Wednesday, 27 February 2013

Wednesday, 27 February 2013

Wednesday, 27 February 2013

Mr Speaker took the Chair at 2 p.m.

Prayers.

Questions for Oral Answer

Questions to Ministers

Business Growth Agenda—Purpose and Building Capital Markets Progress Report

1. JONATHAN YOUNG (National—New Plymouth) to the Minister of Finance: What is the Government doing to encourage investment, business growth and jobs?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: Today in Auckland the Minister for Economic Development and I released the sixth and final progress report in the Government’s Business Growth Agenda. This latest report, which is called Building Capital Markets, updates on 50 initiatives that the Government is working on to provide a productive and efficient environment for both investors and the borrowers of capital for jobs and growth. Together with the five previous progress reports, which were on export markets, innovation, skills, infrastructure, and natural resources, the Government has now spelt out more than 300 initiatives that it has prioritised to assist businesses to become more competitive on the international playing field and to help them to be profitable and to invest and grow. It is only when that happens that we get the job growth that we are all working to see.

Jonathan Young: Why were capital markets, in particular, chosen as a topic for the Business Growth Agenda?

Hon STEVEN JOYCE: The global financial crisis brought home to everyone how imperative it is that markets function well, because we have seen around the world what happens when they do not. Compared with other countries our public equity markets are small as a percentage of GDP. For example, our listed market capitalisation is equivalent to about 30 percent of the size of our economy, compared with 85 percent in Australia and nearly 120 percent in the United States, so even though New Zealanders are saving more than they have in the past, they may not yet be taking advantage of investment opportunities that are open to them. We are working to encourage that because we have an ambitious target of lifting exports to 40 percent of GDP by 2025. That will require an extra $160 billion to $200 billion of new productive capital, or around 70 to 90 percent more than is currently invested in the export sector, and that is what we are working on through the capital markets report.

Jonathan Young: What needs to happen to reduce the cost of capital?

Hon STEVEN JOYCE: There is a broad range of areas we are working on to reduce the real interest rate premium that makes debt in New Zealand more expensive than in places like Australia or the US. In particular, factors that influence our borrowing costs being higher include our small capital markets, our higher levels of national indebtedness, volatility in the exchange rate, and low domestic savings compared with investment. We are seeing those ameliorated over time as we are proceeding through the Business Growth Agenda. For its own part, the Government also must continue with its responsible fiscal management. As well, reforms like those planned for the Resource Management Act will help create an environment that encourages investment in the New Zealand economy.

Hon David Parker: Why should New Zealanders believe him when he says he is going to grow exports and jobs, when data released by Statistics New Zealand today shows the value of manufactured exports fell by nearly 7 percent and we know that 17,000 jobs were lost in the manufacturing sector in the past year?

Hon STEVEN JOYCE: I see the member is not referring to the fact that there was only 1 month’s data, but he is a trainspotter so he always likes to find something that can talk the New Zealand economy down. The reality is that both our goods exports and our services exports have grown over the last few years. In relation to job losses in manufacturing, the reality is that with increased mechanisation in manufacturing we have had that job loss situation for the last 40 years.

Hon David Parker: Has the Minister of Finance seen the latest forecasts from the New Zealand Institute of Economic Research, which see the current account deficit blowing out to more than 8 percent of GDP in 4 years; if so, why is he sticking to a plan that has failed to rebalance the economy towards exports and jobs?

Hon STEVEN JOYCE: Well, I did notice that the New Zealand Institute of Economic Research report is expecting significantly higher growth over the next 2 years. I would also note that if the balance of payments deficit did get to 8 percent—and we are not predicting that and neither is Treasury—it would be at levels last seen only under the previous Labour Government. In terms of a plan, I would back this plan as against that plan, which is the one-page plan released by the Hon David Parker. It calls to change gear.

Film Production, Employment Legislation—Ministers’ Statements on Factors Influencing Changes

2. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Economic Development: Does he stand by all of the Minister of Economic Development’s statements made regarding the Hobbit dispute?

Hon STEVEN JOYCE (Minister for Economic Development): Yes, because in my experience both the current and former Ministers for Economic Development in this Government are fine and upstanding gentlemen.

Dr Russel Norman: Does he stand by the statement by the Minister for Economic Development in this House on 28 October 2010 when he said there had been “no request or … pressure from Warner Bros to change our law.”?

Hon STEVEN JOYCE: Yes. My understanding is that at that stage that was the situation. I would expand for the member in this regard that the information released yesterday just shows how much risk there was that The Hobbit movies would not be produced in this country.

Dr Russel Norman: Is the Minister aware that that statement was made on 28 October 2010 during the debate on the bill to introduce the law changes, so it came after the negotiations, and is he also aware of the correspondence from Carolyn Blackwood of Warner Bros on 12 October, which referred to its deep concerns with our employment law?

Hon STEVEN JOYCE: I am not aware of the details of those particular communications, but it is apparent that there was concern about whether The Hobbit movies would be produced in New Zealand. It is apparent that the law was changed and The Hobbit movies were produced in New Zealand.

Dr Russel Norman: How can the statement by the Minister for Economic Development on 28 October 2010 that there had been “no request … or pressure from Warner Bros to change our law.” be true when we have the email correspondence from Warner Bros stating its deep concerns with New Zealand’s employment law?

Hon STEVEN JOYCE: I have not seen the original quote the member is referring to, and, of course, there are differences in practice between what is a concern and what is requiring a law to be changed. But the fact remains that the Government moved to clarify a law that was obviously causing concern for this industry. As a result of that, this industry has been far more successful in New Zealand, and this Government is very proud of that fact.

Dr Russel Norman: Will the Minister make himself familiar with the speech by the Hon Gerry Brownlee in this House on 28 October 2010, where Gerry Brownlee said, and I quote from Hansard: “I want to make it abundantly clear, again, that there has been no request or—the Opposition would say—pressure from Warner Bros to change our law.”; and, if that statement is not true, will he request the Minister to come to this House and amend it?

Hon STEVEN JOYCE: I have not had the opportunity to read that. I am working through Mr Brownlee’s speeches since 1996, since I have been in the House, because they are generally brilliant speeches, but I am only up to 2002 at this point, so I have a fair way to run before I get to 2010.

Dr Russel Norman: Does the Minister think it is a laughing matter when a Minister of the Crown comes to this House and misleads this House—directly misleads this House—by telling the House that there had been no pressure from Warner Bros when the email traffic released just yesterday proves that there was very significant pressure from Warner Bros to change our law?

Hon STEVEN JOYCE: Well, I think what is a laughing matter is the fact that this member talks constantly about creating jobs in the New Zealand economy but opposes every hands-on—

Dr Russel Norman: I raise a point of order, Mr Speaker. The Minister was not addressing the question in any way whatsoever. I want to know the answer to the question. Does he think it is a laughing matter when a Minister misleads Parliament?

Mr SPEAKER: I think the member ought to go back and reread his own question to the Minister. The Minister very adequately responded to and addressed that question.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I apologise for being somewhat late with this, because I thought our Opposition would have picked up the matter that there was an accusation in the House, unrefuted by the Government, of deliberate misleading the Parliament. I think that should not be allowed to stay on the record, because the right way of bringing that up is a breach of privilege.

Mr SPEAKER: I am advised that it was not a suggestion of a deliberate misleading of Parliament, and, if it was in the hands of the Government and they wanted to take objection, they are able to do so.

Dr Russel Norman: Will the Minister now familiarise himself with the speech by the Hon Gerry Brownlee on 28 October where Gerry Brownlee said that “there has been no request or … pressure from Warner Bros to change our [labour] law.”; and, if he discovers that I am in fact correctly quoting from Hansard, will he go to Gerry Brownlee and ask him to correct this statement, which is clearly untrue?

Hon STEVEN JOYCE: In answer to the first part of the member’s question, I may well at some point read that speech, but the Government has no concerns about the actions that it took to get The Hobbit movies and other movies produced in this country. It is because we like to be hands-on and actually achieve some things for the New Zealand economy.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. That is not the question that the Minister was asked. What he has sought to do now twice is to duck out of it by making a statement to do with another issue, but not to do with—

Mr SPEAKER: Order! [Interruption] Order! I do not need any more assistance from the member. [Interruption] I do not need any further assistance from the member. The member asking the question asked a two-part supplementary question. The Minister rose and very satisfactorily answered the first part of that question.

Dr Russel Norman: Will the Minister for Economic Development be correcting his clearly misleading statement that he made in this House during The Hobbit law debate that there had been no pressure from Warner Bros to change our labour laws?

Hon STEVEN JOYCE: I need to point out to the member that I was not the Minister for Economic Development at the time.

Dr Russel Norman: I raise a point of order, Mr Speaker. Nonetheless, he has responsibility. He is the Minister. He must answer the question.

Mr SPEAKER: I think the appropriate way forward is for the member to re-ask that question.

Dr Russel Norman: OK. Will the Minister for Economic Development come back to this House to correct the statement he made that Warner Bros had never pressured the Government to change the labour law, given that there is clear evidence that Warner Bros did pressure the Government to change the labour law?

Hon STEVEN JOYCE: I would repeat that I was not the Minister at the time, but, in any respect, the Government is very happy with the decisions it has made in regard to The Hobbit movies and to the legislation change.

Dr Russel Norman: I raise a point of order, Mr Speaker. Are you saying that he addressed the question, given that he is the Minister and there is continuity in ministerial responsibility—

Mr SPEAKER: No. No, I am not, and I think on this occasion it is appropriate that the member asks the question a second time, or now a third time.

Dr Russel Norman: I have got to remember.

Mr SPEAKER: Yes, it is varying a little bit. I appreciate that.

Dr Russel Norman: The essence of the question is that the record is very clear that the Minister for Economic Development said to this House there had not been any pressure or request from Warner Bros to change our labour law, yet the email evidence is very clear that Warner Bros did put pressure on New Zealand to change the labour law, so will the Minister for Economic Development correct the record in Hansard? [Interruption]

Mr SPEAKER: Order! I particularly want to hear the answer.

Hon STEVEN JOYCE: Well, I have struggled with this particular suggestion of the member, because my question is how far back do I go in terms of responsibility as Minister for Economic Development, because I am no more responsible for the statements of my good friend the Hon Gerry Brownlee than I could be for Jim Anderton or Trevor Mallard before them.

Hon David Parker: I raise a point of order, Mr Speaker. The problem with that answer is that he is responsible.

Mr SPEAKER: The difficulty I have here is that the question has now been asked three times. It is not for me to satisfactorily design any answer to the satisfaction of the member asking the question. It is now for the House and the public to judge that answer for themselves.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. With respect, given your ruling, the fact that you allowed the member to ask the member three times presumably indicates that the Minister had not complied with the Standing Orders in even addressing the question. So to leave it there, I think, is very unfair to the questioner, because the Minister still has not complied, given what you have just said, with the Standing Orders. That is grossly unfair to the questioner.

Mr SPEAKER: I think the Minister has addressed the question—I accept maybe not to the satisfaction of the member asking the question. There have been three opportunities. That is quite sufficient, and the matter now will be for the public of New Zealand to judge the answer.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker.

Mr SPEAKER: Is the member questioning my ruling?

Hon Clayton Cosgrove: No, I am going to ask you a question, Mr Speaker.

Mr SPEAKER: Well, no, you are not. You are going to raise a point of order.

Hon Clayton Cosgrove: Yes, I am. The point of order is this: is the new regime now, in effect, whereby a questioner—a member—can ask a question several times with your indulgence, and then, if the Minister has not complied with Standing Orders, that is it? They have worn out their welcome—

Mr SPEAKER: No.

Hon Clayton Cosgrove: —and the Minister gets off the hook?

Mr SPEAKER: I appreciate the point raised by the member. At the end of the time, I have stated that in my opinion the question has been addressed. I am not arguing that it has been satisfactorily answered to the questioner’s satisfaction or to that of any member of the Opposition. The question has been addressed and on that basis we are moving on.

Grant Robertson: Did the Minister for Economic Development become aware that the blacklist on The Hobbit movie imposed by Actors Equity had been lifted before 20 October 2010?

Hon STEVEN JOYCE: I am not exactly aware of that chronology, but I would point out to the member that there is no doubt that the damage caused by the blacklist had been done and the confidence of the industry was obviously affected, as is reflected—

Grant Robertson: I raise a point of order, Mr Speaker. We have the same problem here. We have the Minister for Economic Development, who is responsible for that portfolio and responsible for answering questions, and he has once again failed to answer a very direct question.

Mr SPEAKER: I thought the question was whether the Minister was aware, and he said he was not aware.

Grant Robertson: No. Do you want me to re-ask the question?

Mr SPEAKER: I think on this occasion that that is the safest way forward.

Grant Robertson: Did the Minister for Economic Development become aware that the blacklist on The Hobbit movie imposed by Actors Equity had been lifted before 20 October 2010?

Mr SPEAKER: And I would have thought that was adequately answered, but I give the Minister another opportunity.

Hon STEVEN JOYCE: Well, I will do it again. I am not aware of the exact chronology, because there was a lot happening at that time, but if the member wants to put it down in writing, I am sure we could address it for him. But the reality is that the damage, in any event, had been done in terms of the confidence of the industry.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Why are you allowing this Minister to get up and say “No, I am not aware of the detail that is being asked.”, and then to bombard the House with information that is not to do with the question? Why do you not sit him down, like you would anybody else?

Mr SPEAKER: Because on this occasion I was absolutely sure that that was the way the Minister answered on the first occasion. Mr Grant Robertson took a legitimate point of order, suggesting the question had not been addressed. I wanted to listen to that being addressed. The question clearly has been addressed, and on that basis we will move on, if there are any further supplementaries.

Prime Minister—Statements on State-owned Asset Sales, KiwiRail, and Skycity Convention Centre

3. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes. In particular, I stand by the statement that the Opposition spokesman on education, Mr Hipkins, is making so little progress against Hekia Parata that he has taken to pulling his hair out.

Mr SPEAKER: Order!

David Shearer: Which is correct: that the revenue from asset sales “could easily be $5 billion to $7 billion”, as he said yesterday, or that the numbers will “move around and may need to be revised downward”, as his finance Minister conceded yesterday?

Rt Hon JOHN KEY: Both of them are potentially correct, and they are not incompatible.

David Shearer: Does he stand by his statement “We’re delivering on our election promise, so we can free up between $5 billion and $7 billion,” given that Solid Energy is now considered worthless?

Rt Hon JOHN KEY: Yes, but, of course, that is subject to the Supreme Court ruling, which we will hear at 3 o’clock.

David Shearer: As someone who has worked for an investment bank, does he think it is a smart idea to sell a State-owned energy company when electricity demand is projected to be flat for at least a decade?

Rt Hon JOHN KEY: It is not for me to give investment advice to New Zealanders—[Interruption] Well, I know that the Prime Minister in Labour’s term got herself in trouble with securities law, but I do not intend to. It is not for me to give investment advice, but what I can say is this. If we go and have a look at the mixed-ownership model, and we go right back to when National started promoting that policy, we see that it led to us in 2011 undertaking a scoping study. That scoping study really did the work of what the mixed-ownership model companies would be much more subjected to, which is external analysis, external directors, continual disclosure to the NZX, and a capacity to have a better understanding of what is going on with the company. In my opinion, if the member is asking me whether that would make those companies stronger and therefore more likely to succeed, the answer to that is “Definitely.”

David Shearer: Has he contemplated cancelling his mixed-ownership model programme?

Rt Hon JOHN KEY: No, but I will let you know at 3 o’clock this afternoon.

Brendan Horan: Does he stand by his words in the Prime Minister’s statement on 29 January that he would continue to support KiwiRail’s Turnaround Plan, given that the near-fatal Morningside crossing accident would not have happened if track maintenance workers were still employed instead of having been laid off under KiwiRail’s Turnaround Plan?

Rt Hon JOHN KEY: Yes, I stand by that statement. Secondly, I would really urge the member, who is relatively new to Parliament, to be extremely careful about making statements that could prove to be very incorrect and extremely upsetting for families. The member has a responsibility as a member of Parliament to get his facts right, and I am not entirely convinced that they are.

David Shearer: What advice has he received about legislative change should the Supreme Court ruling be adverse to the Government’s mixed-ownership model programme?

Rt Hon JOHN KEY: I have not had any advice.

Rt Hon Winston Peters: Given that the Skycity expansion is the biggest single event in his ministry as tourism Minister and the biggest single event in Auckland at this present time—

Hon Craig Foss: The World Cup.

Rt Hon Winston Peters: —at this present time—which sees him go with officials, armed with taxpayer resources and money, to a meeting with Skycity with no pre-meeting record, no meeting record, no post-meeting record, and no contact with Skycity to find out whether it has a record, is it fair or unfair in those circumstances for the average New Zealand person to think that you as Minister are flat-out lying?

Mr SPEAKER: Please address it to the Minister, not to the Speaker.

Rt Hon JOHN KEY: Seeing as the member did not ask me a question, I am not going to answer it. It started with “Given”, buddy!

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You know that I asked him a question. I set up the circumstances and asked him whether it was, in the circumstances, his lack of—

Mr SPEAKER: Order! Can the member please resume his seat. I listened very carefully to the question, and at the end of the question there was something about “is it fair”. I think if just that part of the question was given to the Prime Minister, the member would have more chance of his answering to the member’s satisfaction.

Rt Hon Winston Peters: I will say it slowly. Given that the Skycity expansion is the biggest single event in his term as the Minister—

Rt Hon JOHN KEY: I raise a point of order, Mr Speaker. Starting a question with “Given” is a statement.

Mr SPEAKER: We have heard—[Interruption] I am trying to assist the member on this occasion. It was a very lengthy question. We have all heard the “Given”. If the member could now just get to the question, which is “Is it fair?”, I will try to elicit a response for the member.

Rt Hon Winston Peters: My question very simply is: is it fair or unfair for the public of New Zealand to conclude after this denial in respect of no pre-meeting, actual meeting, or post-meeting record of either party that he, as Prime Minister, is flat-out lying?

Mr SPEAKER: Order! That is a very—

Rt Hon JOHN KEY: The member has not indicated which meeting he is talking about. I cannot answer that question.

David Shearer: If there is an adverse decision by the Supreme Court today, will he rule out cancelling the mixed-ownership programme?

Rt Hon JOHN KEY: It would be extremely imprudent of me to make a comment when we are 35 minutes away from a Supreme Court ruling. If I were to answer that question, what would happen is the muppets on the other side would jump up and down saying I was trying to run in front of the Supreme Court, and I do not intend to do that.

Health Targets—Progress

4. SHANE ARDERN (National—Taranaki - King Country) to the Minister of Health: What reports has he received on this quarter’s national health targets?

Hon TONY RYALL (Minister of Health): The latest quarterly report released today shows that district health boards have achieved four of the national health targets this quarter and made improvements in the other two. The results show that 95 percent of hospitalised patients who smoke were offered support to quit in the last quarter of last year, which means we have achieved this national health target for the first time. Our district health boards have performed nearly 4,000 more operations than planned, and, once again, we are well on the way to exceeding the target of increasing elective surgery volumes for New Zealanders by at least 4,000 discharges a year.

Shane Ardern: What other progress can he report on the Government’s national health targets?

Hon TONY RYALL: There has been an increase to 93 percent of patients admitted, discharged, or treated in emergency departments within 6 hours, which is an improvement compared with the last quarter in the same time last year. The national immunisation coverage of 8-month-olds increased by 2 percent, and the rates for Māori and Pacific increased by 5 percent and 3 percent respectively. The Government is committed to protecting and growing the New Zealand public health service, and we are seeing more high-priority front-line services being delivered as a result of the Government’s $14.1 billion investment in health this year.

Hon Annette King: Will he give a guarantee that no district health board is manipulating his 6-hour target for patients being admitted, discharged, or transferred from an emergency department—for example, by putting patients into other units so that the clock does not start when the patient actually arrives at the emergency department?

Hon TONY RYALL: Look, if you put that bluster aside, what I would be very clear to that member—

Hon Annette King: I raise a point of order, Mr Speaker. It was a very straight question with no bluster, and that is no way to start an answer.

Mr SPEAKER: I agree. If the Minister could address a very clear question that has been asked, I would be grateful.

Hon TONY RYALL: I am regularly assured that district health boards know that the Government’s very clear message to them is that we do not expect anyone to game the target. But I can tell that member that I am surprised she asks a question on emergency departments. When she was Minister of Health—

Hon Annette King: I raise a point of order, Mr Speaker. Apart from the fact that it was a straight question to the Minister on his performance, he did not answer whether he would give a guarantee.

Mr SPEAKER: I am ruling that the Minister adequately addressed the question.

Solid Energy—Governance and Management

5. Hon CLAYTON COSGROVE (Labour) to the Minister for State Owned Enterprises: Prior to his resignation as CEO of Solid Energy, on what date was Don Elder’s contract last renewed?

Hon TONY RYALL (Minister for State Owned Enterprises): I am advised that Dr Elder’s contract was last updated for employment law changes on 31 August 2012, although this is an operational matter. I am advised that no changes were made to pay or entitlements, and this has been confirmed by Mr Mark Ford, the current chair, and Mr John Palmer, the former chair.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. Given the noise, could he confirm the date. I could not hear it, I am sorry.

Mr SPEAKER: I am sure he can. Minister?

Hon TONY RYALL: I am advised that Dr Elder’s contract was updated for employment law changes on 31 August 2012, although this is an operational matter.

Hon Clayton Cosgrove: Given that 31 August 2012, according to the Companies Office, was the last date that the then chair of Solid Energy, John Palmer, held that office, does he think it is appropriate that an outgoing chair, on the day he leaves office, signs off a new contract, thereby locking in the incoming chair to a financial commitment that as a result would mean a far greater amount being paid by the taxpayer for Dr Elder’s subsequent severance pay?

Hon TONY RYALL: As I told the member yesterday, that same allegation he made yesterday was incorrect. The contract was updated—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I asked the Minister whether, given that 31 August, according to the Companies Office, was the last official date that Mr Palmer was in office, it is appropriate for the outgoing chair to sign off a new contract, thereby locking in that commitment to the incoming chair, which has a direct impact on the severance pay the taxpayer would pay—

Mr SPEAKER: Order! The member has now repeated his question, and I think, considering the length of the question, it is only appropriate that the Minister be given an opportunity to answer it. If I look at Hansard, I am sure I will see that the Minister was about 2 seconds into his answer before the member raised the point of order, which is hardly helpful. Would the Minister like to respond to the question?

Hon TONY RYALL: As chairman, Mr Palmer was entitled to enter into whatever arrangement. It is my understanding that Dr Elder’s contract was updated for employment law purposes, and there were no changes to the pay or to the entitlements that Dr Elder received. This means that his—

Hon Trevor Mallard: The term.

Hon TONY RYALL: He did not have a fixed-term contract. He was, effectively, a permanent employee, operating under a contract since about the year 2000. There was no change to Dr Elder’s pay or entitlements. Therefore, there was no effect on what his contractual arrangements would be during the changes to his employment. I think it is quite wrong for that member to come into the House and make misinformed allegations. It is exactly the same as—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. My point of order is very similar to Annette King’s. The question was answered. He then started to ramble on with extraneous words.

Mr SPEAKER: Has the member got a further supplementary question?

Hon Clayton Cosgrove: Yes. Is Dr Elder still employed and being paid in any capacity today by Solid Energy?

Hon TONY RYALL: I think in the statement that came out when Dr Elder announced his resignation it was made clear that he was going to be available to the company for a period of time; I think that period of time is still in existence.

Hon Clayton Cosgrove: Does he believe it was appropriate to reward the chief executive with a new contract on the day the outgoing chair officially left office, given the severe financial strain the company was under, the fact that Solid Energy was under month-to-month monitoring and the Minister was receiving month-to-month reports, and further that Dr Elder then subsequently resigned some months later?

Hon TONY RYALL: Dr Elder had an open-ended contract, so I think trying to paint it as a renewal is quite inappropriate. I have been assured by both Mr Ford and Mr Palmer that there were no changes to his pay and entitlements that would have affected any of his requirements thereafter. Can I say to that member that he is constantly misrepresenting the situation, like he did when he claimed $22 million—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I raise the same point of order again. This member has a habit of answering questions and then rambling on with extraneous material.

Mr SPEAKER: It was a very—

Hon Clayton Cosgrove: You have ruled previously with Annette King that once the question is answered, the Minister should sit down and we get on with it. I just simply ask for consistency.

Mr SPEAKER: It was a very long question. It was equally a very long answer, but a satisfactory one.

Hon Clayton Cosgrove: How can the Minister characterise the re-signing of a contract with the chief executive of Solid Energy as anything but a renewal of a contract?

Hon TONY RYALL: Because the advice that I have received was that it was an open-ended contract, that what Mr Palmer was doing was seeking to regularise it for later employment law changes. I have been assured that there were no changes to his employment, pay, or entitlements that came as a result of that process.

Hon Clayton Cosgrove: Will the Minister give a commitment to the House today that he will initiate an independent inquiry into the governance and so-called financial management of Solid Energy, given that last year his Government valued Solid Energy at $1.7 billion as part of the asset sales programme, and now, according to his own Prime Minister, it is worth “less than nothing”? Will he give that commitment to the House today?

Hon TONY RYALL: No, I am not going to launch some sort of independent investigation into the governance of Solid Energy. The governance of Solid Energy, much of which was appointed under the previous Labour Government, was running that company and it was doing very well up until 2011. We had the scoping study. It identified a number of issues. And I agree with Trevor Mallard: the collapse of world coal prices is a most significant factor in this matter.

Hon Clayton Cosgrove: I seek leave to table a document showing that John Palmer was reappointed in 2009—

Mr SPEAKER: The source of the document?

Hon Clayton Cosgrove: I believe it is from the annual report.

Mr SPEAKER: The annual report is very available to all members.

Screen Production Industry—Government Support and Outcomes

6. Dr JIAN YANG (National) to the Minister for Economic Development: What support has the Government given to the film industry in New Zealand?

