Tuesday, 25 May 2010

Tuesday, 25 May 2010

Tuesday, 25 May 2010

Mr Speaker took the Chair at 2 p.m.

Prayers.

Questions for Oral Answer

Questions to Ministers

State-owned Assets—Assessment for Sale

1. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Which State assets was he referring to yesterday when he said work would begin soon on assessing which, if any of them, would be put up for sale?

Hon JOHN KEY (Prime Minister): I was not referring to any particular State assets but, rather, to the policy. But I can assure the member that they will not include Telecom, the State Insurance Office, the Tourist Hotel Corporation, New Zealand Steel, Petrocorp, the Government Printing Office, or the DFC, because the member has already sold those ones. [Interruption]

Mr SPEAKER: We will not have this go on across the House. I have called the honourable Leader of the Opposition, and he will be shown some courtesy.

Hon Phil Goff: Why even consider selling Kiwibank when 700,000 Kiwis bank with it precisely because it is community and New Zealand - owned, retaining its profits in and for New Zealand, when the private, commercial banks take $2.6 million in private profits and send it overseas?

Hon JOHN KEY: The Government has given no consideration to selling Kiwibank. What I can say is that the Government is giving consideration to putting more capital into Kiwibank, because the board of Kiwibank wants more capital.

Hon Phil Goff: If the National Government is not considering selling Kiwibank, as the Prime Minister has just told us, why did Bill English raise it publicly the day after the Budget, and privately to the National Party conference 2 years ago?

Hon JOHN KEY: Because when the Minister of Finance goes to a post-Budget function, hundreds and hundreds of people turn up. They ask him questions and seek his advice because they can see from the quality of the Budget the man’s wisdom and knowledge, and if he is asked a straight question he gives a straight answer.

Hon Phil Goff: That was half-hearted. Why would he risk Kiwibank shares falling into the hands of overseas investors, and its profits going offshore, when Kiwi mums and dads already own it, and benefit from its profits working for them and for New Zealand?

Hon JOHN KEY: The member is well and truly ahead of himself. But if the member was so opposed to the Crown owning a majority stake, and thinks the Government should have owned a 100 percent stake, why did the member not buy the rest of Air New Zealand? It was on the stock exchange.

Hon Phil Goff: I am not sure how that is an answer, Mr Speaker—[Interruption]

Mr SPEAKER: I say to Government backbench members on this occasion that I have called the honourable Leader of the Opposition to ask a supplementary question, and the House wants to hear it.

Hon Rodney Hide: I raise a point of order, Mr Speaker. I agree with you, but the Leader of the Opposition on three occasions has stood up and before asking his question has made a snide comment into the microphone, and I think that is what upsets my colleagues behind me.

Mr SPEAKER: I think that is a fair point that the Hon Rodney Hide has made, and I ask the Leader of the Opposition to desist from doing that.

Hon Phil Goff: If the Prime Minister is considering “selling shares”, as he quaintly puts it, to mums and dads who are investors in New Zealand, how does he stop those shares being onsold overseas, given New Zealand’s obligations under the General Agreement on Trade in Services and CER, which require national treatment?

Hon JOHN KEY: That is a question the Government has not tried to answer because it has not looked at that issue yet, but I can say there are always options. One option to ensure that is of course to make sure that Kiwis have more money—that is one thing the Budget did. Other options are to encourage them to save more—that is another thing the Budget did—and to invest in New Zealand, which is another thing the Budget did.

Hon Phil Goff: In assessing which assets the Prime Minister, and the National Government, might put up for sale, has he considered past experience with privatisation, when a private sector board ran Air New Zealand into bankruptcy and private owners asset-stripped KiwiRail and ran it into the ground?

Hon JOHN KEY: The Leader of the Opposition has a fair point. If one is going to consider these matters, one should definitely seek someone who has had experience. Maybe, just maybe, the Minister of Finance and I should go and have a chat with the Leader of the Opposition, because that is the man who sold Telecom, the State Insurance Office, the Post Office Bank, Air New Zealand, the Tourist Hotel Corporation, New Zealand Steel, Petrocorp, the Government Printing Office, the DFC, the National Film Unit, the Rural Banking and Finance Corporation, the Shipping Corporation, New Zealand Liquid Fuel Investment, Maui Gas, SynFuels, forest cutting rights, Health Computing Services, and Communicate New Zealand. If there is ever a man who knows something about privatisation, it is that one.

Hon Phil Goff: I raise a point of order, Mr Speaker.

Mr SPEAKER: A point of order has been called, and it will be heard in silence.

Hon Phil Goff: Although it is interesting to have a history from 20 years ago, I point out to you that the Prime Minister made no effort to answer that question.

Mr SPEAKER: Members will cease this interjecting while a point of order is being considered. I say to the Leader of the Opposition that the slight dilemma I have is that he asked the Prime Minister whether he had considered something, and it is that kind of language that then gives the Minister the chance to answer that way. In answer, I think the Minister said he had not considered something but he had considered something else, and that is the dilemma with that kind of question. I realise it is frustrating, but the more precise a question and the less opinion sought, the more help I can be in assisting that members get answers.

Hon Phil Goff: Should New Zealanders have as much confidence in the assurances that the Prime Minister is giving around not selling Kiwibank as they had in his promise that “National will not be raising GST.”?

Hon JOHN KEY: I did not hear that.

Mr SPEAKER: If the honourable member would not mind repeating his question—the Prime Minister did not hear it.

Hon Phil Goff: Should New Zealanders have as much confidence in the Prime Minister’s assurances about protecting their interests in Kiwibank as they had in his promise before the election that “National will not be raising GST.”?

Hon JOHN KEY: Yes, because when I was asked about GST I was asked a different question, and I answered absolutely accurately.

Emissions Trading Scheme—ACT Confidence and Supply Agreement

2. Hon RODNEY HIDE (Leader—ACT) to the Prime Minister: Has he received any reports regarding the comment attributed by the New Zealand Herald to National MP Shane Ardern that “Mr Hide could stop the ETS if he wished by reconsidering his party’s confidence and supply agreement with National”; and what is his view of the ETS and the confidence and supply arrangement?

Hon JOHN KEY (Prime Minister): I am aware of the comments. My view of the emissions trading scheme is that it strikes a good balance between our economic opportunities and our environmental responsibilities. My view of the confidence and supply arrangement with the ACT Party is that it forms the basis of a very positive and healthy relationship. I thank the ACT Party for its contribution in our stable and balanced Government, and, in particular, I thank the Minister for the great work he has done in reforming Auckland.

Hon Rodney Hide: Does he share ACT’s concern that the entire net gain from tax cuts for the 550,000 households earning between $40,000 and $85,000, shown to be 0.4 percent of their income on page 9, in the Minister’s Executive Summary, in the Budget, is eaten up by the 0.4 percent extra cost of the emissions trading scheme, as shown on page 65, in the Economic and Fiscal Update—that is, that what Bill English has given back, Nick Smith has taken away for over a million middle-income New Zealanders?

Hon JOHN KEY: No, because the estimates I have are that the emissions trading scheme will cost the average household around $3 a week, and the tax cut for someone on $50,000, even if they consume the lot, net of GST, is about $14 to $15 a week.

Hon Rodney Hide: Is the Prime Minister, therefore, saying that the figures contained on page 9 in the Minister’s Executive Summary and on page 65 in the Economic and Fiscal Update, showing, respectively, the extra income for middle-income households earning between $40,000 and $85,000 and the extra costs of the emissions trading scheme are wrong?

Hon JOHN KEY: No; but the answer is that one is a measure of the CPI, and one is a measure of their general income.

Budget 2010—Results for New Zealanders

3. CRAIG FOSS (National—Tukituki) to the Minister of Finance: What reports has he received on how Budget 2010 delivered for New Zealanders?

Hon BILL ENGLISH (Minister of Finance): The reactions have been generally pretty positive—so much so that the Opposition did not even ask a question on the Budget today. Most commentators agree the Budget has struck the right balance between maintaining public services and controlling debt while making worthwhile and overdue improvements to the tax system, which will help to rebalance the economy.

Craig Foss: Has he seen any surveys of public responses to the Budget?

Hon BILL ENGLISH: A wide range of surveys have indicated a public response. I will simply refer to one from the New Zealand Business Council for Sustainable Development, where a vast majority—about 80 percent—approved the reductions in personal income tax rates, 73 percent supported the tax base broadening measures, 69 percent supported the Government’s investment in ultra-fast broadband, and around 70 or 80 percent supported the increased investment in schools and hospitals. Rounded up with all the issues, including the tax increases, approvals outnumbered disapprovals by about two to one.

Craig Foss: What conclusions does the Government draw from the reaction to the Budget?

Hon BILL ENGLISH: I think it means that New Zealanders have a pretty good grasp of what went wrong in this economy in the last decade, and what is required to put it right. It also means that when they understand the issues—and in this case, they are issues that affect every household and every small business—they will support bolder policy initiatives. Taxpayers who are interested to know their own position can go to the website www.taxguide.govt.nz. The website has had about 300,000 hits, and I encourage all New Zealanders who want to understand their position to visit it.

Craig Foss: What possible measures were considered and rejected for Budget 2010?

Hon BILL ENGLISH: We had a number of suggestions, including some that were raised in this House. We rejected an increase in personal tax. We rejected the idea of fiddling with GST to create exemptions. We rejected the idea of getting back on the treadmill of unsustainable Government spending, and we rejected the idea of significantly increasing Government debt beyond responsible levels. All those suggestions came from the Labour Opposition.

Budget 2010—Effect on New Zealanders

4. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: When he said the vast bulk of New Zealanders would not be worse off after this Budget, which New Zealanders did he expect would be worse off?

Hon JOHN KEY (Prime Minister): What I actually said was that I expected the vast bulk of New Zealanders to be better off under a tax system that increases GST to 15 percent, reduces personal income taxes across the board, and compensates people receiving income support. That is demonstrably the case.

Hon Annette King: Does he expect life to be better for the 60,000 New Zealanders his Government is budgeting to be still on the unemployment benefit in 4 years’ time, which is double the number of unemployed he inherited when National became the Government, and how will gradually creating only 10,000 jobs through this Budget help them?

Hon JOHN KEY: I remind the member that less than a month ago unemployment in this country was reduced from 7.1 percent on an adjusted basis to 6 percent. The Budget indicates that the unemployment rate will continue to fall from that rate. I think this Government is doing a lot to create jobs. As the Budget quite clearly pointed out, supported by Treasury, this Budget will create more than 170,000 jobs.

Hon Annette King: I raise a point of order, Mr Speaker. My question asked whether he expected the 60,000 people who will be on the unemployment benefit in 4 years’ time to be better off. He did not address the question.

Mr SPEAKER: I will allow the honourable member to repeat her question, without loss of her supplementary question.

Hon Annette King: Does he expect life to be better for the 60,000 New Zealanders his Government is budgeting to be still on the unemployment benefit in 4 years’ time, which is double the number of unemployed he inherited when National became the Government, and how will gradually creating only 10,000 jobs through this Budget help them?

Hon JOHN KEY: Firstly, it is a hypothetical question, because no one knows who will be on the unemployment benefit. What I can say to those who are on the unemployment benefit and coming off that benefit, is that they are far better off under a National Government, because they will almost certainly face a tax rate of no more than 17.5 percent, which is half what they used to face under a Labour Government.

Hon Annette King: If he is correct that the vast bulk of New Zealanders will not be worse off, does this Budget include sufficient funding to reverse the cuts to home help for thousands of older New Zealanders who have paid taxes all their lives, and who now face daily risks to their health, unnecessary costs, and misery?

Hon JOHN KEY: The answer is that this Budget provided more money for health than has ever been provided for it in New Zealand’s history—$14 billion. Those matters are operational and are being taken up by the district health boards.

Hon Annette King: I raise a point of order, Mr Speaker. I did not talk about the health budget. I asked whether there was sufficient funding to reverse the cuts to services for thousands of older New Zealanders.

Mr SPEAKER: The member asked about sufficient funding in the Budget, and the answer referred to the amount of funding in the Budget for health. I think the Prime Minister in his answer, on this occasion, basically rejected part of the member’s question. I think he was rejecting the part of the question about cuts; that is his right in answering the question.

Hon Annette King: Does he believe this Budget will reduce the underclass in New Zealand—as he has previously described some New Zealanders, and which he said was to the shame of us all—in light of the fact that thousands of New Zealand children will get little or no benefit from this Budget and cannot even see the first rung of the opportunity ladder that he likes to talk about?

Hon JOHN KEY: I think there are a number of things in the Budget that will help. One of those is the funding that goes into education to provide national standards to make sure that this is a Government that takes it seriously that young New Zealanders can read and write properly. The Budget will virtually halve the tax rate on low-income New Zealanders, it provides tax cuts for the bulk of New Zealanders, and in my view it puts the right incentives into the economy to help those who are least well-off to improve in life. As a short answer, yes.

Hon Annette King: Does he agree with the New Zealand Council of Christian Social Services, an organisation that works with the most vulnerable in society, and his own Minister of Finance, Bill English, that the gap between rich and poor in this Budget is about the same, and when will he match his rhetoric about an underclass with some action?

Hon JOHN KEY: Yes, numerically, but the Budget has tremendous incentives in it to allow people to progress, and that is what will happen.

Budget 2010—Tax Package Objectives

5. AMY ADAMS (National—Selwyn) to the Minister of Finance: What are the objectives of the Budget 2010 tax package?

Hon BILL ENGLISH (Minister of Finance): The main objective of the Budget 2010 tax changes is to foster faster economic growth. It does this in several ways. Across-the-board cuts to personal tax rates will help families by giving them the incentives to get ahead under their own steam. It will also attract and retain skilled New Zealanders in this country. The tax package, including the measures taken around cutting the company and savings tax rates, extending the tax base, and lifting the rate of GST will make the tax system fairer as well as close loopholes.

Amy Adams: How will the tax package help hard-working New Zealand families to get ahead?

Hon BILL ENGLISH: It will leave more cash in the hands of those hard-working New Zealanders in order to give them more choices and better incentives. Under the changes 73 percent of income earners, those earning less than $48,000 a year, will now face a top statutory income tax rate, excluding tax credits, of 17.5 percent or less. For those near the top of this income range the tax rate is almost halved, from 33c in the dollar just 2 years ago to 17.5c today.

Amy Adams: How will the tax package make New Zealand’s tax system more internationally competitive?

Hon BILL ENGLISH: The shift in the tax system will help to attract and retain the skilled workers this economy needs. Before this tax package, on a straight dollar for dollar basis, all Australians earning up to $228,000 a year were paying less tax than New Zealanders on comparable incomes. This package reduces that figure to about $55,000 a year. In other words, all New Zealanders earning more than $55,000 a year will be paying less tax than Australians who are on the same income. The cut in the company tax rate, from 30 percent to 28 percent, means that our headline rate reaches 28c sooner than in Australia. This will help lift investment and create jobs.

Amy Adams: Has the Minister seen any reports of support for dropping the top personal tax rate to 33 percent and dropping the company rate to 28 percent?

Hon BILL ENGLISH: I have seen a number of reports, including one that states: “This allows New Zealanders to keep more of their own money.” I have seen another report about dropping the company rate, which states that it will “create an environment in which enterprises can succeed—both New Zealand enterprises and those that are attracted from overseas.” Those statements were both made in 1988 by Phil Goff when he implemented those tax measures.

Budget 2010—Gap Between Rich and Poor

6. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he stand by his statement that the gap between rich and poor is “about the same” after Budget 2010?

Hon BILL ENGLISH (Minister of Finance): Yes. The tax base broadening measures, particularly those that close loopholes and change the effect of taxation on property, mostly impact on wealthier taxpayers. The GST compensation measures are concentrated among low-income earners. The end result is that low, middle, and high-income groups all receive about the same percentage increase in real after-tax incomes.

Hon David Cunliffe: How does he reconcile his statement that he is concerned about the gap between rich and poor with his admission that the Budget tax cuts have actually done nothing to close that gap?

Hon BILL ENGLISH: Very easily. The Government has created a tax system with stronger incentives in the direction the economy needs to go in—that is, there are more incentives towards work, savings, and investment, and less incentives towards consumption, borrowing, and property speculation. That means we will have an economy with more opportunities for New Zealanders to get ahead, whatever their income.

Hon David Cunliffe: When the Minister said that the Government is creating stronger incentives, could he be referring to the fact that, according to this graph, an average wage earner takes until year 5—2014—to break even after the effects of the rampant inflation that will take place next year?

Hon BILL ENGLISH: No, I do not. That member should recall the time when he was, I think, an Associate Minister of Finance, when there was 5 percent inflation in this economy. I do not remember him protesting about its effect on average wage earners then.

Hon David Cunliffe: When he said that incentives had been strengthened, was he referring to the net position after tax of average and minimum wage earners, which—by the time we take out GST, inflation, and accident compensation levies—does not recover, in the case of average wage earners, even by 2014?

Hon BILL ENGLISH: The member has been doing some magic with the inflation numbers. The fact is that the inflationary effect of GST is more than offset by the reduction in income taxes. The rest of the inflationary effect is dealt with in the usual way: low-income people on income support get an annual adjustment, and wage earners do their best to claw back increases in the cost of living through wage increases. That is no different from how it has ever been.

Peseta Sam Lotu-Iiga: How does the Budget improve the position of lower-income taxpayers?

Hon BILL ENGLISH: As I have pointed out, the Budget lowers tax rates for all taxpayers and improves their incentives to work, save, and invest, because in this economy we need a bit less incentive towards borrowing, consumption, and property speculation. Over 70 percent of all income earners now face a marginal income tax rate of 17.5 percent or less, and a family with two children that receives Working for Families will now pay no net tax on income up to $50,000.

Hon David Cunliffe: If the Minister is so concerned about lower-wage earners, then why did he use this “once-in-a-generation” tax cut to give himself a double-dip tax cut of $240 a week instead of focusing that money and other sums like it on closing the income gap between rich and poor New Zealanders?

Hon BILL ENGLISH: I point the member to a graph that I used in, I think, the Budget lock-up; it is readily available to him. It will show him that over the last 15 years people on incomes of $30,000 to $50,000 have had about a 40 percent reduction in the income tax that they pay. Our tax system has become more progressive over the last 15 years, not less progressive.

Peseta Sam Lotu-Iiga: How is the cost of lowering personal income taxes distributed across taxpayers?

Hon BILL ENGLISH: The cost of lowering personal tax rates is estimated at just over $4 billion per year by 2014. About two-thirds of this cost was used to reduce tax rates in the lowest two tax brackets—that is, people earning up to $14,000 on the lowest tax rate, and people earning up to $48,000 on the next lowest tax rate. This distribution demonstrates the Government’s commitment to making tax cuts across the board. The reason for that is we believe that the incentives matter for people who are on the minimum wage as much as they do for people who are above the average wage.

Health Services—Minister’s Statements

7. Dr PAUL HUTCHISON (National—Hunua) to the Minister of Health: Does he stand by all his statements in relation to health services?

Hon TONY RYALL (Minister of Health): Yes, including the statement that despite the world’s worst economic crisis since the 1930s, this Government is determined to protect and grow the New Zealand public health service.

Dr Paul Hutchison: What additional resources are being invested in public health services this year, and how does this investment compare on a GDP basis with previous years?

Hon TONY RYALL: This year the Government is funding Vote Health an additional operating budget of $512 million, bringing it to a total of over $13.5 billion every year. Members will know that the Budget projects an increase in GDP next year. I can advise the member that the health budget for next year—and, indeed, for the current financial year—is the largest percentage of GDP ever spent on health in New Zealand. That is to say—and members opposite will want to note—that this Government is investing a greater share of the economy in the public health service than any previous Government has in the history of this country.

Hon Ruth Dyson: How will thousands of older New Zealanders who are already struggling with cuts to their home help view his Budget, when district health boards received $200 million less in additional funds under his watch? All that those older people want is $30 a week worth of home help, which is being cut.

Hon TONY RYALL: I say to those old people that the Government is putting $512 million extra into the health budget, whereas that member opposite projected $330 million. District health boards will spend a record amount on home care in the next year; 65,000 to 70,000 people receive home support services each year. Each year around 15,000 people either start or finish receiving support services in their homes. Some receive it for short periods to recover from an operation or illness; others may cease receiving home care and go into a rest home. District health boards are planning to spend a record amount on home care next year.

Dr Paul Hutchison: What does the Government expect to see as a result of this Budget’s commitment to protecting and growing the public health service?

Hon TONY RYALL: The Government is determined to get the best possible value for every dollar put into the New Zealand public health service. The Government expects to see more elective surgery for New Zealanders, faster emergency departments in our hospitals, and better cancer treatment for New Zealand men and women. In addition, district health boards are putting more money into home support both this year and next year.

Hon Ruth Dyson: How can he justify his statements boasting about his health budget when Nelson and Marlborough residents have just been told that $1.51 million will be slashed from their front-line mental health services in a move described by locals as “a mass dumping” of the most vulnerable?

Hon TONY RYALL: The budget for mental heath will be increasing by $174 million over the next 4 years. In this House, we have learnt that the claims that the member opposite makes have to be checked.

Prime Minister—Conflicts of Interest and Blind Trusts

8. Hon PETE HODGSON (Labour—Dunedin North) to the Prime Minister: On how many occasions has he as Prime Minister dealt with actual or perceived conflicts of interest involving himself since the election?

Hon JOHN KEY (Prime Minister): I cannot recall exactly on how many occasions I have considered actual or perceived conflicts of interest matters involving me, but I do know that there have been at least two.

Hon Pete Hodgson: Does he believe that he has avoided, or might avoid, conflicts of interest issues arising because he has taken the precaution of putting his relevant domestic assets into a blind trust?

Hon JOHN KEY: Well, that would be my hope.

Hon Pete Hodgson: Will he recommend to all his Cabinet Ministers that they establish a blind trust for relevant assets so as to reduce the growing list of conflicted Ministers who have come to public attention for real or perceived conflict of interest issues, such as Dr Worth, the Hon Dr Nick Smith, the Hon Chris Finlayson, or himself with Jackson Mining and Tranz Rail?

Hon JOHN KEY: There are two aspects. Firstly, I refute that the members listed have conflicts of interest; just because that member says they have one does not mean they do have one. Secondly, it is up to individual Ministers to seek advice from the Cabinet Office on that matter.

Hon Pete Hodgson: Has the Cabinet Office confirmed that his blind trust has been established in a manner that means he cannot know what he owns from one day to the next, and is, therefore, fully compliant with the relevant sections of the Cabinet Manual; if so, why will he not require that other Ministers do the same?

Hon JOHN KEY: To the best of my knowledge, yes. I am not aware of the blind trusts arrangements that Ministers have. They take them up with the Cabinet Office.

Budget 2010—Schools Operational Funding

9. ALLAN PEACHEY (National—Tāmaki) to the Minister of Education: What increase did Budget 2010 give to school operational funding?

Hon ANNE TOLLEY (Minister of Education): Budget 2010 invested an additional $155.9 million into school operational funding over the next 4 years. This means that despite the Government facing very tight fiscal conditions, we have delivered a 4 percent increase in funding to schools.

Allan Peachey: What does this increase in school operational funding mean for an average-sized school?

Hon ANNE TOLLEY: I am advised that the 4 percent increase in school operational funding means that for an average primary school there will be an additional $10,700 next year, and for an average secondary school there will be an additional $26,700 next year. That is a substantial cash increase to schools in a very tight fiscal environment.

Hon Trevor Mallard: In light of the figures she has just given the House on the basis of a 4 percent increase, does she accept with a 5.9 percent inflation that the average secondary school will be $13,000 a year worse off next year?

Hon ANNE TOLLEY: I understand that part of the 5.9 percent is the one-off spike from the rise in GST, and the underlying inflation is closer to 3 percent. I am also advised that the Ministry of Education receives a cash disbursement for the GST component of operational funding that is passed on to schools. That means when the rate of GST increases, cash payments to schools increase by the same amount as the GST increase, so schools are compensated for the GST rise and they get a 4 percent increase in their operational funding. I am surprised that Mr Mallard does not know that, because he was Minister of Education.

Mr SPEAKER: Order!

Hon Trevor Mallard: Why then did she announce them as GST inclusive?

Hon ANNE TOLLEY: The Budget was announced as GST exclusive.

Allan Peachey: What response has the Minister received from the education sector to the increase in operational funding?

Hon ANNE TOLLEY: I have received a number of responses welcoming the increase. One response from a chairman of a school principals association said that the Government is showing that education is a priority. Another response from a member of the national executive of the New Zealand Educational Institute said that the increase in operations grants was a “biggie” for primary schools in the Budget.

State Housing—Number of People on Waiting List

10. METIRIA TUREI (Co-Leader—Green) to the Minister of Housing: How many people are currently on the State housing waiting list?

Hon PHIL HEATLEY (Minister of Housing): I am advised that there 10,749 people on the waiting list, of whom about 380 are categorised as being in severe housing need. Their waiting time is about 10 days.

Metiria Turei: Will providing no money for building new State houses in this year’s Budget reduce the number of people—10,749—who are waiting for a home?

Hon PHIL HEATLEY: Actually, the Government provides about $650 million on income-related rents, which goes into the Housing New Zealand Corporation and which the corporation is free to use on accumulating houses. We are encouraging it to do so.

Metiria Turei: Will providing no new money for the building of new State houses increase or decrease the growing inequality in Aotearoa New Zealand?

Hon PHIL HEATLEY: I assure the House that the net number of State houses has increased since National has been in Government, and it will continue to increase while we are in Government.

Metiria Turei: How will the effect of slashing funding for State housing in this year’s Budget impact on the 30 percent of at-risk and vulnerable young people who are living in unsafe and insecure housing and the 10 percent of New Zealanders who live in overcrowded housing?

Hon PHIL HEATLEY: The member may not be aware, but last year’s Budget contained part of the $120 million stimulus package, which was a one-off payment, for 18 months, to repair State houses that were in serious disrepair and to add new State houses. That $120 million capital injection finishes on 30 June. That is not a cut in State housing; it is a stimulus boost during the recession, which has now ended.

Metiria Turei: Is the Minister saying that the marginally higher spending last year justifies the gutting of the Budget this year, leaving, still, 10,749 people and their families on the State house waiting list waiting for a home?

Hon PHIL HEATLEY: I direct the member to the Budget vote of 3 years ago, which was the Budget of the last Government, and to Bill English’s most recent Budget. She will find that operating appropriations have increased by about $30 million and capital receipts by about $65 million. If one takes the in-between Budget, which was a National Budget, one will see that, yes, there has been a drop, mainly because of the $120 million stimulus package.

Metiria Turei: What Budget does the Minister expect that Housing New Zealand Corporation will need to slash in order to, as he has said, find the hundreds of millions of dollars for the promised 1,550 State houses that he said will be built?

Hon PHIL HEATLEY: I am not sure how the member came up with “hundreds of millions of dollars” for X number of houses. I do not know what she pays for her houses. We occasionally buy houses, we sometimes build houses, and Housing New Zealand Corporation leases houses. I can tell that member that we are asking Housing New Zealand Corporation to make savings, like every Government department, even though it is a State-owned entity, and we are continuing to make significant appropriations to Housing New Zealand Corporation.

Metiria Turei: When will this Minister fight just as hard for the 10,749 people and their little families on the State house waiting list as he did for his own little family?

Hon PHIL HEATLEY: I am quite concerned for those on the waiting list, particularly the close-to 400 people in significant and serious housing need. But, equally, John Key and I and this team were concerned about the 69,000 current tenants, many of whom were living in squalor because the State housing stock had fallen into such disrepair. Most of our capital has gone into that, because we care about those who are currently in State houses as well as those who are on the waiting list.

Moana Mackey: What advice has he requested about the impact of rises in GST and inflation, as well as predicted rent increases of up to 8 percent in the private sector, on demand for State housing?

Hon PHIL HEATLEY: My understanding is that Treasury expects a 1.5 percent increase in rentals over the next 3 to 5 years, so I challenge that figure. I can say that Housing New Zealand Corporation has come under increased pressure to house people during the recession, as one would expect. That may continue, although our Options and Advice Service is seeing a lot more people housed privately or buying their own homes.

Moana Mackey: Does he think he has his priorities straight when Housing New Zealand Corporation is being asked to “find savings in baselines for much of their operations” while he has sat idly by while the corporation has paid consultants $600 an hour to develop an $11 million business case for a computer upgrade that its own reports say it does not need?

Hon PHIL HEATLEY: The member ought to know that the stock of State houses is worth $14 billion, and Housing New Zealand Corporation receives over $1 billion a year either in rents or Government subsidies. So spending a few million dollars on a computer information technology system and the support that goes around it will keep track of those houses and those tenants. That way we can track and upgrade the stock instead of leaving it to get into serious disrepair.

Budget 2010—Fee Increases for Early Childhood Education Centres

11. SUE MORONEY (Labour) to the Minister of Education: What advice, if any, did she receive on the range of possible fee increases in early childhood education centres as a result of the changes announced in last week’s Budget; if so, what was that range?

Hon ANNE TOLLEY (Minister of Education): I was advised that the funding of over half of early childhood education services is unaffected. I have also received advice suggesting that funding reductions to affected centres are likely to be between $8 and $30 for children attending for around 20 hours a week, and around $15 to $40 for a child attending full-time. Fee increases are impossible to predict, because early childhood centres are independent bodies, which set their own fees.

Sue Moroney: Has she seen the estimates from early childhood education providers that show that the cost to parents could be as high as $60 per child per week?

Hon ANNE TOLLEY: No, but I have seen estimates from that member predicting the cost to be $60. It is pretty poor maths to multiply the figure for 20 hours by two to make the figure for 40 hours. As I have explained, the subsidy for 40 hours is different from the one the member is quoting. But those services have almost 9 months in which to make the changes they need to make in order to absorb the changes.

Sue Moroney: Does she agree with the statement made by the Minister of Finance, Bill English, about the funding cuts on Television One’s Q+A programme on Sunday, when he said: “Personally, I think providers are unlikely to have to pass it on.”; if so, is she telling kindies and childcare centres to reduce the quality of the education they deliver to children by sacking staff and cutting wages?

Hon ANNE TOLLEY: Yes, I heard what the Minister of Finance said. This is a particularly well funded sector. It has received treble the amount of funding in the last 5 years. It has received three times the amount of funding for an increase in participation of less than 1 percent—in other words, almost three times more funding for the same amount of children. I think it is unlikely that most centres will pass on those costs, because they are able to change their staffing, they are able to change their services—they are able to do a number of things in order to make those changes.

Louise Upston: What provision was there in last week’s Budget for increasing participation in early childhood education?

Hon ANNE TOLLEY: Last week’s Budget allocated an addition $91.8 million over 4 years for a package to boost participation of Māori and Pasifika children and children from lower socio-economic backgrounds. This Government recognises that we have to spend our money differently to get better results. This package will build on the very successful intensive, community-focused projects currently under way in Counties-Manukau.

Sue Moroney: Can she confirm that the top two subsidy rates for 20 hours’ early childhood education will be cut from 1 February 2011, dropping the top 20 hours’ early childhood education subsidy rate from $12.45 per child per hour down to $10.88 per child per hour—a broken promise?

Hon ANNE TOLLEY: I challenge the member’s figures and I challenge the assumption she is making. This Government has made it very clear that we have set early childhood centres an 80 percent target for qualified teachers. In Budget 2010 we are now removing the incentives for centres to go above that 80 percent.

Hon Trevor Mallard: If she is challenging the figures given by Sue Moroney, why did she publish them in her documentation with the Budget?

Hon ANNE TOLLEY: Because I challenge the context in which those figures were given. Budget 2010 changed the two top rates for subsidies to centres, not the 20 hours.

