Thursday, 7 July 2011

Thursday, 7 July 2011

Thursday, 7 July 2011

Mr Speaker took the Chair at 2 p.m.

Karakia.

Business Statement

Business Statement

Hon SIMON POWER (Acting Leader of the House): When the House resumes on Tuesday, 12 July the Government intends to move the first reading of the Subordinate Legislation (Confirmation and Validation) Bill (No 3), and to make further progress on the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill, the Electoral (Administration) Amendment Bill (No 2), and the Misuse of Drugs Amendment Bill.

Hon TREVOR MALLARD (Labour—Hutt South): I thank the Leader of the House for his advice. I wanted to check that he has no plans for urgency next week.

Hon SIMON POWER (Acting Leader of the House): Not at this stage.

Questions for Oral Answer

Questions to Ministers

Economy—Reports

1. TODD McCLAY (National—Rotorua) to the Minister of Finance: What reports has he received on the economy?

Hon BILL ENGLISH (Minister of Finance): The general picture is that the economy has stabilised and is beginning to grow steadily. Both the June Quarterly Survey of Business Opinion and the National Bank survey showed levels of business confidence returning to where they were prior to the recession in 2008, with the exception of the construction sector, which remains weak, and some uncertainty about Christchurch. Overall, the economy is expanding in line with Budget forecasts.

Todd McClay: What steps has the Government taken to ensure that this lift in confidence is sustained?

Hon BILL ENGLISH: The policies that the Government has pursued are assisting with the improvement, with activity and confidence, which have both risen in the face of the earthquake, and with rising household savings, despite a fairly high dollar. In our first Budget we turned back a decade of deficits. In our second Budget we invested in infrastructure and changed the tax system. In this last Budget we have set out a track back to surplus. If the Government has its books under control it gives confidence to everyone else that they can get on with it.

Todd McClay: What policies would endanger this lift in confidence?

Hon BILL ENGLISH: New Zealand is currently enjoying low taxes, stable Government spending, the lowest interest rates in 45 years, and the highest savings rates in 20 years. Most of what the Opposition is proposing would undermine all of those things.

Mine Safety—Underground Mines

2. KEVIN HAGUE (Green) to the Minister of Labour: Does she agree that the test of practicability in the Health and Safety in Employment (Mining-Underground) Regulations 1999 is likely to result in different mines having different safety standards, in contrast to the regulations in place until 1992?

Hon KATE WILKINSON (Minister of Labour): No. The 1999 underground mining regulations set both general and specific duties in relation to recognised hazards in underground mining. In meeting these duties, both specifically and more generally, mine operators are required to take all practicable steps to manage the hazards in the particular circumstances of the mine. There may be different ways for mines to meet the standard, but the standard remains the same.

Kevin Hague: Does she agree that a well-resourced mining company will be able to afford more safety measures, and thereby find them practicable, than a less well-resourced mining company?

Hon KATE WILKINSON: The standard remains the same, whether or not the mine is small. The employer must take all practicable steps to manage the hazards in the particular circumstances of the mine.

Kevin Hague: Does she agree that mandatory rules requiring all underground mining companies to continuously monitor for the presence of flammable gases would result in safer mines than the current regulation requiring employers to take all practicable steps to test for the presence of such gases?

Hon KATE WILKINSON: I do not want to speculate on hypothetical questions relating to the actual requirements, but can I say those matters are subject to a royal commission of inquiry, and we will be looking at the recommendations of that inquiry very carefully.

Kevin Hague: I raise a point of order, Mr Speaker. There is nothing hypothetical about the question, and the issue of a comparison of the two sets of standards, which is what the question related to, is entirely independent of the royal commission.

Mr SPEAKER: What the member asked, though, was whether the Minister agreed with something, and the Minister has a range of ways to indicate whether she agrees with something. With that kind of question, I cannot help the member a lot further.

Kevin Hague: Does she share the concerns of mine safety experts that the practicability standard in our mine safety regulations allowed a 55-metre-high sheer vertical escape ladder in the Pike River coalmine, rather than what the previous standards specified, which was a safety platform every 9 metres or so?

Hon KATE WILKINSON: Of course we have concerns about mine safety, which is why we have taken the matter of Pike River and the tragedy that happened there very seriously. That is why we have a royal commission of inquiry in relation to that. But in relation to the practicable steps, I believe that that is a high standard. Indeed, in the High Court Justice Ellis noted: “The obligations on an employer are uncompromising and onerous. An employer must be proactive and anticipate harm, and take all practicable steps to minimise it.”

Kevin Hague: Is the Minister saying a practicability standard is equivalent to a mandatory standard?

Hon KATE WILKINSON: No.

Kevin Hague: What possible reason is there to wait until the royal commission reports, before making urgent moves to improve the safety of workers going underground every day right now?

Hon KATE WILKINSON: Following the tragedy at Pike River, we undertook an independent audit of the other underground mines. There was no indication of any imminent danger in those underground mines. We will be looking very carefully at the no doubt comprehensive review and recommendations of the royal commission of inquiry.

Kevin Hague: I seek leave to table this photograph of the 55-metre sheer vertical escape ladder at the Pike River mine.

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

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

Hon Trevor Mallard: Is a practicability standard higher or lower than a mandatory standard?

Hon KATE WILKINSON: It is not a question of whether it is a higher or a lower standard; it is a question of whether it is an appropriate standard. Practicable steps have been assessed as being a high standard, and, in fact, have been assessed as being “uncompromising and onerous” in terms of the employer’s obligations.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a very simple and very direct question, and for a Minister to say that is not the question is, in my submission, not an appropriate way to start an answer. The next part of my point of order is that given that, the actual question was not addressed. She might say she thinks it was high—

Mr SPEAKER: The member asked which was the higher standard, if I recollect correctly, as between practicability and the mandatory standard. The Minister’s answer said she believed that was irrelevant—that is what I believe the Minister implied by not saying whether one was higher than the other. She said what was relevant was—I do not want to paraphrase the Minister’s answer. To me, she is entitled to do that—not to say one is higher than the other—if she believes that a comparison is not relevant to safety. That is what I believe the Minister was indicating. If I am wrong, I invite the Minister to correct me.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. This is a further point of order. I think that does goes to the essence of questioning in this House. My submission to you is that it is not for a Minister to say a question is not the question that should be asked, and the Minister would rather answer another question, which is what the Minister just did.

Mr SPEAKER: No, that is not what I believe the Minister did. In fairness, I believe the Minister argued, in answering the question, that the comparison with regard to which was the higher or lower of those two standards was not a relevant issue to safety, and therefore she was not prepared to say whether one was higher or lower because in her view that was not relevant to mine safety. She was not saying the member had asked the wrong question, but in answering the question—if I heard her correctly—she was saying that comparison, whether higher or lower, is not relevant to safety. Whether that is a good answer is not my job to judge. That is what I believe she answered, and I believe that is an answer to the question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I will have one further go. My supplementary question did not have a safety aspect to it at all.

Mr SPEAKER: Well, I believe these are safety standards that the member is talking about, and that is why I believe—

Hon Members: Higher or lower?

Mr SPEAKER: Well, I do not believe, with regard to these standards, that the issue is where they are placed on a scale of altitude; it is a matter of being higher or lower with regard to safety, and—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. That is the very essence of the question. The Minister has lowered the standards—

Mr SPEAKER: No, that is not a point of order.

Hon Trevor Mallard: —and people have died.

Mr SPEAKER: That is definitely not a point of order. I have listened to the questions very carefully—and these are serious questions; they are absolutely serious questions. I have listened to the Minister’s answers very carefully, and it is not my job to judge how good they are; it is my job to assess whether she has answered the question. It is within the Minister’s rights to argue with regard to a question asked in terms of standards relative to safety that one standard is not higher than another. She has argued that that is not the relevant issue, and I believe that is a fair answer to the question. People can judge its quality; that is not my job as the Speaker. I cannot rule that Ministers should answer further just because some members may not feel the answer is a good answer. I cannot rule on that.

Hon Damien O’Connor: Why did her department take 10 weeks to conduct an on-site inspection of Spring Creek Mine after it was closed for production on the day of the Pike River disaster, and does this delay give an accurate indication of the inadequate level of monitoring her department was able to carry out to protect the safety of miners in underground mines?

Hon KATE WILKINSON: In answer to the second part of that question, no.

Hon Damien O’Connor: I raise a point of order, Mr Speaker. The Minister herself separated out the question. I would like to hear the answer to the first part of the question, as well.

Mr SPEAKER: A point of order has been taken; there will not be comment. If the member wanted the first part of the question to be answered, that is all that he should have asked.

Darien Fenton: Does she stand by her decision, outlined in a letter dated 12 November 2009 from her department to the Engineering, Printing and Manufacturing Union, which states “The Minister considers that the existing legislative framework under the Health and Safety in Employment Act 1992 already provides a good basis for effective employee participation.”, and that she does not agree to a regulatory change to introduce check inspectors, nor for there to be an improved code of practice for employee participation specifically in the mining sector?

Hon KATE WILKINSON: Yes, I do stand by those statements, but I am also looking forward to the recommendations of the royal commission of inquiry, which will be able to show whether our regulatory framework is appropriate, and where, if anywhere, it can be improved.

Darien Fenton: I seek leave to table the letter I just quoted from the Department of Labour to the heath and safety coordinator of the Engineering, Printing and Manufacturing Union, dated 12 November 2009.

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

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

Hon Damien O’Connor: I seek leave to table in the House an audit report on Spring Creek Mine that shows this audit was conducted 10 weeks after the disaster at Pike River.

Mr SPEAKER: Could we just check who compiled the report?

Hon Damien O’Connor: This is a Department of Labour report.

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

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

Pay Equity—Gender Gap

3. Hon ANNETTE KING (Deputy Leader—Labour) to the Prime Minister: In light of his comment that “New Zealand is to be congratulated because, at least in terms of the gender pay gap, ours is the third lowest in the OECD”, does that mean he is satisfied with the 10.6 percent gap between men’s and women’s pay in our country?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: No. Of course it means there is more change to occur, but New Zealand is in a better position on an international comparison than most other OECD countries.

Hon Annette King: Is he aware that a claim against an employer for pay discrimination on the grounds of gender cannot be made unless the claimant has information to prove that she has been discriminated against; if so, how does he suggest this information be gathered?

Hon BILL ENGLISH: I am aware of that debate, and I understand there is a proposition to introduce a member’s bill into the House to resolve it, which, of course, will be a waste of time, because the Labour Party is filibustering all members’ days and that bill will never be debated.

Hon Annette King: I raise a point of order, Mr Speaker. I think I asked a pretty straightforward question. To flick off at the Labour Party about some other debate hardly satisfies as an answer.

Mr SPEAKER: What the Minister said in his answer was that he was aware of this issue and the debate on this issue. He did not offer any answer himself. The member had asked whether he could explain how such a person could obtain the information, and the Minister was unable to explain how the person would get the information, but he did say that a member’s bill was to be introduced to address that. That was an answer to the question.

Hon Annette King: Does he believe that privacy issues override the rights of women to receive equal pay for equal work; if so, why?

Hon BILL ENGLISH: We in Government are always, as the member will know, balancing personal privacy issues with the requirements of achieving the public good. In the case of pay equity, it is simply not legal to pay people different amounts based on their gender. There is the opportunity for individuals or the courts to enforce what has been the law of Parliament for several decades.

Hon Annette King: If privacy issues can be mitigated, as suggested by the Human Rights Commission, will National support legislation that would require employers to report on gender pay rates in their workplace, and release aggregated information on gender to employees on request?

Hon BILL ENGLISH: If someone proposed legislation of that sort, then we would consider it. But it looks as though it would be a very low priority for the Labour Party, because it is spending most of the year on the Royal Society of New Zealand Amendment Bill, which is taking up all of the members’ time available to Parliament.

Metiria Turei: I seek the leave of the House to have the pay equity member’s bill in the name of Catherine Delahunty set down for first reading on the next sitting day.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is objection.

Hon Annette King: Does he agree with Elizabeth Bang from the National Council of Women, who said that people should be able to ask whether there is a disparity in pay between people who work in similar positions, and that there should be transparency; if so, how does he intend that his Government will make it happen?

Hon BILL ENGLISH: The Government is yet to see the detail and be persuaded of the merits of the case. But I might point out that significant progress is being made. The measure of the gender pay gap shows that it has dropped from 13 percent in 2008 to 10.6 percent in 2010. In fact, it has reduced more quickly over the last 3 years than at any other time since it has been measured.

Hon Annette King: Given that he said earlier in the week that he does not know whether women are being paid differently because of their gender, will he listen to the growing chorus of leading New Zealand women, from the former Prime Minister Dame Jenny Shipley to Janet Tuck, Cathy Quinn, Mai Chen, and Dr Judy McGregor, to name just a few, who are telling the Government that there is a gap and it ought to do something about it?

Hon BILL ENGLISH: Of course the Government will listen to anyone who articulates an interesting and challenging point of view. The fact is there are many causes for the gap in pay, and it has been improving at a faster rate in the last 3 years than at any time in the last 15 years.

Carol Beaumont: Does the fact that only a handful of equal pay cases have been taken in the last 30 years under either the Equal Pay Act or the Human Rights Act show that there is no issue with women being paid differently because of gender, or that the existing legislation is not adequate to deal with the problem?

Hon BILL ENGLISH: It is also possible that employers and employees follow the law, and the law says that someone cannot be paid differently based on their gender.

Carol Beaumont: When he is looking closely at the gender pay gap of 27.5 percent in the Department of the Prime Minister and Cabinet, will he also look closely at the gender pay gaps of other Government departments, which, based on the report of Dr Judy McGregor, include a gap of 29 percent in Treasury, 30.65 percent in education, and 26.09 percent in the Crown Law Office, or will he put that down to “different people are doing different jobs, it is not an issue of gender; it is an issue of the jobs they perform.”?

Hon BILL ENGLISH: I certainly agree with the second statement. If there is evidence of pay discrimination in Government departments, then the Government as an employer has to comply with the law. We would expect to take action to deal with any pay discrimination.

Unemployment Beneficiaries—Number

KATRINA SHANKS (National): On behalf of Louise Upston, to the Minister of Social Development and Employment, what reports has she received—

Mr SPEAKER: I apologise to the honourable member. Would both the Hon Annette King and the Hon Bill English please cease the interjections—and the Hon Chris Finlayson for good measure, too—because I cannot hear Katrina Shanks.

4. KATRINA SHANKS (National) on behalf of LOUISE UPSTON (National—Taupō) to the Minister for Social Development and Employment: What reports has she received on the latest benefit numbers?

Hon PAULA BENNETT (Minister for Social Development and Employment): The June benefit numbers show nearly 800 fewer people on the unemployment benefit since May, and 94 percent of that reduction is of young people—that is about 754 of that nearly 800. This is the fifth consecutive month that benefit numbers have fallen, and the first time in 4 years in the month of June that numbers have fallen, as well, which is of course a credit to the sound economic direction set by our Prime Minister and this National-led Government.

Katrina Shanks: What impact have this Government’s policies had on benefit numbers?

Hon PAULA BENNETT: This Government has reduced the numbers on the unemployment benefit by more than 9,000 since September, with a range of measures designed to give businesses coming out of the recession the confidence to take on new staff. These measures include lowering company and personal tax rates in October, and in April this year; extending the 90-day trial period to all companies, which has made a significant difference; providing 12,000 Job Ops places for young people; and implementing the first phase of the welfare reforms in the Future Focus package last year.

Te Ururoa Flavell: Kua heke iho te tatauranga mō ngā tāngata Māori e noho kore mahi ana?

[Has the number of unemployed Māori reduced?]

Hon PAULA BENNETT: The number of Māori receiving unemployment benefit - related benefits decreased by 399, or 2 percent, during June. [Interruption] Do you not want to hear the answer about Māori and unemployment—

Mr SPEAKER: I apologise to the Minister, but a member of the Māori Party asked a supplementary question; he has the right to hear the answer. I ask the Labour Party on this occasion to please cut the noise, because it is so discourteous. [Interruption] On this occasion the Hon Annette King, again, is being particularly naughty, and the honourable Minister, the Hon Paula Bennett, will cease this noise. When I am on my feet this nonsense will stop or someone will be taking an early shower.

Hon PAULA BENNETT: The number of Māori receiving unemployment benefit - related benefits decreased by 399, or 2 percent, during June. This decrease was larger than the overall decrease of 1.4 percent in unemployment benefit - related benefits. The largest decreases were in the Auckland region, where the number was down by 374, and the Northland region, where it was down by 112. The number of Māori on the unemployment benefit in June 2011 was 19,400, and in June 2010 it was up at 21,100, so we are making a bit of a difference.

Earthquakes, Canterbury—Allocation of Land Value in Crown Purchase Offer

5. Hon CLAYTON COSGROVE (Labour—Waimakariri) to the Minister for Canterbury Earthquake Recovery: Does he consider the allocation of the value of the land within the rating valuation process to be robust, when it has produced such variable outcomes, leaving many in the red zone with insufficient funds to buy a section to take advantage of the replacement option in their insurance policy?

