions process of the Finance and Expenditure Committee, which dispels the myth that the process was so rushed that we did not learn anything from it. The first change concerns tree weeds. Tree weeds and the managing of tree weeds—for example, wilding pines—were of significant concern to submitters. We heard from a large number of organisations, including local government, that wanted to see changes in this area. The amended emissions trading scheme had fixed the problems that had arisen under Labour’s emissions trading legislation, which had meant that organisations and councils that were removing wilding pines were liable for deforestation payments. However, there was a further problem, and, after hearing the latest submissions, National has introduced a Supplementary Order Paper to deal with one further aspect of the situation. The problem occurs when trees have been deliberately planted, often by the Government, as in some parts of Southland and the Marlborough Sounds, and it is from these plantations that wilding pines are being seeded. The changes in the Supplementary Order Paper will deal with this issue.

The second issue I want to talk about is the burning of waste wood. Over the last few years some industries have moved away from fossil fuels to renewable biofuels.

GRANT ROBERTSON (Labour—Wellington Central): It is interesting to follow on from the member who has just resumed her seat, Nicky Wagner, in the Committee stage of the Climate Change Response (Moderated Emissions Trading) Amendment Bill, and to have clarification that Treasury appears to have a crystal ball that is also a computer. We just heard from Ms Wagner that the computers are to blame. The machines have taken over at Treasury. Nobody is putting any data in; there are no actual people. I do not know what Aaron Gilmore thinks of this. He is a former Treasury person and he must have been part of the crystal-gazing over the road there.

Moana Mackey: He was the crystal ball!

GRANT ROBERTSON: In fact, he was the crystal ball at Treasury. That is what we heard. The problem for Ms Wagner is that Treasury did make this estimate. Treasury made this estimate for 2050, and National has been very, very happy to talk about the emission reduction targets that it has for 2050. It has been very happy to stake its credibility on reducing emissions out to 2050, but suddenly, when Treasury—the brains that drive the financial management of New Zealand—comes up with a projection and National does not like it, it is crystal-gazing. It does not matter any more.

New Zealanders will have to pay for this emissions trading scheme. Ms Wagner shakes her head, but someone has to pay. I quote somebody she knows very well: “Are there fairies at the bottom of the garden with money?”. Somebody has to pay for this, and Part 1 shifts the burden for that payment from heavy emitters to taxpayers. It shifts the burden from heavy emitters to ordinary taxpayers. It shifts the burden from this generation to the next generation. Last night we heard a disgraceful interjection from the National side of the Chamber on one of my colleagues. Jacinda Ardern was speaking about the impact of this bill on future generations and we heard an interjection that said she had no right to talk about that because she did not have children.

Hon David Parker: It was Amy Adams.

GRANT ROBERTSON: That was who the interjector was, I say to Mr Parker. I was appalled by that interjection as I myself am somebody who does not have children. I will tell members of some other people in our history who have not had children and who have made a big influence on this Parliament: Michael Joseph Savage and Peter Fraser. They did not have children, but they cared about future generations. On this side of the Chamber we also care about future generations, whether or not we have children. Part 1 of this bill is pushing the burden for paying for this, for paying for our future, on to future generations without taking responsibility for it now. I believe that that is a great shame.

We need to recap a little on where we have got to. I am a relatively new member in this House so I take the advice of experienced members, who have been here for some time. I want to quote from one of those members: “The importance of getting this legislation right cannot be overstated. [The development of an ETS] represents the most significant economic reform since the deregulation of the economy in the late 1980s. Getting this bill right is also important for the environment. Poor policy can also have unintended adverse environmental consequences.”—I think we can agree with that. The quote continues: “the legislative process has been rushed and inadequate given this bill’s complexity and significance. The public has not had adequate time to examine and submit on the bill, and it is inevitable that serious mistakes will be made that will adversely affect New Zealanders … this process has not been conducive to getting such an important bill right nor in getting the cross-party support needed to ensure the stability and longevity of New Zealand’s ETS.”

Moana Mackey: Who said that?

GRANT ROBERTSON: I will tell members that the Minister in the chair, the Hon Nick Smith, said that, and he was talking about Labour’s climate change legislation last year.

That legislation had had over a year’s worth of work on it, extensive consultation prior to it being introduced, with working groups working alongside the Government throughout the process, and a proper select committee process with a wonderful chair in Mr Chauvel, and Mr Smith told us last year that it was inadequate. I ask members what we are seeing now. We are seeing a process rushed through select committee, legislation rammed through in urgency, and we heard yesterday that the deal with the Māori Party was agreed to 18 minutes before it was announced to the public. Is that the proper scrutiny this bill deserves? Is that the proper scrutiny that Dr Smith was talking about last year?

Paul Quinn: Absolutely!

GRANT ROBERTSON: No, it is not. This bill has been rushed through and this process is a shambles. Over there is Mr Quinn, the politiciser of the Public Service. I wonder whether he will be organising something in association with the Ministry for the Environment in his electorate over this. I do not think so.

This process has been deeply, deeply flawed. This is what the Treasury, which the Government side of the Chamber does not want to listen to, said about this bill: “The level and quality of analysis presented is not commensurate with the significance of the proposals, which represent major design changes to the Emissions Trading Scheme and the Regulatory Impact Statement does not provide an adequate basis for informed decision-making.” Treasury made that comment in all seriousness; the people at Treasury are not frivolous people. The National Party campaigned on respecting the professionalism of public servants, but it has completely failed to do that in this case. Treasury made a serious statement, and it further stated that the changes to the emissions trading scheme “come at a cost to the economy as a whole, by delaying the transition of the New Zealand economy to a carbon constrained world.” [Interruption] I repeat for Mr Quinn’s benefit that the changes to the emissions trading scheme “come at a cost to the economy as a whole, by delaying the transition of the New Zealand economy to a carbon constrained world.”

That is the problem with Part 1. National seems to believe that we can somehow reduce our emissions and meet our international targets without having to really change. Nicky Wagner described Part 1 as a “gentle phase-out”. What that really means is that the people who need to be fronting up—the large, heavy emitters—are being given a gentle phase-out and the taxpayers of New Zealand, out to 2050 and beyond, will shoulder the burden of this legislation. Future generations will shoulder the burden because this Government has not been prepared to front up, take some responsibility, and take some time to develop a scheme that is sustainable and has cross-party support. That is shameful. Part 1 is deeply flawed.

Hon PETE HODGSON (Labour—Dunedin North): I raise a point of order, Mr Chairperson. I did not raise the point at the time because I did not want to interrupt the flow of the debate, but a member in the Chamber, Mr Paul Quinn, has maintained a running commentary of interjection, which is, I think, disruptive. It is also contrary to the Standing Orders for a person to shift his seat in order to interject. I suggest that if Mr Quinn wishes to continue to scream his lungs out, he is returned to a seat over there, from now on.

Paul Quinn: Mr Chairperson—

The CHAIRPERSON (Hon Rick Barker): No, I do not need any comment. This is a well-worn path; we have been here on many occasions. I say to members that I am very tolerant of these things. If people want to shift around the Chamber and sit closer, down this end of the Chamber, because it intensifies the debate, I think that is a good thing. Interjections are part and parcel of a robust debate in the Committee stage, and both sides have interjected quite robustly. I think it adds to the flow of the debate to have interjections backwards and forwards. I could certainly hear all of the comments being made by the speaker when Mr Quinn was interjecting. The member speaking had the advantage of the microphone. I did not find the interjecting particularly disruptive.

I also say to the member who raised the point of order that a point of order needs to be raised at the time. It cannot be retrospective. If at the time the member feels that interjecting is disruptive, the member must raise the point of order then and there. Once time has flowed, the point of order has gone; it cannot be retrospective.

But I took the member’s point that we should be careful about interjections, and make sure the debate can be heard. I am sure Mr Quinn will take cognisance of that, as will those who have made the loud, robust comments that I have heard from my left-hand side, as well—the many and several, and I will not name them all.

Hon DAMIEN O’CONNOR (Labour): When I was in the Chamber last night I heard an interjection from the Minister in the chair, the Hon Nick Smith, and I thought it important to clarify that comment this morning, before I get into other points in my speech. He accused my colleague Chris Hipkins of double standards, I guess, for raising the point of the outrageous rise in power prices, because, he said, Labour was campaigning for changes to the Climate Change Response (Moderated Emissions Trading) Amendment Bill that might increase power prices. Well, there is some truth in both of those statements. What Mr Hipkins has been raising is the outrageous rorting of the system by State-owned enterprises, by dominant players. That point has been clearly identified in reports in this country, and Mr Hipkins has every right to point out the reality that the Minister is part of a Government that is demanding more return from power companies. Unless we raise that concern, no doubt the Minister, Nick Smith, and his mates will extract more money from the State-owned enterprises through excessive electricity prices.

On the other hand, we know that the impact of this bill will mean increasing costs for any area of energy utilisation. That is the reality of the emissions trading scheme legislation. We cannot shy away from that. But we have to ask the question why we are doing it. Members on the other side of the Chamber say they are great champions of the market. They believe that market signals will determine behaviour. Well, that is fairly true, I have to acknowledge, so where we have increasing costs we will have decreasing demand, or so the saying goes. The emissions trading scheme is designed to apportion climatic costs, environmental costs, on to the whole economy so that we will change our behaviour, reduce our emissions, and become more efficient in the utilisation of hydrocarbons or any form of energy. The Minister in the chair, the Hon Nick Smith, nods his head. I think that is what we are trying to achieve here. But the issue Labour members are raising is whether this amended legislation will give effect to what we want, which is to reduce international emissions.

I will concentrate on New Zealand, because I speak on behalf of the agricultural sector, a sector that will have the lion’s share of concessions, along with the fishing industry and along with some sectors in our society that are into forestry. There is an inherent unfairness here, because what we are seeing is a shift in wealth; low-income New Zealanders—people who do an ordinary job, work hard, and try to look after their families—will be paying more. Treasury gives us forecasts for many areas—accident compensation, for example. The Minister has been happy to use forecasts from Treasury on accident compensation, moving out to 2030, to say that the scheme is broke. Well, I challenge his assumption, but he is happy to use forecasts there. Contrary to Nikki Kaye’s assumptions, we have to rely on forecasts from Treasury in other areas. When we come back to the emissions trading scheme, the Treasury forecasts say that we may be shifting wealth from ordinary New Zealanders to some polluters—to some major emitters—to the tune of $100 billion. That is a huge transfer of wealth. The question is whether it will assist our achievement of the goals of meeting our international obligations and ultimately reducing our emissions into the atmosphere. It is about having some positive effect on global warming, on climate change—call it what you like. That is what we are trying to do here.

What Labour members say is that the compromises and the sweet deals between the Māori Party and the Government, including shifting out the inclusion of agriculture from 2013 to 2015, are the kinds of deals that will reduce the effectiveness of the legislation we put in place last year. We say that this bill is a sham. In fact, it is not just a sham from the point of view of ordinary New Zealanders, who will pay another $100 billion; the major beneficiaries of the Government’s wheeling and dealing—arguably, the forestry sector and the farmers—also think it is a sham, a shambles, and a mess. So if the major beneficiaries of the Government’s wheeling and dealing think this whole legislation is a shambles, then perhaps it begs the question of whether we should be passing it, at all. Sensible New Zealanders—the few who are listening to this debate, and a few more who might have been listening last night—who are starting to understand what the emissions trading scheme is for know that we have to be part of an international movement to try to reduce the human contribution to climate change, and that if we are not part of it, we will not be able to sell anything to the members of that movement, and we certainly will not be able to sell anything to the high-value markets. The farmers will not be able to get rid of their goods. Those countries that currently buy our goods will say that we are not part of the international effort to reduce climate change, so they will not want our goods, which may have been produced in an unsustainable way.

Labour brought into this House legislation that moved us in that direction. It was a compromise all round. It did not go so far as to put at risk our world trade obligations by providing a huge subsidy to farmers that might have undermined our efforts and our moral high ground in asking for freer trade around the world. We had reached that compromise. The question I have for the Minister is whether his shifting out of the date of the inclusion of agriculture puts at risk our position in world trade negotiations in that we are seen to be giving a huge subsidy to agriculture, and thereby undermines our ability to get free-trade agreements with Europe and other high-value markets. This scheme might put that at risk, which may be one of the reasons that Don Nicolson, the president of Federated Farmers, says this bill is a sham and a shambles, we should step right away from it, and maybe, he says, we should go back to a carbon charge.

Hon David Parker: That would be silly.

Hon DAMIEN O’CONNOR: That would be silly. I have to say that I thought the carbon charge idea was a good step in the right direction when we discussed it and introduced it. However, who campaigned against it? Federated Farmers. They called it a “fart tax”. Well, with the wisdom of hindsight, or call it what one likes—a road to Damascus moment, or whatever; I do not care—Federated Farmers—

Hon David Parker: You know why they liked it? Because they didn’t have to pay.

Hon DAMIEN O’CONNOR: Of course they do not want to pay any more than they have to, but they are now coming to the realisation that to trade long term into high-value markets, they must be part of an international effort to reduce climate change. The question is why they would think this legislation that Nick Smith, with his Ministers and Cabinet, has negotiated with the Māori Party, will work. Sweet deals have been offered to some iwi groups. Sweet deals have been offered to quota owners—but not for catch, not for fishermen. The quota owners will get all the benefit of the transfer. The Minister in the chair shakes his head. In fact, 50 percent of the fish caught in this country is caught by foreign vessels, and they will not have any impost from our emissions trading scheme; the fishing industry and the quota owners will have further incentive to use foreign boats to catch fish in New Zealand waters. That is an outrage, along with most of the things that this Government has negotiated behind closed doors, in dark rooms, to try to get this flawed legislation through the House.

If farmers, who are the greatest beneficiaries of this change, think it is a sham, then maybe the rest of the country is justified—and the Opposition certainly is—in saying that this change to the legislation that Labour introduced to the House is a waste of time. It will not give effect to what we really want from the scheme, which is to incentivise people to change their long-term behaviour in order to reduce their emissions. Yes, there will be an additional cost on electricity and on all other hydrocarbons. That is the reality. The Minister knows that. Whether it is his legislation or sensible amendments from the Opposition, yes, there will be additional costs. They must be affordable and they must ultimately give the right signals to people who emit. The problem is that National has done enough sweet deals to not leave in place incentives for the major emitters to use technology and use science to try to reduce emissions over time. In fact, the Government halved the amount of money that the previous Government had put in place for agricultural research. It is an outrage.

Hon Dr NICK SMITH (Minister for Climate Change Issues): I am really enjoying the Committee stage of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Out there, members opposite can get their sound bytes and their cheap shots away, but under the blowtorch treatment of the scrutiny of this Parliament we are finding that Labour’s views do not stand up to scrutiny.

Let me go through three areas where I think Labour is making a big strategic mistake. The first is that we have repeatedly heard Labour members use the figure of $110 billion as the cost of the bill. The truth is that it depends on the way the question is asked about those costings. I will tell the Committee where Labour members are tying a noose for their own necks. If they want to apply that sort of approach to the pricing of policies, it will work as follows: for instance, Labour has said that part of its policy is to restore a research and development tax credit worth $400 million per year. But if we apply the $110 billion rule—that is, if we compound the figure over 42 years, the cost of the policy would be $20 billion. I say to Labour members that if that is the approach they want to use for costing, then for every single promise they make up to election day in 2011, I want them to price it on the same rules—that is, the figure should be added up for every single year all the way up to 2050, and compounded at 6 percent each year. That is how the figure of $110 billion is arrived at. I say to members opposite that if those are the terms of their approach, they will blow any credibility they have. There is not a day in this House when they are not making commitments to spend money on this or that cause, so we will now apply that funding approach to their promises, and that will come to bite them very hard in the behind.

The second thing that is really interesting is the way the language changes. You see, when Labour does a deal with the Green Party and New Zealand First to get its emissions trading legislation through, that is MMP politics working well. But when we do an agreement with the Māori Party, then that is a dirty, secret deal. Let me give members another example. When the previous Labour Government made an allocation to industry, the Green Party challenged them; the Green Party said that it was a subsidy for big industry. Mr Parker said that it was not a subsidy. So I say to hang on; I want members of the Labour benches to answer this question: why is it that when Labour makes an allocation to industry, it is not a subsidy, but when National makes an allocation in this bill, it is?

Then we come to some of the other areas around the bill. Let us remember and recite the history. There were 800 amendments tabled a year ago in this House, and what was the reason that Labour wanted to pass that legislation? It was purely political. Labour wanted the legislation through before the election to try to save its skin. Why do we want this legislation through? I will tell members why. We want it through for very practical reasons. What is the biggest issue for New Zealand right now? I tell members that it is the recession and it is jobs. If we do not get this bill through, on 1 January there will be a 10 percent increase in the price of electricity, and there will be a $400 million cost on industry next year.

Do we want to snuff out the recovery in the economy? This is not an ideal process, but members on this side of the House will put the national interest of this country first. The national interest of this country is overwhelmingly in favour of fixing the mistakes in that legislation and getting a sensible and balanced emissions trading scheme in place for 1 July next year. That, in my view, is the absolutely responsible thing for the House to do. I am yet to hear any member set out a realistic and balanced view of an alternative approach.

I will say one other thing. Members ask us just to leave this scheme where it is on 1 January. Well, every member of this House knows that that would be a real shambles for industry. I was advised by officials that even if we rushed to implement the current scheme, the allocation plan could not be done.

PHIL TWYFORD (Labour): I am speaking against the Climate Change Response (Moderated Emissions Trading) Amendment Bill this morning, and I will follow on from comments made earlier by my colleague Grant Robertson. He referred to the interjection made by a National member last night, a member who told Jacinda Ardern that she had no right to talk about or reference the rights of future generations, given that she had no children. Well, I have a son, and my son will be 60 years old at a time when he will be paying half the costs of the subsidies for high-intensity industry emitters. When my son is 60, he will be paying half the costs of the subsidies for high-intensity industry emitters. Something is seriously wrong with that; there is a very disturbing pattern with this Government to push off the costs of today’s decisions on to future generations.

I will make some comments about process, because there is a direct relationship between the quality of process and the sausage that comes out the other end. The process of this bill has been shambolic, shoddy, and shonky. The result is a piece of legislation that I think quite frankly should not be before this House. If this Government had a shred of self-respect, it would take this bill back to the drawing board. I have been in this House only a year, but I have learned one or two things about parliamentary process. I have watched the progress of two of the Auckland super-city bills as they went through the House, and I thought that they were bad!

There is a strange Alice-in-Wonderland principle at work with this Government. The more important an issue is to the country’s future, the less scrutiny and the less attention is paid to it, and the more rushed its process is. I do not know why that is. Could it be the perpetually relaxed Prime Minister, grinning aimlessly while his coalition partners in major legislation spin off into the ether? Could it be the genial incompetence of Gerry Brownlee and his House management, or has Nick Smith finally blown a gasket and what we are seeing with this emissions trading scheme process is a result of that? At least Rodney Hide has an excuse for his shambolic handling of the Auckland super-city reforms. He was off around the world, going to Universal Studios and attending weddings in London. What is this Minister’s excuse for this shambolic process?

Let us talk about some of the similarities between the Auckland governance process and this emissions trading scheme process. Some things that I think have a very strong parallel between the two processes include the misuse of urgency, which has been another hallmark of this Government’s record over the last 12 months; a rushed and inadequate process; inadequate select committee scrutiny; important decisions made behind the scenes while the committee was actually receiving submissions from the public—and we have seen the sweetheart deal that the Government made with certain iwi in order to get Māori Party support—and shambolic last-minute changes. In the case of the Auckland super-city, it was the panicked last-minute decision to bring the Rodney district into the super-city; in the case of the emissions trading scheme, we have seen very similar things.

Let us continue with this issue of process. We have seen the chair of the select committee try to limit oral submissions to 30 and the hearings to a single day. I ask members how bizarre that is. In the end, submitters were given only a few hours’ notice to appear before the committee—far too short a time to actually speak, prepare, and communicate on issues of this complexity. The Government withheld key documents, including the Treasury analysis of long-term fiscal costs and the details of an agreement with the Māori Party. Treasury officials looked at each other in confusion and had to ask for a break so they could go out and discuss what the real estimates of the long-term fiscal consequences were. It was utterly bizarre, and both Treasury and the Parliamentary Counsel Office said to the committee that they simply did not have the time to do their work properly in order to provide advice to the committee. The process was a shambles, and Government members should be ashamed. To rescue this bill at the last minute, we have seen a cobbled-together deal.

Dr KENNEDY GRAHAM (Green): This Climate Change Response (Moderated Emissions Trading) Amendment Bill presents perhaps the greatest challenge ever to come before this House in its 150 years, I believe. We are of minor significance in the greater human drama that is unfolding around us, but what we do has an importance proportionate to size. We can never shirk our responsibility to contribute to the common good, which in the 21st century means the good of humanity. This bill holds the mirror up to that responsibility. If our climate change legislation is inadequate, we not only shall condemn our children to a miserable and precarious life but also shall have committed a new crime: the crime of global negligence. As Russel Norman said yesterday, future generations will curse our memory.

Along with the Minister, Dr Nick Smith, I attended the Rio Earth Summit back in 1992. The Minister has recently been wont to recall that attendees at Rio thought climate change could be solved within 5 years, and he cheerfully admitted to having underestimated the challenge. I can attest before members today that Dr Smith was alone in that belief at Rio. No other delegate, not one, thought for a second that climate change would be solved within that impudently short time frame. That is why the United Nations Framework Convention on Climate Change was concluded that year. That is why its Kyoto Protocol was negotiated 5 years later, with its binding obligation to keep our national emissions to 1990 levels, an obligation we are cravenly violating today by 22 percent.

I have scrutinised the framework convention and the Kyoto Protocol, I have read the 2008 Climate Change Response (Emissions Trading) Amendment Act, and I have read the 2009 Climate Change Response (Moderated Emissions Trading) Amendment Bill. I have sat through some of the committee hearings, I have read the committee’s report and the Supplementary Order Papers from the Government, Labour, and the Māori Party, and I have sat through the whole of this debate. What have I learnt? I have learnt that National has scored eight times more solar panels in 1 year than Labour did in 9 years. I have learnt that an allocation is not a subsidy, and that it is. I have learnt, or at least I have been told, that Labour’s emissions trading scheme would cost households $6 per week and National’s only $3 per week. I have learnt that it is unpatriotic for an Opposition member to attend the UN conference on climate change in Copenhagen. Amidst the verbiage I can discern one thing, and that is that any emissions trading scheme, whether the balance of responsibility is by design or accident, weighs most heavily on the New Zealand taxpayer or consumer, the businessman or farmer, the forester or fisherman, whether Pākehā or Māori; it will all ultimately fall on each of us as humans, all breathing the same air, all worrying about our children and theirs.

But at a more fundamental level I have also learnt that humanity is in deep trouble, for as a species we seem to have become afflicted with a cognitive dissonance and have lost our ability to perceive reality with any clarity. We have lost—perhaps never possessed—a true depth of field of historic proportionality. We stare unblinkingly into the void that is the 21st century, mindless of magnitude, oblivious to its portent. In this country, and in this House, we have become so preoccupied with inter-sectoral interests and inter-party point-scoring that we fail to comprehend the truth of what is happening around us. As the beautiful southern icebergs begin their slow and menacing northward drift into our waters, we pretend that it carries no meaning. The searing plight of the polar bear, so far away and yet so near to our fate, we prefer not to acknowledge; we are too busy worrying about our national export earnings. This bill, with its uncapped, trade-intensive, indulgent wink at “New Zealand Incorporated”, constitutes a threat to the global climate and thus to the future of this country.

Let us seek to restore the broader picture that frames the debate we are having in the New Zealand House of Representatives. The global objective of the 1992 climate convention was to protect the climate system for the benefit of present and future generations of humankind. The aim was to stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate quickly enough to allow ecosystems to adapt naturally. The Intergovernmental Panel on Climate Change judges that the critical threshold to avoid catastrophic climate change is 2 degrees above the present, which means a threshold of 450 parts per million volume carbon concentration. The emissions cuts prescribed for that by the rich North are 25 to 40 percent by 2020, and 80 to 90 percent by 2050. The UN Secretary-General urges countries to accept these targets.

Down here on Earth’s last islands, the Government—befuddled with its mantra of balancing economic opportunity with environmental responsibility, as if they were competing weights on the blind scales of justice—talks of doing its fair share in its national contribution to the global interest. So what are its national targets for the global good? They are less than half the prescribed target for 2020, and just over half that for 2050. That is an abject failure to do our fair share, a failure that borders on criminal negligence. It is one to be ashamed of, as, indeed, we shall all be before much time has elapsed.

Last night Kevin Hague described the degraded planet that our descendants may inhabit at the end of the century. To most of us the year 2100 sounds far enough away for political, if not intellectual, absolution. Yet my four granddaughters aged from 3 months to 5 years will, God and Gaia willing, be alive at that stage. I truly fear for their future. Can an agreement be achieved at Copenhagen to avert catastrophic climate change? There is something existentially dysfunctional about 192 nation States, each claiming untrammelled sovereignty, purporting to negotiate a global solution to a global problem through competitive pursuit of the national interest as traditionally perceived. If there is a single global interest, there needs to be a single global institution empowered to identify and enforce the solution. The only legitimate national interest lies in meeting that responsibility.

The underlying issue of sovereignty surfaced recently when Anzac Ministers forewarned that a binding global agreement may not be achieved at Copenhagen, and we should turn to plan B—a schedule of voluntary commitments for cuts. That, of course, would be the ultimate regression to the 19th century. We must never be persuaded to drop global aspirations simply by the siren call of the complexity of the problem.

The Government has provided no causal linkage between its 10 percent cut by 2020 and the impact that it would have on our contribution to the critical global threshold. It follows that the Government is engaging in the obsolete method of policy making of determining a priori its national interest and disavowing the global consequences, rather than accepting the global objective, determining the national obligation from that, then determining how intersectorally we reach it. In New Zealand we have no choice but to meet our national responsibility targets of 40 percent by 2020 and 90 percent by 2050. The 2020 target means a cut of about 48 million tonnes.

The Green Party’s report, released in August, showed that a 36 million tonne cut in domestic emissions is feasible, requiring only 12 million tonnes in international credits to be purchased. The sectoral share of domestic cuts was calculated not on the basis of interminable mutual recrimination and sweetheart deals, but on what is scientifically and economically optimal. That is the rational basis for national salvation. We have studied the environmental ministry’s critique of our report. We adhere, for the moment, to our own calculations, and we are ready to debate the matter constructively.

Each economic sector in New Zealand—business, farming, forestry, fishing, and energy—has a vested sectoral interest that is sub-national. Claims advanced by each of Business New Zealand, Federated Farmers, and the Coalition for Climate Change Policy should, with due respect to each institution, be viewed in that light. It is only the Government that forms policy for the national interest in the context of the global interest. How the Government does that is what this debate is all about. It is about a question of method, and that depends on one’s world view. Jeanette Fitzsimons and I will be at Copenhagen, conducting ourselves in the most patriotic manner of all: seeking to ensure that our Government does this country and its children proud, in this moment of global need.

JOHN BOSCAWEN (ACT): I have been very disappointed in the performance in this House from the Minister for Climate Change Issues, Dr Nick Smith, on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Last night, in answer to allegations by Jeanette Fitzsimons that this bill generated no net savings in emissions, Dr Smith quite correctly stood up and raised four or five examples of how this bill will reduce emissions. In my view, everything Dr Smith said was absolutely correct. However, this morning we heard from Dr Smith a statement that we should be concerned about the recession. He said that we have a recession and unless we pass this bill, electricity will be going up by 10 percent on 1 January. Dr Smith and the National Government know that that is absolutely incorrect. The ACT Party opposes this bill, and we do so because it is being rushed through before the United Nations Climate Change Conference in Copenhagen. There is no need to do that.

We oppose this bill because it is based in part on following Australia. Australia is not finalised. We oppose this bill because our key trading partner, the United States, has not made any formal, binding commitment, and this bill will put our trade-exposed industry at risk. The ACT Party offered the National Government support in legislation to defer the introduction of the effective date of Labour’s emissions trading scheme. For Dr Smith and the National Government to hide behind this bill as the reason for having to postpone the electricity price increase is nothing more than dishonest.

Last night Dr Smith said that he was enjoying this debate. He commented in particular on the comments of Chris Hipkins on electricity. Dr Smith said that if we remove the two-for-one discount, New Zealanders will pay more for their electricity. Dr Smith is absolutely correct. If we remove the two for one discount, New Zealanders will pay more for their electricity. Under this bill, that discount is removed on 1 January 2013. The Labour emissions trading scheme that was passed last year would have a 10 percent increase in electricity from 1 January. The National Party proposed that we reduce that increase in electricity from 10 percent to 5 percent, and then institute that full increase of 10 percent before 1 January 2013. I stand in this House this morning as one of five ACT MPs, the only MPs in this Parliament who are prepared to stand up and ask why we are increasing the price of electricity by 10 percent from 2013.

Last night the House heard from Hekia Parata, who is a distinguished former public servant in New Zealand. She said that the Māori Party and National should be proud of supporting this bill. I ask Hekia Parata how the National Party and the Māori Party can be proud of supporting a bill that will increase the price of electricity by 10 percent from 2013. How can they be proud? We have heard debate as to whether we allocate fishing quota to the fishermen or to the quota holders. We could argue that is irrelevant; it does not matter. We are talking about only 2½ years of allocations. Dr Smith wrote the National Party minority report on Labour’s emissions trading scheme legislation last year. He said the fishing industry was trade-exposed and energy-intensive, and he questioned why we would not extend support to the fishing industry beyond 2013. He has the chance to do that now, and he is choosing not to do it. I again ask Hekia Parata how she, National, and the Māori Party can be proud to tax the fishing industry $15 million from 1 January 2013. How can they be proud? The ACT Party stands up and represents all New Zealanders who are facing a 10 percent electricity price increase from 1 January 2013.

Hon Dr NICK SMITH (Minister for Climate Change Issues): Having heard the contribution from both the Green Party and the ACT Party, there are a couple of points to which I would like to respond. Firstly, I respond to the claim by ACT MP John Boscawen that somehow the Government is being dishonest, because I do take offence at that. Let me tell him why. The truth is that the ACT Party does not believe in climate change and does not want to take action. When we had a debate about a carbon tax the ACT Party said no, we should have an emissions trading scheme. Then, when we said we would have an emissions trading scheme, it said we should have a carbon tax. Now, I think the ACT Party needs to be honest with this Parliament and say what it really believes: that we should do nothing.

So right at the very last moment, when it was well speculated in the media that we had reached an honourable agreement with the Māori Party, ACT suddenly fronted up and said we should delay things for 12 months. Let us think that through. Can I be any more confident than I am today that in 12 months’ time National—which believes we should take action on climate change, and which has long said we need to have an emissions trading scheme—and ACT could reach agreement? The honest truth is that I cannot. The truth is that we had a special select committee inquiry. The truth is that the ACT Party’s position at the end of that inquiry was exactly the same as at the beginning, albeit it was a single view. So do I think the right step forward for New Zealand today is to defer things for another 12 months? No, I do not.

John Boscawen says that we are doing this ahead of other countries. Let us think that through. I think Kennedy Graham’s point on this is quite true: that if New Zealand takes the approach of saying we will move only when another country has moved, and if every one of the 196 countries takes that approach, nobody will do anything.

So we have said we want to realign this emissions trading scheme with Australia’s scheme. I have been to Australia three times. Most recently I had a long discussion with Malcolm Turnbull on Monday, so that I could ensure that this legislation took into account the most recent accounts of what is occurring in Australia. The reports continue to be that its scheme is likely to be passed into law this week. Given all the arguments about process, I remind the New Zealand Parliament that the Australian Government has not yet tabled its amendments, and is intending to both introduce them and pass them all in the same week. This issue—[Interruption]

I do want to respond to a point that has been made by Grant Robertson and the likes of him. Those members have said the process is a shambles, but they take no responsibility for their role in that. I will say why they should.

Hon Members: What?

Hon Dr NICK SMITH: Well, let me tell those members this. During the first reading of this bill, Labour members argued strongly that it should be referred to the Finance and Expenditure Committee. I have long held a view that it would be better if National and Labour could reach an accord on this issue. So, in discussion with Gerry Brownlee, we said it was not a big deal and we would allow the bill to go to the Finance and Expenditure Committee. I sought leave to do that. Can members believe that the Labour members voted against it when I sought leave for the bill to be referred to that committee? A large number of technical amendments were agreed to at the select committee. Members of the Labour Opposition agreed with the changes around tree weeds. If they agreed with those changes, why were those amendments not made at the select committee? It is because Labour wanted to make the process as bad as possible, and because it is simply being destructive.

I challenge the Labour members. I say this issue is too important to play those sorts of political games with. This is the sort of issue on which this Parliament should rise to the occasion, rise to the huge challenge, and not be involved in that sort of silly exercise. I say if the Labour members want to make claims about the process, they need to answer to New Zealand on the role they took in the process to make it as destructive as they possibly could. They must bear responsibility for that, and they must eyeball their children and grandchildren about that, as we confront the issue of climate change.

The CHAIRPERSON (Hon Rick Barker): I think we have had so much urgency that we have almost worn the bell out. If members hear this sound in the future, it is the normal bell. We are trying to get it fixed.

Hon CLAYTON COSGROVE (Labour—Waimakariri): Thank you for that technical briefing, Mr Chairperson. Some of us were wondering whether baked beans had perhaps been on the menu this morning! I make one observation about the Minister for Climate Change Issues, the Hon Dr Nick Smith. We have now reached the point in this debate where that Minister will say absolutely anything. I was astounded by his last contribution. He effectively tried to make a case that New Zealand should show international leadership, should be out there and be one of the first to have an implemented emissions trading scheme, should lead the world, and should do the right thing. I think he asked how we can expect others to do the right thing—and I paraphrase—if we are not prepared to step up to the plate.

I am not allowed to use the “h” word, but I say to that Minister that he is full of it. When it comes to the “h” word, I say that he is the archetypal definer of that word. In Opposition that member stood up and lambasted the then Labour Government for showing international leadership, and for saying we should be out there leading. As we said, we cannot expect others to follow us if we are not prepared to step up to the plate and to put this scheme in place. It was that member, who is now the Minister, who led the charge every day, saying exactly the opposite. He nods his head, because he knows he is the parliamentary definition of the “h” word. He will say anything now, absolutely anything.

Hekia Parata: Keep calling him a hero!

Hon CLAYTON COSGROVE: No, the word is not “hero”; I am not allowed to use the unparliamentary word. What it is about for Hekia Parata is having a different position in Opposition when it lambasted the then Government. The Minister, when in Opposition, asked why New Zealand should be first, why New Zealand should show leadership, why we should be ahead of our trading partners, why we should not wait for the United States and others and the big polluters, and why we should not wait until the large contributors in terms of pollution have got their acts together before we do anything. Yet today, I say to Hekia Parata, the Minister stands up and says exactly the opposite.

The Minister has no credibility, at all. Nick Smith, as Minister for ACC, cannot find any money for accident compensation. His Government cannot find any money for superannuation or for real training for the unemployed. It cannot find any more money for health. It tells teachers that there will be no money next year. But when it comes to a little deal in the back of a darkened room with the Māori Party—a very slippery deal that has never been put under scrutiny and that opens a can of worms around the whole Treaty debate—then, oh, it is all OK! A Treaty clause that was done in 18 minutes, or with 18 minutes to go, is OK! I say to that member that he is a disgrace as a Minister.

I thought that even Nick Smith would not have the gall to get up and say exactly the opposite of what he said not a year ago when Labour’s emissions trading scheme was going through. He lambasted us for it. He said we should not show leadership. He said we should stay behind and do nothing until the great polluters—the United States and the European countries—had got their act together, and today he stands up and says the opposite. He makes the case that his Government is showing leadership. It is appropriate, he says, that his Government is out there as the No. 1 or No. 2 country to put together an emissions trading scheme. I ask the Minister, Nick Smith, how on earth he can exhibit such gall.

The Minister grins away in his boyish way. Does he not realise that these things are recorded in Hansard and that editorial writers and journalists actually listen and report what he says? Does he not realise that embassies around the world and ambassadors, in preparation for Copenhagen, take note of what happens in this place and what Ministers say in this place? There will be Governments, ambassadors, and international officials around the world who are laughing at that Minister. No, they will probably not be laughing; they will be shaking their heads in dismay as we proceed to an international conference that will deal with possibly one of the most important issues of our time and of our generation. That Minister will get up and try to be credible at an international conference. Does he not know that ambassadors and his ministerial equivalents around the world will have read what he said a year ago and will have made file notes to their capitals? As he said, we are the first or second country, possibly, that will do this and some of the eyes of the world look at what happens in this place around this issue.

Hon Dr NICK SMITH (Minister for Climate Change Issues): Personal denigration has always been Clayton Cosgrove’s approach to such issues.

Hon Clayton Cosgrove: Deal with the facts.

Hon Dr NICK SMITH: I am happy to deal with the facts. Let us go through the facts.

Hon Clayton Cosgrove: What did you say before, when you were in Opposition?

Hon Dr NICK SMITH: Let me quote directly from what National did say in its minority report, and let us compare it with the bill. The first thing I said was that New Zealand should not be leading the world and that New Zealand should be doing its fair share. That is exactly what this bill does. We said in that minority report and in our policy that we should take an intensity approach to allocation. What do we do in this bill? We do exactly that, I say to Mr Cosgrove.

Hon Clayton Cosgrove: You didn’t say that in Parliament.

Hon Dr NICK SMITH: We did indeed say that.

Hon Clayton Cosgrove: You didn’t say that in Parliament.

Hon Dr NICK SMITH: Well, I challenge Mr Cosgrove to read the record. He is a johnny-come-lately to this issue. He was not on the select committee. I challenge him to read our policy, because that is exactly what we said we would do—

Hon Clayton Cosgrove: Read your Hansard.

Hon Dr NICK SMITH: —and that is what is in my Hansard. I also said we should provide a greater level of support for the fishing industry, and we have done that. I said we would provide 90 percent support for the fishing industry—and we have done that. I expressed the view—

Moana Mackey: Not the whole fishing industry.

Hon Dr NICK SMITH: I will come to a point made by Moana Mackey. She will be interested because she has misunderstood a provision, but first I want to finish my comments to Mr Cosgrove. We also said that the 8 percent phase-out rate was too great, and we said we would take a different rate. We said we would align with Australia—Australia is 1.3 percent and we are 1.3 percent—in every key respect, and I challenge members opposite to find a single area in our emissions trading policy that we took to the last election that is not consistent with this bill. We are doing exactly what we said we would.

I now want to deal with a specific point, because I think that Moana Mackey actually does not understand the bill. Moana Mackey made a mistake, and I do want Parliament to know exactly what we are addressing. The question with this bill is whether we are providing the support for the quota holders or the fishing operators. The argument from officials has been relatively balanced, and Moana Mackey said that all the support in the amendments is going to the quota holders, but that is not actually correct. Let me explain why. As a consequence of these amendments the fuel price increase will be halved in that period. Because of the two for one, rather than the price of diesel going up by 7c per litre it will go up by 3.5c per litre. Who benefits from that? The fishing vessel operator. In effect, and if we look at the fiscals that have been provided in the advice, we have the choice of providing the support for the quota holder or providing the support for the fishing vessel operator. The reduction in the increase in the price of diesel is a benefit for the fishing vessel operator. The other provision, which provides the allocation to the quota holder, provides the other benefit.

So the member’s claim is simply incorrect. She does not understand the bill. The reality is that there is a benefit from these amendments to the fishing vessel operators, and that is part of the package of reforms that we have provided for in this bill.

SUE KEDGLEY (Green): George Orwell coined the terms “newspeak” or “doublespeak” to describe language that makes the bad seem to be good, the unacceptable and the truly terrible seem to be acceptable, and the inappropriate seem to be appropriate. They are the terms for a whole new language, and they seem to me to encapsulate the whole approach of this Climate Change Response (Moderated Emissions Trading) Amendment Bill and what it is about. It is Orwellian. The whole thing tries to make it look as though we are reducing our emissions, when in fact we have a bill that will increase our emissions. This bill tries to make us look good, so that the Minister can to go to Copenhagen and stand up and say: “Look! We have an emissions trading scheme in place. Isn’t it fantastic!”. He will be able to go out to New Zealanders and say the Government cares about climate change and really worries about it. He will also be able to say he has a bill in place, but, when we look at the fine print, we see that it will increase our carbon emissions for at least the next 10, or possibly 20, years. The Minister in the chair, Dr Nick Smith, is shaking his head. The Minister will not tell us for how long emissions will increase but it seems that it will be for the next 10, and possibly more, years.

Here we have a bill that we are pretending will reduce our emissions, when it will increase our emissions. Here we have a bill that basically tells the major industries of New Zealand: “Look guys, it’s business as usual. Just carry on using your coal. Let’s carry on building our motorways. Let’s just carry on as we are. We have this fig leaf, this emissions trading system in place, so we can say to the world and to New Zealanders that we really care about climate change. Let’s just pay for the polluters and just carry on as usual.”

Then we had the extraordinary spectacle of a member of this Committee standing up to say that we should be doing nothing about climate change, and that climate change is all nonsense. It is interesting that my colleagues Moana Mackey and Shane Ardern are here in this Chamber. All three of us went recently to Tanzania for a Commonwealth Parliamentary Association conference. The major issue there was climate change. Were the delegates there sitting around and debating whether climate change was real and whether we should do nothing? No, they were not. There was an intense discussion. Delegate after delegate said they were not discussing in the abstract whether climate change existed; delegates said they were confronting the reality of it every single day. They were horrified by the slow progress of nations like New Zealand, in the face of what they saw as overwhelming evidence of climate change—for example, floods and droughts.

When the President of Tanzania opened the conference, he said that everywhere in Tanzania people were confronted with the effects of climate change. The snow on Mount Kilimanjaro is melting, there is salination of coastal islands, there is coastal erosion in the whole coastal area, and there is desertification. We went on a trip, and everywhere we saw animals—cows—that were starving and so thin that the SPCA would consider them to be cases of animal cruelty. Everywhere there was evidence of desertification. Animals are stressed. Tourists go to Tanzania to see the migration of the magnificent animals, but the animals are very stressed. Because their breeding grounds are affected, people worry that there will be no migration of animals, so the tourists will have nothing to go to see. Those are just some of the examples from Tanzania.

Last year I went with my colleague Steve Chadwick to a Viet Namese seminar on climate change, and I found the Viet Namese were passionate about it. They said that 20 million people who are living in their low-lying coastal areas will be affected, and this could happen in the next few years. The Bangladesh delegates said a 1 metre rise in sea level would inundate 17 percent of their country, displace 15 million people, and so on and so forth. The fact is that everywhere I have been, every developing nation delegate whom I have talked to says—

The CHAIRPERSON (Eric Roy): Before the member proceeds, can I just have a wee go at this bell. I want to see whether I can give it a decent work over. No, so we will be working to a manual system.

SUE KEDGLEY: We can all pretend to ignore the bell and say we cannot hear it.

I want to talk about the idea from the ACT member. It is embarrassing that we have someone sitting here like King Canute, with his head in the sand and pretending that all of this is nonsense. All of us will not just be called to account by future generations but will be called on to assist the millions, probably billions, of people who will suffer if we do not respond to climate change quickly enough. But also, more particularly, there will be the millions—billions—of environmental refugees. They will be heading for New Zealand, and here we are with our heads in the sand.

John Boscawen: Speaking up for the poor. Speaking up for second-class citizens. Speaking up for the underprivileged. Speaking up for the have-nots.

SUE KEDGLEY: Here we have the member saying he is speaking up for petrol users, and about the price of petrol or electricity next year.

John Boscawen: Everyone.

SUE KEDGLEY: Hang on a minute. I presume the member has children. We all say in this Chamber that we are worried about children. We are always wringing our hands about children. But the single most important thing for our children is that they will have a world that is habitable. The idea that we can just sit here and worry about the price of electricity next year, while allowing our children to inherit a world that will be uninhabitable, is, quite frankly, unthinkable. But the trouble with many members of this House is that we think in terms of 1 or 2 years; we do not think about the future.

At the conference on climate change in Viet Nam there was a debate about the idea that countries with the highest per capita emissions—and, of course, we do not need to be reminded that New Zealand has the sixth-worst carbon footprint in the world, per capita—should have added global responsibilities for combating climate change and assisting low carbon - emitting countries. In particular, delegates said that countries with the worst carbon footprint, like New Zealand, should have a special obligation to take in the millions of climate change refugees who will need to find somewhere to live. That is already being debated, so we need to be aware of that. That debate may well develop momentum. We can sit here like the ACT member, saying we contribute only point something or other of one percent of global emissions, but the truth is that we are, on a per capita basis, the sixth-worst country in the world. We may well find ourselves being confronted with an obligation, because we are a high-emitting country on a per capita basis, to take in all of those climate change refugees.

To get back to this bill, I say that most of us in this House accept that there is an issue that needs to be dealt with. That is progress, considering that only a few years ago many members of this House, perhaps most, were denying that there was even an issue. However, what we have now is a bill that makes it look as though we are doing something, when we are not. That is really what it is; it is a public relations bill. It is like a fig leaf that we put in front of ourselves in order to pretend that we are taking action and doing something. But this bill will actually increase our emissions, not decrease them. So it is an Orwellian bill: it makes the bad look good; it makes the unacceptable look acceptable; and it gives the Government and the Minister, Nick Smith, something to talk about. But how can the Minister, in all conscience, come up with a bill that he knows will increase our emissions and will enable the major polluters to carry on polluting?

This bill sends the signal that it is business as usual. In the rest of the world, particularly in Europe, everyone is switching to a low-carbon economy, yet we have no incentive to switch to a low-carbon economy. Because there are no incentives to do so, we will be left behind. If we think of this issue simply from a business perspective, why would we allow New Zealand to be left behind and not give anyone incentives to move to a low-carbon economy? This bill does not make sense. It is Orwellian and is designed simply for public relations purposes. As Russel Norman said, our children and our children’s children will curse us for doing this. Thank you.

The CHAIRPERSON (Eric Roy): The next call will go to the Hon David Parker, but let me make some observations at this point in an attempt to assist the Committee. Firstly, in respect of where the call goes, by convention if a member has had a call or two calls, and someone else has not had a call, the call normally goes to the person who has not spoken. I see affirming glances and assurances from members in the Chamber. That is the process. If a party wants a member to have a second call, when someone else is seeking the call for the first time, that becomes a matter for the party’s whip. It is not for me to rule on that convention, because I would give the call to someone who has not taken a call. That is the first thing. Secondly, Part 1 is very big and contains the substance of the bill, but the debate seems to have developed into a general debate on climate change. It would be very helpful to the Chair, and to everybody else, if members could reference their speeches to the clauses of this large bill, so that we might make some progress. The member indicating to me should not do that; I am just saying where we are going. No one particularly is being accused; I am making a general statement.

Hon DAVID PARKER (Labour): I would note for listeners that I have been seeking a call for 4 hours. The Minister in the chair, the Minister for Climate Change Issues, has been making accusations that I will not explain the difference between subsidy and transitional assistance. I am grateful for the call in order to be able to respond to some of the issues that have been raised.

For a start, I shall respond to something that Dr Paul Hutchison said last night. He used the example of Hunua and said there are two major sources of employment up there that are affected by emissions pricing: greenhouses that use fossil fuels for heating, and the steelworks. There are two points to be made there. Firstly, in respect of greenhouses, the conversion of their fuel source for heat from coal to renewables is happening. I have had reports recently that woodchip boilers are now close to economic, and they are made economic, in comparison with coal, by this legislation as it stands. Secondly, in respect of the steelworks, it is interesting that, in terms of the ridiculous rate of free allocation, the Engineering, Printing and Manufacturing Union, which represents most of those steelworkers, told the Finance and Expenditure Committee that it was not impressed by the huge subsidy, extending out for many years, in respect of free allocation for industry, because the union knew that it would be to the cost of other members it represents in other parts of the economy.

While Dr Nick Smith is temporarily engaged elsewhere, I will flick quickly to the Treaty of Waitangi issues. Firstly, the process around the Treaty of Waitangi clause was terrible. It did not go before the select committee. We have not had enough time to consider it properly. So far as I have been able to gauge from reading it now, it looks quite a well-drafted clause. It is likely that Labour will support that amendment. I feel a little bit at risk in doing that, because I have not had the benefit of the normal checks and balances of the select committee process in order to ensure that my understanding of it is correct and that I am not making a mistake. None the less we will probably take that risk.

What we do not approve of is the special deal for some landowners of pre-1990 forests. That is an unprincipled decision. There was no withholding of information by the Crown, and there is no justification for the special deal that has been done in respect of those assets. It breaches the full and final settlement Treaty principle.

Paul Quinn: You did the same deal.

Hon DAVID PARKER: We did not, I say to Mr Quinn. That is just nonsense. That is not correct.

I refer members to an amendment that I have prepared on the Treaty issue. It inserts a new section 226, which states: “No additional compensation will be accorded to any pre-1990 forest landowner on the basis that the land was transferred to the owner under a Treaty settlement unless it is proven that the Crown made misrepresentations or withheld material information about emissions pricing at the time of settlement.” So if there was misrepresentation or withholding of material information, then, yes, there should be recompense, but if there was not, there should not be. I encourage all members of the Committee to vote for that amendment, because if, as Dr Smith says, there was misrepresentation or withholding of information, then those landowners can get additional compensation; if they cannot get it, then they are in the same position as any other landowner, in just the same way as everyone is subject to the Income Tax Act, the Resource Management Act, and, now, the emissions trading legislation. That is as it should be. We have not, for example, taken back the windfall gains that come from advantages that were not thought of at the time when the settlement was agreed, such as the advantages that accrue from the New Zealand - China free-trade agreement.

I will just respond briefly on the issue of electricity emissions. We heard Dr Smith saying that giving a discount to major emitters in the electricity field saves consumers money. Well, that is a moot point. That is not clear. The reality is that electricity is heavily influenced by the cost of new generation, and the cost of new generation does not change with that sweetheart deal for the electricity emitters. So I have an amendment to deal with that. It inserts a new section 222C(4), which states: “That before the 2 for 1 emissions discount for electricity emissions is allowed, the emitter must prove”—

The CHAIRPERSON (Eric Roy): I call the next speaker.

Hon David Parker: Mr Chairperson—

The CHAIRPERSON (Eric Roy): No, the member has had two consecutive calls.

Hon David Parker: No, I have not.

The CHAIRPERSON (Eric Roy): I have very exact records.

Hon DAVID PARKER (Labour): I raise a point of order, Mr Chairperson. My understanding of the agreement is that members were entitled to consecutive calls, and that there is no restriction on the number of occasions that could occur.

The CHAIRPERSON (Eric Roy): Your understanding is incorrect. We had a clear ruling on this yesterday. Members get consecutive calls on one occasion per part. The member had his yesterday. We are still on Part 1.

Hon DAVID PARKER (Labour): I raise a point of order, Mr Chairperson. The underlying Standing Order says that members are entitled to up to four calls per part.

The CHAIRPERSON (Eric Roy): I do not really need any assistance. What happened yesterday was that leave was taken. Any member could have objected to that leave. It was quite specific. I read it out twice yesterday, and members, I thought, had some understanding of it. I will read the portion to the member again so that we understand it: “The direction of the House allows members to have unlimited calls of 5 minutes each but not more than two consecutive speeches on each part of any provision.” That is quite clear. We have ruled on that, and there is acceptance of it.

Hon Dr NICK SMITH (Minister for Climate Change Issues): I raise a point of order, Mr Chairperson. I seek leave, because I do have great respect for Mr Parker and he has a number of amendments and considerable knowledge in this area, for him just on this occasion to have the second continuous call so he can speak to his amendments.

The CHAIRPERSON (Eric Roy): Leave is sought for that purpose. This is a one-off. Is anyone opposed to that course of action? No one is opposed.

Hon DAVID PARKER (Labour): I appreciate it, I say to Dr Smith. While the Minister is in the chair I also acknowledge that in respect of tree weeds, I agree that the amendment that is proposed is appropriate. I thank the Minister for addressing that issue. It is an issue that I came to him about privately, outside the House, as well as raising it through the select committee process, and I accept that the solution is appropriate. But that is about the only good thing in this bill, in my opinion.

I will deal with another of our amendments. We have an amendment in my name saying that if we will not bring in methane, at least we should bring in nitrous oxide at a decent date. My nitrous oxide amendment says that notwithstanding any provision under this legislation, nitrous oxide comes in from 1 January 2013, with free allocation based on 90 percent of 2005 emissions, and any revenue collected between 1 January 2013 and December 2014 shall be used to subsidise the use of nitrification inhibitors.

I want to return to the issue that Dr Smith talked about—the difference between free allocation being transitional assistance and a subsidy. There is a point of principle here, I say to Dr Smith. He has acknowledged that 80 percent of the extra free allocation goes to the agricultural sector—

Hon Dr Nick Smith: 80 percent of the total.

Hon DAVID PARKER: —80 percent of the total—and we know that by 2050, relative to the current scheme, that is approximately 80 percent of $50 billion, which is $40 billion. Including interest—and I know that the Minister disagrees with that—that is responsible for $80 billion of the $110 billion of extra debt. The question is whether that is a subsidy, or whether it is something other than a subsidy. How does one define what a subsidy is? It is not a subsidy if it is a short-term transition assistance for what is already happening. It is a subsidy if it goes on for ever. That is one way in which it becomes a subsidy. It is no longer transitional assistance. It is only abating at 1.3 percent per annum. It is a subsidy.

Another way it is a subsidy is the way Jeanette Fitzsimons articulated it to me last night, and I think she is right. She said that if it is covering existing base emissions, one can actually argue that it is transitional assistance as we move into a new paradigm; but if it is covering new emissions, because there is increased production or a new factory, then that is not transitional assistance; that is a straight subsidy. That answers that point quite clearly, I think.

The reality is that we have now have a “cap and trade” scheme without a cap. There is no cap. That is another point. Dr Smith tried to say that Labour’s scheme had no cap. Of course it did. Free emissions allocation rights were capped. Now they are not. Free emissions allocated rights were capped at 90 percent of 2005 levels. Now they are absolutely uncapped. In the case of agriculture, which does not come in until 2015, emissions growth between now and then is largely not covered by the scheme. So between 1997, when the Kyoto Protocol was signed, and 2015, all the emissions growth in the agricultural sector will be free for that sector. That is just wrong, and it is economically inefficient. As a consequence our country gets poorer rather than wealthier.

The other example the Minister used was the fishing sector. He said that the fishing sector was like the agricultural sector, and that the compensation there was for loss of value rather than loss of production out of the country, because the fishing would, of course, still happen in New Zealand. I absolutely agree. The same would happen in agriculture. The land cannot move, the cows cannot move, the factories cannot move. Production is not at risk of moving. Therefore, the basis of free allocation is not to stop leakage to another country. It is to fairly compensate for lost value as a consequence of the change in value brought about by emissions pricing.

That will not be done until 2050, and even in 2050 more than 50 percent of the agricultural emissions will still be subsidised. It is economic nonsense. It is like supplementary minimum prices. It is like going back to the 1980s and phasing out tariff production but, during the transitional period, instead of having tariffs going down, increasing the protection during the phase-out period. That is what we would be doing if this system were applied to the tariff example. A better example is supplementary minimum prices, where land prices were artificially held up by highly subsidised agricultural prices. That is what is happening here. We have the additional disbenefit here of curbing afforestation, which, of course, soaks up carbon.

Hon Dr NICK SMITH (Minister for Climate Change Issues): I always enjoy dialogue and debate with Mr Parker, because he is thoughtful and well informed, and I think he has genuinely made a significant contribution to New Zealand in climate change policy by advancing an emissions trading scheme as the Minister responsible for Climate Change Issues under the previous Government. But I also want to debate, in a proper way, a number of the points he raises.

He says that there is no economic analysis on which to base the approach with which we are doing the allocation. I accept that it is a debatable point; there is a range of views. But let me read very clearly the in-depth analysis that was done by the New Zealand Institute of Economic Research and Infometrics in the conclusion of their inquiry. They said: “Our recommendation in the short run is to introduce an ETS with free allocation to competitiveness-at-risk sectors, with agriculture excluded if measurement of its emissions is prohibitively expensive. Free allocation should be output-linked and phased out as competitors adopt carbon pricing. If agriculture is initially excluded it should be transitioned into the ETS as measures become economic.” That is the key conclusion of the major analysis that was done this year in that regard.

I want to cover a couple of other points. I want to deal with the question of economic analysis and how costings are done. I want to make this analogy for Mr Parker and Labour members, so they understand. If they want to argue that the $110 billion figure is the way in which we need to cost policies, that is, we need to add up the cost every year, and if it is a loss of income—because it is a loss in terms of these changes—then we need to add interest at the standard rate, which is what those figures involve. Let me tell members what that means.

Hon David Parker: Or borrowing costs.

Hon Dr NICK SMITH: Labour has said that it will proceed with its tax policy in respect of research and development tax credits. That policy is described as costing $260 million. Labour members mean that there will be foregone revenue of $260 million per year. If we apply the same costing approach that Labour members are adopting, and we run it through to 2050, the cost of that policy is $43 billion. Is it fair, when Labour announces such a policy as we go before the next election, for us to use the same pricing method on a research and development tax credit that results in a loss of revenue in exactly the same way as they would want to use the $110 billion figure? The third point I will make—

Hon David Parker: Then explain away the $50 billion.

Hon Dr NICK SMITH: The member challenges the figure of $50 billion. The real crux—and I have an interesting analysis here that the member may be interested in—and the key sensitivity of that number is the phase-out rate. We are starting the phase-out rate a little earlier. We are doing it in 2013 at 1.3 percent. Agriculture tax starts in 2015 at 1.3 percent. If we change the rate to 2 percent, the number would reduce to $40 billion. It we reduced it to 4 percent, it would be $20 billion. If we phased out at 6 percent per year, it would come out at about zero.

Hon David Parker: We could have compromised with that.

Hon Dr NICK SMITH: Members on this side of the Chamber are saying this, and this is an invitation to the Opposition. I am not sure where international negotiations will go. I am not sure where the carbon price will go. I am not sure where the technologies that we are spending significant money on will go. I am not married absolutely to that 1.3 percent rate. That is why it is one of the key features that will be reviewed in 2011. Our policy position is that that phase-out rate should be in line with our major trading competitors, as per the comprehensive analysis from the New Zealand Institute of Economic Research and Infometrics. When the Government says that the 1.3 percent rate is only in the short term, for Labour members to put great weight on what the implications of that will be in respect of 10, 20, 30, or 40 years’ time is, in my view, quite misleading. When we do the review in 2011, I invite Labour to engage with the Government, because the analysis is very sensitive to that rate. The last point I will make is this: if we scratch the surface of what Mr Parker just advised us, if the allocation is just to 2030—

CHARLES CHAUVEL (Labour): I want to talk about the issue of phase-out for industry and agriculture, because I have tabled Supplementary Order Papers that would deal with this issue. They set out a position that I really wish the Minister in the chair, Dr Nick Smith, would consider in light of the comments he has just made about the unlikelihood of the 1.3 percent rate surviving. One of those Supplementary Order Papers changes the phase-out of free allocation to industrial emitters to a defined 18-year phase-out, with all assistance ending in 2030. It does that by amending clause 22. It inserts new sections 82 and 85A into the Act. The phase-out rate is too slow. One of the problems is that there is no specified date at which allocation will end. Under the existing legislation in force now, there would be a phase-out of all free credits by 2030, but under the Climate Change Response (Moderated Emissions Trading) Amendment Bill, there will be an indefinite continuation of free credits.

Hon Dr Nick Smith: Same as Aussie.

CHARLES CHAUVEL: We have a completely different emissions trading profile from Australia.

Hon David Parker: Because they’re wrong doesn’t mean we should.

CHARLES CHAUVEL: That is a good point. Just because another jurisdiction is doing something that is flawed does not mean that we ought to copy them. That is one of the problems with harmonisation. I said to the Minister earlier, half-jokingly, that it might be the end of the career of the Liberal Party today or the next day, thanks to the stance he has taken—which I happen to agree with—on its Carbon Pollution Reduction Scheme. It just shows the folly of harmonisation, which is another argument that we will have to have. David Carter was reported as saying the other day that the Government plans to provide free credits for agriculture for 90 years. That seems to be pretty close to the truth, given what others have said. The 1.3 percent per annum phase-out rate for free carbon credits means that taxpayers will still be funding over half of the emissions for high-intensity industry in 2050. According to the Parliamentary Commissioner for the Environment, the phase-out rates will stop the Government from achieving its 50 percent reduction target by 2050. The effect of this absurdly slow phase-out rate on free emission rights, compared with the status quo, is shown in a couple of graphs in the Labour Party minority report.

The comparison between the phase-out of the existing scheme and the scheme that the Minister proposes is quite instructive. Members will see on this graph the point where all assistance would phase out under the current scheme, and under the amendments that the Minister proposes. Basically, for high-intensity industries it continues indefinitely. For medium-intensity industries it continues for a long time.

Compare that with another graph I have here, which shows the situation under the Waxman-Markey Bill, which is the leading proposal in the United States. One can see that at 2030 there is a very steep phase-out for all assistance. For all the Minister likes to say that he proposes the same sort of thing that is being done by our trading partners and our competitors, it is actually not so, because of the design of these amendments.

It is not just industry where we need to be concerned about the phase-out. There is another Supplementary Order Paper dealing with agriculture. Again, the Supplementary Order Paper phases out all assistance for agriculture by 2030, consistent with the industrial allocation amendment that I have just spoken about. It would also return the entry date for agriculture into the scheme to 1 January 2013, rather than 1 January 2015. This is an essential amendment for fiscal responsibility, because it is the ridiculously generous allocation to agriculture in the amendment that causes the blow-out in the accounts that we have had so much debate about in the House and which is so unjustified.

This assistance, as David Carter told us, will go on for another 90 years. The country cannot afford it. The Minister has admitted that it is unlikely to survive reviews. Why on earth we are enacting it and sending the signal to the market that cannot simply be maintained beyond the next review period, is beyond members on this side of the Chamber. It is useful to recall what was said by the select committee on this topic. We said in our minority report that there should not be a change to the current entry date into the emissions trading scheme for agriculture of 1 January 2012. We all know the argument: agriculture contributes nearly 50 percent of all New Zealand emissions. However, under this bill the agriculture sector is required to be responsible for only 4 percent of the total costs of meeting our international obligations. There cannot be any policy justification for delaying the date of entry for agriculture or not dealing to the phase-out.

JOHN BOSCAWEN (ACT): First of all, I owe you an apology from last night, Mr Chairperson, because I misunderstood the advice I had received from Mary Harris about the consecutive speech motion. When I checked that this morning your ruling was absolutely right on point.

I want to respond to the comments of Dr Smith, who said the ACT Party is opposed to an emissions trading scheme. Yes, it is. But the ACT Party has also made it very clear that if we are to have any sort of tax on carbon, it should be a carbon tax. So there is the option of negotiating a carbon tax with the ACT Party. But Dr Nick Smith also said if he did not do this deal with the Māori Party, there was no guarantee that he could have done a deal with ACT next year. I ask Dr Smith why he could not have done a deal with the Māori Party then. If the Māori Party had more time to consider the implications of this bill, it might well have done a much better deal for itself and for all New Zealanders.

I want to talk a little about the electricity industry. I do this for the benefit of Sue Kedgley. Let me see whether I can explain how the electricity industry works, in the simplest possible terms. Electricity is generated either from renewable sources, like geothermal or water, or from thermal sources, like gas and coal. Essentially, the emissions trading scheme puts a price on the carbon discharges from thermal power stations. So, for example, if Contact Energy was to generate electricity from gas, it would have to pay a tax on its emissions from its thermal power plants. That has the effect of costing Contact Energy—and another example is Genesis Energy, in respect of the Huntly power station—more to generate that electricity. It has been estimated that at $25 a tonne for carbon, it will add about 10 percent to the cost of electricity. But it goes further than that, because that 10 percent increase in the price of electricity is charged across the whole market. Everyone pays more for electricity.

In respect of the power stations that operate from renewable sources, from hydro and from geothermal generation, they do not pay that carbon tax, and that increase in the price of electricity is a windfall gain. In other words, Contact Energy, TrustPower, Mighty River Power, and Meridian Energy, which all own hydro stations, will be able to charge more for their electricity and it will not cost them any more to produce it. That will result in windfall profits. If Sue Kedgley takes objection to the ACT Party being the only party that is prepared to stand up and speak out about a 10 percent increase in the price of electricity from 2013, I wonder whether she actually understands what she is talking about. Essentially, she is condoning a massive increase in profits and a massive windfall gain, not just to State generators but to privately owned power operators. I ask Hekia Parata, again, how she can support a bill that will increase the price of electricity and have massive windfall gains going to those companies.

Let us come back to fishing. Officials have calculated that the diesel that the fishing industry uses to drive its trawlers and its operations will generate some 600,000 tonnes of carbon. It has to pay for those emissions. It will get a 90 percent allowance for those emissions. But from 2013 it will need to pay for the full cost of those 600,000 tonnes of carbon. At $25 a tonne, that is $15 million a year. That is despite the fact that New Zealand gets an allocation of free units under the Kyoto Protocol because our fishing industry was generating carbon emissions in 1990.

The CHAIRPERSON (Eric Roy): I thank the member for his acknowledgment. It was not necessary, but I thank him for it.

Hon PETE HODGSON (Labour—Dunedin North): At its heart the Kyoto Protocol is designed to take a problem that is environmental in its essence and turn it into a challenge that is economic. That is what a “cap and trade” system does. The Kyoto Protocol has also managed the awkwardness of only a few of the Western nations in the world signing up, by inventing the so-called flexibility mechanisms, the joint initiatives, and the cleaner development mechanisms. It does not work in practice, I freely can see that, but at least in theory we have a chance of the world moving along the cost curve at the same time. That is the idea of the Kyoto Protocol. For it to work, the full marginal price of pollution needs to be faced by the polluter. That is the essence of it. The full price at the margin has to be faced by the polluter in question. That is the case in theory.

In the Climate Change Response (Moderated Emissions Trading) Amendment Bill we do not see anything of the sort. We see the right price not being put in place in a timely manner. There are no right signals to the right players at the right time. That is as a result of an admixture of phase-outs and of arrangements that have come into play and distorted the original theory of the Kyoto Protocol and the original idea of “cap and trade” to the point where it is now well short of what it could be. That is a shame. The essence of our opposition to this legislation is around that.

Let me put it to the Minister in words of one syllable. If we as a nation have the goal of reducing our greenhouse gas emissions by 50 percent by 2050—if we will halve them in the next 41 years—how come we are about to adopt legislation that does not have a complete phase-in of the economic signals until 2090? If we are supposed to be getting ourselves to halfway by 2050, why are the signals not fully coming in until 2090? Under the Parker legislation, which will now be repealed, that 2090 date would have been 2030. There is much more that I could say about that in the detail, but instead of going on about the environmental shortcomings of it, I want to speak of the social shortcomings.

This Kyoto Protocol and emissions trading legislation seeks to transfer wealth. That is the guts of it. If there is no change in signals from a non-polluter to a polluter, then there will be no reaction by the polluter, which of course includes all of us. In this legislation, in short, the big end of town is winning. It does not matter whether it is the big end of “white town” or the big end of “brown town”, the big end of town is winning. The corollary to that is that the small end of town, both white and brown, is losing.

Last night we heard Jeanette Fitzsimons giving a careful anatomy of the sell-out of the Māori Party. She did it more in sadness than in anger. But she looked at the criteria that the Māori Party used to vote against the Parker legislation and put the same criteria against the current legislation. She said that she was bewildered, she was sad, and she was confused. She was really saying that the Māori Party has lost its principle. Let us leave aside the fact that Ngāi Tahu has a deal for its trees, or that there are another few thousand houses in the mix. That is the essence of it for the Māori Party, and for Māoridom that will not work. Māoridom will be subsidising Comalco and other big polluters—foreseeably. That is not OK. Māori are disproportionately at the small end of town; relatively few Māori are at the big end of town. Therefore, nearly all Māori will be worse off under this legislation than under the Parker legislation. The Māori Party said that the Parker legislation did not go far enough for them. It is now supporting legislation that goes nowhere near as far as the Parker legislation did, and that has caused the Green Party to express its bewilderment. I say, in a much more direct way, that it is a sell-out and that the small end of “brown town” loses. They are taxpayers. They are trying to make their way as families year by year, and they will not see a reduction in their taxes—they will see an increase in their taxes—as a result of this legislation.

CHRIS HIPKINS (Labour—Rimutaka): I am happy to take my first call on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. The people in my electorate whom I have spoken to about it over the last few days have had one question for me: why should we pay through our taxes or through a lower level of public services in order to subsidise the big polluters? Their question is very simple. We can get engaged in all of the detail of the debate here, but the people in my electorate want to know why they should pay higher taxes or have a lower level of public services, so that the big emitters, such as Rio Tinto and its Canadian and Chinese owners, can make a larger profit and be subsidised by the Government for their emissions. Fundamentally, that is what this is all about.

I want to respond to some of the comments made last night by Te Ururoa Flavell from the Māori Party. He accused me of not listening to him, but I assure him that I listened very carefully to everything he said. I found his speech about the principles of the Treaty of Waitangi and the need for a Treaty clause in legislation quite interesting. I do not think members on this side of the House have ever had the level of difficulty with those ideas that the party he now sits beside on the governing side of the House has had with them. It was the party he now sits with that talked about the drift towards racial separatism and that ran the “Iwi/Kiwi” campaign. It is no wonder that the Māori Party’s core supporters, on seeing the Māori Party voting for a bill like this, which was introduced by the National Government and which the Māori Party is now supporting, have gone into an absolute revolt, as we have discovered from the news stories that have been coming out in the last half-hour or so. They say that the Māori Party’s national council is having a special meeting this afternoon to discuss whether it supports the position taken by the Māori Party leadership to support this bill introduced by the National Government.

This bill will increase the costs on some of the lowest-income New Zealanders. Of course, we know that National would rather tax people at the lower end of the income spectrum, because the very first thing that it did when it came into Government—and the Māori Party voted for it—was to increase taxes on the lowest-income New Zealanders so that it could give bigger tax cuts to those on the highest incomes. That has direct relevance to this debate. If National’s proposed amendments to the emissions trading scheme go through, the taxpayer—and, because of the way that National has structured the tax system, the lowest-income taxpayers now pay a higher rate of tax than they otherwise would have—will end up footing the bill for emissions.

I say to the Māori Party that it is not too late. I know that National’s junior whip sitting over there with them there is trying to make sure that National still has the votes to get this legislation through the House, but I tell the Māori Party members to listen to their members, who are having meetings as we speak. They have called meetings to tell the Māori Party leadership not to do this to Māori voters. I tell the Māori Party members to listen to what their members and supporters are saying. They are saying it is not too late to vote against this bill. I encourage the Māori Party members to listen to what they are saying. As one of the Māori Party members said: “Even though there is a signed deal on the table between the Maori Party and National, the third and final vote is yet to be taken,”. It is not too late for the Māori Party members to say that, no, they made a mistake; that they stand by the minority report that they wrote in the first place that said that Labour’s scheme did not go far enough and they wanted something tougher; and that they will not vote for something that waters down the scheme and gives Māori an even worse deal than what they would have got previously.

The Māori Party members could stand up; it is not too late for them to change their minds, vote against this bill, and stand up for the people who voted for them. As is now being reported in the media, “The Māori Party membership are becoming increasingly aware of the huge debt that our people are going to have to pay, despite all the window dressing going on by the leadership about deals struck with Iwi and the $4 per week being saved with cheaper petrol and electricity prices … That figure fails in comparison with a 40 year debt of anything between $110 and $220 billion.” That is what the Māori Party’s membership is saying to the leadership. It is not the Labour Party’s position; it is the Māori Party’s grassroots membership saying that. I tell Te Ururoa Flavell to listen to what those people are saying. It is not too late. The final votes—

Te Ururoa Flavell: The foreshore!

CHRIS HIPKINS: He can talk about the foreshore and seabed, but this issue is the biggest sell-out by the Māori Party since it has been in Parliament. His membership will desert his party over it, if the reports coming through now are anything to go by. The Māori Party will be abandoned by its membership if it goes ahead and votes for this bill. Māori Party sources calculate that Māori will pay $500 million to $1 billion a year through the cutting of services, increases in taxes, or the sale of assets. How on earth can the Māori Party justify that?

Hon Dr NICK SMITH (Minister for Climate Change Issues): I really enjoyed that contribution from Chris Hipkins. It was a truly remarkable contribution given the news release that he put out on Sunday, where he said that he had had a rush of constituents to his office concerned about—

Hon David Cunliffe: I raise a point of order, Mr Chairperson. It is certainly a convention in this House, if not binding under the Standing Orders, that the Minister in the chair in the Committee stage of a debate is there to serve the Committee by responding to the questions that it poses on the policy in the bill. It seems to me to be at odds with that convention that the Minister has launched into an attack on a member of this House about a press release from the previous week on an arguably unrelated aspect of business. I ask you to restrain the Minister and bring him back within the normal conventions—

The CHAIRPERSON (Eric Roy): The Minister in the chair was responding to an issue raised by the member, and I am prepared to hear the argument at this stage.

Hon Dr NICK SMITH: A key part of the amendments we are making to the emissions trading scheme is to prevent a 10 percent increase in the price of power on 1 January, and to put in place on 1 July next year a lesser increase, while having a responsible climate change policy. I challenge Mr Hipkins to say how he can challenge the Māori Party about integrity, when on Sunday he said: “I’m going to Parliament this week to do all I can to fight power-price hikes.”, and then his own colleague tabled a Supplementary Order Paper to reverse changes in those amendments, which would put power prices up. I say to Mr Hipkins that he is an embarrassment to his electorate, and to himself, if he is going to run those sorts of lines and then challenge the Māori Party about impacts on low-income earners.

The advice is absolutely consistent. The changes the Māori Party is supporting will result in the lesser cost of $165 per year on every single New Zealand household. That is absolutely consistent in the advice. The real question for Mr Hipkins is whether he will support the Māori Party and the National Party in reducing that price impact. The very first issue that the Māori Party put on the table in its negotiations was the same issue that Chris Hipkins raised: lower impact costs on households. So I simply say to Mr Hipkins that he should be supporting the Māori Party, and he should be thanking it for helping not only Māori but all families in reducing the impact of the emissions trading scheme on those households by $165 per year. If he is true to his word, he will be voting with the Māori Party and National for these very sensible amendments.

Hon MARYAN STREET (Labour): I want to go back to some of the entry points for the Climate Change Response (Moderated Emissions Trading) Amendment Bill. I did not come into this House to make life worse for my daughter, her peers, and any children whom she might have in the future. I did not come here for that purpose, and one of the reasons why we as the Labour Party are voting against this legislation is that it does nothing to advance the future for New Zealand.

National has always been the party of the status quo. What we have here is spin upon spin upon spin, layered on what is, essentially, a status quo document. The National Party has always been the party of big business. It is only recently that its members have discovered Māori big business, but it is still the party of big business.

We are concerned—deeply concerned—about this legislation, because of not only its content but also its process, which I will come back to in a moment. The content of this legislation does nothing to incentivise our producers—it does not matter whether they are agricultural producers or industrial producers—to do things differently: to build a new economy, and to build a new productive base in this country on the basis of new methods. It does not help to build productivity and economic output for this country, based on new methods that are sensitive to not only the environment that we are blessed to live in, in this country, but also the needs of the planet’s environment. That is the fundamental concern for us in Labour. This legislation provides no incentive to reduce emissions.

If there is nothing else that National understands about climate change, can it please understand this? This watered-down scheme—it is, in effect, a return to supplementary minimum prices—panders to the corporates by giving them vast handouts, and it does nothing to incentivise them to change their behaviour in order to reduce greenhouse gas emissions. At least that is what we all understand; surely, we all understand that. The public knows that greenhouse gases need to be reduced if this planet is to survive in any kind of reasonable condition for our children and their children. So it is absolutely essential that some of the amendments that have been put up get proper consideration and support. If I am allowed to take a second call in a moment, I will go over some of those Supplementary Order Papers.

But I also want to talk about the process around this bill. The Government would not be in such distress now about the numbers, or be in such a shambles about the passage of this legislation, had it simply taken a breath and done it in a more consultative way. To give legislation of such importance as this only 6 weeks in front of a select committee is a travesty of the process. This Government has prostituted the processes of Parliament in order for the Minister for Climate Change Issues to say there is legislation with his name on it when he goes to Copenhagen. That is not a good enough reason for doing that. I say to Dr Smith that this legislation is not about him; it is about the future of New Zealand. It is about our contribution to the reduction of global warming, which is a man-made phenomenon.

If this bill had gone through a proper process and had taken some time, we might have arrived at legislation that was durable—at an emissions trading scheme that was durable. Instead of ramming through these completely inadequate—worse than that; destructive—clauses in this legislation, all that the Minister needed to do was, in fact, to extend the implementation date for the previous Labour Government’s emissions trading scheme. All that he had to do was to delay the implementation of our scheme, give it a greater hearing, and let the Māori Party work out whether it was going to be advantageous to its people—that is, not simply advantageous to five iwi corporates, but advantageous to Māori and Pākehā families in the lower socio-economic brackets in our country. This legislation will not do what the Government is trying to spin that it will do. It will not reduce power prices as it stands. It will require taxpayers to foot the bill for subsidies to large emitters to carry on with their emissions. Those large emitters will not only carry on but also increase their emissions. They will be allowed to increase their emissions; there will be no progress.

This issue is not meant to be about the Minister’s ego in Copenhagen. He could easily have said New Zealand has an emissions trading scheme in place—he could have said that in Copenhagen. He could even have said we were still in discussions about amending it. This is not about going to Copenhagen with nothing; we have something in place, so we could have held our heads up. When the first soundings of this legislation were broadcast through the diplomatic channels in the pre-Copenhagen conference, people laughed—people laughed. The Minister thinks he is going to achieve something by way of reputation by having this bill—this legislation with his name on it—held up in Copenhagen. But when people look at it closely, they will continue to laugh. This legislation will do nothing to reduce greenhouse gas emissions, and, worse than that, it will require the low-paid, the low-income households, to pay for this scheme through a reduction in services—whether they be reductions to education, to health, to other infrastructure, or to public services that they draw on and require in order to live with dignity in our country.

I ask the Māori Party members not to be influenced by National sending its Māori members to cuddle up with them on their benches right now. They just need to be aware of what the Māori Party’s membership is saying. They should be aware that the party’s membership has dropped to the fact that this spin is completely transparent, and that this bill will not deliver the kinds of relief wanted by low-income Māori households—relief that they would wish that their party would represent for them in this Parliament. It is time for the Māori Party to withdraw its votes and to listen. It is not too late. It is time now for the Māori Party to withdraw its votes on this bill and to vote it down.

We have an emissions trading scheme in place. Let us spend more time on achieving a durable consensus around that. It was the Minister who walked away from the bipartisan talks—from the multiparty talks. It was the Minister who walked away, thinking he could sew up the Māori Party votes on this bill and get it passed. That is not good enough. It is a travesty, it is an abuse of parliamentary process, and it is not what, I would suggest, many National members came into this House to do. Regardless of the issue, surely they would not subscribe to that kind of abuse of process. This is the moment for the Māori Party to withdraw its votes on this bill, to listen to its membership, and to understand that what has been said by the Government, in terms of relief for low-income households, has been just spin.

Let us take time. Let us build, I say to the Minister, a durable consensus around the emissions trading scheme. This bill is a shambles. This process is a shambles. It is now getting to the point where the votes in support of the bill are at risk. The best thing that the Minister could do is to withdraw this bill, rather than suffer the ignominy of a defeat. He could withdraw it and say “All right, let us go back. Let us see if we can gain some multiparty consensus.” The last thing that our farmers need is instability around the emissions trading scheme.

JEANETTE FITZSIMONS (Green): I will begin by just briefly awhi-ing the Māori Party, which is a membership-based, grassroots party like the Greens. We know what that means. We know that it leads to some difficult internal decisions. We know what it is going through at the moment. The Māori Party members should not withdraw their votes because Labour has asked them to, and they should not withdraw their votes because the Green Party has asked them to; they should listen to their members and do what their members are asking them to do, because that is who they are accountable to.

I want mainly to talk now about what I think is the primary reason for the unease that is being caused to members of the Māori Party, to the Greens, and to most other people who oppose this legislation. It all comes down to the intensity basis for the allocation. That is what creates the huge inequities and the huge debts going forward into the future that this legislation creates. There has been a lot of talk about the phase-out rate of free allocation. Nobody seems to have twigged that under this legislation there is no phase-out. The 1.3 percent is a complete mirage. Any industry getting an allocation that grows by more than 1.3 percent a year gets no phase-out at all.

Let us look at the dairying industry for a moment. Dairying output has been growing by 4.4 percent a year recently. That is a huge rate of growth, and the National Government and Fonterra want it to go on for ever. I do not know where they will put the cows, I do not know what they will do about the rivers, etc., but the fact is that is its output growth, and the free allocation depends on output. So we will get a 4.4 percent increase each year in the basis for the allocation, then a 1.3 percent decrease, leaving—if my school maths serves me well—a 3.1 percent increase in free allocation to the dairy industry every year. There is no phase-out. If Comalco manages to increase its production by more than 1.3 percent a year, it gets no phase-out, either. If Methanex manages to ramp right up to full production in two plants, it gets a massive increase, as well. The free allocation goes on, then, for ever.

The key difficulty with it is not what happens in the next few years. It is not about how much we might help people with sunk investment in existing plant transition to a new world. What it means, though, is that new investment decisions—people building new plants that will be trade-exposed, or existing plants significantly expanding in the trade-exposed area—will not take the price of carbon into account in making those investment decisions. Investors who are looking at a choice between a low carbon investment and a high carbon emissions investment will have no encouragement at all to take the low carbon investment, because the intensity-based allocation says “You go for it, and the taxpayer will cover 90 percent of your increase in emissions, virtually for ever.”

The other thing the intensity allocation does is it takes away what limited cap there was in the existing legislation. We had some argument previously between the Minister for Climate Change Issues and David Parker about whether there was a cap in the existing Parker legislation. In a sense there was, and in a sense there was not. The Act that is law now has no cap on emissions. Emissions can continue to grow, but at the full cost of carbon. What it does cap is free allocations, and that is what creates the full cost of carbon for growth in emissions. But that cap on allocation is taken away in this legislation, so in this bill neither emissions nor free allocations are capped. There is no sense at all in which it could be called a “cap and trade” scheme.

Let us go back to the fisheries management system of individual transferable quotas, which is often held up as the ideal “cap and trade’” system. Imagine a fisheries system with no total allowable catch: fishers had quotas and could trade them, but there was no total allowable catch. That is how stupid this is.

Hon SHANE JONES (Labour): Kia ora anō tātou e te whanau. Tēnā koe e te Heamana. There is a famous story in Te Ao Māori. It is about a kahawai—not unlike the Māori Party—and a great white shark. The great white shark said to the kahawai: “Let’s learn to live together. Let’s swim in a common current, and get the feel of the environment.” So the kahawai joined the shark, and they were swimming, cavorting, etc. But the shark got tired of that and said “Let’s get even closer.” The kahawai came closer, and said “How close?”. The shark went “Gulp!” and said “That close!”. This is the day the great white shark consumed the Māori minnow.

As the Māori Party minnow disappears down the long throat of the great white shark, we can hear the shrieks of anguish from its membership. Some of those shrieks have been brought to our attention. Supporters are leaving the party as the real issues behind this legislation are becoming known by the wider public. This legislation could spell the end of the Māori Party. Actually, that happened when the Māori Party entered into a tawdry deal to reward the gentrified 1 percent of Māori with a foul settlement with a narrow group in the South Island, leaving the vast majority of Māori taxpayers to bear that burden for 40, 50, or 60 years. Does the member for Te Tai Tonga think she will not go the way of Tūtekawa Wyllie, who pulled a similar stunt, believing that he would save the interests of South Island Māori by going against the interests of wider Māori? He disappeared in 1999, never to be heard of again. That road lies before that member, because of this dreadful sell-out in this House.

Fortunately, the amplification of the Māori Party’s perfidy has captured the attention of the media. The supporters of Hone Harawira have now got hold of the guillotine he brought back from France, and they are applying it to the real culprits in this wretched affair—the leadership of the party, who have taken the proud name of Māoridom into this House and debased it. They have debased it through supporting this dangerous, anti-Māori, anti-public emissions trading legislation. That point needs to be made, because the burden for bearing the costs of this wretched scheme does not fall on the gentrified elite. It falls on the hard-working, garden-variety, living in “Struggler Gully”, Māori families who can ill afford to bear the burden of those expenses whilst at the same time finding dough for whānau ora, finding the money for hospitals, and finding the money for education, which has been slashed.

It is bizarre. The Māori Party is willing to acquiesce and bring this legislation into the House that is an embarrassment for our entire country internationally. It defeats and negates every single ethic of kaitiakitanga. How dare those members stand and use those proud Māori terms in this House, whilst their actions indicate that although the mouth might say something—kei ngā ngutu he kōrero engari, kei raro te rahurahu—every other element of their anatomy is doing the opposite. That is what we have seen today.

