Tuesday, 27 November 2012

Tuesday, 27 November 2012

Tuesday, 27 November 2012

Mr Speaker took the Chair at 2 p.m.

Prayers.

Questions for Oral Answer

Questions to Ministers

Housing Affordability and Availability—Government Work Programme and Auckland Issues

1. JOHN HAYES (National—Wairarapa) to the Minister of Finance: What steps is the Government taking to address the long-standing problem of housing affordability in New Zealand?

Hon STEVEN JOYCE (Acting Minister of Finance): The Government—[Interruption]

Mr SPEAKER: Order! The Minister has barely uttered a word, and the interjections are unreasonable.

Hon STEVEN JOYCE: They do not want to hear. The Government recently set out its plan—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Does business dress involve having one’s collar—

Mr SPEAKER: Order! [Interruption] Order! That is enough. [Interruption] Order! The House will come to order. It has been noisy all day so far today. [Interruption] It seems like all day because it has been so noisy. We do not need that kind of point of order. I call the Hon Steven Joyce. [Interruption]

Hon STEVEN JOYCE: Thanks, mum! The Government recently set out its plan to improve housing affordability in its response to the Productivity Commission’s comprehensive 320-page report on the same subject. The Government will work with councils to increase land supply, both greenfield and brownfield; reduce the delays, costs, and uncertainties of the Resource Management Act, including introducing a 6-month time limit on medium-sized consents; improve infrastructure provision; and improve productivity in the construction sector. The plan builds on progress already made in housing, including the Resource Management Act reforms in 2010 for faster decisions, streamlining of the Auckland Unitary Plan, and the Government’s ongoing and substantial investment in social housing.

John Hayes: How will the Government’s plan improve housing affordability in New Zealand?

Hon STEVEN JOYCE: The Government’s view is that you cannot fix housing affordability without fixing the underlying drivers of cost. That is why the Government’s plan targets red tape and low productivity, which are tying up house construction. In addition to freeing up land and improving construction sector productivity, officials have been directed to look at developing a performance monitoring regime for local government and introducing a single plan for each district. It is also important to point out that already the Government’s responsible economic management is helping to keep interest rates low. [Interruption] They do not want to hear it, but it is true. A family with—

Mr SPEAKER: Order! I apologise to the Minister. The level of interjection is unreasonable. Members have every right to be able to hear the Minister. I would ask, though, that answers not be too long.

Hon STEVEN JOYCE: It is an important point. The Government’s responsible economic management is actually helping to keep interest rates low, and that is very important in this context. A family with a $200,000 mortgage is saving about $200 per week compared with what it was paying in 2008.

John Hayes: What are some of the particular issues in the Auckland market affecting housing affordability?

Hon STEVEN JOYCE: One of the big issues in Auckland is the availability and price of land. The median cost of an Auckland section is nearly $320,000, which is around 60 percent of the cost of the house, and that compares with around 40 percent in the rest of New Zealand. That is why the Government is putting a big emphasis on land section availability in our biggest city. I have heard there are some people who believe there are thousands of sections around Auckland available for around $50,000, apparently. That is news to most people. I actually suspect we would have to zone all the land to Taupō as residential before we would get to that sort of price.

John Hayes: Has he received any other proposals on housing affordability?

Hon STEVEN JOYCE: I have received a proposal that would take $1.5 billion of borrowed money, magically build $30 billion worth of houses with it, provide those houses to people at low interest rates but apparently at no cost to the Government, and then get the $1.5 billion straight back again. Under this particular “back of the envelope” plan, apparently, two-thirds of these houses will be built in Auckland on all those widely available sections that sell for $50,000. A very esteemed colleague of mine has referred to this plan as fantasyland.

Hon Annette King: Has he visited sites within the current Auckland City boundaries to view houses that have been built for $300,000, which are of quality and are affordable; if not—

Hon Member: Include the land.

Hon Annette King: —including the land—what is the Government’s basis for its assertion that it is not possible to build such homes?

Hon STEVEN JOYCE: I think it is called the statistics of the actual cost of building homes, and I refer the member to this excellent report, which would be able to help her with it. But in answer to her question, I am aware that there were some people who visited some houses in Auckland, but I also understand that the houses that were visited were subject to quite a significant Government subsidy.

Hon Annette King: I raise a point of order, Mr Speaker. I asked a specific question: has he visited sites within the current Auckland boundaries to view homes that have been built for $300,000 including land, which are of quality and affordable? I will give him the addresses if he wants them.

Mr SPEAKER: Order! I would ask the House, please, to settle down a little, because it was very difficult for me to even hear the original question. That is why I let the member, on her point of order, go on a little longer. She did ask whether the Minister had visited such houses, and the Minister said that some people had visited such houses. I am not sure that he said whether he had. If the Minister could enlighten the House as to that.

Hon STEVEN JOYCE: No, I have not personally. But if there are so many thousands of these houses, and they do not involve Government subsidies, and they have been built recently—not in the 1950s at 1950s prices—I would be happy for the member to supply a list of streets and addresses where these wonderful houses are, and we will take it from there.

Manufacturing Sector, Jobs—Household Labour Force Survey Numbers

Dr RUSSEL NORMAN (Co-Leader—Green): Thank you, Mr Speaker. [Interruption]

Mr SPEAKER: Order! Look, I apologise to Dr Russel Norman. These interjections must, please, become more reasonable.

2. Dr RUSSEL NORMAN (Co-Leader—Green) to the Prime Minister: Does he stand by his statement that the Household Labour Force Survey shows that “over the last four years, the number of jobs in manufacturing is roughly about the same”, given that the survey shows employment in manufacturing has declined by 31,600 in the four years to September 2012?

Rt Hon JOHN KEY (Prime Minister): Yes. In September 2009 it was 244,700, in September 2010 it was 245,000, in September 2011 it was 244,700, and in September 2012 it was 240,400.

Dr Russel Norman: I raise a point of order, Mr Speaker. The Prime Minister began his recitation of the figures, but he went back only 3 years. The quote was about 4 years.

Mr SPEAKER: Order! The Prime Minister has, in his view, answered the question. He certainly gave some figures to back his answer. The member has got further supplementary questions to dig further into that answer if it was deficient. He cannot use a point of order to challenge the quality of the answer.

Dr Russel Norman: I raise a point of order, Mr Speaker. The question was “Does he stand by his statement …” la la la, and that over the last 4 years it had been roughly the same number. He did not answer the question, because he talked about the numbers over 3 years.

Hon Clayton Cosgrove: It was on notice.

Dr Russel Norman: This was a question on notice. I want to hear about 4 years. That is the question.

Mr SPEAKER: The member has further supplementary questions. The Prime Minister gave figures going back to 2009 and gave 2009, 2010, and 2011 figures. OK, the question did ask whether or not he stood by his statement. It sought an opinion. The member did not ask how many people were unemployed under the household labour force survey. It sought an opinion. Where members seek opinions in questions on notice, and where a reasonable answer is given, I am not going to pin the Minister down any further. The member has further supplementary questions.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With the greatest respect, the question “Does he stand by his statement” is not about an opinion. It is about whether it is a fact, or not, and that he stands behind it. [Interruption]

Mr SPEAKER: Order! Order! This will cease. I invite the member to reflect on what he has just said. The question did not ask whether the two sets of figures were identical. The question asked the Prime Minister’s opinion—whether he stood by his statement. The Prime Minister can stand by his statement for all number of reasons. So this nonsense will stop. I commend the member’s own question that is coming up on the day’s Order Paper, because it actually asks for some information.

Dr Russel Norman: Is the reason that the Prime Minister gave in his answer to the primary question statistics going back only 3 years that the household labour force survey shows that in the 4 years to September 2012 there are 31,600 fewer people employed in manufacturing?

Rt Hon JOHN KEY: What the household labour force survey shows is very similar to what the linked employer-employee data survey shows and what the quarterly employment survey shows, and that is that there has been a gradual decline over 20 years in manufacturing. What is true is that manufacturing was hit in the economic crisis that we inherited from Labour in 2008, and over the last 3-odd years that has been pretty constant. [Interruption]

Mr SPEAKER: Order! I want to hear this question.

Dr Russel Norman: Is the Prime Minister disputing the fact that the household labour force survey shows that there are 31,600 fewer people employed in manufacturing today than when he came to power 4 years ago?

Rt Hon JOHN KEY: It is certainly true that the difference between 272,000 and 240,400 is 31,600. I was not the Prime Minister of New Zealand in September 2008.

Dr Russel Norman: Is he aware that the September 2008 figures are the last household labour force survey figures before he became Prime Minister; and is he disputing that the household labour force survey shows that there is a decline in manufacturing employment over those 4 years of 31,600 fewer jobs?

Rt Hon JOHN KEY: What I am saying is that, broadly speaking, the numbers have been quite consistent in the period of time we have been in office. What is true is that there was a global financial crisis that we inherited from Labour, and that had a big impact on the economy.

Dr Russel Norman: Is the Prime Minister saying he inherited the global financial crisis from the Labour Government?

Rt Hon JOHN KEY: In part of it, yes, because after 5 years of increasing Government expenditure by 50 percent, interest rates were 8.25 percent in this country. But—this is the good bit of the news; this is the good bit of the story—if Labour are now accepting that there is a global financial crisis, then they will stop all that talk about Greece not having any impact on New Zealand. [Interruption]

Mr SPEAKER: Order! Now that we have let off a bit of steam, let us have a little more order.

Dr Russel Norman: Which of these figures does he dispute: that the household labour force survey shows a 31,600 decline in the number of people employed in manufacturing in the past 4 years; that the quarterly employment survey shows a 31,300 decline in the number of jobs in manufacturing in the past 4 years; or that the linked employer-employee data set shows a decline in the number of filled jobs in manufacturing of 20,000 in the 3 years to September 2011?

Rt Hon JOHN KEY: No, no, in the past 4 years.

Dr Russel Norman: Does it not all boil down to the fact that whichever way you cut it, whichever statistics you care to choose, the Government has failed on jobs, unemployment has grown in New Zealand, and the number of jobs in the manufacturing sector has not grown; and is it not time he just admitted it and figured out what to do about it?

Rt Hon JOHN KEY: No, what it shows is that the Green Party, along with the Labour Party and New Zealand First—

Dr Russel Norman: I raise a point of order, Mr Speaker. This is nothing about the Green Party. It was a simple question about the Prime Minister.

Mr SPEAKER: Order! National front-benchers do not need to interject. I invite the member to reflect back on the question he asked if he is not happy with the way the Prime Minister is answering it. I think that question left plenty of room for the Prime Minister to answer in almost any way he liked.

Rt Hon JOHN KEY: The answer is no. What it shows is that the Green Party, supported by the Labour Party and New Zealand First, has been running around saying—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With the greatest respect, he cannot draw New Zealand First into his answer to this question. We were not responsible for the question, and we are surely entitled for him to be terse and to the point, and it does not include the magnificent policies of New Zealand First.

Mr SPEAKER: We have had enough of this. If members ask such loose questions there is a lot of scope in the answer. If he attributes any specific policies to New Zealand First I will stop him, but the Prime Minister has a fairly wide licence in answering that kind of question.

Rt Hon JOHN KEY: What I was going to go on to say is that the talk of those three parties that there is a manufacturing crisis in New Zealand is wrong. If you go and have a look at the comments of Craig Ebert from the BNZ, he said: “So, all things considered, we can see enough positivism emanating from New Zealand’s manufacturing sector to take the signs of recent weakness as more turbulence than tragedy. Talk that the industry is in crisis is overblown.” If one looks at Rob Hosking’s comments, he says: “In a dose of reality aimed at the recently politically generated posturing around manufacturing …”, and he goes on and on and on. I was simply quoting that three parties—New Zealand First, the Greens, and Labour—went to what they quoted was a manufacturing crisis, Mr Peters. That is why I said that. I should point out that I deal in the facts. All I am interested in is the facts.

Housing Affordability and Availability—Government Work Programme, Auckland Issues, and Hobsonville Development

3. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that “Yes, there is a housing issue in New Zealand”?

Rt Hon JOHN KEY (Prime Minister): Yes, and that is why the Government has responded to the Productivity Commission and is working with local councils on the underlying problems of land supply, building and resource consents, provision of infrastructure—[Interruption]

Mr SPEAKER: I apologise to the right honourable Prime Minister. Look, the members’ leader asked a question. I imagine he is interested in the answer, and too much interjection is not reasonable.

Rt Hon JOHN KEY: Yes, and that is why the Government has responded to the Productivity Commission and is working with local councils on the underlying problems of land supply, building and resource consents, provision of infrastructure, and productivity in the construction sector. I also stand by the statement I made yesterday in relation to this issue. I reckon—

Mr SPEAKER: Order! The Prime Minister is now going on a little long.

David Shearer: How many houses does he guarantee will be built as a result of his Government’s package that he announced on 29 October?

Rt Hon JOHN KEY: More than the number that Labour will produce in Auckland—

David Shearer: I raise a point of order, Mr Speaker. That was a pretty straight question. It asked just for a number. [Interruption]

Mr SPEAKER: What is it about a point of order the National ministerial benchers do not understand in terms of being silent? The House is just so rowdy today. When a person asks how many, I think it is unreasonable to expect just a single figure answer, but the Prime Minister needs to do his best, though, to give some information about how many.

Rt Hon JOHN KEY: The answer is more than the number of $300,000 houses that Labour will ever produce in Auckland, given the median price of a house in Auckland is currently $530,000. The median section price is—

Mr SPEAKER: Order! That is sufficient answer given the question asked.

David Shearer: I raise a point of order, Mr Speaker. I think that the Prime Minister could at least give a ballpark figure about how many houses his package will be able to provide. [Interruption]

Mr SPEAKER: Order! Again, I say to National ministerial benchers that that was a point of order and only the Speaker can determine whether it is a valid point of order, not members. They must listen to it in silence so the Speaker can hear it. The reason why there are more supplementary questions is that if the quality of the answer is not sufficient, and I accept that the member has some grounds for not thinking the quality of the answer was quite what he might have expected, there are further supplementary questions that dig into what “more” meant—if he thinks that is a wise supplementary question.

David Shearer: What proportion of the houses that he hopes to build will be in the affordable category of houses?

Rt Hon JOHN KEY: Well, it depends on what the member means about what I intend to build. I do not intend to build any houses.

David Shearer: Does he agree with Murray Sherwin when he said: “We no longer build the starter homes that allow … young families to get started in a decent home. … We can build them cheaper, we should be building them cheaper, and we need to.”; if not, why not?

Rt Hon JOHN KEY: I do agree with Murray Sherwin and that is why the Government has been doing quite a lot of work looking at this issue. But let us have a dose of reality. Let us just take the average section cost at Hobsonville, an area the Labour Party knows well. The bare land cost was approximately—[Interruption]

Mr SPEAKER: Would the foghorn at the back please desist from his interjections.

Dr David Clark: I raise a point of order, Mr Speaker. With respect, my interjections today have been rare. That, I believe, was my third today in the whole of question time.

Mr SPEAKER: Order! Look, this is getting beyond a joke. Members do not take on the Speaker in that way if they want to stay in the House. The member’s interjections have been, in my view, unreasonable. He is not the only one. Members sitting against the back walls should know that their voices project across the House loudly and they need to be a little more reasonable. I have got to be able to hear and I cannot.

Rt Hon JOHN KEY: I have enormous sympathy with the member. He is not the only David sitting in the back row who wants to make a noise and be the leader.

David Shearer: Does he stand by his statement that building homes for low-income people in Hobsonville is economic vandalism; if so, why?

Rt Hon JOHN KEY: That was in relation to the building of State houses on prime land at Hobsonville, and, yes, I do stand by that. Let us go back to Hobsonville, because the bare land at Hobsonville was bought from the Defence Force at roughly $46,000. The land that went to the council for roads and reserves was $46,000. The infrastructure costs that largely went to the council were another $80,000. The professional consultants and selling costs were $18,000, and the consenting—[Interruption] Look, this is not a Labour Party caucus meeting. I know that is the way you talk to each other there.

Mr SPEAKER: Order! In the past I have had to ask the Attorney-General to look after a certain Minister sitting next to him during question time. I am now asking the senior Opposition whip to please take care of the member on his left, to have him interject just a little more reasonably. Today’s performance is not a good look, believe me.

Rt Hon JOHN KEY: So, Mr Speaker—

Mr SPEAKER: No, I think we have heard a sufficient answer.

Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. I was in the middle of answering a serious question that was interrupted by endless interruptions by the senior Opposition whip. It was a serious point, I was not being smart about it, and I was simply making a point about costs. I think I should be allowed to finish.

Mr SPEAKER: Well, the thing is, though, that the question was a certain question and the Prime Minister’s information was a little more additional than was absolutely essential to answer the question. I let him go on until he started to respond to the interjections, but answers cannot be too long. A lot of information had been provided.

David Shearer: Why does he say that building homes for $300,000 in Auckland is impossible, when the New Zealand Housing Foundation, backed by the Tindall Foundation, is already building homes in Auckland for that price?

Rt Hon JOHN KEY: If one goes and has a look at the social housing fund as a good example of subsidised housing that the Government supports, then across the entirety of New Zealand the average price is $409,000, and in Auckland it is $431,000. That is coming from the social housing fund. If you go and have a look at a basic place, a large piece of land like Hobsonville, the total cost of the land is about $200,000 on average for a 250 square metre section, of which $80,000 alone is development contributions to the council. So that member is saying he can build on land that is less than almost half of the development contributions from the council. That is why he is in fantasyland.

Michael Woodhouse: Has he heard of any reports that would encourage the building of at least one house for $300,000?

Rt Hon JOHN KEY: I have. I have seen the reports that there would be interest to build one house for $300,000 in Lumsden. The advice I have had is that it is possible to build a house for $300,000 in Lumsden. That house would contain David Cunliffe and it would be called the doghouse.

Whānau Integration, Innovation and Engagement Fund—Management and Eligibility

Rt Hon WINSTON PETERS (Leader—NZ First): My question is to the Minister responsible for Whānau Ora—[Interruption]

Mr SPEAKER: Order! I apologise to the right honourable member. The House is being particularly unruly today. I accept some days are like that. Members have got a bit of a head of steam up over this issue, and I accept that, because it is a topical, current issue. But the House has to behave in a reasonable manner, and it is not reasonable at the moment.

4. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister for Whānau Ora: Is the Whānau Integration, Innovation and Engagement Fund open to individuals who do not have New Zealand citizenship or residency; if so, how many non-residents have received grants from the Fund since 2010?

Hon TARIANA TURIA (Minister for Whānau Ora): The Whānau Integration, Innovation and Engagement Fund is not open to individuals or privately owned businesses. However, any New Zealand family or w’ānau collective can make application to the fund.

Rt Hon Winston Peters: Has she received any reports of Whānau Ora providers using Whānau Integration, Innovation and Engagement Fund grants to help overstayers remain in New Zealand; if so, what are the details?

Hon TARIANA TURIA: My understanding is that we have had one provider in the South Island that during its work with a group on the Whānau Integration, Innovation and Engagement Fund discovered that one of the members—there were 18 members of a family included—was, in fact, an overstayer and that it has been dealing with that issue. It has been incredibly transparent.

Rt Hon Winston Peters: Does that mean she is aware of a case in Canterbury where an overstayer with a history of family violence, child neglect, and drug abuse received help from Whānau Ora in an attempt to get his residency application approved?

Hon TARIANA TURIA: That is not correct. This particular person was, as I said, part of a group of 18 family members. They have been assisting that person with all of the issues that are confronting him, including the family violence issues. The issue of whether he gets to stay in New Zealand will depend on the outcomes of that.

Te Ururoa Flavell: Kia ora tātou. How can the Whānau Integration, Innovation and Engagement Fund inform or support the way in which the Government can address monitoring gaps in how taxpayer funds are being spent?

Hon TARIANA TURIA: The evaluation points out that the Whānau Integration, Innovation and Engagement Fund plans provide an early indication of the goals and the aspirations that w’ānau are pursuing. The evaluation identifies a rich w’ānau-centred data source that points out where the gaps are for Māori in mainstream services and other families. The collation, analysis, and reporting of the data will enable Whānau Ora to demonstrate leadership in the State sector in being able to inform service delivery responsiveness. Operational improvements continue to be made as a result of this information, including sharing of good practice and revision of policy and procedural guidelines, and a greater understanding of this work draws on departmental capacity.

Rt Hon Winston Peters: So does that mean that this psychobabble is appropriate when a Whānau Ora provider supported this overstayer’s attempts to become a permanent resident, despite him having a history of violence towards women and children as well as of substance abuse?

Hon TARIANA TURIA: I am not prepared to discuss in this House one individual person when we have 33,000 members of families who are participating in Whānau Ora. Although this particular person likes to get around and find the issues where things are wrong—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. This Minister is required to come to this House and answer questions properly put. She pointed out in answer to the primary supplementary question that she was aware of this case in South Canterbury, down in the South Island, and now she is saying she is not prepared to discuss it. She should be, with respect, told that she is a Minister. When a person properly puts a legitimate question in this House, her job is to answer it if she has the information.

Mr SPEAKER: I think the member makes a fair point. If the Minister is invoking the public interest or—and I guess it is related—there are privacy issues where it is not in the public interest to breach privacy issues, that is a matter for the Minister to determine. But if the Minister is not invoking such matters, then the Minister should answer the question, unless she is invoking those things.

Hon TARIANA TURIA: I have already answered that particular question. I have made it very clear that this was a group of 18 family members, that this issue was, in fact, disclosed by the provider immediately it was discovered, and that that matter is being dealt with in the appropriate way.

Rt Hon Winston Peters: Why should New Zealand taxpayers be supporting an illegal immigrant with a history of family violence and substance abuse to work towards permanent residency, when that information is on the material of the Whānau Ora provider that was dealing with this person?

Hon TARIANA TURIA: I have already told the House that this matter is being dealt with appropriately by the provider concerned. Mr Peters did not disclose this information; we disclosed it to him when he applied for it. We have been very transparent, the provider has been transparent, and the issue is being dealt with.

Mr SPEAKER: The only problem with that answer is that it is not responding to the question the member actually asked. He asked why—and admittedly it was seeking the Minister’s view on something, but it would be helpful if the view related to the question asked—or whether the Minister considers it acceptable, or something, for taxpayers’ money to be spent on assisting an overstayer. I do not want to get the member’s question wrong so I invite the Rt Hon Winston Peters to repeat his question.

Rt Hon Winston Peters: My supplementary question is why should New Zealand taxpayers be supporting an illegal immigrant with a history of family violence and substance abuse to work towards permanent residence when that information was available on the material that Whānau Ora was dealing with?

Hon TARIANA TURIA: That particular information was disclosed once this family had become engaged with the organisation down in the South Island. I want to point out that we do not agree with anybody misappropriating any taxpayer funds. In this case I do not believe that this is a misappropriation. That particular issue, once it had been discovered, is being dealt with appropriately.

Rt Hon Winston Peters: Given that the individual in question was a successful applicant to the Whānau Integration, Innovation and Engagement Fund, what confidence can the public have in Whānau Ora when it is so vulnerable to exploitation by overstayers, gang members, and other undesirable characters?

Hon TARIANA TURIA: I think that the member needs to make up his mind whether he is saying Whānau Ora is Māori separatism or that it is throwing open the door to immigrants, because—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. With the greatest respect, my question has nothing to do with that, at all. I am asking what confidence the public can have when we know that overstayers—in this case gang members and other undesirable characters—have received funds from Whānau Ora.

Mr SPEAKER: The member—unlike some of the earlier questions—was simply seeking an opinion here from the Minister, and injected into his question some statements the Minister may disagree with. I think we need to give the Minister a bit of licence in answering that particular question.

Hon TARIANA TURIA: To quote Mr Peters, “show me the facts and the evidence” that an individual—[Interruption] Hold on a minute. You can laugh, because that is how you deal with these issues: you laugh them off. You show me—

Mr SPEAKER: Order! [Interruption] Order! [Interruption] Order! This will cease. That answer is totally out of order because the Speaker is certainly not going to show the Minister any evidence whatsoever. The Minister is senior enough to know that she does not refer to members across the House in that way.

Rt Hon Winston Peters: I seek leave of the House to table a Whānau Ora assessment and Whānau Ora family plan from Pacific Trust Canterbury—confidential, it says on the document—dated 23 January and 24 February 2012, which stated the individual in question has a suspended immigration status and a history of family violence and drug abuse.

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.

Te Ururoa Flavell: How will we know a difference has been made in people’s lives through the Whānau Integration, Innovation and Engagement Fund?

Hon TARIANA TURIA: Professor Sir Mason Durie told Whānau Ora last week that most Government programmes do not measure outcomes; they measure volumes, they measure the amount of work that is done, and they measure the amount of money that is spent. Whānau Ora is about measuring the difference that is made and the outcomes that are achieved.

Unemployment—Current Rate

5. Hon DAVID PARKER (Labour) to the Minister for Economic Development: Does he accept the findings of the most recent Household Labour Force Survey that show the unemployment rate at its highest level in 13 years; if not, why not?

Hon STEVEN JOYCE (Minister for Economic Development): I welcome the member to his acting role. I accept that the household labour force survey—[Interruption]—another day, another David. Can I say that I accept that the household labour force survey is a key indicator of employment and unemployment, although not the only one. The different measures do not always agree. The latest household labour force survey, for example, says, as the member points out, that the unemployment rate is at its highest rate since 1999, and yet, for example, the number of people on an unemployment benefit is around 100,000 fewer than in 1999, despite a big increase in New Zealand’s population over that period.

Hon David Parker: How many additional people have become unemployed since he became Minister of employment in December 2011—is it 20,000 or 24,000 more?

Hon STEVEN JOYCE: Again, it depends on the measure that you use. If you look at the number of people on the unemployment benefit, that number has actually dropped over the year to September, from 55,700 to 50,400, which is 5,300 fewer over that same period of time. So it all depends on which figure you use.

Hon David Parker: Given that the household labour force survey shows 31,600 fewer people employed in manufacturing in the 4 years since 2008, the quarterly employment survey shows 31,000 fewer filled jobs in manufacturing, and the linked employer-employee data set shows 21,000 fewer jobs in the period 2008 to 2011—which is the latest statistic—does he still agree with the Prime Minister that “None of the stats that Treasury provided to my office argue the case that there is anything other than actually quite consistent to modest growth in manufacturing.”?

Hon STEVEN JOYCE: Well, I think the member is once again playing with the start dates to suit his case—which is fair enough; I mean, you would do that in his position—but the reality is that over the last couple of years since the global financial crisis, which, actually, hit manufacturing right around the world, as Mr Parker may not be aware, we have actually had a pretty steady result there. If you actually look at the Reserve Bank report on that same matter, the Reserve Bank says that the issue is construction, not actually manufacturing. It is the construction business that is the challenge—in other words, the supplying of manufactured things for construction—

Hon David Cunliffe: Can’t do the numbers.

Hon STEVEN JOYCE: —and, actually, the rest of the manufacturing sector is holding up very well. Who cannot do the numbers?

Hon David Parker: Does he now regret dismissing—

Mr SPEAKER: Order! I apologise to the honourable member. Again, I say to National Party front-benchers—I have been critical of the Labour benches for making too much noise, and now it is the National members being too noisy.

Hon David Parker: Does he now regret dismissing members who raised the numerous job losses in this House over recent months as being from another planet, which I think is the phrase he has used, given that the statistical evidence now shows that unemployment rose sharply in the third quarter, to the highest level in 13 years?

Hon STEVEN JOYCE: I have not dismissed concerns that are raised when people lose their jobs, because it is a very difficult situation for those who lose their jobs. The point I am making is that we are in a very challenging situation. We have had some job growth but not as much as we would like. But I would point out to the member that if he is genuinely concerned about unemployment in New Zealand, he should look across the Tasman, because, interestingly, they have lost around 60,000 or 70,000 jobs in manufacturing over the last 3 years, but they have created around 120,000-odd jobs in the mining sector. If the member could actually get together with his friends in the Greens—

Mr SPEAKER: Order! [Interruption] Order! That is not the Minister’s responsibility.

Hon David Parker: If, as the Minister implies, his Government has no responsibility for these jobs losses and rising unemployment, why did his Government hold a job summit in 2009, when the unemployment rate was 5.1 percent, and is his failure to call another job summit because his Government has got no plan to change course, despite rising unemployment, falling exports, and the Canterbury real build being the only source of growth in the country?

Hon STEVEN JOYCE: I am sorry but the member, again, is on another planet, because, actually, the world has been going through a global financial crisis. Actually, he speaks of the Canterbury earthquakes as if they have been some lucky thing, but, in actual fact, for the New Zealand economy and for the people of Christchurch they have been a very unlucky thing. Yes, we are going to get some benefit out of the post-earthquake construction, but, actually, it has cost New Zealand and the people of Christchurch substantially, and so it is only proper that they actually benefit in terms of the rebuild. If the member is saying that that somehow should be discounted away, then, truly, that is ludicrous.

Better Public Services—Wellington Office Accommodation Strategy

6. CHRIS AUCHINVOLE (National) to the Minister of State Services: What recent announcements has the Government made regarding public service office accommodation in Wellington?

Hon Dr JONATHAN COLEMAN (Minister of State Services): Last week the Government announced the Wellington office accommodation strategy. This strategy has seen the Ministry of Business, Innovation and Employment, Crown Law, and the Ministry of Health, the Ministry of Social Development, and the Ministry of Education tendering for office space in a coordinated fashion. This will lead to an overall reduction in office space footprint equivalent to three Reserve Bank buildings.

Chris Auchinvole: What are the benefits of the Wellington office accommodation strategy?

Hon Dr JONATHAN COLEMAN: As well as improving efficiency by having each department situated at a suitable site, coordinated tendering will reduce the Public Service office footprint by 30 percent and reduce rental costs by 20 percent, saving $338 million over 20 years. This means that these departments will need no additional funding for Wellington accommodation over the next 20 years.