Hon STEVEN JOYCE (Minister for Economic Development): This Government has continued to support the Large Budget Screen Production Grant Scheme, which has supported the production of movies in New Zealand such as King Kong, The Chronicles of Narnia: The Lion, The Witch and the Wardrobe, The Adventures of Tintin, and, of course, The Hobbit. Also, in October 2010, we made changes to the Employment Relations Act to clarify the law in regard to those working in the film industry. This enabled workers in the industry to be deemed independent contractors unless they chose to have an agreement that they were employees. We have also streamlined the immigration process for entertainment industry - related work visa applications. It is now easier for applicants who meet the criteria to work in New Zealand.

Dr Jian Yang: What recent successes have resulted from the Government’s changes?

Hon STEVEN JOYCE: The filming of The Hobbit in New Zealand is a recent and very successful example. This film resulted in jobs for many New Zealand actors, including seven lead dwarfs, 24 supporting cast, approximately 16,000 New Zealand actor days worked, 1,250 people paid as extras, and 7,200 extras’ workdays. It also resulted in nearly 7,000 domestic flights, 93,000 hotel bed nights, 1,800 rental cars hired, $9.1 million spent with local set construction, and $1.5 million spent with local food suppliers. And for Wellington, an economic impact report said that the world premiere of The Hobbit contributed nearly $12 million to Wellington’s economy during the week of the premiere late last year.

Dr Jian Yang: What tourism benefits have resulted from the Government’s changes?

Hon STEVEN JOYCE: Well, very good ones. The media exposure for New Zealand tourism from the films of The Hobbit and the world premiere will be felt for years to come. The National-led Government realised the benefits that would come from making these films in New Zealand and is proud to have actively encouraged the Hobbit movies to be produced here from the very beginning. An example of the direct tourism benefit is the “100% Middle-earth, 100% Pure New Zealand” campaign launched by Tourism New Zealand. This video has received more than 800,000 views on YouTube, resulting in nearly 5,000 hours of video content being consumed. Research on the back of this campaign—and this is very important—shows eight out of 10 people saying that they are more interested in coming to visit New Zealand after seeing The Hobbit brand advertisements.

Dr Jian Yang: Is he aware of any opposition to the changes the Government has made to support the film industry and is making generally to support jobs and help grow the economy?

Hon STEVEN JOYCE: Yes, and it is a bit confusing. There are some groups that declare they are in favour of hands-on Government, but then they oppose it when the Government is hands-on. For example, in just the last 2 weeks these groups have opposed the Government encouraging a convention centre in Auckland and opposed, again, The Hobbit movies being produced in New Zealand. I have come to the conclusion that the only the thing the Opposition is actually hands-on about is getting its hands on tickets to The Hobbit premiere.

Health Services—Funding and Minister’s 2013-14 Letter of Expectations

7. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Health: What expectations has he set for District Health Boards and subsidiary entities for 2013/14?

Hon TONY RYALL (Minister of Health): I would like to welcome the member back into her responsibilities. The expectations summed up in the letter of expectations to district health boards and subsidiary entities for the 2013-14 year are available on the Ministry of Health website. They have been there since 6 February. The headings in the letter are: “Better Public Services: Results for New Zealanders”, “National Health Targets”, “Care Closer To Home”, “Health of Older People”, “Regional and National Collaboration”, and “Living within our means”. I can also advise that the Government will be investing more money in health this Budget, and this contrasts with the ongoing reductions in health spending in many parts of the world.

Hon Annette King: In light of that answer, is the new way to provide his “Better, sooner, more convenient care” health service for charities to pay for the bandages and dressings for children with skin infections in Northland and South Auckland, because the Government funding is not enough, and for charities to pay for medicines where a family cannot afford his new $5 prescription charges?

Hon TONY RYALL: The Government is making a very large investment in the rheumatic fever programme around the country and we welcome any organisation that wants to join with us in backing that. The member will remember that rheumatic fever was made a national health priority in 2001 and that Government did absolutely nothing in the subsequent 7 years—a priority in 2001 and absolutely nothing was done until this Government put $24 million in. [Interruption]

Mr SPEAKER: Order! Supplementary question, Annette King.

Hon Annette King: Well, in light of that answer, why do the Minister and the Prime Minister not tell the whole truth about his flagship rheumatic fever programme: that charities are helping to fund it in South Auckland, because the district health board has not got enough money to be able to cover the 61 schools at higher risk of rheumatic fever? And can he tell the House whether all the funding has actually been allocated for the programme that he promised?

Hon TONY RYALL: I am advised that the ministry and the Counties Manukau District Health Board intend to spend $11 million in the next 2 years on rheumatic fever, and they appreciate the $95,000 that the Middlemore Foundation is contributing to the programme. This is an important programme because rates of rheumatic fever were excessive and grew dramatically between 1999 and 2008—a shameful record of Third World disease, neglected by the failed party opposite.

Hon Annette King: It’s time he manned up and took some responsibility.

Mr SPEAKER: Supplementary question. [Interruption] Order! The noise level now is getting quite excessive, from both sides of the House. Would the member please ask her supplementary question.

Hon Annette King: Why does he not—

Hon Paula Bennett: This is the fresh new face of Labour—the fresh new face.

Hon Annette King: Oh, come on. There’s the old fishwife over there.

Mr SPEAKER: Order! Does the member want to ask her—[Interruption] The Hon Paula Bennett, unless you can stop interjecting across the House, I am going to ask you to leave the Chamber.

Hon Annette King: Why does he not change his expectations of “Better, sooner, more convenient care” to “Worse, later, and very inconvenient” in light of the latest Quality of Life Survey, released yesterday, showing 46 percent of those who wanted to go to a doctor last year did not because it was too expensive, because general practitioner fees in some areas have doubled under his watch, and because poor children have to rely on charity to bail out their health services?

Hon TONY RYALL: No, because we would have to adopt Labour Party policies if we wanted to do that. This Government is determined to improve services for New Zealand, and the reason why we want to do that is that we are not prepared to accept that for the 6 years that that member was Minister of Health, the number of operations performed for patients went down. The budget went up, and the number of operations went down. We are not prepared to accept that. We are trying to provide better services for New Zealanders, in much tighter funding circumstances.

Buildings, Earthquake-prone—Proposed Changes to Policy

8. AARON GILMORE (National) to the Minister for Building and Construction: Has the Government changed the system for dealing with earthquake-prone buildings?

Hon MAURICE WILLIAMSON (Minister for Building and Construction): No, not yet. Right now a Ministry of Business, Innovation and Employment consultative document that outlines proposals for improving the earthquake-prone buildings policy system in our country is out for public comment, but it is only a starting point. We need the public’s feedback to set a national policy that balances risk versus cost. Submissions can be made up until 8 March, and I would encourage people to put one in.

Aaron Gilmore: Is the criticism of these proposals from a number of mayors valid?

Hon MAURICE WILLIAMSON: No, because we have not yet decided on any new policy. I would encourage all those mayors to carefully read the consultative document and then make a submission. I want to tell the House that the Government is listening to all those submissions. We will not be going to any extreme policy that sees “the main streets of all our provincial towns demolished”. There will be exemptions for things like heritage buildings. I truly believe that when a discussion document has a picture of a pretty rumpty old woolshed and says that this will not apply to haysheds, woolsheds, and other used things, and then mayors say that is going to cause a whole lot of problems, they really do need a remedial reading course.

Aaron Gilmore: How much could changes to the earthquake-prone buildings policy system cost?

Hon MAURICE WILLIAMSON: If we use the figures based on the starting point that the royal commission has suggested, the estimated cost of this scheme would be around about $1.7 billion for the whole country. Given that the current earthquake-prone buildings policy that is in place is estimated to cost around $1 billion, it means that if we did adopt the starting point, we will have only about $700 million expenditure over 15 years. When I hear the mayors of Timaru south saying that in their region alone it will cost $1.8 billion just for them, I really do find that my gast is flabbered.

Wage Rates—Minimum Wage and Living Wage Campaign

9. DARIEN FENTON (Labour) to the Prime Minister: Does he stand by his statement that the living wage is “simplistic”?

Hon SIMON BRIDGES (Minister of Labour) on behalf of the Prime Minister: Yes, and for two reasons. The first is that the Family Centre’s living wage of $18.40 an hour is calculated on the basis of a two-adult, two-child family, whereas a lot of low-income earners are in different circumstances—for example, students working part-time. The second reason is that it assumes that paying much higher wages is costless, when it is not—it costs jobs. If all employers in the country paid a minimum wage of $18.40, it would cost an estimated 26,000 jobs.

Darien Fenton: When he said that providing New Zealanders with a living wage is not high on his Government’s agenda, was he saying that Kiwi workers should not expect to make a living from their work while he is Prime Minister?

Hon SIMON BRIDGES: No. Ultimately, above the minimum wage, what is paid is up for employers and their employees to negotiate.

Darien Fenton: Does he believe that the minimum wage of $13.75 an hour is enough for families to live on; if so, why do two out of the five children in poverty come from families in work?

Hon SIMON BRIDGES: What is very clear is that actually there is a range of circumstances. For people on the minimum wage with children, for example, there are a range of packages available to them from the Government. The truth of the matter is that actually our minimum wage, as a proportion of the average wage, is the highest in the developed world.

Darien Fenton: How is it fair that his Government is giving minimum wage workers a measly 25c pay rise, while at the same time it is splashing out on $23 million worth of bonuses for Solid Energy’s management?

Hon SIMON BRIDGES: What is very clear is that having a job is much better than not having one, and we are very conscious, unlike the other party, which does not seem to understand economic fundamentals, that the higher we raise the minimum wage, the more people are put out of jobs—7,000 under your policy.

Darien Fenton: Why is the Prime Minister still insisting that a $15-an-hour minimum wage will cost thousands of jobs when Treasury and the Ministry of Business, Innovation and Employment both say there is little evidence to support this, and his own Minister of Labour said this morning that there is no science behind that argument?

Hon SIMON BRIDGES: It is uncontroversial amongst good economists that the higher the minimum wage goes, the more jobs people do not get. At $15 an hour, it is about 7,000—a town.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou. Does the Prime Minister agree that income inequality has increased in the last 30 years, and that increasing the minimum wage to $16 an hour would be a significant step in reversing that trend and achieving what the Living Wage campaign also seeks—that is, the income necessary to provide workers and their families with the basic necessities of life, to enable workers to live with dignity, and to participate as active citizens in society?

Hon SIMON BRIDGES: No, because, with respect to the member, I think what is distinctly arguable is that at $16 an hour for the minimum wage we would end up putting a lot of people out of jobs. That would increase inequality, not the other way.

Television, Switch-over to Digital—South Island

10. NICKY WAGNER (National—Christchurch Central) to the Minister of Broadcasting: What percentage of households in the South Island have gone digital ahead of the digital switchover on 28 April 2013?

Hon CRAIG FOSS (Minister of Broadcasting): In the South Island 91 percent of households with TVs have now gone digital ahead of the switch-over of the South Island on 28 April. The West Coast of the South Island, along with Hawke’s Bay, successfully went digital at the end of September last year. There is a high degree of awareness in the South Island, at around 95 percent, of the need to go digital. Although some households may choose not to go digital, I encourage all those that intend to, to do so well before 28 April. Nationwide, 91 percent of all households have already gone digital, and are enjoying more channels, better pictures, and new services.

Nicky Wagner: What action needs to be taken for those households that want to watch TV after the digital switch-over?

Hon CRAIG FOSS: To keep watching TV, households need to go digital by getting FreeView, Sky, TelstraClear, or Igloo. You do not need to have a new TV to go digital, as practically any television can receive the signals, with the right equipment. There is currently a comprehensive public awareness campaign around the South Island to help people know everything they need to know about the digital switch-over before 28 April. People wanting to find out what they need to do to go to digital should visit www.goingdigital.co.nz or call 0800 838 800.

Kiwifruit Industry—Reports on Source of Psa Outbreak

11. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister for Primary Industries: Has he received a report from the Ministry for Primary Industries that identifies the pathway by which Psa bacteria entered New Zealand?

Hon JO GOODHEW (Associate Minister for Primary Industries) on behalf of the Minister for Primary Industries: My predecessor, the Rt Hon David Carter, received a briefing from the Ministry for Primary Industries on the possible pathways by which Psa could have entered New Zealand. The report does not identify a single likely pathway, but does identify pollen and people movements as the most likely pathways. This report is available on the Ministry for Primary Industries’ website.

Rt Hon Winston Peters: Has he received any advice about a shipment of anthers from Shaanxi province in China to Kiwi Pollen Ltd in June 2009; if so, what was the advice?

Hon JO GOODHEW: I have not been given any advice that the Minister is aware of that.

Rt Hon Winston Peters: What assurances can he give the public that the Ministry for Primary Industries and its predecessor, the Ministry of Agriculture and Forestry, have been totally objective and rigorous in investigating the biosecurity breach by which Psa bacteria entered New Zealand and devastated the New Zealand kiwifruit industry?

Hon JO GOODHEW: Since the incursion that brought Psa to New Zealand there have been a number of reports. The first report was a business-as-usual report—the pathway tracing report—that looked at what could possibly have been the ways in which Psa came to New Zealand. The second report was commissioned by the director-general, Wayne McNee—an independent report called the Sapere report. That looked again at what the possible pathways of Psa into New Zealand actually were, and also made some recommendations. I am aware that there is one other report, again an independent report, from a gentleman down in Dunedin, which has made a suggestion about where in fact the origin of Psa has come from. But I can assure the member that the recommendations are being looked at by the Ministry for Primary Industries, and that we take this matter very seriously indeed.

Rt Hon Winston Peters: Has the Ministry for Primary Industries used the research of Associate Professor Russell Poulter of the department of biochemistry at Otago University, who has undertaken genetic analysis to trace the particular Psa bacteria strain that entered New Zealand; if not, why not?

Hon JO GOODHEW: The Minister is aware of the report. The Minister is aware that the report suggests Psa arrived in New Zealand from China rather than Italy. This is not unexpected, but the research does not point to a definitive pathway into New Zealand. The Ministry for Primary Industries will continue to look at any new evidence that might suggest pathways and might suggest ways in which we can improve the biosecurity in New Zealand to prevent things like Psa coming into New Zealand again and affecting the industry as Psa has done.

Rt Hon Winston Peters: What assurances can he give the public that the investigation into the biosecurity breach by which Psa bacteria entered New Zealand has not been constrained or limited—has not been constrained or limited—in order to avoid opening up the Ministry for Primary Industries and its predecessor, the Ministry of Agriculture and Forestry, to legal action on the grounds of negligence and a failure to exercise a proper duty of care?

Hon JO GOODHEW: I can assure the member that this is being taken very seriously, and, in fact, the very independence of the Sapere report means that the Ministry for Primary Industries is taking it seriously and is not looking to conduct just an in-house investigation. Of course, the initial report was a business-as-usual pathway report, as I mentioned in my first answer.

Rt Hon Winston Peters: What does that mean?

Hon JO GOODHEW: The pathway tracing report. But then an independent report was commissioned—the Sapere report. I believe that points, in fact, to no covering off the opportunity to find out exactly what happened in this case.

State Housing—Focus and Progress on Building New Houses

12. HOLLY WALKER (Green) to the Minister of Housing: Is the Government on track to build the 2,000 new state houses promised by Rt Hon John Key and Hon Bill English over the next two financial years, or was the Minister correct when he said “I am not yet at the point where I can tick off and say they are going to meet all of those targets”?

Hon Dr NICK SMITH (Minister of Housing): Yes, I am now confident, having met the chair and chief executive of Housing New Zealand Corporation and having been on the ground and seen the developments that are occurring both in Christchurch and in Auckland, that we will, in fact, be able to build those 2,000 new houses in the next 2 years.

Holly Walker: Did he prevaricate about Housing New Zealand Corporation’s ability to meet the target because he knew that in the last financial year the corporation built only 68 houses and is clearly not in a position to increase its building programme by the 1,400 percent needed to meet the target?

Hon Dr NICK SMITH: No. I am just not in the business of giving false assurances. I was a new Minister—

Hon Clayton Cosgrove: What about ACC?

Hon Dr NICK SMITH: That is well-known. I am very proud of—[Interruption] Unlike ACC making a loss of $4.8 billion, it is now doing very well. But in respect of when you are a new Minister and you are asked whether you can give absolute assurances, someone from the other side may be prepared to do so. I said no, I want to check it out. I have now checked it out, and that is why I am confident that those houses can be built.

Holly Walker: Given that Housing New Zealand Corporation had a net loss of more than 300 houses last year, can he really deliver on the Prime Minister’s promise of 2,000 new houses, or will he have to give the Prime Minister some sage advice and tell him he is dreaming?

Hon Dr NICK SMITH: The members in the Greens may not have noted that over the last 2 years Housing New Zealand Corporation was dealing with the biggest natural disaster in New Zealand history, in which hundreds of homes were severely damaged in Christchurch. I think it is absolutely proper that the corporation has focused on repairing those existing houses rather than simply being solely focused on the building of new State houses.

Melissa Lee: How does the approach of the current Government to Housing New Zealand Corporation vary from that of the last decade?

Hon Dr NICK SMITH: The focus last decade was solely on the number of State houses, and maintenance was deferred. We have been far more concerned, firstly, about the quality of State housing; secondly, about aligning the housing stock by location and size to family needs; and, thirdly, ensuring that those most in need get priority for social housing, and also enabling the community housing sector to play a greater role.

General Debate

General Debate

Hon CHRIS TREMAIN (Minister of Internal Affairs): I move, That the House take note of miscellaneous business. The National-led Government is on a mission to lift jobs and lift economic growth. Today we saw the Minister for Economic Development roll out a new initiative: the sixth tranche of our Business Growth Agenda—lifting capital markets in this country. Long ago we heard the Opposition stop calling out for a plan on this economy because there is a clear plan on this side of the House, and the sixth tranche was delivered today: capital markets growth.

That sixth tranche of the wider growth package is a great initiative. What we have seen as part of that is, again today, the $60 million initiative from the New Zealand Venture Investment Fund, another initiative that is part of that capital markets growth agenda. That particular lift will really help to fund new initiatives in this country. Raising the level of venture capital investment in innovative companies is going to be a huge focus going forward. We have seen investment from that fund of $117 million into 126 companies, including Orion Health, SLI Systems, PowerbyProxi, and Booktrack, amongst a number of other amazingly innovative companies.

What do we see on the other side of the House as we drive out this plan to lift growth and to lift wages? We see a yawning gap moving us further and further apart from Labour and the Greens as they oppose every initiative we bring to the House to lift jobs and growth—every initiative. Today in question time we saw a great example of that, with Russel Norman once again opposing the film industry in this country and its opportunity for green growth. You would think that with the film industry, they would be behind it. But, no, they are against that industry and against the growth that it is bringing.

They are against tax changes that drive incentives for companies to invest. They are against major roading projects—projects that would increase the efficiency of our economy. They are opposed to free-trade agreements, including the US free-trade agreement, which could bring up to another $2 billion per annum into our economy. They are against Resource Management Act changes, they are against the 90-day employment trials, they are against work expectations for beneficiaries—go figure; they do not expect that beneficiaries should have to get out there and work—and they are against oil and gas exploration. But to cap it off, the most amazing thing that the Green Party was against in New Zealand was Callaghan Innovation. It is against a high-growth institute aimed at lifting high-end manufacturers in this country.

But where I really want to focus today is a detailed example of where the Greens are opposed to just about everything in this country. They came into the House last week criticising the Hawke’s Bay Regional Council for its opportunity to lift growth in the province of Hawke’s Bay—to lift jobs and economic growth. Here was a project that is also good for the environment. It is helping to move water from the aquifers to the dam and, therefore, increase the flow in the Tukituki River. To me that is a win-win. That is a green growth project, which is bringing growth to the economy. There are 26,000 additional hectares of irrigated land, $250 million to $300 million more in exports, and wins for the environment, yet they are against it. They are against it, because they felt that the Hawke’s Bay Regional Council’s debt was going to go through the roof, from $15 million to $90 million. Well, they cannot even read a balance sheet, because at the same time as the debt was increasing, equity was going up and assets were going up. It was a massive win for the economy.

So I want to talk about that, because on one side of the coin they want jobs and growth, and on the other side of the coin they are saying: “Oh, it can only be green growth.” Well, actually, our economy is dependent on our primary industries. That is where the first dollars in our economy are created, day in, day out. You are going to be able to get green growth at the high-tech end only if you have got a good, strong primary economy.

Actually, the primary economy is exhibiting great examples of green growth all the time—excellent examples. It has some wonderful examples of what it is doing there. Take, for example, the dairy industry, which came out last week with another initiative to improve its environmental footprint. What do those guys do? Oppose it—oppose it. That industry is trying to lift its footprint, and they are trying to oppose it. They are against that. They are against dairy farmers. Everything they go against—they are opposed.

DENISE ROCHE (Green): In the last week or so the difference between how the Government treats the richest and the poorest in our country has never been clearer. On the one hand we had confirmation yesterday that the Government ignored Crown Law advice to change the industrial relations law of this country to advantage Warner Bros during the making of The Hobbit. This is the film that also attracted over a hundred million dollars in subsidies from New Zealand taxpayers and that so far has taken over US$1 billion in box-office receipts worldwide. It has dressed up these law changes and its dodgy dealings as something that deserves an award, maybe an Oscar—a winner. The Government thinks it is the winner of the Oscar for nationalism, but it is not. Government members are not Oscar winners, because when you defrock what they have done, their actions turn out to be a treacherous betrayal of vulnerable workers on behalf of overstuffed and overseas powerful interests. There will not be any golden statues for this act of betrayal, this betrayal of decent Kiwi values.

Those papers reveal the Prime Minister and his Government, and their actions, for what they are. It was always about union busting. The Prime Minister and his Ministers said that it was about protecting jobs for the 3,000 workers that were involved in The Hobbit. By his own admission the international film industry now thinks New Zealand is an attractive location for movies because New Zealand has “a flexible labour market and an educated workforce which is not heavily unionised.” The Prime Minister’s own briefing papers from his trip to Hollywood in October last year show the growth in the film sector, but also describe employment in that area as of “varying tenure and sporadic duration”. He has allowed for more precarious work for vulnerable workers. Changing the law has changed New Zealand into the sweatshop of the film industry.

So what about those jobs, eh? The same briefing said that almost everyone was a contractor with earnings that were relatively low or middle-income. With this ill-advised change the Prime Minister has added to the lack of security for a whole raft of workers. He has contributed to what Professor Guy Standing calls the precariat. These are fixed-term casual on-call contractors who sell their services for whatever they can get. They are unable to bargain collectively and the employment environment is not an even playing field, so they often end up with low wages and poor conditions. Professor Standing calls this group and this sort of thing the commodification of work and workers. So what we got from selling our labour laws was a whole bunch of casualised low-wage work, and I guess that as well as The Hobbit being a vehicle to promote the gorgeousness of our country and, hopefully, attract tourists, we also got an international reputation for screwing down workers’ rights. It is not the type of reputation many of us wished for. I want to make it clear, and particularly to the previous speaker, Chris Tremain, that the Greens want to see a strong, vibrant film industry, but we do not think the way to achieve it is to pay poor wages and undermine workers’ rights.

We want to see real jobs. We note that in the last year we lost another 17,000 jobs in manufacturing, according to the Statistics New Zealand household labour force survey that was released today, and we are not seeing a hundred million dollars of investment in that sector, despite the fact that these jobs were real jobs, not casual and insecure. Our Prime Minister has also been doing dodgy deals with Skycity to build an International Convention Centre in Auckland and, again, he says this will create jobs, but we have not done the cost-benefit analysis of what that will mean for problem gamblers and for those who deal with them—and pay for that—in Auckland. Contrast the cosy relationship of this Government with big business—Warner Bros, Skycity—with its relationship with ordinary workers, who received a 25c pay increase yesterday and are still earning poverty wages. Contrast that and you will see that the Government setting is towards the wealthy and not towards the deserving poor.

Hon MAURICE WILLIAMSON (Minister for Building and Construction): We are coming up to around about 16 months into the second term of the current National-led Government, and it is about a time, at mid-point, when it is worth while looking at a comparison between what is on offer between either side of the House. I do not think the differences could be more stark. If we look at the circumstances under which this Government came to office, we came in in the year when the global financial crisis had decimated the world’s economy, and we were then smacked by the most incredible natural disaster this nation has ever experienced, called the Canterbury earthquakes—about 11,000 of them—and the huge loss of wealth and income that those quakes caused. I would have to say that that, plus a number of other issues along the way, would normally have taken a Government to its knees. But what has happened is that the public, in the current polling, is suggesting that they still have confidence in where the Government is taking this place—

Andrew Little: It depends which poll.

Hon MAURICE WILLIAMSON: —under incredibly trying circumstances. I was hoping my Labour colleagues would interject, because I now want to quote from one of the most luminary people from the media in this country—not a friend of mine, not even a close friend, but actually someone whom I do not normally agree with. Brian Rudman of the New Zealand Herald said today in an article headed “… Labour should be making inroads”—I want members of the House to listen to what the wonderful journalist Brian Rudman of the New Zealand Herald had to say—“Despite the best efforts of Opposition politicians, single-issue campaigners and me and my colleagues in the media, most Kiwis seem resolutely unconvinced that this country is heading for hell in a handcart.”

There are about five little nuggets of gems in that little statement. Does “the best efforts of me and my colleagues in the media”, for example, not give you an idea that this is now official? It is actually official that Brian Rudman and others are indeed the official Opposition of this country. He has declared it. He has actually not just said it; he has finally declared something that we have suspected for a while. He has declared it. But the New Zealand public have not been hoodwinked by that—no, no, no. They realise the incredibly difficult circumstances. So when Labour members get up and talk about whether there have been as many jobs created as there should have been, most members of the New Zealand public immediately say “Well, actually, I think the Government’s done a damn good job, based on the circumstances that it faced.”

