Wednesday, 18 August 2010

Wednesday, 18 August 2010

Wednesday, 18 August 2010

Mr Speaker took the Chair at 2 p.m.

Prayers.

Visitors

Papua New Guinea, Independent State—Minister for Defence

Mr SPEAKER: I have much pleasure in informing the House that the Hon Bob Dadae, Minister for Defence from the National Parliament of the Independent State of Papua New Guinea, is within the precincts of this Chamber. I am sure members would wish that he be welcomed and accorded a seat on the left of the Chair.

The Hon Bob Dadae, accompanied by the Deputy Speaker, entered the Chamber and took a seat on the left of the Chair.

Questions for Oral Answer

Questions to Ministers

Economy—Reports

1. AMY ADAMS (National—Selwyn) to the Minister of Finance: What reports has he received on the economy?

Hon BILL ENGLISH (Minister of Finance): I mentioned yesterday a report that showed that in the 9 years from September 1999 to September 2008, real after-tax wages in New Zealand grew by only 3 percent in total. I thought that number must be wrong, and I asked my office to check it. The figure is correct. But in fact almost all of that growth happened in the first 4 years of the period. In the last 5 years, from September 2003 to September 2008, there was essentially no growth in real after-tax wages in New Zealand.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. We have repeatedly brought up with you the issue of the sound system. It clicked in then, so I am now echoing back upon myself. It is very easy to hear comments from the other side of the House, and there is nothing wrong with that, but it was not easy to hear the Minister’s comments. There is something seriously wrong here that needs to be sorted out. It is quite unfair to members at the present time.

Hon Trevor Mallard: It might be something to do with the balance, because the system seemed to be working when comments were coming in our direction. The problem might be just comments coming back to members on that side.

Mr SPEAKER: I do not believe we need to take further time on this right now. But let me apologise to all members. I am not happy with the performance of the sound system. Members will recollect that we gave permission for sound technicians to be present on the floor of the House to make tests and conduct an analysis of what is wrong with the sound system. Those technicians are coming back in September, next month, to make further adjustments to the sound system, following the problems that they detected from their work here. I do apologise in the meantime for the inadequate performance of the sound system.

Amy Adams: What were some of the reasons for real after-tax income increases being so low in the 9 years to 2008?

Hon BILL ENGLISH: One reason was that annual inflation was frequently running at above 3 percent. In fact, by September 2008 annual inflation had reached 5.1 percent, without any pressure from an increase in GST. The other reason is that right through those 9 years to September 2008 there were no tax cuts, which meant that people on the average wage were paying an increasing proportion of their wage in tax.

Amy Adams: What measures has the Government taken to increase New Zealanders’ after-tax incomes and boost economic growth?

Hon BILL ENGLISH: Of course, the two of those go together: measures that boost economic growth will ultimately boost after-tax incomes. In Budget 2010 the Government announced across-the-board personal income tax cuts. These will help families by leaving more cash in their pockets, giving them stronger incentives to get ahead. The average household, after it has paid the increased GST, will be $25 per week better off.

Amy Adams: How will the tax package on 1 October improve New Zealanders’ incomes?

Hon BILL ENGLISH: It certainly will, if only because the Government will be collecting less revenue from GST than it will be paying out in income tax cuts. For example, the average household income is $76,000 a year, and those households will receive a weekly tax cut of $46. Even if they spend every last dollar aside from their housing costs, they will pay extra GST of $21. This will leave them $25 a week better off. A wage worker on the average wage of about $50,000 a year will be around $15 a week better off. A typical couple on New Zealand superannuation, with a fixed income, will receive a tax cut and compensation worth $22 a week, and pay about $11 a week more in GST, so they will be $11 a week better off.

Recession—Prime Minister’s Statements

2. Hon PHIL GOFF (Leader of the Opposition) to the Prime Minister: Does he still believe that New Zealand is coming out of recession “reasonably aggressively”?

Rt Hon JOHN KEY (Prime Minister): Yes, and I will make three points. The first is that it would be worth reading out my full quote. Although I said: “I think actually starting to come out of it reasonably aggressively,” I then went on to say: “I’m more optimistic about 2011 than 2010 but nevertheless I think 2010 will be positive.” That statement was right. Secondly, it proves that I am better at economic forecasting than the Leader of the Opposition, who at exactly the same time I was making that statement was predicting that growth this year would be 6 percent, which is actually wrong. Maybe the most important point is that the economy has actually grown more in the last 6 months than it did in the entire last 4 years. That is what I define as “reasonably aggressively”.

Hon Phil Goff: If New Zealand were coming out of recession reasonably aggressively this year, as the Prime Minister predicted, how does he explain the dramatic increase of more than 20,000 additional New Zealanders unemployed in the last quarter, when he told the country that unemployment would be coming down?

Rt Hon JOHN KEY: Unemployment is always a lagging indicator, not a leading indicator. [Interruption] The member was a Minister of Labour and if he wants me to quote some of the statements he made at that time, I am more than happy to. The second point is that average unemployment is lower.

Hon Phil Goff: How is his claim that this year the country would be coming aggressively out of recession consistent with the fact that last month 2,700 people—2,700—lined up for 150 jobs at the Mount Roskill New World supermarket?

Rt Hon JOHN KEY: My answer is that I did not make that statement.

Hon Phil Goff: If the New Zealand economy is recovering, as the Prime Minister and the Minister of Finance repeatedly claim, how does he explain the surge in business liquidations and receiverships and the record number of mortgagee sales for domestic homeowners over recent months?

Rt Hon JOHN KEY: A picture speaks a thousand words, so let us look at this picture. This is a sign of the economy, and this is the enormous recession that we have had. Members will note that the recession we inherited from the previous Labour Government was deeper than anything we saw in the 1990s. We are a good Government, but even we struggle when we have to inherit the mess we got from the previous Government.

Hon Phil Goff: If the Prime Minister is so confident that he is closing the gap with Australia and that the economy is recovering, how does he explain the comment by major construction suppliers and by major retailers in the last 24 hours that the situation today and in the last couple of months is the worst that they have seen in 20 years?

Rt Hon JOHN KEY: I will say a couple of things. Firstly, one of the things that the Government has been doing is running an enormous cash deficit in the order of $8 to $10 billion. The vast bulk of that deficit is going into things like infrastructure support. If it was not for the Government spending so much in that area, the construction sector would be worse. Secondly, in terms of retail, I think the member may find that he is inaccurate. He should go and check his facts, because the last time I looked retail sales were not as weak as they were 20 years ago.

Hon Phil Goff: If the Prime Minister is so confident that he is closing the gaps and that he is getting the economy to recover, how does he explain that after the high level of confidence at the start of this year, in the last 3 months the business surveys by the major banks in New Zealand have shown that each month confidence has gone down because of inaction by his Government?

Rt Hon JOHN KEY: The only thing the Leader of the Opposition is proving this afternoon is that he does not know anything about economics. Firstly, unemployment is a lagging factor—

Hon Phil Goff: I raise a point of order, Mr Speaker. My questions have been quite consistent, quite clear, and quite straightforward. They do not require personal abuse from the Prime Minister; they require an answer.

Mr SPEAKER: I ask the House to settle down a little. I think that the question was reasonably clear about how the Prime Minister would explain changes in business confidence. When someone is asked how they would explain something there is a fair bit of latitude around the answer, but the Prime Minister’s answer should be related to the question.

Rt Hon JOHN KEY: If the member thinks that that was personal abuse, I should introduce him to Pete Hodgson and Trevor Mallard. Anyway—

Hon Trevor Mallard: I raise a point of order, Mr Speaker—[Interruption]

Mr SPEAKER: I apologise to the honourable member. I say to National members on this occasion that just because they do not like the fact that a member has called a point of order, that is no excuse to carry on like that. Their only good fortune was that so many were involved that I could not pick on any one of them. I will now hear the point of order from the Hon Trevor Mallard.

Hon Trevor Mallard: It is a relatively simple point of order. The member has been here for some time. He should know that when you have ruled, Mr Speaker, no comment is made on that ruling. In a funny way, I am not very unhappy, because it shows that the pressure is getting to them.

Mr SPEAKER: No—[Interruption] I have just told National members that when a point of order is being heard they are to be silent. The fact that the member making the point of order had strayed outside the Standing Orders with his last comment is no excuse for the error to be compounded by other members carrying on the way they just have. I tell the House that it will come to order or some members will be getting an early shower—I make that very clear. I will not tolerate some of the noise that was in the House yesterday.

Having said that, the Hon Trevor Mallard was perfectly in order at the start of his point of order, and the right honourable Prime Minister should not make those kinds of comments after the Speaker has just given a ruling. However, the honourable member then deviated from what is allowed under points of order. I guess I have to allow that on this occasion both sides deviated equally. Therefore, that is where the matter will rest, but I ask the right honourable Prime Minister not to do that again. I invite the honourable Leader of the Opposition to repeat the question, because it has been so long since the House heard it.

Hon Phil Goff: If the gap with Australia is closing and the economy is recovering, why is it that after high business confidence at the start of this year, in each of three successive business surveys, month after month, the level of confidence is going down because of inaction by his Government?

Rt Hon JOHN KEY: Firstly, I do not think business would see this Government as inactive. Certainly that flavour came through the mood of the boardroom when David Cunliffe forgot to turn up. But moving right along, one of the reasons why business confidence surveys move around is that they are an expectation of what activity will be like. Business confidence was extremely low when we were at minus 3.1 percent—the conditions we inherited from a Labour Government. Of course, the figures will move around a bit but overall business confidence is still positive.

Hon Phil Goff: If the gap with Australia is closing, as he and his fellow Ministers have claimed, how does he explain the fact that in June the level of New Zealanders leaving for Australia was up 50 percent on the same period last year?

Rt Hon JOHN KEY: There are a couple of things. To put the member’s mind at rest, I say that the gap with Australia is definitely closing, so it is not a matter of “if”. If he wants to pop up for a coffee I will take him through the numbers, and I can take him through a few others. Migration will move around a lot, but the last time I looked at it, I saw that the number of people leaving for Australia under this Government is about half the number who left under the Labour Government. Does that not say it all?

Foreshore and Seabed Act Review—Extent of Customary Title

3. DAVID GARRETT (ACT) to the Attorney-General: Are iwi and hapū who gain ownership of the foreshore and seabed by negotiation with the Government likely to gain a title with greater or different rights from those granted by the courts?

Hon CHRISTOPHER FINLAYSON (Attorney-General): No. Let me say, though, that the member referred to “ownership” in his question. I think it is important to emphasise that we are talking about customary title, which is not to be equated with a freehold title, or a fee simple title. Customary title holders will not be able to exclude the public or sell the foreshore and seabed. Where customary title can be proved, it will sit alongside the public space rights of free, public access, fishing, navigation, and existing use rights. Customary title does not exclude these guaranteed public rights.

David Garrett: Will iwi whose claims for customary title of the foreshore and seabed are turned down by the courts be able subsequently to gain ownership or customary title of the foreshore and seabed through negotiations with the Crown?

Hon CHRISTOPHER FINLAYSON: I would have thought that in most cases it would be the other way round: iwi or hapū would seek to negotiate with the Crown and if they were dissatisfied they would commence proceedings.

David Garrett: Who will gain a greater degree of ownership and a greater area of ownership: iwi who claim through the courts or iwi who claim through negotiations with the Crown?

Hon CHRISTOPHER FINLAYSON: All issues as to where customary title will be granted, be it negotiations or through the courts, are intensely factual questions and cannot be answered in the abstract as the member asks me to do.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou. Is the Minister aware that the UN special rapporteur on indigenous peoples, James Anaya, in his recent visit to New Zealand, recommended a new legislative arrangement that “avoids any discriminatory effects and establishes measures to recognize and protect rights” of iwi over the foreshore and seabed; and what progress has been made in achieving this?

Hon CHRISTOPHER FINLAYSON: Yes, the Government is addressing the extinguishment of legal and other rights caused by the 2004 Act, while protecting public access, fishing, and navigation rights so that all New Zealanders can enjoy our beaches.

Te Ururoa Flavell: Does he agree with Ngāti Porou chairman, Dr Apirana Māhuika, that the comments of the Coastal Coalition, a lobby group opposed to Māori claiming customary title to parts of the foreshore and seabed, is “right-wing anti-Māori invective”; and what response, if any, will the Government make to its campaign of what iwi describe as ill-informed scaremongering?

Hon CHRISTOPHER FINLAYSON: I always prefer not to get into personalities but rather to take a principled approach to these issues. That has always been my style. Those issues are ensuring public access to the foreshore and seabed, ensuring access to justice for all New Zealanders, and respecting everyone’s property rights.

Savings, Compulsory—Prime Minister’s Statements

4. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister of Finance: Does he agree with all of the Prime Minister’s statements on compulsory savings?

Hon BILL ENGLISH (Minister of Finance): Yes.

Hon David Cunliffe: Does he, then, agree with the Prime Minister that “KiwiSaver shouldn’t be made compulsory” because it “goes against the National Party grain”?

Hon BILL ENGLISH: I think the member will be aware that the Government is likely to establish a working group on savings, which will look at a range of issues, KiwiSaver among them. It is quite important that we understand that New Zealand needs to improve its national savings. The Prime Minister has always been a strong advocate of that point of view.

Hon David Cunliffe: Will the terms of reference for the Minister’s savings working group reflect his statement: “Forget it. We’re not doing compulsory super; we’re not talking up incentives.”?

Hon BILL ENGLISH: The member will have to wait and see what the terms of reference are, but they will follow the practice that this Government has followed on important issues, which is to have a very open policy process where all points of view can be aired. In the end, the Government will make some considered and very well-balanced decisions aimed at improving our economic performance.

Hon David Cunliffe: Translated, does that mean that this is simply another U-turn after those on the financial hub, mining schedule 4 land, and overseas investment; and when will the Government instead present a real plan for an economy struggling with rising unemployment and falling business confidence?

Hon BILL ENGLISH: No. What it means is that the Government is taking seriously the long-term effort that will be required to deal with the habitual problem New Zealand has had of low levels of national savings, which were made considerably worse by the damage done by Labour’s mismanagement in its last 3 or 4 years in office.

Hon David Cunliffe: Is the Minister saying that National does, in fact, not have a policy, and that it is a “blank sheet”, or is his policy simply to destroy the savings advances made by the previous Government, like KiwiSaver and the pre-funding of New Zealand superannuation?

Hon BILL ENGLISH: No. The Government is indicating that on this substantial issue it has already taken a significant step with its tax changes in the 2010 Budget, which are designed to reduce the incentive to consume too much and to borrow to pay for it. The indications are that New Zealand households, at least, are changing their ways and increasing their savings rate. The next step is to see whether we can push further in the same direction.

Peseta Sam Lotu-Iiga: Why is it necessary to lift national savings?

Hon BILL ENGLISH: I think the most obvious reason is that we now owe $170 billion to overseas lenders. Over the next 4 or 5 years it is projected to reach $250 billion, which in American numbers is a quarter of a trillion dollars. That is a very large liability, and we need to turn it round. One way we can turn it round is to lift levels of national savings.

Internet, Child Safety—Police Initiatives

5. HEKIA PARATA (National) to the Minister of Police: What actions are being taken by the police to protect New Zealand children from exploitation via the Internet?

Hon JUDITH COLLINS (Minister of Police): I am pleased to report that a specialist team in the New Zealand Police called OCEANZ, which is short for Online Child Exploitation Across New Zealand, is producing excellent results in its work to spare children from abuse by online predators. The squad was formed in October last year to coordinate international operations into online paedophile networks, and to identify and rescue victims of abuse. It also targets those who produce images of abuse for financial gain. The team has already rescued six children from current sex abuse settings, safeguarded a further 25 children from potential sexual abuse, and identified another two victims from images seized during its investigations. The team’s work has also led to an offender in the UK being arrested for extremely serious offences.

Hekia Parata: What other agencies are the police working with to protect children from exploitation by online predators?

Hon JUDITH COLLINS: The OCEANZ squad is working closely with its New Zealand partners in the Department of Internal Affairs and the Customs Service. In addition, the police have just joined the Virtual Global Taskforce. The task force is made up of law enforcement agencies from around the world, working together to fight child abuse online. This will strengthen the efforts being conducted on an international scale to break online paedophile networks, and to protect and rescue children from abuse.

Neurosurgery Services—South Island

6. Hon PETE HODGSON (Labour—Dunedin North) to the Minister of Health: Will he take the final decision on the future configuration of South Island neurosurgery services if wide consensus cannot be reached; if not, why not?

Hon TONY RYALL (Minister of Health): Mr Speaker—[Interruption]

Mr SPEAKER: I apologise for interrupting the Minister, but I say to the Labour Party front bench on this occasion that one of its colleagues asked a perfectly fair question on which there is considerable public interest. Before the Minister could say a word in answer there were numerous interjections from the Labour front bench. I ask members on the Labour front bench to please be a little more reasonable so that I do not have to force them to be a little more reasonable. I do not want to have to do that.

Hon TONY RYALL: This is a hypothetical question. As the member well knows, all of the South Island district health boards agreed to ask the Director-General of Health to arbitrate on the best configuration of neurosurgical services for the South Island, and the director-general has set up an expert panel to advise him on the matter.

Hon Pete Hodgson: Is the Minister aware that the Acting Director-General of Health has stated publicly that the final decision is the acting director-general’s to make, not the Minister’s; if so, does he agree or disagree?

Hon TONY RYALL: It is correct that all of the South Island district health boards have asked the Director-General of Health to arbitrate the decision on the configuration of neurosurgical services, which indicates that they will stand by that decision. The challenges facing neurosurgery in Dunedin have a long history. The Dunedin unit had three neurosurgeons until October 2006, when one of the three neurosurgeons resigned. There was a further resignation in early 2008, then the sole remaining neurosurgeon resigned just before the election to move to Christchurch. Dunedin has maintained its service by using locums and the support of Christchurch.

Hon Pete Hodgson: I raise a point of order, Mr Speaker. I wonder whether you believe that the question has been addressed. I remind you that I am seeking the Minister’s advice as to whether his acting director-general is correct or not correct in asserting publicly that it is the acting director-general’s final decision to make, not the Minister’s.

Mr SPEAKER: I believe that the Minister did in his answer say that he understood that the decision of the director-general would be accepted by the district health boards. I believe that that is a reasonable answer to the question.

Hon Pete Hodgson: In the event of wide consensus not being reached on the future configuration of neurosurgical services in the South Island, is it his intention to take the issue to Cabinet at any point?

Hon TONY RYALL: That is a hypothetical question. The district health boards have inherited a situation whereby Dunedin has lost three neurosurgeons in 3 years. The district health boards are now looking at, and have agreed on, a whole-of-the-South-Island service, and a panel has been established to advise the director-general, who has been asked to arbitrate. I think that everybody in this process would want to ensure that there is a safe and reliable service for the people of Otago, Southland, and the rest of the South Island.

Hon Pete Hodgson: Is he therefore leaving open the possibility that a final decision on the future configuration of neurosurgical services in the South Island may be made by an unelected official; if so, what does that say about his accountability?

Hon TONY RYALL: As that member would know, wherever a decision is made in the public health service, and by whomever, the Minister of Health always has to stand up in Parliament and give an answer. But let us be clear here: the South Island district health boards cannot agree on how the service should be configured, and the doctors cannot agree on how the service should be configured, so they have asked the director-general to arbitrate and make that decision on their behalf.

Hon Pete Hodgson: How is the Minister able to consider himself an accountable Minister, when perfectly reasonable media inquiries to his office are deflected routinely to officials, when countless communications to his office have gone unanswered, and when he declines to become involved in one of the most important decisions his portfolio faces?

Hon TONY RYALL: This is indeed an important matter, because when that member was a Minister three neurosurgeons left the service in Dunedin. We have got to a situation where Dunedin is relying on locums and support from Christchurch. The district health boards have now agreed they should have a whole-of-the-South-Island service, but they cannot agree on how it should be configured, and the doctors cannot agree, so they have asked the director-general to arbitrate on their behalf.

Climate Change—Increase in Extreme Weather Events

7. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Climate Change Issues: Does he expect that climate change will result in an increase in extreme weather events such as floods; if so, what steps is he taking to prepare for such an increase?

Hon Dr NICK SMITH (Minister for Climate Change Issues): Yes, but I caution against ascribing a particular flooding event to human-induced climate change, as did the member’s statements at the weekend about the Bay of Plenty floods. Extreme weather events have long been part of nature’s processes, and it is not scientifically robust to assign any particular event to being the result of human-induced climate change. The steps the Government is taking to help New Zealand adapt to climate change include publishing the documents Preparing for coastal change, published in March 2009, and Preparing for future flooding, published by the Ministry for the Environment in May this year.

Dr Russel Norman: Does he agree with the World Meteorological Organization and the global insurer Munich Ri that the unprecedented level of extreme weather events around the globe is part of a trend that can be fully explained only by climate change?

Hon Dr NICK SMITH: The advice I have received from Dr David Wratt, who is the head of the National Institute of Water and Atmospheric Research (NIWA) and its chief climate scientist, is that in the New Zealand context there is not sufficient evidence of the increased frequency of storm events for it to be assigned to human-induced climate change. However, at a global level there is a likelihood of the link, albeit the connection between the change in the chemical composition of the atmosphere and temperature is stronger than it is for extreme weather events because, quite simply, our record of extreme weather events is not as extensive.

Dr Russel Norman: Does he believe there is a vast global conspiracy between the scientific community, the Intergovernmental Panel on Climate Change, the World Meteorological Organization, the insurance industry, and NIWA to fake the numbers on climate change, or are such beliefs held by newer members of the executive?

Hon Dr NICK SMITH: No. However, I caution that the sorts of extreme statements that have been made by the member, such as that the Bay of Plenty flood was a consequence of climate change, are not scientifically robust. When we are presenting the scientific information about climate change, we need to present it in a balanced way, which is exactly the way this Government is doing so.

Dr Russel Norman: Will he provide directions to local government organisations that they must take climate change - related weather events into account when drawing up district and regional plans, to properly prepare for more floods, more droughts, and sea level rise, as are expected as a result of climate change?

Hon Dr NICK SMITH: The document that was published by the ministry this year, Preparing for future flooding, provides exactly the sort of robust advice that local authorities need for dealing with climate change. I am interested that the Green member is inviting the Government to provide direction. As a practical civil engineer who has done work, for instance, in designing stormwater systems, I caution the member that the level of robustness about the projections for climate change is not sufficient to be used directly in the design of such facilities. They have relevance, and that is why we provide guidance. I think that that is the responsible approach.

Dr Russel Norman: Which is the least-cost option for New Zealand: giving local councils the option of planning or not planning for climate change in an ad hoc way through such guidance documents, or providing direction through a national policy statement on climate change adaptation?

Hon Dr NICK SMITH: My view is that the guidance that we have provided for local authorities in this very document is exactly the sort of practical information that engineers and others working in local authorities need to adapt to climate change. But I question the member on the idea that some national policy direction on climate change will somehow assist when there remains quite a lot of uncertainty at a regional level. In my own community of Nelson, for example, exactly how the climate in Nelson will be affected by climate change does not have a level of definitiveness that would justify a national policy statement.

Dr Russel Norman: Does he agree that, just like with leaky buildings, taxpayers and ratepayers will foot the bill if some councils do not plan for climate change and sign off on new housing in areas that may become flooded, and that the much cheaper option is to provide some clear national direction so that all councils prepare for climate change - related extreme weather events?

Hon Dr NICK SMITH: The Government is providing very clear direction to local authorities. That is what is provided in this very document, which this forward-thinking Government provided for local authorities in May of this year. That is what it is—

Dr Russel Norman: It’s guidance.

Hon Dr NICK SMITH: The member interjects that it is guidance. I stress to the member that the idea that there is absolute factual information that will enable us to direct local authorities simply does not exist.

Dr Russel Norman: Does he believe that central government should direct local government to take a precautionary approach to the extreme weather events that could result from human-induced climate change or not?

Hon Dr NICK SMITH: Yes, I do. That is why the Government has provided the material for—

Dr Russel Norman: It’s a guidance document.

Hon Dr NICK SMITH: The member seems to have got carried away with the fact that our document refers to guidance. The member seems to ignore the simple fact that one cannot provide more than guidance. For instance, NIWA provides scenarios about what might happen with climate change and the sea level in any part of New Zealand. I ask how one can provide definitive direction when that work is based on scenarios.

Income Gap, Parity with Australia—Interim Milestones

8. Hon DAVID PARKER (Labour) to the Minister for Economic Development: Does he agree that New Zealanders wish to see measurable interim milestones between now and 2025 to achieve pay parity with Australia, so as to assess whether the Government is making any progress on this goal?

Hon GERRY BROWNLEE (Minister for Economic Development): As I clearly told the member yesterday, I have no ministerial responsibility for the establishment of milestones in this regard. I do not agree with the member’s insistence that I do have such responsibility, and therefore it would be inappropriate for me to give any other answer to this question than the one I have given.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Yesterday, when the Minister replied in that way, it was possibly fair enough, because it was in reply to a supplementary question. This is a question on notice, and the responsibility on the Minister is that if another Minister has responsibility for that area—if any other Minister does and he does not—then it is his responsibility to transfer the question, not just to deny responsibility when the question comes up.

Hon Gerry Brownlee: If you look at the question, you will see that it began with “Does he agree …”. That asks for an opinion. I explained to Mr Parker that I am the wrong Minister to ask that opinion of, but he clearly links it to questions that he has asked in the past. I do not think it is unreasonable for me to assume that he might have a cunning supplementary question that would extract, perhaps, further information on the portfolio responsibilities that I have.

Mr SPEAKER: This is an interesting issue of order, and that is why I am hearing senior members on it.

Hon Rodney Hide: The primary responsibility for deciding to whom a question should be addressed lies with the member of Parliament who lodges the question, so it is quite important that members take care to ask it of the right Minister. It is then up to the Minister as to whether to transfer the question. If the fact of the matter is that the Opposition asks it of an inappropriate Minister, it is perfectly within order for the Minister to answer the question by saying “You have the wrong one.”

Hon Trevor Mallard: I am digging back now into the recesses of my memory, but you will find a ruling from, I think, Mr Speaker Burke, or possibly Mr Speaker Wall. It probably does not appear within the Speakers’ Rulings that you have there, but it was made when a National member asked a question of the Hon Stanley Rodger in a similar way. Mr Rodger answered in a very similar way to the way that Mr Brownlee has answered now, and the ruling was that the Minister, if he did not have responsibility, should have transferred the question to the Minister who did have it.

Mr SPEAKER: I beg the indulgence of the House while I consider this matter, because an interesting issue has arisen. The reason why it is important is that it would be unacceptable for the answering of questions to be avoided simply through allowing a Minister who is not responsible to have the question lodged in his or her name, then come to the House and say it is not his or her responsibility, and for that to be the end of the matter. I have been exploring Speakers’ Rulings while the Hon Trevor Mallard was talking just now, and I note that the matter has arisen previously. There is no question about that, and I refer members to Speaker’s ruling 145/6, which states: “Where a Minister indicates a question is outside his or her area of portfolio responsibility, or challenges its validity, acceptance of the question must be reconsidered. In order to save a question for a member, the Clerk’s Office may negotiate rewording of the question. This will of necessity involve some give and take.” That describes a situation that is not possible today, because the Clerk’s Office has not had the opportunity to do that.

I think all that I can do for the time being, given that this situation has arisen today, is to ask that where a Minister feels there is no responsibility in his or her portfolio area in relation to a question put to him or her, that Minister should seek to have the question transferred. I think it is not unreasonable to ask that. Otherwise the dilemma is that questions will be lost, because the only people who ultimately know who has responsibility for particular matters are Ministers. We cannot necessarily expect members who lodge questions to know with certainty which Minister has responsibility. Today we have to let this matter go, and the member David Parker will have to pursue his question as best he can, but I ask that in the future when a Minister feels a primary question is not in his or her area of responsibility, that Minister should have the question transferred to the appropriate Minister. I think that is only reasonable. I am prepared to consider the matter further, if members disagree with that.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I appreciate the ruling you have given, but I ask you to consider the dilemma. The question asked “Does he agree that New Zealanders wish to see …”, etc. Mr Parker could have asked that of any Minister. Questions need to be more specifically directed to Ministers and their portfolios. Question time is the Opposition’s opportunity to question the Government, not to have a broad speculation about what might be the wish of New Zealanders.

Hon Trevor Mallard: Speaking to the point of order—

Mr SPEAKER: I do not think I need further help on this matter, but I will hear the Hon Trevor Mallard.

Hon Trevor Mallard: I have here the third edition of McGee, and on page 559 it states: “A Minister is under an obligation to transfer a question to the appropriate Minister if it has been misdirected. It is not satisfactory to reply to a question by saying that it should have been directed to another Minister. If that is so, the Minister should have arranged its transfer in the first place.” It refers to Hansard, Volume 483, at page 224, which could well, given the timing of it, relate to the incident involving Stanley Rodger to which I referred earlier.

Mr SPEAKER: I thank the Hon Trevor Mallard for that. He has basically confirmed what I was putting to the House, which is that on the basis of my quick reading of Speakers’ Rulings and what is logical around this matter, it would be unreasonable for the executive to be able to avoid answering questions if they were not transferred to the appropriate Minister.

I will come back to the point raised by the Hon Gerry Brownlee. The honourable Minister seems to be saying he is not arguing that the entire question is outside his area of responsibility. The fact that he is being asked for an opinion as to whether he agrees with what New Zealanders might wish to see does not put the question outside his area of responsibility, because Ministers can be asked for opinions these days. In the old days, they could not be, but these days, under the current Standing Orders, Ministers can be asked for opinions. The substance of the question is whether there should be measurable interim milestones between now and 2025 in respect of achieving pay parity with Australia. If that matter is within the Minister’s portfolio responsibility, then the question is within his responsibility, and it is not for me to rule on that.

Hon David Parker: I seek leave of the House to instead put supplementary questions to the Prime Minister.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is objection. The House has been very good in considering a very interesting point of order. Let us not wreck it now.

Hon David Parker: How can his Government’s refusal to provide any milestones between now and its 2025 target date be reconciled with Steven Joyce’s statement that “The Government does not dodge its milestones”?

Hon GERRY BROWNLEE: Every year the Government produces a Budget. The Budget is a comprehensive document. It is delivered by the Minister of Finance. It has the Budget speech, the Fiscal Strategy Report, and the Budget Economic and Fiscal Update. New Zealanders and commentators are quite capable of taking the information that they may require from those documents.

Hon David Parker: Is the real reason that his Government is refusing to be held accountable for achieving any milestone between now and 2025 that they show Bernard Hickey to be right when he recently said: “We are losing a whole generation of workers before our eyes and our government appears to be sitting on its hands hoping the problem will go away.”?

Hon GERRY BROWNLEE: No. But I invite the member to look at the appalling statistics of the previous Labour Government between 1999 and 2008, when there was an absolute flight of talent from this country out of fear of what his Government was doing to young people.

Hon David Parker: Is the real reason that there are no milestones—not one—between now and 2025 that National will stand up to be judged on that National has no credible plan to meet its election promise to close the wage gap?

Hon GERRY BROWNLEE: No. It will not matter how often David Parker likes to sit in the back of the car and scream “When will we get there?”; the fact is that the Government does have an agenda. We have taxation reform. We have investment in infrastructure, roads, and ultra-fast broadband. We have a research and development package, reform of the labour market, electricity market reform, developing skills and education, cutting red tape and regulation—

Catherine Delahunty: I raise a point of order, Mr Speaker—[Interruption]

Mr SPEAKER: I imagine that the point of order being raised by Catherine Delahunty is that she cannot hear. I say to the House that is totally unreasonable. The member who asked the question challenged whether the Government had a credible plan to achieve closure of the gap. As the Minister who was answering the question sought to outline the Government’s plan in that regard, I could not hear what he was saying. If the member asks a question about a credible plan, we ought to hear the answer about the credible plan. I invite the Hon Gerry Brownlee to carry on with that answer.