Hon MAURICE WILLIAMSON (Associate Minister for Canterbury Earthquake Recovery) on behalf of the Minister for Canterbury Earthquake Recovery: The Minister can only accept the valuation that was accepted by the Government of the day—that member was the Minister for Building and Construction at the time, and his colleague David Parker was the Minister for Land Information—back in August 2007. The 23 June offer by the Government to purchase properties in the most damaged areas at the 2007 rating valuation is a fair and balanced one.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I think the Minister may be confused. My question was about land value, not property value per se—land value. There is a distinction.

Mr SPEAKER: Well, I believe that what the Minister said in his answer was that he did believe that it was robust because the Ministers of the day had accepted that it was robust. That was what I thought the Minister answered. If I am wrong on that, the Minister had better indicate I am wrong, but he is not doing that.

Hon Lianne Dalziel: I raise a point of order, Mr Speaker. The question talks about the value of the land within the rating valuation process—

Mr SPEAKER: What I understood the Minister to indicate was, given this question, I presume the Ministers of the day accepted that the land within the rating valuation process was a robust arrangement, and the Minister is saying that he is not second-guessing the Ministers of the day—that he accepts their judgment. That would seem to be what the Minister was saying.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. That might well have been what the Minister meant to say. I know that it is an unusual process, but can I seek the indulgence of the House to ask the Minister to repeat his answer, because I do not think that was what he did actually say.

Mr SPEAKER: I listened very carefully, and I accept that the Minister could perhaps have been more precise in his answer. If the questioner indicates to me that the way land values are treated within the overall rating process has changed since 2007—that that process has changed—I will allow him to ask his question again. If it has not changed, the answer is relevant, because the Minister in answering said the Ministers of the day had accepted it was robust and he is not second-guessing that.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think he said the property valuation is robust, but that is not the land. I think that is what he said.

Mr SPEAKER: We are not going to debate it by way of point of order. We have done that for long enough. There are further supplementary questions. I believe that the Minister answered it. It may not have been exactly the answer the member wanted, but given the question asked, it was an answer.

Hon Clayton Cosgrove: Will he be putting in place a formal appeal process to address any issues of inconsistency in the rating values of land, recognising that the rating evaluation mechanism was never established for the purpose of paying out on land damaged by a natural disaster—referring here to land?

Hon MAURICE WILLIAMSON: I understand that a whole lot of the technical, specific details of the package are still to be worked through. I understand that the Minister has had brought to his attention some issues about land valuations with regard to cross-leased and unit title sections. And I understand that all of those will be addressed in great detail as the package is brought to the market.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. It was a relatively straightforward question that asked “Will he be putting in place a process?”.

Mr SPEAKER: And it was a good question, I say to the honourable member, if I may be so humble as to do so. But the Minister indicated in his answer that the details of the package to which appeals might relate are not yet finalised. He cannot indicate to the member whether there will be an appeal process, because the package that relates to all of this is not yet finalised. That is what I believe the Minister said. That is an answer to the question. He cannot indicate whether there will be an appeal process, if the package that might contain an appeal process has not yet been developed, not yet been finalised. I believe that the Minister has given a genuine answer to that question.

Hon Clayton Cosgrove: Does the Minister now accept that his public commitment—which he repeated as late as 15 June, and was detailed in yesterday’s questions to him—that the equity that earthquake victims have in their properties will be preserved has about as much value now as many of those damaged properties in Christchurch?

Hon MAURICE WILLIAMSON: No.

Hon Lianne Dalziel: Does the Minister accept that the rating valuation process divides the total capital into two components—land and improvements—and does he now accept, knowing that so many in the red zone have insufficient funds to buy a section, that the land component is not fair and balanced?

Hon MAURICE WILLIAMSON: With regard to the first part, yes, I do. All I can say is that homeowners have their rating valuation from 2007. An analysis from the Institute of Valuers shows that sales prior to 4 September confirm that we have come up with a fair number. For example, where the member lives, I understand—in Bexley—just prior to the 4 September earthquake properties were selling for around 93.7 percent of their rating value.

Hon Lianne Dalziel: Can he confirm that in certain situations the Earthquake Commission’s cash settlement for land within the red zone will be more than the land component of the 2007 rateable value; if so, what steps is he taking to notify homeowners of this option, before the Government offer is made on a formal basis?

Hon MAURICE WILLIAMSON: No, I cannot confirm that.

Hon Lianne Dalziel: Supplementary question, Mr Speaker.

Mr SPEAKER: Before I call the member further, I invite the member to repeat the question she just asked. It was a very reasonable question and I want to make sure I heard it correctly myself. The member may repeat her last question.

Hon Lianne Dalziel: Can he confirm that in certain situations the Earthquake Commission’s cash settlement for land within the red zone will be more than the land component of the 2007 rateable value; if so, what steps is he taking to notify homeowners of this option, before the Government offer is made on a formal basis?

Hon MAURICE WILLIAMSON: My answer was that, no, I cannot confirm that. On a case by case basis that may be true, but I cannot confirm that.

Hon Lianne Dalziel: Can he advise whether the Earthquake Commission’s cash settlement for land includes the cost of repairing individual sections, when the Government has ruled land repair in the red zone to be uneconomic; if so, will he review that decision in light of his stated commitment to fairness and balance?

Hon MAURICE WILLIAMSON: I am sorry but I cannot confirm some of the details the member keeps asking about. If they were put down in a primary question or a question for written answer, we would be very happy to give specific details. All I will repeat is that the Government put a lot of work into this. The package is between $485 million and $635 million. We believe it to be a fair, reasonable, and balanced offer.

Hon Ruth Dyson: Does it meet his definition of fair and balanced that a couple in their late 80s living in the red zone who do not meet mortgage criteria, and could not sustain a mortgage if they had one, have a significant shortfall between the rateable value on their property and the purchase price of anything similar; if it does not meet the definition, will he take some action to deliver fairness for them?

Hon MAURICE WILLIAMSON: As I have said on a number of occasions, the Government put long thought into the process of coming up with a number that could be justified. The 2007 rating value seemed to be the right number to use. As I said, in many cases property prices had dropped since that time. We think it is a fair and balanced package.

Hon Ruth Dyson: Does it meet that same definition of fairness that a couple in a brand new home that could be repaired—but they are living in the red zone, so they have to move out—have been told by their insurance company that they will be paid only the cost of the repair; if that is not fair, will he act to deliver fairness for them?

Hon MAURICE WILLIAMSON: I will not be foolish enough to get involved in making a comment on any specific case, other than to say I think the package is fair and balanced. It is also voluntary; people can choose to take it, or not.

Mr SPEAKER: I want to hear Brendon Burns’ question. These are serious questions. I must hear them.

Brendon Burns: Does the Minister have any estimate, or even an indication, of what percentage of owners of properties in the red zone are likely to lose equity on their land, or on their land and home, under the Government’s two buy-out options?

Hon MAURICE WILLIAMSON: No, I do not have that estimate, but what I can say is that a very large number of emails and messages have been coming in from people saying to the Minister: “Thank you for the package you’ve put up. We look forward to being able to sign up and take advantage of it.”

Brendon Burns: Given the Minister’s assurances about preserving equity, made as recently as 2 days after the 13 June shakes, what does he say to my Avonside constituents, many of whom believe they will lose equity of between $50,000 and $90,000 under either of the Government’s buy-out options, including David Hayward of Avonside Drive, who says $90,000 is the minimum amount he stands to lose?

Hon MAURICE WILLIAMSON: I know that this is sounding like a cracked record, but, look, the Government believes that the package we have put together is a fair and balanced package. I will not spend time in this House debating specific cases. There will always be circumstances unique to each case.

Hon Lianne Dalziel: I seek leave to table an extract from an email that shows three separate rateable values for the land-only components of three 17-metre frontages on the river Avon in the suburb of Avondale—

Mr SPEAKER: Could the member indicate the source? Who prepared this document?

Hon Lianne Dalziel: It is an extract from an email sent to me by a resident of Avondale.

Mr SPEAKER: It is an email from a resident of Avondale. Leave is sought to table that document. Is there any objection? There is objection.

I call question No. 6, Dr Cam Calder. [Interruption] On this occasion it is the Hon Trevor Mallard I ask to show some courtesy. I have called Dr Cam Calder. Once a question is dealt with, I expect the House to show some courtesy to the next questioner.

Green Growth—Business Opportunities

6. Dr CAM CALDER (National) to the Minister for the Environment: What work is his Ministry doing to help New Zealand take up the opportunity from green growth following the OECD May 2011 report on the high expected global demand for such products and services?

Hon Dr NICK SMITH (Minister for the Environment): The Government established the Advisory Group on Green Growth, led by Business New Zealand Chief Executive, Phil O’Reilly, earlier this year. This week it issued a discussion paper highlighting some of the opportunities. Our objective is to get our regulatory, research, and economic policies right so New Zealand businesses can maximise those global opportunities.

Dr Cam Calder: What examples does the Minister have of green growth businesses that the Government is supporting, and which are providing jobs and improving the environment?

Hon Dr NICK SMITH: I could give many examples, but I want to draw the attention of the House to EnviroComp, a Canterbury-based family business that was started in 2009 composting disposable nappies, which is a world first. It has announced plans to expand to Wellington. It is now exporting that technology to both the UK and Australia. Another Kiwi business, Eco Stock Supplies, was started in South Auckland and it recycles food processor waste into livestock feed. It now employs over 30 people and diverts 25,000 tonnes of food waste from landfill into useful product. I commend both Nicky Wagner and Cam Calder for the way they have championed those sorts of businesses.

Foreign Affairs and Trade, Ministry—2010-11 Human Resources Contracts

7. Hon MARYAN STREET (Labour) to the Minister of Foreign Affairs: How many human resources contracts, if any, were let by the Ministry of Foreign Affairs and Trade without tenders being invited in 2010/2011, and what criteria were used to assess non-tendered contractors?

Hon STEVEN JOYCE (Minister of Transport) on behalf of the Minister of Foreign Affairs: I first advise that the chief executive of the ministry is responsible for the internal procurement policies and practices of the Ministry of Foreign Affairs and Trade. The Minister has further advised that in terms of contracts entered for human resources services, including services provided under the ministry’s change agenda, the Ministry of Foreign Affairs and Trade entered into 21 contracts of over $10,000 in value that were not tendered. The criteria used were the specifications for the role, with applicants being assessed through an interview and referee-check process. I am advised that the ministry has in place an extensive procurement policy and guidance for staff, and is governed by a procurement policy put in place by the previous Government. I also add that the Minister of Foreign Affairs has made it clear to the ministry that the current level of expenditure on human resources contracts is out of line with the Government’s expectations.

Hon Maryan Street: Given that something in the order of $1.2 million was spent on untendered human resources contracts alone in 2010-11, is this what the Minister meant when he said to the Foreign Affairs, Defence and Trade Committee that “The idea that the only people that can work for the New Zealand foreign ministry in a valuable way are full-time staff members who have been there all their lives is, frankly, outdated nonsense.”?

Hon STEVEN JOYCE: I am not sure that I can vouch that that is exactly the reason why, but I point out again that the ministry is responsible for those decisions and it is governed by a procurement policy and guidance for staff in relation to making those decisions that were, of course, put in place by the previous Government.

Hon Maryan Street: What criteria out of those in the Minister’s answer to the substantive question did Momentum Consulting Group satisfy to earn $129,000 without tender?

Hon STEVEN JOYCE: I do not have information on that specific contract. If the member would like to put that to the Minister in writing, I am sure he would be happy to respond.

Hon Maryan Street: Is it “outdated nonsense” for Government ministries to keep to budgets in this time of fiscal constraint, and does that explain the Ministry of Foreign Affairs and Trade’s $2.6 million blowout on contracts and consultants in 2010-11?

Hon STEVEN JOYCE: Quite obviously, the answer to the first part of the question is no.

Hon Maryan Street: I seek leave to table annex 5, table 2 of the answers to the Ministry of Foreign Affairs and Trade supplementary estimates questions on 2010-11, on expenditure on consultants and contractors.

Mr SPEAKER: This is information to the select committee. I just want to check. They are already available to the public. I seek leave of the House for that document to be tabled. Is there any objection? There is objection.

Public Transport, Wellington—Commuter Rail Network

8. PAUL QUINN (National) to the Minister of Transport: What is the Government doing to improve Wellington’s commuter rail network?

Hon STEVEN JOYCE (Minister of Transport): A huge amount. This week the Government has entered into an agreement with the Greater Wellington Regional Council and KiwiRail that will provide a permanent improvement to the commuter rail network in Wellington. As part of that plan the Government has committed to funding a further $88 million of renewal of the Wellington rail network infrastructure. Earlier in the week I was present at the signing of an agreement that included KiwiRail transferring ownership of the Ganz Mavag trains to Greater Wellington, and the council committing to upgrade the Ganz Mavag trains at a cost of around $80 million. As a result of this asset transfer, the regional council is now the owner of much of the region’s above-track rail infrastructure, including the rolling stock and most of the stations. This will give them more independence and flexibility in how to configure services going forward.

Paul Quinn: How will these measures affect users of Wellington’s commuter train services?

Hon STEVEN JOYCE: This package, coupled with previous investments from the Government and the regional council, including the new Matangi trains, will at last deliver Wellington a modern, reliable commuter rail service into the future. Commuters have put up with the shortcomings of the Wellington rail network for a very long period of time—too long. Although new trains, double tracking to Waikanae, and other initiatives have been a great start, more work has needed to be done to provide a consistent modern service. These improvements will give commuters a real choice about travelling to and from the central business district, leading to less congestion on the roads and greater mobility for those unable to drive.

Welfare System—Benefits of Work

9. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his statement “there is no question in my mind - someone would be better off in paid employment than on welfare. If they were not, that is a real indictment on the welfare system”?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Prime Minister: Yes.

Metiria Turei: Is the Minister aware that a sole parent working part-time who earns an extra $100 a week currently keeps $80 in the hand, but under the recommendations of the Welfare Working Group would keep only $40, and is his Government considering adopting this recommendation from the Welfare Working Group?

Hon BILL ENGLISH: The member has been speculating for a while on recommendations that are from the Welfare Working Group and not Government policy. The Government is working through all the recommendations of the Welfare Working Group, and, as it has signalled already, some of them it is likely to pick up and others it will not pick up. But we will certainly not be treating them individually. We will be looking at the recommendations in the context of a package of change that will improve the welfare system and reduce dependency.

Metiria Turei: Does the Minister agree that the benefit abatement rates should support and encourage sole parents to move to appropriate part-time work; if so, why would his Government consider adopting a recommendation—[Interruption] Excuse me! I am asking the question. I raise a point of order, Mr Speaker. This is a question that has been set down. It is reasonable that I ask my question of the Minister and have him at least listen to the question so that he can answer it—which is what this process is for—rather than having a private conversation with another person—

Mr SPEAKER: I am sure the Minister is listening and I am sure that the Minister will answer the member’s question. I invite her to start her question again.

Metiria Turei: Does the Minister agree that benefit abatement rates should support sole parents to move to appropriate part-time work; if so, why would his Government consider adopting recommendations from the Welfare Working Group that would punish sole parents for making that transition to work?

Hon BILL ENGLISH: The Government does agree that the abatement system is there to help sole parents transition to work. In recognition of their circumstances we raised the thresholds—that is, the amount of income they are allowed to earn while staying on a benefit. But there has always been a trade-off in a benefit system between allowing people to earn more while they are on a benefit but not making it possible for them to earn substantial incomes or better incomes than people in full-time work. So, the system also has to try to encourage them to make the leap to full-time work. There is nothing new about these trade-offs, and people have different opinions about it.

Metiria Turei: Does the Minister agree that an abatement regime that provides for an effective marginal tax rate for beneficiaries of up to 92 percent is a massive disincentive for those beneficiaries to move into part-time work, and will he commit to reviewing the Welfare Working Group recommendations in light of a system that does not penalise but rather supports and encourages beneficiaries to move into appropriate part-time work?

Hon BILL ENGLISH: Yes. Ninety percent marginal tax rates are of course undesirable; it is just that they happen to be better than the worse alternatives. One way to drop those marginal tax rates is to allow people who are getting a benefit to earn very substantial income in work, and that could easily put them in a better situation than being in full-time work. So that is the trade-off. No one wants 90 percent marginal tax rates, but it is extremely difficult to avoid them when one is making large cash payments to people who are, most of the time, out of work.

Metiria Turei: I seek leave to table a letter from Professor Innes Asher to the members of the ministerial group on welfare reform, showing how a beneficiary moving into part-time work would receive only $40 of every $100 earned under the Welfare Working Group recommendations.

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

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

China Investment Corporation—Meeting with Minister

10. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Finance: When he said that “I did visit the Chinese Investment Corporation … They are very pleased with New Zealand’s economic policy”, was one of the policies he discussed with this foreign sovereign wealth fund his plan for privatising state assets?

Hon BILL ENGLISH (Minister of Finance): No.

Hon Trevor Mallard: What is the official advice that he has received on whether foreign investment would be essential to his plans for privatising assets?

Hon BILL ENGLISH: We have not received any advice that it is essential. The Government has made its intentions clear—that is, we will maintain 51 percent ownership, and we will provide a very good opportunity for New Zealanders to invest in New Zealand. Kiwi mums and dads will be at the front of the queue.