I want to give the Opposition a good example of a general manager of an Asian airline, when I was speaking to him back in the 1990s—about 1996, or whenever the Asian financial crisis occurred. He said “Maurice, every time I meet with my chief executive back in our home base, I am held to total, absolute targets, and if I don’t achieve them I’d lose my job. But do you know what’s happened this year? Because of the Asian financial crisis and the total meltdown, I’ve been told ‘Just do whatever you can, because the circumstances are so ghastly. We won’t hold you to anything. Do your best.’ ” The New Zealand public have looked at this Government, and looked at a track record of incredible successes along the way, in some of the most trying times, and said “Well, actually, that’s good. Well done. We’re going to stay with you. We’re going to back you on it.”

Then they look at an Opposition who cannot even determine who their leader is. I mean, it is the most open leadership race that has ever been. Normally there is only one person there and another person challenging, but I think there are 34 of them who could be the leader. In the next ballot, they could all be having a go at it. It is the most open ballot. What I found interesting was that in their last ballot for leader—I think this is delicious—there was only one candidate. It was a little bit like the Mugabe leadership challenge. There was only one candidate, and he did not get 10 votes from his own people—10 of them did not vote for him. How does that happen? I would understand that if there had been a really good challenger taking on David Shearer. I would understand that. There was no other candidate, and yet 10 people still did not vote for him. That is why the public do not think they can be a Government in waiting, that is why the people will not ever support the Labour-Greens Opposition, and that is why the public are staying with the current National-led Government.

Hon ANNETTE KING (Labour—Rongotai): “It’s No Way to Run a Country”—“It’s No Way to Run a Country”. Well, that is the name of the latest big-budget, closed-shop, crony-ridden feature from this Government. It is being performed by a whole raft of second-rate, B-grade actors, starring, first of all, John Key. He is the leading man. He has made his name with performances involving brain fade and shonky deals. You know, in Italy they have a comedian who wants to be a Prime Minister, and in New Zealand we have a Prime Minister who wants to be a clown. Then we have Bill English. Well, he is just a bit player, really, in this whole play. He takes any role that involves personal rorts. Then we have Steven Joyce. He is the main supporting actor, who has his finger and his toes in every action and every deal. Then we have Tony Ryall. He has been chosen for his ability to play any role, but he does specialise in pantomime—you know, a sort of fairy godmother comes to mind when you think of him. Then we have Hekia Parata. She is a fading star, whose career is really over but they are trying to revive her. I have to say that it is a mystery, it is a thriller, it is a horror, it is a tragedy, and it is a comedy in slapstick all rolled into one, and it is playing right now in your town—and that is this Government.

You know, it is hard to remember a Government that has in such a short time sunk to arrogance, cronyism, cover-ups, and intimidation. Arrogance, because Ministers will not meet with people; arrogance, because they will not answer their mail; and arrogance, because they do not believe the public really matter. Cronyism, because the jobs for their mates come thick and fast. And when we get to cover-up, the doozies of the cover-up are seen day after day after day. It can be Skycity, it can be Contact Energy, it can be in any area like Solid Energy, or it can be in The Hobbit. You name it, there are cover-ups.

Let us just look at some of the dodgy dealing that this Government has been involved in. There have been a lot of terminological inexactitudes told, some fabrications, and quite a lot of porky-telling going on—you know, Skycity. Let us take Skycity. The whole thing has been decided behind closed doors. There has been a case of “nod nod, wink wink”. “Nothing to see here.”, we are told. Is that not what you say, Mr Borrows? A former police officer would know this. “Nothing to see here,” they say at the site of an accident, “move on, move on, nothing to see here.”, while on the ground we have the bleeding bodies.

Well, of course, because of the behaviour of the Prime Minister in this whole area, the Dominion Post made him the “wally of the week”. Well, it was very deserved. Then we get to The Hobbit—deals, deals, and dirty deals.

Then we get to the appointment of Nick Smith as Minister of Conservation. Well, he has just announced that he is going to make the decision about the tunnel and the monorail at Milford. I want to know why he has decided to do that. Who is going to benefit from that decision? Why has he decided that the officials in Wellington cannot make that decision but that he, as Minister, can? Let us just watch this spot, because I believe we are going to see more from this area.

Then we have Mr Ryall, the Minister of Health, who I have to say really does need to man up and take some responsibility for some of those decisions he has been making for almost 5 years as the Minister of Health. The best he could do today was to say: “Well, when they were the Government, they did this and that, and they should take responsibility.” You cannot have the salary, the car, and the seat and not take responsibility.

I have to say, I just happened to comment that I thought that under Tony Ryall the health sector had been intimidated into silence. Well, you will not believe the number of emails that I have had pouring into my office saying: “You are spot on. You are spot on.” What they have said to me is that there has been pressure at a ministerial level not to release health data. Oh! I wonder why? Does the Government not want the true story out? Might it cast the Government in an unfavourable light? There have been officials hauled over the coals when data has been produced that has led to unfavourable headlines.

This is a shonky Government that has got a lot to hide, and it is hiding a lot.

Hon JO GOODHEW (Minister for the Community and Voluntary Sector): The National-led Government has a really strong plan and a busy agenda to encourage investment, strengthen our economy, and boost jobs for Kiwis, and that is the overarching reason that we on this side of the House get up in the morning. On the other side of the House, it would appear that those members get up knowing that they are led by a man wearing a toga, sitting on a toilet—a man wearing a toga, sitting on a toilet. That must really inspire them to get up in the morning!

I have a message for Ms Annette King, before she leaves the House, and that is simply—

Mr SPEAKER: Order!

Hon JO GOODHEW: My apologies. You are right; I cannot say that. Nevertheless, I will put on Hansard a correction to the statement that Ms King made in a newspaper. Ms King will need to know that when she deals in the health sector, no one asks for anything more than the facts. There are no cuts scheduled for Ashburton Hospital, and she has worried the people of mid-Canterbury. But when they read in the paper tomorrow that there was no substance to her claim, they will know that this is, yet again, just a Labour Party member who is scaremongering and cannot come up with anything concrete.

In Ashburton, the earthquakes struck there, too. We have lost the theatres in Ashburton. They will be rebuilt. There has been an absolute undertaking that they will be rebuilt. Yes, certainly, the provision of services at the moment is different, but there are no planned cuts to services. Ms King should start out as she means to continue, which is with the facts.

But back to the National Government. Across New Zealand we are faced with a wide divergence of what the communities have to deal with. In Christchurch it is the effect of the earthquakes. I am going to talk about the women in Canterbury in a moment. Also in Canterbury—in South Canterbury—we have just recorded in the last year 4.4 percent growth. That is phenomenal, and in part that is on the back of the Canterbury earthquakes.

I want to go into my message for the women of Canterbury, and then I am going to talk a little bit about apprenticeships, as well. Right now, there are many jobs available. Right now, there are also many women in Canterbury who are no longer in the jobs of caring, retail, and hospitality that they once were in. I want to exhort them to think about their skills in a different way, think outside the box, because if they used to manage a small business, then they can go back and they can manage a small business again, but it might be a small construction business, administration, or project management. So I exhort the women of Canterbury to think differently about their skills, to look through the paper, and, instead of discounting the advertisements and saying: “That’s for a man. That’s for a man.”, to think again—actually apply for those jobs.

We are actually making it quite a lot easier in terms of apprenticeships, as well. Five new vocational pathways are clearly showing young people which sorts of subjects they should take to prepare them for their future. From 1 January next year we will combine Modern Apprenticeships and other apprenticeships-style training under an expanded and improved scheme called New Zealand Apprenticeships. Regardless of their age, the new apprenticeships will provide the same level of support and subsidy for all apprentices. I think that is fabulous, because, once again, I exhort the people of Canterbury who are no longer in the jobs they once had because of the earthquakes to consider this opportunity.

The trades are crying out for people who will take on a new skill, and I certainly encourage them to do so. We already have 4,000 places available in trades and services academies and around 8,700 Youth Guarantee places. These are the pathways into work. This is the future for people. This is a future beyond relying on the minimum wage. This is a future where they have skills and they are rewarded with employment with those skills. They certainly have a much brighter future under this Government.

We are also boosting the overall apprenticeship funding. The current top-up for Modern Apprentices will be redistributed across all New Zealand apprentices. In addition, there will be around an extra $12 million in the first year. That will rise over time. So this Government is putting an awful lot of emphasis on to lifting the profile of, and participation in, apprenticeships. We are also giving the first 10,000 new apprentices who enrol after 1 April this year $1,000 towards their tools and off-job course costs, or $2,000 if they are actually in a priority construction trade.

There is a lot happening in this space. It is a much brighter future for New Zealanders under this National Government, which is working hard to achieve it.

Dr DAVID CLARK (Labour—Dunedin North): My colleague Annette King has talked about the terrible tragedy, the horror show, the comedy, that is unravelling under this Government. It is no way—no way—to run a country.

Far be it for me normally to comment on the outfits of other members in this House—it is not normally my style—but the Sunday Star-Times has given me a little bit of licence lately, with my newly found reputation for sartorial elegance. Some wag on Twitter, I see, has commented that Jo Goodhew, the member who has just resumed her seat, has today assumed the comedy wrestling belt of the vacant World Boxing Association political featherweight title. It is certainly a stunning outfit.

But moving back to the topic at hand, the fact that this Government is running the country in an appalling fashion. Today—just today—we have had the latest of Steven Joyce’s glossy brochures. It has come out. His year-long comms plan has finally ended. The Business Growth Agenda has produced nothing—nothing that we can see. We have 30,000 fewer jobs in this country as a consequence of this Government being in office in the past year. The Business Growth Agenda is a set of glossy brochures devoid of any meaningful plan, and, in fact, the only thing—the only thing—Steven Joyce has created in that year is a boost at the printing presses. He has been churning out these glossy brochures left, right, and centre.

This Government has no plan, and that is no way to run a country. There are 30,000 fewer jobs than there were a year ago; 17,000 manufacturing jobs have gone overseas in the past year, or have gone completely. New Zealanders have been losing their jobs. Unemployment is pushing 7 percent. There are 163,000 unemployed people. Unemployment has not been this bad since National was last in Government.

We have people also helping that unemployment rate by moving to Australia. It would be worse if we did not have 1,000 Kiwis a week leaving permanently for Australia, and the sad thing is that 40 percent of those people are aged 18 to 30. That is our future. The brighter future they are choosing is offshore. We know that, in total, over 180,000 New Zealanders have left for Australia since John Key took office, and it is no wonder.

The other statistic we have had this week is that the wage gap with Australia has grown by 50 percent under this Government. This Government promised to reduce the wage gap with Australia; instead, it has grown by 50 percent. It was $120 a week when John Key took office; now it is $180 a week. That presents no hope to young New Zealanders who hope to get ahead.

There are so many ways this Government is demonstrating that it is not fit to run this country. When we count back the ways over the year that it has been in office, we can go right back to the broken promise on GST. We can see the teapot tapes, which started to pull the wheels off, which saw the popularity of the Government start to drop. We have seen the growing wage gap between rich and poor—worse than it has ever been in recorded history in this country.

Hon Tau Henare: You got promoted for this? What about Andrew Little?

Dr DAVID CLARK: This is a Government, Mr Henare, with the worst economic growth record of any Government in the last 50 years. It is a disgrace. This is no way to run the country.

We have also seen ACC scandals abounding. We have seen a letter of support written by a Minister with a conflict of interest. We have seen privacy breaches sent out to Bronwyn Pullar—sensitive client data.

We have seen a Skycity deal that has gone wrong for the Government, and a report that sees the PM not vindicated but implicated.

Then we see in the education sector Hekia Parata. She says: “Let’s increase the class sizes.”, she backs down, and then she is on to Novopay. And on it goes—a train wreck in the making. That is no way to run a country.

Then if we think about the higher ethical standards this Prime Minister promised, we do not see any evidence of them. We see Mr Banks with his brown envelopes, still traipsing around with empty brown envelopes—or so he tells us, or so he thinks. He cannot remember helicopter flights, he cannot remember cheap accommodation, and he certainly cannot remember any donations. Well, the police said that Mr Banks filed a false declaration but that it was too late to prosecute him.

Then we go on to the Government Communications Security Bureau. Mr Key suddenly has a touch of the “Banksies”—he cannot remember what happened, either. It is spreading. It is spreading. And onwards we go.

Today the Minister for Economic Development could not remember, either. And then we have got privacy breaches. On it goes, on it goes, on it goes. It is no way to run a country.

TIM MACINDOE (National—Hamilton West): That member for Dunedin North is guilty of uttering the most clichés and the worst speeches of any member from his district for 50 years. I must say that he has even inspired Mr Hipkins to copy his worst haircut in 50 years.

I want to put on record some of the great things that are happening in my fine city of Hamilton, and I will get on to that in a moment, but because our Opposition has beamed in again today from “Planet Labour”, apart from the odd few over there who are in “Lentil Soup Land”, I think it is important that we remind ourselves of some of the facts that the Minister of Finance put on record in his speech today in Auckland to Massey University and the Auckland Chamber of Commerce. He has reminded us that although the global financial and economic situation remains pretty uncertain, here in New Zealand we are actually doing pretty well. Our opponents do not like that—they certainly do not want to admit it—but the fact is that New Zealanders do, and that is why a whole raft of public opinion polls lately have reflected that support.

Our economy is growing. We are on track back into surplus. We were told when Michael Cullen left office that he was bequeathing the Government coming in a decade of deficits. He boasted that he had spent the lot. Well, we have got there in half the time because of prudent financial management. Business confidence is improving. Our companies are becoming more competitive. Wages are growing. Inflation is low. Net household disposable income is around 20 percent higher than it was when we came into office.

Dr David Clark: The member’s wrong—real wages are dropping.

TIM MACINDOE: These are the facts. Compared with when your Government was in office, Dr Clark, over 60,000 more Kiwis now have jobs. It is a pity that the Green member who tried to tell us otherwise is not here to hear that. Of course our unemployment rate remains too high—that is a reality of the times—but we have got the right prescription and we are seeing good results. Interest rates are at a 50-year low, and households are saving more. And on top of all of that, as the Hon Chris Tremain told us, our $30 billion Christchurch rebuild programme is well under way, with considerable help from the New Zealand taxpayers.

Well, Dr Clark, if that is the worst economic record of 50 years, let us have another 50, because that is the right prescription and we are doing well. They are the facts. It is good news for New Zealanders, and yet the knockers and the hands-on-your-wallet brigade opposite would have us trying to believe that the opposite is true.

Let us remember that the Government has a very clear programme. The Prime Minister outlined it in his statement at the start of the year. We were re-elected in 2011 with a clear plan to build a faster-growing economy supporting more jobs, rising incomes, and better public services, and that is what we are doing. Our plan is to return to surplus, to reduce debt, to push ahead with a wide-ranging programme of reforms, to create a more productive and competitive economy, to drive better results and better value for money from public services—

Kris Faafoi: If it’s your plan, stop reading it.

TIM MACINDOE: —and to support the rebuilding of Christchurch. The reason I read that is that I want to put it into the record, yet again, that that is the Government’s programme. That is our focus, and we remain unwaveringly determined to get there. It is the right prescription for New Zealanders. New Zealanders endorse it.

Let us look at just a couple of examples of how our plan is resulting in better public services. We have recently had announcements about smart technology for the police, and the impact of that will be dramatic. It is the equivalent of having many more officers out on the beat every day in every community in New Zealand. In my city of Hamilton, that impact is dramatic. That is one of the reasons why recorded crime is now at a 30-year low. What a terrific achievement that is.

In health there is so much good news that it is hard to know which one to choose, but I am going to talk about something that is relevant to some of my constituents who have written to me lately, and that is that over 45,000 New Zealanders have recently benefited from new and more accessible medicines in just the past 6 months. That number will continue to increase, with $10 million more being invested in new medicines during this financial year.

Let me close by saying that it has been a fantastic start to the year in Hamilton. We have got a booming city. It is a great place to visit. We have just had one of the most wonderful summer arts festivals that I can ever remember. It is always of a high standard. It is right up there with the best that the arts community can offer in New Zealand. Well done to everybody who has run the programme, and thank you. I hope that many other members got there. I want to congratulate the Hamilton City Council on its Green Flag Award for the Hamilton Gardens—one of the best in the country. And well done the Black Caps, because Seddon Park is where they win.

Rt Hon WINSTON PETERS (Leader—NZ First): One more speech like that, and Mogadon will be out of business. “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public,”—so said philosopher Adam Smith. And when John Key met with the Skycity Casino people, there was a meeting of minds. A group of wheeler-dealers were meeting with New Zealand’s chief wheeler-dealer, who by a twist of fate and some gullible voters ended up being the Prime Minister of this country.

Remember the background to all of this? Three years ago the Prime Minister’s chief of staff went on a blokes’ holiday to Las Vegas with the lobbyists for Skycity Casino. In June 2010 the New Zealand Herald said: “John Key’s right-hand man is living it up with big-spending lobbyists in the casinos of Las Vegas, sparking questions about their influence on Government policy.” By some strange coincidence, another lobbyist from the same firm is on the board of Television New Zealand (TVNZ). We know that the dirty deal was done nearly 3 years ago.

The Deputy Auditor-General’s report into the Skycity convention centre, despite being a woeful whitewash, lays bare a lack of transparency, and exposes a sordid saga of inconsistency and failure to follow appropriate processes. The money trader running New Zealand is making this country into a banana republic. He prostrates himself before big business, especially overseas big business. We know that John Key promised Skycity that it could get the land from TVNZ. Why does the National Party hold all its important functions at Skycity? Why does the National Party hold all of its important functions at Skycity? It is because they are all in each other’s pockets. The Deputy Auditor-General’s report, such as it is, shows that the process was deeply flawed, far from robust, and far from fair, and the public are entitled to expect better than that.

Mr Key gambled that the deal would escape scrutiny, but the sordid secret is now out in the open. The common mistake made by New Zealanders is to think that John Key and the National Party give a tinker’s damn about ordinary people, like in the old days National did. New Zealanders’ great mistake is to think that today National gives a tinker’s damn. The frightening part of all this is that John Key thinks that this is the way of doing business and that it is normal. I am actually shocked that he cannot see what is wrong with it. That is the part that is so disquieting.

It is a Government out of control. Ask the teachers who have been waiting for 2 or more years to get their pay system fixed. He will not sack the Minister of Education. Do you know why? Because she is the last National Māori standing. The journalists in this country should wake up. The reason why Hekia Parata is still there is that he cannot afford to fire the last Māori standing in his party. It is the final sop to Māori, and a grossly insulting one at that. The only Māori better off under this Government are the Māori Party and its cohorts in the Treaty trough. Ordinary Māori are struggling with low wages or no jobs, and this Government does not care.

Hon Tau Henare: That sounds like a speech from Richard Prosser.

Rt Hon WINSTON PETERS: Do not tell me you have discovered you are Māori over there. Do not tell me you have discovered you are Māori. There is no leadership. Instead, there is the slippery salesman doing slippery deals with anybody, anywhere, anyhow. This is not New Zealand’s Government any more; it is John Key’s own piece of Wall Street. He holds this country in contempt. He is an insider trader, posting posts that Mr Key and his cronies understand.

Look, it is high time that people understood one thing about this Skycity matter. It was the biggest tourism affair. It is the biggest development. It is a huge issue, according to Mr Key. He goes to a meeting financed by the taxpayer. Over there are these serious businessmen. And there is no pre-meeting, actual meeting, or post-meeting record. Ladies and gentlemen, anybody who makes that claim is a liar.

KATRINA SHANKS (National): I would like to start my contribution to the general debate today by acknowledging the contribution of Charles Chauvel, who will be leaving this Parliament at the end of the week. I would particularly like to acknowledge his contribution to the Regulations Review Committee, which he has been chair of for a number of years. It is a very technical committee and he has been very competent in that role. I would also like to acknowledge the contribution that he has made to the Justice and Electoral Committee, which he sits on as well and which I am also a member of. In his role there he has been very hard-working, always diligent in his work, and he has made great contributions to the bills that come into this House. I believe there will be a hole left in the Labour caucus, that they will miss his law and commercial background, and that they will be very hard shoes to fill. I want to wish him all the best in New York at the United Nations for his career coming up.

This Government has a strong plan and a busy agenda to encourage investment, strengthen our economy, and boost jobs for Kiwis. We will continue to build on our strong foundations of the last 4 years. Not only that, I would also like to talk today about what we are doing in terms of our agenda and where we want to go. We have got a clear and consistent plan about what our programme is and how we are going to deliver it. In fact, we are managing our finances so that we are going to get back to surpluses and we are going to start paying off some of our debt. We are going to press ahead with a wide range of our measures to be a more productive and competitive economy.

One of the measures I want to talk about today is the launch of Callaghan Innovation, or the new Advanced Technology Institute. This is going to focus on industries that have got significant potential in growth. It is going to seek to motivate and connect innovators and entrepreneurs, and it is going to deliver equipment, facilities, and expertise to business. This is a real initiative that is going to help real people, and it is going to be a useful tool in the future for our young coming through who are innovative and creative. Just last week I went to a school and I was privileged to judge the Young Enterprise Trust BP Business Challenge. This is a challenge that schools can do with their year 11 students. What they do is over 3 days they have to form a virtual company, they have to devise a product that solves a problem or fills a need, they have to have researched the product, they have to develop a business plan, and then they have to prepare a 10-minute presentation to judges.

The school I went to was Onslow College, and I have got to say that the year 11 students were so impressive. They were innovative, they were creative, and they had passion for the products that they were putting forward. The winner of the year 11 students was a team that had a product called e-can. E-can, which is a truly innovative product, I thought, is like a wheelie bin. They get the wheelie bin, it sends itself to the curb, it gets collected and emptied, and then it sends itself back on to its docking station. And they power this by solar energy. This product was innovative. This product was thinking outside the square. It is green and it is clean. If this is what the future looks like for us in New Zealand, if this is what our year 11 students look like who are doing economics, who are getting this experience of entrepreneurship and innovation, I think we have got a great future ahead of us in New Zealand.

But also it is a great example of how business, how NGOs, and how the Government can all work together to enrich the education of our children. These year 11 students are going to go on to the National Certificate of Educational Achievement (NCEA) in economics, and they have to produce a product, they have to take it to market, and they have to sell it. This Young Enterprise Trust BP Business Challenge has allowed them already to have a feel for what it is like to do that, so when they do this module later on in the year, they have already got a heads-up and they are already thinking in the right space. They are innovative, they are creative, and they will do well in year 11 NCEA economics.

What I want to talk about now is our economic growth agenda work programme, and I want to talk about this because I do not think there has been any other Government ever in New Zealand that has stated such clear initiatives about how we are going to grow our economy. So the six areas, when you think—

ANDREW LITTLE (Labour): Helen Reddy had a song with lyrics that said:

That ain’t no way to treat a lady

No way to treat a lady

A woman, your friend.

Well, we have got a new saying: “That ain’t no way to run a country. The citizens, our friends.” This Government is Government by sleaze, by slipperiness, by shabbiness, by tawdriness.

Hon Tau Henare: You’ve been watching too much Les Misérables.

ANDREW LITTLE: We have never seen the like in this country for as long as I can remember. I have been around for a wee while—not as long as Mr Henare, but I have been around a wee while—and I have never seen anything like it. This Government’s conduct and the way it deals with people and businesses is imperilling this nation’s reputation. Up until now we have stood at the top of the non-corruption or anti-corruption league around the world. Well, that is slipping now. The mask is slipping because of the way this Government conducts itself, because the truth is that when it comes to this Government everything is for sale. It does not matter whether it is State assets and businesses or coalmining companies that it has allowed to run into the ground; it includes law and policy, as well.

We saw it with Skycity. The Government started a process—as you would expect with a Government, a non-corrupt Government—going out, seeking tenders, saying it wanted a convention centre, and the minute it got the ear of an outfit that said: “Oh, we’ll give you a special deal.”, it was into it. It closed out the other potential bidders and maintained a conversation with Skycity throughout. It did not matter about process. It did not matter about the detail. It did not matter about good Government and good governance. It was interested in a cheap, shabby deal. It was classic “never mind the quality, feel the width” style of Government, because that is the way this outfit operates.

Then we had The Hobbit. Of course, The Hobbit came before the Skycity deal was exposed, but now we have got the truth about The Hobbit—the real deal. This is the Government and the Prime Minister who claims he is the great manager, the great deal-doer. They claimed that they would look after the interests of New Zealand, and nothing could be further from the truth. The reality is exposed in an email from Warner Bros. A Warner Bros executive, Carolyn Blackwood, wrote to what was then the Ministry of Economic Development, now called the Ministry of Business, Innovation and Employment. This was the time when screen producers, Sir Peter Jackson, and everybody else had said: “Look, we’re at risk. The film industry is at risk. We have this snake of an Australian running around compromising our industry. Oh woe is us! Save us!”, they said. “Save us”—our meek, humble little industry that generates $250 million per movie for Sir Peter Jackson—“we’re at risk because this snake of an Australian is running around.”

Then what did the Warner Bros executive say, from her air-conditioned office in Los Angeles? She was not really alert to what was really happening in New Zealand. She said: “… we are committed to NZ, both because of Peter and Fran’s deep commitment to be there, [but also because of] our significant investment to date (and in the future) …”. They had already plunged $100 million into production; they were not going anywhere. They were not going anywhere, and this was days before the real deal had been done, when the blacklist had been lifted and there was no need for anything further. But she went on to say, because she could see the main chance, and with Sir Peter Jackson breathing down her neck, that there was one remaining concern: “… the uncertainty of the labor issues creates real risk to us.”

So what did she say? What did she say when Gerry Brownlee asked: “Well, where would you go if it was not in New Zealand?”—where would she go when she has complained about the snake in Australia? She said: “New South Wales”—New South Wales, where she would be dealing with the same snake. It just was not credible. You read between the lines and you can see there was no issue here. If there was ever a time when this Government should have said: “There’s nothing going on here, move on.”, this was it, but it did not, because it wanted to cuddle up to corporate America, lick its boots, and do its dirty work for it.

Then she went on to say this. She said that they had got a deal from Australia and that they had been offered financial incentives. She said it was “a very attractive incentive to us.”—from Australia—“When I asked you”—this is the Ministry of Economic Development—“if your office (or perhaps another branch of the government) was available to discuss that sort of thing with us, too, or if you would consider anything similar to help us … address our growing risk profile (especially given the currency issues”—because they were concerned about the rising New Zealand dollar—“… it sounded like you were amenable to that conversation.”