Hon GERRY BROWNLEE: The Government does have a credible plan. It involves a number of initiatives, which include taxation reform, and investment in broadband and infrastructure like roads. As well, there is an increased research and development package; reform of the labour market; electricity market reform; developing skills and education; the announcement this week of nine new trade academies; the cutting of red tape and regulation, which is part of an ongoing programme; the trade agreements that Mr Groser is negotiating throughout the world; the reform of the Resource Management Act, which has already had some effect on the economy; the transition to the International Growth Fund for New Zealand Trade and Enterprise; focusing all of the Government’s resources on front-line services; and strengthening the science system with the arrangements that we have made. Mr Speaker, you have invited me to outline the plan, and it is extensive. It is just a shame that Mr Parker does not know more about it.

Hon David Parker: If it is so obvious, why can the Minister not see what is obvious to many, including New Zealand’s largest newspaper the New Zealand Herald when it said of the Government’s economic performance, in a recent editorial: “when relatively little is done, relatively little happens. Things can even go backwards.”?

Hon GERRY BROWNLEE: The New Zealand Herald is well known for having various editorial opinions at various times.

Taxis—Driver Safety

9. Dr JACKIE BLUE (National) to the Minister of Transport: What actions has the Government taken to improve the safety of taxi drivers?

Hon STEVEN JOYCE (Minister of Transport): I announced last week that all taxis in our larger towns and cities will be fitted with security cameras, along with measures to tighten up communications requirements for all taxis around New Zealand. Unfortunately, the working environment for taxi drivers is no longer safe, as it once was. Since December 2008 there have been a number of serious attacks on taxi drivers, and two deaths. These measures will help to enhance the safety of both taxi drivers and their passengers.

Dr Jackie Blue: What support is there for these moves?

Hon STEVEN JOYCE: In-vehicle cameras are widely supported across the industry, both by Taxi Federation members and by most non-federation companies. Although drivers can never be 100 percent safe, these measures will significantly reduce the risks that drivers face. The available evidence suggests that in-vehicle cameras could reduce crime against taxi drivers by up to 70 percent and taxi fare evasion by a similar amount.

Hon Darren Hughes: Why did he cite Australian evidence as a justification for introducing this policy in a New Zealand setting, when he chooses to ignore Australian evidence for lowering the alcohol limit for driving, as my bill would do?

Hon STEVEN JOYCE: Because the evidence of the actual harm caused by drivers with a blood-alcohol level of between 0.05 and 0.08 in this country is not available, because a previous Government did not make the legislative change that would have allowed that data to be collected. It is a bit of a joke to hear from the member on that subject, given the previous Government’s incredibly poor record.

Climate Change—Minister’s Statements

10. CHARLES CHAUVEL (Labour) to the Minister for Climate Change Issues: Does he stand by his statements at the Australia - New Zealand Climate Change and Business Conference last week?

Hon Dr NICK SMITH (Minister for Climate Change Issues): The conference chair, Gary Taylor, described my speech as one of the highlights of the conference, and commended the New Zealand Government for successfully implementing an emissions trading scheme on 1 July, so I am very pleased to stand by those statements.

Charles Chauvel: Probably not the most riveting conference—

Mr SPEAKER: The member should just ask his question.

Charles Chauvel: Apart from the emissions trading scheme, does the Minister have any plan to reduce New Zealand’s greenhouse emissions, apart from the Biodiesel Grants Scheme, which Gerry Brownlee admitted on 22 July was a failure; the electric vehicle user-charge exemption, which only a few vehicles qualify for; and schemes originated under the last Government, like Warm Up New Zealand, subsidies for solar heating, and energy conservation campaigns?

Hon Dr NICK SMITH: I would be very proud to highlight just a few of the complementary measures that the Government has provided in addition to the emissions trading scheme. Let me take the member through a few: 50,000 New Zealand homes have been insulated under a scheme that is being led by Gerry Brownlee; over 5,000 homes have received grants for solar water panels, which is more than was achieved in the 9 years of the last Government; the Global Research Alliance on Agricultural Greenhouse Gases, which is led by my colleagues Tim Groser and David Carter; the Biodiesel Grants Scheme; the scheme for electric cars; the grants for marine electric production—I could go on and on, but I do not want to humiliate the member.

Charles Chauvel: Why did the Minister say last week that a national policy statement to incentivise renewable electricity generation is needed by the end of the year, when his Government repealed the renewable preference legislation late in 2008, which just shows that New Zealand has lost 2 years’ worth of valuable progress in this area?

Hon Dr NICK SMITH: I draw that member’s attention to the record on renewable energy, because in every year that Labour was in Government the proportion of renewable energy dropped—dropped! In fact, the amount of electricity produced from coal more than trebled during the term of the last Government. The measures that were adopted in respect of—

Hon Darren Hughes: I raise a point of order, Mr Speaker. That was all very interesting but this question is about today, about this Government, about the future, not about going back decades—[Interruption]—or whatever it was he was going on about.

Mr SPEAKER: I say to the Hon Tony Ryall, who is normally a well-behaved member in this House, that he must not interject like that when a point of order is being raised. The point of order was a most reasonable point of order. What the Hon Dr Nick Smith had to say was very interesting, but the question asked very particularly about some matters. I invite Charles Chauvel to repeat his question; the Minister obviously did not hear it first time round.

Charles Chauvel: Thank you, Mr Speaker. Why does he say that a national policy statement to incentivise renewable electricity generation is needed by the end of the year, when his Government repealed the previous Government’s renewable preference legislation late in 2008, which shows that New Zealand has lost 2 years’ worth of valuable progress in this area?

Hon Dr NICK SMITH: The advice the Government received on coming to office was that the renewal preference clause was a Clayton’s measure that would not work, and that was why the Government repealed it, and that view was held right through the industry that actually has to make the investments in renewal energy. We campaigned on having a national policy statement on renewal energy, because, quite frankly, under the Resource Management Act as it stands it is easier to get resource consent for a thermal-generating station than for a renewable energy one. We are going to change that, and that is why the Government will advance that policy this year.

Nicky Wagner: Has the Minister seen reports of the conference from an Australian business journalist, Ian Hamilton, that “… New Zealand is showing bigger developed nations how it’s done when it comes to tackling greenhouse-gas emissions and climate change.”, and from the Business Spectator, which was equally complimentary; if so, what other feedback did he receive?

Hon Dr NICK SMITH: I have seen those reports and many others that were universally positive about New Zealand’s position on climate change. The only criticism I heard in Sydney at the conference on climate change came from Charles Chauvel, which was a bit off, given the longstanding convention that we keep our domestic politics at home. [Interruption]

Mr SPEAKER: Members will please be courteous to the House.

Charles Chauvel: Does the Minister have any plan to reduce agricultural emissions, or will the terms of reference for the review of the emissions trading scheme, which he is shortly to announce, foreshadow an exemption for agriculture from the scheme?

Hon Dr NICK SMITH: The most important challenge around New Zealand’s agricultural emissions is to find the technologies by which we can efficiently produce food for the world while not contributing to greenhouse gas emissions. That is why this Government has invested tens of millions of dollars, and secured the support of a huge number of developed and developing countries to invest in the Global Research Alliance on Agricultural Greenhouse Gases. I appreciate the support of the Green Party for that initiative; I have been disappointed that Labour has been opposed to it.

Border Control—SmartGate System

11. NIKKI KAYE (National—Auckland Central) to the Minister of Customs: What reports has he received about the performance of the SmartGate system?

Hon MAURICE WILLIAMSON (Minister of Customs): I bring good news to the House—more good news. Last week the SmartGate automated border clearance processing system processed its 300,000th passenger. This level of uptake highlights how incredibly successful the SmartGate system has been since it was launched just 8 months ago. Over 50 percent of all eligible New Zealand passport holders are now using it. Customs officers are reporting to me that a lot of New Zealanders who do not have an e-passport are saying that they will upgrade their passport early so they can take advantage of SmartGate. My personal favourite, though, is that over 1,300 passengers a week over the age of 60 are enjoying the benefits of SmartGate.

Nikki Kaye: What are the benefits of using SmartGate?

Hon MAURICE WILLIAMSON: The benefits of SmartGate are huge. The system makes the arrivals process much quicker and easier for trans-Tasman passengers. I think my second personal favourite is that there is an average processing time through the gates of 22 seconds—22 seconds. We hope to get that better. SmartGate also enables the Customs Service to focus its important resources on higher-risk passengers, and operate more efficiently as the system is progressively introduced across other airports, with Christchurch International Airport to come next month. SmartGate is currently operating for trans-Tasman passengers arriving in Auckland and Wellington, but on 13 October it is Christchurch’s turn.

Employment, 90-day Trial Period—Job Advertisements

12. DARIEN FENTON (Labour) to the Minister of Labour: Is it her intention that an employer is entitled to advertise a vacancy with a 90-day trial period where an employee can be dismissed with no reason given, as a condition of employment under the current Employment Relations Act?

Hon KATE WILKINSON (Minister of Labour): It is my expectation that employers should be free to advertise any of the terms and conditions they intend to offer a successful applicant. If a prospective employee agrees to a 90-day trial period and wants to take up that job opportunity, then it is win-win for both.

Darien Fenton: So if an employer is entitled to make as a precondition for employment a 90-day trial period when an employee can be dismissed for no reason given, why did she say in the House 2 weeks ago that unless employees want a trial period they do not have to have one?

Hon KATE WILKINSON: Because that is exactly true. If an employee does not want to have a trial period he or she does not need to have one. It is an opportunity for an employee to get his or her foot in the door and to be given a chance. There are numerous stories of employees taking that opportunity and really enjoying it.

Hon Tau Henare: What reports has the Minister seen of trial periods delivering opportunities to New Zealand?

Hon KATE WILKINSON: I have seen a report of a hairdresser in the central North Island who took on somebody who was a bit rough around the edges, whom she would not have hired without the 90-day trial period. Six months on, the employment relationship is working out brilliantly. The employer now has a new hard-working employee, and the employee is learning valuable skills and has a solid career path.

Darien Fenton: When she said in the House 2 weeks ago in relation to jobs advertised with 90-day trial periods as a condition of employment: “clearly it is not compulsory for a prospective employee to apply for that job.”, did that include someone on the unemployment benefit who is referred by Work and Income to a job with a 90-day trial period and told that if he or she does not take that job he or she will lose his or her benefit?

Hon KATE WILKINSON: As I have said before, the trial period is voluntary for prospective employees. If they do not want to avail themselves of that job opportunity and that trial period then they do not have to.

Darien Fenton: Is it possible for an employee who is dismissed under the 90-day trial period to then face a 13-week disqualification period from Work and Income because a case manager believes that he or she was dismissed for misconduct reasons, even though that employee has no way of testing the validity of that dismissal through an unjustifiable dismissal claim?

Hon KATE WILKINSON: I do not have responsibility for the Ministry of Social Development. I suggest that that question be redirected to the appropriate Minister.

Darien Fenton: Does she agree that employment law is there to protect against abuse of the inherent inequality of power in employment relationships, as outlined in the Employment Relations Act; if so, why is she allowing those abuses that are occurring under her current 90-day trial period?

Hon KATE WILKINSON: I think that the member is making some assumptions. If there have been abuses, why have they not been brought to the attention of the Department of Labour in the last 18 months? In that time the 90-day trial period has been working very, very well.

Urgent Debates

Heather Roy—Ministerial Resignation

Mr SPEAKER: I have received a letter from the Hon Darren Hughes seeking to debate under Standing Order 380 the resignation of the Minister of Consumer Affairs, Heather Roy. This is a particular case of recent occurrence involving ministerial responsibility. Not every ministerial resignation will lead to an urgent debate being accepted. However, having carefully considered this application I have decided to err on the side of allowing the debate. The application is therefore accepted. I call on the Hon Darren Hughes to move that the House take note of a matter of urgent public importance.

Hon DARREN HUGHES (Labour): I move, That the House take note of a matter of urgent public importance. We have seen some extraordinary events in Parliament in just the last 24 hours, as the Key Government starts to fall apart at the wheels. What has happened with the ACT Party is that a party with just five MPs, which is taking the Government further and further to the right, could not agree even on keeping its confidence and supply agreement with the Government intact. What did we get from the Prime Minister about that? Not a word—not a word. A Minister of the Crown has left office in our country and no one is allowed to know why. No one is allowed to have an explanation of what it is about. No one is being told how a confidence and supply agreement that led to a Government of New Zealand being formed is all of a sudden bereft and not being taken seriously, at all.

Several key points of constitutionality, I think, come into play. One of them should be of most concern to the Māori Party and to United Future, because it seems that the Prime Minister can arbitrarily rewrite confidence and supply agreements after they have been signed at the time of a general election. I would have thought that it was a very serious thing indeed if a small party signed up to support a Government but did not know whether it would get the opportunity for the words in that document to be taken seriously as the coalition continued.

I refer to the confidence and supply agreement that National signed with ACT, which, most curiously, sets out something that I guess the Prime Minister would describe as being slightly aspirational. It states “The relationship between ACT and National will be based on good faith and no surprises.” Well, I would have thought that it was a day of surprises yesterday in the office of Heather Roy as she turned up for work, to be told that she was about to be knifed by her parliamentary colleagues, that the ousting was going to be done in secret, and that what was driving it and the reasons behind it were not to be communicated to the public.

But today in the newspaper we were able to find out one of the reasons, and it is a very serious point. Rodney Hide has sat in this Parliament for 14 years, and he has sat in judgment over every other party and every other politician. He has sat here being holier than thou, he has sat here as the “Perkbuster”, and as the person who was going to be “Mr Transparency”, “Mr Accountability”, and “Mr Openness”. He has been a cut above most other parliamentarians and most other parties. But we have found out that in 18 short months, after Rodney Hide’s long career as an Opposition member sitting outside the glasshouse and throwing rocks, now that he is inside the engine room of the Government, nearly every single decision he has taken has shown he is not up to the job of being a Minister, let alone a party leader. He was the person who went around the country complaining that ministerial standards had slipped under previous Governments because not enough action was taken by Prime Ministers of the time. Yet he is the same person who went to a press conference yesterday and would not tell the public of New Zealand why he had taken measures to politically execute his deputy, and what effect that would have on the executive Government of this country, as a Minister was driven from office because of a tawdry backroom deal done by the ACT Party.

What is really clear here is the question of accountability for Mr Hide, because it seems that Mrs Roy, in her role as the Associate Minister of Defence, had significant concerns about the security of the paperwork and documentation in her office. The New Zealand Herald makes it very clear today that the Associate Minister was concerned that documents related to the defence portfolio were being taken without her permission from her desk in her ministerial office here in Parliament. It is very serious, indeed, for that to happen. Those documents are given to Ministers on the basis of confidentiality, they are often classified documents, and the former Minister Mrs Roy was quite rightly concerned at the extent to which the confidentiality of her papers was being abused by Rodney Hide. So what did she do about it? She went to Rodney Hide, asked him about it, and he bullied her. He tried to bully her—

Hon Damien O’Connor: I raise a point of order, Mr Speaker. I do not like to interrupt my colleague. I know that we are not allowed to point to the absence of a member in the House but I wonder whether pointing to the absence of a party is—

Mr SPEAKER: The member will resume his seat. That is not a point of order.

Hon DARREN HUGHES: I am sure the research notes are being done right at the moment, because the ACT Party will have to front up at some point as the party that put every other party to a higher test—its members saying that they would do better in Government than everyone else. They have sat there in this Parliament for 12 years, in opposition to National and Labour Governments, and have said they would bring a higher standard of ministerial accountability. But what we have seen of the behaviour of members of the ACT Party is deserving of Rodney Hide coming down to the House and telling us what has gone on, because we are talking about the political career of a Minister of the Crown.

I return to the point about the defence documents, because it is one of the critical issues as to why, apparently, Mr Hide acted against his Minister. Mrs Roy went to him to raise her concerns about the fact that he had been sneaking papers from her desk—classified defence documents—that he was not entitled to receive. She checked that, and Rodney Hide acted against her in that respect. When she was bullied by Mr Hide on that, the matter was then raised by the Prime Minister. So the Prime Minister knew that in that office there were concerns about documents relating to the defence portfolio, but yesterday when Mr Key was asked why Heather Roy had been removed from office, he said he had no idea. We are expected to believe that John Key had no idea, whatsoever, why a Minister of his Government left office yesterday. It is of huge concern to the parliamentary Opposition, and I believe to the public, that the Prime Minister is prepared to argue that he had no idea why a Minister was forced to leave office.

We were also told, by way of the newspaper today, that the new deputy leader of ACT Party, John Boscawen, lodged his challenge for the deputy leadership on 5 August. It is impossible to believe that from 5 August through to yesterday, 17 August, John Key was not advised of this challenge by the ACT Party. We know how close John Key is to Rodney Hide. We know that John Key is propping up the leadership of Rodney Hide at the present time, because they are political soulmates, in that respect. It is impossible to believe John Key’s assertion that from 5 August through until yesterday he had no idea that this was going on.

It is even more impossible to believe, accept, or even understand that having heard about the coup, if John Key was indeed aware of it, he never thought in any of his conversations with Rodney Hide to ask why it was happening, what was going on there, and why the party was thinking of changing its deputy leader. If the ACT Party’s ministerial responsibilities were to be the responsibility of the ACT Party alone, then why was Heather Roy’s name specifically written into the confidence and supply agreement? If, as the Prime Minister, Mr Key, says, it is simply a matter for support parties to decide whom they supply as Ministers, why was it written down in black and white that Heather Roy and Rodney Hide would be the Ministers in this Government? John Key yesterday changed the political history of the collective responsibility of Cabinet, and the Cabinet Manual, with the new term that he called “the implied concept of ministerial work”. So it does not matter now what is written in black and white as parties sign up to a Government, and go to the Governor-General and say they have the numbers to run the country; we now work on the principle, called the “implied concept”, of the Key Government about who gets ministerial warrants. This is impossible to take seriously. It is impossible for there to be credibility on it at the point that that ministerial warrant was taken away by Mr Hide.

Secondly, if Mr Hide was so keen to move against Mrs Roy because he was so anxious to get his hands on those defence documents—the action that Mrs Roy so objected to—why, when all the portfolios were redistributed yesterday, did the ACT party decide to give up the defence portfolio? There was Rodney Hide going through the Minister’s desk, checking out all the papers that he was not entitled to—[Interruption] The deputy leader of the Labour Party made a very unkind suggestion! Rodney Hide went through Heather Roy’s papers and took her ministerial documents without her permission because, apparently, it was so important that he should be aware of what was happening in the defence portfolio, yet the whole time Mr Hide was planning on giving up that portfolio as soon as he could get rid of Heather Roy. But the real reason, we think—we do not know; we have to assume—that this Minister has been summarily dismissed, behind closed doors in the ACT Party caucus room, is that Mr Hide believed that she was being far too critical of his leadership. Well, she will never be lonely, in that particular respect. I say to Mrs Roy that she will not suffer alone, in that regard.

It is a bit rich of Mr Hide to sack a Minister, to execute a Minister politically, and to keep it a secret, when he himself is on record as having gone around this country—when he thought he was off the record—criticising not just any Minister but the Prime Minister of New Zealand. We remember Rodney Hide telling a table of business people that the only problem his party had in its support of the National-led Government was that Mr Key “doesn’t do anything”, and that, although he was highly regarded, “ACT did everything and we are hated”. So Rodney Hide went around the place criticising the Prime Minister up hill and down dale, but that had no implication whatsoever on his ministerial role. The Hon Rodney Hide was protected in his job by John Key, despite the overt criticism being made by Rodney Hide. Members should remember that that was the only occasion when Rodney Hide was caught out telling that particular story about John Key; we have no idea how many other functions around this country the Hon Rodney Hide has gone to, criticising the Prime Minister behind his back.

But as soon as Heather Roy raised some criticism of her leader, Rodney Hide, then he could not wait to put the knife into her and to politically execute her yesterday. Having overseen her political execution, he fronted up to the media conference and simply said that caucus had made a decision and that it was a tough day for him. He said that people should feel sorry for him. He said that it might have been a tough day for Heather, as well, so people should feel sorry for her, but he would not discuss what went on at caucus. Well, I am sorry, I tell Mr Hide, but for over 12 years as an Opposition member of Parliament he has stood here and railed for higher standards in our Parliament, higher standards in our Government, and higher standards from our Ministers. But when that man is finally in the driving seat himself, he does not have the fortitude to get on and deliver to the same standards that he has demanded from so many other people. That is why there is intense criticism, not only of the way he acted in the time leading up to the events of yesterday but of the way he acted once he finally got rid of Heather Roy. He could not even show the leadership required to front up to the public and explain what had gone on.

It seems unbelievable that a Minister can be dismissed from her portfolio without an explanation being given, but that is what has happened here. Ministers have come and gone over the years on both sides of politics, but there has always been an explanation from the Prime Minister, or from the leader of the party, about what has gone on. However, it seems here that this has not been the case, at all. When John Key would not back his own Minister, he had an opportunity to tell the country why that was.

Heather Roy tried to reach out to John Key on Monday night. She rang him and left a message on his voice mail. John Key would not call her back. But John Key was very quick to call Rodney Hide in December when the supposed coup was on, to guarantee that if he were rolled as leader, then the coalition deal was off. In fact, the Government was so keen to prop up and protect Rodney Hide, it even talked about having an early general election because it was so keen to have Rodney Hide stay in his job. So there was constant communication between the National Party and the ACT Party at the time when Rodney Hide was on the ropes, but as soon as it was Heather Roy’s turn to be on the ropes, John Key wanted nothing to do with it. In fact, yesterday he said that he had no idea why she was voted out. It is absolutely unbelievable that that could be the truth. It is unbelievable that that could the case. What did Heather Roy say on the telephone to the Prime Minister? Why would the Prime Minister not come out and say that his Minister rang him, tell us what she had to say, and explain that he chose not to reply because it was an internal party matter? Yet after the dismissal yesterday he said that he would give her a call some time and tell her that she acted in a professional way and had done a good job as a Minister.

Even after the December troubles Rodney Hide was running around the country telling people that Heather Roy was someone who was standing up for consumers, and saying that it was about getting prices down for ordinary New Zealanders and households, and about getting quality up. He even went as far as to say that the ACT Party stood for the Association of Consumers and Taxpayers—we were glad to get that clarification; we always thought it was something else—and that we had a Minister who was standing up for consumers. Rodney Hide was busy on the Q+A programme promoting Heather Roy and saying what a good job she was doing, yet yesterday he was prepared to oversee her political execution. The man who campaigned for transparency, openness, and accountability was not able to live up to his own standards that he has preached about.

In Rodney Hide’s 18 months as a Minister he has done grubby deals with the National Party at the expense of the Māori Party and Māori representation on the Auckland super-city, by threatening, in an outrageous way, to throw out his toys. Rodney Hide has campaigned with the National Party against his own deputy leader, and he has gone around New Zealand criticising John Key, because in Mr Hide’s heart of hearts he believes that no one is as good as he is. He believes that he is better than everyone else. Yet when the acid is being applied to him, whether it is in relation to his parliamentary entitlements, his ministerial leadership, or his party leadership, he is not living up to the expectations he puts on others, which he has touted about himself for year on year.

If a member is going to execute a political colleague—and Bill English knows what it is like to be on the receiving end of that—he or she should at least have the decency to front up and explain what the reason is. All we have from yesterday is the clarification that John Key will choose Rodney Hide over everyone else every time, and that it is possible to do these grubby political deals behind closed doors. Ministers of the Crown pay a price for that.

Finally, we know that John Boscawen will be the new deputy leader of the ACT Party. That is good news for lamington bakers everywhere, but it is not good news for the Parliament of New Zealand to see a Minister of the Crown executed in such a grubby fashion when she was the deputy leader of a support party of the Government. Rodney Hide should get up and explain to the country the sorts of things that he used to demand of others. He should apply the same litmus test to himself as he has applied to others. If he does not do that, then he is not worthy of being called a political leader, let alone a Minister of the Crown.

Hon BILL ENGLISH (Deputy Prime Minister): I would like to thank the Opposition for the opportunity to talk about the stability and the cohesion of the Key National Government and its relationships with the ACT Party, United Future, and the Māori Party. I think that Labour is very disappointed that it has not had the running camera shots. It has not had the stand-up press conferences in the airports. It has not had the apologies. It has not had a leader, as well as his members, being chased around, and all the palaver that goes with the loving family that is the Labour Party under pressure. Labour is so disappointed that it has not seen that kind of performance going on around George Hawkins, or my good friend Luamanuvao Winnie Laban, who suddenly resigned, precipitating a by-election without telling her leader. Labour is so disappointed that the ACT Party has not indulged in melodrama, soap opera, mess-ups, mistakes, and apologies, which have been the chapter of the Labour Party for the last 3 months. I must say that new chapters are likely to be revealed as the months go on.

The relationship between the National Party and its support parties is, as we have often said, one of respect not necessarily agreement. That sensible description of our relationships, along with the consummate skills of the Prime Minister and the relentless attention of various Ministers and members of the respective caucuses to a positive relationship, has led to a cohesive and stable Government through some very difficult times. All small parties have to bear the pressures of being in Government, and I would have thought the Labour Party knew a bit about that. I can recall that at about this stage of the Labour Party’s political cycle—or, in fact, a wee bit later on—Jim Anderton was the leader of the Alliance in Parliament although he had been expelled from the Alliance out of Parliament. I am trying to work out whether that is exactly the obverse of the ridiculous situation with Chris Carter, who is not a member of the Labour Party in Parliament but is still alive and kicking and paying his subscription as a member of the Labour Party outside of Parliament.

Hon Darren Hughes: Do you mean like Maurice Williamson?

Hon BILL ENGLISH: Maurice Williamson would be very proud to be dragged along to Labour’s ruling council to be expelled. He has said that Phil Goff cannot win, just like Chris Carter, so why are they not trying to kick Maurice Williamson out of the Labour Party? They have not succeeded in moving Chris Carter one inch. He is a full-blooded, totally subscribed, 24-hour-a-day member of the Labour Party. Even though in Labour’s Stalinist way Chris Carter has been diagnosed as suffering from mental illness, which is what happens when anyone disagrees with anyone in the Labour Party, he is still there. I am sure that that little show will go on. Like the show Two and a Half Men it will continue with the same punchlines and that slightly wacky atmosphere for the next 9, 12, or 15 months through to the election. I left out George Hawkins and Shane Jones, but there will be more episodes.

The Government has developed a healthy and stable culture. I think it is pretty obvious that the ACT Party does not always agree with the Māori Party, and neither of those parties always agrees with the Government, but we have in those parties people who are committed to a national good for New Zealand, who have an ability to understand the complexity of the issues and who are able to deal with them when they are laid out in a transparent and respectful way. With that recipe this Government has been able to deal with some very complex issues. As the Minister of Finance, representing Cabinet’s effort to get New Zealand through a recession, for instance, I have found that all of our support parties—ACT, United Future, and the Māori Party—have a strong intuitive grip of what is needed to get through a recession. They do not agree with every detail of the Government’s economic policy, but we have been able to put together two coherent Budgets with the full support and involvement of those parties. The National Party appreciates that, but, more important, New Zealand as a nation is benefiting from what has been a unique combination of political interests and a uniquely successful style of management by the Prime Minister.

The Prime Minister has, in the matter that is the subject of this debate, simply ensured the continuity of a competent executive. Small parties and big parties have their own internal issues that they deal with. The Prime Minister has made it plain that it is his prerogative as to who is in Cabinet. That is an issue that can be discussed at any time with minor parties and support parties, and it has been. He has simply ensured the continuity of the executive. I must pay a compliment to the ACT Party in the sense that whatever issues it has been dealing with, it has made absolutely sure there has been no disruption to the process of government. There has been no attempt to draw focus away from the big issues that the Government has to deal with. I know that Labour members are very disappointed that issues that they have, which over a series of months take night after night on TV to deal with, have been dealt with within the framework of this Government and by the ACT Party in a way that ensured that those things that are properly the province of a party membership in a caucus room are dealt with there, and those things that are properly required by a Government to continue with good government have remained there.

One of the reasons the ACT Party has worked with the Prime Minister through these circumstances is because it supports the Government’s economic programme. It is a comprehensive and wide-ranging programme. For instance, it knows that in order to get effective investment in infrastructure it needs to support this Government, and it has done so admirably. It is particularly focused on another part of our six-point plan, and that is reducing red tape. The leader of the ACT Party, the Hon Rodney Hide, has taken up a role somewhat as the conscience of the Government on this matter to make sure that the relentless pressure to regulate more is resisted, and that the relentless pressure to react to political circumstances with low-quality regulation is also resisted.

The ACT Party and all its members have shown a great deal of interest in the Government’s plans for making the public sector more productive, by delivering effective front-line services and reducing back-office costs. I am quite sure that the ACT caucus would rather that the National-led Government moved faster, that it consolidated the Budget more quickly, and that we reached surpluses more quickly. Those are all arguable propositions; other countries are following the kind of track that the ACT Party advocates. The United Kingdom would probably be the most obvious example. But because of the style of relationship that exists between National and its support parties we are able to debate those issues, to come to coherent decisions, and to implement them.

The ACT Party has also shown a great deal of interest in the Government’s tax moves, which the Government will implement on 1 October. That is because, I think, those members understand the reason for those tax changes. This economy has become unbalanced, with too much consumption and excessive borrowing to pay for that consumption, so we have increased taxes on consumption with an increase in GST. We have increased the effective tax rates on property, we have dropped the tax rates on income, work, savings, and investment, and dropped the company tax rate, and we have created a more conducive environment for exports. In principle, the ACT Party and National agree on that, and we were able to work through the detail of quite a complex package of tax reforms.

It is part of the skill of running a Government that a major party can work with minor parties in a way that is constructive and forward-looking. I am sure the support parties would agree that the skill with which the Prime Minister has gone about that task has been critical to their success in getting the kinds of changes they want, within reason, and to the Government’s success in being able to present a programme that is broadly supported by the New Zealand public. Of course, the Prime Minister’s efforts have been backed up by the efforts particularly of the spokespeople for the smaller parties, because they carry a large burden. There are a lot of us; there are hardly any of them. They have to cover all of the activities of Government with fewer resources and fewer personnel. They are, without exception, very hard-working and very strong contributors, even when we disagree or wish they did not contribute so strongly—which we do sometimes. So we are very pleased to work with that group of people.

The Opposition made a somewhat weak attempt today to take a particular event of yesterday and turn it into some kind of problem for the Government that warranted the urgent attention of the House. Well, it does not. The Government is stable, the Government is coherent, and the Government has a wide-ranging programme. The Government is putting in place changes that the small parties want and support, and that National can present to the public as a broad-based programme. We are very proud of the ongoing relationship with the ACT Party, and also with the other support parties in the Key-led National Government.

Dr RUSSEL NORMAN (Co-Leader—Green): I stand to speak in this urgent debate. Many pressing issues are facing the country at the moment, so it is somewhat surprising to be speaking in a debate on this issue. But here we are. MMP is a great system. It is a system that means there is diversity in this Parliament in a way that there would not otherwise be. That means there are people in Parliament whom one strongly disagrees with. It is fair to say that there are strong disagreements between the ACT Party and the Green Party. None the less, we are both here because of the MMP system, and although we have different views it is part of the respect with which we treat each other that we listen to those views.

I think it is important that the smaller parties, the MMP parties, are in this Parliament and have a voice. It seems to me that today’s issue should be one of principle. It is not about Chris Carter or anyone else; it is about whether the ACT Party has the right to change its leaders. It seems to me that it does have that right, and that it is the fundamental right of the ACT Party to choose who its leader and deputy leader are, and, hence, as part of the agreement with National, to determine who the two ACT Ministers will be. Although ultimately it is up to the Prime Minister to choose his Ministers, as part of the agreement there has to be the give and take that allows the smaller parties to choose who their Ministers will be. So it seems to me that the ACT Party is entirely within its rights to choose who its leader is and to choose who its deputy leader is.

We can argue that Mr Hide should have told the country why Heather Roy was sacked. Clearly, there is an argument about transparency and openness, and the country would like to know why one of the Ministers of the Crown has changed. The country would like to know why the ACT Party went through that change. I strongly encourage Mr Hide and the others within the ACT Party to be open with the country, and to tell people why they chose to make this change in leadership. None the less, I stand by the principle that the ACT Party has the right to choose its own leaders through its own process. I think that that is a fundamental principle.