Hon Trevor Mallard: When he went on to say “Contact Energy … still has the largest register of shareholders on the New Zealand stock exchange—shares still largely held by Kiwi mums and dads.”, was he aware that 97.5 percent of Kiwis have been stripped of their ownership of Contact Energy, two-thirds of the company is owned overseas, and over $1 billion of dividends from Contact Energy have headed offshore so far?

Hon BILL ENGLISH: Well, the Opposition uses the example of Contact Energy, which was sold in a different way. It was sold to overseas owners in a majority. Edison Mission Energy bought 40 percent of Contact Energy shares. The Government’s plans are to retain 51 percent ownership of State-owned energy companies. In the end we would rather pay dividends to Kiwis than interest to overseas lenders. Labour wants us to pay interest to overseas lenders; we want to pay dividends to Kiwis.

Television—Switch-over to Digital

11. JAMI-LEE ROSS (National—Botany) to the Minister of Broadcasting: What recent announcements has the Government made on progress towards digital switchover?

Hon Dr JONATHAN COLEMAN (Minister of Broadcasting): Recently the Government confirmed the dates and timing for completing the switch to digital television across the country, as well as the extension of digital terrestrial transmission work from 75 percent to 87 percent of the population, and an $850,000 assistance package for regional broadcasters.

Jami-Lee Ross: What are the benefits of the switch to digital television for New Zealand?

Hon Dr JONATHAN COLEMAN: In addition to enhanced reception and better picture quality—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Just to be a little bit helpful to members on this side, I am not sure whether the member’s microphone is pointing in the right direction, but it does not appear to be—

Mr SPEAKER: I just ask the member to speak a little closer to the microphone. If the Hon Jonathan Coleman could start his answer again.

Hon Dr JONATHAN COLEMAN: I do not think it is me, Mr Speaker, quite frankly. In addition to enhanced—[Interruption] In addition—

Chris Hipkins: That’s what he said about Mt Albert, too!

Hon Dr JONATHAN COLEMAN: That is it. You have had my answer.

Mr SPEAKER: No, no. If the Minister could please answer the question, and start again.

Hon Dr JONATHAN COLEMAN: In addition to enhanced reception and better picture quality, the spectrum will be ideal for fourth-generation mobile technologies, which provide access to faster mobile broadband services with improved coverage. The total economic benefits are estimated to be between $1.1 billion and $2.4 billion over 20 years.

Rahui Katene: What will be the financial impact on families of making the digital switchover, and what is the Government doing to mitigate this impact?

Hon Dr JONATHAN COLEMAN: The costs of going digital vary, depending on location, and the equipment people need, but 77 percent of New Zealand households already have digital television. Any television can be converted to digital with a set top box, which can be bought at The Warehouse for as little as $79. The Government is yet to take any decisions on the possible form of any assistance package.

Health System—Scope and Range of Services

12. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Health: Does he stand by his statement to the Cabinet Expenditure Control Committee that “we may need to take some tough choices regarding the scope and range of services the public health system can provide to New Zealanders”?

Hon TONY RYALL (Minister of Health): Within the context, yes.

Grant Robertson: Is one of the changes to the scope and range of services that he meant the cutting of beds, of the emergency department, and of palliative care services at Hāwera Hospital, which have been described by the chairman of the Ngāti Ruanui rūnunga as “a drastic and unacceptable reduction in health services”?

Hon TONY RYALL: There is a consultation currently under way on services at Hāwera. The proposals do include the maintenance of maternity beds, palliative care beds, and short-stay emergency department beds. They are all in the plan, along with after-hours general practitioner services. The Government and the district health board believe that the people of South Taranaki deserve better facilities and services, and we are consulting on those.

Grant Robertson: How can he interpret the people of South Taranaki as getting better services when he is cutting $1.1 million worth of services to Hāwera Hospital?

Hon TONY RYALL: First of all, $1 million is about 0.3 percent of the district health board’s budget. The important issue here is that—[Interruption] One of the biggest issues faced by the people of South Taranaki, which we have inherited from the previous Government, is a difficulty with regard to general practice access. That is part of this plan: to improve general practice access, and also to improve access to other specialist services. The consultation on the plan is under way.

Chester Borrows: What advice has the Minister received about proposed changes to health services in South Taranaki as to whether they are set in concrete, or is this a genuine public consultation?

Hon TONY RYALL: I have seen a number of reports. One report said the emergency services at Hāwera Hospital were privatised to a private company under the previous Labour Government—[Interruption] They were privatised under the previous Labour Government. And it fell over. I have also seen another report about a comprehensive consultation process under way with the people of South Taranaki about how best to meet future health needs. It is important to remember that no decisions have been made by the district health board, and that the people of South Taranaki deserve something more future-orientated than what they have at the moment.

Grant Robertson: Given that 8,000 people have now signed a petition to retain the services at Hāwera Hospital, does he stand by the statement he “repeatedly” made to local MP Chester Borrows, as reported in the Taranaki Daily News last month, that “health services in South Taranaki will not change unless the people want them to change.”?

Hon TONY RYALL: That is why there is a public consultation under way. It is interesting to note that I do not think there was any public consultation when the previous Government privatised the emergency department at Hāwera Hospital—privatised without consultation.

Grant Robertson: I raise a point of order, Mr Speaker. I know that I began the question with the word “Given”, but I did then ask “does he stand by the statement”, and the Minister did not make any attempt to answer that question.

Mr SPEAKER: The member is clever enough to know that once he starts a question with “Given”, he leaves a lot of scope for a Minister’s answer.

Hon Heather Roy: Can he advise whether one of the reasons that tough choices are required is the fact that the health sector suffered a 15 percent drop in doctors’ productivity and an 11 percent drop in nurses’ productivity under the previous Labour Government?

Hon TONY RYALL: I am aware of the numbers the member refers to. This National Government is doing 20,000 more elective procedures a year. There are 1,000 extra nurses and 500 extra doctors. We have put in place programmes to make wards more productive—this is being led particularly by nurses—and we have seen a remarkable improvement in waiting times in emergency departments, cancer treatment times, and immunisation rates. I think productivity is on the way up because the clinical staff of New Zealand know they have a coalition Government that is prepared to back them and their services.

Hon Heather Roy: What is his best estimate of the number of operations and procedures that were lost as a result of the massive fall in productivity under Labour, and are there any estimates of the pain and suffering this caused to New Zealanders?

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I ask you to rule on whether the assertion in that is necessary for the question; if not, I think you are obliged to rule it out.

Mr SPEAKER: My goodness, does the member really want me to rule out assertions in questions on a regular basis?

Hon Heather Roy: Point of order—

Mr SPEAKER: Before I hear the honourable member, I say the question asked the Minister about what advice he had received on the reasons for the reduction in productivity. In answering it he will need to be careful, because he is not responsible for the policies of the previous Government. He can report on any advice he has received, but he must not give any personal views about the previous Government. That is not his responsibility.

Hon TONY RYALL: It is difficult to obtain an estimate of the number of operations and procedures that were lost as a result of the massive fall in productivity under the previous Labour Government, but I suspect the appropriate number is 30,000, which is the number of patients culled off waiting lists under the previous Government, even though they had been promised they would get treatment.

Hon Heather Roy: I seek leave to table a report entitled Productivity Performance of New Zealand Public Hospitals 1998/99 to 2005/06 by Mani Maniparathy.

Mr SPEAKER: The report was prepared by whom?

Hon Heather Roy: The author was Mani Maniparathy.

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

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

Question No. 10 to Minister

Hon TREVOR MALLARD (Labour—Hutt South): I seek leave to table a page of a document from the Crown Ownership Monitoring Unit that indicates that the advice to the Government was that significant participation by foreign investors will be essential to achieve the Government’s overall objectives in its privatisation programme.

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

Third Readings

Third Readings

Hon SIMON POWER (Minister of Justice) on behalf of the Minister for Courts: I move, That the District Courts Amendment Bill, the Land Transport Amendment Bill, the Summary Proceedings Amendment Bill (No 3), the Children, Young Persons, and Their Families Amendment Bill (No 2), the Crimes Amendment Bill (No 4), the Criminal Proceeds (Recovery) Amendment Bill, the Customs and Excise Amendment Bill (No 2), the Disputes Tribunals Amendment Bill (No 2), the Family Courts Amendment Bill, the Immigration Amendment Bill, the Misuse of Drugs Amendment Bill (No 3), the Misuse of Drugs Amendment Act 1978 Amendment Bill, the Personal Property Securities Amendment Bill (No 2), the Prisoners’ and Victims’ Claims Amendment Bill, the Privacy Amendment Bill (No 2), the Railways Amendment Bill, the Residential Tenancies Amendment Bill (No 3), the Sentencing Amendment Bill (No 5), the Social Security Amendment Bill (No 4), and the Tax Administration Amendment Bill be now read a third time. These bills have been divided from the Courts and Criminal Matters Bill, and, as such, represent possibly the most comprehensive reform of the enforcement of fines, reparation, and civil debt in over a decade.

As at 30 June 2011, $666.5 million in fines, including reparation, await collection. Although this is $112 million less than when the bill was introduced nearly 15 months ago, further efforts are needed if fines are to remain a credible sanction for breaches of the law. Regular surveys of the public perception of courts find that half of the respondents believe that offenders can avoid paying their reparation or fines. This legislation will modernise the collection of fines, and introduce new enforcement tools, to encourage people to voluntarily pay their fines and reparation.

The policy development was commenced under the previous Minister for Courts, the Hon Rick Barker, in 2007, and the Government acknowledges and recognises that. The present Minister for Courts, the Hon Georgina te Heuheu, has expanded the scope of the legislative reforms, particularly to address inconsistencies across the relevant legislation.

The amendments to the Summary Proceedings Act 1957 establish a single, comprehensive definition of “fine”, which includes all court-imposed sentences and orders of reparation, court-imposed fines, infringement penalties filed at court for enforcement, court costs, and, of course, the offender levy. Cross references to this definition will be inserted into the other principal fines enforcement legislation. The legislation also aligns the provisions relating to the payment of monetary penalties from the sale of proceeds of seized, confiscated, and forfeited property across four Acts: the Summary Proceedings Act, the Sentencing Act 2002, the Misuse of Drugs Act 1975, and, of course, the Criminal Proceeds (Recovery) Act 2009, to ensure that all monetary penalties can be paid out of these proceeds and that priority is given to the payment of reparation.

The legislation introduces three new enforcement tools to encourage those with overdue fines and reparation to pay or enter into an appropriate payment arrangement. First, the legislation allows the amount of the person’s overdue fines to be released to the credit-reporting industry, and, in turn, authorises the Ministry of Justice to use updated addresses and other information supplied by credit reporters for fines enforcement. Second, the legislation gives the courts, in effect, super-priority over secured creditors for the sale proceeds of seized goods, when a person has unpaid fines and a creditor lends him or her money to buy an asset—for example, a car—that is used as security for the debt. Third, amendments to the Land Transport Act 1998 enable the Ministry of Justice to impose a driver licence stop order, which suspends any driver’s licences of individuals with overdue traffic fines, or, if they do not have a driver’s licence, prevents them from getting one.

The amendments to the Sentencing Act will enable the courts to resentence a person who has not complied with a sentence or order of reparation, by drawing on the full range of alternative sentencing options that were available for the original offence. The legislation also clarifies that payment of reparation has priority over payment of other fines when distributing funds recovered from the sale of seized, forfeited, and confiscated property under the Acts identified earlier, which is consistent with the Government’s response to the Law Commission’s report on compensating crime victims.

Finally, this legislation, importantly, will improve enforcement processes for judgment debtors and creditors. In particular, the amendments to the District Courts Act 1947, the Disputes Tribunals Act 1988, and the Residential Tenancies Act 1986 will make it easier to establish an attachment order to make deductions from a person’s salary, wage, or benefit to resolve an outstanding judgment debt, as determined by a court or a tribunal.

The long course of this legislation means that there are many people I would like to acknowledge for their contribution to this legislation, including officials from a range of departments: the Parliamentary Counsel Office, the Law Commission, local authorities, the judiciary, the Privacy Commissioner, representatives of the credit-reporting industry, the previous Minister for Courts, the Hon Rick Barker, my colleague the Hon Georgina te Heuheu, and all those who made submissions to assist the Law and Order Committee in its consideration. The reforms contained in this bill will enhance the credibility of monetary penalties as alternatives to prison or community-based sentences, and reduce the compliance costs of using the civil debt recovery system. I commend this legislation to the House.

Hon RICK BARKER (Labour): Firstly, I acknowledge the compliments paid to me by the Hon Simon Power, and say that they are appreciated. Very seldom do we have across the House acknowledgements of work. I say in that regard that this legislation arising from the Courts and Criminal Matters Bill should be seen in the context of a range of bills to try to modernise and update the administration of justice in this country. When I first became the Minister for Courts I was quite surprised at how antiquated the administration of justice was in New Zealand. It was complex, it was arcane, and things were done that were appropriate 50 to 60 years ago but are no longer appropriate in the modern time. For example, if a person had a debt to the High Court, and they had a debt to a District Court, two people had to serve the notice of debt—one for the High Court and one for the District Court. Well, as far as the person who owed the money was concerned, the debt was to the courts and to the State. But the State had a different perspective on it. This meant that there was a considerable amount of duplication. These circumstances arose, I think, principally because—not wishing to cast aspersions on the efforts of my predecessors—there was an overdue emphasis on looking at justice as policy and public law, rather than the administration of law.

I think that we should have spent a lot more time on looking at the administration of law. Personally, I did not see myself as having a great deal of expertise in public law, but I did see myself as an administrator. So when I looked at the court system, I looked at it as an administrator would, and asked “What needs to be done?”. A great deal has been done, and I want to acknowledge the good work and cooperation of the Hon Simon Power—for example, in respect of depositions, which are not touched on in this legislation but are a very important form of reform. I know there is a substantial amount of other reform going on in addition to this legislation to improve the administration of justice. I think this is an area on which all sides of the House should work cooperatively, and constructively, to make sure that our justice system performs to the highest level it possibly can. There is a great deal of room for more improvements, and I hope to see many more courts and criminal matters bills, and other justice bills, come before this House to improve the administration of justice. We tend to spend time as a Parliament on legislation that has a high public profile and is about offences and offending, and so on. But we spend little time on legislation about the administration of justice; this is one such bill. As I repeat myself, I hope we see many more of them.

The legislation covers a lot of bills, whose names the Hon Simon Power has read out. I was quite surprised when I came into contact with his work about just how many agencies were involved. It is a vast network, and all have to be actively engaged in the way in which New Zealand does its legislative work, which I think is very good. There is a high degree of consultation with the local authorities, and with all the other agencies—police, and so on—to make sure that the legislation works, and works well. There was a clear determination to make sure that it worked well, and it was because our systems were not working.

Very often we had in the courts young people who were confronted with $20,000, $30,000, $40,000, $50,000, or even $70,000 worth of outstanding fines, and the system seemed to be incapable of dealing with it. It is a little bit like the old saying of Lord Maynard Keynes: “If you owe the bank $100, you’ve got the problem. If you owe the bank $1 million, the bank has got the problem.” So it was with the justice system. If young people owed a small amount, then they had the problem, but when they owed $70,000 the system of justice was in the spotlight, and I think that is a significant problem. I regret to say that this legislation does not do as much as I think it could have in this area. I think that two other interventions could have been made, and I hope they come later. The first is early intervention so that when a young person’s fines get to a certain amount—say, $2,000 or $3,000—they are case-managed. There is no point in our trying to case-manage this when the young person is before the court with $70,000 worth of fines. I think that is an area in which we can get involved.

But the area where we have taken a strong lead is in relation to outstanding fines. I will repeat what I said in the Committee stage. One of the things that drove me on this matter was a letter from a constituent, a person who was known to me, whose mother had been involved in a dreadful accident. At the court hearing it came to his attention that the young man driving the car had approximately $40,000 of outstanding fines and a range of other prior convictions. The letter went on to ask whether the system did not understand or appreciate that this young man was a menace on the road and was likely to cause an accident. The accident that occurred was to his mother, who was in hospital in considerable pain. There can be only one answer to that question: we should have known and we should have taken action. But we did not, and the system needed to change. People needed to be held to account for their fines. The point was that this young person could drive, incur a fine, and not pay it with impunity. Because he could avoid his fines with impunity he saw the justice system as lacking teeth, lacking enforcement, and lacking credibility, and I thought it was time for us to do something.

Three things will happen as a consequence of this information. The first is that a person’s licence will be under threat if they do not pay their fines. The legislation provides for a driver licence stop order, which will say to the young person that if they have not taken responsibility for their fines, their licence will go. The second thing that will happen is that we will deal with a problem brought to my attention by officials that some young people were getting high-speed, expensive cars, driving very badly, incurring huge numbers of fines, and when the car was seized and sold, the finance company got all the money for the car and there was nothing left to pay the fines. The young person whose car had been seized would immediately turn up to a dealer again, finance himself into another car, and carry on driving down the road. The dealer knew the circumstances of this young person’s driving and what was going on, but there was no disincentive for the dealer not to finance the vehicle. Well, there will now be a strong disincentive. If a young person has a substantial amount of money owing in fines and reparation for their bad driving, then if a dealer sells that young person a car and the car is impounded, the dealer will now be told that the fines and the reparation outstanding will be taken out of the proceeds of that vehicle first, and only if there is something left over will the dealer get their money out. This will be a strong disincentive to financing bad drivers back into more vehicles, and I applaud that. There were some concerns about this from a privacy point of view, but I am happy to report that the Privacy Commissioner spoke to the Law and Order Committee and was very happy with the arrangements we had.