Chris Auchinvole: I thank the Minister but would like to ask further: what will be the longer-term effect of the strategy?

Hon Dr JONATHAN COLEMAN: We will be applying the strategy to the 81 leases that expire over the next 2 years. The aim of the strategy is to locate agencies with overlapping policy objectives in close proximity, so that they can more effectively share services and back-office functions. The effect will be a contribution to the delivery of better public services.

Emissions Trading Scheme—Effect of Proposed Changes on Forestry

7. Dr KENNEDY GRAHAM (Green) to the Minister for Climate Change Issues: What projections, if any, have been done on the impact of his amendments to the Emissions Trading Scheme on forestry?

Hon TIM GROSER (Minister for Climate Change Issues): None. I have not received formal advice containing specific projections. There are good reasons for this. Principal amongst them is the fact that of the recent changes the one change that would be likely to have a substantial impact on forestry over time is the introduction of offsetting, but it is impossible to quantify at this stage the implications for our emissions projections.

Dr Kennedy Graham: Is he concerned by reports that forest nurseries have cut back on planting millions of trees this season because the bottom has fallen out of the emissions trading scheme, and is he concerned that, given the lack of incentives in the scheme now, we are facing another chainsaw massacre, with forestry jobs at risk?

Hon TIM GROSER: Last year we had deforestation, I am told, of around 3,000 hectares. The bottom has fallen out of the international price, not the emissions trading scheme—the structure remains fully in place.

Dr Kennedy Graham: What plan does he have for achieving his Government’s emission reduction targets, given that he gutted the emissions trading scheme this month, and the low carbon price means foresters are not planting enough trees to offset our increasing emissions; what is his plan?

Hon TIM GROSER: It is the Government’s plan to maintain the emissions trading scheme. The decisions that Cabinet took recently were not to accelerate it at this point in time. So that is the plan, and we need to stick with that long-term plan.

Dr Kennedy Graham: I seek leave to table a report showing that New Zealand’s net emissions—

Mr SPEAKER: Order! What is the source of the report?

Dr Kennedy Graham: The annual report of the Ministry for the Environment.

Mr SPEAKER: No, that is readily available to all members.

Dr Kennedy Graham: Are two “Fossil of the Day” awards on climate change at Doha enough, or is the Minister gunning for more with his Rolls Royce emissions trading scheme, with fewer trees, prompting nursery owner Kevin Strawbridge to conclude: “Government intervention is the problem. It gives free carbon credits to heavy emitters and allows in these cheap foreign credits.”?

Hon TIM GROSER: We receive these Fossil awards at every single ministerial conference. It is about as predictable as the punchline to a Tui billboard ad.

Housing Affordability and Availability—Hobsonville Development, Auckland Issues, and Statistics

8. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Housing: Does he agree with all of the Prime Minister’s statements on housing?

Hon PHIL HEATLEY (Minister of Housing): I do.

Hon Annette King: Does he agree with the Prime Minister’s statement that using land at Hobsonville for affordable and State houses would relegate the site to “a lifetime of mediocrity”; if so, why is the Government now prepared to build what he has called affordable homes on this site?

Hon PHIL HEATLEY: I think members know that the Prime Minister made it clear that there would not be any State housing at Hobsonville. The main reason for that is that the demand in that area is not very high, and the Housing New Zealand Corporation can build houses on much cheaper land—more affordable houses—in other parts of Auckland, which is the sensible thing to do. Once again Annette King is changing history.

Mr SPEAKER: Order!

Hon Annette King: Pathetic. In light of his statement that the Hobsonville affordable housing scheme will “demonstrate innovative commercial market-based solutions that could be replicated … elsewhere in New Zealand.”, what is the breakdown of the actual cost of land, house, and development for an affordable home to be built at Hobsonville?

Hon PHIL HEATLEY: The bare land cost at Hobsonville is $46k; land for road and reserves, $46k; infrastructure works, $80k; professional consultants, $18k; and consenting fees and development levies, $10k. The total cost before finance and margins is $200k. That is just the land, but apparently the Labour Party is going to build 100,000 houses—

Mr SPEAKER: Order! [Interruption] Order! The Minister is not responsible for the Labour Party. I am sure he would not want to be.

Hon Annette King: Has he visited sites within the current Auckland City boundaries, for example in Mount Roskill, Glen Eden, and Māngere, to view homes that have been built for $300,000 including land, house, and development costs that are of quality and affordable; if not, why should New Zealanders believe the Government that the only place that you can build a $300,000 house is in Lumsden?

Hon PHIL HEATLEY: I have visited sites in those areas in the last few years. I think what the public question is whether you can build 100,000 houses in 10 years. That is one house every hour, 24 hours a day, 7 days a week for 10 years and still 13,000 houses short. That is what that party thinks the Housing New Zealand Corporation is going to do.

Rt Hon John Key: If it is so possible for houses to be built for $300,000 in Auckland, unsubsidised, why is it not happening today, and why would the Government need to get involved? The answer is it is not.

Mr SPEAKER: The Hon—[Interruption] Order! Have the Labour benches quite finished?

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I have to say that the noise over here was rather too loud, and I would sure like to hear that question again, please.

Mr SPEAKER: I believe the noise followed the question.

Hon PHIL HEATLEY: It is because builders and developers advise us as the National Party that when they sell a property people expect to buy the house and the land, not just the house.

Hon Annette King: How many houses was New Zealand building in the 2000s, how many houses was New Zealand building in the 1970s, and if the Minister does not know how many houses we were building then, how can he say it is not possible for us to build 100,000 houses over 10 years?

Hon PHIL HEATLEY: That is quite easy, and I want to put it to the public, the House, and the gallery that we are asked to believe that the Housing New Zealand Corporation, which is leading this scheme, is going to build one house every hour, 24 hours a day, 7 days a week for 10 years and still—

Hon Annette King: I raise a point of order, Mr Speaker. That was nowhere near the question I asked, and no one has ever said that the Housing New Zealand Corporation was going to build the houses.

Hon PHIL HEATLEY: I raise a point of order, Mr Speaker.

Mr SPEAKER: Before I call the honourable member, the Leader of the House knows he should not interject like that on a point of order.

Hon Gerry Brownlee: That was not a point of order, was it?

Mr SPEAKER: It was a point of order.

Hon Gerry Brownlee: It sounded like a question.

Mr SPEAKER: Order! No, no, the Leader of the House knows he should not do that either. Before the Minister seeks to carry on any further, I bring him back to the question that was asked. The question asked related to whether he was aware of how many houses were built during the 2000s, how many were built in the 1970s, and why it is that he—forgive me; I do not want to go any further in case I get the question wrong. But the Minister, in answering it, I think, should have made some reference to whether he knows how many houses were built in that period of time, in those 10 years.

Hon PHIL HEATLEY: I do not know how many houses—

Hon David Parker: I seek leave to table a calculation to show that if a house was built every hour, 24 hours a day—

Mr SPEAKER: Order! What is the source of this document?

Hon David Parker: I have prepared it.

Mr SPEAKER: Order! The member will sit down now. [Interruption] Order! Someone will be going soon if this nonsense carries on. I will not tolerate—[Interruption] Order! I am on my feet, and the member knows that is not a point of order. It has been pretty good—[Interruption] It is just as well I did not see who that was. This nonsense will stop. It has gone on too long. It is just too noisy and too disrespectful of this place. I just want the House to come back to order. I call the Minister to answer that question.

Hon PHIL HEATLEY: I do not have the numbers of houses built, but I do have some statistics on housing in New Zealand, and they show that interest rates, rent increases, and property price increases—

Mr SPEAKER: Order! The member will resume his seat. How do interest rates during the period of the Labour Government respond to the question asked?

Hon PHIL HEATLEY: I can answer that.

Mr SPEAKER: No. Order! I am not even going to give the Minister the chance to answer that, because I am struggling to, and I am not going to give the Minister the chance to do that, because it is not reasonable. The interest rates during that period are not relevant. The member asked the Minister whether he knew how many houses were being built during the 1970s and the 2000s. It would seem the Minister does not know, and we are not going to waste further time in the House if he does not know. It is not his fault if he does not, but we are not going to waste time. I will give the Minister one more chance.

Hon PHIL HEATLEY: I started the answer by saying I did not have that information in front of me.

Mr SPEAKER: That, therefore, has answered the question.

Hon David Parker: I would ask whether the Minister checked his arithmetic coming to the House, because, by my reckoning, if there was going to be one house built every hour for every hour of the day, 7 days a week for 10 years, there would be a build of 613,000 houses, not the 100,000 houses that Labour says we are going to build.

Hon PHIL HEATLEY: I guess that the press gallery will now go away and do that calculation, and we will find out the answer.

Mr SPEAKER: Question No. 9—[Interruption] Order! This is just—[Interruption] The Minister is skating on thin ice. I am warning him—I am warning him. I was on my feet and he was continuing to interject, as he is now. This will stop—just a little discipline. It is not that difficult.

Roading, Wellington—Transmission Gully Public-private Partnership

9. Hon PETER DUNNE (Leader—United Future) to the Minister of Transport: What factors led to the Government announcement last Wednesday to proceed with the construction of the Transmission Gully Highway as a public-private partnership?

Hon GERRY BROWNLEE (Minister of Transport): Notwithstanding the valuable input and advocacy for the project from the member for Ōhariu-Belmont, the decision by Cabinet will bring certainty to the project, which has been on the books—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. The Minister has just made up a seat that does not exist in the House. He cannot do that.

Mr SPEAKER: Order! I do not think it is that helpful to the order of the House. The Minister was answering a question. We do not need to be that pedantic. If every time members made mistakes in this House we stopped the House, we would never get anywhere.

Hon GERRY BROWNLEE: I am sorry, Mr Speaker. I guess when you have been around as long as him, you remember the names of old seats. Notwithstanding the great advocacy and the valuable input of the member of Parliament for Ōhariu, Cabinet sees that this decision will bring certainty for a project that has been on the books for many years. It fulfils a key policy initiative of the two confidence and supply agreements between National and United Future made in 2008 and 2011. In addition, it will be a positive development that will significantly enhance the future economic growth of the wider Wellington region, as well as delivering improved road safety to motorists.

Hon Peter Dunne: Can the Minister therefore tell the House what the next steps to be taken to progress this project will be?

Hon GERRY BROWNLEE: The New Zealand Transport Agency is now moving to the next stages of procurement, with a public-private partnership contract that will be awarded by the middle of 2014 and construction will begin soon afterwards. It is expected the road will be open by 2020.

Hon Peter Dunne: Can the Minister also tell the House what reaction there has been to the announcement from regional leaders, business groups, and the wider community in the Wellington region?

Hon GERRY BROWNLEE: In the main the response has been very positive. Groups have highlighted the earlier start date, economic benefits, decreased congestion, and an extra route into Wellington in case of an emergency. They have said all those are real positives. They include the Wellington chamber of commerce, CentrePort, the Road Transport Forum, the Greater Wellington Regional Council and its chairman Fran Wilde, and Porirua’s Labour mayor Nick Leggett, who has previously pointed out the necessity for Transmission Gully to happen sooner rather than later. By contrast, we have had Phil Twyford enthusiastically aligning himself with the Greens to oppose this project.

Teachers and Support Staff, Payroll—Implementation of Novopay System

10. CHRIS HIPKINS (Labour—Rimutaka) to the Associate Minister of Education: Was he aware, before he signed off on the decision for Novopay to go live, that the Ministry of Education’s survey of trial Novopay users found only 37 percent of them believed they were ready for its introduction; if not, why not?

Hon CRAIG FOSS (Associate Minister of Education): No, because that operational survey was undertaken 2 months after I received the recommendation from the Ministry of Education and the Novopay board to proceed with the implementation of Novopay.

Chris Hipkins: What date did he first receive the results of the ministry’s survey of trial Novopay users, and what date did Novopay actually go live?

Hon CRAIG FOSS: In answer to the second part, 20 August was the go-live. I am not aware of the results of that operational survey as part of the lead-up to the go-live.

Chris Hipkins: Did he ask to see the results of any trials or pilots of the Novopay system before signing off on its implementation; if not, why not?

Hon CRAIG FOSS: I accepted the recommendation of the Ministry of Education and the Novopay board, which dealt with all such issues. They are experts in this field.

Chris Hipkins: I raise a point of order, Mr Speaker. My question was very specific. It asked whether he had asked to see the results of any trials or pilots of Novopay before he signed off on its implementation.

Mr SPEAKER: That is correct. The question did ask that. The Minister’s answer appeared to say that he did not, but he had better clarify that.

Hon CRAIG FOSS: Excuse me, Mr Speaker. I constantly sought assurance from the Ministry of Education, and therefore the Novopay board, that the system was ready to go live. They recommended that it was so.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. That still did not answer the question.

Mr SPEAKER: The question asked whether the Minister actually saw any of the—

Hon Members: Sought.

Mr SPEAKER: Sought—I beg your pardon. The Minister has said he did seek assurances from the ministry. To clarify, I will let the member repeat his question.

Chris Hipkins: Did he ask to see the results of any trials or pilots of Novopay before signing off on its implementation; if not, why not?

Hon CRAIG FOSS: As part of the recommendations to go live, I sought and received assurances of security and performance testing, training, etc., as the Novopay board recommended to me and the Ministry of Education.

Chris Hipkins: I raise a point of order, Mr Speaker.

Mr SPEAKER: The member may repeat his question.

Chris Hipkins: Did he ask to see the results of any trials or pilots of Novopay before signing off on its implementation; if not, why not?

Hon CRAIG FOSS: Specifically, no. But, forming part of the recommendation, a raft of issues was addressed.

Chris Hipkins: What was the point of the trials of Novopay if it was not to establish whether, in fact, the system was ready to be implemented?

Hon CRAIG FOSS: The system was not trialled. It was tested in parallel with the previous system, and the Novopay board and the Ministry of Education recommended that it go live.

Veterans—Assistance to Attend Commemorations

11. MELISSA LEE (National) to the Minister of Veterans’ Affairs: What is the Government doing to help veterans attend significant commemorations of their service?

Hon NATHAN GUY (Minister of Veterans’ Affairs): Last week I announced that 30 Korean War veterans will be funded to attend the 60th anniversary commemorations of the Korean War armistice in July next year. This will be a chance for veterans to pay tribute to their fellow servicemen and servicewomen who served New Zealand in this conflict, and it is an important way of honouring those who made the ultimate sacrifice. I thank Melissa Lee for her support of Korean veterans. This package is in addition to the Government’s wider commitment to allow any fit and able veteran to attend the 70th commemoration of their service.

Melissa Lee: What reports has he seen on the success of the commitment to allow any fit and able veterans to attend the 70th commemoration of their service?

Hon NATHAN GUY: I have seen a number of reports on the success of the programme so far. In February two veterans attended the commemoration of the fall of Singapore. In June 32 veterans of Bomber Command attended the unveiling of a memorial in London. In October 22 veterans attended commemorations of the Battle of El Alamein in Egypt. In April next year a commemoration of the war in the Pacific will be held in New Caledonia. Veterans have expressed sincere gratitude for the opportunity to return, and have praised the work of Veterans Affairs and Ministry of Defence staff for their fantastic support of their travels.

Dotcom Case—Discussions with President of United States and Notification of Extradition Proceedings

12. GRANT ROBERTSON (Deputy Leader—Labour) to the Prime Minister: Was the subject of Kim Dotcom raised in his recent discussion with US President Barack Obama; if so, by whom?

Rt Hon JOHN KEY (Prime Minister): Yes; I made a passing reference to it as an issue that was topical in New Zealand. Throughout the East Asia Summit we also discussed the Trans-Pacific Partnership, Gaza, the fiscal cliff, Myanmar, the summit, the recent US election, and the New Zealand economy.

Grant Robertson: Why was not the Prime Minister prepared to confirm that he had raised the matter when reporters asked him that on the visit?

Rt Hon JOHN KEY: Because it has been a longstanding, I think, position of New Zealand Prime Ministers to have discussions with other leaders, but they do not characterise every part of them. Otherwise, by definition you really could not have those kinds of conversations.

Grant Robertson: Does he stand by his statement that Kim Dotcom is not a “top-of-mind issue” for him, given that in the very few minutes he has with President Barack Obama in 1 year he decides to raise it with him?

Rt Hon JOHN KEY: Contrary to that member’s opinion, it was not a “very few minutes” I had with President Obama. But this point was about 30 seconds of the considerable amount of time we had to discuss matters.

Grant Robertson: Would he expect to be informed about extradition proceedings involving a New Zealand resident where the extradition order was signed off at the highest levels of another Government?

Rt Hon JOHN KEY: No, I would not have thought so.

Grant Robertson: Was he informed at any point in 2011 that the US Government wished to extradite a person resident in New Zealand for copyright infringement, racketeering, and money-laundering?

Rt Hon JOHN KEY: No.

Question No. 8 to Minister

Hon MAURICE WILLIAMSON (Minister for Building and Construction): In order to clear up some of the confusion in the House today, I wish to table a document that shows—

Mr SPEAKER: What is the source of the document?

Hon MAURICE WILLIAMSON: It is on parliamentary letterhead, showing 100,000 houses over 10 years—

Mr SPEAKER: Order! The member will resume his seat. The member knows I was somewhat critical of his colleague on the other side of the House for trying to do that by way of point of order, and I am not going to allow a Minister to do it by way of point of order, either. That brings to a close questions for oral answer.

Mr SPEAKER: I ask members leaving the House please to do so with reasonable courtesy to the House and not make too much noise. I hope members could hear the Clerk informing the House of the bills to be considered in Committee.

Bills

Local Government Act 2002 Amendment Bill

In Committee

Part 1 Amendments to Local Government Act 2002

Hon Annette King: Mr Chairman.

The CHAIRPERSON (H V Ross Robertson): I call the Hon Annette King, with those dulcet tones.

Hon ANNETTE KING (Labour—Rongotai): Thank you very much, and I respond that I heard your dulcet tones, Mr Chairman. Can I say that Labour opposes the Local Government Act 2002 Amendment Bill. We will be moving a number of Supplementary Order Papers against this bill.

This bill arose out of a Nick Smith paper released in March called Better Local Government. Much as he did with the ACC straight after the 2008 election, he created a story around a crisis in local government, a crisis with debt and rates out of control, and he related this crisis back to the Local Government Act 2002, passed by a Labour Government. He produced figures to show that significant costs had arisen from changes that required councils to take account of social, economic, cultural, and environmental well-beings in their communities—the four well-beings.

Interestingly, since then the new Minister of Local Government—and I have to say that I am disappointed that the new Minister is not in the chair, because this bill is obviously of such importance and needs to be passed with such speed that we are hearing it before Christmas, after it was rushed through a select committee process. I am disappointed that the Minister is not sitting in the chair to take and answer questions around this bill. He was not available to speak in the second reading either; he handed that over to the junior Minister Chester Borrows to do that job for him. So I am uncertain as to whether the Minister is actually really committed to this.

All that is happening is that the Minister is following the path of Nick Smith, who got the reasons for this bill totally wrong on facts—the basis of it was totally wrong. So we will be opposing this bill. In fact, at the Local Government and Environment Committee we were unable to agree that the bill be passed, and the only recommendations that appear in the reported-back bill are those where all members of the select committee could agree, and there are very few clauses that we could agree on. We were evenly divided in our opinion, so that is why there are very few amendments. We now have a raft of amendments coming from the Minister.

The reason we could not agree is that the members of that committee listened very, very carefully to the submissions we received around the country. We took this bill to Christchurch, Wellington, Auckland, and Hamilton and we had many, many submissions. There was a lot of interest in this bill, not just from local authorities, as you would expect, but also from members of the community, individuals, groups, and non-governmental organisations—organisations that have had close contact and association with local government. So we listened to those submissions—the New Zealand First Party, the Green Party, and Labour—and we listened to what the people were saying, because is that not why we have a select committee process? There was one overwhelming response from the submitters—that is, do not change the purpose of the Local Government Act 2002; do not get rid of the four well-beings. Of course, there was the odd person and organisation that supported getting rid of them—for example, the chamber of commerce and the Cockle Bay Residents and Ratepayers Association. So there were the odd number of people who supported that, but overwhelmingly the submitters were opposed to removing the four well-beings.

Will the Government listen to it? No, it will not. It has decided that it is going to rush headlong into making these changes, to hell with the evidence, and to hell with what the submitters say. Well, we are incredibly disappointed, because if this Government had taken time to listen, if it had taken time to look at the evidence, it would not be making some of these substantial changes it is making in this bill today. I would say to those members—and I do not believe that many of the members have read it—to go and read the New Zealand Institute of Economic Research paper released just 2 months ago. It has done some in-depth work into local government and it actually put out a paper saying Is local government fiscally responsible?.

The reason I am highlighting this is that the Government is making the changes based on shonky figures—shonky figures. These were figures that were put into the Better Local Government paper, and within 5 days were removed. Go to the website now and look at the last page of the Better Local Government paper. The figures have been removed because the figures did not give an accurate description of what was happening in local government, according to the Minister, who wrote to me to tell me that. So this whole bill has been based on myth, falsehoods, and, I believe, distortions of what is happening in local government.

If you want the evidence looking back 10 to 20 years in local government, it is in this very good piece of research. This is what the research said. It said that “the data from the last 10 to 20 years suggests the local government sector as a whole has not been fiscally irresponsible. Rates and spending have risen. But the increases are not startling relative to property values or GDP. At an aggregate level, investment and borrowing also cannot be said to be irresponsibly high.” Debt is low relative to assets, capital spending is steady relative to the asset base, and debt-servicing costs are at a responsible level. That is what came out of evidence.

One of the things that I have been impressed with is the Prime Minister’s Chief Science Advisor, Dr Peter Gluckman. He has been saying to the Government: “Base your policy on evidence—evidence-based policy.” He says it on many, many occasions, whenever he can. Is this policy—are these changes—based on evidence? No, they are not. They are based on a handful of egregious examples that Nick Smith used to promulgate this bill, and it is not a basis to make such sweeping changes.

I have got a number of submissions that I am going to share with this Committee, but before I do that in another call later on, I want to say that we have moved a number of Supplementary Order Papers. One of them is to restore the four well-beings. I say to Peter Dunne, who is a pivotal vote in this, that he ought to think long and hard about where he puts his vote in terms of this Local Government Act 2002 Amendment Bill. He knows, as anyone in this Chamber knows, the importance of local government being able to respond to its community, and his vote could ensure that we do not remove those four well-beings. So we have got a Supplementary Order Paper on that issue.

We have also got one to restore the right of local people to have a ballot as to whether they want to have amalgamations. That is the removal of democracy. In fact, if you look at what this Government has been doing in terms of local government, but also in other areas in our community, it has been winding back democracy. This is an extremely good example of taking away the right of local people in their local community to vote as to whether they want to be amalgamated with another local authority area. That, we believe, is taking away democracy—local people making local decisions. Will the Government members listen to that? No, they will not. They have not got the least bit of interest in what the public are saying and what many of those submissions were saying: “Do not take this away. Let local people have a local ballot as to whether they want to be amalgamated.”

Of course, this all came out of, as we know, the fact that Nick Smith lost the ballot when there was an amalgamation proposal under the current regime between Nelson and Tasman. He was unable to get the amalgamation he wanted, so what does he do? He has a bill written and puts in it the taking away of the requirement for local people to have a ballot as to amalgamation and reorganisation proposals.

We will strongly oppose this bill. It is an unfair bill. It portrays local government as out of control, and I can show this Committee through many submissions we received that that is a falsehood, that that is not the case, and that local government is open to changes that improve it, but it is not open to making changes that are based on falsehoods and myths and made-up stories about how it is operating within the community. If I was just to move to one very quickly, it would be the submission from the smallest local authority, the Kawerau District Council. In that submission the first thing it said to us was “We have no debt.”—we have no debt.

NICKY WAGNER (National—Christchurch Central): It is my pleasure to stand and discuss the Local Government Act 2002 Amendment Bill. As we talk to Part 1 in the Committee stage, I want to talk about the Minister of Local Government’s Supplementary Order Paper 153. This Supplementary Order Paper mainly focuses on two areas. These were the two areas that were of great interest to submitters and generated good debate within the select committee. The first is to do with the legislation around the Minister’s ability to intervene in local government and the second concerns the provisions and regulations relating to the reorganisation of local government. These are both complex areas, and, although there were some parts of the legislation that the Local Government and Environment Committee could agree on, it was decided that the best way to make the changes, the best way to reflect submitters’ opinion, and the best way to produce well-organised and coherent legislation was to do the work as a package, and hence we have this Supplementary Order Paper.

First of all, I would like to deal with the powers of the Minister of Local Government and discuss the terms of the Minister’s ability to support, assist, or intervene early—early, as a problem arises in local government rather than having to wait until the damage is done. Most submitters were in favour of additional support to councils if problems arose and they understood the need for flexibility within the system and flexibility of response, and they supported a graduated or progressive system of assistance or intervention. I suppose it really reflects the old “a stitch in time can save nine”—trying to proactively deal with issues before they get out of control.

The other part of the Supplementary Order Paper I would like to discuss is about the provisions and schedules for the reorganisation of local government. There is no doubt that there needs to be changes in this area, because there has been no reorganisation under the existing rules since 1989. There were no changes made—although the world is a very different place 24 years later—despite the huge changes in everything else. There were huge changes in society, huge changes in the economy, and huge changes in how we live. The only tweak that has actually happened in those 24 years was the inclusion of Banks Peninsula into the Christchurch City rating area. That was done by circumventing the rules. Yes, it was a pragmatic result, and I think it was a good one, but that is not something that we really want to foster. In the past 24 years, we have seen a big drop-off in the amount of people voting in the local government elections. I wonder whether that is partially to do with the fact that ratepayers have had no real say in the shape of their local government council. Sure, they can vote for their councillors—they can vote them in and out—but if the structure is not fit for purpose, and it would be better and more cost-effective in a different configuration, they can do absolutely nothing. Councils have been stuck in a 24-year time warp. If the structure was not optimal in 1989, ratepayers have just had to live with it. This bill gives them the democratic right to discuss the shape of their councils, and we know that some areas are keen to do just that.

Just this week Wairarapa councils voluntarily have all agreed to support a joint move towards a single unitary authority. This is their democratic right. I hear the Opposition saying it does not like the grassroots making their own decisions, but on this side of the House we support them. This legislation will allow those councils to work together through a joint process that can deliver them what their local ratepayers are asking for.

Of course there was debate about how this should work to make sure that local democracy is enhanced rather than stifled. I think we have come up with a pretty good model. But after reading the submissions, I noted that some were concerned about testing the model for a vote, and to also make sure that there was enough time to raise a petition. So the Minister has amended the legislation through his Supplementary Order Papers and he has amended the original requirements to make it easier for communities to exercise their vote by changing the petition requirements to 10 percent of voters in any affected territorial authority area, and increasing the number of days allowed to complete the petition from 40 days to 60 days. I believe that this will please some of our submitters. The mechanism for reorganisation is a two-stage process, through which the Local Government Commission determines the preferred option for reorganisation. These options can come from anywhere within the community. They take the preferred option, and they formulate that into the final proposal, which may be tested by a poll, and, if it survives that poll, will be given effect by Order in Council. The commission then develops a reorganisation scheme to implement the final proposal and that is given effect to by Order in Council. I believe that this reorganisation process increases local democracy by giving local people a say in the shape of their local council, which has not been available for 24 years. I commend this Supplementary Order Paper to the Committee.

Hon ANNETTE KING (Labour—Rongotai): I should have done this at the end of my contribution. I seek leave to table the New Zealand Institute of Economic Research’s paper Is local government fiscally responsible?.

The CHAIRPERSON (H V Ross Robertson): Is there any objection to that course of action being taken? There is none. The member may do so.

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

PHIL TWYFORD (Labour—Te Atatū): Things have got truly Orwellian in this Committee, when the last speaker, Nicky Wagner, got up and tried to describe this Local Government Act 2002 Amendment Bill as a bill that is enhancing grassroots democracy. Taking away the ability of communities to decide in a binding ballot whether their council should be amalgamated is enhancing grassroots democracy? Narrowing the scope and the powers of local government is somehow enhancing democracy? The member’s speech-making powers are truly remarkable.

I want to focus my comments on what is probably the most significant and controversial part of this bill, and that is the narrowing, or, I should say, the replacement, of the purpose statement of the Local Government Act 2002. This is, if you like, the constitutional charter for local government in our country—remembering, if you will, that local government is one tier of our democratic system. It is an important part of the system of government that we have in New Zealand, and this National Government, by bringing this bill to the House, unfortunately is messing around with a part of our democratic system that, in the view of many people in this country and certainly the members on this side of the House, works well, by and large. But for political reasons this National Government is willing to, I think, mess around with, undermine, and corrode a really important part of our democratic system.

This bill replaces what has become known as the four well-beings that were introduced in the 2002 local government legislation—economic, social, environmental, and cultural well-beings. This, for listeners who have not spent a large amount of time following local government in this country, is the basis of the power of general competence. Local government was given a mandate to meet and to respond to the needs and aspirations of their communities in the best way that they could, governed and constrained by the democratic process and the fact that every 3 years elected councillors and community board members are subject to a general election.

But this bill takes away that power of general competence and it is based on a lie. I am going to tell the Committee the lie that the member Nick Smith, the former Minister of Local Government, has perpetrated to try to sell this bill. He has tried to make the case that after the power of general competence was legislated in 2002, councils have somehow expanded the range of activities that they have done, that they are out of control, that they are engaging in all kinds of illegitimate activities that they should not be doing, that they are wasting taxpayers’ money, and that this is why rates are going up and this is why council debt is going up.

Well, the debate over this bill, and the many intelligent and well-informed submissions that came to the select committee, have completely debunked Nick Smith’s pathetic little campaign to slander the good name of local government in this country—

Jacqui Dean: Oh, that would be typical.

PHIL TWYFORD: —and I am going to cite, for the benefit of the member for Waitaki, some of the submissions that were made and some of the commentary that has completely discredited Nick Smith’s little campaign.