This is an opportunity, I guess, to talk about the ACT Party and its role in the Government, as the finance Minister just did. It may be the case, it seems to me, that the ruckus that ACT has just been through may weaken its hand in Government. In fact, ACT may find that it has a weaker hand in Government than it had previously. From the Green Party’s point of view, because we disagree with ACT on a large range of issues—privatisation, for example—that is not necessarily a bad thing.

The ACT Party is very pro-privatisation. If we privatised some of our assets they would go into overseas ownership. Ultimately, because it is hard to avoid, that would increase the current account deficit and add to the economic problems New Zealand already faces. So if the ACT Party is strengthened during this process, the problem will be that it adds to the privatisation agenda.

Likewise, as the finance Minister just spoke about, the ACT Party tends to be the party for supporting inequality. It wants a tax system that maximises inequality. That is one of its objectives and one of its fundamental principles. The problem with a policy that supports inequality is that it is bad for everybody. Whether people are wealthy or poor, a society that is more unequal is a worse society to live in. It also means that more and more of our resources would be used in the prison system, because the more unequal a society is, the higher the prison population is.

That, of course, combines with another tenet of the ACT Party, which is the so-called “tough on crime” policy. Basically that means locking up more and more people in jail for fewer and fewer crimes. That means—

David Garrett: Fewer and fewer crimes—you’ve got that wrong, Russel.

Dr RUSSEL NORMAN: That is quite right. The ACT Party is in favour of locking up more and more people for a wider and wider range of crimes—Mr Garrett is quite right. That means that more and more of the tax take would be spent on locking people up in jail. Because ACT wants to reduce the amount of tax that is taken but also wants to spend more and more money on prisons, there would be less and less money for spending on everything else.

If this process, this ruckus around Heather Roy, results in a weakening of the ACT Party agenda, then that is possibly a good thing for the country. It seems to me that it would be a good thing for the country if we did not go down the ACT line of having more privatisation, more inequality, and more people in prisons.

One of the other issues that Mr English touched on and is, I think, worth addressing is the deregulation policy that ACT—and to some degree National—has been pushing. We know that the leaky house fiasco, which is costing our country something like $20 billion, is a result of the deregulation that came with the Building Act of 1991. Had that Act, with its deregulation ethos, not come in, a lot of people would not have had leaky houses, and we would not have a $20 billion bill to repair those houses. One of the ACT’s fundamental tenets, which it has brought to this Parliament, is that deregulation methodology. It is, in fact, one of ACT’s strong points. The problem is that the 1991 Building Act has been very, very expensive for New Zealand.

The other part of this change that is quite significant is John Boscawen becoming a Minister. Mr Boscawen has many strong views, and they are honestly held views, but, clearly, he does not want to listen to the science on climate change. He is a climate change denier. He does not want to listen to the science on climate change, and it will be very dangerous for New Zealand if the executive is pushed in a direction where the science on climate change is more and more marginalised.

Will the replacement of Heather Roy with John Boscawen mean that the climate change deniers have more influence in the executive? That will be one of the challenges. In fact, the Government has weakened its emissions trading scheme already. It is not really coping with the increase in extreme weather events that is happening globally and that we need to prepare for, and that situation will become even more dangerous if those who do not want to read the science or listen to the science have a bigger say in the executive. That is one of the other dangers in this particular change in the ACT Party.

None the less, I accept that the ACT Party was voted for by New Zealanders. It has the right to be in this Parliament. It has the right to choose its own leaders. Although I may disagree with it on many issues and disagree with many of the policies of the ACT Party, I certainly respect its right to choose its leaders and to choose, as part of its agreement with National, which members of the ACT Party find themselves as Ministers in the executive. Thank you.

Hon RODNEY HIDE (Leader—ACT): I thank the co-leader of the Greens Dr Russel Norman for his contribution. I also congratulate Mr Darren Hughes, who has given us the opportunity to have this urgent debate in the House. He had the wit to put the application in and get it across the line. I say to the member that with another 9 years in Opposition, he will start to be a good Opposition MP. I also say to Mr Hughes that we welcome the opportunity to have this discussion about the Government.

For the benefit of members opposite, I would also like to contrast the incredible stability of the arrangement between the National Party, the Māori Party, United Future, and the ACT Party with the arrangement between the Labour Party and the Alliance. What happened? It fell to bits. There was also the arrangement between the Labour Party and United Future. What happened? It fell to bits. Then there was the arrangement between the Labour Party and New Zealand First. What happened? It fell to bits. Here we have a Government made up of the National Party, the ACT Party, and the Māori Party. Yes, we have our differences, but we are working together extremely well. I put that down to Prime Minister John Key, who has done a fantastic job as Prime Minister for the benefit of the country and of this Parliament.

I say to members opposite that the ACT Party was elected, and we had said before the election that we would support John Key as Prime Minister and would support a National Government. We said that again on election night, and we have kept our word. The people of New Zealand know that they have a stable, centre-right Government that is getting on with the business. As a consequence of the ACT Party, we have the 2025 goal of catching up with Australia, which is now exercising the Labour Party, and so it should, because it is important that we lift our economic performance. We have the task force to measure our performance. We are working with the Minister of Finance, Bill English, to get spending under control after the country was left in a disastrous state. We have red tape under control, we have local government being reformed, we have our “three strikes” legislation, and we have our inter-party working-group on school choice. Let me address this matter.

Phil Twyford: Where’s Heather?

Hon RODNEY HIDE: Let me explain this, I say to Mr Twyford. Yes, it is the case that under our caucus rules, we can change the leader and the deputy leader, and we follow a process. As soon as—

Hon Steve Chadwick: Why change Heather?

Hon RODNEY HIDE: I want to explain this, because it will explain the difference between members on this side of the House and members on that side of the House, and the difference between our Prime Minister and the previous Prime Minister. John Boscawen put it on notice in the ACT caucus that he would contest to become the deputy leader of the ACT Party.

Hon Members: Why?

Hon RODNEY HIDE: Because it was John Boscawen’s view that he would make a better contribution to the ACT Party as the deputy leader than he was making in his previous role. He was perfectly entitled to do that. As soon as John Boscawen lodged that application, I told the Prime Minister about it. I told the Prime Minister 13 days ago—12 days before the vote—that John Boscawen had put forward his name to become the deputy leader of the ACT Party. That is the level of trust that we have as parties. We discussed it in detail.

Then what happened was that I discussed with Prime Minister John Key what would happen—

Hon Darren Hughes: And what did you say?

Hon RODNEY HIDE: I tell Darren Hughes to be quiet for a minute, and I will tell him. I discussed with the Prime Minister what would happen in terms of our confidence and supply agreement if there was a change of deputy leader in the ACT Party.

Hon Darren Hughes: Did he ask why there’d be a change?

Hon RODNEY HIDE: No, we explained that it would be up to the caucus. We then discussed the situation. The Prime Minister explained that, actually, the ministerial position goes with being the deputy leader of the ACT Party.

Hon Darren Hughes: She’s named in the confidence and supply agreement. She’s named in it.

Hon RODNEY HIDE: We had a discussion, I say to Mr Hughes. The Prime Minister and I worked out our situation. We worked out the timing. The ACT members turned up to a caucus meeting. John Boscawen made his case to the caucus. Heather Roy made her case to the caucus. The ACT caucus had a vote, and I informed the Prime Minister of the result.

Hon Darren Hughes: Did he ask why?

Hon RODNEY HIDE: Well, I tell members that there is a funny thing about what the Labour Party does not get. I will tell members why they do not get it. It is called democracy, I say to Mr Hughes. We do not live in a party that was known by the name “Helengrad”. The Prime Minister understands that in a democracy a caucus can have a vote. I know that that is a hard concept for Labour members to grasp, but the ACT caucus can vote to change its leader and its deputy leader. I was then able to inform the Prime Minister of the result of the vote, and we made the requisite changes.

Mr Hughes has made a great play about transparency and accountability—a great play about transparency and accountability. We were absolutely transparent with the Prime Minister about what was going on. This was internal party business, and it might have been that John Boscawen did not succeed. It might have been that John Boscawen did not succeed. In the event, he succeeded, and we had a democratic outcome in our caucus.

Let me say this about Helen Clark—I looked over there and I do not know why, but I thought of that other woman. Let me say this about Heather Roy. Members have never heard me say a bad thing about Heather Roy. Members have never heard me say anything bad about Heather Roy. I accepted the result of the caucus vote, and I said to Heather that I thought it would be a good idea for her to take 2 weeks’ leave, which she is doing. Unlike the Labour Party members, we do not go and say of a respected member that we think he or she is mentally deranged, which is what those members do. We do not have a member being chased around by people with cameras. We respect the members of our caucus. Heather is taking 2 weeks’ leave. We hope that Heather will come back—and I believe that this will be the case—and will continue to make a great contribution to the ACT Party as a caucus member. Why? Because it is important that ACT members work well together and that ACT supports this Government.

Hon Darren Hughes: This is the beginning of the end for ACT.

Hon RODNEY HIDE: I say this to Darren Hughes—

Hon Darren Hughes: This is the beginning of the end for the ACT Party. It will not be here at the next election, and this man’s responsible for that. First to 2 percent; next to zero percent.

Hon RODNEY HIDE: Let me ask Mr Darren Hughes a question. I ask whether he is one of the ones who think that Labour can win at the next election, or whether he is with Mr Chris Carter, who tells the truth.

Hon Darren Hughes: I guarantee that there will be no ACT Party.

Hon RODNEY HIDE: Oh, we are going to be toast at the next election. I have heard that being said for a long time. I was hearing that, Mr Hughes, when you were still in short pants. Actually, come to think of it, you are still in short pants.

Mr SPEAKER: The Speaker is not, today, in short pants. He might wear them around the farm, but not here in the House.

Hon RODNEY HIDE: I apologise, Mr Speaker. I was referring to Mr Darren Hughes being in short pants—perish the image.

The ACT Party has emerged from this stronger—absolutely. I tell members that we have a stronger relationship with the National Government, the Prime Minister, the Deputy Prime Minister, Bill English, and, indeed, the Māori Party and United Future, because we know that these things can occur in a democracy. We have a commitment to the Government, the people of Epsom, and the people of New Zealand to provide good, stable Government, which is something that Labour could never do. Thank you very much.

TE URUROA FLAVELL (Māori Party—Waiariki): Kia ora Matua. Kia ora huihui tātou katoa. Hei wāwāhi i taku kōrero me rere tonu ōku whakaaro ki te āhuatanga o te mate e pīkautia nei e Ngāti Porou. Ko Te Kapunga Matemoana Dewes tērā, e takoto mai rā i runga i tōna marae. Ka mutu, ka huri ki Te Tai Hauāuru ki a Te Miringa Hōhāia, tērā o ngā pou o te ngahau o Parihaka. Koia tērā e takoto mai rā. Ki roto i a au, o roto i a Te Arawa, ko Peri Ngata tērā. Tēnei kāhui mate kua ngaro atu te tirohanga kanohi. Ahakoa kai te kōrerohia ko te āhuatanga e pā ana ki a ACT, i a au e tū nei, ko te tikanga o runga i te marae, kia kōrerohia wā tātau mate. Koinei au e tū nei. Me mihi rā ki a rātau. Waiho rātau kia moe, kia okioki. Ko tā tātau, ko te wānanga i ngā take o te wā. Nō reira, huri noa i tō tātou Whare, tēnā koutou, kia ora tātau katoa. Arā anō tētahi kōrero, kai roto i te Ao Māori.

Ko taua kōrero e pēnei ana “Whakatikatika i tōu ake marae i mua o te kōrero mō tētahi atu”. Nō reira, kāre i te tino pai ki a au te kōrero mō tēnei rōpū. Kai a rātau ō rātau tikanga, kai au ōku ake tikanga o roto i te Ao Māori. Ko te tikanga o tērā kōrero e pēnei ana. Kia katia tērā momo whiu i te kupu. Anei a Reipa e ārai atu, e pīkau nei, e hiki nei i te pū, ā, ka huri mai kia pēnei mai te pahū mai, ā, kua tukuna. Ēngari, anei anō a ACT, ka taea e ia te hiki tana pū, ka pahū atu ki a Reipa nā runga i te āhuatanga o te tangata Carter. Arā anō a Reipa, hikina tana pū, ka huri mai ki a Nāhinara, ko Richard Worth tērā. Ā, ko Nahinara, ka hikina tā rātau pū ki a mātau o te Pāti Māori, kāre anō tētahi kia puta ēngari, ko te tikanga o taku kōrero, he pērā anō te āhua. Tātau katoa o konei, he raruraru ka puta i waenganui i a tātau o roto i ngā rōpū, tātau katoa e taea ana e tēnā, e tēnā, e tēna o tēnei Whare te hiki atu i te pū, ā, ka tukuna atu ki tētahi atu o te Whare Pāremata. Koinā te tikanga o tērā kōrero “Whakatikatika i tōu ake marae i mua o te kōrero mō tērā”. Nō reira, anei au e kī nei, ā, he raruraru anō rā kua pahū ake i roto i te Pāti Māori ngā marama kua hipa ake ēngari, tōna mutunga mai kua noho piri, kua noho tata, ka tahi.

Ka rua, ko ngā āhuatanga o tēnā rōpū, o tēnā rōpū, kai a koutou tērā. Nō reira, kai te āhua whakaae atu ki te kōrero o te tumuaki, te kaiārahi o ngā Kākāriki me tana kōrero, ko ngā kōrero o tēnei rōpū, ko mātau ko te kī atu, kai a rātau te tikanga. Me te mōhio anō hoki, mēnā ka tū mai rātau ki a au a Pāti Māori, ka kī atu, e kī, e kī, e noho, e tau ki raro. Kāre mātau e paku whakaae atu, kia riro mā tētahi atu mātau e kohete mēnā kāre rātau i te mōhio ki ngā nekeneke o roto i a mātau. Nō reira, he paku kōrero tērā nō roto i te Ao Māori, kia kōre tētahi e noho i te rangirua.

I te mea ko te wahine nei he wahine pai. He wahine pai a ia. He wahine o roto i te tāne, ō, he uauatanga tērā i ētahi wā. Ki te noho te wahine i waenganui i ngā kāhui tāne, he āhua uaua. Nō reira, kua noho au, kua mahitahi au me tērā o ngā wahine, he wahine pai, i kaha nei ki te mahi i tāna mahi me te tūmanako ia, ka hoki mai ki roto i te Whare Pāremata. He moumou tērā wahine kia tukuna ki te koraha ēngari, kai a ia tonu te tikanga. Ko tā mātau ko te Pāti Māori, ko te kī atu, kei konei mātau hei hoa haere mō te rōpū Nāhinara, he wā tōna pea, ē, kua noho hei hoa haere mō tētahi atu. Ko wai ka mōhio? Ēngari tēnei wā, ko tā mātau titiro, kaua mō nāianei tonu nei, kaua mō āpōpō, kaua mō ātahirā, kai te titiro kē mātau mō ngā tau kai mua noa atu i te aroaro.

Ehara i te mea kei te rata atu au, mātau o te Pāti Māori, ki ngā kaupapa katoa e whai haeretia e te Rōpū ACT, kāo, kāo. Ko tā rātau ko te kī, kaua a Māori nei e noho i runga i te kaunihera o Tāmaki. Tino kawa mātau ki tērā whakaaro. Tino kawa. Kāre mātau i paku whakaae atu ki tērā. He aha i pērā ai tana kōrero? Nā te āhuatanga o te “democracy”. E kī, e kī. Ko tana kōrero, “one person, one vote”. Hā, te mutunga mai ka tae mai te rōpū nei i raro i te aha? I raro i te MMP. Kaua i runga i te āhuatanga o te one person, one vote.

Nō nātata nei kua puta ngā kōrero, ngā whakawhiu, ngā whakahē mō te āhuatanga o ngā whakataunga kerēme. Kua tae mai ngā iwi ki roto i ngā pakitara o te Whare nei, kua hara mai i runga i te humārie, kua tae mai nā runga i te hiahia kia whakatau i wā rātau kerēme i raro i te Tiriti o Waitangi. He aha te mahi o te rōpū nei? Ē, karawhiuwhiu haere i ētahi kōrero ki te āhuatanga o te Ao Māori. Nō reira, koinei au e kī nei, kai te āhua noho kawa au ki ētahi o ngā kōrero o tēnei rōpū.

I tōna mutunga mai, ko ngā mahi e mahia nei e rātou, kai a rātau te tikanga. Pēnei i a au, ko ngā mahi o te Pāti Māori, kai a mātau te tikanga. Me pēnei rawa te kōrero, he pai kē nā runga i te āhuatanga o ngā kōrero kua puta i te rā nei, he pai tonu te noho hai hoa haere, ki te noho hai hoa riri. I tōna mutunga, he wā tōna, ā, he rangi ātaahua tēnei rāngi, he rā tōna, ē, kai te pō uriuri, kai te pō tangotango te ngākau. Nā runga i te aha? Nā runga i te mea, e kore ētahi o ngā tūmanako o roto i te Pāti Māori i eke ki ngā taumata e wawatatia ana. Hoi anō, koinei te āhuatanga o te noho i tēnei Whare Pāremata. Ēngari i tōna mutunga mai, ki te noho i tērā taha o te Whare, ē, kua rongo au i tērā momo noho. Kāre au e tino rata atu ki tērā momo noho i te mea, i tōna mutunga mai, ko tāu he whiu i te kōhatu, i ētahi wā ka hoki mai te kōhatu ki te pao i te ūpoko. Koinei te mate o te noho hei hoa riri.

Ka noho ki konei, ahakoa pai mai, kino mai, i tōna mutunga, nā runga i te āhua o tēnei mea o te kōrero, ka whiriwhirihia ngā painga mō tō rōpū, i tōna mutunga mō te Pāti Māori, mō te iwi Māori.

Nō reira, e kī ana tētahi kōrero i roto i te Ao Māori: “Ko te kai o te rangatira, he kōrero”. Nō reira, koinei tā mātau me te Rōpū Nāhinara, he kōrero, he wānanga, he whakawhitiwhiti whakaaro, he kohete, he amuamu, he kōhumuhumu ēngari, i tōna mutunga mai, ko te whakatau ka puta i waenganui i a māua, koia tērā. Ko te āhuatanga o tā Nahinara ki a ACT, kai a rātau tērā. Kāti, kua rahi tēnei.

Koinei te āhuatanga o te Pāti Māori, me tā mātau kī nei, ē, waiho ake tēnei rōpū ki a ia anō, ka waiho ake ngā raruraru, ngā painga, ngā kino, ngā āhua reka o te Pāti Māori ki a mātau. Kai te titiro mātau ki te paerangi, ki ngā tau kei mua i te aroaro kia eke ki te taumata e wawatatia nei e te Ao Māori. Nō reira Mr Speaker, e te Whare huri noa i tō tātau Whare, tēnā koutou, tēnā koutou, kia ora tātau.

[Greetings, Mr Speaker, and greetings to us all. As I open my address, my thoughts immediately go to the death borne by Ngāti Porou—that is Te Kapunga Matemoana Dewes, lying in state on his marae. Next, I turn to the west, to Te Miringa Hōhāia, one of the pillars of the Parihaka International Peace Festival; he is the one lying there in state. Within my own region of Te Arawa, that is Peri Ngata lying there—this assemblage of the dead, lost, and no longer to be seen. Even though we are debating the situation of ACT, the protocol on the marae as I stand here is that we must acknowledge our deaths. This is why I am standing here. Acknowledging them is a must for me. Allow them to slumber and rest there. Our task is to debate the issues of the day. So to you, collectively throughout our House, I extend salutations to you, and to us all.

There is an aphorism in Māoridom: “Put your own marae in order before telling others to sort out theirs”. I am not really at ease commenting on that party. It has its own protocols, and I have mine from a Māori perspective. This statement means that we desist from throwing that kind of talk about. Here is Labour, defending, carrying and raising the gun, turning it in this direction so it bangs this way, and then firing it. But here is ACT, as well. It is able to raise its gun, and fire it at Labour, because of the situation of that man, the Hon Chris Carter. There is Labour again: it raises its gun, turns it towards National here, and, bang, that is Dr Richard Worth done for. National, in turn, raises its gun and aims it at us of the Māori Party. We have not lost anyone yet, but what I am implying has the same outcome. If a problem wells up amongst ourselves in our party—and it applies to us here—we can all, each one of us in this House, lift up the gun and fire it at someone else. That is the meaning of the aphorism “Put your own marae in order before telling others to sort out theirs”. What I am alluding to is that we too had a problem, which blew up within the Māori Party in the past months, but at the end of it all we have remained tight, close, and united.

That is one issue. The second one relates to situations that arise within each party. It is totally for them to deal with. So I agree somewhat with the statement by the co-leader of the Green Party, when he said that what that party is saying is endorsed by the Greens because it is its right. Mind you, if they get up and tell me what the Māori Party should be doing, my response would be “Is that so? Take a seat and settle down.” We would never agree to others taking us to task if they do not know how we operate internally. Not one bit. That is a little bit of advice from a Māori way of looking at things, so that no one is confused.

Because this woman is a good one; she is fine. She sits amongst males, but can be difficult at times. To live in a male environment can be difficult. However, I have experienced it; I have worked alongside her, and she is good. She works hard at carrying out her responsibilities. The hope is that she comes back into the House. It is a waste for that woman to be left out in the wilderness, but the obligation is still with her. We of the Māori Party say that we remain here as a coalition partner with the National Party, but there may come a time when it is with someone else. Who knows? But at this time we are not just looking for now, for tomorrow, or whenever, but for the distant future.

It is not as though I am, or we of the Māori Party are, satisfied with all the policies the ACT Party is running—no, no. They advocate that Māori people should not be represented on the Auckland Council. We find that idea very distasteful—not palatable, at all. We do not agree with that, at all—not one bit. What prompted that? Because it is “democracy”. Yeah, right! “One person, one vote” is what the member goes on about. So in the end, how did that party get here, and under what banner? It was under MMP—not under the one person, one vote principle.

Remarks, sanctions, and objections about settlement claims have appeared recently. Tribes have arrived here, within the confines of this Chamber, in all modesty and with the desire that their claims under the Treaty of Waitangi be settled. So what is that party doing? It is giving anything to do with Māoridom a real bash. That is why I am saying that some statements by that party leave a bitter taste in my mouth. But in the end, what they do in their party is their business; that is their right. And what we do in the Māori Party is ours to deal with. We have that right, as well. However, I must concede that on the basis of what came out of the speeches today, it is somewhat comforting to be a coalition partner, and not in Opposition.

At the end of it all, there will be a time when today is a beautiful day, and another time when one experiences the dark and gloomy side of being here. Why? Because some aspirations within the Māori Party will not be achieved to the level desired. However, that is the situation of being here in this Chamber. In the end, being on that side of the House—and I have been there—is an experience that is rather disconcerting, because the role of an Opposition is to throw stones. At times, the stone will fly back and hit you on the head. That is the trouble with being in Opposition.

But when you sit here on this side, despite the good and bad times one is able to negotiate through the power of talk what would ultimately be for the benefit of the Māori Party and the Māori people.

There is a proverb in Māoridom:“Talk is sustenance to the chief”. That is us and the National Party—talking, holding discussions, exchanging views, scolding, whispering. The decision that emerges between us at the end of it becomes a final and joint one. What National and ACT arrive at between them is theirs. Enough said. That is sufficient.

The situation as far as the Māori Party is concerned, and we say again, is to leave that party to deal with what is rightfully theirs to sort out. The problems and the benefits, and the bad and the delightful that concern the Māori Party, should be left for us to address. We are looking at the distant horizon, and to the years ahead, when Māoridom reaches the desired pinnacle. To you, Mr Speaker, and to everyone throughout our House, greetings, greetings, and greetings to us all.]

Hon TREVOR MALLARD (Labour—Hutt South): I join my colleague Te Ururoa Flavell, who has just resumed his seat, in acknowledging the death of Koro Dewes, who was someone I spent quite a lot of time with over the last 35 years. I first went to Tikitiki with him in, I think, early 1975, and we spent some good times in the wharenui around the fire until the—well, I was about to say until the early hours of the morning, but it was probably later than that. He was someone who made a difference to my life and he was a very special person. There are some other stories I could tell that might be appropriate for the marae, but probably are not appropriate for the House.

Having joined with the member on that point, I will take a contrary point of view on whether it is necessary within politics to have transparency and accountability. We have had a party, ACT, that has stood for those principles. Openness has been extremely important from its point of view. What we have seen yesterday and today is a party that is attempting to shut down debate and not give reasons to the public for, as it was described by Rodney Hide, the case that was made for change by John Boscawen. Of course parties change their leaders and deputy leaders all the time. I think the closest parallel to this case that I can remember is David Lange taking out Bob Tizard in the early 1980s or—

Hon Darren Hughes: 1979.

Hon TREVOR MALLARD: —in 1979. It was pretty bitter. Roger Douglas was in the Labour caucus at that time and he was one of the main proponents of that change. I gather he was on the other side, on the receiving end, on this particular occasion.

We have heard some things in this House today from Rodney Hide that can only be nonsense. He has talked about his respect for Heather Roy. If he had any respect for Heather Roy at all, he would be honest with this House and with the public of New Zealand about the reasons she has gone.

Hon Annette King: And he would have voted for her.

Hon TREVOR MALLARD: Well, I am not saying that he has to vote for her and I am not saying that the party cannot change. I am saying that we expect from members of this Parliament, and from people who are getting extra salaries as a result of being leaders of parties, some sort of honesty, transparency, and straightforwardness as to the reasons for what they have done. What is also interesting to me is the degree of complicity from John Key in this change. His closeness to Rodney Hide has become clear. We have been told in the House today that John Key knew for 13 days that Heather Roy was to be taken out, but he would not return a phone call from Heather Roy. We have to be very careful how we express this in the House, but I would have said that a man of courage, a man of integrity, and a man who supported his Ministers when he is Prime Minister would have taken that phone call. He would have had the backbone to take the phone call and listen to Heather Roy. He did not have to say anything or agree with her, but to say that he would not talk to her because Rodney Hide has told him not to is an indication of who is pulling the strings in that particular relationship.

It has been a little bit apparent for some time that this has been coming. Heather Roy is straightforward. She is honest. She does not take the Boscawen approach and the Hide approach of knifing people in the back. She has made it clear that she wanted an ACT Party that had enough votes to make a difference. She wanted an ACT Party in the House that was not dependent on one member in the way that it is now. She wanted ACT to have broader appeal and to be a principled party, the way it was when Richard Prebble and Roger Douglas had a leading role in the party in the past. She said that the current approach that is being taken is not good enough, but she also asked some other questions.

I understand that one of the questions she asked was whether it was appropriate for the ACT Party to be taking money from David Henderson when he was not paying his other bills. She asked whether it was appropriate for the ACT Party to be taking money from David Henderson when he was not paying the Inland Revenue Department and the Christchurch City Council. She also asked whether it was appropriate for David Henderson, Bob Parker, Rodney Hide, and John Key to go to Queenstown together and spend time making political arrangements. Was it appropriate for the four of them to be together in Queenstown? Was that appropriate for Rodney Hide as a Minister? It was even less appropriate for the Prime Minister to spend time with Bob Parker, Rodney Hide, and “Davo”—as he is called by Rodney Hide—Henderson. I think that Heather Roy asked the right questions as to what is appropriate behaviour for the Prime Minister and for her own party leader. I think the idea of meeting in that way with David Henderson is wrong. The idea of taking money from someone who is not paying the Christchurch City Council or the Inland Revenue Department is wrong, and a party should not do it. I commend Heather Roy for blowing the whistle on that sort of arrangement.

I think we are beginning to get pretty close to what the real story is—that is, that Heather Roy said to Rodney Hide that she thought it was inappropriate for him to take documents from her office. I understand that he has denied taking documents that he was not meant to have. Well, certainly within the previous Labour Government, there were documents that were top secret documents that some Ministers got and others did not. It was not a matter of security clearance because we did not clear our Ministers, but we had arrangements whereby our senior group of Ministers—if, for example, the Minister of Defence was a less senior Minister and that person was involved—had clearance for those documents and other Ministers did not. We thought that that was appropriate, especially when it concerned the safety of New Zealand service people or security people abroad or in New Zealand. I am not sure whether we agreed, but Helen Clark said that the arrangements would be like that.

I want to know why Rodney Hide took those papers and why he gave them to Nick Kearney, a former member of the ACT board. I am not saying that he gave them to him directly; there might have been a staff member involved. Nick Kearney was, until last night, a member of the ACT board. He resigned from the ACT board because he was caught trying to give New Zealand defence assessment papers to a blogger. He picked the wrong blogger, because that person was an ex-military person who had integrity and who said that that was inappropriate and should not happen. Apparently, now the SIS is involved. I do not want to go too far down that track, because, you know, we do not talk about those matters too much in the House. I ask the ACT Party why Heather Roy got the sack because one of Rodney Hide’s mates on the board got some secret papers. It is absolutely wrong. John Key, who is in charge of the SIS and the overall security intelligence situation in New Zealand, needs to tidy that party’s act up and not let it sack a Minister for having integrity.

Hon Sir ROGER DOUGLAS (ACT): The fact is that within the ACT Party caucus we have a democratic process in terms of electing our leaders and deputy leaders.

Hon Member: Unlike Labour.

Hon Sir ROGER DOUGLAS: I will get to Labour in a moment. This week we had a vote of 3 to 2 to have a change of deputy leader. This vote was like every other vote that I have seen within Labour or anywhere else.

Heather, as a result of that vote, is somewhat bruised, but I have seen a lot of people who have been replaced bruised in that way. I have talked to Heather today, and I know that she accepts the result. She is looking forward to coming back to Parliament and sitting on the Education and Science Committee; she will be taking my place, I might add. She wants also to look after the health vote, which I am responsible for, and I think we have been talking about her taking over her old bill, the Education (Freedom of Association) Amendment Bill. In other words, she is ready to get on with the job. Naturally she is hurt about what has occurred; one would not be human otherwise.

Unlike the Labour Party, the ACT Party has a democratic process. The Labour Party used to have a democratic process in the 1970s and 1980s, and I can remember a number of votes then. Trevor Mallard mentioned a vote for the deputy leadership between Bob Tizard and David Lange. At that time it was a democratic process. When Cabinet was elected, there was always a democratic vote. Generally speaking, we would see 13, 14, or 15 members get through on the first ballot, and then we would see up to another 20 ballots before we finally arrived at 20 votes, or 20 people in Cabinet.

But, of course, that changed recently. The Labour Party does not have a democratic process any more. Helen Clark changed all that. She was for a democratic process if she got in in the 1980s, but was not so happy when she did not. She had an arrangement whereby she would sit down with Michael Cullen and they would prepare a list of 20 members. They would go and touch those 20 members on the shoulder and say that they had decided that they should be in Cabinet, but they could be in Cabinet only if they were prepared to vote for the other 19 members whom they had decided on. We had this situation, under Helen, whereby she tapped 18 members on the shoulder and said they were in Cabinet, but only if they voted for the other 17. That was not necessarily a majority. Then they selected six or seven members who would be Associate Ministers, and they did the same job on them. They said they were sorry they did not get into Cabinet and that they were not on the list to get into Cabinet, but they would be pleased to know they were Associate Ministers. But they could be an Associate Minister only if they voted for the 20 members in Cabinet. That is the democratic process of the new Labour Party.

Hon Member: What about the transparency process of the ACT Party?

Hon Sir ROGER DOUGLAS: There is no transparency whatsoever in the Labour Party. I think the only person who stood up—

Sue Moroney: Tell the story. Tell us what happened in caucus yesterday.

Hon Sir ROGER DOUGLAS: Oh, I am wrong, am I? I do not think so. That is the democracy that now goes on within the Labour Party.