This is a very sad day not only for the country, and not only for taxpayers, because it is a reversion to the terrible days when taxpayers subsidised negative producers in the economy; this is the day when Māori voters realise they made an egregious error when they placed their trust in that party, which for a trivial amount of money, something like $25 million, has turned round and imposed $110 billion worth of bills on future generations. Why did those members think the proud legacy of Māori environmentalism, stewardship, and belief in future generations should be passed off for such a trivial, miniscule amount of money? Up and down the country people have viewed the emissions trading scheme as something that is largely international and hard to understand, but, boy, they smell betrayal and they recognise treachery when they see it. This bill, as a consequence of this new development, shows that that party has decided to be treacherous to the interests of their own people, to not stand for the legacy of Māori environmentalism, and to sell out their own people.

History must record that even if this bill does pass, it passes because of an act of deceit, an act that abrogates the very reason that Māori were sent to this House. They were not sent to this House so that the people who are ruining the environment can be paid to do so. They were not sent to this House to turn their backs on struggling families, struggling youth, and communities looking for a remedy to climate change. No, they were not sent here to do that, but that is what we see today.

It is a sad development that the Treaty of Waitangi settlement process has been held to ransom and actually lacerated as a consequence of this legislation. When society invests goodwill and trust into the process of settling historical grievances, it wants the nation to move on from that epoch and for all of us to be able to absorb and stand in the face of our international competitors as equally patriotic. Why should the Māori Party go around listening to the mischief-making lawyers and their deluded, gentrified Māori clients—a very narrow band, who have no concern whatever for the majority of Māoridom, and are concerned only for their own specific agenda? They have ruined Māori credentials of a patriotic nature. When we stand as Māori with our fellows, whether they are Pākehā, Asian, or whatever their ethnicity, we should all face equally the obligations of meeting our international duties, and we should not use the Treaty of Waitangi to deepen and feed the mentality of victimhood and grievance.

The whole theory and the spirit underlying the Treaty settlement process is for Aotearoa to move on, but National was keen to open that wound again. It was keen to use simple trinkets, hiriwa, pieces of gold and silver miniscule in form, to open up the prospect that there can never ever be full and final settlements. Whenever a Government feels that it is expedient to go back and open up those historical wounds, it will do it. National does this to the shame of Doug Graham and to the shame of Jim Bolger, who took heroic steps. They never lied to Ngāi Tahu; this nonsense that there was a great conspiracy to devalue their settlement, to defraud them of their assets, etc., is absolute rubbish. Dr Cullen himself hired an eminent Queen’s Counsel, and not a skerrick of evidence was found that that level of larceny or villainy might have taken place. Doug Graham was a proud and honourable man, unlike members on that side of the House who on this particular issue use grievances as a crutch, deepening the grievance mentality that keeps the Māori Party alive.

Craig Foss: I raise a point of order, Mr Chairperson. The member is in full flight, but he did question whether members across the House were honourable, and I take offence at that.

Hon SHANE JONES: I used the context of this issue. However, I am pleased—no drama—to withdraw and apologise. The point is taken.

Not only is the Māori Party membership abandoning the Māori Party because it does not listen to its members; unfortunately for its leadership, its only member of Parliament who at this stage is listening to the membership is the person it is trying to sack. But no doubt he will be back. I predict that if that party survives, that man will take it over. Then we will see. [Interruption] We are hearing profane emissions from the descendant of Ngāi Tahu over there, but that is another matter. I will leave Mr Harawira and the Māori Party to the side, and I will come back to the bill.

The emissions trading legislation, in the unlikely event that it does pass, will not stand the test of time. It will be taken internationally as a watered-down, hackneyed version of something that could have been created had there been a grand coalition. Our colleagues made multiple entreaties. They were rejected at every particular point in the process. That is why this legislation not only is bad for the Treaty of Waitangi, not only is bad for Māori, but, in particular, is fatal for the Māori Party and the sell-outs from National.

Hon DARREN HUGHES (Labour): I seek leave to table this document, which states: “to avoid taking decisions and approaches that lead to division and disharmony within the organisation;” The document is the Māori Party constitution.

The CHAIRPERSON (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is objection.

Hon RODNEY HIDE (Leader—ACT): Once again I find myself in complete agreement with the Hon Shane Jones. Maybe I will not use his great oratory to reinforce the point, but I say that what we have here is good Government making atrocious policy and also following an atrocious process. I just want to pick up the point that the Hon Shane Jones made, which I think is a very serious one for this Parliament to consider—that is, the Government, by this decision in this Parliament, is saying that there is now no such thing as a full and final settlement. This bill is saying that any settlement can be reopened and relitigated, if the Government ever makes a decision that might somehow have a cost on an iwi that has had a settlement. Everyone knows that there was no underhand business in the settlement of the Ngāi Tahu deal, but back then we never knew we would have an emissions trading scheme. God knows we never thought the country would be so stupid! But there we go. This means that if any Parliament makes a decision about the Resource Management Act, or anything like that with an impact on an iwi that has had a settlement, then suddenly the iwi will come back to Parliament, there will have to be some cash go across to it, and there will have to be some resources go across to it, because presumably the Government says there is no such thing as a full and final settlement. That is one of the real tragedies of what we have seen here today.

I think we all know in this Committee that that is not true. We know that the Government is not doing this because of the principles of the Treaty; it is doing it because it needs five votes. The Government has gone across to the Māori Party and asked what is necessary to get its support through all stages of this bill. That has meant that they have had to construct the idea that somehow a Treaty settlement has been breached, when in fact it has in no way been breached. That is not me saying that; that is Crown law saying that. So this is simple pork-barrel politics, which means that we have bad policy and bad process.

There has also been a transfer of wealth to a particular iwi. Pre-1990 forest owners have not been treated in the same way, so the settlement is actually for just five iwi. Māori owned a lot of forests pre-1990, but unless those Māori are part of the five iwi they will completely miss out, like everyone else. So it is not particularly a race issue. It is not about Māori benefiting to the exclusion of Pākehā; it is actually about five iwi benefiting to the exclusion of all other Māori, and of all other New Zealanders. We have a policy there that is not about affirmative action for Māori or anything, or a special case for Māori; it is a special case for just five iwi, and it is saying that all the other iwi can go to hell. It is saying that all the other forest owners can go to hell—they will not get a deal.

We also have National agreeing to take its emissions trading scheme and insert into it the principles of the Treaty of Waitangi. I ask members to ask themselves what on earth the principles of the Treaty can inform us about climate change. Nothing, actually—nothing! And National knows it. Why does National know it? Because in 2005 National pointed out that we could not have the principles of the Treaty in education legislation, or in resource management legislation, because what on earth was it informing decision makers about? It was nothing, because the principles had not been defined. We do not know what that means; its vague and woolly thinking is setting us up for endless litigation.

So we now have a poorly constructed emissions trading scheme that has been hacked around in the select committee, with businesses trying to make it somehow palatable by having a pound of flesh taken off everyone equally. Then the scheme has been hacked around to get the support of five iwi, so that they benefit but no other iwi in the country does. On top of that, we have inserted the principles of the Treaty of Waitangi.

No one in the National Government is prepared to stand up and say what those principles are, and to put them on the record so we know what this amendment is all about. I would quite like a member from the Māori Party to take a call to say what the principles are. I am looking at my friend the Hon Parekura Horomia, and I am asking him how many principles there are. Are there three, are there five, or are there 10? Let us say there are 10. We need to stand up and say: “Here are the 10 principles of the Treaty, and here is what that means for climate change policy.” That is what I would like to hear.

Why could we not just have a clause that states: “to give effect to the Treaty”? That was what was signed. Actually, I would vote for that, because the Treaty is about citizens being equal in New Zealand, it is about respecting every New Zealander’s property rights, Māori included, and it is about having one Sovereign—not a bunch of five iwi who can run the Government ragged because they can somehow determine five votes in this Parliament. That is what the Treaty is about. Why do we not put in “Let us have regard to the Treaty”, not some airy-fairy principles that can never be defined? The National Party knows that. Why? In 2005 it was National’s campaign promise. But if we jump ahead 4 years, we see that not only is National not ridding us of the principles of the Treaty in all the legislation on the statute book but it is reinserting it into legislation on the emissions trading scheme. So I say that we have atrocious policy, we have an atrocious process, and we have a process that is empowering and enriching five iwi to the exclusion of other Māori.

What else do we find? Not surprisingly, when we go to the Stuff web page we find that the Māori Party’s ruling council is in revolt. We do not know even now whether the Māori Party will finally vote for this legislation, because members of its council are saying publicly that the Māori Party should not do so. I ask the Government why it does not take this legislation, with its amendments, and send it to a select committee for public scrutiny, and for parliamentary scrutiny, so that all Māori can see what it says—not just the five iwi but all Māori—and, more particularly, so that every New Zealander can look at it, and every member of Parliament can have the debate, so that we do not have a decision that was hatched between the Māori Party, the five iwi, and this Government 18 minutes before it was made public and the day before it was being passed into law. In God’s name, how can that be good lawmaking process? It cannot be. It is a disgrace.

CHRIS TREMAIN (Senior Whip—National): I move, That the question be now put.

TE URUROA FLAVELL (Māori Party—Waiariki): Kia ora tātou katoa. I will respond to some of the issues that have been put before the Committee this afternoon. I happily sat and listened to some of the comments. The first thing I would like to do is thank Shane Jones for issuing a press release on behalf of the Māori Party this afternoon. Unfortunately, he got his facts wrong.

Hon Shane Jones: I raise a point of order, Mr Chairperson. I want this Committee to know that I have not been releasing press releases. Hone Harawira has been doing that himself.

The CHAIRPERSON (Lindsay Tisch): That is not a point of order; that is a debating point.

Hon Rodney Hide: I raise a point of order, Mr Chairperson. I think it is important not to show that there is any confusion about this process. It is morning.

The CHAIRPERSON (Lindsay Tisch): I understand the comments at this hour of the debate.

TE URUROA FLAVELL: I confirm that the Māori Party will stay with its stand, and that there is no discussion on the part of the national council in respect of the Climate Change Response (Moderated Emissions Trading) Amendment Bill today. The second thing I will say is that I have found some of the comments made today a little bit sad, in the sense that Mr Hide all of a sudden has a view about the Treaty that has been raised by the Māori Party for the last 4 to 5 years on the issue of its principles. In fact, I spoke about them last night, so I will not go back and reiterate those comments. They concerned cases from the Court of Appeal and the Waitangi Tribunal, which are there for anyone to read. They are a good starting point in respect of how to move forward.

The third thing I want to say is that the Māori leadership group has been hung out in the public forum as being a select few. I am not going to debate that; suffice it to say I was at Hopuhopu when a large number of the tribes came together to provide a working party to give a view in respect of the emissions trading scheme. I cannot remember whether Mr Jones was present, but they put forward a view, and they represent, for better or for worse, a large number of people. The fourth point I want to make is that getting lessons from the Labour Party about Māori Party members going back to speak to their leadership is, I think, a little bit rich. Members should bear in mind that, about 3 or 4 years ago, there was a particular bill before the House, and a large number of people made their views clear in terms of what they thought of it at that time. Did some people listen to that? No, they did not—they did not, actually. So we have that to think about.

CRAIG FOSS (National—Tukituki): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Motion agreed to.

The question was put that the following amendments in the name of Rahui Katene to the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to add to new section 2B in new clause 5 the following subsection:

“(4) Before recommending the making of an Order in Council under section 2A(8) or (9), the Minister must consult, or be satisfied that the chief executive has consulted, persons (or their representatives) that appear to the Minister or the chief executive likely to have an interest in the order.”; and

to insert the following new clause:

5B New section 3A inserted

The following section is inserted after section 3:

“3A Treaty of Waitangi (Te Tiriti o Waitangi)

In order to recognise and respect the Crown’s responsibility to give effect to the principles of the Treaty of Waitangi,—

“(a) with respect to section 2B (which relates to Orders in Council in relation to Part 5 of Schedule 3), before recommending the making of an Order in Council under section 2A(8) or (9), the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the order:

“(b) with respect to section 76 (which relates to consultation on a pre-1990 forest land allocation plan), before making a recommendation under section 73, the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the pre-1990 forest land allocation plan:

“(c) with respect to section 77 (which relates to consultation on a fishing allocation plan), before making a recommendation under section 75, the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the fishing allocation plan:

“(d) with respect to section 161 (which relates to the appointment and conduct of a review panel),—

“(i) the Minister must, when appointing members to a review panel under section 160(6), ensure that the review panel has at least 1 member who, in the Minister’s opinion, has the appropriate knowledge, skill, and experience relating to the principles of the Treaty of Waitangi and tikanga Māori to conduct the review; and

“(ii) the review panel must consult with the representatives of iwi and Māori that appear to the panel likely to have an interest in the review; and

“(iii) the terms of reference for the review panel must incorporate reference to the principles of the Treaty of Waitangi:

“(e) with respect to section 161G (which relates to regulation-making powers in relation to eligible agricultural activities), before recommending the making of a regulation under section 161G(1), the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulation:

“(f) with respect to section 162 (which relates to regulations adding further activity to Part 2 of Schedule 4), before recommending the making of a regulation under section 162(1), the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulation:

“(g) with respect to section 163 (which relates to regulations relating to methodologies and verifiers), before recommending the making of a regulation under section 163(1), the Minster must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulation:

“(h) with respect to section 164 (which relates to regulations relating to unique emissions factors), before recommending the making of a regulation under section 164, the Minster must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulation:

“(i) with respect to section 224 (which relates to the gazetting of targets), before the Minister responsible for the administration of this Act may set, amend, or revoke a target, the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the target:

“(j) with respect to section 225 (which relates to regulations relating to targets), before recommending the making of a regulation under section 225(1), the Minister must consult, or be satisfied that the chief executive has consulted, representatives of iwi and Māori that appear to the Minister or chief executive likely to have an interest in the regulation.”

Amendments to the amendment agreed to.

The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to insert before the definition of animal welfare export certificate the following definition:

“1990 baseline means the level of New Zealand emissions in 1990”;

to insert after the definition of animal welfare export certificate the following definition:

“Committee means the Climate Change Advisory Committee established by section 245”;

to insert after the definition of Crown holding account the following definitions:

“emissions for which New Zealand is responsible, in relation to a period, means net New Zealand emissions reduced by the quantity of Kyoto Units retired during that period

“intermediate target means a target set for the level emissions for which New Zealand is responsible for a target period under section 225

“New Zealand emissions means emissions of greenhouse gases from sources in New Zealand

“New Zealand removals means removals of greenhouse gases from the atmosphere due to land use, land-use change or forestry activities in New Zealand

“net New Zealand emissions in respect of a period means the amount of New Zealand emissions in the period reduced by the amount of New Zealand removals in the period”; and

to insert after the definition of solid biofuel the following definitions:

“target for 2050 means the target set for the level emissions for which New Zealand is responsible in 2050 in section 224

“target period means each succeeding period of five years beginning with the period 2013-2017”.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendments to the amendment not agreed to.

The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 82(1) the formula “” and substitute the following formula:

; and

to insert after the definition of “OSY” in new section 82(1) the following definitions:

EB is the total emissions produced by eligible industrial activities in the baseline year of 2005

ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the specified year, as determined in accordance with regulations made under this Act.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendments to the amendments not agreed to.

The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 82(1) the definition of “LA” and substitute the following definition:

LA is the level of assistance for the activity for the specified year, being,—

(a) for a moderately emissions-intensive eligible industrial activity,—

(i) 0.6 in 2010, 2011, and 2012; and

(ii) in each year after 2012 and before 2030, the level of assistance from the previous year less 0.033 (the phase-out rate for a moderately emissions-intensive eligible industrial activity) (expressed to 2 decimal places):

(b) for a highly emissions-intensive eligible industrial activity,—

(i) 0.9 in 2010, 2011, and 2012; and

(ii) in each year after 2012 and before 2030, the level of assistance from the previous year less 0.05 (the phase-out rate for a highly emissions-intensive eligible industrial activity) (expressed to 2 decimal places).

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment to the amendments not agreed to.

The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 84(1) the formula “” and substitute the following formula:

; and

to insert after the definition of “OSY” in new section 84(1) the following definitions:

EB is the total emissions produced by eligible industrial activities in the baseline year of 2005

ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the following year, as determined in accordance with regulations made under this Act.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendments to the amendments not agreed to.

The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 85A(2) the definition of “LA” and substitute the following definition:

LA is the level of assistance for the activity for the specified year, being,—

(a) for a moderately emissions-intensive eligible industrial activity,—

(i) 0.6 in 2010, 2011, and 2012; and

(ii) in each year after 2012 and before 2030, the level of assistance from the previous year less 0.033 (the phase-out rate for a moderately emissions-intensive eligible industrial activity) (expressed to 2 decimal places):

(b) for a highly emissions-intensive eligible industrial activity,—

(i) 0.9 in 2010, 2011, and 2012; and

(ii) in each year after 2012 and before 2030, the level of assistance from the previous year less 0.05 (the phase-out rate for a highly emissions-intensive eligible industrial activity) (expressed to 2 decimal places).

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment to the amendments not agreed to.

The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 85A(2) the formula “” and substitute the following formula:

; and

to insert after the definition of “OSY” in new section 85A(2) the following definitions:

EB is the total emissions produced by eligible industrial activities in the baseline year of 2005

ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the following year, as determined in accordance with regulations made under this Act.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendments to the amendments not agreed to.

The question was put that the following amendment in the name of Charles Chauvel to the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 86(2) the formula “” and substitute the following formula:

; and

to insert after the definition of “OSY” in new section 86(2) the following definitions:

EB is the total emissions produced by eligible industrial activities in the baseline year of 2005

ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the following year, as determined in accordance with regulations made under this Act.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendments to the amendments not agreed to.

The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 86(2) the definition of “LA” and substitute the following definition:

LA is the level of assistance for the activity for the specified year, being,—

(a) 0.9 in 2013; and

(b) in each year after 2013 and before 2030, the level of assistance from the previous year less 0.053 (the phase-out rate for an eligible agricultural activity) (expressed to 2 decimal places).

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment to the amendments not agreed to.

The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 160(3)(a)(ii) “5” and substitute “3”; and

to omit new section 160(4).

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendments to the amendments not agreed to.

The question was put that the following amendment in the name of Dr Kennedy Graham to the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to clauses 43 to 49 be agreed to:

to omit new section 188(1)(c)(i) in new clause 46 and substitute the following subparagraph:

“(ii) the post-1989 forest land in respect of which the application is submitted contains no areas with significant numbers of tree species that are identified as a pest or unwanted organism under the Biosecurity Act 1993.”

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment to the amendment not agreed to.

The question was put that the following amendment in the name of Charles Chauvel to the amendments set on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit new section 222A.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment to the amendments not agreed to.

The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit new section 222B.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment to the amendments not agreed to.

The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 222C(2)(a)(ii) “$25” and substitute “$100”;

to omit from new section 222C(2)(a)(iii)(B) “$25” and substitute “$100”; and

to omit from new section 222C(2)(b)(ii) “$25” and substitute “$100”.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendments to the amendments not agreed to.

The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to”

to omit from new section 222D(1) “$25” and substitute “$100”;

to omit from new section 222D(1)(a) “$25” and substitute “$100”;

to omit from new section 222D(2) “$25” and substitute “$100”;

to omit from new section 222D(3) “$25” and substitute “$100”; and

to omit from new section 222D(3)(a) “$25” and substitute “$100”.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendments to the amendments not agreed to.

The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit from new section 222F(b) “4” and substitute “2”; and

to omit new section 222F(d).

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendments to the amendments not agreed to.

The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to insert the following new section:

“222GA Transitional provisions regarding prohibition on banking of New Zealand Units

“(1) Despite anything in this Act, no New Zealand Unit issued in the period 1 July 2010 to 31 December 2012 may be surrendered after 31 December 2012.

“(2) Despite anything in this Act, the Registrar must not convert any new Zealand unit issued in the period 1 July 2010 to 31 December 2012 into a designated assigned amount unit for the purposes of transferring that assigned amount unit to an account in an overseas registry.

“(3) The Registrar must not transfer to an account in an overseas registry under section 18C any New Zealand unit issued in the period 1 July 2010 to 31 December 2012.

“(4) This section does not apply to New Zealand units—

“(a) received in respect of removals for an activity in Part 1 of Schedule 4; or

“(b) transferred following a determination of the Minister under sections 78 or 79 in accordance with an allocation plan providing for the matters in section 73.”

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment to the amendments not agreed to.

The question was put that the following amendment in the name of Hon David Parker to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to omit new sections 222C and 222D.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment to the amendments not agreed to.

The question was put that the following amendment in the name of Hon David Parker to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to:

to add to new section 222C the following subsection:

“(5) That before the 2 for 1 emissions discount for electricity emissions is allowed, the emitter must prove to the satisfaction of the Commerce Commission that but for the 2 for 1 discount, electricity prices would have been higher.”

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment to the amendments not agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to.

A party vote was called for on the question, That the amendments as amended be agreed to.

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Amendments as amended agreed to.

The question was put that the amendment set out on Supplementary Order Paper 90 in the name of Dr Russel Norman to insert new clause 10A be agreed to.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to insert new clauses 11A to 11D be agreed to.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

The CHAIRPERSON (Lindsay Tisch): We have an amendment to new section 70 in the name of Jeanette Fitzsimons as set out on Supplementary Order Paper 91. This is out of order as being inconsistent with a previous decision.

We now move to Charles Chauvel’s amendment to new section 70 as set out on Supplementary Order Paper 94. This is out of order as being inconsistent with a previous decision.

We move to Rahui Katene’s typescript amendment to new section 77(1). The question is that the motion be agreed to.

Hon David Parker: I raise a point of order, Mr Chairperson. Could we have clarification? Is that the Treaty of Waitangi clause? There is one of these provisions that we wish to vote in favour of but others that we oppose.

The CHAIRPERSON (Lindsay Tisch): I think you need to talk to your whips about which ones they are. The whips have them. We are now voting on Rahui Katene’s typescript amendment to section 77(1). I will hold the vote so that the member can look specifically at what the issue is. This is section 77(1). We are dealing with clause 22, new section 77(1), and the amendment is on page 3. Are we all happy with that?

The question was put that the following amendment in the name of Rahui Katene to clause 22 be agreed to:

to omit new section 77(1) and substitute the following subsection:

“(1) Before making a recommendation under section 75(1), the Minister must—

“(a) prepare a draft fishing allocation plan; and

“(b) consult, or be satisfied that the chief executive has consulted, persons (or their representatives) that appear to the Minister or the chief executive likely to have an interest in the fishing allocation plan.”

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

Ayes 116

New Zealand National 58; New Zealand Labour 43; Green Party 9; Māori Party 4; Progressive 1; United Future 1.

Noes 5

ACT New Zealand 5.

Amendment agreed to.

The CHAIRPERSON (Hon Rick Barker): The amendment set out on Supplementary Order Paper 97 in the name of Charles Chauvel to insert a new section 86A in clause 22 is out of order as the Clerk has ruled it is outside the scope of the bill.

The amendment set out on Supplementary Order Paper 89 in the name of Russel Norman to clause 23 is ruled out of order as it is inconsistent with a previous decision of the Committee.

The question was put that the amendment set out on Supplementary Order Paper 97 in the name of Charles Chauvel to insert new clause 23A be agreed to.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

Result corrected after originally being announced as Ayes 53, Noes 69.

The question was put that the following amendment in the name of Charles Chauvel to clause 38 be agreed to:

to omit from new section 160(5)(g) “including (but not limited to) Australia’s carbon pollution reduction scheme”.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

Hon DARREN HUGHES (Senior Whip—Labour): I raise a point of order, Mr Chairperson. Could I just check with you, for the vote cast before the vote we have just dealt with, what the voting tally of the Māori Party was, as there is some understanding that five votes were cast but I understood that they were casting only four votes today.

The CHAIRPERSON (Hon Rick Barker): It is recorded that the Māori Party cast five votes on Mr Chauvel’s amendment on Supplementary Order Paper 97.

Hon DARREN HUGHES: The whip for the Māori Party might want to correct that figure, because the trouble is it might not be correct.

TE URUROA FLAVELL (Whip—Māori Party): I thank Darren Hughes. The Māori Party vote should have been recorded as four against. That number has been consistent throughout the morning.

The CHAIRPERSON (Hon Rick Barker): Is the member seeking leave to change the vote from five to four?

TE URUROA FLAVELL: I seek leave to have our vote changed accordingly.

The CHAIRPERSON (Hon Rick Barker): Leave is sought. Is there any objection to that course of action being followed? There is none. The vote is now amended and the Ayes recorded as 53 and the Noes as 68.

The question was put that the following amendment in the name of Rahui Katene to clause 38 be agreed to:

to insert in new section 161(5) the following paragraph:

“(ab) must consult persons (or their representatives) that appear to the panel likely to have an interest in the review; and”.

Amendment agreed to.

The CHAIRPERSON (Hon Rick Barker): The amendment set out on Supplementary Order Paper 92 in the name of Dr Kennedy Graham to new section 160 in clause 38 is ruled out of order as being inconsistent with a previous decision.

The amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to new sections 160 and 161 in clause 38 is ruled out of order as being inconsistent with a previous decision.

The amendments in the name of Charles Chauvel to amend subsection (2), omit subsections (6) to (8), amend subsection (9), and add new subsection (10) in new section 161A in clause 38 are ruled out of order as being inconsistent with a previous decision of the Committee.

The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to insert new clause 41A be agreed to.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to insert new clause 41B be agreed to.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

The CHAIRPERSON (Hon Rick Barker): On clause 44, Jeanette Fitzsimons’ amendments set out on Supplementary Order Paper 102 are out of order as they are inconsistent with a previous decision.

The question was put that the following amendment in the name of Charles Chauvel to clause 57 be agreed to:

to omit from new section 217(1)(d) “1 January 2015 to 31 December 2015” and substitute “1 January 2013 to 31 December 2013”.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

The CHAIRPERSON (Hon Rick Barker): Charles Chauvel has amendments to clause 61 set out Supplementary Order Paper 95. These are out of order as they are inconsistent with a previous decision.

The question was put that the following amendment in the name of Charles Chauvel to insert new clause 61A be agreed to:

to insert the following new clause:

61A Complementary Measures

The following new section is inserted after section 223:

“223C Complementary Measures

“(1) This section establishes a fund for the purpose of reducing greenhouse gas emissions through the promotion of complementary measures additional to the Emissions Trading Scheme (the Complementary Measures Fund).

“(2) The annual appropriation for the Fund shall be at least:

“(a) 20,000,000 New Zealand Dollars per year; or

“(b) 10 percent of all revenues accruing from the Emissions Trading Scheme

whichever is the greater.

“(3) The Complementary Measures Fund may be used for purposes that included (but are not limited to) the delivery, marketing and promotion of, and provision of grants or loans relating to—

“(a) incentives for households to improve energy efficiency; or

“(b) incentives for businesses developing renewable energy projects; or

“(c) incentives to replace energy inefficient home appliances with energy efficient ones; or

“(d) incentives to purchase fuel efficient, low emission vehicles; or

“(e) investment funding to help quickly commercialise new lower-emission technology invented in New Zealand; or

“(f) assistance to sell New Zealand emissions reduction technology to other countries.

“(4) The Minister—

“(a) must, as soon as practicable after this section comes into force, determine the criteria for the use of the Complementary Measures Fund; and

“(b) may re-determine the criteria at any time.

“(5) Before determining or re-determining the criteria for the use of the Complementary Measures Fund, the Minister must seek and consider the advice of the Energy Efficiency and Conservation Authority.

“(6) When advising the Minister on the criteria for the use of the Complementary Measures Fund, the Energy Efficiency and Conservation Authority must have regard to—

“(a) the degree to which any measure will reduce New Zealand’s long-term emissions pathway, including by encouraging broad technological change; and

“(b) the cost-effectiveness of expenditure from the Complementary Measures Fund in relation to the purpose of the Complementary Measures Fund; and

“(c) any other matters that the Authority considers relevant.

“(7) The Energy Efficiency and Conservation Authority must manage and administer the Complementary Measures Fund in accordance with the criteria determined by the Minister.”

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to omit clauses 62 and 63 and substitute new clause 62 be agreed to.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

The question was put that the following amendment in the name of Rahui Katene to insert new clause 62A be agreed to:

to insert the following new clause:

62A Gazetting of targets

Section 224 is amended by inserting the following subsection after subsection (2):

“(2A) Before the Minister sets, amends, or revokes a target, the Minister must consult, or be satisfied that the chief executive has consulted, persons (or their representatives) that appear to the Minister or the chief executive likely to have an interest in the target.”

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

Ayes 72

New Zealand National 58; Green Party 9; Māori Party 4; United Future 1.

Noes 49

New Zealand Labour 43; ACT New Zealand 5; Progressive 1.

Amendment agreed to.

The question was put that the following amendment in the name of Rahui Katene to clause 63 be agreed to:

to insert in new section 225 the following subsection:

“(1A) Before recommending the making of an Order in Council under subsection (1), the Minister must consult, or be satisfied that the chief executive has consulted, persons (or their representatives) that appear to the Minister or the chief executive likely to have an interest in the order.”

Amendment agreed to.

The question was put that the following amendment in the name of Hon David Parker to clause 63 be agreed to:

to add the following section:

“226 Compensation to pre-1990 Forest Owners

“(1) No additional compensation will be accorded to any pre-1990 forest landowner on the basis that the land was transferred to the owner under a Treaty settlement unless it is proven that the Crown made misrepresentations or withheld material information about emissions pricing at the time of settlement.”

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

Ayes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Noes 63

New Zealand National 58; Māori Party 4; United Future 1.

Amendment not agreed to.

The question was put that the following amendment in the name of Hon David Parker to clause 63 be agreed to:

to add the following section:

“226 Nitrous Oxide

“(1) Notwithstanding any other provision in this legislation, nitrous oxide emissions from agriculture will be included in the scheme from 1 January 2013 with free allocation based on 90% of 2005 emissions.

“(2) All revenue collected under subsection (1) between 1 January 2013 and December 2014 shall be used to subsidise the use of nitrification inhibitors.”

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

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

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Part 1 as amended agreed to.

Part 2 Consequential amendments

CHARLES CHAUVEL (Labour): I understand that there is going to be a wide-ranging debate on the title and commencement of the legislation, and that it is unlikely that calls will be taken on this part. I just wanted to advise the Committee of that understanding.

The CHAIRPERSON (Hon Rick Barker): If there is no further debate on Part 2 we will move to the amendments.

Hon Steve Chadwick: Do we vote on Part 2?

The CHAIRPERSON (Hon Rick Barker): Yes. I am moving to the amendments. That is why I said to the Committee that we are now moving to the amendments, which means we will have a vote. Unusual for the House, I know, but brace yourselves, members.

The question was put that the amendment set out on Supplementary Order Paper 98 in the name of Hon Dr Nick Smith to Part 2 be agreed to.

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

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Amendment agreed to.

The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to add new clause 67 be agreed to.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

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

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Part 2 as amended agreed to.

New schedule

The question was put that the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to add a new schedule be agreed to.

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

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

New schedule agreed to.

Clauses 1 to 3

Hon DAVID PARKER (Labour): It gives me no pleasure to rise after we have just voted through those terrible amendments to the emissions trading scheme. Effectively, they have rendered largely ineffective New Zealand’s main response to our growing emissions.

Hon Steve Chadwick: A sad day.

Hon DAVID PARKER: It is a terribly sad day. The effect of that decision on future generations is that our children and their children will have visited upon them many billions of dollars, and emissions will grow more than they would otherwise have done. I think it is timely to record the fact that if a country like New Zealand, with our comparative wealth—we are one of the richest countries in the world on a world scale; we are not as rich as Australia, but we are still very wealthy—with our good environmental ethic, which is not held by the National Party or the Māori Party but generally held by most New Zealanders, who think we should do our bit for the environment; with the benefit of the rule of law; and with our wonderful scientists and our understanding of these things, cannot do this right, what hope is there that the world will do it right in time? What hope is there that the world will get on top of these problems in time for them not to be catastrophic? I am not a man of hyperbole—I do not use the word “catastrophic” often in this Chamber—but scientists warn us that if the world does not reduce its emissions very soon, then the climate change effects will see millions of people displaced by rising sea levels, changing patterns of food production caused by drought, and, conversely, terrible storm events, meaning that millions of people will not have enough food to eat, and that thousands of species that currently exist on our planet will be lost. I think that is very sad.

I will move on to why I disagree with something that the ACT Party contributed at the end of the last part of the debate on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. An ACT member said that we had to protect property rights. That member was saying what Business New Zealand said in its submission to the Finance and Expenditure Committee, which was that there is a property right to pollute. I might not agree with much that the Minister in the chair, Dr Nick Smith, has done on this amendment bill, but I hope that he agrees that there is no property right to pollute. We have to stand down that notion in this country. There is no property right to pollute—whether it be the right to pollute a river; whether it be the right to pollute with ozone gases, destroying the ozone layer; or whether it be the right to put lead in petrol because it was cheaper for oil companies. There was no property right to do that. There is no property right to pollute in any area.

It is not a private property right to pollute. That is where the business lobby has made a fundamental error in its logic. I correct myself: not all of the business lobby is wrong, but the Business New Zealand business lobby is fundamentally wrong. I think it is such a lazy error; it is so patently wrong. There is no property right to pollute. We did not have to compensate oil companies when we took lead out of petrol. We did not have to compensate refrigeration companies when we took out ozone-damaging substances from their refrigerants. We do not have to compensate farmers when they are told not to pollute rivers. We did not have to compensate councils when we stopped them pouring raw sewage into harbours. We did not have to compensate factories when they stopped polluting rivers with the freezing works blood and guts that they used to just dump in them. We do not have to compensate businesses to do what this country and the world needs to be done when it comes to reducing carbon emissions into the atmosphere.

This principle needs to be reiterated. I ask the Minister in the chair to state clearly that he disagrees with Business New Zealand, and that he disagrees with the ACT Party’s notion that there is a property right to pollute. That is what lies behind the right-wing agenda of those who say that we should protect property rights in this bill. That is what they mean. They say it should protect their property right to pollute. I disagree with that in principle, but even if Dr Smith disagrees with it in principle, he is doing it in practice with this bill.

Some of the amendments that I have put up change the name of this bill to more properly reflect what it is. It could be the “Greenhouse Gas Emissions (Property Rights Creation) Bill”. It creates that property right. It entrenches those rights to create, and persist in creating, carbon pollution well past 2050. In fact, the emission abatement curve is so slow that it does not abate fully for 80 years. We will all be dead and gone. Actually, most of our children will be dead and gone by the time the free emissions rights completely abate under this bill. It effectively creates such a long period of tradability of that pollution right that one could not but say that in practice it creates a property right to pollute.

In doing so, we know that it increases Government debt. It increases Government debt because the free emissions rights that are given to major emitters long after they had a fair adjustment period are so enormous that Government gives away an extra $50 billion worth of emissions right. We can argue with the Minister as to whether it is proper to include the interest on that increased Government debt, as Treasury did, to get the figure of a $110 billion increase in Government debt, but there is no doubt that it substantially increases Government debt. So an alternative name is the “Climate Change Response (Increased Government Debt) Amendment Bill”.

At question time yesterday the Minister wriggled and wriggled and tried not to answer the question about Brian Fallow’s statement in the New Zealand Herald that the effect of this bill is to delay the date when New Zealand’s emissions peak, and to have a higher peak before they go down. We now know, on the record, that even the Minister agrees that the effect of this bill is to increase New Zealand’s emissions. So the “Climate Change Response (Increased Emissions) Amendment Bill” might be a more proper name for it. We could give various other names to the bill. The “Permanent Pollution Payments Entrenchment Bill” would be a fair name for this bill.

Members can choose between those names, but the sad effect of this bill is to severely undermine the environmental effectiveness of the scheme. It causes irresponsible fiscal cost to be put on the taxpayer and on future generations, who will have to repay that cost. It does nothing to improve New Zealand’s contribution to fixing this problem. Editorials up and down the country, commentators, Treasury, the Ministry of Economic Development, and the specialist adviser to the Finance and Expenditure Committee, Dr Suzi Kerr, all say the same thing. But according to the Government they are all wrong. Dr Smith is wrong. This bill is fatally flawed and it should not have the name that it masquerades under currently.

Hon Dr NICK SMITH (Minister for Climate Change Issues): The first thing I point out to Labour and Green members is that Labour was entrusted with this issue for 9 years, and in every one of those years emissions went up. They did not just go up; they went up by ever-increasing amounts. I will give members some of those areas. The first is with regard to the electricity sector. During the term of the previous Labour Government, emissions from the electricity sector increased threefold. We all accept that forests are an important part of the Climate Change Response (Moderated Emissions Trading) Amendment Bill, but the last 9 years were the worst since World War II in terms of deforestation. That is the first point I wish to make.

The second point I make is on whether I accept that business has a right to pollute. No, I do not. What is behind the changes to make the emissions trading scheme affordable and workable is a really difficult problem. We want to make progress on climate change in New Zealand—we do—but, equally, we do not want to implement policy in New Zealand that exports industries, jobs, and emissions offshore. All the analysis says—

Charles Chauvel: Show us the evidence!

Hon Dr NICK SMITH: I will show members the evidence. The report that was commissioned by the New Zealand Institute of Economic Research made plain that the approach of a production-based method was the best way in which to respond to climate change without simply increasing emissions offshore. I tell members opposite that they might feel good if the cement, steel, and aluminium industries in New Zealand closed down and those goods were manufactured in China or some other part of Asia, but it makes no practical difference to the environment, and it costs an awful lot of New Zealanders jobs. That is the dichotomy that we have been working through.

Mr Parker again used the figure of $110 billion. It is nonsense. I challenge David Cunliffe, Labour’s spokesperson on finance, on this basis. I tell members what sort of outcome there would be if we took the approach of adding every single year’s cost—and remember it is a loss of revenue, not a cost—and then adding the compound interest on the basis that we would have invested that lost revenue. Labour’s policy is to reinstate a research and development tax credit. That would result in a loss of income of $260 million per year. Most of us in the Chamber would say that that policy costs $260 million. But if the members applied the approach that they are taking to their criticisms of this bill, it would be correct to say that that research and development policy costs $43 billion—if we add it up each year and apply exactly the same approach. I challenge Phil Goff and David Cunliffe. If they are not going to be in the business of misleading New Zealanders on an issue as important as climate change, and they want to adopt that approach to the assessment of numbers, then they should be consistent. They should talk about their research and development policy costing $43 billion, installing a huge debt of $43 billion on our children, and increasing Government debt into the future by $43 billion. That is for a policy that in any one year would cost $260 million.

The further point I make is on the controversy over the phase-out rate. We campaigned on a policy and we said that we would phase out industry support in line with our major trading partners. Australia has chosen a rate of 1.3 percent; we have set that rate for a period of 5 years through till 2018. A large amount of the argument is about what occurs beyond 2018. This bill will reduce emissions over its first 10 years, according to the advice I have received, very little—about 10 million tonnes is the reduction in emissions that it will cause over that first 10 years of the scheme. I say to the members opposite that making a big deal about what that phase-out rate will be into the future is pretty slippery ground to stand on. Every member of this House knows that there will be negotiations in Copenhagen, that legislation is going through the United States Senate, that legislation is going through Australia, and, most important, that this bill will have a review in 2011, which is only 2 years away, and another review in 2016. Even if we take the shorter phase-in and start the phase-out period a little earlier, it is not until 2021 that there is any key difference in the approach. We all know that things will be reviewed and debated further down the track, so for this Committee to be ripping its guts out and for us to have all of these quite personal and derogatory statements around a debate that is as far out as that undermines a pretty broad consensus about the way forward.

Charles Chauvel: Why did you put it in?

Hon Dr NICK SMITH: Mr Chauvel asks why we would put the 1.3 percent rate in. We have said we will put 1.3 percent into the law. We will review it in 2011; we will review it again in 2016.

Charles Chauvel: How are businesses supposed to plan?

Hon Dr NICK SMITH: I say to the member Charles Chauvel that this is a key difference. Let us say where it is at. We are saying to business that the phase-out rate will be in line with our major trading partners. I have to say that I have given notice in many business speeches that if our major trading partners give a stronger phase-out than other countries, it is our intention to increase the phase-out rate. Equally, I have to say—

Charles Chauvel: Nonsense!

Hon Dr NICK SMITH: Charles says this policy is nonsense. I ask him to ring Senator Penny Wong, the Australian Minister in charge of their climate change legislation. Australia has exactly the same provision in its law—

Hon Darren Hughes: They don’t have a law!

Hon Dr NICK SMITH: Well, neither do we have a law yet. We will be a few days ahead of them. In my view, Mr Chauvel needs to get on the phone and make all the derogatory comments he has made of me to her. He will not, and that shows the duplicity.

Moana Mackey: Why? You’re the Minister in our country!

Hon Dr NICK SMITH: I say to Moana Mackey and Charles Chauvel that they may not have noticed, but climate change is a global issue, so what other countries are doing is relevant.

I have really enjoyed the Committee stage of this bill because we have been able to pop, one after another, the fragile balloons that Labour has put up as excuses for opposing this bill. I think those Labour members know in their heart of hearts that we are doing the right thing. I think they secretly admire the Māori Party because it was able to achieve what Labour could not—that is, a sensible agreement on the way forward on climate change.

The last point I make is that all the behaviour I see from Labour members is like that of a spurned bride. They get awfully bitter and twisted, and that is because—

Hon Darren Hughes: Have you looked in a mirror lately?

Hon Dr NICK SMITH: I have to say that we wanted to get an agreement with Labour. That was my first preference. Time got tight and—unlike my discussions with the Labour Party, which leaked all over the place—our discussions with the Māori Party were totally confidential. The key difference was that Labour assumed there was only one deal, and that it was with Labour.

Moana Mackey: No, we didn’t!

Hon Dr NICK SMITH: Labour did. After we did the deal with the Māori Party, we said that we had introduced the bill only to the select committee. We wanted to build as broad a consensus as possible for this legislation, and Labour walked out. This issue deserves better than that, and I again say to Mr Cunliffe and Labour members that my door is open any day, any week, and any month to do what we should always have done—that is, build a broader consensus of policy around this important issue for New Zealand and for the world.

Hon DAVID CUNLIFFE (Labour—New Lynn): I appreciate the opportunity to correct for the record some of the gross—I am trying to find a parliamentary word—untruths that have been contained in the comments of the Minister for Climate Change Issues, the Hon Dr Nick Smith, from the floor. I begin with the last one he made: that Labour somehow walked out of good-faith negotiations with the Government. Let me remind the public of what actually happened. The negotiations were proceeding well. We were down to three sticking points, and the major one was around the use or not of a global emissions cap. We had indicated that we would accept a variant of intensity-based emission charges, and that was a major concession for the Labour Opposition. The nature of our offer is set out on the public record in the Finance and Expenditure Committee report.

But something happened, and it was not the deal with the Māori Party; it was the Labour Party conference in Rotorua. That is relevant because a source close to the National Party has told us that the polling indicated that Labour support grew by 5 percent and our leader’s popularity grew by the same amount in that week. The pollsters said to John Key: “Thou shalt not allow a deal with the Labour Party on climate, lest they be seen as statesmen.” So the word went out to the Climate Change Iwi Leadership Group and the financial backers, few in number though they be, of the Māori Party. And Hone Harawira, who had opposed the previous bill because it did not go far enough, was reined in. It is ironic—it is silly—for the Minister to raise that in the Chamber because today that has come full circle.

This morning we heard from the media that the Māori Party council would be called together later today in an emergency meeting to discuss the issues and to raise their concerns about the costs on ordinary Māori. Māori Party sources calculate that Māori would have to pay $500 million to $1 billion a year through cutting services, increased taxes, or the sale of assets. On the other hand, under the deal with the Government five iwi would get $2 billion, but some in the Māori Party insist it does not offset the money all Māori will have to repay over 40 years, which they calculate at between $21 billion and $42 billion. We see full circle today the Māori Party being sacrificed on the altar of Business New Zealand and Fonterra.

That brings me to Fonterra, because word has reached me that Fonterra is none too happy because its deal implied an allocation being made in Australia for agriculture. Although the scheme in Australia is uncertain, I understand that agriculture is being left out, and there is no free allocation to the competitors of Fonterra across the Tasman. So there has been some late-night work in the Beehive to determine whether late amendments could be submitted or whether the Minister will use his discretionary powers under this bill to cut a subsequent deal for some of our largest industries over and above the shabby, tawdry deal that has been brought to this House already.

That brings me back to process. I do not need to be lectured by Nick Smith on financial rectitude, thank you very much, when that Minister has refused the public a right by withholding under the Official Information Act critical pieces of the analysis that go to the financial estimates around this bill, and when the Minister has officials who have, through no fault of their own, had to admit to the Finance and Expenditure Committee that they had not done sensitivity testing around the financial costs of this bill. They could not produce for the committee a range of scenarios and tell the committee the assumptions on which they were based. Treasury’s own regulatory impact assessment unit therefore had to conclude that the analytic base of this bill was insufficient for a matter of this importance. So we do not need to be lectured by National members on fiscal prudence. From now until the next election National members will never be able to look New Zealanders in the eye and say that they are the custodians of fiscal responsibility, because today they have sold our children, and their children, down the creek.

I do not need National members trotting out the old refrain of “You had 9 years; what did you do about it?”. They were 9 years of the longest post-war economic expansion in New Zealand’s history, years when we saw an enormous boom in the dairy sector, and forestry conversions came into that. But, of course, we recognised that the matter of putting an overall global cap on emissions was essential. It was because of the difficulty we experienced—and I give due credit to the former Minister responsible for Climate Change Issues, David Parker, who spoke so eloquently just a few moments ago—that we understand the difficulties of this problem. We have been there before. That is precisely why we know that a global cap is essential. It is precisely why we are very hesitant to embrace any form of intensity-based “control”. It is precisely why we know that industry will take everything that the Minister for Climate Change Issues has so generously given it in this deal, and then tomorrow he will wake up and it will want more—it will want more and more.

That is also why I want to acknowledge a PhD thesis by Dr Rick Boven, who is now the director of the New Zealand Institute. He is a very eminent economist. He modelled the political economy of climate change against the Intergovernmental Panel on Climate Change’s projections of global warming. He looked at the political economy of when democracies are likely to adjust. The problem is that 50 years after we limit emissions, the planet stops warming as a result of the emissions we let go a generation before. There is a real risk that if the planet warms by more than 2 or 3 degrees Celsius, we could set up self-reinforcing processes that mean that it is virtually impossible to stop global warming. The outcome of the econometric modelling by Dr Boven showed, essentially, that the planet is going to fry, and that fundamental disruption to human civilisation is likely, because of the 50-year lag time, combined with the reluctance of democratic governments to take the steps required to rein in industry. That means that our children face horrific consequences. They will look back on us, as David Parker so eloquently said, and they will ask us why we looked over the brink. Did we not know? Were we not informed? Did we not understand the problem of the lags? Were we not prepared to have the courage to look at the future and say “Now we must start to turn it round.”?

I am sad today for our children, because I know that they will face tougher decisions than those we have not faced up to in this Chamber today. It will not be just about climate, because the Government is making a habit of passing our hard problems on to our children. They will have the burden of superannuation to catch up on, because the Government has cancelled pre-funding so there will be fewer than half the taxpayers per retiree paying to catch up. [Interruption] I hear a member opposite ask why that is relevant to the bill. I will tell the member why. The Minister for Climate Change Issues has had the gall to say that the fiscal liabilities, the $50 billion to $110 billion in this bill, are not real money. Well, of course they are real money. They are an offset that could have been used in part to cover the costs of superannuation, or the costs of adaptation to catastrophic climate change, or the costs of educating our children how to live in a future that we would not dare live in, or the costs of sending them to some other planet because this one is ruined. So please do not tell us that somehow the $100 billion does not matter because we are not sending all of it to the United Nations. Of course we are not sending all of it to the United Nations. But it is a real liability, and it is a real offset that must be met against expenditure, or increases in taxes, or debt. It is not appropriate to ascribe to one piece of expenditure one item of revenue and square it off. It all goes in the same pot, and the write-offs go to the country’s largest polluters, the multinationals that own part of our energy sector, as well as the Crown—and the Crown ought to be ashamed. Those debits will come back to haunt our children.

I do not want to export jobs, but the Minister for Climate Change Issues has made no evidence available to the Finance and Expenditure Committee that that prospect is substantial; nor has any logic been demonstrated as to why, if it was a real issue, the bill has been designed as it is. Let me give several examples. If we wanted to stop exporting jobs, why would we not impose the carbon liabilities on the actual fishermen burning the fuel, or the actual farmers who could change their crops or their herds to a lower-emitting standard? Why would we not have a demonstrable logic related to carbon intensity between sectors?

METIRIA TUREI (Co-Leader—Green): In this debate today—and I know it is the title debate—I am wondering whether we should call this bill the “Brown Wash Bill”. Although I think the Māori Party has been engaging in “greenwash”, I suspect and will accuse the National Government of engaging in a “brown wash” over the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Like my colleagues, I have been very disappointed in the Māori Party’s support for this legislation, especially given that it is so contrary to the Māori Party’s original view in the Emissions Trading Scheme Review Committee. How it could shift its view so radically from one side to the other is very difficult to understand.

I am also disappointed in the Māori Party, at the way it has allowed the National Government to skew the public debate against Māori, against whānau and hapū, by its use of this legislation and the deal it has done with National. The justification for supporting this bill is supposedly that Māori have obtained some benefit as a result of the negotiations. Let us have a look at the bundle of supposed gains that Māori have made through the deal done by the Māori Party. None of them are new, and none of them are innovative.

The forestry deal, which has been such a major distraction, should have happened anyway. In fact, the Green Party was working with Ngāi Tahu last year on the same issue, to try to get some support from the previous Labour Government about dealing with this Treaty settlement question. It is a Treaty settlement issue around forestry; it is not an emissions trading scheme issue. It should have been resolved in any event. At some point this Government, like any Government, would have been required to deal with the issue, whether it was because of the threat of legal action or for whatever reason, but it has nothing to do with this business. It is neither new nor innovative.

The 6 months’ reprieve that Enviroschools have for their funding cut is meaningless. It gives the 210,000 schoolchildren who are involved in the Enviroschools programme no security at all. The Minister of Education has confessed that the programme will be reviewed in 6 months’ time, anyway. What is the point? Where is the gain for those 210,000 children if the programme gets 6 months’ reprieve? How could the Māori Party give over those children’s future and lumber them with a $24,000 debt for the rest of their lives, in exchange for 6 months of a school programme that should have continued, anyway.

Enviroschools is the one programme in this country that has had major success in teaching children not only numeracy and literacy, but also environmental sustainability, and the economics of that environmental sustainability. That programme deserves support, anyway. The Māori Party should have been supporting Enviroschools and the continued funding for it, not giving it a 6 months’ reprieve from the axe. Those children do not want to be lumbered with a $24,000 debt, in exchange for 6 months of the programme.

I turn to the little extra that has been provided for home insulation. We know that two-thirds of the people who are already accessing the home insulation fund—the Green Party home insulation fund, I must say—are community services card holders. We know that those low-income families are already getting access to the scheme. That $24 million is a good amount of money but in 4 years’ time who knows what will happen. There is no guarantee, at the end of the day, because 4 years is a very long time in politics. The Māori Party has nothing extra for the people today who need access to the home insulation fund, because they are already accessing it. There is no added benefit to the Māori community.

The Māori Party has promoted a Treaty clause in the legislation. The Greens will support a Treaty clause because we think it is good to have recognition of the Treaty in legislation. But let us be real about what this Treaty clause actually does. It is simply an arrangement between the Government and Māori business. If we look at it in detail it is a very complicated clause. It is very narrow in its approach, and essentially provides a means by which—it should happen, anyway—Māori leaders of iwi and Māori organisations, which are large business organisations, can talk to the Government about the things that they are doing. It is a consultation agreement, but that is all it is. It does nothing for hapū. The Treaty is about respecting whānau and hapū, and the Treaty clause does nothing to do that. I have an objection to even calling it a Treaty clause, quite frankly. It is a business agreement between the National Government and some Māori businesses. And as for sending negotiators to the Copenhagen Climate Change Conference, I mean please! We knew months ago that National was taking them. Everybody knew that National was taking them. There is nothing new. They have been given nothing.

Hon Darren Hughes: They are constantly being tricked.

METIRIA TUREI: I wonder whether it is a trick or whether there is some other need for maybe the Māori Party to feel that it needs to make some gains. It has been shafted continually by this National Government over the Māori seats. I understand there was something of a gentleman’s agreement by John Key that Māori seats would occur, but that was shafted pretty quickly. Nowhere has the Māori Party made any substantive gains into serious political issues that it has been trying to pursue. So maybe that is what is behind it. But none of the gains that it has supposedly made here can justify the wealth transfer from the poorest families, many of whom are our own whānau, to the richest international corporates from around the globe.

National has managed to cobble together a whole series of little bits and pieces—nothing new, nothing innovative, nothing that we did not already know about—to get the Māori Party on board for this legislation. I want to know what Māori get out of it. What do Māori whānau get out of it? They get nothing but the blame, supported by the Māori Party. The forestry deal has been a distraction. National has played up the forestry deal in order to distract attention from the wealth transfer from the poorest to the richest.

In effect, National can say that it has given Māori lots, and that is what it is saying in the public realm; that it is able to deliver all of this benefit to the Māori community through the Māori Party, and that thereby justifies the environmental degradation and wealth transfer under this legislation. The public rightly understand and object to that massive public subsidy to corporates, and rightly object to the environmental degradation that this legislation will incentivise, and they need somebody to be angry at. National has delivered them the Māori Party, and the Māori Party has delivered Māori communities to the public, who are angry at the bill and the Māori community. That is what we are seeing outside this Chamber. The public are angry at this legislation. Who are they blaming? They are not blaming National—National has managed to divert it—but they are blaming the Māori Party and Māori whānau.

Maori will bear the burden of the stink of the wealth transfer of public funds to these international corporations. Māori communities will bear the stink of the environmental degradation inherent in this legislation.

Hon Darren Hughes: They were tricked again.

METIRIA TUREI: Well, I ask whether it is a trick or is it just the Māori Party being prepared to put the interests of the few ahead of the interests of the many, even its own communities. I suspect that is more likely what the decision is about.

The legislation is a tragedy for Māori communities. It is a tragedy for Māori whānau. Perhaps, if it was just about the business, if it was just about the wealth transfer, if it was just about supporting Māori business, it would not have such an impact. In fact, it has turned into a public debate about why Māori are getting heaps of stuff and why everybody else has to pay. That is creating in the minds of the community an anti-Māori sentiment that is promoted by the Māori Party’s support for this bill. That is what is happening outside this Chamber.

That is the risk the Māori Party has been prepared to take with its own communities and with its own people, backed by National, because National can avoid all of the distraction and all of the blame. National can just get on with its interest groups that have always been about business, and we all know that. National can justify what it is doing because it is supporting the Māori Party and it needs those votes. The Māori Party has allowed itself to be used in this way.

Debate interrupted.

Sitting suspended from 1 p.m. to 2 p.m.

Questions for Oral Answer

Questions to Ministers

Health Care—Policy

1. Dr PAUL HUTCHISON (National—Hunua) to the Minister of Health: Does he still stand by his policy to deliver better, sooner, and more convenient health care?

Hon TONY RYALL (Minister of Health): Despite the fact that the Labour Government left the new Government with around $160 million of unfunded services to fill and quietly stripped $150 million out of Vote Health before the general election, yes.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I am sorry to interrupt, but I am just across from the Minister of Health and I could not hear a word of that answer, because of the barracking. It is the very first question of the day. I think it is a courtesy to members that they should be able to hear the question and the answer.

Mr SPEAKER: I concur with the honourable member. He makes a perfectly fair point of order. With the House being in urgency, of course, we go straight into question time, as was agreed by the Business Committee. The House would do well to settle down. In fairness, the Minister actually said yes, in answer to that question.

Dr Paul Hutchison: What reports has he received in relation to more New Zealanders getting much-needed elective surgery?

Hon TONY RYALL: I have received reports that from the year 2000 to 2007-08 the average increase in elective surgery discharges was 1,432, which did not even keep up with population growth. The new Government set the goal of nearly trebling this average increase to 4,000 a year—a goal that was well and truly exceeded, with record discharges in the past year. Meeting the continuing growth of elective surgery is a real challenge. However, even with the effects of the swine flu, I can advise the member today that the number of patients getting much-needed elective surgery in New Zealand has reached yet another all-time high: our public health service has delivered elective surgery to an unprecedented 34,000 patients in the past quarter.

Hon Ruth Dyson: What does he say to the people who will not figure in the district health boards’ league tables, such as the 5,000 people in Timaru who have had their access to the emergency department cut, so they will not be on the league tables because they will not even get through the door of the hospital?

Hon TONY RYALL: There has been no cutting of access to the emergency department at Timaru. I visited there recently, and the doors were still wide open. What I can tell the member is that emergency departments throughout New Zealand are working with their comrades and colleagues in the wards to improve service for New Zealanders, and really good progress is being made.

Hon Ruth Dyson: Why did the Minister not include a list of front-line health services and front-line staff in his league tables; was it because we have already seen cuts in both front-line health services and front-line health workers, or is it because it shows that the tens of thousands of dollars he has spent on publicity is just wasted health money?

Hon TONY RYALL: I cannot comment on any specific case that the member might have raised in that question, because she did not do so. But I can tell the House that the latest information from the Ministry of Health is that there are actually more front-line doctors and front-line nurses working in our public hospitals than at any other time under a Labour Government.

Dr Russel Norman: Would an extra $110 billion in health funding over the next 40 years help the Minister to deliver better, sooner, and more convenient health care?

Hon TONY RYALL: I can advise the member that I am currently in discussions with the Minister of Finance about the budget we need for the health sector next year, and that is not a figure I have yet promoted.

Dr Paul Hutchison: Which particular specialties have contributed to the record number of patients benefiting from elective surgery in this period?

Hon TONY RYALL: Basically everything.

Hon Members: Dodgy-ing the figures!

Hon TONY RYALL: That is from the crowd that cut 30,000 patients off waiting lists, then stood up and said they had them under control. In the 3 months to the end of September, a record number of patients have received ear, nose, and throat surgery, general surgery, neurosurgery, ophthalmology, plastics and burns surgery, and vascular surgery. These results really are a tribute to the work of our doctors and nurses in district health boards in responding to the Government’s very clear expectations of better services for New Zealanders.

Dr Russel Norman: With regard to his discussions with the Minister of Finance about funding for health in future years, has the Minister of Finance raised any concerns about the level of debt the Government is building up, and may build up over the next 40 years, and will that have a negative impact on the level of funding for health care?

Hon TONY RYALL: In those discussions with the Minister of Finance, our concern really has been very much focused on the inheritance that we received from the previous Government, and on the fact that we inherited a health service on a track to financial crisis, with significant deficits. We are working very closely to try to fill those unfunded services that we inherited from the previous Government, and the $150 million that Labour quietly cut from the health budget only days before the general election.

Corrections, Department—Confidence

2. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Minister of Corrections: Does she have confidence in the Department of Corrections?

Hon JUDITH COLLINS (Minister of Corrections): In spite of the years of neglect inflicted on the department by the previous administration, yes.

Hon Clayton Cosgrove: Does she have confidence in all the advice provided by the Department of Corrections about the cost of privately run prisons in comparison with public prisons, even though it has been giving her advice since last December that shows that the cost of the privately managed Auckland Central Remand Prison—the only example New Zealand has to draw on—is more expensive than the public equivalents, which is advice that is completely contradictory to her claim that private prisons are cheaper to run?

Hon JUDITH COLLINS: Yes. The department also provided advice that included the 70,000 hours of rehabilitative treatment that the Auckland Central Remand Prison had to give when it was privately run. The figures that the member is talking about were not actually included. The real figures—the “apples with apples” comparison rather than the “apples with oranges” one—show that private prisons are better value.

Hon Clayton Cosgrove: I seek leave to table a number of documents. The first is the Department of Corrections advice of 18 December 2008, which states: “The costs of the ACRP were higher than those of publicly run prisons.”

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 Clayton Cosgrove: The second document is departmental advice to the Minister on 10 March 2009 that “the closest scenarios” the department is able to provide show the privately run Auckland Central Remand Prison to be more expensive than the public prison service.

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There is none.

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

Hon Clayton Cosgrove: The next document is departmental advice to the Law and Order Committee on 20 July 2009 and 25 August 2009 that the per prisoner costs of the Auckland Central Remand Prison were more expensive when privately managed than when the Department of Corrections was in management the following year, and more expensive than the per prisoner cost of remand prisoners—

Mr SPEAKER: Can I just clarify whether this is advice to the select committee.

Hon Clayton Cosgrove: Yes, and it is now public.

Mr SPEAKER: Parliament already has that.

Hon Clayton Cosgrove: I think it is germane to the question, Mr Speaker. It is your call, of course.

Mr SPEAKER: Leave is sought to table a document presented to the Law and Order Committee. Is there any objection to that document being tabled? There is objection.

Hon Clayton Cosgrove: Does the Minister have confidence in the advice given to the Law and Order Committee this afternoon by the chief executive of the Department of Corrections that it would not be equitable to compare the costs of the privately managed Auckland Central Remand Prison with the entire public prison system at the same time, because the Auckland Central Remand Prison dealt only with remand prisoners?

Hon JUDITH COLLINS: Unless I actually saw the direct quote myself, I could not take for granted that rendition of it from the member, because, of course, he has paraphrased it. I can, however, have confidence in the quote from the department’s chief, who told me that in New South Wales private prisons cost 32 percent less per prisoner than public prisons, and in Victoria they cost 11 percent less. That is the comparable figure.

Hon Clayton Cosgrove: Given that we are talking about New Zealand and not Australia, why did the Minister tell the House on 18 August 2009 that Auckland Central Remand Prison’s “equivalent in the public sector cost $61,796 per prisoner.”, when that is the cost comparison across the entire public prison system, which her chief executive has said is not an equivalent or fair comparison?

Hon JUDITH COLLINS: Because those are the figures given to me by the department. I have said time and time again that it is very difficult to actually compare the remand prison when it was run privately—when there was health treatment and there was all sorts of rehabilitation for 70,000 hours a year—with the publicly run prison, where there was not. Unfortunately, that member does not want to hear the truth, but that is what it is. It was a better service.

Hon Clayton Cosgrove: Given that we now have four documents from the Minister’s department that contradict her, is she aware that one of the reasons—

Hon Rodney Hide: I raise a point of order, Mr Speaker. That cannot be allowed. The member started off without a question and made a highly charged political statement, rather than simply standing up and asking a question.

Mr SPEAKER: I accept the point the honourable member makes that although I have not insisted on questions starting with a question word, I think it is very unhelpful when members make a provocative statement at the start of a question. I ask the member to not do that, and to ask his question without that.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. Could I then get some advice, because it is now a fact on the record of the House that there are at least two, and I think there was an objection to two other documents—

Mr SPEAKER: This is not a matter that can be litigated by way of point of order. If the member wants, I can go back to insisting questions simply be started with question words. I do not want to do that; I like the House to have more freedom. But the member would be wise not to make a provocative statement at the start of his question. I invite him to ask his question.

Hon Clayton Cosgrove: Is she aware that one of the reasons it is so difficult to asses the costs of the privately managed Auckland Central Remand Prison is, to quote her departmental advice of 10 March 2009, “the lack of visibility on some of the private operators’ information”, and will she therefore support the Supplementary Order Papers introduced by Labour that seek to increase the transparency of private prisons?

Hon JUDITH COLLINS: I think it is important to remember that it was some years ago that the Auckland Central Remand Prison was privately managed. I stick to the advice that we are after a quality service in our prisons, not a cheap service. If we were just after cheap, nasty services, we would put everyone in tents.

Warm Up New Zealand: Heat Smart—Number of Houses Insulated

3. CHRIS AUCHINVOLE (National—West Coast - Tasman) to the Minister of Energy and Resources: How many houses were insulated in October through the Government’s Warm Up New Zealand: Heat Smart home insulation scheme?

Hon GERRY BROWNLEE (Minister of Energy and Resources): Across the country a total of 5,720 houses were insulated in October. In only 4 months nearly 20,000 homes have been made warmer, drier, and healthier, thanks to the financial assistance provided by the Government. I am also pleased to report that 70 percent of the houses insulated in October were occupied by people on low incomes with community services cards.

Chris Auchinvole: What is the Government doing to cope with a huge demand for the scheme?

Hon GERRY BROWNLEE: The Government is responsive to the extraordinary way in which New Zealanders have decided to embrace the scheme. Accordingly, after discussions with the Green Party, we have made arrangements for the original appropriation of $323 million over the 4-year period to become a multi-year appropriation. This will allow a better spread of the funding, so that people will not miss out and have to wait until the start of the next financial year to get assistance. It also means that we will easily be able to surpass the target for the first year of 27,500 homes—something we have almost achieved in 4 months.

Chris Hipkins: Will he admit that a lower standard of underfloor insulation has been specified by this Government so that it can poorly insulate more homes for the same amount of money that it would have cost to do fewer homes properly; if not, how does he justify lowering the insulation standards that approved providers are expected to meet?

Hon GERRY BROWNLEE: No.

Rahui Katene: Can the Minister confirm that new money has been allocated to allow low-income households to benefit from the home insulation scheme, as a result of the Māori Party’s relationship with National, and what impact will that new money have, over and above current allocations?

Hon GERRY BROWNLEE: Yes, I can confirm that. It has previously been announced that discussions between the Māori Party and the National Government meant that a further $28 million was added to the fund, bringing it up to almost $350 million that will be spent over the period of time. An extra 8,000 low-income households will be warmer and drier as a result of that arrangement. The Māori Party has expressed its concern about that group of New Zealanders, and the Government has recognised that.

Chris Hipkins: How can he continue to claim that standards have not been lowered, when the latest Energy Efficiency and Conservation Authority guidelines suggest that homes previously fitted with foil underfloor insulation should have the foil repaired rather than replaced, and when previously the authority had recommended against foil underfloor insulation, because of “safety risks, challenging installation, dubious performance, and possible lack of durability”; why is he cutting the corners?

Hon GERRY BROWNLEE: Simply because it is not new installation; it is repair of what is already there.

John Boscawen: By how much is the Heat Smart home insulation scheme forecast to reduce the profits of New Zealand power companies, and how does it compare with the billions of dollars of windfall profits that these same companies will receive under the emissions trading scheme, from, particularly, low-income New Zealanders, including Māori—or does he not know?

Hon GERRY BROWNLEE: One of the things that has become abundantly evident in the last few days is that all sorts of figures can be thrown into the mix when we come to discussing the emissions trading scheme, and any figure that does get put into the mix will be widely disputed. The purpose of the home insulation scheme was to improve the health outcomes of New Zealanders.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I appreciate the Minister’s answer, but I think he was asked what the reduction was, and whether he did know what it was. What we got from the Minister was his saying that lots of numbers were being bandied around, then restating the goals of the programme. I think the House can take that as his saying that he does not know, but it was hardly answering the question.

Mr SPEAKER: I appreciate the point the member has raised, but I think that when one considers the specificity of the question asked and the primary question that was laid down, the chances of the Minister having that particular information would not be high. I think the Minister was indicating that he did not have that particular information. I cannot expect him to give more precise information on such a question.

John Boscawen: By how much is the Heat Smart home insulation scheme set to reduce greenhouse gas emissions, and how does it compare with the Government’s emissions trading scheme; if he does not know, why have we been sitting under urgency to pass the emissions trading scheme?

Hon GERRY BROWNLEE: Firstly, there were a number of aspects to that question, and I think a complication of two very simple issues. I will answer the first one, which was by how much the scheme will reduce the cost of home heating, effectively. Was that the question?

John Boscawen: No.

Hon GERRY BROWNLEE: Oh, by how much will it reduce greenhouse gases?

John Boscawen: I raise a point of order, Mr Speaker. The Minister does not seem to have understood my question—

Mr SPEAKER: The easiest way to resolve the issue would be for the member to repeat his question.

John Boscawen: By how much is the Heat Smart home insulation scheme set to reduce greenhouse gas emissions, and how does it compare with the Government’s emissions trading scheme; if he does not know, then why have we been sitting under urgency to pass the emissions trading scheme?

Hon GERRY BROWNLEE: The first point is that it would depend entirely on what sort of home heating appliance was being replaced under the scheme. When we have collected all the information on that, we will be able to provide the member with a best estimate. On the matter of why we have been sitting under urgency to pass the Climate Change Response (Moderated Emissions Trading) Amendment Bill, I take it that the ACT Party now wants to be party to our passing the bill, and I look forward to it casting its vote accordingly.

Tertiary Education, Minister—Decisions

4. Hon MARYAN STREET (Labour) to the Minister for Tertiary Education: Does she stand by all the decisions she has made as the Minister for Tertiary Education; if not, why not?

Hon ANNE TOLLEY (Minister for Tertiary Education): Yes.

Hon Maryan Street: Is she aware that the Prime Minister indicated to the Manukau Family Literacy Programme that he may be able to find some money for it after all, despite her original funding cut decision, but that it has now lost the opportunity to continue its programme for at least term 1 of 2010, while officials negotiate around her misguided criteria in order to meet John Key’s wishes?

Hon ANNE TOLLEY: I totally reject the member’s assertion that the criteria are misguided. What happened was that the request for funding did not fit the criteria, so I have instructed the Ministry of Education to work with the City of Manukau Education Trust to find a way to support the continuation of the programme.

Louise Upston: What announcements has the Government made recently to provide more opportunities for younger people in polytechnics?

Hon ANNE TOLLEY: The Government has already announced that 2,000 Youth Guarantee places are to be added to the tertiary system next year. That is 2,000 young New Zealanders who will have fees-free learning in tertiary institutions next year. Yesterday I announced that an additional $8 million of funding will be allocated across a number of polytechnics next year. It is being made available to polytechs in areas of high unemployment that have demonstrated an ability to provide for younger students.

Hon Maryan Street: Does she consider the removal under her amended legislation of guaranteed representation of students on polytechnic councils to be consistent with previous assurances she has given to students’ associations about the importance of their presence at the top decision-making table in polytechs, or is this another fix-it job for the Prime Minister?

Hon ANNE TOLLEY: The bill that went to the select committee provided for eight-person councils. With regard to the councils’ composition, a great many submissions expressed a desire for more community representation. The solution that the select committee has proposed is, I think, quite an elegant one; it retains an efficient governance size, and it allows the councils the flexibility to determine whom they have in those four ministerial positions.

Hon Maryan Street: Does she continue to stand by her decision to cut adult and community education funding to high schools, now that it is clear that no high school - based adult and community education will be available throughout the whole of Gisborne, Hawke’s Bay, the Hutt Valley, most of the West Coast, and large parts of north, central, east, and south Otago, or will a visit by the Prime Minister to those areas see her decision overturned?

Hon ANNE TOLLEY: I remind that member that she was part of a Government—in fact, she was the Associate Minister for Tertiary Education—that left a funding hole of $520 million; $520 million that had not been funded that we had to start to find and make changes around. That is the first thing. Secondly, that member continues to misrepresent—

Mr SPEAKER: It is a very interesting speech that the Minister is making, but I heard a question that asked whether the Minister stood by a certain policy. Therefore, I think the Minister in answering is expected to talk about her policy, not the Opposition’s policy. I was trying to hear some response to the question asked.

Hon ANNE TOLLEY: In response to the member’s continual misrepresentation of adult and community education as being provided only by schools, I say that, in fact, the instructions to the Tertiary Education Commission were to ensure that there was coverage of adult and community education across New Zealand, with it being provided by schools in some cases, polytechs, and private providers right across the country.

Summer Research Scholarships—Progress

5. ALLAN PEACHEY (National—Tāmaki) to the Minister for Tertiary Education: What progress has been made on the Government’s summer research scholarships?

Hon ANNE TOLLEY (Minister for Tertiary Education): I am pleased to tell the House that 1,600 places for the summer research scholarships that the Government promised and jointly funded with the New Zealand universities have been filled. Many of these students started their scholarships last week and will be beginning their placements in universities, so that they can further their studies and gain some income over the summer months.

Allan Peachey: Why did the Government decide to fund the summer research scholarships?

Hon ANNE TOLLEY: The scholarships were first mooted at the Prime Minister’s Job Summit at the beginning of the year, and the Government agreed to meet the universities dollar for dollar up to $4 million in Budget 2009. These opportunities are important for the young people who have obtained them, and these extra places also help to free up other job opportunities for students over the summer period.

Hon Maryan Street: How do the short-term summer scholarships help the 2,000 - plus mainly low-decile students who had their Step Up and bonded merit scholarships scrapped by this Government?

Hon ANNE TOLLEY: Again, I say to that member that $521 million was promised by the previous Government in tertiary education and not funded. There were some changes to some of those smaller programmes, but they have been well taken care of. I remind the member of the 2,000 Youth Guarantee places that will be funded next year and will take many of those students.

Roading, Kapiti—Community Consultation

6. Hon DARREN HUGHES (Labour) to the Minister of Transport: What weight is being given to the views of the communities affected by the transport proposals through Kapiti?

Hon NATHAN GUY (Associate Minister of Transport) on behalf of the Minister of Transport: The New Zealand Transport Agency is responsible for making the final decision on the State Highway 1 upgrade through the Kapiti region. I am confident that the views of local people and communities are being listened to closely and that each submission is taken on its merit. The New Zealand Transport Agency’s job is to balance the wider views of the community, which are extremely important, with the other relevant factors such as the cost, the benefits to the economy, and the impact on the wider region.

Hon Darren Hughes: How will it be possible to read, analyse, consider, and reflect on the 4,100 submissions and then make a decision all in the next 4 weeks, and why were submitters not asked whether they wanted to be heard in person?

Hon NATHAN GUY: My understanding is that the New Zealand Transport Agency is working around the clock to process and analyse the submissions. Some people chose on the feedback form to mention that they wanted to present in person to the New Zealand Transport Agency board.

Hon Darren Hughes: How will people in residential areas who are affected if a four-lane expressway is built right next to their properties be compensated if none of their land is required?

Hon NATHAN GUY: That detail probably should be directed to the New Zealand Transport Agency board. My understanding is that there are two pieces of relevant legislation: the Public Works Act and the Resource Management Act.

Hon Darren Hughes: Why did the Government not offer as an option the platform it joined Labour on during the election campaign—that is, Transmission Gully, rail electrification to Palmerston North, the Western Link Road as a local road, and improvements to State Highway 1?

Hon NATHAN GUY: This area is one of the fastest growing in New Zealand. It connects through to our capital city. We are well aware of the fact that over the last 5 years there have been 59 serious or fatal accidents on that stretch of road between Paraparaumu and Levin. Most of the feedback from the submissions that, I am told, the local MP for Ōtaki has received shows that people want action and progress on the issue—after 10 years of inaction by the previous Labour Government.

Hon Darren Hughes: I raise a point of order, Mr Speaker. My point of order is not about the veracity of the last comment but about my question, which asked why a certain option had not been offered to the community. The Minister, in reply, told us about feedback that had been received, but I asked him why the Government did not put to the community, as part of the consultation programme, an option that mirrored the stance that National took at the election.

Mr SPEAKER: I hear the member’s point. When a member asks why the Government did not do something, the member is not asking the most precise question. The Minister’s answer talked about the increase in population in the area, and although that answer may not be what the member wanted, I believe it was an answer to the question. I cannot start assessing the quality of answers; I can only assess whether the Minister has answered the question in some way. I believe that he did answer the question in some way.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I seek clarification. When the Minister said that he had received submissions from the MP for Ōtaki, was that Darren Hughes? Because I thought he lost that seat.

Mr SPEAKER: The member will resume his seat right away. Nice try but that is not allowed as a point of order.

Hon Darren Hughes: I raise a point of order, Mr Speaker. While we have the leader of the ACT Party with us in the country, I wonder whether he should lose a supplementary question for that very unfair reference.

Mr SPEAKER: We will not take this any further.

Question No. 7 to Minister

Mr SPEAKER: I call Metiria Turei. [Interruption] I apologise to the member but I am on my feet; I ask her to resume her seat. I have called a member, and I have dealt with the points of order that were raised earlier, and I do not think it is very helpful for members to be continuing to interject across the House. I call Metiria Turei.

Hon CLAYTON COSGROVE (Labour—Waimakariri): I raise a point of order, Mr Speaker. Although not wishing to challenge your ruling—

Mr SPEAKER: I hope not.

Hon CLAYTON COSGROVE: —could I just seek your advice, or ask for your reflection. Yesterday you observed what you termed an abuse of the point of order process by a colleague of mine, and I think that last week you docked a supplementary question off my colleague Mr Hodgson. A similar abuse of the point of order process has happened today and the member simply got a slap on the wrist. I invite you to reflect on that.

Mr SPEAKER: I point out to the member that I am the sole judge in these matters, and when I got to my feet the member responded by sitting down. If the member abuses the point of order system again, I will treat it very severely. When I do treat it more severely is when a member does not respond to my getting to my feet and asking the member to resume his or her seat. That is when I take a very dim view of the matter. I have called Metiria Turei and I would appreciate the House allowing her to ask her question.

Benefits—Children’s Social Health Monitor Baseline Report

7. METIRIA TUREI (Co-Leader—Green) to the Minister for Social Development and Employment: Does she agree with the authors of the Children’s Social Health Monitor baseline report, launched today, that New Zealand’s current benefit provisions are unlikely “to protect a large proportion of our children from severe or significant hardship”?

Hon PAULA BENNETT (Minister for Social Development and Employment): Yes, I agree with a lot of what the report says. What I do not agree with is where it states that the number of children in families on benefits is likely to rise. Work and Income is working very hard to help people into jobs so that they can build better futures for themselves and their families.

Metiria Turei: Does she think that $110 billion over the next 40 years will be enough for her department to make sure that no New Zealand child goes without fruit, veges, raincoats, shoes, or visits to the doctor, which this report shows many are doing today?

Hon PAULA BENNETT: What I will say is that it is not just about the money. Research by the Ministry of Social Development in 2002 showed that for two families on the same low income, one on a benefit and one in work, the one in work had better outcomes every time.

Catherine Delahunty: Tēnā koutou. Is she aware that many vulnerable families are not accessing the basic support that Work and Income should be providing now, such as the hundreds of people in Rotorua who are asking national beneficiary advocates for help this week because they have not been able to access basic support such as food grants?

Hon PAULA BENNETT: I can tell the member that the number of special-needs grants has gone up considerably this year, so more people are accessing them via the department. We certainly encourage anyone who is having problems to go to Work and Income. Emergency payments and supplementary money can be made available to them; it is there.

Catherine Delahunty: Is it acceptable that a solo parent raising five children in Rotorua is able to access only $70 from Work and Income to feed them for a week; and does that not show that the benefit system is failing to meet the needs of vulnerable children?

Hon PAULA BENNETT: It would be too hard to make an assumption based on what the member is saying is the level of support available to them.

Metiria Turei: How will her plans to force single parents out to work when their youngest child turns 6 relieve severe and significant hardship for those children, when the number of full-time jobs for women is declining; the market for part-time work is highly competitive; hours of existing jobs are being cut back, threatening in-work payments; and rental housing prices for our most vulnerable families continue to rise?

Hon PAULA BENNETT: It would be fair to say that we start from different assumptions. The Green Party assumes that people do not want to work, that those on the domestic purposes benefit are happy to stay on it, and that is how they want to survive. National believes that a lot of them want to work. If the incentives are right and the jobs are right, they will go out and take jobs, and that is what we are focused on.

Hon Annette King: If she is serious about helping children in New Zealand, why did the National Government recently turn its back on a suggestion by the Every Child Counts organisation to establish a multiparty working group on children’s issues in Parliament? Instead of agreeing to work with other political parties, the Government refused, stating that Parliament already had enough processes in place to consider issues relating to children. And can she tell the House of the success of one of the processes?

Hon PAULA BENNETT: Because for 9 long years we had a lot of talk, and now this Government has decided that it is about action. We have seen already this year a number of initiatives that target the most abused and neglected children. The Never Ever Shake a Baby campaign starts on 6 December, and the First Response non-governmental organisation trial will be going out to those businesses, with an independent experts forum delivering actual responses on what we can do. This Government is focused on action, not on a whole bunch of chit-chat that gets nowhere.

Hon Annette King: Does she believe that her naming and shaming of two solo mothers earlier this year who had the audacity to speak out on the impacts of the cuts she had made to the training incentive allowance, which was helping them to get off the benefit, has made it harder to assist beneficiaries and their children, because of the venom and vitriol her comments generated out there in the public?

Hon PAULA BENNETT: That is another example of recycling old arguments. One of those women did not feel it was naming and shaming; she was quite happy with having the information, which was correct, put out there. I make no apologies for telling a true story of where our welfare state is.

Hon Annette King: I seek leave to table a letter to me from the Prime Minister, dated 3 November, in which he turns down the suggestion, not from me but from an organisation that does not just do chit-chat, asking—

Mr SPEAKER: The member should not make that kind of comment when seeking leave to table a document. 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.

Metiria Turei: I seek leave to table the New Zealand Children’s Social Health Monitor released today.

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.

Injury Prevention, Rehabilitation, and Compensation Amendment Bill—Hearing Aids

8. Hon DAVID PARKER (Labour) to the Minister for ACC: Does he think it is fair that his Injury Prevention, Rehabilitation, and Compensation Bill will determine the threshold for entitlements to hearing aids rather than clinical need?

Hon Dr NICK SMITH (Minister for ACC): Yes, because the law in respect of accident compensation is about defining the extent of the scheme. A scheme with no limits is unaffordable. Other schemes, like WorkCover in Australia, also have a 6 percent threshold for hearing aid entitlement.

Hon David Parker: Is he aware that a man in his 50s with up to 6 percent noise-related hearing loss cannot hear birds sing, misses most of what his grandchildren say to him, and needs a hearing aid?

Hon Dr NICK SMITH: No, I do not accept that. The advice that I have received is that the 6 percent limit is a reasonable limit to the point where a hearing aid actually becomes useful. It is a standard that is used in a number of parts of the world. However, the bill is before a select committee, and I will wait for the select committee to report back to the House before making final decisions on the bill.

Hon David Parker: How can he deny criticisms that it is cynical to take away people’s right to sue for work-related hearing loss of up to 6 percent, but then say they will be included in accident compensation cover, so they have no right to sue, when they cannot get a hearing aid or any other treatment?

Hon Dr NICK SMITH: I am advised that it is highly unlikely that for industrial hearing loss any case could be pursued in the courts under normal tort. The reasons are, firstly, that it is normally after a very long period, and, secondly, in terms of the proof of fault, that is very unlikely.

Hon David Parker: Why does he continue to say workers in Australia with up to 6 percent work-related hearing loss cannot get a hearing aid, when they can, because the decision is a clinical one in the likes of Victoria and South Australia?

Hon Dr NICK SMITH: There is some variation from state to state in Australia. In New South Wales it is a 6 percent rate. But the decision will still be left to clinicians, in the same way as many other parts of the accident compensation law set out the threshold at which a person gains an entitlement.

Hon David Parker: I seek leave to table a document showing that in Victoria there is no threshold and one can get a hearing aid for work-related hearing loss at 6 percent, and similarly for South Australia.

Mr SPEAKER: What is the source of the document?

Hon David Parker: It is information that has been provided to me by audiologists in New Zealand.

Mr SPEAKER: Leave is sought to table a document provided by audiologists in New Zealand on the thresholds for hearing aid entitlement in Australia. Is there any objection to that document being tabled? There is no objection.

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

Family / Whānau Violence—Preventive Initiatives

9. HEKIA PARATA (National) to the Minister for Social Development and Employment: What is the Government doing to prevent violence within families and whānau?

Hon PAULA BENNETT (Minister for Social Development and Employment): Today is White Ribbon Day. I am sure that I join with the rest of the House in our stand against family violence, particularly against women. This is an opportunity for all New Zealanders to stand up and show that they will not be standing for that sort of family violence. This morning, the Minister of Women’s Affairs and members of the Families Commission joined with the police at the Wellington Railway Station to hand out white ribbons. I can say that it was a fantastic response from the New Zealand public.

Hekia Parata: What steps is the Government taking to reduce family violence?

Hon PAULA BENNETT: Much work has been done to raise awareness of family violence over many years. We have to look only at the increased reporting to see that New Zealanders know that it is not OK. But we are past talking about it; now we need to be doing what we can do, what the Government can do, what the community needs to do, and what families can do to stop violence. Minister Turia is focusing her efforts on the doing.

Sue Moroney: Why, then, has the Minister allowed her Government to increase the trauma of sexual violence by making it harder for victims of sexual abuse to get help through accident compensation, with 111 people having dropped out of the system already across New Zealand?

Hon PAULA BENNETT: As the House well knows, those matters are complex. Those decisions are made by clinicians, not by politicians, and that is exactly how it should be.

Sue Moroney: I seek leave of the House to table a document. It is the answer to written question—

Mr SPEAKER: Is this the answer to a recent written question?

Sue Moroney: Yes, and it demonstrates—

Mr SPEAKER: The House already has that information. The member will resume her seat immediately. Why did the member continue to make that statement to the House when I was on my feet? In what way was that assisting the order of the House? The member was seeking to abuse the position. I will not tolerate that in the future.

Hon Dr Nick Smith: I seek leave to table the statement by the Royal New Zealand College of General Practitioners welcoming the changes that the Accident Compensation Corporation has made in respect of sensitive claims.

Mr SPEAKER: Is this a press release?