The third element is that people were racking up large amounts of fines and this was having no effect on their particular financial position—it did not affect their credit. They would therefore be paying off multiple debts; they would pay off the debts they owed to the private sector and not pay the debts they owed to the Crown. They would not pay the reparation. If they paid off their debts to the Crown and the reparation ahead of the private sector debts, and left the private sector debts, then those debts would impact upon their creditworthiness, but if they paid off their private sector debts and did not pay off the debts to the Crown, then it would appear to all the world that they had a good debt record and they would have a positive credit rating. I thought this was wrong. This legislation changes this so that if a person has a debt to the Crown for fines and reparation, it will be on the public record and it will affect them. When that person goes to get a credit card or finance of any sort the finance company will see that that person has $5,000, $10,000, $20,000, $40,000 or whatever amount outstanding and will know the sort of person they are and their liability. This will put extra pressure on those people to pay.

This is good legislation that contains many things that will improve the processes for collecting debts and for putting attachment orders on people with debts, and it will simplify the system across the board. It will mean that one official from the Ministry of Justice will be able to serve debts from multiple courts and multiple jurisdictions. All of this is good stuff. There is nothing down in this legislation at all. The last point I want to come to is, I think, a very important one: it is the ability to resentence. I think this is very important because many young people have gone before the courts and promised to pay reparation and that has been taken into account when they have been sentenced, but they have not done so and they have laughed at the courts because of that. This change will say to them that if they do not pick up on the promise they made, they will come back to court, they will be held to account, and the book will be thrown at them. This is a very good provision. Thank you.

JACQUI DEAN (National—Waitaki): The legislation will enhance the courts’ powers to collect fines, reparation payments, and civil debt and will strengthen enforcement measures available when people do not arrange or continue to pay outstanding moneys as ordered by the courts. I thank all those involved, including the Law and Order Committee, and commend the legislation to the House.

LYNNE PILLAY (Labour): I am very pleased to stand at the third reading and speak in support of this legislation. Indeed, I spoke several times in the Committee stage, because I believe that it is very important legislation.

In starting, as I have previously done, I acknowledge all the work that was done under Labour, with Rick Barker. But also, without wanting to be too negative, I say that it is a pity that it is only now that this legislation has come before the House. It was ready, and could have been introduced in the 90 days of action, when the Government first came into office. That would have been—

Hon Members: 100 days.

LYNNE PILLAY: Oh, a hundred—yes, OK. I got muddled with the “Sacking Bill”, did I not?

Hon Maryan Street: Right; you got it mixed up.

LYNNE PILLAY: I got it mixed up with the “90 Day Shaft People in Their Work Act”.

I come back to this legislation, because I know that it is very important that we speak on it. We in Labour are very pleased to see the legislation before the House, and we are very pleased to see all the work that Labour put in. We acknowledge the work that Simon Power, on behalf of the Government, has put in, as well.

Let us get the negative out of the way first: one disappointment is that we have not seen an overarching agency with responsibility for fines. There is no provision for this in the legislation, but I know that it was one of the things that Labour really wanted to be part of the legislation.

However, let us focus on the positive things. The legislation will certainly alleviate a lot of problems in terms of unpaid fines in this country. If we look at the statistics, we see that between July 2008 and June 2009 the courts wiped $95 million in fines. But that was out of a total of $806 million in unpaid fines, so although that amount was wiped, there was still a substantial amount owing. I will talk about the people who have those fines, which are black marks against their names. It means that they are not abiding by the law, and we do not support that in our democracy. But wiping fines also means a loss, obviously, of huge amounts of money that could be well spent in other areas, such as education, housing, and health—a spend that, sadly, we see lacking under this Government. It would be a win-win for people with those fines if there were an ability to get them off the track of having debt incurred to them and on to a track of repaying that debt. That would be not only a win, financially, for the country but a win for those people.

I do not have the statistics in front of me now so I will work only from memory, but I recall that about 69 percent of people with unpaid fines are young people, between the ages of 20 and 39 years. I stand to be corrected if anyone is able to correct me. As I have said before, I put it out there that I am very, very confident that an overwhelming majority of those people are young men. So these provisions are very much a progressive move in accountability, and perhaps in setting people on the right track in their lives. I acknowledge Rick Barker. I heard him tell the story of a very good example, as he is inclined to do. He is quite the raconteur, actually. He gave a good example of a young man and his experience with debt. Indeed, that is one of the examples that we hope will be remedied by the new situation.

I think that other parts of the legislation are important. The waiving of minor infringements—for example, of warrants of fitness and registrations—is a really good move. This legislation is about compliance, but an infringement might be just a one-off oversight for someone. Who amongst us has not looked at the windscreen and thought “Whoops, I have missed the warrant of fitness renewal date.”? People may have no desire at all to break the law—no desire—so they appreciate being able to have those minor infringements waived. It is important to ensure that people comply with the law, but we should have the police and the authorities putting their efforts into more important issues, like chasing bigger debts and dealing with more serious infringements. The waiving of minor infringements, we see, is a very, very good part of this legislation.

I have spoken about attachment orders, and I will not go through that again. I, along with other speakers, spoke quite extensively about attachments orders. To allow deductions to be paid from wages in order to repay debt is very, very good. At the moment the orders can be imposed only after an examination hearing, so a more streamlined ability to get access through deductions is very, very sensible.

In terms of that issue also, I will go through the arrangements for longer-term payments of fines, or payments by instalments. This, I believe, is a very, very progressive move. The court, rather than make an order, will have the ability to direct a registrar to determine whether to enter into an arrangement with the defendant, thus allowing a greater time for that fine to be paid completely or to be paid by instalments. It could be a bit of both. Payment could be made by a partial payment of some of the fine and then by instalments. That is a very sensible arrangement.

There is no point in saying to people that they must pay a fine now. In fact, we could look at the dreadful situation where people might get into dreadful arrangements with loan sharks in order to pay their court payments. In that situation there is no benefit, at all. It is far more sensible to have a situation whereby people can enter into an arrangement and be given payments that are manageable and achievable. They can therefore get into a position of being debt-free from that. I personally find that a very, very good part of this legislation.

I see I have 2 minutes to go.

Hon Trevor Mallard: It’s not compulsory.

LYNNE PILLAY: The member says it is not compulsory, but I have plenty more to say on this legislation, and I take issue with him saying that. He knows that it is the role of good Opposition members to use all their time for speeches and to try to make them as entertaining and—

Hon Trevor Mallard: I’m trying to help!

LYNNE PILLAY: Trevor Mallard is here and he is trying to help. That is something we always say in our caucus—“Good old, helpful Trevor.” So I thank Trevor—

Hon Trevor Mallard: Especially the women’s caucus.

LYNNE PILLAY: Especially in the women’s caucus—he is very popular with the women’s caucus.

But I come back to this legislation. I take the opportunity to congratulate the Law and Order Committee, which did a very good job on this legislation. I think it might have been under the chairpersonship of Sandra Goudie, so that in itself is quite an achievement, is it not.

Raymond Huo: Oxymoron.

LYNNE PILLAY: I will not comment on that. I also take this opportunity to congratulate the staff and the officials of that committee. Although I was not a member of it, I know that—

Shane Ardern: Why weren’t you a member?

LYNNE PILLAY: I was not a member of that committee, because one cannot be everywhere. But I know we had good representation on that committee and I know that its members were very well supported and served both by the officials and by staff. I take this opportunity to thank them, and I know that other members will probably take the same opportunity to do so.

So, as Trevor Mallard has reminded me, and as Mr Assistant Speaker Robertson is saying, it is time to wind up. I say “Well done and congratulations.” I commend this legislation to the House. Thank you.

Dr KENNEDY GRAHAM (Green): This has been a long and complex process getting to where we are today, the third readings of the legislation arising out of the Courts and Criminal Matters Bill. The bill was introduced last year in April, the first reading was in May, the Law and Order Committee reported in October, and the second reading was in November, but the Committee of the whole House did not convene until this week—7 months later. The reason for this was the sheer complexity of the original bill. It was described by the Minister for Courts as the most comprehensive set of legislative improvement in the recovery of unpaid fines, reparation, and civil debt in 12 years. The amount of unpaid debt stands somewhere around $700 million, so there is a strong rationale to improve matters. We acknowledge the intent of the Government to simplify what is a complex matter, as the Minister said a short while ago, to arrive at, for example, a single definition of “fines”, “court costs”, “offenders’ levies”, and other concepts.

The original bill itself would have amended four principal Acts: the District Courts Act, the Land Transport Act, the Summary Proceedings Act, and the Sentencing Act, and would make consequential amendments to 16 other statutes. In the Committee of the whole House this week it was agreed to divide the bill into 20 separate bills that cover, in addition to these four, the Children, Young Persons, and Their Families Act, the Customs and Excise Act, the Disputes Tribunals Act, the Family Courts Act, the Personal Property Securities Act, the Misuse of Drugs Act, the Prisoners’ and Victims’ Claims Act, the Privacy Act, the Railways Act, the Residential Tenancies Act, the Social Security Act, and the Tax Administration Act. This gives some insight into how hugely complex the changes are, which has been commented on by both Government and Opposition members already, and their ramifications across the statute book.

At the first reading I advanced the Green Party’s concern that the statistics we have to hand in this country on this kind of thing appear to be unsatisfactory. We sought to research the question of whether the fines exacted on convicted defendants fall disproportionately on lower-income groups. Neither the Parliamentary Library nor the Minister of Justice seemed able to ascertain that fundamental fact pertaining to social equity in our judicial system.

There is a paucity of sociological statistics in this country, which has the effect of thwarting social engineering and legislative insight. We suspected, though—yet we acknowledged that there was not conclusive proof available—that the fines were exacted disproportionately on the lower-income group, which is, moreover, correlated with age and ethnicity difference, and Lynne Pillay commented on that just a moment ago.

We were concerned that the bill would authorise home detention or even prison sentences as substitutes for unaffordable and unenforceable reparation orders. This, we believe, was inappropriate and would add strain to the already overstretched prison facilities, and we opposed the proposal of vehicle seizure and confiscation as introducing an unduly harsh penalty regime for unpaid fines.

The Green Party is not represented on the Law and Order Committee, so did not make an input into the report. But in the second reading we commented further, with a view to making constructive input. We advanced an alternative approach for unpaid fines, to get alongside defaulters and to ameliorate the problem through a process of consultation. A repayment system over a period of time could, we suggested, be devised that does not impose an unduly harsh financial burden on people who, in today’s world, are finding things tough. A supportive, rather than punitive, regime for people who are struggling to abide by judicial penalties is, in our view, the politically preferred and societally wiser route. Overall we saw the bill as counter-productive to the stated goal. Rather than getting more money from people, it is likely to give more social problems through greater unemployment, incarceration, alienation, and, possibly, racial tension.

The debate in Committee saw a slew of amendments put forward by the Government itself, designed to streamline some of the flaws it had perceived in the bill as originally drafted. None of this is to criticise the good intent of the Government in drafting the legislation and, for that matter, its efforts to keep Opposition members informed and updated on the increasingly complex critical path it trod with the bill. We have followed the rather bewildering fate of Supplementary Order Papers 201 and 202, and then 243 and 244. We could not agree with these amendments, because ultimately they would, in our view, weaken people’s rights: specifically, the proposed changes that strengthen the regime to allow personal property to be seized when someone might not have been convicted, yet a judge thinks they could be involved in crime, and for the incarceration of people who do not pay fines. Put simply, putting people in jail increases the likelihood that they will commit further crimes.

We do not think this is the best outcome for New Zealand and our communities, so we could not vote for those changes. That being said, I thank the Minister and her officials for their effort in compiling an annotated legislation guidebook, and subsequently its corrigendum, and then the addendum to the corrigendum. They have certainly tried to keep the faith in this procedural respect. But none of this has altered our fundamental judgment about the far-reaching shortcomings in the bill or, to be precise, the thrust of the original bill in the 20 separate pieces of legislation now before us. The omnibus legislation fails the tests laid out in the Green justice policy platform, which clearly states a preference for, and support of, provisions to deduct unpaid restitution and court fines through the Inland Revenue Department or Income Support mechanisms. As I have noted, when offenders receive income support or are of limited means, they should be given a choice to either pay off fines or provide restitution in some other way. We remain of the view that the main provisions of the bill are an affront to national justice, and a danger to the social cohesion of the country. As a result, we remain opposed to the bills, and shall be voting against them at the third reading.

RAHUI KATENE (Māori Party—Te Tai Tonga): Tēnā koe, Mr Assistant Speaker Robertson. I stand at the third readings of the bills arising out of the Courts and Criminal Matters Bill to acknowledge on behalf of the Māori Party our utmost respect for the sponsor of this legislation. If I could be so bold, I might mention that it takes a Māori woman to make sweeping changes that encompass some 20 separate bills, overflowing on to two pages of the Order Paper. This legislation is an absolutely fitting tribute to the skills and leadership of Minister te Heuheu. Georgina te Heuheu is well used to breaking new ground. She was the first Māori woman to gain a law degree, and to be admitted as a barrister and solicitor of the High Court. She is the first Māori woman to chair the Māori Affairs Committee, and only the second Māori woman to be appointed to a New Zealand Cabinet. In the decade prior to entering Parliament in 1997 Minister te Heuheu was a member of the Waitangi Tribunal, a director of the Māori Development Corporation, and a member of the Courts Consultative Committee. I mention the vast experience that the Minister has brought to this legislation as a tribute to one of our most distinguished wahine Māori politicians. Her decision to retire from politics at the end of this term will be a loss to the executive and to the House. I have no doubt that her expertise and knowledge will be eagerly sought after by Tūwharetoa, Tūhoe, Te Arawa, and Ngāti Awa when she returns home.

I want to make one other acknowledgment, and that is to John McEnteer, who has applied himself conscientiously to the task of getting this legislation through the House.

The bill seeks to address a general concern about the amount of overdue fines, the dissatisfaction of victims when offenders do not comply with reparation orders, and the frustration of creditors and debtors using the courts’ civil debt enforcement process. There are longstanding matters of concern, which the Minister herself has dealt with in a comprehensive and efficient manner.

The general concept of criminal matters and penalties is not exactly a matter that our constituency has raised with us as a matter of priority. The Māori Party does, however, support the effective use of taxpayers’ money as it relates to a more efficient court system, including the collection of fines. I want to be quite clear that we distinguish between the action of the State pre-court, the process of sentencing, prosecutions, and charges, and the actual administration of the sentence handed down.

The Māori Party has consistently raised concerns about the administration of the justice system. This nation, to our shame, has a system of justice in which one group of people—indigenous New Zealanders—is disproportionately overrepresented. Māori are four to five times more likely to be apprehended, prosecuted, and convicted for a criminal offence than non-Māori. This legislation does nothing about that, but we are hopeful that the work taking place under the Address the Drivers of Crime strategy will make some desperately needed progress, with the fence at the top of the cliff, rather than the bat at the bottom.

This raft of legislation is all about honouring one’s dues and paying up on debts incurred. This is an approach to enhance the administration of the fines system, rather than letting things slip and eventually sending recalcitrant offenders off to jail. We have had a huge issue in New Zealand of overdue penalties, so anything that can improve upon the administration of the system has to be supported. Finally, I have to say that of course we would rather not be devoting some time in the House to the issue of reparation, of crimes and punishment. It will be a great day when our focus can be on well-being and whānau ora rather than courts and criminal matters.

SHANE ARDERN (National—Taranaki - King Country): I rise in support of these bills, which were formerly part of the Courts and Criminal Matters Bill. I am a member of the Law and Order Committee, and I congratulate the officials and the members of the committee, particularly the former Minister for Courts, the Hon Rick Barker, who made a substantial contribution on that committee. Like the previous speaker, Rahui Katene, I also pay homage, I guess, or recognition to the current Minister for Courts, who has shepherded to this stage what has been very challenging legislation.

At the moment, young people, and not so young people, owe the State $672.2 million in outstanding fines. This Government wants to send a very clear message to those people that if they break the law or infringe against the State, there will be repercussions. For that reason, and because such good work has been done by the select committee and the Parliament, this legislation has my full support.

The ASSISTANT SPEAKER (H V Ross Robertson): I call the honourable member Raymond Huo. Ni hao ma.

RAYMOND HUO (Labour): Kia ora. That is a very nice comment from you. On the third reading of these important bills, I acknowledge the great work done by the Hon Rick Barker. I also thank the Ministers Georgina te Heuheu and Simon Power for continuing the great initiatives. Work on this legislation commenced in 2004, through a review of the infringement system undertaken by the Ministry of Justice and the Law Commission. A joint discussion paper entitled Review of the Infringement System: Options for Reform was issued in November 2004. Initial reforms were made by Cabinet in March 2008, approving guidelines for new infringement schemes developed by the Ministry of Justice.