Dr JIAN YANG (National): I want to continue the excellent speeches of my National colleagues to say how proud I am to be part of this strong National Government, which has been working hard and continues to work hard for New Zealanders. Despite continuing global uncertainties, our Government has a strong economic plan: to encourage investment, strengthen our economy, and boost jobs. We are pressing ahead with a wide range of measures to build a more competitive and productive economy, with growth built on the solid foundations of investment, exports, and savings.

We remain committed to job creation and the National Government’s track record of creating jobs remains strong. There are many examples. Among them, and so strongly opposed by the Opposition, is the international convention centre, which is projected to generate hundreds of jobs during its construction and afterwards to run the centre. This will encourage more overseas businesses, particularly from Australia and China, to hold conferences in New Zealand, which will generate a tremendous economic benefit to our country. Last month China’s biggest dairy company, Inner Mongolia Yili Industrial Group, announced plans to spend $214 million building an infant formula plant in South Canterbury. The Inner Mongolia Yili Industrial Group’s investment would create 80 new jobs in New Zealand. Unlike the Opposition parties, we in National encourage these types of investments because without more investment, we cannot have the jobs and economic growth that our hard-working families and communities need and deserve.

Likewise we are boosting skills with schemes such as the trades and services academies and Youth Guarantee places. In particular, the New Zealand Apprenticeships scheme will ensure our workforce remains competitive. We have been increasing our exports. One of our focuses this year is Asia, because there are huge opportunities for New Zealand businesses. For example, since 2008 our exports to China have trebled. These include dairy products, meat, and wool, but increasingly non-agricultural areas such as technology and machinery. Our services exports such as education and tourism have also risen. Tourism New Zealand has reported major increases in interest in New Zealand as a premier travel destination as a direct result of exposure from The Hobbit. Labour and the Greens had opposed the law changes that allowed the movies to be produced here.

In the next 5 years developing countries in Asia, such as China, India, and ASEAN countries, will increase their share of world GDP by nearly 20 percent. We therefore need to seize this opportunity. The year 2012 was the 40th anniversary of diplomatic relations between New Zealand and China. This important anniversary was celebrated by the Chinese community all over New Zealand. I was privileged to have been able to attend many of these events. It will culminate with the Prime Minister’s visit to China in April. Given the fact that China is our second-largest trading partner, it makes sense for us to continue to build on this valuable relationship. The Opposition says no to investment, jobs, and growth, whereas the National-led Government remains committed to encouraging investment, strengthening our economy, and boosting jobs for New Zealanders. Thank you.

EUGENIE SAGE (Green): The Government is claiming that the Green Party says no to investment and jobs. That is a nonsense; it is this Government that is undermining investment. It is undermining jobs in the long term, because it fails to recognise that a healthy economy depends upon a healthy environment.

The Green Party recognises that the $196 million in economic output that Fiordland National Park generated in 2005 depends on the integrity of that park being maintained and protected. That is why we are concerned about the decisions that the new, recycled Minister of Conservation may make about the monorail and the Routeburn tunnel proposals, because this Government is toxic to the environment. It is dismantling the Resource Management Act. It is insisting on rapid decision-making, rather than on quality decisions where the environmental impacts are properly assessed. It has undercut and undermined water conservation orders in Canterbury. It is handing out large subsidies to irrigation companies, so that the state of our rivers gets worse, not better.

It is when you have a pro-development agenda, when you have the Minister of Conservation talking about balance—which in this Government’s lexicon means trading away a bit more of nature in order to get a few more short-term jobs—that we worry. It will be a real challenge for this Minister to make the correct decision on the Routeburn Tunnel and the monorail, and that is because there are very strong legislative protections for nature in both the Conservation Act and the National Parks Act. There is a very proper process in those Acts.

When we have seen a Government engage in shonky deals, backroom deals like Skycity, where it favours its business mates, does not put it out to open tender, and does not follow due process, we do not have very high expectations of this Minister. But he needs to follow due process. He needs to look at what the statute says, because thousands of New Zealanders engaged in the campaign to have south-west New Zealand, Te Wāhipounamu, listed as a World Heritage site to recognise its internationally significant landscape and its ecological and geological values through World Heritage listing. Those New Zealanders recognise the importance of our National Parks Act. They understand the meaning of that Act when it says that parks are to be administered so that “they shall be preserved as far as possible in their natural state:” and that they should be preserved “in perpetuity as national parks, for their intrinsic worth and for the benefit, use, and enjoyment of the public” because they contain “scenery of such distinctive quality, ecological systems, or natural features so beautiful, unique, or scientifically important that their preservation is in the national interest.”

National does not understand about preservation and protection of nature. That is why the Minister must talk to those in the tourism industry in Te Ānau. They have overwhelmingly said that the Routeburn Tunnel would be bad for tourism. It would undermine local businesses in Te Ānau, because putting people in a bus underground for 11 kilometres, where they see nothing of the national park, means they have no immediate experience of the park during that tunnel journey. That is not promoting clean, green New Zealand. It is not an experience that is consistent with our international reputation. It is not why visitors come here, to go underground. They come here to experience what is distinctive, special, and unique about New Zealand, which is these natural landscapes, it is our national parks, and yet the Government proposes to undermine this by its so-called balancing act, which is not a legal test that is anywhere in either the Conservation Act or the National Parks Act.

Then we have the monorail. The Conservation Act outlaws logging on conservation land, yet the monorail promoter, Riverstone Holdings, wants to clear and log nearly 20,000 trees to create a 30 kilometre scar through the Snowdon Forest conservation area. It is astounding that this proposal has got this far. These values need to be protected in our national parks and conservation areas, because they are part of our public conservation estate and our national heritage.

The debate having concluded, the motion lapsed.

Bills

Reserve Bank of New Zealand (Covered Bonds) Amendment Bill

Second Reading

Debate resumed from 21 February.

LOUISE UPSTON (National—Taupō): My colleagues on this side of the House who spoke before me spoke very ably on the Reserve Bank of New Zealand (Covered Bonds) Amendment Bill, so I am proud to support it in this reading.

Bill read a second time.

Bills

Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill

In Committee

Debate resumed from 26 February.

Clauses 1 to 3 (continued)

The CHAIRPERSON (H V Ross Robertson): The House is in Committee. Kia ora tātou, nō reira e te Whare, e ngā iwi, e ngā reo, e ngā hau e whā. Tēnā koutou, tēnā koutou, tēnā koutou katoa.

Hon Trevor Mallard: Translation?

The CHAIRPERSON (H V Ross Robertson): Greetings, greetings, greetings to you all. We are the people, we are the culture, we are from the four corners of the Earth. How is that? Has that got you, Trevor? Good. We are on. Members, the House is in Committee for further consideration of the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill and consideration of the Child Support Amendment Bill. Members, we turn first to the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. When the Committee’s consideration of this bill was interrupted, it was debating clauses 1 through to 3. The Hon Damien O’Connor had the call, and has 4 minutes and 37 seconds remaining if he so wishes. I recognise the honourable member Grant Robertson.

GRANT ROBERTSON (Deputy Leader—Labour): And I recognise the Chair, as well—thank you very much. We are debating clauses 1 to 3, traditionally known as the title and commencement clauses, and in particular I do want to address the title of the bill, the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. It is that word “temporary” in the title that concerns me greatly, because they are rapidly becoming permanent, not temporary, commissioners.

The approach that this Government took initially was for this to be a temporary measure. Nick Smith said: “whatever the circumstances, the next regional council elections in Canterbury will take place no later than those scheduled for late 2013.” That is what he said—“whatever the circumstances,”—and yet we have in front of us today a bill that really is not about temporary commissioners any more. It is about making permanent the taking away of democracy from the people of Canterbury. So this bill is misnamed. It should not be called the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill, because this Government appears to have no intention of returning democracy to Canterbury.

Yet, time and again, not only has the Government told the people of New Zealand that this would be temporary and that there would be elections in 2013 but also its officials have told this Government that it should move to a different model. In fact, if the officials had had their way, this bill would have been called the “Environment Canterbury (Mixed Model of Commissioners and Elected Officials) Bill”, because that is what was proposed by the officials. The Department of Internal Affairs and the Ministry for the Environment recommended to the Government that it move to a model where there was at least some democratic representation on Environment Canterbury. But, no, the Government dismissed that. It did not want to see democracy returned in any form whatsoever for the people of Canterbury when it comes to their regional council.

The Government was not interested in a mixed-governance model like this. David Carter actually, when he was the Minister, said that he was interested in such a model, but the mind was changed, and it was changed fundamentally because this legislation is not about democracy; this legislation is about irrigation. That is what this legislation is about. The bill could easily be titled the “Environment Canterbury (Temporary Commissioners and Ensuring We Can Get Irrigation for Our Mates) Bill”. That is what it could be called, because the Government is actually being quite clear that this is all about irrigation.

Let us just stop for a moment and think about a country where democracy can be suspended in a large region—suspended not just temporarily but on into the future—so that a small group of people get to benefit financially or get to benefit in terms of irrigation for them. What kind of country is that? It is no kind of country that I want to be part of. It stinks of cronyism. It is anti-democratic; fundamentally, that is what this bill is. It is anti-democratic. It is not about some temporary arrangement for some misguided view that perhaps there was chaos reigning down in Canterbury. It is an arrangement where democracy has now been denied, for two successive elections, to the people of Canterbury. It should actually be called the “Environment Canterbury (Denial of Democracy) Bill”, because that is what this bill is doing. It is saying to the people of Canterbury that the needs and wants of a small group of people for their irrigation is far more important than the democratic will of the people. That is a shame and a stain upon this Government.

The Government was told time and time again in this process that it did not need to carry on this intervention. Again, from the regulatory impact statement from the officials: “given the progress made by the Commissioners, there is no apparent reason for continuing this level of intervention,”—so the Government had the advice from the officials. The commissioners themselves said that they would prefer a mixed-governance model, and yet the Government carried on and said: “We don’t want to see democracy returned to the people of Canterbury.” That is not on. It is no way to run a region, and it is no way to run a country, to base it on cronyism and inside deals.

It is time this Government got real and remembered that this is a country that is founded on democratic principles. It does not get to trade those away in deals with multinationals overseas or Skycity in New Zealand, and it does not get to take away the rights of people in New Zealand to have a say.

This bill should be renamed. It is the “Environment Canterbury (Denial of Democracy) Bill”. It is not about temporary commissioners; it is about taking away democratic rights from New Zealanders, and that is a shame on this Government.

Su’a WILLIAM SIO (Labour—Māngere): Malo le soifua, Mr Chairman. It is good to be in the Committee to further have these discussions around the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. As the Committee will be aware, this bill proposes a process that is at complete odds with the fundamental beliefs New Zealanders have regarding the importance of democracy and upholding the strong historical basis of our governance order. Irrespective of whether it be local government or central government, the governance order that New Zealanders, the younger generation, have grown up with is government by the people, of the people, for the people. This bill proposes to set aside for the second time in a row the basic and fundamental right of the people of Canterbury to hold free and democratic local body elections.

The John Key - National Government first took away the rights of the people of Canterbury in 2010 by forcing through the original piece of legislation, the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act. That legislation got rid of the then elected people’s representatives in Environment Canterbury, and, by force of that legislation, the people’s representatives were replaced with seven Government-appointed commissioners. Again by force, through that legislation, the people of Canterbury continued to be taxed to pay for the Government-appointed commissioners. I recall, as many will, including the people of Canterbury, that the Government sugar-coated that proposal by imposing on the people of Canterbury a promise: a promise that the people of Canterbury would have their democratic elections in 2013. That is this year. This Government included that promise in that original Act—the Act that we now debate, and its amendments. The original promise was that the people of Canterbury would hold their democratic and free elections in 2013. This Government and this bill will now break that promise.

Ordinarily, if any hard-working citizen of our country, whether they be from the north or south—in this case, the Canterbury people—breaks any law, whether it be traffic laws or otherwise, the consequences are that they are imposed with either a fine or a jail term. Yet this Government will break this law, the original promise from 2010, by changing the legislation, by ramming through another piece of legislation. It is now saying: “Look, you’re not going to hold your elections this year. Instead, you’ll hold your elections in 2016.” This is the silly part of it. Ordinarily any citizen breaking the law would be fined or thrown into jail, and yet this Government is able to get away with it, avoiding any consequential ramifications from breaking its legal promise and again imposing another promise by amending the original Act to say that now Environment Canterbury and the people of Canterbury can hold their local body elections only in 2016. That sends a message that this Government has forgotten about the people of Canterbury, has forgotten about the value of democratic rights. That sends a strong message that this Government places no value on the rights of the people of Canterbury to be able to vote for their own representatives.

The people of Canterbury will recall that the original Act was rammed through this Parliament by this Government under urgency in a single day. New Zealanders were not given the opportunity to have a say then, least of all the people of Canterbury. I suspect that because this Government—and none of the Ministers has been able to say once and for all whether they intend to consult with the people of Canterbury about the changes that they are proposing, particularly with the review that they are intending to bring in. So the people of Canterbury, unfortunately, will, under this Government, have to continue to pay taxes without representation. Yet the Government’s own Cabinet papers in 2010 stated that the deferral of the 2010 election should be only a temporary measure, as it “did not allow for the rights of the people to participate”. In other words, this Government was told to keep its promise in its own parliamentary papers. Its own Cabinet papers advised it that it should honour its promise—the promise that the people of Canterbury could hold democratic elections in 2013.

Those same Cabinet documents explicitly state that the intent was to return to a democratically elected council as soon as the Government-appointed commissioners’ task was completed. In the Cabinet papers on this amendment bill, we have both Ministers—the Minister for the Environment, Amy Adams, and the then Minister of Local Government, David Carter—state categorically and clearly that any option except the return to a fully elected council would limit the democratic rights of the people of Canterbury compared with the rest of the country and violate article 25 of the International Covenant on Civil and Political Rights. In other words, this bill means the Government would be in breach of its commitment in the International Covenant on Civil and Political Rights to protect, promote, and fulfil the rights of people in New Zealand. As the Human Rights Commission submitted in its submission to the Local Government and Environment Committee, the greater concern is how the Government will justify their deliberate determination to get rid of the rights of the people of Canterbury—rights many New Zealanders paid the ultimate sacrifice in defence and protection of. Those fundamental rights are now being cast aside by this bill being introduced by the Government.

My colleague Grant Robertson referred to the regulatory impact analysis, and I want to give acknowledgment to the Department of Internal Affairs and the Ministry for the Environment because it is a thorough analysis of this bill and the impact. They truly recognise that this analysis and the proposal by this Government had no public consultation whatsoever. It is in their recommendation that public consultation take place. But we know, from sad experience so far under the term of this Government, that it despises, almost, talking to the people who are going to be affected by its decisions.

In the regulatory impact analysis there are five options given. The authors of this report recommend option one, which states: “The intention of Option One is that ECan will return to a fully locally elected democratic body under a transitional plan …”. Here we have the advice from the two critical Government departments advising the Government on what it ought to be doing, and yet this Government decides on “Option Three: Legislation to extend or entrench …”. So, despite the original advice given that this should be only a temporary measure, despite the promise of this Government that 2013 is when it will hold elections, despite the words of the then Ministers that it is best if they quickly hold elections so that they do not entrench this kind of behaviour, and despite the recommendation of the authors of the regulatory impact analysis that they quickly return to a fully locally elected democratic body, what this Government does is it accepts option three. Option three entrenches a governing body of commissioners appointed by this Government. I think that for the people of Canterbury the message they will hear from this bill is that they have been a forgotten public, that they are forgotten Cantabrians, and that their democracy, their rights to be able to elect their own local government representatives, are being denied under this bill.

Sadly, I have to say, in April of this year this House will play host to a number of members of Parliament from across this region. It will include Fiji amongst the other countries. In addition to the debates that members of this House can participate in, in addition to some of the seminars that will be held, and in addition to us hearing from the members of Parliament from the Pacific, one of the aims of this forum is for us as a Parliament in New Zealand to be able to share with our Pacific counterparts the importance of democracy. I feel somewhat embarrassed because if any of those members of Parliament picks up on what is happening—

LOUISE UPSTON (Senior Whip—National): I raise a point of order, Mr Chairperson. This title and commencement debate commenced last night and the Chair was very clear about the fact of its being a very narrow debate. I have been trying to point out the fact that the speaker who just resumed his seat was talking well broad of the mark. I would ask that the debate be contained to the title and commencement clauses.

The CHAIRPERSON (H V Ross Robertson): Well, no. Can I refer the member to Speakers’ ruling 115/1. The ruling was actually made by me back in 2004, and by Hartley also. I will read it out to the member: “When debating the preliminary clauses at the end, members should have some latitude to summarise, and make concluding remarks about, the issues they have raised during the committee’s consideration of the bill.” That was done as a result of a report from the Standing Orders Committee in 2003. The member was quite within his rights in the way in which he was debating.

Hon LIANNE DALZIEL (Labour—Christchurch East): Thank you very much for the opportunity to contribute on this last Committee stage of the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. The reason that I did want to take a call in this particular debate was because of the issues that have been raised by so many others and also points that were made in front of the Local Government and Environment Committee. I had the opportunity to sit on that select committee and hear submissions on this particular piece of legislation. There was considerable anger in the room, and I wanted to kind of reflect that in the Chamber here, that that degree of anger comes from the fact that this is called the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. Temporary commissioners were established in 2010, all of the submitters were opposed to it then, and all of us are opposed to it today.

But the real slight, I guess, in the title comes from the use of the language “improved water management” when we know perfectly well that this legislation is designed to ensure that management of the water in our Canterbury region is undertaken in a way that removes it from democratic oversight. That is deliberate. It is quite a deliberate decision to do that. I have heard Government members talk about the impact of the earthquakes with respect to this decision. It has got nothing to do with that. Back in 2010 there was a report done by a review group. It was chaired by Wyatt Creech, a former Minister in a National Government. His part of the report was quite different from the independent analysis that accompanied the report, which said that Environment Canterbury was getting back on track, and that in fact the water chapters were almost concluded. What the incoming commissioners have been able to put in place relates to all of the very hard work that was done before they came on the scene. To say that this is “improved water management” legislation really does not reflect the truth of the situation nor does it reflect the degree of anger that is felt in the Canterbury region as a result of this particular extension.

When that review came out in 2010 it was made absolutely crystal clear that elections would be held no later than the elections scheduled for late 2013. In fact at the time the Hon Nick Smith was absolutely explicit about the fact that we could return to elections even before the 2013 year, but 2013 would be the last point. So having elections reinstated by 2013 was absolutely the end point of a process, and to now have legislation extending them out to 2016 has represented a betrayal of the trust that people showed in that particular Minister at the time.

I think, as colleagues have referenced, the regulatory impact statement, again, is not reflected in the title of this bill or its commencement provisions. I would have to say that the regulatory impact statement does not meet the adequacy test of a regulatory impact statement, and that is because—and it states this—“there has not been a Crown led public consultation process with Canterbury stakeholders and communities on the options in the RIS.” If you do not have that degree of consultation and engagement with the wider community, then the analysis can be flawed. But even with the flawed analysis they still came up with options one and two as the preferred options. Those two relate to the legislation to allow for a mixed governing body in the interim as we move back to a fully democratic body, or, alternatively, legislation to establish a permanent mixed governing body. In fact, the departments themselves, the department and the ministry, stated: “The net benefits of the options, when measured against the status quo … are finely balanced. The choice between the two options essentially comes down to the relative weight attached to democracy versus stability.” That to me is the essence of what is so wrong with this legislation and why Labour so strongly opposes it. In being opposed to this legislation we are on the side of the people of Canterbury.

EUGENIE SAGE (Green): I was very pleased to see that the deputy leader of Labour had adopted the title that we had proposed in terms of this Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill, the “Denial of Democracy Bill”. Our title adds “and More Irrigation Bill”. The current title of the bill reflects the spin that this Government likes to create around its dismantling of regional democracy and of environmental legislation. That is one of the reasons why 90 of the 95 submissions on the bill opposed it. The people in Canterbury want the right to vote and they are being denied that for 6 years.

People in Canterbury want better water management. This bill does not deliver that, because it promotes irrigation and it kneecaps water conservation orders. It has led through the Government-appointed commissioners to what Fish and Game has described as a very weak Proposed Canterbury Land and Water Regional Plan. Those commissioners have notified that plan and it is currently open for hearings. That will not deliver improved water management, because it will not control the intensification of dairying on the Canterbury Plains and the increased pollution that that will result in.

Nor, as other speakers have noted, is this bill about temporary commissioners, given their long tenure. Why does the Government want commissioners and not elected councillors, other than to promote irrigation? There is another reason, and that is the very autocratic way the Government is going about the recovery from the earthquakes in Canterbury. If you had an elected regional council, you would have another democratic body challenging the Canterbury Earthquake Recovery Authority and the Minister for Canterbury Earthquake Recovery and their failure to genuinely engage with Canterbury people. But no, we have these commissioners so you do not get that counterweight.

I turn now to improved water management. If this bill was genuinely about improved water management, that would mean that after nearly 3 years of the commissioners we would have had a reasonable flow in the Selwyn/Waikirikiri River instead of a largely dry riverbed. Improved water management would mean an adequate flow in the Rākaia River by reducing some of the abstraction from that river so that we do not have the risk of the river mouth of the Rākaia closing, as it did last year. Improved water management would mean that outstanding rivers such as the Hurunui River and the Clarence River would be protected by water conservation orders rather than the kneecapping of that instrument that this bill achieves by completely changing their protection and preservation purpose, by not allowing appeals to the Environment Court, and by having them recommended by the regional council rather than a special tribunal.

If this bill was genuinely about improved water management, as its euphemistic title suggests, we would see a stabilisation or a decline in the levels of nitrate nitrogen in our aquifers, not an increasing trend, as Environment Canterbury state of the environment monitoring has shown in a number of bores. If the bill was genuinely about improved water management, it would mean that river flows in rivers throughout Canterbury would be sufficiently large and sufficiently variable—as is part of the natural character of braided rivers—so that we would not see more incidences of the toxic cyanobacteria algae, as we have seen recently in the Hurunui River, which are a definite sign that we are not getting improved water management. Improved water management would be about people in Canterbury having no fear of swimming in our rivers and getting some nasty stomach bug or coming into contact with toxic cyanobacteria algae.

This bill is not about improved water management; it is about more irrigation and more water pollution. That is interesting, when we have seen the former Minister of Local Government, David Carter, want more rigorous performance measures for local councils. This bill provides no objective measures of what constitutes improved water management in Canterbury. There are no measures of or limits to contaminants in waterways that one might expect as a measure of whether we are heading towards cleaner streams. There are no measures of improved water quality in the aquifers. So the bill’s title is a complete misnomer for the denial of democracy that it promotes, the kneecapping of water conservation orders, and the very different law that applies under this bill to rivers in Canterbury in relation to water conservation orders elsewhere.

CHRIS AUCHINVOLE (National): I move, That the question be now put.

Su’a WILLIAM SIO (Labour—Māngere): I have to agree with many of my colleagues that the title of the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill is the wrong title for this particular bill for a whole range of reasons. I have got a list here of the bulk of the people who took the time to make submissions and who oppose this bill. So I would say that it is the wrong name for the bill. Probably a fitting name would be—as the member who spoke earlier, Grant Robertson, said—the “Environment Canterbury (Denial of Democracy) Bill”, because when you look through the submissions, every single submitter whose name I have here raises this issue: that their democratic right to elect their own representatives is being denied. Despite the promise made in 2010, this Government is now ready to break that promise. Another fitting name for the bill would be the “Forgotten Cantabrians Bill”, because, clearly, with this bill, it seems that this Government has no intention to value the people of Canterbury and to value their right to elect their own representatives. A better name for the bill would be the “More Irrigation Bill”, because this bill is not about the management of water; it is more about more pollution and more division within the people of Canterbury.

The bill could probably be more fittingly named the “Taxation without Representatives Bill”. If I look through the submissions, a primary concern raised by the people of Canterbury is that despite their elected representatives being removed forcibly by this Government under the original Environment Canterbury (Temporary Commissioners and Improved Water Management) Act 2010, they continue to be forced to pay for the commissioners. So here again, under this bill, the Government is telling the people of Canterbury that they do not have the right to elect their representatives in 2013, despite that explicit promise. Instead, they are going to have to wait until 2016. But if the Government has broken the promise for 2013, how can the people of Canterbury have confidence that this Government will keep that promise for 2016? In the meantime, while that right has been taken away from them, they continue to be billed for the cost associated with those appointed by this Government.

Another name could be the “Entrenched Government Commissioners Bill”, because the Cabinet papers that we have been able to access say clearly that the right thing to have done there was to hold these elections early and not to entrench the Government-appointed commissioners. Yet what the Government is now doing is amending this bill and entrenching the attitude that the people of Canterbury do not know any better. The Government cannot trust the people of Canterbury to elect their own representatives. Therefore, Big Brother, the John Key - led National Government, knows better. Therefore, the people of Canterbury will not have the opportunity to elect representatives, so a fitting name would be the “Entrenched Government Commissioners Bill”.

But I think that the name of the bill that would resonate more with the people—not just the people of Canterbury, but right across New Zealand—is the name that this bill could rightly be called: the “Broken Promises Bill”. Time and time again we have seen example after example of how this Government makes promises and then does not fulfil them. As I said earlier, the shame of it all is that if an ordinary citizen were to write and sign a document saying “I promise to do this.”—as was the case with this Government; it promised in 2010 that local elections for Environment Canterbury would take place in 2013—and then break that promise, they are liable for court action. They are liable for a fine. They are liable for a jail term. Instead, what we now see is that the Government can get away with breaking the promise because it will change the legislation. That is not the only broken promise. And this is the sadness of this whole case. How can the people of Canterbury, and how can New Zealanders, have any confidence in this bill that elections—

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

The CHAIRPERSON (H V Ross Robertson): The question is that the question be now put. As many as are of that opinion will please say Aye, to the contrary, No. The Ayes have it.