CAROL BEAUMONT (Labour): I find this extraordinary. ACT is supposedly the party of transparency, led by Rodney Hide, who has shown us all, in the time I have been in Parliament, his complete lack of transparency and accountability. There was his travel, of course, and now we see that a Minister has been deposed and the people of New Zealand have not been informed at all as to the reasons for that. We have the unbelievable situation of the Prime Minister telling us that despite knowing that this was on the cards for nearly 2 weeks, as we found out recently, he has no idea why. That is what he told the public of New Zealand.

What are we to make of this? What are we to make of the demise of Heather Roy? Is it because she did not do a good job as a Minister? Is it because of some of the very serious matters that my colleague Trevor Mallard has outlined, about secret papers and papers being taken by Rodney Hide?

Certainly, we know that Rodney Hide is indeed a bully. As a member of Parliament from Auckland, I know that to be true, as do all Aucklanders. We have seen his bullying behaviour and tactics over the formation of the super-city. We now see that with a caucus of five members, he cannot control a situation without having to throw out one of his own members—in fact, his own deputy. We do wonder what that says about his ability to establish a structure that works for the diverse population that makes up Auckland.

But who is in charge here? Certainly, we have to wonder whether the real reason that Heather Roy is gone is that Rodney Hide has all of the power in the ACT Party. After all, every single one of those members is reliant entirely on Rodney Hide, and on Rodney Hide winning Epsom. Without Rodney, there is no ACT Party in this Parliament. He certainly has enormous power, and we know that he is a bully. If we put those two things together, then clearly Rodney wanted Heather Roy gone. We do not know the precise reason—whether she challenged him, as has already been asserted, or whether he felt she was not up to the job. The Prime Minister, as, effectively, the person in charge of our Cabinet, the most senior person in the country, cannot tell us the reason either. Well, I think that New Zealanders have a right to know.

I will also take the time to talk about what this says about the consumer affairs portfolio. I congratulate the new Minister of Consumer Affairs. I think that is only proper, as I am Labour’s consumer affairs spokesperson. I will be working with Mr Boscawen in a productive manner, I am sure. But what message does it send about the importance of this portfolio? Basically, ACT can just get rid of the current Minister and put another one of its members in her place. I wonder about that.

Consumer affairs is particularly important in tough economic times, like the times we are facing at the moment. The unemployment rate has risen to 6.8 percent in the last quarter, and 159,000 people are unemployed. There have been 19,000 more people unemployed over the last 3 months. In tough economic times, making sure that consumers are well informed, making sure that consumers are protected from rorts and rip-offs, is particularly important. Having some sense of what has happened to the Minister of Consumer Affairs seems to me to be an important question for the public of New Zealand.

The Minister has effectively been summarily dismissed—something that this Government is very fond of. All New Zealanders, for the first 3 months of their employment, will be in the situation where they can be dismissed without any reason being given and without any recourse to justice. Of course, that is precisely the situation that Heather Roy is in.

I will make just a few comments about consumer affairs, in a very constructive manner, to Mr Boscawen as the new Minister. I think that a number of areas need to be looked at, such as improving consumer knowledge and protection, and looking after vulnerable consumers. I am hopeful that Mr Boscawen’s stated concern for the victims of loan sharks may mean that we will have more interest shown in this particularly important issue—one that National and ACT to date have shown complete disdain for and a lack of concern about.

I recommend to Mr Boscawen that targeting exploitation is pretty important. Of course there is the need to update consumer law, but in a way that takes account of the view of consumers. One of the areas that I think is a problem for an ACT Minister of Consumer Affairs is that consumer affairs requires regulation, which is something that we know ACT is not particularly aware of. Finally, the other matter is the need for recognition of greater global consumer awareness. Thank you.

CHRIS TREMAIN (National—Napier): Political walruses rolling in a sea of sewer water—that is the occupation of members on that side of the House. They are not rolling in it; they are wallowing in the sea of sewer water. What we see today, yet again, is Labour Party members jumping into the gutter at every opportunity that is presented to them. This debate is a political exemplar of the stark differences between the two sides of the House. Members on this side of the House are focused on taking New Zealand forward, lifting our economic game, and lifting wages. We are totally focused on that. I will be talking about that plan. Members opposite are wallowing in a sea of sewer water. They have personal agendas and they attack other parties. That is what they are all about. Whenever there has been an opportunity, they have taken it. Whether it be in respect of Richard Worth, digging dirt on John Key throughout the last election, or sending people to Australia to dig dirt on personalities, that is the agenda of members on the other side. But members on this side are focused on taking this economy and this country forward. We have had plenty of opportunities to dig the dirt and go after Chris Carter and Shane Jones when those situations were presented. In previous general debates, we have had plenty of opportunities to talk ad infinitum about the difficulties they got themselves into. Did anyone hear anything about that from members on this side?

Hon Members: No.

CHRIS TREMAIN: Not a bean! Did anyone hear us calling for urgent debates about Chris Carter or Shane Jones?

Hon Members: No.

CHRIS TREMAIN: There was nothing. We are focused on an agenda of taking this country forward, while members opposite wallow in the sewer. The sooner they realise that they need to get themselves out of the sewer, the sooner New Zealanders might start listening to what they are saying.

I will use the rest of my time to talk about lifting our game for this economy, because that is what I am interested in. I want to talk about the amazing plan that is led by the Prime Minister. This plan will take this country forward in leaps and bounds. It is a six-point plan for a growth-enhancing tax system. It is absolutely fantastic. We want better, smarter public services. We want to lift education in schools, and that is being done through the work of the wonderful Minister of Education, Anne Tolley, who is doing a fantastic job around the country. Parents and teachers are getting on board with national standards. It is absolutely magnificent.

Another part of the plan is boosting infrastructure, and we are seeing a roll-out of infrastructure around the country. It is absolutely magic. We want better business innovation and an ambitious trade agenda. When I go back to the Hawke’s Bay, all of a sudden the sheep and beef industry has options for exporting its lamb. The other day, one guy told me that the industry had actually turned down Sainsbury’s, because the industry now has other options in other markets. That is absolutely magic and is lifting the game for our economy.

The sixth part of the plan is cutting red tape and regulation. Members on this side have a plan to take the economy forward and lift our game. Members opposite continue to wallow in a sea of political sewage water. That is them; that is what they do. Mr Mallard is making swim-like movements. I rest my case. We are here for the economy and for the people of New Zealand. We are focused on the things that matter to hard-working Kiwis. Thank you.

The debate having concluded, the motion lapsed.

General Debate

General Debate

Hon BILL ENGLISH (Deputy Prime Minister): I move, That the House take note of miscellaneous business. So the party that is mired in splits and divisions calls a snap debate on splits and divisions. Now, that is a great strategy, in the same way as the party that is responsible for all the damage to the New Zealand economy is trying to front-end the economic policy as its strongest point! It is a bit like Trevor Mallard saying that other people are unbalanced. That is the strategy of a party that is still struggling, and understandably so, with the challenges of being in Opposition. The one hurdle that members opposite must get over—there are a lot of hurdles in Opposition, and we know a bit about that—is to admit the voters were right.

Hon Members: Ah!

Hon BILL ENGLISH: They have to admit the voters were right. How close do we think the Labour Party is to admitting that the voters of west Auckland were right to throw Labour out? It is no closer than it was a week before the last election—no closer. With all the other machinations—all the little tactics, all the very odd strategies such as we have seen today—that is the one hurdle members opposite are nowhere near getting over. I think that will happen in about year 4 or year 5, probably, which is a long way to go.

The interesting thing is that the voters know when a party has got over that hurdle. It does not matter how clever a party is, or whether it is the most cohesive and smartest political machine that was ever invented—and still run from New York by the sound of it—the voters know that the Labour Party still thinks the voters were wrong. Guess what? The voters think they are right, I have found. The voters have not changed their mind. Actually they think they are in charge. I know the Labour Party does not understand that, yet. It still thinks that Darren Hughes is in charge. It still thinks that Phil Goff is in charge. Actually, Chris Carter is in charge. He is the one who is really telling the voters what the voters believe—that Labour cannot win, there are splits and divisions, and they cannot make up their mind about their policy.

The Government, fortunately, has the opportunity—given to us by those same voters—to grasp the challenges, and particularly the long-term challenges for the economy. Those are considerable. They have always been a bit of a challenge in this small, open economy at the end of the world but they have been made much larger, much more challenging by the actions of the last Government, particularly since 2005, where its policies effectively wrecked the tradable sector of a trading nation. If a Government is going to damage a trading economy, it could not have done more than the last Government did. There has been a 5-year recession in our export sector, in the best economic conditions—that decade was called the “great moderation”—where other countries grew very strongly. Just by way of example, in the 4 years to March 2010 the Australian economy grew 11.6 percent; we grew 2 percent. Then we found out in recent days that if one takes the statistics that Governments use to calculate national superannuation—that is, the average wage series that is used to calculate national superannuation—and one adjusts it, takes the after-tax numbers, which the Government takes when it is adjusting national superannuation, which is the after-tax average wage, and adjusts it for inflation, guess how much New Zealand incomes grew on that series—which is used for national superannuation, so it is not one randomly selected? For 9 years it grew by 0.3 percent. [Interruption] It grew by 0.3 percent. I thought that meant 0.3 percent a year, but it does not. No, most of that growth happened while Labour was still enjoying the benefits of the previous National Government’s policies. From 2004 on it was almost zero. I think 0.3 percent was the actual result. From 2005 on, real after-tax incomes, as measured by Statistics New Zealand with the tool it uses for calculating national superannuation, had almost zero growth.

Hon DAVID CUNLIFFE (Labour—New Lynn): The previous speaker, the Hon Bill English, sat down in a hurry, and well he might. On the subject of splits and divisions, let us call to mind the record of John Key and Bill English. Let us think about policies that matter to real New Zealanders. Here is the top of the list. Bill English said that the Overseas Investment Office should be open slather, that we should bring in the buyers for Crafar farms and let Sammy Wong and the others have their way with it. Guess what? John Key said no, we would be tenants in our own country. He said that Mr English could not do that.

Let us talk about KiwiSaver, shall we? Bill English said that KiwiSaver was a rotten system that was not working. Bill English has been doing some polling and he now says it is time we had a policy. After 2 years the Government has set up a committee, but Government members cannot agree amongst themselves. On tax policy, John Key said we should make tax better and we would not increase GST. Bill English said that we would—we are putting up GST on 1 October. Every New Zealander will suffer.

In his speech Bill English said that the voters were right. I do not know about that, but I know that voters gave National a chance. Kiwis are fair-minded people. They said that Labour had had three terms and they should give National a chance to see what it could do. Do members know what the voters have found out? National promised them we would catch up with Australia. We went backwards by 50 bucks a week for the average worker, and we are falling further behind. National said it would stop the brain drain across the Tasman. What have we got? The June-on-June number—the number of Kiwis leaving—has doubled from a year ago.

National said it had a plan—wrong. A plan is not a goal. A goal is not a strategy. A plan has a map: we know where to start, we know where we want to get to, we work out the milestones, and we have a compass to get us along the way. Is that what this National Government has given New Zealand? It does not have a plan. It does not have any more than a series of slogans, and it is running from poll-driven fruitcakes to flip-flops—flip-flops.

In the last 3 months 19,000 more New Zealanders have lost their jobs and the number of unemployed has risen to 159,000. I want to talk about just two of those New Zealanders, both from my electorate, whom I have seen recently. “Mrs U” worked for 14 years in a rest home in Epsom—14 years. She was sacked without notice. She was rung up and told not to come to work, because her employer had ended up hiring a younger, newer person on a lower wage rate. “Mrs U” got a reference after 14 years that had four lines in it—after 14 years of hard work. That is one example.

I will give members another example. “Mr E” lives in Kelston. He is a Polynesian worker at a factory in Penrose. He is an honest man. He has four children and a wife. He lost his job in the recession because this Government did not have a plan for jobs. Now he cannot afford a State house, and he and his family have moved in with his brother. There are eight kids and four adults in one 2½-bedroom house. That Government has no plan. There are 19,000 more New Zealanders like those 12. “Mrs U” was sacked at will because this Government’s latest fad is firing workers and cranking down employment conditions.

The list of National’s reversals and short-term flip-flops has got so long that it is a joke. Those members called it a rolling maul, but it looks to me like a ruck up. Catching up with Australia? The 2025 Taskforce was dead on arrival. The Job Summit and the national cycleway were both scaled back. The 9-day working fortnight was cancelled in the middle of a recession. Budget 2009 deferred pre-funding superannuation and lied to New Zealanders about it. It created a $50 billion fiscal hole. It reduced stimulus and it raised unemployment. Budget 2010 broke a promise by raising the rate of GST. Most New Zealanders will be worse off next year when they face 5.9 percent inflation.

Who knows where the review of the Overseas Investment Office will come out? Bill English wants to liberalise it and John Key wants to tighten it. What about the latest random walks on their map: mining national parks, firing at will, so-called compulsory superannuation, and—here is the newest stuff—savings?

Hon ANNE TOLLEY (Minister of Education): Well, I am absolutely astounded. I am absolutely amazed to hear in this House that after 9 years of Labour, in the best years—in fact they were described as the best years of a generation—

Dr Cam Calder: The golden years.

Hon ANNE TOLLEY:—the golden years—of Government surpluses that we could only dream of, everything going for it, that under a Labour Government the real after-tax increase in wages was 3 percent. It was 3 percent after 9 years, and that happened in the first 4 years—

Hon Members: Rubbish!

Hon ANNE TOLLEY: Members opposite say that that is rubbish. Well, we know that they did not listen to advice. We know that they never listened to any of the advice. They did not help New Zealand. They did not help ordinary New Zealanders with all that. They did not help ordinary New Zealanders by reducing taxes, until right up to the last when they thought they would lose an election. In fact, they drove up Government spending. They did what Labour Governments have done every time they get into Government and they get a bit of money: they spray it round like confetti. Anyone who had a little programme, who had a little itch, it was scratched by Labour dishing out heaps of money. They had programmes, plans, strategies, and initiatives, but what did that achieve? It achieved a real increase in wages of 3 percent over 9 years. That is pathetic—absolutely pathetic. Then when the previous Labour Government was kicked out by the public, who knew it was pathetic, it left the incoming National Government with an economic mess. It left a Government absolutely riddled with promises for expenditure.

I came into the tertiary education sector as the Minister for Tertiary Education and found half a billion dollars—half a billion dollars—promised but not funded. That was half a billion dollars. It was right throughout the sector. Young people were out of jobs, out of school, and with no literacy and numeracy skills. That is the most outrageous thing that the previous Labour Government did. It failed the young people of New Zealand.

Grant Robertson: So last century.

Hon ANNE TOLLEY: Labour members knew what they needed to do. In fact Trevor Mallard, as Opposition spokesperson on education, said in 1998 that a national system of benchmark testing was needed so that principals and teachers could significantly raise standards in schools and help New Zealand to regain its status as a world leader in education. He knew that in 1998. Those members knew from research that was undertaken, like the Iterative Best Evidence Synthesis and Strengthening Education in Mangere and Otara, what needed to be done to lift the numeracy and literacy skills of young children in our schools. But what did those members do? They ignored that, and let those kids fail. For 10 years they stood by and watched as the unions stopped them—the unions stopped them—from implementing what Trevor Mallard knew had to be done: setting benchmarks so that we clearly understand what children need to know and by when.

So what was the first thing that this National Government did? It introduced the national standards that Trevor Mallard talked about. “So last century.”, the member said. What about the kids who are suffering in this century because they did not get that help from the so-last-century Labour Government? Well, this Government has acted, and, quite frankly, the previous Labour Government should hang its head in shame for failing up to one in five New Zealand children in our schools—up to one in five. That is 150,000-odd kids. How many of them have been cast out on to the streets in this recession not only with no skills or qualifications but not able to read, write, or do maths at anywhere near the level they need to get an apprenticeship or even a semi-skilled job? When we talk to some of the employers they shake their heads. They ask how a compulsory education system could allow kids to go through school for 8 or 9 years and come out unable to write a sentence or fill in a simple employment form. They ask how that could happen. The previous Government knew what to do. There was good research put out on the Progress in International Reading Literacy Study of 2001.

Hon DAVID PARKER (Labour): We heard the Prime Minister today admit, under questioning from Phil Goff, that the Government is struggling to make progress. Those were his words—struggling to make progress. He said it was because the Government had inherited a mess from the previous Labour Government. Let us just reflect on that. National inherited zero net debt, gross Government debt that had come down from 38 percent to 17 percent of GDP, and an unemployment rate that was amongst the lowest in the world. So let us park that mantra from National to the side.

Hon David Cunliffe: Minor details.

Hon DAVID PARKER: Yes, minor details. John Key said the Government is struggling to make progress. I was amazed to hear that acknowledgment today. The Government is struggling to make progress. I think we might hear more about that in Parliament over the next few days. That was an incredible admission from a Government that has already been labelled by the media as lacking a plan.

The Government is struggling to make progress because its members do not know what to do. Look, I am not the only person who thinks that.

Hon Steven Joyce: No.

Hon DAVID PARKER: I tell Mr Joyce that after the little gaffe of making a mistake about whether the gap was widening between New Zealand and Australia, and after Mr Key followed Mr Brownlee down that slope, Mr Key was accused by TV3 of being too selective and slippery. For the Prime Minister to be called slippery is not very good. The New Zealand Herald said “This provided its own commentary on the Government’s attempt to close the gap,”—and this is the New Zealand Herald—“which has so far encompassed little more than tinkering with the Resource Management Act and suchlike.” The same editorial stated, in respect of the Government’s economic performance, “when relatively little is done, relatively little happens. Things can even go backwards.” What did Bernard Hickey say? He said: “We are losing a whole generation of workers before our eyes and our government appears to be sitting on its hands hoping the problem will go away.”

What did the National Government say earlier in the year? Earlier in the year it was promising a step change. This was its thing for the economy in February 2010: “Our 2010 priorities. National seeks a step change in economic performance.” What is its latest version? Edition two of the same document came out a week ago. There is no talk of a step change. Three things have dropped out of the plan between then and now. The Government has stopped promising a step change, it has abandoned its attempts to extend the areas open to mining, and it has dropped its plan to investigate a hub for financial services. There is nothing new in the August plan; it is just that the Government has dropped out some of the things that were in the February plan.

National members’ latest acknowledgment is that they have been wrong about savings. Having tipped over the Kirk scheme, having opposed the Peters superannuation scheme at the end of the 1990s, having undermined KiwiSaver, and having stopped contributions to Government saving via the Cullen fund, they now say the big problem relates to savings. We have news for National members: we have been saying that for years. That is why we developed the KiwiSaver plan, that is why we started contributions to the Cullen fund, and that is why, since the election, we have been saying National has got it wrong. The big difference between New Zealand and Australia is in the level of savings, and National members have just agreed with us about that. They have just agreed with us, but will they deliver in that area? No, they still have no vision; all that they are planning is to establish a committee. After two Budgets, 2 years into this National Government, its big announcement and its big plan last week, when it was on the ropes in respect of the gap with Australia widening instead of narrowing, was to establish a committee. The Government does not even have members for a committee and it has no terms of reference for it yet, but its plan is to establish a committee.

It continues to be amateur hour on the National Government benches, at a time when the economy is tanking. We have more and more people going overseas—

Hon Steven Joyce: Ha, ha!

Hon DAVID PARKER: Steven Joyce laughs, but Bernard Hickey says “We are losing a whole generation of workers before our eyes”. I say to Mr Joyce that if he wanted to do something about that, he could have done something at the Hillside railway workshops. He had the justification for doing so in an independent report from Business and Economic Research Ltd, and he has ignored it. As a consequence there will be 300 fewer jobs in Dunedin.

Hon STEVEN JOYCE (Minister of Transport): Let us be clear about what this Government inherited. It inherited a recession before the rest of the world. This country was in recession before the global financial crisis. It also had a pathetically poor level of increase in after-tax wages. That was caused by the previous Government not handing back the hard-earned income of New Zealanders. We also inherited a projected decade of deficits, because when the recession arrived and the tide went out the high levels of Government expenditure were projecting a decade of deficits. That is what we inherited. We also inherited—just so that we are clear—a record number of New Zealand graduates living overseas. There were massive numbers. So if we are talking about the flight of New Zealanders, it was done under the Labour Government over the 9 years it was in office.

There are others things. Labour members criticise us about corrections. The record pipeline of incoming prisoners into the corrections service was created by Labour in its 9 years in Government. Further, it tipped a whole lot of money into a whole range of areas—even one I happen to know a little bit about called tertiary education. It slipped a massive amount of money in there, but over that period it did not increase the number of graduates per year coming out of our universities at all. Over the whole 9-year period that was flat and it was the most ludicrous waste of public money that that administration oversaw.

We have a plan, which is a serious, considered range of things that will lift the growth path of this country. I thought, given that Mr Cunliffe does not understand it, I would take him through it briefly. First is personal tax reform, which is hugely important. The biggest personal tax reform that this country has seen in 20 years will put more money in people’s pockets and encourage them to work hard and get ahead. The second thing we are doing is cutting a lot of red tape right across the public sector, including, of course, in the much-talked-about Resource Management Act reforms, but also in a whole range of areas. We are putting investment into science. We are putting the country’s money where its mouth is in science and that is very important.

We are reforming employment law, which this Opposition does not want us to do. It does not want us to encourage people into jobs. We are putting more money into industries like tourism. We are lowering company taxes down to a rate of 28 cents in the dollar, which will give us a lift over the Australians. We are sorting out Canterbury irrigation, something that members on the other side of the House admitted that they should have done over their period in office—only 9 years, one should understand; it is hard to get around to doing things when one has only 9 years. It did not sort it out. We have sorted it out; we have grasped the nettle.

Speaking of which, Auckland governance reforms took the previous Government ages. It had a royal commission, which we inherited because it did not have time to do it over the 9 years that it was in office. We inherited the Auckland governance reforms. We took the issue and we ran with it. Now Labour members are turning around to say that it should not happen and that if it is going to happen it should not happen until 2014. That was classic of Labour in office—to kick everything off. We have also taken off Labour’s moratorium on aquaculture—the handbrake it had on the aquaculture sector over 9 years.

We are putting a huge effort into trade negotiations by sending our friends Mr Groser and Mr McCully offshore as often as possible. We have the Primary Growth Partnership. We are encouraging responsible mining. Export education—how is that going? That has grown under the 2 years of this National Government very, very significantly; it was flat and declining under the previous Labour administration.

I come now to infrastructure. In infrastructure, a massive investment is being made by this Government in such areas as roading, first of all. That is a big investment, $10.7 billion over 10 years by reprioritising expenditure. That is a big lift to the construction and contracting industry and to the productivity of the New Zealand economy. We are also investing in KiwiRail. We inherited an incredibly expensive option—nearly a billion dollars was paid for something worth around $350 million—but we have said that we will invest in it and turn it round. We have a turn-round plan that can work. It is a challenging plan, it is a big plan, and it will cost around $4.5 billion over 10 years. We are putting three-quarters of a billion dollars into it, and that is a big investment. Ultra-fast broadband is about to have partners chosen for it—

Hon David Cunliffe: That’s an oxymoron.

Hon STEVEN JOYCE: I say to Mr Cunliffe that he has no record on that; 9 years in office and in the last 2 years he managed something. That is the history of Labour.

Hon MARYAN STREET (Labour): For the last year or so it has become increasingly apparent to all who watch that the Government has no plan for jobs and growth in New Zealand. The only consistent theme in the Government’s activities has been an inability to join any dots, an inability to recognise how one policy might impact on another, and how a cohesive plan might get New Zealand out of where we are now and into growth, job creation, higher skills, and higher wages as a result.

Connecting those dots seems to be beyond this Government Let me give a couple of examples. Let us consider the portfolio of the member who has just resumed his seat, Steven Joyce. The failure to increase the negotiated caps on student numbers at universities and polytechnics impacts on the pathway towards a high-skill, high-wage, high-productivity New Zealand. If we want a high-skill economy we need highly skilled workers.

I say to Mr Joyce that there are no new students. Mr Joyce is funding only the ones who are already there. There are no new places. So there is no plan, there are no skills, and there are no more places for students. Turning students away means there will be no improvement in skills. Let me join the dots for the Minister for Tertiary Education. No improvement in skills means that there are no improvements in productivity. No improvement in productivity means that there are no improvements in profits, and no improvement in profits means that there are no improvements in wages. So can that Minister not simply join that series of dots and call it a plan?

There is no skills strategy. The Minister of Education celebrated the fact that nine trades academies will open across this country, but, with a bit more vision and a bit more sense of a plan, there could have been the equivalent in every high school and polytech in this country. So what has the Minister got? She has a saving of $13 million in adult and community education, and that is what she has to celebrate—cuts to second-chance education and the chance of upskilling.

Another example of where the Government does not have a plan is the idea—a very old idea of the National Party—that we whip anybody who is on a benefit and we tell them they have to get back into work. That is fine for an old-fashioned Tory party mantra, but how does it work when there are no jobs? How does it work when nearly 20,000 more people have become unemployed in the last quarter? When 2,700 people queue up for 150 jobs it is patently obvious that this Government has no plan to create jobs, no plan to upskill the workforce, and no plan to improve this economy.

The mining fiasco was meant to be the cure-all, the Shangri-La. The nirvana of economic policies was to mine the innards out of this country and dig a hole. Yet somehow the Minister of Tourism, who also happens to be the Prime Minister, could not join the dots between tourism and a cycleway on Dun Mountain in Nelson and prospecting for silver on Dun Mountain. That man could not even join the dots within his own head, let alone join the dots between Cabinet portfolios.

There is no plan. There is no way to join any of the critical elements into a plan that could develop this country, provide jobs, and move the economy forward. We have lost the language of step change. In fact, exporters said that it was not a step change that was needed; it was a quantum leap in this economy’s performance by adding value to our exports. So one of the great initiatives in this six-point plan is to improve free-trade agreements—not the Government’s idea, but Labour’s

ALLAN PEACHEY (National—Tāmaki): Goodness me! Nine years in Government, 18 months in Opposition, and that is all the socialist Labour Party has to show. That is the best that that party can do. Labour had 9 years in Government, 18 months in Opposition—I almost said 18 years, but let us not get too far ahead of ourselves—and that is the best that it can offer.

There has been a bit of talk in this debate as to whether this Government inherited a mess. I would have thought that was a non-debatable point. Obviously, the Government inherited a mess—a big mess—but a mess can be fixed. With discipline, application, and good policies, a mess can be fixed.

What can never ever be recovered from, though, is 9 years of lost opportunity. New Zealand will never get those years back. The people of New Zealand will never ever recover the lost opportunities that they experienced as a result of 9 years of the previous Labour Government. There is that simple, telling figure: real after-tax wages grew by only 3 percent over the 9 years of that Government—only 3 percent. What is worse is that the bulk of that growth occurred in the early years of that Labour Government, on the back of disciplined economic policies from the 1990s. Rather than squawking across the floor at me, I suggest that members like Mr Cunliffe, Ms Street, and the others over there get out into the streets of the working-class parts of my electorate of Tāmaki and tell that to the people who used to vote for Labour in the past.

Carol Beaumont: We do. We get out on those streets.

ALLAN PEACHEY: I look forward to Miss Beaumont actually being out there doing that and explaining to those good people why, over 9 years, the real growth in their incomes, their wages—

Chris Tremain: People they were representing.

ALLAN PEACHEY: —was a miserable 3 percent, I say to Mr Tremain.

There will be more explaining for the Labour party and its members to do as well. They can begin to explain not only why the real salaries of those good people did not grow under that Labour Government but also why that Government required those people to pay so much more in tax than needed to be paid. I ask why that Labour Government, year after year after year, took so much money in the form of taxation from the good working-class people of New Zealand. Labour members should get out on to the streets in places like Glen Innes and similar areas around New Zealand and explain that. They must explain to people how can it be that in 18 months of a National Government, somebody on the average wage can have their income tax effectively cut by a half. How can it be that through good government the income tax of a person on the average wage can be cut in half?

Carol Beaumont: Tell those people in Tāmaki why you did a deal with the issue of loan sharks—the huge issue in that community.

ALLAN PEACHEY: Then go a step further, I say to Ms Beaumont: explain to those people why that Labour Government had to take so much of their money from them, and then apologise. Labour members should apologise for the way that money was squandered.

While Labour members are at it, they might also like to explain to the parents in communities like that why Labour’s investment in the schools in those communities was so poor. I ask them to explain that. Why was it, despite the fact that New Zealanders were being taxed to a greater extent than ever before, their schools were allowed to become run down? How can it then be that, in just 18 months, this Government can produce a Budget that allows for $12 billion of spending in education—$12 billion in 18 short months? That is more money than has ever been spent on schooling and education in New Zealand in the past.

GRANT ROBERTSON (Labour—Wellington Central): Last week the Labour Party held its caucus in Whangarei. It is a beautiful city. The people are wondering where their member for Parliament is, but it is a beautiful city. When we were there we spoke with people in a number of different businesses, and those that I was talking to there, in particular, were in the boatbuilding industry, which is an industry that Whangarei has been trying to grow. When we went there we discovered that that boatbuilding industry was looking for a Government that could provide some leadership. The boatbuilding industry was looking for a plan. What we have seen from this Government is the complete absence of a plan, and a plan is what the boatbuilding industry wanted. People in the industry said to us that there were people there who wanted to work, there were people there who were skilled, and all those in the industry wanted from the Government was some support. All they wanted from the Government was some interest in their industries, and they have seen nothing whatsoever. All we have seen is a set of half-baked ideas and slogans—the cycleway, the mining, the financial services hub. They are all slogans and all ideas, but there is nothing in practice that makes up a plan. A list of goals and a list of slogans is not a plan.

This Government is poll driven; this Government is without a plan. Steven Joyce talked before about savings. Nothing is off the table; nothing is on the table. In fact, Steven Joyce is polling to see whether there should be a table. The Government is not sure whether there is anything on it or off it, but, of course, we still have to pay. Tony Ryall does not even have a plan to get his shirt and tie to match, let alone the Government having a plan for the public sector. The best thing we have heard from the Government in terms of a plan for the public sector was Bill English telling us that within the next 2 or 3 years the Department of Corrections will be the biggest department in this country. That will be this Government’s ambition. This Government’s legacy will be that it will put more New Zealanders into prison. Judith Collins is proud. Judith Collins says that it will be the economic leader—that building more prisons is the thing to give us growth. That is the extent of the image and the ambition of this Government.

We hear from Government members that they are a blank sheet, they are going to kick the tyres, and nothing is off the table. This Government is all map and no compass. It is all about what the polls are telling it and not about what it actually wants to do. It has no plan and no principles. There is no point being a Government if all that it is going to do is kick the tyres; if all that it will do is come to the House and say that it has to rely on what has happened over the last 9 years because it is too difficult to come back. I tell Mr Joyce that the people in Whangarei told us that they are not interested in a Government that is looking backwards for someone to blame. They are looking for a Government that will invest in people. Mr Joyce says that he has put money in for more places in tertiary education. If that is the case, why are the universities locking the doors? Why are universities locking the doors if the Government has put so much more money into New Zealand? We know from the Department of Labour that by 2018 the demand for degree-qualified people will exceed supply. The supply of people with vocational qualifications will be insufficient. That is what the Department of Labour is telling the Government, yet Mr Joyce is locking the doors on universities and polytechs. There is no plan from this Government other than a plan to read the next poll, to look into the future, and to ask whether Steven Joyce and John Key will be able to continue to enjoy their ministerial salaries.

This country is looking for some investment in skills, in training, and in jobs. The Government proudly brought out a paper on its six new goals. The word “jobs” features once in that paper. The Government’s goals, which do not make a plan, include the word “jobs” once. That is simply not good enough. Shouting slogans at unemployed people telling them to get off welfare is not a plan. The way to get people off welfare is not to shout slogans and abuse at them, it is to help create jobs. This Government has done very, very little since it came into office about actually creating jobs, about sitting down with people with businesses like those boatbuilders in Whangarei and asking them how it can support them and ensure that they have a skilled workforce. I ask Mr Joyce about supporting the Kiwi jobs bill. That is what the boatbuilders told us in Whangarei. They said: “Why has the contract to refurbish the Tangaroa gone to Singapore?”. That is what they asked us. They want investment in New Zealand.