The Department of Internal Affairs—that well-known radical and subversive organisation—in the Minister’s own regulatory impact statement said: “There is no clear quantitative evidence to suggest that the Local Government Act 2002 has resulted in a proliferation of new activities, or that local government is undertaking a wider group of functions.” Kaboom! The first element of Nick Smith’s case is completely demolished. The paper is referenced and backed up with data that substantiates that claim. There is no evidence for the claim that Nick Smith has put forward that the 2002 Act resulted in any kind of proliferation of activities by councils and that they are out of control.

It has also been put very persuasively in the course of this debate over the last few months that whatever activities councils are doing have no relationship in terms of so-called non-core activities. There is no evidence that non-core activities like social and cultural activities, like economic development, for example, have any relationship to the increase in council debt. It has been shown conclusively that the increase in council debt is largely related to catching up on the infrastructure deficit, and councils dealing with the unfunded mandates that have been imposed on them by central government legislation.

Hon Annette King: Who told them to do the infrastructure?

PHIL TWYFORD: Exactly! As the member Annette King has said, who told them to catch up on infrastructure? Well, the members on that side of the House do not have to look very far. They have only to look in the mirror to see that the Prime Minister himself, actually, at the Job Summit commented that local government had lazy balance sheets, and that perhaps local governments should be doing more to spur the economic recovery by investing, by taking a more proactive role, and by using their balance sheets.

So there is no truth in the claims that Nick Smith has tried to get up, that local government is out of control and that because of them being out of control, there is this burgeoning debt. As Annette King quite rightly said—I think she was quoting Rod Oram, who said that the Government’s plans to gut local government are wrong-headed, illogical, and based on gross distortions of the truth and a handful of egregious examples. Well, I hope those words are ringing in the ears of Nick Smith, because he has mounted an utterly dishonest campaign against local government and against communities around this country.

Furthermore, the suggestion that the replacement purpose statement for local government in this bill is anything more than an illogical absurdity, I think, is very clear. We saw it from the beginning where the Minister said that the classic example of local councils that are out of control is the V8 Supercars races. Within a few months central government was actually putting taxpayers’ money into the V8 races, and then, apparently, V8 races were OK. Maggie Barry might like to comment on this: the Ellerslie Flower Show was apparently fine. I am not sure why that should be fine, when at first blush the V8 races were beyond the pale and should not even be considered by any responsible council. We have seen the Government going on record, with the Prime Minister saying that cycleways—the Prime Minister’s pet project—should be considered within the definition of the core business of local councils. So cycleways, flower shows, V8 races—it all goes to show that the Government’s idea of core services is completely illogical.

I also want to make the point that by doing this, by narrowing the purpose statement of local government, it will undoubtedly have a corrosive effect on the ability of councils to respond to the needs and aspirations of their communities. The mayor and councillors of Ashburton District Council were saying just the other day that rural and provincial councils are the very local authorities that most need the flexibility that they currently derive from the four well-beings and the power of general competence. Isolated and small communities are the ones who most look to councils, to their elected representatives, to meet the needs of their communities. The Ashburton District Council cited health clinics that it runs in Rākaia and Methven. If the council did not provide those services, the people of those communities would not have easy access to health services. There are many, many other examples that you will hear, I say to members on the National Party benches, from Opposition members this afternoon.

There are many other examples of services that councils run that do not fit the National Government’s definition of core services, and the danger of this narrowed purpose statement is that it will have a corrosive and a chilling effect on the ability of councils to do what their communities need. This purpose statement will be fodder for those council critics who want to confine local government to rates, rubbish, and roads. It is a 1950s idea of what local government should be about.

ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First on the Local Government Act 2002 Amendment Bill. I was one of members of the Local Government and Environment Committee, which considered this bill. There were 775 written submissions and 186 oral submissions. It was most interesting—these submissions came from all over New Zealand; the committee sat in Auckland, Hamilton, Wellington, and Christchurch—that the vast majority, the overwhelming majority, opposed this amendment bill. These submitters were organisations, councils, community groups, individuals, and people from all over the country saying that this was not healthy for our important second tier of local government in New Zealand.

But it was interesting to note the organisations that did support it. Again it was the organisations who are the mates of the National Government—the likes of Business New Zealand, the likes of Federated Farmers, and the likes of the chamber of commerce. They are all the ones who stand to gain the most, from a monetary point of view, from the paybacks for sidling up to the National Government—all of those ones, you know, the Federated Farmers and all these sorts of people who could gain from having yet another go at our local councils throughout New Zealand, which are the important glue that keeps our communities, our towns, our cities, and our districts working as a country.

It was most disappointing to hear some of the comments on what the effects of this bill would be, and, in particular, the reference to the four well-beings. Ian McKelvie, a former Mayor of the Rangitīkei District, is sitting over there. He will know full well how important it is for a community to work, in terms of the four well-beings, to bring the social, the cultural, the economic, and the environmental considerations into the decision making of a council, because you do not do these things in isolation. You do not do it for just an economic reason, and you do not do it for just an environmental reason. You do not do it for just a social reason, and you do not do it for just a cultural reason. You do it as a combined effect of the four well-beings for any part of society.

By removing that from the Local Government Act 2002 we are basically undermining the society in New Zealand and being able to provide good quality local communities. That was the concern that echoed through so many of the submissions—that what will happen is this will open up all the local authorities and local councils to a whole lot of litigation from vexatious litigants who will say, if they are from the chamber of commerce, that they do not agree with something, because it is not to do with economics and businesses in this district, so they will oppose it because it has really got only good social or cultural outcomes. On the other hand, you might have a particular green or environmental group who opposes something because it has got only good economic considerations; the council is not thinking of the environmental effects of it. What it opens up is that every council will end up having to fight lots and lots of battles against lots and lots of groups because the Government is taking away in this bill the right of those councils to consider those four well-beings in tandem to see what is the outcome for the community that it represents. I have been in local government for 9 years and I know how important it is to have those four considerations—

Maggie Barry: Before you were thrown out.

ANDREW WILLIAMS: The new member for North Shore might think she has been here a long time in Government, but she has actually been here only 5 minutes, and she does not know much about it. Perhaps when she has spent 9 years in local government rather than being in the back garden plucking weeds—perhaps when she has spent 9 years in local government—she might realise what it is about. It is about making balanced decisions. It is about making balanced decisions across a community and not taking a decision on the basis of just certain factors.

In this particular case we heard a lot of false truths from the Government as well. It reeled out all those old stories that Rodney Hide used to reel out in this Parliament. It mentions things like: “Oh, local authorities have bought things like lotto stores in Bluff. How dare it buy a lotto store.” We heard from the likes of Nick Smith that a local authority had bought a lotto store in Bluff. We had a submission from the Southland District Council that said it bought a complex in the Bluff township where in one corner of the store there happened to be a lotto outlet. This whole store was up for sale, it was on the block, and the council needed to acquire it for a redevelopment of this area in Bluff.

Hon Member: Typical.

ANDREW WILLIAMS: But typical of this Government, the headlines are “Council buys lotto store”.

Another lie it put out was about another council, in Hāwera. The South Taranaki District Council, I think it was, bought a picture theatre, and how dare it buy a picture theatre! What a ridiculous council to spend money on it! Again this is to try to back up the falsehoods the Government puts out about local government. Again a submission came along, I think from the South Taranaki District Council, that said—and, actually, again the Government is wrong—“We bought this complex because it had closed down. It was not viable in the township. It was part of the centre of town for providing social entertainment for the town, which was going to die.” The council said the nearest place for the young people of Hāwera to go to was New Plymouth, something like 50 or 60 miles away, and the township decided it did not want its young people driving in cars to New Plymouth on a Friday or Saturday night, and coming back at midnight on dangerous country roads. They, as a community, decided they wanted to keep this thing open, they wanted to put some community funding into supporting that. And they did. Their decision—a good decision. But under this bill there will be so many challenges along those lines because that was a good decision based on the social, cultural, and also economic effects in that particular township and that district, and they wanted to do it. Again, this National Government trumpeted it as being another failure of a council buying a cinema. Well, for that community it worked. For that community it was a good outcome.

Is it not a shame that the Minister of Local Government was not here to take a call? We all know that the Minister is already moving out to become the next Speaker of this Parliament, to make way for Nick Smith to come back in to take over local government again. So New Zealanders listening to this telecast today, be very afraid. Be very afraid because the Minister of Local Government who was kicked out 6 months ago, who started most of this, who is behind most of this, and who also had Rodney Hide’s hand up his back for most of this, is going to be back, probably soon after Christmas when the big reshuffle comes. When the big reshuffle comes Nick Smith will be back at the helm. David Carter will be sitting up there in the Speaker’s thing. Lockwood Smith will be off to London to the high commissioner’s residence. We all know this is going to happen. And Nick Smith will be back there.

The thing that we heard also from the Labour speaker earlier is that Nick Smith will finally get his way in Tasman and Nelson. He wanted an amalgamation there. He will push for that. He will want more amalgamations around New Zealand, and he will create the environment to do that. One of the ways of creating the environment to do that is this business of giving all the mayors all these additional powers. You will end up with mayors against their own councils. Their own councils will be fighting with their mayors because the Government is giving virtually executive powers to the mayors, a bit like the Auckland mayor.

What happens there—this is what the Hon Nick Smith will want—is that you get the council fighting with the mayor, and the mayor fighting with the council. It becomes all disjointed, a bit like Bob Parker and his council down in Christchurch, and suddenly what do we get? The Minister says: “This council is dysfunctional. Let us send in a commissioner, or let us send in a Crown manager. As Minister I am going to do it.” Mark my words, New Zealand—mark my words. If this Government gets away with this, within the next 2 years, and very soon after the next local body elections, mark my words that after the 2013 elections there will be lots of Crown managers being appointed around New Zealand. The Minister—the Hon Nick Smith, who will be the next Minister of Local Government—will decide that he does not like this particular council. He does not like the way it is running its business. He does not like what is happening. Then once again the Nats will go in there. They will go in there on the basis of what Federated Farmers have said, or on the basis of what Business New Zealand has said, or on the basis of what some other National Government mates’ group has said, and that is what they will do.

What we are seeing in this country is a breakdown of local democracy. The important second tier of government in New Zealand is our local authorities. We are seeing the undermining of this. It is symptomatic of this Government’s modus operandi of putting up combative forms of governance throughout New Zealand and then basically destroying the fabric of our society. This is not good legislation. New Zealanders deserve better. When you look at the walls around this Parliament and you look at Passchendaele, you look at Messines, you look at Gallipoli, and you look at all the names of the people who went away to fight for this country, for democracy, and for decency, this not the way in undermining our second, important tier of local government.

Hon Dr NICK SMITH (National—Nelson): I look forward to participating in the Committee stage on this important bill, the Local Government Act 2002 Amendment Bill, because there are thousands of New Zealanders who are concerned about the compounding increase in rates and costs of local government, who are genuinely concerned about the level of debt, and who want to see a Government that has got the courage to make some of the changes in this important sector to ensure it supports this Government’s plans for economic growth.

I want to make a number of key points. The first: does this bill have strong support amongst New Zealanders?

Hon Members: No.

Hon Dr NICK SMITH: Well, members opposite say no. Let me just give a couple of examples. In my annual newsletter to every one of my constituents I include a questionnaire. It covers issues on gay marriage and on euthanasia. It includes questions on things like mineral developments, and I have to say to members opposite that gay marriage is pretty close, actually. My community is pretty evenly divided. In respect of—

Hon Phil Goff: What percentage of people returned the survey?

Hon Dr NICK SMITH: Actually, over 2,000 responses, Mr Goff. And do you know that 87 percent of my constituents supported the need for this reform? Then let us look at an organisation like the New Zealand Council for Infrastructure Development, an organisation that was championed by members opposite. Did we see the release from the Council for Infrastructure Development last week? Its survey showed that 80 percent of New Zealanders wanted to see a Government pass legislation that would result in a lower—

Hon Annette King: How many returned the survey?

Hon Dr NICK SMITH: The question members ask is what level—well, let me give you an example. I have done a survey of my electorate every year that I have been a member of Parliament. Do you know this year’s response of over 2,200 was the highest response ever? I challenge—

Hon Phil Goff: 2,000 out of 50,000. What about the other 48,000?

Hon Dr NICK SMITH: If you have got 48,000 households in your electorate, Mr Goff, you are obviously the guy who has been doing the numbers on Labour’s housing policy because you are out by more than half.

Then let us come to the numbers. I have heard speech after speech from members opposite that say the numbers do not support the Government’s reform of local government. Well, let us go through them. Statistics New Zealand says that over the last 10 years the Consumers Price Index for rates has gone up faster than any other component of the Consumers Price Index—faster than food, faster than fuel, faster than electricity, faster than clothing, faster than insurance, faster than any other—at 7 percent per year. Do members opposite dispute those figures?

Hon Annette King: Yes, because it’s not a fair comparison.

Hon Dr NICK SMITH: Oh, Annette King says—well, there are actually two sources for those figures. The Consumers Price Index shows the 7 percent per annum compound increase, and at the same time we know that Statistics New Zealand’s actual addition and reporting specifically on local authorities match up with that 7 percent compound figure.

The thing that is really interesting is this. In the 10 years prior to 2002, when Labour rewrote these government laws and provided these general powers, the average increase was just 3 percent per annum. Did you know that if rates over the last decade had followed what they had been doing for the previous decade, New Zealanders today would be paying $1 billion a year less in rates, or $500 less for every single household? Members opposite say that I do not care about that stuff. Well, actually, they are completely out of touch with the real issues that are facing New Zealand households. It is pure fluff for them to be shedding crocodile tears about New Zealanders not being able to afford housing and then, in the next breath, not caring about the very large increase in costs in things like rates and other expenses that are making that dream of wanting to own a Kiwi home so much more difficult.

Then let us look at the issue of debt. When Labour passed its massive reforms of local government on debt in 2002—go back and read the Hansard—it said there would not be any increase substantially above historical trends in either rates or debt as a consequence of its changes. That is what it said. That was the assurance that the Annette Kings and the Phil Goffs gave the people of New Zealand in 2002. Well, what has happened? The level of local council debt throughout New Zealand in 2002 was $2 billion. Today it is $8 billion. That is a fourfold increase. But the more concerning fact is this. If we look at the 10-year plans that have just been published by our councils throughout New Zealand, they show that level of debt, which had gone from $2 billion to $8 billion, going from $8 billion to $19 billion—to $19 billion. What do members opposite say about the level of council debt in this country going from $8 billion to $19 billion? They say it does not matter. I say open your eyes. Look at the world and the damage that is being done by toxic debt. Do you not take on board the real necessity—whether it be farmers, households, Government, or councils—to get debt under control? That is why I say to members opposite that this will—well, the deputy leader of the Labour Party is nodding his head. Is he comfortable with the 10-year plans that have debt in our councils going from $8 billion to $19 billion over the next 10 years?

Grant Robertson: I’m comfortable that it’s already at prudent levels.

Hon Dr NICK SMITH: He says he is all OK about it. Well, that is good, because when we go to the next election New Zealanders will know that the Labour Party is more than happy to have rates continuing to go up by 7 percent per year, just as they did when it was in Government. New Zealanders will know that if they vote for Labour they can count on even more local government debt and count on it continuing to go up.

It is true that this bill changes the purpose of local government. We are very up front about what we stand for: we stand for limited government. We do not think government should be involved in every possible endeavour, across every field. But let me test members opposite, because the local government spokesperson for the Labour Party has said that she agrees that there should be a limit on what local government can do. Well, that is very interesting, because do you know what Crown Law advised the Local Government and Environment Committee about the level of limit that is provided to councils that can provide for social, economic, cultural, and environmental well-being? The advice is that it provides absolutely no limit at all. If the council wants to buy a steel mill, a corner dairy, or a farm—if it wants to do any business it likes—the Labour Party says that that is OK. Well, we do not. We are saying that councils need to be focused on providing good quality local infrastructure, that they need to be focused on providing those important local services that only councils can do, and that our councils need to be focused on providing really good quality regulatory services so that people can get sections subdivided and so there can be new homes at affordable levels, rather than trying to do all things on the planet for mankind.

You see, this bill is about a very necessary change in local government. It is about the sort of change we need to get costs under control in that local government sector so that we can get the growth in the private sector, where there are real jobs and the real creation of wealth for this country. This is a Government that is committed to sensible reform that will see New Zealand doing better. Council reform has to be part of that, and that is what this bill is all about.

EUGENIE SAGE (Green): Well, that was very interesting, again, the way in which debt issues in local authorities have been twisted to promote this bill, the Local Government Act 2002 Amendment Bill. There has been a small number of councils that may have overstretched themselves in relation to their debt levels, but that debt is driven—as it was in Kaipara—by the need to fund core infrastructure like waste-water treatment, and none of the councils involved are perceived to have a problem or any difficulty that would suggest that they are going to default on debt. So this has been magnified as a reason for this legislation, a piece of legislation that is fundamentally undemocratic. As the Human Rights Commission noted: “Effective democracy demands respect between the different spheres of government and recognises the defined roles that they play in serving their citizens.” The bill is undemocratic because of the significant increase in the ministerial powers of intervention and tying it back to these fiscal benchmarks, and because of the way in which it changes the purpose of local government and because of the reorganisation proposals.

I would like to focus on the purpose of local government. This National Government knows the cost of everything and the value of nothing, and this bill is a tribute to that. It is causing significant constitutional change, which has not been widely debated, and by putting in these changes to the purpose of local government—removing the promotion of the four well-beings as the purpose of local government, and changing it instead to public services and core infrastructure—it is going to substantially undermine the ability of councils to deliver on their community priorities. How do they determine those priorities? Through their election every 3 years, through consultation with their communities, and through the councillors representing those communities. So that was the thrust of a lot of the submissions to the Local Government and Environment Committee—calling for the purpose to be kept. Given that this Government has overseen the decline of jobs in manufacturing by at least 30,000, we will see this change in purpose potentially cutting across regional development and the efforts of local authorities to promote sustainable economies in their regions.

There were a number of submissions from organisations like the Tourism Industry Association, which represents 1,500 players in the tourism industry, that showed that the change in the purpose potentially put at risk a lot of the council funding that exists with tourism promotion, with destination promotion, with i-site management, and with the services and facilities that councils provide to encourage visitors to come and to return. Tourism is a $63 million-a-day industry. It employs one in 10 people in the New Zealand workforce. It is those jobs that councils assist with at the local level, through promoting events like the Blossom Festival and the Wildfoods Festival in Hokitika—things that would not happen if they were not supported by local councils—that create vibrant local communities and that encourage people to go to and to return to those communities. This change in well-being not only puts at risk a lot of the community facilities that councils provide in the social service area but potentially undermines the ability of councils to promote regional economic development. It is the sort of infrastructure like museums and art galleries that councils invest in that is not clearly within the definition of core services that the bill proposes to implement. So, having presided over all of those losses of jobs in the manufacturing sector, this Government and this bill is going to potentially increase the number of jobless by undermining the local bases for tourism.

As well, it affects organisations like Venture Southland that are involved in the promotion of economic and community development. Venture Southland is a joint initiative—as the Chair will well know—by the Invercargill City Council, the Southland District Council, and the Gore District Council. It is funded by those councils and the Community Trust of Southland. It works to encourage regional tourism promotion, destination management, and business enterprise development, but nothing in this bill and this new purpose provides a platform for the work of regional development organisations like Venture Southland. It does not allow councils to support that economic development that ensures the economic sustainability of their communities.

The change in the purpose also cuts fundamentally across councils’ work with environmental management. At the moment, the purpose talks about the promotion of environmental well-being. As an excellent submission from the Environmental Defence Society noted, the bill and the change have got implications for how councils perform their responsibilities under the Resource Management Act. That is because if the promotion of environmental well-being is not part of councils’ purpose, then it is not clear how councils, particularly regional councils, can fund and undertake activities that are part of their core function of environmental management. Of course, it is the financial decision-making processes, through the annual plan and the long-term plan, that allocate funds that allow councils to engage in a lot of the non-regulatory activities in environmental management, whether that is promoting riparian planting, whether it is incentive and award schemes, or whether it is encouraging stakeholders to engage in collaborative processes. It is these processes that are non-regulatory, yet they are not within the definition of core services in the new purpose clause of the bill.

Again, the Government is cutting across the breadth of councils’ functions, and it is potentially undermining councils’ ability to implement the Resource Management Act. That then has a perverse consequence. If councils cannot fund these non-regulatory initiatives—like riparian planting and like subsidies for efficient heating—then they are forced back to just the regulatory functions that the new purpose clause talks about. So cutting back this breadth of activities that the councils engage with under the well-being purpose is completely out of step with international best practice. In the UK since 2000 councils have had the ability to promote or improve economic, social, or environmental well-being. Similarly, in New South Wales there is a test of ecologically sustainable development. So the 2002 principal Act is completely in keeping with what is happening internationally, and it is the Government, with this bill, that is cutting across the promotion of community well-being and the fact that councils are much more responsive to their communities by looking at economic, social, environmental, and cultural well-being.

The select committee had a number of submissions about the diverse social activities that councils are engaged with—things like early childhood education. Councils like the Auckland Council provide their early childhood centres with premises or land to build those centres on at peppercorn rentals. When the well-being purpose goes, that sort of provision for those services is potentially vulnerable to challenge by corporates and others because it is not provided at the most cost-effective rates for businesses and residents. At the moment, councils, through the well-being purpose, are guided by their communities. The new purpose, with its restrictive nature and its focus on cost-effectiveness, cuts right across that.

JACQUI DEAN (National—Waitaki): The Local Government Act 2002 Amendment Bill does not remove the power of general competence from councils. This bill will not stop councils from doing any new activities, which was told to us a number of times by the councils themselves. What this bill does is focus local authorities on providing good services for their communities and for their ratepayers. It is interesting, is it not, that during the whole course of this debate the noise coming from the other side of the Chamber does not seem to include the rights of the ratepayer; it seems to focus almost exclusively, I would venture to suggest, on the local government sector. Well, of course the local government sector does not want to feel something is going to be taken away from it—of course it does not. But this Government is absolutely focused on a bill that will provide good services and core infrastructure for the ratepayers and for their communities. This bill focuses on exactly what we want it to, and that is to require local government to stick to its knitting.

I want to go into the Local Government Act 2002 for a moment and just note this to the Committee. Perhaps members opposite, before they advance this idea, which they seem stuck on, that refocusing the purpose clause of local government is going to stop councils from doing anything, should just for a moment consider the Local Government Act 2002 and have just a wee look at sections 11 and 12, which are not amended by this bill. Section 11A of the Local Government Act 2002 says: “In performing its role, a local authority must have particular regard to the contribution that the following core services make to its communities:”—and it is to its communities, not to itself, but to its communities—“(a) network infrastructure: (b) public transport services: (c) solid waste … (d) the avoidance or mitigation of natural hazards: (e) libraries, museums, reserves, recreational facilities, and other community infrastructure.” Community infrastructure—it is there in the 2002 Act and it is not repealed by this bill.

I now want to direct members opposite—they can look this up on their laptops or go out into the lobby and find the Act, if they care to, to inform themselves in this debate—to section 12(2)(a): “For the purposes of performing its role, a local authority has—(a) full capacity to carry on or undertake any activity or business, do any act, or enter into any transaction;”.

So do not tell me, members on the other side of the House, that the power of general competence has gone. Do not tell me that councils are going to be absolutely hamstrung in the future and will not be able to look after the needs of their communities. Do not tell me that there is going to be endless litigation in the courts. There never has been in the past. Do not—do not—give the lie that is out there that the refocusing of the purpose of local government is going to shut down the local government sector, because it is not. What the refocusing of the purpose of local government is going to do is provide good service to ratepayers. It is going to provide good local government services to communities. And that, I venture, is what the purpose of local government is actually for. Thank you.

GRANT ROBERTSON (Deputy Leader—Labour): I think Jacqui Dean missed the memo from Nick Smith, which is that this bill, the Local Government Act 2002 Amendment Bill, is actually meant to be about restricting what local government can do. He actually said that about 10 minutes ago, but Jacqui had switched off during that speech and decided to come up with a new narrative. Well, the National Party cannot have it both ways.

But more than that, it is a bit rich to be lectured by Nick Smith about the rights of ratepayers and local democracy. This is the man who cancelled the elections for Environment Canterbury because he was worried about the result. That is why Nick Smith cancelled the elections for Environment Canterbury—because he did not like what might come out of a democratic result.

Well, it is absolutely clear on this side of the Chamber what the agenda of this National Government is. It is actually about central control. Once upon a time members over there would throw those accusations at the Labour Party. Well, look at what this Government has done when it comes to local government. It is wanting to centralise control to itself and take it away from ratepayers.

Jacqui Dean talks about the rights of ratepayers. What about the rights of ratepayers to have a say on reorganisation of their area? What about that? They used to get an automatic say in a referendum. This bill takes that away. This bill says you have to find 10 percent of the ratepayers to actually get that. That takes away the automatic right to a referendum. That is taking away democracy, Dr Smith. That is taking away democracy in Canterbury: cancelling elections and installing commissioners. When the commissioners themselves, the officials, and the whole of the country is saying “Bring some democracy back to Canterbury!”, what does the Government decide to do? It decides to carry on with unelected commissioners in Environment Canterbury. So I will not be lectured in this Chamber by Nick Smith about the rights of ratepayers and local democracy. This whole legislation is all about getting rid of the rights of democracy for ratepayers in New Zealand.

When Dr Smith got up he decided to tell us a little story about the four well-beings and what was wrong with them, and how this had led to a huge explosion in rates across New Zealand. Let us take a look at the view that is expressed in the regulatory impact statement. This is the basis of the change in the purpose statement—that it is out of control. That is what Nick Smith is telling us—out of control at local government level. Let us see what the regulatory impact statement says.

Hon Dr Nick Smith: Read the whole thing.

GRANT ROBERTSON: It says there is no evidence to date, Dr Smith, that the 2002 Act has led to a wider group of functions being undertaken.

Hon Member: No evidence.

GRANT ROBERTSON: No evidence at all. That was the 2006 Local Government Funding Issues report. A year later, in 2007, the Local Government Rates Inquiry noted in its assessment that there was “little that local government is now doing that it has not previously been doing.”

Dr Smith has tried to manufacture a crisis around local government to pursue his own ideological agenda about stopping local people having a say over what they want in their communities. That is what this bill has been about. It has been predicated on a falsehood. There are two reports there for Dr Smith—2006 and 2007. Then there was the excellent report of the New Zealand Institute of Economic Research that my colleague Annette King tabled earlier on.

Hon Dr Nick Smith: Who commissioned that?

GRANT ROBERTSON: It does not matter who commissioned it, Dr Smith.

Hon Dr Nick Smith: Oh!

GRANT ROBERTSON: Are you questioning whether the statistics in here are valid?

The CHAIRPERSON (Eric Roy): Order!

GRANT ROBERTSON: Is that what Dr Smith is suggesting?

Hon Dr Nick Smith: I’m saying it was written by councils—self-serving councils.

GRANT ROBERTSON: Let us have a look at that. Dr Smith had a lot to say before about debt levels. Let us have a look at what it says about debt levels here: “Debt and debt servicing measures are at prudent levels.”

Hon Member: Prudent?

GRANT ROBERTSON: Prudent levels. It says: “Debt to assets, a commonly used measure has risen only modestly and interest payments are at a prudent level of incomes.” Local government will always have to carry debt. It is about what you do when you have a large asset base like local government.

Hon Dr Nick Smith: Why has it quadrupled? Fourfold.

GRANT ROBERTSON: It is prudent levels, Dr Smith.

Hon Dr Nick Smith: Fourfold increase.

GRANT ROBERTSON: I am not going to take Dr Smith’s statistics, because of what we learnt about the numbers that Dr Smith and the Department of Internal Affairs put on its website to back up Better Local Government. When my colleague Annette King wrote to Dr Smith’s successor to ask why the numbers on the website had changed, this was the answer she got back: “You note that the Department has removed the tables from its website. As noted on the website, this was because there were issues with the data both in terms of its accuracy and in terms of the picture that was being given for some councils.” Dr Smith puts statistics up on the website to try to say that spending is out of control and then his successor has to come along and say that, no, actually that was wrong as well. What we have got is a litany of incorrect statistics and falsehoods that have been put up to justify taking away from councils the right to make their own decisions.

This is the bit where the Government just does not seem to get it. What the four well-beings have been about is actually giving local communities the ability, through their councils, to see services that reflect the needs of those communities. That is what has happened. As Eugenie Sage said before, if we take away “environment”, what does that mean? What does the Government actually want out of doing that? If we take away “social”, we take away “cultural”, and we take away “economic”, what does the Government actually mean by that? It is one clear message that central government is saying to local government: “We don’t want you in these areas.” Well, that might be all right if central government was actually doing something in those areas.

Hon Dr Nick Smith: What does the RMA say?

GRANT ROBERTSON: I say to Nick Smith and to the National benches that the Mayors Taskforce for Jobs has done more in its work to create employment and jobs than this Government has managed in 4 years. It has done far more, and those mayors deserve to be congratulated. That is because they have taken on board what is happening in their local communities, and they have said they are going to step up and do this work. And communities have backed the people who have done that, and re-elected them. They are doing that under the 2002 Act because they are looking at the whole well-being of their communities: economic, social, cultural, and environmental. This bill seeks to say, no, that is not the right approach; central government knows best and will come in and tell local government what to do.

It is a fundamental misunderstanding of the place of local government in New Zealand by Nick Smith and the National Party. Local government, as has been said before, is a key part of our democracy. We have only the one Chamber here in Parliament. We seek to govern New Zealand from here. But we need strong, effective local government that is delivering the services that New Zealanders need and want.

Jacqui Dean: That’s right.