Sue Moroney: I seek leave to table a document from the Ministry of Education outlining the early childhood education funding changes that shows the top two subsidy levels for 20 hours’ early childhood education being dropped on 1 February 2011.

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

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

Hon Trevor Mallard: I raise a point of order, Mr Speaker. We now have a problem, and it is one on which we have corresponded and on which I have got into some trouble in the past for challenging answers. But I ask you, Mr Speaker, what an Opposition can do when a Minister challenges figures that she has published and that members are relying on for supplementary questions. We are in a very hard position in trying to hold Ministers to account.

Mr SPEAKER: I accept that the member has raised an issue of real concern. I appreciate his letter to me on the matter, and I am giving it quite a lot of consideration.

I think that what the member did today is exactly what members can do. The member believed that the Minister may have, in his view, challenged figures that he believed to be correct. The member asked a very blunt question, and I think he included the fact that the figures had been included in the Minister’s own statements. That is a pretty powerful thing to put on the record of the House.

Members are not allowed to use points of order to litigate answers, but when a member believes that an answer is incorrect, the member can ask point-blank, in the way that the member did just now, for the Minister to justify the answer or repeat the answer. I want Ministers to listen to this carefully, because concern about the accuracy of answers is an issue that comes up frequently. When a Minister, while answering a supplementary question, gives an answer that may be disputed, it is very hard to argue that the Minister has misled the House, because the circumstance may be one in which the Minister is talking about one issue but throws in a matter that is peripheral to it and may include information that another member believes is wrong. But when a member—and I want notice to be taken of this—questions a Minister particularly over information given, and in reply to a very clear question gets a repeat of the same information, which can later be shown to be false, then that is a rather different situation. That is starting to get close to where the bar is set around issues of privilege. I am concerned that information should not be used recklessly in this House.

I am not saying that that is what has occurred today. I am just using the point the member has raised to make the point that it is very difficult, when members disagree with an answer, to expect me to do something about it when it has been given as part of an answer to a supplementary question. The remedy, in my view, lies in the hands of the questioner to ask very specific questions about the information the member believes is incorrect. If a Minister then repeats what can be demonstrated to be incorrect information, and therefore may mislead the House, and if that can be shown, that is a rather different situation. To me, that is a better way to handle it. Rather than try to litigate answers by way of points of order, members should use supplementary questions to pin a Minister down. When Ministers repeat what can be demonstrated to be false information, that is a very serious situation.

Tairāwhiti District Health Board—Contracts for Mental Health Services

12. RAHUI KATENE (Māori Party—Te Tai Tonga) to the Associate Minister of Health: Is he aware of the decision by Tairāwhiti District Health Board to award contracts for mental health services to the Challenge Trust based in Auckland rather than the existing provider Turanga Health; and how does this decision comply with the Government’s policy for providing more personalised health care closer to home?

Hon Dr JONATHAN COLEMAN (Associate Minister of Health): Yes, I am aware that the Tairāwhiti District Health Board has awarded the Challenge Trust the contract for mental health services. I have been advised that the Challenge Trust will be offering a wide range of services, some of which have never been offered before, and that this contract represented better value for money than the previous contracts. It is my understanding that the Challenge Trust will employ local people to deliver the services, and that the contract is in keeping with the Government’s desire to deliver more personalised care closer to home. I also note that the Tairāwhiti District Health Board will get its fair share of the $174 million of new mental health spending that was recently announced in the Budget.

Rahui Katene: What justification does he have for the mental health funding cuts in Christchurch that led to the closure of the 198 Youth Health Centre and the Newell House Trust—a respite for women who are severely affected by mental illness—which will close at the end of the week?

Hon Dr JONATHAN COLEMAN: I inform the House that there have not been funding cuts for mental health services in Christchurch. With regard to the closure of the 198 Youth Health Centre, 198 chose to close its doors because the district health board contract was no longer enough for 198 to remain viable in its current form. I understand that it had faced cost increases related to the lease of its premises, and lost a non - district health board research contract. It is also my understanding that equivalent services are now provided by other organisations and funded by the district health board.

The Canterbury District Health Board has maintained its funding for the Newell House Trust, and it is the cessation of various past funders that the trustees said was the major reason for the closure of Newell House. The Canterbury District Health Board received $125 million for mental health services in the year to June 2010. It will get more this year as part of the $174 million of new money going into mental health. In short, there is much more money going into mental health services but there has to be some reprioritisation of funding.

Rahui Katene: Has the Minister heard the claim from Platform, an umbrella group of mental health providers, that $2 million will be trimmed from mental health spending in Wellington and Hutt Valley district health boards, and how will the whānau of mentally unwell people continue to have access to quality support?

Hon Dr JONATHAN COLEMAN: Yes, they have raised those concerns with me and I have asked the Ministry of Health to discuss that with the relevant district health boards. But there are two points to note. The first is that the mental health ring-fence remains in place, and that protects expenditure in mental health. Secondly, $174 million of new money is going into mental health, of which these two district health boards will get their fair share. Of course, it should be noted that the last Government handed over the Capital and Coast District Health Board with a massive deficit of $65 million, which really did a major disservice to the people of that region. This Government has been striving hard to right the situation.

Budget Debate

Bills

Appropriation (2010/11 Estimates) Bill

Debate resumed from 20 May on the .

Hon GERRY BROWNLEE (Minister for Economic Development): I rise to speak in support of the Appropriation (2010/11 Estimates) Bill, in what is commonly known as the Budget debate, and to oppose the amendment proposed by the Hon Phil Goff. That amendment is an utter joke and it tells the public that the Labour Party has absolutely no sense of where public thinking lies. It is an amendment that clearly shows a party stuck in what it believed to be the best style of governance, during the 9 years in which it squandered opportunities to move this country forward. I find it offensive that no one on the other side of the House has had the temerity to stand up and say “We wrote that amendment prior to hearing the Budget delivered, and we now realise that we were completely wrong and want to withdraw it.”

I find it amazing that a Budget that delivers a very, very low tax rate to three-quarters of all workers in this country can be described as a Budget that lacks vision and that raises taxes for working New Zealanders. That is quite untrue, and I would like the members on the other side of the House to tell us how they would respond to the simple facts that I will offer to the House. Firstly, let us take an average family on a $76,000 income a year, with two kids and a mortgage, who are receiving Working for Families. After the tax cuts and after the GST rise, and with the Working for Families increase, that family will be $25 a week better off. I would like Labour members to go to that family and tell them that the Budget is bad for them. Let us take the average earner, who is on $50,000 a year and renting a place to live, and who is saving towards a first home. After tax cuts and the GST rise, that earner will be $16 a week better off. Why does the Labour Opposition not go to the people who are in that category and tell them that they are worse off? Let us take a retired couple receiving New Zealand Superannuation, who own their own home and have no other income—which is the case for the vast majority of superannuitants in this country—so they rely entirely on their superannuation payments to get by. After the tax cuts, the GST rise, and the increase in their superannuation to compensate for that rise, they will be $11 a week better off. Why do Labour Opposition members continue to insist that they are not better off when patently they are.

We will hear this afternoon, no doubt, Labour members saying that all of the value of the tax cuts and the adjustments made to all of those State benefits and superannuation will in fact leave people worse off, or—

The ASSISTANT SPEAKER (Eric Roy): I am sorry to interrupt the member, but there are very clearly defined rules about visual aids. They are to be used only while a member is speaking, and by that person. So those charts on the Labour front bench will be put down, please.

Hon GERRY BROWNLEE: I was hoping that the cameras would catch a glimpse of those charts and the context in which they appear, and that people would compare them with the genuine information contained in the Budget documents, to prove that David Cunliffe, the poor fellow, is somewhat lacking in his ability to analyse these matters, as well as being quite out of step with what New Zealanders are feeling about these matters.

Hon David Cunliffe: Treasury numbers.

Hon GERRY BROWNLEE: He yells across the House “Treasury numbers.”, and it may well be that he has used some numbers to bodgie up those particular graphs. But the reality is that he is not Treasury, despite the fact that he has got one of the biggest intellects in the world, and he does not have the same capacity to impart that information to New Zealanders. I have no doubt that Mr Cunliffe will try to mount a case stating that after all these changes have come into effect—increases in State benefits, Working for Families, and superannuation, and more income in the pockets of New Zealanders by virtue of tax cuts—we will have inflation that will rip it all away from them.

A couple of points about that are worth noting. Firstly, yes, there has been a one-quarter spike in inflation, but the underlying inflation figure is still running at around 3 percent. I would like Mr Cunliffe to say why he was not worried about workers, superannuitants, beneficiaries, and families who relied on Working for Families payments when he left office with an inflation rate of 5.1 percent. It seems that it is another case of it being OK when Labour does it, but not being OK when anyone else does it. The point in this case, though, is that no one else is doing it—the high inflation records lie entirely with the previous Government of that member.

One might expect that in a Budget like this, where there are such large tax cuts—the largest in 25 years—a number of trade-offs might see other spending start to fall. But that is not the case. When one goes through this Budget, one can see that there is an increase in funding for housing, a massive increase in funding for health services—an extra $512 million over the next 12 months—and very large increases in the education portfolio, with an extra $417 million in just the next 12 months. There is funding for infrastructure, with a total spending programme over a 5-year period from now of $7.5 billion. There is also the huge commitment that the Government has made to science, innovation, and technology, in working with business to grow opportunities for this country, and a very, very sizable $243 million support for business research. That is not some sort of pie-in-the-sky, “maybe” figure, like the one that was being touted by the previous Labour Government for about 3 years prior to putting it in a Budget but never funding it. National’s increase in funding is real, it is available, it will be taken up, and it will make a difference.

Hon David Cunliffe: It’s less than half what Labour had.

Hon GERRY BROWNLEE: The member over there says it is less than half of what Labour promised. The problem is that having promised it, Labour never delivered it. Those members had 9 years, but they never delivered it. National’s has taken just 18 months, and here it is, on the table and available. It is real, and it is for businesses to work with.

Another feature of the Budget is the Government’s ongoing commitment to taking out of the public sector the spending that is of pretty low value. A huge effort has been made across the public sector to remove that lower-priority spending—about $1.8 billion of it. To quantify that, I tell members that it is about 1,800 Saturday-night Lotto prizes. It is a huge amount of money, which was formerly spent on what can be described only as low-priority spending.

All Budgets have in them particular features, but normally they reach out to only a small sector of the community. This Budget is one that has reached out across the board. One of the most impressive things about this Budget is the way in which the business community has embraced it, and that will mean more investment and more jobs. The significant number of additional jobs calculated in this Budget—170,000 extra jobs predicted—will come to pass.

When it comes to the issue of a fairer tax system, some of the write-offs that were available to people who owned second properties or commercial properties have gone. There was no loss in value on a usual annual basis that they were able to claim. The Budget has been embraced by that sector. There are newspaper reports today that landlords throughout New Zealand are saying that this is a good Budget that will not have an adverse effect on the rental housing market.

This is a Budget that can be described as delivering on National’s promise to reduce taxation for New Zealanders, to ensure that there is genuine reward for work that is done. It sets the scene for real incomes in the pocket to grow over a number of years. I think that the Minister of Finance, the Hon Bill English, should be congratulated on this Budget. I hope that Mr Cunliffe, his opposing shadow spokesperson—and I will say his name again because not many people know it: Mr Cunliffe—might come into the House this afternoon and withdraw the amendment to the motion moved by the Hon Bill English, because that amendment is out of date, it does not mean anything, and it most certainly misses the mark as far as most New Zealanders are concerned.

Hon DAVID CUNLIFFE (Labour—New Lynn): I wish to second the amendment moved by the Hon Phil Goff, on behalf of one of your constituents, Mr Assistant Speaker Roy—Mr Henry Lindsay of Southland, who is an 84-year-old. His family has emailed me. Unfortunately, he has kidney cancer and heart failure. He used to receive a couple of hours of home help a week—that is, until the Government cut it. We have received a second email from his son telling us that, unfortunately, Mr Lindsay has been admitted to hospital suffering from exhaustion, and that he is still there. If the Minister of Finance cares to tote it up, the $700 a day that Mr Lindsay is now costing the taxpayer would have covered his home help for, probably, the rest of his natural life. The case of Henry Lindsay of Southland is just a taste of what people will suffer in the future because of this Government.

I turn now to “scene 2”. I was in a Noel Leeming store in Newmarket last weekend, which was the first weekend after the Budget. Signs were up everywhere, saying “Beat the GST rise. Buy your flat-screen TV today.” If this Government thinks that New Zealanders will suddenly save and enhance the national wealth because of the baubles and beads in this Budget, it has another think coming. There will be a roaring trade in flat-screen TVs all over Newmarket while the Mr Lindsays of this world struggle to get the care they need.

When the Budget hype lifts and the hangover sets in, ordinary Kiwis will know the truth—that they have been sold a pup. This is not a step-change Budget, a step-forward Budget, or even a small-step Budget. It is not a step-up; it is a set-up. It is a set-up because it is the sucker punch of the real blow that is yet to come. It is not an economic Budget; it is a political Budget. It is a Budget that is designed to try to do one thing, which is to get the National Party elected next year so that the real privatisations—and Bill English said what he thought about that on Friday last—and the real cuts can come in the second term. Let us hope that New Zealanders join together and stop that from happening.

Today I will ask three quick questions about what the Budget means for the ordinary Kiwi, for the country, and for the future. What does the Budget mean for the ordinary Kiwi? National has made it tougher for Kiwis to get ahead—to get better jobs and higher incomes. National has dashed the hopes of ordinary New Zealanders at the checkout counter.

Early in my time as an MP I was door-knocking in a place in New Lynn called Northall Road, and I met a young mum who was on the domestic purposes benefit. She had three young boys who were about the age of my own kids, and she had just come back from the doctor. The youngest one was calcium deficient, and as I talked to her she cried because she could not afford milk to feed her boys. She could afford milk powder but not milk, so she cried.

She would have done better under Labour in the 9 years that followed. She would have been able to use the training incentive allowance to get a job when the kids were old enough, but she has probably lost that job now in the wave of unemployment that has grown since the change of Government. One thing is for sure: she will not be better off following this Budget, and I will tell members why. My colleague Parekura Horomia is now holding up a bar graph of gross income for an average-wage earner. These figures are based on Budget numbers. When we put in the Budget document’s inflation rate, the average-wage earner, after his or her tax cut, will not break even until 2014—two elections away.

When my colleague holds up the second graph he will show what happens to minimum-wage earners under this Budget. They just break even after tax by 2014, but the average-wage earner does not even do that. That is why 75 to 80 percent of Māori and over 80 percent of Pasifika people will be worse off after this Budget. Ordinary New Zealanders will be worse off after this Budget. Henry Lindsay of Southland will be worse off after this Budget.

But let us not put it in terms of fancy graphs and statistics; let us talk about others who will be worse off. Anybody with a child who has been benefiting from 20 hours’ free early childhood education is at risk of paying up to $31 extra a week for that child to be in childcare.

Paul Quinn: Outstanding Budget.

Hon DAVID CUNLIFFE: Oh, “Outstanding”, he says. The learning of our youngest New Zealanders is impeded, but only if their parents cannot afford to pay.

Hon Trevor Mallard: Paul Quinn said that.

Hon DAVID CUNLIFFE: Paul Quinn said that, and Hansard will show that Paul Quinn said “Outstanding” to ordinary Kiwis paying $31 a week for early childhood education.

What about the tenants in the Housing New Zealand flats in Rata Street in New Lynn, where some genius forgot to put an extractor fan in the bathrooms so that the flats are covered in mould, rot, and rising damp all winter? They desperately needed part of the money that was there for improvements and refurbishments in the State housing estate—the hundred million - odd that has been slashed out of this Budget. Those New Zealanders will not be better off. Those State housing tenants will have to live with the asthma and respiratory diseases that occur as a result of that rising damp.

If the Budget is not good for ordinary Kiwis is it at least justified, by some overwhelming result, for the nation as a whole? The answer, sadly, is no. By the Minister’s own admission, there will be no reduction in the widening gap between rich and poor. How could it be that a millionaire—a person who earns a million dollars a year—gets back $1,000 a week in tax? Fifteen percent of the total tax refund goes to the top 1 percent of earners. One-third goes to the top 5 percent. Shame! They are not the people who have had to tough it out through the recession. They are not the people who have done it tough and have tried to meet the grocery bill at the checkout counter—and those people will be disappointed when they still cannot meet the bill at the checkout counter every year from now until 2014.

Is there a great growth impact to make up for that social inequity? The answer is no. On the Budget’s own figures, it takes over 7 years to scrape up an extra 1 percent of growth. It takes over 7 years to accumulate 1 percent—actually, not even 1 percent—of extra growth. This Government promised a step change to catch up with Australia. It needed 2 percent a year, and what does it have? It has less than one-seventh of 1 percent each year over the next decade. It is pathetic. But, of course, the Government is pulling the wrong levers. Nobody on this side of the House would have put their faith in trickle down. Supply-side economics was dead and buried after Ronald Reagan.

In terms of employment—and this is important—fewer than 10,000 jobs are forecast, while unemployment widens by 60,000 and the Government creates less than half the jobs that Labour created in its term of office. This Budget is delivering only 3 percent of the total growth in employment. The rest would have happened anyway. The best the Government could do was 3 percent.

The external account more than doubles—from 3 percent of GDP to 7 percent of GDP—because of this Budget. We are not paying our way in the world. We are not exporting enough. We are not saving enough. We are not innovating enough. This was the Government’s big chance to turn the boat round, and it failed. Total national debt approaches 100 percent for the first time in our history. To be fair to Bill English, he had the courage to say that it was our biggest single vulnerability, and I agree with him on that. But what did he do in response? He made it worse by borrowing an extra $1.1 billion to give $1,000 a week to someone earning a million dollars a year.

Carol Beaumont: Ridiculous.

Hon DAVID CUNLIFFE: It is ridiculous. He called it the biggest single vulnerability, and he broke his promise to be revenue-neutral on his tax package, therefore making that promise worse.

This Budget is not good for ordinary New Zealanders, and it is not good for the country. So why do it? That is the big question. Well, here is the rub. Here is the sucker punch, I say to New Zealanders. This is the hoodwink, to make them think they are better off, so they will vote for this lot one more time. Mr English has let the cat out of the bag. Kiwibank is the first of many State assets to go. We will see savage cuts in spending, the privatisation of assets, and New Zealanders will regret the day they entrusted these people with national office.

GARETH HUGHES (Green): Kia ora, Mr Assistant Speaker. I want to look at one part of the Budget in particular. When it comes to transport, this Budget is a gambler’s Budget. The Government’s cards are now on the table, and they show that we do not have a Minister of Transport; we have a “Minister for Motorways”, a “Minister for Trucking”, and a “Minister for Corporate Welfare”. The Key-led Government is betting billions on uneconomic motorways that lock us into a future that is dependent on cars and oil. Like a gambling addict, this Government fools itself into thinking it does not have a problem—“Just one more win, and then I can finally quit.”, “Just one more motorway, then we can relieve congestion and finally stop building them.” But one motorway leads to another, then another, until we are building motorways to solve the problems caused by the other motorways.

This Budget announces $714 million on new State highway construction, on top of the billions already announced for the roads of national significance. This massive amount gambles away our national wealth in some sort of 1950s fantasy, the major beneficiaries of which will be the trucking lobby. Like a gambling addict, most of the money goes directly into feeding the addiction. From Government funds, for every dollar spent on sustainable modes of transport like buses, trains, walking, and cycling National is spending $7 on roads. Why would the Government place all of our bets on roads, as a measure to reduce congestion, when all the local and international experience shows it just does not work?

Steven Joyce’s big gamble is simple economic mismanagement. The recent OECD report, referenced in the national infrastructure plan, showed there is no evidence of a positive relationship in New Zealand between motorways and macroeconomic growth, but a strong, positive link between growth and investment in rail. Research from the United States shows that the economic stimulus spending of public transport created twice as many jobs per dollar as spent on motorways. To look at but one example, the Government is planning to pour $1.7 billion of our national wealth on the Pūhoi to Wellsford holiday highway. This “road of National Party significance” has a benefit-cost ratio of only 0.8 percent, which means the Government is not even staking on an economic return from it. This is coupled with the possible closure of the main trunk rail line north of Auckland, which will see more trucks on Northland’s roads and State Highway 1. The agenda is clear: this is a road of trucking significance. Like gamblers who borrow from friends and make hollow promises about paying them back, the Minister has even managed to convince finance Minister Bill English to give him massive amounts of cash for his politically based mega-monuments.

This Budget is not allocating resources according to a rigorous assessment of the economic benefits, but, rather, according to a misguided belief that building expensive infrastructure for high-carbon, land-hungry, job-poor imported cars and trucks is somehow good for the economy.

As with many addicts, often it is those who live the closest who get hurt, like the 205 Waterview residents who will now have their homes bowled and paved for State Highway 16. Also, there are the job opportunities we have missed out on in general, at Woburn and Hillside in particular, and the $547 million we are spending in Auckland on health costs, from the extra one billion kilometres travelled by car in Auckland over the last 5 years. This Budget invests $250 million for KiwiRail’s turn-round plan, which is a start towards addressing 15 years of infrastructure neglect. But, coupled with likely line closures, increased fares for public transport users, and increased costs for local bodies, this Budget is still a Budget for and by the roading lobby, and it comes at the expense of local communities and the resilience of our transport network.

What will the legacy of this Budget be for transport issues? Mr Joyce’s big bet locks us into a model of car dependence that makes our roads less safe, makes our communities less walkable, and reduces choices for people to get around. Under this Budget, our cities will continue to sprawl outwards, with more suburban big boxes. Unlike Europeans, Kiwis will keep paying more of their incomes on commuting and will spend more of their days stuck behind cars and stuck on our congested motorways. New Zealand will keep borrowing $250 million a week to pay the bills on our oil imports, which last year were $5.7 billion. That is a significant cause of our current account deficit.

Like betting against the casino, this Budget takes a punt that the price of oil will stay stable and affordable, but on both counts the odds are stacked against us. It is like gambling to pay off gambling debts, and it is high time we stopped using the same ideas that got us into this mess to get us out of it.

The first step to health is acknowledging that there is a problem—a motorway addiction. The next step is seeking help. Luckily, the Greens are there for the Government, with real options and new solutions. The Greens are not anti-car or anti-roads; we are pro - transport choice. The Greens believe in sustainable, smart transport investments that balance roads with sustainable transport options in order to deliver jobs, safety, and livable towns and cities. The Minister could read the Auckland Regional Council’s regional land transport strategy for some inspiration for next year’s Budget.

The biggest loss of this Budget is the opportunity cost. Mr Joyce could have surprised us all with his leadership and vision, and he could have earned himself a place in history as the Minister of Transport who started Auckland’s central business district rail loop, which is the single most effective thing that he could do to get Auckland moving. He could have announced Wellington’s urban light rail system, paid for by the funds scrapped from Transmission Gully. Most important, Mr Joyce could have taken the opportunity to announce a fundamental overhaul of our transport planning in New Zealand that would balance funding between roads and other transport modes. This Budget could have announced the shift to corridors of national significance. For around $100 million, he could have linked the main trunk railway line with Northport, near Whangarei, and saved more than $1 billion and taken trucks off our congested roads.

We have heard this Government loudly trumpet that it is spending more than Julius Vogel did on roads. However, Vogel looked to the future in his investment decisions. We could be doing that, too. We could be investing in integrated transport options, in fast, modern public transport—bus rapid transit, light rail, and underground rail in our biggest city—in walking and cycling, and in telecommuting and flexible working hour solutions. This Government, however, looks to the 1950s. It is as if Vogel would be borrowing to build bullock tracks.

I look forward to the day when we have a Minister of Transport who is a transport choice champion, who has an inspiring vision for how livable our towns and cities could be, and who is prepared to lead. I welcome the chance to be on record today, because it provides a stark contrast to the deficit of vision espoused in this Budget. Kia ora.

Hon PAULA BENNETT (Minister for Social Development and Employment): There is a buzz in the air; New Zealanders are excited. They see an opportunity for themselves, and they are simply saying: “Thank you, Bill English. Thank you, John Key.” This Budget delivers to New Zealanders. This Budget delivers hope. It delivers opportunity. It makes us see a future that is full of opportunity for our children, for our young people, and for the people who are here now. It is exciting. It is really exciting to see a country that can move ahead and develop those sorts of opportunities. Economic growth matters, and it matters most to those I work with in the social sector. It matters most to those who are at the vulnerable and hard end of some of the choices made. I am so proud to stand up and say that it is the only way that we can lift incomes, create opportunity, create permanent jobs, and build the kind of country that young people not only need but also simply deserve.

We have steered our way through the worst of the recession. We have steered our way through some of the toughest times. The social services that have held on to that money have made sure there has been opportunity for the people who have needed it. We have been able to shorten waiting times within Work and Income. We have been able to stand up and create opportunities for our young people, ranging from Limited Service Volunteers to Job Ops and Community Max.

This is a great time to talk about Job Ops, and about exactly what it is doing for our young people. We have stepped up. At the weekend, when I read the papers that come to me, I saw there were 5,649 jobs via Job Ops at the moment; more than 5,000 of them have been filled. Those young people throughout New Zealand are in jobs at the moment. Of those young people who have finished their Job Ops placements, 86 percent have stayed off a benefit. That is pretty remarkable. This Government is pumping in more places. We are saying that we can put up another 6,000 places, and I am optimistic that those places will be picked up quickly by our business community. We feel energy in the air and we feel that bit of optimism in the business community. Members of the business community are excited to see taxation coming down from 30 percent to 28 percent for companies. I think that business people are ready to step up, and to say that with a bit of a hand from the Government they will take on young people and give them an employment opportunity. There are 6,000 more places for Job Ops in this Budget—$26.7 million extra funding is going there.

I am responsible for those who are on benefits and for those on the superannuation we pay out. There has been a key focus on making sure that those people are treated fairly through the taxation changes. We have stepped up, and in this package we have $159 million more going into compensation for the increase in GST—$2.2 billion will be going in over the next 4 years. That will cover the main benefits. It will cover the obvious ones that we can think of, such as the unemployment benefit, the domestic purposes benefit, the sickness benefit, and invalids benefit, but it will also go into the student allowance, the veterans pension, and Working for Families. It will provide payments equivalent to just over that 2 percent, as members would have seen. To give a bit of an example, I tell members that someone on the domestic purposes benefit will receive $9.79 in GST compensation.

I will give a further example, because this Budget is good news for those on benefits. We are hearing about how we can help those people who are on benefits at the moment, and how these measures will create real opportunities for them. Someone on the domestic purposes benefit, for example, who works 15 hours a week, is already better off because we are raising the abatement this year. At the moment, those on the domestic purposes benefit can earn $80 but are taxed quite highly on earnings after that, so we are raising that threshold to $100. The $80 threshold was not good enough for this Government, because we really do want to create opportunities and the right incentives for people to be getting into part-time work. So we have raised the second abatement level. People on that benefit are already substantially better off; they can earn $100 before their benefit is abated. They will also get an extra $5.62 in GST compensation, which is on top of the extra $14 a week they will be getting from the abatement.

As well, someone who is working 15 hours a week at $20 an hour will pay $10.50 less because of personal tax cuts. This measure has not been picked up on widely yet, but the secondary tax level coming down is really exciting. It is a great opportunity for people to see the benefits of abatements and of the secondary tax rate coming down so significantly from 21 percent to 17.5 percent, and then to see the way they can get a bit more money in their own pockets. So it is good news, good news, and good news again for those who need it most.

In particular, members know that I always go on the side of those who are on the domestic purposes benefit with their children; I personally want to see them supported the most. We have the single biggest spend on teen parents ever seen in a Budget—the single biggest spend on teen parents ever seen in a Budget. The National Government started the teen parent units in 1997, which is something that I have always been particularly proud of, as a member of the National Party, because we recognised the needs of teen parents. In this Budget we are seeing $14.9 million being spent on teen parents. That will boost the number of teen parent coordinators from nine to 19, and get them into a role where they are using more intensive management in relation to what those needs are. This Budget goes towards coordinating what those teen parents most need: helping them to stay in work and education, and ensuring that they get antenatal care at the very beginning of the process, as well as budgeting advice, parenting advice, and everything else. We have seen teen parent coordinators working in some places; we reckon that we can take it a step further. We are also bringing in voluntary support and financial support with regard to those advisers, so that they can be making sure that teen parents get what they need.

In respect of support in homes, which is a biggie, we all know the stories. I know that members opposite will be hearing those stories, as well. We see teen parents who are struggling to the point where they are probably getting pretty close to notifications to Child, Youth and Family, quite frankly, and involvement in some pretty awful stuff. But where do they go for help? Where do they get that live-in assistance that they not only need but also deserve in a country like New Zealand? Will people step up next to them? I think that support in homes with trained staff available 24/7 so that teen parents can live in, is a most worthy spend. If we want to have the economic argument, then I think that the benefits, as far as how those children develop and how they—hopefully—stay out of the system, are brilliant.

Then we have that group that is always overlooked: our teen fathers. I do not think that we focus so well even on teen mothers, to be honest—I would like to see more going on there—but we do not actually focus on teen fathers, at all. There are some good programmes around the country, but we can coordinate them better. We can give teen fathers the resources they need to get some best practice, and I am particularly proud of what we are doing there.

We are also increasing the number of Child, Youth and Family social workers in hospitals. When we talk about what is happening for our most vulnerable, we need to step up, stand up, and listen up well. We are talking about support for teen parents. We are talking about compensation for those on benefits. We are talking about more Child, Youth and Family social workers in hospitals. One baby under 2 years old is hospitalised in this country—at the hands of someone who should be caring for babies and looking after them—every 5 days; we have to do better than that. The rate of re-abuse, quite frankly, is far too high. There needs to be better coordination of what happens to those children when they get into hospital, and we need to look at what we can do differently. The $6.6 million coming out will cover each district health board in this country, and, again, I am proud to stand up and advocate for that spend. I think it is a good use of money, and I am proud to say that that is part of the Budget.

Then there is the Pathways to Partnership programme, and, no, we do not hear a roar from Opposition members, because they know that we are standing up and giving more power back to communities than they have ever had before. Local solutions simply cannot be driven from Wellington by officials here; they should be driven locally. It was not enough to take the money allocated to Pathways to Partnership and put that back into our communities. We have taken the family and community services spend of $110 million, which is already there, and we have added that to the Community Response Fund. We have said that we trust communities to know what is best. We will put that money into the hands of local community people—some retired business people and local officials—and we will look at that measure closely.

We ask whether what we are doing now is working well. We are looking at the current Government spend, and adding $90.5 million into that fund over 4 years, to make sure that we are identifying where services can collaborate better, and where that training and supervision is going for those fantastic people who work at the grassroots and on the ground level. We are stepping up and giving them resources.

This Budget supports the people of New Zealand and those who need it most. I am incredibly proud to stand up and advocate for it.

Hon DAVID PARKER (Labour): I will make a couple of general comments about equity before going on to try to undermine the myth the Government is portraying that this Budget achieves a significant rebalancing of the economy.

First, I think it is important to put on record that this Budget should be valued according to how much one values one’s word. There are three broken promises in this Budget. The first promise was made by John Key on behalf of the National Party before the election, and that was that National would not increase GST. That promise was broken. The second promise was that National would not borrow for tax cuts. This Budget increases Government debt in order to fund tax cuts. It is not a mere tax switch, as the Government pretends. It is increasing Government borrowing to fund tax cuts. That is the second broken promise—the Government promised it would not do that. The third promise, which was made before the election, was that National would roll out more free early childhood education. In actual fact, this Budget cuts provision for quality early childhood education, and this imposes a future cost on parents whose children are currently receiving that free early childhood education. So if one values the keeping of one’s word, one would not value this Budget, because those three promises have been broken.