Hon Dr Nick Smith: It is a statement by the Royal New Zealand College of General Practitioners. It is not a document that would otherwise be generally available to members, and given the debate there has been on this issue—

Mr SPEAKER: I will take the member’s word for that. Leave is sought to table this document. Is there any objection? There is no objection.

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

Sue Moroney: I raise a point of order, Mr Speaker. I am unclear whether leave was sought for my document.

Mr SPEAKER: I am not seeking leave for that, because that information is readily available to the House. The House has answers to written questions.

Education, National Standards—Revision

10. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Education: Was she correctly reported this morning as indicating flaws in her proposed national standards are being addressed; if so, what is the process she is using to address those flaws?

Hon ANNE TOLLEY (Minister of Education): The member must be suffering from a bit of jet lag. No.

Hon Trevor Mallard: Mr Speaker, are you going to deal with that, or not? [Interruption]

Mr SPEAKER: I am on my feet. We can see what happens when members are disorderly. I say to the Minister that that response was totally out of order, and it led to disorder. That will not be tolerated.

Hon Trevor Mallard: Is there one published expert or academic who agrees with her view on national standards, rather than with the views of Thrupp, Crooks, Flockton, and Hattie, who have today written an open letter to her; if so, who is that academic or expert?

Hon ANNE TOLLEY: Several academics have expressed support at various stages in the process. Several have been involved in their development.

Colin King: What sector involvement was there in the development of the national standards?

Hon ANNE TOLLEY: Over 4,000 principals, teachers, literacy and numeracy advisers, and other professionals attended meetings. There were 1,176 written responses from the sector, of which 490 came from groups representing, in total, 4,557 people. The education sector was also involved in an independent expert panel, which helped to develop the standards, and in the national standards reference group, which provided feedback on the draft standards.

Hon Trevor Mallard: If she disagrees with Thrupp, Crooks, Flockton, and Hattie, New Zealand’s four leading assessment academics, who have written to her stating inter alia that full implementation of the intended national standards system over the next 3 years is unlikely to be successful, will not achieve intended goals, and is likely to lead to dangerous side effects, why are they wrong?

Hon ANNE TOLLEY: I said this morning that the academics’ concerns are being addressed. For instance, the Ministry of Education is working on how schools can report on children’s progress and achievement in relation to the New Zealand curriculum. Professor John Hattie himself is participating in this work. I say to that member that parents want this proposal, and they want national standards—

Mr SPEAKER: I always get concerned when Ministers start with “I say to that member”, because it invariably means they are no longer answering the question. The Minister answered the question, and that is sufficient.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I hate to disagree with the ruling you have just made as to whether the Minister has sufficiently answered the question, but I do not think she actually got to the question about the specifics of why she disagrees with those four experts.

Mr SPEAKER: The Minister did point out that she did not disagree totally with the experts, and that in fact one of the experts was involved in working on the scheme to address issues that were of concern. I believe that that was a perfectly fair answer to the question.

Hon Trevor Mallard: Was her reading of this picture book to a group of secondary school teachers designed to be evidence of her ability to meet literacy standards, and was she describing her position with the line about rats having a better life, or was she telling teachers that the final line, “You have to be happy with a lot less.”, applies to them?

Hon ANNE TOLLEY: I suggest that that member reads the book. It is a great read. [Interruption]

Mr SPEAKER: Interjections that are nasty are not helpful, at all. I ask the House to just take a deep breath.

Immigration—Silver Fern Visa

11. Hon TAU HENARE (National) to the Minister of Immigration: What announcements has the Government made on the introduction of the Silver Fern Visa?

Hon Dr JONATHAN COLEMAN (Minister of Immigration): Today the Government announced the launch of the Silver Fern Visa. It is designed to attract highly skilled young people to New Zealand. The Silver Fern Visa creates a pathway to residency for young people educated overseas and fulfils the National Party’s manifesto commitment to access higher-level skills for the economy.

Hon Tau Henare: How will the new Silver Fern Visa policy work?

Hon Dr JONATHAN COLEMAN: Applicants with high educational qualifications aged between 20 and 35 will be eligible to apply for one of 300 Silver Fern Jobseeker Visas, issued annually. This gives them 9 months to search for a skilled job. Once they have skilled employment, they get a further 2-year permit that will allow them to gain points under the skilled migrant category and apply for residence. The Silver Fern Visa is about attracting the right skills and matching them to the employment needs of the economy.

Aorangi School—Closure

12. Hon LIANNE DALZIEL (Labour—Christchurch East) to the Minister of Education: Why did she not ensure that the Aorangi School board was given time to inform teachers and parents of the confirmation of her decision to close the school before the announcement was made public?

Hon ANNE TOLLEY (Minister of Education): Under the Education Act the decision to close a school is made by the Minister of Education. The Ministry of Education communicated my decision to the chairman of Aorangi School yesterday afternoon. I thought it necessary to notify and explain my decision to the community directly and immediately.

Hon Lianne Dalziel: Is she aware that two of the four schools in the 1.5 kilometre radius of Aorangi School have enrolment schemes that exclude almost all Aorangi School students; if so, why did she allow a misleading impression to be created that there are more options for these children than there are?

Hon ANNE TOLLEY: Because there will be one fewer school in the area and the enrolment schemes will have to be redone. I informed the board of that quite some time ago.

Hon Lianne Dalziel: Did she follow the ministry’s advice to discuss her final decision with the Hon Dr Pita Sharples, an Associate Minister of Education; if so, when did she do that and what was his response?

Hon ANNE TOLLEY: I informed Dr Pita Sharples of my decision yesterday afternoon.

Rahui Katene: How does she respond to the statement from Aorangi School principal, Stephanie Thompson, that closing the school sent a clear message that the National-led Government did not believe that a low socio-economic, multicultural part of Christchurch was as important as other groups; and what specific provision will be made for the whānau affected by the closure of the only bilingual unit in the north-east of Christchurch?

Hon ANNE TOLLEY: There are two parts to that question. With regard to the first part, I absolutely reject the offensive suggestion that the decision to close Aorangi School was based in any way on the economic and cultural elements of the area. The reasons have always been the cost of the rebuild, the roll’s size, and the number of schools in close proximity. With regard to the second part of the question, I have stated a number of times that I am committed to ensuring that there is an ongoing provision for bilingual education in the area. I have directed the Ministry of Education to work with Ngāi Tahu and local boards of trustees on this very important decision.

Dr Russel Norman: I raise a point of order, Mr Speaker. The Minister appeared to be reading the answer to that question. I wonder whether she was reading from the official document.

Mr SPEAKER: I ask the Minister whether she is reading from official documents. The Minister indicates that it is not an official document.

Hon Lianne Dalziel: Has she or her ministry advised the principal and board of trustees of Waimairi School and Fendalton Open Air School that their zones will be altered as a result of this decision?

Hon ANNE TOLLEY: The decision to close Aorangi School was made and announced yesterday. A change-manager is being appointed as soon as possible by the Ministry of Education, and he or she will be in contact with all the surrounding schools. I say to the member that the children who attend Aorangi School come from quite a wide section of Christchurch, so it is impossible to tell at this stage how many children will be going to the surrounding schools.

Hon Lianne Dalziel: I raise a point of order, Mr Speaker. My question to her asked whether the two schools that are covered by enrolment zones had been informed that there would be a change to their enrolment zones. That was a very specific question, and she has not addressed it, at all.

Mr SPEAKER: I accept that that was the absolute thrust of the question. If the Minister has that information, I would appreciate it if the House could have it.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. The first point is that the Minister did say that the change-manager would take care of this matter. That has to be an answer.

Hon David Cunliffe: Count the votes, Gerry.

Hon Gerry Brownlee: I am, don’t you worry.

Mr SPEAKER: I am on my feet. I say to the Hon David Cunliffe and the Hon Gerry Brownlee that when I am on my feet they will de-decease from interjecting.

Hon Members: Decease!

Mr SPEAKER: The Speaker can get tongue-tied too. I say to the member who has raised the point of order that the question asked whether the schools have been advised that the enrolment schemes would be changed. Whether someone is being appointed to change-manage the process is another matter. Whether the schools have advised is a fairly simple matter. The Minister may not have that information, and it is perfectly acceptable if she does not. If she does have the information, I think it is reasonable that it be provided to the House.

Hon ANNE TOLLEY: The decision was made yesterday afternoon. A change-manager is being appointed. I have no knowledge as to whether that change-manager has informed those schools. But they know that there will be one less school in the area, so it is normal that the enrolment schemes would be re-done.

Points of Order

Reserves and Other Lands Disposal Bill—Letter to the Speaker

Dr RUSSEL NORMAN (Co-Leader—Green): I raise a point of order, Mr Speaker. I waited until the end of question time before raising this matter. As you may know, I have written to you regarding the Reserves and Other Lands Disposal Bill. I wonder whether you could give an indication as to when you may be able to respond regarding the order of including the private matter within that bill. I wonder whether you have had a chance to look at it.

Mr SPEAKER: The member has written to me about this matter. The member is perfectly at liberty to come and see me about it, but it is not a matter for the order of the House.

Bills

Climate Change Response (Moderated Emissions Trading) Amendment Bill

In Committee

Debate resumed.

Clauses 1 to 3 (continued)

Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti): This legislation is about detail, and today is a very, very sad day for this nation, in the sense of the surety that we tend to espouse. The legislation has simply been about going to Copenhagen; this whole bill is scribed in double Dutch. At the end of the day I plead with the Māori Party leaders not to vote with this Government at the end of this debate, because there are some simple fundamentals about this whole issue. The major polluters are being let off free, they are running wild, and that person from Napier who just passed a comment should have a look at Whirinaki, have a look at the creeks in Whakatāne, and more than certainly have a look at the rivers and the pollution that goes into Poverty Bay.

Why would this legislation be a negative for Māori? Quite clearly there is a Treaty settlement process, but one wonders why this bill was taken outside the process, and why iwi were settled with. I can say, being half Ngāi Tahu, that well be it in relation to the settlement. But in relation to the emissions trading scheme proper, the Minister for Climate Change Issues has been inventing the figures. He knows full well that he has to find money; we know full well where it has to come from. It has to come from health, from education, and from all of those areas that are very, very relevant to Māori.

Hon Dr Nick Smith: I don’t believe it.

Hon PAREKURA HOROMIA: The Minister can shake his head, but some of us have been around as long as he has, and we know that that is what will happen to Māori. But he has plumped it up with a little addition on the side—the insulation of about 10,000 houses. That is one-fourth or one-fifth of all Māori households. I understand there will be the insulation of State homes, which the Government would have done anyway. The omission or the contradiction is quite simply that.

Dairy farmers this year received an extra $100,000 payout. But are they pulled up? Is there any prescription, in the sense of making sure that they do not continue to pollute? No—no way! There is a river in Whakatāne, in the electorate of my colleague Ururoa Flavell, that is so black and dark that all the life in it is stagnant or has been removed. There is a great overseas indigenous saying: “When the rivers have darkened and the fish are lost, and the mountain tops lose the snow, and the trees crumble to dust, then the world will understand that it is not just about money.” That is what Paul Quinn understands—moni, which translates to money. This is about moni.

The Māori Party came in here in relation to its mana, and Labour members were chastised about the foreshore and seabed. This is the foreshore and seabed situation again, but three or four times worse. With the accumulation of accident compensation charges and the 90-day employment legislation, Paul Quinn is punishing his people, and he knows it. His Government has accumulated negative issues like that 90-day bill and the new accident compensation charges, and this legislation on top of that is a shocker. Paul Quinn can sit there and try to abdicate responsibility for what he has done for the Māori people. He knows this bill is a shocker. He is supposed to be one of the bright macro minds in Māoridom; he knows about the corporate front, he knows about the top end, and he knows about making sure that they are looked after. But this legislation is about our people, and it is a disgrace.

I am saddened, because I know that the Māori Party leader, Minister Sharples, is well revered. He is a sensible person, but this process is shambolic. I am stunned that the Māori Party even cares to go with it. This is one of the biggest “brown” pay-offs—buy-offs—that has ever been made in this House. People have said that the foreshore and seabed issue brought in the Māori Party. No, the Māori Party brought in the foreshore and seabed issue.

Let me tell Mr Tremain that up there in Hawke’s Bay the unemployment rate is running at about 12 percent. What did the Prime Minister say? He said that the rate was great because it was 8 percent. That is relevant to this legislation, because it will be common language in the years to come, when our people, 60 percent of whom are under the age of 15, will suffer through it. They will pay for the legislation as taxpayers. People in Māoridom generally always have been taxpayers, but do members know that most freezing workers in this country have barely had 3 to 4 weeks’ work over the last 2 months? Do members understand that? [Interruption] I say that the deals with the five iwi that that member is talking about are done, and that is between that Government and them. But that is not the issue. I tell Paul Quinn that the issue is about what the legislation will do to our people. He knows that. He knows, as well, that the Māori unemployment rate is all over the place—and he can add to that. You can cry like one of us, but you do not know about Māori people. That is why they have stuck you back there, and not on the front bench. Do you care? This is the same thing—

The CHAIRPERSON (Eric Roy): The member is including the Chair in the debate, and I could take offence at that, especially at the vigour with which he is doing it. The member should be a little more careful about how he chooses his words.

Hon Annette King: I raise a point of order, Mr Chairperson. I have been listening very carefully to the use of “you”, and to including you in the debate. To your right there has been a constant barrage from Mr Quinn that included you in the debate. I wonder whether you could perhaps hear that breach of the Standing Orders, as well.

The CHAIRPERSON (Eric Roy): I had actually missed that. I apologise to the Committee, because I was making a general comment. When members use a great deal of vigour, which they are entitled to do, it can be quite offensive if the Chair is included. All members should note that.

Hon David Cunliffe: I raise a point of order, Mr Chairperson. Further to the point of order by my learned colleague, I just point out that Mr Quinn is not sitting in his usual seat, and there is a Standing Order that prevents members from moving seats for the purposes of interjection. As my colleague has said, he is one of the brightest minds of Māoridom in the National Party, and I am sure that he has something valuable to say, but it would be better if he chipped in from his own seat.

The CHAIRPERSON (Eric Roy): In response to the point of order, I tell members that Speakers’ rulings are quite clear that members should not move to have an advantage. I do not believe that the member did that, but I would caution him that he has a loud voice, and he ought to show some decorum around that.

Hon PAREKURA HOROMIA: He has a loud voice because he has a hearing impairment, and I excuse him for that. The brightest Māori member there is my cousin Hekia Parata, not him. But I apologise for that, Mr Chair.

I tell the Committee that there is no incentive under National’s plan for big polluters to reduce emissions, and National knows that that is going on all over the place. This legislation is about kissing or kicking off—as in Big Brother—in relation to Rio Tinto and all those overseas companies, and leaving ourselves alone. That is the reality. As the floods bash homes in England—the land where the colonisers came from—and set to on all those families, and as the fires burn in Australia, we do not have to be rocket scientists to understand what is going on.

That big buffoon over there who is bellowing does not care. He talks about energy and the costs that are going up. He is lacking energy at the end of the day, and at the end of the day we are running up costs of $110 billion that have to be taken from somewhere. Those people scorn that figure, but they talked about the closing of the gaps, they got into the “iwi Kiwi” debate, they flip-flopped, and they said there would never be any single targeting of Māori development—never!

But what is this about? It is a buy-off; it is a trade-off. Where is the guarantee? Minister Turia has been talking about Whānau Ora. What does that mean? It means “whanāu family betterment”. This legislation does not add to family betterment, yet the Māori Party came in here with basic fundamentals about kaitiakitanga, and all those things like awhitanga. They are all relevant to a good country, clean and dear to our soul. But what has that Government done? At the end of the day Mr Brownlee and company have really run off with this bill and rushed it through.

As a party, even though we did not see the detail, we have voted for the Treaty amendment; we have supported that. The amendment did not go even to the select committee, so a fair bit of this legislation has been run through, not by parties who care about it but by people who do not care. But I can stand here and listen to this waffle over the years about how we must not spend money on specific Māori issues. That member from Hastings knows about that, because the takutai moana is still there in his area but the Tūtaekurī River is just that. It runs out to sea with all the blinking damage of pollution, and over at Whirinaki the mill is polluting the air like hang. What is the member doing about it? He goes around kissing the Māoris on the marae to get a few votes, because he knows it is all about that, but at the end of the day he does not know, because people with plenty of money have chastised Māoridom into a lower and deeper phenomenon. I want to let members know about that, because that member has done a hue and cry about it but he knows that it is wrong. He knows that overall it is wrong. That member knows that Māoridom is not where it should be.

The Māori Party has simply traded away critical spending, in areas, as I have said before, such as health and education. We do care about that, especially when we listen to a Minister over on the other side of the Chamber who is hell-bent on just closing anything down and not wanting to ensure that Māori education is important. Members can mark my words as the years go along, and as our very, very young population—one of the youngest in this country—grows up and has to pay tax. Most Māori people from the age of 40 to 65 are from the labouring ilk—excuse the pun. They are people who have worked and paid taxes right from the age of 16. So it is rubbish about Māori not earning and paying taxes. They have paid them, and so have some of the working class Pākehā, but taxes will be put back on them again. The Government is looking after the top end and saying “Never mind the bottom end.”

I say shame on the Māori Party; it is adding to the injury of all this. Today is a sad day for Māoridom. There is nothing to crow about, and the fact that the Māori Party has held hands with National to do this is amazing. It is a disgrace.

JOHN BOSCAWEN (ACT): I understand that the Chair will be happy to take a double-call, a 10-minute call. We are debating the name of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Rather than calling it that name, why not call it the “Lost Opportunities Bill? Why not the “When is a Subsidy Not a Subsidy, and When is a Subsidy a Subsidy Bill”? Why not the “Tax the Poor Bill”? Why not the “Let Us Devalue Māori Fisheries Bill”? There are many names we could give the bill.

I am deadly serious when I suggest naming it the “Let Us Devalue Māori Fisheries Bill”. The reason I say that—and let me be very clear to National—is that, under this emissions trading scheme, beyond 2013 there will be no relief available to Māori fisheries whatever. Currently they generate some 600,000 emissions units, or carbon units, and the taxpayer is being given an allowance from the United Nations for those 600,000 units. We will continue to get that allowance; as a country, we will continue to get that allowance in 2013, in 2014, and for many years after. But will we pass the benefit of that allowance on to Māori fisheries—in fact, to all fisheries? No, we will not. We will stop it dead on 31 December 2012. And at what cost? Well, at $25 a tonne, those 600,000 units of emissions will cost the fisheries industry in New Zealand $15 million. That industry currently makes $60 million in gross margins. So a tax of this nature represents 25 percent of its profit. It is a trade-exposed sector. It is an emissions-intensive sector.

The Minister for Climate Change Issues knows it, because he said exactly that in his minority report on Labour’s emissions trading scheme just on 12 months ago. And did he take the opportunity to fix it? Did the Māori Party insist upon it being fixed? No, they did not. They left the trade-exposed, emissions-intensive fishing industry to be hung out to dry in 2013. All I can say to the Minister is that if the Sanford fish processing plant in Nelson should close at some stage in the future, it will be on his head, and I hope his constituents are aware of it.

Hon Maryan Street: Sealord, not Sanford.

JOHN BOSCAWEN: Sorry, it is Sealord. I apologise, and thank Maryan Street. It is the Sealord plant in Nelson, not the Sanford plant.

This has been a reckless process. We heard that this bill was pushed through the Finance and Expenditure Committee in 6 weeks. I gave credit to Mr Foss, the chairman, and he deserves credit, because he was given a hospital pass. Mr Foss was given instructions to give submitters less than 24 hours’ notice. We had 380 submissions, of which 170 said they wanted to be heard orally, but Mr Foss’ riding instructions were to hear only 30 submissions and to hear them in 2 days. The Labour Party said the committee was given 1 day; my recollection is that it was given 2, and that is what my minority report says.

But I also give credit to Rahui Katene, who sits alongside me, because she had the courage and the wisdom to vote with the Opposition and the ACT Party to allow the people who wanted to submit on this bill to submit. [Interruption] Yes, she did. And I say to Mr Cunliffe that although the Māori Party may be coming in for some criticism right now, I think we need to acknowledge that had it not been for Rahui Katene voting with the Labour Party and the ACT Party, we would not have heard 90 of the 125 people who came to the select committee. So I give Rahui Katene full credit for that. And I give Rahui Katene credit for the Māori Party press release that she passed to me as she was walking back from the Prime Minister’s press conference on Monday afternoon. What does it say? It says: “It is estimated that as a result of the Maori Party concessions on petrol, power and insulation, households will save at least $4 a week.” That is it—$4 a week.

The ACT Party genuinely believed that the Māori Party had secured some concessions over and above what was in National’s original bill; it had secured some additional concessions. When I questioned the Minister in his office on Tuesday morning, he confirmed to me that there were, indeed, no additional concessions. Electricity will go up by 10 percent on 1 January 2013, and there will be massive windfall profits for electricity companies that generate from water—hydro power—and from geothermal energy. It is estimated that those profits run at about $300 million a year, so we are talking about projections to 2050 that some billions of dollars will be paid by ordinary New Zealanders. To whom? To the shareholders of Genesis and Meridian Energy, which is us, and to the shareholders of Contact Energy and TrustPower. So it is little wonder that there has been speculation today that the ruling council of the Māori Party is meeting because it is very, very concerned about the Māori Party’s support for this bill, because the poorest New Zealanders will pay the biggest proportion of their incomes for basic staples like electricity. They can go without petrol—they can ride buses—but everyone needs electricity. People need electricity to cook and to light up their homes. Electricity is a major component of living cost, certainly for low-income New Zealanders.

Pete Hodgson said earlier that the ACT Party is not interested in climate change, and that it calls it a hoax and a scam. He was extremely critical of Rodney Hide. Well, the science is unproven. In the last few days the data processing system—the computers—of the climate science unit at East Anglia University were opened up to hackers, and the scientists at that unit have had to acknowledge that some of the leaked emails are indeed true. At the very least, that indicates dishonesty on the part of those scientists; at the worst, it indicates massive fraud. The ACT Party has said, and said consistently, that we should not be pushing headlong into doing this. The Minister well knows, although he may wish to deny it, and the National backbenchers know—the National backbenchers are not dumb—that they will have to go to their constituencies and defend this bill. They will have to defend it next week, and they have to defend it at the 2011 general election. We could have postponed the effective introduction date of Labour’s emissions trading scheme. We could have sought a much better compromise. We could have looked to protect the fishing industry in exactly the same way as we are protecting the farming industry beyond 2013. There is so much more that we could have done.

Earlier this afternoon Rodney Hide took possession of a petition from Neil and Esther Henderson. They were in the gallery earlier this afternoon; they may not be there now. They are farmers from Gisborne. Over the last 6 weeks they have collected over 10,000 signatures opposing this emissions trading scheme. Why have they done that? Well, it is a well-known fact that some 50 percent of our emissions come from agriculture, but at the present time the maximum use of technology will reduce those emissions by only 13 percent—only 13 percent. So if we are to have any realistic chance of a 50 percent reduction in emissions by 2050, essentially we are saying that the other half of our economy has to reduce its emissions by 87 percent.

Hon Dr Nick Smith: 50 years.

JOHN BOSCAWEN: I say to Dr Smith that technology may well develop over the next 40-odd years to allow agriculture to reduce its emissions beyond 13 percent, but we do not know that it will. We cannot be certain of it. For this Government to enter into any binding commitment to that sort of reduction by 2050 without knowing how it will be achieved is no more than reckless. If this Government is to make any commitment at all, it should be making commitments based on known technology. The select committee heard that we can make improvements. The output of the Kinleith mill has increased by some 50 percent while the absolute level of emissions has reduced. But in terms of agriculture we are talking about changing the digestive system of a cow or a sheep. We are talking about developing grass. We hear the Green Party express concern about genetic modification, but those members seem to be very—

RAHUI KATENE (Māori Party—Te Tai Tonga): Thank you, Mr Chairperson—[Interruption] I am sad to hear such disappointment that I have been called to speak. I have been sitting here thinking that for about 4 hours a week for at least 20 weeks of this year I have sat on two select committees hearing about the emissions trading scheme, and it has been a very interesting time. During those hearings we have heard from environmentalists who say that the emissions trading scheme does not go far enough, from business interests who say that the emissions trading scheme goes too far, from farmers who argue that they should not be part of an emissions trading scheme, and from Māori interests who argue that they need to look after the interests of Māori households, the environment, and the Māori economy. It is very clear that whichever way the Māori Party votes, somebody will be unhappy.

We had to look very carefully at what we were going to do about the emissions trading scheme. We did not enter into our decision at all lightly. I was a little bit concerned about the things that have been said in the Chamber today. Some of the things that have been said today have been very ironic. For example, the Greens are very concerned that the Māori Party is about to be shafted. The Greens should know all about being shafted. They were shafted when they got cosy with Labour. Indeed, when Labour was passing its emissions trading legislation and conning the Greens, Labour came to the Māori Party and implored us to support its scheme. Labour members preferred to work with the Māori Party because they did not want to be working with—and this is a direct quote—“the crazy Greens, who are off their tree”.

Paul Quinn: Is that what they said?

RAHUI KATENE: Yes, it is what they said. The Greens know about being shafted because their legislation to remove age discrimination from the workplace was renamed as the Minimum Wage (New Entrants) Amendment Bill, which was a mini version of the 90-day Mapp bill both Labour and the Greens vigorously opposed. But with the change in the name of their bill they, along with Labour, ensured that young people would continue to be discriminated against. Sue Bradford, the sponsor of the bill, recognised the principled stand of the Māori Party, which voted against that bill, when she said: “I would also particularly acknowledge the Māori Party members, who are opposing the Bill in its amended form, but who are in fact its fiercest supporters. I am grateful for the Māori Party’s unflinching and uncompromising support for the bill as originally conceived rather than in its watered-down version, and I hope that one day their party and ours, and others, will join in going the whole way in abolishing youth rates altogether. This bill, even as it was originally drafted, was a compromise all along. Right from the start I was criticised in some quarters—and rightfully so—for putting up a bill that did not do away with age discrimination altogether but maintained it for workers under 16.”

Hon David Cunliffe: I raise a point of order, Mr Chairperson. As endearing as it may be for the member to read through the list of other bills that the Māori Party has welshed on, I point out that it is not relevant to the bill at hand. I ask that you bring the member back to the bill in the remaining 5 seconds she has.

The CHAIRPERSON (Eric Roy): By tradition, the speeches on the preliminary clauses have come to cover a wider issue, and I think the member is only following a pattern that we have had throughout this debate.

RAHUI KATENE: Just to point out—

Hon David Cunliffe: I raise a point of order, Mr Chairperson. If you are happy for the member to refer to completely different legislation from the bill that is supposedly the topic of this important debate in the Chamber, I ask that the member at least clarify for the Committee which bill she refers to.

The CHAIRPERSON (Eric Roy): Members do refer to other things in order to support the arguments they are making. I am prepared to hear members and see them draw a conclusion from what they are saying.

RAHUI KATENE: Speaking to the point that the Māori Party supports this bill and will continue to support it until it is enacted, I say that we are very interested to hear the points that other parties have to make, but we are not persuaded by them. Those arguments are made out of pure self-interest. We will continue to make that point because the existing scheme has nothing at all to do with Māori. There is nothing Māori in the existing scheme. We are very pleased to be working with a party that is able to see beyond its self-interest; to see how Māori contribute to the economy, to the environment, and to households; and to see that this bill will help them to do that.

I am very pleased to know that others outside of this Chamber support this bill. We are pleased about that.

MOANA MACKEY (Labour): I am happy to take a call on the title and commencement clauses of this terrible Climate Change Response (Moderated Emissions Trading) Amendment Bill.

That was an extraordinary contribution from Rahui Katene. I thought that the contribution from John Boscawen was very fair; indeed, she did vote with Labour at the Finance and Expenditure Committee to ensure that all submitters could be heard. I really appreciated that support, and I know that the submitters did, and I think that comment was only fair. John Boscawen left out the Greens, of course, who also supported that motion. But, suddenly, Rahui Katene was pulled into line by the Government, which realised that she might also allow us an extension of time so that we could consider the bill properly. She was told that she could not vote with the Labour Party any more. She even said to us that the Māori Party would be voting with National all the way through to the end, before the committee had considered the rest of the bill.

I have been thinking about what other names we could have for this legislation. I think we could call it the “Climate Change Response (Money-Go-Round Rob Peter to Pay Paul) Amendment Bill”, because the Minister in the chair—the Minister for Climate Change Issues—and other National members are very fond of going on and on about how they will halve the cost to households of this legislation. What Dr Nick Smith does not say is that the reason they are doing that is to allow companies dealing with liquid fossil fuels—the petrol companies and the power companies—to retire only half the emissions units that they would otherwise have to retire in terms of the emissions that they put out. That means that the taxpayer picks up the rest. On the one hand, the Minister is telling us that taxpayers should be grateful for the fact that they may not have to pay, I think, $165 a year, but, on the other hand, who will have to pay for the difference? It is the taxpayer. Well, I think that is what we would call Tory charity—take with one hand and give with the other. That is exactly what is happening. It is a money-go-round.

Within that, there is absolutely no mention of the $110 billion liability that is being put on future taxpayers. National members conveniently leave that bit out. When they talk about the cost to consumers, they conveniently leave out the fact that New Zealand taxpayers under this amendment bill—which is supported by the Māori Party—will now have to come up with $110 billion so that our big polluters can keep on polluting. Grassroots Māori, who have absolutely no influence on the way that Rio Tinto controls and handles its emissions, will have to pay for those emissions, and Rahui Katene says that is OK. Grassroots Māori families have absolutely no control over the way that all the big emitters in this country control their emissions—because they cannot make big companies like Rio Tinto reduce their emissions—but they will have to pay for it. The Minister thinks that is fair and Rahui Katene thinks that is fair.

Labour has always accepted that there would be a transition period and has always accepted that there would be free allocation, for many of the same reasons that the Minister has given. But for the Minister to try to claim that what Labour wanted to do and what National wants to do are the same is incredibly misleading. Labour wanted to transition New Zealand to a low-carbon economy, and we were looking at complementary measures that would assist that. We wanted to have an emissions trading scheme that would reduce New Zealand’s greenhouse gas emissions, as opposed to one that would give incentives to increase greenhouse gas emissions as long as the emission of greenhouse gases per unit of production remains the same. And the Māori Party says that is OK.

The Minister also likes to go on about alignment with Australia. He gets really angry with my colleague Charles Chauvel whenever he tries to claim that there is no Carbon Pollution Reduction Scheme law in Australia, which there is not. There is no Carbon Pollution Reduction Scheme law in Australia. Maybe we could call this legislation the “Climate Change Response (Alignment with Unicorns, Leprechauns, and Carbon Pollution Reduction Scheme Law) Amendment Bill”, given that those three things do not exist. The Minister has been getting very tetchy whenever my colleague raises the possibility that we may be aligning our scheme with a scheme that may never happen.

I thought this bill was a terrible bill, but I did not think that it was so bad that the Hon Nick Smith could almost bring down the leader of the Liberal Party in Australia; it appears that this bill is as bad as that. It appears that Malcolm Turnbull, the Liberal Party leader and Leader of the Opposition in Australia, may be rolled at some point this week.

Minister Nick Smith has been getting very upset with my colleague when he has said that there is no Carbon Pollution Reduction Scheme law in Australia, but the Minister has not explained why we are aligning our scheme with Australia’s. For example, why are we insisting that agriculture face the same kind of regime as industrial processes in Australia? Why are we aligning with a scheme that does not include agriculture, when our scheme does? Agriculture contributes 50 percent of our emissions and only 15 percent of Australia’s, and agriculture will not be included in the Australian scheme. Why are we aligning our scheme with that scheme, when we do not know when it will come in—if, indeed, it ever does come in? It is changing by the day.

Hon Dr Nick Smith: Because we promised we would.

MOANA MACKEY: A lot has changed since the election, I say to the Minister. The Minister has done many things, and his Government has done many things, since the election, and they have claimed that is because things have changed. This week we have already seen the Labor Government in Australia making a lot of concessions and a lot of compromises, trying to get cross-party support from the Liberal Party. It has been a changeable feast. Our Government will blindly align our scheme with that scheme, when we do not even know what will be in it, if it exists at all. I think the Minister would have done very well in the Committee stage of this debate to accept the amendment from my colleague Charles Chauvel that removed that requirement. The Minister still could have been working towards alignment, and still could have been doing all the work that I know he is currently doing with the Australian Government over alignment. I ask why we are setting ourselves up like that, or is the Government opposing the amendment just because the Labour Party put it forward?

I will also respond to something else that the Minister said earlier, when he spoke before the lunch break and question time. I think we could also call this bill the “Climate Change Response (Hon Dr Nick Smith Walked Away from Negotiating with Labour Because He Did Not Want Phil Goff to Get Any Credit) Amendment Bill”. Let us be quite clear: when we were in negotiations with the Minister, he told the Labour members who were in that room that some people on the ninth floor of the Beehive thought that the negotiations with Labour were a mistake, because they might give Phil Goff the boost that the section 59 negotiations had given John Key. He told us that.

Hon Dr Nick Smith: Not true.

MOANA MACKEY: The Minister told us that. That was exactly what he told us. The fact is we knew that that was a reality for the National Government, and we accepted that, but we thought that cross-party agreement was very important in this area. Remember that just about every submitter from the business sector who came to the select committee said that what they wanted was certainty. What they did not want was a scheme that would go backwards and forwards between National and Labour, with both parties putting forward their versions while in Government, and creating enormous uncertainty. We agreed.

Hon Dr Nick Smith: Well, stop playing politics.

MOANA MACKEY: Oh, please! The Minister stood up in this House and misrepresented what Labour members said in those negotiations. He asked why we had agreed to things in our negotiations when we do not agree with them now. He does not understand that we were there to reach a compromise with the Government. We were there. We appreciated that we had not won the election, that the Government has a mandate to make changes, and that we would not be able to get our way on everything. That was why we were prepared to compromise, even if it was on things that we would not do if we were in Government. We thought those negotiations were going very well, we thought we had a real chance of getting a durable emissions trading scheme, and the Hon Dr Nick Smith walked away from it. He walked away from it. He said that we should have just known that he was dealing with the Māori Party. Well, that is fine. I ask the Minister to answer me this question: why did he not pick up the phone and tell Charles Chauvel—

Hon Dr Nick Smith: Because he would’ve leaked it.

MOANA MACKEY: —no, the Minister should listen—that he was walking into a room now to announce that National had done a deal with the Māori Party? He could have talked on the phone, then walked straight into the room and made the announcement. Why did he not do that?

Hon Dr Nick Smith: Because he would’ve leaked it.

MOANA MACKEY: The Minister says that Charles Chauvel would have leaked it in the 5 seconds between the Minister telling the Labour Party and the Minister making the announcement. Labour members believed that they were in a good position with the National Government and that they were making progress. We had had a great meeting the week before. We had sent through a document for the Minister to respond to, with a proposed summary of the issues—where we should go from here, what information we wanted from officials, and what we wanted to see from officials before we were able to commit—and then we found out through the media that the Minister had done a deal with another party. And he says that we acted in bad faith.

Paul Quinn: Yeah, that’s what happens when you have a Dutch auction.

MOANA MACKEY: I know that Paul Quinn is the master of absolutely everything, but he was not in that room. Mr Quinn was not in that negotiations room. [Interruption] No, he was not.

Paul Quinn: I didn’t need to be.

MOANA MACKEY: He did not need to be, because the facts do not matter to Paul Quinn. But the fact is that we were very, very close to getting a durable agreement, and the Minister walked away.

JO GOODHEW (Junior Whip—National): I move, That the question be now put.

KEVIN HAGUE (Green): Members of this House come to this Chamber today with both a privilege and an awesome responsibility. We do so because the issue of climate change, which is before us today, is the most important issue that will be dealt with by this Parliament, or, indeed, by any New Zealand Parliament. That imposes a particular standard on us, a standard of responsibility that requires us to examine our consciences and to do the right thing. I fear that the reality is that we are about to do absolutely the wrong thing. I ask the members of the Government parties—National, United Future, and the Māori Party—to examine their consciences and, regardless of the instructions that they come to this Chamber with, to consider again—

Hon David Cunliffe: I raise a point of order, Mr Chairperson. I apologise to the member for interrupting an important contribution. I have twice before raised the issue of Mr Quinn rudely chipping across the Chamber from a seat that is not his own. You have chosen to infer that he did not move for the purposes of chipping, and you have asked him to restrain himself. There is nothing particularly substantive in his interjecting—it is just noise—but it is very discourteous to the member speaking, who is trying to give a considered contribution to this House, and it is inciting disorder amongst my colleagues, and that is not helping the public of New Zealand to understand the arguments. I ask—

Hon Dr Nick Smith: I would note that Rahui Katene gave a speech only 15 minutes ago, and all the way through that speech there were rude and aggressive comments from members like Mr Cunliffe. Although I am very keen to hear what Mr Kevin Hague from the Green Party wants to say, I think there has to be some consistency. If members ask for courtesy, it should be applied to members on both sides of the debate, and not just to his side.

Hon David Cunliffe: I appreciate the Minister’s point that there has been vigorous debate in the Chamber, and that is to be expected on a bill of this nature. But there is a specific case here of a member who is not in his own seat, and the Chair has previously warned him and it has had no impact on his behaviour, which is now disorderly to this House.

Paul Quinn: Speaking to the point of order—

The CHAIRPERSON (Eric Roy): No, I do not need the member’s assistance. I think we have at times throughout this process had quite vigorous interjections from members who have not been in their seats. The Speakers’ ruling is quite specific about moving to gain an advantage. When the Chamber has fewer people in it, people tend to congregate down the front, and there is a degree of tolerance of that, but I think, generally speaking, all members of the House should be advised that it is expected that interjections be rare, reasonable, and, if possible, humorous. I ask members to have some consideration for other participants in the debate.

KEVIN HAGUE: Thank you to the member for raising that point. I was commenting on the gravity of the issue before us. I have spoken previously in the debates on other parts of the Climate Change Response (Moderating Emissions Trading) Amendment Bill about the inadequacies of this bill. The gravity of the climate change situation facing the Earth requires all Governments, all Parliaments, and all countries to do everything that is in their power to mitigate the disaster that looms. This is a bill that does not contribute to that purpose, but, rather, weakens the law that already exists. Compared with the law that already exists, this bill will result in increased emissions.

We are debating the title of the bill, and the words “Moderating Emissions” seem to me to be completely inappropriate for a bill of this sort. The Green Party will be introducing an amendment in the name of Dr Russel Norman to change the title of the bill to the “Climate Change Response (Polluters Get Paid) Amendment Bill”. He has another amendment to change it to “Climate Change Response (Payday for Polluters) Amendment Bill”. Both of those names would be more suitable names for this bill.

Earlier today, a brief flame of hope flared when the news hit this House that the national council of the Māori Party was intending to meet today to reconsider its position. It seemed that, for that brief window, the Māori Party was prepared to listen to the evidence and the arguments, and to reconsider. I have to say that it was with great regret that I read the comments of Te Ōrohi Paul dismissing that rumour as nothing more than rumour, and saying that the Māori Party was a party of integrity and a party that considered that its word was its bond.

In my intervention last evening about Part 1, I referred to a number of comments that the co-leader of the Māori Party, Tariana Turia, had made in her speech in March last year in relation to emissions trading. All of those comments are totally at odds with the position that the Māori Party is now taking on this bill. I ran out of time before I was able to come to the last comment that I wished to use. It was a comment from Tariana Turia in relation to the Greens’ position on that bill. What she had to say was this: “A billion dollars was the price of the Green Party support for a scheme that achieves almost nothing. We predict that that $1 billion will seem like 30 pieces of silver once the full impacts of climate change start to be felt.” If Te Ōrohi Paul is correct and the Māori Party is a party of integrity, then I call on the Māori Party members to reconsider, examine their consciences, and actually consider what it is that their party stands for, because what they stand for in this debate is at odds with everything they have stood for on the issue of climate change until this debate, and it is at odds with everything they have come to this House with, and represented their members and their voters on, prior to this debate.

I will quote from OraTaiao, one of the submitters on this bill. It is an organisation of senior health figures—doctors, nurses, and other health professionals—and mirrors, in fact, the global interest and urgency that the health professions are bringing to the issue of climate change. One of the things that it had to say to the select committee was this: “We submit that if passed, the bill would render the current emissions trading scheme completely ineffective, resigning it to irrelevancy. An ineffective ETS means falling between two stools for health, failing to mitigate the threats to health from climate change while introducing a regressive policy with a high economic burden on those who can least afford it. Such a policy also passes on significant costs to future generations.” What OraTaiao was saying is what health professionals around the world have been saying: that the health consequences of not dealing with climate change effectively are extreme—and this is a bill that proposes to increase emissions. OraTaiao enumerated many of those consequences in its submission. In particular, I want to point out that those consequences are most severe for Māori.

We have heard a lot in the debate from the Government about the need to balance the economy and the environment. It is very clear that it is possible to do both—and the Green Party has given many examples of how—and to actually have a meaningful emissions trading scheme and also a productive economy. It is with great regret that I have to say that National and the Māori Party have chosen instead to favour an economy that is based on the short-term thinking of current business.

I will conclude by quoting from an editorial by Professor Hugh Montgomery in the New Zealand Medical Journal from 9 October. He says this: “There is a real danger that politicians [at Copenhagen] will be indecisive, especially in such turbulent economic times at these. Should their response be weak, the results for international health could be catastrophic. We must all act now to ensure that there is a deal, and that it is meaningful rather than fanciful. At present, voiced aspirations for large targets for 2050, or small ones for 2020, are nothing more than dangerous hot air. A weak deal will represent not an historic international agreement, but a suicide pact. Now is the time for us all to act. If not us, who? If not now, when?”. That applies equally in this House today as it does in Copenhagen next week.

CAROL BEAUMONT (Labour): I too rise with great sadness, given the response of National and the Māori Party to what has to be the most fundamentally important issue facing the world today. We are seeing this afternoon in this Chamber a bill being passed that weakens the provisions that this country had already put in place to play our part in dealing with the issue of climate change. There is increasing evidence that the changes taking place will change the world as we know it. Many examples have been given of the consequences for human life, for human habitat, for our animals, and for the future of this planet. This is a serious issue, yet we are addressing a bill that weakens those provisions. It is environmentally irresponsible, economically inefficient, and socially inequitable.

I think, as have others, that this bill needs to be renamed. I have a couple of suggestions. I thought perhaps the “Climate Change (Responsibility Transfer Costs from Polluters to Taxpayers) Bill” might be a possibility, or the “Climate Change Response (Missed Opportunity for Cross-Party Consensus) Amendment Bill”, because those titles are more accurate reflections of what we are facing here today.

Our response as a country should be to put in place a strong scheme to deal with emissions. Instead, we are weakening the response of the previous Government. This legislation, which modifies Labour’s emissions trading scheme and is being passed under urgency, is fundamentally flawed. In fact, as others have argued so cogently, it may have the perverse effect of increasing emissions, and it will undoubtedly load costs on to ordinary New Zealanders.

The criticisms of this bill come from all quarters. I think it is worth reflecting on some of these criticisms, although I know for certain that the Government will arrogantly dismiss them because, of course, they are right. Brian Fallow stated: “The changes agreed are all about transferring cost from the emitter to the taxpayer, and to that extent it defeats the purpose of the exercise.” Greenpeace stated: “We now have on the table a pathetic ETS which won’t actually do anything to reduce emissions … our emissions will just keep climbing and taxpayers, rather than polluters, will have to pay for them.” Rod Oram stated: “National’s changes would drive up emissions, perpetuate old technology, necessitate ever-greater subsidies and reduce New Zealand’s international competitiveness and reputation.” The New Zealand Business Council for Sustainable Development stated: “Overall, this proposed policy appears to greatly reduce incentives to heavy emitters to reduce emissions, increase costs of subsidies to them, slows down the timetable for reducing emissions …”. The Institute for Policy Studies stated: “It does not provide a path forward to decarbonise the New Zealand economy in an efficient, effective or equitable manner. It will barely reduce emissions. It imposes high costs on the economy for the benefit of a favoured few.”

I repeat the phrase “for the benefit of a favoured few”, because that is what the essence of these changes is all about. It is about transferring the cost from polluters; whether they be Māori or Pākehā polluters, they are having their costs transferred on to ordinary taxpayers.

What about the Parliamentary Commissioner for the Environment, the independent Officer of this Parliament with the role of reviewing environmental policies and actions? The commissioner commented: “New Zealand should not align itself with Australia’s proposed scheme. A cap on the number of carbon credits freely allocated is vital to create the right incentives, and to reduce fiscal risk to the Government and policy uncertainty for business. The phase-out of free carbon credits is far too slow.”

Criticisms have come from every quarter, yet the Government intends to push this legislation through. National, with the support of the Māori Party, will today push this legislation through the House. The process has also been flawed. I will not go into detail, but I know that my colleagues have raised the fact that this is probably the worst process they have been engaged in in their parliamentary careers.

NICKY WAGNER (National): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Motion agreed to.

The question was put that the following amendment in the name of the Hon David Parker to clause 1 be agreed to:

to omit this clause, and substitute the following new clause:

1 Title

This Act is the Climate Change Response (Increased Emissions) Amendment Bill.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

The CHAIRPERSON (Eric Roy): I will quote Speakers’ ruling 112/4 because I am going to rule out some of the amendments to clause 1. Speakers’ ruling 112/4 states: “An amendment to the title of a bill must be a serious or objective description of the bill rather than an attempt to criticise its contents.” In that respect I am ruling out the following amendments in the name of the Hon David Parker: to omit clause 1 and substitute “This Act is the Permanent Pollution Payments Entrenchment Bill.”, to omit clause 1 and substitute “This Act is the Climate Change Response (Increased Government Debt) Amendment Bill.”, and—

Hon David Cunliffe: I raise a point of order, Mr Chairperson. I appreciate that you are in the process of ruling, and it is with some hesitation that I raise this point. You have referred to a Speakers’ ruling that requires your ruling to be based upon an assessment that the nature of the amendments is, first, an attempt to be pejorative, and, second, not based in fact. Now, taking as an example the one by my colleague the Hon David Parker around permanent pollution payments, the Government’s own analysis indicates that there is an infinite stream of subsidies, and that the phase-out rate does not reach zero. I would submit to you that, in fact, the amendment is a perfectly accurate description of the bill.

The CHAIRPERSON (Eric Roy): I have had plenty of time to give this matter serious consideration, and I have looked at other precedents. I am ruling out these amendments specifically because of the ruling’s words “a serious or objective description”. They are ruled out for that reason. Furthermore, the amendment in the name of the Hon David Parker to omit clause 1 and substitute “This Act is the Greenhouse Gas Emissions Property Rights Creation Bill.”, the amendment in the name of Russel Norman to omit clause 1 and substitute “This Act is the Climate Change Response (Polluters Get Paid) Amendment Bill”, and the amendment in the name of Russel Norman to omit clause 1 and substitute “This Act is the Climate Change Response (Payday for Polluters) Amendment Bill.” are also ruled out of order.

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

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Clause 1 agreed to.

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

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Clause 2 agreed to.

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

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Clause 3 agreed to.

Bill reported with amendment.

Report adopted.

Third Reading

Hon Dr NICK SMITH (Minister for Climate Change Issues): I move, That the Climate Change Response (Moderated Emissions Trading) Amendment Bill be now read a third time. This bill is about implementing for New Zealand a workable and affordable scheme that will provide an incentive to reduce emissions and to encourage afforestation. It strikes that right balance that we need to find between protecting our environment and ensuring New Zealanders have jobs. It ensures that we do our fair share on climate change without the pretence the previous Government ran of New Zealand being carbon neutral.

New Zealand has actually been going round and round in circles for over a decade on trying to get a price on carbon pollution. This bill means that on 1 July next year there will be that important price on carbon as part of our package to respond to the challenge of climate change. This revised emissions trading scheme is consistent with National’s commitments to the electorate. We said we would align our scheme more closely with Australia; the bill does that. We said we would provide incentives for industry to reduce emissions without encouraging an exodus of jobs and investment overseas; the bill does that. We said we would rejig the scheme to be fiscally neutral, so households, farms, and businesses would not be funding multibillion-dollar windfall gains to the Government; the bill does that.

If this bill was not passed, the existing scheme would come into effect on 1 January, and it would increase power prices by 10 percent and put $400 million a year in costs on to industry. There are also no allocation plans, and there are a number of serious areas in the existing legislation that would cost jobs and do damage to the environment. This Government is not prepared to burden households and businesses with that scale of costs at this time, when we are just seeing the fragile signs of an economic recovery after the worst economic downturn since the Great Depression. The scheme would have to had to be delayed until 2011 if it were not for an agreement with the Māori Party, for which I must thank them. Frankly, mokopuna in the future will thank them also. They have been constructive players and want to move New Zealand forward.

The Māori Party brings a very balanced perspective to this debate, with both a strong commitment to Papatūānuku, the environment, but also a real concern about jobs and about the impacts on low-income households and an understanding of the importance of primary industry to New Zealand. In the Opposition’s criticism of the Māori Party, it has been said in one breath that this does too much for Māori, and in the next breath that it does too little. Well, both cannot be right, and I think that reflects the fact that we have come to a very fair agreement.

I also acknowledge the role of United Future, who have consistently—not just now, but also over the last decade—played a very constructive role. I particularly acknowledge the work of Peter Dunne in chairing the Emissions Trading Scheme Review Committee. I also thank the very capable Craig Foss for the work he did in chairing the Finance and Expenditure Committee. I acknowledge the hard work of officials, particularly those in the climate change and risk directorate of the Ministry for the Environment, led by Stuart Calman; the Ministry of Agriculture and Forestry team, led by Julie Collins; and select committee staff. I particularly acknowledge the Parliamentary Counsel Office officials, who have worked extraordinarily hard. It is interesting to me that for all the debate on the bill over the last 2 days, scrutiny of Supplementary Order Paper 98, which we have moved through the House has found not a single error.

This bill makes a number of important changes to make our emissions trading scheme workable and affordable. The industrial, energy, and transport sectors will be entering the scheme on 1 July, and agriculture in 2015. There will be a transition phase for the next 3 years with a half obligation and a fixed-price option of $25 a tonne. Those changes will halve the cost increase for electricity and fuel for consumers and businesses.

The bill also makes changes to support for trade-exposed emissions-intensive industry, which I think is the most challenging dimension of climate change and emissions trading scheme policy. First, a high-intensity and medium-intensity threshold is specified. Secondly, the allocations will be based on an industry average and not on 2005 levels. That will ensure that we do not reward those that have been laggards and have had higher emissions, and punish those that have invested early in efficiency. Thirdly, the allocations will be production-based. That is as per the economic analysis that was done by the New Zealand Institute of Economic Research and Infometrics showing that that was the most effective way to address the problem of leakage. This Government is not about exporting jobs offshore; it is about incentivising more efficient production here in New Zealand. The fourth change is about slowing the phase-out of support to industry so that it is in line with our major trading competitors.

There has been a nonsense claim of $110 billion worth of cost to families. Let me go through and challenge that. First, it is not a cost; it is a lower level of revenue.

Hon David Cunliffe: The New Zealand Treasury is not a nonsense.

Hon Dr NICK SMITH: The analogy I make for Mr Cunliffe, who interjected, is that if his research and development tax policy, which cost $260 million a year, was costed in the same way that he wants to cost this emissions trading scheme bill, it would cost $43 billion. That is, if we add all the years up and add all the interest, we get that sort of ridiculous figure. All the rhetoric about debt, etc. is simply a smokescreen for Labour, who fundamentally have not been able to find fault with this bill.

There has been criticism that this bill is too generous. This emissions trading scheme will be the first in place of any country outside of Europe, and it will be the most comprehensive, by including transport, industrial, and energy emissions. New Zealand is also the first country in the world to include forestry, and under these amendments, because of our unique emissions profile, it will also include agriculture. There has also been criticism of our production-based approach, which was recommended in the analysis in the Finance and Expenditure Committee review. I note that Australia is taking that intensity approach in its Carbon Pollution Reduction Scheme, which is expected to be passed in its Senate this week. It is also the approach that has been taken by Europe in the third phase of its emissions trading scheme. This is about incentivising efficiency, rather than just exporting emissions-intensive industries to other countries. It is true that we are making a provision in this bill to ensure that it does not snuff out the early recovery of the economy. The passing of this bill means we have an emissions trading scheme that balances environmental and economic outcomes while showing the international community that we are serious about tackling climate change.

After having achieved the milestone of passing this bill, attention will have to turn to the complex intellectual job of implementing the scheme. The Government looks forward to working with industry to ensure a smooth implementation. The passing of this bill will be an important first step for New Zealand towards addressing climate change. It allows us to get on and implement an affordable and pragmatic scheme, and to play our part in addressing this global problem. I emphasis that it is a first step, and that New Zealand must remain nimble-footed with regard to agreements that may be reached internationally, to decisions that our trading partners make, and to advancements and updates in the science. Getting the emissions trading scheme up and running will be a major programme for the Government over the next year. Challenges include providing the allocations of emission units to those intensive trade-exposed companies, and that will include consultation with industry and other New Zealanders about how we calculate and implement those entitlements.

This bill will deliver for New Zealand a workable and affordable emissions trading scheme. I am pleased to commend this bill to the House. It is a critical and important first step in our nation’s effort to do our fair share in combating climate change.

CHARLES CHAUVEL (Labour): We are about to pass a bill into law, the Climate Change Response (Moderated Emissions Trading) Amendment Bill, that is fundamentally flawed on multiple levels. It is economically irrational, socially inequitable, environmentally counter-productive, and fiscally unsustainable. Its hallmark has been one of poor procedure and hasty consideration.

The Committee stage of the bill was taken in about 8 hours under urgency. That allowed for no proper chance to remedy the defects associated with the select committee process, including the withholding by the Minister for Climate Change Issues of key aspects of the official analysis of the legislation. What is worse is that the 8 hours were completely insufficient to allow Parliament to come to terms with the two sets of amendments tabled only yesterday. One, from the Minister, was a Supplementary Order Paper of 121 pages, with at least five mistakes that I have found already in the explanatory note, which we opposed. The other one was from the Māori Party enacting a Treaty clause. We ultimately decided to support that, notwithstanding that there was no proper scrutiny allowed for those particular amendments. What is worse, National, the Māori Party, and Peter Dunne voted down every amendment put up by the Opposition designed to improve this bill. Having deprived the people of an adequate select committee process, those parties then prevented any real improvement being made in the later stages of the legislative process.

We proposed an amendment to cap overall levels of free allocation, given that the bill as it stands puts in place an uncapped intensity-based allocation model. An uncapped method allows the overall level of allocation and, therefore, emissions themselves to increase because there is no cap in the “cap and trade” scheme. So it carries with it an extensive fiscal risk if recipients of free allocation choose to increase production. That is why the Parliamentary Commissioner for the Environment told Parliament that it is vital to create the right incentives to reduce fiscal risks and to create policy certainty for business. But National, the Māori Party, and Peter Dunne did not support this amendment, which sought to advance fiscal responsibility and environmental effectiveness.

Labour also tabled amendments to phase out free allocation to industrial and agricultural activities completely by 2030. We did this because, as the bill stands, the level and duration of allocation is excessive. Providing free allocation for more than 80 years with a phase-out rate of only 1.3 percent a year defies any common-sense idea of a transition. Even the Minister says that 1.3 percent will not survive future reviews, which begs the question of why he wishes to enact it in the first place. At this level of generosity, as with any protection or subsidy—as we saw with supplementary minimum prices in the 1980s—future Governments will find it very hard to roll back this level of assistance. Allocation recipients will have a very powerful incentive to maintain the status quo. National, the Māori Party, and Peter Dunne voted to keep these permanent pollution payments.

Given the immense costs of the levels of allocation, not just fiscally but also economically and environmentally, it is crucial that there should be transparency over how allocation takes place. But this bill reduces that transparency, so Labour sought to enhance it and put in place safeguards against corruption by requiring the details of all allocation to be published. Allocation involves the transfer of enormous amounts of wealth in the form of carbon credits from the taxpayer to individuals and firms. The taxpayer deserves to know the level of these subsidies and have a clear, analytical rationale as to why they are provided. If we do not have that transparency there will be no public trust in this scheme and there will continue to be rightly held suspicions that allocation levels are based more on politics rather than economics. Labour tried also to require any donation to a political party by a recipient of allocation to be disclosed. But National, the Māori Party, and Peter Dunne do not support the right of the public to know these things.

We also tabled amendments to remove the half obligation and raise the price cap from $25 to $100 during the 2010-12 period. The half obligation is unnecessary. It shifts costs by more than half from the polluter to the taxpayer, and, despite the Minister’s claims, in the electricity sector it will not reduce the impact on electricity prices. The European experience shows that it will not. What is worse is that the fixed price is set at such a low rate that it does not fulfil the purpose of any transitional price cap to provide certainty against price spikes. Any price cap should be set high enough to act as a safety valve, not just another subsidy.

We also sought to prohibit the banking of non-forest New Zealand units during the transition period. This would have prevented the collection of credits while the price of carbon is low and then the selling of them at a higher price once the cap is removed. Banking and trading free allocated credits, taken with price caps, will result in increased emissions and windfall gains to polluters. But National, the Māori Party and Peter Dunne did not support fixing the bill in these ways.

We also tried to put back the entry date for agriculture from 2015 to 2013. As the Parliamentary Commissioner for the Environment told Parliament, there is no evidence to justify delaying the date of entry of agriculture to 2015. We can measure emissions at processor level from 2013, and emissions-reducing technologies are available, particularly in the form of nitrogen inhibitors. Delay merely keeps the full cost of emissions with the taxpayer until 2015 and postpones appropriate levels of emissions-reducing investment and proper behaviour in this sector. National, the Māori Party, and Peter Dunne did not support these changes, either.

We also sought to establish a fund to reduce greenhouse gas emissions through the promotion of complementary measures. All the evidence internationally is that an emissions trading scheme can do only part of the job. There need to be robust complementary measures in place, as well. The amendment that we proposed would have provided for an annual appropriation for revenue accrued from the emissions trading scheme to promote energy efficiency, renewable energy, and research and development. We put this amendment forward because assistance provided to households beyond 2012 has been axed. This bill gets rid of the household fund in the original legislation. That fund would have provided a billion dollars of energy-efficiency assistance to low-income households over 14 years. The Māori Party traded off its abolition for a one-off $24 million scheme targeted at low-income households. Let us do the maths on that. Low-income households, many of which are Māori, will receive $976 million less in energy-efficiency assistance than they would if this amendment was not passed. National and Peter Dunne were part of that deal.

The bill as it stands makes highly undesirable changes to the Act in order to achieve alignment with the Australian Carbon Pollution Reduction Scheme, an objective that Treasury, the Parliamentary Commissioner for the Environment, a leading independent expert, and others all tell us is without any clear analytical basis, given the unique emissions profiles and industrial profiles of the two countries. The fact that the Carbon Pollution Reduction Scheme is still proposed only, but went through a $7 billion revision only this week in order to try to get Liberal Party support, only adds to demonstrating the incoherence of the harmonisation proposal. We proposed amendments to remove the harmonisation objective and to take out the criterion as a relevant one that the Minister should take into account when determining allocation plans. Despite this clearly being in the national interest, National, the Māori Party, and Peter Dunne opposed it.

We also tried to enshrine national emissions targets in law and to require the Minister to ensure that they are actually met. Targets should not simply be a matter of pious intention. The current levels, duration, and model of allocation are completely incompatible with the Government’s target to reduce 1990 emissions by 50 percent by 2050. If the Government’s “50 by 50” reduction target is anything more than a catchy slogan, the Minister should have been prepared to agree to enshrine the target into law.

Finally, we proposed amendments to establish an independent advisory committee on climate change to provide advice to Ministers and promote informed public debate on the public policy response to climate change. The development of climate change policy in New Zealand has been controversial; we all know that. There is no consensus on key issues as there is, for example, in Europe. There has been insufficient independent analysis of the costs and the benefit of climate change policy initiatives. The select committee process that we have just witnessed aptly demonstrates why such an independent body is so sorely needed in this country. National, the Māori Party, and Peter Dunne opposed even these measures.

This bill is fundamentally flawed. As I have said previously, it will make New Zealanders poorer, our economy weaker, and our emissions increase. The amendments Labour tabled over the past day would have addressed some, but not all, of these significant deficiencies, but, like our attempts to reach a consensus with National earlier in the year, they were spurned.

HEKIA PARATA (National): Tēnā koe, Mr Assistant Speaker Barker. Tēnā tātou e te Whare. The Climate Change Response (Moderated Emissions Trading) Amendment Bill was always about fulfilling New Zealand’s international, environmental, and domestic obligations in a fair and balanced manner, and I am glad to speak in the third reading of this bill because that is what it will achieve. From an international perspective, this legislation will enable the Government to head to Copenhagen in a few weeks’ time with a substantive framework to curb emissions and to show that New Zealand is prepared and committed to do our fair share in the fight against climate change. Indeed, this National-led Government will ensure that New Zealand stands with our international friends and neighbours as progress is made on this most significant of issues.

I agree that we should be standing with our neighbours, but we need not march out ahead on our own. To do so would not make any practical improvements towards the goal of combating climate change. It may allow our Government representatives to attend future conferences with a slight feeling of moral superiority, which is a landscape the Opposition was most addicted to when in Government, but that feeling would have been built on the back of failing businesses, a struggling economy, and job losses. That is why we stand side by side with our partners and why we are aligning ourselves more closely with Australia.

As I have said, this bill ensures that we do our fair share for climate change while balancing our international and environmental obligations with our domestic responsibilities. This is what New Zealanders said on 8 November last year that they wanted and this is what the National-led Government will deliver.

This is very important legislation, and the changes that National supports are designed to assist the transition into the scheme for those most affected by the changes. By extending entry dates and increasing allocations, this bill is helping to cushion the transition for existing industries and their related consumers so that they can continue to hire workers and contribute to our recovering and strengthening economy. Again, from an environmental perspective these industry and worker-friendly amendments will not negatively impact the global issue of climate change, at all, in practical terms, but they will make a big difference to thousands of New Zealanders who represent the backbone of this country’s economy, the agriculture, fisheries, and energy sectors among them. Those in the agriculture sector at least will sleep a little better knowing that when this bill passes its third reading, they will now have until 2015 to prepare for their involvement in the scheme. The agricultural sector is to New Zealand what the mining industry is to Australia, and we need to ensure, more than ever in the current economic conditions, that we allow this sector to continue to thrive.

There has been a tight timetable for the progress of this bill, but, as the Hon Nick Smith pointed out, it was not only the upcoming Copenhagen talks that called for timeliness but also the fact that under the previous administration’s scheme, which currently stands, consumers and businesses were about to unwrap a $400 million bill for Christmas, including a 10 percent rise in power prices, due to changes that come into effect on 1 January. That is not what New Zealand’s businesses and families need; in fact, it is not what many families can handle right now. There are signs that the worst of the economic crisis is over, but the effects are still being felt and will continue to be felt for a long time. The existing legislation is not what New Zealanders want, and they said so at our general election after John Key openly proposed a moderated emissions trading scheme that acknowledged the hardships that Kiwi workers, families, and businesses are facing.

This issue is all about sustainability. It is a buzzword that has been bandied about liberally, and with good reason, but it has been overlooked in its wider application to climate change response. Policies need to achieve the goal of creating a sustainable world to live in now and for future generations, but these policies themselves need to be implemented in a way that is also politically and economically sustainable. Although the previous Government’s emissions trading scheme put many measures in place towards this goal, it was a fundamentally unsustainable response because the balance was wrong. The legislation was out of touch with the people in my communities of Ruatōria and Porirua, who are already struggling to pay their escalating power bills. It also placed too many impositions on sectors of the economy that felt they were not being given enough time to come to terms with the new environment and the costs that were being demanded. To make sure that the scheme is achieving its goals in the future, there will be 5-yearly reviews to ensure that we really are dealing with a sustainable climate change response. Although we will never please everybody, I am confident that this bill will remedy and address many of the inadequacies of the current scheme and take us forward in a sustainable manner to a sustainable future.

The Treaty was signed by hapū and iwi and it protected their right to manage their lands, forests, fisheries, and other taonga. This bill provides that opportunity. The Treaty created this population of people called Māori and said that they should have the gift of citizenship. The quality of that citizenship has not been all that it should have or could have been, but the opportunity to get and keep jobs because we have a strong and growing economy and to have access to warmer, drier homes are all elements that contribute to a better-quality citizenship. This bill provides for that. The Treaty provided that there would be a Government that would govern for all and balance interests for the benefit of all. This bill reflects that.

In the end, this comes down to whether one philosophically believes in perpetual dependence on the State or the creation of wealth so that all are better off through the development of their own resources. I choose the latter. I commend the Māori Party for making the same choice, for believing in iwi and their rights and aspirations to grow their own resources, for understanding and supporting the downstream opportunities for whānau, and for seeing the balance that has to be struck between the environmental and economic interests of our country—our nation of Aotearoa New Zealand. I acknowledge and thank the Minister for Climate Change Issues, the Hon Nick Smith, and our colleagues in the Māori Party. Ngā mihi nui ki a koutou. I commend this bill to the House.

Hon DAVID PARKER (Labour): I can but disagree with the last speaker, Hekia Parata. How can extending subsidies for carbon pollution until 2080, if not longer, be the road to independence and self-reliance? It is exactly the opposite. The ambition of the emissions trading scheme is to reduce New Zealand’s greenhouse gas emissions. That is stated in the existing legislation. It is meant to do that at the lowest possible cost to the economy by reflecting into the economy the cost that arises from the Kyoto Protocol to the New Zealand economy of increases in emissions. So, if one produces emissions, one is meant to pay for them; if one reduces emissions, one gets rewarded. That is what happens to New Zealand already under the Kyoto Protocol. The Climate Change Response (Moderated Emissions Trading) Amendment Bill undermines the effectiveness of the emissions trading scheme to do that. For those who are major emitters, the amendment pays for virtually the whole of the costs of their emissions.

The existing scheme was already generous in the free allocation to trade-exposed industries, and that was for good reason. I think on all sides of the House we are agreed that during a transitional period when some other countries are not properly pricing emissions, it would be wrong to force major emitting industries to pay for all of the cost of their emissions, because that could make them broke. In the case of industries that could move, like the steel, aluminium, or cement industries, they could relocate to a country like China, with no environmental benefit but with an economic loss to the country. For that reason, the existing Act is already very generous in its allocation. It gives free allocation to those industries of 90 percent of their 2005 emissions—90 percent, not 10 percent, not 20 percent, not 50 percent, but 90 percent of their 2005 emissions. So the idea that that was not generous was always nonsense. The free allocation of that 90 percent rate was to go unabated until 2018—a decade from last year, when the legislation was passed. Industries had a decade of that 90 percent allocation of 2005 emissions provided to them free—a decade to adjust before it started to abate. Then it would abate at 8 percent per annum, but it would all be over by 2030.

The independent expert advising the select committee, Dr Suzi Kerr, is a pre-eminent world expert. We are very lucky to have her in New Zealand. She is not just an expert in a New Zealand context; she is so expert that she is currently a visiting professor lecturing in emissions pricing at none other than Stanford University in the United States of America. She told the select committee that the existing scheme, which had free emission rights phased out by 2030, was already, if anything, too generous to major emitters, that it was economically wrong for New Zealand to be so generous, and that we should be less generous. But this bill does the opposite.

I will turn to a couple of other things. We heard Hekia Parata say that this bill saves people money on their power bills. Well, that is not necessarily true. New Zealand’s power price is heavily influenced by the cost of new generation capacity. That new generation capacity cost is not changed by this short-term gift of free extra emission rights to the heavy emitters in power generation. So I proposed an amendment. I said “Let’s guard against double-dipping here.” All that amendment said was that before major emitters in the power industry got free emissions they had to show to the Commerce Commission that the prices would have gone up but for that extra free allocation. The reason I put that amendment forward was that the experience in Europe, which we ought to have learnt from, shows that if we do not do it, power generators put up their power prices anyway and pocket the extra free allocation that they get at the cost of taxpayers. That is not fair. National and the Māori Party voted against that amendment, and it did not proceed. People now face the risk that they will get an increase in the power price when the Government is giving even more free allocation to the electricity sector.

I will talk a little about Treaty issues. We have agreed to the Treaty clause in this legislation, which says that the Treaty principles ought to be honoured in terms of consultation around forms of regulation. I felt somewhat uncomfortable doing that, because it did not go through the normal select committee process and it was just dumped in the bill yesterday. We did not have the time to properly examine it, but we read it as thoroughly as we could within that time frame, and we thought it was fair enough so we voted for it. But we do not support this unprincipled additional free allocation to only some owners of pre-1990 forests or the land on which those forests lie. The principle that National has breached is the principle of full and final settlement in Treaty settlements. Once there is a Treaty settlement and the assets pass from the Crown to iwi, those assets—and they are mainly land assets—should be subject to the laws of the land. I am bound by the Income Tax Act; so are Māori iwi. I am bound by the Resource Management Act; so are Māori iwi. I am bound by the emissions trading scheme, and so should Māori iwi be. There is one exception to that: if the Government, through some duplicitous wrongdoing, hides from Māoridom at the time of the settlement some undisclosed liability for future cost that undermines value, that is wrong. That would either amount to a misrepresentation by the Crown or the withholding of important information that ought to be transparently made available to the iwi in the settlement. So, again, I put up an amendment. I said, well, if there is that, yes, there should be additional compensation payable. But if they cannot show that there was withholding of information or misrepresentation then the same laws of the land should apply to all. I think it does not bode well for National nor the Māori Party that they have breached that principle. They breached it for the benefit of, let us be honest, the corporate end of town. Just as they gave money to the corporate end of town for the major emitters, they have done the same to Māoridom. They have ensured a profit for a few Māori at the cost of the rest of the community, including most Māori. It is wrong, and it undermines the effectiveness of the scheme.

The cost of free allocation in the agricultural sector is plainly unsustainable. We have a scheme that purports to transition to emission pricing, but allows emissions to increase in the interim. That would be like going back 20 years in New Zealand’s history; phasing out tariffs but actually increasing tariff protection while we phase them out is as stupid as that. It is as stupid as that. The best comparison I can think of is one I have already made with supplementary minimum prices. Again, it was a National Party folly—that time under Mr Muldoon. The rate at which this Government is falling into debt is bad, with Government debt already spiralling out of control in New Zealand. This will add to it. Supplementary minimum prices held up land prices by artificially subsidising farm output and profitability of farms. That is what this bill does to farmers. They get more than 80 percent of the additional free allocation. In fact, I think they get more of the total free allocation; 90-something percent of the overall free allocation goes to farmers. Eventually, that will have to be withdrawn, because it is unaffordable for the country. Otherwise, Government debt will go up by $110 billion by 2050. Even if we exclude interest, the additional cost of free allocation in all sectors—the vast majority of which goes to agriculture—is $50 billion dollars. These are astronomical numbers—$50 billion. It cannot be sustained. When that free allocation is withdrawn, farm prices will crash. People who have been farmers throughout will not be any worse off, because they have been farmers throughout. The people who buy farms in the next 20 years will do their dough. They will do their dough, and they will be poorer. They will suffer as people suffered in the 1980s following the removal of supplementary minimum prices.

This bill is fundamentally flawed legislation. It undermines the environmental outcome. Our emissions will go up relative to where they would have been under the existing scheme. As Brian Fallow said, the point at which New Zealand’s emissions peak will be later, and the amount that they peak at will be higher before they decline. That will be at an environmental cost to the planet and at an economic cost to the country. It is not just me saying that: it is Treasury, it is the Ministry of Economic Development, it is the Parliamentary Commissioner for the Environment, and it is the expert advisor to the committee, Dr Suzi Kerr—it is virtually everyone. And still the Government proceeds.

Dr RUSSEL NORMAN (Co-Leader—Green): I stand to speak on behalf of the Green Party on the third reading of the Government’s amendments to the existing emissions trading scheme in the Climate Change Response (Moderated Emissions Trading) Amendment Bill. One of the interesting points that I think is often forgotten in this debate is that people think if we muck it up now, we can somehow fix things up later. The problem with greenhouse gas emissions and particularly carbon dioxide is that they pretty much last forever. A great proportion of the carbon dioxide that is emitted today will be around in several thousand years’ time. Carbon dioxide does not break down quickly but builds up in the atmosphere. It means that every year we increase our emissions we increase the stock of greenhouse emissions in the atmosphere. It is not that simple to get it out of the atmosphere again.

If we want to reduce the level of greenhouse gases in the atmosphere below a level that we think is safe, say 350 parts per million carbon dioxide equivalent, it means the curve to reduce the level in the atmosphere—the emissions curve that we have to go down—gets steeper and steeper every year we increase our emissions into the atmosphere. There is no free lunch here. We cannot say that today we are not going to address our greenhouse emissions because we can deal with them later. Actually, we cannot. The emissions that go out today will add to the stock in the atmosphere and increase the problem for everybody on planet Earth for the next couple of thousand years.

I think it is important that we remember what this is all about. This is supposed to be a bill to reduce greenhouse emissions in order to reduce the risk of out-of-control climate change. That is what the purpose of this bill was supposed to be. My colleague Sue Kedgley described it as Orwellian, and in a way she is absolutely right. It is Orwellian in the sense that this is a bill that says it is about reducing emissions, but it does not. The result of passing the bill through this Parliament this afternoon will mean that there are more greenhouse emissions coming out of New Zealand than there would have been otherwise. That is just a fundamental truth.

It is also important to talk about the current emissions trading scheme. The emissions trading scheme that exists now is not a great scheme. The Green Party supported it reluctantly because, as David Parker said earlier, the scheme already had very, very high levels of allocations and subsidies to emitters. It was not what the Green Party wanted. It was not our ideal emissions trading scheme, because the level of subsidies was far too high. However, we supported it in order to get the beginnings of a price on carbon and because of the complementary measures that came with it, in particular the billion-dollar home insulation fund.

It is also true that the previous Government’s record in reducing greenhouse emissions was terrible. Emissions increased very significantly from 1999 to 2008, so we were pleased that there was some progress towards the end of that Government, in terms of addressing greenhouse emissions and climate change, but there was still a long way to go. Let us remember that the scheme did not cap emissions. It capped free allocations, which was good, but it did not cap emissions. It meant that people on the margin were paying the real price, but emissions within New Zealand were not capped. It worked within the global Kyoto system. The amended emissions trading scheme, by comparison, not only does not cap emissions in New Zealand but also does not cap free allocations, which is quite extraordinary.

I was just reading an article by Geoff Keey, who works for Greenpeace and has been at a lot of the international negotiations. When he described the new emissions trading scheme to some of the people he has been meeting at international negotiations, they said: “But that just means New Zealand’s emissions can keep increasing and increasing.”, which of course is exactly what it means. If we reduce the price signal, we get more emissions. The fundamental idea of an emissions trading scheme, the idea that the whole thing is based on, is that price influences behaviour. When this emissions trading scheme reduces the price, it will influence behaviour. The result will be more emissions. That is a simple fact about all emissions trading schemes and it is a fact that the Minister for Climate Change Issues tries to deny over and over, but in the House the other day we pinned him on it. He does not like to admit the simple fact that emissions trading schemes work on the idea that carbon pricing over time reduces emissions, so if we have a lower price we will have higher emissions.

It is incredible to think that because the rate of abatement of the free allocations is only 1.3 percent per year, it means that if an industry increases its output, and it is output linked to emissions, at more than 1.3 percent per year, it will get more free allocations every year. That is an extraordinary thing. The taxpayer will be handing over more free allocations every year if an industry increases its output by more than 1.3 percent. For example, DairyNZ tells us that over the previous 10 years the dairy industry increased its output by, on average, 4.4 percent per year. This means that the taxpayer will be increasing the allocation of free carbon credits, which costs money because ultimately the taxpayer has to pay for them, to the dairy sector every year. The subsidy from the taxpayers to the dairy sector will increase year on year. It is uncapped. It is most extraordinary that here we are today, in a world where we are trying to reduce our greenhouse emissions, and this Parliament is about to vote for a bill that will increase the free allocation to the dairy sector and others as they increase their emissions and their output. It is an extraordinarily stupid thing to do.

The other part of it that I think is a real worry, aside from the difficulty of getting carbon dioxide out of the atmosphere once we put it up there and the steepness of the abatement curve we will have to go down in order to get anywhere near reducing our emissions by the amount we need to, is the political problem that has been alluded to in this debate. Because this bill sets in place a whole bunch of give-aways to friends of the Government and others in the form of free allocations, it will be very hard to roll it back politically. There is a particular problem in Australia. The Australian Greens produced a legal opinion that shows that because these rights to pollute are considered property rights under the Australian Federal constitution, it will be even more difficult in Australia. We have the same problem here in terms of trying to roll back these rights to pollute, as they will be seen by the recipients, once this Government hands them out.

We have a further complicating problem about the binding nature of this scheme, which is the bilateral investment treaties that we are signing left, right, and centre at the moment. These are otherwise known as free-trade treaties, but a big component of them is investment treaties. The bilateral investment treaties mean that foreign companies operating in New Zealand will be able to sue the New Zealand Government for indirect expropriation if we change the rules around emissions trading schemes. In fact, if we look at the Cabinet paper that went with this bill, we see that when they talk about why it is that forestry credits have to be tradable internationally, part of the reason they give is the bilateral investment treaties that bind us currently and the fact that if we were to place restrictions on the international trade of those credits, we could be sued under those bilateral investment treaties by overseas-owned forestry companies. We have this problem around the binding nature of what we are about to do and how we are committing future generations to a very expensive process of trying to unravel the bill we are about to pass.

Part of the idea of an emissions trading scheme is to facilitate the transition to a low-carbon economy. One of the things that has been most extraordinary about the process is that we have not had any time to read all the advice we have been getting. For example, Suzi Kerr, senior fellow at the Motu Economic and Public Policy Research Trust and visiting professor at Stanford University Economics Department, gave us her advice right on the very last day at the select committee and of course absolutely canned the bill, as anyone who knows anything about emissions trading has. To quote from her report: “Free allocation redistributes the cost of climate policy away from the owners of protected firms, who tend to have higher than average incomes, towards all taxpayers.”—Māori and Pākehā, I would add. “It also significantly raises the overall cost of the climate policy to the economy. A policy that is fiscally neutral can still have large damaging effects on the parts of the economy and society that do not receive free allocation.” We are passing legislation that is damaging to the New Zealand economy in the long run. Treasury estimates that the cost of putting out all these free allocations, including interest and looking at a price of $50 a tonne, will cost the New Zealand Government around $110 billion by mid-century, and that cost has to be borne. It also results in a misallocation of resources within the New Zealand economy because we are not as efficient as we should be.

What is missing with all of this is all the complementary measures that should have gone alongside an emissions trading scheme, whether it be fuel-efficiency standards; pest control on Department of Conservation land; measures to promote public transport, walking, and cycling; or a reduction in the spending on motorways.

RAHUI KATENE (Māori Party—Te Tai Tonga): When I was speaking in the second reading of this Climate Change Response (Moderated Emissions Trading) Amendment Bill, I remarked that it was a joy to work with a party like the National Party. I want to expand on those remarks now. The Māori Party has been very impressed throughout the negotiations over this bill by the clear vision of the Minister for Climate Change Issues, and by the good faith shown by both him and the Government in general. It has been a blueprint for a mana-enhancing relationship, and I thank the Minister and the Government.

The Māori Party came to this bill with a clear and comprehensive focus on outcomes for our whānau, our whenua, the Treaty, and the Māori economy. It has been a focus that has sustained our strength, despite the bitter opposition of others in this House who prefer to rely on the worn-out rhetoric of tired campaigners. The nation has observed a vitriolic attack against tangata whenua from the surprise new bedfellows, the Labour Party and the ACT Party. We have heard Labour leader, Phil Goff, describe the scheme as benefiting only a handful of iwi. David Cunliffe added insult to injury by describing the arrangements as being about beads and blankets. We have heard Shane Jones talking of deceit and treachery, and describing the emissions trading scheme as having sold out low-income Māori families “to protect a narrow privileged southern elite”. As member for Te Tai Tonga I have to tell the House that the latter comment has been interpreted by our iwi throughout Te Wai Pounamu as being particularly offensive.

I refer any members who have the view that iwi are somehow removed from their people to the vision of Ngāi Tahu, which is, most simply: mō tātou, ā, mō kā uri ā muri ake nei, for us and our children after us. Ngāi Tahu has a proud history of creative endeavour to ensure that our whānui are culturally enriched, live long, and live well, and that Ngāi Tahu Whānui lead the future. To suggest that our iwi are a privileged elite, when the very definition of iwi is a collective of whānau and hapū, is both ridiculous and insulting.

ACT leader Rodney Hide referred to the emissions trading scheme negotiations as a backroom deal. He said that full and final settlement should not be relitigated, and made a huge issue about the final wording of the Treaty clause being, in his assessment, concluded only 18 minutes before its announcement. Māori have had enough of being told that their capacity to negotiate arrangements is about special privileges or race-based politics, that their numbers are too small or too narrow, or that they did not follow the time frame that others had set for them.

In case this House has forgotten, the Māori asset base contributes $16.5 billion to our economy. This money stays in New Zealand, and will continue to grow over generations to come. Māori are stakeholders. They are taxpayers. They are business people. They are entrepreneurs. The Māori Party has been proud to support their initiative. The Māori economy has unique characteristics. It is rapidly growing in response to being locked into underdevelopment, over history. We want to support the growing billions of dollars of contributions per annum to the New Zealand economy, and that was one part of the package we successfully negotiated in this bill.

Under the previous scheme, the Māori economy took a hammering from being concentrated in all the areas most affected by the scheme—forestry, fishing, and farming. What we have achieved in this emissions trading scheme is the commitment that the Government will work with all iwi on indigenous tree planting, in addition to the specific agreement with Waikato Tainui, Ngāi Tahu, Te Uri o Hau, Ngāti Awa, and Ngāti Tūwharetoa ki Kawerau that has resulted from the Crown’s breach of contract with those iwi. I remind those who have overlooked the record that this is a breach dating back to 1998, when a Government failed to disclose in its negotiations with iwi the fact that a domestic emissions trading scheme was inevitable, and the effects it would have on forested land. The ability of iwi to make an informed choice about its purchase of Crown forest lands with settlement monies was therefore impaired. The bill today finally rectifies that wrong.

It is important that we have indigenous forests grown by New Zealanders, and that iwi are part of the carbon market. The Māori Party will never stand in the way of iwi initiative. I note, too, that the intention of the climate change Iwi Leadership Group was always to lock down a solution for the iwi interests that are represented in this bill, and then to work for and advocate a solution for all pre-1990 exotic forests. Those negotiations have already begun with other pre-1990 exotic forest landowners and the New Zealand Forest Owners Association. The fisheries sector does better under this scheme, by its ensuring that New Zealand owners of quota, instead of vessel owners, receive allocation. The agricultural sector will also be supported by a number of research and uptake-work programmes, to support the sector to transition into more environmentally sustainable practices.

But this emissions trading scheme was never about economic drivers on their own. Māori Party policy has always made it clear that our whenua is the most important inheritance that we will leave to our mokopuna. Our commitment to kaitiakitanga is all-enduring, and reflects the importance that our people place on the whenua. This emissions trading scheme is only a small part of the environmental efforts we need, and we should never expect that any one bill will address the major mind shift we need. We have always said that climate change is our collective responsibility. A trading scheme will never be a complete answer to climate change, but we have done what we could to make the difference.

Our environment has needs, and New Zealanders expect our environment to be protected, because it is part of our national identity. We have advocated on behalf of the environment for trees to be planted and for biodiversity to be valued. The truth is that as a country we pride ourselves on the pristine state of our whenua but in reality our practices do not meet our reputation. The Māori Party negotiated to get indigenous trees planted, and our environment valued, as part of our common inheritance as New Zealanders. Native trees will mean more native species in New Zealand, owned by Kiwis, as well as a reduction in our Kyoto bill. Five iwi will now have the right to plant indigenous trees. The benefit and the ownership will stay in New Zealand, and all our mokopuna will be able to enjoy more native forest. It has been disappointing that so little attention has been allocated to the national policy statement on biodiversity, which we have known is long overdue. The national policy statement is one way of recognising nationally important ecology, and helping district councils to protect it more efficiently and effectively. We are also pleased that the review of the Permanent Forest Sink Initiative will increase the incentives for all landowners to plant trees.

One of the overarching priorities for us, however, has always been he tangata, he tangata, he tangata. We brought to the table the fact that lower-income households would be exposed by the emissions trading scheme, and we negotiated a package to protect their interests. We want to see that all whānau in need get home insulation, and so we are delighted that there will be $24 million in new money to insulate homes. Home insulation is important, because it brings power prices down and improves health outcomes. This fund, and the significant reductions in power and petrol prices, will achieve immediate and long-term contributions to the health and well-being of vulnerable households, and we are proud of that. We have also managed to reinstate the Enviroschools programme.

Finally, we recognise that the Treaty of Waitangi is about doing what is right. It will also deliver greater certainty and stability to the emissions trading scheme. We have negotiated a Treaty clause to give effect to the Treaty, so that iwi will continue to be involved in this scheme. Many of the details of the scheme will come through regulations, and it is important that our people are part of working through those details. There are many challenges ahead of us all. All of us, as members of the public, can encourage emitters to decrease emissions. Public pressure can be a formidable force. All of us can commit to collective action against climate change, and all of us can make the commitment for an open, constructive, and respectful relationship with tangata whenua. We are proud to vote in support of this bill.