ANDREW WILLIAMS (NZ First): I raise a point of order, Mr Chairperson. This is an MMP democracy we have here, and our party has not yet had a say on this particular bit. I find that very disappointing. We have been waiting for a call, and now when we want a call we are not able to get a call. There are a number of parties in this House—

The CHAIRPERSON (H V Ross Robertson): Order! Can I refer the member, please, to Speaker’s ruling 10/4: “Once the chairperson has accepted a closure motion and commenced to put the question, it does not matter how far the chairperson gets; … the time to report progress is deferred until the closure and any consequential questions are determined.” So I am happy to determine your question now. Can I say that I looked up and I did not see the member there when I gave the previous call.

ANDREW WILLIAMS (NZ First): I raise a point of order, Mr Chairperson. I was on my feet before the National Party member had stood. So, you know, I am sorry that you did not see me, but I was on my feet and seeking a call.

Hon TREVOR MALLARD (Labour—Hutt South): I think there are two points. I accept that we are probably not going to make much progress on this, because in the end it is your discretion, but I think there are two points that I would like to make. I think the Speaker’s ruling that you quoted from had to do with reporting progress rather than reporting a vote. I am not sure you got the right Speaker’s ruling, although I am sure you could find one if you looked. The other point, and I think the more important point, is that it is normal for a Chairman, before awarding a call, to cast their eyes around the Chamber to see who is seeking a call. On this occasion it is absolutely clear that Andrew Williams was seeking the call. He called—he called before the National Party person did. You had no obligation to take him, but my suggestion is that it would have been helpful if you had had a look.

The CHAIRPERSON (H V Ross Robertson): Well, I have put the question. It has been put and it has been voted on, and now the question will be put. Thank you, Mr Mallard, for your contribution.

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 56

New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.

Motion agreed to.

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

Ayes 64

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

Noes 56

New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.

Clause 1 agreed to.

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

Ayes 64

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

Noes 56

New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.

Clause 2 agreed to.

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Chairperson. If I am not mistaken, it appears that the Minister in the chair, Nikki Kaye, is either texting or emailing. That is a clear breach of the earlier rulings on this matter. You are allowed to do it in the Chamber, but not in the chair, I understand.

The CHAIRPERSON (H V Ross Robertson): I think you are allowed to knit, if I remember right from the days of Judith Tizard—

Hon Trevor Mallard: Yeah, but not in the chair.

The CHAIRPERSON (H V Ross Robertson): But not in the chair—not in the chair. The member has been reprimanded.

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

Ayes 64

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

Noes 56

New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.

Clause 3 agreed to.

Bill to be reported without amendment presently.

Bills

Child Support Amendment Bill

In Committee

Part 1 Formula assessment of child support

The CHAIRPERSON (H V Ross Robertson): Honourable members, we now move to consideration of the Child Support Amendment Bill. The question is that clause 1 stand part, and debate is on clauses 4 through to 25A and schedules 1A to 2.

Hon Trevor Mallard: Part 1 or clause 1?

The CHAIRPERSON (H V Ross Robertson): Part 1—Part 1.

Dr DAVID CLARK (Labour—Dunedin North): The Child Support Amendment Bill represents a lost opportunity to address the well-being of children in vulnerable families. It is a real disappointment. Labour supported this bill’s referral to the Social Services Committee in the hope that it could be advanced, that it could actually gather some focus, and that the Government would be brave enough to step forward and say: “We want children to be a priority.” We know that Labour at the last election took a platform that involved having all policy filtered through the view of what it would mean for children and actually asking: “What is a difference we could make for vulnerable children with every policy? How can we make sure that no policy makes children worse off?”.

Well, this policy certainly does nothing positive for children. It is based on the presumption that we raise children, particularly the vulnerable children, in the same way that they are currently raised. The funding model for this formula that we have, presented in the legislation, is based on an understanding of what is currently in place. It is a lost opportunity.

We know that 25 percent of New Zealand kids are raised in poverty—that is, 270,000 children are currently being raised in poverty. We also know that in this particular group of vulnerable families, that proportion is likely to be much, much higher. About 133,000 children are dependent on families in difficult situations like this. So this is a missed opportunity. That is the first thing to say about this bill. And we have heard that, of course, from a large number of groups who represent the interests of children: the Auckland Coalition for the Safety of Women and Children, the Child Poverty Action Group, the Dunedin Community Law Centre, the Families Commission, the Human Rights Commission, the New Zealand Law Society, the Office of the Children’s Commissioner, the Equal Justice Project, and the Women’s Studies Association.

This bill represents a lost opportunity to raise these vulnerable children in a situation where they are not battling the disadvantage of poverty, and, therefore, Labour cannot in good conscience continue forward in support of this bill. In the select committee we raised concerns about this approach. We asked whether the legislation that New Zealand had signed up to in the United Nations Convention on the Rights of the Child could be brought to bear on this, whether we could honour the commitments we made there in this bill, and whether the scope of the bill could be broadened.

The advice that we received was that we could ask the Minister to broaden the Act to consider the rights of children, and to consider children’s well-being in this formula more explicitly. So we put that to the select committee, and that debate in the select committee was a lively one, but ultimately the Government members voted down the opportunity to broaden the Act so that it did explicitly look at the welfare of children. I think that is to the Government’s shame.

This legislation has been consulted on for a very long time. We see a Government that at least on the surface wanted to make a difference. It wanted to examine the shared-care arrangements that we currently have, and find a fairer formula. That is the language that has been used. We dispute that we have actually got to that point. But that was the language used. It was a long process. We thought, given the current Act that chugs along and given the view of many of those who submitted that this is no improvement, we could have extended the period for this legislation in order to get it right. It seems a sensible thing to do, when time in this Chamber is being used for the debate, to make sure that we are looking after those vulnerable children and to make sure that the Act is as good as it can be, to make sure that the well-being of those vulnerable children is prioritised.

There was a second opportunity, when some concerns were raised about the legality and the potential litigation that might arise from taking such a step, to get some advice. So the select committee sought further advice on how we as a committee could reference the United Nations Convention on the Rights of the Child obligations to the objects of the legislation whilst preserving the integrity of the Child Support Act and making sure that there were no litigation opportunities.

Again, we put that to the vote and the Government members blocked it. They simply did not want the rights of children explicitly noted in this legislation—and you can check the select committee records. These were things that we had discussion on, and these were things that were voted down on the select committee. I think that is very much to the Government’s shame.

We in the Labour Party do think that children should be the priority. They represent the future of this country. Those children are the future of our country. They are the people who will earn wages that will pay into superannuation schemes that will keep all of us in our old age in the lifestyle to which we wish to become accustomed. If these children do not have the opportunities to maximise their potential, they will grow up without realising their potential. That has an onflow to the rest of society, and we cannot afford to have children in this country who do not reach their potential—quite aside from the social concerns that sit with this.

This legislation, let us remind ourselves, is actually about those families who cannot reach a voluntary agreement as to how they are going to support their children. This legislation is about families who are in a difficult situation and are often vulnerable because they have had disagreements, and they now find themselves in a situation where they are forced by the State to adopt a formula as to how that care arrangement will work. So we are talking about a group in society that is in a difficult position.

I have already touched on the fact that 25 percent of New Zealand’s children are living in poverty and that this new formula is modelled on keeping that same proportion going forward. It should be noted also that taxpayer support here is actually going to those who are liable more. So what is happening is that this is also going to cost the taxpayer more, even though the children do not get additional support. We think that in this bill there are a number of things that are wrong and that should be addressed.

The Government did not take a view on a pass-on mechanism, which many submitters recommended, as a way of incentivising parents to meet their payments—to make sure that they know that their payments are going to be passed on directly to their children. The Government refused to express a view on that. It refused to really even consider that as an option. What we also know is that this bill has some real negative implications for women in our society. We know that most of the caring for children in these circumstances is done by women. They are usually the primary caregivers. The fathers, more often than not, are those who are the liable parents, so they are making the financial contributions that support the children. We know that women in this vulnerable situation are often in situations of poverty and are forced to make trade-offs between buying school uniforms for the children, or buying nutritious clothes, power—food, rather—or paying the power bill—

Todd McClay: Nutritious power?

Dr DAVID CLARK: —for a warm house. The member at the back says “nutritious power” and mocks the issue. I think this is a very, very serious issue. The fact that women in this vulnerable situation are likely to be worse off, we understand from the modelling the officials have done, is a tragedy and it is a shame. It could be done better.

We think that the 28 percent shared-care threshold is too low. Those who have the children for 2 days a week do not bear the full proportion of the cost that that represents, because during the week the children go to school, they go to the dentist, they go to the doctor, and so on. So it is likely that the one who has them as the primary caregiver is meeting all of those bills. The one who has them for 2 days a week is actually not meeting the majority of costs. So having a reduction to 28 percent, as is dictated in the formula, seems an unfair way to go. It means that those women—largely—will be worse off.

There is also a big concern on our part around the transparency of the new formula. The new formula is designed, we are told by the Government, to be fairer. It is a more complex formula. It takes more factors into consideration. On the surface that might appear to be a good thing. We agree that there is some need to take shared-care arrangements into account. We do not quibble with that. The legislation definitely needs updating. Any constituent MP will tell you that coming through their door some of the more difficult cases that they have to deal with are around the care of children. But the new formula is too complex. It is very difficult for affected parties to understand. The Inland Revenue Department itself has acknowledged this, saying that it will have to retrain its staff. It is going to have to pour more of its own budget into that area, just to train its own staff to use the formula that is expected to be used in the care of children.

We cannot expect parents to understand it immediately. It is opaque. We on the committee spent many, many hours, under the chair’s guidance, going over and over how the formula would work and how it would apply to different people. What we saw was that officials could not immediately answer the questions. They had to go back and they had to—

Hon DAVID CUNLIFFE (Labour—New Lynn): I rise to speak to Part 1 of the Child Support Amendment Bill, and I wish to pick up the themes that my colleague the Rev. Dr David Clark has just espoused. The first of those is to note that Part 1 is the main, operative part of this bill. It internalises the new funding formula and it contains the operative provisions that set the amounts of child support that are required in the event that a couple contemplating separation cannot reach a voluntary agreement. There are a number of issues that arise in this part.

The first of them is the complexity of the funding formula. As Dr Clark has told the Committee, the reality is that it took many hours of consideration for the members of the Social Services Committee—of which I was not a member at the time—to understand the mechanism embodied in this formula. It took officials a number of hours to be able to explain it to the members of the select committee. It has, as Dr Clark has said, required the Inland Revenue Department to contemplate retraining its staff. So what? The so what is that if it is that hard for professional officials and the average doctorate-holding member of Parliament to get their heads around this, then it sure as heck is going to be difficult for the average Joe in the street or Jane in the street to be able to clearly understand their rights and obligations in the event that they cannot reach a voluntary agreement. So transparency—the lack of it—and complexity are two issues that are built into this reform.

Why does that matter? It is because the incentives that the law really ought to be putting in place are that a couple can have every support to find a mutually supporting, voluntary agreement to manage the transition from one family structure to another in the interests of the children. By not making the counterfactual transparently clear in a simple and easily understood form, then it is much more difficult for couples who are already under extreme stress to be able to manage their way through that difficult period.

That, of course, brings us to another point that we debated quite vigorously in the second reading speeches, which is that the formula does not specifically prioritise the interests of the children; it is a fall-back. What it should have had and what Labour members argued for—but which National members, I am told, actually voted to block consideration of—was an accompanying provision, for example, in the purpose statement that would underline the best of our jurisprudence, which is that the children come first. What I understand informally is that there was resistance to that from the Minister of Revenue and his office because they were worried about litigation risk against the Crown. I would have thought in these circumstances—vulnerable children; big powerful Crown—that actually the Crown ought to be able to wear that risk in the interests of legal clarity for the common law. That would have, it is also true, better reflected article 3 of the United Nations Convention on the Rights of the Child, which is not specifically picked up in this bill.

There is, of course—turning to the substance of the formula—a real concern about the adequacy of the payments made. Submitters raised concern about that adequacy using the proposed formula, particularly given that a significant proportion of New Zealand’s children are currently growing up in poverty. As we said in the second reading debate, there are 270,000 children growing up below the poverty line in New Zealand. That is an awful shame. It is a stain on our national character, because those—over a quarter of a million—kids are going to have their lives, their prospects, and their children’s prospects impaired because they did not get the start that we would expect every child to get. Of that 270,000, roughly a half, we were advised—about 133,000 children, or more than the population of Dunedin or Hamilton—are growing up in single-parent families. Many of those, no doubt most of those, are dependent upon child support.

It is essential, firstly, that the formula correctly upholds the interests of those children, and, secondly, that the basic income adequacy is there for the liable parent to be able to meet those obligations. Two issues flow from that. The first is that we are embarked now on a debate about whether New Zealand should have expectations around a living wage. Well, too damn right it should, because the counterfactual is that we are paying wages that might be legally lawful, but are acknowledged to be less than a family can possibly survive on, and the implications of that are taken out of the well-being and the future potential and productivity of the children growing up in that household.

Let us turn to the pass-on mechanism. Expert submitters recommended using a pass-on mechanism to increase the collection of support payments—that is, if a liable parent knows that the money they are paying is actually going to go to their own children, international evidence indicates they are more likely to pay. At the moment, of course, the money goes to the Crown, and the Crown pays the child support to the custodial parent and the kids, and because that chain is indirect, sometimes the liable parents find it easier to not meet those obligations. Well, they should meet them. There is no justification for not meeting them within the terms of either whatever agreement that couple has agreed to or the legal minimum that is required. Too many liable parents have not met them and have built up child support debt. The current Government loves to harangue the Opposition for the fact that when it was in Government it had less than $1 billion of child support debt. It is now $2.3 billion and climbing—$2.3 billion of child support debt has not been collected from liable parents. Anything that can get that down is probably worth considering, including, I think, close scrutiny of the pass-on mechanism. Of course, the risk to be addressed is that if the pass-on mechanism is not supplemented by some fall-back, then, of course, families could be in extreme poverty if they are not so provided for.

We note that the Children’s Commissioner, in particular, was critical of the understatement in the supplied regulatory impact statement, which said that the pass-on mechanism may affect rates of payments. The international evidence is clear that it does so.

Turning to the implications for women of the funding formula contained in Part 1, the legislation, of course, has very significant implications for women. On average, as is well known, women earn less than men and are more likely to be the primary caregiver. They are more likely to be in the vulnerable position here. The actual effect of this bill is to apportion a greater share of the cost of child rearing to the women—a greater share of the cost of the child rearing goes to the women. Now, is that not extraordinary? We know we have got a child poverty problem, we know the women bear the brunt, we know they are disadvantaged, but the great National Government has brought to the Committee legislation that makes those problems worse.

We believe, according to evidence that we have seen, that the 28 percent shared threshold in the legislation is too low. Parents caring for a child 2 days a week are unlikely to share a proportionate responsibility for providing the basics of life. Although food bills might be able to be shared proportionately, the primary caregiver is more likely to be responsible for things like school costs, uniforms, clothing, medical, dental, and so on. As every parent knows, this one included, those costs can really mount up.

Let us just sum up the points that have been made in this part of the Committee of the whole House debate. There is a real problem with transparency. There is thus a problem with accountability. Couples do not have a clear counterfactual upon which to base their decisions. There is no pass-through, and women are worse off. Those are all serious issues with the funding formula contained in Part 1 of this bill. Thank you.

HOLLY WALKER (Green): I am pleased to take a call in the Committee stage of the Child Support Amendment Bill. As I told the House last night in the second reading, it is with sadness, really, that the Green Party continues to oppose this legislation. We absolutely support the goal of a fairer, more transparent child support system, but right from the get-go with this legislation we have found ourselves unable to support it, because of a number of concerns that we have, which have not been addressed by the Social Services Committee’s deliberations on the bill.

I think it is really important to ground this debate in the subject matter, which is, of course, the rights of children to be well supported and cared for when their family is going through difficult circumstances. By definition, to qualify for child support, children’s parents and/or caregivers have been unable to reach an agreement about how to financially support that child. That is not an ideal circumstance for any child, by any stretch of the imagination. It is a time when children are likely to be stressed and vulnerable, and a time when it is absolutely important that the legislation and the scheme governing the support for those children maximise their best interests and seek the best possible outcome for those children.

To take probably our most fundamental concern with this bill, it is the fact that it fails to maximise the best interests of children and it fails to take that opportunity to do so. We have heard from one of the previous speakers, Dr Clark, about the efforts that the select committee went to to consider enshrining a commitment to the best interests of children into the purposes of the Child Support Amendment Bill. That would have gone a long way, I think, to alleviating the concerns that we as the Green Party have about this bill. Unfortunately, the attempt to do that was blocked by the Government members of the select committee, and even the attempt to have some further advice from officials on that point was blocked.

I think that when we consider that not even in the Child Support Amendment Bill are we prepared to enshrine the best interests of children, we really have our priorities wrong as a Parliament when it comes to how we are taking care of our kids. It is also a missed opportunity to alleviate child poverty. We heard from a number of submitters that the child support scheme could be improved in such a way that would actually directly benefit some of the 25 percent of New Zealand children who are living in poverty—for example, the ability for parents who are reliant on benefits to receive a passed-on child support payment, rather than having that whole payment retained by the Crown as a means of offsetting their benefit.

Additionally, the ability for the Crown to advance child support payments to families in order to ensure a stable and guaranteed income for the children and family, even if the liable parent is late or behind on their payments, would have made a huge difference for thousands of children and helped to alleviate child poverty. That opportunity has been missed, and that is a great shame.

To turn to what takes up the bulk of Part 1 of this bill, which is the new child support formula—really, this is at the heart of the changes that the bill introduces—we remain incredibly concerned at the complexity and lack of transparency of the new child support formula that this bill introduces. It has been acknowledged by officials in their advice to the committee, that the new formula is much, much more complicated than the one it replaces, and the one it replaces is already reasonably complicated and already a source of friction for many parents who need to calculate their liabilities or their entitlements under the existing child support formula. That will only get worse under this bill, because the new formula is incredibly complicated. It introduces a huge number of new variables, and the upshot of that, I think, is that it will become basically totally impenetrable for the average parent to work out their own liabilities or entitlements under the child support scheme. They will probably need to sit down with the advice of a professional accountant in order to be able to figure it out, and, certainly, without the full and complicated information required to plug in all the variables, they will not be able to do their own calculations, check the calculations that the system has spat out for them, and feel confident that the system is fair and transparent.

That, I think, has the real potential to create new grievances between parents, because if it is felt by either a receiving or a liable parent that they have not had a fair deal from the new formula, they really have no ability to go in themselves and check against it, because it is so complicated that it will simply be impenetrable for them. That, I think, produces a real weakness in the scheme that actually puts it at considerable risk.

What we also heard from officials with regard to the new child support formula is that it is going to put the Inland Revenue Department’s systems, both administrative and IT systems, under considerable strain. We know that the Inland Revenue Department’s IT system is already creaking and groaning under the weight of what it has to administer, and we have seen recently in other legislation before this House regarding the student loans scheme that the system basically cannot cope with the changes that are being introduced. And here again we have an example of that with the child support formula. It is so complicated that it is going to require significant investment in that IT system for it to actually be able to administer and process the formula.

We know already that that whole system needs replacing, so it is a very inefficient use of resources to invest in it—and we have heard from officials that about $91 million will be required to administer the new formula—when that whole system is going to need to be replaced soon anyway. I would not be surprised, actually, if it was the straw that broke the camel’s back and caused the system to collapse.

So significant are these problems that the introduction of this bill has had to be delayed by a year so that the Inland Revenue Department’s systems can get up to scratch. I think that tells you a lot about the readiness of the department to administer the new child support scheme. Simply put, it is not a good idea to go ahead. So we have very fundamental concerns with that, with the cost to the taxpayer of an additional $91 million and a contingency of $28 million to even put into place the administrative requirements, the training of new staff, and the IT systems to administer the scheme, and no additional benefit for the children who are supposedly at the heart of the scheme. We have very fundamental concerns about that.

Finally, I want to turn my attention to the Minister’s Supplementary Order Paper 181, which is before the Committee. The concern I want to raise with this is really a process concern. This legislation goes back a very long time. The consultation to begin to review and reassess the child support scheme goes back a number of years. There was a very lengthy public consultation process undertaken and a very lengthy report produced, and over several years this legislation has progressed incrementally.

We also had a very full process at the select committee when we considered this legislation. We took our time over it, as we heard from Dr Clark, largely because we had to spend so long trying to get our heads around the new formula. But we had a very lengthy process and we had plenty of time for advice from officials about amendments to the bill. Indeed, the select committee recommended a number of amendments. And yet here we have at the last minute, with no advance notice, and the amendment available only earlier this afternoon, changes on the floor of the Committee from the Minister, when, in fact, I believe that he has had years and years and years to get this right and to put those amendments in place. I think it is very unacceptable that this kind of last-minute process has been followed with those amendments in the Minister’s Supplementary Order Paper.

Those are some of the reasons that the Green Party has fundamental concerns with this legislation, that we opposed it at the first and second readings, that we will oppose it through the Committee stage, and that we will oppose it at the third reading. Thank you.

Peseta SAM LOTU-IIGA (National—Maungakiekie): It is a pleasure to speak on the Committee stage of the Child Support Amendment Bill and to support it. The reason I support it is that this bill transforms this area of the law and makes it more effective, makes it fairer, and makes it more efficient to distribute child support to those kids who need that funding. I think members who have already spoken on the bill earlier and who are opposing the bill misunderstand, actually, what this bill stands for. This bill, presented by the Minister of Revenue, the Hon Peter Dunne, does not seek to solve all the problems of the world and the problems that children have in our society. All this bill does is act as a mechanism by which payments are made and collected between parties, often spouses, who have raised a kid but who for some reason, whatever reason, have found themselves separated. It is the payments between those parties that this bill covers.

So where people are talking about solving poverty, and where people are talking about making this bill more effective, and about the United Nations Convention on the Rights of the Child, that is not what this bill solves. I think if you read the bill and you read the commentary, you understand that the mechanism to have those transfer payments made is within this bill. There are a whole range of other programmes and payment schedules that deal with those problems. Working for Families, the accommodation supplements that various families receive—those are the appropriate payments to be made to support families and to support, especially, young children being raised in our country. So I think we need to get the context around what this bill actually covers.

The other part of the context, which Mr Cunliffe referred to in his speech, was around the debt around child support. We in the Finance and Expenditure Committee 2 years ago—and I know he sat on that select committee—actually looked at why those payments and penalties have escalated over time. He said that $2.3 billion had accumulated, much of it in penalties and much of it leading—and he is agreeing with me; I am glad we agree on some things—to distorted behaviour in those who were liable for certain payments to actually abscond, move away, and not make those payments, on the basis of the penalties that had been incurred over time. That is why this bill is solving that type of problem. It is not about the punitive aspects of child support; it is about effectively managing the payments that are made to those children, so that the children who are in receipt of these moneys are able to benefit from them. That is what this bill does.

Admittedly, as has been stated across this Chamber, the bill has a complicated formula, but I submit that we should give credit to the people of New Zealand that they will be able to understand these things when they sit down with their adviser or an Inland Revenue Department officer, when they sit down with those people who are able to assist. The formula is an objective formula that is based on a calculation and based on modern ways of looking after children. The expenditure that is incurred for children, and the incomes that those parents derive from their everyday lives—those are the factors that are taken into account when that formula is calculated. I ask members, if they do not understand, to read the bill, to sit down and read it—

Hon David Cunliffe: I seek leave to table a copy of the formula, because the member either cannot remember—

The CHAIRPERSON (Lindsay Tisch): No. The member is interrupting a debate.

Peseta SAM LOTU-IIGA: Well, the “Prince of Ponsonby” might not understand it, but I certainly do.

Hon David Cunliffe: I raise a point of order, Mr Chairperson. In the second reading of this debate we firmly established that Ponsonby is not in the New Lynn electorate, yet—

The CHAIRPERSON (Lindsay Tisch): The member will resume his seat. That is not a point of order. The member is interrupting the flow of debate and it is unacceptable.

Peseta SAM LOTU-IIGA: All I will say about the formula is that it is objective and it leads to fairer outcomes. Admittedly, there are some who will lose money, according to the formula, but it is an objective formula that you can look up or you can get advice on. Thank you.

JACINDA ARDERN (Labour): We have just been told by Peseta Sam Lotu-Iiga, the chair of the Social Services Committee, which I have the privilege of being a member of and which heard the submissions and deliberated on the Child Support Amendment Bill, that this bill will make child support—what was it—more effective, fairer, and more efficient. I would not mind running through that criteria and really testing whether or not that is, indeed, what this bill has achieved. Unfortunately, on this side of the Chamber that is not the impression that we have been left with, having traversed this bill in the select committee.

I would like to start with the general principle of why child support is there. We were just told by the chair of the select committee that it is not actually about child welfare and well-being. Well, what is it about? What is it about? If it is not about the welfare of the child, about making sure a child is well supported whether they are with one parent or two, then what is it about? What we strongly argued in the select committee was that, surely, if that is what this should be about—if it is about income adequacy when parents, for whatever reason, no longer combine their incomes—then surely that is about the welfare of the child. And if it is, why would we not put the paramountcy principle up front in the centre of this legislation?

The interesting debate that was had at the select committee was that it was pointed out to us by officials that putting in a principle that said that decisions should ultimately be made based on the welfare of the child was actually contrary to the principles of the bill. Nothing could be more stark in pointing out that, in our view, we lost our way about what this issue is actually about. Within the complexity of the formulas and the potential feuding of parents—because we know that those parents who use this legislation are generally less satisfied with their child support payments than if they set up a payment system outside of this regime—we get so caught up in all of that that our fear was that we were losing sight of what it is all about. I understand the legal reasons, the drafting reasons, that made the paramountcy principle difficult, but that triggered in my mind the thought that the Minister of Revenue should have started with a first-principles review with this legislation, rather than adding layers of complexity to an already complex and ineffective formula. That is the principle of why, surely, we should be discussing this.