Other speakers have spoken about the fact that some of the benefits in terms of income tax cuts are largely dissipated through the effects of inflation and the increase to GST. That is true, except, of course, for the highest income earners. We know that a full one-third of the cuts to income tax accrue to the top 5 percent of income earners. I think that bears repeating because it is easy to say too quickly. It does not bear scrutiny, because it seems unfair that a full one-third of the total value of those income tax cuts goes to the top 5 percent of income earners. That is disproportionate, and it shows that the overall effect of this Budget is what we always see from National, which is that the proportion of taxes that are paid by low and middle income earners goes up, and the proportion of total taxation paid by highest income earners goes down. Stripped bare, that is what the Budget does.

I will turn to the issues relating to whether this Budget is fiscally responsible, and then I will deal with the issue of whether it rebalances the economy. David Cunliffe noted earlier that the Government borrows more than a billion dollars extra as a consequence of the tax cuts in this Budget. That is correct. In the first year, the extra borrowing of the Government will be something like $450 million. I ask whether that is prudent at a time like this. Well, I think it is not yet clear that the world is clear of the serious problems following the world financial crisis. New Zealand is better placed than most countries because of the previous Labour Government, notwithstanding the protestations of John Key, when he was Opposition spokesperson on finance, followed up by Bill English, who said exactly the same thing. Every time Labour ran a Budget surplus they said that we ought not to be have been running surpluses in those times and that we ought to have been giving tax cuts.

If we had done that, New Zealand would have been closer to the position of those European countries that have such high levels of Government debt, which is causing problems not just in countries like Greece but also in Spain, Ireland, Portugal, Great Britain, Japan, and the USA. In those countries, high levels of Government debt are constraining Government action. The risk of this so-called double dip has been highlighted again by economists as being a consequence of the problems that we are presently seeing in Europe, which has some serious problems with sovereign debt. Europe has some serious problems that go to the stability of the eurozone generally, and many pundits are now predicting that the eurozone will break up because of the strictures that are being imposed on the Latin countries by Germany, in particular, and because of the imbalances that have been allowed to build up in Europe. There are massive trade surpluses in countries like Germany, and there are trade deficits in countries like Greece, which means that those countries have current account deficits as well as Government deficits.

The prospect of the so-called double dip—of a second whammy, if you like—besetting the world is real. It will not necessarily happen, but the risk is substantial. In the last week I have seen reports that in Beijing there has been a 90 percent decrease in the volume of property transactions, which has been holding up demand in Australia and, therefore, in this part of the world. A 90 percent decrease in the volume of transactions suggests that its property boom is coming, or has come, to an end. That could have some pretty big implications in this part of the world.

That is significant because the Government has made some brave assumptions in this Budget as to future tax revenue. Those assumptions are very brave, and they may not come to pass. I think Business and Economic Research Ltd has put it well in its Budget commentary. It states: “New Zealand’s largest single vulnerability is now its large and growing net external liabilities. New Zealand now owes the world $168bn, or around 90 per cent of GDP.” I say good on it for acknowledging that it was right that the Minister of Finance acknowledged this as being the biggest risk to New Zealand at the moment.

But the Budget commentary, having identified this as “the largest single vulnerability”—and those were the words used by the Minister of Finance in his Budget speech—goes on to state that that vulnerability will get worse over the next few years. Of course, that is because we have not only a Budget deficit as a result of the Government spending more than it collects in tax but also we have the country spending more than it earns in the world, with the current account deficit going up to 7 percent of GDP by 2014.

That points to a couple of things. It points to the fact that the so-called rebalancing of the New Zealand economy that the Government talks about is baloney. This Budget does not rebalance the economy. It rebalances taxes so that more tax is being paid by the low to middle income workers, and less is being paid by the higher-paid workers. It rebalances only taxes; it does not rebalance the economy. The effect of this in terms of New Zealand’s overall net asset position in the world, as predicted by Treasury, is that by 2014 New Zealand’s net assets will be negative 100 percent of GDP. That is an enormous figure—negative 100 percent of GDP will be the sum of our net debt in the world. That should be worrying to New Zealanders because it is not sustainable.

To have a current account deficit going forward in the future of 7 percent means that we are not exporting or saving enough. We are not rebalancing the economy towards savings in this Budget. If we contrast that with Australia, we see that the big difference between the New Zealand and Australian economies is that Australia has a better savings record, and therefore Australia has more investment capital available to it. It is no surprise that Australia, with its better savings record, owns our banks—we do not own our own. Every year we export to Australia not just the interest that we pay on our current account deficit but also the profits of those four big banks, because those banks are Australian-owned. We do not own our banks, because we do not save enough. The economy is not rebalanced to address that.

In addition to that, the Business and Economic Research Ltd analysis asks: if it is not the net external sector that is rebalancing and causing growth in the economy, where is it coming from? Where is the Government going to see the growth in the economy driving a growth in revenues to get the Government deficit back to neutral? The commentary notes that the Treasury forecast assumes a rebound in non-residential private investment. It notes that this business investment will grow, according to the forecast, by 6.2 percent in the current year, followed by 10 percent in the following year, 4.7 percent in the year after that, and then 3 percent in the following years. The commentary notes that that is a hugely optimistic forecast, given that at the moment businesses have cash-flow problems. They are having difficulty accessing credit for expansion, even if they are not having cash-flow problems. If they need to borrow some money from banks, they are having difficulty accessing credit for expansion.

The summary of the commentary by Business and Economic Research Ltd states: “Yes, an investment rebound of this magnitude would be welcome news indeed. We are just unsure as to how confident we are of it occurring. But, it is the basis upon which government revenue forecasts and, hence, the affordability of the tax cuts rests.” I think that is a good summary. So if this investment rebound does not come to pass as it is predicted to, where does this leave the Government? Well, it leaves the country with rising Government debt, so the Government will have only three choices. It will have to cut spending and cut services, it will have to increase taxes, or it will have to flog off capital assets. The Government already knows that it has put us in that position, because it is signalling that it will flog off capital assets—the silver that has been accumulated through years of prudent management by prior Governments—such as Kiwibank and electricity State-owned enterprises. State-owned enterprises will be flogged off in order to pay the operating deficit that the Government is accruing.

Hon Sir ROGER DOUGLAS (ACT): There is no doubt that this Budget has been well-received by the public at large. There is also no doubt that this Budget is vastly superior to the Budget of last year. It is also superior to anything that Labour produced during its 9 years in Government. There are some good measures in this Budget, but I will not dwell on that. I raise questions about two areas—and the last speaker, David Parker, raised a third area; I am not going to touch on that—where this Budget, in my view, does not stand up to the test of examination.

The first area is that of expenditure. Prior to the Budget the Government talked about expenditure increasing by around $1.2 billion. In fact, Government expenditure under this Budget increased by around $5.8 billion, or around 9 percent. That 9 percent figure is around four times the current rate of inflation. It is fair to say that in looking at the increase in Government expenditure, we should allow for the costs of offsetting the increase in the rate of GST, but even allowing for that, we see a situation where expenditure is increasing by around three times the rate of inflation. As a nation, we simply cannot put up with that or continue to do that for much longer. The unwillingness, frankly, of the Government to deal with expenditure, either in last year’s Budget or this year’s Budget, will see debt-servicing costs rise from around $2.4 billion this year to $4.5 billion in 2014. To put it another way, had this increase in debt not occurred, we could have had a corporate tax rate that is 4 cents lower and a personal income tax rate that is 4 cents lower than they are. That would do a lot more to get growth going in this country than the increases in expenditure will.

There were options to reduce expenditure, if we had been brave enough to take them. For example, there is approximately $3 billion of what I would call corporate welfare in this Budget. Frankly, in my view, most of the people who are the so-called beneficiaries of that corporate welfare would have rather had a 4c or 5c extra cut in the corporate rate of tax and paid 4c or 5c less in the personal income tax rate than actually receive that corporate welfare. I have never seen a Government that can pick winners or spend the money as well as individuals can.

In my view, the problem with this Budget, in terms of expenditure, is also that it takes a short-term view of expenditure. This Budget has undoubtedly been tough on expenditure for a lot of departments—undoubtedly. We have put a cap in place, and that cap lasts for 3 or 4 years in some cases. But although caps work for a while, they do not work in the long run, and they put pressure on the system. What is required is much more fundamental change if it is to work. Fundamental change requires of a Government that it asks the right questions. The first question it needs to ask is whether a particular department should actually exist. If it says yes to that, it should move on and ask about the functions that the department carries out and which of them should continue. In terms of the functions that will continue, the Government needs then to ask whether it is delivering those functions in the most effective way, or whether they should be opened up to competition—should they become contestable? Even when we determine that an item is desirable, we still have to weigh up whether that item is as desirable as some new request for Government expenditure. Only by following that approach will we get expenditure under control.

The second issue I want to raise—and it is, I think, an important one; and the last speaker, David Parker, touched on it—is the whole issue of the growth framework outlined in the Budget, which, I have to say, is totally inadequate. It will not enable us to catch up with Australia by 2025, nor 2035, nor 2045. The Budget outlined the six factors that comprise the Government’s growth framework. The fact is that the most important item, if we are to have growth, was not even mentioned—it was not even mentioned. The most important item if we are to get growth back is the introduction of competition, particularly the introduction of competition within the State monopolies of health, education, and welfare. If one does not want to privatise and open up those sectors to the private sector, then one has to design a system that enables competition to take place within those departments. I personally want to see them opened up.

The health, education, and welfare services are approximately 30 percent of this economy. They pose a huge problem because of the lack of productivity within those areas. We have seen over the last 6 or 7 years a decline in productivity in health of 15 percent for doctors, and of 11 percent for nurses. Nothing in this Budget—nothing in this Budget—will do anything about that. The way that we avoid facing up to the lack of productivity is to increase expenditure. The same is true in education, where we have a system that is 70 years old, and that system is failing 25 percent of our kids. Each year 30,000 kids come out of school inadequately prepared for the future. The idea in this Budget that somehow we can flat-line future expenditure growth in education and in health is nonsense, given the present system. I know that the Government will say there is a $1.1 billion allowance for new expenditure, but, frankly, that is not much more than the rate of inflation in the areas of education and health, and it is simply not realistic.

What are the six factors that the Government mentioned in its growth strategy, and how is the Government doing on each of them? There is the regulatory environment for business, the area of education and skills, and the need for quality infrastructure. That is a nice idea, but it is hardly the reality.

I will wind up by saying this: the real cost of taxes is not the money that individuals send to Wellington. Instead it is the dead-weight loss that arises when taxes alter how people behave, and we need to learn that. A review of OECD countries over a 40-year period revealed that those that had the fastest growth, averaging 6.6 percent a year, were those that spent less—spent less—than 25 percent of their GDP through the Government. If a country jumped to spending between 25 and 30 percent of its GDP in that sector, the average growth rate fell from 6.6 percent to 4.7 percent, or approximately a 2 percent drop. The trend continued all the way up. When Government expenditure was above 60 percent of GDP, the average growth rate fell to 1.6 percent. Over time the compounding effects of adding just 1 percentage point to GDP growth are enormous, let alone the 4 to 5 percent we could achieve. The difference between countries that achieve 6.6 percent growth and those with 1.6 percent growth—5 percent a year—means that it takes 45 years to double their income in the case of those that achieve 1.6 percent growth, whereas those that achieve 6.6 percent growth double their income every 11 years. Over a 44-year period that happens four times for that group and 1.6 times over a 44-year period for the other.

Hon KATE WILKINSON (Minister of Conservation): I move, That this debate be now adjourned.

Motion agreed to.

Sentencing and Parole Reform Bill

Third Reading

Hon JUDITH COLLINS (Minister of Corrections): I move, That the Sentencing and Parole Reform Bill be now read a third time. The purpose of this bill is to deny parole to repeat serious violent offenders and to offenders who are guilty of committing the worst murders, and to impose maximum terms of imprisonment on persistent repeat offenders who continue to commit serious violent offences.

This bill has changed significantly since its introduction and its referral to the Law and Order Committee. These changes will increase its effectiveness and its contribution to public safety. The bill creates a three-stage regime that will imprison the worst repeat violent and sexual offenders and the worst murderers for longer periods, with increasing sentences and reduced access to parole if they continue to commit serious violent offences. The changes have increased the certainty of the punishment that offenders will receive, mainly through offenders now qualifying for the regime following conviction rather than following a sentence of 5 or more years’ imprisonment.

I take this opportunity to again acknowledge the pivotal role played by the ACT Party in the passage of this legislation, and especially David Garrett. I thank the Law and Order Committee and its chair, Sandra Goudie, for guiding this bill through the select committee process. I also particularly thank the New Zealand Police and the Department of Corrections for their tireless efforts.

For the benefit of the House, I will recap the main elements of the regime. When convicted of a serious violent offence for the first time, an offender will be sentenced as normal but will be very clearly warned that he or she will now be subject to the three-stage regime, and warned what will happen if he or she is convicted of a further serious violent offence. If the offender is convicted of a second serious violent offence, the implications are more serious. He or she will be sentenced as normal but any jail sentence will be served in full without parole. The offender will be warned again, both verbally and in writing, of the consequences of a third conviction for a serious violent offence. If the offender fails to heed the previous warnings and is convicted of a third serious violent offence, he or she will be sentenced to the maximum penalty for that offence, to be served without parole. The exception to this regime is for conviction for manslaughter, for which an offender will be required to serve a life sentence, with a minimum non-parole period of at least 20 years.

The bill has specific provisions for those convicted of murder. Those convicted of murder at either stage two or stage three of the regime will be required to serve a life sentence without parole. The bill also makes special provision for offenders convicted of the worst murders. These offenders can be sentenced to life without parole even if they did not have a record of previous violent offending. However, the bill provides for judicial discretion in those very rare cases where the circumstances of the offender and of the offence would be such that to serve a maximum sentence without parole at stage three, or a life sentence for murder at stage two or three, would be manifestly unjust.

By means of this bill, this Government is sending a strong message that we are serious when we say that parole is a privilege not a right. Parole is a privilege that will not be available to those who fail to take heed of warnings and continue to commit serious violent offences. This bill ensures that the rights of victims and their families are put before the rights of offenders who choose to continue to offend in this way.

Once again I thank all those members of the public who submitted on the bill, 94 percent of whom supported it. These people welcomed this new regime to address violent crime and to spare victims the stress associated with the current system, which many view as favouring the offender rather than the victim.

I turn now to the amendments proposed by Labour members during the Committee stage of this bill. Those amendments sought to weaken the impact of the regime on repeat serious violent offenders by supposedly reducing what they describe as the potential for disproportionate sentencing and unjust outcomes. These amendments did not receive the majority support of the Committee. The Opposition fails to understand that this bill deliberately puts in place an escalating regime of penalties for which I make no apology. An offender who is being sentenced at stage three has committed a third serious violent offence and has received two previous warnings about the consequences of reoffending in this way. It is also highly relevant that the regime includes only offences committed by people over the age of 18. The severity of the sentence reflects the repeat nature of the serious violent offending and the refusal of the adult offender to respect the rights of law-abiding citizens. The community expects and rightly deserves to be protected from those serious violent offenders for a lengthy period.

The Opposition also tried to discredit the legislation by citing some of the more controversial scenarios that have arisen from the Californian “three strikes” legislation, such as offenders whose juvenile offending record is taken into account and are given sentences of more than 25 years for shoplifting. I restate the fact that this regime will not apply to offences committed by those aged under 18 and will apply only to a specific range of 40 serious violent offences, all of which are punishable by a maximum penalty of 7 years’ imprisonment or more. Some members of the Opposition chose to overlook these two key differences.

Another issue that has been raised is the importance of the appropriate charges being laid by police. The Government is confident that the police have sufficient checks and safeguards in place to ensure that the appropriate charges are laid, particularly at the third stage of the regime. At stage three police will be referring all charges that qualify for the mandatory maximum penalty to the Crown solicitor for review, either pre-charge or by second appearance.

I also take this opportunity to reassure the public that this Government is committed to helping those offenders who genuinely want to turn their lives round. Some offenders are simply bad and the best thing we can do is make sure that they stay locked up. But for others, turning to crime is often the result of being poorly equipped to live law-abiding lives. Drug and alcohol problems and a lack of basic skills are a big impediment to offenders who want to make a change for the better. This Government made a commitment to increasing the number of prisoners gaining skills and work experiences by at least 1,000, to doubling the number of prisoners receiving alcohol and drug treatment to 1,000, and to expanding prisoner literacy and numeracy programmes. We are well on the way to achieving these targets in just 18 months. Over the past year 23,000 hours of literacy and numeracy tuition have been provided to prisoners. This is an increase of 10,000 hours over the same period in the previous year. We now have 4,428 prisoners employed in work activities, and this represents substantial growth towards the target of 1,000 extra prisoners in employment. International studies have shown that participation in employment can reduce the risk of reoffending by between one-third and one-half.

We are also providing more alcohol and drug treatment to prisoners. A new drug treatment station is in operation at Otago Corrections Facility and two more units are being built—one at Auckland prison and the other at Whanganui. The more prisoners we have who are learning to live productive, law-abiding lives, the less crime we will have in the community. Less crime in the community means fewer victims of crime, and everyone should agree with that.

In conclusion, this Government is very pleased to fulfil our election promise to deny parole to, and impose maximum terms of imprisonment on, the very worst repeat violent offenders. This bill sends a clear message to those offenders who think it is OK to use violence to get what they want that their behaviour will no longer be tolerated. If they continue to commit serious violent crime despite being warned of the consequences, they can look forward to being locked up for a long time. This Government is proud to put the interests of victims, their families, and the wider community ahead of serious violent criminals. I commend this bill to the House.

GRANT ROBERTSON (Labour—Wellington Central): I rise on behalf of Labour to oppose this bill, as we have done throughout this process. I put on the record of the House that Labour is deeply concerned about increasing crime rates, we are especially concerned about reoffending rates, and we care deeply for victims of crime, no matter where that crime takes place in New Zealand. And those are some of the reasons why we oppose this bill, because, quite simply, this bill does not address the causes of those crimes, it does not seek properly to address the reoffending, and it certainly does not reach out to victims. In fact, it could be argued that in many ways it will put victims under more stress—and I will return to that shortly.

We oppose this bill because it gives false hope to victims and their families, and it is unworkable, unjust, and inequitable. If we continue to park ambulances at the bottom of the cliff of crime, we will not address the causes of crime, and we will not reduce crime and its impact on society. I will return to these specific matters shortly, but I raise now several process concerns that Labour has about this bill.

The major one is the role—or the lack of the role—of the Ministry of Justice throughout the process of this bill. It is important to know that the Ministry of Justice was prevented from having a role as adviser to the Law and Order Committee by National members of that select committee. That raises an extremely serious issue for Parliament around where Parliament gets its advice from—not where the executive gets its advice from, but where Parliament gets its advice from. In our system very important distinctions are made between the operational arms such as the police, and the Ministry of Justice, which is the policy arm. That has been blurred by this Government and it has prevented parliamentarians from being able to seek the advice they need to make decisions in this House. I believe that that represents a significant and a serious let-down by this Government.

But perhaps we can see why the Government did not want this Parliament to have the Ministry of Justice advising the select committee. I will quote from the Ministry of Justice paper on this bill: “The proposals will add substantial direct costs to the justice system without creating any significant improved outcomes in terms of reducing the drivers of crimes, improving social outcomes or reducing reoffending and victimisation.” Those are the words of the Ministry of Justice. Those are the words of the Government’s chief advisers on justice issues, and this Government has chosen to ignore that advice, and—what is more—chosen to prevent a parliamentary select committee from having those people as their advisers on this issue. That is a disgrace, it is a mark against the chair of that Law and Order Committee, and it is a mark against the whole Government for preventing those parliamentarians from getting that advice.

I also note that the select committee did not hold oral submissions on the bill after, as the Minister herself has just acknowledged to us, it was substantially amended. No oral submissions were held on that; written submissions were required with 2 weeks’ notice to submitters. That is unacceptable for what we all recognise as an extremely serious change in our system. This whole process has been rushed through by this Government for political imperatives, rather than to trying to find the best possible law that can help protect New Zealanders and keep our communities safe.

Before I leave the whole question of process, let me say that the fact that the responsibility for this bill transferred from Simon Power as Minister of Justice to Judith Collins as the Minister of Police and Minister of Corrections speaks volumes for this bill. Some light was made of this in the Committee stage—that Mr Power was being rolled by Mrs Collins and having this bill, which he loves, taken off him. Well, I want to get serious in this third reading. I suspect that Simon Power is somebody who understands that this bill is unjust, unworkable, and simply should not be going through our Parliament today, and it has gone to Mrs Collins to put it through, leading the charge on behalf of the ACT Party. I think that as the Minister of Justice and the Ministry of Justice do not seem to want to be part of this bill, surely that must raise questions for this Government and for the country as to whether the bill should be passed.

I now want to move to some of the substance of the bill. The issues raised in the Committee stage in particular were about whether this bill can achieve the things we want it to achieve, and one of those things is deterrence. We all agree that we want people to be deterred from committing crimes, but no evidence was presented to us that this bill will do that. In fact, it was quite the contrary. The international evidence presented was that deterrence will not be improved by this bill. Greg Newbold and other experts said that this is simply not an effective way to improve deterrence of crime. We were offered no proof in that regard.

The Minister has already talked about the definition of “manifestly unjust”. There was an opportunity in the Committee stage for the Minister to take up the point that the regulatory impact statement says that this creates a disproportionate system, and that the Attorney-General, in his New Zealand Bill of Rights Act submission, said that it was disproportionate and severe, but the Minister made no attempt to do that. It is easier for the proponents of this bill to obfuscate and say that the “manifestly unjust” provision is in there. The bar is set so high that there is no doubt that there will be disproportionate outcomes from this bill.

Another area is the whole question of judicial discretion. It is very important to note that even the Police Association came out against that aspect of the bill. Even the Police Association felt that it would shift away from judges having discretion and move it into the hands of the police. We know that is the case. The only point in this process where the judicial system will continue to have discretion is at so-called “strike one”. After that it shifts to the police.

Let us hear what the Police Association has to say: “Judicial discretion provides a ‘safety valve’ for the myriad of possible circumstances surrounding any given case and is preferable to mandatory sentencing,”. So the officers themselves say they would like to see judicial discretion retained; but, no, the Government did not want to listen to that. There will be less transparency in the system as a result of moving away from judicial discretion to a system where the police play a much greater role. Our police are a great force, and I do not like the idea that they can be accused of corruption, but this puts them into that frame unwillingly, because the Police Association itself has said that it does not want that.

The other thing that a number of experts have raised is the fact that there will be fewer guilty pleas as a result of this legislation. Fewer guilty pleas mean greater costs on the system and more stress for victims. It will put victims in court when they need not be there. There is no doubt that people facing the consequences of this scheme will think twice about whether they want to plead guilty, and, as a result, there will be greater costs and more stress to victims.

One of the things that have been raised time and time again in this debate is the importance of community safety. During the Committee stage we attempted to get some measure of agreement that we all want our communities to be safer, but the problem with this bill is that it will not necessarily bring that about. The New Zealand Prisoners Aid and Rehabilitation Society said in its submission that it does not support this bill, because it will not achieve a safer New Zealand. John Pratt, a criminologist from Victoria University, said that the realities of the “three strikes” bill are that it is more likely than a preventive detention sentence to endanger community safety.

So, on substance, this bill fails. But where it really fails New Zealand is in principle. We all want there to be less crime, but to get less crime we need some real leadership from this Government. This is the easy bit, because this is a populist bill. The hard work is about making sure that people do not end up in prison in the first place, that we address the causes of crime, we intervene early, we help with parenting, we reduce poverty, and then, when and if people do commit crimes, we support reintegration and rehabilitation. That requires leadership, and this bill does not deliver leadership. We need to solve the problems of crime at the beginning, not at the end. We should not be parking the ambulance at the bottom of the cliff; we should be trying to endeavour to build the fences and create the environment at the top of the cliff that will prevent crime. This bill gives false hope and it should not be passing through this House today.

SANDRA GOUDIE (National—Coromandel): I am delighted to speak on the third reading of the Sentencing and Parole Reform Bill, and I acknowledge the members of the Law and Order Committee for their hard work, and I acknowledge the staff, the Department of Corrections, the New Zealand Police, and David Garrett from ACT for the excellent work that has been done in the process of this bill.

This bill has been a milestone. I am delighted that we are on its third reading and that it will be enacted, because keeping the public safe is one of the most fundamental obligations of any Government. It is not about being soft on crime, which is exactly what the Opposition is. Labour members say that this legislation could result in disproportionate sentences for offenders at stage three. This Government makes no apology for that, because by stage three an offender has been convicted of two previous violent offences and has been warned, both verbally and in writing, on two different occasions of the consequences of further convictions for serious violent offences.

This bill is about serious violent offending. I point out that all of these serious violent offences are identified in clause 5. The specifications for these serious violent offences are in the Crimes Act 1961. I say that because some queries were raised about the specifications for the serious violent offences. One of the queries was from the AIDS Foundation, which I have had the privilege of being a member of. I was pleased that the foundation raised the matter and that we were able to clarify that the specifications for its particular area of concern are in the Crimes Act, but the actual offence is identified in the Sentencing and Parole Reform Bill. Let us face it: it is a serious violent offence to wilfully inflict a disease—AIDS—upon another member of the public. If anybody accepts that it is otherwise then that person is deluding himself or herself. There is nothing acceptable about the wilful passing of such a disease on to another human being. It is a serious violent offence that is rightly identified in the schedule of serious violent offences, and the specifications for it can be found in the Crimes Act 1961. It has been around for a long time, so nobody should be in any doubt about the details of those particular offences.

This legislation recognises the repeat nature of offending by those few who fail to heed warnings and continue to offend, regardless of the consequences. These are the people whom we cannot necessarily do anything with. These people are a minority, which I think has been made abundantly clear time after time. The National-led Government promised to get tough on crime—to toughen up on criminals—and this bill does exactly that. I am proud to support this bill, with ACT as our coalition partner, in its passage through the House.

DAVID CLENDON (Green): It is a sad day because it looks as though the Sentencing and Parole Reform Bill will go through the House today. In the future those who supported this bill will look back with regret. This bill is intended to make society safer. It will fail to do that. It will make our prisons more dangerous for police, for guards, and for inmates. It will not achieve the goal of making our streets safe, and it will not make the public safer—or indeed feel safer.

It is interesting that when the Greens have spoken to oppose this bill there has often been some amusement from some of its proponents, who dismiss our objections because, after all, we are communists, watermelons, and the various other things that it amuses people to call us. I enjoy the irony of the fact that the most robust, comprehensive, and damning objection to this very poorly drafted and poorly conceived legislation I have heard was at a Maxim Institute event in Auckland recently. Two gentlemen, Professor Warren Brookbanks and Dr Richard Ekins, of the faculty of law at Auckland University, who are both people of considerable experience and extraordinary mana, have done a remarkable job and made a very objective assessment of this bill. I am sure that those gentlemen would have no objection to my calling them conservative in their views. That is their position. From that very objective academic and, indeed, informed judicial position they have come back and said that Parliament “should not enact” this bill.

I will quote from some of the reasons they give as to why this Parliament should not enact this bill. In their paper entitled Criminal injustice and the proposed “three strikes” law they state that the bill “departs from the central principle of just sentencing, which is proportionate response to wrongdoing.” They go on to say: “The ‘three strikes’ regime … especially on strike three, ignores the nature of the offences, which include conduct that ranges from the relatively minor to the very serious.” They point out that “The regime ignores almost all mitigating and aggravating factors”. They say “The application of the regime … will often be unjust.” There can be no clearer and more damning language from two respected, highly qualified, and capable judicial commentators to say that this legislation will often be unjust in its effect. They suggest that the regime will often impose grossly disproportionate punishments on relatively minor offences.

We are told that this bill will have some deterrent effect. In fact, there will be none. We know this. Throughout the discussion, from the analysis from all sorts of parties, we know that the deterrent effect simply is not there. I quote again Professor Brookbanks and Dr Ekins: “The application of the regime is unlikely to defer would-be offenders in general, or the offender with one or two strikes in particular.”

At the last reading of this bill we heard much about the fact that parole is a privilege and not a right for prisoners. Indeed, those two gentlemen in their analysis concede that point. They state, however, that “There is no need to cancel eligibility for parole to establish that parole is a privilege and not an entitlement.” We simply do not have to go there. The way this bill is structured suggests that we in this House—the majority in this House who will pass this bill—know better in every circumstance than a judge or a jury who will hear all the mitigating factors, the whole story, everything that is said and done about a particular case.

In terms of the cancellation of eligibility for parole, the two distinguished jurists go on to say: “Cancelling eligibility for parole for all second strike and most third strike offenders will not deter offenders but will undermine incentives for prisoners to reform or to refrain from further offending in prisons.” In other words, prisoners will have nothing to lose. They will have no opportunity, no possibility of parole. Therefore, what weapons, what tools, and what mechanism will prison officers have to manage prisoners’ behaviour, improve behaviour, or prevent further offending? This bill will make our prisons more dangerous places. It will make the job of the police more dangerous because they will be pursing people who know they have nothing to lose. This is not good law. It is not well-thought-out.

The executive summary of the paper by Brookbanks and Ekins goes on to state: “The regime will remove the incentive for offenders facing a strike three conviction to plead guilty (or to cooperate with the authorities), which will sharply increase trial costs and impose unnecessary trauma on victims.” In the last reading of the bill we heard that the removal of parole meant that victims would no longer need to address parole boards and relive their no doubt traumatic and unfortunate experiences. However, this simply will misplace, if you like, or relocate the trauma they will need to go through, because prisoners, or rather accused, who might otherwise plead guilty will have absolutely no incentive to do so, and, in fact, will have every incentive to plead not guilty.

The final summary point they make that I will refer to states: “The regime has a substantial fiscal cost, which would be better spent on (among other things) victim support, intensive policing, and improving parole supervision.” It must be acknowledged that there are one or two provisions in the Budget, as we heard last week, that actually do improve the situation. Some useful money is being put into those things, and I see the hand of the Māori Party in those wins in the Budget. However, it is still a drop in the bucket. It is inadequate. It will not be sufficient to turn round enough lives. This bill will create many, many more problems than it could possibly resolve.

When there is opposition to proposed legislation as it goes through this House, it is often very easy to see the self-interest of the parties that are objecting to it, and that is the nature of the democratic process. When we are dealing with commerce bills, sectors within the business community will come and protect their vested interest by trying to support, or not support, a particular provision in a piece of legislation.

I reflect on some of the groups that are objecting very powerfully and publicly to the passing of this legislation: the Howard League, with over a century of history in supporting the human rights of accused and of prisoners; Caritas, the Catholic Church’s social services arm; the Rethinking Crime and Punishment group, directed by Kim Workman, a gentleman with experience as a police officer and as a consultant in the prison service, who is now a volunteer for the trust; and Prison Fellowship New Zealand, which is essentially a collection of church interests.

I look at those groups and I struggle to see anyone who could possibly be driven by self-interest to oppose this very vicious legislation. In this instance it is clear that their concerns or objections are coming from a commitment to basic humanity, to genuinely looking for ways of making our communities safer, to protecting the human rights of inmates and accused, and to making the workplace safer for prison guards and officers.

There has been reference to the Californian experience. The original proponents of this bill looked at California as a glowing example of a “three strikes” regime giving positive outcomes. The regime being proposed in this bill is different but the principle is the same: mandated sentencing, longer sentences, tougher sentences, and fewer basic human rights for prisoners. Of course, the analysis was that this bill would remove or reduce human rights for prisoners.