JOHN BOSCAWEN (ACT): The ACT Party opposes the Climate Change Response (Moderated Emissions Trading) Amendment Bill, and will be voting with the Green Party and the Labour Party against it. One of the privileges of coming to Parliament is that one works with many different people from both sides of the House. Our position is different from that of the Māori Party, but I regard it as a privilege to have worked with Rahui Katene over the last 12 months on the Finance and Expenditure Committee, both on its deliberations on the emissions trading scheme and on that select committee generally. I am sorry if she takes exception to the comments made by Rodney Hide earlier today, but he was simply reiterating what the Minister of Māori Affairs, Pita Sharples, had told the Wellington Regional Chamber of Commerce at a breakfast just yesterday. It was, indeed, Pita Sharples who said that the Māori Party was advised that agreement had been reached just 18 minutes before this deal was announced. That was at 12 minutes past 3 on Monday. Those were the words that Pita Sharples said to the people at the Wellington Regional Chamber of Commerce breakfast yesterday.

This has been a reckless process. We have discussed that at length. It gave me no pleasure whatsoever to vote against the National members on this bill. At the select committee Rahui Katene, the Green Party, Labour, and I voted to allow those submitters who had something substantial to say to have the right to say it. We voted for their right to say it, and that vote was won by 7 votes to 5. Five National members were defeated in that vote, and I give some advice to those members and to the new backbenchers, in particular: losing a vote is an unpleasant experience, and they run the real risk, following the 2011 election, that it will happen a lot more frequently if they are in Opposition.

I now turn to the issue of the $110 billion. This issue was seized upon by the Labour Opposition to discredit this bill. The bill had to be discredited, but to quote the $110 billion was the wrong way to do it, because there are many other ways that one can discredit this bill without misrepresenting the facts. The Minister for Climate Change Issues, the Hon Dr Smith, is quite right. Essentially, the way the emissions trading scheme operates is that New Zealand receives an allocation of emissions units based on our historical emissions. We do not know what that allocation will be post-2012, but given that an agreement comes out of Copenhagen or subsequent negotiations, we will be given a target to reduce our emissions, and we will be given an allocation of units. That allocation of units will be based on what our historical experience has been; it will be some percentage of our historical experience. That allocation will continue for a number of years—well beyond 2050.

Under the Labour scheme, the allocation of those units was to be reduced to zero in respect of all sectors by 2030. So at that stage New Zealand would have had surplus units and would have been able to sell those units to emitters. Essentially, it amounted to a huge tax scam, and I think Dr Smith talked about the Government receiving a lesser amount of revenue—those were the words that Dr Smith referred to—under the National scheme. Under the Labour scheme, it is a fact that the Government was going to earn windfall gains of $2 billion a year from 2030. Accumulating those gains through to 2050 would have resulted in a massive tax windfall of something like $50 billion. The Labour Opposition, trying to seize upon that to discredit the scheme, used compound interest to take the figure to $110 billion.

It is interesting that the Labour members focused on the fact that that took the projected deficit from 8 percent of GDP to 15 percent of GDP. They may well have ignored the fact that just 3 or 4 weeks ago Treasury made projections that took New Zealand’s debt out not to 15 percent of GDP but to 220 percent of GDP—10 times the figure that the Labour Opposition has waxed lyrical about over the last 3 or 4 days. The reason that New Zealand’s debt is projected out to 220 percent of GDP is the result of the massive failed policies of 9 years of Labour Government.

I could not believe it when Hekia Parata talked about her constituents in Gisborne and Porirua. She said they were already struggling to pay their power bills. Well, I ask Hekia Parata and all the members of this House what we will achieve by artificially increasing the price of electricity for every New Zealander by 10 percent from 1 January 2013, when it does not cost the companies that sell that electricity, in respect of hydroelectricity, anything more to produce. We are giving them a windfall gain of some $200 million or $300 million. I have made that claim 3 or 4 times today, and it has not been refuted by anyone. Why is that? It is because it is true. It applied under Labour’s scheme; it continues to apply under National’s scheme.

Rahui Katene talked earlier about the savings in electricity and petrol. She talked about the longer-term contributions they would make. Those contributions expire on 31 December 2012, so if Rahui Katene was talking about the savings in electricity for a period of 3 years, I wish her luck, but I got the impression that she was talking about the situation longer term, and there are no savings there. All of the members in this House have condoned a tax on every New Zealander in respect of one of the most basic commodities: electricity. It is little wonder that the Māori Council is railing against this bill.

We heard from the Federation of Māori Authorities, which said this bill represented the greatest confiscation of Māori wealth since the 1800s. I will explain why that is so. It is because Māori have many thousands of hectares of forest land that could be converted into pasture. Trees could be felled and we could convert that land into pasture and dairy farms, and we could create some wealth for New Zealand. And if we created some wealth for New Zealand, we would actually set about reducing that projected deficit that Treasury makes of 220 percent of GDP down to something much more manageable. But the Māori foresters who have that land are denied that opportunity under the emissions trading scheme, because if they fell the trees and convert that land into pastoral land to create greater wealth for New Zealanders, they are faced with a penalty of some $20,000 a hectare, which makes it inefficient to do so. So in the absence of a change of approach in Copenhagen or subsequent agreements, doing that will be inefficient because those foresters will be taxed, and there will be a massive devaluation of Māori forest land. It would have happened under the Labour scheme, and that has not been fixed under National.

Rahui Katene talked about how Māori will do by having the free emissions units allocated to quota holders as opposed to fishers. I accept that, but I explain to this House, to all Māori, and to all New Zealanders that that will apply only up until 31 December 2012. Why is that? Because there is no free allocation from 2013 onwards. The farmers get it, and we can be thankful that both Māori and non-Māori farmers will continue to get an allocation of free units well into this century. But fishers will not. The fishing industry is trade-exposed, and it is energy-intensive. The Minister for Climate Change Issues knows that, because when he was in Opposition he wrote about that in his own National Party minority report just on 1 year ago.

I sat up in the gallery 2 years ago and listened to the debate on the Electoral Finance Bill, knowing that the Labour Government was going to vote into law a totally undemocratic change. Nothing can be more frustrating than speaking against this bill, highlighting its deficiencies, and knowing that in a very short time exactly the same thing will happen, but it will be done by the National Government. Thank you.

CRAIG FOSS (National—Tukituki): First of all, I congratulate Minister Smith on getting the Climate Change Response (Moderated Emissions Trading) Amendment Bill to its third reading, and on all the work that has been done, both in the previous review committee and in the Finance and Expenditure Committee when the previous work came through from, I think, 2007. We all learnt a lot, and there has been a lot of good information for members to rest on.

I need to pick up a couple of points that the previous speaker, John Boscawen, made. He missed a key point when he talked about submissions. I tell that member that the only instruction I took about the number of submissions to be heard was an instruction from the committee. Actually, the member is right: there was a vote. The member said “substantive submissions”, but he is wrong. I tried to get the word “substantive” and the word “material” in there; that was missed by certain members. Thus, all those submitters who wanted to be heard were heard. That is absolutely fine, but speakers should not try to put heat on me, because I could produce lists of submissions that various members wanted to hear, and some of the stuff that is coming back is very cute.

Anyway, let us put that aside. The Climate Change Response (Moderated Emissions Trading) Amendment Bill is a very, very good response. It is a response to the will of the electorate, because the National Party put this issue before the electorate before the 2008 election. We laid out our principles: having intensity without a cap, aligning with our partners, keeping an eye on our competition, balancing a scheme with our economy—you name it. I think most members acknowledge that we cannot look after our environment if we are not looking after our economy. Some parties, I think, would like to address only one side of that equation, but their members get on jet aircraft, use the Internet, and globalise all sorts of things, which seems to be contrary to every other speech they make. But I digress a bit.

This bill is a response to climate change. It is a balanced response and it is a good legislative response. What seems to be missed is that on probably 80 to 85 percent of the points we and the other major party in this House are in general agreement. Some details about 5 or 7 years out are actually the key points. Some members are making more politics of this than others; I do not know what they will talk about once this bill is passed. This bill is also a good response to the recession that New Zealand finds itself in—not only the economic conditions this new Government inherited but also the recession that the whole globe is in at the moment. It looks as if we are possibly coming out of it, so what Government would do anything to put New Zealand back into recession? What Government would do anything to impose higher input costs and a burden on households in a recession, when it looks as if we just might be coming out of that recession? But with the fiscal record of the previous administration, I am not surprised that they seem to be taking off down that track.

This bill is a very good response to the New Zealand economy—to our profile and to our trade-exposed economy. We are an exporting economy, so we want to be exporting goods and services, and getting funds back into the country. We do not want to be exporting jobs, factories, and our kids’ futures to the rest of the world, to pollute somewhere else in the world, to the detriment of the future of this country. It is interesting that not one member on the other side, when they got up and talked about children, etc., raised that point.

There are a couple of things I cannot let go. I fiscally embarrassed the members on the other side. I ask them just to be consistent. The $110 billion figure keeps coming up. As Minister Smith said earlier, we will now apply the logic that seems to have been adopted by members on the other side, including their leader. If he wants to earn his stripes, he should not go down this path, because on every single spending announcement made by Opposition speakers from now until the next election we will price the figure up and compound it at whatever the cost of capital is at the time. Members should just watch the figures blow out—the decade of deficits we inherited is about to blow.

I will wrap up with one particular point that I found very offensive today. I am so surprised about what some members have said. I am really offended; they could have said much of what they were trying to say in different language. Quite frankly, I am disgusted by the term “brownwash”, which the Green Party has been using. I am disgusted by the term, and by its implications and insinuations of trinkets, beads, and blankets in exchange for an arrangement National has with one of its coalition partners. Sure, members can make their political points, but they should not go down that line. If anyone ever said that of them, they would be the first to go off to the Race Relations Commissioner, so members should not go down that line. That phrase says so much more about their true selves and where they really stand. Now members seem to be backing away from the term, but it is on the record. Its use was absolutely disgraceful—absolutely disgraceful. [Interruption] This member did not use the terms that those members used during the debate, or the term that that member over there used during question time. I think members should just taihoa, look in the mirror, and look at the rest of their caucus, and they may see that many of them are very, very offended by some of that language. I respect members’ points of view; I do not respect—and I am totally offended by—some of the language that was used by some members in this House today in and around this bill. I think I have made my point.

I thank the Minister for Climate Change Issues, I thank the officials, and I thank the other members of the Finance and Expenditure Committee.

Hon DAVID CUNLIFFE (Labour—New Lynn): I acknowledge Craig Foss, the member who has just resumed his seat, who is the chairperson of the Finance and Expenditure Committee, which considered this bill. I acknowledge all members who have contributed to this debate, on all sides of the House. More than many debates, this debate has been a multi-sided debate. I particularly acknowledge Charles Chauvel, Labour’s spokesperson on climate change, who, I think, has done a sterling job in bringing forward a range of facts for the public’s consideration, and David Parker, the previous climate change Minister, and the current Minister, Nick Smith, who has been prepared to debate with other colleagues the pros and cons of this bill, and who has made a contribution in this House.

Having said that, it is with both great sadness and, I guess, a slow-burning kind of anger that I rise to speak in the third reading debate. This debate is the bottom of the third innings—the time to sum up the various arguments, if you like—and this is where we try to draw together the threads so that the public can make sense of the debate when they look back, in the future. My sadness comes, as I have repeated several times, because this bill bequeaths to our children a harder problem than we inherited.

This bill is fundamentally flawed. It will make New Zealanders poorer, it will make our economy weaker, and it will increase greenhouse gas emissions relative to the law that was on our books before we started the debate. Of course, the bill locks in subsidies and condones the proposition that we have created property rights to pollute, which is a precedent that this House will come to regret. My anger, I think, comes because National’s conduct over climate change policy has been, I am afraid to say, both sneaky and shambolic.

The Finance and Expenditure Committee process has been the worst I have ever seen. It was nothing short of a travesty, which is all the more ironic because the substance of this bill is crucial to the future of our country and our planet. Official information was withheld from the committee process. Only a minority of public submissions were heard, and then only after much debate. There was no clause-by-clause departmental analysis. There was a regulatory impact analysis that Treasury described as inadequate. There was no revision-tracked bill, because there was not time. There was no supplementary economic analysis, no sensitivity testing, and no justification of the numbers.

The result is, I am afraid to say, a “Nick Smith shambles” of the very worst kind. We are left with a “cap and trade” system with no cap, and intensity-based emissions subsidies that are, effectively, infinite and will cost $110 billion, including compounding interest, by 2050—in other words, an extra 17 percent of Crown debt, which effectively doubles the total amount of debt that this Government inherited at the time it took office.

What is wrong with the bill that has led us to this conclusion? There is almost too much to cover, but let me offer a few potted highlights. The essential and obvious flaw is that the bill is so generous to large emitters in industry and agriculture that it shields them from the very incentives they need in order to be able to plan with certainty an adjustment path that would lead New Zealand into a low-carbon future at the least cost. By succumbing to lobbying pressure, the Government has neutralised the very point of the exercise from its inception.

Big industrial emitters already received a generous 90 percent free allocation and a 10-year window before abatement commenced at 8 percent per annum under Labour’s legislation, and this Government has made that even more generous. Now big emitters will have a two-for-one lead-in deal for the first 2 years, and an artificially low carbon price of $25 a tonne. Carbon is trading at about $40 a tonne at the moment, I am told, so the taxpayer will wear the risk and cost of the difference. There is no cap in the “cap and trade” system globally; there is, instead, an open-ended, intensity-based system that subsidises the worst polluters the most.

There are inappropriately placed, arbitrary deals that provide windfall gains to people who cannot control the emissions. In fisheries the allocation is to the quota holder, not to the fisher, who is in the position to make the decision at the margin about how much fuel to use. It does not go to the farmer, who is able to decide what feed to use or what strain of animal to run, but to the processor, who is removed from the decision point. Of course, at the end of the day there has been a refusal from the Government to negotiate in good faith, either prior to when the bill was introduced in the House or when it was going through the House, and not one single constructive amendment from the Opposition has been accepted.

What is the effect of this sorry tale? Well, these are the facts: the Sustainability Council says that actual emission reductions will be only half what they would have been under the existing Labour scheme. Large industry makes up 13 percent of the emissions and now faces only 1 percent of the cost. By contrast, the activities of people in small businesses, many of whom voted for National at the last election, make up 11 percent of the emissions, and those people will face 38 percent of the cost because they cannot lobby as much or as well. Agriculture makes up 49 percent of the emissions, but it now faces only 3 percent of the cost. Total fiscal cost on agreed carbon price paths, which is now bipartisan, is between $50 billion and $110 billion by 2050.

Hon Dr Nick Smith: You don’t believe that.

Hon DAVID CUNLIFFE: Yes, those are Treasury numbers, I tell the Minister. I do believe it, and so does he. The only argument that remains is whether to include the compounding effect. That may be arguable, but at the end of the day, even $50 billion is a big, big number, and it will affect our children.

The bottom line is that polluters gain and New Zealanders pay. They pay through their taxes, through forgone debt reduction, tax relief, or alternative expenditure as well as, at worst, through paying charges through an international carbon system. This is not balanced nor affordable, and it is neither environmentally nor fiscally sustainable.

The Government has put forward some fiscal counterarguments. The first is that it is not really debt. Well, yes, it is. Provided that one is carrying any debt at all, then one faces an opportunity cost of reducing that debt, purchasing other essential services, or adapting to climate change. In plain English, it is like when we have a mortgage and a credit card bill, and we have income that we could use either to pay down our credit card or, if we are not using our credit card, pay our mortgage. This is a carbon credit card that prevents us from reducing our national mortgage by 17 percent of GDP by 2050, and that is huge.

The Government is prepared to accept Treasury’s advice at face value on the long-term fiscal outlook, but it is not prepared to accept the Treasury’s equivalent criticism of this bill, because, as the Minister of Finance has said: “Good advice is that which we agree with. Bad advice is that which we do not agree with.” That is devoid of integrity, and it is no way in which to make good decisions. The second argument is that it does not matter anyway—that is Nick Smith’s favourite. He says that it does not matter whether it is a 1.5 percent abatement or an 8 percent abatement, because it will be reviewed every 5 years.

Business is crying out for certainty. Business people want a bipartisan agreement. They need to plan their affairs. That is why it does not help them for the Minister to artificially have a 1.3 percent abatement now but frighten them by saying that he will change his mind in 5 years’ time. That is a worst-case outcome.

The final argument is that New Zealand is already out in front. Fifty percent by 2050 will not be out in front at Copenhagen. In any case, independent authorities—including the statutory authority on that matter, the Parliamentary Commissioner for the Environment—have stated on the record that even if one accepted the target, there is no conceivable way that this bill can achieve it. Even if one accepts every other argument that the Government has made, the mechanics of this bill fail to deliver even the Government’s own outcome.

The lessons of this process are that no Treaty settlement is now final. In Rajen Prasad’s day as Race Relations Commissioner, he and his team worked hard to get the citizens of New Zealand to accept the Treaty process as final. It is no longer final, because Pandora’s box has been opened, for $24 million - odd.

NICKY WAGNER (National): I support the Climate Change Response (Moderated Emissions Trading) Amendment Bill because it is a common-sense response to an enormously difficult problem. After a couple of decades of debate, discussion, and policy making, and after three select committee processes, we finally have a practical and workable way to deal with New Zealand’s emissions.

I thank Rahui Katene for her comments this afternoon. The Māori Party is a valuable and respected part of our Government, and we enjoy working with it. I am also pleased that our Government has been able to sort out Ngāi Tahu’s Treaty issues. We have come up with an intelligent solution—an intelligent solution culturally, an intelligent solution environmentally, and an intelligent solution economically.

Although New Zealanders are very aware of and love our natural environment, many of them have little capacity to financially contribute towards managing climate change, particularly right now, at a time of financial turmoil and recession. So for the first 3 years of this scheme, as Kiwis learn better ways in which to deal with carbon emissions, the bill will halve the costs for businesses and households. Labour’s scheme put a price on households of approximately $6 per week; National’s scheme will cost households about $3 per week.

But the long-term motivation is to encourage all New Zealanders to embrace a low-carbon lifestyle and to modify their behaviour accordingly. The carbon charges will be a reminder and a stimulant for lower carbon use. Just as we saw a slow-down in the use of cars when petrol prices went up, we expect the carbon charge to help people make better transport choices. To mitigate the increased costs of energy, we have introduced the $323 million Warm Up New Zealand: Heat Smart home insulation scheme, which has already, within its first 6 months, insulated over 20,000 homes. Adding to that funding the provision for another 8,000 low-income homes will mean that nearly 200,000 homes will be insulated within the next 4 years.

We are also making significant changes around industry allocation, so that industry allocations are production-based and more closely aligned with the approaches of other countries, particularly Australia. We do not want to cripple industries by making them uncompetitive with our trading partners. We need to challenge our businesses and organisations to embrace change and embrace new, cleaner technologies, but the key to this legislation is to support vulnerable, trade-exposed businesses and to ensure that they, and the jobs that they provide, survive as the world transitions towards a lower-carbon economy.

I have already discussed in earlier debates the lack of accurate information, the partial information, and the misinformation around this bill. Sadly, we are still hearing it from the Opposition. I am prepared to accept faulty arguments when they are based on ignorance, but there is no excuse for deliberately misleading the public. That is not right.

In conclusion, I reiterate five points about this bill. First, the bill will ensure that New Zealand does its fair share in tackling the problem of global climate change. Second, there is no taxpayer subsidy. Free international carbon credits that are allocated to New Zealand will be passed on to trade-exposed and emission-intensive industries. They will be used as they were designed to be: to support businesses to remain competitive internationally and to continue to provide jobs. The Minister for Climate Change Issues has already assured New Zealanders that the National Government will not be purchasing carbon credits to allocate to industry. Third, the scheme will be fiscally neutral. There will be no windfall profits for the Government, but also no long-term debt for the New Zealand public. Fourth, the legislation is flexible. The first review is scheduled for 2011, and then every 5 years thereafter. In the face of international uncertainty and ongoing change, flexible legislation is the key to a good outcome for New Zealand. Fifth, this bill is the culmination of decades of discussion, debate, research, and policy making. With the exception of ACT, everyone in this House agrees that we need to take action to deal with climate change, and that an emissions trading scheme is a reasonable way to go. The debate is only around the details.

This is a good bill. It is workable, and it is an affordable piece of legislation. It is high time that it was passed.

MOANA MACKEY (Labour): This is a very, very sad day for this House, and this is a very sad day for a Minister who once used to tout his blue-green credentials, but Dr Nick Smith will for ever go down in history as the man who put in place climate change legislation that damaged New Zealand’s economy, weakened our position with our trading partners overseas, and had no environmental credibility whatsoever. He will go down in history as the man who came into this House as a proud blue-green National Party member, and will exit his role as Minister for Climate Change Issues by being known for putting together and passing legislation that makes New Zealand and New Zealanders poorer, and I think that is sad.

The one thing that I will be happy about when we finally pass this Climate Change Response (Moderated Emissions Trading) Amendment Bill is not having to be lectured any more by Nicky Wagner from a high moral ground that she has absolutely no right to inhabit. I noticed that there was an article in the Christchurch Press today in which Nicky Wagner explained how the Government’s emissions trading scheme will work—but, actually, she did not. In that article, Nicky Wagner explained how the previous Labour Government’s emissions trading scheme works, in terms of putting a price on carbon and influencing behaviour in that way. I say to Mrs Wagner that the legislation we are about to pass now does absolutely nothing like what she stated in that article. It will not reduce greenhouse gas emissions, it will not put the full price of carbon on the emitters by 2030 rather than on the taxpayer, and it will not change behaviour.

We need to remember why we are here doing this, because when we get rants from the National Party that we will be shutting down New Zealand if we try to do anything about climate change, I think we forget why we are here. We are here because all the parties in this House, with the exception of ACT, and I acknowledge that, believe that we need to do something about climate change and believe that this issue is so important that New Zealand needs to be seen to be playing its part. We also need to do this because we are an export-driven economy. We are incredibly susceptible to mood changes overseas and smear campaigns against our products, so it is even more important that we are seen to be doing our bit, even if that bit in percentage terms is not great when we look at the entire world picture.

I was at a Commonwealth Parliamentary Association conference in Tanzania, and the President of Tanzania gave a very powerful speech in which he talked about climate change. He said that the snowcaps of Kilimanjaro are disappearing.

Nicky Wagner: What is their emissions trading scheme like?

MOANA MACKEY: If Nicky Wagner listens to me, I will tell her that he said that this is not a problem that Tanzania created. This is not a problem that Africa created, but it is living with this problem every single day. The snowcaps of Kilimanjaro are disappearing. That is a water source for millions of people; it is a water source for their irrigation. The safari animals are starving, the cattle are starving, and the people are starving. The President said that his people do not have the luxury of sitting in a First World country, arguing about the science and about which economic model to put in place that will cost their country the least, because his people are suffering right now. He also said that we should not try to tell him that our farmers feed his people, because they do not, and they never will. He said: “You know what? Our farmers want to be able to feed themselves. That is what they want.” He begged the Western countries there to take action on climate change and to show some leadership.

We also sit in the Pacific region. We need to be able to go to our Pacific neighbours, whose islands are disappearing under water as we speak and who are facing salination issues because of the repeated floods and severe weather events in their region, and show that New Zealand, which has always been a strong advocate for our Pacific neighbours, is doing its part. We can no longer do that.

I think that if the National Government is not worried about what this might do in terms of our trading partners, it only needs to look at the Guardian article that appeared in the UK. This is another in a long line of campaigns against New Zealand products in Europe and in the UK. The Guardian slammed New Zealand’s “clean, green” and “100% Pure” branding as a cynical ruse and a shameless two fingers to the global economy. The article went on to state that, per capita, New Zealand is one of the world’s worst polluters, with carbon emissions that are 60 percent higher than those of Britain. It decried our weak revised emissions trading scheme and mocked our reputation as a global leader in tackling climate change. If the Government—

Hon Dr Nick Smith: Who’s been in Government for the last 9 years?

MOANA MACKEY: The Minister should let me read that bit. The article decried our weak revised emissions trading scheme. The emissions trading scheme we have in place already is not that scheme, I say to Dr Nick Smith.

This is not an easy issue for Governments, because everyone says that something needs to be done about climate change but no one wants to pay for it, and that is what we found out at the select committee. Everyone has a reason why their sector is special or should be excluded. We acknowledge that it is difficult, but that is why a Government has to show leadership and not just buckle to the strong lobbying of big corporate business interests, as this Government has.

What we have learnt in this process is that everyone in the world is wrong about climate change, except Dr Nick Smith. We only need to look at the editorials. The Christchurch Press headline was “Authority lacking” and the New Zealand Herald had “Another sorry chapter in emissions farce”. We also had “Key should pull the plug on this dog of a bill”, “Compensation deal discredits all involved”, “Climate bill $92,000 per person”, “$50 billion rise in carbon scheme costs ‘shows process too rushed’ ”, and “Carbon bill time bomb for taxpayers”. I ask why everyone in the country is wrong, except for the Hon Dr Nick Smith.

I thought it was interesting that when we were talking about Suzi Kerr, who is a visiting professor at Stanford University and a well-known expert on emissions pricing, Chris Tremain asked how good she could be if she had not managed to get the United States to put agriculture in its scheme. Suzi Kerr is not actually an elected representative of the US House of Representatives, I say to Mr Tremain, but that raises an interesting point about the United States. Dr Nick Smith is very, very keen on aligning New Zealand with Australia and on going with an intensity-based approach, because that is what Australia has done—

Hon Dr Nick Smith: As is Europe.

MOANA MACKEY: —and Europe. But what he did not tell people is that this would exclude us from working with the United States, which will be one of the biggest markets for purchasing carbon credits. It will be one of the biggest sources of investment for clean technology. Section 728 of the Waxman-Markey Bill on climate change, which was passed by the US House of Representatives, explicitly bans the United States from linking its emissions trading scheme with any country that moves away from volume caps and goes to intensity-based allocation. That is precisely what we have done in this legislation, and it did not have to be that way. It did not have to be that way.

I will now come to the Māori Party comments. I appreciated the contribution of Rahui Katene at the Finance and Expenditure Committee and I very much appreciated her support for Labour, the Greens, and the ACT Party in ensuring that all the submitters who wanted to be heard were heard. I genuinely mean that. I also think that she was in a very difficult position at that select committee, and I would not have wanted to have had to sit through all those submissions. It was difficult for her and she handled it with grace, and I congratulate her on doing that. I am pleased that Rahui Katene has enjoyed working with the National Government so much, and I am pleased it has been such a positive and self-affirming experience for her. It kind of misses the point on what I am complaining about in this legislation, though.

I will point out one of the things that I find really offensive. I have sat in this House, both up in the public gallery and as a member of Parliament, and I have listened to things that the Hon Dr Nick Smith has said. He stood up and peppered his speech today with words like mokopuna, and Papatūānuku. I remember sitting in the House and listening to the debate on the local government bill that the previous Labour Government passed, and hearing the Hon Dr Nick Smith say that Labour’s provision to allow councils to have Māori seats, as we have in the Bay of Plenty, was apartheid. He called that apartheid.

Hon Dr Nick Smith: I did not.

MOANA MACKEY: Yes, he did. He is smiling now, because he knows that he did. I find it incredible that a member whose party had “Iwi/Kiwi” billboards up not that long ago, and who had a big ““One law for all, the beaches belong to everyone” billboard paid for by the taxpayer, called having Māori seats apartheid, and is now standing up, peppering his words with Māori, and acting as though those things did not happen. That is not sustainable.

I say to Rahui Katene that the fact that ACT and Labour have been such strange bedfellows on this legislation and have both voted against it shows just how bad the bill is and how bad the process has been. We oppose the bill for very, very different reasons, but we both agree on the process. The process has been one of the worst I have ever seen in my time in Parliament. The bill went through the select committee process in 6 weeks.

Hon Dr Nick Smith: Oh, rubbish! What about the 800 amendments on Auckland?

MOANA MACKEY: I ask Dr Smith how other many bills he has seen that have not had a revision-tracked version and have not had a clause by clause analysis. The answer is none; that is exactly how many.

Rahui Katene commented on fisheries. She praised the move from vessel operators to quota holders, and I think that really sums it up. That means that the Māori Party is favouring big corporate interests over the small-business people who run those fishing boats. I think that is—let us be honest—where we got on this, because the average cost to Māori households will increase dramatically. Power prices will not go down. The Government cannot force companies to drop power prices. It will not do that. It did not happen in Europe; it will not happen here. It is simply another handout that will not result in any lowering of costs for the New Zealand taxpayer. Power prices will not go down or be halved as a result of this bill.

AMY ADAMS (National—Selwyn): It falls to me to take the last call on this third reading debate on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. I am very pleased to say that this bill gives us a good balance between environmental objectives and economic realities. That is what it does; it takes the two most important issues facing the world and facing New Zealand—the environment and the economy—and says that we need to come up with a solution that is responsible, that does our part environmentally, but that also protects our economy and our jobs. It is a balancing game; there is no question about that. We have deeply ingrained zealots on both sides of the debate who will not see any other position but their own. But the answer has to lie in the middle between balancing those two positions. I think the Minister and the officials, as I said in my earlier contributions, have done an excellent job of that.

We are doing our part as a country, in this debate. We should remember that New Zealand produces 0.2 percent of the world’s emissions; that is what we are talking about here. When we talk about the seas rising over Pacific Island countries, 99.8 percent of that we cannot influence, so let us get real about it. Do we really want to throw our businesses under the train so that they can beat the drums about what they are doing? The reality is that New Zealand can only play its part—and this bill does play its part.

I find it really interesting that, when we look at this bill, in actual fact members across the House agree on more about the structure of this system than we disagree about. Labour wanted an emissions trading scheme; we are proposing an emissions trading scheme. Labour was going to give free allocation to business; we are giving free allocation to business. Labour was going to give 90 percent of its top level of free allocation; so are we. So when Labour members talk about subsiding business, let us remember that Labour was going to give 90 percent allocation to industry.

Interestingly enough, it has come out in subsequent discussions that even Labour members conceded that there were problems with their bill and the 8 percent phase-out was not going to work—it was going to be too tough. They knew that. They were prepared to compromise on it. I tell members that they were even prepared to agree that industry should get an increased allocation. We were getting very close.

Do members know why we do not have broad bipartisan support on this? Do members know why? I will tell members exactly why. It is because Labour hates farmers. It has a visceral, deep, abiding, hatred for farmers. I cannot wait for 2011. I cannot wait to get up on the hustings versus a Labour candidate who will tell rural New Zealand that Labour will unwind the National bill and increase their costs from $3,000 a year to $30,000 a year. That is what the bill for the average farmer would be if Labour had its way. It would not be the $3,000 a year that we are talking about—it would be $30,000. And to any Labour candidate who wants to campaign in rural New Zealand on a platform of Labour putting farmers out of business because that is ideologically right, I say good luck. If Labour candidates think they will go to rural New Zealand and tell people there that they will put up their costs tenfold, and give them a $30,000 bill, and that Labour is prepared to give intensity allocations to industrial sectors but not to farmers, I say good luck with that.

This Government realises that farmers are the backbone of this economy. They are getting 80 percent of the $50 billion allocation that members talk about. When Labour talks about that money going to big industry, I point out that it is not going to big industry; 80 percent is ensuring our farming sector can continue to survive and can continue to put food on the shelves to feed the world. I say “Come on, 2011.” If Labour is going to honestly campaign on a platform of putting up the costs to farmers to $30,000—a tenfold increase—good luck!

This is an excellent bill. It is a very good balance between economic and environmental responsibilities. I am pleased to see that this Government is taking steps to halve the cost for Kiwi households. It is a good bill and I support it.

A party vote was called for on the question, That the Climate Change Response (Moderated Emissions Trading) Amendment Bill be now read a third time.

Ayes 63

New Zealand National 58; Māori Party 4; United Future 1.

Noes 58

New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1.

Bill read a third time.

Bills

Policing (Constable’s Oaths Validation) Amendment Bill

Procedure

Hon GERRY BROWNLEE (Leader of the House): I seek leave for there to be one debate of 12 10-minute speeches on the motion that the Policing (Constable’s Oaths Validation) Amendment Bill be now read a second time.

Mr DEPUTY SPEAKER: Is there any objection to that course of action? There is no objection.

First Reading

Hon JUDITH COLLINS (Minister of Police): I move, That the Policing (Constable’s Oaths Validation) Amendment Bill be now read a first time.

Bill read a first time.

Second Reading

Hon JUDITH COLLINS (Minister of Police): I move, That the Policing (Constable’s Oaths Validation) Amendment Bill be now read a second time. I take the opportunity to thank the parties represented in Parliament for their support of this legislation. The Policing (Constable’s Oaths Validation) Amendment Bill is validating legislation. It will deem oaths of office taken by police employees between 1 October 2008 and 12 October 2009 to have been administered as though the persons administering those oaths had been authorised by the Commissioner of Police. It is a straightforward amendment involving the insertion of one new section into the Policing Act 2008. It is to come into force the day after it receives the Royal assent.

The background to the bill is as follows. On 1 October 2008 the Policing Act came into force. Prior to this, the constable’s oath was taken before a justice or commissioned officer; in other words, an inspector or above. A justice or commissioned officer was not required to be specifically authorised to administer the constable’s oath. Section 22 of the Policing Act instituted a new procedure for administering that oath.

Under the new Act, the oath can be administered only by the commissioner or a person authorised by the commissioner. As well, the new Policing Act requires a person administering the constable’s oath to be satisfied that each police employee taking the oath has been adequately trained to exercise the powers of a constable and is capable of exercising the powers of a constable.

Between 1 October 2008 and 12 October 2009 the constable’s oath was administered to police employees graduating from the Royal New Zealand Police College by senior police employees based at the college. Persons who were able to administer the oath under the Policing Act 1958 assumed that that ability continued under section 22. Since 12 October 2009 one recruit wing has graduated from the Police College. The constables’ oaths were administered to that wing by persons authorised under section 22 of the Act—that is, the commissioner or a person authorised by the commissioner.

So police employees graduating from the college on and from 13 October 2009 have unquestionably had constabulary powers conferred upon them. However, uncertainty about conferral of those constabulary powers continues for those police employees who purportedly took the constable’s oath between 1 October 2008 and 13 October 2009. It is important that people have confidence that officials are properly invested with statutory powers, and taxpayers should not be obliged to meet the significant expenses that would be incurred if all exercise of statutory powers taken by the affected employees were subject to challenge.

The bill will deem the oaths taken by affected constables to have been administered as if the persons administering the oaths had been approved by the commissioner. It will remove any doubt about the validity of the actions of the affected police employees and thereby promote certainty and confidence in the acts carried out by them.

The bill is consistent with the New Zealand Bill of Rights Act. The bill does not retrospectively validate any actions that could be seen as inconsistent with the New Zealand Bill of Rights Act. The bill does not legitimise unlawful actions by the police in the event that a person’s rights have been infringed by any of the affected police employees. A claim under the New Zealand Bill of Rights Act would still lie. I commend this bill to the House.

Hon ANNETTE KING (Deputy Leader—Labour): I rise to support the Minister of Police in passing through all stages the Policing (Constable’s Oaths Validation) Amendment Bill 2009 today. The Minister has clearly set out the reasons for this bill, and I am pleased that members are supporting the Minister in ensuring that it passes smoothly through the House.

The Policing Act 2008 replaced 50-year-old legislation. It was legislation that went through a very long process. There was a 2-year process of consultation, consensus, agreement, and, finally, the passage of the bill. A positioning paper put out for consultation was followed up with something like eight scoping papers that addressed many parts of the old Police Act, then a consultation document, and, finally, a draft bill. Throughout that process there was close collaboration and work between all parties in the House, and I think it was one of those bills where there was buy-in by all parties to ensure that we got legislation for the police of New Zealand that had the broad support of this Parliament. As the former Minister of Police, that was really important to me.

At the time of the passage of the bill, I thanked the parties that had been involved and worked so constructively to ensure we had good legislation. We thought everything was right in the bill, but we now find that there could be a technical error in it. Therefore, we ought to correct it as quickly as possible. As the Minister pointed out, in the past at the swearing in of a new police officer the oath was taken before a justice or commissioned officer of police. The new Act changed that process. A new process was put in place, one that I think was definitely an oversight, so the police carried on with the old requirements under the old Act. This legislation will ensure that it will validate any of those oaths that were taken in the period that the Minister has already set out.

I say to the Minister that we support her in this measure. We do not wish to delay it longer than is necessary, and I hope that the House can see the bill passed speedily. It was suggested to me that there could be some people out there who would be cheering if they thought their arrest for a particular issue during the stated period now no longer stands. We can assure them that that is not the case. The officers who were sworn in under the amended regime will be just as well sworn in after the passage of this bill. I commend this bill to the House.

Bill read a second time.

Instruction to Committee

Hon GERRY BROWNLEE (Leader of the House): I seek leave for the Committee stage on this bill, the Policing (Constable’s Oaths Validation) Amendment Bill, to be taken as one debate, with six questions at the end.

Mr DEPUTY SPEAKER: Is there any objection to that course of action? There is no objection.

In Committee

Clauses 1 to 4

Hon ANNETTE KING (Deputy Leader—Labour): There are four clauses in this bill: clause 1 specifies the title, clause 2 specifies the commencement date, clause 3 specifies the principal Act the bill is amending, and clause 4 validates the constables’ oaths taken by police employees from and including 1 October 2008 through to the close of 12 October 2009, which had not been administered in accordance with section 22 of the principal Act. There are no issues to raise other than that.

Clauses 1 to 4 agreed to.

Bill reported without amendment.

Report adopted.

Third Reading

Hon JUDITH COLLINS (Minister of Police): I move, That the Policing (Constable’s Oaths Validation) Amendment Bill be now read a third time. I take another opportunity to thank all members of the House for the extremely constructive way in which they have dealt with this amendment bill.

It is validating legislation. It will deem oaths of office taken by Police employees between 1 October 2008 and 12 October 2009 to have been administered as though the persons administering those oaths had been authorised by the Commissioner of Police. It removes any uncertainty about conferral of constabulary powers for those Police employees. It is a very simple administrative provision. It fixes the matter. I commend this bill to the House.

Sitting suspended from 6 p.m. to 7 p.m.

Hon ANNETTE KING (Deputy Leader—Labour): The Labour Opposition supports the Government in the passage of the Policing (Constable’s Oaths Validation) Amendment Bill .

Bill read a third time.

Bills

Corrections (Contract Management of Prisons) Amendment Bill

In Committee

Part 1 Amendments to allow contract management of prisons

Hon RICK BARKER (Labour): Seldom does this House get bills before it that are completely ideologically driven. The Corrections (Contract Management of Prisons) Amendment Bill is one of those rare bills. It is completely ideologically driven. There are no good reasons for supporting this bill; in fact, all of the evidence is to the contrary.

The right wing has as its philosophy cutting taxes, privatising, contracting out, and deregulation. This Government is displaying all of the characteristics of an extreme right-wing view. This bill is one of those displays, as it is about contracting out. The Law and Order Committee heard, in submissions on the bill, that the annual cost per prisoner to the public of operating the Auckland Central Remand Prison as a private prison was $33,900, but the cost when the State ran it was $32,000. As privately running it meant an increase in cost, the committee was left wondering over and over again why we would do so. We heard no good reason other than, simply, ideology. When we look around the world at experiences in the United States, Canada, and Britain, we see that all of the evidence shows that private prisons do not work.

The second very important point is that we are considering contracting out one of the most powerful and fundamental rights that this Parliament takes upon itself, which is to incarcerate its citizens. The executive arm of Government does not do that. The judiciary does not do it as of right. This Parliament sets the laws, this Parliament gives the judiciary the power to put people in prison and deprive them of their liberty, and this Parliament elects an executive to administer the prisons that undertake that work. It is not the executive that delegates power from the Minister of Corrections to the Chief Executive of the Department of Corrections; it is this Parliament.

This matter brings us to several of the amendments that the Labour Opposition is moving. We have put forward three Supplementary Order Papers that would ensure that Parliament has direct scrutiny of the operation of prisons. The Government has put forward this bill on a “trust us, we know what we’re doing” basis. It is saying that the chief executive of the Department of Corrections, under the observation of the department’s own auditors, will supply us with sufficient, good information. Well, I do not accept that, at all. This Parliament has an Officer of Parliament, in the form of the Controller and Auditor-General, because it does not have complete faith in the audits that executives may choose to take. Some people think that once there has been an audit, that is it, all is done. But several names show the failures of auditors: Enron, WorldCom, and Arthur Andersen LLP. All of those firms were thoroughly audited, yet collapsed and crashed spectacularly. The paperwork was perfect. That shows that independent scrutiny is important.

One of the amendments we are moving, Supplementary Order Paper 88, will give the Office of the Controller and Auditor-General the authority to go into prisons and ask directly for information. The select committee considered this matter and received advice that the existing powers are sufficient for the Office of the Controller and Auditor-General, but Labour’s view is that the powers still leave the office at arms length, with no direct ability to investigate for itself. One has to ask why this is. The answer is simple: the Department of Corrections, driven by the ideology of the current Government, wants to contract out prisons. If it does so, it will, inevitably, contract them out to foreign companies from Australia, the United States, Britain—you name it. How this export of New Zealand dollars will be good for New Zealand, I do not know. The Government has not explained this yet, but no doubt the Minister of Corrections, Judith Collins, will tell us how the export of profits from our prisons is good for New Zealand. I can see no logical argument that would demonstrate that.

The second thing is that these will be privately run institutions. Companies that run them under contract will not be subject to the scrutiny of the select committee and will not be subject to the direct scrutiny of this Parliament. We will give them the power to hold people in prison and deprive them of their liberty, and we are expected to believe that we can trust them to do everything well. Well, I do not believe that, because the committee heard from submitters that figures had been massaged. Staff who were on the job in private prisons testified to the committee that they massaged figures to suit their employers—that is what they wanted—and to suit the administration of the day. I simply do not trust this Government with these matters. I believe very strongly that the Opposition and Parliament should have the ability to scrutinise these activities. That is why Labour is moving an amendment to ensure that the Office of the Controller and Auditor-General can on its own initiative, if it so chooses, go into private prisons, interview staff, and go through all the details itself, rather than relying on the advice of the Department of Corrections or its auditors.

We also believe, as shown by our Supplementary Order Paper 87, that this amendment should apply to the Ombudsman, as well. The argument has been put that the Ombudsman can get access to this information, but, again, it can do so only indirectly; it cannot get it directly, on its own motion. We believe that that is a weakness.

The third amendment put forward by the Labour Opposition, Supplementary Order Paper 86, will restrict the length of contracts. We are very mindful that we are dealing with public money. This is not the money of the Department of Corrections and it is not the money of the Minister; it is taxpayers’ money. The Opposition is very concerned to ensure that the money put into these contracts is well spent. We do not want to bind future Parliaments by having prison contracts that run for 12, 20, or 25 years. We believe that the next Government that comes in, in 3 years’ time, must be able to examine such contracts to see whether they suit that particular Government. The contracts are hardly likely to suit it, because the department’s own figures show that, on every measure, contracted prisons are more expensive to run than publicly run prisons. The American experience shows that they are more expensive and run worse than those run directly by the State. The Canadians experienced this and got rid of private prisons because they were poor performers. The British got rid of them also because they were poor performers. They do not work.

If this Parliament gives power to the judiciary to deprive people of their liberty, and gives power to the executive to hold people in our prisons, then, as a fundamental principle, it should have the right to inspect and scrutinise that work directly. If a prison is run by a private company, we will not have that power. The power will be held by the private company and we will not have the ability to haul the company before the select committee to interrogate it. We can talk to the Department of Corrections, but, of course, the department and the Minister will have a vested interest in ensuring that the figures look good. They will work with staff to massage the figures, as we have already been told by people who have worked in privately run prisons. They made sure that those prisons looked good—that is exactly what they did.

Nothing we have heard so far justifies this legislation, other than ideology. It is ideologically driven because all of the facts stand in opposition to it. It is ideologically driven because National believes in contracting out. There is no justification for it, at all.

If members look at the legislation that has been put forward, they will see that it states in new section 199, to be inserted by clause 5, that in the contracted prison standards are to be “no lower” than in public prisons. The Minister in the chair says that the privately run prisons will all be better than public prisons. Well, why would one not state in the legislation that contracted prisons must always perform better than publicly run prisons? Of course, National will not write legislation to that effect, because it cannot deliver on it. The only restriction on our prisons from doing better is a lack of resources. The people who run our prisons are very able, very capable, and very innovative, and they will do better if we give them resources in every particular regard in terms of holding people in prison. The restriction on them has always been by way of resources.

This legislation not only is ideologically driven but also lacks ambition. It lacks ambition because National wants to see privately run prisons do only no worse than those in the public sector. This lack of ambition will be at a cost to the taxpayer. Every figure that the Law and Order Committee received shows that privately run prisons were more expensive than State prisons. There is no question about that. National members of the committee tried to get figures to show that privately run prisons were better, but they could get none—not one example of how they were better. The world experience shows that contract prisons are worse and inferior to those run by the State.

Hon JUDITH COLLINS (Minister of Corrections): It is a pleasure to follow that member, Rick Barker. It was particularly good to hear him talk about the wonderful work of the Department of Corrections. I am sorry to say that in the Law and Order Committee today, during the review of the Department of Corrections, Rick Barker did not show any confidence in the department, at all. In fact, he quoted extensively some terrible recidivism rates, and he talked about how the department should be ashamed of itself. Then the member realised, as one of our members pointed out, that he had in fact been referring to the 2007-08 annual report, all of which was under the previous Labour Government. So when that member now wants to praise the Department of Corrections, I say good on him for doing so, because there has been a massive turn-round this year under this Government, and it is good to hear that we finally have a good Government helping and working with the department, and great performance.

That member also raised issues about cost. I did not realise that the Labour Party was such a low-cost option, but obviously that is what it wants. Prisons are not just about incarcerating prisoners; they are actually about keeping the public and our staff safe, and they are also about rehabilitation, and that is why this Government is committed to the rehabilitation of prisoners. We know that when we have a prison being run efficiently, along the lines so that we get the best value for money, we have more money to spend on rehabilitation. We know from the Auckland Central Remand Prison experience that the member talked about that the prison was the only remand-only prison in New Zealand at the time it was running. Therefore, comparisons with others are somewhat wonky. Frankly, the Auckland Central Remand Prison contracted for 70,000 hours of rehabilitation a year for prisoners, and the last year the prison was in operation it actually produced about 120,000 hours of rehabilitation—well above its contracted level. Yet at the same time, remand wings in our prisons were not doing that. When we are looking at numbers it is important to be realistic about what we are talking about.

The people who privately ran the Auckland Central Remand Prison brought iwi into prison management. They did a fantastic job. I went to see that prison when it was running—and, as a lawyer, I had been into other prisons before—and I knew that that prison was the best prison I had ever visited. The reason is that the whole attitude was about respect. When I went to the prison the staff said that they ran a culture of respect. Earlier this year I went to see four prisons in Australia. The member who has just resumed his seat, Rick Barker, says that this is all ideologically driven. Well, the prisons I went to see in Australia were all in Labour-run states in Australia, so I am not sure about the ideology there. In fact, they have been Labour-run states pretty much since Adam was a cowboy. We went to see two in Victoria and two in Queensland. What I saw there were maximum security prisons where I could walk around with other visitors in amongst the prisoners, in a situation where I actually felt safe. That is not something we could say about all of our maximum security prisons in New Zealand. I also saw rehabilitation, and I saw rehabilitation working.

Hon Lianne Dalziel: You’re talking about a remand prison.

Hon JUDITH COLLINS: They were not remand prisons. These were actually maximum security prisons.

Hon Lianne Dalziel: A remand prison is slightly different.

Hon JUDITH COLLINS: No, they were not, actually. There was one that was; all the others were maximum security prisons.

Grant Robertson: Oh, one was—so all the others weren’t?

Hon JUDITH COLLINS: Three were not, of the ones I went to. I saw some rehabilitation, and I saw some efforts being made towards securing the best outcomes for prisoners. We already do what we can in the corrections area. The Department of Corrections has really improved in its performance this year, and it is great to be able to say that. But we can do better. One of the ways of doing better is to be able to benchmark ourselves against international standards and look at what we can do.

The member who has just resumed his seat talked about cost, cost, and cost again. But private prisons in New South Wales cost 32 percent less per prisoner than public prisons. The member did not want to talk about that. In Victoria they cost 11 percent less than public prisons. So when we are talking about cost we should look across the ditch and see what has been happening in states where there have been privately run prisons for years. The member also talked about the State needing to take over this role because of a constitutional issue. Well, actually, we also have privately run and contracted transporting of prisoners. In fact, that happened under the previous Labour Government. I did not hear Labour members talking then about it being ideologically impure, and I did not hear them talking then about the need to have the State doing every single thing because otherwise it would not be right.

One of the great things about having privately run prisons, apart from benchmarking, is the fact that we can actually have fines and incentives for programmes and for performance. That is not something we can really have in the State-run system. What we would like to be able to do is look at how we can make rehabilitation and a lessening in the rate of recidivism part of our contract management. Members also talked about the need to have the Auditor-General roaming through our prisons. I do not think that is necessary, when we have it quite clearly stated in the legislation that there will be prison monitors appointed by the Department of Corrections who will be responsible to the chief executive. One of the other good things about that clause, if the member wants to look at it, is that it means those monitors have to be changed on a routine basis so that we do not get people who get captured by the environment in which they are working. I think that is incredibly important.

Over the past few months people have said that we have been talking to people who have been running privately run prisons. Yes, we have. A lot of people who have come to see us have talked about privately run prisons, and we have been to look at them in Australia. I can say that every single one of the people who have talked to me has made it very clear that we want strong iwi involvement in prisons in this country. Fifty-one percent of our prison population is Māori. That is a shocking statistic, and it is certainly not getting any better. I expect that we will have a great input of iwi, in particular, into rehabilitation. We think that is absolutely crucially important, and that is why I would love to be able to see the Labour Opposition come out and support the work of my Associate Minister of Corrections, Dr Pita Sharples—in particular, in relation to the rehabilitation unit that he is putting together. Yet all we heard from the Labour Opposition—actually, from Mr Cosgrove, to be fair to the rest of its members—was about a race-based justice system. Actually, that is the sort of nonsense we have heard from that party in Opposition over prisons. What we should be doing is looking at what works.

Hon Lianne Dalziel: Do you want me to go and get the Hansard of every time you said that?

Hon JUDITH COLLINS: No—well, I tell the member to find one. In fact, I think it is extremely important that people look at what works. That is why we are putting through this bill, with the support of the ACT Party, United Future, and the Māori Party, and I would like to thank those parties for their support. That is what we are doing. It is about good outcomes for people and good outcomes for all New Zealanders.

Chris Hipkins: Tell us the evidence; there is no evidence.

Hon JUDITH COLLINS: I know that Mr Hipkins does not think there is any evidence at all in relation to the Māori units that Dr Sharples is looking at, but I say to Mr Hipkins that I think it is really important to give things a go and go for the best outcomes. We have 20-odd prisons in this country. We will have at least two that will be privately run. That is what we are looking at—not wholesale privatisation but a reasonable benchmarking against which we can benchmark ourselves.

Hon LIANNE DALZIEL (Labour—Christchurch East): Article 3 of the Universal Declaration of Human Rights states: “Everyone has the right to life, liberty and security of person.”, and that is what this debate is about. The reason we are debating this matter from a human rights perspective is that the implementation of the Universal Declaration of Human Rights is something we have responsibility for. That responsibility for the deprivation of liberty lies with the Crown, and it simply cannot be contracted out to just anyone the Government of the day considers might be appropriate.

I think that the Minister in the chair, the Hon Judith Collins, needs to think seriously about the consequences of a Supreme Court of Israel decision that came out late last week on Thursday, 19 November. It is a very interesting case, and I believe that it has relevance to this particular debate because, essentially, the Supreme Court of Israel has overturned the privatisation of prisons in Israel. It has done so on constitutional grounds, because of the fundamental breach of human rights that the process recommends. I do not have the actual decision in front of me, but I do have a report of the decision. It reports the President of the Supreme Court of Israel as saying: “Israel’s basic legal principles hold that the right to use force in general, and the right to enforce criminal law by putting people behind bars in particular, is one of the most fundamental and one of the most invasive powers in the state’s jurisdiction. Thus when the power to incarcerate is transferred to a private corporation whose purpose is making money, the act of depriving a person of his liberty loses much of its legitimacy. Because of this loss of legitimacy, the violation of the prisoner’s right to liberty goes beyond the violation entailed in the incarceration itself.” The president also argued that “in a prison run by a private company, prisoners’ rights are undermined by the fact that the inmates are transformed into a means of extracting profit.”

Sandra Goudie: Rubbish!

Hon LIANNE DALZIEL: “Efficiency”, the president wrote, “is not a supreme value when the most basic and important human rights for which the state is responsible, are at stake.”

Sandra Goudie: What a load of rubbish!

Hon LIANNE DALZIEL: I know that members opposite do not care about human rights. I understand that, and the interjections coming from the chair of the Law and Order Committee I expect from her, because she does not have the same background as her colleague next door to her, who, at least, has picked up a law book and read it, which could be surprising. But maybe the Minister of Education could read a book to her—maybe that would be a good idea; if it had enough pictures we would probably be away laughing.

But the point that I want to make is serious, and the serious point I want to make is that this decision is the beginning of the end of the international privatisation of prisons. It is the beginning of the end, because I believe that this case will become the foundation stone for cases that will be taken to the International Court of Justice, which will overturn what has been a fundamental breach of the Universal Declaration of Human Rights by the privatisation—for profit—of the deprivation of liberty. I am not arguing that any of the individuals concerned are not entitled to have their liberty deprived; they have committed crimes for which they will be held accountable. But this case says, and puts it very well, that the loss of legitimacy when profit is being made out of their incarceration is beyond that for what would otherwise be a violation of a basic human right. So I believe that the Minister does need to respond to this very recent decision. It is the beginning, I believe, of a series of cases around the world where the fundamental tenets that support our justice system in this country will be challenged in international jurisdictions, and where those of us who have gone down this track will be held to account.

The second thing that I will say is not so much in relation to that decision but to what happens when there is a change of Government, because we have made it absolutely clear that this will end in the same way that it ended after Labour became the Government in 1999 and inherited the Auckland Central Remand Prison under private management. I would like the Minister to respond to the content of the report. I know that she has probably not read this part of the report back from the Law and Order Committee, because it comes under the heading “New Zealand Labour Party minority view”. But I am assured, and the footnote states, that the source of the information—and it is reprinted exactly—is from the “Department of Corrections … request for further information from the Law and Order Committee,”. So this information comes from the Minister’s department, and I just want her to respond to these per prisoner costs, as tabled in the report.

When the Auckland Central Remand Prison was under private management from 1 July 2004 to 30 June 2005, the cost per prisoner was $35,700 for operating costs only, and $57,280, inclusive of property-related overheads, to look after a single prisoner. Remand prisoners held in other public prisons in that same period were only $32,000 and $50,208, by way of comparison. There are those who would say that the Auckland Central Remand Prison had particular additional costs, so that in the year after it went back into public management it would of course have cost more because costs would have risen. But in fact, no, the costs went down. The comparable figures per prisoner were $33,900 and $55,853.

I am really confused about the Minister’s comments that the private system is more cost-effective. Why, then, did it cost more when the Auckland Central Remand Prison was under private management, from 2004 to 2005, than it cost from 2005 to 2006 under public management? Obviously, at that time when other costs had gone up, the system, under public management, still cost less than it had cost the year before under private management. That to me is the second element of the argument against the privatisation of the prison function. Although there are statements as to privatisation being more cost-effective, in fact I cannot find examples anywhere of where it is. And the figures that the Minister has used to compare public with private of course do not mention that prison officers get paid less in a private prison, and that the ratio of officers to prisoners is substantially lower as well. I do not think that it is reasonable to say that we are comparing apples with apples. I think we heard the comparisons from someone today about “apples and apples”, “oranges and oranges”, and “apples and oranges”. But the point is that no comparison can be made unless we actually have a clear statement as to the nature of the terms of engagement for officers.

Officers do this important work on our behalf. This is not work that anyone would choose particularly to do, and the fact that we have loyal prison officers within our corrections system willing to undertake that role, on our behalf, and on behalf of the State, is something that we should value and not contract out to the lowest bidder.

That brings me to my third point, which is the ability to have genuine supervision over what occurs in our prisons. I totally support the Supplementary Order Papers that have been tabled by my colleague the Hon Rick Barker. The first is in relation to the Ombudsman; the second is in relation to the Auditor-General. I do not think it is good enough to have a prison reporting through a department. There is nothing better than to have the direct oversight of those who have the standing and the independence of both our Ombudsman and our Auditor-General, in respect of ensuring both that the processes being conducted within the corrections system are being conducted in a proper manner, and that there is accountability and transparency back to this House. That is where the accountability and transparency must lie. If it does not lie here, then I really do think that the Government has lost the plot as far as our obligations go.

The third Supplementary Order Paper that my colleague has tabled is to ensure that no contract is let for more than 3 years. That is a very good Supplementary Order Paper, because it makes it very clear to anyone who is possibly even thinking about taking advantage of contracting for one of our prison managements that they will have that contract overturned after a change of Government.

SANDRA GOUDIE (National—Coromandel): After listening to the Opposition, one would think that the end was nigh. I just cannot believe how overblown it is making this whole issue. I want to make a few comments, and I will quote from a report around contestability. There are three things I want to talk about. One is the Australian study comparing two new-generation public sector prisons, where the operating arrangements in the industrial award have been negotiated by the state Government under an explicit threat of market testing with two old-style prisons.

Grant Robertson: Take it slowly, Sandra.

SANDRA GOUDIE: Well, there are three quotes here, so it could take a while. I would be surprised if the Opposition members are listening, actually, even though they need to learn a bit.

Hon Member: They don’t understand, Sandra.

SANDRA GOUDIE: Well, that is the problem, and I guess this issue is mostly around union protectionism, really. The bottom line is that competition actually does work.

The Australian report states: “The authors of the study compared overtime and sick leave, which were regarded as major sources of inefficiency in the traditional prison estate, and found significant improvements. To our knowledge, this is the only study that has explicitly explored the efficiency gains from threatened competition.” Well, that is what Labour members do not like. They cannot stand competition—the idea that somebody might make one dollar more than somebody else. They cannot stand that. They would rather have inefficiency, because they cannot stand competition. They cannot stand the fact that competition generates innovation and new ideas, and a new way of exploring how to do things.

The report goes on to state: “One of the most significant impacts of introducing competition into custodial services has been to force prison managers to explore new service designs and management regimes. … A national survey of 65 private correctional institutions across the United States … found that, on average, staffing levels were … lower … Moreover, where public prison operators were exposed to competition, this was one of the most common ways in which they strove to reduce their costs.” Then it goes on to say—and this is the final quote I will use—“Competition has played an important role in the adoption of innovative new approaches to prison management”. Is the Opposition listening to this?

Hon Darren Hughes: No.

SANDRA GOUDIE: Well, the Opposition members should listen, because time and time again they miss the point.

Jonathan Young: It’s all about ideology.

SANDRA GOUDIE: That is right—it is all about ideology. It is not about the reality of the situation. The Opposition is driven solely by its ideology and its love of unions. The Opposition wants to protect union members’ jobs and make sure they are secure. Competition does bring in new ideas and new approaches to prison management, and brings the dissemination of best practice across both the public and private sectors. The two sectors actually benefit each other.

The last argument put forward by Ms Dalziel was about the lack of monitoring and accountability. Well, the fact is that there is a tonne of it in the bill, as the Opposition members will see if they look at it. Some of that monitoring and accountability was generated through good discussion from the members of the Law and Order Committee. There were times when we had reached consensus on some of the ways forward, but there were other times, of course, when we could not possibly do so, because the ideology was a bit of a roadblock. There is plenty of monitoring and accountability. A monitor is to be appointed for each contract prison, and the chief executive can appoint further monitors for different and particular purposes. There are also assistant monitors. So there are primary monitors, monitors for particular purposes, and we also have assistant monitors. We actually have three levels of monitoring.

Hon Darren Hughes: It’s a land of opportunity, this country.

SANDRA GOUDIE: Just how much oversight does this Opposition—this Labour Opposition; the nanny State party—need? The Labour members just cannot get away from the fact that they are not happy unless they have a whole heap of monitors. [Interruption] That is absolutely right; they do not trust anyone.

What is the next Opposition argument? The next argument is that it is wrong that the running of prisons should offer the potential to make a profit. Well, for goodness’ sake! If it were not for a bit of profit, we would not survive in the economic world today. The Opposition members just do not understand business. They do not understand how to make a buck, and we can understand why that is the case.

DAVID GARRETT (ACT): It is rather surreal sitting here and listening to this debate about ideology from the other side of House. Let me get this right. I will go slowly. Your ideology is like this: State control good—

The CHAIRPERSON (Eric Roy): Order!

DAVID GARRETT: I am sorry, Mr Chairperson. I meant Labour—and the Greens even more so, but I will come to them in a moment. Labour’s ideology is: State control good, private enterprise bad. So to say that this measure is driven by some sort of mad, right-wing, privatising market ideology is really quite amusing. I expected far better from the Hon Rick Barker, whom I happen to respect considerably as a man of integrity and experience. But my incredulity was increased even more when the Hon Lianne Dalziel got to her feet. She is a graduate of the same law school I went to.

Hon Darren Hughes: She got better marks.

DAVID GARRETT: I doubt that, actually, I say to Mr Hughes. We can compare academic records any time the member likes. When I was at law school our court hierarchy went like this: the District Court, the High Court, the Court of Appeal, and the Privy Council. Now, thanks to a—thankfully departed—politician, who is now on the far side of the world, our hierarchy of courts is like this: the District Court, the High Court, the Court of Appeal, and the Supreme Court—that monstrosity over the road.

Ms Dalziel was at law school before me, and at no time, to my knowledge—and I have done a wee bit of legal history—has the Supreme Court of Israel been part of our court hierarchy. I find it very amusing that Ms Dalziel stands there brandishing a judgment from the Supreme Court of Israel and cites it with approval. If I am not much mistaken, I have heard that party over there, Labour, and certainly that one down there, the Greens, bagging the country of Israel at great length and on many occasions. Those parties say they are Zionists and have oppressed the Palestinians. Well, I happen to agree with them. Israel did not come into an uninhabited desert, as they would have us believe, and make orange groves out of nothing. They came in and drove the Palestinians out. So for Ms Dalziel to be quoting the Supreme Court of Israel is, as her colleague Mr Cosgrove says frequently, a bit rich. So that is point No. 1.

Now, talking of ideology, the more ideological party here is the Greens. Former Green member Mr Tanczos has admitted in this House that although the Auckland Central Remand Prison had better indicators on suicide, suicide attempts, violence to guards, and violence by prisoners against each other—he admitted that all that was true—the Greens were against it. He admitted that even if that result were repeated in spades, the Greens would be against it. That is ideology, is it not? Let me ask the Green Party a question. Let us say, for example, that a private prison, run in conjunction with an iwi, reduces Māori recidivism from 70 or 80 percent, as it is now, to 25 percent in 5 years. I ask Mr Clendon whether the Green Party would still be opposed to private prisons. The answer is yes, because of ideology. It does not matter what works. It does not matter what the indicators are. The Greens would be opposed to it. What about Mr Hipkins? If we establish a private prison—and it will happen, as the member knows—and if in 5 years the recidivism rate is 25 percent less than it is now, will you still be opposed to it?

Chris Hipkins: There is no evidence.

DAVID GARRETT: No, just answer the question—it is quite simple. Would you still be opposed to it?

Chris Hipkins: It’s completely hypothetical.

DAVID GARRETT: You obviously have not read the Standing Orders. You are allowed to ask hypothetical questions in here, even in question time.

Hon Darren Hughes: I raise a point of order, Mr Chairperson. When the member starts lecturing other members about reading the Standing Orders, and his entire speech consists of references to “you, you, you”—“you” being the Chair—I think that is sailing pretty close to the wind. He should come back to Part 1 of the bill. These references to “you” are just unbecoming.

The CHAIRPERSON (Eric Roy): I did actually call order there before, but I had in my excitement muted myself. So I take responsibility for not being able to impart that. But the member must mind his pronouns. Any member gets a 5-minute call. If members seek another call and I think they have not made best use of their time, it is my judgment as to whether they will get an additional call. That is my methodology—I probably should not be giving away secret information, but members, in the best interests of the Parliament, ought to be making the best use of their time.

DAVID GARRETT: I stand corrected, Mr Chairman. Thank you very much. I simply make the point that on the limited experience we have, private prison operation works. We will give it a go. We will see. ACT is supposed to be the ideological party, but on this occasion we in ACT say “Let us see what works.”

GRANT ROBERTSON (Labour—Wellington Central): Part 1 of the Corrections (Contract Management of Prisons) Amendment Bill is fundamentally wrong in principle and fundamentally wrong in practice. Mr Garrett wants evidence, and I will come back to that shortly.

We need to be absolutely clear that what takes place in our correctional system and the taking away of liberties are fundamental responsibilities of Government. If we want to go down the path of privatising the taking away of individuals’ liberty, we are on a very slippery slope in terms of the kind of society we will live in. It is a core function of Government to take that liberty away—a core function.

Jonathan Young: The courts do that.

GRANT ROBERTSON: No, I say to Mr Young that it is a core function of this Parliament to make laws. When we make a law like this, we go down a very dangerous path. We have to accept that when we pass laws in this Parliament there is accountability and responsibility. I want to return in this call, or perhaps in another one, to the Supplementary Order Papers that Mr Barker has put forward on the matter of accountability. If the driver of our prison system is profit, the safety of our communities and the safety of the people who work in our correctional system will be compromised. If the driver is profit, the driver is not the safety of our communities. That is the evidence from around the world. It is fundamentally wrong in principle to go down this path.

I do not think members opposite should dismiss the decision of the Israeli Supreme Court quite so quickly, because it is quite clear that those people who have driven the opposition to private prisons in Israel know that this is an issue that will be taken up globally. This is a major legal challenge to the rights of private prisons to actually exist, and it will be picked up. Whether or not members opposite agree with that legal challenge or think that Israel should not be considered in this debate, the challenge will be picked up by the opponents of private prisons. The opponents of private prisons in New Zealand do not come just from the Labour Party and they do not come just from the Green Party; they come from right across the sectors of society. The Catholic Church in New Zealand opposed it. The Howard League for Penal Reform—

David Garrett: There must be another lawyer over there somewhere who knows something about the law, surely.

GRANT ROBERTSON: I say to Mr Garrett that this bill is actually about a fundamental responsibility of this Parliament. Lawyers are not the only people who have an opinion about this. It is a vitally important law and it will be taken seriously on this side of the House.

The Israeli Supreme Court said quite clearly that the right to enforce—

David Garrett: Who cares?

GRANT ROBERTSON: I say to Mr Garrett that people will take this case up, and the Government needs to have a response. I want to know whether the Minister of Corrections knows about this decision. Has she been briefed about it? Can she take a call and let us know whether this Government is ready for the legal challenge that will come in relation to the right to have private prisons? That legal challenge will be coming in New Zealand and around the rest of the world, and the Government needs to know how it will respond to it.

This bill is also fundamentally wrong in practice. Sweeping statements have been made throughout this debate about how private prisons will be more efficient and more effective, yet the evidence right around the world is that that is not true. In the United States we know that from a report in 2001 describing what happened when prisons were privatised. It makes absolutely clear that the quality of services and safety was compromised. Abuses found in privately run prisons included low wages for staff, poorly trained staff, bad food, and overcrowding. That is from Project Censored of the Sonoma State University in California. It describes a destructive pattern of extensive inmate idleness, a lack of correctional experience on the behalf of almost all staff, and a search procedure that could fairly be described as a reign of humiliation directed indiscriminately at the entire prison population. That is the evidence from the United States of America.

We could go to the United Kingdom, where in 2008, 10 of the 11 private prisons in the United Kingdom were in the bottom quarter of prisons. The United States National Council on Crime and Delinquency said—and here is the evidence; this is its quote—there was “no data to support the contention that privately operated facilities offer cost savings over publicly managed facilities.” The privatisation of prisons is wrong in principle, it is wrong in practice, and it does not save any money.

We can go to Australia. In fact, the Minister has told us already that she went to Australia to look into this. Firstly, the briefing the Minister herself got for her trip to Australia from the Department of Corrections advised that there was no compelling evidence to demonstrate privately managed prisons provide higher-quality services, better outcomes, or significant cost savings in the correctional system. That is what the Minister was told by her own department. But when she went to Australia, she could have perhaps looked into the Metropolitan Women’s Correctional Centre in Victoria. It was privatised. After an inquiry in 2000 found widespread drug use, deaths in custody, poor training, and cover-ups, the Victorian Government was forced to take that facility back into public control. In Canada in 2006 the Government returned the country’s one private prison to the public sector because there had been no appreciable benefit to the country and to the correctional system. That is the problem with this bill: it is wrong in principle, but it is also wrong in practice.

When we come back to the situation in New Zealand, we know what we have experienced. We had that time with the Auckland Central Remand Prison. My colleagues have already spoken about the fact that from a financial point of view, it provided no benefit whatsoever. It also did nothing in terms of the wages or safety of staff. None of that was improved by going down this path. In fact, as Mr Barker has said already, the bar is set so low in Part 1 of this bill that the prison does not even have to be better or provide a better service in terms of New Zealanders’ safety. This is a mistaken piece of legislation. It is driven by ideology; it is certainly not driven by evidence. It is certainly not driven by evidence globally or evidence within New Zealand.

I will refer to the Supplementary Order Papers, because I think one of the critical elements about why incarceration is a State responsibility comes down to transparency and accountability. In the bill we can see that the Law and Order Committee realised this, because it did include a provision for the Public Records Act to apply to the contracts that are entered into under the bill. That material about prisoners will now be treated as if it were produced by the Department of Corrections. The natural corollary to that is to allow Parliament to have some scrutiny via the Ombudsman and the Auditor-General so that we can see what is going on and look at how resources are being used. I simply cannot see why, if the Government is prepared to accept that the Public Records Act should apply, the Ombudsman and Auditor-General should not be given the same ability to come forward and look into and analyse those things.

The Supplementary Order Papers from the Hon Rick Barker will do just that. They will allow the Office of the Auditor-General to have complete and unrestricted access to all aspects of any contractor prison, as if it were a prison run by the Department of Corrections. The Minister needs to tell us what is wrong with that. What is wrong with Parliament having the ability to have some scrutiny over these things? The same applies with the Ombudsman. Although the Ombudsman may have some indirect ability, Parliament needs some reassurance, if we are going to go down this mad path of privatisation in prisons, that we can look into what is happening in those prisons. Supplementary Order Paper 87 “authorises the Ombudsman to have complete and unrestricted access to any contracted prison, prisoner, prison records, and prison staff to carry out the duties and responsibilities of the Ombudsman’s Office …”. They are two very sensible Supplementary Order Papers that attempt to make some kind of transparency and accountability available to the people of New Zealand. The Minister must tell us why she is not—I presume she is not—supporting those Supplementary Order Papers. Could we get some indication from the Minister?

Chris Hipkins: She obviously thinks they are quite funny.

GRANT ROBERTSON: She does seem to find it quite funny. In fact, National members seem to find the whole debate quite funny. I would like to hear her take a call on those Supplementary Order Papers and let us know what she wants to do with them. The third Supplementary Order Paper that Mr Barker has put forward amends section 198 to make sure that no contract for running a prison under this Act will be more than 3 years. This is a very sensible amendment because it will not bind a future Government; this bill will be repealed under a future Labour Government.

This bill and this Part 1 are fundamentally flawed in principle and in practice, and they simply do not stand up to the scrutiny of international evidence. If we really want to enter into this brave new world, as Sandra Goudie said, to give it a go and give it a whirl, I say that it is too important for that. The safety and security of New Zealanders will be compromised. The safety and security of staff will be compromised. It simply is not good enough to say that we are just going to give it a go. It has not worked elsewhere; it will not work here.

CARMEL SEPULONI (Labour): I am on the Law and Order Committee with a few other members who are in the House tonight. For the whole time, the Government has pushed the idea that private prisons are safer, better, and cheaper. But I know, like every other member on that select committee knows, that the vast majority of the submissions that came through on the Corrections (Contract Management of Prisons) Amendment Bill were opposed to private prisons.

One submission that was not opposed—that was in support of private prisons—was from the GEO Group. We all know that that group has a vested interest in making sure that we privatise prisons, because it wants to make profits out of our prisoners. John Key is reported as saying that private prisons produce very good results, and he was talking with regard to the GEO Group and the private prisons that exist in Australia. The GEO Group is part of the Wackenhut Corporation—the owner of 13 correctional facilities, 11 of which are operated by GEO Group. The group has immigration detention centres, youth facilities, and adult prisons. GEO Group’s value now apparently exceeds $1 billion.

If it is really as good as that, why did it recently settle a case where staff had placed a woman in a cell block with male inmates, by whom she was raped and beaten, and she later took her own life? If it is really as good as that, why were 125 inmates removed from a prison by state authorities because of inadequate staff training and inadequate health care? GEO Group’s facilities have been reported as serving rotten food. They have knowingly made false and misleading statements to state officials, they have failed to complete criminal record checks on at least 100 guards, and they have violated domestic and international laws on due process and humane treatment. Mr Key says that private prisons have shown good results, but I ask members whether they think those are good results. We do not think so on this side of the House.

Prison officers who worked for the Auckland Central Remand Prison when it was under private management made a submission to our select committee. They said that serious, dubious things had gone on with regard to cover-ups, the way in which they were paid, and working conditions. They pointed out that in order to get bonuses, it was important that they made sure that they reported in a way that did not show up anything untoward; otherwise, they would not collect the money. Those concerns were raised with the select committee, yet the Government is still pushing for us to privatise our prisons.

The Minister in the chair, the Minister of Corrections, was earlier talking about the fact that privatisation is not all about cost, but, unfortunately, not long ago the Minister was the one saying that private prisons would be cheaper, and it was all about the fact that they would be safer, better, and cheaper. We already know, when we look at the evidence that I just discussed, that private prisons are not safer. Cost has been discussed by some of the members on this side of the House, and when we compare it with the cost of State prisons, we see that private prisons are not cheaper. We know that they are not safer, not cheaper, and not better. So there is absolutely no reason for this Government to go ahead and privatise our prisons.

Among the Supplementary Order Papers that have been discussed is Supplementary Order Paper 86, which was put forward by the Hon Rick Barker. It states that the contract for the running of a prison shall last for no more than 3 years. The problem at the moment with this bill is that the length of the contract is unlimited. The Minister will decide the length of the contract. Our concern on this side of the House is that if the management of the prison goes wrong, New Zealanders will have to fork out money to pay to get out of that contract. We cannot determine for how long the Minister will decide that the contracts run. For Mr Rick Barker to put forward an amendment that would limit the contracts to 3 years is completely reasonable. At the end of the day, whoever is in Government can decide whether private prisons are working and decide whether those contracts are to be extended. There is absolutely no reason why the term of the contract should be at the discretion of the Minister, and there is no reason why we cannot legislate for a certain term, so that on behalf of New Zealanders we can check on how privatisation is going, and can make sure that they do not have to pay out when things go wrong and we desperately need to get out of a contract.

With regard to the evidence that I discussed earlier, it is obvious that things go wrong with private prisons. They have done in other countries; they have done in New Zealand in the past. It is a real issue.

CHRIS HIPKINS (Labour—Rimutaka): I want to do several things in the next few minutes. First, I would like to agree with some of the comments my colleagues have made in respect of their disagreement in principle with the idea of the privatisation of prisons. Then I would like to talk a little about what it might mean in practice, and about the evidential base that we might draw upon when making that decision.

In principle I absolutely disagree with the idea that any private firm should make a profit out of the incarceration of people. I think it is a morally repugnant that somebody should make a profit out of incarcerating a prisoner. It is simply, in my view—

David Garrett: Ideology.

CHRIS HIPKINS: It is ideology; it is ideological. I find the idea that someone would make a profit out of somebody else’s suffering—whatever the cause of that suffering—simply wrong. I do not agree with it. But let us look at the evidence.

I have been sitting and listening to this debate. I am opposed to this bill—and that is my ideological view, but I am willing to listen to a good argument based on evidence. I have not seen any evidence from the Government, from the ACT Party, or from anybody else who is in favour of the private operation of prisons that actually suggests it will be better and that it will work.

The Minister in the chair, Judith Collins, used two main justifications for it: that it would be cheaper, and that it would have an impact on prisoner rehabilitation. If we measure the effect on prisoner rehabilitation by the rate of recidivism, it is worthwhile looking at the very limited amount of peer-reviewed academic research that has been done overseas.

My colleague David Parker, during the first reading of this bill, referred to two peer-reviewed studies that were done in the United States. Very few peer-reviewed studies have been done on the private operation of prisons. I will quote from the first one, which is called The Effectiveness of Juvenile Correctional Facilities: Public versus Private Management. The authors are Patrick Bayer from Yale University and David Pozen from Oxford University. Their study concluded: “for-profit management has a statistically significant impact on recidivism …”.

The unfortunate fact for the Government is that the statistics go the wrong way. The 1-year recidivism rates are 5 to 8 percent higher for those juveniles who were in a privately run prison facility. That is some of the limited international evidence about the effectiveness of private prisons. It suggests that recidivism rates are higher in for-profit private prison facilities. So we can discount what the Minister has said about that on that ground.

The other study is called the Bales report. Again, it was a peer-reviewed study, and it was about the experimentation of private prisons in Florida. That study found no empirical justification for the policy argument that private prisons reduce recidivism any more than public prisons do. So we can discount the idea that a private prison will be any better for prisoner rehabilitation. In fact, when we look at the motivations behind how a private prison will operate, and the motivations for why someone would go into running a private prison, we see that there will not be the right incentives for effective prisoner rehabilitation.

The second argument the Minister, Judith Collins, put forward was one on cost, and it was simply wrong. The limited experience we have in New Zealand shows that, in fact, private prisons are not cheaper. We can compare public and private management figures in relation to the Auckland Central Remand Prison. The rate for a public prison is $50,208, which is $7,000 less than the New Zealand experience in the private prison sector, when we had a private prison. So we can discount that, as well. The New Zealand experience shows that cost simply is not a factor. So the two justifications that the Minister put forward for wanting to push this bill through Parliament have already been discounted.

I have a couple of technical questions that I hope the Minister will address. I refer her to new section 198 in clause 5, “Management of prisons under contract”. Rick Barker has put forward an amendment limiting any contracts to 3 years, and I support that, but what this bill does not do is establish any criteria under which a decision may be made as to why a prison may be contracted out to private management.

Hon JUDITH COLLINS (Minister of Corrections): I think it is only fair that I answer some of the questions raised by the Opposition members. I am happy to do so.

In relation to Mr Barker’s Supplementary Order Papers, I say that Mr Barker has never once referred those matters to me or to our caucus, and I am afraid we will not be supporting them.

Mr Hipkins has been talking tonight about several issues. I hope I have this right. I think one of the things he has raised is that, effectively, no one should make a profit out of someone else’s unfortunate circumstances. Is that a reasonable rendition of what the member said?

Chris Hipkins: In the case of prisons.

Hon JUDITH COLLINS: On that basis we would not have private hospitals. We would not have dentists outside of the hospitals. We certainly would not have grocery shops, because, basically, food is all privatised in this country. We certainly would not have insurance, and we definitely would not have schools that were private or privately owned. The fact is that the State provides the funding, and as long as it is monitored and the chief executives are in charge, it is another matter who runs it. I have not yet heard Labour members refer to the fact that under their watch it was quite all right for prisoners who were sent from the court to prison to be transported in privately run prison vans. How does that work with the Opposition’s theory that only the State should be in charge of that area? Why should that be?

The fact is that Opposition members are ideologically driven, as long as it works for them. But unfortunately we have found that sometimes the State is not always the best performer on every single measure. I heard a lot from Miss Sepuloni tonight about the terrible things that have happened in private prisons. I have news for that member: really terrible things have happened in State-run prisons too—quite a few of them when Labour was in Government. In fact, some of the things we have had to fix happened when it was in Government.

One of the good things with a privately run prison, from our point of view, is that we can put performance measures on it. We can have accountability that means something. When Auckland Central Remand Prison was privately run, a clause in its contract said that if there was an escape it would pay a fine of $50,000. This was at a time when there was a very high escape rate in New Zealand prisons. There was one escape from Auckland Central Remand Prison and it was fined $50,000. One of the great things was that it never happened again.

Simon Bridges: Simple but effective.

Hon JUDITH COLLINS: It is very effective. Miss Sepuloni has also said that there have been cover-ups. Well, let us see the evidence of that. She has talked about wholesale privatisation. Well, we indicated that we are looking at one-tenth of our prisons being privately run, which is hardly wholesale privatisation.

I heard tonight from the Hon Lianne Dalziel about the Supreme Court of Israel. The member quite truthfully said she had not read the case, but someone had told her about it. I am sorry, but I will need a bit more evidence than that. I have never been to the State of Israel, but I am confident that our record on human rights would stack up pretty favourably against that of the State of Israel—or against most other States, frankly.

When we look at the cost—the Labour Party goes on and on about cost—we see that it is a fact that rehabilitation costs money. Auckland Central Remand Prison was contracted to perform 70,000 hours of rehabilitation when no other remand wing in this country at that stage was doing it, and, yes, it did cost. In fact, it did not just produce 70,000 hours; it produced 120,000-odd hours. It over performed and did not get paid extra for that, either.

She talked also about the loyal prison officers. It is nice to hear a member of the Opposition saying something nice about prison officers. When I became the Minister of Corrections, I was the first Minister of Corrections to ever turn up to a graduation ceremony for our loyal prison officers. Corrections Ministers under Labour, which was in Government for 9 long years, never once did so—not once. So it is nice to hear that now Labour likes the prison officers.

Grant Robertson MP spoke about liberties being taken away by private prisons. Well, I have news for him; I know he is not a lawyer. It is actually the courts that remove people’s liberty; the Department of Corrections does not. We just receive them. I think most of the issues have been dealt with.

METIRIA TUREI (Co-Leader—Green): How funny it is to listen to this Minister, Judith Collins, talk about iwi involvement in prisons. How terrible it is to listen to her talk about how great that would be. Do we remember that when this Minister was a new MP, she went to a pōwhiri—a Department of Corrections pōwhiri, if I remember correctly—and she had a big “waa” because she had to sit in the second row of the pōwhiri instead of in the front row. She stormed out of the pōwhiri and made a huge big row about it all through the country. She walked out in a huff, possibly with tears streaming down her face, because she had to sit in the second row and not in the front. And here she is now, supposedly crowing about how private prisons—international corporations—will be able to make a wonderful profit from the imprisonment of those Māori whose pōwhiri she might have been part of. She is really pleased that international corporations will make money out of the imprisonment of Māori. Her own behaviour has clearly demonstrated her absolute failure to respect Māori and Māori process, yet she stands here and tries to say contract management is a good thing for Māori people. It is a terrible day to hear the Minister talk about that in this context.

My colleague Nandor Tanczos and I went to visit a number of prisons, including the Auckland Central Remand Prison when it was being run by GEO Group—by Wackenhut—and he and I talked with Dom Karauria, who was there at the time, and with the iwi involved with the management and running of that prison. It was very innovative. The prison was a wonderful building, built with public money and designed for that purpose, and the management was very engaged with trying to find ways to involve Māori. But that came down to the fact that Dom Karauria was in charge. It had nothing to do with the ownership of the prison. It was about this one guy who had had experience in Australia of working for other prison organisations that did not have respect for indigenous people, and he himself had made a commitment to do so. Nandor and I were both very pleased to have worked with him and to have talked with him about his commitment, and we celebrated that. But that was the commitment of just one person. It had nothing to do with whether the prison was privately run or publicly run. It was because of the commitment of individuals: the people that Dom Karauria built around him to support Māori.

It surprises me a great deal that the Māori Party, in particular, supports the Corrections (Contract Management of Prisons) Amendment Bill, and does not recognise that that was the case—that it does not recognise the special skills of Dom Karauria, and instead buys into the misleading information and misleading rhetoric about private prisons being essentially good for indigenous people. We know that is not the case. We can look at the experience of the private prisons in Australia, and at the significant abuse and damage that is done to indigenous Australians, to Aboriginal people, in those prisons.

Carmel Sepuloni: Absolutely.

METIRIA TUREI: That is right. We can look at the example of the prisons that GEO/Wackenhut has operated in America, and my colleague Carmel Sepuloni has described some of those things. Again, a huge proportion of the prison population are black people, Mexicans, Hispanics, and the indigenous people of that country, as well. In those countries we can see that there has been an ongoing exploitation of indigenous communities by these companies, which make a profit from the systemic racism inherent in their legal systems. That systemic bias, that systemic racism, exists in this country as well, and the Māori Party knows that. The Māori Party knows that that is the case.

I hope that Tariana Turia is doing all right. She was reported a few months ago in the Wanganui Chronicle—it should be Whanganui with an “h”, I have to say—talking about this issue. She stated: “Our people continue to go to prison, and many of them have spent a long time not functioning well in society. They need the opportunity to have their mauri ora and mana restored. No one is going to do that in a public prison.” She stated: “Absolutely, we are not in this to make money. I am a firm believer in redemption.” She went on to state: “Our people have been deeply affected by the inequalities of the system, and the current system does not address the reasons that people go to prison.” She said the Māori Party support was about not just rehabilitation but also habilitation, and Māori could be part of their own solutions to these issues.