The second point that the chair tried to make was that this was about making it fairer. Well, even in the select committee we came up with a different threshold for care than the Minister did. So to try to argue that somehow it was an easy thing to establish fairness is, I think, quite contrary to the experience we had even deliberating on this bill. The notion, though, that you could claim that it is more efficient, I found quite simply laughable. As the Green Party member has pointed out, it will cost $91 million to administer this piece of legislation. That is probably more than what it would cost if we instituted a pass-on mechanism. I am not entirely sure, but it would be a significant chunk of that, anyway.

This is going to be a difficult piece of work to administer. The member is also right to point out that the Inland Revenue Department’s systems are going to struggle with it. I would say this seems even more tricky than Working for Families, and that was probably a test for it in the first instance. I think the fact that the Inland Revenue Department will have—what was it—a 15 percent increase in workload for case managers trying to navigate this, as well, also points out the complexity.

But ultimately I think probably what demonstrates better than anything else the fact that this is not going to make our system more efficient, more effective, or fairer is that you are probably yet to hear any speaker in this Chamber elaborate on how the formula is going to work. We heard the chair say that it will take a modern approach to the care of children in the calculation, whatever that means. Let us be honest, members of the select committee: there were whiteboards brought out to try to explain to us how this calculation was undertaken. It is not a simple formula. This is not about insulting the members of the public; this is about being honest that when trying to establish a regime that reapportions income across a liable parent and a caring parent and that takes into account thresholds of care and different income levels, it is complex. We cannot deny that. Surely that is something that we would agree on. So the first point I wish to make is that Part 1 ultimately should have included the paramountcy principle.

Secondly, if we were going to take a first-principles review of this legislation, we should have looked at using a pass-on mechanism. We are being very honest on this side of the Chamber. No one is denying that pass-on has fiscal implications. But I think most New Zealanders would be shocked to know that childcare payments that are paid from one parent to another parent, who may be on Government support for their income, do not go to their child. I think most New Zealanders would be shocked to know that. Given that we know that the majority of children who are living in poverty are in sole parent households, and that sole parent households from time to time are going to be reliant on Government support, particularly if their children are at an age where they need full-time care responsibilities, we know that roughly 88,000 children, from memory—around that mark—who are living in poverty are going to be reliant on sole parent support in that form. So they are the kids who are not getting child support payments—those kids who need it most.

All that we asked on this side of the Chamber, acknowledging the fiscal cost, was that the Government at least look at it—at least look at it. That is what the Expert Advisory Group on Solutions to Child Poverty recommended. We at least wanted to take a look and to analyse it collectively as to whether or not we should be doing it.

The second big issue that we grappled with as a select committee was, indeed, the funding formula. I am going to have a little go at sharing how the formula is at least elaborated on in the legislation. If you go to Part 1, clause 7, it states in new section 4A(4): “The amount of annual child support payable by a liable parent for a qualifying child is determined under Part 2, and is worked out by deducting the liable parent’s care cost percentage from their income percentage, and then multiplying the result by the appropriate amount set out in the relevant child expenditure table (which identifies, amongst other things, the average annual expenditure on children in New Zealand, by reference to average weekly earnings).” Did everyone follow?

There are three variables in this formula. The first is the proportion of care, and that was something under much debate. When this bill first came in there was a recommendation that we reduce the threshold. So a parent, to reduce the amount of child support they paid, had to care for their child for at least 40 percent of the time. That is where it was. This bill came before us and it said it was 28 percent of the time. Our issue on this side of the Chamber was that in the majority of cases we are talking about women caring for children. You take 28 percent of the care, and that means that you might be picking up just a weekend. Is that impinging on your ability to then be a full-time earner? Probably not. Is the mother able to be a full-time earner when she is caring for the children the rest of the time, 5 days of the week? It is much more difficult. So we felt that that threshold needed to be adjusted, and to a certain degree that has been built into the bill. So that is the threshold element.

The second part states that it is worked out “by deducting the liable parent’s case cost percentage from their income percentage,”. What is the income percentage based on, Mr Chair?

Peseta Sam Lotu-Iiga: Don’t bring him into the debate.

JACINDA ARDERN: I am talking to the chair of the select committee at this point. The income formula—as the chair will remember, I am sure—is actually based on a core living cost for an adult, which is based on what? I hear silence on that side of the Chamber. It is roughly based on the DPB. We use that to say, well, how much does someone need to earn to survive? Some might question, actually, whether that is enough to earn to survive, when you use the DPB as the base for how much an adult might need to survive. Then we reapportion the leftover income.

I am being very crude in my explanation here, but crudely that is what that formula does. There are lots of variables in it, and there are lots of holes, and you could ask whether or not even the base income threshold that we used to establish it is sufficient for an adult. But that is what we have run with here. To try to claim that all of that is effective, fairer, and more efficient—I still think there are plenty of holes in the argument that was presented from the chair of the select committee in that regard.

I want to come back to the discussion on the threshold of care—the 28 percent versus the 40 percent. Yeah, we agree—40 percent is a high threshold before you start taking into account monetary deductions from your childcare. But we are also making a crude assumption that if you take up the part-time care of your child, you are, therefore, picking up the cost. Are you picking up an equitable cost of doctors’ visits? Are you picking up the costs of their school fees? That is not the kind of thing that is roughly calculated on that threshold.

ALFRED NGARO (National): I rise to take a call in this Committee stage of the Child Support Amendment Bill. We have heard a lot of talk about the things that have gone wrong with this bill; we have not heard about the things that are going well with this bill. The previous speaker, Jacinda Ardern, talked about an aspect of the bill, the injustice, the inequity, that almost seemed to be coming out, and yet what the previous speaker did not talk about was the other aspects of support and care that are provided—for instance, Working for Families and the accommodation supplement. It is a bit unfair to have a sense that this bill alone provides for all the needs of the children, and of the family in particular.

We know that when families break up it is a very complex and a very difficult situation. In this case we know that it is often traumatic, and especially for the children. Financial instability following break-up is all too common, and this is the area that we and the Minister of Revenue have been concerned about: ensuring that we provide the adequate support. All parties have actually agreed that the intent to reform the current scheme is important. In fact, we know that there has been extensive consultation around this. There was the report in 2010. The Government released a discussion document and there has been extensive consultation: 2,270 participants, 834 receiving parents, 753 paying parents, and 685 other parties—30 percent who were included both pay and receive child support.

I note those comments about the consultation, because when we talked about the formula—and there has been a lot of talk about the formula, and how it has been complex. The previous speaker, Jacinda Ardern, was quite correct that at times when we were going through the process at the Social Services Committee it was complex. There were whiteboards, there were papers, and we were trying to work out what this was. It is complex because we know that the circumstances for families are often very complex as well. But in the consultation that was had, 69 percent of those who were surveyed online said this: “It should also be noted that [the] respondents to the online consultation undertaken thought that all the factors should be used to determine child support payments.” In other words, the overwhelming majority said this: “We know it is difficult, we know it is complex, but we don’t want you to remove the opportunity for us to be recognised in our different circumstances.” We have heard people say that it is too complex, it is too difficult. The consultation of submissions has clearly said that they know it is complex but they need those individual factors to be included as well.

The New Zealand Law Society, in fact, talked about this, stating that the “proposed child support formula is too complex and should be simplified …”. So this is the consideration to address those issues, and “taking all those elements into account results in a more cohesive and comprehensive change to the formula that incorporates: estimated average expenditures for raising children; varying levels of care; and the income of both parents.” That is the basis of this formula. That is the basis of the formula that I think that most Kiwis, most parents, would understand and would appreciate in regard to addressing their circumstances and their situation as well.

That said, the proposed child support formula is more complex. I know that the honourable member Holly Walker talked about the fact that people will need accountants, and they will need Inland Revenue Department specialists. Well, that is not true, because here is what has been acknowledged: “However, parents or other affected parties will not be expected to undertake the calculations themselves. Inland Revenue’s systems will undertake all calculations required to determine liabilities and entitlements.” And they may talk over there about the $91 million and all the months of training, but we have heard the wailing and the gnashing of teeth at times when we have been unprepared, it seems, and when we have not got the systems right. And here we are, investing in the system, investing in an approach to ensure that the liabilities and the entitlements for families and for children are in place.

I want to also address this issue of paramountcy. Can I say this: the reason why this is important—that the entitlements will go back to the parents—is because these are the caregivers who will care for their children. Most Kiwis want the ability to care for their own children, want the ability to make their own decisions, hence this Government is not about taking away that control. Instead, it wants to ensure that even they can be entitled. When we lowered the threshold, for instance, we have heard the fact that it is mainly women—and, absolutely, it is mainly women—who are the caregivers, but in circumstances where men, where fathers, are taking their responsibilities, should we not recognise that?

Le’aufa’amulia ASENATI LOLE-TAYLOR (NZ First): New Zealand First supports the move for improvement to the current system at the moment. We accept that it is difficult to find a new formula for child support that will satisfy everyone. The new formula is not without concerns. However, it is a step in the right direction and a vast improvement on the existing outdated system—shall I say 22 years outdated. Part 1 and clauses 5, 8, and 9 of this bill, the Child Support Amendment Bill, will actually dictate to us or indicate to us some of the changes that are moving towards the right direction.

Recent child studies have shown that it is more beneficial for children to have ongoing contact with both parents rather than one. Therefore, the bill is to be acknowledged for having a new formula that recognises shared care. New Zealand First recognises that it is often difficult for paying parents to have their shared care acknowledged, especially if it does not involve overnight care. Our Social Services Committee has worked really, really hard to try to find a way to close some of the loopholes that the original bill had created.

It is common for paying parents to have daytime care, which can be quite costly too, and I think we all acknowledge that. Therefore, with the proposed system, it is encouraging to see that consideration is given to these parents, as the cost of supporting a child will be apportioned between both parents according to the difference of income adjusted by their share of care. It was a very difficult formula to understand, and, yes, I acknowledge that we ended up with whiteboards to try to understand how it works. Such circumstances, though, when it comes to share of the care, should be considered in order to enable just and equitable outcomes based on the level of financial support to be provided by a paying parent. I think that often we worry about arguments between mum and dad. Last night when I spoke at the second reading of this bill I did mention that we worry about what a child will become tomorrow, yet we forget that he or she is someone today. We often forget that.

New Zealand First believes that confidence must be instilled in our judiciary system, and that parenting orders or agreements to establish the percentage of shared care for child support must be relied on. This will provide an efficient process of child support and reinforce court decisions made in the best interests of the child or children. With such a complex formula, which is very much what Part 1 of this bill is all about, we must rely on the Inland Revenue Department to provide adequate services to parents who may find it difficult to determine their liabilities and entitlements. People change employment and often come in and out of work, but when income changes occur we must ensure that these will be dealt with thoroughly and without confusion.

There has been confusion around self-employment and liable parents who use tax deductions to reduce their child support. The new formula must accommodate these situations. It is often seen that the introduction of a new system with an implementation period that is not transparent can cause a whole heap of stress to the communities affected. I do not believe that this system will avoid this. However, it is imperative for families to have the new system in place to address the many loopholes that currently exist.

This bill recognises the role that grandparents play in the care of children. It is a piece of gratitude that has been long deserved. When grandparents fall under the definition of “carer”, it is often not by choice but is almost always accepted. Grandparents who are on superannuation have been faced with the costs of raising grandchildren. It is pleasing to see that the new system will look into this factor and ensure that not only grandparents but other relatives who take over the responsibility of caring for a child or children are also recognised.

Parents should want to pay child support. I think that is very important. Parents should want to pay child support in order to raise their child or children. It should not be a burden or ignored. The new penalty, or incentive plan, as we call it, attached to this formula enables parents to fulfil this right—the right to pay to support his or her child. The pressures of late payment can sometimes avert parents from supporting their children, so let us hope that this has become more clarified within the outcomes of this bill. Raising children right should be a prerogative of any parent. The new system indicates that the old one made it difficult to do so. Thank you.

Dr RAJEN PRASAD (Labour): I believe there has been no adequate response at all from Government members as to why the Government did not take an opportunity with this bill, the Child Support Amendment Bill, to address child poverty. Government members have sat in this House for 4 years now, denying any reasonable approach to child poverty. Here, there was a chance to do that. The explanation that they have come up with is that this bill is only technical, and it is only looking at some minor arrangements. There are 133,000 solo parents, I say to the chairman of the Social Services Committee, who live in poverty, and here was an opportunity, through the provisions that many, many presenters gave to the select committee—there was an opportunity. The pass-on mechanism was not recommended by just one or two people; it was recommended by the major institutions, the major Crown entities, and the major organisations that know about families. They all came to the select committee and said that here was an opportunity to do it.

Here was a way in which those who form part of the family but are not together could contribute to the care of the children. So here was an opportunity that was not taken—not once. When we did ask what were the reasons, the one reason that came from the Inland Revenue Department people was that they did not have the expertise. So because they did not have the expertise, they wanted to just leave it by the wayside. That opportunity has been missed, and there has been no explanation or any note as to why the pass-on mechanism that was recommended by the Children’s Commissioner ought not to be taken up. All they simply said was that this was technical and this was not the place to do that. The opportunity was lost. Members opposite have stood up and tried to defend this, but it is indefensible. At least they could have shown some understanding of the situation of the families we are talking about, but the members opposite have not done that. They want to defend something, and they deny that the opportunity was not taken.

The other major problem with this particular bill was the thresholds that have been set. We do believe that the 28 percent threshold is too low, and, as has been said, the 40 percent threshold was too high, so there should be some adjustment if the other parent who provides an income is providing some care. But 28 percent is only two nights. It is only two nights out of seven. We do know that it can be gamed as to which nights are picked. The most vulnerable person in this situation is the person caring for the child full-time, who is often the mother. This 28 percent provision has not taken account of the effects of that on the income of the mother looking after the children.

Debate interrupted.

Valedictory Statements

Valedictory Statements

CHARLES CHAUVEL (Labour): Oscar Wilde apparently once claimed that he never travelled without his diary. This was so that he would always have something sensational to read on the train. This was not exactly what I had in mind when I reread my maiden statement the other day, but I was keen to compare what I said then against what I have learnt from all of you while experiencing the privilege of more than two terms of service in this House. On 1 August 2006 I made my affirmation of allegiance in English and in Tahitian. This was intended as a tribute to both of my parents. Like so many who have helped build our society, they were immigrants to New Zealand, both of them. I want to repeat that tribute now, and I acknowledge my family members who are here this evening: my father, Charles, my sister, Fleur, and her husband, Michiel, and my Auntie Annie, who has travelled from Tahiti. I am sure that if such things were possible, my late mother and grandmother would be keeping a close eye on proceedings as well.

I chaired the Regulations Review Committee of this Parliament from late 2008 until 9 a.m. this morning. More recently I have been shadow Attorney-General and a member of the executive, with Therese Arseneau, of the Australasian Study of Parliament Group—the ASPG. These roles have all required me to observe at close hand the daily operation of the machinery of our Government, and much works well. Today, for example, the House disallows, on my motion, transport regulations that clearly contain matters more suitable for legislation. They lapse because a disallowance motion moved by me as a member of the Regulations Review Committee will not have been brought on for debate within 21 sitting days. Remarkably, this will be the first time since 1986 that the relevant Standing Order has been successfully used in this way. Although I have not always seen eye to eye with the Leader of the House, I acknowledge and congratulate him on allowing the system to work in this way, as it was intended, on this occasion.

Of course, there is always room for improvement. Elsewhere in this building Geoffrey Palmer and Jim Bolger are about to give papers at a seminar hosted by the Australasian Study of Parliament Group, and that seminar will look forward to how Parliament might be made to work better over the next 30 years. Geoffrey has shown me his paper in advance. I agree with much of what it says, and in fact I would go further in many respects. I think it is time for an entrenched Bill of Rights and a constitution, including provisions that accord the Treaty of Waitangi appropriate status. Parliamentary procedure badly needs further reform, including rationalising the number of select committees that members are required to sit on, and increasing the powers of those select committees. Our public watchdogs need proper powers and resources. The judicial branch’s independence needs to be formalised and safeguarded, while ensuring that the courts remain responsive to public need. Preparation for the inevitable transition to a republic needs to begin. Opportunities offered by technology to open government and eliminate red tape should be maximised. I am very proud, as the outgoing Labour justice sector spokesperson, to see that Labour policy now reflects many of these positions.

But it is not only Government institutions that need strengthening. Democracy requires a free, well-resourced, unbiased fourth estate. Journalists working in much of our undercapitalised, foreign-owned media are under constant professional pressure. This comes from many quarters, including the constant need to sell newspapers and air time, and also the need to compete with instantly available online sources. In the case of the two better-known right-wing blogs, those online sources are proxies for the present Government, and much copy is supplied to them directly out of Ministers’ offices at the taxpayer’s expense. A general dumbing down, but, more important, a loss of independence have been the inevitable results. For those of us who want to read and listen to unbiased domestic news and analysis, or even for those of us who do not really care whether John and Jacinda are still New Zealand’s sexiest politicians, there remain a diminishing number of options. The quality of reporting and analysis offered by the Public Broadcasting Service, the Australian Broadcasting Corporation, and the BBC, as well as the effect that they have on the standards of other media, are simply not available here. It is high time for the re-establishment of a strong, independent, well-resourced, multimedia public broadcaster in New Zealand.

Since 2008 I have chaired the New Zealand - European Union Parliamentary Friendship Group. The New Zealand State, founded on the principles of the Treaty of Waitangi, situated in the South Pacific, is not European, and we must become more integrated in our own Asia-Pacific region. We have known this for years. We also know that the Americas and, increasingly, Africa will offer important trading and cultural exchange opportunities to us. But the EU remains the world’s largest economy. Like us, it has an emissions trading scheme on its statute book. We share similar economic, social, cultural, and environmental values. We profess a shared belief in a government of laws. The EU offers models for better regional institutions in the Pacific to promote development and good governance. We need, in order to secure our nation’s future prosperity, to pursue greater engagement with the rest of the world. We all know this. But as we do that, it would be folly to ignore Europe, or, worse, simply to take it for granted.

I want to particularly mention three members’ bills with which I have had some involvement. In the last Parliament Carol Beaumont adopted my bill to control loan sharks, the Credit Reforms (Responsible Lending) Bill. Sadly, the combined votes of National and ACT saw that bill defeated. Since then the recession has bitten deeper, and many more thousands of lives have been blighted by the activities of loan sharks and the repossession agents who inevitably follow in their wake. New South Wales has just passed legislation in very similar terms to my original bill. There is overwhelming public demand for Parliament to act on this issue, and I wish Carol well in completing that task when she takes my seat in 12 days’ time. On the subject of members’ bills, I want to acknowledge Lianne Dalziel, for whom I drafted a bill, the Crimes (Provocation Repeal) Amendment Bill, based on the work of the Law Commission to abolish the partial defence of provocation. That doctrine gave licence for the murder of defenceless victims, too many of them gay men. It needed to be scrubbed from the statute book, and it was finally repealed in 2009, after the defence sought to invoke it in the Weatherston trial. The Government’s method of repeal was the substantial adoption of Lianne Dalziel’s bill. As MPs over the years, including my friends Jonathan Hunt, Fran Wilde, Katherine Rich, and Lynne Pillay, have demonstrated, members’ bills matter—more so in this MMP Parliament.

Of course, I have to mention another important member’s bill standing before the House in the name of Louisa Wall, which comes back for debate next month, the Marriage (Definition of Marriage) Amendment Bill. Moana Mackey and I sat on the meetings of the Government Administration Committee that heard evidence on that bill. I was incredibly impressed both by the overwhelming support that was expressed for the measure, and by the respectful way that submitters were heard by the committee. Members supported the bill by an overwhelming majority when it was read a first time last year. I sincerely hope that will occur again at the second and subsequent readings. David and I had been partners for 13 years when we had the privilege of getting married in January 2008—we just had to go to Canada to do it. Our laws should no longer deny all New Zealanders the fundamental human right to marry and found a family here.

I want to acknowledge the fantastic support I have had from so many people during my time as an MP. Particular thanks go to the staff who have worked in my office: Gina, Sue, Juliana, Geoff, Chris, and Ritchie. Many of those who volunteered to help on my campaigns in Ōhariu are here this evening as well. I thank Diane, Caroline, Glen, Janine, Kaine, Dolly, Wendy, Alastair, and everyone else who lent a hand. Together we reduced an incumbent’s majority from over 8,000 to just over 1,000, we collected more signatures on the petition opposing asset sales than any other non - Labour-held electorate, and we have organised the local party again.

I have been a member of the Labour Party since 1985. In my view, it remains the greatest force for meaningful social change in this country. It continues to offer energy, ideas, and talent from its ranks that would adorn any Cabinet. I want to express publicly now two hopes that I have confided to David Shearer in private. First, I sincerely wish that he will be Prime Minister in a Labour-led Government at the end of next year. I regret that I will not be his Attorney-General, and I appreciate his statement that he shares that regret. Secondly, it is unproductive to keep trying to locate and exclude the supposed enemy within. Instead, in order to avoid history repeating, it is time for an honest, open, and overdue assessment of why the 2011 campaign produced Labour’s worst ever electoral result. Those responsible for it should make dignified exits, and all the undoubted talent and diversity of the caucus should be included in the shadow Cabinet. To put it another way, in Gough Whitlam’s immortal words, the party must have both its wings to fly.

Next month I begin work full-time for the United Nations in New York. I think I have some idea of what to expect. I served for 2 years on the UN Global Commission on HIV and the Law, and I have undertaken some follow-up work to that exercise, including travelling with Jackie Blue and Jan Logie to Timor-Leste last year to observe the work of the Global Fund to Fight AIDS, Tuberculosis and Malaria there. It seems that there is much truth in Dag Hammarskjöld’s observation that the UN was not intended to send humanity to heaven, but merely to prevent humanity from sending itself to hell.

As far back as the 1940s Peter Fraser recognised the UN’s importance, and devoted much of his time and energy to its early design. Now, of course, its principal operational programme is headed by another former Labour Prime Minister of New Zealand, Helen Clark. I am very proud to follow in the tradition of New Zealanders who have supported the extraordinary work of the UN over the years in peacekeeping and peacemaking, its promotion of democracy and development, and its protection of human rights and the environment. My role will be to give advice on democracy and good governance. Without all that I have learnt from you all in the last 6½ years as a member of this Parliament, I would not be equipped to perform that role.

In 2006 I ended my maiden statement with thanks to all who had supported me to become an MP, and expressed the hope that they would find my service in this place worthy of that support. I conclude this speech, and my service in this House, by repeating that hope, as well as expressing my thanks and best wishes to you all.

Sitting suspended from 5.58 p.m. to 7.30 p.m.

Bills

Child Support Amendment Bill

In Committee

Debate resumed.

Part 1 Formula assessment of child support (continued)

The CHAIRPERSON (Eric Roy): Members, the House is in Committee for the consideration of the Child Support Amendment Bill. Before the dinner adjournment, or before the Committee was suspended actually, Dr Rajen Prasad had the call, and it looks like he wishes to continue. He has 1½ minutes remaining.

Dr RAJEN PRASAD (Labour): And a call to follow, I hope. As I was saying—[Interruption] The members opposite do not want to hear the arguments, and particularly the two members moving around the Chamber have not actually provided any explanations in this debate about why they have taken the views they have taken.

I was saying before the dinner break that no adequate explanation has been provided from Government members for not really taking the opportunity in the debate on this Child Support Amendment Bill to address the purpose of the bill. Particularly in Part 2 we do not see that addressed. The purpose of the bill is quite clear. It is to improve the fairness of the child support system, and to promote the welfare of children. That is why it is called the Child Support Amendment Bill. But we do not actually see that. We do not see fairness really being improved and the welfare of children being promoted in the way that this Parliament has an opportunity to do.

If the members opposite did internalise that, if the Government did internalise that, then they would write a requirement around the best interests of children, the paramountcy clause if you like. That was the consistent advice from all of our major Crown entities in this field—all of them. Yet there is no response to that. [Bell rung] Mr Chairman.

The CHAIRPERSON (Eric Roy): Dr Prasad.

Dr RAJEN PRASAD: What a wonderful call. Thank you, Mr Chairman. It was a shame that the members opposite did not take that call. When we really pushed—and I do not blame the officials for this because it is a Government responsibility—as to why was it so difficult to do, the answer was that the Inland Revenue Department did not have the expertise. It could have bought that expertise quite easily. When it is prepared to spend well over $100 million on the provisions of this bill, it is prepared to spend that on systems, and yet it was not willing to make that expenditure in order to get that result. I think what the Government did say in the end was that “Well, if we think it is a question we will ask the Children’s Commissioner to make some comments about that.”

So the Government did not really consider it from that point of view. It would actually have been an incentive to parents, to both parents, to both sets of parents, if indeed a requirement like the best interests of children was actually written in because parents, even when they separate, are interested in the welfare of their children. They are not interested in just paying the money over, which is entirely what this bill is about—just paying the money over; how, how much, when, what happens when you do not, and how to work out how much you pay—but if the Government had written in that type of clause it would have changed the face of the child support system because there would have been a requirement for everybody involved to consider what was in the best interests of children.

That, I guarantee, would have changed it, because we know that parents do not mind paying over their responsible part when they know that that goes directly to the children. That is when they are happy to do that, that is what all the evidence shows us, and that is what people before the Social Services Committee told us as well. So why was that principle not adopted in Part 1 of this particular bill? It was not. It was just totally blind to what this bill was about. I just do not understand why members opposite did not take that particular opportunity. It was too easily dismissed, and that begins to show us something about the attitude of Government members to the interests of children in every bill that comes before the House, and in particular this one. If it did it would have given serious consideration to what was recommended by the Children’s Commissioner. This would enable parents to pay directly—enable what they pay to be transferred to their children, if you like—or to promote the interests of the children.

That is a very well-thought-out policy. There are countries that actually do that. The Inland Revenue Department did give us the costings of that as well, and in the scheme of things, the scheme of raising people out of poverty, that was affordable in a country of this type. Yet there was no interest in doing that. Part 1 of the bill provides the opportunities to have it included, but it was not. So it looks as if price was the only consideration for members opposite.