GRANT ROBERTSON: The right of ratepayers, Jacqui Dean, is the right to have a council that is able to meet the needs that they identify. That is what the purpose statement of the 2002 Act says, and along comes the National Government, which thinks it knows best about what is happening in New Zealand and thinks it can dictate to councils and local communities. Well, that is wrong.

Peter Dunne is the final person I want to address in this contribution. He has the vote that can say to New Zealanders in their local communities that they still have a right to have control over what services are provided to them; they do not have to have central government dictate to that. Peter Dunne can do that by supporting Annette King’s Supplementary Order Paper. I urge him to do so.

TRACEY MARTIN (NZ First): Kia ora, Mr Chair. I rise to speak against the Local Government Act 2002 Amendment Bill. I am one of only two members of this House who have worked inside an amalgamated city, and I am the only member of this House who still works inside an amalgamated city. I find fascinating the statements from that side of the Chamber, and I am going to address Nicky Wagner’s statements around the ability of 10 percent of ratepayers to make a decision as to whether they want to have an amalgamated council, or not. I am asking on behalf of the people of Rodney. Does it go both ways? The people of Rodney never had an opportunity to express their opinion before being absorbed into the amalgamated city of Auckland. The people of Rodney asked their elected central government representative at the time, Dr Lockwood Smith, at a meeting at Ascension Wine Estate to just take a show of hands as to whether they wanted their rural communities to be dragged inside a massive urban environment, and he said no.

This is an extension of that sort of consultation from this Government. This is an extension, and the Wairarapa should be aware. The Wairarapa should watch out. They need to come and talk to me and talk to the people of Rodney. Forty-six percent of the land mass of Auckland is in the Rodney Local Board area, and only 5 percent of the population. Our service levels are dropping. Our rates are rising. Our mooring fees have doubled. Our horses on the beaches are under threat, because they are now urban beaches. Our people cannot get their voices heard in the ivory towers of Auckland, because of an amalgamation. So I find it very interesting that Ms Wagner suggests that this bill, with further amalgamation suggested, actually will bring more democracy. That is not the experience of my community. That is not the experience of local boards in Auckland City. There is a major difference between the role of local boards and the role of councillors, and the local boards are the advocates for their communities.

Mr Smith continues to bang on about the rising levels of debt, and he suggests that this is because councils are frivolous. Yet he makes no statement about the legislation passed by central government, which puts an onus on to local government to provide certain infrastructure, and for Rodney I pick up the point around water quality. When the Rodney District Council was still in existence, central government passed legislation that said that the infrastructure had to be upgraded so that all water quality was the same across the country. That was a massive amount of infrastructure required by that local government. That is how you get these levels of debt, Mr Nick Smith, and if you do not know that—

Hon Dr Nick Smith: Of course I know that.

TRACEY MARTIN: —then I suggest you have not had a good enough breakdown. You have not had a good enough breakdown from the officers from whom you have requested it, because you continue to shout across the Chamber “Why is the debt fourfold?”. That is why, in the same way that central government decided that rates must be based upon capital value. Do you know what that did? Do you know what that did to the farmers and the people of Rodney when that decision was made by central government? But now central government wants to blame local government for the rise in rates that came out of that decision.

I think that is misleading. It is misleading to say that local government has been frivolous with money, this has created this massive amount debt, and that it has come from the four well-beings. Let us remember what some of those four well-beings provide, shall we? There are Christmas parades. Christmas parades are happening all around my area at the moment. They are all funded by discretionary grants for social cohesion. There is privet removal. For our young unemployed people working with organisations like Springboard, and through economic and environmental grants, we are able to form working parties to give work experience to those young people to remove a noxious weed from our environment. It is called a win-win situation and it would not happen under the restrictions that are applied inside this bill. There are libraries. Libraries currently provide literacy and English for speakers of other languages support inside our environments. Libraries currently provide literacy and English for speakers of other languages support, and, again, they are supported through discretionary grants for volunteers to provide community programmes.

Mr Smith in the first reading of this bill pointed out—he made a big song and dance about it, actually—a council-controlled organisation that Auckland City has called City of Manukau Education Trust. He made a big song and dance about why—why—a local government body is involved in education. I would suggest that the Government needs to be careful what it wishes for. I believe the City of Manukau Education Trust is three or four human beings who collectively hold all the knowledge about the different educational providers and initiatives inside the whole of Auckland City, and the Ministry of Education and the Minister of Education use that single touch point to save them money, and to save them from having to put people on the ground to go and find out where those organisations are, in order to come up with a comprehensive overview of what Auckland needs for its future.

The hand of central government is so far down into Auckland it is not funny. This is not about saving ratepayers’ money, and the ratepayers of Rodney and the ratepayers of Auckland can tell you that. This is about control. This is about taking control from the people of Rodney and Auckland, and giving it over to central government. This is not—and I thought it was particularly interesting that one of the speakers said it was—about local government trying to keep control for itself. We are on the ground every day with our ratepayers. You sit here in your ivory tower, and you tell us we do not know.

The CHAIRPERSON (Eric Roy): Order!

TRACEY MARTIN: I beg your pardon. Members of this House sit here, in an ivory tower, and do not go down to see the ratepayers at street level. Just because they have a few constituents who are property developers, who find it too hard to get through the Resource Management Act, or have to make a reserve contribution for their communities, this is not the way to address those issues.

DARIEN FENTON (Labour): I really appreciate the opportunity to contribute to the Committee stage of this debate on the Local Government Act 2002 Amendment Bill. I was not on the Local Government and Environment Committee, but I have been kept well briefed by our spokesperson and other members of the Labour caucus about what has been going on here.

I have to say, it was pretty obvious what was coming earlier in the year when Nick Smith was still the Minister of Local Government, before his downfall. It was pretty obvious because there were patsy questions to him in the House about rates—you know, how much have rates increased by—and about debt. Actually, it was Nicky Wagner, I think, who was asking the patsy questions, was it not?

Kris Faafoi: Surely not!

DARIEN FENTON: Well, I think it was, actually. Maybe Jacqui Dean shared them as well. There were patsy questions about rates, patsy questions about debt, and patsy questions about staffing, following the same pattern that we saw with his manufacturing of a crisis in ACC. And where did that end up? Where has that ended up? Not a pretty sight.

Hon Dr Nick Smith: ACC is in a lot better shape.

DARIEN FENTON: It has not been a pretty sight, Nick Smith. I would have thought that your successor, David Carter, might show a bit more wisdom and would pause to take a good look at this bill, as many people have urged him and the Government to do, and to slow down, pause, and rethink this bill. It had 700 written and oral submissions, the vast majority of which were opposed to it. Seventy-eight councils opposed it. Up and down the country, people are concerned about this. They are also concerned about the lack of consultation before the changes were sent to Cabinet, and the lack of consultation that has gone on up and down the country, as I said, with various people who have come along and made submissions that were not listened to. Here we have a bill back to the Committee just a few months later with no substantial amendments at all. There are no substantial amendments at all. All of those people—

Hon Dr Nick Smith: There’s an SOP.

DARIEN FENTON: —substantial amendments—who took the time to make a submission have been ignored. But we have got used to that with this Government. We have got used to it undermining democracy—undermining local democracy. It is a Nick Smith special.

I have taken the time to put in a Supplementary Order Paper, Supplementary Order Paper 156, and I have done that for a couple of reasons. Like every other ratepayer in the country, I am affected by this bill. I am affected by this bill. Even though local government issues are not something that gets people marching in the streets—well, occasionally they get people marching in the streets—

Dr Megan Woods: It does get people in Christchurch.

DARIEN FENTON: That is true. In Christchurch they get people marching in the streets. I am concerned about the removal of the four well-beings: economic, social, cultural, and environmental. So I have taken the trouble to put in a Supplementary Order Paper to resubmit something that the National Government foolishly—foolishly—voted against when I put it forward in a member’s bill about libraries being protected from charges. As I thought about it—

Hon Annette King: A good SOP.

DARIEN FENTON: It is a Supplementary Order Paper.

Hon Annette King: It’s a good one.

DARIEN FENTON: It is a good Supplementary Order Paper. Yes, it is. When I thought about it, I could have gone further, but the reason I did that was that people have been talking to me about the provision of services by local government, and I started to feel very concerned about the impact of this bill. For example, has this Government told local communities that where early childhood centres are housed on council land they could end up paying rent? I would like to ask the Minister in the chair, Craig Foss, whether he can guarantee that this bill will not result in early childhood centres on council land having to pay rent—

Nicky Wagner: They’re already paying rent.

DARIEN FENTON: —shifting the cost to the taxpayer and shifting the cost to the parents of the children who attend those centres. Nicky Wagner can look puzzled, but it is a genuine question, and I look forward to an answer from the Minister in the chair. If he can guarantee that, I will be very happy. I will be very happy to go back to the community that I work in and tell them that Craig Foss has guaranteed that there will be no rental charges for early childhood education centres on council land under this bill.

Another question that I have is about community houses. Every centre throughout the country has community houses that are on council land that, by and large, are funded by councils. What is going to happen with those under this bill? There she goes, Jacqui Dean is screwing up her nose. I am simply asking for a guarantee, for an assurance, that community houses will not become user-pays. Of course, we all know that the Government does not support protecting libraries from user-pays, because it voted down a very good member’s bill on that, which I proposed. It does not support that. Then there are things like sports facilities and grounds, kids’ play areas, parks, and arts facilities. Again, I ask the Minister in the chair whether he will give this side of the Chamber a guarantee that this bill will not—will not—result in user-pays for the community services that are provided for, and valued by, people. If he cannot, I am looking forward to going to tell the parents of children who play in their local park, and the parents of children who attend the early childhood centres, that this Government cannot give them a guarantee that we are not moving to a user-pays system under this bill with the removal of the four well-beings.

I do not think there has been proper discussion and consultation with communities about this, I do not think the consequences of this bill are well understood, and I do not think some people in this House understand the extent of the work that is done by local councils and local boards. I appreciated the comments from Tracey Martin, because, actually, there was a bill that came forward to allow Rodney to vote on its destination, sponsored by me. The National Government would not sponsor it. Guess what! Guess what! National voted that down too because it does not believe in local democracy. That is what this bill does. It takes away local democracy. It is taking the local out of local government.

There are so many things that could be affected by this bill. I mean, things like drainage in the local sportsground—does that come under a core service or not? I know that general drainage does, but does drainage in a sportsground come under it? There are things like all the youth programmes that are funded. Are they affected by this? You know, will councils have to make a decision—cash-strapped councils—about youth programmes?

Hon Annette King: And community safety.

DARIEN FENTON: And community safety—that is right. And things like Enviroschools—of course, they have already been slashed to bits under this Government, but they still exist. They are funded and supported by local government. Graffiti management, which is done by core—

Hon Annette King: How can the private sector do that?

DARIEN FENTON: Well, exactly. I suppose it could do it, but, actually, those services are funded and supported by local community groups that work with young people on making sure that they come to value their environment. They work to make sure that things like graffiti do not get away from us. All the little kids in the park whom I see on the North Shore every day—I am looking forward to Jonathan Coleman going along and explaining to the Northcote community what is going to happen to its playgrounds, which I know the local board has fought very, very hard for, has had issues about, and actually has been opposed and criticised by Jonathan Coleman in the local newspaper. For all the little children who play in the areas that are provided by the local board, I am really interested to have an answer, so that I can go back and tell those people that this Government is prepared to guarantee that this bill will not mean that there will be user-pays for kids to play on the jungle gyms. I ask the Minister in the chair, again, to answer that—

Kris Faafoi: What about Santa parades?

DARIEN FENTON: Santa parades, too—that is right. Will they be user-pays? How will that work?

Andrew Williams: What about garden shows?

DARIEN FENTON: Garden shows—well, that is true. Garden shows—well, that is right. They will probably have to pay—[Interruption] Yes, that is right. One of the other things that the Government does not seem to understand are the proposals for amalgamations in this bill. With restructuring costs, the costs end up being borne by the local council. That is what has happened in Auckland. It is no wonder, actually, that it has ended up spending a bit more. It had to make thousands of people redundant and pay redundancy pay. Of course, it has now had to re-employ a lot of them because it did not have enough staff to do the work. It is no wonder. That is the sort of thing that will happen under this bill. As I said, a very simple guarantee from the Minister in the chair would be very welcome.

The second part of my Supplementary Order Paper is about ports, and I hope that I will have an opportunity to talk about that a little bit later.

NIKKI KAYE (National—Auckland Central): I am very pleased to be speaking on this piece of legislation, the Local Government Act 2002 Amendment Bill. Can I start by acknowledging the hundreds of submitters whom we had from around New Zealand. We have had comments from Opposition members that this was not a comprehensive process. Well, actually, the Local Government and Environment Committee heard submissions over 7 days, and we also heard them in many different cities in New Zealand. We went to Hamilton and Canterbury, we were in Wellington, and we were in Auckland. This was a very comprehensive process.

The second thing I would like to say is to reinforce the comments of the Hon Nick Smith. The Labour Party and members of the Opposition, in my view, are showing how out of touch they are at the moment with so many New Zealanders who are concerned about the costs of living and are concerned about rates. Every day, as a constituency MP, I see through my office issues of hardship. For members opposite to argue a position that there should be no change is, I think, negligent.

In terms of this bill, we have heard a lot of issues around the numbers. Well, can I take you through some of those numbers. The first point I would like to make is that it is correct that the costs that we have seen in terms of local government have quadrupled. That is a fact. There have been many people who have raised issues around where those costs have gone, and that is crucial to this debate. The reality is that some of those costs are to do with infrastructure. I accept that. I accept that some of those costs are to do with infrastructure. But the issue here is whether we can do better in terms of local government and reduce the costs to taxpayers and local residents by actually having more efficient government, and also by re-clarifying the roles.

We have heard from Opposition members all of the scare stories, and I am sure we are going to continue to hear them. I tell you what: we heard these same debates and these same issues raised by Opposition members when it came to Auckland local government reform. I want to address that for a moment here. One of the most fascinating things about the submitters who came to our select committee was that there were a number of the local boards in Auckland that actually talked about how successful the Auckland local government reforms had been. I want to take you through some of those successes: $140 million of savings in the first year, and we have seen water rates reduce. The real reason for the differential in terms of rates is the fact that we have had huge infrastructure deficits in Auckland over a long period of time. We have had fractured government, and I am very pleased to say that through this bill we had a whole lot of local representatives saying how good the system was.

I want to raise that because when we had those Auckland local government debates we heard from people like Phil Twyford. They went around with the same arguments. They raised fear, and they also said that this was a loss of local democracy. Well, my message to members opposite is that it is not acceptable to say that they care about issues like affordable housing when they are not prepared to make changes to refocus local government to ensure that we have more reasonable rates in this country. Prior to 2002 we did not have the four well-beings. That does not mean that there will not be certain things in the community that people will still be able to do. All it means is that this Government is being fiscally responsible and clarifying the role of local government. My message to members opposite is that they raised these arguments of fair and local democracy last time, but the facts are clear in Auckland. The facts are very clear that we have seen a reduction in water rates, and we have also seen a reduction in the costs of local government.

This bill is about refocusing the purpose of local government while also ensuring that our wonderful local representatives across the country get to deliver for their communities. But for members opposite to argue for no change is, in my view, negligent. At the end of the day, people have high costs of living at the moment. When we see issues like housing on the agenda, it is incredibly important that we deal with issues of land supply, and that we have a credible housing plan that looks at the costs of infrastructure and looks at the issues of land supply, and we do not argue for housing raffles on fake prices of $300,000 a house. I am looking at Annette King right now. I would like Annette King to give us a list of those $50,000 housing plots in Auckland, because they do not exist. The reality is that we consistently hear from members opposite policies that are not properly costed or detailed, and we hear calls for no change.

KRIS FAAFOI (Labour—Mana): Thank you very much, Mr Chairperson, for an opportunity to speak to the Local Government Act 2002 Amendment Bill. There might be a manufacturing crisis around New Zealand, but there is no manufacturing crisis in Nick Smith’s office, because no one manufactures a crisis quite like Nick Smith does. No one manufactures a crisis quite like Nick Smith does. Not content with manufacturing the crisis of ACC and making an absolute mess of that, he had to go and have a crack at our local councils. He had to go and have a crack at our local councils. He has thrust upon them that they are wasteful and they are borrowing too much, and then he says the Government will do away with the four well-beings. Well, no one manufactures a crisis quite like Nick Smith does, and because of that we have had this piece of legislation manufactured for us—manufactured for us.

Nicky Wagner and Nikki Kaye spoke earlier in this debate. Nicky Wagner said that our councils were in a 24-year time warp—a 24-year time warp—and Nikki Kaye said we are out of touch. Well, if we are out of touch, then so is the public and so are the councils in my area, which bitterly oppose this bill. Both the Porirua City Council and the Kāpiti Coast District Council oppose this bill bitterly because it is a complete and utter attack on what they do every day; on what they do well. They are being maligned for doing that job and are being told they are spending too much and borrowing too much, when the former Minister of Local Government knows too well that that is complete and utter rubbish. As I said, no one manufactures a crisis quite like Nick Smith does. It is his modus operandi. He did it with ACC, and this bill is all about manufacturing a crisis in local government so he can have a crack.

Why is he having a crack? I think it was a member of the Green Party—I think it was Eugenie Sage—who said that this is about control. That is what this is all about. The former Minister said that they are a Government that is about less government. Well, yes, less local government, that is what National wants, and more central government control, because Nick Smith wanted more control over local government, and that is what this bill is all about.

I want to get to the bill itself, Part 1, and look at clause 7. This is where the action is at, because it replaces section 10, and it removes those four well-beings—those four well-beings being social, cultural, economic, and environmental. The crisis has been manufactured by Mr Smith. He says that because the councils are doing this, council budgets are blowing out, spending is out of control, and budgets are out of control. Well, Mr Smith, the Kāpiti Coast District Council, which is within my electorate, has said that infrastructure costs make up about 75 percent of its costs, and all these social well-beings make up somewhere between 10 and 15 percent. So where is the crisis, Mr Smith? Where is the crisis that you say there is—where is the blowout? Where is the blowout? There is no blowout.

Mr Smith quite happily manufactures this crisis to make it sound like there is a huge crisis in local government, but this is not about council budgets blowing out. This is not about the four well-beings. This is about the former Minister, when he was the Minister of Local Government—

Hon Annette King: Revenge.

KRIS FAAFOI: —coming to get revenge, as the Hon Annette King says, and coming to get more control over local government.

I just want to look at what the Porirua City Council said when it came and made its submission to the Local Government and Environment Committee when the submissions were being held. They did not hold their punches back, because their very first paragraph says: “Overall Porirua City Council (PCC) considers that the Local Government Act 2002 Amendment Bill (the Bill) is unnecessary,”—unnecessary—“undermines local decision-making and creates risks such as deferred infrastructure renewal.” So is that out of touch? Is that out of touch? Is that, as Nicky Wagner says, a 24-year time warp? Is that a 24-year time warp when Porirua City Council—I believe one of the most progressive councils in this country—says that the bill before us is unnecessary, undermines local decision-making, and creates risks such as deferred infrastructure renewal?

So here we have the Porirua City Council saying that this potentially could be negative for its community in terms of making sure it has strong infrastructure, something that the former Minister of Local Government says that this bill is all about. So what have we got here? We have got Nick Smith manufacturing another crisis. What is this all about? But it does not stop there. Porirua City Council says it is “concerned about the haste in which this Bill is being introduced, the insufficient evidence upon which this is based, and the associated risks which are clearly identified in the Better Local Government Regulatory Impact Statement.” So here we go. The Porirua City Council says that this bill is unnecessary, undermines local decision-making, and is also being rushed through this House in haste.

So I do not think that is a 24-year time warp. I do not think that is this side of the House being out of touch. I think that this is about this side of the House being well in touch with our councils and our communities, which say that this piece of legislation is a crock—is a crock.

Hon Dr Nick Smith: More rates, more debt.

KRIS FAAFOI: Oh, and here he goes. “Oh, boring. Oh, boring.” That will go in Hansard. Well, if you think this is boring, an attack on local government is not boring to the people out there in our communities. It is not boring to the people in our communities. But, hey, let us not stop just at the Porirua City Council. Let us also go to look at some facts from the Kāpiti Coast District Council, because, as I said, when Nick Smith manufactured this crisis, he would have the rest of New Zealand being led to believe that councils around this country were spending about 95 percent of their money on the social well-beings, borrowing that money, and doing nothing in terms of infrastructure. But I just want to read from the Kāpiti Coast District Council submission, where on page 3 they said: “All infrastructure and related services account for about 75 percent. In common with other councils, our annual plans and long-term plans show expenditure on social, environmental, and cultural well-beings comprises a small part of the council’s budget—typically, 10 to 15 percent for us, but is often highly cost-effective in addressing issues at a very local scale.” I just want to repeat that last sentence: “but is often highly cost-effective in addressing issues at a very local scale.”

David Bennett: Oh, sit down, Kris.

KRIS FAAFOI: The member for Hamilton something over there is going “Argh.” Well, he would, because when was the last time he went and spoke to his local council about this bill? I am sure they are not happy with him in Hamilton, with what the Government is doing with local—I would actually invite the Mayor of Hamilton to give his office a call right now, because it is plain to see that that member from Hamilton does not care about what the Hamilton City Council and the Hamilton mayor think about this piece of legislation.

Just for the benefit of those at home who may have had that member over there talking over the top of this, I want to talk about the four well-beings spending, which the Kāpiti Coast District Council says is “often highly cost-effective in addressing issues at a very local scale.” This is a serious issue, especially for my electorate, because Porirua City Council does invest a lot in those four well-beings and it does not want to see this being removed from the legislation. It has invested a lot of time and effort into making sure that it looks after its communities with its village plan. It is something that has been seen around the country as a leading example of a council being very much in touch with its communities, making sure that at the very grassroots level, people can have input into district plans and long-term plans. So if we take away these four well-beings then, I guess, the Minister in the chair, the Hon Simon Bridges, could answer the question as to what happens then. Does the Porirua City Council have no remit to continue the village planning? Does it no longer have a remit to continue some of the work it does to make sure that the youth—and it is a very young city, I think it is the youngest city in New Zealand—in its area are looked after? I think these are pretty serious questions for the Minister in the chair. It may be that the former Minister who was responsible for this bill might like to address this in another contribution on this bill, because they are questions that many, many councils right round the country are asking.

In conclusion, this bill is unnecessary. It removes powers and obligations from councils in relation to things that they are already doing proactively, and it is all being done because one man wanted to have a crack at local government. As I say, in all seriousness, this crisis was manufactured in local government in order for this bill to come through the House. It is a serious attack on democracy. It takes away the grassroots democracy that Kiwis and communities do take very seriously, and we do not support it at all. We wish that the Government would have a look at some of the Supplementary Order Papers to improve it, because we think that through the select committee process some good amendments have been offered up.

Dr MEGAN WOODS (Labour—Wigram): We have heard quite a number of contributions from members on the opposite side of the Chamber. It started with Nicky Wagner, who said that there was going to be no change—it is fine, there is no change in this bill. She said that the well-beings were not going to be disrupted—there was no change. Then we had Nick Smith, who went on that what this Local Government Act 2002 Amendment Bill was about was growth in the private sector. We have had the most recent contribution from Nikki Kaye saying that this is all about change, this is a change bill, this is great change. Well, really, we had these three contributions from the “Nicks” and all that is being nicked are our democratic rights, through this piece of legislation. This is nothing but another raid on those.

So let us have a look at the reasons why it is that Labour is not supporting this legislation. This is a really important piece of legislation in what is being done to our communities all over the country, and what this bill does is alarming for us on this side of the Chamber. There is no evidence to show that the Local Government Act 2002, which brought in the requirement for local governments to consider the four well-beings—the economic, the social, the cultural, and the environmental well-beings—resulted in expansion of purpose and the function of local government, and the costs associated with that. There simply is no evidence to show that, and I am going to come back and address that a little bit later in my speech.

I am also going to address some of the complexities that this has introduced of what is in and what is out. There are very real anxieties being felt in our communities all over this country around what is going to be funded and what is not going to be funded by their local councils as a result of this piece of legislation. But, really, I think one of the main things that we find so difficult on this side of the Chamber is that this is a bill, this is a piece of legislation, that, as my colleague Kris Faafoi signalled, came out of the manufactured crisis of Nick Smith’s office. We had a series of patsy questions leading up to this, about the crisis, when the evidence was not there. What we ask is that we have legislation that is based on evidence and not a manufactured crisis with made-up evidence. We look at the reality out there and that evidence simply was not there, and that is one of the things that we on this side of the Chamber find so difficult.

What we had was Nick Smith standing here telling us about the thousands of New Zealanders who are concerned about this compounding debt and about how these people were flocking to his office and returning their surveys, with the No. 1 issue of the day of the compounding level of local debt—and I am wondering whether they throw in debt-equity ratios when voicing their anxieties there, as well, as the No. 1 issue of our time. Sure, the cost of living is something we all as constituency MPs need to face and we all have to deal with, but I tell you what, Dr Smith, I can tell you that there are 558,000—and I will give you a number—558,000 Cantabrians who are concerned about that member when he was Minister of Local Government and taking away their vote and their right to have a democratically elected regional council in Canterbury. That is something that, as a constituency MP, I do hear a great deal of anxiety about and that I do hear constituents, who come in all the time, voice their anxiety about.

To hear Nick Smith when he stands in this Chamber and his National Party colleagues talk about more efficient local government sends a chill down my spine, because to members opposite more efficient local government means less democracy, it means fewer elected members, and it means fewer democratic outcomes. It is indeed chilling for us on this side of the Chamber, and we need to do something about that.

This is a piece of legislation—and make no mistake about it—that takes away the power of local communities. I think that the submissions that came in to the Local Government and Environment Committee, and the way in which Local Government New Zealand and local bodies all over the country reacted to this piece of legislation, show without a shadow of a doubt that this is a piece of legislation that is about taking power away from local communities, because local communities know what is suitable for their community.

I would like to have a look at the submission from the city council in my city, the city I represent, Christchurch City, which is facing a unique set of circumstances as it rebuilds its city, and the tensions there are plain to see between central and local government. One of the paragraphs that was included in the council’s submissions is very important to me as a member who represents people in that city and I think it is something that all members who represent the people of Christchurch should take on board and indeed should listen to, and I invite the chair of the Local Government and Environment Committee to reread her own city’s submission on this bill. The Christchurch City Council said: “The Council is aware that this Council and its community are different from other councils. Although there are similarities across all councils, each council has fundamental local differences, and different priorities and goals that it wishes to achieve. In Christchurch, at present, the differences are more striking than normal, as the community recovers from the earthquakes. Some key recovery challenges include land supply for housing, impacts of services on population movement, rebuilding of physical and community infrastructure, repairing of waterway infrastructure and maintaining community health and wellbeing.”

We cannot rebuild our city without a city council that has the four well-beings of its people at its heart. We simply cannot do it. The rebuild of our city is not about roads, rubbish, and rates. The rebuild of our city is about the people who live there, and I invite the chair of the select committee, who represents some of the people of Christchurch, to think long and hard about that and what this piece of legislation is doing to the people of Christchurch in disempowering them and their interests being at heart. I, for one, want to represent the people of Wigram and know that their well-being is ingrained into the fabric of the new city that we will rebuild. It is not just about the roads, it is not just about the rates, and it is not just about the rubbish.

The Christchurch City Council went on to say that it was very concerned about whether the change to the purpose statement would mean that it could not carry out activities it currently provides for its community. The council believes that local government should continue to have the capacity, as it does under the current legislation, to deliver an agreed mix of services and rating levels appropriate to local circumstances and preferences. Why is it that members opposite want to take away that ability of local communities to articulate their local circumstances and their local preferences?

The Christchurch City Council questions whether or not the fact that it is the second-largest landlord in the country is going to come under question. Is this something that falls under how this Government imagines local government in this country? It expresses real reservations about that. And these are reservations that should be expressed. What we see is that the local government Minister, David Carter, who inherited this bill, through many people, has been reported as saying that some councillors have told him that the changes would give them the ability to say no to some activities that they are asked to undertake on behalf of their communities—that this bill will empower them to say no. Well, the people in our communities, and the people whom I represent, want to know what the activities are that councils are going to say no to. We now even have local councils asking what the activities are and whether they are going to be able to carry them out. We hear that the V8 Supercars, car races, and Santa Parades are being put on the table as being in question.

But there is real provision around housing in our city that needs to be addressed. Is this something that this Government sees as falling within the ambit of this legislation? Is this something that is about better public service and more efficient delivery of local government? I would like an answer to be given to that in this Chamber. I would like an assurance to our communities that their well-being is still going to be taken care of. Members opposite have fallen very silent and I do not hear those assurances coming. I really would like someone to take a call and tell us whether or not those assurances would be there.

What we have is a piece of legislation that is founded on a manufactured myth of a crisis. The numbers simply do not stack up; indeed, the numbers were taken off the website because they were so shonky. We have reports that tell us that debt is low, relative to assets.

MAGGIE BARRY (National—North Shore): I move, That the question be now put.

MOANA MACKEY (Labour): That was another wonderful contribution from Maggie Barry on a very important piece of legislation. As a member of the Local Government and Environment Committee, which considered the Local Government Act 2002 Amendment Bill, I do want to thank the officials who worked on this piece of legislation. They did a wonderful job of defending the indefensible with dignity and with professionalism. It was obviously a piece of legislation where it was difficult for them to come up with the reasons as to why we were doing this, and that was clear right throughout the submission process.

The very basis upon which this bill was premised, which was that debt is out of control in local government, has been proven to be utterly false. Dr Nick Smith put up figures when he was the Minister in charge of the bill that claimed that debt and spending was out of control. Those figures were so dodgy that the ministry had to take them down off the website—

Hon Dr Nick Smith: Not true.

MOANA MACKEY: Absolutely true. It was not that long ago, of course, that Business New Zealand was criticising Local Government New Zealand for having a lazy balance sheet, saying that it needed to invest more and spend more on infrastructure. Then suddenly Dr Smith, because he has an ideological issue with how local government is run in New Zealand and wants to see that changed according to his desires and his whims, manufactured a crisis, as only Dr Smith can do, in order to justify these Draconian and very, very damaging changes to the Local Government Act 2002.