The Rev. Ron Givens has just been in New Zealand. He has given firsthand experience, and has shown images, of the direct impact of locking people away for longer; such as the fiscal cost, the human cost, the suffering, and the danger to police and guards. These are not things we need to invent, because there is evidence that the principle—

David Garrett: You should go and check the claims he made.

DAVID CLENDON: The images he showed us were from the corrections services’ own websites in California. They were not manufactured images. They showed inhumane conditions. They showed people who were being brutalised and were more likely to further offend.

Last Sunday on our own televisions we saw an example of two young men. One committed suicide in prison and one looks as though he will be going to prison. The young man heading for prison has committed a very serious crime—there is no question of that—but what that young man needs is treatment. That young man going to prison would be an unjust outcome, and it is that sort of injustice that this legislation will not only facilitate but positively encourage. We will continue to oppose this very poorly thought-out legislation. Kia ora.

Hon RUTH DYSON (Labour—Port Hills): I am very pleased to be able to stand in opposition to the Sentencing and Parole Reform Bill. I am ashamed that Parliament is using its time to progress legislation that will not achieve one single point of what is described as being its aim.

This bill will do nothing at all to reduce offending. If there was legislation before the House to reduce offending and make our families and communities safer, there would be unanimous approval of it. This bill does nothing to reduce reoffending; something that we should all be very seriously concerned about. If the bill did something about reoffending, it would receive unanimous support from this House. The bill does nothing at all to support the victims of crime, which is something that the Minister who is now responsible for this legislation said she cared about when she spoke in this debate. If she does care about that, why does her legislation not do anything to better support the victims of crime in our community? Then Labour would support it. The bill does nothing about that. That view is backed up by the advice from many of the officials, although they were not able to give that advice directly to the Law and Order Committee. The bill does nothing to address the causes of crime.

Simon Power, the Minister of Justice, who should have been responsible for this bill, had a big get-together that was intended to look at the drivers of crime. He did it in a very inclusive way; he invited all sorts of people to that conference. He was serious about asking what the drivers of crime were, what caused crime in our community, and what we, as a Parliament, should do about it. Instead, we got this load of drivel, which, frankly, I think Simon Power is relieved not to be responsible for, because he knows that it is an embarrassment to him, his Government, and the big get-together that he called to look at the drivers of crime.

This bill offers false hope to victims, and I think that is actually the most despicable thing about it. We, as a Parliament, should be upfront about the fact that if there is not enough support for people whom we care about, we should agree to do more. Instead, the Government offers this drivel, driven by one of the biggest drivellers of all in terms of substantial policy, the Sensible Sentencing Trust representative in our Parliament, and it offers victims hope that will never be delivered on. I think that victims deserve better than that from our Parliament.

I will now pick up on the process point that my colleague Grant Robertson raised during his contribution earlier this afternoon. It is an absolute outrage that the proper officials—the Ministry of Justice officials—who are entitled to give their opinion to the executive and to Parliament through the select committee process—were stopped by Minister Judith Collins from giving their advice on this bill to the Law and Order Committee. I have never heard of such a breach of rights in an open, democratic parliamentary process. That was just extraordinary, and members in this House should be outraged about it. Actually, they should demand the Speaker’s consideration of that very point: that when members of the select committee asked for the proper Ministry of Justice officials to give advice to the select committee—they could have done it with other officials; that is a very common practice—the executive of the Government barred those officials from giving that advice. I think we have a right to obtain advice, and we have a right to obtain competing advice if that is what the officials recommend. That is the advantage of having a Public Service.

It is not surprising that that advice was stopped, though. I will give the House an example of what Ministry of Justice officials said about this bill. They said it was unlikely to be consistent with the Government’s publicly announced policy regarding the drivers of crime. The Ministry of Justice said this legislation goes absolutely against what the Minister of Justice said was the Government’s policy intention in terms of the drivers of crime. The issue is not just that this legislation fails to be very competent or very robust; it goes against the stated Government policy outlined by Simon Power. It was not only justice officials who said that; Te Puni Kōkiri, the Police, Treasury, and the Department of Corrections have all said this is a rubbish bill driven by a—no, they did not say it was driven by a rubbish member, because they are high-quality public servants. But they said this bill would not achieve the purpose that the Minister has outlined: that it will not reduce offending or reoffending, and it will not support the victims of crime. This bill is just a way of keeping ACT quiet. Well, I wish the Government good luck on that particular point.

I will talk about another group of people, apart from the Ministry of Justice officials, who were not consulted about this bill: the Ministry of Health officials. That ministry was not asked for its opinion on the implications of transferring large sections of the Crimes Act into this bill, and completely redefining the nature of offending. Public health experts were not asked about the provision in the Crimes Act that has been moved into this “three strikes” bill. The public health advice would have been that including section 201 of the Crimes Act—the section referred to by the chair of the committee—which deals with infecting with disease, sends entirely the wrong message to people whom we want to be free of disease and free of infecting other people with disease. It gives them entirely the wrong message from Parliament about discrimination and stigmatisation, and it drives risk-taking behaviour underground. That would have been the public health advice if the select committee had bothered to ask for it.

The Minister of Health should know about those issues. He is responsible for public health in New Zealand, and he has recently been alerted to the concerns of the New Zealand AIDS Foundation in that regard. Transferring that section of the Crimes Act to this legislation sends the wrong message about public health. When the Minister of Health, the Hon Tony Ryall, was asked to put public health considerations first on the agenda of this Parliament, what did he do? He was asked to put public health first, and he referred those concerns to the Minister of Corrections. The Minister of Corrections, the Hon Judith Collins, interestingly enough, is not responsible for public health in New Zealand. I do not know why the Minister of Health collects his salary if, when he is asked about a major public health concern, he refers it to one of his colleagues. If he cannot do the job, he should hand the whole lot of it over to someone else.

Another interesting bit of information that has come to light during this debate is that the public health bill that is on the floor of Parliament will also be moved into a justice environment. So we will be putting public health messages and concerns into a criminal and justice framework. Clause 127 of the Public Health Bill will be moved into the legislation that deals with crimes against a person. I implore the Minister of Health to do better with regard to that legislation than he has done in his response to this legislation. When a public health issue is raised with the Minister of Health, he should take it seriously. He should have used the privilege of his position to respond to those concerns, even if it was a matter of delaying the progress of this legislation in order to get the concerns aired properly, debated, and hopefully resolved. I certainly would have been supportive of that. But the Minister of Health took no such measure; he washed his hands of it. It was bad news, it was a bit tricky, and it was a bit difficult, so he washed his hands of it and left it to Judith Collins to respond to.

If this legislation did anything to reduce offending or reoffending, or to better support the victims of crime in our community, Labour would support it. It fails on every single measure. It does not offer us safer prisons, safer communities, or safer families. It is a wasted opportunity.

DAVID GARRETT (ACT): I begin by repeating an acknowledgment I made during the Committee stage of the Sentencing and Parole Reform Bill that I am sure members on the other side of the Chamber are concerned about victims. Mr Robertson and Mr Hipkins made interesting and informed contributions, and I acknowledge them.

“Three strikes” was one of the ACT Party’s major policy planks at the last election, and it was No. 1 on the list of policies that we wished to advance in the confidence and supply agreement with National. I start by thanking the National caucus as a whole, the Minister of Justice, the Minister of Police and of Corrections, and the Prime Minister for honouring the commitment in the confidence and supply agreement in both the letter and the spirit. I particularly acknowledge and appreciate the Prime Minister’s openness of mind in being prepared to look at the evidence that showed that including a qualifying sentence in the definition of a strike would have been fatal to the bill’s purpose and would have made it ineffective. I pay tribute to him for that.

I thank Dr Jennifer Walsh, an American academic who prepared a very comprehensive submission and came to New Zealand at her own expense to appear before the select committee and to speak to any member of Cabinet who wished to speak to her. Dr Walsh has provided invaluable help to me and to us by providing information to counter the misinformation about how the policy has worked in the 26 states of the United States that have laws of this kind, as well as very useful ammunition to counter the misinformation promulgated here in this House. Interestingly, that misinformation is the same kind of empty rhetoric that was seen in California in 1994.

In my maiden statement I said that I came to Parliament to try to make New Zealand a better and safer place. I truly and sincerely believe that this bill is a major step forward in that regard. Contrary to what has been said by members on the other side of the House and by some commentators, this measure is not contradictory to the Drivers of Crime initiatives that National wishes to advance; rather, it is complementary to them. I offer an analogy: imagine that our criminal justice system is a person suffering an acute overdose of drugs who is in dire shape. In that situation one saves the person’s life first and worries later about where they got the drugs, who sold them to them, and why they felt the need to take them. The imperative is to save the person’s life. With this bill we have sent a message that repeat violent offenders have a choice: they can change their ways of behaviour or they can condemn themselves by their own choices to spending most of their lives in jail. It is their choice.

Again, contrary to what has been said by members on the other side of the House and by people elsewhere, this bill is not about locking people up and throwing away the key, and it never has been. I re-emphasise what the Minister of Corrections said: the only people who will be locked up for life under this bill will be persons who have committed murder as a “third strike”, or the worst of our murderers—people like Graeme Burton, William Bell, Liam Reed, and, sadly, a number of others whose names are less well known.

This law is about protecting victims. I say again that it is about protecting victims. Since the election four more people have been killed by persons who would have been third-strikers, and thus in jail, had this bill been in force at the time they committed those killings. That means four more lives tragically lost at the hands of repeat violent offenders who are for the most part, if not all, beyond rehabilitation. We need to face that.

Contrary to Ms Dyson’s contribution, we say that there is absolutely no doubt that the policy will work. It will work in one of two ways: incapacitation and deterrence. The only question is how effective it will be. Incapacitation will put behind bars those who cannot and will not alter their behaviour. It will protect society from them. Members on the other side of the House pay lip-service to agreeing that that is where they should be. The other way that the bill—or the Act, as it will become very shortly—will work is by what is known as general deterrence, which means deterrence of others.

I put on record again that no one will be happier than me, personally, if there is never a third-striker locked up. I say again that no one will be happier than me, personally, if no one is ever exposed to the full extent of this regime. But, sadly, the reality is that within days or possibly hours of this bill passing, someone will commit a first-strike offence. The reality is that that person will probably already have a lengthy record of violent offending. When that person is convicted the media will report the first-strike conviction, I have no doubt, and possibly it will report the next several after that. When the first second-strike offender gets his or her final warning and a lengthy sentence, that will be big news too, and all the criminals will know about it.

Criminals know about this legislation now. Contrary to what members on the other side of the House think, criminals are not stupid. They may not have university degrees or even have finished high school, but they know about cause and effect as it affects them. All the criminals will know in 5, 6, or 7 years, when the first third-striker goes away for 14 years if their conviction was for aggravated robbery, or 20 years if it was for sexual violation. The crims will know about it, just as they know today when a child sex offender has been convicted and which prison that offender will turn up in. They know. They are not stupid.

They know about the bill and its effects. We know that because we were told so in the Law and Order Committee. An earnest young man came along and told us how terrible the legislation was, and how the criminals did not think and did not understand the consequences; then, without seeming to realise what he had said, he said that when he was in Pāremoremo Prison last week he was amazed that all of the 75 criminals he talked to knew about this bill. I asked him immediately whether they knew about the Tariff (Malaysia Free Trade Agreement) Amendment Bill, which we had been debating in the same week. Of course they did not, because it did not affect them.

This bill is not for the criminals; it is for all the victims who have gone before, and for all those who will now not be victims, as a result of this law being passed. Sadly, there have been so many victims. This law says to John and Val Hargreaves and countless others who have lost loved ones that their loved ones did not die in vain. It says that they helped to spark a change of direction in our criminal law. I say to the mother of Emma Agnew, whom I have met, that her daughter did not die in vain. I say to the parents of Fitzgerald Risati, a Samoan choir boy who was out celebrating his birthday when he was stabbed to death by a scum gang member who was looking for a patch, that their son did not die in vain.

Contrary to the predictions from members opposite and from elsewhere, this bill is not the end of justice as we know it. It is not the end of compassion or justice. It is a turning point. It allows us, having dealt with the overdose, to focus on the children of today’s violent offenders and try to ensure that they do not follow their fathers. It is, in fact, a great day for New Zealand justice.

HONE HARAWIRA (Māori Party—Te Tai Tokerau): Kia ora, Mr Assistant Speaker. Kia ora tātou e te Whare. Today is the anniversary of the arrests at Bastion Point on 25 May 1978. Back then 222 of us were hauled off to the clink and charged with trespass, which was not a big charge back in those days, but today things are different. As we saw from the police paranoia in the terrorist raids on Tūhoe a couple of years ago, even simple charges such as trespass seem to have taken on a greater seriousness, as the State targets those it wants to shut down, using charges that allow it to call out the armed offenders squad, and using the media to beat up stories that the court is showing have no substance whatsoever in the harsh light of day. So when we talk today about the list of 32 charges that will make up the “three strikes” criteria—

David Garrett: Forty-one.

HONE HARAWIRA: —well, I have just added another one—the 42 charges that will make up the “three strikes” criteria in this third and final reading of the Sentencing and Parole Reform Bill, believe me, that is only today’s list. It will not be long before trespass and other similar charges will be added to the list by politicians too dumb, too lazy, and too mean-spirited to resolve issues intelligently, and who choose the big stick as the resort of first choice. To no one’s surprise, it will be Māori who suffer most when that happens. Prison statistics tell us that even though Māori are only 14 percent of the population, we are 50 percent of the prison muster, and have been so for more than 20 years. If members think that is bad, believe me, this “three strikes” bill will make it much, much worse, because without decent rehabilitation programmes, first-strikers and second-strikers will carry on getting it wrong because they will not be learning anything. They are simply reacting to problems in the only way they know, and they will get hammered.

Because I suspect that a lot of members in this House do not believe me, I recommend that they read the countless reports that vividly detail the historical tragedy of systemic bias and outright racism against Māori in respect of arrests, charges, convictions, and jail sentences in this country. These reports tell us that given equal number of Pākehā and Māori being arrested for similar incidents, the ones who are more likely to be charged are Māori; given equal numbers of Pākehā and Māori appearing in court on similar charges, the ones who are more likely to be convicted are Māori; given equal numbers of Pākehā and Māori being convicted on similar charges, the ones who are more likely to be sentenced to jail are Māori; and, given equal numbers of Pākehā and Māori being sent to jail on similar charges, the ones who are more likely to be given the longest sentences are Māori. For those who doubt this scenario, I urge them to give me a call and I will be happy to organise a seminar, with a Pākehā lecturer, to confirm what I am saying today. When I say that Māori are the ones who will cop the dirty end of this “three strikes” bill, members can believe it.

It is a short-sighted man who thinks that legislation that sends people to jail for a long time reduces crime rates. It is a blind man who sees justice in sentencing people to life imprisonment for responding to circumstances they have little control over. It is a bloody fool who thinks that this bill will do anything else but create frustration, anger, and violence within our prison population. This anger will explode for any reason and at any time, because when someone is in jail for life the only question that that person considers, when faced with conflict, is not: “Gee, what can happen to me if I do this?”. It is: “What else can they do to me?”. There is nothing they can do. I know, because I have been to jail. I have been in the mainstream wing, I have been in the remand wing, and I have been in the separation wing. An offender in the separation wing who is faced with conflict does not worry about what the bloody jailer will do or what the system will do. They cannot do any more, because the offender is already in jail. I know what I am talking about, and 100 percent of the MPs in this House do not.

When politicians talk about a safe society, let me ask this question. What about the next generation who have to grow up with the children of those who have been jailed for life? These children will grow up with a deep-seated and very real hatred of society for a life spent below the margins that they have been forced to lead. This hatred will be revisited on society, through ever-increasing rates of mayhem and murder. That, of course, will add weight to the calls for more guns for the police, and that will lead to more guns for civilians, which will lead to bigger guns for criminals. The only question we will have left to ask ourselves is when did we become the southernmost state of the gun-loving USA. That is the future we will be giving ourselves, with a bill like this. That is the only future for a society that treats the punishment of its members with the contempt being contemplated by this legislation, that refuses to take the steps of intelligent societies to reduce offending by reducing the causes of offending, rather than jailing offenders for life.

Heck, even our own Ombudsman admits that there are smarter ways than imprisonment to prevent crime and make criminals accountable, and that prison is not the most effective or efficient approach to reducing crime. Yet what are we doing? We are building more prisons, we are double-bunking prisoners, we are making plans to keep offenders in prison for life, and we are dumb enough to think we can tell how well we are dealing with crime by counting how many people we have put into prison.

The Department of Corrections received $500,000 in 2000, nearly a million dollars in 2008, and it is predicted that we will spend $2 billion by 2020, and that is without the “three strikes” bill being factored in. We could ask whether that is what this Government thinks our society should be spending its money on. Yes, we have a problem with violent crime in this society; there is no question about that. Yes, we have to do something about it. But let us at least be intelligent about it and look to other international examples where rehabilitation and reintegration into society have been proven to work, over the “lock ’em up and throw away the key” model. Research tells us that places that have trialled “three strikes” have higher murder rates, bigger prison populations, and leave a huge impact on marginalised populations—read Māori, when I say that—higher costs, and negative impacts on the families of offenders.

I am not a great fan of British justice, but I note that the Justice Committee of the British House of Commons recently made the case for justice reinvestment. It called for a more holistic approach to crime reduction by tackling the conditions of criminality—poverty, low educational attainment, drug and alcohol problems, and the lack of housing and employment. The committee’s report came out of very clear evidence that prison is a very expensive way of dispensing justice and seeking reform, and concluded that justice reinvestment was a far more prudent, rational, effective, and humane use of resources.

Last week Dr Pita Sharples took a step down a similar path when he announced the establishment of two reintegration units where the focus will be on helping inmates to prepare for life outside the wire, using kaupapa Māori to help them get jobs and accommodation, and help them to improve relationships with whānau and with their communities. But, even still, it seems that our focus is elsewhere. Only 5 percent of the budgets of the Ministry of Justice and the Department of Corrections is spent on rehabilitation, reintegration, and crime prevention; only 5 percent. Most of the money is burnt up in administration, staffing, buildings, and beefed-up security measures for bigger prisons. When a department spends only 5 percent of its budget on rehabilitation, we can guarantee that all the highfalutin plans will not only fail but will eventually come back to bite us on the backside—if not us, then certainly our children and grandchildren.

The Māori Party opposes this bill with all its heart. We will work with whomever it takes to develop intelligent policy over knee-jerk idiocy, and rehabilitation over degradation. Kia ora tātou katoa.

JONATHAN YOUNG (National—New Plymouth): I am pleased to speak on the third reading of the Sentencing and Parole Reform Bill. After listening to the previous speaker, Hone Harawira, perhaps I can pose a question to him, as he posed one to us, in terms of the attitude of the son of a prisoner who was sentenced to life imprisonment. Perhaps we should also ask about the effect on the son of the man whom that prisoner may have killed. I think we need to understand that this bill is about victims. It is about the protection of our society.

For some time there has been a growing tide of concern at the rising rate of violent offending in New Zealand, and objection to the length of sentences given to serious repeat offenders. Almost 92 percent of voters in the 1999 referendum voted in the affirmative for the proposition that restitution and more support be provided for victims of crime, and that violent offenders be subject to longer prison sentences. Ninety-four percent of the 1,118 submissions made to the Law and Order Committee supported the bill. New Zealanders want sentencing to be tougher for the worst repeat violent offenders.

I acknowledge the issues that the previous speaker raised about addressing rehabilitation. This bill does not pretend to address those issues. This bill is about sending a signal to the people of New Zealand that this Government, in association with the ACT Party, is serious in its concerns about violent offending and is prepared to make sentences tougher and to ensure that repeat violent offenders do not get out on parole and thereby have the opportunity to repeat their crimes.

The 1999 referendum was instigated by Norm Withers after his elderly mother was brutally attacked in Christchurch. The offender had committed 56 previous offences but was released early on parole, which gave him the opportunity to attack Norm Withers’ mother. Since that time, we have had numerous cases of murders committed by offenders who were on parole. William Bell and Graeme Burton are the most well-publicised cases. Both had over 100 convictions. Both were convicted killers who committed murder while on parole.

When this reform bill was first proposed, the New Zealand Herald ran a poll because it believed that such a toughening of the law would damage our international reputation. I read through some of those comments to see what people on the streets of New Zealand thought. One particular comment amongst the many caught my attention. It was written by a person who identified himself or herself as Akiwi. At 9.30 a.m. on Friday, 20 March 2009, that person stated: “It’s shocking everytime some right steps are planned to be taken to fix the crime situation, some idiotic thinking tries to stop it in the name of human rights, as if all the human rights are meant only for criminals.” I think that comment puts it well. Our Prime Minister said some years ago that where there is a balancing of rights to be done between criminals and victims, we take a side, and that side will be on the side of the victim.

This bill is about supporting victims. This bill is about addressing the issue of repeat violent offending and ensuring that it does not happen to the extent that it has in the past. The purpose and the principles guiding the corrections system, as spelt out in the Corrections Act 2004, are “to improve public safety and contribute to the maintenance of a just society”.

I will finish my speech with an excellent quote from our Minister of Corrections, the Hon Judith Collins. She said recently that “none of the 41 qualifying offences for three strikes is relatively minor. All involve serious violence or sexual offending, and all have a maximum penalty of at least seven years in prison. Perhaps more importantly, they all have a long and profound impact on the lives of victims. In defending the rights of offenders, critics of three strikes downplay the goal of the legislation, which is to protect the public from criminals who have a track record of serious offending. The bill focuses on the repeat nature of offending rather than just the offence itself. An offender who has committed three serious offences will, in all likelihood, go on to commit a fourth. By imposing maximum sentences without parole, three strikes gives offenders much less opportunity to do so because they will be in prison.” Thank you.

CARMEL SEPULONI (Labour): I will refer to David Garrett’s speech. I point out that he is a staunch advocate for this Sentencing and Parole Reform Bill and that he has pushed very strongly for it from the start. While he was speaking I was thinking about why I feel so concerned about what he had to say. The reason is that we hear over and over again from the ACT Party and from National that this “three strikes” bill is about the victims, but unfortunately when I listen, I hear that it is more about hatred for the offender than about compassion for the victim. When that is the driver for legislation, I think that members in this House need to be concerned.

A few weeks ago we had a judge from California here in New Zealand. His name is Judge Eugene Hyman. That judge spoke to us about his concerns with regard to this bill. We asked him questions about rehabilitation in California, and he made it very clear that the money in California with regard to the corrections system was overwhelmingly invested in incarceration, rather than in the rehabilitation of prisoners. I think most New Zealanders would look to the US and think that they would not see that country as being the model that New Zealand should to aspire to. I think most New Zealanders would think and say that our current system is much better as it stands, and the last thing that we would want our legislation to do is reflect the legislation in place over there.

We also had Rev. Ron Givens here recently, about 2 weeks ago. Rev. Givens is the executive director of prison chaplains in California. He has first-hand experience of what happens when a “three strikes” bill is reactionary and Draconian—like this bill—and he spoke of the consequences of California’s “three strikes” legislation, upon which this bill is based. He talked about skyrocketing rates of incarceration, unjust sentences, and unmanageable costs.

David Garrett: Rev. Givens was always busy when I wanted to debate him. He had prior engagements on every evening.

CARMEL SEPULONI: I find it quite disconcerting that I took the time to listen to Mr Garrett, even though I disagreed fundamentally with everything he said, and he cannot sit there quietly while I am giving a speech that reflects my opinion and views on this bill. Rev. Givens knows exactly what will happen if this bill is passed, which is why he came to New Zealand to warn us against it. National should have been listening, but instead it was already tied into a deal that it had made with the ACT Party right at the beginning of its term as Government, despite the fact that, fundamentally, it disagreed with this measure. That is why the Minister of Justice has washed his hands of the bill. Still, National members know that it is bad legislation, but they are supporting it, because the deal gave them the power in the House. We look at those members and we think that that is incredibly sad, and it is quite bad for New Zealand, actually. The chair of the Law and Order Committee, Sandra Goudie, sits there laughing, because she finds it impossible to take anything seriously.

The Māori Party brought up an interesting point about the amount of money that goes into the corrections system and the amount of money that will have to go into the incarceration of prisoners. Quite frankly, most New Zealanders would agree that that is not where they want their money to be spent, yet we see that under this National Government more money is being invested into the corrections system. On the other hand, we see that less money is being invested into things that New Zealanders agree are important—things like early childhood education. We have more money spent on incarceration and less money spent on education. I think most New Zealanders would agree that that is a blight on the Government with regard to its decision making and with regard to what it sees as being priorities for this country.

A number of concerns arose as this legislation was going through the select committee process. I will talk to some of those. On 19 January 2010 the National Government and ACT announced that a revised “three strikes” policy would be incorporated into the Sentencing and Parole Reform Bill. The Law and Order Committee met to consider the revised bill for the first time on 10 February. Despite the significance of the changes made to this bill and the high level of public interest, the National and ACT members of the committee used the weight of their majority on the committee to ram through the following resolutions.

The first one was to “prevent the Ministry of Justice, the implementing authority for the bill, to have any role as advisors to the committee”. It is one thing that the Ministry of Justice was not the lead agency with regard to this legislation, but it is another thing when the chair and all of the members from the National and ACT side voted to block any role that the Ministry of Justice might have played with regard to advising on this legislation. The other thing that National and ACT members did was to “hold no further oral submissions on this bill, even though the substance of it has changed since submissions were last invited”. There is a recurring theme with regard to that matter. The recurring theme is National’s ongoing mission to block democracy, and that is what it has been doing since it became the Government.

Another thing National and ACT members on the select committee did was to “allow only written submissions on the revised bill from those who have previously submitted on the specific clauses that have been amended”. It makes one wonder what National and ACT members were concerned about. Obviously, they understood that, overwhelmingly, anyone who made a submission on this legislation would have submitted evidence that went against what National and ACT were trying to do—that is, it would have supported our side and what we were saying, which is that this bill would not be effective for what National and ACT were trying to achieve. The other thing it did was to “give those submitters two weeks or less notice to make further submissions”. It was a very small time frame. The process right from the start was flawed, and Labour members are concerned about that.

The Labour members of the committee voted against each of those resolutions. We believe that this is an unnecessarily rushed process, and that to close submissions to all but those who have already submitted on specific clauses affected by the National-Act “three strikes” announcement is to deny the public its right to submit on the revised bill. The select committee process is one of the most important parts of our democracy, as it provides an opportunity for the voting public to have their say. That opportunity was denied by National and Act with regard to this legislation.

One of the themes of New Zealand today is the shift from all decisions being made on behalf of citizens in a representative, democratic style, to a participative democracy in which institutions and processes are open to public submission. The denial of public access to submissions is a step backwards to a “We know best, we are in charge, and we make the decision.” attitude. That is unfortunate, but it is happening.

The original Sentencing and Parole Reform Bill was in the name of the Minister of Justice, the Hon Simon Power, and the Ministry of Justice was the lead advising agency. That made sense, because the bill aims to change sentencing laws, which are clearly under the jurisdiction of the Ministry of Justice, through the courts. Without explanation, the revised bill was transferred into the name of the Hon Judith Collins, who is the Minister of Police and the Minister of Corrections. The New Zealand Police were made lead advisers, with the Department of Corrections as the assisting advisers.

We realise that there are serious constitutional issues with this legislation. There has always been a deliberate separation between the justice agencies such as the Ministry of Justice, the courts, the police, and the Department of Corrections. That is because it is considered constitutionally inappropriate for the same agency to undertake the roles of arresting offenders, trying and sentencing them, and imprisoning them.

We are concerned about a number of things with regard to the process. We are also concerned about the substance of the bill. We have said over and over again, and so has the Minister of Justice, that this bill will go no way to acting as a deterrent to crime. Although we have heard from members on that side of the House time and time again that this legislation brings about justice for victims, we have also seen with regard to the evidence that we will instead see victims dragged through the mud even more so, as people are more likely to appeal their cases, and less likely to plead guilty, because there is more at stake. We disagree with this bill. I say that as the chairperson of the Law and Order Committee continues to laugh and mouth funny things to me from the other side of the House. She cannot take this bill seriously, but we do. Thank you.

PAUL QUINN (National): It gives me great pleasure to speak to the third reading of the Sentencing and Parole Reform Bill. I have not been impressed at all by the contribution of the Labour Opposition, for a couple of reasons. Firstly, Labour members seem to have focused most, if not all, of their contributions to the debate on process. That is probably because 94 percent of the submissions supported the bill. So instead of bringing some rigour to the bill itself, they are left to wallow in the misery of process, for which they are the past masters.

Every speaker that I have heard on that side of the House has stood up and lectured this House about democracy. Can members believe that? Labour members are giving this House and the people of New Zealand a lesson on democracy simply because the Law and Order Committee felt that the Department of Corrections was the appropriately nominated adviser to the bill. This is the very party that rammed the Electoral Finance Act through this House against the desires of the overwhelming populace of New Zealanders. How dare they lecture us on democracy? How dare they lecture the people of New Zealand on democracy? Labour members have no grounds to tell us anything. That is the first point I wanted to make.

The second point I make is that I understand the heartfelt contribution of my erstwhile friend Hone Harawira. I understand his side of it, but the truth of the matter is that when we look at the statistics, we see that 70 percent of inmates have had 10 or more convictions before they go to prison for the first time, 70 percent of people who have been to prison reoffend within 2 years of their release, and 86 percent reoffend within 5 years of their release. So although I hear the argument for the carrot to encourage and to develop, we have to be mindful of the facts. The reality is that people are given chances, but they do not take them.

So we turn to this legislation, and the ultimate sanction is that 41 crimes now constitute the serious criminal offending that will mean the “three strikes”—that colloquialism. Those crimes fall under about four or five main headings: sexual violation, murder, manslaughter, use of a firearm against a law enforcement officer, kidnapping, and aggravated robbery. If Opposition members want to say in this House that they are not serious crimes against the community and society, then they do not deserve to be in the Opposition. When we consider these crimes, and the variations thereof, against the fact that 70 percent of prisoners who go to prison have committed at least 10 crimes before they go to prison for the first time, we see that the reality is that those Labour members deserve to leave their seats so we can bring someone else in. With those few words, it gives me great pleasure to support the third reading of this outstanding bill.

CHRIS HIPKINS (Labour—Rimutaka): I think that Paul Quinn’s ability to lecture the House on democracy would have been enhanced significantly had he not voted in favour of taking away the right of Aucklanders to have a say on the structure of their local government, and had he not voted in favour of taking away the right of Cantabrians to have a say on the form of their local government. I think the public will be pretty sceptical about being lectured on democracy by Mr Quinn.

It is good to see Hone Harawira in the House debating the Sentencing and Parole Reform Bill. As I have previously stated when he has spoken on this matter, I have agreed with many of the comments that he has made. I look forward to seeing him vote against this bill. It is good to see when the Māori Party votes with its conscience, rather than voting with the Government, so we welcome him and his opposition to this legislation.

I come to this debate with some reluctance because, as with many debates on law and order, the comments of those who are opposed are likely to be misinterpreted and wrapped up in bumper sticker slogans. I think that those who perpetrate serious violent crime need to be held accountable for their actions. I think that we need to consider victims in all of this. But that does not mean that I agree with the “three strikes” bill. We have to get past the point in this House where anybody who disagrees with a particular measure on law and order is labelled as being soft on crime, not caring about victims, or condoning the actions of offenders. None of those are necessarily true. I do not condone the actions of violent offenders and I have a lot of compassion and sympathy for the victims of crime. I simply do not believe that the “three strikes” legislation will reduce crime or leave victims better off.