HEKIA PARATA (National): Members on this side of the House have a plan, unlike members opposite who think that if they keep repeating their rhetoric that there is no plan, somehow that makes it true, but it does not. This side of the House is committed to delivering action, and people from Porirua to Paraparaumu understand that plan.

This very morning I was at the Porirua Chamber of Commerce. They cannot wait for 1 October. They want to see personal tax rates go down. They welcome the fact that the lowest two tax brackets will get the most out of that. The people of Porirua welcome the fact that they get to keep more in their pockets, and that they have a Government that understands that they need incentives to get out there and work. Businesses out there are absolutely delighted that the company tax rate is going down, because it gives them the opportunity to have confidence in themselves to expand their businesses and employ people.

Let me tell members another thing. Last weekend I was at a business in Tawa. It welcomed the 90-day hire-at-will bill that we have brought in, because it gives businesses the opportunity to take a risk on young people. Members opposite want to wallow in unemployment and spread gloom and doom, but let me tell them that businesses in Tawa and Raumati welcome the opportunity to take a risk on young people in the Mana electorate. Those businesses are committed to giving young people the opportunity for work, and they get that opportunity because this Government backs them. We are also lowering personal tax rates and company tax rates.

We recognise that lifting education is part and parcel of this opportunity. In the Mana electorate we have a much lower achievement rate than that of the nationwide average. Nationally, four out of five secondary schools are succeeding. Two of our secondary schools, Tawa College and Kapiti College, are above the national average, but four of them are not quite there. They understand that this Government is serious about lifting educational achievement, instead of wringing its hands, printing more reports, and feeling anxious about the lack of achievement that a decade of the previous Labour Government’s administration delivered to New Zealand students.

We are investing $91.8 million in early childhood education, as announced in the Budget. We recognise that participation rates for Māori and Pacific Island students have to be lifted, and Porirua and the Mana electorate will benefit from that investment.

We recognise that national standards will catch early the fact that primary school students are not achieving the literacy and numeracy competence level they need to in order to ensure that when they arrive at high school they have the best possible chance to leave with National Certificate of Educational Achievement level 2. They can then go on to tertiary education or a trade, and have a real opportunity at a career, unlike the myths perpetuated by Opposition members.

We understand that better, smarter public services have to be available and we are passing a work-ready welfare reform. Unlike members opposite, we do not want to consign people to a lifelong dependence on benefits. We understand that people want to take responsibility for their own lives. We are putting in place reasonable welfare reforms to ensure that people get ready for work but will not be punished if they are unable to find it. It is scurrilous that members opposite say that somehow this Government does not care about those who are least able to look after themselves. That is utter rubbish.

We understand that boosting infrastructure is part of our plan to get this country on to a long-term sustainable future. We have just heard the Minister of Transport, Steven Joyce, talk about the significant investment we are making in roading. We welcome that a decision was made about Transmission Gully. It was another example of members opposite wringing their hands and saying “Oh, my goodness! We need another 20 years of reports.” This Government was in office for something like 9 months when it made a decision on Transmission Gully and allocated the money, and plans are roaring ahead.

We understand that broadband is the platform on which not only education but also the economy swoop into the 21st century, and the people of Mana welcome that, as well.

We understand that cutting red tape and regulation will facilitate businesses to grow. We understand that, and we have put in place reviews to ensure that the complicated red tape and bureaucracy that members opposite absolutely adored is unnecessary.

Dr KENNEDY GRAHAM (Green): I rise to challenge the Government to maintain the dignity and honour of the Crown in respect of the actions of the SAS in Afghanistan. Reports that the SAS may be witnessing the handing over of detainees to the Afghan National Directorate of Security raised serious concerns as to whether New Zealand is violating its obligations in international law.

This matter goes beyond purely State responsibility. If those legal obligations are violated, and if they have been translated into New Zealand domestic law—and they have—our individual soldiers may be guilty of criminal misconduct in our courts as a result of their action in Afghanistan. Because of our adherence to the International Criminal Court statute and the Geneva conventions, New Zealand nationals are subject to criminal liability for any acts of genocide, war crimes, crimes against humanity, and inhumane treatment of prisoners. As a party to the Geneva conventions—in particular, to Common Article 3—New Zealanders must apply humane treatment to all persons in enemy hands. We are specifically prohibited from murder, mutilation, torture, and cruel, humiliating, or degrading treatment. There may be prima facie evidence that our SAS soldiers are violating these obligations, and they may be individually accountable in New Zealand criminal law.

This is not the first time such suspicions have been raised. In 2002 our SAS troops were involved in actions where over 50 individuals were detained in order to capture Taliban and al-Qaeda suspects believed to be among them. The previous Government addressed these concerns in 2007. According to the then foreign Minister, Phil Goff, “The NZDF understands that no person who has been held, even temporarily, in New Zealand custody is currently in the hands of the United States or other nations represented in the international forces.” That statement is characteristic of Government statements on such morally and legally sensitive issues. Its significance lies more in what it does not say than in what it does say. It did not identify the dates on which such detentions occurred, and it did not discount the possibility of coalition forces having held such detainees at any time before February 2007, or provide information on the manner of treatment during any such detention.

The Minister also said: “The Chief of Defence has put in place procedures for the notification of the International Committee of the Red Cross of the fact that persons have been captured and/or transferred to another power … New Zealand has, from an early stage, made clear our expectation that all detainees would be treated humanely and in accordance with international law.” That statement is almost meaningless. Conveying an expectation does not constitute a verifiable assurance that an illegal action has not occurred or may not occur in the future. Statements of expectation of another party’s behaviour do not absolve one of criminal responsibility.

Three years later this National Government is also dissembling. Yesterday the Minister of Defence acknowledged that the SAS worked with the Afghan Crisis Response Unit to capture insurgents, and that it was likely they were being transferred to the National Directorate of Security. At question time yesterday the Minister of Foreign Affairs assured this country that “appropriate steps” will be taken, and “relevant inquiries” will be made in respect of SAS operations in which detainees have been handed to the National Directorate of Security. Yet, true to form, the Prime Minister blandly assured the public not to worry. The SAS, he said yesterday, was not involved in the torture of prisoners, and where the SAS worked alongside the Afghan unit, it was not the detaining force. In that instance, he said, it was not our responsibility when it came to those people who were detained.

I tell him that that is completely wrong. It is astonishing that the Prime Minister has such an erroneous knowledge of the international obligations of the country he purports to lead. I say to the Prime Minister that if our troops jointly capture people, we are not absolved of responsibility for their humane treatment simply because our soldiers do not lay hands directly upon them. The Prime Minister has the obligation under the Geneva conventions to ensure that those who do the act of detaining do not torture. An international act can consist of actions, but also of omission—the recognised doctrine of positive obligation. If we do not take steps to ensure that, we can be criminally liable in international law, and in New Zealand domestic law. We have not done those things, and the Prime Minister has the temerity to say that we are not responsible.

I call on the Prime Minister to get his knowledge of the law right, and on his Government to immediately suspend operations with any military units in Afghanistan that hand over detainees to the National Directorate of Security.

PAUL QUINN (National): Firstly, I thank Dr Kennedy Graham, the honourable member who has just taken his seat, for his contribution.

I will now return to the theme of the debate, which has really been about the economy and the fantastic work this Government is doing to take this country forward after the mess that was left by the previous administration. Those members now have the audacity to sit on that side and hope that by throwing mud and calling out “They have no plan.” people will listen. Well, I have news for them: people are sick of them. That is why they are sitting on that side of the House.

In fact, I have been reflecting on the debate as it has moved through the hour, and I have tried to think of some words that might capture the different approach this Government shows compared with the approach of that side of the House. When I reflect on the 9 years those members were in Government, I can best sum it up by saying that their approach was to dispense and consume, whereas members on this side of the House focus on investing and producing. I think that those two phrases sum up the difference in approach between the two major parties.

We have come in, and whether or not the Opposition likes it, we do have a plan. We have a plan to shift the focus of what happened over the last 9 years of a consumption binge, with no productivity increases, no capital investment—[Interruption]—no capital investment—none.

Hon Annette King: What? $350 million into hospitals—

PAUL QUINN: Ms King should read the statistics—read the statistics. There had been no investment. The tradable sector had gone downhill. It was absolutely going downhill in all the economic growth statistics. But we came in and had to pick up this country by the bootlaces, in a recession, and turn it round. We are doing that under the great leadership of the Prime Minister and his team, and we are focused on a plan that starts off by introducing a whole new tax regime—

Chris Tremain: Which happens on 1 October.

PAUL QUINN: —that happens on 1 October. When we think about it, we know that we are going to give $4 billion—I say $4 billion—back to the people. They have earned it; it is their money. There will be $4 billion to allow them to spend, invest, and save in the way they desire.

Hon Member: How much goes to the top 5 percent?

PAUL QUINN: Of GST? It will be $2 billion. So there will be a net outflow to the people, there will be a net outflow to wage and salary earners, and there will be a net outflow to consumers. There will be a net outflow to the people of $2 billion to enable them to do with it what they want.

We hear from the Opposition the fact that people on higher incomes get more of the tax cuts. Well, of course they do; they earn more. But I have not heard one Opposition member offer to give his or her tax cut back to someone else. Oh, no. Have we heard any of them?

Hon Tau Henare: No.

PAUL QUINN: No—no. But in terms of fiscal issues, tax is just one.

Let us focus on education. I would be ashamed if I sat there and had said to me that under the previous administration 56 percent of Māori school kids left school without the National Certificate of Educational Achievement (NCEA) at level 2—56 percent. Look at those members—shamed! Then they criticise us for holding teachers accountable in order to lift standards, but only 18 percent of Māori leave school with NCEA at level 3 and above—only 18 percent. I call that shameful.

Hon Annette King: Simplistic rubbish.

PAUL QUINN: I say that Ms King should be ashamed of herself.

DAVID GARRETT (ACT): I wish to speak today about the detail of the new foreshore and seabed legislation—at least, I would if I could. Despite the Government’s intention—

Hon Tau Henare: Have you seen it?

DAVID GARRETT: No, I have not seen it, I tell Mr Henare. Despite the Government’s intention to pass the legislation by Christmas, as of today there is no draft bill in the public arena that I can speak on. It is, however, likely to be a law that will give billions of dollars worth of minerals to a few select iwi. It is a bill that could quite likely limit free public access to beaches. I note that despite many invitations to do so, neither the Prime Minister nor the Attorney-General will confirm in this House the fact that the legislation will forbid charging for access to a beach. This bill will be upon us just in time for summer, if National and the Māori Party have their way.

It is incorrect to claim, as the Government does, that the bill will restore the right to go to court to claim customary rights. Such rights were preserved in the Foreshore and Seabed Act 2004. It is more correct to say that the proposed bill allows claims to the courts for greater ownership rights than were available under the 2004 legislation. The bill will also say, however, that iwi will be able to negotiate customary title with the Government. That is why many, many New Zealanders are gravely concerned. Just today the Coastal Coalition, representing over 8,000 Kiwis, has started a billboard campaign highlighting its real fears of having a New Zealand where people are excluded from the foreshore because they are not Māori or, for that matter, they are not from the right iwi.

Looking at this Government’s record of giving away rights to Māori covertly, it is no wonder that people are frightened. There have been veto rights over the Waikato River, and we had a Minister sneak off to New York to sign a taxpayer-funded separate Māori governance that even Miss Clark’s Government would not sign. The ACT Party shares those people’s concerns. Once again, one group of New Zealanders is getting special rights over the rest. This is not what the Treaty of Waitangi intended, as can be seen by anyone reading it without a vested interest in distorting its meaning. In fact, it is not even what the decision in Attorney-General v Ngāti Apa, the case that started all this, said. Herein lies the problem with letting Governments do a job that is properly the role of the judiciary. Despite the claims of many, including my colleagues in the Māori Party, the Ngāti Apa verdict did not give Māori the foreshore. It merely gave the iwi the right to have their case heard in the Māori Land Court.

The judges stated in that case that the chances were slim. They stated: “any customary property in the areas vested seem unlikely to survive.” That is a direct quote from the Ngāti Apa decision. We can contrast that with what the Attorney-General, Chris Finlayson, has been saying. He said that 10 percent of the foreshore and seabed is likely to end up in exclusively Māori hands—2,000 kilometres of the coastline. He even touts the direct negotiation route as the better option, and why would iwi not go for the direct option? Mr Finlayson says that it will “negotiate a settlement outside the courts to eliminate excessive cost or uncertainty”. Well, if I was an iwi leader who wanted to get my hands on a whole lot of foreshore and minerals, I would be a moron to go through the courts when I can negotiate with such an accommodating Minister.

If Mr Finlayson concludes that giving large tracts of Ninety Mile Beach to the five iwi that make up the Te Hiku Forum will keep the Māori Party onside, then no legal precedent will stop him from doing so. If the Prime Minister decides that it will be less strife to give Te Ātiawa the 20 kilometres of foreshore and seabed in Taranaki that they are after, then what the courts say is immaterial. If they succeed, who would blame the other six iwi with coastal boundaries in the region from having a go themselves? Successive Governments, both National and Labour, have shown that political expediency is far more important than doing what is right. Labour did this when it overreacted in 2004 to the Ngāti Apa decision, and National is doing it again now. The only place to determine those property rights is the High Court.

The debate having concluded, the motion lapsed.

Third Readings

Third Readings

Hon PAULA BENNETT (Minister for Social Development and Employment): I move, That the Children, Young Persons, and Their Families Amendment Bill, the Education Amendment Bill (No 3), the Taxation (Definitions of Dependent Child) Bill, the Social Security (New Work Tests, Incentives, and Obligations) Amendment Bill, and the War Pensions Amendment Bill (No 3) be now read a third time.

This legislation, which started out as the Social Assistance (Future Focus) Bill, was introduced to the House in March of this year. The introduction of the legislation represented a turning point for this country. A debate about the welfare system is now under way, and I think it is high time for that. There is much discussion about the possibilities that a new approach to welfare could bring to New Zealand. There is much interest in how it could be done better—how the system could be redesigned to be fair to those who use it and those who pay for it.

There is also some angst among a few, driven largely by mischief-making from the Opposition. The scaremongering has been appalling. The Opposition has been misinforming beneficiaries that they will have their benefits cut and will be thrown to the wolves arbitrarily. It talks about the horror of it, the cheek of it, that the Government will ask those who rely on taxpayer-funded benefits to look for work if and when they are able to! How dare we? Well, Opposition members should look at themselves, especially because they know exactly how important it is to curb the insatiable growth of the welfare system. They know, because they presided over the system in much better times—not that they took advantage of those very good opportunities. Even as the job ads burst out of the papers, all that those members could do was stand and watch as the figures for those on the sickness benefit and the invalids benefit continued to grow.

We all know that the unemployment benefit numbers ebb and flow according to economic conditions. When there are jobs, people are in work. When the economy dips and the jobs dry up, people have to fall back on the State. What does not make sense is the continued expansion in the number of those on the sickness benefit, which bears no resemblance to the overall health of the country. It is nothing to be proud of that we have operated a system that has seen thousands of sole parents take up the domestic purposes benefit every year, sometimes remaining there for decades. It is nothing to be proud of that we have families growing up with intergenerational dependence on welfare. We are talking about parents in some instances raising children on benefits who grow up to be beneficiaries and raise their own kids on welfare. I ask how anyone could argue that the system is working well for them when that is their reality. It is time for this debate, and this Government is not afraid to have it. This is the turning point.

I have watched with considerable interest the progress of this legislation very closely over the past 4 months. It is a pleasure today to see all the hard work that was done by the Social Services Committee on the bill come to fruition. I thank the committee members very much for their work, and particularly the chairperson, Katrina Shanks. I thank all of those who made submissions on the bill for their contributions.

The phrase in the title of the bill as it was, “New Work Tests, Incentives, and Obligations”, tells the story of what these changes are all about, and I thank the Law Commission for its advice on changing the name of the bill. The intention behind the introduction of clear obligations and expectations is to rebalance the system, making it fairer and discouraging long-term benefit dependency. Most people want to work, and I know that for many right now, it is actually damn hard. The recession swept away much of the economic wealth that had built up over the last 10 years, and jobs suddenly became much harder to find. Those Kiwis who are battling on looking for work and relying on a benefit while they do so will not be penalised by this legislation, as some people seem to think.

I stand with the National Government and say proudly that we live in a country that supports those who need it in their toughest times. We will continue to do so. But we also want people to make an honest effort to find work, and we will help them to do that. Those who can work should. It may be a bit harder for some people to find a job right now, but they definitely will not find one if they are not looking. We are simply asking them to look. It is as simple as that.

Our economy relies on work. Our children need to grow up in families where people are in work, not on welfare. Our communities will be driven on to better success, greater health, and greater prosperity only through having their members working. Welfare reliance and long-term, intergenerational welfare will not create success. We see the effects on individuals, families, and communities when life revolves around the weekly benefit cheque. It ain’t pretty, and it is not the kind of environment any of us wants to see our kids grow up in.

When people are in work there are aspirations and hope for the future. If people cannot find work or if the jobs are just not there, we will continue to support them and their families. The obligation on people is to do everything they can to grasp every opportunity. We are asking those on benefits to make every effort to be in work if they can be, and when people are not prepared to look for work, there will be consequences. Sanctions will be imposed on people who are not prepared to make an effort. Those sanctions will apply to people who do not bother turning up to a job interview or who are sent on a training course but do not get up and go to it. We are making the sanctions regime more effective by graduating the penalties. That means that sanctions get progressively tougher if people continue to fail to meet their obligations. We are serious about holding people to their obligations; we owe it to them and to the taxpayer.

We are also serious about asking those on the domestic purposes benefit to actively look for part-time work when their youngest child is 6. There is evidence to show that families are better off when a parent is working. It is better for the parents and for the children. We are not expecting sole parents with young children to work, although we are expecting them to plan for a return to work in the future. We are saying that if one’s youngest child is 6 or older, he or she is in school, and 15 hours’ work a week is fair to ask. That is a reasonable expectation. Children are in school for the best part of the day, and it is quite possible to balance part-time work with childcare responsibilities.

There is no intention to force sole parents into unsuitable work, as some people have suggested. Jobs with long hours or shift work are clearly not suitable for some sole parents. Before Work and Income will refer sole parents to a job, their individual circumstances will be carefully considered. It would be very short-sighted to refer someone to a job that was clearly not suitable for them.

It has been suggested that people should be able to do voluntary work in order to meet their obligations; I do not agree with that. Voluntary work is important, and those who do it carry out an important role in their communities. We are asking people to do 15 hours’ paid work, and it will be up to them to do voluntary work on top of that, if that is what they wish. For people who rely on benefits for their income, getting a paid job has to be the priority.

In a few months’ time we will be introducing a new requirement for people on the sickness benefit. At the moment there is no requirement for anyone on the sickness benefit to work, no matter what the extent or nature of their illness. We know that some people are capable of working part-time, but, more than that, we also know it is better for them and their long-term recovery if they do so. If a doctor thinks that someone is capable of working part-time, that is what we expect of them too.

During the debates on the legislation I have heard people say there are no jobs, and that this legislation does nothing about getting jobs for people. That is not the point of the legislation. The legislation is about reinforcing expectations that people who can work, should. This Government is wholly committed to growing the economy, which will grow the jobs. We are also investing $223 million a year in employment-related training and support. We are investing in industry partnerships, Straight 2 Work programmes, training opportunities, providing help with writing CVs, boosting literacy and numeracy skills, and placing people in work.

As I said when I introduced this legislation in its first reading, my focus is on the future. We want a society that values work, and in which people provide for themselves and their families. We also want a system that is fair to those who need help, and to those who provide the dollars that support it. This is a turning point for New Zealand. This is a point when we acknowledge we could do better in the way we provide welfare and support people into work. These bills are a step in the right direction towards achieving those things, and I commend them to the House.

Hon ANNETTE KING (Deputy Leader—Labour): The Minister for Social Development and Employment had an opportunity to rewrite the Social Security Act. She had the opportunity to do a full rewrite of an Act that was described to the Social Services Committee as the worst statute of this Parliament. The Act is a dog’s breakfast; it is incomprehensible. It has been amended close to 50 times, and it is a disgrace. It needed to be repealed, not revised with more patches put on it.

But the Minister was not interested in a real change in social welfare policy. She wanted to pursue a political agenda, and that is what she has done with this legislation, which she calls a turning point for New Zealand. How can it be a turning point for New Zealand when at the same time she has a working party doing work on changes to social development for the future? Will that be a turning point as well—turning back and round and round in circles? It is just pure rhetoric.

The Minister started the Committee stage on the original bill by saying the debate had been emotive, with a lot of angst and scaremongering from the Opposition. Well, I say to the Minister that I can only assume from those comments that she thinks those who made submissions on the original bill to the select committee were idiots because they did not understand the bill and they heard what the Opposition said about it. They were not idiots. They managed to read the bill. They managed to listen to what was said by the Government. They understood only too well what the bill meant. They were not idiots, and they were not scared into putting in a submission.

Our first clue that the Minister did not know anything about the strength of feeling about her legislation was when she made that comment at the beginning of the Committee stage. There were strong feelings in the Chamber. The bill was strongly opposed by Labour, the Greens, the Progressive Party, and five of the six Māori Party members, with only Tariana Turia voting with in the Government in a split vote from the Māori Party. The bill was supported by National backbenchers, who sat like stunned mullets for most of the debate, hardly able to get out of their seats to contribute to it. The real strength of feeling against this legislation is outside this Parliament, from most of the submitters to the select committee.

Do we all remember what John Key said about his Government? He said that his Government listens to the voices of New Zealand and values what the people of New Zealand tell it. The submitters to the bill overwhelmingly told the Government not to proceed with it. Were they listened to? They were treated as if they were idiots because they were stupid enough to make a submission against the Minister’s excellent bill.

The submitters came from front-line organisations, church groups, and Government organisations, and they came as individuals. Opposition came from newspaper editorials, cartoons, commentators, and opinion pieces. Organisations such as the Law Society called the bill discriminatory. Why? Because it discriminates against men. Under this legislation a widower will be work tested, but a widow will not. No reason is given for the difference, other than that the Government believes that is what the people of New Zealand want. What century does the Government live in? We do not believe in discrimination against men or women.

The Attorney-General said the legislation is discriminatory. Why did he say that? He said that because it discriminates between men and women. It discriminates between women who are widows and sole parent women. That is why it is discriminatory.

Carol Beaumont: That is discriminatory.

Hon ANNETTE KING: It is; it is disgraceful.

The legislation was not fixed when we had the chance to fix it here in the Chamber. It was not fixed on the basis of the weight of submissions that were given to the select committee. Then there were the submissions themselves. Many of those submissions came from organisations we greatly admire and whose work on the front line is so important to the social fabric of New Zealand. We ask them to do a lot of our “hard lifting” when it comes to people who are in need. So when we hear from the Salvation Army, an organisation I have a lot of respect for, we usually open our ears and listen.

The Salvation Army said that under this legislation the care of children will suffer. When the Minister spoke she said a lot about the idea that work was the way out of the problem that people on benefits have. She spoke about an unrelenting focus on work. But does she believe that caring for children is work? Does she believe that bringing up a child in the best possible way one can, with the best care one can provide, is work? Is that useful work? Does that contribute to New Zealand society? Well, in my view it does. In my view the heroes are the people who are good parents looking after their children, and making sure they contribute to society. Did we hear the Minister once mention children? This bill is about children and the care of children, because the people most affected by this bill are those on a sole parent benefit. That is who is affected. She is not listening now, and she did not listen then.

The Salvation Army said that populism is not an appropriate basis for making policy. The Salvation Army, who should know, said that this bill may cause even more poverty in New Zealand, and it is estimated by Massey University, by Mike O’Brien who submitted to the select committee, that poverty under this legislation will increase by between 14 and 17 percent. Who will be hurt by that? The children of those parents on benefits will be hurt.

Why can we not get it into our heads that the best investment we can make in this country is an investment in everybody’s children—not just the children of the good; not just those who have husbands and wives and a nice little home. Good on them, but do we not care about all children in this country? Do we not believe that all children should get a good start in this country, including the children of beneficiaries?

Wellington Women’s Refuge submitted to us and said that this bill may force women to stay in violent relationships, and that the Government was only paying lip-service to violence against women. There was also a submission from Presbyterian Support, and there would not be any members in this House, if they are doing their job, who have not dealt with Presbyterian Support. It said the bill sends a signal that paid employment is far more important than caring for children. It said that children will be disadvantaged by this legislation.

The New Zealand Council of Christian Social Services said that research was needed. It said that the bill is not based on any research or evidence. The Equal Employment Opportunities Commissioner, Judy McGregor, came to the select committee and provided some evidence from her project focusing on work, which took her to 16 regions of New Zealand where she interviewed 300 employers. They said that it was the lack of jobs that is the critical component as to why people are not working. Overwhelmingly, she said, people want to get back to work but there is none available. For example, 2,700 people applied for 150 supermarket jobs. There are 159,000 people in New Zealand out of work, and another 19,000 have been added in the last month.

Unemployment went down when there were good times. The number of people on benefits went down in good times. The number of people on the domestic purposes benefit went down when there were jobs and Working for Families. That is the key to ensuring that people get a job. Alongside that, we need to provide the support to enable them to do that. We have to have good childcare. We have to have good parenting help and support. We have to have early intervention and adequate income. We have to ensure that people have the ability to get the tools and the strength to go out and get a job, not a job that leaves them in a poverty trap but one that takes them and their family somewhere in the future because they have education and training behind them.

I ask why we should not treat education the same as work. I asked the Minister to do that. I put up a number of amendments to improve this bill, but every one of them was voted against. This legislation will not do what the Minister said it will do. It will not improve the lot of people on benefits in New Zealand.

KATRINA SHANKS (National): It is a pleasure to speak on the third reading of this legislation tonight. Firstly, I acknowledge our hard-working Minister for Social Development and Employment, Paula Bennett, for her effort and her commitment to, vision of, and unrelenting focus on getting people back to work. I also acknowledge the officials who came to our committee and provided great support. They have been here for most of the readings and were here for most of last night supporting this legislation through the House and listening to members as we debated our way through the night on this legislation. I acknowledge the submitters who came before our select committee and made their submissions. I thank them for the time and effort they put into their submissions, because it does take time and effort to make high-quality submissions. I acknowledge the work they have put in. I also acknowledge all of the members on the committee who sat through a number of submissions, participated well, and asked very well-thought-out questions of our officials. We sent them back many times for more answers when we were trying to tease out some of the details in the legislation.

I stand here in support of this legislation, and I do not apologise for the focus that this legislation has on getting people into work. I think it is a really positive step to have legislation that says the Government wants people to enter the workforce and have a successful life. During the debate yesterday there was a lot of talk about there being no jobs and people ending up with no support at all. That is not true. That was a bit of a scare tactic in the debate yesterday. If there are no jobs out there, there will always be State support for those people. That will always be the case under a National Government. We will not say that there is no support for people if there are no jobs. We are focusing on getting people back to work, where the jobs are.

I want to touch on one more point in the debate, and it came through quite clearly to me last night. Labour members believe that no work is better than low-paid work. Actually, I do not believe that is true. Dr Prasad is looking at me like I do not understand what I am saying, but that member has said many times that low-paid work is not good work, and that it is better to be in no work than in low-paid work. I do not get that. I ask what message is being sent to all the people out there who are on minimum wages, working really hard to sustain themselves and their families, independent of the State, and are getting ahead. Members opposite place no value on those people, in the work they are doing. I do not get that. I will tell the House that work is better than no work, regardless. Work is better than no work. Members opposite are saying that if someone has children, no work is better than work. I am sorry, but this Government is about giving people opportunities to get work and it is focusing on that.

I will talk about some of the new obligations under this legislation. I will highlight three or four of them. The first obligation is that the unemployment benefit is limited to 12 months, and after that time a recipient has to reapply for it. That is a really good provision. It gets those people into the office, to talk about how they are going and where they need to go to get themselves into a state of employment. That is a really positive move. The reassessment of sickness beneficiaries is really good. They will be assessed at 4, 8, and 13 weeks, plus they will undergo a mandatory 1-year reassessment. That means going back to those people and asking them how they are, whether they are feeling better, whether anything has changed, and whether they can do some part-time work, because part-time work is a good thing as well. This provision is about bringing people back into the office and asking them how we can help and how we can take them along this pathway.

The other thing we talked about in this legislation is youth training requirements. The ministry can now direct our youth into education and training as a first priority. That is a really, really good thing. We have to ensure that we do not have a generation of youth who come out of a recession and have not worked for 4 or 5 years. After that time, it is very difficult to change their habits and make them employable. We want to keep them busy in education and training. That will be our priority for them if they cannot get work, and that is really important.

We have put in three new supports under this legislation. The first one is boosting the income abatement level, the second is the inflation adjustment in law, and the third is training support for a student loan, to support sole parents on the domestic purposes benefit to study full-time at level 4 and above. That is really important as well. This legislation implements a whole lot of new obligations on recipients of benefits, and it also has some new supports in place. I commend this legislation to the House because I think it will make a difference for the people of New Zealand. Thank you.

SU’A WILLIAM SIO (Labour—Māngere): I say that the previous speech from Katrina Shanks was very disappointing; in fact, it was a pathetic contribution. The fact that the member does not understand the arguments that Labour members are presenting about why the legislation is opposed by us tells the country a lot about why it is flawed and why it should be rejected. When I listened to the Minister for Social Development and Employment, I was reminded that this Minister is an example of somebody who, once upon a time, received the domestic purposes benefit and through the support of taxpayers was able to raise herself up and get an education. She has managed to raise herself through the ranks of National, and one would think that as she is now earning over $200,000 a year and has the power to make change and effect positive change and help others who are in need, she would reach out and give a hand up to the many other mothers out there and the many other people who are struggling and suffering.

Instead, disappointingly, the Minister has introduced this legislation, which is a kick in the guts for beneficiaries. That is the disappointment for me, in respect of this Minister and the legislation that she has introduced to the House. The Minister herself has said that beneficiaries need a kick in the guts.

Sue Moroney: A kick in the pants.

SU’A WILLIAM SIO: They need a kick in the pants. In 2008, when I won my electorate seat, the local media, the Manukau Courier, asked me what I thought would happen with the National Party now being in power. I responded by saying that I thought people were gravitating towards Mr Key, and that he had been given an opportunity. People thought he had a good smile and was genuine. But I said that in the end, when we see this Government’s policies we will then be able to identify once and for all that this National Government is no different from the National Government of the 1990s, and that under this Government and under Mr Key we will have to fight in Māngere and in Manukau to protect the things that are valuable to our community.

One thing that is valuable to our community and that Labour values, and one of the things that the previous speaker does not understand, is the work of parenthood. Labour values the raising of children. Those are not necessarily paid jobs, but they are important jobs if we are to build a strong nation going forward. They are important jobs if we want to ensure that all our kids—it does not matter who the parents are—are given every opportunity to be able to pick themselves up. The only way we can do that is by ensuring that we have policies in place that encourage and support education. One of the fundamental principles of policy development is that if one wants more of something, one encourages it, one supports it, and one funds it. The parties have to encourage that.

When we look at what this Government has done thus far, with the cutting of adult and community education, what does that say? It means the Government does not want community members to be able to lift themselves and to be able to receive that kind of education and skill development. When we see this Government cutting the funding going into early childhood education centres, what does that mean? It means that this Government is saying it does not want to see our children accessing the same opportunities that the Minister received once upon a time for herself and her family, at the expense of the taxpayer. It is disappointing that we have to fight for the things that, once upon a time, other people, like the Minister, received. Now that the Minister is in a position of power and influence, she is unable to do the right thing and help those who are in need.

We have seen what this Government has done, and it is in a similar position with this legislation. This legislation states that there is to be an unrelenting focus on getting people into jobs. The reality is that this legislation is about forcing, coercing, and bullying beneficiaries to find jobs. I have to ask: where are those jobs? There are almost 160,000 people who are unemployed. The rate is 16 percent for Māori and 14 percent for Pacific people. We ask this Government what it is doing to create jobs. If it is to have this unrelenting focus on getting beneficiaries into jobs, then we want to make sure that those jobs are available. If these beneficiaries are to be punished for not getting into a job, and they have their benefits reduced or cut by 50 percent, and ultimately by 100 percent, what will happen to them? Will they then spend the rest of their lives on the streets, begging? Is that what we want to see? Is that what we are trying to build? Do we want to see the masses on the street, as beggars, while the select few control all the assets and the income of this country? I say that this legislation is threatening beneficiaries.