I agree with Tariana Turia about that; Māori can be part of the solutions to imprisonment issues. The fact that more than 50 percent of the prison population is Māori is a disgrace, and more needs to be done about that. But there is nothing to prove that privately owned prisons will make any difference to that situation. In fact, if we look at the overseas evidence, we see there is ample evidence to prove that privately owned prisons will do more damage to indigenous communities. They will do significantly more damage than public prisons do to the Māori population, because of the use of that population as a cash cow with which to make money. That is the basis behind the thinking around privately owned prisons. There is money in it.

The prison staff who came to talk to the Law and Order Committee talked about that. They showed us that in great detail, putting themselves at risk by doing so, because one or two of these guys had worked in the private prison and they will not get a job there now, even though they knew this legislation would be passed. They came and talked to us about the financial incentives for the managers, the owners of the private prison, to avoid their obligations in order to protect their financial bottom line. They talked about incentives not to find drugs, about staff being not disciplined but encouraged to resign in order to avoid the reporting of those problems, and about inadequate drug-testing. The only way to describe it is, I guess, as the company actively hiding information in order to appear to be complying with its contract, so it will retain the performance bonus. Those are the kinds of things that the Minister in the chair, the Hon Judith Collins, was talking about when she said privately run prisons were a good thing. The Minister said those things were good about private prisons, because they would have financial incentives to behave better.

Privately run prisons have financial incentives to hide information. That is one reason why the Green Party will be supporting the amendment to provide for the Auditor-General to have a great deal more oversight over private prisons. There needs to be a means by which the public can investigate the financial incentives, the financial issues, behind these companies and their operations. If we do not do that, there is no means by which that can happen through the contact. The owners and managers of the private prison can hide their financial information by using commercial sensitivity as a barrier. The only way to find out whether they are incentivised to hide information, and whether they are actively preventing their staff from doing drug testing, from finding drugs, and from being involved in all of the issues that those staff brought to us will be by making the Auditor-General able to investigate those matters. That will provide the best possible level of scrutiny over those issues.

It still remains a mystery to me as to why the Māori Party supports this bill, and why the Associate Minister of Corrections, Dr Pita Sharples, instead of supporting private prisons, was not able to negotiate with the National Government for Māori to be able to be involved in the running of public prisons. That could be done just as easily. In fact, if private prisons will comprise only 10 percent of the prison management in this country, then 90 percent of the Māori prison population will still be in the public sector. If there is no reform of the public sector, then how can we possibly expect that anything will be made better, or that anything will be done to resolve the issues around the Māori prison population? There has been no effort to deal with the public sector. What the Māori Party has done, and what the Minister has allowed to be done, is the diversion of attention, again, from the issues around the Māori prison population. The real need that should be met in the public sector is to be diverted to the private sector as some kind of panacea, or some kind of magic bullet solution, because that is what it is meant to be in the end.

Contract management is meant to be a magic bullet solution to the issues around dealing with the Māori prison population. It will not work for the vast majority of those Māori who are in jails. We know that jails increase recidivism and that jails cause enormous costs to whānau, to family, and to children. None of that will be resolved through the private prisons. None of that will be resolved by the Māori Party’s support for this legislation. Private prisons cost more than those in the public sector. That argument is based on evidence, not on the fallacies put out by the National Government. The private sector will profit from the systemic racism in the system.

JACINDA ARDERN (Labour): Anyone watching this debate from afar might be somewhat baffled, I think, by some of the arguments that have been put forward—in particular, by the Government members. People would certainly be baffled by the fact that the Minister in the chair, the Hon Judith Collins, somehow thinks that dentistry and grocery stores have some relevance and are a point of comparison for some of the arguments that we have been putting forward.

Government members have continued to claim that the fact that some part of Labour’s arguments are based on a principle, and on a principle that we hold very strongly, is somehow repugnant. I find that quite bizarre. I make no apology for the fact that we are applying a principle in this case. I make no apology for it, whatsoever. The difference between the way that we have presented our argument and the way that Government members have presented theirs is that we are willing to explore our view. We are willing to talk about where our principle comes from. We have quite clearly stated that we do not believe that the removal of someone’s liberty—a fundamental part of our justice system—should be carried out by a private citizen. We do not believe that the removal of someone’s liberty—an action that is either enacted by a court or carried out on a day-to-day basis by a prison service—should be put into the hands of a private citizen who enacts that action on behalf of shareholders. We do not believe that. We are fundamentally opposed to the State being directly removed from that responsibility.

I have not yet heard from the Government members a willingness to stand up and directly articulate their ideology on this bill. I have not heard from any Government member who has been willing to stand up and plainly state that he or she believes that private citizens should be able to make profit from our prison service and from this fundamental role of the State. I would be very interested as to whether any of those Government members have the same courage of conviction to stand up and directly state that.

It is not just principle that we have been talking about. In this case, we are backing up our principled argument with evidence. Over and above the question of whether private companies should be operating in this role, the evidence demonstrates that in the past when we have allowed that to happen, it has not led to an improved service. In fact, it was far from it. We need only go back to a very, very basic question. It is the same kind of question that we could apply to accident compensation, for instance. Why would a private company seek a contract from the State to administer a prison unless profit was involved? We do not hold objection to the notion of profit, but we do hold objection when it comes at the cost of a fundamental service.

Let me break it down. Where will the profit come from? Where is the incentive for private companies to enter into this? We have seen it before. One way to make a profit is to lower staff-to-inmate ratios. That has a natural implication: often prisons end up making lockdowns longer. There is less time out of the cells participating in things, like education, that will reintegrate a prisoner into society. Auckland Central Remand Prison was one of those that lowered its staff-to-inmate ratio, so we have the evidence already. Having fewer rehabilitative services is another way that prisons could enact a few cut-backs; a reduced range of services is another. Again, we saw the Auckland Central Remand Prison take part in that. In fact, there are reports that the Auckland Central Remand Prison refused to take prisoners after 6.30 p.m. because the majority of its staff were off shift at that point. Cuts in staff pay and conditions are also a possibility.

In a nutshell, profits in this case have often compromised service delivery, and this is an area where we cannot afford cut-backs in service delivery. Some of those reports came directly from prison officers who had worked at the Auckland Central Remand Prison, both when privately and when publicly managed, and they submitted that when it was privately run decisions were made on a day-to-day basis that were intended to protect the reputation of GEO Group, and to ensure that performance bonuses provided under the contract were obtained by GEO Group.

MELISSA LEE (National): I move, That the question be now put.

Hon RICK BARKER (Labour): I will pick up on a number of points. Firstly, I will come back to the point made by David Garrett as to why private profit is not always the best thing to have in situations like this. I will do that by picking up on the points made by Sandra Goudie and the Minister, the Hon Judith Collins, which basically seem to say we should do this just to have a try at it—we should give it a go and see what happens. It seems to me to be a cavalier approach to making public policy. Give it a go! This a laudable Kiwi attitude. It has done us well in the bush, on the sports field, and in those sorts of things, but I would suggest that it is not a good principle for developing public policy.

Public policy has for a long time understood the importance of separating the powers. This Parliament does not make decisions about individual court cases, for very good reason. There are a whole range of things where we separate the powers. Parliament has separated its power from the executive for very good reasons. Parliament should not try to run things. We separate the powers of the Minister and the chief executive for very good reasons. There are accountability reasons.

One of the important points about this is that in having the State itself run the prisons, there is no opportunity whatsoever for private interests to get into play with the operations of a prison. I will give a very good example, and that was in the United States, where recently a judge had thousands of decisions overturned because the judge was making decisions about where prisoners were being sent and for how long, and they were going to a prison in which he had private interests. His private interests overlapped with his public policy duty. If we have private prisons we put that principle at risk.

David Garrett: How many corrupt judges are there?

Hon RICK BARKER: The member can interject as much as he likes, but by ensuring—

Chris Hipkins: And he will.

Hon RICK BARKER: —which my good colleague here, Chris Hipkins, has said—that the incarceration of prisoners is done by the State, there can be no private interests, and there can be no profit motive in it. When we have contracted out we have allowed people who have private interests whilst carrying out public duties to have an overlap of interests, and these are not always good things.

Secondly—

David Garrett: Chubb does that, doesn’t it?

Hon RICK BARKER: Well, let me just deal with Chubb. Chubb runs a few buses and trucks around the place. It does not carry all the prisoners. It was there long before the Labour Government was in place, and it is not responsible for the prisoners. Chubb is effectively a specialist taxi service. A prison has control of the prisoners 24 hours per day, 7 days per week. It has absolute control of them. It picks a person up and takes him or her to another place where he or she is then placed in the control of the police, who have absolute control of them.

The point I will come back to is about the role of Parliament and the Auditor-General in ensuring that these things are done properly. This is a fundamental weakness. What the Minister is saying to us is that the chief executive and the monitors and auditors whom the chief executive appoints should offer this Parliament sufficient assurance. I say to the Minister that the interests of the chief executive can overlap with the interests of the particular prison. No chief executive will allow a contract to be arranged where one will say after a short period of time that this is a failure, this is wrong, and it has gone terribly bad, because it reflects badly on him or her. The chief executive will be very tolerant of any private contractors, because their success will reflect on him or her personally—a contractor’s failure will reflect on the chief executive badly.

As we heard in evidence before the select committee, the private prison that we have tried in New Zealand was massaging its figures. There is no doubt that it was massaging its figures with the—

David Garrett: There were allegations. We did not hear evidence. Get one of the lawyers to explain the difference between allegations and evidence.

Hon RICK BARKER: We heard directly from the people who turned up, at a risk to themselves, and they told the select committee. I have no reason to disbelieve them. There were a number of them, and they said that they were massaging the figures. They massaged the figures because that was in the interests of their profit-driven employer. The interests of the chief executive and the contractor do overlap. The interests overlap in that they do both have a commitment to ensuring that they can show a success on paper. That is why this Parliament should have an independent oversight of that through its auditor, our Parliament’s auditor, the Office of the Controller and Auditor-General.

SANDRA GOUDIE (National—Coromandel): I move, That the question be now put.

CARMEL SEPULONI (Labour): It has come up over and over again, but we cannot say it enough: one of the main reasons that Labour members oppose the Corrections (Contract Management of Prisons) Amendment Bill is that we believe that prisons are a core function of the State.

Hon Member: Oh God.

CARMEL SEPULONI: They groan whenever we say that. Do members know why the Government members groan? They groan because they do not understand what we mean when we say that prisons are a core responsibility or core function of the State. The reason they do not understand what we mean is they would quite happily privatise anything. They would quite happily privatise all the functions of the State—education, prisons, health, accident compensation, and perhaps even our welfare system. Who knows? They are quite happy to privatise. They do not understand what a function of the State is. That is one of the reasons why Labour members oppose this bill.

We understand, given some of the things that have happened in the last year since this Government came in, why the Minister of Corrections and the National Government would want to shift the responsibility for this function. We understand, given what has gone on under their watch. Let us look at what happened over the last year that might explain why the Minister and the Government want to shift responsibility for our prisons, to hand over the accountability to private managers. Let us look at what happened. Under the Minister of Corrections’ watch over the last year, two prisoners broke out of a police van at Palmerston North District Court on 15 January. Three remand prisoners broke out of a prison van in Hamilton on 19 January. Ărai Hema fled from an outside work party at Auckland’s Pāremoremo prison on 21 January.

Sandra Goudie: Hello? We’re doing Corrections, not the Police.

CARMEL SEPULONI: I say to that member that she should hang on—there is a lot more to go. I might have to take two calls on this one. Storm Hughes fled from a work party outside the Spring Hill Corrections Facility in North Waikato on 11 February. Robert John Wikaere escaped from Te Awamutu’s Waikeria Prison on 17 March. Ollies Siaea walked out of the Manukau District Court after he claimed to be another prisoner on bail, on 20 March. Three prisoners were caught on a roof at Mount Crawford prison on 13 September, trying to jump over a prison wall. A fourth who had already managed to successfully escape that way was caught by police less than an hour later. William Katipā, aged 43, escaped from a medium-security unit at Waikeria Prison after scaling a security fence on 29 September 2009. On 23 October, police were seeking help in locating Ernie O’Neal Paul, a high-risk offender, who was wanted for breach of bail. Christopher Watkins, 46, escaped from Tongariro/Rangipō Prison on 22 October.

These things happen, and they are happening more so—the research shows this. All of the submissions that came through the selection process, except for the one made by GEO Group, supported what Labour members are saying. These things happen more in private prisons, but the point of difference is that when prisons are privatised the Government no longer has to be accountable for them. The Government can put the blame entirely on the private company that is managing the prison. We can see why the Minister would like to shift the responsibility. The Government does not want to take responsibility for this. It would rather see the private companies cop the flak, so that it is not the Government that is held to account by New Zealanders. That is the issue.

I will go back to the proposition that private prisons are safer, better, and cheaper. Everything that has come up tonight from this side of the Chamber, and from my Green colleagues, demonstrates that they are not safer, better, and cheaper. As my Green colleague Metiria Turei said earlier, in respect of prisons, all of a sudden the Minister of Corrections is concerned about iwi. This issue was discussed in the submissions, as well. We saw a submission from prison officers who had worked in both State-run prisons and the Auckland Central Remand Prison when it was under private management. They said that cultural factors were not taken into account when that prison was privately run. They brought up the fact that at one point Australian prison officers were brought over to New Zealand to work in the prison. There were issues with regard to how much they were being paid compared with our local prison officers. There were issues with regard to the ability of the Australian prison officers to understand the cultural background of some prisoners. They gave examples in respect of Pacific Island prisoners.

SIMON BRIDGES (National—Tauranga): I move, That the question be now put.

CHRIS HIPKINS (Labour—Rimutaka): I will come back to some of the technical provisions of the Corrections (Contract Management of Prisons) Amendment Bill. I have a number of points that I am hoping the Minister in the chair, Judith Collins, will address. I turn to new section 198, “Management of prisons under contract”, set out in clause 5. The point I was beginning to raise, when I so unfortunately ran out of time, concerned the criteria the Minister will use when determining whether a prison should be put out to private contract, and what process there would be around public consultation in doing so.

The Minister mentioned in her speech that she envisaged that 10 percent of current prisons, if I understood her correctly, would be put out to contract management. I think that a number of New Zealanders who live in areas where there are existing prisons will be interested to know how the Minister will determine which prisons will be put out to contract and which ones will not be. The bill is completely silent on that point. The only thing that new section 198 does is allow the chief executive of the Department of Corrections to put any prison out to contract management with the Minister’s prior written consent. It does not give any criteria or establish any grounds upon which the Minister will give that consent. I think probably the Minister in the chair will be the Minister who would make those determinations, so I will be very interested to hear exactly how she will do that.

I represent the Rimutaka electorate, which shares its name with the country’s largest prison, Rimutaka Prison. The vast majority of constituents—78 percent, I think—who completed the constituency survey that I put out were opposed to having a contract manager for Rimutaka Prison. Interestingly enough, though, there was some support amongst the local population for expanding Rimutaka Prison, which surprised me. It is not that Rimutaka constituents are anti-prison—we appreciate that we need a prison—it is that the vast majority of residents are opposed to the idea that it should be run by a contractor.

Hon Judith Collins: Not going to.

CHRIS HIPKINS: The Minister is not going to do that. I wonder whether, for the sake of the residents of my electorate, the Minister may stand up to take a brief call and put that on the record of the House. The Minister has at least indicated to me, before all these witnesses, that she is not going to put out Rimutaka Prison to private contract. I am very heartened by that, and I thank her. But I imagine that every other area in the country that has a prison will want to know whether their prison could be put out to private contract. New section 198 is very silent on that point. I am pleased that the Minister has obviously thought about whether Rimutaka Prison would be put out to private contract, but I would quite like to hear about the other prisons in the country.

I turn to new section 199(1)(c)(ii), set out in clause 5. It talks about “sufficient suitable staff members to enable the contractor to carry out the contractor’s statutory and contractual obligations in relation to the prison;”. Obviously, the Minister will be involved in determining what goes into these contracts when she is dealing with the chief executive, who will have the primary responsibility. One of the questions that I have is whether she would envisage, for example, minimum staffing levels being in a contract. If, hypothetically, Rimutaka Prison were to be contracted out—and I accept the Minister’s word that she will not do that—the people in my electorate would want to know that any private contractor of Rimutaka Prison had some specified minimum staffing levels that it had to meet. Obviously the safety of the people who work in the prison and the safety of the people in the community around the prison is very much dependent on the number of staff who work in the prison. I would like to know a little more from the Minister as to how she envisages the requirement under the provisions of that new section being put into practice.

I turn to new section 199(3), set out in clause 5, which is basically a catch-all provision for any other provisions that the chief executive and the contractor see fit. The bill provides a fairly comprehensive range of criteria that any contractor will have to cover. I wonder whether this section is necessary, and, if necessary, what types of clauses and provisions the Minister envisages being captured by it.

The final point I raise concerns new section 199B, set out in clause 5, which limits the liability of the Crown in relation to the contractor. In particular, this section provides that the Crown is entitled to be indemnified by the contractor.

METIRIA TUREI (Co-Leader—Green): I know that I have Labour Party colleagues who have not yet had the opportunity to make a contribution to the debate on the Corrections (Contract Management of Prisons) Amendment Bill, so I appreciate the opportunity to do so.

I refer to a comment that the Minister in the chair, Judith Collins, made. She compared a prison to a grocery store or the local dairy down the road. I do not know what a Minister of Corrections—a Minister who is responsible for one of the most serious parts of the Public Service, and responsible for the policy that deals with some of the most serious issues of safety and the rehabilitation of those who are involved in criminal offending—could possibly have in her mind such that she could compare a prison to a grocery store. I guess that is just what we have to live with, with a National Government that puts a person who would think like that in a position of such responsibility. There has been some discussion—[Interruption] The Minister herself said it. If the public are to have any sense of security about who is running the policy behind one of the most important parts of the Public Service and the machinery of Government, it is important that they know. If the Minister is prepared to stand up in this Chamber and compare prisons to grocery stores, be it on her own head if other members in this Chamber then make it obvious—

Carmel Sepuloni: Talking about apples and apples, and apples and oranges.

METIRIA TUREI: Yes, she was talking about apples and apples, and apples and oranges. It is her own fault if other MPs make sure that that is highlighted for the information of the public. It is, after all, their community. It is, after all, their machinery of the State that is being messed around with by this Government.

There has been a lot of discussion about the economics of private prisons. We know for a fact that private prisons are more expensive in this country. We know from research overseas that there has been a failure of private prisons either to be cheaper or to both return quality services and be cheaper. The United States Department of Justice report that I have referred to in other contexts, Emerging Issues on Privatized Prisons, clearly showed that the privatisation models simply mimicked the public sector in practically every way, essentially saying that there was no innovation at all in the private sector. All of the new innovation and all of the new ideas were coming out of the public sector, and they were simply mimicked by the private provision.

The report also said that promises that were made by private companies in the US of 20 percent savings did not happen. Those savings were not provided, despite all of the promises. Although there were some modest savings of less than 20 percent, they were made by reducing staff conditions and other labour-related costs. The Minister said earlier that one of her priorities was keeping staff safe, but we know that the policy of the Minister and the Government includes double-bunking, for example. She is now engaging with private prisons, where staff will find it more difficult to work in an environment where their conditions and their pay are the priority. They will not be the priority for the private company; the bottom line will be the priority for the private company. The way the company gets access to a bigger bottom line, to more profit, will be hidden from the public. One of the things that will be hidden from the public is the staffing conditions and wages.

We can see that that is the case not only in the evidence from the United States Department of Justice but also in reports from Australia. The “Privatisation and New South Wales Prisons: Value for Money and Neo-liberal Regulation” report showed that privatisation in New South Wales did not result in value for money or a significant reduction in cost. So even closer to home, just in Australia, we know that the economic arguments do not pan out.

David Garrett was yelling out earlier about how staff of the GEO Group - run Auckland Central Remand Prison brought to the select committee views and information that there was hiding of their contractual requirements in order to avoid getting fines and penalties for failing to meet those requirements. He said there was no evidence.

JONATHAN YOUNG (National—New Plymouth): I move, That the question be now put.

The CHAIRPERSON (Lindsay Tisch): The question is that the question be now put.

Hon DARREN HUGHES (Senior Whip—Labour): I raise a point of order, Mr Chairperson. I was out in the lobby when I heard the closure motion being moved by the Government. It is standard practice for the Government to begin to move closure motions, but the House is in urgency on this matter. We have completed Part 1 in Committee faster than we would have done under ordinary time for a bill where the main policy decisions are in Part 1. Under urgency normally there is a longer period for the Committee to consider that part of a bill. This is faster than normal.

The CHAIRPERSON (Lindsay Tisch): I certainly thank the member for his comments, and I have taken them into account. We have gone for an hour and 43 minutes on this. I have a list of who has spoken. There has been a lot of repetition; there has not been any new material that has come out in the last 40 minutes. I decided to accept the closure, and I have put the motion.

Hon DARREN HUGHES (Senior Whip—Labour): I raise a point of order, Mr Chairperson. I realise that you have to take into account a number of factors.

The CHAIRPERSON (Lindsay Tisch): I have ruled.

Hon DARREN HUGHES: There are members who have been calling who have not had the chance to contribute to the debate.

The CHAIRPERSON (Lindsay Tisch): I understand, but I have ruled. We have Part 2 coming up, and then we have the other—[Interruption] I have ruled! We have Part 2, we have the commencement, and the other debates are still to continue.

Hon DARREN HUGHES (Senior Whip—Labour): I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Lindsay Tisch): I hope you are not going to litigate the decision I have made.

Hon DARREN HUGHES: I am reluctant to do it, but we are in urgency. I think you have truncated this bill; all of the policy decisions are in Part 1. I move, That the Speaker be recalled.

Motion agreed to.

House resumed.

Speaker Recalled

The CHAIRPERSON (Lindsay Tisch): The Speaker has been recalled because Opposition members and the senior Labour Whip, the Hon Darren Hughes, believe they had other members who wished to speak, and that I did not give adequate time for Opposition members to be part of the debate. My reasoning for accepting the closure motion was that this debate had been going for an hour and 43 minutes. Twelve Labour members, three Green members, and two Government members had spoken, and the Minister had spoken three times. There was a lot of repetition; no new material was being debated. It was my view that the debate had run its course. I accepted the closure motion.

Hon DARREN HUGHES (Senior Whip—Labour): Mr Speaker, you have been recalled on the motion of the Opposition, which is not something that we have at all made a practice of. The reason is that in the normal course of parliamentary business there is an unspoken tariff for how long a Committee stage should take and how long the debate on parts should take. The formula is set down in both Speakers’ Rulings and the Standing Orders. There is also an understanding between the Government and the Opposition about how long the debate on different parts should take. In urgency it has always been accepted that a longer period will be given, for the fact that normally Parliament would be moving through on a much slower process. Urgency brings that into a much tighter focus. A longer period of time is normally allowed for that.

What makes it so critical on this particular bill is that the bulk of the bill sits in Part 1. The bill makes enormous changes to an important part of the State’s responsibility, putting aside the different political differences. Everyone agrees that this is important legislation. We believed that there were members on this side who had not been given a chance to make a contribution. The presiding officer is under no obligation to call every single member, but there were members who had been called ahead of those who had not yet made a contribution.

The Opposition has put up amendments to this part—not a ridiculous number in order to slow things but a serious number for a bill on which there are sharp differences across the House. Government members began taking the closure motion quite early, and it is well within their rights to use their call in that respect. But we would assert that the Chairman accepted the closure motion far too early, given the importance of the bill, the fact that the House is in urgency, the fact that members of the Opposition had not spoken, and the fact that we have put up amendments that we wish to speak to.

Hon GERRY BROWNLEE (Leader of the House): I have been watching proceedings this evening from my office in the Beehive. I think the difficulty we have here is that the presiding officer has made a determination about the value of the debate continuing. I think it would be very unfortunate if that were to be in any way discussed or, should I say, overturned as a decision. There may be a way through this matter, though, because I do appreciate that members have pretty strong views on this issue. It is probably one of the strongest ideological divides that we have had in the House almost all year. I think it is important that all views are canvassed.

I suggest, Mr Speaker, that you make your decision based on the pleadings that are in front of you. I suggest that if the whips were to confer, we may well be able to make the debate on the next two parts quite wide ranging, with the questions taken at the end of that. That would facilitate people being able to express their views, without impugning the integrity of the officer in the Chair who has made, in his opinion, a proper decision that the Committee should accept with regard to the debate so far. If the Committee grants leave for the debate to be wide ranging, then that is another matter. I do not know what the shadow Leader of the House thinks, but we may confer and be able to come to some arrangement around that.

The ASSISTANT SPEAKER (Eric Roy): I thank members for their contribution. Let me address these matters in no particular order of importance, starting with the last point. Of course, the Speaker cannot make an assumption based on an interaction between whips, or anything else, but I think the House is appreciative of the comments made by the Leader of the House, the Hon Gerry Brownlee.

With regard to the expectation about how much of an urgency motion will be devoted to a debate, that is the sole prerogative of the presiding officer. Irrespective of the stage a bill is at, it has always been tradition that members who would like to continue to debate have to, by their actions, persuade the presiding officer that the debate will be relevant, not repetitious, and a whole range of other things. It is solely the presiding officer who determines whether to accept a closure motion at a particular time. Ultimately, the test is when the House has to vote on that motion. There have been times when closure motions have been defeated. When the House has seven parties, as it does now, that is more likely to occur.

I will acquaint the House with a couple of Speakers’ rulings that I think are quite pertinent on this occasion. Speakers’ ruling 77/1 states: “The chairperson is judge of all matters arising in committee, and the Speaker will not interfere …”. The ruling goes on with some points about that. There is particular reference to closure in Speakers’ rulings 65/3 and 65/4. Speakers’ ruling 65/3 states: “The [chairperson] is the sole judge as to whether or not he ought to sanction the putting of the closure motion, and it must be left entirely in his hands. The [chairperson], who has been presiding and has listened to the debate in committee, must be the best judge whether the closure ought to be put.” There is a bit of a rider: “I can only express the hope that it will not be applied too harshly.” The Leader of the House has given some indication that there is some flexibility to address the desire of the House, going forward. In that case, I report to the House that I will not interfere with any decision made by the Chairperson in determining whether the closure motion should be put.

In Committee

Debate resumed.

Part 1 Amendments to allow contract management of prisons (continued)

A party vote was called for on the question, That the question be now put.

Ayes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Noes 53

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

Motion agreed to.

The question was put that the amendment set out on Supplementary Order Paper 86 in the name of the Hon Rick Barker to clause 5 be agreed to.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 87 in the name of the Hon Rick Barker to clause 5 be agreed to.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 88 in the name of the Hon Rick Barker to clause 5 be agreed to.

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

Ayes 53

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

Noes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Amendment not agreed to.

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

Ayes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Noes 53

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

Part 1 agreed to.

Hon GERRY BROWNLEE (Leader of the House): I seek leave for Part 2 and clauses 1, 2, and 3 to be taken as one debate, with all the arrangements that previously existed for speaking times; for the debate from this point to be a wide-ranging debate across the full scope of the bill; and for two questions to be posed upon closure of the debate so that we vote on the provisions consecutively. In the meantime, let us debate freely the matters covered in this bill.

The CHAIRPERSON (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is no objection. I remind members what this means. We will debate Part 2, which comprises clauses 7 and 8 and the schedule, and clauses 1, 2, and 3. This will be a wide-ranging debate. As agreed earlier today, members may take two consecutive calls of 5 minutes each in order to make a 10-minute call—that is what we have agreed to. Are we all comfortable with that? Very good.

Part 2, schedule, and clauses 1 to 3

MOANA MACKEY (Labour): I thank the Chair and the Leader of the House for allowing us to continue this very important debate. I am very pleased to take a call. I was not able to take a call in the debate on Part 1, but I am very happy to be able to do so now because I have a number of concerns and questions for the Minister in the chair, Judith Collins, that I hope she will take the time to address.

I endorse the comments made by my colleagues thus far—

Simon Bridges: She knows about everything.

MOANA MACKEY: I say to Mr Bridges that I just care about everything.

Simon Bridges: That’s a beautiful thing.

MOANA MACKEY: Well, that is what the Labour Party is about; we think about people other than ourselves. That is where I am going with this. I want to comment on one of the things Sandra Goudie said when she got up. She went on about how important competition is in innovation in the prison sector, and how important innovation is within our prison system for getting great new ideas. Evidence from around the world has shown that although private companies are very, very keen on showing how great they are when they are trying to get a contract, there is no competition when it comes to follow-on contracts. In fact, the bill, as far as I am aware, does not even stipulate a length of contract time. So on the one hand we have a situation that my colleagues have outlined where a private prison management company could get a contract for 50 years, then it all goes pear-shaped, the Government needs to get out of the contract, and it will have to pay out for a very, very long contract.

Carmel Sepuloni: New Zealanders.

MOANA MACKEY: That is right; it is taxpayers who will pay for that.

The flip side of that argument is that when there are short-term contracts, the contracts are not given to other companies. There is no competition overseas when it comes to follow-on contracts. There are arguments about how great it is that sustained competition throughout the sector will create these wondrous results, but that does not actually happen. It only occurs at the point when companies are trying to grab contracts, and then it all falls by the wayside and follow-on contracts often do not follow. That is what evidence from overseas has shown, and I would like to know what protections have been put in this legislation to make sure that the claimed benefits of this law will eventuate.

There are also concerns that the quality of these services may be reduced in an effort to maximise profits. I know that National members have rubbished this argument, but it is an incredibly important point. I point out that private companies are fundamentally responsible to their shareholders. More than that, they would be acting against their fiduciary duties if they engaged in projects that they knew would disadvantage their shareholders. To me, that seems very much to run against the public interest in prisons being run properly. I would like the Minister’s comments on that as well. If these private companies are required to maximise profits for their shareholders, how does that sit well with the public need for safety and the levels that the public may be expecting.

I also know that the ACT member David Garret rubbished Labour members for saying that private prisons are bad by saying we are just ideologically opposed. I am, and I am quite open about that. I think that it should be the State that incarcerates people, not private companies. I think it is particularly repugnant to be making money off imprisoning people, and the evidence backs that up as well. I am one of those people who think we should have an evidence-based approach to these things and in the area of law and order under this Government we absolutely have the opposite. I believe the evidence does not back that up. I want to say to the ACT member in particular that even if he does not believe in that moral argument—and of course ACT does not—how does he feel about a situation where the privatising of a prison may jeopardise public safety if there is a major emergency, a riot, a breakout, or a strike?

Hon Gerry Brownlee: Come on, put the notes down. Say something you think yourself!

MOANA MACKEY: I say to Mr Brownlee that I want to get it right because he is here, and I really respect him and want to impress him. Government-run institutions are able to more effectively coordinate safety measures and emergency procedures than private companies. This is an important point and I would like the Minister in the chair, Judith Collins, to explain what she is doing to ensure that the private companies will have the same contact and the same ability to respond to an emergency as the State system, because that has been a concern overseas.

I notice that clause 199H of the bill, “Control of contract prison in emergency”, raises another issue: where there are concerns about public safety or other matters, or emergencies, the chief executive of the Department of Corrections can step in and take over. That raises the question that when things are going great, the private prison gets to keep the profit, but when things go pear-shaped the State has to step in, pay the money, and clean up the mess. How is that a good deal for the taxpayers of New Zealand? We saw this in the United Kingdom, where a private prison company got into significant trouble within months of opening. It made all these claims about all the wonderful things it could do and all the targets it could meet. Within months the company had practically fallen over and it was the UK taxpayer and the UK prison system that had to step in to clean up the mess and pay for it.

We have another case here of privatising the profits and socialising the losses. I would really appreciate the Minister’s comments on that as well, because it is an important point. There is also the issue, which members have rubbished but it has happened in the United States, that it creates opportunities for corruption such as bribes, kickbacks, and political promises. We have seen political parties get a lot of money from these private prison organisations. They come up with “tough on law and order” policies, because the more people there are in prison the more money those organisations get.

If we look at Pennsylvania in the United States, we see an absolutely terrible case that happened in 2007. Judges were being paid to put children into correctional facilities because the correctional facilities were privately run and the more children they had, the more money they got. One kid threw a sandal at her mother, I think, and ended up being put into a correctional facility because the judge was getting a kickback. I ask the Minister what there is in this legislation to make sure—

Hon Dr Jonathan Coleman: Where was this?

MOANA MACKEY: —it was in the United States, in Pennsylvania, in 2007—it does not happen here.

Before I finish, I want to read a submission. We have heard a lot about New South Wales and a lot about Australia, and I thought this submission was particularly good. Do members know who the submission is from? It is from the Police Association of New South Wales and this is what it had to say this year in its submission on the privatisation of prisons: “Private companies fundamentally are responsible to their shareholders to generate a profit on funds invested. Indeed, company directors would be acting contrary to their fiduciary duties if they were engaged in projects they knew would be likely to not be profitable. It cannot be said that the interests of the shareholders and the public interest may always coincide—indeed all too often we know that this is not the case. The current world economic crisis is as a direct result of the clash of interests of private organizations and the general public.”

That raises a number of questions that I would also like to ask the Minister. What will suffer as a result of the need to make a profit? How can there be a guarantee that corners will not be cut to meet the economic demands of making a profit for shareholders? If contracted services are remunerated on the basis of the size of the prison population, what incentives would there be for the provider to rehabilitate offenders? Will the financial imperatives of filling prisons lead to overcrowding? How does the provider become accountable beyond the terms of the contracts and contract law? Private contractors are insulated from public scrutiny; they are not subject to the same controls and oversights that apply to the Government and public sector employees.

Is there a real possibility that the safety of both inmates and the public will be jeopardised through inadequate staffing, training, and resources in order to increase profit margins? Will there be a higher staff turnover with private contractors meaning less experienced staff with less preparedness to respond to riots, fires, and escapes, and what is the increased risk of opportunities for corruption within private companies that are not subjected to the very rigorous oversight and training of government prison officials? And what is the risk and potential impact if the private company goes bankrupt? Those were the questions put by the Police Association of New South Wales and I think they are questions that deserve to be answered before any member of this Chamber supports this legislation.

David Garrett and the Minister in the chair said we should just give it a go and see how it goes. We are not talking about changing one’s hair colour or about getting a new haircut. We are talking about a significant shift in the way we run corrections facilities in this country. We are talking about a system that overseas has seen increased violence and prison deaths, and lower reporting. If something is not reported, the private company does not get pinged with the penalties and we have seen lower reporting in the private sector. Ten out of the 11 worst prisons in the UK were private prisons. I visited Her Majesty’s Inspectorate of Prisons for England and Wales when I was over there and I was told that the private prisons were diabolically bad and they cut corners at any cost. When MPs go through them the red carpet is rolled out and they are shown everything they want to see. It is like when we get that Microsoft Windows demonstration software that is nothing like the real thing. When we finally purchase the real thing it is very, very different. We were told “Don’t go there.”

JONATHAN YOUNG (National—New Plymouth): The private management of prisons is a forward step to improve our prisons, to encourage innovation in ways in which we can ensure a better result for all New Zealanders, which is why we are in Government and others are not. Private prison management provides an opportunity for innovation and service delivery, which will support better outcomes for Māori and Pasifika, and the public. Provisions will also be included in contracts for each prison to respond to the unique needs of people. Other significant nations have taken this step some time ago, and I mention a comment made by Mr Mel Smith, a former Ombudsman: “I can say categorically that the ACRP was very well managed, and certainly lost nothing in comparison with overseas examples in Australia, the USA and Great Britain.”

I want to speak about what has been presented to us by members of the Opposition regarding the core function of State. They have said it is their philosophy that the incarceration of prisoners is a core responsibility of the State and should not be contracted out. That view is obviously not supported in Victoria, New South Wales, Queensland, the United Kingdom, and the USA. Those states and nations are very similar to us here in New Zealand. One could equally say that health and education services should be the core function of State, because these are human rights, yet we see and accept private providers. What about one of the most important of all needs: feeding the population. Should that not be a core function of State? Well, Labour Governments have told us what we can eat and what we cannot eat; that is about as close as we allowed them to get. What about housing New Zealanders? Should that not be a core function of State? Where does it stop? That is the question. The truth of the matter is that in the modern world all these essential provisions come as a mix of private and public provisions. What makes a prisoner any more important than a law-abiding citizen, to attract such support from the Labour Party? Is it the fact that prisoners have lost their freedom? What about the loss of freedom felt by the victims of their crime? We need to understand that a private manager has only delegated authority to act on behalf of the State. To say that a private manager is incarcerating a prisoner is a mistruth. The fact is that Parliament in its laws and the courts in the enactment of those laws incarcerate a crime-breaker. What the Minister of Corrections has said in presenting this legislation is that in order to deliver the best corrections system for New Zealand, this Government believes that we should not limit our choices. By changing the legislation to allow private management of prisons we are giving ourselves a choice.

This legislation is not about the Government offering profits to private enterprise. This legislation is about seeking best outcomes for the New Zealand taxpayer, which may or may not be about costs. Let us talk about quality. A reported comment from Te Wārena Taua, who chaired a group that represented six iwi in a formal relationship discussion with Australasian Correctional Management, said that under a contract with a private provider “we have seen more progress and innovation in a prison than we have seen in decades from the public prison service. The private management of prisons does lead to innovation in management. This is a good example of that particular case.

Let me just read out a quote from a Labour MP from Great Britain Gerry Sutcliffe. He said: “The first private prison opened in 1992, and there are now 11 such prisons operating in England and Wales holding about 10 per cent of the prison population.” Listen to what he says: “The companies that provide those services have developed a strong track record of delivery and are driving forward the decency agenda, as well as introducing innovation and increasing value for money in public sector prisons.” Members opposite do not want to hear that. “Martin Narey, the former director general of the Prison Service, has said that if it had not been for the private sector, the decency agenda would not have moved at the pace that it has.” To say that private management of prison is all about profits is obviously and totally incorrect. Labour says that profit motives will compromise service quality. The evidence is to the contrary. In fact, Gerry Sutcliffe from the UK went on to say that there were “barriers to the best provider being selected.” This legislation will remove the barriers so that merit can be the determining factor instead of monopoly. Prison staff also have the comfort that this bill ensures that their superannuation entitlements will be protected, if they move to work for a private manager of a prison.

I think that Labour members have somehow become lost in the fog of their ideology. I respect that they have that view but I just disagree with it. They have lost perspective on what really counts. It is not about who provides; it is about what is provided and also for what cost. It is not about the cheapest; it is about the best outcomes for New Zealanders.

Carmel Sepuloni: It’s about transparency and being accountable. That should be the test.

JONATHAN YOUNG: Let me tell members opposite what their leader, Phil Goff, said. He agrees with us. He said: “The point I am making is that it does not matter a damn whether one has private or public prisons in that sense. What really matters is the way in which those prisons are operated.” That sounds sensible. I do not think that members opposite have an open mind to consider the opportunities that this bill will present. The concerns that they have are answered in the proposed legislation. The requirements of prison management contracts are covered in new section 199 in clause 5. Subclause (1) states: “Every prison management contract must provide for—(a) objectives and performance standards for the contractor in relation to the management of the prison that are no lower than the standards applicable to prisons managed by the department; and (b) objectives and performance standards for the contractor in relation to the management and care of prisoners in the prison that are no lower than the standards applicable to prisoners in prisons managed by the department;”. I believe that this is solid legislation. I believe that this legislation opens up opportunities for innovation to come through. We know that improvement always comes when contestability is able to be entered into, and we also understand that a monopoly closes that down.

There is accountability in this legislation. The commentary notes the amendment to clause 5 where it replaces section 199E(1): “This amendment would require the chief executive to appoint at least one monitor to each privately-managed prison, and allow the appointment of one or more additional monitors to assist that monitor.” As the Minister has said, those monitors are moved around from prison to prison so they do not become captured. I remember that when I was a teacher, many, many years ago, these monitors, whom we would call “inspectors” would come to look at what we were doing, and there certainly was a very strong degree of independence in their work. Labour members are concerned about what they state is a lack of accountability and transparency. They state that the Auditor-General’s office and the Office of the Ombudsmen will not be able to hold a private manager to account. Let me just explain, once again, that these people are “acting” as delegated authority under the chief executive, that they have contracts with provisions, that there are very strict criteria, and that there are ample opportunities for wide scope for accountability in this bill. The Auditor-General’s office stated to the Law and Order Committee that additional power to access information was not necessary for the office to obtain information from a privately managed prison, as it already had the power to do so. We do not hear that point from the Opposition—that the Auditor-General’s office is already satisfied that it has ample provision to be able to get the information that it requires to hold privately managed prisons to account. Other significant nations have taken this step some time ago. It is time for us, as well. Thank you.

Hon LIANNE DALZIEL (Labour—Christchurch East): I am very grateful to the Leader of the House and our chief whip for negotiating the opportunity to have a debate such as this. Everyone has said it, and it is true: there is a huge philosophical divide between the two sides of the House on this matter. The National Government seems to have it fixed in its mind that if it is public, it is bad; if it is private, it is good. The Labour Party, on the other hand, takes a different view. We say that if it is public, it is good; and if it is private, it is good in its place.

Sandra Goudie: You don’t like privatisation.

Hon LIANNE DALZIEL: I actually do not think that anyone on the other side heard what I said. I said that on this side of the House we tend to believe that when it is public, it is good; when it is private, it is good in its place. We are not debating the efficiency of business generally. That is not what this debate is about, from the philosophical point of view. Those who claim that members on this side of the House do not understand business are not picking up on the essential point that we are making. We are challenging the very use of private business to undertake the nature of this work. That is what we are challenging, and that is a fundamental difference.

But I will get on to the efficiency of this business anyway, because it does not stack up even on that ground. In terms of dealing with the philosophical divide we have here, we have heard members opposite absolutely mock the concept of the State. We have heard the ACT Party come to the fore, as usual, and say that the State really has no core function, at all, and that anything the State does can be contracted out. Government members simply do not accept that there are certain core functions that should never be contracted out from the State. They are absolutely clear-cut about their view. We had a lecture from David Garrett. It was interesting to be lectured by someone who touted the fact that he completed his law degree some time after I did at Canterbury University. He mocked the landmark ruling of the Supreme Court of Israel by pointing out that it does not appear in our hierarchy of courts. Well, hello! He obviously was at law school, because to know that takes exceptional intellect.

The point I was trying to make—and I think the one he deliberately ignored—was the potential impact of that decision across jurisprudence internationally. I think that it has an incredible capacity for making a significant change. In fact, the article I was quoting from said that the ruling would be studied not only in Israel but that it will also doubtless generate a conceptual revolution worldwide. I think that is absolutely true. I think it is unfortunate that we have not had any debate about this in the House, in the context of what we are talking about here.

The petition that started this particular case argued two things. It argued that transferring prison powers to private hands would violate the prisoners’ fundamental human rights to liberty and dignity and, second, that a private organisation would always aim to maximise profit—and, yes, that is what private organisations are designed to do—and would therefore seek to cut costs by, for instance, skimping on prison facilities and paying its guards poorly, thus further undermining the prisoners’ rights. I think these are serious issues that the court was required to address.

When considering this particular matter, the president of the court stated that normally the court would not intervene in economic policies decided upon by Cabinet, and the Parliament in Israel in that particular case, and that is certainly the case here. But in this case the president wrote that the legislation harms basic constitutional rights, thus the amendment’s economic aspect was not a decisive factor that the court must weigh in exercising its power of judicial review. I think that the fundamental issue that the court has raised in this particular case is that by transferring the power to incarcerate to a private corporation whose purpose is making money, the act of depriving a person of his or her liberty loses much of its legitimacy. I think that will be the basis of the many cases that I believe will be taken around the world. It is not just in New Zealand that this is an ongoing debate. This is being challenged all around the world, and, indeed, at the heart of prison privatisation, the United States of America, we are seeing these things being challenged all the time.

We have listened to National Party MPs talking about feeding people and housing people. We have heard all sorts of different things as being fundamental, so, therefore, why does the State not do all of those? Again, the Government completely misses the point, which is that some things are the core functions of the State and they cannot be contracted out. Maybe National members think a private police force would be a good idea, Actually, the Minister in the chair, Judith Collins, is also the Minister of Police. I ask the Minister whether that is a line across which we would go. Is that thin blue line going to get a little thinner, as the price of those who provide protection for our communities is dropped by the private sector? This is never mentioned.

The courts could be privatised completely. The military—the defence forces—could all be completely privatised, and, of course, we could get that for much better value. A few mercenaries could take up that role in defence of the realm. That, I think, is what we are not having a debate about. We are ignoring the fact that there are some fundamental issues in respect of human rights where we cannot ignore the obligation of the State and the fact that these things should not be contracted out.

Jonathan Young brought to the House the example of the United Kingdom. He quoted the number of private prisons that had been developed in the UK. I do not think he mentioned the fact that 10 of the 11 private prisons in the UK rank in the bottom quarter of all the prisons in the UK. So the UK example is not a very smart argument to be raising, because in fact private prisons do exponentially worse than most others. In fact, 75 percent of the prisons do better. The members opposite love league tables. I tell members that that is a league table that the private sector does not look very good on, at all.

The Minister also failed to respond to the point that I have raised in this House more than once now, and that is the cost differential in the provision of per prisoner management of the Auckland Central Remand Prison, which was under private management from 1 July 2004 to 30 June 2005. We had the comparative cost, which was $35,700 per prisoner when it was under private management. The comparable figure for remand prisoners in public prisons at that time was $32,000 per prison. The comparable price with the remand prison, when it came back under public management—a year later, so the price should have gone up—was lower than the private management cost of $33,900 per prisoner.

Why is nobody stating the obvious? Is the emperor genuinely wearing some clothes here? It seems to me that what has been overlooked is that the one actual example that we have of private sector prison management in New Zealand shows that it is more costly to run prisons within the private sector than it is within the public sector. All the international evidence points to detriment to those who are being imprisoned and detriment for the prison officers, who are usually paid less and are at greater risk of attacks and other things happening to them. Of course, there is the whole question of the cost to the taxpayer. In actual fact, a lot of that is hidden additional costs. It blatantly cost more for the private sector to run the Auckland Central Remand Prison in the one instance of private management that we had. That is why as a Government coming in we had no problems overturning that contract and saying that we were not going back there. It simply was not even cost-effective. On every level, this fails.

MELISSA LEE (National): It is a pleasure to rise in this debate to take a short call to talk about some of these things. It is interesting that we actually agree on both sides of the Chamber that there is a huge divide in our ideological differences—the things we believe in. That is a given, and we agree, and that is fantastic. But I would like to talk about perspective. The members opposite lack perspective. It was very, very interesting to listen to some of the members opposite talk about numbers. Do they not even understand the numbers when they quote numbers from the history of the Auckland Central Remand Prison? It was in fact the former Labour Government that came into power and decided to get rid of it because it did not agree with it. There was an ideological difference. But the prison worked better. It had better outcomes. The prisoners had better outcomes. They were getting a better rehabilitation process, yet the previous Labour Government got rid of it because it simply did not agree with the idea.

Let me just answer the Hon Lianne Dalziel, who has just resumed her seat. What she said about privatising different things—the police, the military—was very interesting. I think the only person in this House who has ever agreed or talked about privatising the military sits on the other side of the Chamber and belongs to the Labour Party. His name is David Shearer. Goodness me!

I will bring up some of the things that some members have talked about. Talk about propaganda! Apples versus apples, apples versus oranges! There have been no other remand centres that they could compare the Auckland Central Remand Prison with, but they keep continuing to bring up the costs. They keep continuing to compare the numbers. Do they not understand even basic numbers—maths? I am so glad the Hon Anne Tolley is introducing maths and numeracy properly in our schools. Perhaps Labour members should all go back to school.

I will talk about what Mr Barker said earlier during the debate. Mr Barker said that the Minister of Corrections and the Department of Corrections have vested interests and, hence, could massage the figures. But I say that perhaps that is what happened when Labour was in Government. Perhaps that is the reason he is suggesting it. Massaging the numbers—my goodness! There are no numbers with which to compare Auckland Remand—I cannot even speak now; I am so excited—Auckland Central Remand Prison.

Carmel Sepuloni came up with all those numbers of people who are escaping from prison—so many of them—yet she opposes this bill. That is unbelievable. She cannot come to grips with the fact that perhaps we have a really, really—as Mr Barker would say—woeful performance by the Department of Corrections under the previous Labour Government. Let me say that escape numbers have halved since this Government, the National Government, has taken over. Yet Labour members are opposed to the idea that perhaps there would be a better choice and a better option for the public and for safety, and better outcomes for prisoners’ rehabilitation. I cannot understand why Labour members would oppose that.

Somebody else over on the other side talked about transparency. When they try to say that the Auditor-General and the chief executive cannot control a privately managed prison, do they actually know what they are saying? That is just utterly ridiculous. The chief executive of the Department of Corrections this morning in the Law and Order Committee said that he is the boss of the Department of Corrections, and that, yes, he will be able to monitor the private management of a prison—as I said, private management. We are not lumping up all the prisons and selling them. It is not the privatisation of all prisons. We are actually saying that best international practice could be adopted to improve the situation in this country where the Department of Corrections has failed in its duties—which is woeful, as Mr Barker has said. You know, perhaps we might have a better benchmark against what has happened in the last 9 years of the previous Labour Government. It is improving since the current Minister of Corrections took over.

There is also something else that somebody on the other side of the Chamber said. Lianne Dalziel also said that business in the private sector could be bad, but in the public sector it is good. We all work in the public sector. We are all members of Parliament. We are here to do good for the public. We have never actually said that public is bad.

Hon RICK BARKER (Labour): I come back to the contribution made by Melissa Lee, and I will talk about numbers. Let us come back to the numbers that the Hon Lianne Dalziel put forward. I just repeat them for Ms Lee, because she heard them when they were given to the Law and Order Committee by the Department of Corrections, which is responsible to the Minister of Corrections. These are the numbers that are given by the department. The department says that the Auckland Central Remand Prison, under private management, had operating costs of $35,700, which inclusive of other costs were $57,280, which was higher than for remand prisoners held in public prisons. The cost was $35,700, compared with $32,000 in public prisons, and $57,000 was the cost, inclusive of related property costs, in the private sector, whereas it was $50,000 for the public sector. So the public sector was cheaper. These are figures from advisers to the Government; those people can count. These are audited figures. This is solid evidence. This is not rhetoric. The member says she can count and she supports numbers, but they are the same sort.

This is the same attitude from National that it had when Treasury said that the emissions trading scheme was going to cost New Zealand $110 billion. Nick Smith said, no, it will not. Well, who are we to believe: Nick Smith, who counts on his fingers and his toes, or Treasury, filled with highly skilled, highly trained people who can count and can do numbers. The Department of Corrections’ own numbers show that the Auckland Central Remand Prison run under the private sector was dearer than it was under the public sector. Every piece of evidence, whether we look at it from Australia, from Canada, or from Britain, shows that privately run prisons are poorer.

There is another part—members should trust me, and I will come to Part 2 here, which will surprise the Minister—that shows some concerns. If members have a look at clause 7(2), they will read: “the contractor and the chief executive, in the name and on behalf of the Crown, may make any arrangements that they consider necessary or desirable to determine the respective liabilities of the Crown and the contractor in relation to any matter …”. A private cosy deal will be done between the chief executive and the contractor.

Then we can go to section 199B of the Corrections Act, substituted by clause 5 of the bill: “(1) The Crown is entitled to be indemnified by a contractor—”. It does not say “shall”, or “must be”; it says “entitled to be”. That is permissive. So we can have a cosy deal by the chief executive and the contractor. Who will carry the cost of that? It will be the taxpayer. The point about that is that we have to rely—according to the Minister and the Government’s legislation—on the chief executive’s responsibility and integrity about that. I have no doubt about the responsibility and integrity of the chief executive. But I want to have oversight by an external audit carried out by an external agency, and that is why I want the Office of the Controller and Auditor-General to be in the legislation. I want it to be compulsory that those things are done. This is by trust.

When the member Melissa Lee says that Labour members are talking about ideology, I say to her that we are not talking about ideology from our perspective; we are talking about ideology from the National Party’s perspective. This provision is simply an article of faith: National members believe that private contractors will do better when all of the evidence points in the opposite direction. Even when the Minister’s own department says that it is more expensive for a prison to be run by private enterprise than it is to be run by the department, she is still going to go ahead and proceed with this legislation. When Treasury says it is going to cost $110 billion for the emissions trading scheme, and Nick Smith says “That is not correct. We have got other figures.”, whom do we believe, Treasury or Nick Smith? In this particular case, whom do we believe, the Department of Corrections or the Minister of Corrections? I say that the department is correct. A private contract was more expensive before, so there is no justification for it.

The next point I come back to in this debate is that the Minister got up earlier and said how wonderful the Auckland Central Remand Prison was before, because it introduced programmes for Māori. It was innovative—the first prison in the country to do that. Well, I tell the Minister that that is not correct. That is simply not correct. The programme was started in Hawke’s Bay, in Mangaroa Prison, and all of the other prisons followed that. So we have now a fallacious argument being put forward to justify an innovation of a private sector prison. It was not a private sector prison that introduced that innovation; the facts show that to be the case.

Hon JUDITH COLLINS (Minister of Corrections): I need to answer a few of the questions that have been raised. The member the Hon Rick Barker has just resumed his seat. He said I had said the programmes for Māori were first introduced in the Auckland Central Remand Prison. But I said that was the first programme for remand prisoners. He should listen.

The member also made some points there about costs. All through the debate tonight we have heard from Labour members, but not one of them has talked about the need for rehabilitation or the fact that rehabilitation costs money. Unfortunately, they continue to ignore the fact that the Auckland Central Remand Prison, as a remand centre—the only one that was fully a remand centre at that stage—actually provided rehabilitation. It was contracted for 70,000 hours. That was not something that was prevalent in the remand wings of our public prisons at that stage; that prison was, in fact, a leader on that. Those members ignore the fact that that contract cost money. Well, this party is not going to ignore rehabilitation, which is why we have doubled the number of rehabilitation places for our prisoners in our first term.

Some questions have been asked about ideology. What is our ideology? It is pretty simple, really; it is whatever works. Whatever works in corrections is what we are going to do. We will not do what the Labour Party does, which is to say it has an ideology of being against the private sector. But here is a little question for the Labour members to answer; Mr Barker may like to answer it. If Labour members are so against the private management of prisons, why was Chubb, which Mr Barker called a glorified taxi service, the company that under Labour responded to all the home detention call-outs? I ask Mr Barker why that was the case. It was because, of course, it is OK for Labour to call on the private sector when it feels like it, but Labour will not have the private sector anywhere where Labour can make a point out of it. It was quite safe to do that when National was Opposition, because the Labour members knew that National actually—

Hon Lianne Dalziel: That is because it was home detention, not incarceration in a prison.

Hon JUDITH COLLINS: Oh, Lianne Dalziel says it is not incarceration. Well, she should tell that to the courts. I think it is extremely important to ask those questions.

There have been some questions from Moana Mackey. She asked why the terms of the contracts are not in the bill. It is a good point, except that the terms of contracts are in those contracts. That is a sort of basic fact. If she had looked at that, she would understand it.

Moana Mackey also said there would be corruption. She talked about judges being corrupt and sending prisoners off to jails.

Hon Lianne Dalziel: In America.

Hon JUDITH COLLINS: That was in America. Let us just look at this. Moana Mackey is saying judges in New Zealand could be corrupt. Well, I actually do not have one instance of knowing of a judge in New Zealand who could be corrupt.

Grant Robertson: She never said that.

Hon JUDITH COLLINS: If she did not want to raise it, why did she bring it into this debate? The other thing she said was that judges could collude with private prison managers. She said that happened in America, so it is obviously applicable here! Well, in New Zealand—

Hon Member: So the Minister admits it happened.

Hon JUDITH COLLINS: No, no. If the member wants to know about it, she should answer this question: who decides to which prison a prisoner goes? It is actually the Department of Corrections. Is she now going to say the Department of Corrections is corrupt, as well? Is that what she is going to say? When it comes to incarceration, this is a completely different system than that which operates in any of the states of America. We do not have politically elected judges; we have appointed judges, who are appointed until their retirement age. The vast majority of our prison population will be in the State-managed prisons.

Chris Hipkins has asked about Rimutaka Prison and about how many prisons would be under private management. I wish he had listened, because I have said time and time again all year—and I have put out a number of press releases on this—that we are looking at two: the new prison being built at Mount Eden, and a new prison possibly being built at Wiri, which is in Auckland. So we are not talking about wholesale privatisation.

Metiria Turei: Who pays for the buildings?

Hon JUDITH COLLINS: The member from the Greens likes to pipe up and make her voice heard now. She said she went to the Auckland Central Remand Prison. What did she say? She loved the innovation. She said it was all because of Dom Karauria, who was the manager. She then went on to allege corruption in that prison. She said the people were fudging the statistics. That is what she said about the manager of that prison, and she should be ashamed of herself for making that allegation. That man is a very impressive manager of prisons, and she would be very lucky if he came back here.

What are some of the other things? Oh, yes—Lianne Dalziel. She talked about the core functions of the State. I am actually with Phil Goff on this one: when it comes to prisons, it does not matter who owns them and it does not matter who manages them; what matters are the outcomes. The outcomes from privately managed prisons and our State-run prisons should be all about rehabilitation: preventing people from being re-victimised out in society, and making sure that we do not simply lock people up and leave them there. When Labour came into Government—

Metiria Turei: You’re wasting time and money on private prisons, when you should be dealing with the public sector.

Hon JUDITH COLLINS: If Miss Turei would listen, she would learn something.

Simon Bridges: She doesn’t listen.

Hon JUDITH COLLINS: I know she does not listen. She could listen to this: when Labour came into Government, there were—

Hon Steve Chadwick: I raise a point of order, Mr Chairperson. Is it not the usual format for the Minister in the chair to actually answer questions raised by previous speakers, rather than give a political diatribe from the chair?

The CHAIRPERSON (Eric Roy): Leave was sought for a wide-ranging debate on the remaining parts, and I think the Minister is having a wide-ranging debate on the remaining parts.

Hon JUDITH COLLINS: Thank you very much, Mr Chair. It shows that those members do not like the answers, do they? They really do not. Miss Turei has made all sorts of comments about the integrity of the people who worked at Auckland Central Remand Prison. She has said, from hearsay evidence given to her in a select committee, that the place was corrupt, yet she has at the same time said the manager there was one of the most impressive people whom she had met. She also said that prison was innovative. That is what she said. So that member is extraordinarily confused. However, in amongst her ideology against privately run prisons, she has now said we should have a partnership with iwi in the public sector. I am glad to hear that the Greens have come round to public-private partnerships. I look forward to their support when we build the new prison at Wiri, because I think that will be very, very interesting.

Generally, I ask the Opposition members to please stop ignoring the 70,000 hours of rehabilitation that Auckland Central Remand Prison put in, and to please stop denigrating the people who did good work at that prison. They were good people, they did good work, and they should not be denigrated just because the Opposition has an ideological problem. The only ideology that we are bringing to this issue is whatever works, and I am very proud to see that.

JACINDA ARDERN (Labour): I am pleased to take a call. I have to say, though, that I am somewhat disappointed to follow what can only be described as an absolute trivialisation of some really significant points that had been made not only by the Labour Opposition but also by my colleague Metiria Turei. I will touch on a couple of points that the Minister in the chair raised. In particular, she tried to defend private prisons by stating that rehabilitation programmes had taken place under private contractors in remand prison. Remand prisons are for prisoners on remand! Fifty percent of those on remand are subsequently found not guilty; they are under the presumption of innocence. And we are operating rehabilitation programmes on some of these prisoners? No wonder we have inefficiency problems with the private sector!

I would also like some clarification, perhaps if Jonathan Young would like to take another call, on what exactly is meant by the decency agenda that private prisons are operating. I was confused by this term, and perhaps he could shed some light on the decency agenda.

The UK is an interesting example to bring up—the UK and its large number of private prisons. I am not sure whether Mr Young heard the Labour Opposition point out that 10 of the 11 worst-performing prisons in the UK are private prisons. In fact, that might be the very reason why in the UK they established something called independent prison monitoring boards.

I would like to spend a little bit of time talking about the independent prison monitoring boards, because it is a point raised by my colleague Moana Mackey. I guess parallels could be drawn between what was established in the UK, and the monitors that the Minister has raised in Part 1. But I will go through some of the technical differences because I think the monitors that are set out in this bill are actually inadequate in comparison with what the UK has set up; I want us to keep in mind that the UK set them up because of the dire circumstances under which some of these private prisons were operating.

I want to go back to new section 199E and the monitors. New subsection (1) of that section sets out the number of monitors that could be appointed at any one time, and I ask the Minister whether she has any expectations over what is an adequate number of monitors for any given prison. The responsibilities for these monitors, as set out in this bill, are significant. In fact, in the UK the independent prison monitoring boards have multiple members on them, in light of the fact that they deal with such weighty issues, and they are frequently called to report to the Home Office on the operations of the prisons, so I would like to hear whether the Minister has any expectations in that regard.

I would also like to refer to section 199E(1A) in clause 5, which sets out that the chief executive may appoint one or more monitors under the State Sector Act. New section 199D(2) in clause 5 then states that the monitor is responsible to the chief executive for the assessment and review of the management of that prison, and must report to the chief executive “at any intervals”. I want to draw out the question of independence at this point, and it is something that has been raised by my colleagues. Again, there is a significant difference between the independent boards that we see operating in the UK and those we see here. The chief executive appoints the board, and it reports to the chief executive. New section 199E(4) states that “The office of the monitor may be combined with any other office, appointment, or position if the chief executive is satisfied that the duties of that other office, appointment, or position are not incompatible with the duties of a monitor.”

That is a huge amount of discretion placed upon the shoulders of one individual person. The fact that the chief executive can appoint however many monitors he or she chooses, and makes a decision over whether there is any conflict of interest with that individual, and can call the monitor to make reports at any time, is a high concentration of power in one individual, and, potentially, for the one or two individuals whom he or she may appoint.

One of the reasons I have such an interest in independent prison monitoring boards is that when I was resident in the UK I made an application to become a member of one. I had an interest in the way those boards operated and the fact that they drew on lay people—members of the community—who had no conflict of interest in the way, for instance, Brixton prison was managed. I was one of those individuals. I had no vested interest in any regard. The chief executive would not have been the one making my appointment to that board. I would have been entirely separate to the process. My only interest, therefore, would have been the transparent and correct operation of that prison as set out in legislation. I think that is in stark contrast to the way these monitors are set out in this legislation. I would be interested to know whether the Minister took into account any comparisons, such as the way the UK, for instance, operated, which is an area I have some interest in.

I would like to go on to a couple more provisions as they relate specifically to the monitors. New section 199F(2) states “Every contractor must ensure that any monitor has free and unfettered access at all times”. That actually confers on the monitors greater powers than the Auditor-General has. The Auditor-General has an independent responsibility—a responsibility not invested in the Auditor-General by the chief executive—yet the monitors have greater powers than the Auditor-General. I think that is an oversight, and therefore I am disappointed that we have not adopted today what I think are very reasonable Supplementary Order Papers put forward by my colleague Rick Barker. Those Supplementary Order Papers would have rectified and clarified that situation.

I come to new section 199G(2A), which, within that context, states that a monitor is also able to “investigate any matter relating to that prison, or any prisoner in that prison,”. I think that raises an interesting point over the subject matter of the reports that will come from the monitor. For instance, the independent prison monitoring board actually spends a lot of time taking complaints from prisoners about the abuse of very, very basic rights. I do not want to get into a debate over whether we are granting too many rights to prisoners, but the independent prison monitoring board did have a role in ensuring that there were basic standards in those prisons. Often those were kept in check only by complaints made by prisoners themselves. Will a monitor be able to accept complaints and investigate matters raised by prisoners directly? I accept that I may have missed that detail in the bill, but I would be happy for the Minister of Corrections to clarify that for me. I do note that the Minister is quite busy, but I suspect that the Hon Nathan Guy is not raising with her matters related to the bill; perhaps he is discussing designs for the next passport, because that is obviously a weighty issue that the House has spent significant time on today.

I would like to get to another important issue and that is what happens to the reports—the very important reports—being produced by the only one with access, and apparent transparent access, to the private prisons. What happens to the reports generated by the monitors? There are lots of provisions relating to what they can do, how they can get the information, and how they can be tasked by the chief executive, but I did not feel that there was enough consideration of what then happens to those reports. The Opposition has already requested that access is granted under the Official Information Act. I do not feel there is quite enough clarity at this point that they will be covered by the Official Information Act, and that we will be able to gain access to the reports produced by monitors. Again, that is perhaps something the Minister could clarify for us. I think that would be a great service to us.

There is a provision under section 199I that says that prison management contracts are to be presented to the House of Representatives. We will then, in comparison, have greater transparency around the content of contracts than we will around whether the contracts have been abided by and fulfilled, and I think that is an inconsistency. It is one thing to know what is included in a contract, but it is another thing to know whether we have the powers and tools to ensure that those contracts are being abided by. It would be only right to have consistency between those two provisions. I request that the Minister draw out her reasons why she believes that the reports produced by monitors should not be subject to section 199.

Hon Dr PITA SHARPLES (Associate Minister of Corrections): Tēnā koe, Mr Chairperson. I will take a call on the Corrections (Contract Management of Prisons) Amendment Bill. To make it very clear, I say that I am the Associate Minister of Corrections. I asked for the portfolio because I have spent a lot of my time since the 1970s working in prisons in New Zealand and Australia, and I thought that maybe I could offer something to the prison service by being involved in that capacity as a Minister. There are good prisons and bad prisons in terms of their administration and treatment, and of the duties they perform. I have found good prisons in a private capacity and also in a public capacity, and poor prisons in both, as well.

I favour the introduction of private prisons in the sense that it can give Māori an opportunity to be more involved in looking after their own and perhaps rehabilitating them. The role of a prison in the first place is really to incarcerate people and to make the public safe. I believe that the role can be extended to rehabilitation, but it needs a particular programme and culture within it in order to perform those tasks.

A variety of Māori programmes have been introduced in prisons for ages. Mention has been made of the Māori focus units. The first one was in Hastings; I was one of the three people who designed that prison. It did not perform how we wanted it to, and that is what I want to talk about. In New Zealand we have more prisons and more people in prison than we should have for our population. As a result, the prisons are finding it difficult to cope, so they are putting conditions on each other. There is a lot of interaction between prisons, which stops the units from running in their own rights as single prisons. In the Māori focus units, for example, suddenly there may be no more beds left in the matua prison—the senior prison—so they put people into the Māori focus unit who do not want to be there, sometimes who are not Māori, and who do not fit into that programme. It erodes the value of the programme that is operating. There are other factors, too, but unless a programme is set up and is protected so that it can run in accord with why it has been set up, then it is very difficult to carry on.

My own preference is that we build more rehabilitation centres. We have designed some that we are hoping to launch next year. The value of the rehabilitation centres is that they will bring the recidivism rate down, which doubles the amount of beds available. If there is a rehabilitation centre with 60 beds and we manage to keep most of those people out of prison, that means that 60 beds are available in the main prison as well as in the rehabilitation centre because those people are not coming back. It is good to try. We have tried quite a few things in prison, but it has been very difficult to maintain them.

Hon Lianne Dalziel: But they’re not-for-profit, aren’t they? The ones that work are not-for-profit.

Hon Dr PITA SHARPLES: I cannot answer that, because I have seen rehabilitation centres run both in private prisons and in public prisons, and I do not think that the profit thing needs to come into the equation, myself. I think it is up to the manager.

The member is right about Dom Karauria and the good job that he did at the Auckland Central Remand Prison, but that came down to the manager and the freedom that he had to operate. He saw our P programme and he saw that P was a problem in his prison. He gave $13,000 towards our P programme and he asked us to come into his prison and present to all of his staff. He made his entire staff, except those few who were holding the keys at that moment, observe the programme. At the end of it, he stood up in front of them and said that he did not want to see any of them involved in P trafficking or helping to get P. He mentioned a guy who had left the week before, who was sacked because he was involved in P, and he said that he did not want to see it happening there. So I was pretty impressed with the prison that he ran. He also had a cultural arm at the prison, which Peter White ran. He had elders in there by the dozen, and those elders were able to interact. I am not saying that this cannot happen in a general prison, but it is harder in New Zealand, because of all the layers of culture that have happened in our prisons.

During my first 3 years in Parliament, sitting on that bench over there, I noticed that quite a few Ministers of Corrections passed through. Corrections was regarded as the portfolio from hell. That was the kōrero. But, you see, it need not be like that if we are able to effect some change and some difference. Most of the people working in prisons are well motivated, and I mean that, having worked in that area since 1972. Also, most of the inmates start on little offences, like sleeping in a truck bay in town, smashing a bus seat, or something like that. It builds up to a welfare home, then a low-security prison, then a medium-security prison, and then a maximum-security prison.

I visited some private prisons in Australia. I thought they were pretty good, because they had a case management system where every inmate had a personal case manager and every staff member had a number of inmates for whom he or she was responsible. That case management gave people an opportunity to aspire to privileges. They had a privilege system. The inmates would get more visits, more leave, and stuff like that, depending on their behaviour and how they operated in the prison. I think that those sorts of things can come in more easily in a private prison than they can in the mainstream prison, because our mainstream prisons are connected to each other. We might have to move people. We have a programme of trying to relocate inmates near to the town where they come from, and that causes all sorts of complications as well.

There is a case for private prisons. I think, though, that if we do that, then we have to have a public debate. I think we have to look at things like security, escape, and so on, and we have to make sure that people have had the chance to have that debate. We have to look at the human rights—the rights of inmates to appeal and to have their appeal heard properly. All of these things have to happen if we are to extend into the private capacity. At the end of the day I think we should try it, because the way we are doing it now is not working, despite really good attempts being made in the Department of Corrections.

Hon Sir ROGER DOUGLAS (ACT): I came down to the Chamber and I was not inclined to say anything on this Corrections (Contract Management of Prisons) Amendment Bill, but in a way I could not help myself when I listened to the Labour members. When we listen to Labour members these days, whether the issue is prisons, education, health, or accident compensation, it does not really matter, because what they are about is means. They are about public delivery, irrespective of whether the outcome is any good. Those members do not start with objectives and goals, and then ask what the best way to deliver them is. Where they start is with the means, and it has to be the public delivery. It would not matter whether private prisons rehabilitated 50 percent of prisoners and public prisons rehabilitated only 10 percent, because the members opposite would still favour public prisons. That is a tragedy; that is a real tragedy.

I suggest to Labour members that they are going nowhere until they focus on objectives and goals, and not on means. They are in favour of a public system in accident compensation that will lose $4 billion this year. They are not actually interested in delivery. They are interested in a public education system where 30 percent of our young kids come out unable to read or write properly. They are not interested in the kids, but they are interested in public delivery. At the end of the day, that is what this is all about. It is a question of whether we can introduce a measure of competition. Without doubt, competition is vital. It is just as vital within the public sector as it is within the private sector.

It would be fair to say that competition amongst Government enterprises and between Government enterprises and private organisations helps to ensure that the Government is the servant of the people and not the other way round. Whether or not the Labour Opposition likes it, the fact is that competition is a disciplinary force. It provides consumers with a protection against poor quality services. I suggest that some private sector competition in the field that we are talking about—prisons—would do exactly that. The difficulty for the Labour Party, I think, is that those members have locked themselves so much into the means that they have lost sight of the people whom they are trying to help. Until they get back to focusing on people rather than on means, they are going nowhere.

A recent publication on education by their former Prime Minister, which she sent to a lot of parents, mentioned public education in that letter 12 times and never mentioned a child once. That is where Labour has got to, which is a great tragedy.

GRANT ROBERTSON (Labour—Wellington Central): I will talk about some aspects of the Corrections (Contract Management of Prisons) Amendment Bill where I think the Minister in the chair, the Minister of Corrections, would agree that we are basically on the same page. What she has been trying to achieve, particularly in the new section 199, which is in clause 5, is about safety and accountability. I ask the Minister whether it would be fair to say that what we are talking about within this bill is an attempt to establish some parameters for safety and accountability in this process. Yes, I think we have some nodding from the Minister.

The question I then have is to do with, for instance, new section 199(1)(c)(ii), which states that one of the requirements of the contract is that there be “sufficient suitable staff members to enable the contractor to carry out the contractor’s statutory and contractual obligations in relation to the prison;”. What we know from private prisons internationally is that they drive down the ratio of staff to prisoners. We know that. The statistics from America tell us that. A report from the US National Council on Crime and Delinquency said that privatisation led to a 15 percent lower ratio of staff to inmates. That is supposed to make us safer. That is supposed to make communities safer. That is supposed to make our prisons safer. That clause is in this bill. I am sure that the intent of it from the Minister of Corrections’ point of view was to support some kind notion of safety within our prisons and safety for our community, but we know from overseas evidence that it goes the other way, and that we will end up with fewer staff, and more problems within our prisons as a result.

The Minister stood up earlier and said that the problem with Labour was that we did not understand and we were interested only in ideology, but that National was after what works. The problem is that privatisation has not worked in the United States of America. It has not worked in Australia. It has not worked in Canada. It has not worked in the United Kingdom. I have great respect for Dr Sharples, and I think, given his experience, that he should be the Minister in the chair right now. I think we would be a lot further advanced if he was. But we know that, empirically, privatisation does not work. The Minister simply stands up and says that the Labour Party does not understand what works. We have not heard from the Minister what measures that have actually worked have driven her to do this. We have not heard that. The only evidence presented about the performance of private prisons has come from this side of the House. I think that these particular parts of this bill try to establish a framework that will be safe, but we know that that framework has not worked internationally.

The other aspect that I think the Minister is trying to establish is some sort of accountability of private prisons. The problem we have is that this bill decreases the transparency and accountability of the prison system. Earlier on tonight we discussed the fact that the Law and Order Committee obviously had some inclination towards the importance of accountability and transparency, because it had included within the bill that the requirements of the Public Records Act be met in terms of the prisons and the prisoners. That means that the Chief Archivist can get in there and find out what is going on in the prisons. Why, then, would we not let private prisons be exposed to the Ombudsman or to the Auditor-General? Why would we not want those agencies, which are closely related to Parliament and to ensuring transparency and accountability, to be involved?

In the end, what we are reduced to here, in terms of accountability, is monitors appointed by the chief executive. We are, in fact, reducing the ability to hold private prisons to account. We know that we can question the Minister and the Department of Corrections through the select committee process, through oral and written questions, and through inquiries. We cannot do that with a private company. So the clauses within this bill that are trying to create some kind of regime of accountability are simply lacking. We heard earlier tonight from the Minister that the reason she was not supporting the Supplementary Order Papers that would have done that, that would have brought this legislation into line, was because they had not been considered by her caucus. That is simply not on. Ms Goudie will tell us that these matters were raised—and I have checked with Labour members—at the Law and Order Committee.

Sandra Goudie: What matters?

GRANT ROBERTSON: Having better accountability arrangements and better transparency, and involving the Ombudsman and the Auditor-General. These things could have been dealt with, but the Minister airily dismissed them, saying that they were not discussed at her caucus, so she was not prepared to consider them. That is unacceptable. What we have here are accountability and transparency arrangements that will make it less possible for New Zealanders to know what is happening in their prison system.

The Ombudsman’s role is critical within the prison system. Anyone who has dealt with complaints at all, at any time in his or her role as an MP or outside this House, will know the important role that the Ombudsman can play in the prison system. To not have that fully available as we go down this unknown path of private prisons is very, very dangerous. Then we come to the Auditor-General. The Law and Order Committee was told that the Office of the Auditor-General would not have the ability to scrutinise this new arrangement in the way that it normally would. The Office of the Auditor-General reported to the committee that, under this bill, it would not have the power to audit a private company and provide an opinion on the performance of that company. Once again we see this bill reducing accountability and reducing transparency. What I am trying to say here is that Part 1 is the accountability section. Section 199 is the new accountability section. We have the Chief Archivist involved. That is fantastic! The Chief Archivist can be there. But what we do not have is the ability for the Ombudsman, the Auditor-General, and, ultimately, Parliament to have the kind of oversight that is required.

This bill is flawed in principle and it is flawed in practice. But from the Government members tonight we have simply not heard any justification or evidence. We have seen that there will be reductions in accountability and reductions in safety. This bill has gone through tonight without National members standing up and doing anything more than indulging in broad ideological statements. Members on this side of the Chamber have made sure that we have defended our principled position, our ideological position, and we have gone on to debate the practical implications of this bill. We have not heard that from the other side of the Chamber. That means we are passing a law under urgency that will decrease safety, that will decrease accountability, and that will decrease transparency, and the National members cannot even get up to justify it.

SIMON BRIDGES (National—Tauranga): I have to say that I have been frustrated while I have been sitting here throughout this debate by the misinformation that I have heard from the Labour members. I do not think it is wilful misinformation. Members opposite are not setting out to be duplicitous and to say things that are dishonest; I do not think that at all. A fog or a mist has come over those members’ eyes, though, through their ideology and dogma. When I think of their ideology, I think of old men who died probably about 150 years ago, and who were caught up in arguments about profit, the proletariat, and so on. When all that debate is boiled down, that is what it comes to from those members’ perspective. It comes down to ideology.

We have heard from Grant Robertson. I am simplifying it, but I think he said that profit equals bad. Profit equals bad. That is what I heard. I admit that he fancied it up and he titified it, but he made the argument that profit is bad—

Hon Member: “Tit-ify” Harawira?

Chris Hipkins: The National Party would know all about that!

SIMON BRIDGES: I tell Chris Hipkins to look that one up. There are more meanings than he thinks, and he should get his mind out of the gutter. Grant Robertson said that profit is bad. He said that if an organisation has a business imperative in the prisons and is making a profit, then, through those members’ leap of logic, that compromises what those who are running the prison are doing. How ridiculous, I say to Grant Robertson. That argument goes something like this if we apply it in other sectors. Toyota makes a profit from manufacturing motor vehicles, and because it makes a profit, that somehow compromises their safety record.

Hon Members: No.

SIMON BRIDGES: Well, that is what the member said. He was making the argument that profit is bad. The members opposite do not like it. They say that when businesses make a profit, that somehow compromises them. How ridiculous!

We heard the same sort of ideological bunk from Lianne Dalziel, who I admit dressed it up in a kind of human rights language of liberty, and talked about the Israeli Supreme Court and so on. But again, if we boil it all down, it is ideology.

We heard the same from Jacinda Ardern. She said that making a profit was somehow bad, and that the reason it was bad was that prisons are a core Government function and service. Again, I say that is absolutely ridiculous. How absolutely ridiculous! Firstly, the Department of Corrections will be overseeing all these prisons. Secondly, I do not think anyone in this House would argue that health and education are not core Government functions. Those members argue that having private schools and private hospitals corrupts the whole system, when what they actually do is to add to the system. They free up public resources and enhance the system. That shows the ideology of members opposite.

The Minister of Corrections, Judith Collins, is exactly right. What we have from this Government and from the Māori Party is a philosophy that says to do what works. Let us be pragmatic about it, let us look at the evidence, and we will do what works. We are beginning to see that under National, and I think that is a very good thing.

Another point that has come out in the debate concerns price. Those members argue that the evidence that the price is more expensive stacks up, and that we would be paying more under a private prison contract. How ridiculous, again! We are not comparing apples with apples, for starters. We could get into the figures. I do not want to have a sterile debate on the figures, but the reality is that when the Auckland Central Remand Prison was privatised, it cost, I think, $57,000 per prisoner as opposed to $61,000 in the wider system. We have seen cost advantages in Australia and England. If we are talking price, then the arguments go both ways. We could argue about the numbers, but what is more important than that? This measure is not about the numbers; it is about having effective and safe prisons, rather than having cheap ones.

METIRIA TUREI (Co-Leader—Green): The first thing I say, given the contribution we have just heard, is that I make no apology for believing that profiteering from systemic racism is a bad thing. Making a profit is not necessarily a bad thing, but making a profit from systemic racism is bad, and this Committee should not be supporting any kind of legislation that does that.

I will address some of the issues raised by the Associate Minister of Corrections because I thought he made a really important contribution, given the argument that this legislation is supposed to be good for Māori, and given the fact that the Māori Party is supporting it. The process of colonisation that has impacted on the Māori communities in this country is felt nowhere more obviously than in the oldest construction of the colonial Government, which is the criminal legal system and penal policy. They are the oldest constructions of the colonial State. The results of the colonisation process and the systemic racism that has arisen out of that process are clear. More than 50 percent of the prison population is Māori, and more than 50 percent of the female prison population is Māori. Wāhine Māori are in jail in appalling numbers. The systemic bias in the system leads to Māori being more likely to be stopped, searched, arrested, convicted, and jailed than their Pākehā counterparts. Even those involved with the Youth Court have said that rangatahi Māori—young Māori—are more likely to face the Youth Court.

Hon Member: The chair of the Law and Order Committee is shaking her head at what you’re saying.

METIRIA TUREI: It is unbelievable that National cannot face the facts of the matter. Rangatahi Māori are more likely to face the Youth Court, even though their offences are generally of less seriousness than the offences committed by their Pākehā counterparts. We see the evidence in the legal system everywhere, and this is the system in which our whānau exist.

I agreed with the Associate Minister of Corrections when he talked about the different kinds of options for dealing with Māori imprisonment and Māori rehabilitation. Habilitation centres are absolutely the way to go; not the continual building of prisons—habilitation centres that are whānau focused and deal with systemic issues as well as taking a whole whānau approach. The Māori focus units, where they have been successful, have done really well. The systemic problems within the Department of Corrections have made that more difficult, but the example that the Māori units provide is fantastic.

We absolutely agree with Māori involvement in the management of prisons. The only way to deal with the Māori prison population and to ensure that there is real rehabilitation from a tikanga point of view is by having Māori involved in the management of prisons and having kaumātua in the prisons. We agree with that completely. I do not agree with how we then get to the totally relaxed view that somehow the market will be able to provide those things where the Public Service has failed. On what basis can we say that the evidence is there that the market will provide that, when the public system has failed? Jane Kelsey has a really good quote in her submission. She said that in the assumption that both market forces and our system of justice are colour-blind, Māori are invisible. That is the implication of assuming with no evidence—not a skerrick of evidence—that the private sector and market forces will be able to provide these kinds of services for Māori and for the Māori management of prisons.

Certainly nothing—not a thing—in the Corrections (Contract Management of Prisons) Amendment Bill will enable what the Associate Minister of Corrections was talking about to happen. There is no requirement for any kind of joint venture with any kind of iwi organisation. There is no Treaty clause in the legislation. There is no requirement for Māori to be part of the staffing of those prisons, even though we know that more than 50 percent of the inmates will be Māori. There is no requirement for cultural training of the staff who will be in that prison. We heard evidence from the staff of the Auckland Central Remand Prison that they bring over from Australia staff who have no concept of how to deal with Māori prisoners or of the tikanga issues involved. But the bill does not say anything about requiring cultural training. There is no requirement in the legislation for tikanga Māori programmes to be managed within the prison. The Minister has talked in the past about that being part of the contract, but where is the guarantee?

CHRIS HIPKINS (Labour—Rimutaka): Firstly, I agree with many of the comments that Metiria Turei has just raised. I totally agree with her that it is really important that Māori are involved in the management of prisons, and have a meaningful say in that. I totally disagree with the position put forward by the Associate Minister of Corrections, Dr Pita Sharples, that the best way to do that is to privatise prisons and put them over to the private sector. I think the public sector is perfectly capable of managing prisons. If we extended the Minister’s argument to its logical conclusion, we would then start to ask why the public sector would, for example, have any role in schools, in hospitals, or in the provision of any other services. If we take that to its logical conclusion, it simply does not make sense.

I will respond to some of the comments that Simon Bridges made. He said that the notion that the incarceration of prisoners—the deprivation of people’s liberty—is a core role for Government, was ridiculous. If it is not a core role for Government, for whom is it a core role? It certainly should not be a core role of the private sector to deprive somebody of his or her liberty. Where do we stop if we start handing over the power to do that to the private sector? Do we stop at the police? Do we stop at the army? Where do we stop, when we are dealing with issues around fundamental human rights? There are very few human rights that are more fundamental than the right to freedom and the right to liberty. So I think that Simon Bridges has completely missed the point.

The member talked about the fact that he did not want to make this a sterile debate by quoting figures; that is because there are no figures to support the position that he put forward. The figures show that it is not cheaper for the private sector to run prisons. In fact, in the case of the Auckland Central Remand Prison it was more expensive for the private sector to operate it, which shows that private prisons are not more effective in reducing recidivism. From the few studies that are available from overseas—and we do not have any from New Zealand because of the very short period of time that we had a privately run prison—it becomes very apparent that the privatisation of prisons, and the handing of their management over to private prison managers, does not reduce recidivism, at all. This is absolutely a very clear example of the stark differences between the Labour Opposition and the new National Government. As my colleagues have pointed out, the National Government is fundamentally committed to a model that privatises profits and socialises losses.