I do not think that it is right for anybody on any side of the House to suggest that members are hard or soft on crime depending on the way they are voting on this bill. I think the public of New Zealand deserve better in the debate on law and order. They deserve to see their elected members of Parliament actually debating these issues seriously and looking at the evidence and the submissions that were presented to the Law and Order Committee, including looking carefully and seriously at the minority submissions put forward by those who oppose this legislation. I know that the overwhelming majority submitted in favour of this legislation. It is easy to submit in favour when one is given a postcard and told to sign it, which is what the vast majority of the submissions in favour of this bill were. They were postcards that were signed by people, and were handed out, no doubt, by the Sensible Sentencing Trust. So I am very suspicious of the numbers when the Government says that people are overwhelmingly in favour of this bill.

I have a huge amount of compassion for the victims of violent offences and those who are associated with the victims of violent offenders. I understand, although perhaps do not necessarily feel it myself, the desire on the part of some of those people for vengeance against the offenders, but I hope we can move beyond that to look at the causes of criminal offending. I would much rather prevent the violent offending—any form of criminal offending—from happening in the first place than deal with it after the fact. I think we would really demonstrate that we take the concerns of victims seriously if we took action to ensure there were much fewer of them in the first place. Unfortunately, this legislation does nothing to reduce the number of victims who are created in the first place.

We have heard some disgraceful examples in this debate of political rhetoric that simply does not square up with the facts. We had the indignity of the Minister in the chair, Judith Collins, standing up in the Committee of the whole House to say that the only violent crime in New Zealand takes place in South Auckland and that anybody who lives outside of South Auckland has no right to talk about violent crime, because they could not possibly understand. I think that is an absolutely disgraceful position for the Minister of Police and the Minister of Corrections to have taken. First of all, it is a dreadful slur on all of the people who live in South Auckland, and, second of all, it is a slur on people from the rest of the country to suggest that they do not know anything about violent crime and that they cannot sympathise with the victims of violent crime. That is absolutely wrong.

I will mention the reporting of violent crime and crime statistics. We hear crime statistics bandied around the House in justification for this bill and along with a lot of other law and order measures. To some extent the increased reporting of violent crime is a good thing. A lot of violent crime previously got swept under the carpet. It went unreported; it went unnoticed, particularly in the case of domestic violence. A big contributor to the increase in violent crime statistics is domestic violence. I think the fact that it is now being reported and it is being properly handled is a really good thing. I think we should not be alarmist about the increase in reporting of domestic violence. I do not think that domestic violence is happening more than it used to; I think it is being brought out into the open and it is being dealt with. That is really good. We should be proud of that. We should be happy that people are not turning a blind eye to it but are reporting it, and it is being dealt with.

There are problems with the “three strikes” policy, and I will canvass some of the issues that have been raised. First of all, there is not much evidence to suggest that longer sentences reduce crime—they do not. Longer sentences do not reduce crime. The “three strikes” bill provides no incentive for good behaviour, and we should be very wary of that. We are sending prison guards into the prison at the same time as we are removing the incentives for violent offenders to reform their ways and shape up their acts. We are putting prison guards at risk if we remove all of the incentives for the prisoners to tidy up their acts and reform and behave properly in prison. We are placing even more of a burden through this bill on the victims themselves. We are less likely to see guilty pleas for violent offending, and we are more likely to see appeals. All of these things drag out the process for the victims of violent crime, and leave the victims of violent crime even more exposed.

This bill removes judicial discretion. One of the most fundamental parts of a fair law and order system is providing the judiciary with the discretion to cope with different situations. This bill removes that discretion. In fact, it hands it to the police, instead. It means that the police will have all of the discretion in the plea bargaining before charges are brought before the courts, rather than judges having the discretion in the sentencing. So we are more likely to see the police bargaining before a charge is brought, and saying that if offenders plead guilty to a lesser charge, which is not a “three strikes” offence, they will not put forward the “three strikes” offence as their charge. That circumvents the judicial process; it is not fair law and order. It is not fair and people could get off lightly. The offenders could end up getting off lightly if plea bargaining is going on between the police and the offender in order to lower the potential charge that is brought before the courts.

Mr Quinn mentioned the process issues. I think it is concerning that we are considering a significant justice issue, yet the Ministry of Justice was excluded from the select committee process. The regulatory impact statement raised a significant number of concerns about this bill but the ministry was not given the opportunity to flesh them out and debate them. I think that is an abuse of the democratic process, and I think the public should be concerned about that. The Attorney-General—one of the National Party’s own—raised similar concerns. He raised significant concerns with this bill, and they have not been adequately addressed.

The Labour Party agrees with tougher penalties for violent offenders. If one looks back on the track record of Labour in Government, one will see that we increased the minimum non-parole periods for serious violent offenders, we held people in prison longer, and we made it possible for people to be detained for longer if it was in the best interests of the victims—if they were likely to be repeat violent offenders again. We did those things.

We do not agree with the “three strikes” bill. I think it would be much better to give serious consideration to the causes of criminal offending in the first place, to have a serious and honest discussion about the role of mental health in criminal offending in New Zealand, and to have a serious and honest discussion about the role of illiteracy, innumeracy, and low levels of education in the role of criminal offending. We should be talking about the cycle of violence and victimisation, because many offenders are themselves victims and were victims beforehand. Many of our most violent offenders were quite often victims of violent crime in their childhood. If we turn a blind eye and we do not deal with that then they are more likely to become violent offenders, and we should have an honest discussion about that. We should look honestly and openly at the link between socio-economic status and criminal offending because crime is more likely to take place in low socio-economic areas, and criminal offenders are more likely to be from low socio-economic areas. Let us have a discussion about those causes of criminal offending, rather than using the “lock them up and throw away the key” mentality that too often characterises debate on law and order issues. Thank you.

Dr CAM CALDER (National): Thank you for the opportunity to rise and speak on the third reading debate of the Sentencing and Parole Reform Bill. The previous speaker made a valid point. We need to address the drivers of crime, and that is exactly what John Key’s principled and pragmatic National-led Government is doing. We are looking at ways to counter, to prevent, and to reduce offending in the first place. This is a work in progress. This bill is designed to protect the public from repeat serious violent offenders. These are offenders who have ignored verbal and written warnings of the consequence of their violence and shown a cavalier disregard for the rights of others.

A prisoner on remand, and one sentenced, is held under the care of the Department of Corrections. The facilities operated by the corrections service have four main roles: to deter a potential offender from offending, to punish a convicted offender, to protect the public from a convicted offender, and to rehabilitate a convicted offender. Let us look at rehabilitation. Drug and alcohol dependency is a problem for many prisoners, and often a causative factor in their offending. We have doubled the amount of drug and rehabilitation places available, from 500 to 1,000, and aim to increase the number of places further in the future when possible. We are also committed to rehabilitation through training programmes, which improve inmates’ skills.

Spring Hill Corrections Facility is an impressive correctional facility designed so that prisoners in the highest-security cells can view the medium and low security cells and prison workshops from where they are based. So in other words there is a path to rehabilitation clearly visible should a prisoner choose to take it. All the staff I met there impressed me with their professionalism and passion for rehabilitation through prisoner education. Prisoners assessed as suitable have a chance of training in carpentry, metalwork, catering, and farm work. Prior to their final release with the support of surrounding businesses, some prisoners may undertake day release-to-work programmes. The aim at Spring Hill Corrections Facility is ultimately to have 60 percent of prisoners able to take part in those rehabilitation programmes.

The day after my visit, corrections officer Jason Palmer was injured in the course of his duties and later died. His funeral was held yesterday. I offer my deepest sympathy to his family, who have lost a beloved husband, father, son, and brother, and to the Spring Hill staff, who have lost a friend and a valued team member.

The Government announced yet another rehabilitation initiative in this Budget. Whare Oranga Ake, which my colleague referred to earlier, will help to cut reoffending among Māori. Whare Oranga Ake is a kaupapa Māori reintegration unit “outside the wire”, where the focus will be on prisoners gaining employment, securing suitable accommodation, and improving family and wider social relationships. As well as offering rehabilitation, a correctional facility should deter, punish a convicted offender, and protect the public. As a member of the Law and Order Committee, I visited New Plymouth Prison, Auckland Central Remand Prison, Spring Hills Corrections Facility, and Rimutaka Prison. I have no wish to spend a protracted period of time in any of them. Sadly, a number of our citizenry, a prison muster of some 8,500 people, are not deterred. The prison muster continues to grow.

With a rising population, some increase in the muster is inevitable, but this Government is not complacent. We are seeking ways and new ideas to reduce it—in stark contrast to the late, unlamented, lackadaisical Labour administration, which had no answers, where legislative lassitude and lethargy reigned supreme. Their caucus, riven with fear, loathing, and mistrust, careered between querulous cavilling and contented catatonia. New ideas were as rare as a bikini on an Eskimo, as unknown as Vaseline on the hands of a trapeze artist, as scarce as a tsunami in the Sahara. That is in stark contrast to this Government. John Key’s National-led, principled, pragmatic Government is determined to explore every avenue to rehabilitate, every avenue to deter, but also to punish the persistent, repeat serious offender and to protect the public from their depredations. The Sentencing and Parole Reform Bill is part of this wide range of our initiatives. I commend this bill to the House.

A party vote was called for on the question, That the Sentencing and Parole Reform Bill be now read a third time.

Ayes 63

New Zealand National 58; ACT New Zealand 5.

Noes 58

New Zealand Labour 43; Green Party 9; Māori Party 5; United Future 1.

Bill read a third time.

Bills

Statutes Amendment Bill

Second Reading

Hon PHIL HEATLEY (Minister of Fisheries and Aquaculture) on behalf of the Associate Minister of Justice: I move, That the Statutes Amendment Bill be now read a second time. As the House will be aware, Statutes Amendment bills are useful vehicles for making minor technical and non-controversial amendments to Acts. They allow amendments to be made that would not usually receive sufficient priority to be progressed, although, on an annual cycle, the current bill is a combination of the bills developed in 2008 and 2009, and is therefore larger than normal.

The bill amends 47 statutes administered by 15 different Government agencies, and it contains 196 clauses. Each of the amendments in the bill has received unanimous cross-party support. I thank Parekura Horomia and his team for that. The bill was reported back by the Government Administration Committee on 1 April 2010.

I thank the Government Administration Committee for its careful consideration of the bill. I endorse the committee’s one recommended amendment, an amendment to clause 156(2), which I know Jacqui Dean worked on. The amendment will add the words “in each place where it appears” to the end of the clause, as the term to be replaced by the bill appears more than once in the affected section. This change will be addressed by way of a Supplementary Order Paper in the Committee of the whole House, as the committee considered that the six additional words did not justify the expense of reprinting the bill at this point.

Somewhat unusually for a Statutes Amendment Bill, the bill received five submissions from members of the public. Four of these submissions related to the amendment in clause 119. Clause 119, members will be interested to know, amends section 94A of the Protection of Personal and Property Rights Act 1998, and it is important. Currently, two people, such as a husband and wife, who wish to create enduring powers of attorney in favour of each other are required to seek advice and have their signatures witnessed by a person who is independent and who is a lawyer, qualified legal executive, or authorised trustee corporation officer.

In effect, this has meant that two people wishing to create enduring powers of attorney in favour of each other had to seek advice from two different law firms or trustee corporations. This unintended consequence of section 94A has increased the expense involved and has deterred some couples from creating mutual enduring powers of attorney. The amendment will enable witnesses from the same law firm or trustee corporation to separately advise and witness the signatures of two people who have granted each other respective power of attorney, although each witness must otherwise be independent under section 94A(4).

Although the four submitters either supported the intention of the amendment or did not oppose it, they each considered that it did not go far enough to address their concerns about the independence requirements of section 94A. However, any change to widen the amendment in clause 119 to address the concerns raised would represent a significant policy change. As Parliament has deliberately enacted the requirements for independent witnesses, this is not something that is suitable to be progressed in a Statutes Amendment Bill. The committee has recommended that concerns about section 94A be addressed in the review of the Protection of Personal and Property Rights Act 1988, which is set for 2013.

During consideration of the bill by the select committee, Nathan Guy signalled he had received additional amendments for inclusion in the bill, subject to the agreement of all parliamentary parties. All parties have indicated support for an amendment to the Sentencing Act 2002 to correct an error in the definition of “Instrument of crime”. It is intended that this definition be amended so that it is consistent with the equivalent definition in the Criminal Proceeds (Recovery) Act 2009.

The inconsistent definitions were inserted by the Criminal Proceeds (Recovery) Bill, which was passed last April and came into effect on 1 December 2009. The definition was intended to be the same as the definition in the Criminal Proceeds (Recovery) Act so that the instruments of crime restrained under the Act could eventually be confiscated under the Sentencing Act. However, a paragraph was omitted in error. The effect is that where an instrument is sold or converted into another property before a forfeiture order is made, the proceeds of property into which the instrument was not converted can be restrained but not confiscated. As with the amendment recommended by the select committee, this amendment will be moved by way of a Supplementary Order Paper in the Committee of the whole House.

This bill proposes a number of positive changes to the statute book that are minor, technical, or non-controversial. Again, I thank the committee for its diligent and expeditious work, and I commend the bill to the House

Hon STEVE CHADWICK (Labour): I am pleased to take a call on the second reading of the Statutes Amendment Bill. I heard the Minister who spoke previously, Phil Heatley, the Minister of Fisheries and Aquaculture, say these amendments are all small and non-controversial, but these are the very changes to law that can make a fundamental difference, and we are very wary about what gets into a Statutes Amendment Bill without due scrutiny of the House and committees. The Minister may say the amendments are non-controversial and minor, but we have already expressed our concern to Nathan Guy, the Minister who is in charge of the bill, that some of the provisions in this bill are quite close to the edge of acceptability in any Statutes Amendment Bill.

I refer, in particular, to the amendment in clause 103 of the bill to the definition of “foreshore” in the National Parks Act. This requires some debate; it is hardly small and merely technical. We have told the Government that we will support this bill—it will be very relieved to hear that—but that we retain the right to reconsider any individual amendment during the Committee of the whole House.

I will raise some issues here. We have some reservations, as I said, about some aspects that have almost slipped into the Statutes Amendment Bill. One of the amendments in Part 4 of the bill, the one to section 9 of the Births, Deaths, Marriages, and Relationships Registration Act, changes quite substantively the meaning of the circumstances when a parent is unavailable to sign a birth registration form. This one rang bells for me. I think it is really important to realise that even though this amendment is sensible, it is almost like a policy change, and we have to be very careful when we slip things like that into a Statutes Amendment Bill and make statutory changes. That one is a bit close to the wind.

Also, Labour is concerned about the amendments to the Building Act in Part 5 of the bill. The Minister Phil Heatley, who spoke first in this debate, spoke about this. Sections 405 and 412 of the Building Act reduce the scrutiny of the House of these amendments through the Regulations Review Committee. We think that is poor practice. Although these amendments might be technical and minor, we think they should come under scrutiny, and we as a party are not supportive of including any amendments that reduce parliamentary scrutiny as a principle. So that is one area that we have concerns about; we think that such amendments should come to the House.

The Minister will be pleased to know that we support the Chatham Islands Council Act amendment in Part 7 of the bill. This may seem small, but to those in the Chatham Islands it is really big. It gives the council there the same functions, duties, and powers as a regional authority under the Building Act. That is eminently sensible, and I am sure it is a measure proposed by the good member for the Chathams, Annette King. She has learnt on her several trips to the Chathams that the council is quite frustrated about not having those broader powers, especially for things like building construction on the Chatham Islands. We have no problem with that amendment.

We have no problem with other amendments in this bill. But it is quite cavalier to come to the House and say this bill is non-controversial and everybody agrees with it. Actually, we do not always agree—

Jacqui Dean: Yes, you do.

Hon STEVE CHADWICK: No, we do not, on some of these things. We think it is because of the way that the law is drafted that provisions get slipped into a Statutes Amendment Bill. Although we support this bill, we reserve the right to review our position when the amendments come to the House in the Committee stage. The member Jacqui Dean has been calling out that we support the bill, but we reserve the right to review our position on amendments that come before the Committee of the whole House for scrutiny. At this stage we support this bill and are pleased that it is back before the House.

JACQUI DEAN (National—Waitaki): Noting that the first reading of the Statues Amendment Bill enjoyed unanimous support, and noting the good work of the Government Administration Committee during its consideration of this bill, I expect that this bill will continue to have a good and useful passage through the House. The bill consists entirely of amendments to Acts so it is, arguably, an omnibus bill. It is introduced to the House by virtue of Standing Order 258, so it is one of those omnibus bills that seeks to make changes to statutes.

I will highlight in my brief contribution just a few amendments that are of interest. We are proposing an amendment to the Electoral Act 1993 that “removes the obligation for a party to an intended marriage or civil union to provide information to the Registrar-General” but “requires the Registrar-General to provide details of registered marriages and civil unions” to the Chief Registrar of Electors. That change brings the legislation in line with modern times.

There is also an amendment to the National Parks Act that provides for the Minister to “do, or authorise a person to do, any thing that the Minister considers appropriate for the proper and beneficial management, administration, and control” of a national park. Also “the Minister may impose any terms and conditions the Minister considers appropriate in the circumstances, including a condition requiring the payment of fees.” I imagine that that amendment is reasonably topical.

I finish with one more: the Misuse of Drugs Act 1975 amendment. Part 27 of this bill amends the Misuse of Drugs Act. Clause 101 amends section 31 by omitting from subsections (2) and (2A) references to registered post as a means of delivery of something to be analysed, and substituting a requirement that the delivery use a traceable system. This change is made because registered post is no longer available. That amendment is relatively straightforward, and I hope it will be non-controversial. In addition to the requirement that the delivery is made by way of a traceable system, the thing to be analysed must be delivered in a sealed package.

That ends my contribution to this bill. The select committee has given it good consideration, and I anticipate some further good debate as it passes through the House. Thank you.

Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti): Labour has expressed concern to Minister Guy that a number of the provisions of the Statutes Amendment Bill seem close to the edge of acceptability—in particular, the amendment of the definition of “foreshore” in the National Parks Act 1980. Labour has told the Government that we will support the bill, while retaining the right, as my colleague Steve Chadwick pointed out earlier, to reconsider any individual amendment in the Committee of the whole House. The definition of “foreshore” in the National Parks Act will be amended. Currently, the National Parks Act refers to the definition contained in the Harbours Act 1950, which has been repealed. Clause 103 sets out the new definition of foreshore as “any land covered by the flow and ebb of the tide at mean spring tides”. Labour has expressed concern that this will have unintended consequences in light of the review of the Foreshore and Seabed Act 2004. The Associate Minister of Justice, Nathan Guy, has assured Labour members that the Minister of Justice and the Attorney-General are satisfied that the change will have no direct effect on the review of the Foreshore and Seabed Act 2004.

The bill amends section 9 of the Births, Deaths, Marriages, and Relationships Registration Act by substantively changing the meaning of when a parent is unavailable to sign a birth registration form. This is a sensible amendment, but it seems very close to a policy change. It is an ongoing issue that has relevance to people who want to find out who their parents were, if they do not know, and it has unintended consequences.

Other proposed amendments that give rise to concern, as Charles Chauvel pointed out in his letter to the Minister of Justice, were to the Juries Amendment Act 2008, which itself amends the 1981 Act. The year of that Act seems a long time ago but it is not yet in force. That is quite interesting. It is amended to expand the distance used to define jury districts from 30 kilometres to 45 kilometres. We are not too sure of the relevance, and that is one of the things we want to just suss out a bit more.

The amendments to the Marriage Act 1955, which has been quite a hot potato over the last 5 years, change the criteria for appointment of independent marriage celebrants. That is a huge, growing field. It goes outside the Church, and it has its own ethos, and its own practice. Marriage celebrants have a whole host of different practices, and it is something else that we are concerned about.

The amendments to sections 139 and 156 of the Property Law Act 2007 refer to when a mortgagee obtains a court order for possession of mortgaged property. Possession is backdated to the date of the application, to allow the mortgagee to collect any income from the property from that day. That provision opens a raft of difficulties in the sense of determining who is in the right and who is in the wrong, and we will certainly keep track of that.

The amendment to section 94A of the Protection of Personal and Property Rights Act 1988 concerns the independence of witnesses to enduring powers of attorney, and seems to be policy-related. It is very interesting that it seems to read, in the course of the development of this notion, that people can have an attorney practising for them in one sense, but at the same time the attorney can be doing a double act. We certainly want to keep an eye on that.

Both of the proposed amendments to the Radiocommunications Act 1989 allow regulations to be made concerning the importation for supply and the offering for sale of radio apparatus, in the same way as regulations can be made that control the supply of such equipment. We have an ongoing concern about bandwidth and the use of this new equipment. That is really, really important. Labour is also concerned that the proposed amendments to sections 405 and 412 of the Building Act 2004 will reduce the ability of the House, through the Regulations Review Committee, to scrutinise certain instruments. It is very important to keep an eye on that because we are not too sure what the—

John Hayes: What it means.

Hon PAREKURA HOROMIA: Especially in the Wairarapa, where a lot of people will be struggling after this Budget announcement. Although this case seems to have arisen from a drafting error, in principle the Labour Opposition will not generally be supportive of including amendments that reduce parliamentary scrutiny in a Statutes Amendment Bill.

We are very interested in the Companies Act 1993. Notices given by the registrar remove the need for publication of notices in certain newspapers, and it is required that notices be available on the Internet. The difficulty we have with that is that a lot of our constituents do not have the Internet and it seems to be Big Brother tactics to remove from the public eye information that is very important. We would like to understand better what that is about. As I see you looking at me quite quizzically, Mr Deputy Speaker, I can tell you that we will be supporting this bill, but we retain the right to ensure that we come back and debate and discuss in a peaceful fashion those matters that are relevant and that we are concerned about. Thank you.

JOHN HAYES (National—Wairarapa): That contribution was very typical of the New Zealander who once said that thinking bore a low ratio to talking. I think that that contribution demonstrated quite clearly that public life can attract too little of New Zealand’s best thinking ability to this place and that very often our laws are framed in a less than perfect way. And that is the purpose of this bill. This bill, contrary to the comments made by the list member for Rotorua, is a Statutes Amendment Bill. By definition, it is required that there be cross-party agreement. So to begin one’s speech by talking about the possibilities of change is just arrant nonsense. I say to the Māori member, who covers part of my electorate, and who throws off at the Wairarapa, that this bill is fundamentally important, yet he has not read it. How do I know he has not read it? It is because he did not know that there is an amendment to the Taratahi legislation. It is a hugely important amendment and it is clear demonstration that the last speaker had not read this legislation. I absolutely support this legislation and will, accordingly, sit down.

Hon PAREKURA HOROMIA (Labour—Ikaroa-Rāwhiti): I raise a point of order, Mr Speaker. I am maligned by the member’s suggestion that I cannot read.

Mr DEPUTY SPEAKER: These are debating points. I did not take from the member’s comments that he was saying that the member could not read.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): I will take only a brief call on the Statutes Amendment Bill. It is indeed correct that most times when these Statutes Amendment bills are put before the House they are for minor technical amendments. However, my colleagues have raised a number of issues that will be debated with some vigour at the Committee stage, for the simple reason that every bit of legislation that passes through this House should be scrutinised by members of Parliament, certainly through the select committee process, regardless of whether the amendments that it makes are controversial. That process, in itself, enables the public view to be expressed and some considered advice to be put before members of Parliament, because members do not have a monopoly of knowledge on the number of issues that are brought before us. We can also, perhaps, then consider making further amendments as a consequence of that process. With that in mind, I reinforce the comments put forward by my colleagues with regard to this Statutes Amendment Bill.

I want to put a frame around “minor technical amendments”. There is probably only one member currently in this House, who is not with the Labour Party now, but who will remember that it was said with some frivolity in our Labour caucus that a minor technical amendment was brought in to amend the State-Owned Enterprises Act, and arising out that amendment we had a number of actions that led to the New Zealand Māori Council injunction on the sale of State-owned enterprises, and also to the Waikato-Tainui injunction in terms of the sale of Solid Energy. All of that was brought about by a minor technical amendment.

My colleague Steve Chadwick raised specific issues in relation to the definition of “foreshore” in the National Parks Act coming into line with that in the Foreshore and Seabed Act. I present just one issue, and it is in relation to tourism ventures. One could easily apply this thinking to the Abel Tasman National Park, and that provision may or may not impact on tourism operators. If we look at the inclusion of the foreshore definition, we see it could or could not enable kayakers to land their kayaks on the foreshore of the national park, and be charged or not charged for doing so. When we say to members an amendment could have consequential effects, those are the types of issues that this House has no knowledge of. I was not on the select committee, but I would appreciate hearing informed debate from colleagues who were on the select committee to give me a sense of whether this minor technical amendment will have an impact on tourism operators. I know that tourism operators who run a business in Abel Tasman National Park and who land their kayaks on the foreshore will want to know whether their business will be affected. It is quite simple and very practical, and it should be something that members in this House give due regard to.

The ability to debate and discuss these types of issues is very important. If an amendment affects businesses—and in this case it may or may not do so—by affecting the ability of tourism operators to do the things that they are currently doing lawfully and, perhaps, causing a negative down-flow effect, then they should know about that very quickly. It should be brought out through further clarification from the select committee process when debating the issues arising from this Statutes Amendment Bill. I know that we do not have much more time left before the dinner break, but I do believe that if we were to ensure that bills such as this one were debated with the fullest of knowledge by all members, then those select committee members who participated in this debate—

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

The ASSISTANT SPEAKER (Eric Roy): The Hon Nanaia Mahuta has the call—

Hon Darren Hughes: I raise a point of order, Mr Speaker. The Hon Nanaia Mahuta is unable to complete her call and I understand that the Hon David Parker, the chairman of the Government Administration Committee, wishes to complete the remaining part of her call. I believe she has about 4 minutes remaining on that call.

The ASSISTANT SPEAKER (Eric Roy): If the Speaker had not been informed in the first instance, the member would have to seek leave because a call has been taken. If the Speaker is informed first that there is to be a split call—

Hon David Parker: I will seek leave.

Hon Darren Hughes: I am not sure whether a split call was sought, because I was not here.

The ASSISTANT SPEAKER (Eric Roy): The member is seeking leave to complete the call of the Hon Nanaia Mahuta. Leave is sought for that purpose. Is there anyone opposed to that course? There is.

KANWALJIT SINGH BAKSHI (National): It is my privilege to speak on the second reading of the Statutes Amendment Bill. This is an omnibus bill to amend Acts. This bill is introduced under Standing Order 259, which allows an omnibus bill to amend more than one Act. The Statutes Amendment Bill amends and deals with an interrelated topic, which can be regarded as implementing a single broad policy.

The amendments affecting each Act are of a similar nature to each other. This bill amends 47 statutes that are administered by 15 different Government agencies. It contains 196 clauses in total. They range from amending the Juries Amendment Act 2008 and the National Parks Act 1980, to the New Zealand Superannuation and Retirement Income Act 2001, and so on. This bill utilises minor technical amendments, which are non-controversial to many Acts. I commend this bill to the House.

Hon LIANNE DALZIEL (Labour—Christchurch East): Mr Assistant Speaker, I know that you will be surprised that I am taking the call given that the chair of the Government Administration Committee was referred to earlier, but now that a member of the committee has given such an erudite explanation of the details of the report back from the committee, I am sure that my colleague does not mind that he is not taking this call.

I want to take a couple of minutes to talk about some of the things that I think are really important about the process. The first, of course, is that I do like the omnibus bill approach, as I have said in this House on numerous occasions. Statutes Amendment bills are specifically focused on very minor, technical, and non-controversial amendments to existing statutes. They are issues that are not really open for debate, but they are certainly matters that need to be addressed. They do not, however, justify the attention of the House as separate items of business.

I think that there should be more opportunities for omnibus bills, and, as I have said in this House on several occasions, the area of regulatory improvement is one that I like to see. I note that the Government has taken up the bill that was in my name—that is, the Regulatory Improvement Bill—and has decided to adopt that as an annual process.

This particular bill contains a controversial matter, but it is not controversial because of what it is intending to do; it is controversial because of the decision that occurred prior to our having to amend the law to reflect a change that took place outside of this place. I will mention that in a moment.

Hon Darren Hughes: Thank you.

Hon LIANNE DALZIEL: I have got members hooked now, have I not, on a Statutes Amendment Bill.

The other thing I wanted to refer to in respect of the report back from the select committee was that the committee identified an error in terms of one of the 47 statutes, administered by 15 different agencies, that it is amending. It found a small issue in clause 156(2), and it recommended an amendment. However, the committee made the very sensible suggestion not to require the reprinting of the bill for such a minor amendment. I thought that was exceptionally well considered, and I congratulate the chair of the committee, who obviously led that decision.

Hon Darren Hughes: He’s been silenced by the Government!

Hon LIANNE DALZIEL: That is right! But anyway, it is worth mentioning that when we are dealing with non-controversial legislation such as this, sensible arrangements can be entered into. Actually, a bit of leave for the chairman of the committee to speak on the bill might have meant that members did not have to put up with this very lengthy speech—as it is turning out to be—but that is all right.

The one issue that is controversial, not because of the bill but because of the decision that preceded the bill, is Part 29, “New Zealand Institute of Chartered Accountants Act 1996”. The reason for the controversy around this is the institute’s appalling decision to change its name from the Institute of Chartered Accountants of New Zealand to the New Zealand Institute of Chartered Accountants! I just think that is an outrageous thing for it to have done!

Hon Darren Hughes: Start a campaign.

Hon LIANNE DALZIEL: Yes, I know. It was so much easier to talk about “consulting ICANZ”—everyone knew exactly who one was talking about. Now it is “NZICA”, which sounds like “NZ-EEKA”. We cannot help ourselves; we have to turn everything into an acronym of some sort that makes some sort of sense.

Hon Darren Hughes: Even if it doesn’t make sense.

Hon LIANNE DALZIEL: Yes, like “NZ-EEKA”, which does not really sound like the worthy body that our chartered accountants actually are. But, seriously, the particular amendment is required because the organisation changed its name quite some time ago, and it is time we updated that particular statute to bring it into line.

I understand that the Minister, at some point during the Committee stage, will provide some information on the Wills Act 2007. I think it is important to put that on the record, because an important aspect has been raised in respect of a late submission on clause 196(1) concerning the validity of wills according to the Wills Act 2007. Finally, there has obviously been a bit of debate around the Protection of Personal and Property Rights Act 1988. I agree with the select committee’s recommendation in that regard, in the sense that no further change has been made to clause 119 but that the review is to address any remaining concerns about section 94A. I think that is a very sensible way to address the particular issue that was raised by way of submission.

I am very pleased to see the bill back in the House. Again I commend the chair of the Government Administration Committee for the superb work he did, with a very dedicated team, obviously, assisting him very ably in that process.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā koe, Mr Assistant Speaker, kia ora tātau katoa. I a au e tū nei, i te mea i hoki mai au i te wā kāinga i tērā wiki nā runga i te āhuatanga ō-mate, ā, i tēnei pō kua rongo ngā taringa mō te āhuatanga o te matenga o Ēmere Nīkora, he kaihautū o roto i ngā mea reo irirangi. Nō reira, ko tāku ko te poroporoaki i a ia me te kī atu, haere, haere, haere, okioki mai rā.