There has not been an expansion of services since 2002 when Labour introduced the four well-beings—the environmental, economic, cultural, and social well-beings—of communities into the Local Government Act 2002. What it did do, though, was it provided the flexibility for each council to decide for itself—not dictated from Wellington, and not dictated by the Minister of Local Government—what the priorities of local government would be in those communities. That is very important when you consider the large number of provincial councils that we have around the country.

I think nowhere are the dangers and the potential damage of this bill more evident than in the provincial councils around the country. Our mayors in provincial New Zealand are not politicians; they are community leaders. They are the go-to people when something goes wrong. I look at the Mayor of Kawerau, who has been fronting the very difficult issue of youth suicide in his community. I look at the Mayor of Ōpōtiki, who has been fronting the issue of economic development and of long-term unemployment in the Ōpōtiki community. He has been a leader in going around the world to find investment and create jobs in Ōpōtiki. I look at mayors right across the country and the role that they have in fronting up to national media and to national questioning about what is going on in their communities. I thank them for that role that they carry out.

Phil Twyford: And Meng Foon on the rail.

MOANA MACKEY: That is right. I look at Mayor Meng Foon in Gisborne, who has been a passionate advocate for reopening the Gisborne to Napier rail line.

That is the reality of local government in provincial New Zealand. Yes, people are concerned about rates, but the reason for rates going up has been an under-investment over a long period of time in core infrastructure that has now caught up with local councils. One of the reasons why that happens is a lack of forward planning. Ironically, this bill takes out the requirement for any forward planning to ensure that we do not end up in the same situation again, where infrastructure spending has fallen behind because people are elected to councils on tickets of no rate increases, which means that councils were not able to invest in waste water, for example, or water quality or any other range of infrastructure projects that are critical to their local districts.

The other reason that rates have increased is that here in this Chamber we often put requirements on local government that cost, but we do not provide the funding to cover that cost. If you look around the issues of waste-water treatment, around the issues of water quality, these are all things that have been imposed by Parliament—and often for very, very good reason—that fall on local government to carry out, but it does not get any increase in funding. [Interruption] That is right—the microchipping of dogs, as my colleague from Christchurch points out. The funding does not fall to local government from central government to carry that out, but it has to be paid for somehow because Parliament has passed a law saying to councils: “You must do this. You must find out how to pay for it.” That means, of course, that you are going to get rates increases to cover that.

We all agree that infrastructure for local authorities is important. It is something they do need to be investing in. So you cannot then turn round and talk out the other side of your mouth and say “But rates should never be going up, because that’s a bad thing. So we’re going to gut local government in New Zealand, and that’s going to arrest the rise in rates increases.”, because it simply will not.

We had a very good submission when we were up in Auckland from the Auckland District Law Society that did an actual breakdown of where the costs to local government fall and where the impacts of rates would come, and it is not in the area of social well-being and it is not in the area of cultural well-being; it is in the provision of infrastructure. Overwhelmingly, the costs of local government, which are then passed through to ratepayers, are to pay for core infrastructure. Are members of the National Party saying that they do not want local government to be spending money on core infrastructure in their areas? Do they want to see cutbacks in that in order to reduce rates? I tell you what: taking social well-being out of this legislation will do nothing to reduce rates. It will do nothing to—

Maggie Barry: So would you put them back?

MOANA MACKEY: We will bring them back. We will bring back the four well-beings. Annette King has an amendment to that effect on the Table today. And do you know why we are bringing them back? Because we actually listened to local government when it said it wanted the four well-beings. We actually listened to councils and to mayors, who overwhelmingly came to the Local Government and Environment Committee and said: “We want the four well-beings. We don’t want you to gut local government in New Zealand.” They do not take the arrogant, ideological approach of the National Party, which is that because Nick Smith does not like them then that must go for everyone across the country. Because one council up in Northland has got itself into financial difficulty, that means that all of local government is rotten and must be gutted! What a ridiculous premise for a piece of legislation.

David Bennett: Oh, sit down.

MOANA MACKEY: David Bennett says I should sit down. Maybe he should stand up and explain to his council, which opposed this legislation—

David Bennett: Hamilton likes it.

MOANA MACKEY: Oh, Hamilton likes it! That shows how in touch that member is with his own council. The four well-beings, which are being removed in this legislation, are core to the function of local government in New Zealand. Look at the Bay of Plenty as a very good example. The Bay of Plenty mayors came together as a group to submit to the Local Government and Environment Committee. We had the mayors of Tauranga, the Western Bay of Plenty, Kawerau, Ōpōtiki, and Whakatāne, and the Bay of Plenty Regional Council all come before the select committee. I do not think I have ever seen them as angry as they were when they came before the select committee to say: “Butt out. It ain’t broke in the Bay of Plenty. We don’t need your help fixing it, thank you very much. In fact, we work together very well already. In terms of amalgamation, we share services already. We are functioning very well as a region. We don’t need this legislation. In fact, this legislation takes us backwards.” The Mayor of Kawerau raised a very good point. He said: “Do you know how much debt the Kawerau District Council has? Zero.”—zero. So why are you imposing a piece of legislation that guts the very basis upon which the Mayor of Kawerau has been able to be a leader in his community, not just on economic issues, not just on environmental issues, but on social issues as well? On the very difficult issue of youth suicide in Kawerau, that mayor has been a leader.

I want to raise the example of another very good local government initiative: the Mayors Taskforce for Jobs. Under this legislation, it is not under the mandate of local government and it is not something local governments should be concerning themselves with. The reality is that the Mayors Taskforce for Jobs, as Grant Robertson said, has done more for addressing youth unemployment in New Zealand than this National Government has in 4 years in Government. The Mayors Taskforce for Jobs is a wonderful initiative that is grassroots led. It is led by mayors and councils who know their communities far better than Nick Smith does, far better than the Minister in the chair, Simon Bridges, does, and far better than members in this Committee do. Across the country, they know what is going to work. They have been working with local businesses, they have been working with iwi, and they have been working with training providers to ensure that the very unique needs of each provincial area around the country are met. They are able to be met because our Local Government Act 2002 provides that flexibility. It is a flexibility that is being ripped out of the legislation in Part 1 of this bill today.

I want to thank all the mayors who have been part of the Mayors Taskforce for Jobs, who have managed to achieve zero unemployment around the country for 18 and 19-year-olds in ensuring that they are there. That is something that the National Government has not managed to do in 4 years of Government. Why? Why would the National Government send a message to local government that this is not something they should be doing? Youth unemployment—that is not your area; you should just stick to rates, rubbish, and roads. As one of the mayors who came to our select committee said, it is actually cruel to tell them that they cannot represent their communities and be involved in the social needs and the cultural needs of their communities, as well as the environmental needs and the economic needs. As he said, “I don’t want to be a mayor who’s just in charge of potholes. I’m here for the people of my district, and the people of my city, not just to be the guy who makes sure that the rubbish is picked up on time every Tuesday and Wednesday morning.” That was the message that we got across the board. I have to say that the submitters who came before the select committee, the small number there were who supported this bill, when they were actually tested, when they were actually questioned, did not have the answers.

DENIS O’ROURKE (NZ First): The National Party hates local government—it always has, and it always will—and the reason for that is that local government represents ordinary people and their needs. The National Party sees local government as a poor relation and that it should do what it is told. National says to hell with what local people want. True to form, this Local Government Act 2002 Amendment Bill overrides core democratic principles established over a long period of time and, again, undermines local government in New Zealand, and in doing so, it undermines the viability of the governance of local communities. This results in a loss of confidence by local communities in their local government.

An overwhelming majority of the 775 written submissions and 186 oral submissions on the bill oppose it. It is not what the people want. It is really all about halfwitted National Party ideology—nothing more. I was a member of the Christchurch City Council in 2002 when the current Act was passed, after very comprehensive public consultation. That Act clarified what local government was about, and it had the widespread support of communities throughout New Zealand.

People then saw, and now see, local government as being required to take a much more holistic approach than the traditional roads, rubbish, regulations, and rates approach. They do not want a narrow, basic services approach; they want much more than that.

The principle of subsidiarity was adopted in 2002 and decision making was devolved to appropriate levels, with community boards having a much more important role to play for the well-being of their communities. This amendment makes the Act a much narrower Act in terms of the purposes of local government. It says: “… to meet the current and future needs of communities for good quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.”

So what it is really about is money. What it is really about is just basic services. What it is not about is the welfare of local communities. It replaces those four well-beings—economic, environment, social, and cultural—with something that is much more narrow and not what the people of New Zealand want. It returns local government to the bad old days, where its scope of operations is far too narrow to meet the needs of today’s communities, and nowhere is that better shown today than in Christchurch, where I live and was a city councillor for 15 years. Yes, there is a huge need for the repair and reconstruction of basic services in that city, and the Stronger Christchurch Infrastructure Rebuild Team and the city council are doing just that, and, yes, there is a need for the prudent direction of Government money in the rebuild process, and the Canterbury Earthquake Recovery Authority and, again, the city council are doing just that, but few would argue that that is nearly enough. There is a need for, as I have said, a much more holistic approach to the re-establishment of communities in the most affected areas of Christchurch.

The welfare of communities and of people is every bit as important as, or more important than, the traditional approach of roads, rubbish, regulation, and rates. Councils must also be interested in housing, and not just housing for the elderly. They should be interested in rental rates, because rent gouging is commonplace in Christchurch today. I was contacted by somebody last week concerning a family of nine children whose rent went up by $100 a week, from $460 to $560. That is unconscionable. Councils need to play a role in those issues too, as they do in health services—especially in what district health boards do not provide—and also in recreation and in opportunities for healthy living, in economic development, in job creation, in emergency preparedness and the organisation of community responses to adverse events, and also in the provision of public events, which are supported—

PAUL GOLDSMITH (National): I move, That the question be now put.

Hon ANNETTE KING (Labour—Rongotai): The guts of this bill is really in Part 1, and I am really pleased that we are able to have a good debate on this part of the bill, the Local Government Act 2002 Amendment Bill, because the big change is the change to the purpose of the Local Government Act 2002. I was interested to hear members on the other side say that the Labour Party, New Zealand First, and the Green Party are out of touch with the public. Well, I have to say to National members that they are out of touch. They are out of touch, because they are not prepared to listen to what the people are saying. In fact, they have ignored what those submissions said. I am going to go through some of those submissions, but I want to start by responding to something that Nick Smith has perpetrated for a while, and that is that the figures were not removed from the Better Local Government paper that he put out. He said that that is not true—

Hon Dr Nick Smith: Tell the whole story.

Hon ANNETTE KING: I will tell the whole truth. I have got the two papers. You will not get them now, unless you were very fast at getting them off the website before he whipped them off. But I was fast enough out of the blocks and I have got the original copy, and it has got all the figures in it. Go now, people who are listening. Go on to the Government’s website, to the Department of Internal Affairs, and see whether you can find the figures that were put out by Nick Smith, and you will find they have been removed. So I wrote to the new Minister of Local Government, a man with a lot more integrity, who wrote to me and said this: “There are issues with both the data and in terms of accuracy and in terms of the picture that has been given for some councils.” That is why he said he would not put the figures back up. That is the truth. That is the truth, not what Nick Smith has been telling this Committee and telling people at the Local Government and Environment Committee.

We then heard from the member for Hamilton East. He kept chirping away, but would not take a call—he did not have the bottle to get up and take a call—telling us how happy the Hamilton City Council is! Well, I say to that member that he is way out of touch. Did he ever read his council’s submission?

David Bennett: Yes, I did.

Hon ANNETTE KING: What did it say in that submission, Mr Bennett?

David Bennett: Go ask them.

Hon ANNETTE KING: What the council said was that it was concerned around the quality of the policy analysis that underpins this bill, and that this bill is not evidence based—it is not evidence based. It then went on to say that the alignment of the four well-beings is really important. It said that there is little evidence to show that a sustainable development approach to the four well-beings has led to an expansion. It is not a happy council. That member is misleading the public with his interjections—

David Bennett: It’s not upset.

Hon ANNETTE KING: —because it is upset at what is happening here today. In fact, I have to tell you that Local Government New Zealand itself is upset at what is happening. I happen to have here an email sent out by Local Government New Zealand, the pre-eminent group for local government and the body that would be, I think, the equivalent perhaps of Federated Farmers—you know, this is the body that takes in all local authorities. It is chaired by one Mr Yule, the Mayor of Hastings, who wants to be the National Party candidate on the list at the next election. Local Government New Zealand today has sent out this email. It said: “This is just to update you. Local Government’s understanding is that the Government intends to proceed with the final stages of the local government bill tomorrow. Although the Government has been adamant that they will not materially alter anything in the bill, we will nonetheless continuing to try and engage with them and with their support parties on both the wording of the purpose clause and the link between the benchmarks and the power of ministerial intervention. We have provided legal wording to the Government on both aspects to reduce the degree of legal risk to councils in respect to the purpose clause.”

That is a very important point that I want to make. We had submissions to the select committee from councils and from others saying how concerned they are at the legal implications of this bill, and the reason is that there is no certainty around what the Government actually means—what it means in terms of its change to the purpose. It has changed it to “local public services”. John Key said that it should be public good—

DENISE ROCHE (Green): The purpose of the Local Government Act and the changes that are being promoted by this Government are nothing less than evil, essentially. It is. Removing the four well-beings—environmental, economic, social, and cultural well-being of communities—is nothing short of nasty. This Government does not like local government. The premise for the Local Government Act 2002 Amendment Bill is a beat-up and we have heard this from other speakers. We have heard it in the evidence from Local Government New Zealand. We have heard it from the regulatory impact statement as well, which says that there is no evidence to suggest that local authorities are acting imprudently. The regulatory impact statement also says that this is a rushed job. I think we all know that we can follow the slogan that they use for reminding drivers to slow down: “The faster you go, the bigger the mess.” That is what will happen if we allow this bill to go through. This is a solution that is looking for a problem. In fact, this is a solution that will create problems.

This bill punishes local government and it allows the National Government to meddle and interfere in local government. Why would that happen? Why would you allow for the carve-up of assets and services? Why would you allow for communities to disband what they have set up over many, many years, which is accountable, transparent, democratic local representation? I want to pay tribute to the members of this House who have been active in local government. I particularly want to acknowledge Tracey Martin from New Zealand First who is a current serving member of the Rodney Local Board as well as being a New Zealand First list MP. She spoke very eloquently about what it was like to go through a forced amalgamation. I was one of those representatives who was also representing my community as a local board member, and prior to that as an Auckland city councillor, when we were forced and rushed into an undemocratic process that amalgamated the councils in the Auckland region. During that time I can assure you that there was a hue and outcry about the fact that the National Government was stealing from us as ratepayers, was stealing our democracy.

Local government ain’t broke in New Zealand, and there is no need to fix it. Local government does democracy well. It does it much better than this House does. There are annual plans, there are long-term council community plans, there are by-laws, there are other plans like waste management plans, and there are the unitary plans. They all have submission processes. They all have processes where citizens are actively engaged and feed into the process. They participate. This bill destroys that participation. This bill will destroy democracy. When you reduce participation, that is what you do; you destroy democracy. The reorganisation proposals in this bill and these amendments, even the ones that have been put forward by the Government, do not go anywhere near restoring any type of democracy. Having been through an anti-democratic process I certainly do not want to see this rolled out to other councils throughout New Zealand. So we will be supporting Supplementary Order Paper 159 by Eugenie Sage, to restore the democracy and the reorganisation proposals in Part 1 of this bill.

The Government’s intention for this bill is clearly stated in the commentary that accompanied this bill into its second reading into the House, where it says: “The bill also seeks to establish a more flexible range of mechanisms for Crown assistance and intervention in the affairs of individual councils, with the aim of providing assistance to councils before situations become critical.”

Hon Dr NICK SMITH (National—Nelson): I move, That the question be now put.

PHIL TWYFORD (Labour—Te Atatū): Never mind the fact that this Local Government Act 2002 Amendment Bill is based on a lie—Nick Smith’s shonky figures and his wilful misrepresentation of the data on local government spending and debt. Never mind that this bill constitutes a threat to local government’s powers and mandate by central government, and never mind that the whole notion of core services that is embodied in the winding back of the mandate of local government is illogical. One minute V8 races are out, the next minute they are in; flower shows are apparently OK. But one of the things that is most irritating and galling about this bill is that the whole thinking that underlies the narrowing of the purpose statement of local government is a kind of primitive 1950s thinking about the role of government and of community leadership.

I wanted to respond to the comments that Jacqui Dean made where she tried to convince the Committee that the new purpose statement in the bill would not have any effect at all on the scope and activities of local government. It immediately begged the question of why National is making these changes. Why is it passing this bill if it does not want to have any impact? I ask listeners to consider whether this purpose statement will in fact wind back the activities and the scope of local government. The new statement is: “to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.”

Well, I ask listeners to consider whether or not these activities are, as I would submit, treasured and valued by the citizens of their communities. Think about economic development. So many submitters came along to the Local Government and Environment Committee and expressed alarm that the new purpose statement of local government would undermine or even prohibit their councils undertaking economic development activities. All over New Zealand communities and councils consider that economic development is one of the most important functions of local government. Why? It is actually really easy to understand: because this National Government is not doing any meaningful economic development around this country. Local communities are facing job losses and firm closures, and the only people whom they can look to under this National-led Government is their council—to stand up for them, to develop economic development strategies, and to mobilise firms, local institutions, and the community behind economic development strategies.

Think about environmental well-being. I ask the House to consider the situation in Auckland, where currently the kauri dieback disease threatens the species and certainly all of the major stands of kauri in the Auckland isthmus. Central government is doing next to nothing to fund and support the science to try to find out how to deal with that. Who is leading the fight against kauri dieback disease? Auckland Council. Under this bill, the narrowed statement of purpose for local government would threaten many of those kinds of activities.

Think about social activities. Who is providing the leadership at the moment for tackling the affordable housing crisis in Auckland? It is the Auckland Council. The Government’s response to the affordable housing crisis in Auckland has been pathetic. Under this bill, under the narrow purpose statement of local government, you have to think that any significant action to tackle affordable housing would be questionable and would be subject to ratepayers, the chamber of commerce, and—who knows—the Employers and Manufacturers Association (Northern) taking legal action against the Auckland Council for pursuing things that are arguably outside Dr Smith’s new remit for local government.

I ask you to think about the Pasifika Festival in Auckland, which attracts several hundred thousand people every year to Western Springs. It is a showcase for Pacific culture in Auckland. It generates several million dollars in wider economic benefits for the city of Auckland. It would not be the success that it is today, it would not be the matter of pride that it is for the community in Auckland, if the Auckland City Council, over many years, had not fostered and supported what started out as a community event. But does the Pasifika Festival meet the requirements of the new purpose statement of local government? Is it a regulatory function? Is it a local public service? Is it infrastructure? Arguably not, and yet I argue—

NIKKI KAYE (National—Auckland Central): I move, That the question be now put.

The CHAIRPERSON (Lindsay Tisch): The question is that the question be now put. Those of that opinion—

Chris Hipkins: I raise a point of order, Mr Chairperson. There are people here, me being one of them, who have been seeking the call for some time and have not been given the call, and other members have been given multiple calls.

The CHAIRPERSON (Lindsay Tisch): I have been very fair in the allocation of calls. I noticed the member went for the call before, but not previously while I have been in the Chair. I have accepted a closure motion. The question—

Denis O’Rourke: I raise a point of order, Mr Chairperson.

The CHAIRPERSON (Lindsay Tisch): If you are challenging my ruling, Mr O’Rourke, you are out of order. I have ruled that I am accepting the closure motion—

Denis O’Rourke: I am raising a point of order.

The CHAIRPERSON (Lindsay Tisch): The member will sit. The member will sit. If the member is going to challenge my acceptance of a closure motion—and Parliament will decide whether it accepts a closure motion, not me—I intend to put the closure motion.

Denis O’Rourke: I raise a point of order, Mr Chairperson. The member who raised the point of order has already spoken. Is it appropriate—

The CHAIRPERSON (Lindsay Tisch): That is not a point of order.

A party vote was called for on the question, That the question be now put.

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Papers 153 and 155 in the name of the Hon David Carter to Part 1 be agreed to.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Amendments agreed to.

The question was put that the following amendments in the name of the Hon Annette King to Part 1 be agreed to:

delete clause 4;

delete clause 5(1);

delete the definition of “good quality” in clause 5(3);

delete clause 7;

delete clause 8;

delete clause 19;

delete clause 20; and

delete clause 25(2) and (3).

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 156 in the name of Darien Fenton to insert new clause 5A be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 159 in the name of Eugenie Sage to clause 11 be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 160 in the name of the Hon Annette King to insert new clause 17A be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 156 in the name of Darien Fenton to insert new clause 20A be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 158 in the name of Eugenie Sage to clause 21 be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 160 in the name of the Hon Annette King to clause 22 be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 159 in the name of Eugenie Sage to clause 23 be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 160 in the name of the Hon Annette King to clause 24 be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 157 in the name of Denise Roche to clause 25 be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Part 1 as amended agreed to.

Part 2 Transitional provision and consequential amendments

The CHAIRPERSON (Lindsay Tisch): Members, we now come to debate on Part 2. This is debate on clauses 27 and 28 and schedule 2.

Chris Hipkins: Mr Chairman.

The CHAIRPERSON (Lindsay Tisch): Chris Hipkins—first off the block.

CHRIS HIPKINS (Labour—Rimutaka): Thank you, Mr Chairman. It is about time. Part 2 deals with the transitional provision relating to proposals made before this bill, the Local Government Act 2002 Amendment Bill, comes into effect. I want to know whether this transitional provision applies to the secret deal to do that Nick Smith cooked up with Fran Wilde over a year ago to do with the Wellington region. Will this transitional provision apply to that? We know that Nick Smith cooked up a deal with Fran Wilde over a year ago—over a year ago—to reform local government in the Wellington area. And the provisions that have been enacted in Part 1 mean that Wellingtonians will not get a chance to have a say on it. They will not get a chance to have a say on it unless they sign a petition demanding to have a referendum. At the moment, under the current law, they would get a chance to have a say on that, but, oh no, Nick Smith knows better, so he decided to do away with that. The proposal that he has cooked up to reform local government in the Wellington area—he has not been upfront about it; it has not been a formal proposal—will probably not actually be covered by these transitional provisions, and I think that is disgraceful. I think that is disgraceful. That is what this Government does.

This Government does not actually have any respect for the democratic process. Nick Smith is the same Minister who when confronted with the reality that people in Christchurch did not particularly like what the Government was doing there just decided that the best way to deal with that problem was to cancel the elections—just to not have the elections. The Government did not want to know what the people of Christchurch actually thought. We heard Nicky Wagner early on in this debate talking about the importance of grassroots democracy in Christchurch, yet she has said absolutely nothing about the cancellation of local government elections in Christchurch. The member for Christchurch Central has had nothing to say about the cancellation of local government elections, which her constituents are very upset about. They are very upset about that, and Nicky Wagner has not said one squeak in their defence—not one squeak in their defence. And then she had the audacity to lecture Parliament about the importance of grassroots democracy.

This bill is a terrible piece of legislation. It narrows down the scope of local government. I just want to draw the Committee’s attention to one comment made at the select committee by someone whose view I respect quite a lot, and that is Martin Snedden. I asked Martin Snedden at the select committee hearing what the impact of this bill would have been on the Rugby World Cup had it been in place when Rugby World Cup took place last year. I remember word for word what Martin Snedden said. He said: “A lot of New Zealanders would have had a lot less fun.” A lot of New Zealanders would have had a lot less fun. That is it—members of the National Government do not like people having fun. They hate fun, in fact. They do not like it. They hate democracy. They are not interested in the views of the voting public. They command a majority in the House, and that is all they need to know. They will shut down the debate when they do not like the points the Opposition is raising. They will vote to shut down the debate, because they do not like it when the cold, hard truth comes out about the absolutely disgraceful attitude they have shown to the democratic process in pushing this bill through.

The people of my electorate are very concerned about this piece of legislation, and I come back to Part 2 and the transitional provisions that are contained in Part 2. The reason that the people in Upper Hutt are very concerned about this is that they think their fate has already been sealed. They think the Government has already decided what it wants to do in the Wellington region and that it is just not being upfront and honest about that. The people of Upper Hutt want a say in what happens to their local government. I can tell Nick Smith, who talked about his constituency, that I have one of those as well. Overwhelmingly, the people in Upper Hutt do not want their local government to be the subject of amalgamation. Overwhelmingly, the people of Upper Hutt do not want their local government to disappear, but that does not worry Nick Smith. He has already decided what he wants to see happen in the Wellington region.

Hon Dr Nick Smith: What have I decided? Let me in on the secret.

CHRIS HIPKINS: He has already decided, and even now he is still not willing to get up on his pins and actually say what it is—actually say what the decision making is. But, of course, we will have to wait until he is reinstated to Cabinet before we find out what Nick Smith’s proposal for the Wellington region is. But the people of Upper Hutt, whom I am proud to represent, do not want to see Upper Hutt swallowed up in a Wellington super-city like the National Government does.

They took some heart from the Prime Minister’s statement. I am paraphrasing here but he basically said the Government is not going force local government reform on the rest of New Zealand the way it did in Auckland. Yet this bill allows the Government to do exactly that. It is another promise that John Key made that he had no intention of keeping. John Key is very much the “Simon Says” Prime Minister: “Don’t pay any attention to what I’m actually doing; just listen to what I say.” Regardless of what he is actually doing, he will go out there and say one thing while his Ministers in his Government will do something completely different. That is National’s approach to governing. As long as John Key can go out there and smile and wave for the crowds, he thinks that his Ministers can get away with doing whatever they like. And if that means they bring legislation to the House that directly contradicts promises that John Key has made, he does not really care. He is probably quite relaxed about it, in fact. This bill is an anti-democratic piece of legislation that robs New Zealand citizens and residents who are subject to local authority rule in their area of their democratic rights.

This Government ultimately has no respect for the role of local government in their local communities, particularly not in Christchurch, where, actually, the role in local government after something as big as the earthquake is vital. It is not just the city council but Environment Canterbury as well. The National Government’s approach to that is to simply cancel all democratic participation in that process, and cancel the ability of the voters of Christchurch to have their say on issues to do with Environment Canterbury. Why did it do that? What was its justification? Government members were actually quite upfront about it. They were worried what the outcome of an election might be. That is not a secret agenda; they were actually quite open about that. They actually went out and said they do not trust the people of Christchurch to make the right decisions and elect the right people to Environment Canterbury, so they simply cancelled the elections.

Phil Twyford: They’re wanting water for their corporate dairy-farming mates.

CHRIS HIPKINS: That is right. They want to protect the water for their corporate dairy-farming mates, as Phil Twyford just pointed out. This Government has no respect for grassroots democracy. I want to conclude with a quote from David Shearer’s speech to the Labour Party conference last Sunday. He said that the rebuild of Christchurch should be driven from the grassroots up, not the Beehive down. That is the absolutely right approach to the rebuild of Christchurch. This Government does not want a bar of that. Government members do not want to hear what the residents of Christchurch have to say, and if they have to cancel an election or two to make sure they do not get a chance to have a say, that is exactly what they will do. They do not want to hear the views of the people in Wellington about local government reorganisation, either. If they have to change the law to deny them their right to have a say on local government reform in Wellington, that is exactly what they are going to do. That is exactly what this bill does.

This bill is an attack on local democracy. It should not be passed by this House. The people who are voting in favour of it, in particular a local Wellington member by the name of Peter Dunne, should be ashamed of themselves. This bill goes against so many of the things Peter Dunne tells his local citizens, his local constituents, that he supports. It goes against so many of the promises that he has made to local people about his respect for their views and their democratic rights. I am very, very disappointed that Peter Dunne is supporting this piece of legislation. It is bad legislation, and we will be voting against it.

Hon Dr NICK SMITH (National—Nelson): I want to make just a brief contribution in respect of Mr Hipkins, because he does not know the history of his own party. Mr Hipkins says that change to local government without local democracy is an affront to the values of the Labour Party. Do you know who the spokesperson on local government is for the Labour Party? It is another member for Wellington, Annette King. If he checks the parliamentary record he will see that Annette King, Phil Goff, and many of those actually voted for legislation that just simply said: “Central government has decided we’re going to merge all these councils and the lot of you can get knotted.” Did Chris remember that? Did he read that bit in the history of the Labour Party? Does he support Annette King and her views on local government, expressed in 1989?

You see, the provisions in this part of the Local Government Act 2002 Amendment Bill certainly facilitate local communities making changes to their councils. Yes, the bill does that, but it also says that local communities will be in control and will drive that process, and that if only 10 percent of them in even just one district want to have a referendum on that change—that might be in Wellington.

I have got a further challenge for the member for Rimutaka. He says that Nick Smith and Fran Wilde have got a magic plan they stitched up a year ago on the reform of local government. Could he just fill me in? Could he just tell me what it was? I do not have any idea, and I would like to be in the loop.

The provisions that are in this bill have actually been quite carefully nuanced by the new Minister of Local Government, David Carter. There are a number of significant changes that respond to the submissions. For instance, now it takes a petition of only 10 percent in any one district for there to be a referendum triggered. There is a more refined thing about the Local Government Commission being satisfied that there is significant community support in areas. There is a whole series of amendments in Supplementary Order Paper 153 that make this into a sensible reform bill that will let local government change occur. It will not be forced by central government, but will be better than the situation over the last 13 years where a number of councils have wanted to make changes and every single one has been rejected. Members opposite know in their heart of hearts that there are areas of New Zealand where local government reform would be sensible, and the provisions in this bill allow that to take place in a sensible and consultative manner.