I outlined that background in order to show that there is a gap between then and now, and I acknowledge Dr Kennedy Graham, who also commented in a similar fashion in his speech. The original bill was practically ready when Labour left Government, and I wonder—and this concern was expressed by my colleague Lynne Pillay earlier—why it has taken so long for this legislation to come before the House. This legislation is far more important and urgent than a number of other pieces of legislation that have been rammed through by the National Government in urgency sessions. This is an urgent matter. Figures released earlier this year showed that between July 2008 and June 2009 the courts wiped $95.1 million of the total $806 million owed in unpaid fines. The amount of outstanding fines is increasing each year, and it is a problem that needs to be addressed. The amendments in this legislation will address concerns about the amount of overdue fines, the dissatisfaction of victims when offenders do not comply with reparation orders, and the frustration of creditors and debtors who use the courts’ civil debt enforcement process.

The original bill was an omnibus bill, and it was divided into 20 bills in the Committee of whole House stage. Bills with substantial amendments include the District Courts Amendment Bill, the Land Transport Amendment Bill, and the Summary Proceedings Amendment Bill (No 3). My colleagues have spoken rather substantially on those bills, and I will reiterate only some important points at this stage. The first one is with regard to attachment orders. Attachment orders are used to allow deductions to be made from wages and benefits to pay debts. At present, attachment orders can be imposed only after an examination hearing to assess the judgment debtor’s ability to pay the debt. Both parties are required to attend the hearing, which can be inconvenient and incur delays and costs. This legislation aims to streamline this enforcement process, by enabling judgment creditors to file a financial statement or ask the court to assess the debtor’s financial means in the debtor’s absence. But judgment creditors will still be able to apply for a formal examination hearing, of course, which both parties have to attend. It is believed that this process will avoid delays, costs, and inconvenience for all parties concerned.

At the Law and Order Committee we received 16 submissions from individuals, organisations, and other parties. Some submitters commented that the removal of the requirement for a hearing personally attended by the creditor and the debtor is a favoured change, because of the money and time spent attending those hearings. Other concerns included concern that an individual may be subject to enforcement action without being aware of this, as a result of the removal of this requirement. Some submitters also expressed their concerns about relying on the presumption of service and the weakening of the current service provisions.

I would like to note MoneyShop and its submission. MoneyShop was concerned about the lower priority given to civil debts that are being resolved by an attachment order when Government debts—such as fines, for example—are also being collected by attachment orders. It was concerned that priority should be based on the time of action, as is the case for all civil debts, rather than the priority order being set in legislation. I agreed, however, with the advice given by the officials. Priority for enforcing deductions from wages and benefits is driven by the interaction of various statutes, including the Child Support Act, the District Courts Act, the Summary Proceedings Act, and so on and so forth. It reflects the general principle that public debt takes priority over private debt. Any change to this principle and the interactions between the statutes is beyond the scope of this legislation.

Regarding the Summary Proceedings Amendment Bill (No 3), some substantial amendments that are being made include credit reporting, super-priority, and the registrar’s powers if a fine is unpaid or if time-payment arrangements or attachment orders are cancelled. I note the submission from the Privacy Commissioner. The Privacy Commissioner was particularly concerned about the release of Government-held personal information to private sector credit reporters, and the shift in the use of personal information that this signifies. The commissioner recommended that clause 69, which sets out the credit-reporting initiative, be removed from the original bill. I also acknowledge a submission by Veda Advantage regarding new section 92D, inserted by that clause. It submitted that the legislation should allow for online or telephone communications. I further note recommendations from other officials that new section 92D(d)(i) be amended to provide a technology-neutral method of recording agreement in order to allow consent to be expressed in multiple ways—for example, in writing, electronically, or verbally. We are living in a modern world; there is no doubt about that.

However, I have three further concerns. The first one is there are more than 80 issuing authorities and, obviously, that impedes the collection of fines. To remedy the situation, Labour suggested that a single agency be established to take responsibility for fines. My colleagues and I raised this matter in our previous contributions, and in particular in the Committee stage, but it appears that no action whatsoever has been taken, so the proposal has been omitted and that is very regrettable.

Secondly, with regard to the so-called three-strikes offence, I note that Minister te Heuheu intended to introduce a Supplementary Order Paper in the Committee stage that would have allowed offenders convicted of a three-strikes offence, but who were not warned of the consequences of further offending, to be brought back before the court to have the warning issued at a later date. I did not have the opportunity to take a further call in the Committee stage. I would otherwise like to hear from the Minister with regard to the rationale for that and related matters.

Thirdly, and with less trepidation, I note that the regulatory impact statement duly pointed out that the credit-reporting component of this legislation is inconsistent with the Privacy Act 1993 and the Credit Reporting Privacy Code 2004. The legislation overrules the Privacy Act, but provides that the Ministry of Justice will conduct a review after 2 years of the credit-reporting scheme to determine whether the outcomes justify the impact on privacy. With those notes, I commend the legislation to the House.

JONATHAN YOUNG (National—New Plymouth): I am very pleased to stand in support of the third readings of the bills arising from the Courts and Criminal Matters Bill. The public have justifiably reacted against the figures released recently, on 31 March 2011, that state there are at present $672 million worth of unpaid fines. I think the Minister of Justice made a very interesting comment. A recent survey discovered that half of the respondents said that they thought they could get away with not paying their fines. Not only is there great concern for the amount outstanding but also I believe that the general public are terribly concerned about this attitude, which prevails amongst so many.

The purpose of this legislation is to enhance the courts’ power to collect fines, reparation payments, and civil debt, and to strengthen the enforcement measures available when people do not arrange to pay, or do not continue to pay, outstanding moneys as ordered by the courts. This legislation will see reparations paid sooner rather than later. The legislation notes that reparations receive priority over all other fines. Reparations are court-ordered payments to victims. This legislation is designed to strengthen the recovery of these unpaid moneys, and is the most comprehensive set of legislative measures in 12 years.

There was a very interesting process to go through on the Law and Order Committee. I give my regards to the previous Minister for Courts for the work that he did. It is my pleasure to commend this legislation to the House.

LOUISA WALL (Labour): Tenā koe, Mr Assistant Speaker Robertson. Ngā mihi ki a koutou katoa. Kei te tautoko au i te Wiki o te Reo Māori. Ngā mihi ki a koe, whaea Georgina te Heuheu.

[Thank you, Mr Assistant Speaker Robertson. Greetings to you all. I endorse Māori Language Week. Greetings to you, aunt Georgina te Heuheu.]

I want to acknowledge the Minister for Courts, who is not in the House—

The ASSISTANT SPEAKER (H V Ross Robertson): I am sorry to interrupt the honourable member, and I realise she has not been a member for very long, but it is not appropriate to indicate the absence of a member from the House. We are all absent from the House at times.

LOUISA WALL: I want to pay my respects to the Minister who is responsible for the legislation. This is the first contribution I have made to this debate, and it is certainly a pleasure to do so. In doing so, I would like to acknowledge my colleague the Hon Rick Barker for his obvious contribution to the development of this legislation to the point where we are at today. This legislation presents the most comprehensive set of legislative improvements in 12 years for the recovery of unpaid fines, reparation, and civil debt. It addresses a number of issues, including a general concern about the levels of overdue fines. I was really interested. I have been in the House for only 3 months and I note that I am in the infancy of my political career—

Hon Maryan Street: The beginning of a long career.

LOUISA WALL: Thank you. When the Courts and Criminal Matters Bill was first read on 19 May 2010 the fines total was $778 million. On 16 November 2010, when we had the second reading, the fines total was $711 million. I am not sure why but it is trending down, regardless of the passage of this legislation. There seemed to be a bit of a difference between what Minister Power said the current outstanding total is, which is $666.5 million, and what I think Jonathan Young said it was, at $672 million. It is very interesting that the fines are trending down. Obviously the people responsible for collecting fines are doing a tremendous job.

I want to focus on one of the major policy initiatives in this legislation, which is to introduce driver licence stop orders. I highlight that this was approved and was ready to go in July 2008, but through an amendment to the Land Transport Act 1998, contained in Part 2 of the original bill, there will be an enforcement measure that will allow the driver’s licence of a fines defaulter to be suspended when the defaulter fails to maintain payment of outstanding traffic fines. The licence will remain suspended until the defaulter pays the overdue fines or enters into an arrangement to pay the moneys owed. Traffic offences make up approximately 99 percent of all infringements filed in the court each year for collection. The driver licence stop order has proved to be a very effective sanction in Australian and Canadian jurisdictions, and I note from previous kōrero on this legislation that an estimated 50 percent of fines defaulters pay or enter into a payment deferral arrangement, with another 25 percent doing so when their licences have been suspended. So this measure will create an effective, simple, but powerful incentive for people to resolve their fines.

In reviewing what has been said about this legislation previously, I will pick up on points that Dr Kennedy Graham made. I note that he is no longer with us, but he contributed earlier. There are indications that young people have difficulty in paying their fines, presumably in part because of their lower incomes. I found it really interesting to learn from June 2008 statistics that over half a million individuals—about 16 percent of all Kiwis over 15 years of age—owe fines. That is one in six people. That is a particular concern, because this legislation will affect our young people. I note that the Hon Rick Barker addressed this issue, but this legislation makes no attempt to do so.

We propose to bring young people with large amounts of fines within a case management system. That would ensure there is some face-to-face engagement, as opposed to liable persons being sent just a warning notice, giving them 14 days to resolve the issue with the fines authority before their licence is suspended. I think this is hugely relevant. Holding people accountable is a great principle that we all should have. We need it for society to function. But making young people take responsibility, forcing this sort of responsibility on them, I think will have some consequences that may affect their ability, particularly within the employment sphere.

Within the whare that I live in, which I share with my partner, we have two young people. We have a young person who is studying at university and we have a young person who is working. That young person who is working needs his vehicle to get to work. I think for both of them there may be a time when they incur a fine. Obviously we all like to think that our young people will not break the law and incur fines, but they do. The reality is that they do and the statistics prove that they do. There could be some unforeseen consequences. We already know if we look at statistics for Māori that 35 percent of young Māori are what we call “NEET”: not engaged in employment, education, or training. But I am sure that many of them still drive vehicles. We have to say that it is very difficult for them to gain employment. For those who have employment the consequences of losing their vehicle could be quite extreme and have a profound impact on their ability to participate in society.

So, from our perspective a case management approach is appropriate. Our young people need guidance and they need to be supported. If we look at the recently released report of the Prime Minister’s Chief Science Adviser, Sir Peter Gluckman, we see there are a number of competing factors and societal norms that make it really difficult for our young people to take responsibility. They need society, they need parents, they need communities, and they need people who are there to help and support them to be responsible. I have a particular concern that our proposed case management approach was deemed to be inappropriate and to not have merit, or warrant inclusion in the legislation. As I said before, in an ideal world our young people would not get fined, but the reality is that they do. It will be interesting to track the impact of this legislation specifically on our young people.

I will highlight the two other major policy proposals in this legislation. One is credit reporting. Through this system, private sector lending companies and others will be able to find out whether someone has overdue penalties. This will encourage people to pay fines and will make them accountable for the money they owe. It also means that the Ministry of Justice can use information stored by credit-reporting agencies to collect fines. This system will affect people who can afford to pay fines, but choose not to because they have not previously faced any serious consequences for not paying.

Finally, I will highlight the third major initiative: the super-priority contained in Part 3 of the Courts and Criminal Matters Bill. The super-priority will ensure that the court has priority over a secured party for the sale of proceeds of seized goods where the amount of overdue fines was or could have been disclosed by the formal credit-report by the ministry. I am now a permanent member of the Law and Order Committee. I was not on the Law and Order Committee when it considered this bill, but I take this opportunity to acknowledge the process. I acknowledge the chair and the members of that select committee. I have recently sat through some of the processes that select committees have to go through to ensure that New Zealanders have a say. Based on some of the kōrero that my colleague Raymond Huo talked about earlier, there was great interest in this legislation. I congratulate all those people who were involved in bringing the legislation to where it is today. I look forward to contributions from other members. Thank you.

Dr CAM CALDER (National): This legislation went through the Law and Order Committee in a spirit of cooperation and collegiality. I commend this legislation to the House.

A party vote was called for on the question, That the District Courts Amendment Bill, the Land Transport Amendment Bill, the Summary Proceedings Amendment Bill (No 3), the Children, Young Persons, and Their Families Amendment Bill (No 2), the Crimes Amendment Bill (No 4), the Criminal Proceeds (Recovery) Amendment Bill, the Customs and Excise Amendment Bill (No 2), the Disputes Tribunals Amendment Bill (No 2), the Family Courts Amendment Bill, the Immigration Amendment Bill, the Misuse of Drugs Amendment Bill (No 3), the Misuse of Drugs Amendment Act 1978 Amendment Bill, the Personal Property Securities Amendment Bill (No 2), the Prisoners’ and Victims’ Claims Amendment Bill, the Privacy Amendment Bill (No 2), the Railways Amendment Bill, the Residential Tenancies Amendment Bill (No 3), the Sentencing Amendment Bill (No 5), the Social Security Amendment Bill (No 4), and the Tax Administration Amendment Bill be now read a third time.

Ayes 106

New Zealand National 57; New Zealand Labour 38; ACT New Zealand 5; Māori Party 4; Progressive 1; United Future 1.

Noes 10

Green Party 9; Independent: Carter C.

Bills read a third time.

Bills

Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill

In Committee

Debate resumed from 5 July.

Part 1 Amendments to principal Act (continued)

PHIL TWYFORD (Labour): I begin the debate this afternoon by providing a little bit of context on this issue. Many, many New Zealanders have had their lives not just touched but blighted by the leaky homes disaster over the last 20 years. Those people need no explanation about what a catastrophe leaky homes have been, but many others, particularly those who live in parts of the country that have not been badly affected by leaky homes, may not have had firsthand experience of this problem. Many New Zealanders will have seen the documentary that screened on Television One last night and was fronted by John Gray of the Home Owners and Buyers Association of New Zealand—HOBANZ. The documentary set out a little bit of that history and told the story of people who had bought homes that became leaky. It showed the enormous financial stress and emotional burden they have had to carry, and the sheer difficulty of navigating through what became a bureaucratic and financial nightmare for many of them.

The leaky homes problem has exacted an enormous toll on those homeowners, on the economy of this country, and on the building and construction industry. It has set back, by many years, the broadly bipartisan efforts to reform our building and construction industry. There is much to be regretted.

The leaky homes problem is one of the great legacies of the free-market fundamentalism that blighted this country throughout the 1980s and 1990s. We can lay the blame for this problem on a handful of measures. First, we can lay it at the door of the decision made by the Building Industry Authority, under the National Government in the 1990s, to allow the use of untreated timber in the construction of houses. There was a failure to have a proper product certification regime in place. The winding down, or the destruction, of our apprenticeship system was also a major contributor to that problem. Those things are all to be regretted, and many of those lessons have been learnt. The review of the Building Act that was begun under Shane Jones as the Minister—

Hon MAURICE WILLIAMSON (Minister for Building and Construction): I will take the next few minutes, if I can, to address just three of the Supplementary Order Papers that Phil Twyford has put on the Table, and his typescript amendment. I fully believe he has put them forward in good faith, and he deserves for us to give a proper response, so I will take them in turn.

Supplementary Order Paper 250 seeks to reduce the protection of some people by allowing them to be joined in litigation. It could mean that, for example, the Crown could be joined in litigation, the council could be, or even other contributing parties to the proceedings could be. I want to make it clear that I do not think that that is what this legislation is about. Councils, first of all, will not participate. They have made it quite clear that if they are going to put their 25 percent contribution into the fixing of a home, they will not do that if it means they could either be brought into a litigation after that, at any rate, or be joined in a litigation at some stage later, even by way of a circuitous route. So the scheme is not about apportioning responsibility, and so on; it is about just trying to get houses fixed. If we were to accept Supplementary Order Paper 250, that would actually open up some of the litigation channels, and I think that would be a problem. It is not just about the Crown and councils; it could impact on a number of building firms that have said to me that they are dubious about participation. And these are good builders whom we need to have involved. They are dubious about involvement, but if we opened the process up to litigation, and the chance of their being joined into the greater litigation field, they just simply would not participate. This Supplementary Order Paper would change the focus of this bill to litigation rather than to fixing leaky homes, and I do not want that to be the focus.

The second amendment that Mr Twyford has tabled seeks to amend the definition of “qualifying claimant” to exclude property speculators. Although I laud the intent of that amendment, the trouble is that it goes further. It could exclude people who knowingly purchased a leaky home, even if they had bought it as something they were going to do up and live in. That is what—[Interruption] Yes, it would. That is what it would do. That is why the Government will not support the amendment. The aim of the scheme is to get as many leaky homes repaired as fast as we can. The scheme does not discriminate on the basis of who owns the home. It is intended to get the home repaired so that owners and renters can live in a safe environment. The amendment would prevent genuine homeowners, who purchased intending to repair and live in a home, from accessing the scheme. I will repeat that: they may be genuine homeowners when they see a leaky home and think to buy it, do it up, make the repairs, and then live in it, but in the way the amendment is worded genuine buyers would be prevented from doing that. So the Government will not support that one. I understand that the proposed change is grammatically incorrect at any rate, so we would need to make an amendment to that amendment.

Having said that, let us move on to the third one. Supplementary Order Paper 252 seeks to provide that the Crown will guarantee repair loans taken out by bodies corporate. In my view—and I think the officials have given me this advice—the Supplementary Order Paper is actually not necessary. The Government could choose to provide this guarantee under the existing provisions, because the existing provisions are general and do not specify the terms of any guarantee or indemnity under the provision. The reality is that some multi-unit dwellings will not be able to access this financial package—that is true. That might be the case even with this amendment, but they will always have access to the Weathertight Homes Tribunal’s dispute resolution process, which they have now.