Finally, I will talk about one technical point; I wanted to raise it earlier but this is the first opportunity I have had to do so. It is covered in Part 1 and concerns the liability of the contractor, but it extends to the wider issues that we have been debating. Under the contract provisions in the bill, the contract must ensure that “Every prison management contract must impose on the contractor, in relation to the management of the prison, a duty to comply with—”, among other things, “the New Zealand Bill of Rights Act”. Members will find that provision in new section 199(2)(b), in clause 5. Hopefully the Minister in the chair, the Hon Judith Collins, will talk about this matter in her final reading speech. But I ask, in respect of new section 199B, which is about the liability of the contractor, what would happen if a private prison operator were to breach the human rights of a prisoner, for example, or were to cease to exist, for whatever reason. Where would the liability fall for that?

We have seen some examples in recent years of significant sums of money going from the Crown to prisoners, when it has been determined that their human rights have been breached. So I am keen to know from the Minister where the liability for any breaches of that would fall, particularly in light of section 199B in the bill—and I did not get a chance to raise that earlier in the debate. I will keep my comments very short because I am aware that the time for this debate has nearly expired.

This is clearly a decision by the National Government that is driven solely by ideology. It cannot be driven by evidence, because there is no evidence. I have sat through the entire debate this evening waiting for any member from National, the ACT Party, or the Māori Party to actually produce a single shred of evidence that a private prison will be more effective than a public prison in any way, but all members opposite have been able to do is talk in very general terms. There is no proof.

CHRIS TREMAIN (Senior Whip—National): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

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.

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

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.

Part 2 agreed to.

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

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.

Schedule agreed to.

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

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.

Clause 1 agreed to.

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

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.

Clause 2 agreed to.

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

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.

Clause 3 agreed to.

House resumed.

Bill reported without amendment.

The CHAIRPERSON (Eric Roy): I move, That the report be adopted.

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

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.

Report adopted.

Third Reading

Hon JUDITH COLLINS (Minister of Corrections): I move, That the Corrections (Contract Management of Prisons) Amendment Bill be now read a third time. This bill puts in place the Government’s policy to allow competitive tendering for contract management of prisons on a case by case basis. The Government wants New Zealand to have a world-class corrections system. We believe that allowing for contract management of prisons will create much-needed opportunities for the entire system to benefit from outside-sector initiative and expertise. We want a contract manager to support and enhance the Department of Corrections’ overall performance in providing for safer communities and reducing reoffending. Contract management will allow learning to be gained and shared throughout the prison system, so that all prisons become more effective and efficient as a result. We will ensure that real gains are made in providing opportunities to improve outcomes for Māori who encounter the prison system.

The previous experience that New Zealand had with contracting out prison management at the Auckland Central Remand Prison earlier this decade was generally positive. In particular, the Department of Corrections was able to retain many of the innovations introduced by the contract manager. This bill strikes a good balance between a flexible contracting framework that will encourage innovation and the protections needed to ensure public accountability. While providing for a number of different safeguards, the bill also gives scope to contracting parties to negotiate the specific terms and conditions of their contracts with relative flexibility. This is important because the management of each of New Zealand’s prisons will differ depending on the unique characteristics of the prisoners at that prison, its geographical locality, and the interventions to reduce reoffending operating within that prison. Very few of our prisons are exactly the same, and the bill provides room for contractors and the chief executive of the department to agree on how the needs of any one or more of our prisons can best be met.

Much of the debate on this bill has focused on the safeguards needed to ensure that the contract manager is held accountable. It is worth canvassing the most significant of those again. Because the changes reflected in the bill will sit under the umbrella of the Corrections Act 2004, they must be carried out in a way that is consistent with the principles of that Act. Those principles guide the operation of all of the corrections system, including contract-managed prisons. The principles include the maintenance of public safety as the paramount consideration and also involve the fair treatment of prisoners, their rehabilitation, and their reintegration. As with public prisons, contract prisons will have to comply with all relevant New Zealand legislation. This includes contractual obligations to comply with the Corrections Act and the New Zealand Bill of Rights Act, as well as all relevant international obligations and standards. Another key feature of the Corrections Act is the accountability that it sheets home to the chief executive of the Department of Corrections. Prisoners remain in the legal custody of the chief executive at all times. That will not change when a prisoner is held in a prison managed under contract. The performance management regime is set out in the bill. The contract must specify objectives and performance standards for the management of the prison and for the care of the prisoners in that prison. The bill states explicitly that they may not be any lower than the objectives or standards already required of prisons managed by the department.

One of the primary features of the bill is the way in which it supports the chief executive’s accountability by establishing the role of prison monitors. That is one of the areas that received the most scrutiny when the bill was at the Law and Order Committee, and the monitors regime now in the bill is comprehensive. The bill establishes three different types of prison monitor: primary monitors, who are located at the prison and monitor its compliance with the terms of its management contract and with the law on a day-to-day basis; those who assist the primary monitors to undertake their role as and when required, which means that there will always be sufficient staff resource available to properly oversee the activities of contractors; and specialist monitors with particular expertise in different areas, who are appointed from time to time to investigate certain matters if and when they come to light. Examples of the sorts of monitors who might be appointed in this context include the department’s anti-corruption team; its national intelligence unit; specialist health care staff, who could be appointed to review health services that might be run by the contract prison; or experts in the provision of services for Māori, who could review the suitability of the contractor’s Māori-focused initiatives.

All of these different types of monitors have significant powers of access to staff, prisoners, prison records, and all parts of the prison itself at any time of the day or night. They are all appointed by, and report directly to, the chief executive, effectively acting as his or her eyes and ears in the prison at all times. In addition, contractors will be required to provide reports on all serious incidents within the prison involving escapes, escape attempts, or prisoner deaths, to provide regular reports on the use of disciplinary powers within the prison and the outcome of all disciplinary proceedings taken against prisoners and/or staff, and to provide reports providing the details and results of all random drug testing that has been carried out within the prison.

During the select committee deliberations on the bill, and subsequently during the bill’s second reading debate, a number of concerns were raised about the issues of public accountability and parliamentary scrutiny. I would like to point out that prisons managed under contract will be subject to the terms of the Official Information Act 1982 in exactly the same way as the department currently is. Contract prisons will also be subject to the Ombudsmen Act in exactly the same way as prisons managed by the department. That means that prisoners will continue to have the right to complain to the Ombudsman about any aspect of their management or treatment, and the Ombudsman will continue to have the power to conduct independent investigations into the management and treatment of prisoners where it is appropriate to do so. Furthermore, the Auditor-General is able, at any time, to investigate the way in which the department is managing any and all of its prison management contracts, and, for that purpose, has access to all relevant documentation held by the contracted prison managers. The bill also requires every prison management contract or variation to it to be tabled in Parliament within 12 sitting days, which will ensure that all the detail of that contract, or any variation of that contract, is publicly available.

The bill protects the interests of staff working for a contract manager. The bill requires contract prison managers to comply with the requirements of those parts of the State Sector Act that invoke the requirement to be a good employer. Under the provisions of the bill, it will be a contractual requirement for each contract prison manager to appoint and train sufficient suitable staff to enable the contractor to carry out its statutory and contractual obligations. This is a very important qualifier. Not only must sufficient staff be appointed to enable the contractor to carry out its various obligations properly, but also they must also be suitable staff. They must also be appropriately trained on an ongoing basis. The contractor must regularly report on appointments and training so that the prison monitor and chief executive can monitor their performance.

The bill also makes a specific point of protecting the interests of staff who are members of the Government Superannuation Fund. It ensures that existing staff who transfer their employment to contract prison managers are still deemed to be in Government employment for the purposes of their Government superannuation fund entitlements.

The treatment of prisoners is also well covered. The chief executive of the department will remain responsible for all prisoners in New Zealand and accountable for what happens to them. That includes prisoners held in prisons managed under contract. Contract prison managers must comply with the same obligations and standards as public prison managers. If they do not, they will be in breach of their contract. Prisoners will also have the right of redress directly against the chief executive, who remains answerable for what happens to them while they are in the custody of the private provider. The continuing role of the Office of the Ombudsmen also provides further protection for prisoners.

The bill has been further enhanced during the select committee’s consideration by the committee’s recognition of the importance of providing prisoners with employment and skills development. Employment and skills development are essential activities that help prisoners with their eventual reintegration back into the community, and the committee agreed that those things should be recognised in their own right. The bill now requires contractors to provide specific reports on the provision of employment and skills development to prisoners, alongside the pre-existing requirement to report on rehabilitative and reintegration programmes.

Finally, the bill makes an important provision for the department’s ongoing relationships with other State agencies to continue, unaffected by the fact that some of its prisons will be managed by private sector providers in the future. A number of other Government agencies, such as the New Zealand Police, the Ministry of Social Development, and the Department of Labour, rely on information about offenders provided by the Department of Corrections in order to perform their own statutory functions and duties. The bill ensures that that information will continue to flow as it needs to between staff at prisons managed under contract to the Department of Corrections and relevant Government agencies.

Opening up prison management to tender will enable the Government to reap the benefits of innovation in the prison system as a whole. In keeping with the principles of the Corrections Act, this bill will improve public safety and contribute to the maintenance of a just society by contributing to the safe, secure, humane, and effective containment of prisoners. This bill will provide an effective statutory framework for the regulation and control of prisons managed under contract in New Zealand. I am committed to its successful implementation. I now commend this bill to the House for its third reading.

Hon LIANNE DALZIEL (Labour—Christchurch East): The quality of the debate justifying the passage of this Corrections (Contract Management of Prisons) Amendment Bill has been very poor. Essentially, Government members have taken every mention of the failure of the private sector internationally as a reflection being cast on the quality of our own judiciary and our own Public Prisons Service, when in fact the opposite is true. Our position on this side of the House supports the integrity of our prison service and the independence and integrity of our judiciary. We have argued a philosophical view, and it is quite clear that there is an ideological divide across the House. Our view is that the deprivation of liberty is one of those core State functions that should not be contracted out.

I believe that international jurisprudence is coming in behind to support the view that we would present. I know that it is not popular with members of the Government, because, essentially, they do not believe that any human rights arguments are available to be debated on this subject, but that is not the case internationally. I have warned the Government of the implications of the Supreme Court of Israel’s decision to overturn the privatisation measures that had been undertaken there. But these warnings have been ignored by the Government. I want to remind members of what they say, because I think it is worth writing it into the record.

Essentially, the argument was that the Supreme Court of Israel would not normally intervene in economic policies, but in this case the President of the Supreme Court held that the legislation harmed basic constitutional rights. Israel’s basic legal principles hold that the right to use force in general, and the right to enforce criminal law by putting people behind bars in particular, is one of the most fundamental and most invasive powers in the State’s jurisdiction. Thus when the power to incarcerate is transferred to a private corporation whose purpose is making money, the act of depriving a person of his liberty loses much of its legitimacy. Because of this loss of legitimacy, the violation of the prisoner’s right to liberty goes beyond the violation entailed in the incarceration itself. Efficiency, she wrote, is not a supreme value when the most basic and important human rights for which the State is responsible are at stake. I know that members opposite do not like listening to the learned words of a Supreme Court judge, but the point I was making was simply to warn the Government that this is a movement that is happening internationally, and we cannot be impervious to those views that are being expressed, because they will matter to New Zealand as well.

The Government has said there is no core function of the State; it has said there is no such thing. There is nowhere that it would draw the line; anything is up for privatisation or competitive management. We were told by the Minister of Corrections that the only question we need to ask is “What works?”. That is the only question. Anything goes, but it has to work. I make no apology for holding the views that I do, but it would be a mistake for anyone in this House to argue that they conflict with the mantra “What works?”. I am actually a great believer in what works. It has been the driver behind the Opposition’s offer to the Government to work collaboratively on early intervention so that we can reduce our prison population.

I was invited to a meeting with the Minister of Justice and the Minister of Māori Affairs on early intervention, and I was really impressed with the quality of that meeting. I went back to the Labour caucus and told it that we had to offer up something, that we had to work with the Government on that issue. Early intervention is where, we all agree, the most good can be done, if we are genuinely to do something about our prison population. What has the Government’s response been to that general offer? Nothing. We are still waiting. I have had a letter asking that we work together on Sale of Liquor Act issues, knowing full well that it is a conscience issue, but there we go. A genuine offer was put on the table to work with the Government collaboratively on something that really would work.

The Prime Minister of New Zealand has hired a scientist to sit at his right hand to guide the Government on an evidence-based pathway. Yet the approach that the Government is adopting here is not evidence-based at all. I really support the hiring of a scientist to sit at the right-hand side of the Government’s highest decision-maker; I just think it is really important that he is listened to. He is saying that an evidence-based pathway is the way forward. We have heard the Government tout the UK system, when the league table shows that 10 of the 11 private prisons in the UK fit within the bottom 25 percent of all the prisons in the UK. The facts speak for themselves. This is not a seriously good argument that National members are proposing.

The ACT Party blew the cobwebs off arguments that I thought had been buried in the crypt alongside its founding member, but even he could not help himself. He had to get to his feet to argue that competition and profit were the only way that we could get value for money, the only way we could get results. Competition is great for consumers. It is fantastic for consumers. As a former Minister of Commerce I am well aware of the anti-competitive measures that many in the private sector take, particularly in order to take public sector contracts and milk them for all they are worth, as we have seen in the newspapers in the last few days. They want the benefits to accrue to themselves, because they are profit-making businesses and they would rather not see the benefit go to the consumers. That is what competition was designed to preserve—benefit for the consumers.

It is a question of whether the profit motive is the driver we want in a service that benefits from keeping its business full of people. It is absolutely counter-intuitive that we would want the profit motive driving our prison service, of all things. That has been the problem overseas. The incentives have been utterly and completely perverse: keeping people in for longer, punishing them for minor infractions while they are in jail, keeping them there for longer and longer, ensuring that the prisons have their fodder, that the prisoners keep coming back because of the revolving-door syndrome. Private prisons need to keep seeing them return, because that is where the profit lies.

I do not feel that way about the not-for-profit sector. There is an enormous difference, and I disagree entirely with the Minister of Maori Affairs on this issue. I see the real role for the so-called non-public in the not-for-profit sector, where a lot of Māori organisations work, where a lot of Pasifika agencies work, and where agencies like the Salisbury Street Foundation have made a huge difference in terms of really turning round the lives of people and ensuring that habilitation and rehabilitation take place. I think this is where the Māori Party tragically was sold a pup by National. It offered it a slice of the action, when, in fact, Māori could have a much more important role in reducing the prison population and reducing reoffending rates. The Salisbury Street Foundation, as I have mentioned, stands testament to the value that the not-for-profit sector adds to the justice system.

This bill is not about that. It is actually about carving off a profit centre in the shape of people who have offended against the laws of the State, and allowing not only the cost of their incarceration to be passed on to the taxpayer but the provision of profit to the private sector to be passed on to the taxpayer, as well. That is what I object to. The Minister did not once answer the question on cost. We know that the private prison experiment that we had in this country once before was more costly than the public sector alternative. It was more costly, and there is no question about that. Overseas, the costs have been higher, the rates of suicide have been higher, the rates of escape have been higher, and the damage done to prison guards has been higher. The price we pay those prison guards has been lower, and the price the taxpayer pays has been higher. This bill is on a hiding to nothing. It is not something that we stand for, and the Labour Party will be opposing it vigorously.

SANDRA GOUDIE (National—Coromandel): I am delighted to be speaking on the third reading of the Corrections (Contract Management of Prisons) Amendment Bill. That is exactly what the bill is about: contracting out just the management of prisons. It is about innovation, new ideas, and great leadership that provides great outcomes. That is the sort of leadership that National is providing and that is the sort of leadership that we are getting under a new Minister of Corrections, who is actually making a difference in corrections, which is long overdue.

I commend my Law and Order Committee colleagues, the select committee staff, and also the officials, who did an outstanding job in meeting the many demands placed upon them during the progress of the bill. I am delighted that we are supporting this bill, that it is coming to the end of its duration in Parliament, and that it will very soon be an Act.

Hon RICK BARKER (Labour): We have listened now to two National Party speakers, and we are still waiting to hear cogent reasons for the contracting out of prison management, and for the purpose of the Corrections (Contract Management of Prisons) Amendment Bill. We heard the previous speaker, Sandra Goudie, say this bill is about innovation. Well, where is the innovation? One of the items that was raised by the Minister of Corrections, in the Committee stage, concerned an initiative to bring Māori issues within the prison. But that was not brought in by private prisons; that was brought in by a public sector prison in Hawke’s Bay. That was where the initiative started. It was not a private sector initiative, at all. The Minister learnt a second thing when she got advice from her own Department of Corrections about going to Australia to look at private prisons. The department said there was nothing good, nothing new, or nothing worthwhile there when looking at this issue.

The previous speaker also said we had seen innovations by this National Government, and I say that is probably closer to the truth than anything else. The National Government came to power with a sort of pragmatic view, and said to New Zealanders that everything they had been given under the previous administration they would get from National, plus more. People were told they would also get tax cuts and all sorts of other wonderful things. In fact, piece by piece, we are seeing the true face of National. It is a classic right-wing agenda. The right believes in minimum Government. It believes in tax cuts. We have seen tax cuts under the National Government, but people who do not earn over $40,000 a year did not receive anything. The tax cuts that the Government brought in saw over a third of them go to the top 3 percent of income earners.

Hon Tau Henare: That’s worn-out scaremongering.

Hon RICK BARKER: It might be worn out, but the Hon Tau Henare knows that it is absolutely true. The other aspect of the right-wing agenda is deregulation, and we have seen that happen in amendments to the Resource Management Act. Another aspect of that agenda is contracting out. These are ideological positions, whether or not they make good sense.

The point about this decision is that if it is not ideological and there is evidence for it, then let us examine the evidence. I say to the House and to the National Government that there is no evidence to suggest that privately managed prisons are better, safer, cheaper, or more innovative than State-run prisons. There is no evidence of that, whatsoever. In fact, the evidence is entirely in the other direction. In the absence of any concrete evidence we are able to conclude, without doubt, that this decision is driven purely by ideology. It is part of National’s programme of privatisation over time. National has said it is not going to privatise some things in this term of Parliament, but it has not said to the public that it is not going to privatise, at all.

In fact, when we look around the world, and we look at the advice from the United States, we find there is a terrible legacy from privately run prisons. The list goes on and on. A country that is much closer than the United States to New Zealand in its structure, its history, and its background is Canada. Just 3 years ago Canada ended the privatisation experiment and returned all of its prisons to the public sector, saying after 5 years the Government could find no appreciable benefit from privatisation. Canada is very similar to New Zealand, and after 5 years it could find no appreciable benefit of privatisation. That is the Canadian experience. The United Kingdom, another country with which we share a lot of similarities, had a similar experience. The report of the National Audit Office of 2003, some 6 years ago, stated that the performance of the prisons was mixed, but it said almost all of the bottom-ranked prisons were privately managed. It stated that the worst-performing prisons in the United Kingdom were in the private sector. That is the evidence. Canada and Britain have shown that the privately run prisons were amongst the worst-performing prisons.

In New Zealand we have our own experience of privately run prisons. What did we have with the Auckland Central Remand Prison? Well, the first thing we have been told by the Government is that private prisons are more efficient. But being “more efficient” would mean that they are more cost-effective. Well, the facts from the Minister’s own department show that the Auckland Central Remand Prison was more expensive than the public prisons. On every measure it was more expensive. So we will have higher costs to the taxpayer. The Minister said privately run prisons would do better with rehabilitation. Well, if the basic costs are higher, then obviously rehabilitation costs will be on top of that. And we all know there will have to be a profit on top of that, again.

But there is worse to come. The Law and Order Committee heard directly from people who were employed in the Auckland Central Remand Prison—they were staff who turned up to the hearings—who said that by talking to the select committee they had put their future employment at risk. This was evidence that they knew could put their future employment at risk. They were people—

David Bennett: Rubbish!

Hon RICK BARKER: The member says “Rubbish!”, but that is what they said. Everybody agreed that this was the case, and that going on record was putting their future employment at risk. There was no doubt about that. Despite the fact that they were putting their future employment at risk, they made it very clear to the committee that statistics within the privately run prison were massaged. They did not want to get bad statistics, and they were encouraged by their management not to have them because that would put the contract at risk.

And here comes the rub: if we have a privately managed prison and the determination that it will be privately managed is by the say-so of the Chief Executive of the Department of Corrections, then the chief executive has a vested interest in ensuring that the statistics for the prison are good. The management of that prison has a vested interest in ensuring the statistics for that prison are good. What the Government is happy for us to rely on is the belief that the accounting systems run by the privately run prison and the accounting systems run by the chief executive are correct and will tell us with absolutely deathly accurately what went on in that prison. Well, I say that is not good enough. I say that is not good enough, because they both have a vested interest in ensuring that the outcomes look good on paper.

A lot of people put a great worth and store on auditors. I happen to be someone who thinks that audits have a limited use. People want to think audits are great should look at two fabulous world companies: WorldCom and Enron, both of which had fantastic audit reports. Those companies sucked in billions of dollars into them, only to crash overnight and disappear, with not a scrap left. They both had fantastic audits. One of their auditors was Arthur Andersen, a company that did extensive business here in New Zealand, but which disappeared completely. Let us be clear that audits are no guarantee whatsoever that things are right, particularly when the auditors are chosen by the organisations themselves.

Now Parliament has its own auditor, the Auditor-General, because over time Parliament understood that departments that chose their own auditors gave Parliament figures that it could not entirely rely upon. So Parliament made the decision to get its own auditor: the Office of the Controller and Auditor-General. This House has asked for, and been denied by the National Government, the right of the Office of the Controller and Auditor-General to have complete and unfettered access to all of the information on this issue. Well, we have been turned down by the Government. I ask the Government members what they have to hide.

The Minister of Corrections says the Office of the Controller and Auditor-General will have full access to all the information. Well, yes, it will have; it will have sheets of paper, and information supplied by the contractor and by the department. She says the Office of the Controller and Auditor-General will have access to the department’s staff. Yes, it will have, but that does not mean that the Office of the Controller and Auditor-General will have access to the staff of the privately run prison. It will not necessarily have that, because those staff will be employees of a private company. The Office of the Controller and Auditor-General does not have automatic right of access to the employees of a private company. Labour wanted to change the law so that the Office of the Auditor-General would have direct access to those employees, just as it has access to the staff of every Government department in New Zealand. If it wants to go through and audit, for example, Work and Income, the Ministry of Social Development, or Treasury, not only can it look at the figures and interrogate the books but it can talk to the staff and get a feel for what is happening on the ground. The Government’s decision not to give the Office of the Controller and Auditor-General direct contact with the staff, I think, puts a veil between that office—Parliament’s auditor—and the contract prison.

This brings me back to the point made by the Hon Lianne Dalziel. Parliament passes laws to give judges the power to incarcerate people and to deprive them of their liberty. The incarceration of those people is handled by the executive arm of Government via the department. If we as parliamentarians want to ensure that the powers that we have delegated to judges and to the Department of Corrections are handled correctly, then the Office of the Controller and Auditor-General must have unfettered right of access to these institutions, but the Government has denied Parliament that right. I think the Government is wrong. The Government has decided to push this legislation through for ideological reasons.

DAVID CLENDON (Green): The Greens spoke very strongly in opposition to the Corrections (Contract Management of Prisons) Amendment Bill when it was first introduced. Our opposition to it has become, if anything, more adamant as we have observed and analysed the information the debate has revealed to date.

We have heard much about innovation; the word has popped up regularly in a number of speeches. Indeed, the commentary on the bill includes the statement: “Opening up prison management to contractors provides an opportunity for innovation and change in the way in which prisons in New Zealand are operated.” The word “innovation” caught my eye. We most often associate that word with ideas that are new and, generally, positive. It is often associated with some idea or proposal that is forward-thinking or even visionary. Sadly, this bill reflects a mind-set that is as far from being truly innovative or visionary as one could reasonably imagine.

There is most certainly an urgent need for change in our whole approach to prisons and imprisonment. Successive Governments have tried and, it must be said, failed to find solutions. The failure of those efforts is indicated by the reality that, as a country, we continue to have one of the highest rates of imprisonment per capita in the world, and that rate continues to grow. The very dated mind-set behind this bill reflects the assumption that did so much harm in the 1980s and the 1990s, which is that public sector delivery of services is wasteful and ineffective and that private provision is more effective, more efficient, and generally cheaper. The privatisation of the Public Service during that time left a very costly legacy that has still not been repaired, and hard evidence for this case is simply not there, as we have heard a lot tonight.

Comments made earlier today to the Law and Order Committee painted a very graphic picture of a Department of Corrections that is under enormous stress, and, indeed, stretched almost to breaking point. Despite spending millions of dollars each year locking up offenders, our rate of recidivism remains untenably high, with a strong correlation between rates of imprisonment and reoffending. The annual report of the Department of Corrections informed us that the number of serious assaults on one prisoner by another has risen by some 45 percent in the year 2008-09, compared with the previous year, and that serious assaults on staff have risen by something close to 80 percent in the same time period. The introduction of this bill adds to the enormous stress that already exists within corrections, and, not least, to the stress felt by prison officers.

One thing on which I think we can all agree is that our prison system is broken. But passing the responsibility for the management of prisons to private contractors is not the mechanism that can or will fix it. A number of speakers have reflected on the fact that one of the most potent powers that may be exercised by the State in a liberal democracy is the power to deprive an individual of his or her liberty, and freedom of movement and association. This power should be exercised exclusively by the State, with a direct line of accountability to the public. Introducing private enterprise management for profit of people incarcerated makes no more sense than would the private provision of other elements of the justice system—the courts or the police—or, indeed, of the defence forces.

The idea of private prisons might be marginally more palatable if there could be some reasonable expectation of economic or social benefit arising from such a radical departure from historical and, indeed, contemporary norms. Again, the evidence is simply not there. The Corrections Association of New Zealand, which represents something like 3,000 prison guards, made the following comment in its submission to the bill: “Contracting prison operation will only be cheaper if the terms and conditions of employment for employees are reduced. This will lead to considerable difficulties with recruitment and retention of staff. This will expose the Corrections Officers and the prisoners to considerable risk. Potentially these risks will fall back on the Department.” The association made the point that “small rural communities will be disadvantaged by less attractive terms and conditions and the provision of profits to what are likely to be overseas based contractors.” The association went on and expressed the very well-informed view that the bill, if passed, would inevitably lead to more dangerous prisons for staff and inmates alike. It voiced the very real concern that it is very inappropriate for anyone but an officer of the State to exercise extensive powers over prisoners, including the use of force in certain situations and the right of search and seizure.

There is a very legitimate role for the private sector generally to open up new markets, expand business, and generate profit, and having recently come from the business sector, I am very supportive of those activities. In this instance, however, the success of the business model of a private prison would be assured if more people were locked up for longer. So where is the incentive for a private operator to reduce inmate numbers, to reduce recidivism, and to pursue rehabilitation and the much more complex goals of a functioning corrections service?

It is all too well known that Māori are disproportionately represented in prison musters. My colleague Metiria Turei, in her first reading speech on this bill, pointed to the 2007 report entitled Over-representation of Māori in the criminal justice system, in which analysing the data from apprehension through to prosecution, conviction, and, finally, sentencing confirmed that Māori are much more likely to be apprehended and more severely punished than non-Māori. The Māori focus units in prisons have begun to gain some traction. There have been some positive outcomes from that initiative. This bill, however, offers no mechanisms to improve the sorry state of the statistics for Māori. Grossly disproportionate numbers of young Māori are in jail, but the bill does nothing to address this. There is no provision for access to kaumātua and no requirement to liaise with tangata whenua, nor is there any obligation for the monitor to report on such matters.

The prisons would operate through corporate structures that limit the liability, and that distance the parent company from that liability. This would leave joint venture partners such as iwi carrying liability. A very useful and important submission was made by Professor Jane Kelsey from the school of law at Auckland University. She made the point, already made tonight, that the Auckland Central Remand Prison experience of privatisation delivered distorted figures and outcomes, to the extent that it was a loss-leader for the Corrections Corporation of Australia to gain a foothold in the New Zealand prison service. It is clear that private contracts will focus on new prisons being built. They will have no interest in taking on a Victorian pile like Mount Eden Prison. They will leave the public sector to manage the older, run-down prisons, which will make comparisons between the two sectors wholly invalid. There is a distinct disconnect where contractors have access to official information, but reports on performance indicators and monitors’ reports do not have to be released under the Official Information Act, because of commercial confidentiality. Too much of what could occur in a private prison could be concealed under that guise.

We know that the global recession means that it is harder for private prison companies, like others, to get finance, and there are intense pressures to maximise short-term profit. If profits fail to meet expectations, then there is pressure to renegotiate with the State, which may have to carry the risk of private failure. What would be the Government’s position if a privately operated prison appeared to be getting into serious financial trouble? Could the State step aside and allow it to go broke? It is much more likely—in fact, inevitable—that the public purse would once again be called upon to bail out private enterprise that has failed.

We know that private prisons cut costs by reducing labour costs—as labour costs typically represent about 80 percent of overall running costs—through lower staffing levels and more electronic surveillance. Effectively our prisons would become electronic zoos, with brutalising, dehumanising effects on the inmates. The likelihood of their returning to those unfortunate places would be much increased.

I think one thing we can all share is a common aspiration to—

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the member but his time has expired.

DAVID GARRETT (ACT): I am very pleased to rise in support of the Corrections (Contract Management of Prisons) Amendment Bill. The main reason I am so pleased is that we support anything that will benefit the justice system. I have listened very carefully to the debate, both here in the House and on television, and I have to say that I have heard nothing credible from members on the other side of the House or to my immediate right that would suggest that private prisons will not be an improvement.

Data from the UK shows that privately run prisons are cheaper and, more important, that they deliver better outcomes. Closer to home there is plenty of evidence—it has almost become boring repeating it—from the time when Auckland Central Remand Prison was under private management to suggest that there are plenty of positives in such a system. Labour, in its 9 years in power, showed a great aversion to the private sector, bordering on the paranoid. Its decision to re-annex Auckland Central Remand Prison was based not on results, which were very encouraging, but rather on its own ideology. I applaud Mr Hipkins for finally admitting that his stance at least was based on ideology.

The decision to re-annex the Auckland Central Remand Prison cost $3 million in transition costs, but the social cost was even bigger. The Auckland Central Remand Prison was run in a formal partnership with Iwi Whānui o Tāmaki-makau-rau, an advisory board representing six northern iwi. For the first time, Māori were directly involved with the operation and management of the prison system, or at least a part of it. We have heard ad infinitum today and tonight that over half of New Zealand’s prisoners are Māori. That is from a population of about 16 percent of New Zealanders. Many in Māoridom wanted, and still want, to take ownership of that problem and resolve it. Old, intractable problems require new solutions.

I applaud the Māori Party for having the courage to put up with the insults from members opposite for its decision to support a new direction. As I said during the second reading debate—and it has almost become a cliché—on all measures, including suicides, assaults on guards and prisoners, and escapes, Auckland Central Remand Prison fared much better when it was privately run. Those are not my words; they are those of the former Green MP Mr Nandor Tanczos. Yet he, along with the Greens and Labour, opposed it anyway.

Let me be clear on this: Labour and the Greens opposed fewer suicides. They opposed fewer assaults, they opposed fewer prison escapes—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I find the words that the member used about me just then offensive. I have never, nor has any member here, opposed fewer suicides, which is what he just said.

Mr DEPUTY SPEAKER: I thank the member. I accept that point of order. Making comments like that can bring the House into disorder. I ask the member to withdraw that comment and apologise.

DAVID GARRETT: I withdraw and apologise. Since the last election and since this Parliament began, the Greens have opposed every single initiative by this Government to get tough on crime and the causes of crime. Private prisons will be a reality by the end of this evening. For the record, I ask the Greens again whether, in 2 years’ time, if the results in terms of recidivism or any other measure are 25 percent better than they are today, they will still oppose private prisons.

Kevin Hague: Are you seeking leave for another call for us?

DAVID GARRETT: Oh no, no. There was no answer; just a bit of smartness. That is to be expected. If one is a member of the Labour Party or the Greens, blind ideology, and looking after one’s union backers in Labour’s case, is more important than results. It is more important even than people’s lives.

Privatisation is not a right-wing conspiracy. Around the world it has become the norm. The World Bank noted recently: “Privatization is now so widespread that it is hard to find countries not using the approach. North Korea, Cuba and, perhaps, Myanmar make up the shrunken universe of the resistant.” We can add the members opposite and the Corrections Association of New Zealand to that list. They think that the sky will fall in if the Government delegates to those who can do a better job.

It has been very interesting to hear in numerous speeches from members tonight—dozens, I think it would be fair to say—that they see it as an article of faith that the operation of prisons is and must be a function of the State. But no one has actually said where that comes from. I ask which volume of Marx that comes from. Where does it come from? No one has explained to me or to this House why that is an axiom. The simple answer is that it is not. There is no tablet in stone, and there is nothing written by, and handed down from, the gods that says that the incarceration of prisoners convicted by the courts must be a function of the State. We heard Mr Barker, I think, talk about the army as another example of something that must be administered by the State. But the new member Mr Shearer is on record as saying that mercenary armies are in fact a good idea. So I wonder just where those members get that axiom from.

I suppose that in 6 or 9 years’ time, if Labour manages to get into power, we will not have Kiwibank and KiwiRail in the election of 2021; we will have “KiwiJail” as a campaign by members opposite. They are suffering from a phobia, and they need help. I have heard no good reasons from members on the other side to change my mind.

Since being here I have visited Rimutaka Prison, and Pāremoremo prison, which is now known as Auckland Prison. The staff there, in my observation, are doing their best. They are professionals; most of them would have nothing to fear if prisons were privately run. If people like Mr Hanlon and his union mates continue spouting the kind of allegations they made in the Law and Order Committee, they would indeed have plenty to worry about. I will give members on the other side another lesson in law. Unsubstantiated allegations made with the protection of Parliament are not, in fact, evidence. I do not think that any lawyers are left over on that side of the Chamber; they have all gone home. But that is the case—

Chris Hipkins: I raise a point of order, Mr Chairperson. As you will be aware, the member cannot make reference to the absence of other members from the Chamber.

The CHAIRPERSON (Lindsay Tisch): It was a generic point, and this is just an interruption to the debate. The point the member makes is well made, but the member speaking was not referring to individual members.

DAVID GARRETT: This bill will shake things up, and that is not before time. I think that probably the one thing that everyone across the Chamber can agree on is that the present system is not working. It is not working for white people, and it certainly is not working for Māori. The Māori Party has expressed a strong interest in helping to revive the iwi - private sector partnership once again, and again I applaud its courage for doing that. I hope it works; I really do. This Government, unlike the previous one, will focus on what works.

The amusing irony for me is that our party, according to members on the other side, is supposed to be all about ideology. But in this case, we are at one with National and the Māori Party in pursuing what works. I say again, in conclusion, that no one would try to argue that what we have now—75 or 80 percent recidivism after 5 years—is working, so this measure has to be an improvement. Thank you.

Hon Dr PITA SHARPLES (Associate Minister of Corrections): I will take just a short call in the third reading of the Corrections (Contract Management of Prisons) Amendment Bill; I want to clear up a couple of issues from my earlier speech. Many of us have spoken about innovation, and the possibility of privatisation allowing for innovation. I made this point before. Mr Barker has spoken about the Māori focus units starting in Mangaroa Prison in Hastings. As I said earlier, I had a role in that. In fact, Peter Grant and I ended up in there, making the final decisions about the form of that prison. It actually turned out to be not how we wanted it, because the restrictions in being tied to the mainstream prison did not allow it to be free, or to operate freely with its own rules, custom, and culture inside it. For example, inmates were placed in the unit without even wanting to be there, but just to fill it up because the main part of the prison was short of beds. Others were taken out of that focus unit after they had reformed and were put back into mainstream, which was devastating for them in terms of what they had learnt and where they were travelling. The other one was case management. The whole idea of the focus unit was to put each inmate on a case management programme so that he could have an end goal, leave with whānau out there to look after him, and not return. Also, the transfers that happened between prisons affected the unit. At the end of the day the recidivism rate was down only 7 percent; that drop should have been much more.

That is why we are building this new Whare Oranga Ake. This is a State arm of the system, but could quite clearly be a private prison, as well. Māori who are talking about possibly taking over the contract of a full prison cannot do so at the moment under the State, but they might be able to do it if privatisation was allowed. I have no problem with Māori doing that, because at the moment things are getting worse. Over 50 percent of our prison population are Māori, so why not give Māori a chance to see whether they can actually do a better job of reforming those in prison, just as we are looking for them to do so in education and other areas? In health Whānau Ora is now coming up, with Māori working amongst our own people. I think it is really good because nothing will change unless the Māori people themselves feel like someone is leading them and there is an opportunity for them to actually get out of the situation that they are in.

It is all about positiveness, and that is why I believe privatisation will bring innovation. One example arose when I went to Fulham Correctional Centre in Australia. I did not know that it had an Aboriginal group and a Māori group who did a welcome for us—a kind of pōwhiri. We learnt afterwards that those two groups were at war with each other in that prison. There was conflict between the Aboriginal group and the Māori group, and the prison tried that welcome to bring them together. At the end of the pōwhiri, they were shaking hands and giving hugs. I checked up and they have quite a bond going now. They were able to do that; the private situation that I am talking about allows innovation. I have noticed flexibility with Māori in Dom Karauria’s prison here in Auckland City. He allowed different elders to come in and do things, whereas in some prisons we have taken elders in they have had to go through the machine, which is quite humiliating because they are the crème de la crème of Māori society. They have been stopped in the middle of a speech, not allowed to have the food that consummates the occasion, and things like that, whereas in Dom’s prison he was able to say to the whole prison that tea would be late that day because of such and such. So they have that kind of flexibility.

New Zealand prisons are so interrelated that what happens in one carries over into another, and so on. In prisons any little change of practice can cause a riot. For example, one day prisoners may be able to have beards and then the next day they are not allowed beards, and there is trouble; it is really important that the prisoners know where they are at. I believe that the flexibility allowed in private prisons is worth a go, and also that the opportunity for Māori to get in there and have a go at running them themselves is also worth trying. Thank you.

JONATHAN YOUNG (National—New Plymouth): I very much appreciated the sentiments of the Hon Dr Pita Sharples in his speech. I believe his speech highlighted one of the great advantages that the private management of prisons enables, in terms of development and true, great results.

I want to talk about the decency agenda that one of the previous speakers from Labour asked me to speak more on. I read a quote from a Labour MP who spoke during the parliamentary debate on offender management in the UK. I will quote the UK director of prisons from Her Majesty’s Prison Service, Phil Wheatley. He was asked: “What does decency in prisons mean to you?”. Phil Wheatley replied: “Fair and consistent treatment of prisoners—doing time is hard and it is not our job to make it any harder. Prisoners have to rely on staff intervention and cooperation so it is vital they are never unfairly treated or refused what they are entitled. Telling a prisoner you can’t help because you’re busy, when actually you’re talking to your colleague about your holiday plans, is not decent behaviour. Human treatment and delivering promised standards for providing prisoners with a reasonable quality of life are also part of the decency agenda, as is treating prisoners within the law—no one should be punished outside the rules. Finally it means getting the basics right—providing clean, properly equipped and maintained facilities and protecting prisoners from others and themselves.”

He was asked further: “How has the decency agenda helped with suicide prevention, which still remains high on the agenda?”. He said: “The Service has been doing a lot of work with Cambridge University and research has shown that if prisoners—many with mental health problems, serious drug problems and many facing the possibility of long sentences—arrive at a good, safe, orderly prison with good regimes and good staff prisoner relationships, it can reduce the distress experienced by prisoners, which can lead to suicide or self-harm.” Finally he said: “There is a lot of work to be done but we are well placed to implement improvements.” He is acknowledging that there is room for improvement.

I come back to the quote from Gerry Sutcliffe. He said that the first private prison opened in 1992, and there are now 11 such prisons operating in England and Wales, holding about 10 percent of the prison population. The companies that provide those services have developed a strong track record of delivery and are driving forward the decency agenda, as well as introducing innovation and increasing value for money in public sector prisons. So we see a combination of private and public working together to improve conditions for prisoners, as well as introducing innovation, which increases value for money in the public sector prisons—exactly what the Hon Pita Sharples was talking about.

I have visited a number of prisons, and every week a number of years ago I visited inmates in Block B of Pāremoremo prison, which is now Auckland prison. I have seen the quality of care that New Zealand prison staff offer. I was privileged last Friday to give awards to our prison staff in New Plymouth. They are doing a good job. This bill is about creating opportunity for private management to work together with the public to bring innovation and improvement in our prison service. I believe that this bill has great quality in it, and has enabled us to move forward. I commend this bill to the House. Thank you.

CARMEL SEPULONI (Labour): I need to point out a few ironies before I get started on the main part of my speech. The first irony that I really have to point out goes back to what the Associate Minister of Corrections, Dr Pita Sharples, was saying earlier, with regard to some of his aspirations for Māori. I have to ask Dr Pita Sharples how those aspirations can possibly occur under the watch of the Minister of Corrections, Judith Collins, who in the past could not respect even the simple protocols that went with a simple pōwhiri. How, therefore, can she share in the aspirations that he has for Māori with regard to rehabilitation? She could not sit in a pōwhiri because she was told she needed to sit in the second row, yet she has now had some sort of renaissance in her thinking and she can now share the aspirations that Dr Pita Sharples has for Māoridom? I find that very, very difficult to believe. At some stage, the fact that she truly does not share those aspirations will become uncovered, and at that point in time it will be an ugly, ugly sight.

The second irony I have to mention is in regard to something that was raised in the debate on this bill. The irony is that at an earlier time Mr Young, a member opposite, discussed the fact that when Labour was in Government it had incarcerated such a high number of people. The argument prior to that was that Labour was not tough enough, and it had not incarcerated enough people, yet that member said in this Chamber that we incarcerated too many. We have heard on numerous occasions across this debate that the levels of incarceration have increased.

Jonathan Young: I never said that.

CARMEL SEPULONI: I ask that Mr Young checks the Hansard for this debate; he will find that he did say that.

The third irony—for there are so many—is in relation to the next bill we will be discussing, which is the Corrections (Use of Court Cells) Amendment Bill. The Government is saying that private prisons will solve all problems, have better rehabilitation, make safer prisons, and be less costly for New Zealand taxpayers, yet the next bill we will be dealing with, the Corrections (Use of Court Cells) Amendment Bill, is basically legislating in anticipation of overcrowding in prisons. The Government is anticipating that prisons will not be able to cope with the sheer numbers who will be incarcerated, therefore it needs to legislate with regard to the use of court cells for the overflow in numbers. I have to point out that there is an irony in that, and it is something we cannot help but look at and think “Well, what are they going on about?”.

The fourth irony I wish to discuss before I get on to my main points is the irony that comes with some of the things the chief executive has said. How can we think that this legislation is a good idea when the chief executive of the Department of Corrections wrote to his workers, in an email dated 8 June 2009, and said that at a time when the Government was struggling to cope with a global economic crisis and finances were tight, his budget therefore did not allow extra money for wage increases. He then stressed the importance of an agreement on reasonable terms: “Failing this, I will have no alternative but to recommend to the Government other approaches which will include the option of private management of some established prisons.” That sounds like a man who fundamentally does not support private prisons because they are better or safer; in fact, by his making a threat like that in relation to private prisons, he is reinforcing the fact that it is widely felt amongst corrections staff, including himself, that they are an undesirable option. Those are the things I wanted to point out before I got on to the main part of my speech.

Labour members do not support the Corrections (Contract Management of Prisons) Amendment Bill. Labour members are of the view that the incarceration of citizens is a core Crown responsibility and, as such, should be under the direct control of the Crown through the Department of Corrections.

David Garrett: Where does that come from?

CARMEL SEPULONI: If Mr Garrett would listen, I will tell him. Public prisons are morally and fiscally accountable to taxpayers, whereas private prisons are accountable to their shareholders, with a binding obligation to maximise profit. There is a risk that the pressure for a private company to show profit may lead to compromised service quality such as lower staff to inmate ratios, fewer rehabilitative services, a reduced range of services, cuts in staff pay and conditions, cuts in staff quality, or all of the above. Those were things that were discussed by the corrections union, and also by the prison officers who had worked in both the State-run prison and the privately run prison when Auckland Central Remand Prison was under private management.

There is also the potential for abuse. When a profit-making company has the authority to restrict basic civil liberties, profit motives may supersede the safety of the public, staff, and inmates. We have heard of a number of examples of that happening in private prisons in Australia, America, and the UK, and we have also heard about some of the things that went on when the Auckland Central Remand Prison was under private management, with regard to reporting and the fact that things were hidden to ensure that the management could still make the profit it was trying to get out of our Government at the time.

We are also concerned that the passage of this bill will weaken the ability of members of Parliament, the media, and the general public to hold the private contractor to account in respect of corrections outcomes. At the present time members of Parliament can directly question the department, and hold it accountable through the use of select committee inquiries, the Official Information Act, and the use of parliamentary written and oral questions. These avenues are not available in respect of a private company. The Auditor-General at present has unfettered access to Government departments and agencies, and can inquire into any matter he or she feels is appropriate. It is our belief that under this legislation the Auditor-General’s power and ability to inquire directly into matters pertaining to the private sector contractor will be limited. The Office of the Controller and Auditor-General reported to the Law and Order Committee that under this bill it would not have the power to audit a private company and provide an opinion on the performance of that company.

The lack of independence of the people employed to monitor privately managed prisons is also a concern. Those prison monitors will be employees of the Department of Corrections rather than have an independent status. We also note with concern that there is no compulsory provision to require 24 hour, 7-day-a-week monitoring, and the Labour members on the select committee expressed the concern that while there would be someone there from 9 to 5, who would be there to monitor what went on for the remainder of the day?

We do not believe that a good explanation has been given for why there is a need for private management of prisons. In relation to costs and efficiency, there is no evidence to suggest that the privatisation of prisons would be more cost-effective and efficient than the current Department of Corrections model.

Finally, we Labour members had serious concerns about the Government members using their majority on the select committee during the select committee process to block our access to Ministry of Justice officials. The ministry had input into the departmental report, and we believed that the committee would have benefited from hearing the views and the insights of the ministry. We questioned the motive for not allowing the committee access to those officials, and we were disappointed that this opportunity was denied when we were considering such a significant shift in our justice system. And, more important, constitutional issues are involved. The Government members used their majority vote to block Opposition members from making legitimate inquiries of a Government ministry that had specialist knowledge of the matters being considered. Just as members have a right to free speech, we believe that members, as select committee members, must have the right of access to officials and information. We oppose this bill.

MELISSA LEE (National): It is a pleasure to rise to speak to the third reading of the Corrections (Contract Management of Prisons) Amendment Bill. Before I get going on that, I point out that it is ironic that the speaker who has just resumed her seat, Carmel Sepuloni, complained about constitutional rights; she was outnumbered on the select committee, so she was voted down. I take this opportunity to apologise to the officials. The member who just spoke, basically, insulted the officials, who actually helped us tremendously. I would like to thank them for their time and their tremendous help.

I take a little moment to quote my taxi driver who dropped me off at the airport very early on Tuesday morning. When I told her that we would be debating this bill she said “It’s about”—I do not think I am allowed to say the next word—“[bleep] time.” I have to agree with her sentiments.

Apart from the obvious ideologically driven objections from members opposite, one of the main concerns raised during the deliberations of the Law and Order Committee was the issue of whether the privately managed prisons will be as accountable as the publicly managed prisons. Well, the answer that we had, the advice that we had, and the discussions we had said yes. It was just that members opposite refused to listen to that. The Office of the Auditor-General can still audit the Department of Corrections. The cost and performance of the privately run prisons will still come under the jurisdiction of the department. Members of the Law and Order Committee were told that this morning by the chief executive.

I have mentioned in debate on earlier stages of this bill that we are not selling the corrections system; we want only to look at options for the private management of our prisons. If I can quote my wise taxi driver again, we cannot do any worse than we have done before. The Department of Corrections has had a terrible report card from the Audit Office. Mr Barker has referred in debate on previous stages of the bill to the woeful performance of the department. This bill provides an alternative, a choice in how we manage our prison population. Members opposite may not like choice, but to members on this side of the House choice is essential. It is wonderful. New ideas are being injected into a public entity that lacks innovation not only in management but also in inmate rehabilitation. It can only be a good thing to provide better options for all concerned. Prisoners will, hopefully, have a better rehabilitation rate, prison management will have better outcomes, and the public will feel safer for it.

One of the reasons why I feel quite strongly that that will happen with this bill is that it sets standards in all aspects, including care of prisoners, performance standards, training for staff, etc. These standards are to be no lower than those of the publicly run, publicly managed prisons. That means that they will definitely be better than what we already have. Standards across the board will have to be better in privately managed prisons.

In my humble opinion, we should all aspire to achieve better outcomes for all New Zealanders. I have heard many members opposite speaking passionately about wanting better outcomes for prisoners, but if we simply continue on the same path in the area of corrections, we will not improve. The Department of Corrections has struggled to produce better outcomes for our prisoners, and the repeat offending rate is bloated. That the Opposition keeps opposing this bill is simply hypocritical, as the previous Government did not improve the lot of inmates, and the public did not feel safer for the 9 years that Labour was in Government. We need to improve, we need to innovate, and we need to change for the better. This bill will provide that opportunity for the Department of Corrections. Hence, I commend this bill to the House.

CHRIS HIPKINS (Labour—Rimutaka): That was another speech from a National member attacking the Opposition. Those members attack the people rather than the arguments, because the arguments on our side of the House are quite defensible. But Government members can produce no evidence and no facts or figures. All they can do is to attack the people on this side of the House who are raising arguments that those members do not agree with.

Melissa Lee said that privatisation is a new idea. It is a new idea to Melissa Lee. Well, it dates back many centuries, in fact. Let us go back to the 19th century practice of prison labour leasing. I am referring to a document put forward by the Howard League for Penal Reform. It is very useful. Basically, it talks about the prison labour leasing that began in America in the 19th century. For a state fee, prisoners were housed, clothed, and fed by private contractors in return for their labour. A history of injustice, neglect, brutality, and high morbidity rates for the mainly black prison population was recorded, and by the early 20th century those leases were gradually phased out as the privately contracted work was returned to the control of the state. The idea is hardly new. It is not new. This debate goes back centuries, yet National members are saying that somehow they have had a grand new idea. Well, if winding back the clock a couple of hundred years is a grand new idea for National, I would hate to think what is coming next.

I will talk about who may end up running these private prisons, and what some of the risks involved in privatisation are, because significant risks are involved. Private prison operators are encouraged to cut costs, endanger the safety of their staff, and endanger the safety of the public. There is no incentive for them to reduce recidivism. I will talk particularly about the GEO Group. For example, my colleague Carmel Sepuloni raised earlier in the debate a case where the GEO Group placed a woman in a cell block with male inmates, who raped her and beat her, and she later took her own life. State authorities removed 125 inmates from a prison run by GEO Group—the people whom National wants to run New Zealand’s prisons—because of inadequate staff training and inadequate health care. Those running the prison were found to have served rotten food. They knowingly made false and misleading statements to state officials. They failed to complete criminal record checks on at least 100 prison guards. I repeat: they failed to do criminal record checks for 100 prison guards. They violated domestic and international laws on due process and humane treatment. These are the people whom the National Government holds up as the bright hope for improving our prison service. Well, with a track record like that, members on this side of the House do not want a bar of it. If that is what the Government thinks the future of our prison service in New Zealand is, I think that is disgraceful.

This is the wrong debate for us to be having in this House. I have sat here all night since we began this debate, and not once have I heard anybody from any party on the other side of the House talk about anything that would reduce the number of people who end up in prison in the first place. Surely, with New Zealand having the second-highest incarceration rate in the developed world, that is something that the Government would want to talk about. Rather than talking about how it can make a profit from locking up more and more people, perhaps it should talk about how to reduce the number of people who end up in prison in the first place. We have had nothing, not a jot, from the ACT Party or National on any of that.

Fundamentally, this matter is an ideological debate for those members. It is all about how they can make a profit out of the activities of the State. National is absolutely ideologically wedded to the idea of privatisation. The ACT Party, the “Self-help Help Yourself Party”, is completely and utterly off the planet when it comes to this type of thing. If those members can make a dollar out of it, they are into it. If they can make a buck out of it, then they are absolutely into it. But there is no evidence to suggest that privatisation will work. All the evidence goes the other way. All the academic research goes the other way. That is why we have heard none of it from Government members tonight. They simply cannot find any evidence.

I am sure that one of the reasons they blocked the Law and Order Committee from having access to the Ministry of Justice officials is that those officials probably would have told the committee that there is no evidence to support what the Government wants to do. We know that the officials told the Minister of Corrections that there is no evidence to support what she was trying to do, and that the evidence suggested, in fact, that it would probably have the opposite impact to what she was hoping. The select committee was not given the opportunity to hear that evidence. Melissa Lee boldly told us that that is called having a majority. She said that having a majority means that one blocks free speech and blocks the ability to look at the evidence to consider what may or may not work. That is what is being in Government is all about for National. It is all about ignoring the evidence. It is all about doing whatever the bumper sticker slogan says and doing whatever National’s private corporate mates want it to do, without fronting up and producing a single shred of evidence that it will work.

The Labour Party’s opposition to this bill is based primarily on two grounds. The first is philosophical: we do not believe that it is the role of the private sector to incarcerate people and to take away their liberty. We believe that if that is to happen, then it is the role of the State. The second objection is simply based on the operation of this measure—how it will work. It will not work. It will not reduce recidivism. It will not save any money, because we know that private prisons are more expensive than public prisons. The one example that we have had in New Zealand of a private prison was more expensive to run than a public prison. The National Government has produced no evidence to suggest that privatisation will work. Our objection to this bill is not based simply on principle; it is based on principle, but that is not the only objection.

Debate interrupted.

Sitting suspended from 12 midnight to 9 a.m. (Thursday)

Tuesday, 24 November 2009

(continued on Thursday, 26 November 2009)

Bills

Corrections (Contract Management of Prisons) Amendment Bill

Third Reading

Debate resumed.

CHRIS HIPKINS (Labour—Rimutaka): To recap what I was saying last night, the Corrections (Contract Management of Prisons) Amendment Bill represents a purely ideological decision by the National Government to start to privatise the prisons. There is no evidence whatsoever to support what the Government is trying to do. There is no evidence that privatising the prisons will be cheaper. In fact, the only example in the New Zealand context proved to be more expensive for remand prisoners than the public prisons. There is no evidence that it will lead to less recidivism, and the international evidence suggests the opposite of that: recidivism rates from private prisons are higher than from public prisons.

The best that the National-ACT Government could do was to put up Roger Douglas, “Mr Self-help, Help Yourself”, to simply give us the same speech that he gives over and over again—

Grant Robertson: 25 years.

CHRIS HIPKINS: —he has given it for 25 years—about the fact that the State is bad, everything the Government does is bad, and everything should be left to the private sector. This is the same party, of course, that put up Mr Garrett, whose best argument, I think, was articulated in his first reading speech. He said he thought private prisons would be cheaper than public prisons, because they would go round all the dairies in South Auckland and buy all of the stale food that was past its use-by date and feed that to the prisoners. That was the best argument that the ACT Party could come up with to suggest that private prisons would be more efficient and cheaper for New Zealanders.

In the last minute or so, I say to the Māori Party that I agreed with a lot of the aims and objectives that Pita Sharples set out in what I thought was a quite thoughtful speech, in terms of what the prison service should aim to do and aim to deliver for prisoners. I absolutely agreed with a lot of what he said, but I do not see the connection between privatising the prisons and delivering on the aspirations that Dr Sharples set out. They are very worthy, but we do not need to privatise the prisons in order to do that. The Public Service, and all of our prisons, should be delivering on the types of aspirations that Dr Sharples laid out.

So that is the wrong debate for the House to have. The debate should really be about why we have such a high incarceration rate in New Zealand. It is one of the highest rates in the developed world. This debate should be about how we reduce the number of people who end up going back to prison after they have been released—how we can reduce the recidivism rate. It should not be about how we can cut corners and transfer money from hard-working taxpayers to overseas corporate owners of private prisons, which is what this legislation will enable. This legislation will enable the transfer of money to the American owners of the prison contract, if the National Government gets its way. There is no evidence to suggest that we will end up with a better-quality prison service as a result of that. The privatising of prisons is an ideological decision, it does not make sense, and the Labour Party will be opposing it at every step of the way.

GRANT ROBERTSON (Labour—Wellington Central): New Zealand has far too many people in prison. Our incarceration rates are among the worst, and are nearly the highest, in the Western World. Simply building more prisons and locking up more people will not give us the secure and inclusive society that we all desire. It might make some people feel better, it might make the Sensible Sentencing Trust feel better, but in the long run it is not where our attention should be. We must be more involved in addressing the causes of crime, such as poor housing, unemployment, alienation from family, and poor education and health outcomes. We must do this creatively and we must do this innovatively. But we have prisons, and the reality is that we have to deal with prisons as they are today. It is a fundamental principle of the Labour Party and of mine that the incarceration of citizens is a core Crown responsibility and it should be under the direct control of the Crown, through the Department of Corrections.

Incarceration, and therefore the denial of liberty and freedom, is one of the most invasive powers of State jurisdiction. If we are to privatise it, we lose the moral authority that goes with incarceration. Public prisons are morally and fiscally accountable to taxpayers. Private prisons are accountable to their shareholders, and they have a binding obligation to their shareholders to maximise profit. Under the system that is being introduced today what we are saying is that profiting out of incarceration is OK; I say that that is wrong. Profit is what the private sector does best, and we on this side of the House are not opposed to profit. What we are saying is that the incarceration of people, the taking away of their liberties and freedoms, should not be the subject of profit. If fundamental roles, such as incarceration, can be privatised, why not privatise the police? If we do not believe that a fundamental role, like incarceration, is a State responsibility, why not privatise the police? Mr Garrett probably believes that we should do that. Why not privatise the defence force?

David Garrett: Mr Shearer thinks we should have private armies.

GRANT ROBERTSON: Mr Garrett interjects, as he did last night, about David Shearer. The member should read what David Shearer said, and he will realise that it has nothing to do with the privatisation of the defence force. But that probably is what Mr Garrett wants. Is it what the National Government wants? Is privatising those core functions of the State what the National Government wants? That is where we are going with this bill. That is the direction this bill goes in. It says that a core function, the taking away of freedom and liberty, can be handed over to the private sector. I say that that is wrong.

This bill is wrong in principle, because it opens up New Zealand to legal challenge as to whether private prisons are constitutional. Last night we heard a number of descriptions of the decision of the Israeli Supreme Court, but this was dismissed by members on the other side of the House as not being relevant. But I caution those members that the people who brought forward this case in the Israeli Supreme Court said specifically that a worldwide precedent had been set. I am sure that organisations like the Howard League for Penal Reform will be looking very closely at the decision of the Israeli Supreme Court and looking to see whether this can be put in place in New Zealand. Can a challenge be taken to the constitutionality of private prisons? We have seen this decision today, and last night we asked the Minister of Corrections, Judith Collins, to take a call to tell us whether she had had any advice about the Israeli decision. She refused to answer that question. I think it sets a very interesting precedent. I think that cases on the constitutionality of private prisons are likely to be taken around the world, and I strongly believe that the Minister needs to take this issue far more seriously.

There is no evidence to support New Zealand moving to private prison management because there is no evidence that it will deliver a safe, secure, transparent, and accountable system. We know that when New Zealand last went down this path, with the Auckland Central Remand Prison under private management, the costs were higher. The argument that it is somehow a more efficient and cheaper scheme simply does not stack up. The Auckland Central Remand Prison operating costs under private provision were $35,700 per prisoner, $57,280 when we include overheads, and $50,208 in public provision. The evidence from last time was that private management was not cheaper and it was not more efficient. The Law and Order Committee also heard from prison officers, who said that the standard of service, the standards that were put up when the Auckland Central Remand Prison was in private management, simply did not stack up. Corners are cut in the system, because in the end it is about maximising profit for shareholders. It is not about ensuring the safety and security of New Zealanders, or the safety and security of the staff who are involved in those prisons.

An important point to make is that members on this side of the House have argued this debate on principle. We accept the fact that there is an ideological divide on this issue, and we have argued it on those grounds. But we have also argued it on the grounds of evidence—and evidence, in particular, from jurisdictions overseas that have gone down this path. In particular, we talked about the United States of America where over the years a number of reports have come through that have shown that private prisons have simply not delivered the outcomes that people around the world hoped they would. In particular, the role of the GEO Group has been raised a number of times. These are the people whom the National Government would have come into New Zealand and run our prisons. The GEO Group, formerly known as Wackenhut Corporation, has been involved throughout the world in the reduction of conditions in prisons, the reduction of safety in them, and in particular I want to focus on the reduction in terms of staffing. In 2001 the United States National Council on Crime and Delinquency produced a report on private prisons. It said that there was “no data to support the contention that privately operated facilities offer cost savings over publicly managed facilities”. It went on to say that privatisation had led to a 15 percent lower ratio of staffing to inmates. Is reducing the ratio of staffing to inmates supposed to make our society safer? In the end that is what private operators will do. They will attempt to cut the corners and ensure that they maximise their profit. That is fair enough; that is what corporations do. But should we be involving those corporations in such a critical State responsibility in an area where safety is absolutely crucial when that is what we are opening ourselves up for and when that is what the evidence tells us from the United States?

If we come a little closer to home we see that Australia has had, time and again, to relook at its privatisation. I mentioned during the Committee stage of this debate the situation involving the Metropolitan Women’s Correctional Centre in Victoria. Following an inquiry in 2000 that found widespread drug use, deaths in custody, poor training, and cover-ups, the Victorian Government had to take that centre back into public control. I ask whether we really want to continue to repeat the failures of these prisons overseas. In the United Kingdom, a prison service report in 2008 stated that when they did a league table—and we know how much National likes league tables—of prisons in the UK by the prison service, 10 of the 11 private prisons were in the bottom quarter of prisons in that league table. So in respect of private prisons in the UK, we have evidence—Mr Garrett wanted evidence last night—that they are not working. Privatisation is not working in the United States, it is not working in the United Kingdom, and it is not working in Australia. In Canada, a private prison was brought back into public ownership because it was not working. So the evidence simply does not stack up. Internationally, the evidence does not stack up; inside New Zealand it does not stack up.

In the brief time remaining I want to say that it was a bit rich to be told last night by National that we were all about ideology on this side of the House on this issue. We are proud to stand up for our principles on this issue, but we did not see a scrap of evidence from National last night to actually back up why it is doing this. The chair of the Law and Order Committee, Sandra Goudie, who heard us speaking about this, said that the reason why National was doing this was to “give it a go, give it a whirl, and see how it works”. I am sorry, but the safety and security of New Zealanders is far more important than just “giving it a go, and giving it a whirl”. New Zealanders will regret the decision that National is forcing through under urgency. The incarceration of New Zealanders, the taking away of liberties and freedoms, is a core State role. New Zealanders deserve a quality public prison service rather than having it sacrificed for profit margins in the private sector.

A party vote was called for on the question, That the Corrections (Contract Management of Prisons) Amendment Bill be now read a third time.

Ayes 68

New Zealand National 58; ACT New Zealand 5; Māori Party 4; United Future 1.

Noes 53

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

Bill read a third time.

Bills

Corrections (Use of Court Cells) Amendment Bill

First Reading

Hon JUDITH COLLINS (Minister of Corrections): I move, That the Corrections (Use of Court Cells) Amendment Bill be now read a first time. I intend that this bill pass through all stages before the House rises for the year, to ensure that the use of court cells is one of the measures available to us as we deal with the growth in the prison population in the new year.

This bill amends the Corrections Act 2004 to enable the temporary accommodation of Department of Corrections prisoners in court cells as a last resort where there is insufficient capacity in the prison system. The use of these cells for Department of Corrections prisoners will not be allowed to interfere with the operation of the courts, including the normal function of these cells for detaining people who are appearing before the court.

As the House is aware, the prison population is currently at around the highest level it has ever been, and it is forecast to continue to grow. The Government is taking a variety of steps to ensure that there is sufficient capacity to accommodate forecast prisoner numbers. These statistics include extended double-bunking, the use of modular or container cells, and now, through this bill, the use of court cells as a last resort. In addition to these measures to address capacity issues, the Government is implementing its manifesto pledges aimed to reduce the rate of reoffending. These include boosting the number of prisoners learning industry-based skills through corrections inmate employment by 1,000 prisoners by 2011, introducing three additional drug treatment units by 2011, doubling to 1,000 the number of prisoners able to undertake rehabilitation, and expanding literacy programmes so more prisoners leave prison better able to read, write, and do maths than when they entered.

Of course, there are other measures that have been introduced or are being developed. This Government recognises the need to address the growth in the prison population both by increasing the capacity of the prison system and by ensuring that we reduce the rate of offending. This bill contributes to other measures to address the growing prison population by addressing a problem identified by the previous Government, specifically that despite having been declared to be part of Department of Corrections prisons by notice in the Gazette, most court cells cannot be used to temporarily house the department’s prisoners as this use does not comply with the provisions of the applicable district plan.

This situation is not acceptable, as was recognised by the previous administration. However, the approach being taken by this Government differs from the one previously taken in that it avoids undue delay and cost by making changes to the Corrections Act as proposed in this bill. This problem will be addressed with the addition of a new subsection (2A) in section 32 of the Corrections Act and a consequential amendment to section 4 of the Resource Management Act. New subsection (2A) will provide an exemption from section 9 of the Resource Management Act, which deals with environmental requirements including district plans. If used, these cells will operate in accordance with an agreement between the Secretary for Justice and the chief executive of the Department of Corrections. This agreement would specify the cells to be used, the circumstances in which the cells will be made available, and would ensure that the use of these cells does not interfere with the normal operation of court business. Prisoners housed in these cells would continue to be treated in accordance with the provisions of the Corrections Act and subsidiary regulations.

In addition, the proposed changes are consistent with national and international human rights law relating to the treatment of prisoners. In order to ensure that all prisoners receive their statutory minimum entitlements, Cabinet has agreed that the maximum period of detention in court cells will be 96 hours. Consistent with this Government’s focus on value for money, the approach in this bill will save at least $200,000, compared with the approach previously being taken.

This bill corrects an anomaly in that the ability to temporarily house Department of Corrections prisoners in court cells that have been declared to be part of the department’s prisons by notice in the Gazette depends on the particulars of the local district plan. The bill addresses this, while reducing the cost to the taxpayer by at least $200,000. The bill supports the Government’s objectives of ensuring public safety and providing value for money for the public’s tax dollars. I commend the bill to the House.

Hon TREVOR MALLARD (Labour—Hutt South): The Labour Party will be supporting the Corrections (Use of Court Cells) Amendment Bill, but will take advantage, with a bit of time, to point out to National that over the years it has been very, very critical of this practice. In fact the member who normally sits on the bench next to the Minister of Corrections who introduced the bill—

Hon Gerry Brownlee: You should be congratulated for finally agreeing with us.

Hon TREVOR MALLARD: I think it is a minor miracle, and if the Leader of the House wants to keep that up we can stretch the debate. I can congratulate him until the closure, if that is what he would like.

We have a whole pile of cells around the place. They are not used anywhere near the way they need to be. They are not ideal accommodation for prisoners. They are certainly not good for keeping prisoners on a longer-term basis. But in my opinion, compared with some of the cells in some of the older prisons around the country, they are not the worst cells in the country. My view is that using them where necessary, in emergency situations, is logical and a hell of a lot better an idea than setting up a tent somewhere, especially to hold remand prisoners.

But I want to play back to National the comments of Tony Ryall. He said the use of court cells was a warning of a jail crisis. In 2005, when this measure was being introduced by Labour, he said it was a system in crisis. “Police continually warn about the dangers caused by holding prisoners in court cells … Mainstream New Zealand should be worried by this escalating crisis because it means there will be more prisoner compensation claims,”.

That is what Tony Ryall said in 2005. [Interruption] I am very reluctant to adopt his words and to agree with him, so I will not. In respect of compensation, it was nonsense when he said it then and it is nonsense now. But it is a sign, I think it is fair to say, of a very, very lazy Minister of Corrections, who promised a lot more than she has delivered. She promised, for example, that she would have crates and containers all over the place to keep prisoners in. I expected she would have a line up of those down in Wellington. I expected that she would use Wellington Prison to a much greater extent than she is. But what is she doing? She is bringing in legislation here.

I also think it is interesting that someone on the National front bench who is much more rational and much more reasonable than Tony Ryall was also—

Hon Damien O’Connor: Name one.

Hon TREVOR MALLARD: It is not hard to name people who are more rational than Tony Ryall. The particular member I was thinking of is Simon Power. On 22 November 2005 he said: “With prisoners being housed in vans,”—and I gather that is the next National policy—“showered at rugby clubs, and kept in police and court cells, how can the Minister convince the members of the New Zealand public that they are safer since he became Minister of Corrections?”. And that is the issue here. How can Judith Collins convince people that we are safer since she became Minister of Corrections? I want to know why this legislation has taken a year.

Hon Steve Chadwick: Tent city.

Hon TREVOR MALLARD: Clearly the tent city has not worked. I would have thought that in any decent emergency situation getting hold of a few tents, going to Stewart Island, Matiu Island, or somewhere like that, putting up the tents, and sticking the prisoners there would not be too much of a problem. That is what Judith Collins promised she would do, but she is such a lazy member, that she cannot even wander down to the Warehouse or Kathmandu and get a few tents to put prisoners in, in the way she promised.

All we have here is evidence of a lot of hot air from Judith Collins. You know, she likes to act tough. How many cars have been crushed? Not one. How many prisoners are being held in containers? Not one. She is beginning to be known as the Minister of the eight-letter word that we are not allowed to use in this House, and it has to do with bovine animals. She is the “Minister for What Comes Out of Bovine Animals”. That Minister is not delivering. She fronts up tough, she puts her chin out, and she lifts her chest. But does she deliver in the portfolio? No, she does not, at all. She is all puffery, and she shows no action whatsoever.

I want to know why, if the Minister was confident about this bill, she did not send it to the select committee. Why did she not have the confidence of her own intelligence to send the bill to a select committee and have it tested?

Hon Judith Collins: Ha, ha!

Hon TREVOR MALLARD: She is laughing because she does not have the confidence of her own intelligence to defend the bill at select committee.

The Labour Party is happy to get the Government out of the hole. We do not want prisoners running round because that Government has not acted properly. We do not want prisoners up and down the streets, the way they would be if they were being held in tents, as she was promising. We will support her. But if we were allowed to use the word “hypocrisy” in this House, I would have.

SANDRA GOUDIE (National—Coromandel): I am delighted to be able to speak in support of the Corrections (Use of Court Cells) Amendment Bill, and I commend the Minister of Corrections, the Hon Judith Collins, for bringing it to the House to correct the anomaly that she referred to in her address.

The prison system is under pressure, and although we work very, very hard and with a great deal of success under the Minister’s leadership and with the Minister of Justice, the Hon Simon Power, to keep our community safe and deal with the drivers of crime to keep our people out of prisons, we need to make sure that in the interim we have some fall-back positions, and that is exactly what this bill provides. I am delighted to be able to speak in support of it and commend it to the House.

CARMEL SEPULONI (Labour): Labour supports the Corrections (Use of Court Cells) Amendment Bill, but, following on from my colleague Trevor Mallard, I will outline a number of ironies that we need to point out with regard to the bill.

First I will go over the purpose of the bill. The bill amends the Corrections Act 2004 to enable the temporary accommodation of corrections prisoners in court cells as a last resort when there is insufficient accommodation in the prison system. The bill provides that the requirements of section 9 of the Resource Management Act do not apply to the detention of prisoners in court cell blocks that are declared by notice in the Gazette to be parts of a corrections prison. The bill does not contain restrictions on the accommodation of overflow prisoners in court cells. However, administrative safeguards will be put in place to ensure that this will occur only if it is strictly necessary, that the normal functioning of the courts will not be compromised, and that prisoners will continue to receive their statutory entitlements.

Labour supports the bill, but finds it somewhat ironic that National is pushing through a bill to allow prisoners to be housed in court cells even though it criticised us for doing the same thing. I want to point out some of that criticism. On 14 June 2005 Tony Ryall said that the growing use of police and court cells was a warning of a jail in crisis.

Brendon Burns: Who said that?

CARMEL SEPULONI: Tony Ryall—the current Minister of Health—when in Opposition, in 2005 said that the growing use of police and court cells was a warning of a jail in crisis.

We are aware of the fact that there is a crisis going on with regard to crime in New Zealand, and that it has been going on since National took office in 2008. When we refer back to what Tony Ryall said, it just confirms what we already know. It is a message that we need to get out to the public with regard to what this Government is not doing to resolve the problems that we have with crime. Another person from the National Government, Mr Simon Power, said on 22 November 2005: “With prisoners being housed in vans, showered at rugby clubs, and kept in police and court cells, how can the Minister convince the members of the New Zealand public that they are safer since he became the Minister of Corrections?”.

Last night we debated the Corrections (Contract Management of Prisons) Amendment Bill. It was pushed through because the National Government believed that private prisons will be safer, better, and cheaper for New Zealand. Yet here we are now with the Government pushing through a bill that is basically opening up the prison system so that more prisoners can be held in court cells because the Government knows it will not be able to contain them in the prisons we have. There is a certain irony there that I really feel I need to put out.

One thing I really want to highlight is that we are here discussing the need to find accommodation for an excess of prisoners who will not be able to be held in our prisons due to the fact that there will not be enough accommodation for them. Yet one thing the National Government is not discussing in detail is the fact that crime is on the rise. It has been on the rise since National took over in 2008.

The National Government continues to ignore the fact that there is a strong correlation between crime, unemployment, and poverty. Unemployment and poverty are the two things that this Government is not addressing. It will continue to put through legislation that acts as an ambulance at the bottom of the cliff, but it will do nothing to ensure that we reduce the numbers of people committing crimes.

I found an article on The Standard that discusses the leap in crime. Recorded crimes per person leapt 2.8 percent in the June year as unemployment climbed from 4 percent to 6 percent. Obviously, it is not a coincidence. As Mr Ryall pointed out before, crime is a symptom of a society in distress. It shows that there is a crisis, and that is something the National Government has to take full responsibility for.

On a number of occasions Government members have said that the previous Labour Government did nothing with regard to crime, and they have created the perception with the public that crime increased under Labour. I refer to a press release from the University of Auckland—not from the Labour caucus, but from the University of Auckland. It is dated 26 February 2008, and it states: “Contrary to popular perception, according to a recent study, the incidence of crime in New Zealand has steadily decreased over the last decade, says Julia Tolmie, co-editor of … Criminal Justice in New Zealand and associate professor of law at the University of Auckland. What has changed is that the amount of people who are being prosecuted and the sentences that they are getting have both increased.”

Now, that happened under a Labour Government. The prosecutions and sentences increased but the crime decreased. In other words, the numbers we are locking up for committing crimes have rapidly increased in recent years, even though crime is not growing. The perception that crime climbed under a Labour Government was put out by National members, and it was incredibly irresponsible. Now they are in a situation where they are in charge, they are experiencing a crisis, they know they cannot house the number of prisoners who will be coming through the prisons, and they are looking to privatise. But even with the benefits they perceive from that around rehabilitation and reintegration, they know they will have an overcrowding problem in our prisons. Therefore, they have to push through this bill.

I want to touch on the main provisions of this bill. Clause 4 inserts a new subsection that ensures that if a court cell block has been declared by notice in the Gazette to be a part of a corrections prison, then section 9 of the Resource Management Act 1991 does not prevent that cell block being used to detain prisoners. Clause 5 makes a consequential amendment to the Resource Management Act to signal that section 9 of that Act does not apply to the detention of prisoners in a court cell block that is declared by notice in the Gazette to be part of a corrections prison.

As I said, Labour members support this bill, but the issue we are discussing is the irony of this measure—and I am not allowed to use the word, which Mr Mallard pointed out, that starts with “h”. But that is the word we are discussing here, and that is the issue we are discussing.

I want to go back to the bill that was discussed previously tonight, and I discuss it in correlation with this one. That bill was the Corrections (Contract Management of Prisons) Amendment Bill, which is known to most people as the “Privatisation of Prisons Bill”. I go back to what we discussed about the Government’s argument that, for some reason or another, private prisons would be better, safer, and cheaper despite the fact that the vast majority of the submissions showed us that that would not be the case.

In recent months we have experienced a major issue with regard to a shortage of court security officers, and we have also experienced some major upheaval with our justice employees with regard to the working conditions they are being forced to work under, under this National Government. Here we are, putting through this legislation, and knowing that a higher number than usual of prisoners will be kept in our court cells. But do we really have the capacity in terms of staff to ensure that the staff remain safe? Are security measures in place to ensure that the public is also safe? Do the working conditions for the security staff ensure that they will not be on strike every 5 minutes because they are fighting with the Government over what they should be entitled to?

I refer to a Manukau Courier article that was put out on 16 April this year—that is, under this Government. It states: “Judges are publicly backing a third budget bid by the Justice Ministry to increase the number of court security officers nationwide. Security staff at the court wear stab-proof vests because of the number of knives they seize from people entering court, says the Public Service Association, the union for state sector workers … PSA national secretary Richard Wagstaff says there aren’t enough officers to cover the three courts at all times … That shortage is ‘mirrored at courts across the country and threatens the safety of the public’, Mr Wagstaff says.”

This is an issue that the National Government will have to deal with as it brings this legislation through. It is no good saying that prisoners who cannot be accommodated in our prisons can be housed in court cells if it does not have in place the security measures to ensure that not only the staff who are working there but also the public are safe. It is a very real issue that I really thought I needed to bring to the attention of this Government. The other issue I touched on before was with regard to the pay disputes that have been happening across the justice sector.

DAVID CLENDON (Green): The Greens will be opposing the Corrections (Use of Court Cells) Amendment Bill.

David Garrett: There’s a surprise!

DAVID CLENDON: I say to Mr Garrett that I like to be predictable. This bill allows the Department of Corrections to jail prisoners in court cells. Currently, this can be done by providing notices in the Gazette, but this would usually require approval under the Resource Management Act. This bill establishes an exception, so the Resource Management Act does not cover the housing of prisoners in court cells. We know that court cells are not designed or suitable for the long-term housing of prisoners. It is flagged in the regulatory impact statement to this bill that the completely inadequate nature of these facilities means that the New Zealand Bill of Rights Act is potentially contravened, as indeed could some relevant international conventions.

Last night there was mention of innovation and vision in changes to corrections more generally, and specifically in the terms of the Corrections (Contract Management of Prisons) Amendment Bill that was discussed last night. The vision that underpins this current bill seems to be that we will continue to imprison people in large numbers, we will not make any attempt to reduce the number of prisoners, and we will simply use whatever expedient measure we can to put people away, to keep them out of the public view, and to make no effort to rehabilitate them or to reduce or deal with the underlying causes of crime. We have heard of shipping containers being used as cells, and now we have court cells. I can only surmise as to the opinion of the police force when discovering that their holding cells, which are there for a very real and proper purpose, are now to be used to manage the lack of other adequate facilities for maintaining prisoner security and, indeed, public safety.

We know that the prison system is under extraordinary pressure and again I refer to the presentation yesterday to the Law and Order Committee from the head of the Department of Corrections, who indicated quite clearly and frankly that the department is under extraordinary stress and is very close to breaking point. Double-bunking is seen as one mechanism for reducing or managing the pressure on prisons, but we know from prison officers that it puts them in an extremely vulnerable, very dangerous, and potentially very violent situation, which will be dangerous both for them and for inmates.

The option of last resort is this one that seems to have been chosen—the idea of using court cells to accommodate the overflow. It has been used in the past, as I said, for acute accommodation shortages in the very short term. But this bill would embed and normalise the practice of putting prisoners into court cells, which is completely inadequate and is not acceptable in a modern, allegedly developed society.

The objective of the policy, as stated in the regulatory impact statement, is to enable the Department of Corrections to continue to manage the prison population within the available resource and in a manner that is safe, secure, humane, and effective. We argue that this bill fails those tests. It will not enhance safety. Court cells are not secure, in the sense that they are not designed for the long-term custody of prisoners. It certainly is not humane to put people in a situation where there are no facilities for adequate exercise or for access from visitors or, indeed, for proper legal representation, and we do not believe it would be effective.

This bill, in part, is intended to circumvent the requirements of section 9 of the Resource Management Act. The disadvantage of the proposal is that it prevents, or would prevent, neighbouring residents and other affected parties from challenging the overnight accommodation of prisoners in court cells. An understatement in the regulatory impact statement suggests that the legislation could be controversial. To say the least, it will most certainly be controversial; the Resource Management Act is a document that has already been under attack this year and we expect there will be further attacks next year. Specifically, the Greens defend the Resource Management Act on the grounds that it is our primary source of environmental protection and we absolutely will continue to defend the principle of public participation.

This bill endeavours to circumvent the opportunity for members of the public to participate effectively through the sections and provisions of the bill. Granting an exemption from the Resource Management Act requirements also sets a very unhealthy precedent that could be taken up by others who see that there may be advantage in a Government agency seeking to carry out urgent building work, for example, or other activities with an environmental or social impact. The bill could be seen as a precedent to pursue similar exemptions.

The comment has been made that using court cells for overflow might carry a risk of litigation. The prisoners housed in these cells could claim that their treatment does not comply with the provisions of the New Zealand Bill of Rights Act. Indeed, one can readily imagine situations where prisoners would be quite right in that assertion, in that their rights would, in fact, be contravened. It is acknowledged that the use of court cells for overflow prisoners is not a new policy. Court cells have been used in the past, and the department was able to meet its obligations under domestic and international law. However that was always in the sense of exceptional circumstance—a temporary, one-off, seldom repeated situation. As I said, this bill would seek to normalise the use of court cells as overflow with all of the accompanying indications that people will continue to offend, we will continue to provide inadequate treatment, rehabilitation services, or even proper and decent accommodation, and therefore we will use this stopgap measure. Except rather than have it as a stopgap measure, it will become a core part of our corrections system.

We need to put our efforts—significant efforts and, indeed, significant resources—into reducing our prison population. We need non-custodial intervention for minor non-violent offending, instead of the default position of throwing young people into the schools of crime that our prisons are. We need a much greater focus on early intervention, rehabilitation, and adult and community education. Such a large number of our prison population have literacy and numeracy problems, and community-based education is a very powerful mechanism for remedying that very real problem. It is very unfortunate that this Government has chosen to reduce adult and community education funding at a time when it is of critical importance and could make a major, albeit indirect, contribution to reducing our prison population.

There is a need to address the causes of crime such as entrenched poverty, which is becoming endemic in this country despite it being a wealthy—or at least potentially a wealthy—country. The evidence this week that something like one in five children in our country is effectively living in poverty is simply intolerable. The children of those homes, the children of those families, will almost inevitably become a high risk in their time, and that is virtually guaranteeing another generation of offending. I have mentioned in previous speeches the ever-widening income gap in New Zealand. We will have more and more people with very little to lose, and a few with far too much to lose. Again this is not a mechanism for social harmony or well-being. It will increase the risk of offending.

Given that this bill was not available to us until quite recently, these are only very preliminary comments, but I can assure the House that we will continue to oppose this bill throughout its passage. Kia ora.

DAVID GARRETT (ACT): It is no surprise that the Greens are opposing the Corrections (Use of Court Cells) Amendment Bill just as they have opposed every single law and order bill that has been brought before the House. Comrade David Clendon has learnt very fast to toe the party line along with the rest. I say to Mr Clendon that I do not know what the reality is on Planet Gaia, but people do not actually go to jail in this country for minor offending. He should go and look.

One of the most interesting parts of the debate was what Mr Mallard said. I have heard the suggestion of putting prisoners on an island many times, but I have never ever heard it from the Labour Opposition. So I was very intrigued to hear that Mr Mallard thought that one solution would be tents on Stewart Island as a temporary measure.

Hon Clayton Cosgrove: What about Hawaii? What about Honolulu?

DAVID GARRETT: As Mr Cosgrove is aware, I have actually seen tent jails over in Arizona, and they seem to work fairly well. I welcome Mr Mallard’s openness of thinking and his willingness to consider what has, in the past, been dismissed as total red-neckery. I congratulate Mr Mallard for that breadth, that openness, and that willingness to consider innovative solutions to problems.

No one will argue, and I certainly will not, that long-term or even regular incarceration in court cells is a good idea. Of course it is not. But everyone over on the other side of the House has seemingly forgotten that—if I recall correctly, not so long ago—prisoners were held in prison vans outside police stations and courts because there was nowhere else to hold them. I would be very surprised to hear anyone argue, even on Planet Gaia, that incarceration in prison vans is a good idea.

This is a sensible measure. It will not normalise the use of court cells. I say to Mr Clendon that the sky will not fall. We will not have every court cell in the country full of prisoners. But in emergency situations it is sensible and, indeed, humane that prisoners be held in court cells with running water rather than in a van outside. We will be supporting the bill.

SHANE ARDERN (National—Taranaki - King Country): I thank the Assistant Speaker because my electorate, Taranaki - King Country, has a very long title. I am proud of the fact that the Assistant Speaker has been able to pronounce it correctly and say it from beginning to end.

I rise in support of the Corrections (Use of Court Cells) Amendment Bill and there is a very good reason for that. I was reminded of it by the Hon Trevor Mallard, who, like my colleague David Garrett who has just resumed his seat, asked why we are doing this. The Hon Tony Ryall, as the Hon Trevor Mallard pointed out to us, highlighted this concern in 2005. We had a further 3½ years of Labour from the time that that point was made, and nothing was done. The prison population continued to grow and no new prisons were built. I do not think anybody in the House will argue that it is an ideal situation to use police cells, court cells, or any other cells as prison accommodation on a long-term basis, but this is an emergency situation, there are more prisoners than there are cells, and there are empty cells in these facilities. That is the reason behind the bill.