Hon ANNETTE KING (Labour—Rongotai): Prior to that contribution from Nick Smith we had a powerful speech, a passionate speech, by the local member for Rimutaka, Chris Hipkins—a member who is in touch with his local community and actually knows what the people of Upper Hutt want in terms of local government changes. So I was hoping—maybe it is hope against hope—that the Minister in the chair, the Minister of Consumer Affairs, might get up on his hind legs and answer some questions about whether these transitional arrangements apply to the jack-up that was done with Nick Smith.

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member—

Hon Annette King: Oh, I was in full flight. We could keep going. I will be back.

The CHAIRPERSON (Lindsay Tisch): Order! The time has come for me to leave the Chair.

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

The CHAIRPERSON (Eric Roy): The House in Committee is resumed on the Local Government Act 2002 Amendment Bill. Before the dinner break we were debating Part 2. The Hon Annette King has the call. She has just under 4½ minutes, should she require that.

Hon ANNETTE KING: Oh, I certainly will require it, because I was just getting warmed up at this point and saying to the Committee that we had just had an extremely passionate speech from the member for Rimutaka, who is very well connected to his community and very well aware that any changes to local government in the Upper Hutt area would be strongly opposed by the people up there. He knew what was going on in his community.

He did ask the question about whether the transitional arrangements in Part 2 would apply to any deals that have been done for local government amalgamation in Wellington. I have to say that my colleague did get something wrong. It was not a year ago that Nick Smith was working on these changes with the Hon Fran Wilde; in fact, it was for most of the beginning of this year. I would like Nick Smith to get on his feet and deny that he was meeting on a regular basis with Fran Wilde around Better Local Government. In fact, I believe that she had a very large input into what we ended up with.

This part of the Local Government Act 2002 Amendment Bill provides the transitional provisions if there is a reorganisation proposal. I was hoping that we would have a Minister in the chair who would be able to explain what the transitional provisions would be. But, unfortunately, we are on the third Minister in the chair. None of them have been the Minister responsible for the bill. None of them have been able to open their mouths. They have all had their heads down doing whatever they are doing—crossword puzzles or sudoku or whatever—but they have not been concentrating on this bill. They have contributed nothing to this debate. Would you not think it was pretty insulting for local government in New Zealand and people who support local democracy that you could not have a Minister who could stand up and make even a little contribution—even if it was “I move that the question be now put.”? That was Maggie Barry’s contribution to this debate. I am hoping that she has got a lot to say. I am hoping that she has got a lot to say on the transitional provision, because I will be mightily surprised if she has. What we found out in the Local Government and Environment Committee was that if you have a look at this page about the transitional arrangements, it is pretty much a blank one.

Hon Member: It’s across the page.

Hon ANNETTE KING: No, it goes into the schedule after that. If you wanted to know what the transitional arrangements are, which members of the select committee tried to find out—we found that they are a work in progress. That is how I would put it—a work in progress. A lot of what is going to happen in the transitional arrangements—not the reorganisational arrangements but the transitional arrangements—is going to be worked out at some later, undefined date. If you recall, we did ask why the Government did not consult with Local Government New Zealand on some of the ways the transition would take place. In fact, it was because the Opposition insisted that we send part of this back to the Department of Internal Affairs—and it sent it back to Local Government New Zealand—that Local Government New Zealand actually got an input into the transitional arrangements at all. It had not been consulted, and that is what has come through in so many of these submissions that we received from local government—the lack of consultation. You would have thought that when you wanted to have a reorganisation take place you would work with Local Government New Zealand and ask what works, how it would work, what a chief executive would do, what a council would do, how many councillors you would need to have in a transition, etc.

Andrew Little: That would be sensible.

Hon ANNETTE KING: You would have thought that that was very sensible. Well, there was a lack of clarity at the select committee around the transitional provisions. We can certainly talk when we get to the schedule about the reorganisation provisions. There are quite a lot in there, and quite a lot of work. But this is an area where I believe a lot more consultation and work could have been done.

I am really very, very sorry that Peter Dunne has not contributed to this debate, particularly around the transitional provisions. He is a member of Parliament in Wellington. We know that there are three or four areas that Nick Smith has had his eye on for amalgamations for some time. Those areas know who they are. The Hawke’s Bay knows that it is under the gun and that it is looking at amalgamation in the Hawke’s Bay—Hastings, Napier, Wairoa, the southern Hawke’s Bay area. It knows that it is one of them.

The other one, of course, is Christchurch. One of the reasons that the Government has delayed the elections for Environment Canterbury is so that when it gets its rearranged council in place, there will be an election, perhaps on the rearrangement, but not on Environment Canterbury elections at this next election. We also know that the far north itself is interested; maybe it will come up with its own arrangement, because it will work it through.

The other one is Wellington, which is why I am very disappointed that Peter Dunne has not made a stand or made a comment on any arrangements here for Wellington. It was interesting to read in the Whakatane Beacon, I think, that the deputy leader of his party, Judy Turner, said only a few days ago—

Moana Mackey: And Deputy Mayor of Whakatāne.

Hon ANNETTE KING: —and she is the Deputy Mayor of Whakatāne, my colleague reminds me—in the paper that Peter Dunne was considering his position on this bill; he had not made up his mind. When we got a vote in Part 1, we had Peter Dunne voting against everything. So either he has duped his deputy, or he never ever intended to consider changing his mind on this bill.

I was also surprised that the Māori Party voted against the four well-beings. That was a surprise to me, because it has insisted that well-beings be included in all the Treaty legislation that we have been passing through this House. So it is OK to have it in Treaty legislation, but it voted against my amendment to include the four well-beings in the Local Government Act 2002. That would be hypocrisy, in my view, to actually insist on it when it is legislation that you are interested in as the Māori Party, but, because local government is not so interesting to you, to not support the well-beings being in that legislation.

I think that this is a poorly thought-out part of this legislation. I have moved Supplementary Order Paper 160 to amend clause 27. What I have moved is some very sensible ways that you could go about a transition. In it I say that you should consult “with all affected parties, including stakeholders and staff …” involved in any transition, because they ought to know what is happening. It is not a transition made with a small group of people. You need to involve the staff and you need to involve the real stakeholders in any changes that are going to be made in a reorganisation proposal. I believe that it has got to be “conducted on a basis of trust and good faith in negotiations;”. I have included some of these in my Supplementary Order Paper.

I said that reorganisations should also be based on principles. Imagine that—imagine having a bill that is based on principles! What a unique idea for this Government. The principles that I have suggested are that any changes, any transitions, need to be “evidence-based, have a clear and robust rationale, and be derived …” from some very key issues. One is that they “must provide good governance and be capable of adapting to meet immediate needs …” in the long term in that community.

These are sensible suggestions. I suspect the Minister in the chair, the Minister of Commerce, would not have read any of the Supplementary Order Papers. He probably does not even know what Supplementary Order Papers the Minister of Local Government himself is proposing, but I would say that if he does nothing else tonight, when he has finished his sudoku he should actually pick up the Supplementary Order Paper that I have put on this particular provision, the transitional provisions in clause 27. Have a read of it because it is an extremely sensible way of going about transition and reorganisation. It comes from work that has been done on transitional arrangements and reorganisations out of Australia and working with Local Government New Zealand in this country—

EUGENIE SAGE (Green): I am pleased to take a short call on Part 2 of the Local Government Act 2002 Amendment Bill, not because we support it but because Supplementary Order Paper 159 in my name would delete the transitional arrangements for reorganisation provisions that are in clause 27. That was intended as a consequential amendment to the rest of the Supplementary Order Paper, which sought to delete clause 23 and the corresponding schedule 1, which sets out these new reorganisation provisions. The reason for the Supplementary Order Paper and the retention of the current reorganisation provisions, which are set out in schedule 3 of the principal Act, is that there is no evidence that the current law is causing a problem. When there is an initiation and implementation of a reorganisation proposal, it requires quite careful thought to minimise any adverse impacts, and to ensure that it benefits residents and ratepayers. So the current criteria in the Local Government Act strike the right balance, in our view, between enabling such reorganisations and mergers to occur where their implications have been properly assessed, where those proposals have community support, and where they promote good government.

But National wants the changes that are in this bill because the previous Minister of Local Government, the Hon Dr Nick Smith, was aggrieved that the amalgamation of Nelson and Tasman districts did not succeed. Why did it not succeed? Because Nelson residents voted down the proposal in overwhelming numbers. The previous Minister knew that they would vote it down from indications in the community. There were 24,857 people against that proposed amalgamation.

Under the current Act it is a democratic right for local residents and ratepayers to have their say about how they should be represented and how they should be governed, through the mandatory requirement for a poll. But this bill extinguishes that right and requires electors to get up a petition before there is a poll. Certainly, in the Minister’s Supplementary Order Paper there has been some tweaking around the edges. Now there are 60 days to get up the required number of signatures on the petition, and the petition can be in each area rather than the whole of the area, but the bill still extinguishes that fundamental right to have a mandatory poll, and for people to have a say. That is because this Government does not like people voting. It does not trust democracy, as we have seen in Environment Canterbury, with the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act in 2010, and the extension of the suspension of regional democracy there.

So why is the Government so keen on reorganisation? It is because it wants to super-size councils. That makes it much easier to contract out the provision of council services, yet the Local Government and Environment Committee heard a number of times in Auckland from local boards about the longer decision-making lines, the less accountability, and the more difficult access to decision makers that comes when you get big councils.

The Supplementary Order Paper goes back to the provisions in the substantive Act. One of the other reasons that we are opposing the reorganisation provisions is that the bill puts a new section, new section 31A, into the body of the principal Act, and that gives the Minister the power to “specify measures and expectations relating to the Commission’s performance … of its powers …” and duties. The bill specifically mentions time frames against which the commission must progress certain matters, and which applications are to have the highest priority. So what we are seeing here is, once again, “control central” in operation. Local government is being directed from Wellington not only through the much-expanded powers of ministerial interference—so that councils are always looking over their shoulders to see what the Minister is thinking in relation to their fiscal performance because they are scared of being replaced by commissioners or having a Crown manager supervise what they are doing—but also because here, instead of the Local Government Commission operating at arm’s length from the Minister in reorganisation proposals, the Minister can prioritise which proposals are to get priority. As the Hon Annette King noted, there are certain areas where the Government wants these reorganisation proposals to proceed.

This bill is bad because I suspect we will get the same voting of 61 votes to 60 on this part that we had on Part 1. What does that mean? It means that we get zigzag policy-making, because there is not reasonable consensus in this Chamber on something as important as local government and the reorganisation procedures that should apply to amalgamation. There is strong opposition to the bill. On something that is as important as local government, which is such a strong sector of the economy, and which is so important in providing for communities and promoting community well-being, we have dramatically opposed views, and the bill is going to only just scrape through. Zigzag policy-making is not good law. The process by which the bill is being rushed through without careful thought is not conducive to good lawmaking.

ANDREW WILLIAMS (NZ First): I take a call on Part 2 of the Local Government Act 2002 Amendment Bill. This afternoon in this Parliament we had the visit to New Zealand of Crown Prince Philippe of Belgium. It is ironic that on the same afternoon that His Royal Highness visited this Parliament, where we have the names of Passchendaele, Messines, and other great battles fought for democracy and for the rights of people to live in freedom, and when the Prince of Belgium came to this Parliament to reciprocate the great and lengthy relationship that New Zealand has had with Western Europe to fight for democracy, this Government rams through the Local Government Act 2002 Amendment Bill on a slim 61 to 60 vote that is hanging in the wings with the Hon Peter Dunne, who, as we have heard before, double-crosses the bridges when he comes to them. In this case he has obviously given his party deputy and others around the country one message, but then does not turn up to this Parliament, and gives his vote to the National Government to allow this bill to go through by 61 votes to 60.

It is most interesting, therefore, that in this country—which has always stood as a democracy; it was the first country in the world to give women the vote, and it sought to be a country that stood by democracy, and sought to make sure that the democratic principles were upheld and that we stood for those—this Government would ram through a bill that basically kneecaps and reduces the democratic level of our second tier of government, our local government in New Zealand. It is very much the case that, as a result of this bill, our second tier of government—and we do not have more tiers of government, unlike many other countries, and unlike Australia, which has several more tiers of government than we do; the United States and many other democracies have several more tiers than we do. We have only central government and local government. What this National central government is doing, supported by the ACT Party and by United Future, is basically kneecapping and pulling the rug from underneath local government.

I think that what is most disturbing here is that in Part 2, which discusses the transitional arrangements, again it has been shown that this Government has had the arrogance to not properly consult with the likes of Local Government New Zealand—the body that represents the 78 councils in this country, that has as its president Mayor Lawrence Yule, the Mayor of Hastings, that has many mayors and chairs of regional councils around New Zealand sitting on its board, that has senior executives who have extensive experience in local government, and that is the mouthpiece on behalf of local government in New Zealand. Yet throughout this Local Government Act 2002 Amendment Bill the Government has shown a complete disregard, really, of the need to sit down with the very body that represents that sector and say: “Is this right, is this workable, and is this really going to work for local government in New Zealand?”.

Can you imagine if this was a bill that was affecting Federated Farmers, if this was a bill affecting Business New Zealand, or if this was a bill affecting the chambers of commerce in New Zealand? National members would be out there seeing their mates in Federated Farmers, such as Conor English, the brother of Bill English. They would be seeing Phil—whatever his name is—at Business New Zealand. What is his name? Phil—

Sue Moroney: O’Reilly.

ANDREW WILLIAMS: —O’Reilly. They would be seeing Phil, they would be seeing Conor, they would be seeing all their mates, and they would be sitting down and saying: “How does it work for your sector? How does it work for your sector, is this right for your sector, and is it going to have the right outcomes that we need to help your sector succeed and do better?”.

But did this Government do that? No, it did not. It did not sit down and properly consult with Local Government New Zealand. It did not sit down and properly consult with the many councils of New Zealand, with the many mayors and councillors, some of whom have got two, three, or four decades of experience in this field. They did not sit down and consult with them. Many of them are National Party mayors and regional chairs, and National does not even understand the fact that its own party members, its own mayors in some of these areas, are saying to it that they are National Party mayors or councillors—or they were—and they do not agree with their own Government and their own party. What does that say to you? What does it say to you about the arrogance of this Government that it even ignores senior local government people who have had responsibility for the infrastructure of this country, the communities of this country, and building up the communities of this country over many decades? This Government will not even sit down and consult with them.

Then when the councils went to the Local Government New Zealand conference this year, back in July, all 78 councils passed a vote unanimously saying that they did not support this bill. I have never seen that ever—a situation like that where 78 councils would unanimously vote that the Government has got it wrong in this respect. That is incredible, as is the fact that probably the majority of those mayors were National Party mayors and councillors. Is it not extraordinary that they cannot even support their National Government on this? It is very, very disappointing.

In terms of many of these transitions, we saw the problems in the Auckland transition. There were many and they were huge. This National Government rammed the Auckland Council through, it rammed the amalgamation in Auckland through, and now—only now, a couple of years later—we are seeing the outcomes of that. There are some big problems there, and there are some huge cost blowouts. There are some massive costs in terms of the merging of the computer systems and the merging of the staff systems and all sorts of other systems. What we were promised from this Government was a reduction in rates in Auckland. We were promised more efficiency in Auckland. We were promised all sorts of things from this Government.

Remember, this was John Key’s idea back in 2005-06 when he was a backbench MP sitting back up in the gods. As a backbench MP he said he wanted to form a super-city in Auckland, and he would get it. He became Prime Minister and then handed it over to Rodney Hide to do his dirty work for him. So, people of New Zealand, just remember that it was not just Rodney Hide. It was John Key, backbench MP, who had a member’s bill that never got picked from the ballot. Do not look at me like that, Nicky Wagner. Look back there in the records. John Key had a member’s bill to create a super-city in Auckland. It never got picked from the ballot. So always remember, New Zealand, that John Key created the super-city in Auckland, but he got Rodney Hide to do his dirty work.

Now look at what we have got in Auckland. We have got a shambles there. We have got 75 percent of Auckland’s business being controlled by council-controlled organisations, unelected people, people whom nobody knows—all mates of the National Party, all hand-picked by Rodney Hide, all put on these boards. They will not even provide the minutes of their meetings to the elected councillors of Auckland. They will not even provide the minutes of their meetings to the elected council of Auckland. It is shocking. That is what this National Government has set up in this country. It is setting up for the rich, the well-to-do, those who have got influence, and those who can basically get into the ears of John Key, Steven Joyce, Bill English, and the likes of them. It is very poor. Now they have got the ear of Nick Smith, who is going to be the future—well, he was the past local government Minister. He will be back in that seat by Christmas, when Lockwood goes to Britain and when David Carter takes over the Chair as Speaker. Nick Smith will be back in there, and you can bet your bottom dollar that all these Draconian things in this bill will come to haunt everyone in New Zealand. The communities of New Zealand will be absolutely devastated when they see the effects on their communities around New Zealand.

In closing, I will just say that everyone agrees that efficiencies can be found and savings can be found, but this is not the way to find savings in New Zealand through our local government. This is not the way. Local government in New Zealand responded to the Government’s call to increase infrastructure in New Zealand. John Key in 2008, as the Leader of the Opposition, said: “We have a $60 billion shortfall in infrastructure in this country, and $30 billion has got to come from local government or this country will go backwards economically, and economic development is dependent on local government playing its part in this.” Local government responded to the then Leader of the Opposition, John Key, and it said it would step up to the mark. It has increased expenditure from $2 billion to $8 billion to provide that infrastructure at the same time as the National Government has taken its deficit from something like $16 billion to $55 billion, and it is heading to a $72 billion deficit.

So do not, Dr Nick Smith, lecture us on going from $2 billion to $8 billion in local government when your Government, in 4 short years—4 short years—has gone from $16 billion to $55 billion deficit. Local government responded to your leader, John Key, and his speeches to Local Government New Zealand. I have the speeches in my box here. The speeches are here. They responded to him. He said: “We have infrastructure deficit in this country.”

MOANA MACKEY (Labour): I think nowhere is it more clear than in Part 2 of the Local Government Act 2002 Amendment Bill how rotten and how inadequate this piece of legislation is. Part 2 deals with the transitional provisions relating to reorganisation proposals. As other members have pointed out, it is how we carry out the reorganisation of local government that is critically important, yet Part 2 is about five or six sentences long. That is all that is in Part 2 of this bill. The Local Government and Environment Committee wanted to know some of the detail about what actually would be required when the transitional provisions were released. We were given a little bit of information. It is extraordinary that Local Government New Zealand was not even consulted on this particular aspect of the legislation until the select committee demanded that its input be taken into account.

In the debate on Part 1 I thought a couple of the interjections from the Hon Dr Nick Smith, who is soon to return to the portfolio of Minister of Local Government, were interesting. When someone was making comments about Local Government New Zealand, he called out that they were self-serving and nothing more than a union. Of course, coming from the National Party calling someone a union is the ultimate kind of denigration that you could possibly come up with. We do not think it is quite the insult that, obviously, the Hon Dr Nick Smith thinks that it is, but the reality is that Local Government New Zealand is not a union. It is not self-serving. It is the mayors and councillors around this country who are democratically elected to represent their communities. They know far better what is needed on the ground in terms of local government legislation than the Hon Dr Nick Smith does, or, indeed, any member of this House. They come together as a group to discuss issues of importance to local government. They are there as a resource for parliamentarians to use when considering changes to local government legislation. They are not self-serving; they know what they are talking about. They are the people at the coalface everyday doing the stuff that the Hon Dr Nick Smith only talks about. We do not think they are self-serving on this side of the House; we think they should be listened to. It is interesting that a number of them are National Party members, particularly in the provinces.

Hon Dr Nick Smith: The good ones.

MOANA MACKEY: Nick Smith says “The good ones.” Well, whether they are good, bad, or indifferent, they are not happy with you, Dr Smith—not happy at all. In fact, I have a number of provincial mayors in the area I live in who I know are National Party supporters and who are furious with this legislation. They are furious that the Minister is refusing to listen, especially on issues around reorganisation and how those are transitioned through, because there are no guidelines. You do not even have to show that there is going to be a positive benefit for the communities involved for reorganisation to go ahead.

We know that the Hon Dr Nick Smith does not like local government democracy. He said that he stopped the elections for Environment Canterbury, the regional council in Christchurch, because he was worried about the outcome, such is the nature of democracy, such is the nature of having a democratic process where the people, instead of the Minister of Local Government, get to choose who represents them on their local council. It might be annoying for a Government sometimes that it does not get the people it had hoped the good people of Canterbury would elect, but that is just the reality of democracy, unfortunately, and it should not be undermined in the way that it is being undermined in Part 2 of this legislation. As my colleague Annette King pointed out when she discussed her proposed amendment to clause 27, surely it is not too much to ask that when local government reform is happening, it must comply with a few basic principles, one being that it must be evidence-based. We have now had three Ministers in the chair who have all sat there like dried arrangements and not even looked up from their papers. I do not know whether they even know what bill we are discussing, but it would be nice to actually have some input from a Minister on this very important piece of legislation. Why is it too much to ask that local government reform be evidence-based, have a clear and robust rationale, and be derived following consideration of key options and what each would achieve? All we are saying is that there are many ways you could reform local government and many different ways you could do it. There are different councils you could combine together and there are different structures you could come up with.

I note that the Wellington City Council has put up its own proposal for a one-tier structure of a Wellington super-city, which differs from the other proposal, so there are many numerous and different ways that you could do it. Why is it unreasonable that the legislation should say, firstly, that you do not go in with no evidence and make these changes? You have to be able to explain clearly why this is a good change for the communities that are involved. But probably most important is that you have actually considered all the options available, not just one single option that might be being pushed by a certain group or a certain person, and there have been references to people whom Dr Nick Smith has met with who have their own preferences around what a Wellington reorganisation might look like. Surely, we should be saying that if you are going to take this major step of reorganisation, which is going to be costly and which is going to be disruptive, on the other side there are clear benefits, and they are evidence-based. But you would have considered every possible option that would be available in that reorganisation. You did not just go with the preferred option of the Minister of the day, who has, probably, his own preferences and his own ideological bents that he wants to see come through in that, or a proposal from the Opposition, which is going to have different priorities and different focuses, or a proposal from Federated Farmers, Business New Zealand, different community organisations, or organisations that represent different ethnic groups. There are so many different ways it could be done, yet this legislation is silent on it.

It basically says that the Government can do what it did in Auckland. It can come up with the one structure that it wants, regardless of whether the people in that district want it, and say that that is the only option they are going to get, that it does not have to consider anything else and does not have to have any evidence, and that there does not even have to be any benefit to it, and that is OK. That is what Part 2 of the bill currently says. I want to know from the Minister in the chair, the Minister of Commerce, why, as I am assuming he will, he is going to vote down such a common-sense approach, which provides protections for the ratepayers. We have heard a lot of talk about ratepayers from the National Party here tonight and yet the National Party is denying ratepayers around the country one of their most fundamental rights—the right to make their own decisions about the future of their local government organisations and not have anything imposed on them from above.

Currently, in order for a reorganisation to happen or an amalgamation to happen, it has to have the approval by referendum of all the different communities involved. Each council that is going to be amalgamated has its own referendum. If one of them says no, it does not happen, which is what happened in Dr Nick Smith’s own patch. So if you look in an area like the Bay of Plenty, the bulk of the voting strength is in Tauranga, in the Western Bay of Plenty, and a number of the social issues that local government has been really active in engaging with and working on are in the Eastern Bay of Plenty, which does not have the same population base. But we are not saying to Kawerau, or to Ōpōtiki, or to Whakatāne, or to Rotorua for that matter, that if the Western Bay of Plenty votes for it, sorry, they are just going to have to suck it up and live with it. Currently, it does not say that. It says that you have to convince all these communities that it is in their best interests. Otherwise it does not go ahead. What that means is that the work does get done on the ground beforehand. All those negotiations happen because they know that if any one of those communities says no, then it is not going to go ahead. So they make sure that the protections are in place for those communities that have concerns. It provides an incentive for that work to be done early, for it to be done genuinely, and for it to be done comprehensively before it gets near a referendum. Well, that is going in this legislation.

So now, again, the will of the majority will be imposed on the minority and that is very concerning for communities that have high levels of poverty, where the local mayors are active in highlighting those issues, and where they are active initiatives like the Mayors Taskforce for Jobs, which will no longer be under the mandate of local government once this piece of legislation passes. It says to those communities that, actually, what they care about does not really matter. Provided the majority push it through, we do not think that there needs to be any kind of guidance around how these reorganisations happen. What the National Government knows is that if it actually went through a robust process along the lines of the Supplementary Order Paper that my colleague Annette King has put together, it would slow it down and it would highlight the flaws in what the Government is trying to push through, because there would actually be time to consider all the issues, and time to engage with all the stakeholders. Annette King’s Supplementary Order Paper requires that all relevant stakeholders be consulted and worked with, and that those negotiations happen in good faith. We know that when these processes are subjected to the scrutiny that they should be subjected to, a lot of what the Government wants to push through simply will not fly. When there is time to give proper consideration, the flaws will be highlighted. That is why the Government wants to rush it through. That is why there is provision earlier on in this bill for the Minister to actually be able to cancel elections—cancel local government elections. Instead of having a process that goes over maybe 3 years and is informative, the Government wants to ram it through so that we can get this in place, and if we have to delay Wellington’s elections by a year, who cares, we will just push them out for a year because we need to get this done right now, because if we allow—

PAUL GOLDSMITH (National): I move, That the question be now put.

DENISE ROCHE (Green): The Greens will be opposing Part 2 of the Local Government Act 2002 Amendment Bill—we will be opposing the bill in total, actually—and I rise to support Eugenie Sage’s Supplementary Order Paper 159, which calls for the existing arrangements for the amalgamation of local authorities to remain.

What we are seeing with this bill, and what we are seeing with this part of the bill as well, is unprecedented meddling by central government in local government. We have seen it time and time again since National took power. What it is about is wresting control and assets from local authorities all over the country. We have seen it in Canterbury. We have seen that forced amalgamation in Auckland, as well. So this Government is not content with limiting the purpose of local government by removing the four well-beings, which also limits the rights and abilities of councils to set their own course for their ratepayers. It is also not content with increasing the power of the Crown to interfere and intervene in the business of local government. It is also not content to limit even the ability of local authorities to set their own staff numbers, and to interfere with local government’s ability to be a good employer and, basically, set councils up for a whole contracting-out culture. Not content with all that, this Government also wants to remove democracy, the ability of local citizens and ratepayers to determine whether they want to amalgamate their council with another. It removes the right to vote, and replaces it with a petition.

It says in the report that came back for the second reading of this bill: “The bill is intended to streamline local authority reorganisation procedures, give the Local Government Commission more flexibility to develop reorganisation proposals put forward by individuals, organisations, or communities, and make it easier and faster for proposals to proceed.” I said in my previous speech that the faster you go the bigger the mess, and we have certainly seen that in Auckland with the forced amalgamation there and the removal of democracy that occurred around the amalgamation. It certainly has meant that people in our communities in Auckland have quite a lot of resentment towards central government because of this interfering and meddlesome approach that it is taking.

Local government is at the heart of communities. It is where local democracy happens. It happens far more there than it does in these hallowed halls. The intent of the transitional arrangements around amalgamations is clear. It is about forcing amalgamations. Who are those organisations that can propose an amalgamation? Who would that be? Would that be organisations with vested interests? In Canterbury, would it be Federated Farmers, if they are unhappy about the water and the water plan? These are not issues that this Government should be forcing on to communities all across New Zealand. We will be supporting Eugenie Sage’s Supplementary Order Paper, which goes back to the status quo in the way that reorganisation proposals are handled, and we would urge everyone across the Chamber to do that. Thank you.

MAGGIE BARRY (National—North Shore): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Noes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Motion agreed to.

The question was put that the amendment set out on Supplementary Order Paper 153 in the name of the Hon David Carter to insert new clause 27AA be agreed to.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Amendment agreed to.

The question was put that the amendment set out on Supplementary Order Paper 159 in the name of Eugenie Sage to clause 27 be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 160 in the name of the Hon Annette King to clause 27 be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Part 2 as amended agreed to.

Schedule 1

The question was put that the amendments set out on Supplementary Order Paper 153 in the name of the Hon David Carter to schedule 1 be agreed to.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Amendments agreed to.

The question was put that the following amendments in the name of the Hon Annette King to schedule 1 be agreed to:

replace clause 21 with:

21 Poll must be held

A poll of electors on every final proposal must be held in each area or areas that the Commission determines is or are affected by the final proposal.;

replace the heading of clause 22 with:

22 Matters relating to polls; and

delete clause 22(1).

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

The CHAIRPERSON (Eric Roy): The amendment set out on Supplementary Order Paper 159 in the name of Eugenie Sage to schedule 1 is out of order as it is contingent on an amendment already negatived.

The question was put that the remaining amendments set out on Supplementary Order Paper 159 in the name of Eugenie Sage to schedule 1 be agreed to.

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

Ayes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Noes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Schedule 1 as amended agreed to.

Schedule 2

The question was put that the amendments set out on Supplementary Order Paper 153 in the name of the Hon David Carter to schedule 2 be agreed to.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Amendments agreed to.

The CHAIRPERSON (Eric Roy): The amendment set out on Supplementary Order Paper 156 in the name of Darien Fenton is out of order as it is contingent on an amendment already negatived.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Schedule 2 as amended agreed to.

Clauses 1 to 3

PHIL TWYFORD (Labour—Te Atatū): I would like to talk a little bit about clause 3, “Principal Act”, of the Local Government Act 2002 Amendment Bill, because I think this is an opportunity to reflect a little bit about the Local Government Act 2002, which in its time was quite an ambitious experiment. It was an initiative to modernise our legislative framework for local government. There is no doubt that it introduced a much more expansive role for local government, and at the same time it imposed some pretty rigorous and pretty heavy accountabilities on local government.