I think that probably an important point for anyone listening to this debate is that this entire package that the Government is putting out there—with the Government paying 25 percent, the local authority paying 25 percent, and the homeowner getting a loss-sharing arrangement with the bank for a loan for the remaining 50 percent—is a voluntary package. No one has to take it. It is an attempt to try to get some homes fixed, and if people say they do not like it and do not want it, or want to resort to litigation or stay with the Weathertight Homes Tribunal’s process, then they will still have that right.

Finally, Mr Twyford’s last Supplementary Order Paper, Supplementary Order Paper 253, proposes to remove the Crown’s immunity. The Crown is making a huge contribution to this package, and does not have to. We did not have to bring this package to this House. In fact, when other people have tried to join the Crown in litigation in the past, they have never been successful because the courts have ruled that the Crown is not in any way liable. We could have taken the stance that it was not a Government liability, and I know the Labour Government took that position, rightly or wrongly, for the 9 years it was in office. If we were to remove the immunity of the Crown, not only would we be putting up what will be over $1 billion of payment in this package—possibly even more, depending on the number of people who take it up—but also we could be exposing the Crown to huge litigation risk. The Crown’s immunity in the bill has been included because, to date, the Government has not been found liable in leaky home litigation, and I think that that is the best way to keep it. Another benefit of the Crown’s immunity is that it will remove incentives for vexatious litigants trying to join the Crown. A lot of people could be vexatious and try to force the Government to be involved.

I will now talk about the Department of Building and Housing assessors’ immunity, because that is part of it, as well. Department of Building and Housing assessors have always been immune from proceedings relating to their functions under the Weathertight Homes Resolution Services Act 2006, which was passed by Labour. I understand why Labour did that, and I think that is right. Assessors’ immunity is critical for delivering a weathertight homes resolution service and a financial assistance package. Those people who are doing their job, and doing it well, should not be doing it under the threat of not having any immunity. Assessors will not perform their role if there is a risk that they might be joined in litigation about leaky homes. Although I fully understand the rationale behind all four of Phil Twyford’s proposed amendments—in fact, I sympathise with some of the rationale behind all four amendments—I say to members that it has been a very long journey to get here today.

This process started off with trying to get agreement across local authorities, and to tie this package down was one of the hardest pieces of work I have done in my 24 years in Parliament. To get not only local authorities on side but also the banks now on side, with regard to their participation in the scheme, has been a long, slow, arduous process. I have had the news media having a flick at me from time to time, saying: “He has failed to get them on board.”, or: “He has failed to achieve this.” Well, I am happy to report that local authorities are signed up to this legislation as it stands. We would lose them immediately if we made the changes that were suggested here. The banks have now signed up to the package and they are ready to go.

I look forward to getting the Committee of the whole House stage finished, and a third reading of this bill through, for constituents of a number of members of Parliament. I know that people like Darien Fenton and Lynne Pillay in west Auckland have a huge number of affected constituents, as do the members from the North Shore, Tauranga, Wellington, and Christchurch, because that is where the vast majority of these places are located. Those members are looking forward to their constituents being able to walk in and get half of their repairs paid for straight away—25 percent by the Government, 25 percent by the local authority—getting a bank loan for the other half, and moving on to getting their places fixed. I am really delighted with this legislation.

DARIEN FENTON (Labour): I thank the Minister in the chair, the Minister for Building and Construction, for that explanation. Labour acknowledges that this is a genuine attempt by the Government to resolve what is a very longstanding and difficult problem. The Minister in the chair is right, actually, when he says that there are constituents out there who are waiting to see this issue resolved, and we have seen many of them. I have certainly seen a few in my time, even as a list MP. I have had people who are quite simply desperate come to talk to me to see what could be done to help them in their situation. There are some just awful situations. One that I will relay is about a woman—and I will not use her name, but she is fairly well known—who has authored a book. In her former life she was a nun. She went through quite a bad experience in the nunnery, left, and wrote a book about that experience and how it happened. She married, and then her daughter suffered a very debilitating, crippling illness. She spent years trying to help her daughter recover from it—and she did in the end—but her marriage suffered as a result. So she has been through the most incredible experiences in her life.

After she separated she bought a home in Albany that has turned out to be a leaky home. She said to me: “Darien, I have been through so much, but I had never felt like committing suicide until I experienced this.” It is the awful thing of living in a home that is leaky. We all know that water does the most damage, and we know it brings fungi and disease, but it also brings stress, and no speedy resolution or sense of being able to get it resolved.

So I acknowledge, as I said, the genuine attempt by the Government to deal with this problem. Most certainly we can look back—and we will, no doubt, during this debate—at the causes of the leaky home problem. We know that the previous Labour Government made some attempts to deal with it, and it tightened up some of the regulations around building, which is good to see. But one can drive around Auckland, around some of those new estates, look at the buildings and see that they have cladding, Mediterranean style, and think that they are bound to be leaky buildings.

I had the experience of going to a building site the other day with the Building and Construction Industry Training Organisation to talk to a builder who has five apprentices. The purpose of my visit was to talk to him about what is happening with building apprenticeships. I will talk about the skills gap a bit later if I get the chance, because there is a crisis, I think, as my colleague Phil Twyford has alluded to. How will we get the builders to do this work, given that we also have an enormous job to do in Christchurch? The organisation told me that there is a standard now when a house is built—there is automatically a standard. I do not know the ins and outs of building or carpentry, but there is a standard now whereby when a new bit has to be added, part of the job of the apprentices is to explain what it is, how they do it, and to demonstrate that they actually understand the importance of it. That was very, very interesting.

The other thing that was really good about that visit was it made me remember what a craft carpentry and building is—what a wonderful craft it is. This was an old home in Devonport, not a leaky home, that was being significantly overhauled. These guys are on 4-year apprenticeships. They have to do quite amazing stuff. They have to do the planning, the concrete work, and the steel roofs, and they also have to be able to do very intricate woodwork, particularly on the old-fashioned villas in Devonport. What an amazing craft. I think it is such a shame. I know there were some rogue builders, and others, who took advantage of the fact that our regulations were weakened. That was a crime—that was an absolute crime. I would hate to think that that had in any way put a blight on the occupation of being a builder, because the people I met the other day in Devonport were fantastic. They will be wonderful builders, and of course they will benefit from the work that is coming up with this bill. In fact, I was thinking that I have a bit of building at home to do and that I had better get it done quickly because I may not be able to get a builder fairly soon.

I think it is important to understand the purpose of this bill. It does not provide a whole lot of details around the scheme, or the criteria to be eligible for the contribution—that has all been thrashed out elsewhere. The legislation does not require that to be there. People listening to this debate may be looking for that detail, but it actually is not in there; the bill is really about providing immunity, which the Minister has alluded to in reference to the amendments of my colleague.

Labour is supporting this bill, and I think that during the debate we will bring up some of our concerns. I know the Minister will do his best to persuade us that we are wrong, and we are happy to listen to that, but we still believe that there are many affected homeowners who will be excluded by this package, and that is a worry—that is a worry. There will be people out there thinking that some resolution is coming, and that is not going to happen. There are still some unresolved issues around the details, and the skills deficit is an enormous concern. I know it is not covered by the bill. It is fine to deliver the money, it is great that there has been progress, and I accept what the Minister said about what a hard job it has been. In fact, if anyone could do it, Maurice Williamson could.

Dr Cam Calder: Ha, ha!

DARIEN FENTON: No, I want to record my respect for him, actually. He was on the same select committee as me in the last term of Parliament. I always found that although we differed on lots of things, he was always very, very competent and capable. He is the kind of man who will just get on and negotiate.

Phil Twyford: He’s still a free-market fundamentalist.

DARIEN FENTON: He will say that—that is right; he freely admits it. But he says he is a social liberal, so, you know, there are some things that we agree on.

However, in terms of what the Minister has said about it being the hardest job he has ever done, I can see that; I can see the amount of work that has had to go into this and the enormous amount of detail, convincing, negotiation, and work that has had to be done on it. However, I would hate to see all that work put aside if we could not find the people to do the work because of the skills deficit that we have. I would hate to see that happen, and I think that would completely derail it.

One of the groups of affected homeowners I will talk about who are excluded by the package are the owners who are not found to be eligible under the legislation, and owners whose homes are more than 10 years old. How long has this leaky building problem been going on for?

Hon Maurice Williamson: Since 1995.

DARIEN FENTON: Since 1995. OK, so there will be some people, I say to the Minister, who will be excluded—he agrees with that. For those people this legislation will seem incredibly unfair. There will be owners who cannot raise the remaining sum, the other 50 percent, and that will be really difficult for them. Most of those people will be vulnerable and the most disadvantaged. They are people who have put their lives on the line to build their new house. They have put everything into it. I have met a few of them. Then, of course, there are those who are vulnerable now because of job loss. They once had two incomes and now they have one. I think they are being described as the “nouveau poor”, whom we are seeing in places like the North Shore. They are people who used to have two incomes, they have a big mortgage, and they have put an awful lot of effort into getting this lovely new house, only to have this awful tragedy—this awful situation—occur. So I am worried about them, and I am worried that they will not find any relief in this package.

And there are, of course, health implications—not only the stress that goes with having to deal with leaky homes but also the health implications of having to live in them. Some people just do not have a choice, do they? They will just have to stay in their homes. They will not have the choice to go anywhere else. So we are concerned about them.

There are some issues around the financial package, which I am sure we will talk about a little bit more. I think the amendments that have been introduced allow discussion for that. It is good that the Minister has given an early response up front, and I am sure Phil Twyford will have quite a lot to say about those issues.

Finally, as I said, my major concern is the issue of being able to get the work done—being able to find the builders to do this work, particularly when there is such a huge amount of work to be done in Christchurch. I think a whole lot of blame can be lumped on a former Government in the 1990s that ditched the apprenticeship scheme and did away with skills training, and that is what we are reaping now. It is good that we have young people coming through, but what a builder said to me the other day, and what the Building and Construction Industry Training Organisation said to me, is that they cannot find builders who will take on apprentices. So the skills shortage is something that I am concerned about. We hope that all of the hope that this bill offers, and all the work that has gone into it, is not wasted because of a skills shortage and the work not being able to be done.

Hon MAURICE WILLIAMSON (Minister for Building and Construction): I will not do this all the time, but I think Darien Fenton has raised a really interesting element of this bill that I want to cover, and that is the 10-year limitation. I need to make it clear to people who have a leaky home—and we made this clear when we announced it a year ago, in May of last year, which is about 15 months ago—that if they have a leaky home and they are coming towards the end of its 10-year cycle, all they need to do is to register with the Weathertight Homes Tribunal and the clock stops.

The reason there is such a limit is simple; it is the numbers. The dollars make one’s eyes start to water if it is left open-ended. I fully understand that as soon as we draw a line in the sand, there is always a person just on the other side of that line who will feel aggrieved. If we said that we will make it 11 years, then the person who is at 11 years and 1 month will feel aggrieved. It would be the same if we made it 12 years. If we do not make any limit, then we start to basically gut the intention of the original Building Act, which states that there is a period of 10 years—it is actually in the Act—within which a building must be fit for purpose, and so on. I am sure members of this House will know that a lot of their constituents, and maybe even them, will seek to do renovations after 12 or 14 years. They may redo the bathroom, and so on. So we cannot leave it open-ended, and if we did it would simply be fiscally not achievable. Therefore, we decided to keep the 10-year limitation that is in the Building Act to make sure that people can stop the clock. I repeat over and over, for anyone out there today who is listening, that if they are worried that they are coming near their 10-year time frame they should go and get registered. It does not take much, and once that claim is registered, whether or not it is valid, whether or not it comes to fruition, and whether or not this package is accepted, the clock will stop for that person and they will be through the gate.

There are a number of other things about the package that I would have loved to do differently. One of them was that for a number of superannuitants their concern was that if they have to get a 50 percent loan from the bank, it will be very hard for them to make that repayment. I fully understand that, and we explored an option of allowing for the Crown to pick up the 75 percent, not the 25 percent—the local authority does the remaining 25 percent—then the Crown would get back its 50 percent from the estate on the death of that superannuitant. But again that just becomes numbers that go into the billions. Let us remember that PricewaterhouseCoopers estimated that there is $11.3 billion of damage known, and it is estimated that over time, in places with a slower rainfall and moisture level, this number could end up being double. We could see $22.6 billion of damage. It puts it into perspective relative to the Canterbury earthquake, which is about $15 billion. It is a ginormous sum of money.

I make no secret of the fact that 101 different combinations and permutations were looked at to try to get this through. We looked at one-third, one-third, one-third; we looked at the Crown doing only 20 percent and putting local authorities in the gun for 30 percent, which gave 50 percent, but in the end this was the best we could get to within the fiscal restraints that the Minister of Finance and the Government’s budget could withstand. I repeat two things: first, it is voluntary; and, second, the Government could have stood out and said that it was not taking part in this at all. We could have done that. I heard John Gray say last night: “I don’t think the Minister has looked in the eyes of people with a leaky home.” Boy is he wrong. What made me do this more than anything else in my life is that I have looked into so many faces of people with a leaky home. I have never been to so many meetings where everybody at the meeting was crying. My colleagues may suggest that I have that effect on a meeting when I go to it at any rate, but these people were crying because they had nowhere to go. They had no way out, they could not get loans, and they were sitting in rotten, damp, smelly, unhealthy homes. Stachybotrys can actually kill people.

I felt there was a moral obligation to come back and say that we have to do our bit. I have to say from the outset that if anyone thinks this is simplistic and we can blame the Crown for some of these things, or poor-quality builders, or untreated timber, or local councils, or poor inspection, it is not. It is a systemic failure of the whole lot across the board, from whoa to go. We could spend the rest of our lives going into the blame game. I really want to move on. I really want to get some houses fixed, and boy in my retirement will I feel good about it if I know that some people came out of this getting that result.

CHRIS AUCHINVOLE (National—West Coast - Tasman): It is a pleasure to speak on the Weathertight Homes Resolution Services (Financial Assistance Package) Bill. I share the views that were expressed by my parliamentary colleague Darien Fenton, the last speaker from the other side. I think everyone would acknowledge that the Minister for Building and Construction has done a tremendous job on this bill. In fact, for those of us who came into Parliament in 2005, the issue has been an enduring concern. I am sure it has had consideration on both sides of the House as to how it should be resolved.

It is being resolved on a no-blame basis, and that is a significant part of its success. It is the same sort of success we have had with the accident compensation legislation. The solution otherwise was riven with legal difficulties as people sought to allocate responsibility, blame people, fold companies and start up other companies, and dodge the issue. The councils were left in the position of being the last person standing and felt aggrieved about that.

This solution, as well as being of the no-blame variety, is also a shared solution. The Government has stepped up with a financial assistance package to help people have their leaky homes not just fixed faster but fixed. I share the Minister’s concern at being told that he had not looked people in the eye. The members of the Local Government and Environment Committee had people come before us with heart-rending stories of feeling completely isolated in their position of not being able to do things. Many came to us to say they had engaged in litigation and had had what they thought was success. They had been awarded several millions of dollars, only to find that the actual cost would be several million dollars more, and that they were not covered. They were often elderly people who were in the position of not being able to borrow, because they had used up their assets in their initial borrowing. As I said, our hearts went out to them, and we would have loved to help them, but the opportunity is not always there.

The priority of this legislation is to get the homes fixed. It is really nice to be associated with a little piece—well, it is a large piece—of legislation that has a very clear purpose of getting the job done. That, I would suggest, is typical of this Minister, as those of us who have had the pleasure of knowing Minister Williamson for many, many years would know. I have known him for about 35 years, probably. I remember when he was the kid from the electorate where they did things by computer. Technology has always been a major feature of his role in Parliament, I am aware. But his capacity to get on with the job is another well-known feature of his profile, and this bill will do that. We are moving beyond the current state of endless disputes, litigation, and disappointment.

The financial assistance package is about spreading the cost as evenly and fairly as possible to get action. It ain’t a free ride for anybody. It has been really interesting to have the councils come to the select committee to express their views. They are not looking for a free ride, and they are not looking for a cheap deal, but they are interested in certainty of costs. This bill offers that. They are also aware, of course, of the contribution that is being made. The people making application are similarly interested in certainty and assurance.

Several key changes are being made. The bill caps the participating territorial authority’s liability in accordance with the contribution agreement, and any other contributing party’s liability—for instance, other solvent defendants—for claims being addressed through the financial assistance package. It draws a bit of a line across the page. It removes the Crown’s liability for the failure of repairs made under the financial assistance package, and any losses suffered as a result of actions of the Department of Building and Housing, Treasury, or the Crown under the financial assistance package processes. It provides a power for the appropriate Minister to prescribe a loan guarantee, or indemnity for repairs, made under the financial assistance package. It limits the time in which homeowners can apply to enter the financial assistance package to a period of 5 years from the time the package becomes operational. We asked the officials about that, and they said that with the improvement in building procedures, and with the improvement particularly in materials, they felt that 5 years would cover the risk time of the continuation.

The changes are necessary to facilitate the delivery of a financial assistance package to the owners of leaky homes.