Ehara i te mea ka tino mōhio tonu tērā kuia ki te āhuatanga o ēnei momo pire, tērā pea ka rata mai i te mea, he mea whakakao mai i ngā momo pire katoa, ngā momo paku rerekētanga o roto i ngā pire, i rārangihia i roto i te pire nei. Ehara i te mea he nui ngā kōrero, hoi anō ko tā mātou, ko te tautako ake i te tikanga o tēnei pire. Kai te tika tā Hōnore Lianne Dalziel mō te āhuatanga o ēnei huarahi, he tere te whakatikatika i ētahi momo āhuatanga o roto i ngā pire e hia kē nei. Nō reira, he mea pai tērā. I a au e titiro nei ka kite atu ōku tao mātai i te tuatahi, ko te tango mai i ngā mea kāre i tino pai ki a mātau, kua waihotia, kua panaia ērā ki te taha, anā, ko ngā mea kua waihotia mai ai, ko ngā mea me kī, kai te tautokongia e te Pāti Māori.

Ka mutu, i kite atu i ētahi mea o roto i tēnei pire, arā, ko te National Parks Act 1980. Ka pātai au i te pātai mēnā he paku take tērā e pā ana ki te Urewera mēnā, ka kitea atu he wāhanga o te Urewera kai roto i tērā pire, tērā pea ka rerekē tā mātau titiro ki tērā wāhanga.

Ka mutu, mō te āhuatanga o ngā Flags, Emblems, and Names Protection Act 1981 te tūmanako ia, ka whai wāhi tērā ki te tautoko i te whakatau o te Pirimia me te Minita mō ngā Take Māori mō te āhuatanga o te haki, ka whakairia ki runga i te piriti o Tāmaki-makau-rau i te tīmatanga mai o tēnei tau.

Nō reira, kāti ēnei paku kōrero nei. He mea tautoko ake i te tikanga o tēnei pire, ā, me te tautoko o te Pāti Māori i tēnei pānuitanga tuarua. Kia hoki mai i tōna mutunga mai, ka tautokongia anō hoki. Nō reira, kia ora tātau.

[Greetings to you, Mr Assistant Speaker, and to us all. As I stand here, and because I went home last week to a bereavement, I hear tonight that Ēmere Nīkora, a leading figure in radio broadcasting, has passed away. So I farewell her by saying: depart, depart, journey on, and rest there.

I hardly expect that elderly lady to be familiar with what these kinds of bills are about, but she might be satisfied with the omnibus nature of it because of all the legislation gathered together with slight modifications that are listed in this bill. Apart from supporting its purpose, I do not have a great deal to say about the bill. The Hon Lianne Dalziel was right when she said that these procedures speed up amendments relating to all sorts of things in these omnibus-type bills. That is a good thing. As I cast my eyes over it, the first thing was to remove those things that we considered not good to us that we left out and cast aside, but those we have allowed to remain are ones the Māori Party supports.

Further to that, we found some things referred to in this bill, like the National Parks Act 1980, where the question is asked whether there is a tiny bit in it that relates to the Urewera. If a provision for the Urewera can be found in the bill, then perhaps our outlook about that bit might change.

Now, as far as the Flags, Emblems, and Names Protection Act 1981 is concerned, our hope here is that that part endorses the resolution by the Prime Minister and the Minister of Māori Affairs about flying of flags on the Auckland Harbour Bridge at the beginning of the year.

So I end my small contribution here. The Māori Party supports the purpose of the bill and this second reading of it. We will support it again when it comes back. So greetings to us.]

NIKKI KAYE (National—Auckland Central): I am very pleased to support the Statutes Amendment Bill. Firstly I acknowledge members opposite and my members on the Government Administration Committee. I noticed that the chairperson of the committee was not here earlier; I know how much he has been dying to speak on this bill. Unfortunately, I have the wonderful opportunity to do that. I also note that we have had 196 very interesting amendments.

Hon Paula Bennett: Go through them all!

NIKKI KAYE: I would love to go through them all, but I do not have the time to do that. I also note that one of the wonderful things about Statutes Amendment bills is that they bring people together. The reason that they do is that we actually cannot disagree, because if we do, the clause in question drops out. It is a lovely moment being on the Government Administration Committee.

I will deal with a couple of things that the previous Labour speaker mentioned. The decision on clause 156(2)—to not have to reprint the bill—was a really good one by the committee. I also acknowledge that clause 196(1) regarding the validity of wills will be dealt with, I think, during the Committee stage in the House. There are a number of amendments that it is very important that the House scrutinise, but they are not controversial. They include amendments to the Electoral Act, the Juries Amendment Act, and the Copyright Act. I commend this bill to the House.

GRANT ROBERTSON (Labour—Wellington Central): It is indeed a pleasure to stand and give a lengthy address on the topic of the Statutes Amendment Bill. I too pay tribute to the Government Administration Committee, a very busy committee that has to turn its mind to many different items. It is very well chaired by the Hon David Parker. I also pay tribute to National members, particularly John Hayes, who nimbly moves between applications on his eCommittee files looking for details—he does not need to use paper any more; he is right on top of it—and Nikki Kaye, who throughout the deliberations on this bill tempted the committee with talk of a clause that she would perhaps oppose during the Committee stage. We waited and we waited, but we never heard what it was. Perhaps we will during the Committee stage, but Nikki Kaye was not able to tell us then.

Lianne Dalziel has already said that Statutes Amendment bills play a very important role in the House in being able to make minor and technical changes without the need to produce a large number of individual bills. Omnibus bills like this are obviously useful for the House, and this one brings together 2 years’ worth of changes, so in that sense it is really an omnibus omnibus bill.

However, I note that in the cross-party consultation Labour felt that one or two of the amendments were moving beyond technical change more toward the policy realm. I say that as a note of caution. Most of those clauses could be dealt with fairly easily, but any expansion of the scope of how a Statutes Amendment Bill might work would concern us. An example of that was an amendment to the Births, Deaths, Marriages, and Relationships Registration Act, which concerned whether a parent’s signature was required if that parent was overseas. Although that might seem like a relatively minor change, it is actually quite significant in terms of the responsibilities of parents.

Perhaps more significant were the changes to the Conservation Act. We had a submission on that matter—that is worthy of note in itself—from an external party, Mr Graeme Edgeler, about the scope of that change. It was not so much about whether it was the right or wrong thing to do but whether it extended the scope of an offence. In that case, it was an offence relating to dogs causing serious injury to protected wildlife. I think it is important just to note that that is perhaps an example of where the bill begins to move beyond just a technical amendment, to something that is actually widening the scope of an offence. The committee was able to deal with that concern, given the high quality of its membership, but it is an issue when we look towards future Statutes Amendment bills. With that contribution, I am happy to support this bill.

JOHN BOSCAWEN (ACT): The ACT Party will support the Government in the passing of the Statutes Amendment Bill.

Bill read a second time.

Bills

Carter Observatory Act Repeal Bill

Second Reading

Debate resumed from 18 May.

ALLAN PEACHEY (National—Tāmaki): When I look through the Hansard of the debate—well, it was not really a debate; it was more of a discussion—on the first reading of the Carter Observatory Act Repeal Bill, I note that I made the comment that I was very much looking forward to chairing the Education and Science Committee hearings that would be looking into the bill. I reiterate that it was a pleasure. The committee was at one in terms of its objectives. It had a very, very good discussion with a couple of submitters, and it was able to come back to the House with a report with no amendments. I take a moment to acknowledge the work of all committee members. I acknowledge Opposition members. I noted Mr Shearer’s very positive contribution to the debate before it was interrupted, and I appreciated the remarks that he made. I also acknowledge the role that members on this side of the House played.

I acknowledge also the role that the Carter Observatory has played in Wellington and in wider New Zealand in terms of the development of the science of astronomy. Many, many thousands of youngsters will have had their first introduction to science visiting that observatory, where they got that spark of excitement in their eyes. I am confident that the place the Carter Observatory has in New Zealand history, and particularly in the history of astronomy, is secure and will go from strength to strength under the new arrangements.

The arrangement is very, very simple. This bill repeals the Carter Observatory Act 1938 and dissolves the Carter Observatory board. It transfers the assets of the Carter Observatory board to the Wellington City Council and vests the liabilities incurred by the Carter Observatory board in the Crown and in the Wellington City Council. It really marks the next stage in the history of that observatory.

I conclude by expressing the hope that, given that there was unanimous agreement of all sides at the select committee and in the second reading debate, we can proceed very, very quickly through the Committee stage and on to the third reading, and achieve what everybody wants, which is the final passage of this bill through the House.

KELVIN DAVIS (Labour): Labour supports the Carter Observatory Act Repeal Bill. The purpose of the bill is to disestablish the Carter Observatory as the national observatory. It repeals the Carter Observatory Act 1938, and dissolves the Carter Observatory board. It also vests the assets and liabilities of the observatory in the Wellington City Council.

Since 2007 the Wellington City Council has, effectively, been managing the Carter Observatory. The council has agreed to take full responsibility for the Carter Observatory, and the Crown agrees with that. The bill gives effect, as I have said, to that agreement by repealing the Carter Observatory Act 1938; dissolving the Carter Observatory board; providing for the transfer of assets, including land, of the Carter Observatory board to the Wellington City Council; vesting in the Crown the liabilities incurred by the Carter Observatory board prior to 20 December 2007; and vesting in the Wellington City Council the liabilities incurred by the Carter Observatory board on and after 20 December 2007.

The Carter Observatory’s name commemorates Charles Rooking Carter, who gifted his estate to the Royal Society of New Zealand to establish an astronomical observatory in Wellington. Parliament established the Carter Observatory in 1937 and the observatory opened its doors in 1941, becoming a base for astronomical research in New Zealand. Work began with solar investigations, and when new staff joined during the 1970s it expanded to include variable stars, galaxies, and asteroids. The Carter Observatory became New Zealand’s national observatory in 1977.

In 2005 the New Zealand Government commissioned Professor Mike Bessell to review the Carter Observatory and explore New Zealand’s requirements and opportunities in astronomy and space science research and education, and Professor Bessell’s report kick-started the Carter Observatory’s transformation into a world-class visitor attraction and educational facility. In 2006 the Labour Government provided $2.2 million to provide more educational and tourist opportunities at the Carter Observatory, and in 2008 further funds were provided in line with the tourism strategy at the time.

Tourism and education are both portfolios on which I am spokesperson, and it is great that the Carter Observatory is being added to the wealth of tourism opportunities within the Wellington city area. Of course, education is close to my heart. When I was a teacher I took groups down to the observatory at One Tree Hill, and kids really enjoy and get involved in the opportunities that observatories provide, especially when they go there at night and observe the stars, moon, and so on.

There are difficulties in having an observatory in a city, in that observatories work best when they are not surrounded by street lights or lighting that affects the images they get. In 2005 I was lucky enough to travel to Arizona. As part of the trip over there I went up Mount Graham, at the top of which there is an observatory at a height of 10,000 feet. Despite the fact that this observatory was in the middle of the desert, with just a few towns 20 or 30 miles away, the lights from those small towns still distorted the images and the views from the telescopes. In particular, the cities of Phoenix and Tucson, which were a couple of hundred kilometres away, still managed to distort the images, as the light from those cities was visible on the images. So it is not good to have an observatory that is really serious about research and science smack-bang in the middle of a city, especially a city like Wellington. With its inclement weather and cloudy days, there would be a number of nights when the views would not be very good, at all.

The educational programme at the observatory includes some fantastic opportunities. Curriculum-linked teaching resources are sent to schools before visits and offer astronomy information, lesson plans and activities, and links for further research. Members of the Carter Observatory learning team help teachers tailor programmes to meet their groups’ learning objectives. There are free familiarisation visits for teachers. Students are able to explore interactive multimedia exhibitions, which encompass four themes: space, time, and matter; stars, solar systems, and planets; life and the universe; and the astronomy of Oceania. There are opportunities to view and handle significant astronomical artefacts, heritage telescopes, and historic documentation shipped over here during World War II. When the viewing conditions are right, students are able to use the Thomas Cooke Telescope to view the sun under controlled conditions. Optional hands-on workshops are led by the Carter Observatory learning team, and there is a planetarium where the kids get to sit under the stars.

When I was going to school some 25 or so years ago—

Grant Robertson: 30? 35?

KELVIN DAVIS: —some 10 to 15 years ago—the Matariki festival was almost unheard of, and it is great that Matariki has become quite a big event in the Māori calendar. It is great that the Carter Observatory reinforces and emphasises that event. Between 14 June and 18 July the observatory will celebrate Matariki. The rising of Matariki heralds the start of the Māori calendar year. As in many other civilisations, the changing shape of the moon was used to mark months and individual days in this period. Each day of the maramataka or Māori calendar had a name and associated shape. If the moon could not be seen for a number of these days, it was easy to count off those days, or catch up when the moon could be seen. As the lunar calendar does not match the solar calendar, the dawn rising on Matariki heralded the changing of the year, with the first new moon after the rising marking the start of the maramataka. It is great that the Carter Observatory is reinforcing in its educational programmes the whole Matariki concept and acknowledging Māori concepts, and I congratulate it on that.

As well as tourism and educational facilities, there are also conference facilities at the Carter Observatory, and here we can see it has moved right away from the whole research programme it once had. The observatory is no longer suitable for use as a research centre; it has appropriately been converted to support educational and tourism purposes. It is therefore only right and appropriate that the facility and the assets are vested and transferred to the ownership of the Wellington City Council. As I say, the Labour Party supports this legislation. Thank you very much.

SUE KEDGLEY (Green): The Green Party will support, as I think every other party in this House will, the Carter Observatory Act Repeal Bill, which vests ownership of the Carter Observatory in the Wellington City Council. The Carter Observatory has recently been refurbished, and it is a fantastic asset for Wellington. It is a great tourism asset, which is part of a network of tourism facilities in Wellington. It is also a great educational asset, as the previous speaker, Kelvin Davis, has said. It really does have fantastic exhibitions. The multimedia exhibition about the southern skies is fantastic, and the heritage Cooke telescope is fantastic. The aim is for the observatory to become a world-class tourism centre, and I hope that it really will. Certainly it will be one of Wellington’s many tourist attractions.

There is a slight sense of sadness or misgiving about the passage of this legislation, however, because we are losing our national observatory, and we hope that in the process we will not lose a generation of young scientists. What was once a national observatory and a centre of scientific excellence and astronomical study is now becoming a tourism centre and educational institution. So that is a little bit sad. There is the prospect that the University of Canterbury and the Mount John Observatory might take over the role of our national observatory. But there is a sense of sadness, because the Carter Observatory was set up as an astronomical observatory. But I guess one has to say that as well as sadness there is a change in its role, and I am sure it will excite generations of young New Zealanders, in particular, and get them interested in Matariki, the southern stars, and astronomy, and that is a very good thing.

We are very pleased to support this bill, and we hope the Wellington City Council will look after the Carter Observatory well. We notice that it has funding for the next 10 years, with no guarantees after that, so we hope that the Wellington City Council or others will continue to fund it, and that it will continue to be a centre of excellence as well as a tourism and educational institution. Thank you.

Hon HEATHER ROY (Deputy Leader—ACT): As a Wellington-based MP I rise to speak on the second reading of the Carter Observatory Act Repeal Bill. There is something very intriguing about space, the planets, and the stars. They are parts of our universe that we rarely get to see close up, and perhaps it is because of this that adults and children alike are always rather taken by them. We have been very fortunate in Wellington to have the Carter Observatory. It has been an important feature of the Wellington landscape for 70 years now, and more recently has become a popular attraction for those visiting the Wellington Botanic Garden, serving as an interactive learning facility for students, for teachers, and for parents. The observatory provides us with the opportunity to have a closer look at what is going on about us, every day and night.

The Carter Observatory opened in 1941, and it was not until 1977 that it became the national observatory of New Zealand. Following a Government-commissioned assessment in 2005, Professor Mike Bessell reported that it was not meeting the objectives of a national observatory, including training outstanding scientists and promoting international research activities by collaborating with foreign astronomers.

This bill draws to a close the changes that have been under way since 2007, when the Wellington City Council took over the management of the observatory and contributed $1.9 million towards its refurbishment and upgrade. This significant investment has made the observatory the popular attraction that we know today, albeit with quite a changed focus, that of education and tourism.

The transfer of assets to the Wellington City Council and the disbanding of the board mean that the council can continue its efforts to make the observatory an appealing and engaging place for both visitors and locals to enjoy, and that is exactly what has happened since its recent reopening, with a renewed vigour and increased numbers visiting.

This bill marks a timely shift in purpose and focus that is supported widely—I think by every party in the House tonight. The function of the board has changed, and its dissolution is appropriate. No doubt the Carter Observatory will continue to be an important asset to Wellington. Under the responsibility of the Wellington City Council and following the enormous commitment in investment already made, I think we can be well assured that it will be well looked after. The ACT Party supports the bill and is pleased to do so. Thank you.

TE URUROA FLAVELL (Māori Party—Waiariki): Tēnā anō tātau katoa e te Whare. Ehara i te mea he roa rawa taku kōrero engari, hai whaiwhai haere i te kōrero a wētahi. Kai te tautoko ake te Pāti Māori i tēnei pire i tona pānuitanga tuarua. Ko ngā kōrero e pā ana ki te arorangi, he kōrero me kī, kua tuhia i roto i ngā hītori, i ngā kōrero ō-nehe, me kī, o te iwi Māori, o te tangata whenua o tēnei whenua. Nō reira, koinei te tikanga o tā mātau whakaae atu ki tēnei o ngā pire i te mea, arā nō ōna painga. Ko te mea pai ki a au, otira, ki te Pāti Māori, ko tētahi whakatau i puta i te poari o te Carter Observatory i ngā tau kua puta. E ai ki tā rātau, anei tā rātau i roto i tētahi o ngā whakatau:“The Observatory shall have regard to the Treaty of Waitangi and the interests and needs of Maori people in all its business and in the allocation of resources to Distance Education.” Kei te tino rata atu mātau ki tērā momo kōrero i te mea, kua āta whakaarohia e taua poari te tikanga o te Tiriti o Waitangi o roto i ōna nekeneke.

I te noho āhua rangirua, āwangawanga mātou i te tuatahi i te whakakorenga o te poari o te Carter Observatory, ka mutu, ki te whakawhitinga o ngā rawa ki roto i te kaunihera o te tāone nei o Pōneke engari, he pai tonu i te mea, kua puta te kōrero. Ko te tikanga o tā mātau āwangawanga, ko te ngākuanui o te poari ki ngā hiahia, ki ngā ōati o te ao Māori, ka mutu, ki tana aronga ki te Tiriti o Waitangi. Hoi anō, e ai ki ngā kōrero, ehara i te mea ka noho te poari nei, te Carter Observatory, hei mea tirohanga mō te motu engari, i tana katinga me kī, kua whakatahangia he taha ki te Karauna. Ka mutu, ka taka ngā āhuatanga katoa, te kaitiaki rānei o tēnei o ngā kaupapa ki roto i ngā ringaringa o te kaunihera, ki te tiaki pai i tēnei o ngā wāhi, te āhua nei kua pērā rawa mai i Tīhema i te tau 2007.

E ai ki tā te Minita ki te Pāti Māori, te Minita mō Take Pūtaiao, te Manatū Pūtaiao, kua noho tahi me kī, te kaunihera me te poari, te kaunihera o Pōneke tāku e kōrero nei me te poari, ki te whakatau kia tika rā nō te whakatikatika rānei, te whakapaipai rānei i te wāhi nei. Ka mutu, e ai ki tā te Minita, kua kaha nei te poari nei me te kaunihera ki te whakapā mai ki te Ao Māori me te whai i tērā kaupapa i kōrerohia mai rā e tētahi o ngā mema i mua i a au, a Heather Roy pea, tētahi atu rānei mō ngā take mātauranga. Ā, ka mutu, ko te mema o te Reipa, a Kelvin Davis, i kōrero ia mō ngā take mātauranga me te pai o tēnei o ngā wāhi kei te whakaakoako i te āhuatanga o te taiao me te Ao Māori. Nō reira, he pai tērā, me kī kua noho tau tērā take.

Ko te mea pai ki a au, otirā, ki a mātau, i tīmata te poari nei ki te whakapā mai ki ngā hunga kāinga o konei, ki a Ngāti Toa rangatira, otirā, ki te Wellington Tenths Trust. Kua pātaia te pātai mō ngā tikanga e tika ana mō te wāhi nei, nō reira, kua āro mai me me kī, kī ngā āhuatanga me ngā hiahia o te hunga kāinga.

Nō reira, ehara i te mea he nui ngā take i tua atu o tērā. Tuatahi, ko tā rātau ngākaunui ki te Tiriti o Waitangi i roto i ngā kōrero ō-nehe, ka pai kua mau tonu tērā. Ka rua, ko te āhuatanga o te mātauranga me tāna hiahia ki te whaiwhai haere i tērā take kia noho tērā wāhi hei wāhi whakaako i ngā tamariki, ngā mokopuna o te motu nei. Ka toru, me kī, ka noho tata te kaunihera nei me te hunga kāinga, te tangata whenua o te wāhi ki a Ngāti Toa. Tua atu o tērā he mea pai tēnei mea o ngā pire hai whakatau i ēnei take katoa. Kāre he nui ake ngā kōrero, ko tā mātou ko te tautoko, ā, kia ora tātou katoa.

[Greetings to us once again, the House. My address is not a long one, but merely to follow up what others have touched on. The Māori Party supports this bill in its second reading. The stories relating to cosmology are recorded in history and in the ancient myths of the Māori people, the indigenous people of this land. This is the reason why we support this bill, because of its enormous benefits. What pleases me, and the Māori Pārty as well, is that the board of the Carter Observatory has resolved the following: “The Observatory shall have regard to the Treaty of Waitangi and the interests and needs of Maori people in all its business and in the allocation of resources to Distance Education.” We are very satisfied with that kind of statement, because that board has considered the meaning of the Treaty of Waitangi very carefully and factored it into its operations.

We were initially worried and concerned at the proposal to dissolve the Carter Observatory and to transfer the assets of the board to the Wellington City Council, but it is quite all right, because it has been made public. The cause of our concern related to the explicit commitment of the board to the needs and pledges of Māoridom in respect of the Treaty of Waitangi. However, according to reports, and because the Carter Observatory no longer functions as the national observatory of the country, its Crown statutory responsibilities terminate, as well. Further to that, the Wellington City Council will take full responsibility for the ongoing maintenance of this place, and has in fact been managing it since December 2007.

The Minister has assured the Māori Party that the Ministry of Research, Science and Technology has been working closely with the council and the board—I am referring to the Wellington City Council—to resolve matters and to ensure proper redevelopment and sustainability of this area. The Minister has further added that the board and the council have worked hard with Māoridom to pursue that programme about educational matters that a member who spoke before me addressed us on. Was it the Hon Heather Roy, perhaps, or was it someone else? It was Labour member Kelvin Davis. He touched on educational matters, and how the observatory was a good place in terms of teaching aspects of science and Māori perspectives. It seems that that will continue, and that is good.

Pleasing as well, to me and to the Māori Party, is that the board began to engage with the locals here, with Ngāti Toa and the Wellington Tenths Trust. The question about the right customs for this place has been asked in respect of the concerns and needs of the local iwi, and taken into account.

So there is not much more beyond that. First, there is the commitment to the Treaty of Waitangi in respect of accounts of the ancient past. That seems to be well in place. Secondly, in respect of education, there is the desire to follow up on that to ensure that the observatory remains a learning place for the children and grandchildren of this country. Thirdly, this council and the local people of this place, Ngāti Toa, work closely with each other. Beyond that, the bill will resolve all these matters. There is nothing further to add. We support it. Greetings to you all.]

JO GOODHEW (National—Rangitata): There is a bright future for the Carter Observatory, and the Carter Observatory Act Repeal Bill has been in the making for some time. The decisions that will change the future for the Carter Observatory were made by the previous Government. Those decisions were to repeal the Carter Observatory Act 1938, to dissolve the Carter Observatory board, and to transfer the assets of the Carter Observatory board to the Wellington City Council, and then to vest the liabilities incurred by the Carter Observatory board in the Crown and the Wellington City Council. The money is sorted, the future is sorted, and I believe that the three submissions to the Education and Science Committee, which were all in favour, told us that the time has passed for talking about this issue; it is now time to get on with it. I commend this bill to the House.

MOANA MACKEY (Labour): The junior Government whip might think that the time for talking has well passed and that we just need to get on and do it. The question then has to be asked why it has taken so long for this legislation to come back to the House. This legislation has the support of all Parliament and it is uncontentious, so the question has to be asked why it has taken so long for this bill to come through the House, particularly when we have been passing far less important legislation, and far more damaging legislation. The Carter Observatory Act Repeal Bill might have been very important legislation to have promoted earlier on. I put that question to the Minister in the House, the Hon Wayne Mapp: why has it taken so long for this legislation to come back to the House and to pass through its stages?

Hon Darren Hughes: Despite Wayne’s machine-like efficiency.

MOANA MACKEY: That is quite right. Despite the Minister’s machine-like efficiency, it has taken a while for the bill to get through its second reading.

Of course Labour supports this legislation. I think we have to give two thankyous at the outset of this debate. The first thankyou goes to Mr Charles Rooking Carter, who gifted his estate to the Royal Society of New Zealand for the establishment of an astronomical observatory in New Zealand. It cannot be overestimated or said enough how important that gift was, and how much we are indebted to him. The second thankyou needs to go to the Wellington City Council, because without its support for the ongoing work of the Carter Observatory, it would not have been able to continue. The Wellington City Council needs to be congratulated on its recognition of the importance of this observatory.

All members of the House have articulated that the Carter Observatory has an exciting future in terms of tourism and education, and it is with a hint of sadness that we are giving up our national observatory. It is no longer fit for purpose—that is clear. It no longer carries out the research function that it once carried out and that other national observatories around the world carry out, but there is no denying that astronomy is the gateway into science for a number of young New Zealanders. That is why it is so important that the observatory continue in its role in education. For many young New Zealanders, the study of astronomy is the first time that they question the world around them and the things that they do not understand. They ask for explanations that may not be readily obvious or available about what they see in the world around them.

Astronomy is in many ways unique in that aspect. For many young New Zealanders and young people around the world, it is the discipline with which they first find themselves fascinated. I never went down the route of watching Star Trek; it was not my thing. But science fiction, Star Trek, the possibility of intelligent life somewhere else, and all those kinds of things fascinate many people. When they look to the other side of the House and do not see intelligent life, they figure that it must be somewhere else in the universe. It is all an important part of science and of bringing young people into science. In that regard, it is with a hint of sadness that we say goodbye to our national observatory, but at the same time we know that the Carter Observatory has an exciting future. It will continue in its role of educating young people and introducing them to science in its new capacity.

One of the interesting things about the Carter Observatory that not many people know is its role as a private tertiary education provider. It has carried out that very important role. It was not often talked about or trumpeted by the observatory, but the observatory was accredited by the New Zealand Qualifications Authority. It developed national standards in astronomy, and if it had not done that, we have to ask who else might have done it. If members look at the Carter Observatory’s website, they will see the enormous resource for teachers. It has developed the pedagogy for teachers in this area so that they can pick it up, bring it into the classroom, and make sure that their students are exposed to the exciting and innovative advances that are going on around the world in this area. Many teachers have said to me how important that teaching resource has been.

When we consider that last year the Government cut the funding for science advisers, we see that the role of the Carter Observatory becomes even more crucial and important. Science advisers were a crucial part of our education system. Last year the National Government said that it did not need them any more, because that year science was not its focus. The Government did not realise that those people are in high demand around the world, so they have all gone. Those people are all overseas. They have been picked up by other countries, which were very keen to take on people who had the dual role of picking up the science curriculum and introducing it into the primary education sector. Those people have gone. When the Minister of Education said that next year the Government might bring back the funding, I say that that is fantastic, but the people will no longer be here. Members on this side of the House think that science needs to be a priority every year, not just in the years when it suits the Government.

Hon Darren Hughes: They’re unscientific.

MOANA MACKEY: Government members are not evidence-based, at all, in any way, shape, or form.

When we consider the issue of national standards, as well, we can look at the experience in the UK. In fact, Cambridge University recently released a study that showed categorically that national standards in the UK had destroyed the UK education system. But even—

The ASSISTANT SPEAKER (Eric Roy): Excuse me—

MOANA MACKEY: Well, it is very important, Mr Assistant Speaker Roy, because the Carter Observatory works on national standards and on helping teachers who are teaching the curriculum. We are losing that experience, which is why I am bringing it into this debate.

The ASSISTANT SPEAKER (Eric Roy): The member is drawing a long bow.

MOANA MACKEY: It is a long bow, but it is a very important bow—a very important bow. When we look at the national standards in the UK, we see that at least they included science. The national standards in the UK were numeracy, literacy, and science. That is where the Carter Observatory would have an important role in ensuring that our teachers had access to that information and that experience. For that reason, we are very pleased that the Carter Observatory will be continuing in its educational role, even though science is not part of the national standards in New Zealand. I think that is an absolute abomination and an absolute tragedy, because every New Zealand student should be taught science as an absolute priority. It should be placed on the same platform as numeracy and literacy. I think that it is an indictment on the current Government that it has not done that.

Members have raised the issue of whether we will have another national observatory. Well, we may or we may not. I have to point out again that we now have centres of research excellence, which pick up some of this role. The centres of research excellence were started under the previous Labour Government. They were a very good initiative, and they have picked up some of the role of bringing people together around an issue like astronomy, which the Carter Observatory specialised in. They bring together Crown research institutes, businesses, universities, and everyone else who is interested around a core issue and they get them to work together. They have been an enormous success, and maybe we will see something like that develop. Maybe the Mount John Observatory down in Canterbury might be one that picks up that role.

For my own reasons, I alert members to the existence of a very, very fantastic observatory in Whakatāne. It is, as the New Zealand Herald has said, a gem in New Zealand in terms of its capacity and the work that it is doing. The skyline above Whakatāne is unpolluted. It is unadulterated by light, although there are a few issues with local supermarkets turning on their lights late at night. But the fact is that many observatories around the country are looking to help fill the role that a national observatory once filled. If members are interested, they can go and look at the website www.skyofplenty.com. It is not profit making; it is a community facility. If members are ever staying in the Bay of Plenty overnight, I stress that they should go up and look at the Whakatane Observatory, because it is truly wonderful. It has three telescopes and two observatories. It performs an educational function; it has a teaching room. It has astrophotography, which students love. Of course, this will be more difficult now that the Carter Observatory is not a national observatory, but I am merely pointing out that there are other excellent facilities around the country that carry out this very important function in astronomy.

David Shearer: Get your own bill.

MOANA MACKEY: Ha, ha! There is a large audiovisual room for the students. It can cater for the students who come through overnight and spend the night up there looking at the stars. It is incredible that in the middle of provincial New Zealand we have this astonishing facility. Even though we are passing legislation that moves the Carter Observatory, one of our national icons, from a national observatory to an educational and tourism facility—which does not diminish it in any way—it is important to recognise that a number of other facilities around the country also carry out these very important functions. Members should go and look at the Whakatane Observatory. I highly recommend it to members.

COLIN KING (National—Kaikōura): It is a pleasure to speak during the second reading of the Carter Observatory Act Repeal Bill. I will deal with the aspects of the mechanics of this legislation. There was total agreement during the select committee process, but it is interesting to see, in Part 2, how the bill deals with the transition of ownership. Clause 8 talks about the liabilities vesting with the Crown leading up to 20 December 2007, and then, after 20 December 2007, the responsibility is vested with the council. To make sure that everything abides by the law, clause 9 was put in to ensure that no duty would be paid on the gifting of ownership from the Crown to the Wellington City Council.

The other aspect I will deal with is that financial matters needed to be tidied up. Clause 10 states that on the date of commencement, or as soon as is reasonably possible after that date, the previous board is to deliver to the Minister a completed set of accounts. They will then be put on the Table of the House within 28 days of that date. This bill certainly tidies up the transfer of the Carter Observatory from the Crown to the council.