I think that if we look back over the last decade, you would have to agree that local government has changed the way it works in our country. Local government has become much more engaged with the community and much more consultative, and I think most people would agree that that is a good thing. The introduction of the four well-beings into local government really gave councils up and down this country the mandate to seriously try to ascertain the aspirations and the needs of their communities and to address them. On this side of the Chamber we would argue that that was a good and a progressive thing.

We do not hold to the view, even though it was a Labour piece of legislation, that the Local Government Act was perfect. In fact, it is our policy that it is time for a review of that Act, and that, in fact, some of the requirements for planning and consultation are actually pretty heavy and bureaucratic. It is our policy that it would be a good time now to do a review of the legislation to see how it could be streamlined—some of those bureaucratic demands on councils reduced and councils freed up to do what they should do in the interests of their communities. But what this bill does is nothing of the sort. It is an attack on communities, it is an attack on their democratic rights, and it fundamentally undermines a very important part of our system of government, and that is the local authorities.

I think this is the time, really, to reflect on what is good and useful about the Local Government Act 2002. You know, I think back to when Rodney Hide was the Minister of Local Government in the previous term. He set out with great ambitions. In fact, he used much of the political rhetoric that the Hon Nick Smith has used over the last year or so, but Rodney Hide was at least honest enough, having spent a year in the portfolio, travelled around the country, and spent time with mayors, councillors, and chief executives, to acknowledge that he had not understood local government properly. He acknowledged a lot of the worth of local government and what it does. His ill-conceived Local Government Act 2002 Amendment Bill really got wound right back, until finally the main thing in it was that it made it easier for councils to privatise their water supply for up to 35 years. But, in fact, all the great ambitions that he had to take a knife to local government and go down the agenda of rates capping in core services came to nothing, partly because many of the Tory mayors all around New Zealand actually beat a path to the National Cabinet and said “This is ridiculous. What are you trying to do?”.

Andrew Little: Those were the days when they listened.

PHIL TWYFORD: That is right. This second-term National Government has none of Rodney Hide’s intellectual honesty. All that it is left with is Nick Smith’s craven populism, and, unfortunately, the bill that we have got in front of us today reflects that.

Hon Trevor Mallard: Raven or craven?

PHIL TWYFORD: Craven. Last week I was with a large group of mayors and chief executives from councils around New Zealand—provincial and rural mayors and chief executives. They told me that they had been following the debate on this bill in the House, and they were disgusted by the speeches and by the interventions of the National Party members. They thought that not only had National not bothered to have the Minister in the House to front the bill—it put up the C-team—but the speeches were all slogans, all superficial populism, and really were just mounting ill-founded attacks on local government and failing to justify this bill.

This debate is also about the title clause. There are a number of options that I think we should consider for this bill. One of them, I think, is a title that came from one of the submitters who came along to the Local Government and Environment Committee, who said “This is a fantastic example of policy-based evidence-making.” I think that really sums up Nick Smith’s approach to governance and leadership. There is a lot of talk in this whole process about the evidence base, but, in fact, this reform process and this bill is a classic example—it is a howler—of policy-based evidence-making. That former Minister makes it up as he goes along. He is the “Minister of Shonky Numbers”, and this bill should be called the “Local Government (Policy-based Evidence-making) Bill”.

It also could be the “Stripping Democratic Rights From Local Communities Bill”. We said it in the first reading, and we will say it again now. This bill takes away not only the democratic rights of local communities to have their say—to be consulted or to have their views ascertained by unelected public servants—but also the right that they enjoy as New Zealand citizens right now to have a say in a binding referendum about whether their elected council should be amalgamated with a neighbour or taken out of existence. That is a fundamental democratic right that this bill takes away, and no matter how many times Jacqui Dean and the other members on the National benches say that this bill enhances grassroots democracy, it is clear that it does nothing of the sort.

It could also be called the “Rats, Roads, and Rubbish Bill”, because that old cliché about local government basically sums up the National Party’s philosophy on local government. The National Party is 40 years behind all of the international thinking about what makes successful cities and successful communities. Where an elected Government should have an expansive role and a joined-up approach to economic development, to social cohesion—

Hon Dr Nick Smith: Expansive sounds expensive.

PHIL TWYFORD: —and to social well-being, it wants to strip back local government to its bare essentials. Nick Smith sits there and he continues to witter away about rates and local council debt. He obviously has not been listening to all the commentators and all the submitters who came along and demolished his claim that somehow local government is out of control.

Hon Dr Nick Smith: What about Business New Zealand? What about Federated Farmers?

PHIL TWYFORD: Well, how about the Minster’s own regulatory impact statement by Department of Internal Affairs officials? How about the New Zealand Institute of Economic Research report saying that the councils are fiscally responsible? There are so many commentators and so many thinktanks that actually laid the data on the table at the select committee that made a nonsense of Nick Smith’s claims. I am amazed that the member has the gall to come to the House and show his face when this bill is being debated.

It should also be called, I think—if there is one last candidate for the name of this bill—the “Cheap Populism Bill”, because this is not good governance. This is not quality legislation. This is a sham by the Hon Nick Smith, who is trying to project the idea to ratepayers around New Zealand that he is their knight in shining armour.

Not only is this bill based on a lie, which has been conclusively proved at the select committee and in the public debate, but also there is nothing in this bill that will make a blind bit of difference to rates. It is based on a completely false promise. Not only is it based on a lie in the suggestion that councils are out of control and doing all these non-core activities, and that is the cause of the increased spending and increased council debt, but, actually, even if you accept that there is increased council debt for whatever reason, this bill will do nothing about it. There is nothing in here—changing the purpose statement, introducing graduated ministerial intervention, or taking away the democratic rights of local communities in a situation where councils are being reorganised or amalgamated—that will make a difference to the rates burden. I believe that this Government will live to regret an ill-advised local government reform agenda that will do damage—serious damage—to the ability of councils to serve their communities and meet their aspirations.

MAGGIE BARRY (National—North Shore): To the imaginative and fanciful utterances of the member who just resumed his seat, Phil Twyford, where do we start? Cheap populism? We were sort of laughing at the idea that this Labour group believes in expansive local government. What does that translate to you—expansive or expensive? There is nothing about what the last member said that will influence anyone. He witters on endlessly, using much the same sorts of phrases no matter what bill he is talking about.

Let us go back to Annette King. She took one of the first calls in this debate on the Local Government Act 2002 Amendment Bill. Conspiracy theories abounded, of course, and crises upon crises. But what crises does she refer to, apart from the ones in her own party around leadership, of course? She is a person who dismissed the submitters, and I take exception to that. I take exception to the idea that all of the submitters thought like she did, that they were listening to the evidence-based stuff. The Opposition members have apparently ignored any evidence that does not actually agree with their prejudices.

I will cite just one, for example—the New Zealand Chambers of Commerce and Industry submission. Michael Barnett, the chairman of the management committee, represents the interests of 29 chambers of commerce nationwide, which, in turn, represent about 20,000 small and medium enterprises and some of the biggest businesses in the country. This is something the opposing forces do not listen to, because it is not relevant—it does not fit the mould of their particular prejudices. But for those of them who did not listen at the time, let us refresh our memories about what Michael Barnett said in general terms about this Local Government Act 2002 Amendment Bill. He, of course. thought it was very important for local government to recognise the very critical role that it plays and that it is able to make in a competitive, productive economy through the delivery of efficient and responsive services. These are the kinds of things that the Chambers of Commerce and Industry wants to encourage local government to do, and that is why it commended this piece of legislation. It strongly agreed with the bill’s intentions and measures that require local government to focus on activities that cannot be provided currently by individuals, firms, and voluntary groups, and that are not performed by central government.

The whole idea of the four well-beings is nonsense, and the Chambers of Commerce and Industry agreed with us that they have to go. The submission of course made the point that we have made many times over the past 5 or so hours around rates increases. They have increased by an average of around 7 percent per annum since 2003—more than double the rate of inflation. Of course, the submission talked about local government debt, which had quadrupled over the past decade from $2 billion to $8 billion. This has been touched on by many members on this side of the Chamber in debating this motion today.

There are 78 councils in New Zealand. The local government league table has identified 25 percent of them—around 30 of these territorial authorities—that are classed as financially unsustainable. That is according to a league table that was published last year. The report noted: “Over the last 10 years or more, councils’ financial positions have deteriorated markedly. … Their communities will soon be pressured with increases of Council rates and charges that if left unchecked will reach unacceptably high and unaffordable levels. Now is the time to turn these circumstances around.” We agree with that.

So not only do we have 20,000 people involved in business who support this legislation but also we are told in a recent survey by the New Zealand Council for Infrastructure Development that around 80 percent of New Zealanders—that is, people who live in this country; they do not dwell on “Planet Labour”, “Planet Greens”, or “Planet New Zealand First”—actually believe that the councils have lost focus, and a majority support refocusing council roles, which is exactly what this legislation does. It will give councils more tools to keep debt down and rates affordable—

Andrew Williams: Tell Fulton Hogan that. Ask Fulton Hogan what they think.

MAGGIE BARRY: —something that is, of course, going to be lost for ever and a day by the failed former Mayor of North Shore, who pipes up unhelpfully from time to time. We see, as well, that on the select committee there was an inability of Opposition members to work constructively together on the bill. That has meant that this bill has come back to the House largely unchanged, and is why we have this Supplementary Order Paper 153, which I commend to the Committee.

I think that this is a bill that definitely does provide clarity, efficiency, and much more responsible financial management. It is long overdue. When this legislation first went through in 2002 National vowed to overturn it. We heard today from Moana Mackey that in the unlikely event she ever becomes powerful again in Government and Labour takes the Treasury benches, which is highly unlikely—I am not sure where she fell on the leadership struggle; she might find she is a bit further down the pecking order than she might like to be—Labour will actually bring back the four well-beings. If that is not the nail in Labour’s coffin I would be surprised, because there are people in this country who do pay close attention to what goes on in this Chamber and to what goes on in select committees. They clearly identify that Labour is a party that has lost touch and does not listen.

When we sat there on the Local Government and Environment Committee we heard the submissions and heard the quality of the utterances, taking away some of the more emotional stuff that some of the members have tried to do, the emotional rubbish around the four well-beings, and the scaremongering from the theatre luvvies and the others, who really have nothing to fear, because local authorities will be able to do what they feel they can do if it is economically sustainable. I commend this Supplementary Order Paper 153 to the Committee in its entirety. Thank you.

MOANA MACKEY (Labour): I am pleased that Maggie Barry has woken up and given us her speech on Part 1 of the bill, the Local Government Act 2002 Amendment Bill. It is a little bit late, because we are actually up to clauses 1 and 2 of the legislation, but I welcome her Part 1 speech none the less. I thank the Chair for his indulgence in allowing her—a few hours late, granted—to finally give her speech on Part 1 of the bill. It actually had nothing to do with the title and commencement of this particular piece of legislation.

Again, you see this extraordinary rewriting of history, because, yes, there were submitters who came along and said that they supported the general thrust of the bill. But under questioning, they could not actually say that they had any confidence that what the bill was actually putting in place was going to deliver the promised outcomes. When we put the facts and evidence to them—Maggie Barry calls them emotional nonsense, but the rest of us call them facts and evidence—and said “Do you realise that this is not going to reduce the rates burden? It is going to do nothing except put unreasonable pressure on local government to continue to under-invest in infrastructure.” and after, as Andrew Williams pointed out, the Prime Minister told them that he wanted them to invest more, the submitters had to begrudgingly accept that, yes, that could possibly be the case. I do not think I have actually ever seen groups like Federated Farmers, Business New Zealand, and the Employers and Manufacturers Association less enthused about a piece of legislation that they support than they were about this particular bill. They were hardly effusive in their praise for this legislation. They admitted that there were big problems with it, and that it may not actually result in any of the promised outcomes that the Hon Dr Nick Smith had put forward.

This bill is called the Local Government Act 2002 Amendment Bill. Well, that really does not sum up what is in it. That is a very innocuous-sounding title for a very, very damaging piece of legislation. Maybe instead it should be called the “Local Government Act (It Ain’t Broke, So I’m Going to Break It) Amendment Bill”, because that is essentially what this bill does. There is no mischief here that needs resolving. There is no problem in local government that cannot be fixed under the current legislation. It ain’t broke, so Nick Smith is going to break it with this particular piece of legislation. That is exactly what it is going to do, because it undermines local democracy.

Andrew Little: He did it to ACC.

MOANA MACKEY: That is right; he did it to ACC as well. It undermines local democracy. It is built on a tissue of lies and of figures that were so shoddy that the ministry had to take them down off their website. It was a manufactured crisis that local government was so indebted and so out of control and carrying out all these bizarre and superfluous activities that Nick Smith had to ride in and clamp down and seize central control in Wellington, and say “From now on, you are only going to do what I tell you that you can do.” That is what we were told by the Hon Dr Nick Smith.

But the reality is that council debt is prudent. There are a few councils that are having issues, like the Kaipara District Council, which is the one that is constantly referred to. Why we are destroying local government right across New Zealand because the current Kaipara District Council is in financial difficulty is a question that no member opposite has bothered to try to answer. So I wonder whether, when Nick Smith was putting this legislation together as the former Minister of Local Government, he considered just being honest and naming it the “Local Government (I Hate Local Government) Amendment Bill”, because, essentially, that is the message that local government authorities have taken out of this. It is that Nick Smith does not trust them. They cannot make decisions on their own, because he does not trust that they will make the same decisions that he might have wanted them to make.

When we look at what is happening to local democracy in this legislation, it is particularly concerning because this bill introduces powers for a Minister to defer local government elections under regulation—to just defer them. We know that this is happening because he wants to push through changes in Wellington that he has been planning for a long time. He has got a particular view in his head about how a reorganised Wellington local government region would look, and so he wants the power to just say to the voters in Wellington “Sorry, you don’t get to have a local government election in 2013, when every other council around the country apart from Environment Canterbury gets to have an election, because I want to rush this through so quickly. Your democratic election is just kind of annoying and is interfering with my time frames, so I’m just going to defer it.” Well, that is simply not good enough. Local government is not some kind of underling that the Minister can just control at his whim. When Labour was in Government, we saw local government as a partner—as a very important strategic partner. That has died under this current National Government, and that is a tragedy.

When you see every single council unanimously voting against this legislation, saying they do not support it, what Minister of Local Government does not take that seriously? What Minister of Local Government says that it is OK to make massive reforms and changes in local government that every single council—78 of them; every single one of them—opposes? Does that not raise a red flag that maybe, just maybe, the reforms are wrong and that maybe they are going to do more damage than good? When you look across the spectrum of local government in New Zealand, these are not people who are aligned politically one way or another consistently. They are not all Labour supporters or National supporters; they are a mix. They represent communities that have very different issues, very different values, and very different politics, and yet on this issue they all came together with one voice and unanimously said “We do not want this legislation.”

The Hon Dr Nick Smith referred to them as being self-serving and said that Local Government New Zealand was nothing more than a union. That is what he said about Local Government New Zealand. As I said at the time, that is not such an insult for us, but I know for him that is about the highest insult he could possibly hand out. To call the very practitioners who every single day do this at the coalface, who know their local communities, who want to be able to prioritise for themselves what their council’s priorities are going to be—they do not want Wellington to tell them what the priorities are going to be. For the Minister of Local Government to ignore that is unbelievably arrogant—unbelievably arrogant.

And why is the Government doing this? Well, another title for this bill could be the “Local Government Act 2002 (Look Over There) Amendment Bill”, because this is a diversion. This is a diversion. It is saying “Look over there, so that you don’t see what we’re doing over here.” If you look at provincial New Zealand, this Government has been sucking money out of the provinces from the day that it entered Government. Look at the issue of local roads. The Government has cut funding for local roads in provincial New Zealand so that it could fund its uneconomic roads of national significance in Auckland. That money has to come from somewhere, so provincial councils around New Zealand have had to turn to taxpayers to foot that bill and to bridge that funding gap, because the National Government has withdrawn support from provincial councils. And then it turned round and criticised them for increasing rates in order to fund that, because it is the core infrastructure that has driven rates increases in New Zealand. It has been a historical underfunding of infrastructure; it has been a historical lack of planning for infrastructure needs—having a large number of people who stand on tickets of no rates increases, and then get locked into not actually building the infrastructure that is required.

John Key, when he was Leader of the Opposition, said that local government needed to come to the party and start funding infrastructure properly. Business New Zealand accused local government of having lazy balance sheets and said it needed to invest more in infrastructure because its debt levels were low enough that it was prudent to do so, and then suddenly, overnight, we have a 180-degree flip where suddenly its debt levels are out of control. Suddenly it is being criticised for doing exactly what the National Government asked it to do, which is to properly fund infrastructure, because without it we are not going to have the regional economic development that is going to lead to the economic development nationwide that we need in this country. Then, at the same time, the Government pulls out what financial support there was from central government to help local government achieve that. That has driven a rates increase, which this Government then turns round and blames local government for. The blame should not be with local government. The blame should very firmly be with this Government, which has taken away from councils with one hand and then blamed them for having to find that money elsewhere. That is the reality of the situation.

So the Hon Dr Nick Smith and whoever the current local government Minister is—we are not really sure, but it is not going to be for long, because the Hon Dr Nick Smith is going to be back in the helm before too long. The Hon Dr Nick Smith needs to think very carefully about what he is doing to communities right around the country, because this is a solution looking for a problem, but it is a solution that is going to absolutely gut local government in this country. It will absolutely gut local government. It is going to remove local democracy. It is going to mean that when Nick Smith is back in charge as Minister of Local Government, he is going to have extraordinary powers. See, the National Government had to pass legislation in this House to stop Environment Canterbury having an election. It does not want to have to do that for every other council that it is going to stop elections for. So by giving himself a nice, tidy little power in this legislation, Dr Nick Smith does not have to come to the House and speak to the voters of New Zealand, and the voters whose rights to a democratically elected council he will be removing—

TRACEY MARTIN (NZ First): Kia ora, Mr Chair. I rise to take a call on the Local Government Act 2002 Amendment Bill in the Committee stage. Before I launch into my address about the title of the bill and the other areas that this stage addresses, I will just pick up on a comment that Maggie Barry made—thankfully, finally—in her speech in the Committee. It is nice to actually finally get Ms Barry doing her work for her money. That is great. We really appreciate that. It is around the comments around Michael Barnett and the chamber of commerce. Again, I mentioned in my first address on this bill that the Government needs to be careful what it wishes for, and, probably, so does Mr Barnett.

Mr Barnett is working very hard and continues to lobby the Auckland Council for continued support for bids for commerce in the area of Auckland and Greater Auckland. He spends a lot of time lobbying Auckland Tourism, Events and Economic Development (ATEED) for finance and for support for commerce inside Auckland. What will happen to ATEED if economic development is one of the four well-beings that is actually going to be removed? Let us not forget that the reason why Auckland picked up economic development as one of those four well-beings is that central government has failed small and medium sized businesses. For businesses in rural communities, it has failed to assist them. The businesses in my communities that want to grow into the export businesses that this Government says that it wants, to lift New Zealand out of the doldrums of unemployment and grow the pie, cannot get any traction with central government, so they go to local government and seek that support.

But I also wonder whether perhaps another title for this bill that might be suitable is: “We’re Going to Change it Because Len Brown Became the Mayor of Auckland”. When Len Brown became the Mayor of Auckland he picked up on those well-beings. He moved into South Auckland and west Auckland, made a focus of the lower socio-economic groups in that area and said: “We’re going to make a commitment to advocate to central government to do something about this.” If one looks at the Auckland Plan, the comments around the well-beings with regard to South Auckland and west Auckland are the comments that say “We will work with central government to bring in the resources that should have been there. We should not have to fight central government for it to recognise that we have communities of need here.” Although I personally would like to see an extension of this into areas like Helensville and Wellsford that also have social deprivation scores of 8 and can get no traction from this Government—no traction from this Government, which continues to hire and give contracts to people based in the city who know nothing about those communities—we will have to do it through the lobbying through local government.

So perhaps this is actually about Len Brown. Perhaps this is because John Banks did not get the mayoralty and did not take Auckland in the direction that this Government would want, so this is really about trying to curtail the Mayor of Auckland because it did not go the way the Government wanted it to.

I would suggest that one of the other things that the Government has done, and is continuing to do—and it should set off alarm bells for other areas for which it is suggesting amalgamations through this bill—is that the central government came in. If you have a look at the economic development plan for Auckland, it has central government written all over it. It has two main legs. The first one is to import 1 million more people into Auckland. The second one is to leverage off them to sell back to their communities of origin. That is the single plan that this Government has, I believe, to save New Zealand, and it comes out of Auckland. To do that it requires the control of Auckland. To do that it is going to duplicate it up and down the country, so that it can have more control. I would also suggest that rural communities should be contacting their National Party MPs before this bill comes to its third reading.

One of the other side effects of amalgamations like this is that local employment drops like a rock. These contracts, which have lowered nobody’s rates, have taken all the local contract work out of Rodney under the guise of economies of scale. We have people driving from the south of Auckland right all the way up to Wellsford to do a job, because a single company—

The CHAIRPERSON (Lindsay Tisch): Could I just remind members that we are actually on clauses, so I ask you to come back.

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Chairperson. I am not sure whether you were listening to the debate before, but, especially with the discussion of Maggie Barry, who went on for, I think, about 7 minutes using, we think, Part 1 notes, my submission to you is that, by the Committee accepting that, the debate was broadened, and having people reply—

The CHAIRPERSON (Lindsay Tisch): I thank the member. It has been pretty wide. I was chairing before dinner, and I certainly allowed a very wide debate. I did not pull anyone up. I am just reminding members that we are actually talking about clauses, and I would like them to come back and actually mention clauses 1, 2, and 3.

RAYMOND HUO (Labour): In that spirit, my contribution will be very extensive and very wide. What is fascinating about the Local Government Act 2002 Amendment Bill is that whoever introduced or purported to introduce this bill to the House, it turned out, would not be able to stay in that position for long. We first had the Hon Rodney Hide, only for him to be superseded by the Hon Dr Nick Smith, who has been succeeded by the Hon David Carter. So what will happen to Mr Carter? We will see.

The other aspect that makes this bill very interesting is the level of opposition that is reflected in the submissions. There were 412 submissions on clause 7, for example. Clause 7 amends section 10 of the Local Government Act 2002, “Purpose of local government”. Of the 284 submissions that opposed the clause, 222 specifically opposed the removal of the four well-beings, or mentioned the importance of the concept of well-being.

The reason I will read from this departmental report is that if the Minister of Local Government or members who vote for this bill have found our argument less convincing, we should have a look at the departmental report. The Minister’s own departmental report stated very clearly that those submitters considered that the removal of the four well-beings would prevent the local authorities from responding to the needs of their communities, including supporting programmes that address public health issues, providing social services for vulnerable residents, supporting cultural events, and taking a sustainable development approach. If the Minister finds his own departmental report less than convincing, let me state very clearly that there are two further reasons to support the view expressed in those submissions. Firstly, the proposed changes in this bill are, essentially, a nonsense. The regulatory impact statement states that “The change is likely to have a symbolic effect and should not affect council business as usual.” Secondly, councils must have the tools and sources of finance to deliver on their responsibilities, such as providing a share of infrastructure and transport.

A majority of submitters opposed the removal of the four well-beings. At the Local Government New Zealand annual general meeting in July 2012, members voted unanimously to retain the four well-beings.

Let us have a look at the headlines of two of the four major newspapers, which are found to be largely in favour of a National-ACT Government, particularly during the last election campaign. In the Dominion Post published on 25 August 2012, the headline is “Local government revamp ‘draconian, unacceptable’ ”. What the New Zealand Herald said in August 2012 was: “New bill could damage our well-being”. Again, what is fascinating according to Radio New Zealand Newswire is that the Prime Minister says the cycleway is a core council service. So, in the light of the contribution made earlier by my colleague Mr Phil Twyford, I think this bill is Draconian, is a bill for scaremongering, and is a nonsense. Thank you.

EUGENIE SAGE (Green): Another title for this bill, the Local Government Act 2002 Amendment Bill, would be the “Local Government Act (Bash Local Government and Ignore the Facts) Amendment Bill”, because this bill is not focused on the evidence. There is very little evidence to suggest that the local government sector is not focused on core services. Three different reports have concluded that the sector has not significantly expanded the scope of its activities since 2002. When you look at the 2006 and 2009 long-term plans, how much of the funding and expenditure was on infrastructure? Seventy to 75 percent of the capital programme was on roading, the three waters, and flood protection—core services. Then, when you look at the regulatory impact statement, again there is no evidence that local authority costs have increased as substantially as the Government is claiming. In particular, when you have the Government claiming increases in costs, it is using the CPI. Yet, as a lot of submitters and councils have pointed out, the local councils are engaged in buying things like bitumen, not Weet-Bix and the basket of groceries that the CPI uses.

When you look at the figures on debt, those came from the 2009 long-term plans. They are 3 years out of date, and they have been superseded. What the 2012 long-term plans are showing is that the sector, as a whole, is planning to borrow much less than in the 2009 long-term plans. And, as other members have explained, the borrowing is to fund infrastructure on that basic principle that the cost of infrastructure that benefits future generations should be spread across the generations, and not paid for just by today’s ratepayers. One of the things that this bill is likely to do with its benchmarks, and with its ministerial intervention powers that are tied to those benchmarks, is that local government will focus much more on the short term and on keeping costs down, so we will get a neglect of infrastructure spending, and will not be looking at how you get the most value over the longer term.

Another name for the bill could be the “Local Government (Undermine Democracy) Amendment Bill”, because that is another thrust of the bill. It does not recognise what local councils are doing or the full scope of their activities, and by putting in place central control from Wellington it seeks to further narrow the work that local government is doing. Recently I received a copy from the Society of Local Government Managers of the 30 different projects that had been submitted for its excellence awards. Those award applications, and the scope of the submissions that came before the Local Government and Environment Committee, gave an excellent snapshot of the breadth of activities that local government is engaged in and the value of those activities, and, contrary to a lot of the rhetoric we are getting from the Government, it shows that councils are looking to do more with less.

One of the winners of those Society of Local Government Managers awards was the Hastings District Council with its iWay “Walk it, Bike it, Love it” project, where it has put in place 108 kilometres of on-road and off-road pathways, because it is investing in planned walking and cycling infrastructure to reduce its roading maintenance costs. By moving people off the roads and onto cycles, or walking, there is less wear and tear on the roads. It is a pity that the Government does not have a similar vision to that of the Hastings District Council in terms of its roading expenditure and promoting new motorways. So that project won one of those excellence awards. Another project that won an award was one that promoted cooperation and collaboration between councils to introduce a new online dog registration service for, I think, Hamilton and Rotorua. That is what we heard at the select committee: a lot of councils working together to collaborate and cooperate and reduce costs that way.

But going just briefly to the whole democracy argument and the thrust of the bill in terms of undermining democracy, we have that both in the ministerial intervention powers and in the reorganisation procedures and the end to the mandatory poll on reorganisation. There was a very good submission from the Buller District Council, which looked at the claims that Government members had made that amalgamations had not happened. The Buller District Council pointed out that since 1999 there had been seven amalgamation decisions by the Local Government Commission, and in two cases the commission decided that amalgamation would not produce better local government and that the status quo should remain. Five of those decisions did proceed to democratic polls, and I would just like to quote what the Buller District Council said: “In each case”—where the decision of the Local Government Commission went to a poll—“a significant majority of the people democratically voted to reject the amalgamation proposal. When the people are given a chance to vote they continue to reject amalgamation. The reality is that communities seem to like the idea of local decision making and continued local democracy.”

That is why this bill would be better titled the “Local Government (Undermine Democracy) Amendment Bill, because it reverses the presumption that the status quo should remain until the people democratically decide by way of a poll that there should be a change. The way in which the bill is constructed—the very short time of 60 days to get 10 percent of electors to sign a petition—is clearly intended to ensure that the polls of residents will be avoided. There are not any examples of a petition getting so many signatures in such a compressed and short time frame. That is why this bill would be better titled the “Local Government (Undermine Democracy) Amendment Bill’’, because it is all about control central—central government—putting pressure on local government and not letting electors decide how they should be governed.

NIKKI KAYE (National—Auckland Central): I move, That the question be now put.

Hon LIANNE DALZIEL (Labour—Christchurch East): Thank you, Mr Chair, for the opportunity to address the Local Government Act 2002 Amendment Bill, which I think could be better named the “Local Government Act 2002 (Let’s Ignore What is Going On in Christchurch) Bill”. I think that what this bill really does show is that we have learnt nothing about the experience we are going through in Christchurch. I want to remind this Committee—and I know he has been mentioned in this debate more than once—that Professor Sir Peter Gluckman prepared a report for the Government last year about the psychosocial consequences of the Canterbury earthquakes. I just want to share with the Committee why I think the name of this bill ought to be addressed in terms of what is going on in Christchurch at the moment. He stated: “In every disaster there is an inevitable tension between the desire for an immediate response and the need for planning”—by multiple layers of authority—“and risk reduction. This tension aggravates the situation and creates opportunities for externally driven exacerbation of symptoms. Anger and frustration are inevitable and endogenous. It is wrong to respond to this anger in a defensive way.” I believe that this bill is a defensive response to what is going on there. It may not have been driven by what has happened in Christchurch, but if we do not learn the lessons of what has happened there and do not take them into account, then we will be committing a grave injustice, really, and imposing it on the rest of the country.

If Christchurch has to suffer the consequences of what we have been through, we plead of this Parliament to listen to our concerns and to see what is actually going on here. Let me carry on: “It would appear that key to minimising this phase is the promotion of local empowerment and engagement by working closely in a collaborative way with the affected population in co-ordinating and co-leading the response effort.” Having this legislation focused on community outcomes, such as good-quality local infrastructure, local public services, and performance of regulatory functions, and pretending that that has got nothing to do with community well-being is a complete mistake and a complete disaster that I believe we should protect against. “If the population do not sense this is happening, then the phase may well be longer and the symptoms of anger and frustration more intense. A feeling of self-efficacy and community efficacy assists the population in reactivating their coping mechanisms. Local governance, empowerment and ownership have been shown to facilitate recovery.” If we have learnt nothing from what has gone on in Christchurch, we must learn that lesson. By empowering communities to take ownership of their own recovery, and in this respect local government, we must learn those lessons.