Dr RAJEN PRASAD (Labour): I am pleased to take a call on the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill, which has particular meaning for me and my family. In my maiden speech to this House I said one of the commitments I had given to my family was that if ever there was an opportunity to speak up about the leaky building issue, I would. I did that because when my son and my daughter-in-law came home after getting married, like a good—I would like to say Indian—family, the first thing we told our children to do was to buy a house. My son and my daughter-in-law did that. We took them to a house that was nice, and they selected it. They bought the house and set up their home there. But it was not long before it was declared to be a leaky building. I have never seen two young people, who are so much in love and so close to each other, love their home so much, and then get progressively so frustrated and eventually even depressed, in a colloquial sense, because there were no fixes. People were not interested; people were turning away.

I personally went to see those who had built the house. One builder whom I went to see was sitting there in his bula shirt from Fiji, having just come back from a holiday, but he said that it was nothing to do with him because the house had not been built by his company. I asked him the name of his company at the time. He said “Macrennie’s.” I asked him whether that was the name of his company currently. He said yes, so I asked him what the difference was. He said “Oh, it’s a different company.” I went to half a dozen companies that told me the same tale, so there was the private sector acting in its worst guise. It was using every facility this Parliament had provided in order to run businesses, yet I saw those crooks—because that is what they were—literally taking young people like my son and daughter-in-law to task.

We worked our way through that situation. I joined the body corporate and tried to find solutions. I will talk a little about those solutions, because they have some implications for some of the clauses in this bill. In the end, it became so frustrating for the couple that they told me to put a match to the house, and said they were going to leave the country. They wrote to every political party in this Parliament, and they asked them for their policies on this particular issue. They got no change from anywhere. They were frustrated. That was part of what it took for those two young people to apply to go and live in a different country—and they did leave. They are living quite successfully in Canada at the moment, but I hope they will return home before too long, and come back to live here. Thereupon, I said I would take care of the problem, and we then wrote the cheques that it took in order to fix the building and finally sell it, and send them whatever money was left.

When it comes to leaky buildings, I do not think we can take a great deal of credit for our lack of action over quite some time. I salute the Minister and this Government for saying they will do something, because it takes courage. It takes moral courage to say this is an issue, it is going nowhere, and we should try to find a solution. So I salute the Minister in the chair, the Minister for Building and Construction, for that, because we have spoken about this issue before, as well.

However, there are still some matters that bother me. I ask the Minister still to look at the provision he has already put aside. The amendment on Supplementary Order Paper—which one is it—

Phil Twyford: 251.

Dr RAJEN PRASAD: Is it about speculators?

Phil Twyford: 251—qualifying claimants.

Dr RAJEN PRASAD: The one about qualifying claimants. I know that people have been affected. I have talked about my son and daughter-in-law, but they were not the only ones. Some elderly people who live close by came to me as well, to ask what they should do. I know that people have bought leaky properties for a song. I even met some people 10 days ago who told me that they had bought these properties. They know that the properties were worth $500,000 or $600,000, and they purchased them for $200,000 in the full knowledge that they were leaky buildings, and in the full knowledge that there was a facility for 25 percent of the cost of repairs to come from the Government and 25 percent from the local authorities, which will now subsidise the fix. Assuming that it takes $100,000 for the purchasers to fix the property, the value of that property will increase substantially from the $200,000 that they paid for it to the $600,000 that it is actually worth. Here is the State, in the guise of the Government and local authorities, signing that off.

I wonder where the fairness is in that, when the people who bought the property earlier, who actually suffered, and who personally have left the property and sold it for a song, are not the ones who will get any benefit out of this package. It will be the new purchasers who take advantage of this. So there is a real moral aspect to this particular amendment, and I urge the Minister to look at it again. It addresses a serious issue, and there are cases like that around. We ought to know that we are helping those who cannot help themselves in this particular case, not those who have knowingly entered into a particular deal to buy a property or house at a substantially reduced cost. It is ridiculous what some of the properties have been sold for, and now we will subsidise the fix and there is no gain to us as a State. I think there is something wrong with that particular policy.

I move to a second part of this bill, about the assessor’s report. There is something I do not fully understand about the assessor’s report. I want to make two points. One is the reference to the assessor’s report. I get the impression it will be quite a—brief, although brief is not the word—concise report. From the reports that I have seen about leaky buildings, I think they need, of necessity, to be quite detailed. A quick look—or even a detailed look—without taking the cladding off does not give an idea of what the fix is about. What is to be the standing of the assessor’s report? Will the final amount settled for contributions be based solely on that?

And what happens—because I know this actually happens—when the cladding is taken off and people really see the damage that water has done? They cannot see it from the inside or by taking little sample cuts in a building, from either the inside or the outside. They actually have to take off the cladding and take the windows out before they can actually fix the problem. So what will happen if an arrangement has been made for a certain amount of money to be provided to fix the damage and then, when the cladding comes off, the problem is found to be actually bigger than that? Where is the space for the assessor’s report to be challenged? Where is the space, or is it anticipated, I ask the Minister in the chair, that provision for that will be built in? If the cladding comes off and the costs are much greater than had been anticipated, will there be a way in which the percentage increase that people are likely to fund is actually accounted for? That is a real problem; any builder will tell members that. Any person who has gone through this process will know that it was only when the cladding was taken off that they realised how much damage had been done.

Then it is not just a matter of simply putting the cladding back again, because there need to be some design changes. Inevitably there are design changes. There are the problems with cladding, and there are problems with flashing and what have you that have to be changed. Sometimes there are no eaves, for example. There is a cost to fix that, which is not the same as simply fixing the damage that has occurred, because the problem was in the whole design of the building. What will happen then? How is the assessor’s report to inform that fix, or does it set limits? If so, what kinds of limits does it actually set? There has been discussion, I understand, about some claims against that. The assessor’s report is pivotal, it plays a pivotal role, and where is the space for putting right the wrongs of the assessors, so to speak? Is there an appeal, is there some immunity, or is there some process by which an owner can say: “Here is a problem and this is how we will go about fixing it.”?

Those are two issues. I say to the Minister in the chair that I actually tried to get a report on my son’s property, a concise report, in order to get it fixed. We were almost on the verge of settling with those responsible, and I thank God that it did not happen, because we would have settled for about 25 percent of the actual cost of the fix.

Hon MAURICE WILLIAMSON (Minister for Building and Construction): I will try to respond very quickly to two things.

I say to Dr Rajen Prasad, again, that we have a great difficulty in trying to exclude property speculators. There will be a number of people who choose to buy one of these homes, because the person who currently owns it says they cannot afford to service even the 50 percent loan and they would rather sell it. They would rather sell what they have and go. There are people doing that already. So, a young couple—it could be the member’s son and daughter-in-law—could say that they will buy one of those places. They can get it at a lower rate—there is still a lot of risk associated with it—they will spend money to do it up, they will have the Government and the local authority contribute, and then they will live in it. If we start to exclude people from doing that, we have a real definition problem on our hands about who is a speculator and who is a young couple deciding they will give it a go. It is very difficult. It is very difficult to do.

The other issue the member talked about is a real, serious concern, and we have a mechanism in the process to address it. When assessors look at a building and say they think there is $100,000 of damage—they do their probes, checks, and so on—and when the cladding comes off, they say: “Sorry, old son. You were so wrong. This is much more.”, there is a process to go back and negotiate the higher level, an agreed position with all parties concerned. One could take that $100,000 settlement to, say, a $200,000 settlement. It is not saying: “This is what you signed up to and it is fixed.” There will be an iterative process. I have been on enough building sites now to have had enough of an education on this issue. There are many times when, until people have torn off the cladding, they cannot tell how endemic, how severe, and how far-reaching the damage is.

NICKY WAGNER (National): The Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill will be a relief to very many people who have leaky homes. It has been very interesting to listen to the previous member speaking, the Hon Maurice Williamson, who has sponsored this bill.

Leaky homes, as we all know, have been a longstanding problem. This problem arose probably between 1992 and 2005, and well over 40,000 houses across New Zealand have been affected. That number may still increase. Despite the anguish of numerous families coping with damaged, wet, and unhealthy homes, no effective action was taken by the Labour Government. It did introduce legislation to set up the Weathertight Homes Resolution Service, but that body ended up bogged down in expensive, lengthy disputes, and very few houses got through the process and were actually fixed. One of the first things that National did when it came into Government was to commission a report by PricewaterhouseCoopers, which identified and quantified the barriers to getting houses fixed. It was revealed that only about 3,000 homes had actually been repaired at that date. Labour’s system had been money hungry, excruciatingly slow, and uncertain, and it just added to the stress of homeowners.

National decided there had to be a better way. The Minister for Building and Construction, appalled by the waste of resources going into disputes, chose a collaborative model. Today we are able to offer a financial package that gets houses repaired and allows people to move on with their lives. Local government and central government will pay 25 percent each towards repairs, and the homeowner will be responsible for the other 50 percent. The Government will provide a loan guarantee underwritten by the Crown that will cover that 50 percent, as long as the owners meet the lending criteria.

Let me make it clear that no one will be compelled to take up this offer, but it is another option for people who have really suffered this uncertainty and who want to get some resolution in their lives. The package will be available for 5 years, and the Government expects to pay out about $1 billion to help families over that time. I believe that at long last we will be able to slam the door on leaky homes in New Zealand.

PHIL TWYFORD (Labour): I will speak to Supplementary Order Paper 252 on the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. The owners of dwellings in multi-unit complexes are one of the big groups of homeowners who will not benefit under this package. There are two main reasons. The first is that because of the Unit Titles Act requiring there be a 75 percent majority before a decision can be made by a body corporate—for instance, to enter into an agreement under the financial assistance package—it will be very difficult, practically speaking, for apartment dwellers to reach the 75 percent threshold. The other reason is that banks will not lend to bodies corporate, because bodies corporate under the Unit Titles Act cannot mortgage that collective property. About 24 percent, I think, according to PricewaterhouseCoopers, of the population of affected homeowners will not be able to benefit from this package. That is about 5,500 dwellings. So a really significant group of affected homeowners will not benefit.

Supplementary Order Paper 252 proposes to insert new section 125G(2) to allow the Crown to provide an indemnity or a Crown guarantee, which would open the door for banks to lend to bodies corporate. With respect to the Minister in the chair, the Minister for Building and Construction, it is not enough to say: “Well, bodies corporate can do this anyway; apartment dwellers are covered by this.” The practical reality is that they are not, actually. Most apartment dwellers will not be able to benefit from this legislation, because the practical reality of getting the 75 percent majority of members in the body corporate to agree and to put up the money to do this will not happen. It will be almost impossible, as well, to get the banks to lend. This Supplementary Order Paper would extend the Government guarantee to allow banks to lend to bodies corporate. I do not know why I did not really hear a substantive explanation from the Minister about why he has chosen to reject this amendment. He says it is not necessary, and that the Government could provide what it proposes under the existing bill. I am not sure that that is the case. That certainly was not what we heard from officials at the Local Government and Environment Committee.

It is not enough to say that apartment dwellers will have access to the Weathertight Homes Resolution Service. If that was enough, why bring this bill to the House and launch a whole new initiative? I think the Government should think again and give thought to this amendment. Maybe the amendment has been rejected because the budget parameters of the initiative have already been set. Maybe it is because of the ginormous, eye-watering cost of the package that the Minister has been telling us about. But if that is the case, well, then tell the Committee. Otherwise, we are needlessly excluding about one-quarter of affected homeowners, and I think we deserve a better explanation.

I want to move on to my amendment to add to new section 125B. The Minister said he lauds the intent of it but does not agree with the substance. Well, one of the concerns we have had about the package is that it extends a 50 percent subsidy—25 percent from the Government and 25 percent from the local authority—to a speculator who may have picked up a leaky home at a knock-down price, gets the 50 percent subsidy from the ratepayer and the taxpayer, does a quick do-up job, then flicks it on and pockets a windfall profit, which is really courtesy of the ratepayer and the taxpayer. Given how great the unmet need is and how many homeowners who are grappling with this problem are excluded from this package, it makes no sense to us on this side of the Chamber that we are dishing out this generous subsidy to property speculators. The Minister said it was not practical to accept this amendment because it would be excluding people who had in good faith purchased a leaky home, in the knowledge that it was a leaky home. Well, the very point of that is if they bought the house knowing it was a leaky home, then presumably that price would have been heavily discounted so as to recognise the reduced value caused by the defect and the damage. I would have thought there was no need in that case for a 50 percent subsidy from the ratepayer and the taxpayer to go into the pockets of those people. The Minister has said in the past “Look, we’re just interested in getting these homes fixed. It does not matter who does them.” Well, there are so many people who are excluded from this package who will continue to suffer without the assistance this package offers that I would have thought it made a lot of sense to exclude property speculators from it.

The next issue I want to address, and I respond to the Minister’s earlier comments, is about Crown immunity. The whole purpose of this bill is to legislate for Crown immunity. If it was not for that, I do not think we would need the legislation at all; it could all be done by policy and regulation—

Hon Maurice Williamson: And local authorities.

PHIL TWYFORD: —OK, and through the role of local authorities. The Minister makes the point that the Crown does not have to come to the table. It does not have to put hundreds of millions of dollars on the table, because there is no established legal liability in this case. Well, that may be so, but the real point here is we are talking about the immunity that this bill gives to assessors from the Department of Building and Housing, who, thanks to this bill, are relieved of their common law obligation to exercise a duty of care. If the homeowner finds that the quality of work of the Department of Building and Housing’s assessors is substandard—heaven forbid that that would be the case—or the assessment of agreed repairs was defective and because of that the homeowner cops a further liability, he or she will have no comeback. The Crown will not be held accountable for that. The Minister’s own officials in the Department of Building and Housing advised him against this provision giving immunity to the assessors, but he has made a political judgment. I see the Minister querying this, but it is in the regulatory impact statement. The advice in the regulatory impact statement in black and white is that giving immunity to the Department of Building and Housing assessors is not necessary and is not justifiable.

Furthermore, by giving those assessors immunity, it further exposes the builders, the architects, and the designers who will be required to do the remediation work. I think the Minister himself has alluded to the fact that there is some doubt, actually, that there will be many builders, particularly in light of the looming skills shortage, who will want to do this work at all, because the local authority will be indemnified, the Department of Building and Housing will be indemnified, and that leaves only the builders and architects to carry the can if something goes wrong in the remediation work. I am yet to hear from the Minister a convincing explanation for this immunity other than that the Government just does not want to do it. I invite the Minister to take a call in the remaining time and tell us whether there is a reason for Crown immunity. I will leave it there, and I will speak to my third Supplementary Order Paper later.

Hon MAURICE WILLIAMSON (Minister for Building and Construction): I do not want to be a perpetual jack-in-the-box, but I will just respond to Phil Twyford’s comments about immunity. I think it is very important that members of this Committee understand that the Department of Building and Housing assessors have always been immune from proceedings relating to their functions under the Weathertight Homes Resolution Services Act 2006—the Act that the Labour Government passed. Assessors’ immunity is critical to the delivery of the financial assistance package under the Weathertight Homes Resolution Services Act. Assessors would not perform their role if they risked being joined in litigation about the leaky homes issue. Immunity also helps to ensure their independence and the objectivity of their assessment. All I can say is this bill is not affecting immunity. In fact, if we wanted to take away the immunity of those assessors who are going in—

Phil Twyford: So why should builders?

Hon MAURICE WILLIAMSON: The member asks about builders. Many of those have a vested interest in making money, and so on. The assessors from the Department of Building and Housing are not there to make money or whatever else; they are there to provide what I think is a public service role. If we wanted to do what the member wants, we would have to actually remove the immunity from the principal Act rather than from this bill, because this bill is not adding it. That means we would have to go back and say that Labour got it wrong in its 2006 Act. I do not think it did.

SUE KEDGLEY (Green): The Green Party believes in giving credit where it is due, so I think a lot of credit is due to the Minister in the chair, the Minister for Building and Construction, for attempting to solve a very intractable problem, and also for sitting in the chair, listening to the debate on the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill, and answering the questions that we are asking. It is quite a unique experience to be in this Chamber, have people raising questions, and have a Minister actually listen with courtesy, instead of ridiculing us, and answer our questions. I would like to give credit to the Minister for giving good, reasoned explanations for why he is or is not accepting various amendments. I also agree with the Minister that we should go beyond the blame game and look at solutions.

However, history will repeat itself unless we learn from it, and I want to take a moment to look at the history of this issue. It is not actually a blame game. It is not about attacking National or attacking Labour, because the 1991 Building Act was passed unanimously by both National and Labour. At that stage, sadly, there was no Green Party in Parliament. The point I want to make is that the lesson of history is the utter failure of deregulation. I think it is important that we accept that. We have a Government—not just this Government—and a whole lot of people who have the mantra of deregulation and self-regulation. We are being told, everywhere we turn, that self-regulation and deregulation will work, and we do not need all this onerous regulation. This leaky home disaster is an abject lesson in what happens with deregulation and in the huge cost of deregulation.