One thing that fascinated me when I was reading the Wellington City Council submission was that the council thought that having an observatory was an interesting diversion from shopping. The beautiful Carter Observatory was somewhere that people could go to as tourists and observe. It is very interesting. It is very reassuring, I am sure, that when our wives, or our spouses, are in town, they could possibly go up and look at the Carter Observatory. They can learn and their knowledge of the universe can be built up, and they will not have to go down town and go shopping. I think that the bill is very complete, and on that basis I commend it to the House.

GRANT ROBERTSON (Labour—Wellington Central): As the local member in whose electorate the Carter Observatory stands, I am very proud to stand here tonight and support the Carter Observatory Act Repeal Bill. It was a nice occasion when we had the reopening launch and Dr Mapp gave a moving speech—or people moved fairly quickly towards the refreshments immediately afterwards—[Interruption] It was a very, very good speech; I should not be so ungracious to Dr Mapp. It was a very good speech. In fact, he shared with us some of his astronomical background and even some astrological background, as well, so it was a very good speech.

I first want to lay on the table the importance of the role of the Wellington City Council here. It has taken on the Carter Observatory and has committed itself in terms of both the funding that it has put in place to do the refurbishment and the long-term funding to support the observatory. It now has a key place in Wellington City tourism attractions. I know that my colleague Heather Roy is a strong supporter of Zealandia: The Karori Sanctuary Experience, which has also had a refurbishment in recent times, with the development of the visitor experience there. We also have the Otari-Wilton’s Bush, near where I live in the suburb of Wilton, and Te Papa and other tourist attractions that are really allowing Wellington to create a good tourist experience that is built around the natural advantages that we have.

Most of the MPs in the House will have travelled on the cable car up towards the Carter Observatory. A great way for people to experience Wellington as a city is to get on the cable car, reach the top, and take a short walk to the Carter Observatory and see it in all its glory now. So I think it is a real testament to the Wellington City Council. It has shown a great degree of patience, I might add, having had this bill before the House for some time. The council has taken on its roles and responsibilities in the absence of having a legislative mandate for that, so I think the House needs to congratulate the Wellington City Council on its work in that regard.

It is important to note that the future of the Carter Observatory is now as an education and tourism destination. It is not the national research observatory any longer, and other members in the House have discussed how that has come about. I still think there is a place for us to think about how we continue to fulfil research functions as they relate to astronomy and to the role of the observatory, but, clearly, that is not the future for the Carter Observatory. The future for the Carter Observatory is in tourism.

After Dr Mapp’s moving speech in the planetarium at the Carter Observatory, we sat and stared at the stars. [Interruption] The member should have been there; it was a beautiful experience. It was an occasion when one realises just how fantastic it would be for children to go there. I think a lot of us realise, as Moana Mackey said before, that astronomy is the gateway to science for an awful lot of people. As I sat there in the planetarium, I reflected on what the future would be for a young person who came to the Carter Observatory, found him or herself fascinated by science, and wanted to get involved in research. Perhaps that person would look to the Government to see whether that was something that was important to the Government.

Moana Mackey: Don’t do that.

GRANT ROBERTSON: No, they really should not do that. To start with, one of the early actions that people at the Carter Observatory might have noticed from the Government was the cutting of support for science advisers in schools. They are the very people who help gather together the resources and support the teachers who might be taking their students to the Carter Observatory, and their support was cut out by this Government. But, of course, that is small beer only in comparison with removing the research and development tax credits and taking away the Fast Forward fund. Although we did see some funding in the recent Budget on research and development and supporting science, in effect it is nowhere near enough. It is half of what National promised in 2008 and it is half of what would have been there had we stuck with Labour’s Fast Forward fund and research and development tax credits.

It is also important for people sitting in the observatory thinking about a career in science to realise that it is not just the Government that will be supporting science but also the private sector. We have not had a great record in New Zealand of private sector investment in research and development and in science, but that is what the research and development tax credit was about. It was about encouraging private sector investment in science, and giving some notion that the Government understood the importance of it. Even if it is not accepted for its own value, there is the fact that Australia has it and, therefore, if Australia has it, we are automatically at a disadvantage. We hear often from members on the other side of the House that we need to catch up to Australia and compare ourselves with Australia. Yet the Government has walked away from an area where Australia is saying that it thinks that private sector investment in research and development is important, and that it will support it.

So young people who visit the Carter Observatory and consider a career in science are getting all the wrong signals from this Government. They are not seeing the Government putting its own money into research and development. They are not seeing the Government supporting the private sector to put its money into research and development. I think that is a very sad thing, because if we are going to increase our standard of living and if we are going to be a sustainable country as we go on into the 21st century, we need to be investing in new technology, and encouraging young people to follow science through and to see that science is in fact not just something that is interesting of itself and that looking into astronomy, being at the Carter Observatory, and looking at the stars is only a gateway. If we can encourage people to see a career in science, if they can see that there is both money to be made and great satisfaction from the discoveries that one makes when one is interested in science, we need the Government to support that.

So I certainly support the bill. The Carter Observatory is playing a tourism role in Wellington City, as I have mentioned, and it is also continuing to play its education role. I pay tribute to the staff of the observatory who not only have managed to work through a period of great change and a period in which they had to suffer uncertainty about their future but also, through that period, have continued to produce good-quality resources for teachers and students to use. As Moana Mackey said, they have played a role as a private training establishment. They are accredited by the New Zealand Qualifications Authority. It is high-quality science and high-quality education, and a fantastic tourism experience for anyone who is visiting Wellington. I encourage all MPs to make the most of their time in Wellington and visit attractions such as the Carter Observatory and Zealandia, and ensure that they get what Wellington has to offer.

Moana Mackey: And the Whakatāne Observatory.

GRANT ROBERTSON: And should they find themselves in Whakatāne, as Ms Mackey says, yes, they should visit the Whakatāne Observatory.

LOUISE UPSTON (National—Taupō): I am pleased to speak in support of the Carter Observatory Act Repeal Bill. As many of the speakers before me have said, the Carter Observatory has had a close association with, and much support from, the Wellington City Council, so the repeal of this Act and the transfer of the assets to the Wellington City Council makes a lot of sense. Although the Carter Observatory has in the years preceding the current day carried out very valuable scientific work, it has moved on now. Although initially its secondary objective was public education and visits, that has moved into the forefront in terms of what is available at the Carter Observatory. It has led to an increase in people who are interested in visiting the planetarium, and is less about the science focus, as we have heard from other speakers.

It is important to spend a moment acknowledging the value that the Carter Observatory provides in education. I think of the fortunate students these days who are able to have a hands-on learning experience. If we look at the Carter Observatory website, we see the sorts of things that those students can look at. It is obviously a very interactive exhibition. They look at the story of space, time, and matter, and the sheer scale of the universe, the big bang, and the interpretation of how the world began. That topic has, of course, fascinated people up and down the country, young and old.

Visitors to the Carter Observatory can travel through a black hole and into the solar system, and learn about all the planets that are surrounding us. I think it is a really important part of the learning experience that is available here in Wellington, and it will obviously be here for many years to come. It is important to note that this attraction is available day and night so, as one of my colleagues said before, we could take a diversion from a shopping expedition and take a trip to the observatory. Equally, people can get married there, which is fascinating. So it is a valuable asset to Wellington and to this district and town. I am delighted to support the bill.

Bill read a second time.

Bills

Commerce Commission (International Co-operation,and Fees) Bill

First Reading

Debate resumed from 18 May.

PESETA SAM LOTU-IIGA (National—Maungakiekie): When I last spoke on the Commerce Commission (International Co-operation, and Fees) Bill I stated how many of our businesses in New Zealand look to expand into overseas markets. Often Australia is the first point of call. But those companies need to come to grips with the different federal and State regulations in Australia, and sometimes this can be a challenge.

The single economic market is about aligning the regulatory environment in New Zealand and Australia so that a New Zealand company doing business in Penrose or Onehunga or Panmure or Mount Wellington, or like many of the firms in Maungakiekie, can do business as easily as the companies that are in Australia. Those who will indirectly benefit from cooperation by regulators are consumers in businesses in New Zealand that are harmed by anti-competitive behaviour or unfair trading by overseas-based parties. Enhanced cooperation will increase the likelihood of detecting and successfully penalising overseas-based parties that contravene the Act. This should promote competition and fair trading in domestic markets, resulting in lower prices, a greater choice of products, and better consumer protection.

This bill reaffirms Budget 2010, which was delivered by the Hon Bill English last Thursday. It is about lifting New Zealand’s economic performance. The bill is part of a focus from the John Key - led Government on improving access to world markets for our exporters. It is about boosting innovation and improving export access to world markets, and it is one of six policy drivers for a step change in New Zealand’s economic performance. The bill is about increasing economic performance, unlike the last Labour Government. We will lift our economic performance, we will create jobs, we will boost incomes, and we will improve living standards. I commend this bill to the House.

CLARE CURRAN (Labour—Dunedin South): Firstly, I would like to commend my colleague the Hon Lianne Dalziel for her work on the Commerce Commission (Co-operation, and Fees) Bill—a Labour bill—which is part of a work programme supporting the memorandum of understanding on business law coordination with Australia, as my colleague across the House has mentioned. I think it is important to acknowledge that this bill was originally a Labour bill. It is about mutual cooperation, and it has been a long time coming, with the issue first being discussed by commerce Ministers of New Zealand and Australia in 2003. The bill was initially introduced by my colleague the Hon Lianne Dalziel as Minister of Commerce on 9 September 2008. It has since been taken up by the present Minister of Commerce, Simon Power, which is a good thing.

The bill will directly benefit New Zealand businesses and consumers, and will promote open and dynamic markets, as other speakers have mentioned. I am pleased to see that the Government is progressing with this bill. It extends Labour’s work towards supporting a single economic market with Australia. It aligns us with Australia, which passed similar legislation in 2007, and also complements the Trans-Tasman Proceedings Bill, currently before the Justice and Electoral Committee, which focuses on the enforcement stage of regulation.

Specifically this bill provides for the Commerce Commission to use its statutory powers to assist overseas competition through a consumer regulator with an investigation. It also sets out how the commission can share compulsorily acquired information to assist overseas commission and consumer regulators. It also streamlines agency investigations into unfair trading practices and anti-competitive behaviour, which I think we all know is becoming increasingly important in the global marketplace. It also strengthens the commission’s ability to share information and provide investigative assistance, which will make overseas regulators more likely to help us. It is this mutual assistance that will ultimately promote the operation of a fair and effective market between the two countries, which is good for both consumers and businesses.

The bill also makes minor amendments to require the commission to make refunds where appropriate, and allow for fair exemptions for particular groups, including small businesses. Both the Commerce Commission and the Australian Competition and Consumer Commission have advised that the constraints on cooperation are impeding trans-Tasman investigations.

I note that in his speech to the House the Minister raised a couple of issues that he would like the Commerce Committee to consider, and I will reiterate those. One of them relates to whether it ought to be a requirement to have a full cooperation arrangement, Government to Government, as the basis for the sharing of information and investigative assistance with the overseas regulator. The issue is whether it is necessary for that Government to Government arrangement to be in place or to have a lesser form of arrangement that might be looked at.

The other issue is in relation to exempting classes of persons from the requirement to pay any fee prescribed for in an application. As my colleague the chair of the Commerce Committee mentioned, that was interesting because when she was the Minister for Small Business she took every opportunity to make compliance costs more manageable for the small to medium sized enterprise sector, recognising that sometimes compliance costs could be disproportionate when dealing with a smaller entity that simply did not have the economies of scale of some of the larger entities. So that meant that the idea of having an exemption by regulation written into the legislation could be a fair way of allowing for that to occur and for allowing for adjustments over time. Those two issues will be looked at by the Commerce Committee.

The Commerce Commission already has four existing cooperation agreements in place, with Australia, Canada, the United Kingdom, and Taiwan. These provide for cooperation on certain matters, including coordinating enforcement activities and exchanging non-compulsorily acquired information—that is, with the consent of the providing party. The bill acknowledges that without compulsorily acquired information being able to be shared, mutual cooperation is somewhat limited, and these existing arrangements will be likely to be amended to incorporate the new proposed powers.

The bill amends the Commerce Act 1986, the Credits Contracts and Consumer Finance Act 2003, and the Fair Trading Act 1986. Ultimately the reasons for the legislation are that the international nature of transactions and territorial limits on regulators are making it increasingly desirable for regulators to cooperate to manage competition and consumer effects of transactions on domestic markets. The Commerce Commission is currently constrained from providing investigative assistance and compulsorily acquired information that it holds to the overseas regulators. The commission’s statutory powers of compulsion can be used only in relation to enforcement and adjudication within New Zealand. So there are also legal restraints on the provision to overseas regulators of confidential, compulsorily acquired information that was already held by the commission, which in turn limits the willingness of overseas regulators to provide assistance to our Commerce Commission, as cross-jurisdictional assistance needs to be based on mutual assistance.

Most overseas regulators consider the likelihood of reciprocity as a factor in determining whether to provide assistance or information to the commissioner, and at present our Commerce Commission cannot pass on to overseas regulators any information acquired using its compulsory powers. Labour believes that this bill will ultimately enable genuine cooperation between the Commerce Commission and equivalent overseas regulators.

I commend the work that the Hon Lianne Dalziel has done on this bill, and also the current Minister of Commerce, Simon Power, for taking it forward. I look forward to its passage to the Commerce Committee.

DAVID CLENDON (Green): Kia ora koutou. I have not given the Commerce Commission (International Co-operation, and Fees) Bill very close scrutiny, but it appears, on the surface, to be quite a sensible and practical response to a very real problem. In that context it is interesting to discover that it came from the former Minister of Commerce, Lianne Dalziel.

The bill clearly sets out to enhance the ability of the Commerce Commission to work more closely with the equivalent regulators overseas to share information in a bid to better police anti-competitive behaviour. Although in the greater scheme of things the Greens do not necessarily think that competition is always a desirable thing in business—we see cooperative and collaborative approaches also having significant power—clearly in this context it is to everybody’s advantage to not allow anti-competitive behaviour. That would not be in the interests of either good business practice or consumers or other stakeholders. To the extent that this bill can reduce collusion that would disadvantage the market, the stakeholders, and the consumers, then, clearly, it is a good thing.

Given the closeness of the economic relationship between New Zealand and Australia, it is clearly entirely appropriate that this bill should focus first on establishing that relationship in the context of getting some synergy, some parallel operations, between here and Australia in order to enable a higher level of cooperation between the two countries.

The bill sets out some requirements that must be met before information sharing can take place. We see these as, essentially, public interest tests. It is desirable that this assessment be done on a case-by-case basis. There is always a temptation for regulators to be a little bit open-handed, perhaps, inappropriately so on occasion, with information sharing or exchange, whether by intent or simply by poor judgment on a given occasion. Companies whose information is taken by regulators need to know that the information will be treated with the utmost confidentiality within the context of what the legislation is trying to achieve. It is critical to meet that reasonable expectation of companies.

It is proposed that quite significant powers be given to regulators. We think it is important that that comes under some fairly close scrutiny. We have had the recent example of a search and surveillance bill brought to this House that has stimulated significant and very well-founded public opposition, and opposition from the legal profession and elsewhere. It is important that the same mistake is not made with this bill. Having said that, at the moment the degree of regulation proposed seems appropriate, but that is certainly something that the select committee will want to give some very close attention to, and it will want to invite significant input into the question of whether the powers this bill will give to regulators are appropriate and no more than is sufficient to achieve the purpose of the bill.

What is lacking is the very obvious national-interest test. I think that a previous speaker commented on that. We need to look at the bigger picture, beyond individual, consumer, and indeed public interest to the broader national interests in the context of establishing what is appropriate. Our free-trade partners are all specifically protected under the law. We need to ensure that the interests of consumers and businesses are protected under the law. It would be also useful to know that we are considering our more general national interest. We recognise the importance and the value of trade. This country makes its living on trade. But we do not share the belief that any trade is good trade. We insist, rather, on trade that is fair, trade that is mutually beneficial, and, for those reasons, trade that is much more sustainable.

There are some provisions in this bill about reducing fees for small to medium sized enterprises, and that is appropriate, given, as was mentioned by the previous speaker, Clare Curran, issues of scale and of what is appropriate. There is also some suggestion about a waiver in terms of payment of fees for those who get to acquire another business or, in some instances, to engage in a restricted practice. We would like to engage in some discussion at the select committee about the appropriateness of those conditions. It seems that the Minister would be given some quite wide and non-specific powers to make regulations on the waiving of fees. We would like to challenge that to ensure that the best outcome is achieved.

In summary, we certainly support the general thrust of the bill. It is a positive step forward towards getting some international cooperation between agencies tasked with policing anti-competitive behaviour. We will be very happy to support the bill’s referral to a select committee, where some discussion and some appropriate amendments could be made to it. Kia ora koutou.

Debate interrupted.

Amended Answers To Oral Questions

Question No. 11 to Minister

Hon ANNE TOLLEY (Minister of Education): I seek leave to make a personal explanation under Standing Order 349 to correct an answer I gave to a supplementary question during question No. 11 at question time today.

Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is there any objection? There is no objection.

Hon ANNE TOLLEY: I wish to correct an answer given to a supplementary question asked by Ms Sue Moroney during question No. 11 at question time today. During this supplementary question, Ms Moroney asked me to confirm that the top 20 hours’ early childhood subsidy rate was to drop from $12.45 per child per hour, down to $10.88 per child per hour. In my response, I began by stating “I challenge the member’s figures.” I did not have the funding rates with me at the time, but to the best of my recollection thought that those figures were incorrect. I have this evening reviewed the funding rate figures, and I can now confirm that the figures stated by Ms Moroney are correct. I wish to withdraw the beginning of my answer to the supplementary question, being the words “I challenge the member’s figures.” The rest of my answer to this question stands. I apologise to the House and to Ms Moroney.

Bills

Commerce Commission (International Co-operation, and Fees) Bill

First Reading

Debate resumed.

Hon HEATHER ROY (Deputy Leader—ACT): I rise to speak on behalf of the ACT Party to the first reading of the Commerce Commission (International Co-operation, and Fees) Bill. The ACT Party is pleased to support this bill at its first reading. As the Minister of Commerce stated in his first reading speech, and as other members have also noted in the House tonight, this bill contributes to the objective of the single economic market with Australia. As Minister of Consumer Affairs responsible for the Fair Trading Act and the Credit Contracts and Consumer Finance Act, I support this bill and the measures that it puts in place.

The bill will facilitate increased cooperation between the Commerce Commission and the Australian Competition and Consumer Commission, which will allow for better trans-Tasman enforcement of competition and consumer laws. It also provides for the Commerce Commission to undertake investigative assistance and exchange of information with other overseas competition and consumer regulators.

The Commerce Commission (International Co-operation, and Fees) Bill is the result of a 2004 recommendation from the Australian Productivity Commission for increased cooperation between the Commerce Commission and the Australian Competition and Consumer Commission. The Productivity Commission’s report addressed both the Australian and New Zealand competition and consumer protection regimes. It identified and assessed options for better administration and enforcement of Australian and New Zealand competition and consumer protection laws. Following a comprehensive analysis of costs and benefits, the Productivity Commission’s report supported the option of investigative assistance, which is the option that has been chosen in this bill.

The Productivity Commission found that the option of investigative assistance comprised a number of desirable features that this bill has picked up. These include the local regulator retaining discretion. It may choose not to comply with a request for assistance from a foreign regulator, if to do so would be inappropriate. There are clear lines of accountability and national procedural safeguards, which should be retained. Conditions may be imposed relating to maintaining confidentiality of the information obtained and transmitted, and a degree of ministerial oversight is provided for within the bill. The Productivity Commission’s recommendations were accepted by both the New Zealand Government and the Australian Government, and are incorporated into the single economic market outcomes framework, as the Hon Simon Power has already noted.

In 2007 Australia enacted legislation to allow enhanced cooperation between the Australian Competition and Consumer Commission and overseas regulators. The Commerce Commission (International Co-operation, and Fees) Bill is our equivalent legislation. This bill also takes a wider than trans-Tasman view. Similar issues do, of course, arise across a number of different jurisdictions. For instance, the advertising of all-inclusive air fares and mobile phone roaming fees are good examples. Obtaining information from equivalent regulators would enable the Commerce Commission’s investigations to be more efficient and effective. The current provisions in the Commerce Act 1986 and the Fair Trading Act 1986 constrain the Commerce Commission’s ability to share information—

Mr DEPUTY SPEAKER: I am sorry to interrupt the member. There are a number of conversations going on over here that are distracting me from listening to what the member is saying. I ask members to quieten down so that I can hear what the Minister is saying.

Hon Member: Government members should know better.

Mr DEPUTY SPEAKER: I am standing. If members want to continue their conversations at length, that is what the lobbies are for. I am sorry to interrupt the member.

Hon HEATHER ROY: The current provisions in the Commerce Act 1986 and the Fair Trading Act 1986 constrain the Commerce Commission’s ability to share information and provide assistance to equivalent overseas regulators. Not only does the existing legislation constrain the commission, it also serves to constrain overseas regulators from providing assistance to the commission, as cross-jurisdictional assistance tends to be based on reciprocity. This bill serves to address these issues.

The bill currently provides that in order for compulsorily acquired information to be shared with an overseas regulator, a Government cooperation arrangement must be in place between those two Governments. This arrangement must cover a range of high-level concerns, including consideration of the legal framework in the overseas jurisdiction, New Zealand’s international obligations, potential consequences for New Zealand businesses and consumers, and the rules around the use and security of information. There must also be consultation with the Privacy Commissioner, and the arrangement is then made.

Governmental cooperation arrangements ensure consideration of wider principles at the highest level, in both jurisdictions. The New Zealand Government receives a commitment from the overseas Government. This places the arrangement on a morally binding level, not unlike a treaty. It is foreseen that such arrangements may be concluded as part of future free-trade arrangement negotiations.

Since this bill was tabled in September 2008, the Government has received feedback that having governmental cooperation arrangements only may be too constraining for some jurisdictions. As the Hon Simon Power has said, consideration will be given to allowing the Commerce Commission to enter into an agency cooperation arrangement with an overseas regulator, subject to ministerial approval. Prior to granting approval to an agency cooperation arrangement, the Minister would need to take into account international obligations and the legal framework in the overseas jurisdiction. This alternative option of an agency cooperation arrangement would address circumstances where governmental cooperation was not necessary or not possible, whilst preserving the safeguards of a governmental arrangement. The ACT Party supports this bill and its intent to enhance enforcement of competition and consumer protection laws in a global economy.

KATRINA SHANKS (National): It is my pleasure to take a call on the Commerce Commission (International Co-operation, and Fees) Bill tonight. The proposals in the bill are part of the single economic market outcomes framework announced by the New Zealand and Australian Prime Ministers in August last year. The bill enables greater cooperation between the Commerce Commission, its Australian counterpart, and other overseas regulators. It is about lifting economic performance. The bill is part of the National-led Government’s focus on improving access for our exporters to world markets. Boosting innovation and improving export access to world markets is one of our six policy drivers for a step change in New Zealand’s economic performance. Only by lifting our economic performance can we create more jobs, boost incomes, improve living standards, and provide the world-class public services that Kiwi families need.

Actually, it is a bit more than that; it is about making it easier to do business with Australia, and making it easier for our businesses to go to bigger markets, and this is one step towards that. We find, when we go around New Zealand and talk to people in businesses up and down the country, we have a huge number of businesses that have a huge amount of capacity and capability to go to bigger markets. But in New Zealand we have an issue: we do not have what is known as critical mass. In New Zealand we may have a company that is relatively small, and that sells well within New Zealand to our market within New Zealand. But that market is very limited by the size of New Zealand itself, so if our companies want to export, if they want to grow in capability and capacity, they have to go offshore. To do that means they are entering markets they are not familiar with, markets that have different international laws, markets that have different international regulations, and markets that have different exchange rates, and for a guy who is an owner-operator, has a great business, and who wants to take it to that next step, it is a really big move. It is a really, really scary move for a lot of those businesses that do not have the skills in law, do not have the skills in accountancy, and do not understand how to take their business to the next step.

Going into overseas markets is a big step for these businesses to take. This legislation is one step towards finding another economy where we can go in, one that has the same type of international laws as we do, the same types of regulations as we do, and an exchange rate we can understand, because those New Zealand businesses are going out into international markets and competing with other companies that are already at that critical mass state. For a company to produce a million units in New Zealand it may have to go to one other exporting country, whereas in America for a company to produce the same million units it does not have to leave the country to do it, it does not have to enter new markets, and it does not have to understand all the regulations around those markets. Immediately, our small companies that are trying to grow are at a disadvantage because they have all these barriers, all these regulations, and all these costs to add on to the costs of their products, and they are not as competitive as they might be. So it is really important that we ensure we go forward and make it as easy as we possibly can for these companies.

It is my pleasure to be on my feet tonight to support the Commerce Commission (International Co-operation, and Fees) Bill. Thank you.

TE URUROA FLAVELL (Māori Party—Waiariki): Kia ora anō tātou katoa. Just as an opening comment, I say that the Commerce Commission (International Co-operation, and Fees) Bill is entirely consistent with the range of legislation that has been introduced into this House over the last 3 years as we attempt to respond to the perceived increase in white-collar crime—in other words, the internationalisation of hard-core cartels—within the Government’s responsibility to monitor and manage activity. It takes place, of course, in the context in which the Minister of Finance is borrowing a massive $250 million a week—a billion dollars a month—just to keep the country afloat. So from the Māori Party’s perspective it is crucial that we do everything we can to bring the highest standards to all levels of money management.

The Māori Party is pretty keen on kicking the loan sharks out of town, and we are just as fierce about the need to deter dodgy business dealings between respective nations’ commercial activity. In this sense, it is hard to argue with the logic of legislation that seeks to better equip regulators both here and overseas to detect and deter anti-competitive behaviour. It has, in addition, been an idea that has taken some time to get to the debating chamber; I am told that Bell Gully made submissions on a discussion paper on the issues some 4 years ago. Be that is it may, we are happy to have the bill before the House for its first reading tonight.

The added dimension of this bill over and above others that also try to deal with corrupt and fraudulent behaviour is that this one focuses on international cooperation. It is not as though the issue of cooperation agreements has not already been explored. I am told that the commission already has four existing agreements in place, with Australia, Canada, the United Kingdom, and Taiwan. However, this bill is an acknowledgment that without compulsorily acquired information being able to be shared, mutual cooperation is somewhat limited.

The Māori Party believes that the intent is positive in that it attempts to form relationships with other nations to bring a high level of scrutiny and transparency to all dealings related to the commercial activities between nations. Basically, the bill amends the Commerce Act 1986 to allow the Commerce Commission to seek a place under warrant to establish whether a person is breaching the Act. Having a reputation for effective competition laws and enforcement is considered to be vital in obtaining the confidence of potential foreign investors and in attracting finance for development. It is also a requirement that is often raised by other jurisdictions when negotiating free-trade agreements.

Just on that point, the Māori Party has always considered that the economic benefits of international trade agreements need to be balanced with consideration of our own local, regional, and national social progress and environmental enhancement. The House will be well aware that, in brief, the Māori Party supports fair-trade agreements as opposed to free-trade agreements. Throughout the debates that have taken place in the House about free-trade agreements we have constantly raised the view that we also consider it to be fundamental to best practice that, first, we should establish trade relationships with other first-nations peoples, and, second, that we would expect to see tangata whenua involvement in all decision making on international trade agreements.

There is only one other aspect to our position on this bill, and it is one that we hope the select committee consideration will provide an opportunity to respond to. We are aware that New Zealand firms already comment on the length of time it takes the commission to reach decisions on matters such as mergers and other investigations. For them, a diversion of the commission’s limited resources away from its core functions would be unwelcome. As we understand the case to be, when cooperation arrangements are entered into by the Minister of Commerce, that Minister must consider the potential consequences for New Zealand consumers and businesses of providing compulsorily acquired information or investigative assistance to the overseas regulator. The bill also provides for the commission to seek payment from an overseas regulator of any costs it incurs in providing assistance. If the commission does that, it may help to allay concerns about it diverting scarce resources, but we would hope that the select committee consideration would enable a specific focus on this aspect of the bill. To this end we await the response to the bill, and we support its first reading to ensure that the bigger debate is able to occur. Kia ora tātou.

RAYMOND HUO (Labour): I rise to support this bill and as part of my contribution I would like to pay tribute to the former Minister of Commerce, the Hon Lianne Dalziel, who introduced this bill in September 2008, and the current Minister, the Hon Simon Power, who adopted this bill.

The proposals in the bill are part of the work programme supporting the memorandum of understanding on business law coordination with Australia. The Hon Lianne Dalziel, together with the then Treasurer of Australia, signed the memorandum of understanding in February 2006, and it is the centrepiece of the single economic market agenda with Australia.

The primary objective of this bill is to facilitate cooperation between the Commerce Commission and its overseas counterparts, most notably the Australian Competition and Consumer Commission. Both the Commerce Commission and the Australian Competition and Consumer Commission were of the view that the constraints on cooperation are impeding trans-Tasman investigations. Therefore, the bill amends the Commerce Act 1986, the Credit Contracts and Consumer Finance Act 2003, and the Fair Trading Act 1986, and proposes improving and enhancing cooperation by enabling the commission to, first, exercise its statutory information-gathering powers to assist an overseas competition authority, and, second, provide any information acquired under its powers to an overseas competition authority.

Having said that, I point out that it sounds like this bill is addressing international cartel investigations, because they are the areas where these powers will have real relevance and application if the scope of this bill is much wider. Indeed, the international nature of transactions and territorial limits on regulators make it increasingly desirable for regulators to cooperate to manage competition and consumer efforts in transactions in domestic markets.

The Commerce Commission is currently constrained from providing investigative assistance and the compulsorily acquired information it holds to overseas regulators. The commission’s statutory powers of compulsion can be used only in relation to enforcement and adjudication within New Zealand. There are also legal constraints on the provision to overseas regulators of confidential information compulsorily acquired that is already held by the commission. This in turn limits the willingness of overseas regulators to provide assistance to the commission, as cross-jurisdictional assistance tends to be based on mutual assistance.

The first feature of this bill is reciprocity. Without reciprocity it is hard to see how assisting an overseas regulator carrying out its functions promotes competition in New Zealand markets, given that the Commerce Commission’s core function is to promote competition in markets for the benefit of New Zealanders. Secondly, the bill provides for a number of safeguards for New Zealand interests. This includes consideration of matters such as the nature of relevant overseas competition or consumer protection laws, any relevant privacy issues, and a framework within the overseas jurisdiction for dealing with what would generally be sensitive information. The third feature relates to the maintenance of privilege. The bill addresses this by providing for the protection of privileged documents that the commission may provide to an overseas regulator, and vice versa, in order to encourage enhanced cooperation in respect of this type of material.

Other aspects or issues likely to be addressed or looked at closely at the select committee include, first, as the Minister the Hon Simon Power asked in his speech last week, whether the Government to Government cooperation arrangement should be the only means by which overseas regulators may access investigative assistance from the commission, or whether ministerial approval of a regulator to regulator arrangement could be a good alternative. Second, in relation to fees or fee exemptions, clause 13 in Part 2 amends section 108 of the Commerce Act 1986. As the Hon Lianne Dalziel pointed out, the concept of having a tiered approach may be a better way of addressing the issues, taking into consideration all factors, including the need to make compliance costs more manageable for the small to medium sized enterprise sector. Finally, as many legal practitioners queried, it will be interesting to see whether the proposals in this bill will cause any changes in the Commerce Commission’s approach to the use of a section 98 regime.

The first issue related to that is in relation to what information is covered by the information-sharing provisions of this bill. This bill primarily deals with the sharing of information that is “compulsorily acquired information”, which in the competition law context means information that is not in the public domain and is acquired by the Commerce Commission using its powers under section 98 of the Commerce Act 1986. Information that is provided to the commission voluntarily is, however, not subject to the information-sharing regime.