I want to also turn to new section 14, in clause 9 of the bill. Here is a provision that relates to when the commissioner has to decide, establish, proportions of care, and how the commissioner is to go about doing that. New section 15 is quite telling, particularly when you go to subsection (5)—and paragraphs (a), (b), (c), (d), (e), and (f) have been excluded. Now it is to be done by the commissioner deciding the proportionality or the proportion of care that the parent gives: “on the basis of the amount of time that the carer is the person responsible for the daily care of the child.” That is the only principle.

The ones that have been taken out are quite telling because they go as follows—and this is how the responsibility for the decisions about daily care were to be made, how they were to be shared: who is responsible for taking the child to and from school, for example, and how decisions about the education of the child are made. There was a whole series of considerations to be taken in, and that is in the Act that is being amended. What that anticipated, if you like, was that there was a requirement to think through a bit more than just the proportions of care. That is one of the failings.

Hon DAVID PARKER (Labour): I want to take a call in respect of Part 1 of this Child Support Amendment Bill and refer to some of the particular concerns that the Labour Party has in respect of this part of the bill. You will have heard from prior speakers in the Labour Party that we thought there were some general concerns relating to missing an opportunity to put in the issue of child well-being as being a core object of the Child Support Act, which was raised by various submitters. I am not going to deal with that particular issue. I am not going to repeat that. I am going to raise a new issue, and that is the effects of the new 28 percent shared-care threshold in the legislation.

This legislation introduces a new threshold for the relative financial contributions between, normally, a separated couple—normally, a man and a woman—where the most common consequence is that the woman has day-to-day child-rearing obligations. At the moment the percentage of time that the child is with the other parent is higher than 28 percent before there is a diminution in the contribution from the non - main custodial parent. What this bill does is it introduces a new threshold of 28 percent. So effectively if a parent has 2 days’ care of a child per week, then there will be a different allocation of resource within that couple who are no longer together. As a consequence the amount of money that the primary caregiver who has the child for 5 days a week will decrease compared with the status quo.

Sue Moroney: Mainly women.

Hon DAVID PARKER: That was the very point I was going to make. That is quite so. This is normally going to adversely affect women more often than it will adversely affect men. We, in this Committee, are trying to achieve fairness between people. We should also be trying to preserve the interests of the child, or giving primacy to the interests of the proper maintenance of the child who is the primary responsibility of the two biological parents in most cases. I am not convinced that this change does that, because what it will do is it will, in respect of some quite low-income people, result in a reduction in the income that is going to the primary caregiver.

The primary caregiver has a higher proportion of the bills and more often than not is going to have to pick up all of those incidental costs, which are essential as far as the well-being of the child is concerned but probably not viewed as essential by the authorities who count the numbers—things like school trips that are optional, or the occasional participation in a group event by the child, like going to the movies with their friends. Those are the sorts of things that are, effectively, a cost more often for the parent who has most of the care, because they are the parent who has the main responsibility for keeping a decent balance in the household and making sure that they do their child-rearing to the best of their ability and in the interests of the child.

Some of the examples that were given by the Labour Party in our minority report in respect of this included the fact that it is more likely that the primary caregiver will have more responsibility for dental, medical, and other treatments—especially dental. Medical treatment, admittedly, probably arises on more of an as-needed basis, and that could be at any time of the week, although, having said that, most people try to avoid the doctor at the weekend because it is too expensive to go at the weekend. It is more often the mother who will face those costs, particularly in the case of dental treatment. This is also true of clothing costs, of school costs, and of school clothing costs like uniforms. So Labour is not convinced that these changes are wise in that regard. I would like to hear the Minister in the chair, the Minister for Building and Construction, respond to that issue and explain how it is that this is going to be implemented in practice to ensure fairness between parents in respect of children who qualify for support.

SUE MORONEY (Labour): It is a pleasure to rise—actually, it is a pleasure to rise in opposition to Part 1 of the Child Support Amendment Bill, because in standing in opposition to this, the Labour Party is standing up for those families who are most vulnerable and those children who are most vulnerable. There is no coat of whitewash—like white papers on vulnerable children—on this side of the House, but actually a really deep concern about a piece of legislation that is going to adversely affect children who live in poverty in this country.

The mechanism for this is in Part 1 of this bill. It arises in two main ways in Part 1. The first is the absolute opposition from the Government to actually include the fundamental idea that the object of this bill should be to protect the interests of those children first and foremost—first and foremost. That was not just overlooked by the Government but it absolutely refused to do that. It was asked by a number of submitters to do that.

Of course, the Labour Party led the charge on this. It was back in 2011—no, 2010, in fact—when Labour Party members said we were going to put children at the heart of all of our policy development. That has been backed up by the submissions on this bill by the Children’s Commissioner, by the Auckland Coalition for the Safety of Women and Children, by the Human Rights Commission, by the Families Commission, by the New Zealand Law Society—you name it, they said it. They came in behind the Labour Party to say that children should be at the core of this. Children clearly are not, because of the situation that David Parker just described where this part of the bill actually reinvents the idea of shared care. It lowers the threshold of what “shared care” actually means. It means that a parent who takes a child over the weekend now qualifies for a financial incentive to do so. My contention is that if we really had children at the heart of this, we would want—

Alfred Ngaro: What’s wrong with that?

SUE MORONEY: Well, the member Alfred Ngaro says: “What’s wrong with that?”. Here is what is wrong with that, Mr Ngaro: I want to know that there is a commitment to shared care from that parent because they want to be a good parent, not because they get a financial incentive to do so. That is what is so wrong with it.

I know that the Government believes in the market model of parenting, because that is exactly what it is exhibiting right now. It believes in the market model of parenting—that if you give them the financial incentive, they will suddenly become good parents. Well, on this side of the Chamber we do not believe in the market model of parenting. We believe in commitment to parenting—commitment because a parent cares. That is what is important, and that is what should be pursued through legislation like this.

It gets worse than that, though, because not only is the weekend parent, the 2-day-a-week parent, getting a financial incentive to be so but also the 5-day-a-week parent, the primary carer, the primary parent—I am not going to call them a carer; they are a parent—actually suffers a financial loss as a result. How is it in that vulnerable child’s best interest—or vulnerable children, as there may be multiple children involved—that the person they rely mostly on for their care and their security is actually at a financial disadvantage? How is that in their interests? It cannot be.

That is the main reason why the Labour Party is opposing this bill: it is all about Part 1 and the provisions contained in this part. We know that those women—and, yes, they are predominantly women—who are in that primary care role for those children are not living the sweet life. They are not living a wonderful existence where they have got money to come and go on. Most of those families are struggling to get by a on day-to-day basis, and along comes this miserable Government and makes it even harder for them. It makes it even harder for them, and it is not hearing the cries from our community up and down the country to fix child poverty.

Hon DAVID CUNLIFFE (Labour—New Lynn): It is well worth the Committee’s time to take a considered view of Part 1 of this bill, the Child Support Amendment Bill, because it is really at the heart of the bill. It is a very major part that covers the mysterious formula that Sam Lotu-Iiga either never read or cannot remember, and certainly did not want to table. I am very happy for Sam to elucidate to the Committee when he next takes a call as to how he believes this formula is actually going to work in practice.

What the Labour Opposition knows is that there are two core failings with this part of the bill. The first is that it embodies the missed opportunity to put children first, and nobody, I think, could have described that as well as Sue Moroney, who reinforced to us that families in this situation are struggling anyway. This bill has managed to score two own goals. It is going to cost the taxpayer, according to official advice, $42 million a year more to implement than the current law. So it is going to cost $42 million more a year to run, but it is going to put less money in the hands of vulnerable children. How can that be—more cost to the taxpayer, and less money to vulnerable children?

Alfred Ngaro: They’re worth it.

Hon DAVID CUNLIFFE: Oh, they are worth it. Yes, they are worth it, National Government. Would it not be good if you did something positive about it?

It is not simply the matter of the complexity of the formula. In our last, pre - dinner break discussion in this part of the Committee stage, at some length we debated across the Committee the complexity of the formula; the difficulty couples would have in understanding where that left them; the reverse impact, in that it would thereby be harder for them to form voluntary agreements about their separation plans; and that, therefore, perversely, this highly complex and opaque formula would more often be needed precisely because it was hard to understand. Nobody is arguing that life is not complex or that it is going to be easy to write a law that satisfies the full diversity of family situations. What the Government has been saying is that, therefore, you should not be surprised if the formula is complex, but that does not necessarily follow. What we want is a formula that delivers more benefit to children in need, that does not lock liable parents out of the system if they get behind, and that provides the strongest possible incentive for liable parents to meet their child support obligations.

How does this bill measure up? It is not transparent. It has shied away from legislating for the primacy of the interests of the child. It has shied away from automatic pass-through so that liable parents know that every dollar that they contribute will go to their own children. It does not do that, and my colleague Dr Rajen Prasad has very eloquently pointed out that all the international evidence is that collections are improved if that is the case, but it does not do that. It does not put more money in the hands of the children. It does not simplify the system. It does not make it more transparent. It does not make it more directional. What it does do is waste an opportunity.

I used to, for my sins, be the Associate Minister of Revenue responsible for child support, before Sam Lotu-Iiga and his colleagues were members of this House. It was quite some time ago. I am—

Dr Rajen Prasad: About 4 years.

Hon DAVID CUNLIFFE: No, no, no, it was probably longer than 4 years ago. But what I do remember is that the junior Opposition backbencher sent to bite me on the ankles at the time was one Judith Collins. She used to rail about the accumulation—I still remember the day that accumulated child support debt hit half a billion dollars. That was a terrible tragedy. And it was, because we do not want any arrears. We want all that money paid so that kids can benefit and the taxpayer is not copping it. Half a billion dollars. What is Judith Collins saying today, now that debt has reached $2.3 billion and has gone up a billion dollars on National’s watch in the last 3 years?

Dr Rajen Prasad: Nothing, saying nothing.

Hon DAVID CUNLIFFE: Saying nothing. She is too busy working on her leadership campaign and getting around the backbench assuring them of all the awhi in the world. That is what Judith—and if you had any doubt about it, just ask the bad boy, just ask the bad boy Simon Lusk about it. No wonder she is not focused on child support—no wonder she is not focused on child support. She used to rail in this House that it was a travesty that the formula did not deliver for children. Seven years later the National Government has come up with—

SCOTT SIMPSON (National—Coromandel): I move, That the question be now put.

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

Ayes 68

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to Part 1 be agreed to.

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

Ayes 68

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Amendments agreed to.

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

Ayes 68

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Part 1 as amended agreed to.

Part 2 Departures from formula assessment, collection, penalties, and relief

Dr DAVID CLARK (Labour—Dunedin North): Part 2 of the Child Support Amendment Bill is around the nature of the formula and the departures from that formula. Part 1, sorry, covered the formula in detail, so we actually debated the merits of the more complex formula that has been introduced and the disadvantages of transparency and so forth around that, and the way in which children are not put at the heart of the legislation. Part 2 focuses more nearly on exemptions, on departures from the formula, and how they should be treated. One of the things that particularly concerned me in the select committee process was around the automatic deduction provisions that were introduced quite late in the piece in the select committee process, whereby employers could be asked by the Inland Revenue Department to deduct from wages money owed in child support payments. I should say from the outset that the Labour Party absolutely supports collecting the debts that are rightly owed. We believe that liable parents have a responsibility to care for the children whom they are responsible for. So we support in principle the strengthening of a regime for collection.

However, in this case, what we see, or what we saw, at least, in the Social Services Committee was that the department had not yet worked through quite how this would work. It had not thought through the natural justice processes in terms of notifying the person who was likely to have their salary deducted. Nor had it thought through perhaps some of the cultural implications where, perhaps for whatever reason best known to those who had their child support debt, those parents had chosen not to tell their employer that they had a debt, probably for fear of discrimination of one kind or another, or perhaps they had not even told their employer that they had children for whom they were responsible, possibly for fear of discrimination of one kind or another.

We felt that although the State has an obligation to collect that debt, there ought to at least be a process of warning the person that that was going to be put in place, that there should be a means for letting them know that the State was about to take this action and, should they wish to cough up, that they could at that point do it, or make arrangements, or contact the Commissioner of Inland Revenue and ask for some other kind of arrangement. I have every faith after some of the discussions with those officials that they will attempt to address these natural justice concerns. We were very fortunate, I have to say, to have some excellent officials briefing the committee, who listened well, and who came back with suggestions around our concerns, and I believe that we were very well served as a committee.

What I do not think is that the Government itself and the Minister in charge, the Minister of Revenue, had thought that matter through fully. So we felt on the Labour Party side that it was very important to keep a close eye on how this is implemented. We are very hopeful that the Minister will take this on board in terms of the practical arrangements for pursuing this debt. But it is one of the areas where one can end up, if these things are not taken special care around, with some unintended consequences.

Another potential unintended consequence of this, which it became clear that the Government had not considered, was in terms of the additional compliance costs on business. This is something of a pattern we have seen with this Government, whereby additional costs are heaped upon business, which is not a big deal if you are a large-business owner and you have got automated systems, but for many small-business owners there is additional compliance—we think back to the paper boy tax and the cleaners, who now are required to report their earnings through the system, and the extra overheads on schools and others who manage these people in part-time work, and we see a pattern where the National Government does not consult business. It talks about business a lot; that is true. It talks about business a lot, but it always seems to favour big business. There is nothing wrong with big business, in my view, but little business, in the National Government, is often ignored and trampled upon without concern about the additional overheads that a piece of legislation like this could have.

We know that when an employer collects this extra money off their employee, they suddenly become responsible for some personal information, which, if a grievance suddenly takes place in the workplace, they may be accused of having used improperly. We have a whole lot of complexities introduced to the workplace that were not there before. These things are things that businesses were not consulted on. So there are, again, some natural justice issues here, on top of the additional overheads that have been put on business and the additional compliance costs for business that are introduced in this legislation. So these are some of the potential unintended consequences. I was surprised that measures could be introduced so late in the piece, without having been through the proper consultation process that I would expect for a piece of legislation that had been proposed for several years. The bill seemed to be not a priority for the Government, but suddenly it has become a priority for the Government. We see a somewhat unfluid—unfluid—production of the legislation.

The other thing that I think is important to comment on at this stage of my second call—and if I get further calls, I will have some more that I want to say—is around the penalties for late payment of debts. I think that the Government is taking a sensible step here, in making the obligations more likely to be met. We have a trade-off here, because in one sense what is going on is that liable fathers will now be liable for a whole lot less. So there is a question about personal responsibility. That National Government is effectively saying that those who have many children have now less liability and less personal responsibility for the children whom they have produced. That is an interesting position for the National Government to take, yet in some ways I think it is right. If this provision leads to us collecting more of the debt and to the debt not spiralling out of control, then surely that is a good thing. There is $2 billion—$2 billion—outstanding in child support payments. That is something that this Government has needed to address. For some reason, it has not been a priority for the last 4 years that there is $2 billion worth of child support debt outstanding, but it is good that it appears that will be addressed in some way in this legislation. Again, it will be very interesting to keep a close eye on the way that is implemented, and that is around the discretion of the Commissioner of Inland Revenue and so on.

The other issue in this legislation that comes out of these additional compliance costs that National is putting on business and that comes out of the natural justice concerns is the additional cost of administering the formula and, with it, the exemptions. We know that this formula will cost more to administer. Inland Revenue Department officials have told us that the child support legislation is already the most expensive piece of legislation that they have to administer on a per case basis. So we know that this is a cost on Government. Because it relates to people in difficult circumstances, of course we think it reasonable that there should be a cost, but we are concerned about the additional costs introduced by a complex formula and, coming out of it, one can imagine, some more additionally complex exemptions. The commissioner’s discretion will in some ways, I am sure, deal with some of those things, but on a day-to-day basis there are going to be more staff involved in working out how the formula is applied and also when it is not applied. The staff time taken to implement the formula is expected to be more. That is what the officials said. It is reasonable to expect that working out when it does not apply and how you work around the new formula is also going to take more time. So there is more overhead involved for the Government, and, effectively, that means increased bureaucracy. So there is increased bureaucracy that comes from having a more complex formula and also from the exemptions that fall from that formula.

I will end my contribution to this particular part right at the moment, because I am sure other members are very keen to speak. However, I hope to take some more calls on this part of the legislation, because there are a couple more separate areas that I wish to speak to. Thank you.

MIKE SABIN (National—Northland): I am pleased to take a call on Part 2 of the Child Support Amendment Bill, which deals largely with matters related to penalties. One of the challenges when talking about the complexity of the formula is that what it is trying to achieve is to better reflect modern-day society, and that is really a case where I do not think people can have their cake and eat it too, in that respect. The second part deals with rules, related payments, penalties, and write-offs. A perverse incentive develops where people feel that their payments and their obligations get beyond them, and they stop making them. One of the implications of that is spelt out in the over $2 billion worth of debt that we see, 70 percent of which is penalties. The second part of this bill really is dealing with ways in which we can try to change the levers in order to encourage parents to make those payments and to meet their responsibilities.

If we come back to the premise or the reason for child support in the very first place, it is because sometimes parents cannot agree and do not have an amicable platform or relationship on which they can ensure that the needs of their children are being met, at least in a financial sense. We hear from the other side of the Chamber that this bill is about vulnerable children in this context, and that this is about child poverty. I am bemused by this. What we are dealing with here in this bill—is this dealing with child poverty? Is this a welfare bill? Is the Ministry of Social Development dealing with this? I believe that it is actually the Minister of Revenue. This is administration—

Dr David Clark: I raise a point of order, Mr Chairperson. I thought we were debating Part 2 of the bill. So far the member has discussed the formula and aspects that have been in the Part 1 debate, in terms of vulnerable children and whether children are at the centre of the legislation. Or is it acceptable to have a wider debate?

The CHAIRPERSON (Eric Roy): No, it is not acceptable. I have probably shown a little tolerance, as I did in the debate on Part 1 when some members strayed. I hold myself responsible for allowing that leniency, and I would ask the member to continue.

MIKE SABIN: I was under the impression that this was a very important aspect of debate for the other side. Obviously, those members have moved on. With regard to the penalties, what we are talking with this legislation, what we are talking about in this part of the bill, is the ability to ensure that the payments are reaching their intended target and not being drowned out in administration, in penalties, and in disincentivising parents from ultimately making the payments, which will then be spent on the children. The point I was trying to make is that this is very much at the heart of what this legislation is setting out to achieve. The complex formula the Opposition is talking about is a means of trying to ensure some efficiencies, so that the administration of the moneys from the respective parents means that they find the end user, being the children.

I want to run through just a couple of specific points with regard to the penalties. This bill allows for compulsory deductions of child support from employment income payments to parents. In many cases this will take a load off, a liability off, and will ensure that payments are streamlined. That, in itself, will take care of some of the issues. The bill introduces a two-stage initial penalty, with the current full 10 percent being charged only if the debt remains unpaid after 7 days. Again, that is providing incentives to try to encourage payment. It reduces the incremental monthly penalty from 2 percent to 1 percent after a year of non-compliance, complemented by intensive case management from the Inland Revenue Department. It goes on. It relaxes the circumstances in which penalties can be written off, including when a paying parent enters into an instalment arrangement or something of that manner.

The point is that there is over $2 billion worth of debt, 70 percent of it as a result of penalties. Something is not working here, and that something ultimately denies the children. In my submission, this is nothing to do with vulnerable children. This is to do with parents who cannot agree, and the administration process that is required to find agreement. This is not about a need for any implicit or explicit direction in legislation as to children being at the heart of it. This is about administration, and penalties are such an important part of getting the levers under control so that the money that parents are paying into the scheme is ultimately being spent by those parents for the benefit of the children. Thank you.

Hon DAVID CUNLIFFE (Labour—New Lynn): Part 2 relates to a number of important provisions in this bill, the Child Support Amendment Bill, most notably the ability of the Commissioner of Inland Revenue to depart from formula assessment collection penalties and relief. It takes us through automatic deductions and it sets out the grounds for penalties. It does, as our colleagues have just noted, reduce the maximum rate of penalties after a period of time in an effort to prevent people becoming locked out of the system, and it provides more discretionary relief from penalties. What I wish to do is to, firstly, take the Committee through some of those penalty provisions, and to then turn to several of the more operational matters that follow from that and go to the heart of the Inland Revenue Department’s capacity to deliver on this bill, such as it is.

The bill does allow the commissioner the ability to write off penalties. That is important, because during my last call I noted that the accumulation of child support debt has now grown to a colossal $2.3 billion. About $1.6 billion of that is accumulated penalties. The tragedy is that the penalty regime really, really has needed an overhaul for some time. In practical terms, what happens is that liable parents—usually dads who are estranged from the family—can get behind, particularly if they are on a low income or unemployed. They then incur penalties, which makes the problem worse. They get to the point where they cannot afford to catch up, but there has been no provision in the law for the department to write those penalties off or down in order to bring parents back into the system. I know of constituency cases where those parents have fled the country because they have seen themselves, and have been seen, as outlaws, because they have been unable to get square with the ledger of their child support arrears and the penalties have mounted up too fast.

So although the Labour Opposition votes against this bill—we do not support the bill, as it has got some fatal flaws, it does not put the children first, and it is a missed opportunity—we do agree with these provisions that provide more flexibility in the penalties, such as clause 36, which allows the commissioner to write off incurred incremental penalties when a payment agreement has been completed. So there is a positive incentive to bring people together to reach a voluntary agreement on catch up, and it gives the commissioner the ability to support that by a reduction of historic penalties.

Secondly, the penalties incurred by receiving carers, or the charging of penalties due to overpayment of child support—i.e., irregular payments. You might pay too early or too late. Somebody might pay a double amount one month, but then they incur a penalty because they are late the next month. This bill gives the commissioner the ability to smooth that through and avoid an unintended consequence.

It also provides an ability to include the provision for the commissioner to write off some or all child support payable to the Crown where the receiving carer is a social security beneficiary, or where recovery would place the liable parent or the children in serious hardship or would represent an inefficient use of the department’s resources. I will come back to that matter in a second.

In general, much as we do not agree with the bill as a whole, we do agree that these penalty provisions make sense and will go some way to providing positive incentives for people to get together and act in the interests of the children. That has been the core theme of our opposition to the bill the whole way through.

Now here are a couple of things buried within that part that we do not think are constructive. The first is the reversal of the onus of proof on automatic deductions. Currently, somebody has to opt in to say that they want a direct deduction or an automatic payment of their child support liabilities. This bill changes that. It says that they have to opt out, and that throws up some very serious privacy and natural justice issues.

As my colleague Dr Clark has said, just suppose somebody does not want their employer to know their family circumstances. Perhaps jobs are under threat and they do not want their employer to know that their family is split and that their partner has moved away because that might make their employment situation more vulnerable. Maybe it is more complicated than that. People lead complicated lives sometimes, and they are entitled to make judgments about what is in the best interests of themselves, their families, and their children, including whether they disclose those circumstances to their employer. To be fair, there is an opt-out provision, but we believe that the reversal of this burden of proof is flying in the face of natural justice processes and creates a whole swag of additional red tape.

That then raises the next issue, which is the cost of administration. The Inland Revenue Department reports, I understand, that it is expecting a 15 percent increase in the workload associated with administering what is already “Inland Revenue’s most expensive product to administer on a per person basis.”, because, necessarily, it is bespoke. It is fairly customised. The complexity of the formula and the ability for more variation in the payment systems—which I have just said we think is a reasonable thing—will inevitably increase the cost burden on the department.

And here is the kicker: it will put more burden on the adequacy of the department’s computer systems. For those who are perhaps like the Attorney-General, who is getting a little bit of after-dinner shut-eye, they may not have noticed—Minister—that the department’s computer system is creaking. It is good to see that the Attorney-General, after a hard day watching the Supreme Court, is now leaping to his feet in defence of the department, because it may be that his department, Crown Law, will be called upon to adjudicate matters that arise—

Hon Christopher Finlayson: We won.

Hon DAVID CUNLIFFE: Oh, “we” won, did we, Minister? “We” won? Well, what about New Zealand winning? Because I am afraid, Minister, that if you flog off our energy system—

The CHAIRPERSON (Eric Roy): Order!

Peseta Sam Lotu-Iiga: Point of order.

The CHAIRPERSON (Eric Roy): I think I can anticipate the point of order. [Interruption] No, I am on my feet. Let me just say that I know that the member responded to an interjection and we all need to be above that. Let us come back to the bill.

Hon DAVID CUNLIFFE: Mr Chairperson, you provide an excellent example and I shall earnestly try to follow it.

The department recommends that it needs a rebuild of its computer system and that the price tag thereof would be about $1.2 billion—in fact, as much as half the accumulated child support debt, which is a lot of money. I do not know how any person or entity could actually spend $1.2 billion on a computer system, because that sounds like an awful lot of money to a MP from west Auckland. But what I do know is that if you have a computer system that is—[Interruption] I thought that would get the itinerant member for Mt Albert—she wishes. The casualty of “The Maestro” in Mt Albert—this is getting her excited. A price tag of $1.2 billion for a computer system makes one wonder how long the Inland Revenue Department’s mainframe is going to stand up at all and whether it can cope with the additional burden of more customised child support.

So, just wrapping that bit up, let us first concur that the increased flexibility on penalty payments is a good thing. The additional customisation costs, the additional work around automatic deductions, the reversal of the onus of proof, the increased costs of administration, and the grave danger that it will not, in any case, be able to be implemented by the department’s creaking computer systems all adds weight to the Labour Opposition’s conclusion that we cannot support the passage of this bill in its current form.

Concluding my remarks, one must come back to the point that this really is a missed opportunity. It has been common ground across the House for a number of years now that the child support regime needed a fix. The Labour Opposition supported this bill’s referral to the Social Services Committee. We were ready for the debate and for the calling of submissions. We worked earnestly with the Government to try to find a way through this. We regret that we are unable to support the bill at this stage, but the issues of transparency, of accountability, of cost, of the burden of proof, and of the lack of the primacy of the interests of the child have all driven us to that conclusion.