This legislation is a direct contradiction of all of the experience we have in Christchurch so far. The report carries on to say: “Then inevitable tensions and conflicts in achieving this are obvious (long-term versus short-term, public versus private, local versus national interests) and cannot be avoided—rather, they have to be openly handled with sensitivity.” This legislation is the complete contrast to handling things openly with sensitivity. It says: “It follows that, from the psychosocial perspective, those involved in directing the recovery should create governance structures that understand and actively include community participation and enhance individual and community resilience. Such approaches will be most likely to be effective in re-establishing coping and functioning communities.” And I want to say that when we actually look at a conceptual model for infrastructure recovery and enhancement, as has been prepared down in Christchurch, we actually find, if we look at the hierarchy of needs, when we look at that baseline, breathing, water, food, warmth, sleep, and excretion as an example of the physiology that is required for a functioning individual within a functioning community. Above that are personal, family, employment, health, and property matters. Above that are friendships, family, and belongings. And esteem is the confidence, achievement, and respect above that. It actually ties directly to the basic infrastructure—[Bell rung] Mr Chairman—

The CHAIRPERSON (Lindsay Tisch): Lianne Dalziel.

Hon LIANNE DALZIEL: It actually ties directly across—

The CHAIRPERSON (Lindsay Tisch): Can I just make the point to the member to tie in what you are saying, because we are on clauses 1, 2, and 3. It would actually be helpful to mention those in the course of this.

Hon LIANNE DALZIEL: Clauses 1, 2, and 3 obviously talk about the title of the legislation, and as I said at the outset this bill could be better entitled the “Local Government Act 2002 (Let’s Ignore What is Happening in Christchurch) Bill”. I do not believe that the Committee has really seriously thought about how this legislation is going to impact on Christchurch.

And then, of course, we have the commencement date. That has been changed, obviously, since the time the legislation was introduced. It was due to come into effect on 12 October 2013. I presume that that has been updated since the Supplementary Order Paper. I cannot understand why, when one looks at the evidence that has been presented by somebody of the calibre of Sir Peter Gluckman about this need to balance these tensions around the public versus the private, the local versus the national interests, and, particularly, the long term versus the short term. I really fear that this Parliament is going to have a far greater impact not only on Christchurch but on the rest of New Zealand without learning the essential lessons that could have been learnt.

The point that I was making and the reason that I was emphasising the title and, indeed, the commencement date of this legislation, was that it would be better to wait until we have all of the reviews of the impact of both the response and the recovery efforts that have been undertaken in Christchurch. Would it not be better to have all of those reports on the table and, indeed, to obtain a synthesis of those reports in order to better inform the implementation of this legislation? So why implement this legislation? Why have a commencement date that is earlier than all of the reports that are going to be reporting on how we have responded to the disaster that has befallen Christchurch? I believe that there are a number of pieces of legislation that this Government should actually consider holding back until we have had all of that detailed analysis, and until there has been the synthesis that is required in order to get a full appreciation of what has occurred in Christchurch and what those learnings might be.

The international community is looking at what is happening in Christchurch with great interest, because they have been given a narrative by this Government about how things have occurred there. But I think that when they actually look at what has, in fact, happened, then people are going to be actually surprised that this Government has not looked at international best practice, that it has not adopted the approach that other countries have adopted. When they look at the layer of this legislation coming in over the top of what we have experienced, with a commencement date that applies prior to learning all of the lessons that we will have to learn from Christchurch, then they are going to ask why we let this happen—why we let this happen in our country when we have had the experience of this disaster, when we have seen how important local communities are in terms of empowerment, how important local authorities are, and we have seen our own Christchurch City Council completely left out of the frame as far as the consideration of the rebuild of Christchurch central city goes. It has been left out of the picture completely. We have got our Mayor of Christchurch constantly complaining about how he is no longer engaged in any process with central government.

We have the Waimakariri District Council, on the other hand, which performed magnificently. It actually operated on a basis of real engagement with its community. There is no way the people of Waimakariri want to be subsumed into some super-city that involves the Christchurch City Council. It is the Christchurch City Council that has been found wanting in this case. It is the largest council in the region that has been found wanting. That is why I believe this legislation would be better framed as Local Government Act amendment legislation that takes no notice of any of the lessons that have been learnt in Christchurch, any of the lessons that have been learnt in the Canterbury region. If we were to look seriously at what has happened down there, we would not be proceeding with this legislation, and we would be naming it for what it is, which is a complete disaster.

Hon Dr NICK SMITH (National—Nelson): I move, That the question be now put.

ANDREW WILLIAMS (NZ First): This afternoon and this evening have reminded me of an experience I had in the mid-1980s, when I visited East Germany. When you went through Checkpoint Charlie and you went to East Berlin, you saw, in those days, that there was a total absence of democracy. It was a sterile, dull, grey, faceless society, where the people had no say and people had no rights. It was all done by a handful of people back in some sort of a bunker in East Berlin. They lived their lives in misery. When I look at this bill, the Local Government Act 2002 Amendment Bill, and I look at Parts 1 to 3 and what is proposed here, it is almost like this country is moving into the realm of where some of those Eastern bloc countries were 20-odd years ago.

You wonder how they have come about this, when they themselves admit that they know nothing. Rodney Hide, when he was the Minister of Local Government, came to an Auckland Mayoral Forum meeting. He sat with the mayors of Auckland, and he said “I don’t know anything about local government. You’re going to have to help me through here. You’re going to have to work with me, because I really don’t know what I’m doing. So, to the mayors, please work with me and help us through this.” That was after having released a 34-page report that overruled an 800-page report from the Royal Commission on Auckland Governance, which had something like 30 international advisers and spent nearly $5 million preparing an extensive report on how Auckland would be restructured. Within 9 days of that Royal Commission report being released, having taken a year and a half to prepare, the Minister of Local Government at the time, Rodney Hide, threw it out and replaced it with a 34-page photocopied handout to say that this was how local government in New Zealand was going to work. Right up the back of Rodney Hide, pulling the strings like a puppet, were John Key, with his hand up one side, and Nick Smith, with his hand up the other side. They were both manipulating him. Rodney was the puppet, and he was doing their bidding.

It was very interesting, because prior to that, when they announced what they were going to do, I was called to the Prime Minister’s electorate office in Helensville to be given a pre-briefing. He called each of the mayors. Bob Harvey turned up first, I was asked second, and—

The CHAIRPERSON (Lindsay Tisch): Order! We are on a bill, and the member must tie it back to clauses 1, 2, and 3.

ANDREW WILLIAMS: OK, well, clause 3 talks about the powers and roles of the mayors and how they are going to change local government so that the mayors will have far more executive powers in this country, and can basically take on their councils and do what they want to do. John Key said to me, sitting in his electorate office, that this is what they were going to do. I said “Oh, so, John, is this along the lines of your member’s bill of 2005-06? You always planned to do this anyway.” He looked at me. He looked shocked, because I had outed him. He looked at Jonathan Coleman sitting beside him. Jonathan Coleman was sitting right there, and John said “What is he talking about?”. Jonathan said “Oh, you remember your member’s bill? It never got picked from the ballot, but we don’t need to worry about that.” But, basically, I outed—

Hon Dr Nick Smith: I raise a point of order, Mr Chairperson. You asked the member to bring his comments back within the context of clauses 1, 2, and 3. The member asserted that clause 3 deals with the mayoral powers. Clauses 1, 2, and 3 only cover—

Hon Clayton Cosgrove: This is a debating point.

Hon Dr Nick Smith: No, it is not. It is a matter of what the content is that we are debating. We are debating the title—

The CHAIRPERSON (Lindsay Tisch): I thank the member.

Hon Clayton Cosgrove: That’s a debating point. Sit down.

The CHAIRPERSON (Lindsay Tisch): That is not necessary. [Interruption] Order! I am on my feet. To Andrew Williams, I mentioned before that you must tie in the piece of legislation we are dealing with now, clauses 1, 2, and 3. You have got 1 minute remaining.

ANDREW WILLIAMS: It boils back down, talking about clauses 1, 2, and 3, to the fact that basically this Government knows very little about local government. Is it not interesting that tonight Paul Goldsmith, Nikki Kaye, Michael Woodhouse, and Maggie Barry—twice—have all tried to close down the debate and have it stopped? What does that say to you about democracy in this country? What does it say to you that half of the National Party members who have spoken tonight have either said nothing or tried to close down the debate? I say to New Zealanders out there listening to this debate tonight, is this the democracy you want to live in, where all they want to do is close down the debate? Those members do not want to hear about what is happening. They do not want to hear about local government’s concerns. They do not want to hear the likes of Lawrence Yule, a good National Party mayor from Hastings, who is saying that this is wrong, this is not good for New Zealand, and this is not good for this country. Unfortunately, what we are faced with here is a situation of local government being undermined in this country—undermined by former Minister of Local Government Rodney Hide, undermined by the current Minister, David Carter, and undermined by the next Minister of Local Government, Nick Smith.

JACQUI DEAN (National—Waitaki): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 64

New Zealand National 59; Māori Party 3; ACT New Zealand 1; United Future 1.

Noes 57

New Zealand Labour 34; Green Party 14; New Zealand First 8; Mana 1.

Motion agreed to.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Clause 1 agreed to.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Clause 2 agreed to.

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

Ayes 61

New Zealand National 59; ACT New Zealand 1; United Future 1.

Noes 60

New Zealand Labour 34; Green Party 14; New Zealand First 8; Māori Party 3; Mana 1.

Clause 3 agreed to.

Bill to be reported with amendment presently.

Bills

Advanced Technology Institute Bill

In Committee

Part 1 Preliminary provisions

Dr MEGAN WOODS (Labour—Wigram): The clauses we are debating at this stage of the Advanced Technology Institute Bill really cut to the heart of some of the concerns that people have around the bill. The purpose statement in clause 3 is a very short statement that says “The purpose of this Act is to—(a) establish the Advanced Technology Institute and to provide for its main objective, functions, and operating principles; and (b) provide for transitional and other matters.” It is this clause that I want to talk about, because, really, a lot of the anxiety that is being felt out in both the business and science communities is about this very purpose of the Advanced Technology Institute—the what, the when, and the who of this organisation, and what it can hope to achieve.

Let us be clear, the idea of the Advanced Technology Institute is motherhood and apple pie, in many ways. Everybody wants to see it succeed. If it can work, it will be great, but this enabling legislation gives us none of the detail. What we are hearing out there is that what people want to know is what the Advanced Technology Institute is going to achieve, what its philosophy is, and what it sees as its core purpose. You will see as we go through the stages of this debate that Labour has put up an amendment in Supplementary Order Paper 154 that actually does go to what the objective of the institute will be. The benefit to New Zealand—the institute operating to the benefit of New Zealand—is something that Labour really encourages this Committee to mark out clearly to the establishment board that this is how the institute should operate and what the institute should be operating for.

The role and purpose of the institute are currently pretty much a line of question marks. Within the science communities and within industry, people are saying “I am not really sure what the Advanced Technology Institute is, I am not really sure what it is going to achieve, and, what is more, I am not sure how it is going to achieve it.” This is something that is of great concern to Labour members. It was certainly of great concern to Labour members who sat and listened to the submissions to the Education and Science Committee that there really was not this firm idea of the purpose of the institute. We want to see some more detail around that.

Labour is supporting this legislation. It has to be signalled that Labour is supporting this legislation with a great deal of reservations. We are putting up some amendments that we think will strengthen the enabling legislation and will give far more direction and clearer direction to the establishment board and the establishment unit of the institute. What we are seeing is a paucity of discussion with industry and science leaders by the establishment unit, and this even goes back to what the purpose of the institute is.

Unfortunately, the select committee process did not allow for us to progress that discussion and to clear up some of the understanding with the science sector and with industry. We had a ridiculously truncated process at the select committee. Submissions were open for only a matter of days, and submitters had to come and speak within days of putting in their submission, which for many in industry was simply not doable. I think it spoke volumes that a very small number of submissions were received. I think this is incredibly important legislation. It is certainly incredibly important to how Labour sees our economic future, and the fact that we had so few members of industry come along and talk about how this new entity could aid them in increasing and helping with their businesses was of great concern to us.

There are a number of questions around the very purpose of this institute. What business model should be put in place? What should it be? What should its role be? These are all questions that are hanging out there. How should it collaborate with the existing capability sets that exist out there, whether or not they be in research and development? We have a number of players in the research and development space. We heard from a number of universities, we heard from some of the other Crown research institutes, and we heard from some of the other private research and development providers, which are very unclear about what the purpose of the Advanced Technology Institute is. We heard from other people involved in the commercialisation space. They also have no idea, really, of what the core purpose of the Advanced Technology Institute will be. And we heard from people involved in the area of consultancy, which is looking more and more like what the Advanced Technology Institute is going to be, from the little bits of information that we can glean from various places.

One of the fundamental questions that needs to be addressed with the Advanced Technology Institute is how it can avoid cannibalising existing relationships in the science and innovation sector, whether they be at the research level, whether they be at the science level, whether they be at the consultancy level, or whether they be at the commercialisation level. These are the very things that have to be cleared up, because Labour has great fears that this is yet another example of the Government talking big and using the rhetoric of how important science is, but it is talking big and failing to deliver. We are already seeing the establishment date of 1 February being pushed out from what it originally was, 1 November. There are real concerns around whether it will be ready to go on 1 February and whether it really is feasible that we will have something set up.

In terms of the institute’s purpose, we have seen that that has been expanded from its original conception, which was to provide research and development expertise into the high-value manufacturing sector. We have seen that expanded out into the food space, just as we saw that happen with the technology voucher system, which has been a failure for this Government. It was announced with great fanfare in Budget 2010. There was going to be $20 million spent over 4 years on partnering with industry in the space of high-value manufacturing. It was going to be about game-changing research and development. It was going to be about the big pieces of research. There were going to be grants of over $100,000. Well, they have failed—$4 million in only 2 years—because industry has not seen this as something that will help its businesses. It was only $4 million in 2 years, and less than one-third of those grants were over $100,000, because the Government had to shift the threshold down to $30,000 because it realised that this was not something that was fit for industry.

What concerns us here is that industry has not had the chance to input, the purposes are unclear to industry, and there is very little clarity around it. That cuts to the heart of it. What you will hear from us later as we go through this legislation is that we would like to see a legislative requirement for the Advanced Technology Institute to chart out its purpose through the inclusion of a statement of core purpose—statements of core purpose being, of course, what all the Crown research institutes produce every year that chart out the ground in which they work, so all the other providers understand what area a particular Crown research institute works in. More important, industry would understand the area the Advanced Technology Institute would chart out. You will hear about amendments that we are putting up in that space. We would like to see the members opposite on the Government benches support some of these measures that we are putting up as amendments, because we think these will provide some of the clarity around the purpose, provide some of the clarity for science, and provide some of the clarity for industry.

The Advanced Technology Institute, if we look at models in other countries that are working successfully, has to have a strong relationship between Government, the science sector, and industry. Unfortunately, what we are seeing in the case of New Zealand is a really heavy-handed approach from the Government. When we have leaders within the scientific community and leaders within the manufacturing sector coming to us as Labour members and telling us “We have no idea what this Advanced Technology Institute’s purpose is or what it’s meant to do.”, then we have really grave fears.

We really want to see this succeed. We think that in order for the New Zealand economy to improve, it must have science and innovation at its core. Industry must be able to access that, and we have got to be investing in that in meaningful ways. We are very fearful that this legislation, and the Advanced Technology Institute that is being established under this legislation, will not deliver that either for the New Zealand science sector or for the industries that it purports to support. So I would like to hear from Government members opposite how it is that there is clarity around the purpose, the very core of what it is that the bill is trying to achieve, and perhaps move beyond rhetoric and get down to some brass tacks of what the place is of the Advanced Technology Institute within a sophisticated scientific landscape and for industry that already accesses research in other places. How is it different? What is its purpose? What is its unique part within the New Zealand science ecosystem? We have not been satisfied that that question has been adequately answered.

We also know that the scientific community and many of the key players within industry have not been satisfied about what the purpose of the institute is. We hope that that can be cleared up, because in order for the institute to succeed that has to be cleared up. If nobody understands what its purpose is, then there are real clouds there.

NIKKI KAYE (National—Auckland Central): I am very pleased to speak on the Advanced Technology Institute Bill. At the outset I would like to acknowledge that there is a Supplementary Order Paper. There was a function at Parliament whereby an announcement was made about the Advanced Technology Institute being renamed Callaghan Innovation, and there is a Supplementary Order Paper to that effect. I think that we all in this Chamber acknowledge, and many people throughout the different speeches on this bill have acknowledged, the late Sir Paul Callaghan, and we do that again this evening.

I just want to start by mentioning a couple of issues around the process. Obviously, in the Committee stage here we are looking at Part 1, which is about the purpose, but members opposite have raised issues of process. As I have said before, although it was a tight, 6-week select committee process at the Education and Science Committee, we made a huge effort to ensure that stakeholders were aware of this legislation. We wrote to a number of stakeholders and we delivered a very lengthy commentary to address some of the issues that had been raised not only by Opposition members in their speeches but also by the many submitters who came to us. We had 23 submissions, of which we heard seven oral submissions. Of those submissions I think it is really important to note as well that only a couple were opposed. So the majority were in favour, and we saw that the other week, actually, at the announcement of Callaghan Innovation.

I believe that it is actually very clear what the purpose of this legislation is. I think we also need to understand that it is part of the wider economic framework. In relation to the comments that Megan Woods has made—and I am going to address what Clayton Cosgrove is talking about in terms of that wider economic framework—specifically around both the purpose and what other people think about that purpose and also in relation to a number of the comments she made about, for instance, the core statement of purpose, these issues were addressed through the select committee process. They are in the commentary. We heard submissions around the statement of core purpose. But the big message we came back with as a select committee—it was what the majority of the select committee said—was that a number of the amendments that were raised were about being overly prescriptive. Whether it was the stakeholder advisory group and putting forward seats for unions, or whether it was prescribing geographical areas for the stakeholder advisory group, these were incredibly prescriptive things for an institute that was set up to have some flexibility. As we all know, the technology space is a rapidly changing area.

I just want to touch on a couple of things around the core purpose. It is very clear that the first role is to help lift capability within the innovation system, and it is going to do this through a couple of things. The first is to help build industry-led innovation consortia that combine Crown research institutes, universities, polytechnics, economic development agencies, and businesses. One of the core changes that we made as a select committee was to insert the word “collaboration”, because we recognise—whether or not it is through Kiwinet, which came to us—that there is an important aspect of this institute in that it is bringing together stakeholders. It is providing a one-stop shop for businesses to ensure that we convert more ideas to market, but we also do not want to duplicate existing networks.

The second thing is that it will be a portal through which businesses can access appropriate research and development, and technical expertise and facilities within New Zealand and overseas. Again, that is a crucial driver for this institute—that it is a one-stop shop for businesses.

Thirdly, it is there to foster the mobility of experts, for example by sponsoring secondments between universities, the Advanced Technology Institute, and businesses. Again that is about the transfer of knowledge.

So I think it is very clear, when we look at this purpose within both Part 1 and also the many discussions at the select committee about whether we are being overly prescriptive, that these issues have been canvassed, including in a lengthy commentary.

I just want to touch on that issue that Megan Woods raised in terms of the statement of core purpose. We said in the select committee that we recognised that one submitter did propose that the Advanced Technology Institute be required to adopt this. We actually—the majority—disagreed with that, because although we accept that that is a specific mechanism for Crown research institutes, we recognise that the Advanced Technology Institute will have a purpose document and that the responsible Minister is currently considering what that purpose document might look like. We need to understand that we are dealing with something different here. Whether it was about the status of the Advanced Technology Institute in terms of it being an autonomous Crown entity, we dealt with issues right the way along about that variance of the Advanced Technology Institute compared with other entities. So, in my view, the issues of the core purpose have been adequately canvassed throughout the select committee process. When you look at Part 1—

Hon DAVID PARKER (Labour): I rise to take a call on Part 1. Part 1, in clause 3, establishes the Callaghan Innovation centre, as it is now going to be called, and provides for it to meet its main objectives and functions, which actually are not contained in clause 3. To make sense of clause 3, you have to refer to the main objective, functions, and operating principles of the Callaghan Innovation organisation, which are referred to in clauses 12 and 13. There they are listed, but still in very general terms. Clause 12 states that the organisation’s “main objective is to support science and technology-based innovation and its commercialisation by businesses, primarily in the manufacturing sector and services sector, in order to improve their growth and competitiveness.” Then its functions are listed over about two pages.

One of the points that was made by a submitter to the Education and Science Committee, which is referred to in the minority report from the Labour Party members of the select committee, was that if the objective of the Government is to improve our performance in the world by transforming more products into high-value goods—also services, but, in particular, goods—overseas, then the settings in the economy need to be right to facilitate that. They made the point that the macro policy issues, which are not addressed in this purposes section of the bill, are fundamentally important. Those listed in the minority report as a consequence of submissions to the select committee are the settings that get the money going into the right part of the economy. We have a tax system in New Zealand that is rare by developed country standards. It has a bias for certain classes of investment that do not grow our productive output overseas, and have the effect of distorting investment into the parts of the economy that do not grow our exports—namely, into land-based activities, rather than into productive manufacturing adding of value. If the Government was serious about growing the innovative enterprises in our country, it would be addressing those macroeconomic issues that only a Government can fix, because businesses cannot fix them for themselves. I would reinforce that point that these purposes that are being established here are not met by the bill, because these gaping problems in the economic structure of our country refuse to be addressed by this Government.

The other macro setting that was referred to by submitters was the fact that under New Zealand’s Reserve Bank policy at the moment—our monetary policy—we give priority to inflation targeting and the control of inflation, over and above every other factor, by law. We require that the control of inflation is given primacy above everything else, and that includes factors like the currency. We have heard time and again from some of these high-value exporters that they are suffering as a consequence of the overvaluation of the New Zealand currency. Just about everyone agrees it is overvalued. The IMF recently said it was overvalued to the tune of about 15 percent. Since then it has gone higher, and this legislation, again, does nothing to address that fundamental determinant of the competitiveness of our export sector—the overvaluation of our currency. So, although the Labour Party believes that it is important to bring forward innovation and to grow the breadth of our exports, which are too narrowly focused at the moment, and although I certainly agree that our primary production sector is the most important sector of the New Zealand economy in terms of the value of our exports—that is most certainly true—another issue is also clear. It is clear that New Zealand cannot make it in the world on the back of that primary sector alone, and therefore we need to grow the breadth of our exports by transforming more products into higher-value products that we can sell to the rest of the world so that we might, for the first time in decades, cover the cost of our imports and interest through the value of our exports.

So the objectives of this bill, to the extent that they are set out in this legislation, are laudable. I do not think that anyone in this Parliament disagrees that we should be trying to help grow that sector of the economy that is not succeeding as well as it should at the moment by the conversion of more products into high-value products. The problem that we have with this legislation is that we are not really clear how the Government, through this legislation, achieves that purpose, because the legislation does not articulate that in any clear way.

Some of the other concerns that were expressed by some of the submitters who did submit in the short period of time available were that they were not clear that this was necessarily going to result in additional effort in the New Zealand economy, rather than replace existing effort through existing enterprises and institutions, with the same effort being conducted through this new organisation. One of the challenges for this new organisation is that it truly does make sure that it is additive to what is already happening in the economy, rather than just squeezing out what is happening elsewhere. We already do have some really good examples of innovative companies in New Zealand, whether they are companies providing one product or companies that provide research and development expertise. There are some very good examples of that, whether it is the Gallagher Group or whether it is Scott Technology—service providers to other companies that are bringing forward new products and bringing forward new manufacturing processes or products, which aid in the growth of our export business. If a company like Scott Technology ends up finding itself competing against Callaghan Innovation, then we are not necessarily going to be going forward.

There was not much to be found in this Budget that increased the competitiveness of our export sector. The Advanced Technology Institute, or as it is now to be called, Callaghan Innovation, was an exception to that general failing—from my point of view, anyway—in the Budget, and for that reason the Labour Party will be supporting it.

I do want to return to the process point that Nikki Kaye addressed. I do not think there is any excuse for a 6-week submission period. How long has this been on the Order Paper since it came back from the select committee? I cannot really see from the paper that I am looking at when this was—

Nikki Kaye: We had a reading immediately.

Hon DAVID PARKER: What was that?

Nikki Kaye: We had a reading immediately.

Hon DAVID PARKER: Has it just come back in a few weeks ago?

Nikki Kaye: Well, no, we’ve already had a reading.

Hon DAVID PARKER: Right, OK. Well, I cannot see why there was a need to truncate the normal process, as this has been, and not allow submitters the time to actually think about the issues—to actually have the time to consider the issues and make a considered decision as to, one, whether they should submit, and, two, if they were going to submit what they should say in their submission.

You can never know what you do not know. Therefore, we will never know what deficits would have been shown in this legislation and what further ideas would have been brought forward by people who had the normal period to submit. The normal period for the calling of submissions is 6 weeks. That enables people to consider, take advice, talk to their industry associations, talk about it with other people who export, and come to a view, rather than just having to commit straight off the mark to a response, which would be ill-considered. Most people do not like making ill-considered submissions, and so, faced with the choice of making an ill-considered submission or just letting it go past, most people in the end choose not to submit. That is why we should protect the processes that we have at the select committee through the normal process. This is all the more important in a country like New Zealand. We have only one House of Parliament, and, therefore, we are more reliant upon select committee processes to make sure that we do not make legislative mistakes than are other countries that have two Houses of Parliament. With those reservations I will take my seat, noting that the Labour Party supports the bill.

DAVID CLENDON (Green): I am pleased to make some brief initial comments to this first part of the bill, the Advanced Technology Institute Bill, which contains, as we know, the purpose, the interpretation, and the statement of binding the Crown. We will say a great deal more about this bill later. You will be aware, of course, that the Greens initially supported this bill at its first reading, in the belief that there is a place for an organisation of the type that this legislation seeks to establish. But we have changed our view on that, given that, to a large extent, the objectives, the functions, and, indeed, the operations of this new entity are so poorly defined in this legislation. There is still a great deal that is unanswered. There is a great deal that we simply do not know about how this organisation will be structured, even what the transitional arrangements will look like, how it will operate, and what powers it will have. We do know that they will be substantive, in that there is a great deal of concern both in the business and indeed in the research and the tertiary sectors, and in the Crown research institutes and elsewhere, about how this piece of legislation is going to roll out.

On the question of functions, which are core to any organisation—to any piece of legislation, in fact—we absolutely do not know what the boundaries are, what the parameters are of some of the powers of this new organisation, not least of all around funding—the allocation and administration of funding. We asked some very pertinent questions at the Education and Science Committee to which we got answers along the lines of “Come and ask us later when we have made those decisions.”, which will be after the legislation has been passed. That is an appalling process. That is a process that denigrates and, indeed, dismisses the importance of due parliamentary process.

The point has already been made by Labour speakers that we had 6 weeks from go to whoa. We know that that constrained submitters. We know, as the last speaker David Parker quite correctly pointed out, that the sorts of organisations that we would expect to make substantive comments about this sort of legislation are those very organisations that actually want to make well-informed, substantive, thoughtful comments based on reflection and engagement of their stakeholders. They had no time to do that, and the bill, the drafting of this legislation, is so much poorer for it.

We do not know, in fact, what the reason was for the haste. Why have we been presented with a document in which even core functions and powers are so poorly described and outlined? What was the reason for haste? We have asked that question repeatedly, and I would love to hear the answer to it. I understand entirely that there is no reason to sit on one’s hands when there is a need to be filled. Nobody on that select committee, indeed in this Parliament, wants to see legislation delayed just for the sake of process, but nowhere did we hear a compelling reason for such extraordinary haste in this instance.

We understand that the title of the bill will be changed, and we will talk of that later, but the reference to Sir Paul Callaghan has been made. We absolutely hold the late Sir Paul in the highest regard. I never thought that in my life I would sit in a town hall in Wellington listening to a person talking about the relationship between science and industry, and that you could have heard a pin drop. It was as if a rock star was on stage—an extraordinary scientist, an extraordinary communicator. Our reluctance in opposing this legislation is in part because we are very concerned that it is not seen as any reflection on that gentleman or his legacy.

The chair of the Education and Science Committee, Nikki Kaye, made comments about some proposed amendments that were, in her view, rather prescriptive. I take issue with that. She referred to the need for flexibility and innovation. I believe that the functions, the powers, and the operating principles of this bill give the Minister of Science and Innovation such extraordinary control over the future of science funding and the creating of those relationships, but the very innovation, and the opportunity for this organisation to act flexibly, and to respond to business and to the research sector will be seriously constrained. It is, and it will be, a tool of the Minister—that is patently clear if one looks at the provisions, and obviously we will be commenting on the detail of those later. To suggest that the very sound proposals for amendments that were put up by the Opposition parties were overly prescriptive is unfortunate and does not accurately reflect the genuine concerns that this bill is so loosely drafted as to be unworkable.

TRACEY MARTIN (NZ First): I rise to speak on Part 1 of the Advanced Technology Institute Bill around the purpose. New Zealand First will be supporting this bill as it goes forward. I take on board my Labour Party colleagues’ comments with regard to industries, corporates, universities, and research institutes not understanding the purpose of this bill. I want to put on record my understanding from the Education and Science Committee of the purpose of this bill so that it is written down in Hansard, so that if it ends up that this comes back, or this becomes a problem going forward, we have some sort of touch point here in Hansard. And so—

House resumed.

The Chairperson reported the Local Government Act 2002 Amendment Bill with amendment, progress on the Advanced Technology Institute Bill, and no progress on the Legislation Bill and the International Finance Agreements Amendment Bill.

Report adopted.

The House adjourned at 9.56 p.m