The second issue is in the merger area, where the commission obtains information both voluntarily and by the use of section 98 notices in circumstances where information is required in a short period of time or in a way that would otherwise breach confidentiality obligations to third parties. Currently, the method used is irrelevant to the party providing the information, but under this bill the confidential information obtained under a section 98 notice will be liable to be shared with overseas regulators. I look forward to hearing more from submitters and learning more on this subject. I commend the bill to the House.

JONATHAN YOUNG (National—New Plymouth): I am very pleased to speak on the Commerce Commission (International Co-operation, and Fees) Bill. We are a small trading nation. We export 85 percent of what we produce, so it is imperative that very good relationships, understandings, and regulations are agreed to by our trading partners in order for us to have a level playing field, the cooperation and willingness of markets overseas to trade with us, and confidence, which is absolutely necessary. This bill, which was introduced in September 2008, was adopted by this Government and carried forward because it is very much part of our agenda of focusing on improving access for our exporters to world markets.

It is interesting to know that New Zealand feeds the equivalent of 60 million people in the world with our food produce, so we are producers, which I believe are highly sought after and appreciated in the wider world. Evidence of that is the number of free-trade agreements that our very expert and effective Minister of Trade, the Hon Tim Groser, has been able to broker with nations overseas. But backing up all of that is the importance of regulation in order that the process of doing business is streamlined, effective, and sure, particularly with Australia, which is a very important market.

We have been developing a single economic market with Australia, and that is a concept where both Governments are intensifying efforts to move forward. In fact, both Prime Ministers, John Key and Kevin Rudd, agreed on the imperative for continued strong and coordinated international action to restore confidence and global economic growth. They recognised that strengthening trans-Tasman economic integration, including through the single economic market work programme, would be vital for both of our countries. The Trans-Tasman Outcomes Implementation Group, co-chaired by senior officials in the Australian Treasury and our own Ministry of Economic Development, has been working to advance these outcomes, which were identified by Prime Minister Key and Prime Minister Rudd.

Key areas where substantial progress has been made include work towards a single cross-border insolvency proceeding; progress on the alignment of accounting standards for profit entities; establishment in New Zealand of an accounting and auditing standards-setting infrastructure that will mirror those in Australia; the potential for mutual recognition of auditors and financial advisers; a process for achieving more ambitious intellectual property outcomes, including a single application process for patents and trademarks, and a single regulatory framework for patent attorneys; the development of equivalent approaches to approval and verification of weighing and measuring equipment on both sides of the Tasman; and in respect of other aspects of consumer law.

Also, agreement has been reached on cross-appointments of commissioners between the Australian Competition and Consumer Commission and our Commerce Commission. These cross-appointments will underpin cooperation on trans-Tasman competition issues. They will make a way possible for continuing effective and even better trade between our countries and for the betterment of New Zealand exporters. Thank you.

STUART NASH (Labour): I find myself in the unusual position this sitting period of standing to support a Government bill—that is, the Commerce Commission (International Co-operation, and Fees) Bill. The reason I say this is that the tax legislation supporting the Budget was definitely one of those pieces of legislation for the few and not the many. The Budget delivered massive tax cuts to the most wealthy Kiwis, whilst delivering practically nothing for ordinary New Zealand families and households.

John Hayes: That’s dishonest.

STUART NASH: No, no, it did deliver something; it delivered GST increases and it delivered huge inflation. But anyway—

John Hayes: That’s dishonest.

STUART NASH: Dishonest? Does that member want to know what dishonest is? The phrase “I will not increase GST” is dishonest.

This bill is another one of those bills that was originally introduced by my colleague the Hon Lianne Dalziel in 2008 and is now in the name of the Hon Simon Power. In fact, I wonder what Simon Power will do when the rest of Lianne Dalziel’s legislation gets passed, because I think this bill is the second bill of Lianne Dalziel’s that I have spoken on in the last month. I ask Mr Power whether there are any more of her bills to come before the House, or whether this is the last one of hers that he has adopted. I must admit I found it quite amusing when a couple of the National speakers stood up and said this bill was the centrepiece of the National policy of driving economic growth. Well, it is a Labour bill, for goodness’ sake! There is no doubt about it, Lianne Dalziel was a very busy Minister, and that is great.

As already outlined, the proposal in this bill is part of the work programme for supporting a memorandum of understanding on business law coordination with Australia. The current memorandum of understanding was signed by Lianne Dalziel and Australia’s Peter Costello in 2006. That memorandum of understanding was a centrepiece of the single economic market agenda with Australia, which explicitly recognises the trends towards international convergence and the regulation of financial markets and business regulation. If members opposite would choose to listen they might learn something. Apparently this is part of National’s economic agenda. Well, it was Labour’s economic agenda for 9 years.

Hon Darren Hughes: It’s too late for John Hayes to learn.

STUART NASH: The member is dead right; it is too late for John Hayes to learn, but he should listen and he might learn something.

Hon Darren Hughes: That’s unlikely.

STUART NASH: The member is dead right. It is unlikely. This bill is most important, considering what we have seen recently in both our domestic and international markets, due to what many would perceive as a fundamental breakdown in the regulatory framework governing the investment banking sector and the shadow banking system, especially in the United States. But we were not immune by any stretch of the imagination. Countless numbers of Kiwis lost thousands of dollars, and some of them lost their life-savings due to the unscrupulous behaviour of some true rogues.

The crisis and the resulting recession of the last couple of years was not just a case of problems associated with financial deregulation, even though this did not help. According to Professor Krugman, himself a Nobel Laureate, it involved risks undertaken by institutions that were never regulated in the first place. Although this bill does not deal with this specific issue head-on, it is one piece of the legislative jigsaw that is needed to guard the future security of the world’s citizens from unscrupulous and predatory behaviour on behalf of those who seek to rip the heart out of our communities. It is an important step in the process of tightening the regulatory environment by providing an efficient regime that facilitates enhanced cooperation between the commission and overseas regulators, whilst ensuring appropriate safeguards are in place to address public interest considerations.

As has been mentioned, this bill aligns us with Australia, which passed similar legislation in 2007. This is an important bill in terms of regulatory and economic alignment, which was introduced by Labour. The Australians actually thought it very important legislation in terms of developing a regulatory framework in line with international best practice. I suppose the question must be asked why, if the Australians thought this legislation so important—and I think it is, as well; I agree with that—it has taken Mr Power so long to bring this bill before the House.

Hon Simon Power: I’ve had a bit on, actually.

STUART NASH: A bit on? We have been under urgency passing legislation for secondhand-car dealers, and that sort of carry-on. Now we are talking about financial regulation between New Zealand and Australia. I would have thought that was quite important. We have had numerous periods of urgency under this Government debating various bills that one could argue, very successfully I think, do not have nearly the positive impact that this bill does. So much for the rhetoric around increasing productivity and harmony with Australia, or aligning the regulatory framework and providing protection for ordinary New Zealanders! Anyway, here we are.

This bill provides powers for the Commerce Commission to use its statutory tools to provide assistance to overseas competition or consumer regulators with investigations.

Carol Beaumont: What a good idea!

STUART NASH: It is a very good idea. The bill will promote more effective and efficient enforcement of competition and consumer protection law in the global economy.

In this age of globalisation, New Zealand needs to ensure that we are at the cutting edge of regulation designed to ensure that our citizens never again are taken advantage of, as they were by the shady characters running the shonky finance companies preying on the elderly and the vulnerable.

Although we will never be able to totally eliminate that risk, we can put legislation in place to at least mitigate the risk. This bill is one of those pieces of legislation. It is a fundamental part of the Labour philosophy of looking after the many and not the few. That does not refer to just developing a fairer tax system that benefits all Kiwis, not the lucky few. It is backed up by a regulatory framework that serves and protects the many from the few. It is quite interesting, because we are talking about New Zealand and Australian alignment of regulation here, and who would have imagined 10 years ago that a man who had defrauded thousands of New Zealanders out of millions of dollars will today fly back from his Sydney penthouse each time he has to serve his community service sentence? It would almost be comical if it was not so obscene.

Closer economic alignment with Australia, while still maintaining our economic sovereignty, which, of course, is very important, is another important platform of Labour’s economic and foreign affairs philosophy. This bill is about best practice, and, as I have mentioned, follows the signing of a joint agreement between the Hon Lianne Dalziel and Peter Costello. We all know the Prime Minister bangs on about catching up with Australia, which is what this bill is about, yet this Government would not even let a bill on compulsory redundancy, which is law in Australia, go to a select committee in order to let the public have their say. Whilst the Australian Government increases worker superannuation, this Government cuts the Cullen fund and continues to erode workers’ rights.

This bill will help build relationships between New Zealand and Australia, but what would really help cement a relationship is closer alignment of worker pay and conditions. I note with interest how oil workers in New Zealand have received a massive pay increase in order to align them with their Australian counterparts who are doing the same job. The path to economic prosperity is not tax cuts for the most fortunate, but increasing salaries and wages. As anyone who knows anything about economics, economic history, and philosophy will understand, there is a direct correlation between wage rates and productivity. This bill complements a trans-Tasman treaty on court proceedings that was signed by—you guessed it—not the Hon Simon Power but Lianne Dalziel, when Labour was in Government. That bill is currently before a select committee, I understand. That bill concentrates on enforcement, and this bill aims to facilitate mutual assistance during the investigative stages through to enforcement proceedings. This is a good bill, a helpful bill, a constructive bill, and a focused bill. It is a Labour bill, and I commend it to the House.

MELISSA LEE (National): I begin by saying that jealousy is such an ugly thing, is it not? After 9 years of terrible management of this country, the New Zealand public voted Labour off and decided to go with National. What a wonderful thing that was—and with so many votes! Then after delivering a Budget that actually dealt with the worst recession that this country has ever faced, and, this year, delivering a Budget that 90 percent of the New Zealand population agrees with and that is good for this country, all we get is jealousy from members on the other side of the House.

It is a pleasure to rise and speak to the first reading of the Commerce Commission (International Co-operation, and Fees) Bill. I will take the time to take a short call. Economic growth, as many speakers have said before me, is what New Zealand should be focused on. This bill is all about lifting New Zealand’s economic performance. This National-led Government is focused on improving exporters’ access to overseas markets. Only by lifting our economic performance can we create much-needed jobs in this country, boost incomes, and improve living standards for all Kiwi families.

This Government wants to see New Zealand companies do business as easily in Australia as they do at home here in New Zealand, and vice versa for Australian companies, I believe. The easier we make it for companies to operate in both countries, by removing unnecessary barriers, the greater the opportunities for business to make big productivity gains and take up new opportunities for long-term business growth.

The proposals in the bill are part of the single economic market outcome framework announced by our Prime Minister and the Australian Prime Minister in August last year. This bill enables greater cooperation between the Commerce Commission, its Australian counterpart, and other overseas regulators. We consumers will indirectly benefit from this cooperation by regulators, as will businesses in New Zealand harmed by anti-competitive behaviour or unfair trading by overseas-based parties. Stronger cooperation will increase the likelihood of detecting and successfully penalising overseas-based parties who contravene the Acts. That will promote competition and fair trading in domestic markets, resulting in lower prices, which is a fantastic thing, a greater choice of products, and better consumer protection—and, as Georgina te Heuheu and I would agree, better-quality and cheaper shoes, perhaps.

Prime Minister John Key and Kevin Rudd have provided a stronger new political push towards the vision of a single economic market, and we now have the Trans-Tasman Outcomes Implementation Group, which is co-chaired by senior officials in the Australian Treasury and our Ministry of Economic Development. The Minister of Commerce, the Hon Simon Power, has been given the responsibility to work with his Australian counterparts to advance 27 regulatory outcomes identified by the two leaders.

Hon Darren Hughes: Sounds like a news report.

MELISSA LEE: Substantive progress has already been made on working towards a single cross-border insolvency proceeding. Perhaps Mr Hughes should listen to some of this news; his Labour Party is not doing that great. Progress has also been made on the alignment of accounting standards for profit entities, a process for achieving more ambitious intellectual property outcomes, including a single-application process for patents and trademarks, and a single regulatory framework for patent attorneys.

Hon Darren Hughes: Melissa Lee—Nightline!

MELISSA LEE: A bill that deals with cartel behaviour and anti-competitive behaviour to assist our exporters is definitely a step forward. Darren Hughes should actually take a lesson from that. I commend this bill to the House.

Bill read a first time.

Bill referred to the Commerce Committee.

Bills

Animal Welfare Amendment Bill

Second Reading

Hon DAVID CARTER (Minister of Agriculture): I move, That the Animal Welfare Amendment Bill be now read a second time. I would like to extend my sincere thanks to the Primary Production Committee for its very prompt consideration of this bill. I am pleased to say that in the time available the select committee received 17 written submissions and heard six oral submissions, and that resulted in some very valuable improvements to the bill. I am also pleased that the committee agreed unanimously that the bill be passed with minor changes, as it reaffirms the importance that this House gives to animal welfare in New Zealand.

I note that the committee expressed concern over the perceived lack of Ministry of Agriculture and Forestry animal welfare inspectors and resources. That is something I raised with the previous Labour Government on a number of occasions. This Government shares those concerns, and that is why Budget 2010 boosted animal welfare funding activities by $8.2 million over the next 4 years. That is the largest increase in animal welfare funding in over a decade. I am also aware that some will consider that this extra funding is not enough, but it is a significant step, and I am confident it will go a long way towards addressing the concerns of the committee.

I would like to discuss the main changes recommended by the committee, all of which I support. The committee agreed that the maximum penalty for contravening a disqualification order should be raised to the same level as the new offence of reckless ill-treatment—that is, a maximum of 3 years in prison, or a fine of $75,000 for an individual or of $350,000 for a body corporate. People are disqualified from owning animals because they either have repeatedly offended against animals or have offended so seriously that the court has had little choice but to restrict their access to animals. Contravening a disqualification order is a serious offence because it is deliberate and places the animals in the offender’s care at high risk of being abused in the future. To provide an effective deterrent to potential offenders, it is appropriate that a serious penalty be put in place for this crime.

The committee also agreed that section 172 of the Animal Welfare Act should be changed so that the forfeiture clause applied only to animals owned by the offender. As the bill was originally worded, the court could order forfeiture to the Crown of all animals to which a charge related. That could have included animals that were not owned by the offender, and could have resulted in the owners of animals losing those animals even though they had no involvement in the offending. As the bill now stands, the court can order forfeiture of animals that form part of the charge only where they are owned by the offender. As a further safeguard, forfeiture is available to the court only where it is needed to protect the welfare of the animals concerned.

I would like to briefly recap the main provisions of the bill. The bill expands the thresholds for wilful ill-treatment of an animal, the most serious category of offending, to include serious injury or impairment of an animal. Previously, animals had to die, to be permanently disabled, or to be destroyed to end their suffering in order for wilful ill-treatment to have occurred. This prevented many cases of horrific cruelty being prosecuted at the appropriate level, and led to the wrong message being sent to offenders. The bill creates a new offence of reckless ill-treatment of an animal. This offence has the same criteria as wilful ill-treatment, but has a lower penalty, reflecting the lower burden of proof needed to prove that charge. Reckless ill-treatment sits between wilful ill-treatment at one end of the spectrum and the strict liability offence of ill-treatment at the other. Together they provide a graduated regime that will improve the ability of prosecutors to lay charges appropriate to the crime. The bill increases the penalties for wilful ill-treatment of an animal, as well as those for ill-treatment or other neglect-type offences, including failure to meet the physical health and behavioural needs of an animal. I have already discussed disqualification, but I would mention that the bill allows the court to impose a minimum disqualification period. Where the court sets no minimum period, a default period of 2 years applies before the disqualification can be lifted. Finally, the bill allows any or all animals owned by the offender to be forfeited where the court believes that this is required for their protection.

On concluding this reading, members may ask what difference this bill will make. I stand by the statement I made during the first reading of the bill that New Zealand society does not tolerate animal welfare crimes. Our Animal Welfare Act is renowned for being progressive and comprehensive, and we can be proud that we are judged favourably by the international community and, importantly, by our trading partners. This bill will help ensure that we maintain our well-deserved reputation. Once again, I commend this bill to the House.

Hon DAMIEN O’CONNOR (Labour): I guess we should answer the question that my colleague the Hon Darren Hughes asked the Minister of Agriculture during the Minister’s speech about what the Animal Welfare Amendment Bill will do. By itself, this bill will not do much. Again, it encapsulates classic Tory policy, which is to think that by waving a big stick around we will get a change in behaviour. Yes, the stick has certainly been increased in size. Along with the Minister I acknowledge the good work that happened in the Primary Production Committee. There are some very good members on that committee, I have to say, and I think I may be one of them myself. [Interruption] Yes, that is right. The chair of that committee, Shane Ardern, has done a great job. He should, in fact, be the Minister. I have always believed that, but I guess having two Ministers of Agriculture would be a bit much, even for the National Government.

When this bill was introduced to the House, it was a reaction to a couple of high-profile, shocking incidents that horrified the country. The Government, in its usual way, reacted and said it would put up the penalties. It did not, at that point, commit at any stage to provide any further resourcing of the department—

Hon David Carter: Read the Budget.

Hon DAMIEN O’CONNOR: I will get on to that, I say to Mr Carter, in a moment. The Budget came out last week, and some more money was put into animal welfare policing and monitoring. I applaud the Minister for that, up to a point. Before he becomes too excited, I say I went to the Budget documents to find out where he had obtained that money from. The tight Bill English is giving money only to his rich mates, through tax cuts, not to any important area of this economy, so I wondered where the money had come from to increase the monitoring and policing of animal welfare. I think that the increased funding is necessary; in fact, it might be a result of the pressure that we brought on the Government. When the Government introduced this bill, we raised the issue of there being no funding and no resources. I think the Government bowed to that pressure. Anyway, the Minister received an increased allocation.

The money comes from—can I just quote the words “transferred from”. There is no new money at all for the Ministry of Agriculture and Forestry for animal welfare. The Government has simply shuffled money around. Do members know what I think is the reason why Bill English and John Key agreed to that? It is because John Key understands that if we shuffle money around, we can get a slice of it and make a whole lot of money. He has not quite worked it out that shuffling money within departments does not actually deliver any more resources.

In acknowledging the support for this bill—the bill in itself does not do anything; it makes an adjustment—I will make one small concession to the Minister. Under the definition of “reckless ill-treatment” and “wilful ill-treatment”, if the resources allocated through the Budget properly fund the people who follow up on these cases, the bill makes an adjustment to allow people to be prosecuted and not fall through the cracks, which was one of the problems that occurred. But let us be honest: we have a huge task ahead of us. Of the 14,000 complaints made in 2008, only 58 prosecutions resulted in convictions. Usually, fair-minded New Zealanders who are aware of our agricultural and rural economy complain only when there is a fairly legitimate case. Neglect is not wilful ill-treatment, I have to say. There was a big gap between the notification level and the cases that actually went through to prosecution.

I acknowledge there are now more resources, a small amount of additional resources, in this area, but they have all come from the area of climate change, from other animal welfare initiatives, from policy advice around animal welfare, and from the area of grant assessment and management. The resources have come from a lot of areas, and we have yet to hear what effect that might have on the Ministry of Agriculture and Forestry.

The Labour Party will support this bill, because Labour members, along with a lot—

Hon Simon Power: Ha, ha!

Hon DAMIEN O’CONNOR: Mr Power is astounded at that. I am surprised. Mr Power comes from a rural electorate—if he ever puts his gumboots on and goes out there, of course.

Hon Simon Power: I had them on on Saturday.

Hon DAMIEN O’CONNOR: And they might have got dirty. Did they get dirty? No, not quite. It was a good look, I am sure, I say to Simon. The Labour Party, along with an increasing number of leaders—and I say we need more of those in agriculture—and, certainly, commentators say that animal welfare is a key part of our future, in terms of our economy. Sixty-five percent of our exports still come from the primary sector. Pastoral farming, the management of animals and the welfare of animals, is still a huge part of that, and we have to get it right, no ifs, no buts, no maybes.

I would like to promote a report. I do not always promote consultants in this House, or indeed anywhere around the country, but I say this is a very, very good report from KPMG. It is KPMG’s first attempt—

Hon David Carter: Reads like a National Party manifesto.

Hon DAMIEN O’CONNOR: No, it does not; it has far more vision than a National Party manifesto. I hope that the Minister has read the report, because most of the contents will be news to him. The report says something about the need for leadership. It mentions the need for rural infrastructure. It also says there is a need for proper animal welfare management in this country. If we drop the ball on that, then there is a risk that our high-value customers will simply drop the ball on our products. I would like to read from the report, because I think it is valuable: “Increasingly customers want to understand where their food has come from, and have certainty that it has been produced using best practice animal welfare standards.” This is a warning, and the Minister should be listening to this. “While New Zealand farmers may see short-term economic benefits from establishing animal welfare standards below global best practices in respect of the sow stalls, for example”—and I know that the Greens may raise that issue here—“these benefits are likely to be short-lived as the major supermarket chains increasingly adopt strategies to target sourcing towards products that meet the very highest standards.”

We have to be able to hold our heads up high and say that in terms of animal welfare standards we reach the very highest standards in the world, and that we uphold them and police them. This bill, of itself, is one step in that process. It does not guarantee anything. We have had a slight increase in the Budget for the people who go around and monitor these standards, and the SPCA, which is a voluntary organisation, must be acknowledged in this area. The society has received an additional amount of money, which no doubt will be put to very good use. To the farmers who are concerned that people from the SPCA may be unfairly knocking on their door or monitoring their animal management practices, I say the simple fact is that it is often the urban standards that determine the purchasing behaviour of our consumers. Those urban standards and assessments will, no doubt, be applied to farmers up and down this country. If farmers have stock that are in a tight situation, they should not put those animals by the road. In fact, those farmers should make sure that they do not get into a tight situation. Mr Ardern will know, and Mr David Carter might know—no, he would not know this; he is a Canterbury sheep and beef farmer—that dairy farmers, in particular, sometimes come under tight situations. They have to do their best to uphold the standards, look after their animals, and show and prove to the world—

Hon Darren Hughes: He just sells another silver teapot.

Hon DAMIEN O’CONNOR: That is right. Mr Carter will be in touch with reality at some stage in his short career, perhaps. I acknowledge that Mr Ardern, on the other hand, knows what agriculture is about; he should be the Minister of Agriculture.

But to come back to the bill, I say we acknowledge this bill, and we support it for the reality that it is one chunk in an improving situation that New Zealand can proudly show off to the world. We are upholding the highest standards of animal welfare. We uphold the highest standards of animal management, including welfare, in order to achieve good production, but we do it in a way that meets the ever-increasing expectations of people in the global market place and their desire for quality food. We support this bill.

SHANE ARDERN (National—Taranaki - King Country): I rise on behalf of National to proudly support the Animal Welfare Amendment Bill. I fear that this bill has arrived only just in time, because listening to the contribution from the Hon Damien O’Connor in support of the bill, it is clear that he is dancing on the head of a pin in trying to find something wrong with it. He is very annoyed about the fact that the National Government has come up with another $8.2 million to put towards animal welfare. I suspect that some cruelty to animals may be going on across the House that this bill may protect members from. I suspect that someone may need to draw on this bill to help Trevor Mallard in the future.

The Primary Production Committee gave due consideration to this bill and identified some issues with it. I thank the committee for its diligent work in that regard. It worked through the process in a very sensible and timely way, as the Minister of Agriculture has said. We heard submissions from a wide-ranging group of people who had concerns in this area. In particular, the committee heard from the SPCA, which has not always been a friend of the Government, I guess we could say, but has always at heart been caring towards animals. I refer to the comments of Bob Kerridge, the national president of the SPCA. He said that the Government has made it clear, right from the word “go” and right from the time the National Government was elected, that something needed to be done to strengthen the law on the protection of animals, particularly with regard to some of the high-profile, heinous cases that we have seen recently. Mr Kerridge said he thought that the extra funding was a wonderful addition and that this bill would help substantially in terms of protecting animals.

The committee raised the issue of clarity of ownership with regard to forfeiture, which would have, in my view, created some confusion. I could foresee a circumstance involving absentee owners of farms; syndicate owners of farms like, perhaps, the Hon Damien O’Connor—I am not sure whether he still has an interest in the family farm—or others such as me. We are here in Wellington involved in the work that we are elected to do. Animals could potentially be suffering on properties that we may or may not be involved with, and we could end up being victims of poor management. All of this issue was pretty hypothetical, because it might or might not happen, but we felt that the law needed to be clarified in that area. A change was made to clause 7, which substitutes section 169 of the Animal Welfare Act. The wording of that amendment was changed from “having custody of animals” to “owning or exercising authority in respect of animals” with regard to someone who was being pursued by the law in relation to animal welfare matters. That was a sensible change.

The select committee received 17 submissions from a wide range of people. Federated Farmers made an interesting observation that as far as they were concerned, the penalties were about right. They suggested that unless proper enforcement was carried out—they had anxiety about that—then the bill would have no effect. To that end, the Government has come out with more Ministry of Agriculture and Forestry inspectors and, as I said earlier, another $8.2 million to support that work.

All in all, the bill—which started off as a member’s bill, was adopted by the Government, and has been to the Primary Production Committee—will potentially bring about some substantial and well overdue changes to the way that animal welfare is treated in this country.

MOANA MACKEY (Labour): I am very happy to stand and take a call on the Animal Welfare Amendment Bill. It is nice to see the Hon David Carter finally take a call in this House on a bill, but it is a bit of a shame that he had to nick the bill from Simon Bridges in the first place. It is a bit of a shame that it took a National Party backbencher to come up with an idea, on which David Carter weighed in, saying “Here is my opportunity to actually get on my pins and make a speech in the House, so I am pulling rank. Thank you, Simon Bridges, but this legislation is now mine.” That is all right. It is good to do it before the reshuffle, I say to the Minister; that is always a good time to do it. Shane Ardern is snapping at the Minister’s heels. Mr Ardern is a real farmer and a real man, who knows what he is talking about with regard to animal welfare. So I say to the Minister that his pulling rank is a very shrewd move. Poor, poor Simon Bridges is not here; he is probably up in his office, weeping as he hears his legislation being taken through the House by the Hon David Carter.

Mr DEPUTY SPEAKER: You cannot refer to someone who is not here.

MOANA MACKEY: Labour will be supporting this legislation.

I want to support the comments made by my colleague Damien O’Connor, who highlighted the fact that although raising the penalties is a good idea, if we do not have the resources needed to police those penalties, then the penalties are meaningless. That message has to come through on this legislation, because unless the people who commit these crimes really fear that they will be apprehended and that the penalties may come to pass, then the penalties are completely meaningless. I urge the Government to put proper resourcing into this area, because, as we know, 20 years ago one-third of animal abuse prosecutions were done by the police, with the Ministry of Agriculture and the SPCA doing some, as well. But now the SPCA does up to 90 percent of the animal welfare work. That is a significant shift, which shows us how far the resources have gone away from the police doing this work and taking it more seriously—or having the resources to be able to take it more seriously—to charitable organisations like the SPCA having to pick up the flak.

There was a particularly terrible case in my patch in Gisborne, where the SPCA really highlighted the difficulties involved in raising money to carry out prosecutions. The SPCA had picked up six dogs over 2 weeks that were absolutely skeletal. Their condition was so extreme that they had eaten their own faeces, which comprised just pine needles. That is the reality of animal cruelty in this country. Those dogs were 6 months old, but they were no bigger than 9-week-old pups; that shows how incredibly emaciated they were. One pup was so emaciated that the Gisborne Herald reported that sunlight could be seen coming through her hind legs. That shows the seriousness of the situation. Carol Martin, the Gisborne branch manager of the SPCA, who is fantastic, said it was very important to get an ongoing prosecution fund going for the SPCA, because if such animal abuse is not prosecuted, then the animals are simply returned to their owners and the abuse continues. If this law is not properly resourced, and if the SPCA is not able to carry out those prosecutions, then it does not matter how high the penalties are.

I think we also need to take into account the fact that only 0.4 percent of animal cruelty complaints result in a conviction. That is very telling, because there is no disincentive for people when they know that less than half of one percent of all animal cruelty complaints result in a conviction. When one looks at the case in Gisborne, one finds that the manager of the SPCA said her organisation had taken successful prosecutions in the past, but the award of costs was absolutely pathetic and did not cover the real cost of taking a prosecution for cruelty to animals.

This is where we come to the real problem with regard to prosecuting animal cruelty in this country. People have to look for solicitors to put their hands up to do pro bono work in order to take these prosecutions, or they go to the police and hope that the police have the resources to be able to take a prosecution. But I think this is probably Carol Martin’s most important comment: “When you head for the courts you have already lost. If we don’t educate these people it’s going to be an ongoing event”. That is the flip side of this issue, as it is with any law and order issue. We have the prosecutions and the penalties, but if we do not do the work at the other side to educate people and to intervene, then we will not get anywhere on the issue.

When we look at the headlines relating to animal welfare in New Zealand, we see an escalation in complaints over the past few years, in particular. I do not know whether it is just an escalation in the reporting of cases, or whether it is an actual escalation in animal abuse. Who knows? But the fact is that those complaints are particularly difficult to read about, often because they do not involve just hardened adult criminals but also involve children. A number of the animal welfare complaints that we have had in the last few years do involve children.

When I was at university studying for my science degree—I am running a bit of a risk of sounding like Aaron Gilmore here—I also did criminology alongside it. I know that the ACT Party and David Garrett do not like criminology, probably because it is evidence based, but the fact is that criminology shows very, very clearly an enormous connection between animal cruelty and human violence. This is the other reason that we need to take animal cruelty incredibly seriously, because the people who are committing it now are the future violent criminals in our country. If we can get to them when they are committing these offences—hopefully, before they commit these offences; when they show a propensity for committing these offences—then we can avoid much greater violence down the track. Many studies in psychology, sociology, and criminology, particularly in the last 25 to 30 years, have demonstrated that violent offenders frequently have childhood and adolescent histories of serious and repeated animal cruelty of the kind that we are now, unfortunately, seeing in our country—in New Zealand.

The FBI has recognised the connection between animal cruelty and violent offending since the 1970s, when it did an analysis of serial killers. It showed that nearly all of them had killed or tortured animals when they were younger. Other research has shown patterns of animal cruelty amongst the perpetrators of domestic violence, child abuse, and elder abuse. In fact, the connection goes so far that the American Psychiatric Association considers cruelty against animals to be one of the diagnostic criteria of conduct disorder. The link is well documented.

We have a real opportunity here not just to pass higher sentences for something else but to use this legislation to look at how we can intervene. I know that the National Government does not like early intervention. I know that it likes to pass completely ineffective legislation like the “three strikes” legislation, which will do nothing to keep New Zealand communities safer, but here is an opportunity to look at early intervention. I want to quote The Humane Society of the United States, which is the largest animal advocacy organisation in the world: “Researchers, as well as the FBI and other law enforcement agencies nationwide, have linked animal cruelty to domestic violence, child abuse, serial killings, and to the recent rash of killings by school-age children”. In a study of 57 families where there were incidents of child abuse, 88 percent of the offenders had also abused animals. The ACT Party and the National Party are so keen on “three strikes” that they may be interested in the First Strike campaign by The Humane Society of the United States against animal cruelty, which is designed to raise awareness of the connection between animal cruelty and other violent crime. The society helps communities to identify some of the origins of violence, to predict its patterns, and to prevent its escalation, and it also works in a productive way, which is what we should be doing in this country, with animal protection agencies and shelter workers.

Debate interrupted.

The House adjourned at 10 p.m.