Many have spoken about what the bill does. It amends a number of Acts, including the Resource Management Act. It allows for this to take place, without having to go through the normal process, once the legislation has been gazetted. As far as National is concerned, this is a short-term fix and help is on its way. Members can be assured of that. It is a very good move in the short-term and that is why we are supporting it.

Hon CLAYTON COSGROVE (Labour—Waimakariri): That was an astounding speech from Shane Ardern. I generally have a bit of praise for Shane because he is quite a respected member of Parliament around here, but I put that speech down to a sort of temporary amnesia. That member knows that in the life of the previous Labour Government we built four new prisons, despite the current Minister of Police—and now Mr Ardern has caught the same bug—going around telling everybody that nothing was done in terms of correctional facilities. Mr Ardern needs to recast history and know that we built four new prisons. He nods, and he knows that is true and he is probably going to take a point of order and correct his own Hansard because he knows it is a load of hooey. Milton prison was one; Spring Hill Corrections Facility was another. I must say that the interesting thing about this debate is those members on the opposite side of the Chamber getting up and saying that nothing was done under Labour, and forgetting there were four brand-new prisons built under that Government.

They also have a bout of amnesia in terms of what they said before the election. Their own National Party policy stated that if National were to implement all their election promises on corrections, then the prison population would double. We have the document here, as does every other New Zealander who received it in the letterbox. Firstly, it says that the Labour Government was not locking enough people up—and National members said it repeatedly, we have the quotes here and I am sure Mr Ardern would agree because there was one from him—that Labour was soft on crime and the prisons were bursting. Now that those members are in Government, they say: “Oh, shock, horror!”. The Minister of Corrections lowers the tone of her voice when speaking on the radio and becomes very soft and very benign, almost wanting to be beatified, and says: “Isn’t it terrible”, as she wrings her hands, “that we have so many people in prison.” But not a year ago, almost to the day, it was Judith Collins and her ilk who stood on the other side of the Chamber and said that Labour was not locking up enough criminals.

The second point I make as I return to the policy of the National Party before the election—

Paul Quinn: What about the birthday cake in the caucus room?

Hon CLAYTON COSGROVE: —I think that member might be about to blow—is that National put out a pamphlet that said if all its policies were implemented, the prison population would double. That is what it said, but now it recasts history and the Minister of Corrections says that she did not know this was going to happen. Yet her own party’s policy before the election said that if all the National Party’s law and order commitments were fulfilled, it would double the prison population. So that is the “l” word; it is porky No. 1.

The third point I make is that the Minister forgets she had a briefing as the incoming new Minister that gave her, a 1 year ago almost to the day, the prison forecast. I recall when I was in Cabinet—and I am sure that Mr Assistant Speaker Barker will recall it as he was there as well—every Monday morning we had a document that showed the prison forecast and the actual numbers. Every time something happened in the community that was outrageous, the National Opposition members stood up and said Labour was not locking up enough criminals. It is a bit like Nick Smith saying that New Zealand must show leadership over the emissions trading system when a year ago he said we should not show leadership at all, because he was in Opposition. I say to those members: “You can’t fudge history.” That is the point.

We will support the bill because there is a requirement for flexibility. Court cells were used from time to time under the last Government, and we have to put those people somewhere. I accept that, but members of the National Government get up and say “Shock, horror! The prison figures are outrageous and it is an outrage that New Zealand has the second-largest incarceration rate, per head of population, in the world.”

David Garrett: No, we don’t.

Hon CLAYTON COSGROVE: Well, that is what they said, except the problem with that view is that not 12 months ago, during a general election, and years before that, those members accused the last Government of not locking up enough people. I say to members opposite that they cannot have it both ways.

The other observation I would make is that I believe we are now perhaps 7 or 8—depending on whether the Leader of the House stuffs it up again—parliamentary days away from the end of the sitting year. The Minister of Corrections has had her forecast for a year, and there has been no plan to address this issue. Here we stand in urgency, ramming another bill through. Most members never saw it until it was tabled because of the Minister’s own disorganisation. She has bleated about this issue for nigh on 12 months, but she has presented no formal strategy or plan. She has a commitment in her election policy to build a new prison, yet no money was allocated in the Budget, no spade went into the ground, and no foundation was laid—nothing. We have no plan from the Government on how to address the prison muster in a formal, logical, and logistical sense.

Yet we have heard: “Let’s fire some bunks in; to hell with the security arrangements for prison officers; and to hell with the potential for prison officers getting done over, because of the stress rising in the prisons.” I am concerned about those prison officers. We have had the great container campaign: bang a few containers—made in China or wherever—in the odd prison and bodgie a strategy together. Now we have court cells being used. As I say, we do not oppose that, but we do feel a duty to point out the obvious to members opposite because when they were in Opposition they railed against the use of police cells and court cells.

We have already heard from Trevor Mallard quoting Simon Power who, in Opposition, said that it was outrageous that we were doing that and that all hell was breaking loose in the prisons because court cells were being used. Tony Ryall, as Opposition spokesperson on corrections, also railed against that practice, yet 12 months into the ether we see members opposite standing up, one after another, led by the nose, reading out National research unit notes and proclaiming that this is a great strategy. Well, as we move through this debate, I would like to know about the logistical arrangements and what provision has been made—for I talked to a senior prison staffer yesterday—for prison officers within our court buildings. Court buildings are used at particular times, as we know, and court cells are required to be used by the judiciary for the administration of alleged criminals from time to time each day. I ask where the security arrangements are, where the extra staff are, and where the basic logistical requirements for the prison officers who have to guard these prisons are—that is, offices if they need them and beds if they need them, or do they share a cell in the court with the prisoner? None of those issues have been addressed, and I would like to know where the budget and where the resources are coming from in respect of that issue.

I point out to members opposite their scattergun approach to muster management, after 12 months in Government. We hear the groans, on cue—if Mr Quinn is awake—that the Labour Government had 9 years to do it. That is dead right, and we built four prisons. But we were criticised by the then National Opposition.

Carmel Sepuloni: And crime dropped under us.

Hon CLAYTON COSGROVE: Crime did drop under us, but we still put in place formal prison systems. We built four prisons. Those folk in their manifesto said they were going to build a prison or a number of them. We have heard nothing, seen nothing, and nothing has been done in that respect. They have been in office for 12 months. I would have thought that at least the concrete would go down, or that the odd bit of iron or steel would go in as the foundations were raised and the construction begun 12 months ago. But there was nothing in the Budget and no mention of it from the Minister.

Yet we have a bit of double-bunking, which I fear. My fear is not for the prisoners in this respect but what will occur to the prison officers if the stress level is ratcheted up in those prisons. OK, prisoners are locked up in the cells, but at some point they have to be unlocked. It will not be members opposite who turn the key and open the door and get punched in the face by the prisoner. It will not be those members, as they are closeted behind the glass upstairs; it will be our prison service folk. It will be no one in this Chamber who gets done over. Then we have the scattergun approach in the use of containers—drop a few out of the sky here, a few there. But we cannot get the cost for those. There are three or four costs for those but no one can tell us what it will cost or how long they will last.

I predict that after the Government has done the containerisation of prisoners and has built—if it does—a new prison, the taxpayer will be up for far more than had the Government done the job properly and fulfilled National’s election promise. Then, at the eleventh hour, we have this logical move, I accept, to utilise court cells, and no one opposes that on our side. But with 8 days to go in the parliamentary year, that is the sort of forethought and foresight exhibited. That is the planning and logistical strategising exhibited by this Minister of Corrections. “Last-minute Louis”, with 8 days to go, says: “Let’s do this”, when I presume that Cabinet, or at least her office, gets the prison forecast every week, if not every couple of days, as we did when we were Ministers. This is forecast to go through.

I would also like to know whether the claims made by the Department of Corrections are true that there are, indeed, around 100 to 150 beds available in our prisons. We support this bill, but we believe that those members should be held to account for their comments last year.

Dr CAM CALDER (National): It is a privilege to take a call and speak on this bill, the Corrections (Use of Court Cells) Amendment Bill. National campaigned on improving safety in our communities, and we are addressing this issue with a raft of measures. This bill is part of keeping that pledge.

The New Zealand prison population has steadily increased over the last 10 years. Why is this? One of the drivers was an increase of over 40 percent in the number of violent offenders. I will say that again. There was an increase of over 40 percent in the number of violent offenders over the last 10 years, and, of course, a concomitant higher proportion of convicted offenders sentenced to imprisonment. Equally, there has been a disproportionately large growth in the remand prison population.

This Government is trying to lift New Zealand’s performance across all sectors. To do this, we are open-minded and we welcome innovation and fresh thinking. We have said sayonara to the dogma-driven policies of the late, unlamented Labour administration. Those policies led to a 40 percent increase in violent crime and to inadequate accommodation to house the convicted offenders. We have heard from the Hon Clayton Cosgrove about the fact that Labour attempted to address the problem. We accept that, but Labour failed. It became a terminally tired administration that deteriorated to become little more than a loquacious lobby for lassitude, languor, and inaction. This bill is necessary as a result of that legacy of supervised neglect.

The National-led Government has inherited a rising prison muster and a concomitant imminent shortfall in accommodation, owing to inadequate funding by the Labour Government. This bill is necessary to ensure we can provide safe, temporary accommodation for offenders. I commend this bill to the House.

Dr RAJEN PRASAD (Labour): That last contribution to this debate on the Corrections (Use of Court Cells) Amendment Bill added absolutely nothing. The member Dr Cam Calder displayed his ignorance about the causes of crime. The member displayed his ignorance about how little his own Government is achieving in this important area. The member simply believes in some Crosby/Textor - type information. The member knows nothing. He could not give us one example of policies of the last 9 years that had actually caused crime to rise—not one. There was a lot of rhetoric but no substance.

Labour will support this bill, because it provides a response at this particular time to a difficulty. When no options are available, then cell facilities at courts ought to be used, and this is what this bill allows. That is a reasonable thing to do. At the present time court cells can be used only during the day, but they ought to be utilised when there is urgency in terms of demand. This bill amends the Corrections Act 2004 to allow for prisoners to be accommodated in court cells for up to 4 days. That is a reasonable thing to do. Because court cells cannot be used in this way under the Resource Management Act, an amendment also has to be made in the bill to exempt the use of court cells in this way from section 9 of that Act. The Labour Opposition will support that, because overcrowding is a potential problem in the next period. This bill is a way to resolve it, and it is the responsible thing to do.

But the bill does point to some real difficulties that the Government has with regard to provisioning its law and order policies, which, presumably, are policies that National designed several years before the last election campaign. National members had all the figures available to them, and now that they have been in Government for a year, all they have managed to call on is the punitive approach that sections of our community demand and that they have tried to make political capital from. They promised to be tough on crime by locking up more people.

It is important to go back to the website of the Department of Corrections to really see the things that the department is telling us it has known about for some time. Clearly, the prison system is under pressure, and clearly the department would have been telling the Government that for some time. The Government also knows that the future of the policy of double-bunking is uncertain. There are difficulties with the processes, as we have seen in the Employment Court. So the Government does know.

Hon Member: Well, it’s a nonsense.

Dr RAJEN PRASAD: It is a nonsense, I agree. So the Government does know—[Interruption] it is a nonsense, I agree—there will be insufficient accommodation from 2010 onwards. The Department of Corrections is telling us about its problems via its website.

Although the Government talks about this measure being a temporary provision, the member from the Greens raised an important point. The Government’s own website says it is thinking about this facility being made available on an ongoing basis. It is not as though the issue of prison numbers will just go away; it will be there for some time. This measure will be used for some time, and I would like to hear from the Minister as to how she intends to resolve that. For how long does the Minster intend to use this provision? What are the plans for ensuring that it will not be necessary in the future?

There is some good news, and I commend the Department of Corrections for this. It has actually thought matters through, and it does say—both in notes that we have and on its website—that it will do some more work to make sure there is a good understanding of how the use of court cells overnight will work, and to make sure that provisions are made so that prisoners are treated in a humane and effective manner and their rights are protected.

The Department of Corrections’ website also raises—and we have not talked about this a great deal—the fact that there will be difficulties with regard to getting this type of exemption from the Resource Management Act. We should think about that for a moment. If the cells are in neighbourhoods, the people who live in the area will now have no opportunity at all to object to this measure. I am not saying everybody should object, but the facility to object has been taken away. The department’s website also says there are some risks of litigation from the people who are being held in this type of facility.

The Government has promised to look at a whole range of other facilities for prisoners. It does know that we cannot keep on putting more people in prisons. We have an awful performance rate in this area; it is one of the worst rates in the world, after the US.

Todd McClay: It’s been pretty appalling over 9 years—you’re right.

Dr RAJEN PRASAD: I will come to that. The member talks about the last 9 years. Members sit there talking about the last 9 years, but that is intellectual dishonesty. When will the Government really address the drivers of crime? Government members have had the meetings and have had the information put before them, but we have seen nothing. We would like Government members to get up and tell us what their crime prevention strategies are. When should we expect to see them, or is it that Government members have found a sore in our society—the view of those who want to be punitive? Is it the case that the Government has utilised that and that it intends to utilise this issue in that particular way? If the Government was really sincere about addressing the drivers of crime and about getting into early intervention, we would have seen that by now. The Government is a third of the way through its term, and we have not seen any really significant proposals. There is the opportunity to change the performance of this country in this particular area, but we have not seen anything. We would like to hear from members opposite about when we can expect to see their proposals. They have had meetings and there has been plenty of input. Or is the issue becoming too hard? Does the Government intend to keep the proposals for the last 6 months of its term and to take them up from there?

Perhaps the biggest irony—and I liken this to a form of intellectual dishonesty—is the fact that we are here, pushing this bill through under urgency and agreeing to these provisions, when National members, day after day, pilloried this very provision when they were in Opposition. Previous speakers have already referred to that. Where is the intellectual honesty of the members opposite, who ought to say, yes, they were wrong to raise this issue in the kind of way that they did. They ought to say they now realise the difficulties and that this provision is needed to overcome them. Some acknowledgment of what Ministers from the previous Labour Government were trying to do in order to use the cell facilities at courts during times of crisis would not be unreasonable.

It would be useful to gain that kind of acknowledgment from members on the Government side of the House, because there is a pattern here: they stand up, use their Crosby/Textor lines—the same thing, time and time again—and simply say nothing has been done in the last 9 years.

Dr Cam Calder: A lot of damage has been done in the last 9 years.

Dr RAJEN PRASAD: The member for Rotorua repeated that earlier. Mr Calder is also making some noises over there. Mr Calder has shown his ignorance of this field already by not even knowing what the research says, and by not being able to give us any example of what he was talking about. The Minister for Social Development and Employment goes on day after day, in an intellectually dishonest manner, saying Labour did nothing for 9 years, but we should look at what the National Government is doing. I advise that Minister to go and talk to her own advisers in the Ministry of Social Development. They will tell her chapter and verse about the actions that were taken to address our society’s social issues, in a manner that she would be impressed by.

Perhaps one day the National members will come to the House and acknowledge what they are having, by default, to acknowledge. They criticised this very provision, yet they are slipping it in before the Christmas break, under urgency, to enable court cells to be used. We are ready to support that, but I look forward to seeing intellectual honesty on the part of members on the other side of the House, so that we can actually work on that basis in the future.

CHRIS AUCHINVOLE (National—West Coast - Tasman): I wish to reflect just momentarily on a comment made in an earlier speech by the Hon Clayton Cosgrove. In his speech, and I have no reason to doubt his sincerity, for we all know him to be an honourable man, he spoke in tender terms—one could only say in tender terms and in fond terms—of the Hon Judith Collins. He spoke of her soft dulcet tones on the radio, her femininity, and her compassionate qualities. I agree with all the things he said except—[Interruption]—I am sorry? No, he spoke eloquently. He always speaks eloquently, but it was nice to hear him speak in such a favourable manner of the Minister. Everybody recognises those qualities in her, but he gave them voice this morning. He also said that he thought she should experience beatification. I have just a small point of correction: I think he meant to say canonisation, that is, to the level of sainthood. I would have thought that he would understand these things, not that he is striving for the same achievement himself. I thank him on behalf of the Minister for the kind compliments that he made. Indeed, I think he has a sneaking respect for the Minister; it was reflected, I thought, on Morning Report this morning when I heard them speaking together.

It is gratifying to know that Labour is in fact supporting the Corrections (Use of Court Cells) Amendment Bill.

Hon Clayton Cosgrove: This is a speech of substance.

CHRIS AUCHINVOLE: I think it is, yes; we can put a little bit of substance into it. Here is a lovely quote from Oscar Wilde:

I never saw a man

Who looked with such a wistful eye

Upon that little tent of blue

Which prisoners call the sky,

We have heard a lot this morning about the mechanics, the economies—

Dr Cam Calder: That was moving.

CHRIS AUCHINVOLE: It was. Well, it is! I used to visit a young Kiwi prisoner in New Caledonia. He was there for some years. I visited him regularly. I have talked to chaplains. I have talked to people who have spent a long time in prison. It ain’t a nice place. Defence lawyers tell me to never let anyone get away with the idea that people like going to prison. They said people never, ever want to go.

Hon Maryan Street: For the last 9 years you’ve been saying what luxury palaces they are.

CHRIS AUCHINVOLE: Well, yes, they can be, and that can happen. That does not mean to say people like being there. The worst aspect of facing prison, as those who have had that experience tell me, is the uncertainty. Over the 9 awful years of the last Labour Government, all of those vulnerable people in the corrections system have had a rotten time. It has been a dreadful period, and the Opposition knows it. I will not start to list the dreadful series of events that occurred in corrections during the period of governance of the previous Labour Government. Thank goodness for National, thank goodness for Minister Collins, and thank goodness for the common sense that is now being applied to the use of court cells. Thank you.

A party vote was called for on the question, That the Corrections (Use of Court Cells) Amendment Bill be now read a first time.

Ayes 112

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Māori Party 4; Progressive 1; United Future 1.

Noes 9

Green Party 9.

Bill read a first time.

Second Reading

Hon CHRISTOPHER FINLAYSON (Attorney-General) on behalf of the Minister of Corrections: I move, That the Corrections (Use of Court Cells) Amendment Bill be now read a second time. I begin by thanking the various officials who have worked on this issue and on the bill that is now before the House. They have provided valuable support in ensuring that the Government’s priorities of ensuring public safety and providing value for money are reflected in the approach that is being taken. Those priorities are reflected also in the commitment the Government has shown to improving the provision of drug and alcohol treatment in prisons, and to improving the provision of education in prisons, particularly in literacy and numeracy.

In the long term, those measures—coupled with the various other initiatives in the justice sector being promoted, particularly, by the Minister of Justice—will reduce the growth of the prison population. Reducing the rate of growth of the prison population is the Government’s preferred long-term approach to the corrections portfolio. However, in the short term, measures to increase capacity in the prison system and the flexibility of the prison system, such as those in the bill currently before the House, are necessary to ensure that public safety is preserved.

This bill allows the use of court cells that have been gazetted as parts of corrections prisons, notwithstanding the provisions of local district plans. It addresses an anomaly that was identified by the previous Government, and provides increased flexibility in managing the increasing prison population. I commend the bill to the House.

Hon CLAYTON COSGROVE (Labour—Waimakariri): I want to make a couple of observations about the nature of the Corrections (Use of Court Cells) Amendment Bill. As I have said, Labour will support it. I thank the acting Minister for what has been the only semblance of a speech of substance and logic to come out of the Government thus far in the process. We had a rendition from somebody akin to a cross between Uncle Fester and Captain Mainwaring in the form of Mr Auchinvole talking about all manner of things, but he did not provide any justification, substance, or even any logic—

Hon Steve Chadwick: Or any meaning.

Hon CLAYTON COSGROVE: —or any meaning to support his own case.

I will turn to the regulatory impact statement. I have taken some advice, having read the very brief six or seven lines that it appears to be. In that regulatory impact statement, there is no regulatory impact statement. There is a reference to a website, which is a very long-winded website; in fact it takes up 3½, nearly 4, lines. I am advised that that is quite unusual. Normally in a piece of legislation, even a short piece of legislation, one would expect a summary of the regulatory impact statement. One would expect some sort of summary of the facts around the regulatory impact statement. This bill is printed on one A3 piece of paper. I know we are trying to conserve trees in this environment, but there is a little bit of space at the bottom, actually, where I would have thought the Government could have put some words in. When one goes to the website, one sees an exhaustive three or four pages of regulatory impact statement hidden away. One has to ask why that is the case. I am advised that not 24 hours ago the URL link had not been inserted into the bill. That is how rushed this process has been.

I raise that issue because it is more evidence that this Minister does not have a plan or a logical strategy to deal with the prison muster numbers. As I said in the first reading, she has had the reports for 12 months. Prior to the election her party said that if it implemented all its law and order policies it would double the then prison muster—double it. So even before the election—over 12 months ago—this Minister and her party were planning for a doubling of the prison population, yet there was no plan as to where to house them. There was—and still is, I believe—a commitment to build at least one new prison, though we have heard and seen nothing about it. This just provides further evidence, with 7 or 8 parliamentary days to go, of how rushed and unplanned, with a lack of management, a lack of foresight and thinking—

Carmel Sepuloni: A shambles.

Hon CLAYTON COSGROVE: It is a shambles, my colleague says, a bit like the emissions trading scheme.

Hon Member: You’re voting for it!

Hon CLAYTON COSGROVE: Yes, we are voting for it to get the Government out of a hole. It could have put up these proposals 12 months ago, put in place a prison muster plan and a prison build plan—a proper prison—

Hon Steve Chadwick: Integrated strategy.

Dr Cam Calder: With respect, you could have done that yourself.

Hon CLAYTON COSGROVE: My colleague is right. That is a big word for Mr Calder. He says we could have done that ourselves. Well, I tell Mr Calder that the problem is that we did. We built four prisons. We were criticised by Mr Calder, who I think was doorknocking for Judith Collins or something way back then. We were criticised by Judith Collins because Mr Calder’s party said we were not locking enough people up. Does he care to rebut that? No, he will not rebut it, because it is a fact. That is what he said as he doorknocked for Judith Collins: we were not locking enough people up.

Dr Cam Calder: I raise a point of order, Mr Speaker. I submit that the honourable member has no knowledge of what I said when I was doorknocking.

Mr DEPUTY SPEAKER: That is not a point of order; that is interrupting a debate. It is unnecessary.

Hon CLAYTON COSGROVE: That is OK, Mr Deputy Speaker. It proves what a plonker he is, so it is OK. What his party said before the election and what it says today are two different things. I love the Toastmasters. I have helped Toastmasters a number of times to set up little branches around my electorate. It is a fantastic organisation. I mean no denigration by what I am about to say, but I have to say to Mr Calder that this ain’t stage 101; this is a debate of substance about a critical issue. Going through the dictionary late at night, as Mr Calder did, looking for words that start with the same letter and stringing them together does not actually add to the substance of this debate.

I will raise a couple of questions about the shambles that we have and the lack of planning we have around this. I suspect that the member does not know where the regulatory impact statement is; he might be running away to ask his staff to get on the web and look it up. I am happy to give him a copy of the regulatory impact statement, because he probably does not know what it means and he probably does not know where to find it, but it is on the web. In that statement it says: “Cabinet has agreed that the maximum period of detention in court cells would be four days (96 hours).”

As I said, I was talking with a senior person in corrections. I will not name the person, because Judith Collins will bring a machete down on that person if I do. The issues raised are ones of logistics for prison staff, with regard to 4 evenings, 4 days, and 96 hours. I would like to know from the Government—and hopefully we will get to it in the Committee stage—what budget has been put aside for logistics of prison officers. How will they be fed through the court system, for instance? How will prisoners themselves be administered to? What will the accommodations be like for prison officers if they require administrative support while they are there for their shift? What will happen in terms of the day to day interaction between court processes, court staff, and prisoners who are housed for 96 hours? I think those are quite important and germane issues to this debate because, of course, these provisions will effectively take away the right of people who may be living in that area to object. I am sure that they would like some assurance from the Minister as to just how those day-to-day logistical matters will be addressed.

It is not a political point; it is a fair point that communities will want to know. I think it is also a fair point in relation to the security staff—that is, the prison officers who will be charged with dealing with these prisoners and managing them day to day, often in what can be described as very confined circumstances where they do not have the logistical support they would have had if this Government decided to start building a new prison as it promised to do.

So there are some issues in here. As I say, I find it very strange—in fact, I am told it is unheard of—that the regulatory impact statement is not contained within the bill, but is ferreted away and buried on a website. The URL was not even inserted in the draft that I have of the bill, which I received, somewhat prematurely, before it came before the House. I just wonder why. Is there any devil in the detail? Of course, when one finds the paper, one sees that it notes and acknowledges that there are a number of risks in respect of use of prison cells. So I just raise those issues as a matter of course.

Sandra Goudie: Mr Speaker—

Hon CLAYTON COSGROVE: Talking of premature! I just raise those issues as a matter of course, and I seek some assurance from the Minister. She or Mr Finlayson may be able to get some advice from the staff and explain to us without breaching security how in metropolitan areas, without the logistical support of a prison itself, these individuals will be managed day to day, and what protections are in place for the staff.

I hope as we progress through the second reading that we might actually get a speech or two of substance from the opposite side of the House. I would be very interested in some of them; I think Mrs Goudie is in the starting blocks ready to go. I wonder whether Mrs Goudie will address some of the points I have made, like what she said before the election, instead of getting up and saying that the Government of the day did nothing. No, we built four prisons. Those members say that the Government of the day did not lock enough people up—well, we did, and now they say there are too many in there. I wonder whether they will address what the plan is going forward, and why this bill, which is pretty simple and has the support of most of the House, is brought to us 7 or 8 parliamentary sitting days before the election, incomplete though it is.

Dr Cam Calder: Before what?

Hon CLAYTON COSGROVE: Sorry, before Christmas, I should say. God willing, there would be an election! After we have had the emissions trading scheme and the shonky deal with the Māori Party and others, I think it would be a cracker to get on the stump and debate some of these issues. I can only live in hope. I hope we actually get some of those answers from the members, especially the member who purports to be the chair of the Law and Order Committee.

SANDRA GOUDIE (National—Coromandel): Is it any wonder that I tried to take a premature call after Clayton Cosgrove’s address? The previous Government never did do anything about the drivers of crime. This legislation is a new initiative from this new National Government, which will make—and is currently making—a difference, just by the fact that we have started that whole process of addressing the drivers of crime. While we are looking at the drivers of crime, we are also making sure that New Zealanders feel safe in their beds and in their homes.

This Corrections (Use of Court Cells) Amendment Bill is a sensible solution. You know, Opposition members think it is a sensible solution, because they are supporting it, so we have to wonder what on earth they are rabbiting on about in the House. They are raving on in the House when it is quite a simple, straightforward bill, and when they are supporting it.

I will cover a couple of matters in regard to the bill. Clause 3 states: “This Act amends the Corrections Act 2004.” Clause 4 amends section 32 by inserting new subsection (2A), which ensures that if a cell block is declared by notice in the Gazette to be part of a corrections prison, then section 9 of the Resource Management Act will not prevent that cell block being used to detain prisoners. That provision is pretty sensible, and the Opposition must think it is pretty sensible, otherwise it would not be supporting it. So that is great; everybody is in accord.

Clause 5(2) makes a consequential amendment to section 4 of the Resource Management Act, to signal that “Section 9 does not apply to the detention of prisoners in a court cell block that is declared by notice in the Gazette to be part of a corrections prison.’ ”. So I can see no reason why there is so much kerfuffle by the Opposition when it is supporting this bill. That kerfuffle is just bombast on its part.

CARMEL SEPULONI (Labour): I will respond to a few of the claims that have been made by Mr Calder and Sandra Goudie with regards to increases in crime. The perception has been put out there by this National Government that under the Labour Government crime increased. Let us look at the facts. A report from the University of Auckland states that crime decreased under the Labour Government. A New Zealand Herald article in April 2008 stated: “The New Zealand crime rate remained flat in 2007, while police resolved almost 10,000 more offences than the previous year.” That article stated: “New Zealand recorded its lowest murder rate for a decade at 45, with 41 resolved before the end of the year.” It also stated—I touch on this because Mr Calder brought it up—that “Overall the picture was less rosy” with regards to violent crimes, but “This is not surprising when we take into account that there has been a huge focus on family violence with publicity and media campaigns designed to reduce tolerance for such offending,”.

It cannot be held against the Labour Government that we did something with regards to family violence and domestic violence. It cannot be held against the Labour Government that women all of a sudden decided that it was OK to come out and report to the police that they were getting beaten by their husbands. We cannot be accused of doing anything wrong when we did that over the last 9 years. Perhaps violent offences increased in terms of reporting, but it is not due to anything done wrong by the Labour Government; it is because of the work that we put into ensuring that women felt safe coming out and reporting against family violence.

I will touch on just how safe this bill is with regards to our courts. “Just how safe is it in court?” is an article that came out in the Manukau Courier in April 2009. It discussed the fact that “PSA national secretary Richard Wagstaff says there aren’t enough officers to cover the three courts at all times.” He discussed the fact that the shortage is “mirrored at courts across the country and threatens the safety of the public”. He said: “They need an extra three security staff to enable them to cover the three courts at all times.” The article goes on: “Mr Wagstaff says public demand is increasing yet the government has put a cap on staff, which is ‘a recipe for disaster, and in the case of our courts and our probation service, threatens the safety of the public’.” This is an issue.

We support the Corrections (Use of Court Cells) Amendment Bill because the Government is in crisis and crime is on the increase. We know that a big part of that increase is due to poverty. Due to the high unemployment rates under this Government, we are seeing an increase in the number of people committing crimes. Prisons do not have the capacity to deal with them. We support this bill, but only because this Government is in crisis. Therefore, there is no other option with regards to the safety of the public. However, that does not mean that this will be smooth sailing for the Government. There are huge issues here with regards to the numbers of security officers in our courts, and also with regards to the unrest that has arisen in recent months amongst the justice staff members about their working conditions. If the Government does not address those things then we will be in serious trouble when this legislation goes through. We will see an increased number of prisoners pushed to the cells in the courts because they cannot be held in our actual prisons.

I pointed out earlier, and I point out again, that last night what we may just as well call the “Privatisation of Prisons Bill” went through. The National Government was saying that the Corrections (Contract Management of Prisons) Amendment Bill would result in safer, better, and cheaper prisons. How can they be safer and better when anticipation of a huge overflow results in the need for this Government to push this legislation through quickly so that it has cells to house the prisoners because the prisons will not be able to hold them? I cannot see how the private prisons that it says will be the remedy to what it perceives as all its problems will be any sort of remedy when we are seeing more legislation to deal with the overflow. The prisons that the Government is talking about improving will not be able to cope with the sheer numbers.

I will go back to the issue of our court staff and our justice staff. There was a New Zealand Herald article. Again, it was not long ago, at all—it was only Tuesday, 17 November 2009. Our court staff were out on strike arguing for better pay. They were pointing out the fact that they would no longer “continue to accept the ministry’s unjust pay system that’s responsible for their underpayment.”, and the fact that they are working in very poor working conditions. It is this Government’s responsibility to ensure that our public servants are taken care of so that chaos does not erupt in places like our courts. It will be our public whose safety is put at risk, and also that of the security officers who are working these courts.

My colleague Mr Cosgrove brought up the fact that there was an absence of a regulatory impact statement in the bill that we were handed. He also pointed out that this is highly unusual, given the fact that usually it is in the bill. He was advised that it was unusual for a bill not to have it. We looked it up on the website and got a copy. We thought that perhaps there was something there that the Government was a little bit worried about. When we went through what is reported in the regulatory impact statement we found that a couple of things should be brought to the attention of the public. No one would deny that holding prisoners in court cells is not a new thing; there was a way in which that could be done in the past. Now the Government is going to extreme measures to introduce this legislation because it is in crisis.

One of the things pointed out in the regulatory impact statement is that “The preferred option”—this option—“carries litigation risks, in that prisoners housed in court cells may claim that their treatment does not comply with provisions of the New Zealand Bill of Rights Act or other legislative requirements. It is also possible that New Zealand’s compliance with international conventions could be challenged. In this regard, the Chief Ombudsman has indicated that the Ombudsmen may issue adverse reports under Part 2 of the Crimes of Torture Act 1989 if their concerns are not addressed.” Putting prisoners in court cells was done sparingly under the previous Labour Government; it was not done on a regular basis. We did not feel we needed to legislate for it.

When we were in Government—for the past 9 years—we were not in crisis. This Government is in crisis, so it is forced to legislate for it, and we have to support it in that, but this Government will have to face that issue. With the increasing number of prisoners whom they are planning to push into courts cells, there will be a much higher risk that their rights as prisoners and their treatment do not comply with the provisions of the New Zealand Bill of Rights Act. This is especially so given the fact, as I pointed out before, that there is a shortage of security staff at the moment. There is unrest amongst the justice staff because of poor working conditions imposed by this Government. It needs to be highlighted that there are concerns about this that have been pointed out in the regulatory impact statement.

To end, I want to say that last night we saw a bill pushed through stating that private prisons will apparently be better, safer, and cheaper, yet here we are today—and this is ironic—pushing through a bill that will legislate to allow for prisoners to be held in court cells because the Government is anticipating an overflow. It is anticipating that its prisons will not be able to hold the sheer numbers. This is an issue. It is ironic. It contradicts what the National Government discussed last night. Mr Mallard discussed the “h” word before; I will not bring it up. We support this bill because the Government is in crisis, but we have a few concerns that the Government will have to address.

JOHN BOSCAWEN (ACT): I had not been intending to take a call in this debate. I will be very brief. I will make three points. First, I have never heard such a load of rubbish in my life. Carmel Sepuloni has just said that the Labour Party is voting for the Corrections (Use of Court Cells) Amendment Bill because the Government is in crisis. Well, I invite Labour members to vote against the bill. Because the ACT Party supports the bill, it will be passed into law whether or not the Labour Party supports it. The Government does not need Labour’s support. It is welcome to give it. It is a good bill. But I have never heard such a load of rubbish in my life. Thank you.

SHANE ARDERN (National—Taranaki - King Country): Following on from the comments made by my ACT colleague John Boscawen, I am reminded very much of how awful it is in Opposition when one is voting for something but one is required to give a 10-minute speech putting forward the reasons why it is not a good idea. That is the reason we fight so hard to get into Government; it is so much better to be on this side of the House.

I say to my colleagues on the other side of the House who have debated the Corrections (Use of Court Cells) Amendment Bill so far—the Hon Trevor Mallard and the Hon Clayton Cosgrove, who have come up with all the reasons why this bill is not a good idea, but who are supporting it—that they have missed one point. This Government has now been in power for 1 year. They were in power for 9 years. They talked of the prisons that they opened during the 9 years they were in power, but they forgot to mention that they also closed some prisons.

The question that has not been raised so far, given the importance of this bill because of the overflow from our prisons and the crisis that has been created as a result, is why they closed Ōhura Prison in the King Country during their time in Government. When we drill into the reasons they gave for doing that, we find that they argued that they could not get prison officers to live out there. Well, in the end, that was true, but why was that? It was because a decision was made 12 to 18 months prior to the closure of that prison to sell off the prison houses. Of course, when prison officers apply for a job they look at the whole package. They have to consider where they would live, how they would get there, and what the salary was. They found they would have to go out to Ōhura and try to find suitable accommodation for their wives and families, and, of course, it was not available. Talk about a self-fulfilling prophesy! The selling of prison houses, making them unavailable, was a nationwide decision, and in Ōhura the one-size-fits-all approach did not work.

And it was a tragedy. When I look back at it, I realise that the kind of people who generally make themselves available as medium-security or low-security prison officers are the kind of people who like a recreational sort of life. They might be hunters, fishers, foresters, or have other, similar hobbies that they do outside of their hours of work, and Ōhura was perfectly located for that type of person and that type of lifestyle. However, the decision was made, the prison was closed, and now we are here debating a bill under urgency to allow court cells and other temporary facilities to be used to accommodate the overflow of prisoners.

I would be interested in comments from the Hon Clayton Cosgrove, or from anybody else who wishes to take a call, to explain the merits of that decision. When Tony Ryall was the Opposition police spokesperson he identified a looming problem in terms of the growing prison numbers and a lack of construction of new prison facilities. So after 9 years of Labour we are now debating under urgency the need to allow the temporary accommodation of prisoners in facilities that could arguably be described as unsuitable for long-term corrections activity. The Government is aware of that, and it is moving to look at all options as quickly as possible. I am sure that the National Government will find a solution to it.

Dr RAJEN PRASAD (Labour): Mr Boscawen might not have read the regulatory impact statement, but Carmel Sepuloni was referring to the fact that managing the prison muster is in crisis, hence the necessity to pass legislation to enable this to happen. Therefore, there is nothing disingenuous about that; it is a fact. Why would we not support something when it is a reasonable thing to do and when it is something that we also find necessary to do? What is disingenuous is what members opposite used to do when this matter came up under the Labour Government. They would pillory this very kind of provision. What we do not see is a little bit of humility from them. Maybe they could apologise and say they can see why it was necessary. I know that Mr Ardern has had more experience of being in Opposition than we have. It is something he ought to think about. We do not intend to become as experienced at that as members opposite are.

Members opposite have taken this opportunity to legislate a simple provision under urgency. It would have been easy to get through this without too much complication. Members opposite have taken this as an opportunity to say, time and time again, that in the 9 years of the previous Government it did nothing about violence and crime. I do not know where those members were when day after day, year after year, and term after term, the Labour Government did bring forward many pieces of legislation and significantly resourced the addressing of crime. Mr Calder talked a lot about the increase in violent crime. As I said in my first reading speech, he displays his own ignorance about the figures for violent crime. I want to spend a few minutes educating members opposite about the figures for violent crime.

We indeed know that the majority of violent crime shown in those statistics emerged out of domestic violence; we know that to be the case. How did that happen? Did it happen because of 9 years of inactivity by the last Government, or did it happen because year in and year out Ministers and their ministries were working very, very hard to try to understand what some of the drivers were, what needed to be done, and how to bring everybody together and start a programme that in perhaps the next 10 years—because that is how long it would take—would achieve the necessary changes?

Mr Ardern and Mr Calder might not know about the family violence task force and the work that it did to try to find out what New Zealand society should do about violence. It brought all of the information together. It joined up all the agencies possible. I know, because I led the Families Commission at that time. We were key players, and the member’s party exempted itself from the multiparty group. So I say to members opposite that they did nothing to assist in solving the problem when they were in Opposition. In fact, they obfuscated it. They stood on the sidelines and criticised very, very reasonable efforts.

The task force started in December 2004 and it went through for a period after that. That task force, comprising all of the Government’s social agencies, plus the non-governmental organisation sector, has spent a lot of energy, effort, intellectual ability, and resources to begin to address those issues. I say to Mr Ardern that one of the major messages was that one must not live with violence in one’s domestic situation, that one must report it and find assistance. That has caused the major rise in the reporting of domestic violence. The member might want to talk to Mr Calder and explain it to him, so that members opposite can understand and stop this nonsense. It is intellectually dishonest. Ministers and members opposite ought not to do that, because it does them no justice and it does this Parliament no justice. It is a form of dishonesty that is just incredible to behold in this age.

I will go further and say that this Government has changed not one aspect of that programme. In fact, the Government’s programme to address domestic violence is exactly the same programme that the Hon Ruth Dyson led as a Minister, and other Ministers supported it at the time. At one point half the Cabinet Ministers were members of the ministerial group to which the task force was responsible. Maybe the next Government speaker can clarify for us whether that is still the case and whether the member’s Cabinet puts that much emphasis on it, because nothing has changed. The task force works on the same programme. The It’s Not OK campaign works in exactly the same way. The community-led initiatives work in exactly the same way. The member’s Government has added nothing to it, except for on-the-spot protection orders, I think. Labour members supported that measure as well. It was a slight tweaking of something that was already there.

Time and time again ethnic members in National—Mr Bakshi, Melissa Lee, and the Hon Pansy Wong are in the Chamber—

Hon Pansy Wong: Good morning.

Dr RAJEN PRASAD: Greetings, ni hao. Those members speak to ethnic audiences, and what do they do? They tout their achievements in reducing violence in our society, even though it is inappropriate to do so in many, many situations, where members of the audiences do not want to hear about the Government’s work on violence. They want to hear Government members celebrating those cultures.

Hon Pansy Wong: They love the Government.

Dr RAJEN PRASAD: But time and time again, I say to the Hon Pansy Wong and her colleague, that is what those members do, and their audiences are just bored with it. It is time to stop doing that.

Members opposite have also been criticising this provision, which we used and which they now want to use. Of course, members opposite want it for a purpose. We would like to hear for how long the Government intends to use this provision. Is it for the summer, because by that time the Government will have solved the problem? Is it for another 6 months, because by then it will have found the answers? Is it for only 1 year, because by then all of the Government’s new systems will be in place and it will have resolved the violence issues in our society? Or will it be for all of the Government’s term? I ask whether members opposite intend that this will be their policy for the rest of their Government’s term—because it will be their last one—and if it is not, then I ask what else they are putting in place. Members opposite have made this a violence issue. Members opposite have turned this into something that the Government is now guaranteeing. Members opposite are guaranteeing to New Zealand society that in your term you will have resolved this—

Mr DEPUTY SPEAKER: Order!

Dr RAJEN PRASAD: My apologies, Mr Deputy Speaker. Will the Government members opposite have resolved this issue in this period of time? I would put money on there being no guarantee that they can give that this provision will still be there.

Todd McClay: How much?

Dr RAJEN PRASAD: Mr McClay can take me on; I will see him in the lobby afterwards. I would put money on it that this measure will not improve the situation. This is a generational shift we are talking about. Our society is violent, and there is much that we need to do about that. It is inappropriate for members opposite to promise that they can do much better. This will come to haunt their policies.

Sandra Goudie: Ha, ha!

Dr RAJEN PRASAD: Sandra Goudie may smile, but what the Government is doing is explosive. It is appealing to the negative side of life.

SUE KEDGLEY (Green): I will speak briefly on the Corrections (Use of Court Cells) Amendment Bill. The Green Party will be opposing it. It is an extraordinary bill. We have court cells to house the people who are being taken to court, and suddenly these cells are to be used to house prisoners.

Hon Member: Shock, horror!

SUE KEDGLEY: Well, it is an indictment on the prison situation in New Zealand. I believe we have the second-highest number proportionally of prisoners locked up in jail of any nation in the world. We are second only to America. My understanding is that for every prisoner locked up for a year, it costs $70,000. We are all fretting about budgets, but no one is worrying about that cost. We just keep pouring people into jails and it costs $70,000 a year per prisoner.

But the problem, or the crisis, facing the Government is where to put the endless number of prisoners who are going into our jails. Now we will take court cells, which are normally used for people who are being taken to court, for this purpose. The first question I have to ask is what will happen once they are all filled with our prisoners—and, mark my words, they will be. The bill talks about occasional use, but this bill being rammed through under urgency will allow court cells to become de facto prisons. When our court cells are filled with prisoners, where will the people who would be in those cells because they are being taken to court go?

Hon Mita Ririnui: Caravans.

SUE KEDGLEY: Will we now have caravans outside our courts in an attempt to house those people because all the court cells will be overflowing with prisoners?

This bill is an absolute indictment on where we are in New Zealand with regard to this issue. Our prisons are overflowing but all we are doing is treating the symptoms and pouring more and more prisoners into jail, when we should be looking at early intervention, rehabilitation, finding non-custodial interventions for minor non-violent offending, and so on. We should be looking at rehabilitation and at the roots of crime. We know very well that the more unequal a society is, the wider the gap between the rich and the poor. The more that we have entrenched poverty, as we do in New Zealand, the more violence will occur and the more we will have prisoners. So why do we not deal with the root causes of why we have the second-highest number of prisoners in jail in the world, instead of resorting to these ludicrous situations such as turning our court cells into new jails? We will now have courts that are effectively jails. This is completely absurd.

The bill also breaches the Resource Management Act. Normally we cannot just turn a court building into a prison because that would breach that Act. There would have to be a specific amendment or an allocation of land for the purpose of a prison. This bill will grant a Resource Management Act exemption so that nobody can challenge or even be consulted when a court building is to be effectively converted into a prison in his or her neighbourhood. People will wake up and find that the courthouse they have been living near will now effectively become a dual-purpose building—a prison and a court—and they will not be able to offer any objection because of the exemption in this bill.

This is an indictment and the Green Party is horrified. I am certain that this bill will breach not just our human rights legislation but also international legislation. I would be grateful if the Minister of Corrections could confirm what human rights legislation the bill breaches and could tell members how the Government is planning to circumvent breaching that legislation. I ask where the Government will find room to accommodate the people who should be in the court cells, and I ask what impact turning our courts into jails will have. What will we do when the court cells are all filled up? This is completely ludicrous. We have double-bunking and we have containers to house prisoners being erected around New Zealand. As some of the earlier speakers have said, we have an absolute crisis that shows the absolute failure of our approach to reducing prison numbers. The number of prisoners is escalating. It shows the failure to deal with the root causes of the issue. It shows that this is the inevitable consequence of the ever-widening gap between the rich and the poor in New Zealand, and the entrenched poverty we have.

There is one other point that I keep mentioning, and it is completely ignored. It is well established that if violence is screened continually on television, as it is here, it legitimises violence and encourages young boys in particular to think that the way to solve problems is through violence. The Green Party secured funding to do some research on this issue. Thousands of studies have confirmed the findings that prolonged exposure to incidents of violence on television normalises violence. Violence is shown in cartoons. There are up to 16 episodes of violence in an hour of cartoons. Violence is saturating our television and it is encouraging the normalisation of violence in our society. We are bringing up young men to think that violence is a legitimate way to solve conflict. Is this Parliament trying to do anything about that? Is it doing anything to reduce the amount of violence that pervades our television sets? It is one of the root causes of violence. Are we trying to do anything about that? No, no; the two main political parties thump the anti-crime drum. Their members rush up and down the country. National and ACT in particular join with the Sensible Sentencing Trust in beating the anti-crime drum, but they do absolutely nothing to reduce the causes of violence. A very simple cause of violence is the amount of violence shown on television. There are many ways we could be reducing the amount of violence shown on television. We could require that programmes that are filled with violence are screened only after 10 o’clock at night. We could be doing many things like that. But no, we are not doing anything to address the root causes of violence.

We are creating a society that is ever more unequal. We are entrenching poverty, as the report yesterday pointed out. Then we worry, and wonder why our prison population is out of control. It is one of the fastest-growing in the world—the second highest. What will we do next? We have turned the courts into prisons, we have double-bunking in prisons, and we have containers around the nation for prisoners. When will this Government and this Parliament address the root causes and look at the whole issue of rehabilitation, early intervention, and finding other ways to reduce the number of prisoners and the amount of crime in New Zealand?

KANWALJIT SINGH BAKSHI (National): I stand in support of the Corrections (Use of Court Cells) Amendment Bill. First of all, I would like to tell Dr Rajen Prasad that Indians do love this Government and really welcomed us. They were really disappointed that the last Government did not do anything about violence or anything about crime. This bill provides for the Department of Corrections to imprison prisoners temporarily in court cells. Court cell blocks have basic facilities, and an extended period of detention in such conditions would compromise prisoners’ rights to humane treatment. In order to ensure that all prisoners are treated humanely and receive the statutory minimum entitlement, it is proposed that an amendment to the Corrections Act limit to 4 days the length of detention in a court cell. Prisoners under the age of 18 years and disabled prisoners will not be accommodated in court cells. I commend this bill to the House.

A party vote was called for on the question, That the Corrections (Use of Court Cells) Amendment Bill be now read a second time.

Ayes 112

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Māori Party 4; Progressive 1; United Future 1.

Noes 9

Green Party 9.

Bill read a second time.

In Committee

JO GOODHEW (Junior Whip—National): I seek leave for the Committee on the Corrections (Use of Court Cells) Amendment Bill to take the bill as one question.

The CHAIRPERSON (Hon Rick Barker): Leave is sought to take the bill as a single question. Is there any objection to that course of action being followed? There is no objection. We will take the bill as a single question.

Clauses 1 to 5

Hon CLAYTON COSGROVE (Labour—Waimakariri): I have a couple of questions for the Minister of Corrections, Judith Collins. I think that the Minister in the chair, the Associate Minister of Justice, Nathan Guy, will be able to answer them. The first question is with regard to the points that I made in respect of the regulatory impact statement. The Minister will know, presumably, even though he is a new Minister, that it is normal in a Government bill to have a reasonably robust regulatory impact statement. In fact, his colleague Rodney Hide, who holds the portfolio as regulatory tsar, pledged to the nation that he would cut through all the red tape and ensure that the bills that came into this House had been tested for their efficiency, that they were needed, and that the regulatory impact statements stacked up. The purpose of a regulatory impact statement is to test the strictures around bills like this. I would be grateful to know whether this bill got through Rodney Hide’s detailed gaze—whether he actually did his job and looked at it.

The problem we have with this bill is that it may well have made history in that there is no regulatory impact statement in it. There are a couple of lines that point to a regulatory impact statement, and there is the heading “Regulatory impact statement”. But until less than 24 hours ago—I know this, because a copy of the bill was given to me earlier—there was not even a URL included in the bill to link it to the actual regulatory impact statement that I have in my hand and that appears on a website. I would like to know why. I am sure the Minister will give us a long dissertation in this respect, because it seems to me that this proves the bill was rushed through.

The other issues I will raise with regard to the regulatory impact statement relate to some of the points I made earlier. Cabinet has agreed, on page 3 of the regulatory impact statement, that the period of detention in court cells would be for 4 days, or 96 hours. This legislation takes away the right of people to object to the use of court cells for the 96-hour period. It streamlines the process, and we will support that, for obvious reasons. But I think it is incumbent upon the Government to explain to this House and, through it, to the people in those communities that have courthouses that will be used—I think there are some 100-plus cells, if I am correct—how the logistical arrangements will be put together.

How will these folk be fed? Will prisoners be shipped out during the day when the court sits? How will prison officers’ logistical and security needs be dealt with? Where will the extra staff come from and who will pay for them? Where will the money come from? Who will administer to these prisoners whilst they are on additional sites in our courts? Will they be shipped out and back to prison during the day, and then shipped back to the court cells in the evening? How will they be fed, watered, and showered? Those are basic issues. I do not think that any of our courts have those logistical provisions. Court cells have very basic sanitation, but they are holding cells for people appearing before court, not accommodation for an overnight stay, let alone for 4 days. I would be interested to know how that will occur.

I ask whether there will be extra security, given the classification. Presumably these are low-classification inmates, but I ask whether there will be extra security for the 4 days that they are housed in court cells. I think that the Minister of Corrections does not know, even though this bill has been rushed through in urgency, because the Minister had no foresight to forecast and to look at the forecast that she is handed every day, if not every week.

We are in the last 8 sitting days of Parliament, dealing with what is a pretty simple issue but one that has risks, as noted in the regulatory impact statement. Those risks are acknowledged by the Department of Corrections, so I would be grateful if we could know where the extra budget allocation is coming from for staff, because there will have to be one. Presumably, it comes out of baseline funding, so I ask what else will slip. I ask what other sorts of costs there are, because there is no reference at all to costs in the regulatory impact statement. What sorts of costs will be put upon the taxpayer for the transfer of prisoners and for the other logistical arrangements that are required? The Minister should answer these fundamental questions.

Clauses 4 and 5 are pretty self-explanatory—we know what they are about—as are clauses 1, 2, and 3. But we need to know about the detail and the processes contained around this bill and the day-to-day logistics and requirements of security arrangements if this legislation is to be implemented. I am particularly concerned about the safety of prison officers. I ask how those issues will be dealt with where prison officers do not have the logistical or security support that they would have in a prison. These are not prisons, these are court cells. I ask how that matter will be dealt with, and what the added security for prison officers is. What arrangements will be put in place to assist the people who are at the front line?

If the Minister of Corrections does not respond to those questions, then we have to assume that the questions are unanswered, that there is no planning in place, that this is just part of the rushed process of this bill, and that those planning arrangements will be cobbled together in the same sort of shambolic way that this legislation has been as we move through to Christmas. We know generally that the prison release policy takes place pre-Christmas, and normally a little bit of space is created. The regulatory impact statement also points to this legislation being used in the early part of next year.

I would be grateful if the Minister could give members and the communities those assurances, because we know that these court cells are just basic holding cells. There are security issues for staff and basic transport and security issues for prisoners, and the welfare of staff and prisoners has not been addressed. Will we ship prisoners off to the local football club to be showered? Will they be transferred back to a prison nearby during daytime hours so that the court can function, and then shipped back in the evening? I ask what the cost of that will be. Where are the extra personnel who will have to do that task, and where are the extra vehicles and all the other ancillary services that we will need? I would be grateful if the Minister would answer those basic questions. I am sure she has a huge knowledge of this bill, and I am sure it will not be taxing, given that it is only five clauses long and fits on one A3 page.

SUE KEDGLEY (Green): There are quite a number of questions that the Committee deserves an answer to in addressing the clauses of the Corrections (Use of Court Cells) Amendment Bill. I would really appreciate if we could have some answers from the Government to the following questions.

First of all, does the bill breach the Human Rights Act in New Zealand? I suspect it does. If it does, the Government should explain that. Secondly, does the bill breach any international human rights legislation? Thirdly, now that we are converting our courts into jails, some very practical issues arise. I presume that prisoners in jails have to be fed. I presume that they have to have showers and so forth. Will we have cooking facilities in our courts now? Will we have showers in the courts, so that prisoners can be showered? Where will they have their exercise? Where will the prison guards, who monitor them in these cells, be located? In my second reading speech I asked where the people who normally would be in the court cells—people who have been taken to court—would go. Will they sit on the steps outside, or will there be caravans outside New Zealand courts? We should be given answers to all those questions. This bill is being raced through this House with extreme urgency. Ordinary New Zealanders have no idea that this is about to happen. The debate has been shallow, to say the least, and why would it not be, because we know hardly anything about the issue. The bill is 2 pages in length but, nevertheless, far-reaching in its consequences. So I believe we are owed an explanation of these issues before the bill goes through the House.

How many courts in New Zealand are in residential areas? In many small towns the court is right next to residences, homes, and so forth. How many people will suddenly find that there is a jail next to their homes, in their suburbs, without their consent or without their even being informed? The extraordinary thing is that this bill acknowledges that in most cases it will breach the Resource Management Act, because we cannot turn a court into a jail without breaching most district plans. There are rules about the location of jails. Suddenly, we will breach all of the rules in district plans about setting aside specific areas for jails. Suddenly, we will allow our courts to be turned into jails, and we will grant an exemption so that nobody has a right to be consulted when a court in his or her neighbourhood is to be turned into a prison, and so that nobody can challenge it. Does that sound reasonable? We have a whole resource management process, we have district plans, and we have a very clear process to go through for the establishment of a new prison. We have to go through lengthy consultation, we have to abide by the Resource Management Act, and we have to abide by the local district plan. But, suddenly, we can sweep all that aside with one little 2-page bill and allow courts all over New Zealand to be turned into jails that house prisoners, and we will not inform New Zealanders in advance of that and we will not consult them.

Has a select committee looked at this bill? Have we called for submissions?

Hon Clayton Cosgrove: No, they messed up the plan. It is rushed.

SUE KEDGLEY: Will there be submissions on this? [Interruption] There are not going to be any submissions. This is extraordinary. This bill will significantly affect hundreds, possibly thousands, of New Zealanders. They will wake up and discover that their local court down the road is now a jail, and they will not be consulted or informed about that. This reminds me of the national environment standard on telecommunications that was rammed through Parliament last year. It allows cell antennae, masts, and so on to be erected on any telephone pole anywhere in New Zealand. Mr Mallard rammed that one through. The Greens predicted in this House that it would cause outrage round New Zealand when it went through, when people discovered that cell antennae and masts could be erected anywhere in New Zealand without their knowledge or consent, even though they could affect their health and well-being and their property prices—their property prices could plunge by up to 20 percent. Have we been proven to be correct? Yes. All around New Zealand, groups are outraged. Every week someone else contacts me. Last week a guy in Invercargill discovered that a 15-metre high cell tower was about to be erected across the road. It is a 6-storey tower and no one had bothered to inform or consult him. I was speaking to a woman from Christchurch yesterday. When she took her daughter to school there was no cell tower; when she came home at 3 o’clock to pick her daughter up, there was a cell tower across the road from the school. Is this the sort of New Zealand that we think is acceptable? There is growing literature about the health effects of cell towers. In fact, places like France are taking down cell towers near schools, and here we are putting them up without anyone’s knowledge or consent.

This bill does exactly the same thing. New Zealanders will be gazumped by this measure. They will ask: “How did this happen? How come we have prisoners in our courthouse? Nobody told us about it?”.

Hon Clayton Cosgrove: Bad planning.

SUE KEDGLEY: It is not bad planning. The Government has rammed it through deliberately. Do not put it down to bad planning! How can such a bill not have gone to a select committee? It is about an issue of vital importance to New Zealand. We are converting our court cells into jails, and nobody is allowed to make a submission. Nobody will be consulted on it. Nobody will even be told of this measure. Someone will wake up, go to a courthouse somewhere in a suburb, and suddenly discover that it is a jail.

Would someone please explain how this measure will work? I see that we now have a Minister in the chair, the Acting Minister of Corrections. I ask the Minister to please explain to the Committee where the prison guards who guard these court cells will be. Where will food be prepared for the prisoners? Where will they take their showers? Where will they have their exercise? What about the people who should be in the court cells; where will they be held? Will there be caravans outside our courthouses around New Zealand to serve as court cells? And why will the Government not deal with the root causes of crime, instead of allowing more and more prisoners, overflowing jails, and the second-highest prisoner population in the world? How much is this measure going to cost us? It costs $70,000 every year for every single prisoner that we lock up in jails or, now, court cells.

This bill is an absolute travesty. The Green Party will be opposing it. We expect answers to every single question that I asked.

Hon MITA RIRINUI (Labour): I stand to take a call because I think the timing is probably convenient, if not perfect. As Labour speakers have made it clear, we will be supporting the Corrections (Use of Court Cells) Amendment Bill. However, some issues need to be addressed. I want to acknowledge the issues raised by the Hon Clayton Cosgrove and Sue Kedgley in relation to the impact that safety issues will have on court staff, on the police, and on the general public. As you know, Mr Chair, having been a former Minister for Courts, and having visited courts, court cells are not the most secure places in our communities. They are not intended to hold prisoners for long periods. I know that this bill will require those prisoners awaiting sentence to be held for 4 days only. But there are still issues surrounding holding an inmate awaiting sentence for that period of time. I will not call them prisoners, because they are basically on remand. However, issues need to be addressed.

Certainly the House is aware of the reasons for which the Labour Opposition supports this bill. There were issues that we had to deal with in our time in Government, and they meant that some inmates awaiting sentence had to be held in court cells for a limited period of time. But I wonder why the Māori Party supports this bill, because there has been no clear explanation from them. I take this opportunity, while the Minister of Māori Affairs, the Hon Dr Pita Sharples, is in the Chamber; I know that he is a strong advocate for community justice. I take this call because the Associate Minister of Māori Affairs, the Hon Georgina Te Heuheu, is in the chair, and I do not really know what her views are in terms of retention of inmates in court cells. I hope that both Ministers will take a call.

I know that the Māori Party supported the bill that was debated previously in the House, the Corrections (Contract Management of Prisons) Amendment Bill, and I wonder why that is the case, as well, given that the member for Waiariki totally opposes the establishment of the youth justice facility in the electorate of Waiariki, for ideological reasons. He claims that Māori do not support the prison system and therefore should not support the building of those facilities in communities, yet when it came to voting on the previous bill, there was overwhelming support from the Māori Party. It is the same old story. It is the same story with National, which says one thing when it is in Opposition and does another thing in Government. The Māori Party members say one thing in the community, but in the House they say and do things that are completely the opposite of what they claim they believe in. I hope that the Minister of Māori Affairs will take a call and explain the reasons why he thinks that Māori should be owners of the prison system. That ideology clashes with the traditional Māori cultural view. He is aware of that, as is the Minister in the chair. I wonder why they would not take the opportunity now to take a call and explain why they supported the previous bill that was in the House, and why they support this bill.

Labour members are very straight, up front, and honest about our views about why the Labour Opposition supports the bill that was debated previously in the House, and why we support this bill. We are straight, up front, and honest about why we support that position. We are here to help the Government, because it does not have a clue about what it is doing. It needs help. One year in Government and what has happened? It is scavenging for ideas. This legislation is the best it could come up with. National opposed this type of legislation when it was in Opposition; now it does not have to oppose the legislation, because it is making it law. Well, how about that! What does the member for Rotorua think? Will he walk down the streets of Rotorua and say to the community: “Don’t worry, bros. We will hold you in holding cells for 4 days, but the law says we can do it now.” How will he explain that to the Māori rangatira who supported him in some of the work he has done?

Carmel Sepuloni: I don’t think they supported him.

Hon MITA RIRINUI: They were at his meetings. They ate his food. They drank his coffee. I think we can accept the usual flip-flop behaviour by the National-led Government, but, once again, I really, really wonder why the Māori Party has come here today to be present in the Chamber. I am sure that its constituents are waiting with bated breath to hear why the Māori Party supported not only the previous bill but also this bill.

CARMEL SEPULONI (Labour): I have a few issues with the Corrections (Use of Court Cells) Amendment Bill that are highlighted more effectively in the regulatory impact statement. I have one issue with regard to this point in the regulatory impact statement: “To ensure that all prisoners would receive their statutory minimum entitlements, Cabinet has agreed that the maximum period of detention in court cells would be four days …”. My question to the Minister in the chair, the Minister for Courts, is what happens if there is still not a bed in a prison for them. What happens to them then? Is the period extended in which they are allowed to be housed in the court cells? Where do they go? Will they just be released? Will they be told: “Go home, and we will come and get you when we have a bed.”? What will the Minister for Courts do? That is one question.

My other question is with regards to resourcing and the ability to cater to the needs of these prisoners in the court cells. Four days is quite a long time. In my head I have this visual picture of about 20 prisoners crammed into one cell, holding on to the bars, like we see in American movies. I am just wondering whether that will be the case. Will all these prisoners have their own cells in the courts? Will it be one per cell, or will there be double-bunking or triple-bunking in the court cells? I ask the Minister whether there will be one big cell where we put the prisoners all together for 4 days and just leave them to it. I wonder what will happen there. My colleague brought up the question of shower facilities, washing facilities, and food. How will we feed these prisoners? Will the courts be given a budget in order to feed these 30 prisoners that will be kept in a court cell for 4 days? What will happen, and how do we go about that? Will the security guards leave their post and go out to Pak ’N Save to buy some food to feed the prisoners? I ask the Minister how this will all work. That is what I would like to know.

One of the issues raised was that people who live in neighbouring areas will not be able to make a complaint about this legislation. They will not be able to ring up and say: “Actually, I do not agree with the fact that there are prisoners held in the court cells next door to where I live.” What will happen if—or when—something goes wrong that affects the neighbouring community, and the public’s safety is put at risk because of court cells being in an area where there people around. What will happen then? Will the Government respond to public safety concerns about any incidents that happen? Will it respond to those, how will it react, and what action will it take? I am not sure whether any of these things have been thought through, given that we were presented with this bill only last night and it has not had time to go up for any public scrutiny whatsoever. I think the people who really would have liked to have made a submission on this bill are those who are situated close to a court cell. Those who are living in such an area would probably have some concerns and would have liked to express those concerns in the form of a submission to the select committee. But, unfortunately, the Minister and this Government has taken away the right of the public to have a say on this bill. It is not the first time this has happened; it is something we have experienced on an ongoing basis since this Government got in a year ago.

Chris Hipkins: Standard practice!

CARMEL SEPULONI: It is standard practice. The Government refers to the country when it was under Labour as the nanny State, yet it has pushed through a number of bills that have had no public scrutiny whatsoever because it thinks it knows what is right for all New Zealanders. It thinks New Zealanders do not need to have a say on anything. That is what we call a real nanny State.

Some of the issues that have arisen across the course of the debate have been with regards to security officer numbers and their shortage in our prisons. That has been pointed out in a number of different articles in the New Zealand Herald and in various other sources. I ask what the Minister will do with regard to recruiting a higher level of security officers. Has she increased the budget for security officers in courts so they can cater to the needs of these prisoners; if so, how much did she increase the budget to? We would like to know how much the Government is anticipating it will need.

Hon GEORGINA TE HEUHEU (Acting Minister of Corrections): I rise, not necessarily to answer all the myriad issues that have been raised, some of which I missed the argument on anyway, but to comment on one or two things. As the members on the Opposition side know, this proposal is about enabling temporary accommodation of corrections prisoners in court cells as a last resort where there is insufficient capacity in the prison system. Part of the reason I took this call was to acknowledge the Chairperson, the Hon Rick Barker, who, of course, did quite a lot of work previously in his role as the Minister for Courts to address this very issue of rising prisoner numbers and where and how to accommodate them. That is my first point, and it is an important one.

Sue Kedgley: Where are they going to be fed and showered?

Hon GEORGINA TE HEUHEU: I tell the member I am coming to that. It is not new that we have people in these cells. It is not something new or different that we have never before catered for. As is done anyway with prisoners on remand, accommodation is made to have them showered. They are taken to nearby prisons. Part of the implementation of this is that they do need to be showered and fed, but those things are done anyway.

Hon Trevor Mallard: Soft on crims!

Hon GEORGINA TE HEUHEU: No, we are not soft on crims—not at all. But we do want to make sure that we can house the prison population properly. Issues such as how they will be housed and how they will be fed are interesting to raise but if that member thinks about it, we have to do that anyway. People already use those cells, just not in relation to using them as prisons. The issue about—

Hon Clayton Cosgrove: Cost?

Hon GEORGINA TE HEUHEU: —no, no—double-bunking and triple-bunking is, I think, a red herring. There is no intention for that to occur in the cells. For a minute one could let the imagination run wild with this; I do not know where triple-bunking came from and I do not know how it would arise, anyway. I do not think it is worth spending much more time on.

As I said, corrections brings food into cells because the people who are locked in those cells have to be fed. Exercise will be on site if possible, but more likely they will be returned to the prison for that and for showering. During the day, court proceedings will take precedence, and prisoners will be returned, depending on whether there is enough room in the cells, either to the cells or to the prison.

The real reason I wanted to stand up was to address the issue that I believe was raised by the member Sue Kedgley regarding human rights implications. It is proper that that is raised. The New Zealand Bill of Rights Act 1990 and the International Covenant on Civil and Political Rights affirm the right of every person deprived of liberty to be treated with humanity and respect. The Act and the Corrections Regulations 2005 provide for prisoners held in New Zealand prisons to be treated in a manner that complies with these international instruments, and it is consistent with the United Nations Standard Minimum Rules for the Treatment of Prisoners.

Among other things, this legislation sets out prisoners’ minimum entitlements, requires certain categories of prisoners to be separated—for example youth or unconvicted remand prisoners—and provides access to inspectors of corrections and other complaint mechanisms. All requirements of the Act and regulations will apply to prisoners who are detained in court cells, and these requirements will be met. The proposal to limit the period of detention in court cells to a maximum of 4 days will assist in that regard. Depending on their implementation, because everything is in the implementation, the proposals in this bill appear to be consistent with the New Zealand Bill of Rights Act. We have not ignored it, and I believe that goes some way to addressing the concerns raised in particular by the honourable member Sue Kedgley.

Hon CLAYTON COSGROVE (Labour—Waimakariri): I thank the Minister in the chair for addressing some of the questions, as Minister for Courts. I was interested in a couple of the comments she made. She said triple-bunking does not exist. Firstly, if she goes up the road to a place called Mount Crawford prison she will see that it does exist in some of the cells there. Secondly, the Minister might want to get advice in respect of the Employment Court case—and I will not go into it, because it is a current live court case—that is occurring with the prison service, where I am advised that there are arguments for triple-bunking now.

Hon Georgina te Heuheu: In the cells?

Hon CLAYTON COSGROVE: Well, we do not have triple-bunking outside the cells; we have triple-bunking inside the cells in our prisons. Also, if we can make that leap of faith and if there is an overflow, because there is no reference to it in here, there is no guarantee in the legislation to say there will be one prisoner per cell or two prisoners per cell in a court holding cell. If the Minister is giving us that commitment, I would be grateful if she could reiterate that it is one prisoner per cell. The reason I raise this is that it raises security issues for prison officers. There are a whole series of issues—food, transportation, staff security, and sanitation—that the Minister did not address. The questions we raised were where, how much, where the money was coming from, how many staff would be needed, would it be the case that in order to access sanitation facilities—

Sandra Goudie: This is repetitive!

Hon CLAYTON COSGROVE: I am sorry?

Sandra Goudie: I said this is repetitive, incredibly repetitive.

Hon CLAYTON COSGROVE: It is repetitive for those who are sharing the family brain cell. They are legitimate questions that we should ask. I know that that member, who is the chair of the Law and Order Committee, has not taken a call and did not advocate to have this legislation before a select committee, and now she does not want any questions raised.

The reason why it is repetitive, I say to Ms Goudie, is that we have not had the answers. The Minister has been generous enough, I admit, to address a number of points but the reason we are raising questions is that we cannot do it in a select committee. We can do it only in this forum. If we want to earn our pay, our job here is to ask the questions and to test the validity of the legislation. That might be a bit beyond that genius over there, as she squawks away and has a go at us for doing our job.

Hon Trevor Mallard: She’s one of their brighter members!

Hon CLAYTON COSGROVE: I make no comment on that. I ask the Minister—

Hon Trevor Mallard: She’s one of their more intelligent members!

Hon CLAYTON COSGROVE: My colleague says that she is one of National’s brighter members—well, God help us!

I asked the Minister a serious question: if there has to be food, water—and obviously there does—and sanitation, and prisoners will be shipped out, how far will it be? Will it be 50 kilometres, or 100 kilometres to the nearest prison? I suspect it could be. The Minister’s department will require extra salaried staff, extra transportation, and there will be a cost in the downtime of moving people in and out of the courts, day and night. They will have to do that; the courts operate during the day, so prisoners will have to be shipped out during the day, as the Minister said.

This is my question. Nowhere in the Minister’s statement did she address the issue of cost. I assume that the extra costs for staff, security, sanitation, and transportation will be addressed out of the baseline, because there is no new Budget allocation. Of course, the Department of Corrections is before the court at the moment over the whole double-bunking issue. We know from the chief executive, Barry Matthews, that there are military, logistical plans in place if there is a strike and a lockout—he has told us that. These costs are up in the air. I would like the Minister to tell us whether she will give us a guarantee about “one person, one cell” as the issue of the safety of the prison officers then arises.

Will the Minister also address another issue that I think one of my colleagues raised? If something goes wrong, who will be accountable? We know that the Minister of Corrections is very fond of taking credit for anything that is good news, but when something goes wrong it is an operational matter—“go and see those people in the department.” This bill has not had any consultation; Ms Goudie does not like consultation. There has not been any time to look through it and pick apart the logistics. The bill has just five clauses, but it is the implementation that is more important. What will occur in the circumstances I have mentioned? Will this Minister guarantee that her colleague Judith Collins will stand up and be accountable?

Dr RAJEN PRASAD (Labour): I take a short call to raise three matters. Before I do so I refer to something my colleague Sue Kedgley said. She is absolutely right that there are many drivers of crime. Government members have made the Corrections (Use of Court Cells) Amendment Bill a crime issue as well, so it would be useful if Government members could address this when they are looking at the drivers of crime. Ms Kedgley is right that the notion of television violence ought to be looked at again, because a precautionary risk management approach was recommended some time ago. It ought to be put alongside a host of other factors that result in the rise in crime and criminality. I hope Government members will do that, but I rather suspect they will not, because it is far sexier to take one driver as if it will answer everything. It will not, but that might be what members of the public want to hear in the “get tough on crime” rhetoric that we often hear from Government members.

Clause 4 of the bill seeks an exemption from the Resource Management Act; the regulatory impact statement says that this prevents residents and others affected from challenging overnight accommodation of prisoners in court cells. That is pretty clear. I am not familiar with all of the cells that are associated with our courts around the country, but perhaps the Minister in the chair, the Hon Georgina Te Heuheu, could clarify for us whether this provision applies to all of them or whether some are in such a position that they would be precluded from being accessed through this particular provision. If so, how does the Minister intend to go about regulating for that or making it clear? That might assist those who are losing their rights to take the matter further through the Resource Management Act, and it might satisfy them that their concerns will be addressed if there are good reasons why particular courts with cells in them should not be used for this purpose. I would like to hear the Minister talk a little about that so that those listening can be satisfied.

There is also a reference in the regulatory impact statement to an agreement between the Ministry of Justice and the Department of Corrections. I would like to hear a little more about what is to be in that agreement. It simply says that there will be an agreement, but what kinds of things will be in that agreement? Other members of the Opposition have identified some elements, but there are others as well. What has been the experience of using this facility in the last few years and how will that impact on this particular agreement? What risks are there, and how will those risks be managed?

People have also raised the question of guards and how their needs are to be met. We would like to hear a little more about that agreement between the ministry and the department—

Sandra Goudie: I think we’ve heard enough.

Dr RAJEN PRASAD: I say to Ms Goudie that we have heard nothing about those agreements. Perhaps Ms Goudie has been sleeping. I know she is bored by this discussion, but if she had been following the discussion she also would have raised this question. Perhaps she will raise it in her caucus; perhaps she ought to. Certainly we are not bored by this; it affects people and it affects many in the communities in which we live.

The third point I raise is reasonably serious. The regulatory impact statement states: “it is considered that the option of using court cells for over-flow prisoners needs to be available on an ongoing basis,”. In much of what members opposite have talked about they said that this provision was a temporary thing. But the regulatory impact statement states that it is an ongoing provision; there is nothing short-term about it. We would like it to be clarified whether it will be used for ever or whether it will be used for the short term. We would like the Minister in the chair to address that. Thank you.

Hon Dr PITA SHARPLES (Associate Minister of Corrections): I would like to take a short call on the Corrections (Use of Court Cells) Amendment Bill. We agree with most of the speakers—there are a lot of dangers in this legislation. Although we will support it, we think there are a lot of things that have to be taken care of before it proceeds. I am not worried about the food, I am not worried about the latrines, and I am not worried about the showers. I think those issues can be dealt with. But I am worried about safety. Safety is a major issue. There have been several break-outs from court cells—

Hon Trevor Mallard: I raise a point of order, Mr Chairman. I think we had better check. I think Sir Roger is asleep, but I just want to make sure it is not something more serious.

The CHAIRPERSON (Hon Rick Barker): I say to the member that that is not a point of order, and the member should reflect upon that and what it does for the Committee.

Hon Dr PITA SHARPLES: I would like to carry on after being interrupted by the observant member Trevor Mallard. As I said, those safety issues need to be taken care of. There have been several break-outs from court cells. One was through a window and another was through the ceiling. In fact, I think one of my nephews got away from the Waipukurau prison in that way. I think it is important that 18-year-olds continue to be kept separate from older prisoners, even when in a holding period and not in a semi-permanent period.

This measure has to be temporary; it cannot be any longer than that. Given that those things are taken care of, the Māori Party will support this bill but only as a temporary measure. The reality is that by June next year more cells will be needed to incarcerate the many people who are in there now. We are in this situation because prison numbers swelled under the previous Labour Government. Numbers went from about 5,000 in 1996 to 8,400 now. So I am not saying that Labour is at fault for all of that increase, but, quite clearly, that is what happened over that period.

We need to do something about it, and to me the solution is the work that we do in our society. We have to create stable families. We have to put our effort into the community. It is through education and well families that people will turn away from a life of crime. I think we all have to work on that across parties, as well.

I will humour the member Mita Ririnui as to why I supported the Corrections (Contract Management of Prisons) Amendment Bill last night. I gave two speeches—[Interruption] I guess he must have been asleep at that time, but never mind. I supported the bill for a number of reasons. One of them is that a lot of groups want to go into partnership with iwi and have a joint venture, if you like. Now, the number of Māori in the population has not dropped as a percentage, but Māori make up more than 50 percent of the people in jail. What is there now has not worked, so we should try something different, and that measure is an option.

In terms of recidivism, we have some buildings in the pipeline called Whare Oranga Ake, which is basically a rehabilitation institution. It is still a prison; it caters for the last part of an inmate’s lag. Prisoners will put into a programme of therapeutic analysis so they can analyse their own situation. They will be reconnected with the community and with family. They will be trained in an occupation, and so on. They will live in self-care units for four persons. But they will have to earn their way to get into these units.

The good thing about this whare is that if we have a whare for 32 or 36 people, then the majority of the people will not reoffend. So we are actually creating 32 more beds each time there is a roll-over, whereas right now in prisons we are just refilling the beds, sending the inmates out, and then getting them back in again. To me the first emphasis has to be on the rehabilitation of those inmates in jail now and on attacking the recidivism rate. The second emphasis is to look at alternatives to deal with the prisoners in jail now. Over the years the job of prisons has been to just incarcerate, not to rehabilitate at all. Despite brilliant attempts by a lot of people to do a lot of things, the reality is that the prison system as it is now is a “good guy, bad guy” place where they learn a lot of stuff that is not helpful when they get out.

It is very important to me that we break the cycle of recidivism, but it is also important that we do more than just incarcerate people and then send them out. If prisoners cannot make it when they get out and if the support is not there, they re-associate with the former inmates they have known, and sooner or later it is easier for them to go back to jail. A lot of recidivism is deliberate. They find it difficult to make it out there so they commit a crime, knowing that they will ultimately be caught, and they go back into prison. I have been there when prisoners have been readmitted. I have seen them walking down the corridor.

I remember going to the annex, which is where inmates go for the last part of their sentence before they leave Pāremoremo prison. I remember some guys who were going to go flatting. They were going to do this and that—they were full of ideas and hope. I visited them a month later and there were no light bulbs in the flat, there was no money, and there was no food. They were down in their boots, and they had no jobs. Two months later they were back inside.

I have seen people go back inside, walk down the corridor and say: “Hi, Jim, hi Joe. Still got my guitar? Put me on the list for Christmas.”, and this and that. They are back home again. That is what we are dealing with and that is what we have to break. That is the reason that I supported the legislation last night. Let us try something different, something innovative. Kia ora tātou.

Hon MITA RIRINUI (Labour): I thank the Minister of Māori Affairs, who is also the Associate Minister of Corrections, for his contribution to the Committee stage of the Corrections (Use of Court Cells) Amendment Bill, although I am flabbergasted at some of his comments. He stands up in the Chamber and says that questions about this bill need to be asked and answered. But he is the Associate Minister of Corrections, so he should have all the answers. He should come here and provide the answers. There should be no issues with this bill. The problem is that, as usual, the Minister is not in the loop.

Sandra Goudie: Well, the Opposition is thwarting it.

Hon MITA RIRINUI: I am not surprised that the chair of the Law and Order Committee does not want this bill to go to the select committee. She does not want to hear about the problems that it will create. She wants it to pass through the House uninhibited, without any problem whatsoever. Well, life should not be like that. Any bill that passes through this Parliament without proper and full scrutiny will be flawed.

I take it from the contribution of the Associate Minister of Corrections that the major flaw in this bill is that he did not know anything about it. He may have stood up in the Chamber last night and made some grand statements about Māori owning the corrections facilities, but he has made that statement on a purely commercial platform. He also has this ideology that if we change the nature and the way that prisons are managed, then Māori will not reoffend. Well, life is not like that. We have to deal with the social circumstances that affect these people if we are to reduce recidivism. The Associate Minister of Corrections may have made two speeches in the Chamber last night, but I did not hear them. He thought I was asleep in the Chamber, but actually I was in his electorate listening to the concerns about his performance in the Chamber on the emissions trading legislation, on the two corrections bills, and on a whole lot of other issues that he has failed to deal with. However, he is learning the realities of politics on the front line.

I turn now to the Minister in the chair, the Hon Georgina Te Heuheu. Some very practical issues are involved with this proposal. The Minister raised the first one, and I thank her for responding to the queries raised by the Green member and by my colleague Carmel Sepuloni about the safety issues and logistic issues with the bill. I take it that the Minister probably has not been into a courtroom holding cell, because if she had she would have a better understanding of the way they are constructed. They are far different from prison cells. They are far different from police cells. They are not staffed by trained security people or police officers; they are staffed by court staff. They are staffed by people who are administrators of court procedures and the like. These people are not trained to deal with inmates who are held on remand, awaiting sentence by the courts.

The problem is that the Minister and the Government have not given this proposal a lot of thought. One thing the Minister is very good at is exalting your good work, Mr Chairperson, as the previous Minister for Courts. The Minister certainly seems to know everything about that. I endorse everything she said, and I say well done for that period of time.

I wonder whether the Minister, apart from answering the questions raised by my colleague Rajen Prasad—and there were only three so she should not have any trouble doing that—can take a call on this scenario. She said that inmates will be taken to the nearest prison for showers and other facilities. I suppose she would dial a pizza, and the inmates would be fed. Take, for example, the district courts at Whakatāne and Tauranga, which have holding cells. The nearest prison is something like 3½ hours’ drive away, right next to her electorate office in Taupō and further south in Tūrangi. It seems to be a huge drain on resources to get a security vehicle, staffed by two members, to take prisoners 3½ hours down the road for a shower and then bring them back—and I suppose they will want to go to the toilet while they are there. They might even want to be fed on the way there and on the way back. I know that the Minister’s portfolio is not resourced to handle those sorts of contingencies, because the Minister of Finance is cutting back.

SUE KEDGLEY (Green): I would like to make a number of points about the Corrections (Use of Court Cells) Amendment Bill. The first is that we have been told by the Associate Minister of Corrections—and I thank him for responding to some of those questions—that we should not worry, because prisoners will be held in court cells for only 4 days at a time. I thought that that was interesting, so I looked through the bill, and I found nothing in it that says they are to be used for only 4 days at a time. There is nothing about that in this bill. There is no regulation and no legislation to require that prisoners will be held for 4 days only in court cells. Let us be absolutely clear about that. The regulatory impact statement says that Cabinet has agreed that prisoners will be there for 4 days only. But what will happen if it has another meeting and agrees to extend that time? Cabinet can extend it without regulation, without legislation, without even having to go through the charade of ramming another bill through Parliament under urgency, and without allowing any submissions to be made. It can just quietly agree to extend the time period way beyond 4 days. Let people be absolutely clear that nothing in this bill states that this measure is for 4 days only.

The second point, which my colleague pointed out very well, is that the Government has said that this measure is just temporary. We are told we should not worry, because it is just temporary. But the regulatory impact statement says this option needs to be available on an ongoing basis, so let us at least have a little honesty in this debate. This measure is a permanent one that will be used to convert courts into prisons. It is permanent—it will be used on an ongoing basis. The spin says it is temporary; the spin is that the time period will be 4 days only. But nothing in the bill limits the practice to 4 days, and the issue of prison overcrowding will be ongoing.

One cannot help but wonder what the Government will do next. Once it has converted court cells into prisons, where will it go next? Will prisoners come to Parliament? There are some spare select committee rooms here. Perhaps we could convert those into cells. At least we have some facilities here; at least prisoners could have showers here. At least they would not have to travel for 3 hours to have a shower, as we have been told would be the case with many of the court cells, and at least they could get their food from Bellamy’s. I think that would be a much more cost-effective option than the use of court cells. Furthermore, we have security here, so we could even double up on security. So my suggestion is that we start by looking at using Parliament before we look at using court cells.

One of the things that astonished me is that the Associate Minister himself—in fact, both the Ministers who have spoken—acknowledged that there are huge issues here. There are huge unanswered questions. Nobody knows—

Hon Clayton Cosgrove: Someone talked to the Associate Minister.

SUE KEDGLEY: Yes, the Associate Minister says he does not know the answers to these questions. We have been told that prisoners will travel to the nearest prison to have their shower, but, as some of my colleagues said, that could mean travelling for 3 hours. There is a world of difference between a prisoner going to a court cell for a few hours and a prisoner being kept in a court cell for 4 days and 4 nights. My prediction is that it will be for 4 months—it will be ongoing. Nothing in the bill restricts the length of stay to 4 days.

We have all those unanswered questions. The Associate Minister himself says there are serious security issues here. The court cells are not built as prison cells, so there are huge security issues. The court cells are staffed by court staff. Will we suddenly have prison guards coming in from Rimutaka Prison and so on to patrol and to look after prisoners who are holed up in the court cells? We do not have answers to any of these questions. This is astonishing. A bill is being rammed through Parliament in the dead of night—actually, during the day, I must admit—and the Government has allowed not one New Zealander to be consulted on it.

SHANE ARDERN (National—Taranaki - King Country): I move, That the question be now put.

Hon CLAYTON COSGROVE (Labour—Waimakariri): I want to pick up on something that Mita Ririnui said. It is a serious issue and it raises questions about management inside the Government and inside Cabinet. Dr Sharples got to his feet, said that he was supporting the bill, and that the Māori Party was supporting it—we are not quite sure whether that includes Hone, but I put that aside.

Hon Member: He’s in limbo.

Hon CLAYTON COSGROVE: That is right. Here is the serious issue: Dr Sharples is the Associate Minister of Corrections. He got to his feet, and I concede that he raised some very legitimate questions. He asked for answers. I have a question, through the Chair, to that Minister. He shares an office somewhere down the corridor from the Minister of Corrections. He shares a portfolio called “corrections” with the Minister of Corrections, and, as Sue Kedgley and others pointed out, that Minister, who is a member of the executive, has raised serious questions about a bill that comes under his portfolio. He does not know the answers.