Debate is good if the Government is listening, but overwhelmingly the submitters to this legislation opposed it. They opposed it by saying that the assumptions that this Government is working on are flawed, especially the assumptions about dependency. Associate Professor M A O’Brien said: “The bill is flawed in every sense, and should be withdrawn.” He said further: “There is no evidence for the gross and obscene assumptions of dependency. The Government was making things up, saying that there are significant numbers of dependent families and generational dependent families.” He continued: “These assumptions are flawed in every sense, and should be withdrawn.” Another submitter, the Waitakere Community Law Service, said: “The Government’s bill assumes that women choose to be on the domestic purposes benefit.” Women do not choose to be abandoned by their husband or partner. Women do not choose to be bashed by a drunken husband, and then left alone to fend for themselves and their kids. Women do not choose when a husband cheats on them, and then abandons them and their children. This professor says that the assumptions made by this Government in defending its legislation are wrong.

The Waitakere Community Law Service said further: “The Government assumes people choose and want to be on a sickness benefit.” That is wrong. A person does not choose one day to go out and find a drunken driver to run over his or her legs, so that that person can go on the sickness benefit. One does not choose to have rheumatic fever. One does not choose to have leukaemia or have a stroke. These are people who are sick and destitute as a result of no fault of their own. Dr Hūhana Hickey of Auckland Disability Law gave strong evidence opposing the Government’s bill “as it will harm disabled people.” She said further that this bill contravenes the United Nations Convention on the Rights of Persons with Disabilities—the right of disabled people to live well; the right of disabled people, or any people, not to be poor.

According to the overwhelming evidence of submitters, I say that this legislation will drive families—

Mr DEPUTY SPEAKER: I am sorry to interrupt the honourable member, but the time has come for me to leave the Chair.

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

SU’A WILLIAM SIO: As I was saying before we were interrupted for the dinner break, this bill will hurt the masses. It will hurt the many communities that are already struggling. The House may recall that once upon a time Mr Key said of beneficiaries and of the poor that they were the underclass—

The ASSISTANT SPEAKER (Eric Roy): That’s it; the honourable member’s time has expired.

CATHERINE DELAHUNTY (Green): Tēna koe, Mr Assistant Speaker. Tēna koutou katoa. The Green Party does not believe that being rich is a crime, but it seems that the National Government believes that being poor is a crime. This legislation chooses to punish, abuse, and discriminate against children. This legislation will entrench poverty. Even more people will need food banks and emergency housing. It will cause extreme hardship and fail to increase employment. It will ultimately cost the country more for its failures, with the costs borne by the most vulnerable. It is also debatable that it may be in breach of the United Nations Convention on the Rights of Persons with Disabilities, Te Tiriti o Waitangi, and the Declaration on the Rights of Indigenous Peoples.

This legislation could be described as rubbish, but if we are going to say that we must ask what else should be done. A lot more can be done to provide fair income support. A fair society is one that guarantees the essentials. If we guarantee the essentials, we guarantee the opportunities. Critically, an income support system must support and be supported by a commitment to full employment. An income support system can operate as an effective safety net for those in need only if there is an economic policy of full employment so that all those who can, and want to, are able to get a decent job. That is hardly the situation we are facing at the moment.

One of the claims used to drive up division between beneficiary communities and others is the cost of income support, which is what is driving this legislation. The Welfare Working Group went to great lengths to dishonestly claim a $50 billion bill, and that kind of extremist, unsubstantiated claim serves only to prove how ideologically bound and irrational Minister Bennett’s working group is. By manufacturing a crisis it badly undermined its credibility.

The claim has been roundly and widely condemned, even by the more conservative media, every day for the last couple of weeks. But what does it highlight? It highlights that the extremist right, which Paul Bennett represents, will be using the cost of income support as a stick with which to beat the anti-beneficiary drum. As inaccurate as the numbers are, they will be effective in creating fear and driving up fear and distrust.

There is an alternative. We encourage everyone to get involved with the work of the Alternative Welfare Working Group. It is asking for submissions from citizens. This group is focused on welfare justice—on what families and children need to be healthy, happy, and productive citizens who are treated respectfully and with dignity—and it uses different language, not the language of “work test” and “punishment”. The first public meetings of the group are next week on 24 August in Wellington, and we urge people to participate in those forums.

We know that the National Government has no solution to the issue; if it did, it would not have put forward this legislation. So what are the rational, sensible, economic solutions that will provide support for individuals and families when they need it and ensure that every person who wants to and can work has a decent job? The Green Party has a raft of solutions that will meet both objectives in a cost-effective way. If we guarantee the basics, we can guarantee the opportunities.

The fact is there are choices that any Government can make. National makes choices to undermine families in the economy; the Greens make choices that benefit families in the economy. One of our solutions is to repair the targeted financial support that discriminates against the children of beneficiaries. Children should not suffer any form of discrimination simply because of the source of their parents’ income.

All children need a loving, warm, dry home; safe, healthy food; high-quality public education; and decent health care. But the children from the poorest families in Aotearoa New Zealand go without it, not because their parents do not care but because there is simply not enough money in beneficiary households to meet all their needs. Children are going without shoes, breakfast, school trips, etc. They are going without their basic rights—good health-care and a good education.

One can give parents all the budgeting advice in the world but it will not help if there is not enough money to go around. Enforced budgeting will not get blood out of a stone. Those children in the worst poverty can eat stones, according to this legislation, because their families rely on income support and therefore they do not get the in-work tax credit. Why, then, have a child support subsidy that discriminates against those children, as the in-work tax credit does?

We would deliver the in-work tax credit to 140,000 of the poorest families in Aotearoa New Zealand. This would significantly increase the incomes of the most vulnerable families. It would cost about $300 million per year, about half of Peter Dunne’s progressive tax cut for the wealthiest families. Those who need the most should be the priority, not those who have the most. That measure alone would help to relieve some of the worst poverty, because a fair society is better for everybody.

How, then, would the Greens support a full-employment economy? Our communities are still suffering from the effects of the recession, and there are indications that the New Zealand economy will suffer another serious dip. The Government is doing a Pollyanna. It is talking up recovery, but although the Government’s wealthier constituents might be doing better, those at the bottom are not. I talk to taxi drivers every day and they laugh when I ask: “Do you think the recession is over? Have you seen this in your life?”. They say it is a ludicrous idea. When thousands turn up for just a few jobs, we know that New Zealanders are desperate for work and that the jobs are simply not there. We have not had a full-employment policy for decades, and even with the recession National has utterly failed to increase employment. National wrings its hands and claims it is all too hard. It is not; it is a matter of choice. The Government could easily invest in job-rich infrastructure development if it chose to.

Two weeks ago the Housing Shareholders’ Advisory Group released its report on social housing. It is a very comprehensive report, with excellent recommendations about supporting third-sector housing. But it also highlights the extent of the housing crisis in Aotearoa, particularly for those on the lowest incomes—that is, those who need income support. The report shows that we have a deficit of 70,000 homes. It has also highlighted that the inadequate private rental market is failing to provide affordable housing. More than half the renters in the private market require an accommodation supplement in order to pay their rent. That tells us a lot about the state of the housing market.

We must invest in social housing. Three in four homes are cold and unhealthy, and 300,000 children live in housing that is too cold and damp to be healthy. Cold housing costs more than $500 million. It leads to 50 hospital admissions a day for respiratory illness, costs $54 million a year, and means that 180,000 workdays are lost because of sickness, which costs at least $17 million. Also, over $400 million is being spent unnecessarily on power. We need more warm dry homes. So instead of this legislation, which punishes the poor, one of the Greens’ solutions is to build 6,000 new homes over the next 3 years. That could easily be done by the Government in partnership with the third sector. It is waiting to go. It would create 28,000 new jobs. That is a plan towards full employment. That is a plan that costs less than half of the tax cuts to the wealthy. That is a plan that will house our families, protect our children, and give their parents a desperately needed job.

Today National chooses to punish, condemn, and discriminate through this legislation. National members can dress it up how they like, but that will be the effect on the ground. Today National chooses to leave thousands of children in poverty. A fair system provides the essentials for every child, and it is not impossible. It is about the special benefit being returned, it is about in-work tax credits being extended, it is about housing, it is about warm homes, it is about progressive electricity pricing, it is about public education and adult education, and it is about ensuring that parents can provide for their children because the State provides them with the basic opportunities.

We are appalled by this legislation. We have had to go through the whole process, listening to the rhetoric, while we are receiving emails and lobbying every day from people on benefits. They are asking why they are being attacked. I think those voices are really important; the voices of people who feel attacked, who are stigmatised by the sanctions ethos that threatens to take away but offers to create absolutely nothing.

That is why the Green Party has put out our plan Mind the Gap. If we are going to critique a bill as strongly as we have, we have to say what else we would do; we cannot just critique it. So we are—this is what else we would do. We would welcome the Government adopting this kind of proactive approach on the basis that all children in Aotearoa New Zealand deserve warm, healthy homes, income, food, and clothing. It is not a very difficult baseline to commit to. A fair system that provides essentials is our fundamental principle, and we will be opposing this legislation at this reading. God help the poor of Aotearoa.

DAVID GARRETT (ACT): My call will be fairly short.

Hon Member: Like your party.

DAVID GARRETT: Oh no, I have plenty to say. Su’a William Sio finished his speech by asking what people will do. When I interjected about the welfare system in Samoa, where he was born, or in Tonga, where I have spent a good period of time, I heard nonsense back, because there is no welfare system there. What people do is become entrepreneurs. If one goes to Tonga, one will find lunch stands set up, people selling peanuts, selling vegetables, and selling home-made clothes. That is what they do when there is no welfare system.

The tragedy of members on that side of the House is that they want people to be condemned to a life of poverty on a benefit; that is what they want. The reason that is so tragic is that the evidence is absolutely clear. Ms Bennett referred earlier to there being some evidence that people respond better and have better outcomes when they are in work. There is not some evidence; there is massive, massive evidence to show that those who are mentally ill or have any kind of problem are much, much better off if they are working, rather than sitting at home. Those members want beneficiaries to be trapped into poverty, to sit at home on a bare—[Interruption] It is not a luxurious lifestyle. That is a myth; it is a complete myth. There are silly people who say that beneficiaries live their life on the back of the hog. That is quite wrong; certainly it is quite wrong. What those members want is for these people to sit at home, on a subsistence income, barely able to get by, and then leap up and protest vociferously at the suggestion of a gentle encouragement and nudge back into work. That is all that this legislation is.

As I said in the Committee stage, as a lawyer I could drive a truck through the exemptions that are available. Anyone who really wants to try to avoid being nudged back to work will be able to do it. The tragedy is that these guys think that that is a great idea, and that a life of getting up at 10 or 11 o’clock in the morning and sitting watching daytime soaps, while existing on a bare minimum income, is a good idea. Is that not terrible? What an aspiration to have for our people! Those members really want people to live like that, so that they will stay dependent on nanny State and vote Labour for the rest of their lives. As long as they do that, those members do not care—they do not care. As long as those people keep voting Labour and keep thinking that those clowns will benefit them and represent them, then that is all right. What a terrible existence. Anyone with any brains knows that being on a benefit—any kind of benefit; whether it be the domestic purposes benefit, the sickness benefit, or the invalids benefit—is not a luxurious lifestyle.

This legislation seems to be the type that brings out anecdotes from both sides of the House, but more so from Labour members. I will chip in with another one, and it goes back 25 years. This was when the disease started. The welfarism disease began 25 years ago. In 1984 I was waiting in Invercargill, an area familiar to the Assistant Speaker, Eric Roy, for a job. I was the next replacement on an oil rig working off the south coast of New Zealand. I was waiting for the first guy who quit or who got injured; then I would get the job. I was staying at a motor camp in Invercargill, waiting for that to happen. It could have happened at any time: the next day or the next week. In fact, it never happened, and I found a job elsewhere. But I went down to the labour exchange and said that I would like a job, please. They asked me what my registration number was. I asked them what they were talking about. They said that I had to be registered. I said that, all right, I would register. They said that, no, I had to register for the dole. I said that I did not want the dole; I would like a job, please. This was 25 years ago. They looked around and said “This guy is looking for a job?”. Anyway, to cut a long story short, one was not allowed to look at the job vacancies until one registered for the dole and became a beneficiary. I told them that that could not be right, I wanted a job, and I did not care what it was—a casual job, a part-time job, a full-time job; I did not mind. They told me no, I would have to sign on for the dole. So I have been on the dole for 1 week in my life. Later that day I had three job offers, and they asked me which one I would like.

The welfarism disease began 25 years ago. This sorry shower over there wants to perpetuate that disease. The kids who are now the children of beneficiaries were not born in 1984, and those members would like to condemn them to the same misery for the rest of their lives, as long as they continue to vote Labour. This is, may I say it, a fairly timid measure. It is a fairly timid attempt to move away from the disease of welfarism that condemns people to sleeping in until 10 in the morning and watching daytime TV all day, whilst being on the minimum income.

This legislation is to be commended, but it does not go far enough. What a terrible aspiration for a political party with the proud history of the Labour Party. The founders of the Labour Party were workers—real workers. They use the term workers in this House. No one else calls them workers anymore; they are all employees. But in the old days, in the 1910s, the founders of the Labour Party were workers. They would turn in their graves if they saw the system that we have created. Michael Savage, Bob Semple, and those guys would not believe it. Peter Fraser’s statue is across the road. The thing he hated most in life was shirkers. That is what he called people who did not want to work or get off their backsides. He would turn in his grave.

These measures are an attempt to encourage people away from a life of sleeping in until 10 o’clock and watching daytime TV, and we applaud that. We do not want to condemn people to that kind of life, to encourage them to sit at home, sleep, and watch daytime TV, when there is an alternative. We would like people to get out and to advance themselves, as Minister Bennett has and as have other members in the House who have been on benefits from time to time. But the Labour members hate that. They cannot stand it that the Minister has bettered herself. She went off the benefit, gained herself a university qualification, and now she is here in Parliament, and those members hate that. They despise her, because from their point of view she is a traitor to the beneficiary class. What a terrible, terrible attitude. We are very happy to support this very modest set of measures to try to turn round that whole disease that condemns people to living in poverty. Thank you.

RAHUI KATENE (Māori Party—Te Tai Tonga): The legislation sets into statute the commitments made by the Government prior to the election to ensure a fairer welfare system with an unrelenting focus on work. The bringing together of the welfare system with the world of work is key to the legislation. The aim is to create a shift away from State dependency and into full or part-time employment. Although the aspirational goal of reducing State dependency is a logical one—and one that we fully support—the economic downturn has resulted in a greater need for social security, and significantly more so for Māori. We come to this reading shattered by the loss of two leading figures in our world: Te Meringa Hohāia and Te Kapunga Matemoana Dewes. Both of these men lived their lives committed to the pathway toward self-determination. They were leaders who helped shape the transformation of their iwi, and directly led to the cultural revival and renaissance of te reo Māori, of Treaty settlements, of the unique cultural heritage of Hinerupe Marae, of Parihaka Pā, and of our wider history and assets. They were staunch to the kaupapa, they were unafraid of conflict, and they were prepared to act with decisiveness and with courage to set a pathway forward. They were driven by the aspiration of being self-determining, self-managing, of walking the talk.

But the process of positioning themselves in their own pathway was always done with the best interests of the people in mind. Self-determination does not mean sacrificing the well-being of the people, and that is where we must agree to disagree with the policy enshrined in this legislation, for, although we are intent on achieving our own aspirational goal of reducing State dependency, our foundation is always in the whānau.

I remind the House of the key message that we campaigned on in the motu, in the lead-up to the last election: “He aha te mea nui o te ao? He tangata, he tangata, he tangata.” What is the greatest thing in the world? It is people, it is people, it is people. So we look at National’s policy direction and we see that the legislation is intended to promote an unrelenting focus on work. According to the Collins Dictionary “unrelenting” is defined as “refusing to relent or take pity, relentless, merciless”. That is the hub of our concern. In the changes to the legislation from the select committee we note that if a person does not recomply with his or her work-test obligations within the first 4 weeks, then a further 50 percent reduction will be applied on top of the first 50 percent reduction—the punishment that keeps on punishing.

A lot has been made about limiting sanctions for beneficiaries with young children to a 50 percent reduction. But the point remains: “Who cares for the children?”. Why hurt the children because of their parents’ failure to attend a work test? What did the children do to cause the State to punish them?

This legislation amends the Children, Young Persons, and Their Families Act, among others. That Act enshrines the paramountcy of the child; this legislation takes away that protection for children, this legislation punishes our children. Our mokopuna are precious; we must do everything we can to nurture them and to keep them safe, warm, and well fed. We are the first to admit that the system is unsustainable and not working, so change is needed. We believe that a bold and visionary approach is required—a bold and visionary approach such as Whānau Ora is needed, not one of blame and punishment. We agree that people who can work should work. But children must not be punished because their parents are beneficiaries. We must maintain a safety net for them. In 2006 there were over 50,000 Māori children living in single-parent households reliant on benefit income. This figure is likely to have increased. That in itself is 50,000 reasons not to support this legislation

Some positive changes were made during the process that we found favour with. We acknowledge the Minister particularly for introducing the new exemption so that people on any benefit who are leaving situations of domestic violence will not be work tested. This is an important exemption to give them time to adjust to their changing circumstances. We also support the focus in recognising the importance of full-time study as a way to improve job prospects. The exemption for work-test obligations at level 4 or above, and the new $500 loan for course-related costs are positive changes.

But I come back to the origins of this legislation. This package was originally branded as the Future Focus package. Due to the fact that Māori are disproportionately represented in the beneficiary sector, coupled with a downturn in the types of jobs our people are expected to be employed in, we believe that this legislation will be detrimental to Māori at this unique point in time. It is all well and good having an unrelenting focus on work if the jobs are there, but we have a real question around that. We know the intergenerational effect that the reforms of the 1980s and 1990s had on young Māori when their parents were forced from work and then found themselves in considerable poverty. We know the helpless despair of unemployment. In addition, there is cause for concern regarding the availability of part-time work and the 90-day probation period, especially where solo parents are concerned. We cannot look at these bills and policies in isolation from each other; we need to look at the whole range of bills that are coming up and the whole range of policies that affect people in those areas.

Tertiary training as an alternative is only as good as the health of job creation, which is showing only a marginal recovery. All of these factors do not give us the confidence that those of our most vulnerable whānau, who most need our protection, will not be adversely affected by this legislation. We acknowledge that both this Minister and our co-leader Minister Turia have worked really hard to do what they can to address the employment crisis that particular impacts on our people. The latest unemployment figures were nothing short of shocking: 159,000 out of work, 16.8 percent of Māori unemployed. The majority of people want to work, and every day thousands of people spend most of their day looking for a job—for any job. For these people and their families it is little comfort to recognise that unemployment numbers in Māori communities have been consistently high since the 1980s, and even in the time of plenty, Māori unemployment figures have still been high, particularly for those under 25 years of age.

They want a chance, and Community Max and Job Ops have given them that. Community Max, essentially, prepares our young people for work and gives them an opportunity to learn new skills, develop a good work ethic, and find a pathway out of unemployment. The programme has been immensely successful in the short time of its duration. In fact, at last count, some 3,200 positions had been filled, and of these approximately 1,900 were taken up by young Māori. These are wonderful statistics and we acknowledge both Ministers for their vision and their commitment in placing these schemes on the Government’s agenda. But we cannot pretend that Community Max, no matter how good it is, is providing the long-term sustainable employment required. There will be casualties—those who end up back on the unemployment line—and we fear for their future as a consequence of this legislation. It is because of these people, our most vulnerable, and because of our children that we have split our vote—one for, and four against.

CHESTER BORROWS (National—Whanganui): It is a great thing when a political party maintains its promises. The Social Security (New Work Tests, Incentives and Obligations) Amendment Bill, which this legislation started out as, is an example of National bringing to fruition those things that it campaigned on. National campaigned, for instance, on beneficiaries being able to earn $100 a week before the benefit abated, which is in the legislation moving through the House tonight. Members on the other side of the House never did that. They had the opportunity to do that, they had a long and substantial opportunity to do that, they had 9 years to do that, and they did not bother. Yet tonight they try to castigate National for bringing to fruition exactly what its members campaigned on and what Labour did not bother to do.

Labour members did not bother because, I believe, they did not care enough to do that one little thing. It would not have been much. They passed a number of other pieces of legislation, they brought a number of bills before the House to enact things that they had campaigned on during the course of their campaigns in 1999, 2002, and 2005, but they did not bother to do this one little thing, and we have to ask why. They have never ever provided an answer. I look forward to the next calls from Labour members, but they have never ever provided an answer as to why they did not bother to do that one little thing.

We campaigned that solo parents who received the domestic purposes benefit—and so they should; I do not see that as magnanimous; I see that as sensible and practical—and who are the parents of children over 6 would need to present for work. If there were jobs available and if it was within their capability to work, they would have to for some of the time.

It was very interesting to listen to submissions on the bill during its select committee hearing and to note that many of the submitters who came forward in opposition to this bill, and many members on the other side of the House, said that it was very mean because it deprived children over 6 of their parents. They were saying that the bill was an incredibly harsh thing and an incredibly punitive thing to do. They did not realise that the vast majority of solo parents whose youngest child is over 6 work voluntarily. So members on the other side of the House were effectively saying that any parent, and any solo parent particularly, whose youngest child is over the age of 6 and who works must be a bad parent. That is an absolutely stupid position to be in and it is absolutely stupid to suggest that. Everybody knows that work is a good thing. Parents should work to the maximum of their potential as long as that does not detract from their ability to parent or to care, love, and nurture those who are closest to them and who rely on them. Work is essentially a good thing.

For a number of years I worked as a small-town policeman in Pātea. After the Pātea Freezing Works had closed, I watched families grow up under a regime where the children did not see mum and dad tipping out of bed in the morning and going somewhere to work. The single thing that made me give up my support of the Labour Party and join the National Party was in 1987 when the Labour Minister of Labour, Richard Prebble, decided that unemployment had grown so big that it was easier to just pay people the benefit, and not bother making them turn up for work under the Project Employment Programme scheme. A large number of the members opposite were senior members of the Labour Party at that time and some of them campaigned in 1990 in support of all those policies from 1984 through to 1990 that did that. Labour did exactly what my colleague David Garrett said; it relegated those people to the unemployment system. It said what we have heard many, many times over the course of this debate: there are no jobs so we should not try. Well, what a load of rubbish! All that approach does is relegate people who want to work and who have aspirations for a better future and to get on and work for themselves and their families. The other side of the House says that that is not good enough, and that we should not try to help them; those families are just collateral of a system that those members support, and so they will vote against this legislation. Absolutely ridiculous!

Well, our party believes, and those who support this legislation believe, that these people are people whom we were elected to this House to represent. We were elected with a very strong mandate to fulfil the manifesto that we campaigned on, and I am very, very proud to be part of a Government that is doing what it promised. I stand in support of this legislation, and I commend it to the House.

Dr RAJEN PRASAD (Labour): I am really glad that the member who just resumed his seat, Chester Borrows, did not stay a member of the Labour Party. He deserves to be in the National Party. I will take up two of his points. The number of people on the domestic purposes benefit under the previous Labour Government went down for the first time since the domestic purposes benefit was introduced. That member said that we did nothing; well, that is one fact for him. The second point the member might like to recall is that the previous Government worked hard to get the unemployment rate down, and it was the lowest in the OECD. So there is plenty that the previous Government did to address the needs of every citizen in New Zealand society.

No matter how much this Government dresses up the provisions of this social security legislation as representing its focus on fairness and its unrelenting focus on work it is another example of this Government’s punitive approach to the most vulnerable in our society. That is what it is. There are many other examples in the legislation that has come before this House, brought by that Government—this is another example. This legislation could have provided a great opportunity for the Minister for Social Development and Employment to focus on fairness and to focus on work, if she had really wanted to. But she did not do that. She was not up to it, and, therefore, the sadness about this third reading debate is that it is a lost opportunity. The Government was never interested in social security, but it now comes to the House and says that is on its agenda. How come then that nobody believes the Government? Nobody believes it.

This Government has really internalised and been driven by, if we think about it, the views of those who believe that beneficiaries are unfairly receiving State assistance. That is the rhetoric and those are the beliefs that those members opposite in this Government have internalised. This is the reason for this punitive approach to welfare reform. The Government also believes that the lives of those who receive assistance should not be easy. We should make it difficult for them. They should be expected to continually prove that they are deserving of the assistance the State provides. It goes back to the Charity Organisation Society days of the deserving and the undeserving poor. The only step after that is to give them bread and circuses. Those who argue for this legislation rarely demonstrate any in-depth understanding of the lived experiences of many beneficiaries, and, indeed, Mr Garrett was a case in point. He has demonstrated that a number of times in this House. There is no reason to really begin to use the kinds of names that that member used for this group of people. I think he ended his speech by saying that it was like they were diseased, it was like a disease.

David Garrett: No, I didn’t.

Dr RAJEN PRASAD: The member did say that. The belief was that this was like a disease—

David Garrett: I raise a point of order, Mr Speaker. I take offence to that. At no time did I say that beneficiaries were diseased; I said that welfarism was a disease. That is a very different thing.

The ASSISTANT SPEAKER (Eric Roy): That is a point of debate; it is not a point of order. The member has mechanisms for that.

Dr RAJEN PRASAD: I think that the member’s language demonstrates his contempt for this group of people. The member’s thoughts were that this group should be like some others he quoted from the Pacific Islands and make their own clothes. Well, that is the bread and circuses argument. We are not taking New Zealand back to that kind of experience.

At every stage of this legislation this side of the House has tried to bring some balance to the issues that the Government faces in what it proposes in this legislation. But at no point has the Government started to listen to what was said in the Social Services Committee. Hardly anybody spoke in support of the changes affecting the unemployed and those on the domestic purposes benefit. These submissions were not from just anybody. Annette King went through the submissions in some detail. They were from respectable organisations that administered to our most vulnerable. It was their considered opinion that this legislation does not address the needs of the most vulnerable in our society. These organisations said that the changes will make the situation much worse. The Hon Annette King listed the thoughts they had, such as that this legislation was discriminatory and that it would increase poverty. That is what we were told. We were told it would affect children and it would increase the chances of violence within families. We fight against that in other programmes but here we are passing another set of rules that will make it worse. So in this legislation the Government has not considered the perverse effects of these provisions on the important role of sole parents bringing up children. The Government was not listening; it knew best.

The Government’s approach to fairness is interesting. Fairness does not mean, as it does for this side of the House, providing an adequate income for those who are bringing up children on their own so that they may be provided with the best opportunity to provide the best environment. That would be fair, if we really focused on that. Fairness means not subjecting mothers—they are mainly mothers—to the frustrations of access to childcare; it means opening up opportunities for them to undertake training and education so that they may prepare themselves for re-entering the workforce when their children require less of their time and when they can gain employment that provides them with an adequate income. Fairness on this side of the House means balancing the negative views of beneficiaries that some hold in society, which members opposite reflect, with a plan to give every New Zealander the opportunity to make a valued contribution to our society. It is another example of where the Government does not have a comprehensive plan; it goes along one dimension hoping that will work. This is another example of that lack of plan and lack of principle, and it is really wolf-whistle politics that we see.

In the third reading debate one National member asked what was wrong about expecting sole parents, when their children were 6 years old, to take on some work. I say to that member that there is nothing wrong with that expectation, provided that we have taken into account all that a solo parent has to do to provide good care for his or her children. Solo parents have to do single-handedly what many of us struggle with as part of a two-parent family with more financial resources. We must also factor in those who are taking courses to prepare themselves to enter the job market when their children require less of their time, and those who provide a significant amount of the volunteer work that keeps our schools, our communities, our recreational programmes, and vulnerable people supported. These provisions do not take into account the real experiences of those people. The legislation gives enormous powers to case managers to make decisions. The only fall-back criteria will be whether sole parents have work. The punitive regime will then kick in.

If the Government adopted our definition of suitable work, I would take its intentions seriously and accept that it is sincere. There are sole parents on benefits bringing up children whose youngest child has just gone to school. They could well be preparing themselves for work through night school etc., and they could also be doing the volunteer work that our communities depend on, in our schools, in our old people’s homes, in our recreational programmes, and in our churches. That is real work. It is not, as Mr Garrett says, just sitting down and watching television in the afternoon. Our Supplementary Order Paper recommended that that be counted as reasonable work. The only difference is that if it were paid it would be work, but it is not paid. It is valuable work, but there was not even a moment’s consideration on the part of the Government or the Minister to take that into account.

The case has been made. We are sending people to find work when there is no work, when it is quite difficult. I have worked with many of these people and this is a sad moment. This was an opportunity to do something really useful but the Government has come up with another set of punitive measures that will be used to punish those who provide valuable care for our children and our communities. Thank you.

TIM MACINDOE (National—Hamilton West): This is a significant measure that deals with a very important social and economic issue, so I have to say that I have been really disappointed by the quality of the debate we have had from the Opposition, the lack of intelligent engagement as to what the legislation is actually about as opposed to what it is not about—

Hon Steve Chadwick: It’s a new member, of course.

TIM MACINDOE: That is a very patronising comment from Ms Chadwick. Whether I have been here for one term or 10 terms, I have a valid opinion to express and I have worked hard on this legislation.

During this debate Opposition members have consistently resorted to slogans and clichés, and in particular to making a whole lot of accusations about things that the legislation does not deal with. I point out, because I think it needs to be written into the record, that not one speaker on this side of the House at any stage in this debate has engaged in beneficiary bashing, and I would be very disappointed if any of them had done so. Earlier tonight the deputy leader of the Labour Party criticised the Minister for not undertaking a complete rewrite of the Social Security Act. There is little doubt that such a task would be a valuable long-term exercise, but it is also, as surely everybody acknowledges, a huge job that would need time and detailed work. I have to ask the deputy leader of the Labour Party, who has been here for a long time, why, if that was such a priority, Labour did not tackle that task in the 9 years when it was in Government.

After Mrs King, Catherine Delahunty described the legislation as punishing the poor, but she produced no evidence for that criticism that was related to the contents of this legislation. I have to ask whether we have really reached the stage in this country that it is considered a punishment to move off a benefit and into paid employment, because that is exactly the implication of what she was saying.

I was especially disappointed to hear Rahui Katene—a member for whom I have great respect—repeat the allegation that this legislation is an attack on children. The implication that children whose parents depend on welfare are more secure than children whose parents are employed is contradicted by all the evidence in our society. The focus of this legislation is on encouraging people into work, not if they cannot seek work—and, sadly, there are many in that category—and not if there is no work available that they could attempt. We know that the global recession has hit our country hard, as well; that it has had a big impact in our towns and cities, and that in some areas, yes, jobs are scarce. But where jobs are available, or training is available to equip those who are out of work to seek new jobs in the modern economy, it has to be a better option for the worker and for his or her dependants.

I want to return to some of the comments that we heard last night. Metiria Turei spoke of beneficiaries being forced into degrading and demeaning work, and into working for nothing. She described this as a recipe for impoverishing people. Not only was it disturbing to hear her prejudice against manual work but also it is fascinating to try to understand the twisted logic that sees a benefit as being more financially attractive than a wage. I have to say that we heard the same argument from one of the submitters to the Social Services Committee.

Hon Ruth Dyson: Rubbish!