What did this 1991 Act do? The aim of it was to encourage competition in the market, boost the building industry, reduce building costs, and save money. Everyone whipped themselves into a fervour about the wonderful things that would happen with the passage of the Building Act and with deregulation. The Act wiped out all the previous regulations and controls, loosened councils’ inspection procedures, and allowed the introduction of private house-inspectors, so that there would be competition with council inspectors. Oh, there was no need to bother about skills! We did not need to have skills any more. Training was removed. Everyone was so enthusiastic; this was going to encourage competition, boost the building industry, reduce building costs, and save money. I want to repeat this, because this is what we are hearing as a mantra on just about every other bill that comes to the House: “We are going to encourage competition. We are going to reduce costs by removing competition.”

We cannot emphasise sufficiently that this leaky building crisis is an unmitigated fiasco. It is the largest man-made fiasco in our history, with costs likely to be $22 billion. One of the National members talked about 40,000 people being affected by leaky homes, but the expectation is that the number could be somewhere around 89,000 people. This is all happening because of deregulation. We left it to the invisible hand of the market. We allowed builders to enter and exit the industry, with no liability and no costs. They could whack something up, then disappear and go to Australia—deregulation. Please, nobody ever tell me that deregulation and self-regulation are the solutions to save money and reduce costs. This is like a case study of the abject failure of deregulation.

Having got that off my chest, I will mention that we all know people who have been caught up in this fiasco. The most recent was a friend of mine from the United Nations. She thought she would like to return to New Zealand on her retirement and buy a building. She showed me this apartment she was going to buy on the Kapiti coast. I took one look at it—it was a mono-clad building—and said “Sue, are you absolutely sure that isn’t a leaky home?”. She said “Oh no, no.” Her brother-in-law was a real estate agent and he checked it all out. I said: “Please get it checked out. This could be a leaky home.” So she arranged for somebody to come and have a look at it. This person, an independent consultant, absolutely assured her that this was not a leaky home. She had owned that apartment for less than 6 months before the grim news came in that it was leaking like a sieve. This was only a few years ago. This independent contractor had absolutely assured her that her apartment was not a leaky home, but, of course, it was leaking like a sieve.

As the Minister in the chair is answering people’s questions, to my great admiration, I have a question for him. Yes, I understand what he is saying about a time frame for financial assistance, and that we cannot have an indefinite time frame. But we heard a lot about people who had houses built in the 1990s—some estimating the number could be 15,000 to 20,000—that will fall outside the time limit. I can understand that the Minister has set a limit of whatever it is—that financial assistance cannot be given after this particular time—but why are we excluding people who had houses built in the 1990s? They will miss out. That is one of those things that seems incredibly arbitrary. I understand that the Minister is saying there needs to be a time limit, but why not at least include, not exclude, in the package those who built homes in the 1990s?

I strongly agree with Phil Twyford about multi-dwelling homes. The Minister was not at the Local Government and Environment Committee to hear the submissions, but we were told that about 5,500 people in multi-dwellings will not be eligible. It will be very difficult for bodies corporate to be eligible. I think that the proposal that Phil Twyford has come up with for multi-dwellings is a very positive initiative. Again, I would appreciate it if the Minister could answer why that one does not seem to make sense. I say to the Minister that that was one of the big issues that submitters raised with us.

I was very pleased to hear the Minister acknowledge that Stachybotrys can kill people. That also worries me. We had so many people say to us that they could not afford to pick up 50 percent of the cost, so they were wondering what would happen to them. Some of those people said they were living in homes that were unsafe, they were a health hazard, and they have Stachybotrys mould. So what are we going to do? It is fantastic that we are providing some sort of solution, but what will we do for those poor people who simply cannot raise a mortgage, get a bank guarantee, or whatever, for that 50 percent? What will we do about those people? We cannot just ignore them, because we have people who are living in insanitary, unsafe homes that are a health hazard.

So, yes, congratulations to the Minister and to the Government for coming up with a package. I understand that it is extraordinarily complex and difficult. I am glad I did not have to go, as the Minister did, to numerous meetings with people sobbing—I can believe that. But we heard the submissions, we all have our friends, and we know the utter, total tragedy this has caused for so many lives. We need to remember that it was deregulation—deregulation; nothing else—that created this problem. Deregulation is what caused this $22 billion problem, which is estimated to affect 80,000 New Zealanders and causes abject misery to so many people. It is deregulation that has done this, so let us not hear that endless mantra from Rodney Hide, the ACT Party, and National that deregulation will solve our problems. Actually, what it has done is create the biggest man-made disaster in New Zealand’s history.

Hon MAURICE WILLIAMSON (Minister for Building and Construction): I will take a very quick call on Part 1 of the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill to respond to Sue Kedgley’s question about the 10-year limitation period, because it is a very important point. The 10-year limitation period has been reviewed several times in things like the Building Act, the Weathertight Homes Resolution Services Act, and so on in the past few years, and it has been found to be a sound and appropriate level. One cannot sue a local authority over a building that is more than 10 years old. The most recent review was the Limitation Act 2010, which was passed by Parliament last year. It left the 10-year longstop in the Weathertight Homes Resolution Services Act 2006. So the 10-year limitation period is a well-established level. We would be changing a whole lot of the ground rules—we would have to go back and change the Weathertight Homes Resolution Services Act and everything it is founded on as well—if we were to now take out the 10-year limitation period. It is clear that most of the damage appears in a building long before it is 10 years old.

Councils would not be liable, so they could not be brought into this legislation. I am also told by a number of the assessors that it is really difficult to determine the extent of damage that has been caused by weathertight issues versus other possible causes like a lack of maintenance and so on if the limitation period goes for too long. Houses need to be maintained. We found a house that had a serious problem because the homeowner had never cleaned the spouting. The spouting was jammed with leaves. It was blocked rock solid. Any water that came off the roof went straight through the eaves and into the back of the house. If the homeowner had done some reasonable maintenance, there would not have been a problem.

We have a period of time. We have to get to a limit and say that that is it. The 10-year limit is well tried and well tested. I would not want to be a Minister who tinkered about with it, given that it has been looked at so many times. We are maintaining that 10-year limit. The good news for anybody who is worried about getting to the 10-year point or thinking that they are close to it—even as of last May when we made the announcement in all of our material—or if people are worried they will hit the deadline, they should register with the Weathertight Homes Tribunal and we will stop the clock on the day they register.

PHIL TWYFORD (Labour): I refer briefly back to the issue about Crown immunity, or immunity for the Department of Building and Housing assessors. I saw the look on the face of the Minister in the chair, the Minister of Building and Construction querying my suggestion that his Department of Building and Housing officials had advised that there was no need for Department of Building and Housing assessors to have this immunity. I refer him to page 7 of the regulatory impact statement. It states: “The Department of Building and Housing considers that it is appropriate for the Department/Crown to be held accountable for the work that it is responsible for.” That is after a lengthy passage that states that it is perfectly manageable for the assessors to be accountable in the normal way under the law.

I will talk about my amendment to section 125F, which is on Supplementary Order Paper 250. I am disappointed by the response we have had from the Minister about this amendment. This amendment deals with the bar on third-party claims over houses that are subject to the repair agreement under this package. The bill states that if a builder or a designer is sued by a homeowner, they cannot enjoin a council that is already party to the agreement. We heard from submitters—and it is spelt out in the regulatory impact statement—that that takes away a property right. I expect the member for ACT to prick up her ears at that suggestion. This takes away a property right. It takes away a right under the common law for a third party, a builder or a designer, to enjoin a council to legal action. Imagine this as the situation: a builder is sued by a homeowner. They say: “Crikey, we are not the ones who are fully responsible; the council was even more to blame than we were for this leaky home. Why should we be the last man standing? The council should be part of this conversation and should share some of the liability.” Under this bill that legal right is taken away from those third parties. That seems unfair to me. I know that there is a political justification. The Minister has said councils made it very clear that they would not pony up and be part of this package unless they were fully protected.

Supplementary Order Paper 250 offers a balanced and reasonable compromise. It still limits the liability of the councils. It says that if a third party—like a builder or an architect—finds themselves being sued by the homeowner and wants to enjoin the council, then they have to prove to the tribunal or the court that they have a good case that stands a reasonable chance of being successful, and that the liability of the council in question is likely to be significantly more than the amount that they are already committed to under the 25 percent in the repair agreement. There is a significant threshold that the third party would have to reach if they were going to then enjoin a council in this legal action.

When the Minister took a call on this earlier, I did not hear a substantive response to this Supplementary Order Paper. When we are taking away the legal rights of people like builders and architects in this situation, we do at our peril. So it is only fair that we think very, very carefully about it. We offered in this Supplementary Order Paper a balanced approach that does not expose councils to unrestricted liability. It would require that a third party front up to the tribunal or a court of law and make the case that the third party would stand a good probability of winning.

Dr CAM CALDER (National): It is gratifying to hear the accolades from members all around the Chamber for the Minister for Building and Construction, who has been working on the Weathertight Homes Resolution Services (Financial Assistance Package) Amendment Bill. They have commended the Hon Maurice Williamson for his work on this longstanding problem.

An Englishman’s home is said to be his castle; a New Zealander’s home may be a whare, a fale, a crib, a bach, a villa, a bungalow, an apartment, a town house, or a stand-alone modern home. The last three—the apartment, the town house, and the stand-alone modern home—were built from the early 1990s through to about 2005 out of the monolithic cladding that allowed remarkable shapes to be created and built relatively cheaply. For a while it seemed to be an interesting addition to the materials available to the home builder and home buyer, and the designer, architect, and the like in the profession, but towards the end of the 1990s it became increasingly evident that there were significant problems with this building material.

The situation went on for a number of years, and was largely ignored by the previous Government. In 2002, as late as 25 November, Helen Clark famously told Newstalk ZB host Paul Holmes that she had not taken much notice of the New Zealand Herald’s numerous stories about leaky homes, because the New Zealand Herald was well known for banging on about issues of no substance. Her comments surprised Prendos director Phil O’Sullivan at the time, who commented that he had been campaigning for 4 years to stop the problem. He said he was very surprised that the then Prime Minister was so badly informed.

The problem was evident, but no solution to the problem was found. There were some attempts under the previous Government, but when we came into power one of the fundamental decisions we made was to fix a problem that had tens of thousands of New Zealanders living in cold, damp homes harbouring mould and fungi—Stachybotrys was mentioned by the Minister and the honourable member Sue Kedgley earlier—which can have appalling effects on a family’s health. Safety and security of body and soul and of family and property are the fundamental underpinnings of Maslow’s hierarchy of human needs. A safe and secure weathertight shelter is fundamental to the physical, emotional, and economic well-being of all New Zealanders.

Along with other members of the Local Government and Environment Committee, I have met a number of owners of leaky homes and have looked into their faces. I am reminded of the line from an old song: “The lines on my face reflect the wrinkles I’ve ironed out in my life.” I have looked into the face and the eyes of those people whom we have seen in the select committee and others I have seen out in the community, and I have heard their stories. They were heartbreaking—they were heartbreaking. I have looked into their faces. I have seen pain, I have seen rage, I have seen deep sadness, I have seen frustration, and I have seen despair. The estimated number of leaky homes—some say 30,000, some say 50,000, and others say 80,000—are not mere wrinkles in the lives of owners so affected. They represent deep, fundamental, savage, wounding assaults on their very quality of life. As I said, the stories we heard—and I think all members of the select committee would agree—were heartbreaking.

This financial assistance package outlined in this bill is designed to bring tens of thousands of New Zealanders hope—hope and a way forward from an appalling and untenable blight that is damaging thousands and thousands of lives. As the Minister mentioned earlier, the causes of this problem are many and varied. This is not a time to apportion blame; this is about a way forward. The solution is made on a collaborative and no-blame basis. We believe that it is a fair and effective package, and we aim to spread the costs as evenly as possible.

The question was put that the following amendment in the name of Phil Twyford to clause 6 be agreed to:

to add the following paragraph to the definition of qualifying claimant in section 125B:

“(c) but does not include a person who has purchased a dwellinghouse with knowledge that it is a leaky building.”

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

Ayes 51

New Zealand Labour 41; Green Party 8; Progressive 1; Independent: Carter C.

Noes 67

New Zealand National 58; ACT New Zealand 5; Māori Party 3; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 253 in the name of Phil Twyford to clause 6 be agreed to.

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

Ayes 51

New Zealand Labour 41; Green Party 8; Progressive 1; Independent: Carter C.

Noes 67

New Zealand National 58; ACT New Zealand 5; Māori Party 3; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 250 in the name of Phil Twyford to omit section 125F and substitute new section 125F in clause 6 be agreed to.

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

Ayes 51

New Zealand Labour 41; Green Party 8; Progressive 1; Independent: Carter C.

Noes 67

New Zealand National 58; ACT New Zealand 5; Māori Party 3; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 250 in the name of Phil Twyford to insert new section 125FB in clause 6 be agreed to.

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

Ayes 51

New Zealand Labour 41; Green Party 8; Progressive 1; Independent: Carter C.

Noes 67

New Zealand National 58; ACT New Zealand 5; Māori Party 3; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 252 in the name of Phil Twyford to clause 6 be agreed to.

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

Ayes 51

New Zealand Labour 41; Green Party 8; Progressive 1; Independent: Carter C.

Noes 67

New Zealand National 58; ACT New Zealand 5; Māori Party 3; United Future 1.

Amendment not agreed to.

Part 1 agreed to.

Part 2 Consequential amendment to, and relationship with, Public Finance Act 1989

Hon MAURICE WILLIAMSON (Minister for Building and Construction): I will speak very briefly, because Part 2 is about the smallest part that one could ever get in legislation. It is just two clauses relating to a consequential amendment to, and the relationship with, the Public Finance Act. Clause 7, “Consequential amendment to Public Finance Act 1989”, amends the Public Finance Act. Clause 7(2) states: “The definition of ‘public security’ in section 65D(2) is amended by omitting ‘or the Crown Retail Deposit Guarantee Scheme Act 2009’ and substituting ‘, the Crown Retail Deposit Guarantee Scheme Act 2009, or section 125G of the Weathertight Homes Resolution Services Act 2006’.” It is a very technical amendment. I do not think members will have any great concern about this particular part.

Part 2 agreed to.

Clauses 1 to 3

Hon MAURICE WILLIAMSON (Minister for Building and Construction): I will just take the opportunity, as this is the summary of the Committee of the whole House stage, to thank all members. I also want to say to them that this is never ever going to be perfect—it never was; it never will be—but I am really pleased that it is a good attempt at getting a lot done rather then the alternative, which was to do nothing and leave people stranded. Yes, I feel for those people. It is a little bit like when the Government takes someone’s section away to put a motorway on it, as happens under the Public Works Act. That person can often be the luckiest, because at least the Government offers compensation. But those people who own the house next door get nothing, they can feel aggrieved that the Government drew the line just beyond their back boundary, and they wish that the Government took their house instead. That will always be the case when lines are drawn.

As I said in my Part 1 speech, as soon as we have the 10-year limitation period, which is in the Building Act and in a whole lot of other things, including the Weathertight Homes Resolution Services Act, that limitation is on local authorities and their ability to be held accountable for stuff. So the moment that line is drawn in the sand, somebody who is at 10 years and 1 month will fall outside the line.

In fact, I will give the Committee a really good example. A man came to see me who was beside himself about the 10-year limitation period. He was part of a residential development in which he had bought his place quite some time after most of the other owners. However, they qualified to make a claim because they came under the 10-year limitation period, but he did not because he had bought the display home. The display home had been built more than 10 years earlier and it was used as the display home for about 1½ years while all the others were built and sold. He had then bought that display home, and it turned out that all the homes were leaky. The other owners all qualified, as they were inside the 10 years, but he did not. All I can say is that I feel for him, and I think it is ghastly that that is the case, but the moment we decide that we are going to move that line, we put horrendous sums of money on one side of that line, and where do we stop? If that line was drawn at 10 years and 3 months, which was the length of time in his case, what do we do with the people who are at 10 years and 4 months? Then what do we do with the person at 10 years and 5 months? I think that 10 years is a tried and true limit.

I thank members for their contributions. I have tried to make sure I have answered the questions that were asked, and I can promise members that this has consumed hundreds of hours of meetings and trying to bring all parties together, which we have finally done. I can remember going to so many meetings. Paula Bennett took me to one in west Auckland, which I think really stopped me in my tracks. It was to do with a couple of apartment blocks at Westward Ho. Block A had been consented by the Waitakere City Council, and block B had been consented by an independent certifier. Under joint and several liability law, at least the people in block A had somebody to go after. There was a last man standing and it was the Waitakere City Council. Now it is the Auckland Council. But the poor beggars in block B did not have anyone to go after, because the builders had folded and gone, or started under a new name, or flitted off to the Gold Coast, or whatever. One lady was sitting there and crying her eyes out. She said she had to use a rubber stick on the light switches, because water was cascading down the internal part of her wall. There was no one she could go after. It is a shame on our country that lies right across the industry and across Governments and across a whole range of other businesses, and so on. We could spend a long time trying to pin down whose liability this was. This legislation is an attempt to get things fixed and to move on.

Clause 1 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 249 in the name of the Hon Maurice Williamson to clause 2 be agreed to.

Amendments agreed to.

Clause 2 as amended agreed to.

Clause 3 agreed to.

Bill reported with amendment.

Report adopted.

Sittings of the House

Sittings of the House

JO GOODHEW (Junior Whip—National): I seek leave, given the progress we have made, for the House to rise a little early this evening.

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

The House adjourned at 5.41 p.m.