That raises a serious issue. It could mean a number of things. It could mean that he has not read his briefing papers—and we know, from the financial review, that the Minister of Corrections received in the order of, I think, a couple of hundred briefing papers. The Associate Minister of Corrections received 17 in a year. So either he does not read his briefing papers, or—and I suspect that this is closer to the truth—the Minister of Corrections does not communicate with her associate. I would have thought that the Associate Minister would, when he was in the Chamber, be the Minister in the chair, not Georgina te Heuheu, the Minister for Courts. This issue is not within her portfolio brief. I would have thought that the Minister of Corrections would be in the chair, because she knows this bill—all five clauses, one A3 piece of paper, and 3½ pages of the regulatory impact statement on a website—backwards, and she would have been able to rattle off in a microsecond the answers to the legitimate questions around security, transportation, sanitation, and budgetary costs.

Here is the point: the Associate Minister gets up and makes history by questioning his own bill. He worries about the consequences of the actions in terms of implementation in a bill that is under his partial control as the Associate Minister of Corrections. I ask to members opposite what show they are running in a Government, an executive. What is the management around this issue? The bill has been brought in with 8 parliamentary days to go, and the Associate Minister of Corrections has questions. I used to be the Associate Minister of Justice. When the Minister of Justice was not here I often took the chair in the Committee stage of bills. I was expected to be able to answer questions about justice bills. Why? Because the Minister of Justice and I talked to each other, we read our briefing papers, and we took an interest in bills as we had shared responsibility for them.

But today we have made history. The Associate Minister of Corrections gets up, laments, worries, and raises legitimate questions about a bill that he is partially responsible for as the Associate Minister, and he cannot or will not answer those questions himself, because either he was not briefed or he was not treated in a mana-enhancing way. I mean that in all seriousness.

So there is a management issue within this Government. Surely Dr Sharples could take a call and answer his own questions. And I do mean it; I say that to “The Maestro”, Dr Coleman, over there. He has an Associate Minister of Immigration. I wonder whether they talk to each other. I wonder, if there were an immigration bill, whether Kate Wilkinson could take the chair, or whether she would have another folic-acid moment. There is a serious management issue within the executive of this Government. I am astounded that an Associate Minister could not get to his feet and say that he would put up his hand and answer those questions, rather than raising questions himself and saying that those issues have to be satisfied and dealt with.

I ask him where he was when the bill went through Cabinet. Where was he when the bill was drafted? Why did he not raise those issues with his own Minister? Or, if he did, why did she not listen to him? She cannot have listened to him, because he has raised those same issues on the floor of Parliament. He is looking quite legitimately for some parliamentary support, which he has not received from his own Government.

CHRIS TREMAIN (Senior Whip—National): I move, That the question be now put.

CARMEL SEPULONI (Labour): I have to take a call, because my colleague Mita Ririnui did not get to finish the scenario he was putting to the Minister of Corrections. I really need to finish explaining that scenario, because it is a scenario that could happen, and the Minister needs to take it seriously. The Government has not had enough time to consider these types of scenarios, because it has not put the Corrections (Use of Court Cells) Amendment Bill through the appropriate select committee process.

I shall carry on from where my colleague Mita Ririnui was when he finished. The issue relates to courts and their distance from prisons. He talked about courts like those of Whakātane, Tauranga, and Ōpōtiki, which do not have a prison in the near vicinity, and which are quite a distance away from the nearest prison. In fact, to get from the Whakatāne court to the Tūrangi prison, which is the closest prison, takes about 3 hours.

Hon Mita Ririnui: Plus.

CARMEL SEPULONI: It takes 3½ hours. I have an issue in regard to what the Minister said earlier in terms of sanitation and the health of the prisoners. She said that the prisoners will be driven to the nearest prison so that they can shower. We thought about that, and we thought that it would be difficult for the security officers driving the vans to provide the prisoners with food and everything else. Perhaps along the way, on their 3½ hours’ drive in the security van, during which they are listening to Bob Marley and singing, they will drive through Kentucky Fried Chicken and get a feed, and on the way back they will drive through it again so that they can pick up a party pack for the prisoners’ mates back in the court cells in Whakatāne. So on their way there they will get a feed, and then they will get to the prison, where they will have a shower. The security officers will then turn round and drive for another 3½ hours to get those prisoners back to the court cells where they are being held. What if one of the prisoners all of a sudden thinks it would be really funny to soil himself, so that he would have to be driven for another 3½ hours all the way back to Tūrangi to be cleaned up? The security officers would not want to leave him like that; they would not want the other prisoners to feel any discomfort because one of their mates has just soiled himself. I do not know whether the Minister has actually thought that one through, and thought about that sort of scenario. It is the kind of very real scenario that she might be faced with after the Government has brought this legislation through the House.

As I said earlier—and as all the Labour members have said—Labour will support this bill. We are supporting this bill because the National Government is in crisis over this situation. It is in crisis over it. It knows that its prisons will not have the capability to deal with the numbers of prisoners it is expecting due to the rise in crime that is already happening, and the expected further rise in crime. So Labour has to support this bill. We in Labour know that the Government needs somewhere to put those prisoners, and the only option for it is the court cells. This issue has come up before. It is not a new thing; it is something that has happened before. But the National Government is taking it to the extreme in legislating for it, and it is doing that because it is in crisis. Its prisons will not be able to deal with the sheer number of prisoners coming through because of the amount of crime being committed.

My colleague from the Green Party Sue Kedgley brought up a very, very good point earlier on in relation to the regulatory impact statement, which points out that prisoners can be held in court cells for no longer than 4 days—I think it is 96 hours. That is the longest time they can be held there. She pointed out that although that provision is mentioned in the regulatory impact statement, it is not in the bill itself. Therefore, if that aspect of this bill is not fixed up, the Government will be able to house prisoners in court cells for as long as it wishes—for as long as the need is there, for as long as the prisons are in crisis, and for as long as crime is on the rise. More crimes are being committed, and the Government cannot cope with the numbers of prisoners. The Government now can keep prisoners in court cells. That is a real issue, especially given the fact that the public have not had a chance to make submissions on this bill. The public are at risk—that was pointed out in the regulatory impact statement—in regard to court cells holding prisoners, given the proximity of court cells and courts to people living nearby. That has not been addressed, and we need to address it. The public would have a concern about it. So I thank the Green member for pointing out that issue.

She also pointed out that there is perhaps a secret agenda of the National Government to convert the courts into prisons.

CHRIS TREMAIN (National—Napier): I move, That the question be now put.

Motion agreed to.

A party vote was called for on the question, That clauses 1 to 5 be agreed to.

Ayes 112

New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Māori Party 4; Progressive 1; United Future 1.

Noes 9

Green Party 9.

Clauses 1 to 5 agreed to.

Bill reported without amendment.

Report adopted.

Third Reading

Hon GEORGINA TE HEUHEU (Acting Minister of Corrections): I move, That the Corrections (Use of Court Cells) Amendment Bill be now read a third time. This bill makes one amendment to the Corrections Act and a consequential amendment to the Resource Management Act. This bill will provide the Government with increased flexibility in its response to the growing prison population. This bill is part of a range of measures, both short term and long term, that the Government is introducing to help manage the growth of the prison population. Passing the bill before the House rises on 22 December will mean that the changes in this bill can be put in place in time to be used in the new year if necessary. I commend the bill to the House.

Hon CLAYTON COSGROVE (Labour—Waimakariri): This started off as a pretty mundane sort of debate, with Labour supporting the Corrections (Use of Court Cells) Amendment Bill because there needs to be some flexibility in the use of court cells. But as the debate moved forward, a number of legitimate questions were raised about how this five-clause bill would be implemented. The Green members raised questions, my colleagues in Labour raised questions, and the Māori Party’s Associate Minister of Corrections himself, the Hon Dr Pita Sharples, raised questions on his own bill. We will get to that in a minute.

The Minister of Corrections did not take a call in the Committee stage, never sat in the chair, never answered any questions, and now has not taken a call in the third reading. The Associate Minister of Corrections was, presumably, not allowed to sit in the chair to have questions put to him. Rather, he bizarrely raised questions on his own bill. Nor was he, presumably, allowed to read at least his third reading speech as Associate Minister of Corrections. One has to ask why.

As I said in the Committee stage, a number of possibilities present themselves. Dr Sharples says that he and the Māori Party support the bill—presumably Mr Harawira does, wherever he is. We think so, but we do not know. But the most bizarre thing to come out of this debate is something I have not seen in my 10 years in this place, and that was an Associate Minister raising questions on, and expressing dissatisfaction or concerns about, a bill before the House. The question is: why? Either he did not raise those concerns with his Minister or his Cabinet colleagues, or he did raise them and they were completely dismissed, or he did not have his eye on the ball, or he was not shown the respect that an Associate Minister should be shown by his Cabinet colleagues and by the Minister herself. One or a multitude of those possibilities have to be true, because otherwise why would an Associate Minister of Corrections come down to the Chamber and lament, and raise concerns and risks about the implementation of a bill that he is partly responsible for? What is the answer to that? I hope we might have a call from him. Sandra Goudie is over there giving him the benefit of her vast experience and knowledge on those matters, feeding him lines. I think Dr Sharples is not a bad bloke, so I advise him not to take any advice from Sandra Goudie, at all.

Legitimate questions have been raised about this bill. There will be extraordinarily large costs dealing with the logistics of transportation, food, security for staff, and security for the community, especially in relation to transportation. As Mita Ririnui, a former Associate Minister of Corrections, pointed out, it is a 3-hour drive from Whakatāne to the nearest prison. None of those issues have been addressed, and I thought they would be addressed. This bill, in its essence, takes away the right of a community to object. We support that because we have to house these prisoners somewhere, but I would have thought that the Government, or the Associate Minister especially, would use its time in the House to at least address the basic logistical issues of implementation that we and others have raised, to give those communities a level of comfort, especially around the issue of security.

So I just express quite a bit of amazement that the Associate Minister of Corrections has presumably been treated so shabbily by his Minister and his Cabinet colleagues. I cannot see how that sort of treatment being meted out could be considered mana-enhancing according to National and the Māori Party’s coalition relationship. Maybe things are starting to fall apart on the back of the emissions trading scheme, Hone’s comments, and other things. I would have thought that the Associate Minister would at least phone Judith Collins—maybe he has. Maybe between the Committee stage and the third reading he has phoned Judith Collins and said that he has some concerns about this; maybe he asked her to at least listen to those concerns before they tick off the bill. Obviously that has not happened. That says a large amount, and it tells us and the community a lot about the management style and culture inside this Government.

This is a five-clause bill on a piece of A3 paper, bolstered hugely on a website by a regulatory impact statement that was not even included with the bill, because the bill was so rushed. As the Green member and others have pointed out—and I am sure communities will be interested in this—the so-called maximum period of time that we can house a prisoner in a court cell, according to a regulatory impact statement that is on a website but not printed with the legislation, is 96 hours. So the question then is: is it by regulation or Government fiat that those hours and those days can be increased? Maybe the Associate Minister of Corrections might be involved in these future discussions, but I would not bank on it.

I am told by reliable sources whom I trust and who work in the Department of Corrections that, as we speak, some 800 beds are available and free to house prisoners in. I believe those sources because they are in the front line. I will not name them, for obvious reasons: Judith Collins may administer the political version of the crusher. But if that is the case, the question is: why is this bill being rushed through? Why has it taken until there are 8 parliamentary days to go in the year for the Minister to ante up, throw a bill on the Table, and say that we need to do this? It could have had correct parliamentary scrutiny through a select committee.

Carmel Sepuloni: They must need it before Christmas.

Hon CLAYTON COSGROVE: Well, that is interesting. That is the contradiction. Is it required before Christmas? We do not have the prison forecast on this side of the House. If 800 prison beds are indeed—and I believe my sources—available today, then why is the bill being rushed through? Why could it not have been given the parliamentary scrutiny of a select committee? It is a five-clause bill. Ms Goudie reared up and said we were being repetitive. Well, we are. We are raising legitimate concerns that are not rocket science. How will we feed people? How will we make sure prison officers are secure? How will we make sure the community is secure? How long will these folk be incarcerated in a court cell? Where will the money come from to transport them the 3 hours my colleague Mita Ririnui talked about between the Whakatane District Court and the closest prison? Where will the staff come from to do this? What will be cut out of the baseline?

I must give Georgina te Heuheu credit. Even though corrections is not her portfolio—it is Pita Sharples’ portfolio—she attempted to actually answer some of those questions. Given that it is not her portfolio, I extend some goodwill because she made as decent a fist of it as she could. She was not aided or abetted by the Minister of Corrections, and she was not aided or abetted by the Associate Minister, who sat through the whole debate.

This bill is flying through the House, and it will go through with our support, for practical reasons of security, but none of the issues raised by members across this House have been addressed. They are not political issues; they ask how we will transport people, how they will be secured, how prison officers will be looked after, and what logistical arrangements will be put in place for prison officers. They are not political issues; they are practical issues of implementation. None of those issues has really been addressed.

I will talk for a moment, in conclusion, about the nature of this debate. In the earlier speeches in the first reading debate, members got up and said a couple of things. They said it was a disgrace that we have so many people in prison. They were the same members, from the same political party—the National Party—who trumpeted the fact before the election that the then Labour Government was not locking enough people up, and that the Government had done nothing, when it had built four prisons. They were the same people who went to the country at the last election with a party manifesto that said that if they implemented every law and order policy they had, they anticipated a doubling of the prison population. Then they say that they did not know about this problem. Judith Collins says she did not know about this, even though she was planning, pre-election, for a doubling of the prison population, and even though the day she took up the warrant, the limousine, the salary, and the flat, she got a briefing to incoming Minister giving her the prison forecast, which everybody knew anyway. Most journalists knew—for the last few years, anyway—because the forecasts were made public. But she says she did not know.

Those members try to say, of course, that the Labour Government did nothing to incarcerate prisoners. Well, I invite them to go into the four prisons we built. We did not drop containers from the sky or off the boat; we built four prisons. We selectively double-bunked where we needed to, with the agreement of staff and with resources provided; we did not just cobble together a deal and bully some staff, then end up with staff taking us to court and the department being at war with itself. We did not then rush down to the House with 8 parliamentary days left this year because we did not have a plan, and then try to rush through a five-clause bill. We did have a plan. So I say to the Minister and to the National Party that it would be helpful if they answered some questions.

SHANE ARDERN (National—Taranaki - King Country): I rise in support of the Corrections (Use of Court Cells) Amendment Bill and I state that upfront because it would have been fairly difficult for people listening to this debate to know which bill the Opposition is debating. I will run through the list of questions that the Opposition has asked repeatedly over the last few hours: why are we doing it now, where are those prisoners going to be fed, how will they be showered, will they be safe, and is this the most suitable use of legislation to cover that issue? All of those questions have been canvassed in the last few hours.

I say to members on the other side of the House that I have a few questions of my own. Why is this necessary now? After 9 years of the previous Labour Government and all of the forecasts it was presented with, and all the warnings the Opposition gave it as early as 2005, it did not build sufficient accommodation. Those Labour members talk about how they built four prisons. We know about the cost of overruns of those four prisons. We know what a shambles that was. We have not heard why it closed prisons like Ōhura Prison. The Opposition corrections spokesperson—

Hon Trevor Mallard: We closed it down because there was sewerage going right through the town and it was going to cost $12 million to fix it!

SHANE ARDERN: Well, there we go. Finally someone from the Opposition knows why it closed it down. It was going to cost $12 million to fix it. How much did it cost to build the new prisons, which did not meet the standards? That member should take a call.

In his excitement to speak in Opposition for something Labour is voting for—and another question is why it is voting for the bill—Clayton Cosgrove said that he wished there was another election coming. Well, so do we, but I cannot understand it. There is something wrong with the psyche of someone who loves to be thrashed by the amount he would be if there was another election tomorrow.

I say to members over there that there are a few questions they need to answer. Another question—and the Hon Trevor Mallard will no doubt have a crack at answering this—is why are we in this situation where there is a crisis in the accommodation for prisoners after 9 years of the previous Labour Government?

Dr Rajen Prasad: You’re in Government now. What’s your plan?

SHANE ARDERN: I tell that member to go and look at what the plans are going forward. Dr Prasad made a very interesting point when he talked about the good work that he has done in terms of trying to put the ambulance at the top of the cliff, of identifying problems with families and looking at doing something about that. I acknowledge him for the work he did. But Dr Prasad did not say how this Government has picked up on that work and is putting more resources into it than the party he now represents did for 9 long years. His party picked up work, looked at it, and said: “It is not broken. We’re not going to fix it—we’ll support it.” I say to Dr Prasad that when he stands in the House and starts accusing us of inaction, he should know that when we were in Opposition and we did not support something, we voted against it.

For this whole debate we have heard that Labour is supporting the bill, but its members speak against it. If that is not speaking with a split tongue, then I do not know what is. I think that is probably enough from me. The points have been made. Our whip is giving me the nod, so it is presumably time for me to sit down. Thank you. We support the bill.

Hon TREVOR MALLARD (Labour—Hutt South): I have been stimulated by the member opposite, Shane Ardern, to make a speech, which I was not going to do. The Corrections (Use of Court Cells) Amendment Bill is about the use of court cells. The vast majority of that speech was about prisons, why they are open and why they are not open. I have never heard of a local member so ignorant about the reason for a prison closure in his own electorate. There were complaints from his electorate. There was complaint after complaint about the Ōhura Prison and the effect it was having on the local sewerage system, which was not working. Stuff flowed down the streets whenever the water levels of the Ōhura River came up. Complaints were made to the local member. The previous Labour Government had the choice of putting in a $12 million sewerage scheme, an extra scheme that was unnecessary, or picking up the prison and taking it to Rangipō.

I think I know why that member is complaining. We know that Ōhura Prison was known as the gentlemen’s prison. It was the prison that was out in the country. There was no perimeter fence. It was a holiday camp. It was not locked at night. I think the reason the member did not want it to shift to Rangipō was that it was just too far for him to visit his mates. It was too far for him to go and visit his gentleman mates who had been held in the gentlemen’s prison at Ōhura. It was a very low security prison. What has happened? The logical thing has happened. The buildings have been picked up and shifted across to Rangipō. That means that fewer court cells have to be used.

SANDRA GOUDIE (National—Coromandel): I am delighted to speak in the third reading debate on the Corrections (Use of Court Cells) Amendment Bill. It is a very sensible bill, and, of course, one that is supported by Opposition members. One would not think so, though, from all their rhetoric. To give members a little bit of background, 10 blocks of court cells—that is 111 cells—are currently gazetted as being part of Department of Corrections prisons. However, using the cells to house overflow prisoners is subject to section 9 of the Resource Management Act, which includes a requirement to comply with the rules of district plans. How many people would have any idea that the rules of district plans had some jurisdiction in regard to cells? I think this bill is a very sensible move to remedy that anomaly in the legislation. I commend the Minister of Corrections for bringing it before the House. I am delighted that it is done and dusted and will be enacted in due course.

DAVID CLENDON (Green): The Greens will continue to oppose the Corrections (Use of Court Cells) Amendment Bill. The principle that underpins it seems to be one of passively accepting that the number of people in our prisons will continue to increase. This is deemed to be inevitable, apparently. The prison forecasts suggest that current capacity will be exhausted from June 2010, presumably even with the imposition of the very dangerous and undesirable practice of double-bunking, which has been flagged for some of our prisons. The corrections officers at the sharp end of this debate are resisting this option, as well they might, given that they will suffer the inevitable negative consequences in terms of the safety and security of both staff and inmates. Given the date of June 2010 as the crisis point, it is surprising and, I have to say, disappointing that our Labour colleagues—who have made some very strong, well-informed, and powerful statements opposing this bill—nevertheless choose to support it. There is still time for a proper process to engage decently and properly with this issue. We have, according to these documents, until June of next year to have a proper process around this matter.

The regulatory impact statement accompanying the bill notes that the option of using court cells to accommodate overflow prisoners has been used during periods of acute accommodation shortage. The word “acute” suggests something unexpected and short term. Here we have, in fact, a long-term and chronic problem that demands a long-term vision, a long-term strategy, and some decent investment in real solutions. The bill is a classic band-aid solution—or an attempt at a solution—and it does not even pretend to address the long-term chronic issues and problems that demand urgent attention.

Court cells are designed to properly house people in custody while they are appearing in court. They are designed for short stays, and as such they have never been designed or constructed to provide the level of basic facility, or to meet the minimum requirements of longer stay prisoners. My colleague Sue Kedgley, who has been supported in a number of the Labour speeches, has identified the very basic issues. How will prisoners’ meals be delivered and prepared? What toilet and bathroom facilities will be available to them? What facilities will there be to provide for family visits or other support? Where will prisoners exercise their right to physical exercise? How will prison staff be provided with adequate facilities as prescribed by their employment conditions? How will rehabilitation programmes—which are invariably highly sensitive to interruption and depend on a carefully staged, managed, and sustained engagement—be sustained or maintained?

We are asked to simply accept that administrative safeguards will be put in place to ensure that this wholly inappropriate treatment of prisoners will occur only if it is strictly necessary, and that prisoners will continue to receive their statutory entitlements. This test of strict necessity is an interesting one, and I wonder what criteria, what indicators, and what standards will be established against which this very vague and amorphous notion of strict necessity will be measured. The statutory entitlements of prisoners that are referred to in section 69 of the Corrections Act include entitlement to physical exercise, to a bed and bedding, to food and drink, to access to private visitors, to access to statutory visitors, to access to legal advisers, to receive medical treatment, to send and receive mail, and to be able to make outgoing phone calls. How will any of these statutory minimums be met in the context of a court cell?

We are assured, but by no means reassured, that the normal functioning of the courts will not be compromised. An interesting experiment could demonstrate the veracity of that assumption. Perhaps we could require the courts and the police at one or two of our larger courts to function for a few days at a time without access to the court cells—let us just assume for the moment that those cells are full of long-term prisoners—and see what effect this has on the proper functioning of the court system, which already works under considerable pressure. That fairly simple experiment would quite readily, at no cost, reveal the shortcomings of the propositions of this bill.

Some reference has been made to the likelihood of transgressing the New Zealand Bill of Rights Act. We already have case law. Taunoa v Attorney-General relates to a situation where it was deemed that the New Zealand Bill of Rights Act had been contravened when a person who had been held in custody did not have a cell with sufficient standards of hygiene, where bedding and clothing fell below standards established by prison regulations, where there was inadequate monitoring of inmate mental health, and where exercise conditions were inadequate. All of these conditions are likely to apply in court cells. Clearly we now have legal precedent that there will be responses and implications from those conditions.

A rather sneaky mechanism in this bill that is being used to achieve its outcomes is an amendment to the Resource Management Act that overrides the authority of district plans. The Resource Management Act speaks of enabling people and communities to provide for their social, economic, and cultural well-being, and for their health and safety. The processes of preparing and enacting district plans demand a very high level of public engagement. An absolute requirement is placed on territorial local authorities to hear and respond to the public’s views, and incorporate their preferences into the plans. The plans themselves are very powerful and influential documents. They enable and constrain members of our communities in the use and development of natural and physical resource. It is critical to the ongoing success of the Resource Management Act regime that there is a high level of public confidence in the process of plan preparation and enactment. This very brief but pointed bill, being pushed through under considerable urgency, is a very shabby mechanism indeed that will almost certainly undermine people’s confidence in the integrity of the plan preparation and Resource Management Act processes more generally.

Over many years I have been involved in a number of issues and disputes around provisions and processes related to the Resource Management Act, and I know very well that in recognising its central and even unique ability to influence so much of our daily lives, members of the public become highly engaged—and, indeed, passionate—about the content and the application of the legislation. The initial surprise of any community that has worked long and hard to get provisions that meet their needs and ambitions in the plan will very quickly turn to cynicism with the whole process to the extent that Parliament passes a bill such as this that very neatly circumvents the work done to make district plans operational. The complete absence of any consultation on this bill, the lack of a select committee process—all of this signals to the public that this Government is willing and able to jam through legislation that will have negative social and, indeed, economic impacts, and that the Government will provide absolutely no avenue for members of the public who will be affected to participate in the decision making.

We do not actually need to surmise what the practice of putting prisoners into court cells will lead to. We have the benefit of overseas experience. There is a very interesting report from Her Majesty’s Inspectorate of Court Administration in the UK, dated 20 August 2007, where inspectors from the inspectorate visited court cells that were being used in the context of significant prison overcrowding. The report “raises serious concerns about the use of such cells.”, which is exactly the practice that this bill is intended to facilitate. It highlights that “it is in the early days of custody that prisoners are most vulnerable:”, and that most self-inflicted deaths occur within the first days, yet none of the support systems to prevent these tragedies existed in court cells. There was a lack of any “proactive reception or healthcare screening”, “Prisoners were being held in bare cells over a weekend, with no activity, no natural light … and with no exercise facilities”, “Prisoners spent long periods travelling in cramped vans … often arriving late and having to leave early the next morning”, “Prisoners could not contact their families”—indeed, families of prisoners did not even know where their family member was—and “Shower facilities were inadequate and there was no opportunity for prisoners to change clothes, so they slept in what they were wearing.” The inspectorate highlights that this was no shortcoming of the prisons or the court staff.

This is an abysmal bill. It is a disgrace, and the Green Party opposes it in its entirety.

RAHUI KATENE (Māori Party—Te Tai Tonga): The basic proposal in the Corrections (Use of Court Cells) Amendment Bill is that the Department of Corrections will have access to court cells in order to house overflow prisoners from the first half of 2010, when the court cells may be needed. Once the bill has passed today, the Ministry of Justice and the Department of Corrections will fast track work specifying the cells that may be used for overflow prisoners, the circumstances in which the cells will be made available for this purpose, and how the cells will be operated. So, in many respects, we are already well down the road towards implementation while this debate proceeds. This is not unusual, of course. The Department of Corrections has been forecast to run out of baseline beds early next year, so there is an immediate issue around prisoner accommodation and public safety. We are in this situation because prisoner numbers swelled under the previous Labour Government, from about 5,000 in 1996 to 8,400 now.

Changes in New Zealand’s criminal justice policy in the past decade have been extraordinarily rapid and this rapid change is set to continue. But another facet of this increase in the prison muster is of note. From 1997 to 2007, although the number of those sentenced to prison increased by 37 percent, those remanded into custody increased by a staggering 214 percent. This bill is an attempt to do something about housing those prisoners and to do it quickly.

We know that this bill fits into the context of a range of other measures that are being taken to address prison population pressures, including approval for extended double-bunking at five prisons. However, there is some uncertainty about the ability to access the additional double-bunked capacity, which may mean there may be insufficient accommodation for prisoners from June 2010. It is estimated that a further 5,000 beds will be needed by 2018. One of the more controversial operations has been the proposal to establish a 60-bed container unit at Rimutaka Prison. This is the first such project of its kind in New Zealand, and the emphasis has been on the fact that it is cheaper and faster to construct than facilities for a new prison. We in the Māori Party are not convinced as to whether the recycled container solution is an effective solution to the overarching issue of prison numbers, but we will leave that and the double-bunking issue for another time.

Today’s debate is basically the option of last resort. The proposal is that once the regional capacity at police jails is exhausted, court cells will be used to accommodate overflow prisoners. Although there are currently 10 blocks of court cells, some 101 cells that have been gazetted as parts of prisons, the Resource Management Act prevents them from being used for the overnight accommodation of prisoners. The approval sought in this bill is to amend the Corrections Act so that the requirements of section 9 of the Resource Management Act do not apply to the detention of prisoners in court cellblocks. In effect, this means that where there is an acute shortage of prison accommodation, court cells can be used to accommodate overflow prisoners without undue delay or cost. The Māori Party is willing to give begrudging support to this bill, to basically ensure that there is short-gap inmate accommodation in place for prisons to access if there is no other facility available. The last thing we want in prisons is overcrowding, triple-bunking, or for our prisons to be under any more stress than is necessary.

But there is an important rider that we place on our support. The Associate Minister of Corrections, Dr Sharples, raised during the Committee stage the issue of safety and spoke of some break-outs from court cells in the past. He spoke from his wide experience of some 35 years of working in the prisons and courts, but he made it clear that the Māori Party is supporting this bill as a response to the crisis over prison cell shortages. We recall that more than half of the most serious prison escapes in the 2006 financial year were made from court cells. In that year, six of the 11 break-outs took place from courts throughout the country. In one of the more embarrassing cases, two remand prisoners escaped by breaking through the ceiling of their cell. In another case, an inmate was just 20 minutes into a 9-month prison sentence for burglary, when he escaped from a holding cell at Waipukurau District Court. Concern has been raised about prisoner deaths while in custody in court cells, given they are multiple occupancy. There are some real issues around public safety that may fall out of this new proposal, which I trust the Minister will give attention to.

Another key issue is the one around the emotional and physical safety of prisoners located in cells. The investigation of the circumstances surrounding the death of Liam John Ashley reported that Liam, a 17-year-old teenager, had been held in a court cell with adult prisoners for the whole of the day on which he received his fatal injuries. Action for Children and Youth Aotearoa, a coalition of non-governmental organisations and individuals interested in children’s rights, drew on this situation to petition the Law and Order Committee about the Department of Corrections. I draw the attention of the House to that recommendation, namely that the department should ensure that when prisoners under 18 years of age are moved to court cells, either the department or the police ensure that they are kept separate from adult prisoners.

There is, however, a much bigger debate that needs to be held in this House, which forms the broader context for this bill on the use of court cells for prisoner accommodation. It is the urgent need to comprehensively review the criminal justice system, and particularly the high levels of incarceration—specifically of Māori.

Many of the speakers before me have referred to the fact that the Vote Corrections budget continues to escalate as a result of prison being the priority response to offending by both the previous and current Governments. The total appropriations for the Department of Corrections have increased by $368.731 million, or 33.54 percent, since last year. The total vote is now over $1.5 billion per year. This is a substantial increase, given the context of the world’s deepest recession in at least 60 years. We are aware that Treasury projections for Vote Corrections 2020 are a massive $2 billion per year.

There are fiscal reasons why we need to review the overpopulation of our prisons. But there is a far greater moral and ethical issue about the rising trends in prison populations. In 2007 the Ombudsman, Mel Smith, carried out an investigation into issues involving the criminal justice sector. His report suggested a royal commission of inquiry should be called to undertake a comprehensive review of the criminal justice system. The overrepresentation of Māori should be an area of significant focus of any commission of inquiry. One of the reasons why the Ombudsman made the suggestion for a commission of inquiry is that it will allow an opportunity to stop and reflect on why the punitive treadmill seems to grow and pick up speed. It is hoped to find constructive ways to slow it down.

The Māori Party believes that crime prevention needs to be looked at in a different way—holistically—to try to change contextual factors as well as the outcomes. A kaupapa Māori justice strategy will be a starting point for doing things differently—doing things from a Māori values base of restoring and transforming. The idea is to have a strategy that will address practical things that whānau, hapū, iwi, marae, communities, organisations, and institutions can do to get going with the doing of creating alternatives to police, courts, and the prison system. The Māori Party supports the good work that the Associate Minister of Corrections has been doing to this end. We will, as we said earlier, give begrudging support to this legislation to use court cells as an emergency stopgap measure until the more enduring solution is available.

CARMEL SEPULONI (Labour): I begin by pointing out some of the comments that Mr Ardern made earlier. I think that the noise from his tractor has impaired his hearing in some way, because he has not really been listening during the course of the debate. One thing he continues to say, and a number of National members continue to say, along with a few other members in the House, is with regard to Labour’s track record for law and order over the last 9 years. It is one of their catchcries. They like to say what Labour did in 9 long years. Well, what we did was reduce crime. They point out, however, that there was an increase in violent crime, mostly family crime—domestic violence. I point out that Labour members on this side of the House will not apologise for an increase in reporting family violence during the 9 years that Labour was in Government; we will not apologise for that. The fact that there was an increase in reporting family violence is due, as far as we are concerned, to the fact that we did as much as we could to help women in violent situations. The fact that there was a high level of reporting says a lot about what the previous Labour Government did, and we will not apologise for that.

I point out to Mr Ardern and his colleagues that since the National Government has been in office we have seen a real increase in crime. It has been a real increase, not just a perception that a few members of the House have decided to put out there. This increase has been recorded.

I say to Mr Garrett, who never yells in the House, that for his sake I will look at the New Zealand Herald and also at a press release put out by the university that gives information on the fact there has been an increase in crime since the National Government came into power. We all know there is a correlation between poverty, unemployment, and crime. This Government has done nothing to solve the problems around unemployment and poverty. In fact, all it has done is to implement policies that do nothing to help those who are the most vulnerable, and, therefore, we are seeing an increase in crime. The reason this Government is putting this bill through, as we have pointed out on a number of occasions throughout this debate, is that it is in crisis.

Mr Cosgrove pointed out something earlier that is a little bit concerning and would be concerning to the public. Why does National need to push this bill through before Christmas? We know there is something like 800 beds available in prisons at the moment. So why is there such a push to get this bill through—all of a sudden—before we hit Christmas? What is concerning to us is that the Government has access to forecasted numbers; we do not. So is it anticipating an even steeper increase in crime over the Christmas period? Is that the reason for getting this bill through, to cope with the sheer numbers of prisoners whom it will not have the capacity to hold in the actual prisons, and who will need to be held in court cells? If so, the Government needs to take responsibility for that. Crime rises in line with poverty and unemployment, and unfortunately it looks like we will possibly see an increase in crime during what should be our festive season.

An issue that has come up over and over again in this debate concerns the security guards who are in the court cells. It has been pointed out that they are not trained prison officers; they are security guards in the courts.

Sitting suspended from 1 p.m. to 2 p.m.

Questions for Oral Answer

Questions to Ministers

Emissions Trading Scheme—Emissions Compared with 2008 Scheme

1. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Climate Change Issues: Will the passing yesterday of the Climate Change Response (Moderated Emissions Trading) Amendment Bill result in New Zealand’s greenhouse emissions going up or down between now and 2050 compared to the original emissions trading scheme passed in 2008?

Hon Dr NICK SMITH (Minister for Climate Change Issues): The longer we go out, the less certainty there is with the figures. However, I want to go quite specifically through the advice. In the period from 2008 to 2012 the recessionary measures taken to halve the price effect of the scheme on power and petrol increases will reduce the incentive to reduce emissions, so that results in slightly higher projected emissions for New Zealand in 2012. In the period 2012 to 2018 the changes will do more to reduce emissions. This is because there is a significantly lesser allocation to industry and a stronger price signal to reduce emissions. So for the first decade the overall changes in our moderated emissions trading scheme will actually result in lower New Zealand emissions than the existing scheme. Beyond 2018 the key difference between the schemes is in the phase-out rate and the production-based allocations. There is no doubt that beyond that period the amended scheme would result in higher emissions for New Zealand, because it would export emissions from those intensive industries offshore. So, although emissions in New Zealand might be less, all we would simply do is to produce those products elsewhere on the globe, and actually make the global problem worse.

Dr Russel Norman: Will he advise the Prime Minister to go to Copenhagen and explain to Barack Obama and all the other world leaders why New Zealand has just passed a law that, as the Minister has just told the House, will result in New Zealand increasing its emissions, or will he be too ashamed to front up to that meeting?

Hon Dr NICK SMITH: This scheme will, in the first 10 years, reduce emissions more than the existing scheme. But I would make three further points, in light of the comparison with the United States. Firstly, the target that we are taking to the Copenhagen negotiations is significantly stronger than that offered by the United States. [Interruption] It is a matter of fact. Secondly, I would also note that we now have a settled emissions trading scheme, which will be the first outside of Europe, to be put in place on 1 July next year. Thirdly, the one area of concern in going to Copenhagen is explaining why our emissions have gone up by 24 percent since 1990.

Craig Foss: What official advice has the Minister received on the comparison between the free allocations to industry in the first decade of the scheme supported by the Greens, and in the amended scheme?

Hon Dr NICK SMITH: I am advised that under the scheme supported by the Green Party, the free allocation to industry in the first decade was 135 million units. Under the new scheme industry will receive just 69 million units for the same period. This is because there is a lesser allocation to industry, with some companies getting only 60 percent or none, and because of the phase-out beginning in 2013, 5 years earlier. The Greens should be honest and openly acknowledge that in the first decade of the scheme it is actually more efficient.

Dr Russel Norman: I raise a point of order, Mr Speaker. Clearly, in stating that the Greens should be honest, the Minister was assuming that we were being dishonest—

Mr SPEAKER: Order!

Dr Russel Norman: That is unacceptable.

Mr SPEAKER: I am on my feet. I do not think the Minister needs to go down that track, and I do not believe he was in any way impugning the honesty of the Greens.

Dr Russel Norman: Does the Minister think that the Parliamentary Commissioner for the Environment had it wrong when she said that Parliament should vote against his emissions trading scheme because “In its current form, the bill virtually guarantees that the ETS will not achieve its stated goal of reducing our greenhouse gas emissions.”?

Hon Dr NICK SMITH: I also note that the Parliamentary Commissioner for the Environment advised Parliament not to vote for the previous emissions trading scheme, and I note that the Green Party ignored that advice.

Charles Chauvel: Is the Minister aware that his own ministry could not tell a select committee today when it expects New Zealand’s greenhouse gas emissions to decrease; and is it not the reality that following the passage of his moderated emissions trading scheme, the only way that New Zealand will be able to meet its 2020 pollution reduction targets is through what we might call a modified Jacqui Dean solution: to buy them from offshore?

Hon Dr NICK SMITH: It is very difficult to project all of the moving parts that affect New Zealand’s future emissions profile. We do not know for sure the price of carbon into the future. We do not know for sure what the international rules are going to be beyond 2013, and I note that despite repeated questioning when Mr David Parker was the Minister, he could not give exact numbers on when New Zealand’s emissions would decline. What I will say is that the advice is that with the emissions trading scheme that the Government has passed, in 2020 New Zealand can expect its emissions to be 10 million tonnes fewer as a consequence of that scheme.

Dr Russel Norman: Can the Minister confirm that even with the advice he has provided today, after 2018, because the phase-out rate is lower, we will see a significant increase in New Zealand’s greenhouse emissions over the emissions we would have seen under the old emissions trading scheme?

Hon Dr NICK SMITH: I make two points in response. The first is that it is this Government’s policy that we do not simply want to reduce emissions by closing down New Zealand Steel or our smelter, sending that industry offshore, and clapping our hands with joy that our emissions have gone down, only for them to occur somewhere else on the globe. That makes no sense. The second point is in respect of the 1.3 percent phase-out rate. This Government has been quite open that that will be regularly reviewed, so that it is in line with the rate of our major trading partners. We would like to phase out more quickly; that will depend on ensuring that other countries also do so, consistent with this Government’s policy of New Zealand doing its fair share.

Dr Russel Norman: I raise a point of order, Mr Speaker. The question specifically addressed the 2018 to 2050 period. It specifically asked whether New Zealand’s greenhouse emissions would increase during that period, as a result of this change in the legislation. The Minister did not answer, or attempt to answer, that part of the question.

Mr SPEAKER: In fairness to the honourable member Nick Smith, as I listened to the Minister’s answer it was perfectly clear to me what he was saying. It is possible that that might be the case, but he was arguing that there was not much sense in saying that is bad if doing the opposite caused more emissions elsewhere. He just gave a different kind of answer from the one the member may have wanted, but it was perfectly clear to me what the Minister’s answer was to the member’s question.

Dr Russel Norman: Is it not the case that after 2018 we will have a much higher level of free allocation given to industry and agriculture in all sectors, and, as a result of that higher level of free allocation, we will have higher debt on the Government books and increased greenhouse emissions in New Zealand?

Hon Dr NICK SMITH: No, that is not correct and I will explain why. Under the existing Labour scheme, in 2018 a business like the Bluff smelter would receive a 90 percent allocation and would have to pay for 10 percent. Under the changed scheme, in that year the smelter will be required to pay 18 percent; that is, it will get an allocation of 82 percent. Then, in each year after that, there was the notion of that reducing out at a rate of 8 percent per year. None of the commentators believe that is realistic, and even in the discussions I had with Labour during our talks to try to get a consensus, nobody assumed that that 8 percent phase-out rate in the existing scheme would be able to be sustained 10 years hence. I remind the member that it is hard enough to work out the rules in climate change policy for the next 10 years, let alone to make predictions beyond that.

Dr Russel Norman: Is it not the case that by taking the three different periods the Minister identified in his very long answer—that is, 2008 to 2012, 2012 to 2018, and 2018 to 2050—and putting them all together, rather than splitting them up, overall New Zealand will have higher greenhouse emissions under his emissions trading scheme than under the old emissions trading scheme?

Hon Dr NICK SMITH: The member seems to ignore the fact that this is a global problem. The atmosphere does not know whether the emissions come from New Zealand or some other country. The Government side of the House makes no apologies for not wanting a policy that would simply export industry offshore, do nothing for the environment, and cost hard-working New Zealanders their jobs.

Dr Russel Norman: I raise a point of order, Mr Speaker. Again, the question was quite specific about New Zealand’s emissions. The Minister may have a point about global emissions. That is fine, but I asked specifically about New Zealand’s emissions. The Minister did not answer that question.

Hon Gerry Brownlee: The questioner started his question by saying “Is it not …”, and then he put a proposition. What he got from the Minister was a response to the proposition, and that is perfectly reasonable.

Dr Russel Norman: Speaking to the point of order—

Mr SPEAKER: I do not think I need to hear further on this. I hear the point the member is making. It is fair enough; the Minister did not specifically answer that question. Yet in his answer was an implication that yes, that is possible, and I would imagine that any intelligent person who was listening to the answer would have picked that up from the answer. The Minister went on to explain why he and his Government see that as not being the crucial issue. I do not think there is much point in my trying to force him to give a more precise answer along the lines the member wants to hear. The member certainly got an acknowledgment of the point he was making.

Charles Chauvel: Does the Minister know that the independent expert advice received by the Finance and Expenditure Committee, when it considered his moderated emissions trading scheme, was that there is simply no evidence or analysis available to support his contention that the massive subsidies now available to industry under that scheme are actually targeted at industry likely to move offshore; if so, when will he stop repeating the falsehood that his moderated emissions trading scheme will save any Kiwi jobs?

Hon Dr NICK SMITH: The member should read the very comprehensive economic analysis by the New Zealand Institute of Economic Research and Infometrics. That report said that New Zealand suffers very great competitive risk around emissions-intensive industry. The second point I make to the member is that if he wants to call allocations subsidies, it is interesting to note that when Mr Parker was asked a question by Jeanette Fitzsimons about whether allocations were subsidies, he said that they were not subsidies. It seems an odd contradiction that when Labour makes allocations they are not subsidies, but when National makes allocations they are. I would love Labour to explain that.

Hon Rodney Hide: To the Minister—

Hon George Hawkins: Hawaii Five-O.

Hon Rodney Hide: Sorry, what was that?

Mr SPEAKER: I would ask the member to please ask his question. [Interruption] That is not acceptable. The member should not worry about those kinds of interjections. I ask him to just ask his question.

Hon Rodney Hide: Is he willing to assist New Zealanders’ understanding of this Government’s emissions trading scheme by asking the National Institute of Water and Atmospheric Research to explain the adjustments that it has made to the raw data to produce a warming trend for New Zealand for 156 years of our history, when its own raw data in order show New Zealand’s temperature to be stable; if he is not prepared to ask for that explanation, why not?

Hon Dr NICK SMITH: Only as recently as last Friday, I think, Kevin Hague and I attended a Cawthron Institute lecture by David Wratt about climate change science. What Dr Wratt has consistently said is that because New Zealand is surrounded by oceans, all the modelling indicates that the temperature impacts of climate change are most likely to be less for New Zealand than for other parts of the globe. I would welcome the opportunity, not just for the sake of Mr Hide but for that of all members of the House, to invite the chief climate change scientist from the National Institute of Water and Atmospheric Research to address members, so that we can all be better informed on climate change science.

Hon Rodney Hide: I raise a point of order, Mr Speaker. That is very kind, and I will take the member up on that offer.

Mr SPEAKER: Points of order should be terse and to the point.

Hon Rodney Hide: My question asked whether the Minister for Climate Change Issues will assist our understanding by asking the National Institute of Water and Atmospheric Research to explain why its data have been adjusted to show a different result from what the raw data show—yes or no.

Mr SPEAKER: The Minister may not have specific responsibility for a scientific organisation in New Zealand. It may be the responsibility of the Minister, and it is up to the Minister to tell us that if it is the case. I ask him, if it is within his responsibility, to answer the question.

Hon Dr NICK SMITH: I would be happy to have the chief scientist from the National Institute of Water and Atmospheric Research come to the House and answer that technical question directly as a consequence of having a forum with members, and I think the member will find that to be very useful.

Hon Rodney Hide: I seek leave to table a document by the New Zealand Climate Science Coalition about the adjustments that the National Institute of Water and Atmospheric Research has made to the raw data to show a warming trend, when, in fact, none is shown. It is dated 25 November 2009.

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.

Social Development and Employment, Minister—Statements

2. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister for Social Development and Employment: Does she stand by all her statements?

Hon PAULA BENNETT (Minister for Social Development and Employment): Yes, although when you love your job as much as I do, you can occasionally get a little overexcited.

Hon Annette King: Why does she consider the efforts of the Every Child Counts organisation to establish an all-party parliamentary group for children to build awareness of and a commitment to policies for children as “a whole bunch of chit-chat that gets nowhere”, as she claimed in Parliament yesterday, and has she told that organisation it is wasting its time even trying to get National to work with other political parties here in Parliament on policies that tackle issues like child poverty in New Zealand?

Hon PAULA BENNETT: I actually admire the organisation and think that it does a good job in what it is doing. There have been many discussions around this place for quite some time about a cross-party discussion on child abuse and neglect. I notice that the previous Government did not actually get one up and running. As I stated yesterday, and I will state it again, I think it is about the results and the things that are put in place. That is what will make a true difference.

Hon Annette King: Will she dismiss the plan of action developed by the Every Child Counts summit on children held in September, which brought together community leaders, Barnados, Plunket, Save the Children, Unicef, etc., representing about 6,500 supporters and organisations as “chit-chat”—a lot of talk and no action—or will she do what they have requested and work with all parties in this Parliament, who do care about kids, on something that Labour, when in Government, did not walk away from?

Hon PAULA BENNETT: I think it would be helpful to clarify that the words “chit-chat”—all talk and no action—were actually directed at the Opposition, and not at Every Child Counts.

Hon Annette King: I seek leave to table the Hansard of the Minister’s answer to my question yesterday.

Mr SPEAKER: The member knows that that is outside the ruling I have made. That is readily available to the House anyway.

Hon Annette King: Has she had any chit-chat with the Prime Minister about his claim that the number of New Zealanders now on the sickness benefit is only slightly higher than it was a year ago; did she point out to him that the number went up by almost 10,000 since he became the Prime Minister, and that the Government’s policies are only shifting people from one benefit to another?

Hon PAULA BENNETT: We have had many discussions with the Prime Minister on welfare reform, where we are going with it, and how we close some of those tunnels between benefits. We are not hiding the numbers like the previous Government, under which it really was a succession from the unemployment benefit, to the sickness benefit, to the invalids benefit, which we will simply not put up with.

Lynne Pillay: Has she had any conversation with the Prime Minister about the failure of her Restart package, given that it is now helping fewer than 1,000 New Zealanders, even though unemployment numbers are still increasing; if so, is the reason she has failed to make effective changes to the scheme a result of those conversations just being chit-chat that have clearly got her nowhere?

Hon PAULA BENNETT: Yet again, I want to clarify that it is the Opposition that is prone to chit-chat and no real action. The member does not understand that the number of people receiving the unemployment benefit has gone down for 7 weeks in a row; it has gone down. Those who were eligible for Restart needed to be eligible through the welfare system. That is how it was set up. It was successful. I am certainly not undermining the more than 5,500 people who received access to it.

Carmel Sepuloni: What justification can she give for her decision to make cuts to the training incentive allowance, barring domestic purposes beneficiaries from receiving the allowance to help with tertiary study, and her decision to prevent domestic purposes beneficiaries from being eligible for Community Max; and how can these decisions be reconciled with her statement regarding solo mothers that she “will back those women into work and meaningful employment every time.”?

Hon PAULA BENNETT: Just to clarify, there are women who are on the domestic purposes benefit who are on the Community Max programme. Any women on the domestic purposes benefit can move on to the unemployment benefit and be eligible to go on the Community Max project. It is as simple as that. They would get the same amount of money, and they can make that decision.

Schools—Professional Development in Information and Communication Technology

3. JO GOODHEW (National—Rangitata) to the Minister of Education: What recent announcements has she made about information and communication technologies professional development in schools?

Hon ANNE TOLLEY (Minister of Education): More good news. Today the Government announced that we are investing $10.8 million in a 3-year programme to support teachers to use digital technology. From next year 257 schools—members opposite do not like this—will join this major information and communication technology initiative. It will support teachers with the skills, the knowledge, and the confidence they need to get the benefits from information and communication technology and support student learning.

Jo Goodhew: How does the announcement complement other work being done by the Government in the education sector to help schools with digital technology?

Hon ANNE TOLLEY: This investment supports the Government’s $150 million commitment to make our schools broadband-ready, to ensure that our children are at the centre of the digital world. Earlier in the year, I announced a round of school network upgrades, and I will very shortly announce a further larger round to ensure that our schools’ infrastructure is ready for ultra-fast broadband. The announcement today will ensure that more teachers are ready and able to take advantage of it.

Hon Trevor Mallard: Does her announcement today indicate that she is now ranking information and communication technology skills as being more important than science, social studies, music, and art in primary schools, because she has totally cut the funding for professional development next year in primary schools for all of those subjects?

Hon ANNE TOLLEY: I have not cut any funding for professional development in primary schools. [Interruption]

Mr SPEAKER: The member who asked the question has indicated that he could not hear the end of the answer. I invite the Minister to repeat the answer, and I ask members to be a little more reasonable in their interjection; it has been fairly noisy.

Hon ANNE TOLLEY: I have not cut professional development in primary schools.

Hon Trevor Mallard: Does cutting the money that goes to universities that pay the advisers who go to primary schools not count as a cut to primary schools, in that Minister’s opinion?

Hon ANNE TOLLEY: Let me explain in words of one syllable so that the member can understand. We have taken the same amount of money that the Ministry of Education contracts for professional advice and we have refocused it on literary and numeracy in order to support the national standards. The sector asked for support for the introduction of the national standards, and that is what this Government has provided. There are no cuts to what is provided; it is the same amount of money but refocused on literacy and numeracy.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I now have a real problem. I know that you do not like people using a point of order to debate, but this Minister has tabled in the House—

Mr SPEAKER: The member will resume his seat immediately.

Hon Chris Carter: 25 percent cut.

Mr SPEAKER: I am on my feet! I am not sure what is wrong with that member’s eyes. The member may not have liked the answer but he cannot litigate it by way of a point of order. He can ask further questions. I heard the question he asked and the answer the Minister gave. It was very obvious to me where the difference was arising between the question and the answer. It should not take him much thought to work out which supplementary questions to ask, if he wants to uncover more about it.

Hon Trevor Mallard: Did the Minister announce or include in her Budget documentation a 25 percent cut in professional development going into contracts for professional development, which go to primary schools?

Hon ANNE TOLLEY: Some changes were made to professional development around early childhood education.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. The member’s answer was to do with early childhood education. It was a very specific question about primary education and the 25 percent cut she announced.

Mr SPEAKER: I hear the point the member makes and I ask the Minister to answer in respect of primary schools.

Hon Gerry Brownlee: Come on, it’s in two Budgets.

Mr SPEAKER: The point raised by the Hon Trevor Mallard is a reasonable one. He asked a question about professional development in primary schools, which is what the primary question was about. The Minister answered in respect of early childhood education, which is not what the primary question was about. I therefore think it is reasonable—and I warn the Leader of the House that I am ruling on this matter—for the Minister to answer that. If she does not have that specific information, that is fair enough, but she avoided the question by commenting in respect of early childhood education. I think the member has a legitimate grievance and I ask the Minister to reply.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. It may have been that you did not pick up that the member asked the Minister whether there had been cuts to the tertiary education budget, and then he specified what it was and asserted that it had some relationship with the primary education sector. The Minister gave an answer about what was changed in that Budget, and I think it should stand as perfectly reasonable. The member cannot confuse a whole lot of things together, then somehow expect a Minister to unpick them in a very short answer.

Hon Trevor Mallard: Speaking to the point of order, Mr Speaker.

Mr SPEAKER: No, I do not need any assistance. I have indulged the Leader of the House. The Minister is perfectly capable of answering the question asked. It is directly related to the primary question. From what the Leader of the House has just implied by way of his point of order, he has assumed an answer from what the Minister said. There is no problem, therefore, in the Minister giving the House the answer.

Hon ANNE TOLLEY: I do not have the figures in front of me but I am happy to provide them to the member.

Hon Lianne Dalziel: How can she rely on the advice she has received on professional development in schools, in light of her statement yesterday that enrolment schemes in schools neighbouring Aorangi School would have to be redone, something that cannot occur before term 1 next year—or did she just make that up?

Hon ANNE TOLLEY: I raise a point of order, Mr Speaker. The primary question actually related to information and communication technologies professional development in schools.

Mr SPEAKER: I think the Minister is making a fair point. I ask the member to bring her question within the scope of the primary question.

Hon Lianne Dalziel: How can she rely on advice that she has received on professional development in schools, in light of statements she made yesterday that have proven to be incorrect?

Hon ANNE TOLLEY: I did not make incorrect statements yesterday.

Mr SPEAKER: Question No. 4.

Rahui Katene: Mr Speaker, a supplementary question.

Mr SPEAKER: I beg your pardon. If members were a little more reasonable with interjections I would hear when members call. I do apologise to Rahui Katene.

Rahui Katene: Thank you, Mr Speaker. What initiatives are being advanced to develop digital literacy for Māori, to ensure that the flow-on benefits of adopting new technologies are also extended to Māori and whānau?

Hon ANNE TOLLEY: If the member looks through the list of schools involved, she will see that a number of schools with Māori pupils are involved in this initiative. But we are very conscious of the importance of broadband to, particularly, small, rural Māori immersion schools, and we are working with the Māori Party to ensure that they are included in the rural broadband roll-out.

Climate Change, Copenhagen Conference—Prime Minister’s Attendance

4. CHARLES CHAUVEL (Labour) to the Prime Minister: Why is he not going to the Copenhagen conference like most other world leaders are?

Hon GERRY BROWNLEE (Leader of the House) on behalf of the Prime Minister: The member’s assertion is incorrect. It is not true that most of the world’s leaders are going to the Copenhagen conference. The Prime Minister has previously stated that there is a 95 percent chance that he will not go to Copenhagen for that conference. That is because he is satisfied that the Minister for Climate Change Issues, the Hon Nick Smith, and the Associate Minister for Climate Change Issues (International Negotiations), the Hon Tim Groser, are more than capable of representing New Zealand’s position at the conference.

Charles Chauvel: Does the Prime Minister agree with the Secretary-General of the United Nations that President Obama’s attendance at Copenhagen, announced today, will help ensure an agreement; if so, is he not attending because, as he has recently said, he is “quite relaxed” about the threat of climate change?

Hon GERRY BROWNLEE: The United States’ position on climate change and whatever commitments it may be prepared to offer at Copenhagen are, of course, very, very important. I point out to the member, though, that President Obama will be in Copenhagen about 1 week before the conference starts.

Chris Tremain: This is the diary secretary for Mr Obama about to speak.

Charles Chauvel: I thank Mr Tremain for that useful contribution.

Mr SPEAKER: The member will sit down. I will not tolerate interjections with microphones open like that; it is simply not acceptable. I ask the member not to do that and I invite him to ask his supplementary question.

Charles Chauvel: I raise a point of order, Mr Speaker. I accept your ruling immediately—

Mr SPEAKER: Is this a point of order?

Charles Chauvel: Yes it is.

Mr SPEAKER: I am not sure what issue of order the member is raising.

Charles Chauvel: I wanted to record that I was responding to an interjection myself when I was referred to as the—

Mr SPEAKER: The member will now resume his seat. The member will not argue with the Speaker if he wishes to remain in the Chamber for this sitting day, which may go on for a while. I recommend to the member that if someone interjects while his microphone is open and he is asking a question, he should just ignore it because no one else can hear it. It is an unfair advantage to the member to use an open microphone in that way. I invite him to ask his supplementary question.

Hon David Parker: I raise a point of order, Mr Speaker. I presume the same rule will apply to members of the Government when they are answering a question and responding to an interjection.

Mr SPEAKER: Members will notice that when Ministers are not provoked by the question being asked, I am pretty tough when they start to climb into the Opposition. Anyone who thinks that I, as Speaker, am favouring the Government is not, I believe, seeing the situation properly, at all. I am sure that plenty of members in the Government are not terribly happy with the way the Speaker insists on some of them answering questions and stops them in mid-flight. So I suggest to the Hon David Parker that a little more discretion and courtesy would be appropriate.

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

Mr SPEAKER: I am still on my feet, and it had better be a new point of order.

Hon Trevor Mallard: It is, and it is an important one. I would like you to reflect on what you have just told the House. What you have said is that my colleague cannot respond to an interjection through his open microphone but Ministers can if they are provoked. I think that that is unfair and unbalanced.

Mr SPEAKER: What I was actually referring to was when Ministers are provoked in a question. If the member refers back to a supplementary question asked by his own colleague, just a short while ago in this sitting, he will recall that his colleague Charles Chauvel implied that the Minister had not been telling the truth. I let it go—I did not interrupt. But it was a very provocative question. Ministers receiving a provocative question like that are perfectly at liberty to give as good as they get. That has always been the ebb and flow of this House. We will not waste further time on this. I invite Charles Chauvel to ask his supplementary question.

Charles Chauvel: Why is his Minister of Foreign Affairs planning to use the Commonwealth Heads of Government Meeting merely as an opportunity to “compare notes” on climate change negotiations when the Secretary-General of the United Nations, the Danish Prime Minister, and the Secretary-General of the Commonwealth are attending the meeting to seek a “strong political statement” on climate change ahead of the Copenhagen summit?

Hon GERRY BROWNLEE: As the member knows, everything that might be concluded by way of agreement starts with a comparison of one country’s position with another’s. That is an appropriate role for the Minister of Foreign Affairs.

Charles Chauvel: How can the Minister for Climate Change Issues and the Associate Minister for Climate Change Issues (International Negotiations) go to Copenhagen with their heads held high, when his Government voted yesterday against legislating for binding emissions targets and is teaming up, in international climate change negotiations, with major polluters against the small Island States, to whom we generally pretend friendship?

Hon GERRY BROWNLEE: The Minister would not accept the assertion that the member implies in his question. He asks how the trade Minister and the climate change negotiations Minister, who is one and the same person, can hold his head up at the conference. What the Minister can say is that New Zealand has set targets. We do have an “all gases, all sectors” emissions trading scheme, and we are doing our bit to solve a worldwide problem.

Legal Aid—Graeme Burton

5. DAVID GARRETT (ACT) to the Minister of Justice: How much, if anything, did the taxpayer pay in legal aid for Graeme Burton to defend the recent charge of attempted murder, for which he was found guilty?

Hon CHRISTOPHER FINLAYSON (Acting Minister of Justice): I am advised by the Legal Services Agency that the amount paid to date in relation to Mr Burton’s legal aid file is $12,342.50. That amount includes lawyers’ fees and other relevant disbursements that have been approved to date. Although the trial has concluded, Mr Burton has yet to be sentenced. The final cost of services is not yet known.

David Garrett: Does the Minister agree that regardless of the outcome of the trial and, indeed, the sentencing, Mr Burton will be in prison for at least the next 25 years in any case?

Mr SPEAKER: I urge caution in this area, because, as I understand the situation, Graeme Burton has not yet been sentenced, and I do not think it is appropriate for this House to be raising issues in respect of that matter. I do not want to take a supplementary question off the member; if he likes he can ask a different supplementary question. I ask him to be very careful about the fact that this particular convicted person has not yet been sentenced.

Hon Rodney Hide: I raise a point of order, Mr Speaker. That is true, and that was why the question was so carefully framed. It was making a point about the sentence that Mr Burton is already serving. He is already in prison for 25 years. That was the point that my colleague Mr David Garrett was making. Mr Burton is serving 25 years in prison regardless.

Mr SPEAKER: This is quite important. I will hear the Hon Trevor Mallard.

Hon Trevor Mallard: I, unusually, have to agree with Rodney Hide. It was a carefully worded question, which did have “regardless of” the sentence that is about to be imposed as part of it. I think the question was actually about the old sentence and the likelihood of parole. The Minister of Justice could probably say that he has no responsibility and does not want to comment, but I think the question should not be ruled out.

Mr SPEAKER: I acknowledge the advice offered by colleagues, but what troubles me is that we normally have to be very careful in referring to the past records of people who are before the courts. This case, at least, is beyond the basic conviction. We are at the point of sentencing, though. The dilemma I have is that, obviously, details of the convicted person’s past are relevant to sentencing in respect of the conviction currently before the court. That is the dilemma I face on the matter. I ask the member to ask a supplementary question, being very careful of the fact that if there is undue reference to the past record, convictions, and sentencing of a person currently before the court, there is risk of argument that it may influence the court. I ask him to be very conscious of that.

David Garrett: I will simply ask a different question, to save any potential conflict. Does the Minister agree that every single dollar paid out in criminal legal aid is $1 less available for civil legal aid for such persons as those who are suffering from a leaky home that they cannot afford to fix?

Hon CHRISTOPHER FINLAYSON: Yes, and I can understand that member’s point of view. But I would say two things in response to it. First, it is the hallmark of a just society that everyone is entitled to a fair trial, regardless of conduct. The legal aid system provides for a fair trial regardless of what sort of person the court is dealing with. The second point is that—and I am sure that the member, as an experienced barrister, would understand this—legal aid quite often prevents defendants from acting for themselves. I am sure the member is aware of appalling cases where defendants have sought to cross-examine their victims, notwithstanding the restrictions contained in section 95 of the Evidence Act. So there is a very good reason why we have a legal aid system for criminals.

Question No. 6 to Minister

Hon DAVID PARKER (Labour): I raise a point of order, Mr Speaker. Given that the Minister of Finance and the Associate Minister of Finance are away, I seek leave to hold over my question until the next day the Minister of Finance is available.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is objection.

Recession—Rebuilding Economy

6. Hon DAVID PARKER (Labour) to the Minister of Finance: Does he stand by his statement that “In order for that recovery to be sustainable we need improved competitiveness among our exporters and continued recovery in household savings”?

Hon TONY RYALL (Minister of Health) on behalf of the Minister of Finance: Yes.

Hon David Parker: How can the Minister of Finance insist that New Zealand has the best monetary policy in the world when currency volatility makes exporting tougher for businesses than it should be?

Hon TONY RYALL: There is no doubt that currency volatility is a challenge for many exporters. Export volumes have been stagnating for some time, but the real issue in respect of monetary policy and the effect on the currency is very much a reflection of the legacy that this Government inherited from a Government that made such waste of taxpayers’ money during its years on the Treasury benches. Its spending in a 5-year period increased by over 45 percent, and New Zealanders wondered what they got for it.

Hon David Parker: How can the Minister of Finance pretend that he is leading an export-led recovery when he is happy to sit on his hands as our exporters struggle against a volatile dollar, and interest rates driven by debt-fuelled consumption in the non-tradable sector?

Hon TONY RYALL: This Government is not sitting on its hands; this Government is dealing with the issues that really matter to the New Zealand economy. Primary amongst those issues is dealing with the 10 years of economic mismanagement by the previous Government, when it wasted some of the best years of New Zealand’s economic performance.

Hon David Parker: How can the Minister of Finance maintain that New Zealand has the best monetary policy in the world when, despite our economy being small, we are one of the top 10 or 11 most traded currencies in the world?

Hon TONY RYALL: I think the Minister of Finance would be quite clear that many challenges face the New Zealand economy, but those challenges are made more difficult by the fact that during the 10 years of good economic times—

Mr SPEAKER: The Minister has been devoting a fair part of his answers to attacking the previous Government, when the member’s questions have not been particularly provocative. He has been asking about the issue of a volatile currency, which is not attacking the Government; it is raising an issue of relevance. My concern about that last answer was that it did not really answer the member’s question, at all. I invite the Hon David Parker to ask his question again, just in case there was confusion.

Hon David Parker: How can the Minister of Finance maintain that New Zealand has the best monetary policy in the world when, despite our being a small economy, we are one of the top 10 or 11 most traded currencies in the world?

Hon TONY RYALL: I think the Minister can maintain that position extremely well. He can maintain that position because this Government recognises that it has an important role to play in providing balanced economic policy, and ensuring that the Government’s contribution to maintaining stability is a priority.

Question No. 1 to Minister

Hon Dr NICK SMITH (Minister for Climate Change Issues): I seek leave to table a formal statement from the National Institute of Water and Atmospheric Research and its scientist Dr David Wratt in response to the question from Mr Rodney Hide earlier that I did not have the answer to.

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.

Oil and Gas Exploration—Initiatives

7. JONATHAN YOUNG (National—New Plymouth) to the Minister of Energy and Resources: What action is the Government taking to increase oil and gas exploration in New Zealand?

Hon GERRY BROWNLEE (Minister of Energy and Resources): In Budget 2009, $20 million was appropriated for seismic data acquisition over the next 3 years. This summer, the motor vessel Bergen Resolution will acquire seismic data in the Pegasus Basin, the Great South Basin, and either the Challenger Plateau and Bellona Trough area, or the outer Taranaki Basin and Northland East Slope Basin area. Petroleum exploration and investment companies will then have free access to the data to assess the considerable oil and gas potential of our frontier basins.

Jonathan Young: What is the level of exploration in New Zealand waters this summer?

Hon GERRY BROWNLEE: This summer will be the largest exploration activity ever seen in New Zealand waters.

Hon Darren Hughes: That’s just the Minister on the beach.

Hon GERRY BROWNLEE: Seven offshore wells are being drilled, and thousands of kilometres of seismic data are being shot. In fact, New Zealand is ranked in the top 10 countries for offshore exploration wells. This year we have put in place a seismic data acquisition programme to continue the success. It is a good programme. I know that you do not like us responding to interjections, Mr Speaker, but I just want to say that in order that no one rushes to the beach to save the whales, I will be publishing the dates that I am on holiday.

Charles Chauvel: What steps, if any, is the Minister taking to ensure that oil extracted in New Zealand territorial waters can be refined in New Zealand, as opposed to the current situation when it has to be sent to Australia for refining, doing nothing to support New Zealand’s energy independence?

Hon GERRY BROWNLEE: Far from not supporting New Zealand’s energy independence, I tell the member that as part of the International Energy Agency we have obligations to maintain a certain amount of oil stock. In the previous period of Government when that member’s party was in office, many millions of dollars would have been spent on oil tickets to ensure that we were in a good position. That was a proper spend; it needed to be done. But as New Zealand recovers more oil and as we export more oil, the need for those tickets to be in place is a great deal less. The New Zealand Government does not have an interest in the refinery. It would be up to the private sector to look at the resource and decide whether this was the appropriate place to make investments for further oil refining in this country.

Charles Chauvel: Is the Minister familiar with the observations today of Andrew Falloon, the director of his coalition partner ACT’s research unit, that he is “booked for 8 nights in the Abel Tasman National Park before Minister Brownlee rips it up”; and does this accurately reflect his Government’s policy on mineral exploration in New Zealand?

Hon GERRY BROWNLEE: No and no. What is more, I do not even know the guy.

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

Mr SPEAKER: A point of order has been called. I ask the Government backbenchers please to respect that.

Charles Chauvel: I seek leave to table the comments by Andrew Falloon, director of the ACT Party research unit, saying that he is booked for 8 nights in the Abel Tasman—

Mr SPEAKER: Before the member carries on, where are these comments from?

Charles Chauvel: It is from Mr Falloon’s Facebook page. [Interruption] I do seek leave; it is a serious matter.

Mr SPEAKER: No. I think I have ruled out these blog sites, and what have you.

Hon Rodney Hide: I raise a point of order, Mr Speaker. Seeing that Mr Charles Chauvel is Mr Falloon’s Facebook friend—

Mr SPEAKER: I do not see how that is a point of order. The member will resume his seat.

Emissions Trading Scheme—Financial Benefits for Māori Families After 2013

8. Hon SHANE JONES (Labour) to the Minister for Climate Change Issues: What are the financial benefits from the changes to the emissions trading scheme for Māori families after 2013?

Hon Dr NICK SMITH (Minister for Climate Change Issues): There are many benefits to Māori families. Post-2012 there will be thousands of Māori families in well-insulated and heated homes. This will have huge health benefits and will reduce their power bills, as well as reducing greenhouse gas emissions. Secondly, a large number of Māori families are beneficial owners of fishing quota, forestry, and agricultural assets, all of which will benefit financially from changes to the emissions trading scheme. Thirdly, Māori are disproportionately represented in the workforce of companies such as New Zealand Steel that are in the energy-intensive area, and without these changes those jobs would be at risk.

Hon Shane Jones: Why, given that the Minister has singled out forestry, has he confined the concession to an elite number of tribes, and denied the rest of Māoridom—in fact, the entirety of the pre-1990 forestry sector? Why is he driving a wedge between people?

Hon Dr NICK SMITH: The legislation that was passed by the previous Labour Government, including that member, put liabilities on all pre-1990 forest owners. Iwi came to me and strongly asked that those deforestation liabilities be removed for all of those forests. Our Government maintained the position that we would not do that. However, separate to that, there was the issue of quite specific Treaty settlements and information disclosure requirements. To avoid court proceedings, we came to a pragmatic and common-sense arrangement to allow those five iwi—just the ones that were affected by that issue—to plant trees on conservation land.

Hon Shane Jones: Why does the Minister refer to potential liability, when his own letter to Mark Solomon said that the Crown does not recognise or accept that there is a liability of any nature?

Hon Dr NICK SMITH: Anybody who has been involved in legal settlements would know that one says in the base of them that settling the issue is not an acceptance of fault by the Crown. That is well-practised, and any member in this House with legal experience would know that it is a standard provision that is put in such settlements.

Hon Shane Jones: Did he advise the Māori Party before it agreed to support his emissions trading scheme that the Government would face higher fiscal costs as a result of having to cover increased emissions; what social services did he tell the Māori Party would be cut by the Government in order to meet those increased costs, and is that the reason why Hone Harawira sent a letter saying that he could not possibly vote for this measure?

Hon Dr NICK SMITH: The premise that the member has based his question on is quite false. There is no extra cost; there is lesser income. There is lesser income from the emissions trading scheme, and the key element is that of the $50 billion that his colleague talks of, $40 billion is increased emissions trading scheme charges on farmers, and I am not sure how that helps Māori farming interests.

Hekia Parata: Tēnā koe, Mr Speaker. What reports has the Minister received criticising the agreement with the Māori Party, and are they consistent?

Hon Dr NICK SMITH: In the mainstream media the Opposition are saying: “Taxpayers are being diddled for billions in a racially”—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. The question very specifically asked what reports the Minister had received. You have ruled previously that the reports have to be actual reports, not newspaper clippings, which is what the Minister went straight to in his response.

Mr SPEAKER: Forgive me, but I am not sure of the basis of the member’s point of order, at all. As I understand it, this is not about the tabling of a document. The Minister was responding to a question asked. The question asked what reports the Minister had received, and, as I understand it, that has been in order for a lengthy period of time. I do not understand the problem there.

Hon Dr NICK SMITH: In reports I have received the Opposition has said that “Taxpayers are being diddled for billions in a racially preferenced deal in which the Government gave away everything and anything.” That was in the mainstream media. But in the Māori media I have heard reports that the Māori Party got diddled for a few blankets and beads. These contradictory statements from Labour will cause racial disharmony. This Government is focused on bringing New Zealand together and addressing the issues. [Interruption]

Mr SPEAKER: I ask the Hon Dr Nick Smith and the Hon Parekura Horomia to please show some respect for the fact that the Speaker has been on his feet for some time.

Rahui Katene: Does he agree with the Hon Shane Jones that the initiatives for Māori announced in the new emissions trading scheme will “protect a narrow, privileged southern elite”?

Hon Dr NICK SMITH: I am advised that in respect of the agreement we reached on forestry, there are a total of 178,398 beneficial owners, of which less than one-third are in the South Island. That statement is about as accurate as the claim by Labour that the agreement on forestry was worth $2 billion, when the officials’ advice is that it is worth one-hundredth of that amount.

Dr Russel Norman: I seek leave to table a statement from the Parliamentary Commissioner for the Environment, dated yesterday, in which she states the amendments will pass much of the costs from polluters to taxpayers.

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.

Kauri Forests—Protection

9. SHANE ARDERN (National—Taranaki - King Country) on behalf of NIKKI KAYE (National—Auckland Central) to the Minister for Biosecurity: What steps has the Government recently taken to protect New Zealand’s kauri forests?

Hon DAVID CARTER (Minister for Biosecurity): There is more good news. The Government is delighted to announce that it is injecting an additional $4.7 million of funding into a programme to save kauri trees threatened by kauri dieback disease. This will bring total Government funding for a 5-year programme aimed at containing this soil-borne disease to almost $10 million. It is a true demonstration of this Government’s commitment to protect this treasured species from what is a very serious biosecurity threat.

Shane Ardern: Why has the Government committed funding to fighting the kauri dieback disease?

Hon DAVID CARTER: New Zealand’s ancient kauri forests are an important part of our heritage, they are of huge significance to Māori, and they are vital to our native ecosystem. The kauri dieback disease is relatively unknown, but it poses a major threat to kauri species, especially those in the upper North Island.

Hon Damien O’Connor: If the Minister is so committed to protecting Northland forests, then why does he support the closure of the Ōpua biosecurity office, an action that leaves Northland vulnerable to pests and diseases from the hundreds of foreign yachts and vessels that visit Northland every year?

Hon DAVID CARTER: The Ōpua office will be manned from Whangarei. It will be manned throughout the season. It will not be manned throughout the winter, when not a lot of these vessels come into Ōpua port.

Hon Damien O’Connor: Will the Minister guarantee that his cut-backs to Biosecurity New Zealand will not expose New Zealand to greater risk and an invasion of Australian fruit flies, which would destroy our horticultural industry, given that a live Australian cane toad has just hopped through his current system; if not, why not?

Hon DAVID CARTER: There have been no cuts to Biosecurity New Zealand under this Government, unlike those under the previous Labour Government, and—[Interruption]

Mr SPEAKER: I apologise to the Minister. The House is so noisy that I cannot hear when members call. I take it that it is a point of order that the Hon Damien O’Connor is calling for.

Hon Damien O’Connor: I raise a point of order, Mr Speaker. The Minister is misleading the House—

Mr SPEAKER: The member will resume his seat immediately. He cannot use a point of order to contest an answer that is being provided by the Minister, especially not by arguing that the Minister is misleading the House. If he wants to ask further supplementary questions that may highlight what he considers to be inaccuracies in the answer, then that is fine, but he cannot do it by way of a point of order.

Hon DAVID CARTER: Continuing with my answer, the member might like to acknowledge to the House that when his Government was in charge, eight cane toads came into New Zealand in 2003, and four came in in 2004. [Interruption]

Mr SPEAKER: Some members will get a yellow card if they are not careful. I am on my feet. [Interruption] I am getting serious. The House has let off a little steam; let us put that behind us.

ACC, Minister—Statements

10. KEVIN HAGUE (Green) to the Minister for ACC: Does he stand by all his statements in the House on ACC?

Hon Dr NICK SMITH (Minister for ACC): Yes.

Kevin Hague: Why did he claim on 5 March in this House that Treasury had not been involved in the review of the accident compensation scheme, when, in fact, he had received a stream of advice that highlighted Treasury’s involvement in the review?

Hon Dr NICK SMITH: Treasury had provided advice to me about the accident compensation scheme. I have to say that the advice has been very concerning. It is that the scheme’s financial position is unsustainable and that significant change is required, through having either large levy increases or a pull-back on entitlements. The Government has been working through those difficult issues very responsibly.

Kevin Hague: I raise a point of order, Mr Speaker. My question related to the fact that the Minister claimed to stand by all of his statements. One of his statements was that Treasury had not been involved, and clearly it had.

Mr SPEAKER: I am not clear on what that point of order was.

Kevin Hague: Sorry, Mr Speaker. What I am saying is that the Minister’s answer to my supplementary question is entirely unresponsive to it.

Mr SPEAKER: What I will do—[Interruption] I will ask the House to please be a little more respectful of question time. Because it has been a very noisy day, it has been very difficult for me to hear. I invite the member to repeat his question, and I would like the House to please be reasonably quiet so that I can hear the question and the answer.

Kevin Hague: Thank you, Mr Speaker. Perhaps I should stress the critical words. Why, then, did he claim on 5 March in this House that Treasury had not been involved in the review of the accident compensation scheme, when, in fact, he had received a stream of advice that highlighted Treasury’s involvement in the review?

Hon Dr NICK SMITH: I raise a point of order, Mr Speaker. The member set down a written question that is very, very general. There are a number of reviews of ACC. If the member had specific information about a particular review or the like, in order for me to be able to specifically reply on which review and on which statements, the member should have set that information down in his primary question.

Kevin Hague: Speaking to the point of order—

Mr SPEAKER: No, I do not need further assistance on this matter. If the Minister answered along those lines, then it would be a perfectly fair answer, because the point he makes is absolutely correct. Where a very general primary question is laid down, members cannot necessarily expect a Minister to have the information required to answer a specific supplementary question. I invite the Hon Dr Nick Smith to answer the question.

Hon Dr NICK SMITH: The situation with the accident compensation scheme has been quite serious, such that there have been a number of reviews. Some of those have involved Treasury; some have not. The member will need to be more specific in order for me to be able to provide an answer.

Kevin Hague: I raise a point of order, Mr Speaker. My supplementary question highlights the Minister’s answer to my primary question—

Mr SPEAKER: The member cannot litigate an answer in that way, by using a point of order. The member asked a question. I gave him the chance to repeat it. I listened very carefully, and the Minister gave a perfectly reasonable answer, given that very, very imprecise and bland primary question. I think that the member has had a perfectly good answer from the Minister.

Kevin Hague: I seek leave to table some documents. The first of these is a Department of Labour accident compensation briefing to the Minister of 23 December, which states: “Treasury are still considering the scope of the review.”

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.

Kevin Hague: The second document is a briefing on accident compensation of 20 February from the Department of Labour, developed in consultation with Treasury, in which the Minister has noted the involvement of Treasury.

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.

Kevin Hague: Perhaps I should seek your advice on the third document to be tabled. It is the Hansard of Dr Smith’s—

Mr SPEAKER: I will not be seeking leave for the tabling of a recent Hansard. I take it it is a reasonably recent Hansard?

Kevin Hague: It is his answer from 5 March, so it is not very recent. It is the answer in which he states that—

Mr SPEAKER: I take it that it is from Hansard this year, and the House already has that readily available to it.

Carol Beaumont: Does he stand by his promise of 24/7 cover for all New Zealanders, or will his new legislation leave out some New Zealanders who do not meet a 6 percent hearing loss threshold, which, according to hearing experts, was plucked from thin air?

Hon Dr NICK SMITH: No, the assertion from the member is incorrect. The 6 percent hearing loss threshold is standard in Australia and in other parts of the world. There are a number of thresholds in other parts of the accident compensation Act, some of which were put in place by the previous Government. This Government does stand by having a 24/7 no-fault accident insurance scheme.

Carol Beaumont: Does he accept that “operational improvements” to the accident compensation scheme, like the voluntary accord with the hearing industry that has saved $10 million in the last 18 months, are threatened by the complete lack of consultation on proposed changes to the work-related hearing loss provisions?

Mr SPEAKER: Before I call the Minister to answer the question, did that supplementary question relate to a statement the Minister had made?

Carol Beaumont: Yes, it did.

Mr SPEAKER: Could I ask the member to repeat her question, so that she makes the statement very clear to me. The primary question is about statements the Minister has made in this House. It asks: “Does he stand by all his statements in the House on ACC?”, so the supplementary question must relate to any statements he has made in this House. I invite the member to repeat her question.

Carol Beaumont: Does he accept that “operational improvements” to the accident compensation scheme, like the voluntary accord with the hearing industry that has saved $10 million in the last 18 months, are threatened by the complete lack of consultation on proposed changes to the work-related hearing loss provisions?

Hon Dr NICK SMITH: I can confirm to the member that the cost of the hearing loss compensation part of the scheme’s cover has grown very substantially each and every single year, such that it is one of the areas where, if we are to ensure accident compensation is sustainable into the long term, we cannot sustain the level of increase in expenses, which has been way over the rate of inflation. The corporation ran a deficit of $4.8 billion this year, and that means we need to make changes.

Darien Fenton: Will he listen to the select committee, as he promised in the House yesterday, and will he listen to the Rail and Maritime Transport Union, which appeared before the select committee today, and which says its injured workers, who may be forced to work in non-related jobs for 40 hours a week without adequate rehabilitation, will call for the right to sue employers who have caused their injuries?

Hon Dr NICK SMITH: Yes, the Government, and particularly Government members, who are very capable, are listening carefully to the submissions. But I do say that the status quo for accident compensation is not sustainable. Most of the changes are reversals of unfunded changes made by the previous Government. If that Government had actually budgeted for some of the extra entitlements that it offered and promised, we would not be in this situation.

Industrial Action—Advice to Minister

11. DARIEN FENTON (Labour) to the Minister of Labour: What advice, if any, has she received on the reason that thousands of workers all around New Zealand will be taking industrial action and attending rallies tomorrow?

Hon KATE WILKINSON (Minister of Labour): I have been advised of the rally and understand that the workers involved are seeking better pay.

Darien Fenton: Will she or any other member of the National Government be fronting up tomorrow to the 2,700 hospital and service workers, the many thousands of publicly funded disability support carers, school support staff, hospital administrative staff, and public service workers who will be attending rallies up and down the country to protest about this Government’s wage freeze, which is hurting low-paid workers like them; if not, why not?

Hon KATE WILKINSON: I can tell the member that tomorrow I intend spending the day in Taranaki, with a day full of appointments. I could possibly catch a glimpse of the rally up there.

Darien Fenton: Does she think it is fair that low-paid workers, like the thousands who will protest tomorrow, have to accept a zero wage increase, at the same time that the cost of living is going up, the richest chief executive officers in the country are getting massive pay increases, and the Government is planning to make workers pay more for accident compensation and receive less; and is this what the Government calls “taking the sharpest edges off the recession.”?

Hon KATE WILKINSON: I say to that member that if the previous Labour Government had not wasted 9 years of golden economic weather, we would not even be having this conversation. But the harsh reality is that we are in difficult economic times, in which many people have lost their jobs. This Government is borrowing hundreds of millions of dollars a week to maintain service levels, and we want to invest in a smarter, more productive Public Service.

Grant Robertson: How will a wage freeze for low-paid workers in the State sector, such as the ones who protest tomorrow, help to close the wage gap with Australia?

Hon KATE WILKINSON: As that member well knows, this Government is intent on balancing the economy, on taking the sharp edges off the economy. We have opted, as we have said, for a balanced policy that does protect people in the short term from the sharp edges of the recession. The policy lays the foundation for increased economic growth and more jobs, on the road to recovery for our country.

Grant Robertson: I raise a point of order, Mr Speaker. You have encouraged us to ask very specific questions, and I asked a very specific question about how a wage freeze such as the Minister is proposing will narrow the wage gap with Australia; she did not address that question.

Mr SPEAKER: I absolutely accept the point the member makes that he asked a very commendably to-the-point question—very commendable. The only dilemma I have is the Minister’s actual responsibility for the wage round in the public sector. That is my dilemma in asking for a more specific answer, because the Minister of State Services is actually responsible for the wage round in the State sector. That is my difficulty in asking the Minister to be more precise in her answer. So I apologise to the member, because I do commend him for an absolutely succinct question, but, sadly, it is really outside the Minister’s responsibility.

Government Data Accessibility—Launch of Website

12. KANWALJIT SINGH BAKSHI (National) to the Minister of Internal Affairs: What is the Government doing to make government data more easily accessible to New Zealanders?

Hon NATHAN GUY (Minister of Internal Affairs): Earlier this month the Government launched a new website administered by the Department of Internal Affairs called data.govt.nz. The website is a catalogue of publicly available Government data and is a great resource for the public. This is part of a drive to make non-personal Government data more discoverable, usable, and relevant to all New Zealanders.

Kanwaljit Singh Bakshi: What feedback has the Minister had on this new initiative?

Hon NATHAN GUY: There has been a great deal of positive feedback about this new website, in particular from the National Business Review and from people in the UK, USA, and Australia. I understand that Opposition MP Chris Hipkins is also a big fan. He has publicly commented: “I think it would be hugely useful for researchers, journalists, analysts, businesses, in fact just about anyone! Keep up the good work DIA …”.

Mr SPEAKER: It is coming close to the end of a sitting period, so I guess a bit more noise is to be expected.

Question No. 3 to Minister

Hon TREVOR MALLARD (Labour—Hutt South): During question No. 3 Ms Tolley indicated that she would provide information to me. I ask whether the rule that applies to the tabling of information, which is that it is to be done by the end of the sitting day, applies here, or is that not the case?

Mr SPEAKER: No, it is not—nice try. I am sure the member knows that it is not. It is up to the Minister to follow up on that matter.