TIM MACINDOE: We did hear that exact argument from the first submitter to our select committee. I totally reject that reasoning. I firmly believe that all honest work is inherently valuable and I respect everyone who commits to taking an unappealing job if that is the only option available to that person. It is insulting and offensive to suggest that those who accept a low-paid job are demeaning themselves, or have been demeaned by their employer or by society at large. Many people in my electorate work long and sometimes unsocial hours, on the factory floor, as cleaners, or in a myriad of other roles that attract the minimum wage or just a little bit above that figure. They have my total respect and gratitude. Invariably they are also very good parents and grandparents and decent members of caring communities. They give much and they ask for little. They do not feel demeaned and they certainly would not feel more secure or worthwhile if they traded in their jobs and wages for life on a benefit. I am proud to represent those people from my electorate in this House and I thank them all for what they are doing.

Dr Prasad, in his comments a few minutes ago, agreed that it is desirable to encourage beneficiaries into work where work is available. That is all this legislation aims to do. But in the same breath, Dr Prasad repeated his earlier claim that this legislation is punitive.

Dr Rajen Prasad: It is.

TIM MACINDOE: I say again to that well-intentioned but misguided member that there is nothing punitive about expecting those who can work, and for whom work is available, to do so. Those people for whom work is not available, or who are unable to work for valid reasons, will continue to enjoy the security and protection that they have now. Nothing will change for them under this regime, yet from listening to some of the Labour speakers one would think that the sky is about to fall in.

Dr Rajen Prasad: It’s very shallow thinking, Tim.

TIM MACINDOE: I say to Dr Prasad that this legislation is not punitive at all, but it does set out society’s legitimate expectations.

Dr Rajen Prasad: Which society?

TIM MACINDOE: I say to Dr Prasad that it is punitive to expect our nation’s taxpayers to invest more in the welfare system than is genuinely needed or justified. It is punitive to tolerate Labour’s approach that a lifetime on welfare is a legitimate lifestyle option for some who could—and I emphasise that it is those who could—take responsibility for themselves. Labour seems to think that they should be funded by low-income earners who are working long hours in challenging jobs to care for themselves and their families, and who need every hard-earned dollar they get. If this legislation was making life difficult for those who genuinely deserve welfare assistance it might be punitive, but it is not, and under this Government it will not be.

This legislation strikes a blow for fairness, for hope, and for a brighter future. We owe it to those workers, especially those on fixed and modest incomes, who have very little disposable income after they meet their accommodation and other essential living expenses, to ensure that we are not placing an extra burden on them by tolerating abuse of our country’s benefit system.

This is an important measure and we are now on the cusp of it becoming the law of New Zealand. It is aspirational. Labour members do not like that word, but it is aspirational and it is realistic. I look forward to it making a positive difference for many in our country, and I am sure that it will.

CARMEL SEPULONI (Labour): I want to touch on what has come from that member. I was yelling out in my interjections that this legislation is nanny State, and that is what members on that side need to realise. They assume that people on benefits do not want to work. They assume the very worst of the people who are accessing benefits. The National Government assumes that if it does not legislate for work testing, and if it does not legislate with punitive measures, then those people will not get out there and work. That is nanny State, and those are the assumptions that members on that side of the House are making.

Tim Macindoe: So finding a job is now “nanny State” in New Zealand. What an appalling attitude that is.

CARMEL SEPULONI: I will touch on two things, because I think I understand this issue a little more than does that member over there. I will refer to two things—two things that I remember, having been a single mother and having been on the domestic purposes benefit myself.

Chester Borrows: Because they all belong to you? You treat beneficiaries like a commodity.

CARMEL SEPULONI: The first memory I will refer to, I tell Mr Borrows, when I went on that benefit was the stigma, even amongst my own friends, of being on the domestic purposes benefit. I remember at the time—because I was studying; I was a young brown mother who had got pregnant whilst at university—that I thought “I am going to access this now, because for the majority of my life I will be working and I will be paying very good taxes.” I knew that, at 20 years of age. Members on that side of the House assume that young mothers do not know that, and that they do not want to do that.

The other thing I remember very clearly is being a young mother and getting on a bus with a pram, with a baby, and with a bag, and watching the reactions of the people on that bus. They were looking at me as though I was the scum of the earth. That is the stigma that I am talking about, which the National Government is perpetuating in this legislation. Its members are making assumptions about beneficiaries. They talk about aspirations but they do not acknowledge that these people may actually have aspirations, without there being the need to legislate, with punitive measures, to try to get them out into the workforce—as if they do not want to work.

The other thing that those members do not acknowledge is that some people, especially some mothers, may be better off staying home and looking after their children, and that it must come down to their being able to have the choice. It is about putting measures into place to support single parents to go on to further study, if that is what they want to do, and to support them to go on to employment—and to good employment prospects—if that is what they want to do. But if they feel they need to be at home with their children, then the Government should be supporting them to do that rather than putting out messages to our society that say that all single parents should be out there working. Quite frankly, even though I always knew that I was going to work, and even though the vast majority of the single parents whom I know knew that they would go on to work, as well, for some it may not be the appropriate choice to make. But it comes down to them. It is quite interesting, because members on that side of the House are usually about individual responsibility and individual choice, but it is individual responsibility and individual choice for the people who are like them—like those members on that side of the House, but not like the people we are discussing tonight.

I will refer to a few examples from a Facebook group called Single Parents Fight Against Discrimination—It’s Not OK. Here are a few examples of women who have put their stories on that Facebook page. Let us start with a woman called Vanessa. She said: “Thank you so much for initiating this. I am an overwhelmed single mum, and whilst angry about the ludicrousness of this policy haven’t known what to do about it. I am actually on the DPB caring for an adult daughter with a rare disorder, and have now lost my ability to access the training incentive allowance. Even with the training incentive allowance it is stressful, and never ever enough. I am doing one paper at a time, as it’s all I can afford. The National Government’s policies seem to be so Draconian—trying to get us back to work, yet taking away the rug from under our feet.”

She is doing one paper a semester. Having worked at a university, I think back, say, to the average arts degree, which is about 24 papers over 3 years. If this person is doing an arts degree she can expect to finish that degree in 12 years, at the rate she is going, because she is not supported by our welfare system to take up full-time study as that side of the House cut the training incentive allowance. The legislation we are talking about here covers welfare reforms, but on the study front members on that side of the House are denying women like this one the opportunity to take the pathway into higher level tertiary study, because no longer will those women be able to get support from Work and Income New Zealand if they want to take up study at levels 1, 2, or 3. For many people, jumping into level 4 study would be quite a huge jump, particularly if they have no secondary school qualifications. But common sense does not prevail on that side of the House. Those members do not understand that they should be supporting people to take up study at all levels because of the necessary requirements in terms of staircasing through.

I will give members another example of someone who made a comment on this Facebook page. A woman called Hayley said: “Currently studying part-time towards my degree. If I had gone full-time I would have had less than $30 a week for food, cleaning products, and doctors’ bills left after childcare costs. We are not on an equal footing when it comes to higher education.” She is talking about sole parents. I remember very clearly last year when we were debating the cuts to the training incentive allowance, and we questioned the Minister for Social Development and Employment. She said that times had changed, and that if those women who are sole parents can get to university, they are on an equal footing with everybody else. Well, that is absolute rubbish. I have seen it from having provided support to students at university. Single parents have a lot more to contend with than do the vast majority of 18-year-old students. When they are trying to balance not only their study but a household by themselves, they need as much support as possible. They are not on an equal footing, and some equity consideration does need to be discussed and considered by that side of the House.

I will read one more example from this Facebook page, called Single Parents Fight Against Discrimination—It’s Not OK. A woman called Debbie said: “Thanks for starting this group, guys. I am a single working mum. I am really angry and upset about Mr Dunne’s proposed income-splitting bill, which would directly discriminate against working single mums like me, whilst giving more play money to the Remuera housewives to spend on tennis and getting their nails done, and to pay for their coffee, over which they could bad-mouth women on the DPB, oblivious to the poverty that many single mums suffer. We have to do something.” Those are real stories; those are the real people who are suffering at the hands of bad legislation—

David Garrett: Yeah—on Facebook. Everything’s real on Facebook.

CARMEL SEPULONI: Mr Garrett is saying “Yeah, real people on Facebook.” Well, there are a lot of real people on Facebook. A lot of them would be slightly fearful of coming out and telling their stories publicly, because of what they have witnessed, with the Minister for Social Development and Employment dragging those two women through the mud last year—or was it earlier this year—in respect of their stories.

I know that Mr Borrows is looking over here and thinking that we are acting as though members on that side of the House do not care, or do not have any compassion or heart. But when the Government puts through legislation like this, and when the stigma that already exists for the groups of people we are dealing with, and whom this legislation will affect, is perpetuated, then of course we will think that. Of course we will think: “Where is the compassion?”.

There is absolutely no reason to do this. It has annoyed me—to no end, actually—that when those unemployment rates came out 2 weeks ago, and the country got to see how badly this Government was doing, what did we see? We saw the Minister for Social Development and Employment and the Prime Minister get out there and talk up these welfare reforms, and talk them up even more so than they had ever done before. Members on that side of the House know why. It is about shifting the lens, and diverting attention on to beneficiaries so that Kiwis blame them rather than blame the Government for a job badly done. But the fact is that the Government has had no plan, and it has created no jobs, and this country is worse off than it was 22 months ago before this Government took office.

Labour members do not support this legislation. We support the very real people who are out there struggling. We do not support the beneficiary bashing that is going on. We do not support the lack of compassion that members on that side of the House are expressing to some very vulnerable New Zealanders who are struggling at the moment. Thank you very much.

PESETA SAM LOTU-IIGA (National—Maungakiekie): It is a pleasure for me to rise to speak to this legislation. I thank Carmel Sepuloni, the honourable member who has just resumed her seat, for her contribution, albeit scarce in intelligence, content, or substance. But I thank her for her ability to connect with real people on Facebook. I thank her for turning up to public meetings in Mount Wellington, which is in my electorate, while she claims to be a westie out in Waitakere. I thank her for her contribution, because if she thinks she will beat the Minister for Social Development and Employment, the Hon Paula Bennett, in Waitakere, then she will have to get off Facebook, get out of other people’s electorates, and start doing some real work in her own electorate.

This legislation is about National delivering on its pre-election promise, and it is about reforming the welfare system. It is about us, as National members and as this Government, trusting New Zealanders. It is about trusting New Zealanders to go out and work. When I walk the streets of Onehunga and talk to those who are in need, when I speak to so-called real people, as does the previous speaker—who, by her own admission, said that she was annoyed, angry, and frustrated—I hear them saying that they want to work. They do; they want to work. They want to get out there and deliver on the aspiration that our leadership has provided.

National members are committed to having a system that supports people when they need it most. There is no doubt that there are people who need welfare assistance. We are here to support them, we are here to encourage them, and we are here to ensure that if they would like to go out and get those job opportunities, they are provided for. You see, people who receive a benefit do so because others are out there are working, every day, earning wages and paying taxes. We believe that paid employment, provided not just by the public sector but also the private sector, which is important, will always offer better choices. It will always offer better choices than welfare dependency. Although we believe that welfare is important, we do not believe, unlike members opposite, that welfare is the only way for those with children.

This legislation is about action, and this Government has provided plenty of action in terms of the legislation that we need to go forward in this country. We do not refer to beneficiaries as “these people”. The previous speaker was talking about “these people” doing this, and “these people” doing that. No—they are people; they are beneficiaries. They are not clients; they are not “these people”. We do not want everyone to depend on the State. Like my colleagues, I commend this legislation to the House, and it is certainly a pleasure to put this legislation through.

A party vote was called for on the question, That the Children, Young Persons, and Their Families Amendment Bill, the Education Amendment Bill (No 3), the Taxation (Definitions of Dependent Child) Bill, the Social Security (New Work Tests, Incentives, and Obligations) Amendment Bill, and the War Pensions Amendment Bill (No 3) be now read a third time.

Ayes 65

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

Noes 55

New Zealand Labour 42; Green Party 9; Māori Party 3 (Flavell, Harawira, Katene); Progressive 1.

Bills read a third time.

[Hon Dr Pita Sharples originally recorded as voting for the Noes. Corrected to Rahui Katene.]

Appointments

Electoral Commission

Hon SIMON POWER (Minister of Justice): I move, That, pursuant to section 4D of the Electoral Act 1993 and section 32 of the Crown Entities Act 2004, this House recommend His Excellency the Governor-General appoint Hon Justice Sir John Hugh Williams as Chair of the Electoral Commission for a term of three years and Mr Robert Andrew Peden as Chief Electoral Officer and Chief Executive of the Electoral Commission for a term of five years.

The Electoral (Administration) Amendment Act passed by the House in May amended the Electoral Act 1993 to establish a new Electoral Commission. The commission is an independent Crown entity that will bring together functions currently spread across several electoral agencies, and it will be responsible for conducting all parliamentary elections, by-elections, and referenda, and for the registration of political parties.

From 1 October 2010 the new commission will take over the functions of the present Electoral Commission and Chief Electoral Office. The new commission will provide public information programmes and advice on electoral matters, and it will report to the Minister of Justice and the House of Representatives after each general election, and at other times as it sees fit. The new commission will have a board of three members, comprising a part-time chair, a part-time deputy chair, and a full-time Chief Electoral Officer, who will also be the chief executive. Appointments to the commission are made by the Governor-General on the recommendation of the House of Representatives.

At this point in time I am moving the appointment of the chair and the Chief Electoral Officer to ensure that the new commission has sufficient board members in place in the interim. I intend to ask the House to consider the appointment of the deputy chair of the commission in the near future. As the chair of the commission, Justice Sir Hugh Williams will offer the commission strong leadership. He has had longstanding involvement in the administration of justice and has significant governance experience as a highly engaged university chancellor. Sir Hugh was appointed as a judge of the High Court in 1995. He retired from the bench in 2009, but still holds an acting warrant. He previously served as a Master of the High Court for 6 years, and for many years, as I said earlier, he was the chancellor of Massey University. As the president of the existing Electoral Commission since 2009, Justice Williams is well informed on the issues and complexities associated with the preparations for the next general election, and his appointment will provide valuable continuity.

Mr Robert Peden has been the Chief Electoral Officer since 2006, as well as having been a member of the Representation Commission. Mr Peden has a career that combines a mix of policy, strategic planning, and operational planning, and he has a proven record of delivery in his current position of Chief Electoral Officer. He has worked in the area of electoral matters for almost 15 years and has accumulated a comprehensive knowledge of electoral law.

Under section 32(1)(b) of the Crown Entities Act 2004, appointments to the commission may be made for 5 years or for any shorter period stated in the notice of appointment. Sir Hugh’s appointment is proposed for a term of 3 years, to ensure that the position of chair is reviewed with a 12-month lead-in time to the 2014 general election. Mr Peden’s appointment to the position of Chief Electoral Officer is proposed for a 5-year term, taking his appointment a year beyond the 2014 general election and providing sufficient time for the completion of post-election reporting requirements. I commend these appointments to the House.

Hon LIANNE DALZIEL (Labour—Christchurch East): I rise to support the motion and to welcome the two appointments to the new Electoral Commission. The Hon Justice Sir Hugh Williams is more than qualified to continue the role under the new electoral framework that he commenced in September last year under the old framework. Justice Williams brings a depth of experience to the role. This will be welcome as the Parliament beds in new electoral finance laws, and conducts, as I think it will have to do, an in-depth, independent review of MMP after the referendum survives the attempts of those determined to remove proportional representation from our electoral landscape.

It is for that reason in particular that I welcome Justice Williams’ appointment. Reflecting back on the Royal Commission on the Electoral System, which was the precursor to the change to our electoral system producing the MMP system, I note that it was a judge who chaired that royal commission, Justice Wallace. I think it is fitting and appropriate that a judge will lead this all-important review, which is designed to mitigate some of the unintended consequences of the system of MMP chosen by the people of New Zealand by referendum in 1993.

I regret that such an independent process was not provided for in the original legislation when we changed to MMP. The reason I regret it is that the select committee process that was provided for in the alternative, although chaired by the Speaker of the day, did not have the degree of separation or distance from this place that such a review required. I welcome the appointment of a judge to the most senior position within our electoral framework.

Robert Peden, of course, has been a source of excellent advice and support across Governments and Parliaments, and he is, in fact, currently one of the advisers to the Electoral Legislation Committee, which is the temporary select committee I have the pleasure of sitting on. It was set up to deal with two bills: one on electoral finance reform and another on the issue of the coming referendum, as well as some of the Parliamentary Service rules that have been referred to us in the Parliamentary Service Amendment Bill. Mr Peden is extremely practised and he has an excellent knowledge of the law, as well as a very practical understanding of how the law works for people who are candidates, people who are concerned about the activities of candidates, political parties, and, obviously, members of the public as well. I think he has performed an excellent role in terms of education and in terms of the standing he has gained in the community through ensuring that those things are addressed in a proper way.

I think it is important to remember that people’s reputations can stand or fall when they fall foul of electoral rules, whether the mistake is deliberate or not. I recall occasions in the past when individuals have been found guilty of “corrupt practices”, because that is the language used in the legislation, even though it was not a deliberate fraud on the system or an attempt to skirt round the rules. In fact, in one case I recall it was simply a failure to calculate GST on the amount that had been spent. It was interesting because the National Party did precisely that, but in that case the concern was over television advertising and the party could not be done for corrupt practice, which just shows us that one size does not fit all as far as the law is concerned. That is why someone of Mr Peden’s integrity is required to fulfil the role, and I fully support his appointment.

I look forward to the Government completing its consultations so we can see a deputy chair appointed in the not too distant future. We have been consulted on the possible deputy, and I presume that other parties are being consulted on who it might be, and if it does turn out to be the person whom I understand it will be, we will be very pleased with that appointment as well.

I understand, as the Minister of Justice has confirmed tonight, that the appointment of these two members to the Electoral Commission has been made to meet the needs of the impending by-election occasioned by the departure of the Hon Luamanuvao Winnie Laban. I thought it would be appropriate to acknowledge her role model status as an effective Minister, whom I worked with particularly closely as Minister of Women’s Affairs, on economic development issues for Pasifika women. I want to place that on record, and to say how sad we are to see her go. In many respects, where she is going she will be able to continue the very good work she started on behalf of Pasifika women in particular, and I wish her all the very best for the future.

I tossed up whether I should mention the last thing I will mention in the context of this discussion, but given the need to appoint members of the commission now because of the impending by-election and the need to have things up and running for 1 October, I decided I should. I do not like mentioning the fact that there are brain-dead bloggers out there in cyberspace who say terrible things about people that simply are not true. I do not like the fact that I will mention Whale Oil Beef Hooked, because I do not ever, ever read his site—I do not. The only reason I am aware of what he has written on his site, which is entirely relevant to the debate on these appointments, is that I had the chair of my electorate committee send me an email asking me to tell her that I was not leaving. I immediately responded to her asking her where she got that information from. It came from a very unreliable source. We think that Aaron Gilmore was the real source of information; that was just wishful thinking on his part.

I place on record that I am not about to cause a by-election. I am nominating myself to be reselected as the candidate for Christchurch East. I have already submitted my nomination form to the Labour Party. It has been received, and I have a letter confirming the receipt of the nomination. I have not been overseas in the last few weeks; I am not applying for a job overseas. I think somebody will have to get over the fact that they are standing in a seat that will return a Labour MP. I feel honoured to be able to serve that electorate, I believe I serve that electorate well, and I look forward to continue to serve it in the future. I support the motion.

RAHUI KATENE (Māori Party—Te Tai Tonga): Just over a week ago a nationwide ShapeNZ survey of more than 2,200 New Zealanders found that if there is to be electoral reform in Aotearoa, people want it sooner rather than later. I congratulate the Minister of Justice on his speedy execution of change for the people of New Zealand.

The motion fills two of the three positions in the electoral trifecta in establishing the new Electoral Commission as an independent Crown entity. In doing so it will, no doubt, please the 56 percent of New Zealanders surveyed who want a different system to operate at the 2014 general election. The different system will be, we all hope, less complicated and convoluted than the systems that already exist. The new commission will be responsible for conducting all parliamentary elections, by-elections, referenda, and the registration of political parties as of 1 October 2010.

With the recent activities associated with both the Labour and ACT parties, electoral system reform could not be timelier. In respect of the political uncertainty that has played out across our screens in recent weeks, I think the calibre of the two individuals nominated today must be recognised as an immediate strength for the new entity. In the eight words of the name of the Hon Justice Sir Hugh Williams KNZM, QC, LLM we have already an indication of the quality of legal leadership that will come to the fore. He is already well poised to embark on the process of electoral reform, having been in the position of president of the Electoral Commission since last year. The Minister has set out Sir Hugh’s background, and we welcome the skills of governance and management he brings, which are so important in the role of chair.

The Māori Party also supports the appointment of Robert Peden into the dual role of Chief Electoral Officer and chief executive of the Electoral Commission. Mr Peden is well known to the Māori Party, as to other parties, and I comment on one of the initiatives that he introduced by bringing together party officials to meet the relevant authorities—namely, the Chief Electoral Office, the Electoral Enrolment Centre, and the Electoral Commission.

Mr Peden has had to cut his teeth on the intricacies of complex and convoluted electoral administration in the wake of the Electoral Finance Act, following the legislative changes imposed by the previous Government. He had to provide advice on whether the signs on Trevor Mallard’s bright red Volkswagen Caddy could be interpreted as advertisements for Labour, and consequently require the name and home address of the party’s financial agent to be carved into the paintwork. Mr Peden had to answer all of the 101 queries about whether a business card, a tattoo promoting the Māori Party, a tino rangatiratanga flag, or brochures funded by third parties could be considered electioneering. One would think anyone who survived the nightmare of the Electoral Finance Act deserves a medal, not an instant promotion to more of the same. But, seriously, few understand better than Robert Peden the exact machinery of all aspects of the electoral law in operation. We think that has to be a great advantage for the new Electoral Commission.

There is no denying that efficient, effective, and expert administration of the Electoral Commission will be of fundamental importance to Parliament, to government, and, indeed, to the functioning of a healthy democracy. The Māori Party is happy to support these two nominees, and we look forward to the third commissioner being appointed in due course. No doubt the delay is due to extensive efforts being undertaken to recruit a person of tangata whenua descent into the role. We have, of course, any number of people who could fulfil that role with excellent credentials to take the nation forward, and we await with great anticipation the opportunity for the Treaty partner to be engaged in such a significant mechanism for our constitutional future.

Motion agreed to.

Bills

Arts Council of New Zealand Toi Aotearoa Bill

First Reading

Debate resumed from 5 August.

JOHN HAYES (National—Wairarapa): I am very proud to speak on the Arts Council of New Zealand Toi Aotearoa Bill this evening. It is an excellent bill from, I think, New Zealand’s finest-ever Minister for Arts, Culture and Heritage, Chris Finlayson.

Chris Hipkins: Ha, ha!

JOHN HAYES: That member may laugh. I remind my colleagues opposite that they should think back to just 18 months ago, to the mess that they left us. Labour left us an economy that was in financial strife, an absolute administrative mess, a $2 billion shortfall in the accident compensation scheme, and a whole lot of other problems. In the 9 years that Labour was in power, real after-tax wages in New Zealand grew by only 3 percent in total. The Labour members might say this has nothing to do with the arts, but I will tell this House that it is fundamentally important.

The economy is a fundamental part of the Wairarapa cultural and heritage arts strategy. I can assure members that the Wairarapa is a wonderful place in which to live, and I will be perfectly happy to live there in another 20 years when I retire from this House. It is rich with interest and strong with involvement, and we celebrate a highly visible arts culture in every one of our towns, whether it is Waipukurau, Waipawa, Carterton, or Masterton, particularly centred around the Aratoi Museum. Economic matters are important, because if we have a strong economy we can give strong support to the arts. We can support artists, and we can support arts-related activity. That is why the economy is so important.

I will come back to the point that I began with. In the 9 years to 2008, annual inflation was frequently running at 3 percent per annum, and power prices jumped by 70 percent. How could someone afford to go out and buy a painting, for example, or a piece of sculpture? In September 2008 annual inflation was 5.1 percent, with no compensation for that paid to anybody. Labour spent 9 years in office without cutting taxes, which made sure that nobody had money in the pocket to go out and support the arts. In September 1999 people who were on the average wage paid 19 percent of their income in tax, and by September 2008 they paid 22 percent. That was Labour’s legacy. That was absolutely its legacy. We had a bad economy, so what did people do? They left this country in droves. Where did they go? They went to Australia. Those who stayed worked as public servants. We inherited more public servants, local and national, than this country could afford.

That is why we are changing things. John Key and his excellent band of Ministers are leading this country forward, so that we can give a lot more support to the arts and arts-related activity in our communities. Part of this suite of measures is that we have to also streamline bureaucracy. The Minister suggests that we streamline Creative New Zealand’s four governing bodies into a single board with the responsibility for determining strategic direction, priorities, and a policy framework for the whole organisation, and for funding allocation decisions. It stands to reason that if we can come down to having one streamlined board, requiring fewer resources, fees, and staff, we can focus on what is important: artists, arts organisations, arts development, and an economy that enables all of us to support the arts through our pockets. The Minister proposes that we pass this streamlining legislation because it will save us at least $200,000 per annum through the benefit of freeing up staff to concentrate on core responsibilities to the arts sector, rather than on servicing the bureaucracy. This will be extremely significant.

I am very pleased to be able to support this bill. I am very pleased that it is coming to the Government Administration Committee, and with those words I support the bill and end my speech here. Thank you.

Hon STEVE CHADWICK (Labour): If that is the best the Government can do on a very important bill, the Arts Council of New Zealand Toi Aotearoa Bill, then it is a tragedy, really. I will begin, as I intend to carry on, by saying that the value of arts to New Zealand society is critically important for the well-being of people in communities. At the moment we have a Minister for Arts, Culture and Heritage who loves the arts; I will give him that. But in no way could he match the calibre of the previous Prime Minister, Helen Clark, who over 9 years put in an arts recovery package after the previous National Government spent nothing on the arts and never understood the economic value of the arts, let alone the social well-being of the arts. Helen Clark said that she was going to lead an arts recovery in this country and she did. She went around the country and met every group, not just the few elite but the many involved in the arts. She led a resurgence in the arts in this country.

Labour will support this bill to the Government Administration Committee, but with reservations. The previous speaker, John Hayes, talked about streamlining, but this legislation is not about streamlining bureaucracy. I tell Mr Hayes that it is offensive to say that Alistair Carruthers, who is the chair of the Arts Council, Dame Judith Binney, Helen Kedgley, Professor John Davidson, Ērima Hēnare, Anne Rush, and Jimmy Wallace are bureaucracy that is being streamlined. That is how little that member understands of the arts in New Zealand society.

Arts are the soul of the country. They reflect our unique identity, and they are also how we express and reflect ourselves as New Zealanders. Everybody in this House values that. The cultural diversity in our country is the driver of social and cultural capital, and we understand that economic value.

Because of research done on the value of arts to society, we value any structural changes that will give efficiency, but I feel that this bill will marginalise input into this newly structured council. What was once a pipeline of applications into Creative New Zealand has been narrowed to a little straw. The arts community—the arts developers, the artisans, and the artistes of this country—have very little say on what the previous speaker said is a streamlining of the bureaucracy of arts funding in this country. What nonsense.

The Minister has carried over everything that was in the previous legislation about the value of arts to New Zealand and the purposes of Creative New Zealand. He has rationalised board membership and replaced the Arts Council, which we know as Creative New Zealand. It was a council of 27 members, and it goes to seven members, with two arts boards. This is the offensive bit. Te Waka Toi, which was a fine brand in New Zealand, no longer exists. That is offensive. It is as offensive as having no Māori representation on the super-city in Auckland. Te Waka Toi as we know it, as every community in the regions of New Zealand knows it, no longer exists. Do members know what? The seven members of Te Waka Toi are now replaced by four Māori members on the Arts Council—four. They have their own board now, and answer to huge funding. In fact, in the last 3 months $600,000 of funding went out to dance, to literature, to moving image, and to visual arts, and this will now be managed by only seven members on the new council. I know that those voices will be marginalised. There is no way that four Māori members on the new board—and there were seven members on Te Waka Toi—can ever represent the diversity and the demand that is coming from the growing arts community of Māori.

The South Pacific Arts Committee has also gone. Where are the Pacific voices on this new council? Where are they? Where is the ethnic representation on this new council? It is not stipulated, at all. Yet the Government is talking about growing diversity in the ethnic communities. Where are those communities stipulated as being represented on this new council? They are not, and that is worrying to many in New Zealand. I think that taking away the brand of Te Waka Toi and the South Pacific Arts Committee for a $200,000 gain per annum is simply offensive.

Tim Macindoe: They don’t find it so. Have you asked them?

Hon STEVE CHADWICK: I just remind the member opposite that this Minister has only just held arts funding. There is no new funding. He has just held arts funding, so with the CPI adjustments he has not done as well as one might think. The funding has gone backwards.

This rationalisation of membership will marginalise people on the margins of the arts community. They saw under Labour that they had a voice, and outsider art felt it had a place. Where now will we see Arts Access Aotearoa, the Artists Alliance, and mental health providers providing wonderful programmes for people recovering from mental health conditions and illnesses? Those providers use arts as an outlet for recovery. Where will children’s art houses get funding? Where will those little non-governmental organisations in the arts community, like the brass bands, and the recreational organisations, like spinners and weavers, get funding? Does the Government think that their voices will be heard on this council? No, it marginalises arts access for the community. It turns New Zealand art lovers into just an audience, and takes away their right to participate creatively.

There is another worrying little aspect about this bill. The Minister does not require a strategic plan of this new organisation, the Arts Council of New Zealand. He requires only a statement of intent, which means he will tell them to do his bidding with the bit of funding that they get—he did well to get the same level of funding for the Arts Council—but not to develop a strategic plan for the country or the arts community in New Zealand. They should not bother with that! The Minister has done away with the strategic plan, which gave some certainty to organisations like children’s art houses, like Arts Alliance, like those marginalised arts groups that can get a voice heard on the current council.

Tim Macindoe: They didn’t get a cent under you. Go and talk to them. They didn’t get anything under Labour.

Hon STEVE CHADWICK: Actually, they did.

Tim Macindoe: They didn’t get anything under Labour.

Hon STEVE CHADWICK: Yes, they did.

Tim Macindoe: It all went to the elite art groups.

Hon STEVE CHADWICK: No, it did not. The functions are carried over from the old—

Tim Macindoe: I raise a point of order, Mr Speaker. The deputy leader of the Labour Party has just made an insinuation that I take personal offence to. It is completely unfounded, and I ask her to withdraw and apologise.

The ASSISTANT SPEAKER (Hon Rick Barker): Was such a comment made?

Hon Annette King: I didn’t think it was offensive.

The ASSISTANT SPEAKER (Hon Rick Barker): I say to members that it is not appropriate to make comments about people having had a drink, or telling them to have another drink, which is what I heard. The member will withdraw and apologise.

Hon Annette King: I withdraw and apologise. I raise a point of order, Mr Speaker. I ask you to take account of the fact that that member has given a barrage of abuse—and what I consider not to be the truth about the previous Labour Government’s policy—across to this side of the House. When he is doing that he might consider that he may get something back.

Tim Macindoe: The deputy leader of the Labour Party is aware of the fact that I have been in the House for most of this evening. Therefore, the suggestion that I may have been drinking is absolute rubbish. My interjections during the course of the speech being made by the member sitting beside her have been based on the fact that I consider the contribution she has been making to be completely wrong. I am inviting the Labour Party to go and look at the facts of where the funding went under the Labour Government.

The ASSISTANT SPEAKER (Hon Rick Barker): That is a debating point. Firstly, the member was OK up until he started to go over the point that I had ruled on. The member sought a withdrawal and an apology, and I granted that. The member is not entitled to go back over that ground; let us be very clear on that. I say to the Hon Annette King that if, in fact, the member finds the interjections from the other side of the House to be objectionable, she should raise a point of order. Let us recall that this is a House of robust debate and people are entitled to interject, but not unreasonably so.

Hon STEVE CHADWICK: I come back to the point that I was about to make. The functions have been simply carried over from the old Act into this new bill. Those functions are about encouraging, promoting, and supporting all New Zealanders and promoting the New Zealand identity. I thank National for carrying on with the Labour brand.

In summary, we want this bill to go to the select committee so that we can call for submissions and put Creative New Zealand under the spotlight to see how successful it has been in funding those very arts services that Tim Macindoe said we failed to provide funding for. That will certainly come out in the Government Administration Committee. We are concerned at the reduced representation of Māori, Pacific Island, and ethnic people on this new council. We are also concerned that it will be a long time before the funding guidelines are put in place, so that the council knows how to operate within the new funding guidelines.

We have some genuine concerns about this bill. We are not opposed to reorganisation if it gives efficiency, but we want to see advocacy of the voices that have just started to flourish in the arts and we want them to still feel that they have a place that is valued and treasured in the arts community.

NIKKI KAYE (National—Auckland Central): I am pleased to support the Arts Council of New Zealand Toi Aotearoa Bill. I will start by acknowledging Minister Finlayson, and I also acknowledge the previous speaker, Steve Chadwick. I see her at a number of arts functions held within my electorate of Auckland Central, which I would call the heart of the arts community.

I want to make a couple of other comments. I disagree with a lot of what Steve has said tonight. The first reason I do so is that this evening I rang someone who is very prominent within the arts community. I will not name the person, but I will repeat a comment that was made to me. I asked them what this legislation was about and I was told that it was about making the Arts Council responsive to the arts community. That really resonated with me, and I believe at the heart of that is something called freedom. The concern I have about the comments of the previous speaker is that a lot of what we are doing is ensuring that as much money as possible goes to these creative professionals—I think we estimated that about $200,000 will be freed up for these creative professionals—but also it is about ensuring that the arts community drives the policy, not necessarily a whole lot of people who think they know best. I think there is a philosophical difference between what Labour members in the House believe in terms of this legislation and what the Minister for Arts, Culture and Heritage is trying to do.

There is another exciting aspect, which is aligned with what we are trying to do in this legislation. There are changes happening in Auckland. Since we completed the legislative process on the Auckland Council, I have had some pretty amazing feedback about the opportunity, particularly within the spatial plan, to start to come together with a cohesive strategy for arts and culture, both the infrastructure and the policy development within Auckland. So we are seeing legislation that is finally putting more focus on the strategic direction of the Arts Council, which is absolutely aligned with what we are doing with other legislation such as the Auckland Council legislation and the spatial plan, and having a cohesive plan in terms of arts infrastructure and arts policy development in Auckland.

The second point, which the previous speaker made and I disagree with, is that this is not about marginalising certain voices. There will be representatives in terms of Māori and Pacific Islanders on the Arts Council. I am a member of this House who does not believe that numbers necessarily equate to better representation. I believe that this legislation will give possibly $200,000 back to the arts community and we will still have that representation. I believe that is a good thing for the arts.

The other point that the previous speaker raised was on community voices, and I note there are clauses in this bill particularly around the provision of funds to the community. So I think the legislation has dealt with that issue. Another important point is independence. I acknowledge that a very important principle is retained in this legislation, and it is on the independence of the provision of policy from the Minister. That is very important, and again it comes back to that philosophy from this side of the House about ensuring that the arts community gets as many funds as possible to those creative professionals, that the independence is preserved, that it is being driven by the arts community, and also that we are being as efficient as possible from both a structural perspective and an economic perspective.

Another point I will make is on accountability and transparency, which is at the heart of this legislation as well. I know that within this bill there is a requirement for the Arts Council setting guidelines for the collection of funding. That is also a very important aspect, and it is aligned with other legislation that this National Government has brought in.

The final point is on the arts community and the contribution that it makes. The previous speaker touched on the economic contribution of the arts in this country. I know that the Ministry for Culture and Heritage is doing a number of works in this area, because a number of the contributions that are made are often intangible. But it is my belief that we have never had proper recognition of that economic contribution. I see examples of that all the time in my electorate. I do not think it matters whether it is New Zealand Fashion Week or films. I do not believe that this House has adequately understood the contribution of the arts to the economy. I believe that strongly, and I know there is work happening in that area. I know how important that is to so many community groups, because often that is a key criterion for any access to funding. So that is something that I really care about.

I make a wider point, which is very relevant to this legislation. Someone said it to me, and it came up during the Auckland governance reforms as well. In this country we have built a web of bureaucracy in many areas, in my view. I believe that there are members on both sides of the House who would agree with that. When I was first elected someone said to me: “Nikki, the job that you have to do in this House—it’s about death to process.” We are, as a nation, extraordinary innovators; we often think outside the square. But, unfortunately, there are areas of our Government that have been absolutely built up in terms of bureaucracy. That person said to me that it was about death to process.

So I am very pleased to support this bill. In my view we are pushing those funds back to the creative professionals who deserve them, and we are breaking down some of those bureaucratic structures. I am very pleased to support this legislation. Thank you.

CLARE CURRAN (Labour—Dunedin South): I am the final Labour speaker in the first reading debate on the Arts Council of New Zealand Toi Aotearoa Bill. The previous speaker, Nikki Kaye, described this bill as “death to process”, so it is also possibly death to regional funding for the arts and some of our important provincial centres and other communities.

I acknowledge my colleague Steve Chadwick for her work in the area of arts, culture, and heritage, and I thank Chris Finlayson for his work on this bill. The Labour Party, as other speakers have said, will be supporting this bill’s referral to the select committee, with some reservations. We have some genuine concerns, as members have heard, and at the select committee we will get the opportunity to put Creative New Zealand under the microscope. Labour welcomes any changes to efficiency, but we ask whether this structural change is necessary and whether it will be enough. We have some genuine concerns that I want to outline.

This bill is an example of streamlining and downsizing, to the possible detriment of fair representation and Kiwi creativity, despite what the previous speaker said. The bill replaces the Arts Council of New Zealand Toi Aotearoa—also known as the Arts Council—and two arts boards with a single board: the Arts Council of New Zealand Toi Aotearoa. The lone board will be responsible for determining strategic direction, priorities, and a policy framework for the whole organisation and for funding allocation decisions.

The new structure will, supposedly, improve the Arts Council’s efficiency and responsiveness, and ensure the best investment of resources for the benefit of New Zealand artists, arts organisations, and all New Zealanders. But Labour has concerns about the representation of the council, and it is estimated that this bill will reduce the number of board members from 28 to 13. Although we commend the decision to maintain Māori and Pacific representation on the council, we are concerned, as members of the House have heard, that these communities will not be given a strong enough voice on the council.

We are already seeing the possible impact of the changes that this will bring. Some of my colleagues who have spoken earlier have said there is quite a lot of concern in places like Palmerston North and Dunedin, where it is quite likely that organisations will not receive recurrent funding, and that will obviously be detrimental to those communities. At the moment the proposal tells us that there will be support available for three theatre companies only—in Christchurch, Auckland, and Wellington. In fact, this represents problems even in Wellington, where currently two theatre companies receive recurrent funding.

I refer to the concern that is starting to be manifested in my own city, Dunedin, around this issue. I will read to members an excerpt from an editorial that was published in the Otago Daily Times on 27 July. It states: “In the appendix on page 17 of Creative New Zealand’s ‘Review of Recurrently Funded Organisations’ it is written in black and white: ‘Support is available for at least three theatre companies to create and present high-quality New Zealand theatre: one in each of Christchurch, Auckland and Wellington’. On page 16 under the same ‘Limits on support’ column, in the orchestral music category, the report reads: ‘Support is available for at least two high-standard orchestras (in additional to the New Zealand Symphony Orchestra): one in the North Island and one in the South Island.’ Small wonder that cultural leaders in Dunedin and Otago are alarmed.”

In response to quite a lot of the coverage that this received in recent weeks, a visit was made to Dunedin last week by Creative New Zealand chief executive, Stephen Wainwright. Mr Wainwright and Creative New Zealand arts infrastructure services manager, Jane Clarke, visited Dunedin to address the fears over the body’s new funding regime. They visited the Fortune Theatre, the Southern Sinfonia, and the Dunedin City Council, which was good. In an interview with the Otago Daily Times it was reported that Mr Wainwright said that facilities in Dunedin were remarkable for a city of its size. “They [Fortune and Sinfonia] do a lot well, in a very challenging environment.”, he said. Then he said that “Resources may or may not change. We try not to do that in a way that will do harm to the arts community.” Well, that sounds good so far. But then he said: “It is only sensible to look again after 20 or 30 years and make sure what you’re doing is relevant. Communities in New Zealand have very different flavours. There are some places where turbocharged changes are happening. For example, one baby in two born in Auckland is a Pacific Islander now. We wouldn’t be being responsible if we weren’t planning for those sorts of changes.”

So that is all good. Then he said that Creative New Zealand’s charter to provide excellence and accessibility remains “an aspirational goal”. Now, that is a phrase we have heard before in this House—a lot. Now we are hearing it from Government agencies. Then he said “‘We’re certainly very conscious that there are a lot of areas … where people say: ‘We want to have our own stuff’. But, the local authorities also have an obligation for the cultural wellbeing of a community. People want to live in a colourful arts and culture community. We hope these thoughts will crystallise at the council table.” Is that telling us that the council will be responsible for funding the arts in Dunedin? That is a serious concern for the community of Dunedin and Otago, but also Southland, because the Fortune Theatre and the Southern Sinfonia service the whole of that region.

I guess we could call this bill classic Think Big National policy, where streamlining becomes action without consultation. That is why we want to see the bill go to a select committee, because, as we have said, we are concerned that it will reduce representation and further centralise power in Wellington. I listened quite carefully to what the previous speaker, Nikki Kaye, said about Auckland being the centre of the arts, but there is a lot more to the artistic community in New Zealand than Auckland. Although Auckland is very important, the rest of New Zealand is important. Every community matters, and supporting the arts in every community matters. That is what I would hope that this Government would be doing, not just centralising funding around two or three centres.

Instead of having funding for artistic endeavours in communities throughout New Zealand, we could be left with a slow-moving, monolithic entity that serves—I would hate to see this; I hate to think of it—a select cadre of the Minister’s friends and does less to advance Kiwi creativity throughout all communities. Labour is concerned that the Arts Council is no longer required to prepare and publish, after public consultation, a strategic plan every 3 years, and is required to prepare a statement of intent only. That hints that the strategy will come from the Minister’s office, and will therefore be very top-down. I do not know what other conclusions one can draw from that.

The problem with this legislation is that it does not provide any forward thinking; there is no mention in the bill of project-based funding, and infrastructure and capital. We are also concerned that the Arts Council will now be charged with the rights of artists and may end up portraying an elitist view and not considering community artists—classic National Government tactics. This Government needs to look at whether other Ministers and ministries should be consulted when appointing the council members. In addition, Local Government New Zealand should be consulted about appointments.

Labour would like to see a clause in the legislation to review the council in 5 years’ time so that there is an assurance that every community and voluntary sector will not be excluded. It is our expectation that the select committee process will address these and other concerns.

KANWALJIT SINGH BAKSHI (National): I stand to support the Arts Council of New Zealand Toi Aotearoa Bill. This bill streamlines Creative New Zealand’s four governing bodies into a single entity. Art and culture depict the history of a country. This Government is very serious about preserving the art and culture of this country. If one wants to terminate the culture of a country, one does not need to burn books but one has to stop people reading them; one has to stop them from practising their culture. This bill will ensure that the high artistic and cultural ethics of the citizens of New Zealand are preserved.

Most important, this bill will result in the saving of approximately $200,000 per year. The benefit of this is that staff will be able to wholly concentrate on the arts sector. The Arts Council board will be responsible for policies, strategy, and funding allocation. There will be 13 members instead of the 28 members currently serving on the board.

Mahatma Gandhi once said that no culture can live if it attempts to be exclusive. To ensure that the new council is fully acquainted with a knowledge of Māori art, four members of the Māori heritage will be appointed by the Minister of Arts, Culture and Heritage in consultation with the Minister of Māori Affairs. By the same token, at least two members will be appointed who have equal awareness and understanding of Pacific Island people in New Zealand. Those members will be selected in consultation with the Minister of Pacific Island Affairs.

Rather than spending vital time and resources preparing a strategy plan, every 3 years the Arts Council will be required to prepare a statement of intent. This will ensure that staff can concentrate on creative work rather than servicing bureaucracy.

The key significance of the bill is the elimination of duplicate functions. This will permit the council to focus its approach totally on strategy and funding for the arts sector, which receives its funding from Creative New Zealand. The Government will no longer influence which bodies are funded. This bill will allow the Arts Council to make such decisions. Therefore the people of New Zealand will benefit greatly from this bill. It will give them a superior selection and better-funded variety of regional symphonies, theatre companies, and arts-related events in New Zealand. I congratulate Chris Finlayson, who has great passion for art and culture, on bringing this bill to the House. I fully support it.

Bill read a first time.

Hon DAVID CARTER (Minister of Agriculture) on behalf of the Minister for Arts, Culture and Heritage: I move, That the Government Administration Committee consider the Arts Council of New Zealand Toi Aotearoa Bill, that the committee report finally to the House on or before 3 December 2010, and that the committee have authority to meet at any time while the House is sitting (except during oral questions), and during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187 and 190(1)(b) and (c).

Motion agreed to.

Bills

Taxation (GST and Remedial Matters) Bill

First Reading

Hon PETER DUNNE (Minister of Revenue): I move, That the Taxation (GST and Remedial Matters) Bill be now read a first time. At the appropriate time I intend to move that the bill be considered by the Finance and Expenditure Committee, that the committee report finally to the House on or before 15 November 2010, and that the committee have authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day in which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 187, and 190(1)(b) and (c).

Since its introduction in 1985, New Zealand’s GST system has been internationally praised for its simplicity, its efficiency, and its transparency. Overall, our system operates very well. The overwhelming majority of taxpayers find the GST process straightforward, and GST itself is an efficient means of raising revenue for the Government’s various economic and social programmes. But over the passage of time, and with the growing complexity of our business environment in this country, some parts of the GST system have been identified as a cause for concern for taxpayers and the Government alike. The purpose of this bill is, therefore, to address those concerns by strengthening certain rules to maintain the integrity and the fairness of the GST system, and by simplifying others where taxpayers have told us that they are no longer certain about how those rules should be applied.

In order to protect the integrity of the taxation system and the revenue base, the bill introduces new rules to prevent so-called phoenix fraud schemes. These schemes involve the Inland Revenue Department refunding GST to a registered purchaser when there is no corresponding GST payment made by the supplier of the transaction. This is because the company is deliberately wound up to avoid the paying of GST. This particular practice has been of special concern in the property sector, when the amount of GST involved is often quite substantial. In order to prevent this practice, new rules will require GST-registered vendors to charge the GST at a zero rate on most transactions involving land, or in which land is a component, if the purchaser is also GST registered. That is a straightforward solution to a growing problem that has allowed a minority of taxpayers to avoid paying the tax that they should pay.

As members of the House will recall, the closing-off of this loophole was signalled by the Government in Budget 2010, as part of the reforms to promote fairness and integrity across the taxation system. It also follows from a consultation process that was undertaken from the latter point of last year onwards on these very matters.

The second part of this bill aims to bring greater clarity to certain parts of the GST rules, to make it easier for taxpayers to understand their particular GST obligations. In turn, that will help to reduce compliance costs for businesses. The purpose of these measures is to clarify those parts of the GST rules where taxpayers have been experiencing difficulty in accounting for GST or interpreting the legislation. For example, the current change-in-use rules that apply when assets are used for both taxable and non-taxable purposes—a case being when assets are used partly for business and partly for private purposes; that mix—will be replaced with an approach that apportions the input tax deductions according to the actual use of those goods and services. The GST boundary between residential accommodation, which is GST exempt, and commercial accommodation, which is not, will also be clarified. Similarly, the GST rules around transactions involving nominees, where the purchaser has nominated another person to receive the goods and settle the transaction, are being clarified as well.

Finally, to complete the GST reform package, the bill deals with an unintended timing problem for non-profit bodies in accounting for GST when they supply a large asset, such as a house for a person in need. This is an important change so that the GST rules do not act as an undue impediment to the decisions that non-profit bodies must make in the course of undertaking their work for others.

The remaining amendments in the bill are wide ranging and largely remedial in nature. They include allowing portfolio investment entities a deduction for credit impairment provisions, clarifying the tax treatment of superannuation funds under the National Provident Fund, clarifying the way that emissions units allocated by the Government under the emissions trading scheme are to be recognised for income tax purposes, and clarifying the fringe benefit on premises exemptions. This has been a particular problem that has arisen, and the law needs to be clarified to ensure that the clear intent of the fringe benefit tax legislation is being recognised in the law as it stands.

Overall, the bill presents a sound package of measures that will help to protect the integrity of the GST system, promote greater fairness across the taxation system generally, and give greater comfort to those who enter certain business transactions that the decisions they make will be compliant with the law. I need to make the point that this bill is not about the increase to the GST rate that comes into effect on 1 October, nor is it about whether certain suppliers—for example, of food—should be exempt from paying GST or zero-rated for GST purposes. Those matters were decided by this House in the legislation that was passed back in May. This bill is about delivering upon the Government’s promise to strengthen the integrity of the taxation system and ensure that people cannot misuse the system to avoid paying their fair share of tax. Consequently, it is with pleasure that I commend the bill to the House.

STUART NASH (Labour): I rise to support the Taxation (GST and Remedial Matters) Bill in its first reading, and I wish to talk about two things tonight. The first thing that I wish to talk about is what an absolute shambles the whole introduction of the GST increase is turning out to be. The second thing is what a legislative necessity this bill is.

This bill contains a whole raft of amendments, which the Minister has highlighted. It involves changes to Acts ranging from the Income Tax Act 2007 right through to the Local Government (Auckland Transitional Provisions) Act 2010. So it is wide ranging in its scope and reach, and its amendments are part of the ongoing process of improving legislative integrity. But one cannot go past any GST bill without commenting on the absolute shambles that the whole implementation of the GST increase is turning out to be. It is, quite frankly, a disgrace.

Tonight I was listening to the member for Whanganui, Chester Borrows, speak. That seat will be taken by Labour’s Hamish McDouall at the next election. When Chester Borrows stood up, his first comment was along the lines that it was great to be able to stand up and implement policies that the Government had campaigned on. Then he finished his speech by saying he is proud to be part of a Government that does what it promises to do. Chester Borrows is a good man. He will be a list MP next time, and he is a man with a conscience. But Chester Borrows is also part of a Government that is implementing a policy that the National leader promised not to implement. I bet that he feels mighty uncomfortable about that, as do many of his colleagues.

It all started when the previous Leader of the Opposition, one Mr John Key, stood up in front of the nation and laid the fears of ordinary New Zealanders to rest as they were sitting in their living rooms. He said to them that National would not raise GST if he became the Prime Minister. In fact, in answer to a specific question from a reporter who asked whether Mr Key could rule out raising GST to 15 percent, Mr Key replied that National would not be raising GST. Mr Key looked into the camera and said National would not be raising GST. There was no ambiguity in that statement; there was no hidden meaning, and no doublespeak. It was just plain English: National would not raise the rate of GST. How dare Mr Borrows stand up here and say he is proud to be part of a Government that is implementing policies that it campaigned on? I wonder how proud he is to be part of a Government that is implementing policies that it said it would not campaign on.

Well, Mr Key did raise the rate of GST. The implementation of this increase has been a bloody disaster. We are still 6 weeks away from this implementation. On 10 August a large accountancy firm, Ernst and Young, threw up its hands in frustration and in a press release stated “As we face the harsh reality of the 1 October GST increase to 15 percent many are realising this is not a modest increase and the issues are actually more complex than anyone first imagined.” Ernst and Young is a large private accountancy company and would normally welcome any new tax measure, as it creates work and generates fees. However, this time even Ernst and Young are finding that all the changes to GST are totally ill-conceived, very poorly planned, and very poorly communicated. I have heard stories that Inland Revenue Department staff are reaching the point of revolt, as they just do not have the information at hand to answer questions arising from this whole process.

What will the cost of this process be? Every small company that runs the accounting package Mind Your Own Business, currently known as MYOB, will pay $229 plus GST for its accounting upgrade, and $269 plus GST for its payroll upgrade. That is $498 plus GST for every small business in this country. My advice to MYOB users is to purchase the upgrades before 1 October, because they will save themselves $12.45 in GST. Of course, not every small business runs MYOB. But this is a pretty standard, off-the-shelf accounting package. So let us hypothesise here; let us say around 100,000 small to medium sized enterprises use some form of accounting package. That is a cost of around $50 million being taken out of the New Zealand economy. We can thank Mr Dunne for that. In fact, I think it is pretty fair to say—and we have our deputy party leader here—to Mr Dunne that he will not be the Minister for Revenue in 18 months’ time in the sixth Labour Government, like he was in the fifth Labour Government. I think it is pretty safe to say Charles Chauvel will ensure that Mr Dunne is, in fact, no longer an MP.

There is a second point I would like to make, which is about the legislative necessity of this particular remedial matters bill. By definition, remedial matters bills are supported because they play an important role in tidying up legislation and closing down holes or gaps that people may be exploiting. That is certainly the case with this bill. I must admit, though, that when I saw another tax bill on the Order Paper I wondered about what kind of pain Mr Dunne was planning to inflict on New Zealanders. I wondered about what dreaded scheme Mr Key and Mr English had concocted to take more money from the majority of hard-working New Zealanders. Then I remembered that this Government does not have a plan. I have not seen any plan for growing the economy, for creating jobs, and for providing for a long-term, sustainable future for New Zealanders. In fact, I am still waiting for a plan from the “Hollow Man”.

The headline provision of this bill is that it requires GST-registered vendors to charge, subject to certain conditions, GST at the rate of zero percent on any supply to a registered person involving land, or in which land is a component. This measure is intended to prevent phoenix fraud schemes that involve the Inland Revenue Department refunding GST to the purchaser, with no corresponding payment being made by the vendor because the supply company deliberately winds up before making a payment. Basically it closes down a fraud and gets rid of a scheme that people are using to rip off you and me—the taxpayers who work incredibly hard, and who pay their share. I will get a little technical now. However, this is most important, because I want to run through very briefly some of the changes that this bill may give effect to. These changes may not affect many people, but those who are affected need to understand that the law will tighten up around these areas. That is an important part of this bill. The House should be aware that if the bill gets support for its first reading—and there is no reason to assume that it will not, because, as I mentioned, Labour is supporting it—then everything that we have spoken about will go through the select committee process and be open to submissions, unlike the increase in GST that went through the House in May of this year.

We are talking about the sharing of KiwiSaver information, the on-premises fringe benefit tax exemption, joint bank accounts, the application of overseas donee status to certain charities, the treatment of superannuation funds administered by the National Provident Fund, Auckland City Council restructuring, and the taxation treatment of emissions trading units. People will have a chance to make submissions to the select committee on all that sort of technical stuff.

To sum up, I spoke broadly on two key things. The first one is that this is an important bill, because it makes a series of changes that are necessary to preserve the integrity of the taxation system, to close loopholes, and to make changes that are necessary as the regulatory environment changes. This bill is likely to go through to a select committee so that the people of New Zealand can have their say and exercise their democratic right on it. They can make submissions, speak to their ideas, and challenge the process, unlike the tax bill that increased the rate of GST to 15 percent. New Zealanders had no say on that, and that was my second point. New Zealanders had no say in that matter. In fact, it was even worse than that. New Zealanders were told by Mr Key that National would not raise GST, but it did. That is not democratic. He did not take it to the electorate, which Chester Borrows is so proud of saying the National Government does. Mr Key sideswiped the democratic process. He told the people of New Zealand something that he went back on. He flip-flopped.

There is no plan, no strategy, and not even any milestone—just gallstones. They are very painful and are impossible to pass without urgency. Thank you.

CRAIG FOSS (National—Tukituki): As tempting as it is, I will just stay to the Taxation (GST and Remedial Matters) Bill—just briefly, because members have obviously been enjoying themselves tonight.

First, I acknowledge the Minister of Revenue. I also acknowledge the bill’s tight time frame. If the bill passes its first reading it will to go the Finance and Expenditure Committee.

In spite of the rhetoric, most members accept that there is ongoing change: markets change, systems change, things change, and, yes, GST is changing. But, as the Minister noted, the debate here is not about the quantum of GST at all; it is about the administration of GST and closing some of the loopholes. Some of the changes even address matters that members opposite have been spending a bit of time on lately, in and around various property schemes.

GST debates are generally about where the GST rate is set, but I think that across the House the integrity, fairness, and transparency of the GST system have been well noted. Previous Governments over many years have left it relatively unchanged, although there have been many, many tidy-ups along the way.

As previous speakers have noted, yes, there are some headline items here, including the phoenix schemes, and I am sure the select committee will spend a bit of time learning about them. There are also a lot of remedial matters, which we will see as we go through the detail of the bill. For members who are interested, it is well worth noting that much of this came from the GST: Accounting for land and other high-value assets discussion paper released in November 2009. I also note that there are two regulatory impact statements in and around this bill, but, interestingly, I cannot quite quantify what is going on under the phoenix schemes, although obviously there is some mischief going on there.

I will pick up on one point made by the previous speaker, Stuart Nash, in relation to issues around the implementation of various Acts and things. Most important, the bill amends the KiwiSaver Act 2006, which was brought in under the previous administration. Much of this bill amends part of that Act, which has had quite a few appearances before this House in Supplementary Order Papers and remedial matters bills, piggybacking on other legislation to fix it up because it was brought through in haste quite some years ago. But there is general acceptance that some changes are needed. I am particularly in favour of the changes to KiwiSaver that make KiwiSaver itself more relevant in relation to data changes and the way in which most consumers expect their data to be able to be used by default providers and the Inland Revenue Department in this modern age. It reflects consumers’ expectations and it is a good example of legislation keeping up with current practice.

I look forward to this bill coming before the hard-working Finance and Expenditure Committee. I commend the bill to the House.

BRENDON BURNS (Labour—Christchurch Central): The Taxation (GST and Remedial Matters) Bill makes a number of amendments to KiwiSaver, and I will speak this evening about the National Government’s lamentable record on savings. It is a lamentable record that stretches back more than 35 years. It is totally regrettable that the Government is not using this bill to undo the damage done to the KiwiSaver scheme when it passed legislation in a rapid rush prior to Christmas 2008, in order to fund the first round of tax cuts for its wealthy mates. But here we are, less than 2 years later, with the Government beginning to realise that saving is important to this nation and its future, and starting to look at how it can make amends.

The National Government gutted KiwiSaver by taking away the requirement that over time employers contribute 4 percent to the KiwiSaver schemes of their employees. Australia, as a comparison, has a 9 percent employer contribution to the superannuation savings of Australians; we had a scheme that was moving to 4 percent, but this Government cut that in half in order to fund tax cuts for its rich mates. What an absolute disgrace!

Labour, when in Government, talked about, and acted on, the savings problem in New Zealand for years. We introduced KiwiSaver and the Cullen fund, but National’s response was simply to go in and cut what had been the first increase in household savings in a generation. It went back to the time of the Kirk-Rowling superannuation scheme, which was axed by another National Government, Rob Muldoon’s Government, in 1976. If that scheme had still been in place, we would have a kitty of some $300 billion—

Hon Steve Chadwick: How much?

BRENDON BURNS: We would have $300 billion in the kitty, which is the estimate I heard this week, and we as a nation would be able to draw on that. We would be a wealthy and prosperous nation if National, when in Government, had not played politics with superannuation and savings 35 years ago. What a disgrace! And National did it again 2 years ago in the run-up to the election of 2008. National promised New Zealanders tax cuts, and then quietly mentioned that it was going to cut KiwiSaver to fund them. What a backward step, what a retrograde step, and what a short-sighted step. Now, within 2 years, this Government has to acknowledge that what it did was wrong, and that it was short-sighted. It is now scrambling around trying to form a committee to look at savings, because it did such a reprehensible and retrograde thing such a short time ago.

Labour understands, and has always understood, that the difference between the Australian and New Zealand economies is not about mining; it is about saving. But this Government has cut the scheme introduced under Labour, which was to start us towards a savings regime that would give us some measure of complementarity with the Australian savings regime. It has also parked the funding that was going into the Cullen fund, despite the fact that the Cullen fund is now starting to make very positive sets of returns, having bounced back from the recession, as most investment schemes have done to date.

National is absolutely rudderless on this issue of savings. It is desperately now trying to set up a savings task force. I wonder whether Don Brash will be invited to head that one. When a Government has no idea what to do, it gets a task force or a committee together, and that is what this Government has been reduced, absolutely reduced, to doing. National’s history on the whole issue of savings has been a disgrace.

I recall the Winston Peters - initiated referendum in the early 1990s—I voted in support of that—for a compulsory savings regime. It was supported by no more than a handful of New Zealanders, but here we are 20 years later and we are seeing compulsory savings start to come back into focus, and appropriately so in our view. But I noted from tonight’s news that Winston Peters has a new crusade. He will be standing in the seat of Helensville, and he will be challenging the Prime Minister for that seat. Many New Zealanders will be looking forward to that contest and will be judging this Government on its record on issues like savings.

National’s record on savings, even in the last 2 years, has been shown to be shallow and entirely focused on winning an election and not focused on the future prosperity of New Zealanders. National was entirely focused on winning the last election, bribing New Zealanders, and telling them that they could have their cake and eat it too. Within a few months, National had to backtrack and pass legislation to partly put it back in the box, and now this Government is scrambling around to find a way forward on savings. A solution was in hand with the KiwiSaver regime. The employer contribution would have been at 4 percent, to put us on track towards some sort of comparison with Australia in terms of our savings record.

Let me remind members again that there would have been $300 billion for New Zealanders in accounts today if a National Government had not cut it in a disgraceful fashion, and if it had not pledged to New Zealanders at the 1975 election that they could have Government-funded, taxpayer-funded superannuation at the age of 60. It was an absolute travesty. New Zealanders knew in their hearts that it was wrong, and it has taken us a generation to begin to sort it out. Now the National Government is scrambling around again, trying desperately to find a solution to the whole issue of savings, when solutions were put in place by the previous Labour Government. It was all done for the sake of electoral appeal. National knew that tax cuts would not work, most especially as an international recession of the most severe consequence since the Depression was starting to take hold, and still John Key stood on a platform and said: “Yes, absolutely, New Zealand. I promise you these tax cuts are affordable.” They were not affordable and he knew it. He made his money in the financial markets. He knew that markets could be knocked around by an international recession, yet he still went to the polls in November 2008, telling New Zealanders that they could have their cake and eat it too. He said they could have tax cuts, and he funded them by cutting the very sensible KiwiSaver scheme, which the previous Labour Government had implemented. Now we are seeing National scramble around, desperately trying to find a way forward.

This bill also amends the Goods and Services Tax Act. Some of the amendments are entirely sensible and appropriate, but I cannot let the moment pass without noting that we will on 1 October see an increase in GST to 15 percent. We know that New Zealanders are bracing themselves for that increase. In fact, it is already starting to happen. This month, in my city of Christchurch, the bus fares have gone up by 10 percent ahead of the GST rise that is coming in October. The bus fares have gone up by 10 percent. Yes, part of that increase is due to another piece of National legislation requiring that at least half of the cost of bus fares is met by passengers, but bus companies are also saying they have to start factoring in GST of 15 percent. Long before New Zealanders get any sense of relief from tax cuts—which were, supposedly, going to be nirvana for them, but which they know that they will not be; they know that the rise in GST will knock them for six—we are already starting to see the GST increase being factored in by businesses across the country.

I have been looking for a new electorate office in my electorate. The state of the economy is shown in the fact that I have been offered premises at half the price that those premises were being offered at 2 years ago. That is the state of the economy before the GST increase impacts on New Zealanders and their livelihoods, and they have to find another 2.5 percent from already stretched incomes. Christchurch is a city where people cannot find jobs, and where we have had 12,000 job losses over the past year—12,000 job losses. We are seeing that impact on restaurants that are empty, on hotel beds that are empty, and on a service sector that is feeling the pinch, and that is before the GST rise of 2.5 percent takes effect from 1 October.

This Government stands condemned. It has cut savings. It is increasing GST. It has a shameful, shabby record, about which members opposite should be feeling absolutely disgraced. This Government’s record on saving is appalling. It has neglected saving for 35 years, it did that at the 2008 election, and it is doing that again today.

Debate interrupted.

The House adjourned at 10 p.m.