MELISSA LEE (National): It is a pleasure to rise to follow that member from New Lynn—

Scott Simpson: No, Herne Bay.

MELISSA LEE: Sorry, Herne Bay. No, Herne Bay is not in New Lynn. Oh, but he lives in Herne Bay. It is a pleasure to rise to speak after that member. I do not ever remember actually seeing him on the Social Services Committee, though.

I rise to make a very short contribution on Part 2 of the Child Support Amendment Bill, which deals with departures from formula assessment, collection, penalties, and relief. In particular, I want to focus on new section 135GA inserted by clause 34, which talks about discretionary relief for residual penalty-only debt. There are, of course, other provisions, but this is specifically dealing with debt. I know that other members have actually talked previously about unpaid child support, which is in excess of $2 billion in this country, and more than 70 percent of it is from overdue penalty payments. I know that the member David Clark talked about the compulsory deductions earlier. I am actually very pleased to note that this bill allows for compulsory deduction of child support from employment incomes of paying parents.

However, during the select committee process we heard about some members of the public who might have issues in terms of their cultural needs and their privacy needs, where knowledge of their child support payment could jeopardise their jobs and put their jobs at risk. It might even put a black mark on their names, among their ethnic communities. It was a very, very difficult position that they were in. I am very glad to have had great advice from our officials, and now this bill makes it possible that the issue be dealt with. The Commissioner of Inland Revenue will have the discretion to allow alternative methods of payment so that people’s child support payment automatic deductions would not be known by their employers or the community, which might actually put them in jeopardy. Some talked about physical harm as a result of it.

Even in my own culture, in the Korean culture, if you are divorced and you are a child support payer, you might actually—sorry, not you, Mr Speaker—be blacklisted among Korean society members, and might not even be elected to Korean society officialdom if you happen to be in that situation. I personally know as a divorced woman that being a divorced woman has a certain stigma within certain ethnic communities—mine included. I think this element of this bill actually deals with that, I guess, social element very well.

That will be my only contribution on this part, because yesterday we dealt with it in the second reading of the bill, where I actually also talked about other bits of the bill. This is a great bill. I commend it to the Committee.

SUE MORONEY (Labour): At the outset of my contribution on Part 2 of the Child Support Amendment Bill, can I just place on record the bizarre bureaucracy-speak that pervades throughout this bill, including in Part 2, where, strangely, the person whom I would call the primary parent, who actually is providing the main parenting role, is described as a “carer”, and the person who does the paying and not so much of the parenting gets the word “parent” attached to them—“liable parent”—as opposed to the primary carer. It is something that I would like to see in future actually resolved through this bill, because it does seem to me that we attach the word “parent” in quite the wrong situation there. I would much prefer to see the word “parent” actually applied to the person who is providing the role of parenting, not to the person who simply pays the money for the role of parenting. I think we have got that round the wrong way. Primarily, Part 2 is actually about when it all goes pear-shaped. I guess in some ways you can say that it has probably all gone pear-shaped before families are even dealing with this bill, but this is when after the relationship has broken down there is a problem with the liable parent—the payer—actually paying what they ought to pay. This is the part that actually attempts to deal with that.

I was not on the Social Services Committee. I did attend briefly to hear a bit of the conversation that was going on around this bill, but I am not a permanent member on the select committee. I was surprised to learn that the Government would not contemplate looking at one of the most effective ways of dealing with liable parent debt and contributions by considering the idea of a pass-on mechanism, because there is international evidence that one of the best ways to actually improve liable parent payments is to ensure that they know that the money they are paying is not getting lost in some black hole of a huge administrative system, but, in fact, is finding its way to their child or their children and supporting their upbringing. I am just surprised that the Government was not prepared to at least look at that, particularly given that we have this huge debt of $2.3 billion outstanding. And, as I think previous contributors to this part of the debate have pointed out, that has revved up significantly under this Government’s watch.

When this party in Government was in Opposition, it cried crocodile tears over half a billion dollars’ worth of debt in this regard, and now that it is at $2.3 billion, well, it is not even really concerned enough about it to look at one of the most effective ways that happens internationally of making sure that that debt does not continue to accumulate. However, in fairness, roughly $1.6 billion of that $2.3 billion of debt is actually incurred in penalty payments. Clearly, the current system of penalty payments is not working. It is certainly not working, because what obviously happens, it would appear, is that once the liable parent accumulates a debt and they start incurring penalties, it becomes even more unaffordable for them, and so they just continue to ignore it and ignore it and ignore it and hope that it goes away. In fact, it does not go away; it just keeps going into an accounting exercise that blows out to be $2.3 billion.

But in behind that $2.3 billion is actually a story that the Government does not want to talk about, and that is the problem of child poverty. Yes, even this part of the bill, which is all about how we can try to get payments happening and a range of issues around penalties and relief and formula assessment and debt collection, really does again underline the issue that is at the heart of this, which is about how we get those resources to the children who need them. I am really disappointed to hear Government members opposite say that this bill has got nothing to do with children—that it is all about parents and it is all about administration and it is all about payments. What do they think this is all about? Where do they think this is all ending up? If it is not about the children, if it is just about some bureaucratic exchange of money and it is an accounting exercise, what on earth are we here debating child support legislation for?

It is as if they are completely divorced from the real world. It is as if they are completely divorced from what really goes on in these families, because if they do not understand the link between what this bill does, the exchange of finances, and the proportions in which it is moving that finance, then they really need to get out there, start talking to their community, and hear what is really going on. I know that some of the members opposite think that because of their personal experiences they have got this nailed. They think they know all about it because they may have personally taken on a new family and personally been responsible for paying for them, but this is about a whole range of families’ experiences; it is not about them. It is not about those members opposite and their personal situations; this is about a whole range of situations.

I do want to ask some questions of the Minister in the chair, Mr Woodhouse, because we see in clause 26 of this bill that we are giving the courts some discretion to actually change the formula assessment in the situation where a re-establishment cost exists. I was very interested to understand what “re-establishment cost” actually refers to. What it refers to is two situations, it would appear to me. I just want to check with the Minister that I have got this right. The first instance that it applies to is that the court may change the assessment criteria and formula if in the first 3 years after the relationship has split up, the financial situation of the liable parent changes in a way where the contribution that they are required to make would be 30 percent or more of their income. That is what I understand that that part means, and I would like some clarification that I have got that right.

That does not bother me so much, but the next bit I am not so sure about. I think it then goes on to say that this re-establishment cost could include the court being given the ability to change the formula assessment because the liable parent has got responsibilities for a new family now. I would really like some clarification on that, because that is actually quite a departure, I think, from where we have been, and I think that that has some real implications with it. Are we giving the court the right to change the formula assessment based on the liable parent, who often seems to be the parent who has made the decision to leave the initial family unit, setting up a new family within 3 years? That could actually often mean that they have left that family for another family, because it is quite soon after the relationship splitting up. Does that mean that they get some sort of financial benefit for that? Because that is how it reads to me. I think that raises some real questions. It raises some real questions.

Watching the members opposite who have been on the select committee, either they do not know whether I am correct or not, or they are feeling a bit embarrassed by what I am raising. I am not sure. They do not seem to be responding at all about the issue I am raising here. But I would like a response—

Mike Sabin: Because you’re not making any sense.

SUE MORONEY: Well, the member Mike Sabin says it is not making any sense. If I am wrong, I would like to know that, but the way I am reading it, Mr Sabin—and you might tell me whether I am right or wrong—is that, correct me if I am wrong, within 3 years, if the liable parent has a whole new family that they are establishing and that they are financially responsible for, the court has got discretion to change the formula assessment for their commitments to their original children—to the children whom this bill is trying to address. Am I correct in that?

Mike Sabin: Oh, you’ve confused me.

SUE MORONEY: I am confused—so I have got it wrong? I would really like that member, please, to take the next call and explain it to me. Maybe I have got it wrong. I am putting my hand up and saying I could potentially have that quite wrong, but that is the way I am reading this bill. I would like some clarification on that because it is quite—[Interruption]

Hon Annette King: I wouldn’t take notice of what he says.

SUE MORONEY: Well, I really am looking for direction on it, because that is how it reads to me. And if I have got it wrong, then I will feel quite relieved. But if I have got it right, then I would be really quite concerned about what analysis we have had and what official advice the select committee has had that tells us what the impact would be on the original family and their children. That is quite a significant departure.

JACINDA ARDERN (Labour): There were quite a lot of interjections from the other side of the Chamber during Sue Moroney’s contribution on this bill, the Child Support Amendment Bill, and I would really welcome Mr Sabin, or perhaps the chair of the Social Services Committee, standing up and taking a call. If you have got some evidence to refute what Ms Moroney was rightfully querying, I think, using the Committee stage, which is what it is intended for, then I would really welcome Mr Sabin doing that. But I have to say that my previous experience of Mr Sabin has been that his interventions are often slightly antagonistic—I am going to be honest. And I think it was probably quite fair of Sue Moroney to instead just say: “I am asking a legitimate question. If you have alternative evidence”—

Peseta Sam Lotu-Iiga: You called me a scab.

JACINDA ARDERN: I am happy to clarify our comments previously in the select committee; I do not think now is the place. Now is not the place, Mr Lotu-Iiga, to discuss scabs. This is the debating chamber.

I want to talk about the discretion that is granted in the bill to the commissioner around the deduction of individual payments, and I do think that discretion is important in a bill like this. In terms of the kind of discretion, though, that Sue Moroney has referred to—I think it is only fair that she seek clarification on that matter. I have to admit that I am dragging back into the recesses of my mind. I remember the debates that were had around new families. Where new families are formed by liable parents in particular, what then is their responsibility on an ongoing basis to their new family versus their existing biological family, no matter how many years of separation or, importantly, the amount of income that is brought into the home by a new parent, where the non-liable parent is no longer in their place?

I think what was an important principle discussed by the select committee, though, was that regardless of whether or not a custodial parent re-partners with someone with all the wealth in the world, it is still ultimately the responsibility of a biological parent to contribute to the upbringing of their child. I think that is a principle we should stand absolutely firm on. That means that even if a mother re-partners with a very well-to-do individual, or a father re-partners in that same kind of scenario—it does not matter which gender; it does not matter who the liable parent is or who the custodial parent is—the principle is that the responsibility follows the biological parents wherever they may be, and the calculation applies to those parents.

I think that is right and fair regardless of how many years they have been separated. That is certainly what I think this Committee would intend to be on the record—that when it comes to discretionary provisions our intent is that the responsibility lies with those parties. But when it comes to the deduction regime, there is some importance to a certain degree of discretion, particularly—and this is one of the things I remember discussing—when you are involving individuals who have limited income. They might be beneficiaries, including the liable parent, who might be a beneficiary. We do need to take into account the ability to factor in their income levels, and whether automatic deductions would cause someone to dip below what would be considered a fair and reasonable ability to financially survive.

One of the points we also wanted to make, though, concerns the change of the regime so that it is an opt-out system. Until now, of course, automatic deductions from employees’ wages have been permitted only on an opt-in basis, and we are reversing that onus now. That is quite a significant change. That means that the Inland Revenue Department’s guidelines for notifying liable parents of intent to disclose personal information to an employer has not yet been developed—that is my understanding. But it is our view that if we apply natural justice to these situations, liable parents should, of course, have the ability to object to the disclosure of information.

We have had examples before the select committee, which we heard and agreed with, that said that under certain circumstances you would not necessarily want your employer being aware of a deduction for a child that they may not even know that you have. It is up to that individual’s own conscience as to how they manage that. So we wanted to take into account the ability of discretion there. But we have not really thought more broadly about whether or not this automatic deduction regime does allow discretion in other circumstances.

Equally, there are certainly going to be examples where there will be potentially unfortunate and unjust disclosures of personal information by the State, because we have seen them in the past. Inappropriate disclosures by the State have, unfortunately, become quite a common occurrence. The State has proven itself—be it Work and Income, be it ACC—to be a poor manager of people’s individual information. What protections will we have in place to ensure that this information, the opt-out regime, is dealt with with the due care that it needs? That is something I would put to the Minister in the chair. If he at some point were able to speak to some of these concerns, then that would be worthwhile, I think, to the Committee.

One of the other concerns we raised, though, is that when it comes to employers, they will be bearing the brunt of the administrative cost over this now opt-out regime. This was something we wanted to flag, particularly where small-business owners might be impacted by a deduction regime. There did not seem to be any regulatory impact assessment of what costs small businesses—or large businesses—would incur through deduction policies like this, and I would have been really interested to see what impacts that would have. But I also want to point out that when it comes to things like deduction regimes, debt reduction—which is another significant part of this bill—and the idea of trying to reduce down penalties, for us, the principle we were relying on is, what we can do to ensure that on an ongoing basis we try to encourage more parents to ensure fulfilment of their responsibilities under this legislation?

If we have evidence to suggest that the high burden of debt that an individual might be carrying might be reducing the likelihood of their coming back into the system and doing what is right and paying their way, then we should look at how to reduce that. That is a reasonable thing to do and certainly we accept that. Judith Collins, however, did not seem to accept that, and I think it is only fair to point out that in 2005, in her ongoing way of taking an approach that seems to be purely punitive without taking into account the evidence base or what impact it might have on a child, she said: “Writing off debt sends the worst possible message to absent liable parents. The Government is telling them that if they dodge their responsibilities for long enough they will get a discount. That is the wrong message to send.”

We know that the evidence actually says otherwise and that it is penalty payments that seem to be accruing in a lot of cases. If we can do something to ensure that we engage parents back into the regime, then that is what we should be doing whilst, of course, making them responsible. But in 2007 Judith Collins went further than that. She wanted to ensure that action was being taken at the border against parents who default on their child support payments. And I have to say that if we are picking up traffic infringements at the border, why are we not picking non-paid child support payments?

In 2008, in fact, Judith Collins supported making avoiding child support an arrestable offence. Where is it now? Where is it now? Where is that hard line that the Government wants to take on parents who are not paying their way? It was easy in Opposition, was not it, to make all of those statements. Well, where are the provisions now? Only within the past 2 weeks I have had a case of an individual from Australia who has not been paying their way. They are in New Zealand, we know where they are, and what is the Inland Revenue Department doing? Unfortunately, very little, and that must be enormously frustrating for the individuals in this case who are not even biological parents but just want the parent of this child to do the right thing and pay their way.

If the Inland Revenue Department had come to the Government and said: “We think we need these powers.”, then I would hope that the Government would act. Now we are saying that there is a case for the Government to be looking into these powers. Judith Collins seemed to see it before. Why now has it suddenly escaped the Government’s view? The Government seems happy to be focusing on welfare fraud. Well, we already invest $39 million chasing that each and every single year. What about investing a little bit more and chasing some of the debt that has been taken away from our kids as well? I would ask the Minister whether that was explored. I would be quite interested to hear the rationale for why it was not a part of this bill.

TODD McCLAY (National—Rotorua): I move, That the question be now put.

Dr RAJEN PRASAD (Labour): There are just a few final points I want to make on this part of the Child Support Amendment Bill. There is one element of this Part 2 that does please me, and I think it is a good set of provisions. In my observation over the years I have been involved in social provision, it is easy to see how child support, or the lack of payment of child support, has received bad press and a bad name. That has happened quite consistently over the years where people have quoted the amount that is owing to the State. Many people outside do not realise that much of that is by way of penalties—not the base amount, but penalties—and they grow very, very quickly. This has given child support a bad name, and this bill does address that quite well.

It has a much more appropriate penalty regime: it is graded and there is an incentive, if you like, for people not to let it get out of hand. I want to commend the designers of this bill for those particular provisions. I think it is quite a good set of provisions. They are quite well graded, and lots of checks and balances are built into there. So that is a good provision in this part, and I think it will have an effect on the press, if you like, about child support. I think that is a positive aspect of it.

The other aspect that I want to talk briefly about is the automatic deductions regime. I know that others have spoken about this, and I note that Melissa Lee in her comments was singing the praises of this particular provision. It is a complete switch-round. Instead of being an opt-in provision, it is now an opt-out one. It is really up to people to say that they want to opt out of this particular provision. I know that there are some additional provisions that we worked on in the Social Services Committee to say that for particular reasons—and cultural reasons have been mentioned, but it is not just cultural reasons; it is for a whole bunch of reasons—you would not want your employer to have that information. That provision is still an opt-out provision. People have got to go and do something about it themselves, not the other way round. We are worried about that, and I think we will have to watch this, because, as the last speaker, Jacinda Ardern, said, there is no history on the Government benches of respecting privacy of information in recent times. The burden, then, is on members opposite to actually ensure that provisions are built in in such a way that that kind of abuse that has taken place does not occur. I think that is quite an important provision in this particular bill, which we will be watching, and we are not certain that this is the best way to go.

The next point I want to make actually links into that point. It is that in order to ensure that with this system, which is now quite a complex system that has been designed, there is a real possibility of the Inland Revenue Department actually delivering on it. We think the jury is out. It is already being pushed out another year. The computer program that others have talked about is now really struggling under the current demands, and yet we have this new set of provisions that will demand much more of that system going forward. This should not be introduced unless it is guaranteed that the $1.5 billion—that is the figure to be spent on a computer system—will actually deliver on this. There are many more computer systems that the State has invested multimillion dollars in that have failed than have been successful. This is a major one. So here there is a risk for these provisions that have been added into the current system. We just wanted to signal that we have major concerns about that. We think that the system that is designed here is now quite complex. The formula is complex, the system is complex, and there are reviews being built in as well. In order for all of that to operate well, that computer system has got to be bedded in, not like some others that all of us could talk about that are producing all kinds of perverse effects. Unless that is done, the risk will be realised. That also then addresses the question, or the risk, or the problem, really, of the huge expenditure.

ALFRED NGARO (National): I move, That the question be now put.

The CHAIRPERSON (H V Ross Robertson): The question is that the question be now put. As many of that opinion will please say Aye, to the contrary No. The Ayes have it?

Chris Hipkins: A party vote is called for.

The CHAIRPERSON (H V Ross Robertson): A party vote is being called for. Will the Clerk please conduct a party vote for Mr Hipkins.

Chris Hipkins: No, for democracy.

The CHAIRPERSON (H V Ross Robertson): For democracy, OK. Let us carry it out for democracy.

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

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 56

New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to Part 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 58

New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1.

Amendments agreed to.

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

The CHAIRPERSON (H V Ross Robertson): Can I ask the honourable member Brendan Horan whether he wishes to vote. We have just called him to vote.

Brendan Horan: Yes. One vote opposed.

The CHAIRPERSON (H V Ross Robertson): One vote opposed. [Interruption] Order! Can I just remind members that during the course of a vote there is supposed to be silence. In fact, any conversations across the Chamber can be seen as intimidation and could well lead to a breach of privilege. I call the honourable member Brendan Horan, just to explain to him that what the vote was on was that Part 2 as amended stand part.

Brendan Horan: Yes, thank you. I was watching on television and was rushing to get here, so I was aware, despite the squawking of those—

The CHAIRPERSON (H V Ross Robertson): Order! I can just tell the member that when that happens it is effectively a point of order, and he should be terse and to the point. Thank you.

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 59

New Zealand Labour 34; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.

Part 2 as amended agreed to.

Schedule 1A

The CHAIRPERSON (H V Ross Robertson): The question now is that schedule 1A stand part, but we have got some amendments from the Minister for that. The first amendments are set out on Supplementary Order Paper 181, and they are the Minister’s amendments to schedule 1A. All those in favour please say Aye, to the contrary No. A party vote has been called for? The Clerk will please conduct a party vote.

Chris Hipkins: You have to declare the vote first.

The CHAIRPERSON (H V Ross Robertson): I have done that. Part 2 as amended will stand part. That has been passed. We are now moving to schedule 1A. We have talked about the Minister’s amendments—

CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order, Mr Chairperson. On a voice vote you have to declare what you determine the outcome to be before a party vote can be—

The CHAIRPERSON (H V Ross Robertson): Sorry, the Ayes have it?

Chris Hipkins: The Noes have it. Party vote called for.

The question was put that the amendments set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to schedule 1A be agreed to.

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

Ayes 69

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Amendments agreed to.

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

Ayes 69

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Schedule 1A as amended agreed to.

Schedule 1

The question was put that the amendment set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to schedule 1 be agreed to.

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

Ayes 69

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Amendment agreed to.

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

Ayes 69

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Schedule 1 as amended agreed to.

Schedule 2

The question was put that the amendments set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to schedule 2 be agreed to.

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

Ayes 69

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Amendments agreed to.

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

Ayes 69

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Schedule 2 as amended agreed to.

Clauses 1 to 3

Dr DAVID CLARK (Labour—Dunedin North): I am grateful for an opportunity to speak to these introductory clauses, clauses 1 to 3. The title of the bill, the Child Support Amendment Bill, is something that I think could do with amendment. Certainly in the form that we have just passed it as a Committee, it reflects poorly the actual nature of the bill. It suggests that it is a “Child Support Amendment Bill”, which would be implying, or could be taken to imply, that it is aimed at supporting children. In fact, as we have canvassed in the debate at some length and in some detail and as we have noted, it is likely to be, if anything, less supportive of children than the existing formula, and it has a number of other burdens as well. I have a number of competing titles to offer. I shall leave it to the end to tell you which is my preferred title.

First, I wish to talk about the “Missed Opportunity for Vulnerable Children Bill”, because that, in some ways, quite accurately describes what we have in front of us. We had an opportunity in the Social Services Committee to amend the bill, which Labour supported to the select committee so that it could be amended for the benefit of children—so that we could actually put children at the heart of this legislation, so that their well-being and their development could be the thing that we were focused on in passing this legislation, in line with the United Nations Convention on the Rights of the Child which we have signed up to, in respect of looking out for the interests of vulnerable children. We saw in the select committee that that attempt to bring this into the core of the legislation and to bring it in in a way that did not encourage litigation but that was actually being very clear that the priority here was children was defeated in two separate votes. I suggest, then, that the “Missed Opportunity for Vulnerable Children Bill” would be a more apt description than the “Child Support Amendment Bill”.

The Child Support Amendment Bill’s title, I guess, is technically aimed at telling you we are amending the current child support arrangements. That much is strictly true, but it is a little misleading because of the words “support” and “children” being brought in there, when, in fact, what we are doing is undermining the system that we have got. We are making it less transparent. That takes me to my next suggested title, which would be the “Child Support (Transparency Removal) Bill”. This bill has got a new and more opaque formula. This is what we are introducing here in this bill: a new and more opaque formula that makes it more difficult for those with children, liable parents and primary caregiving parents, to calculate how their future arrangements will pan out. We know that the current formula is very simple. Families can work out what their future liabilities are going to be. They can plan towards them. Now we have a bill that is far more difficult to understand in terms of the formula calculation.

We have been told by officials that they will need to upskill so that they can also brief parents on the likely obligations and responsibilities they will have. That will be an ongoing task, certainly with the turnover in the Inland Revenue Department in recent times. That is a department under stress, as we know, running a 20-year-old computer system to collect our taxes, with a dropping revenue base. We know that that department will continue to have high turnover. It will continue to need to train its own people to train the users of this formula, and, therefore, it is a step back in terms of giving parents the transparency to plan for future liabilities. So that is why it should be a “Removal of Transparency Bill”. That is one thing that is very clear here with this new opaque formula that is being introduced.

Another possible title for consideration is the “Child Support (Further Disadvantaging Women) Bill”, because this bill very clearly puts more burden on to the primary caregivers, the majority of whom we know are women. We have seen data for this in the select committee that makes it very clear that an increased burden will fall on women who are the primary caregivers, who usually are the most vulnerable in these situations. I generalise a little, but I think it is fair to say, from those who come through the electorate door and those whom we see as constituency MPs, that women are often particularly vulnerable in these situations, and particularly where poverty and stress are involved. This further makes those women more vulnerable, and so therefore we could have a title around the further disadvantage that this bill will generate for women.

Another title that leaps out from this bill is the “Child Support (Increasing Bureaucracy, Cost, and Business Red Tape) Bill”—increasing bureaucracy, cost, and red tape for business, because this bill does increase all of those things. We have learnt, as we have had the debate, as we did in the select committee, that not all of these things had been consulted upon. This is typical. I think I made that point earlier in the debate with the paper boy tax and the various other tax grabs that this Government has done to try to fill the revenue hole that it created with the 2010 tax cuts, which went to the wealthiest New Zealanders. I remind anyone who is watching at home that 44 percent of the value of the tax cuts in 2010 went to the wealthiest 10 percent of New Zealanders, while just 2 percent of the value of those tax cuts in 2010 went to the 20 percent who are the poorest in New Zealand. Those were unjust tax cuts. The story we were told was that they would stimulate economic growth. Well, we know now that we have got a Government here that has got the worst economic growth record of any Government in the last 50 years. That Government has not stimulated the economy with those tax cuts, so it has got a revenue hole that it has been trying to fill with tax grabs. At the same time as it has been going about those tax grabs, it has been increasing red tape—it has been increasing red tape. That red tape on business is just collateral damage, as far as the National Government is concerned. As long as it talks business, it is not really concerned what happens to small business. Talk to small-business owners around New Zealand and you will see that they are hurting right now. So I will come back to the title—

The CHAIRPERSON (H V Ross Robertson): Good.

Dr DAVID CLARK: —because clearly this all lends itself to the title “Increasing Costs, Increasing Bureaucracy, and More Business Red Tape Bill”, because that is precisely what is generated by this new, more complex formula. You will see I was making a point quite relevant to the title debate.

So if we weigh up all of those options, whether it is the “Missed Opportunity for Vulnerable Children Bill”, whether it is the “Women Further Disadvantaged Child Support Amendment Bill”, whether it is the “New, Less Transparent Formula Bill”, whether it is the “Difficulty for Planning Bill”, or whether it is the “Increased Cost, Bureaucracy, and Business Red Tape Bill”, we think all of those things—I think all of those things—perhaps more accurately reflect the nature of the bill than “child support”. So I contest that those are better titles for the Committee’s consideration, but overall I want to stress that in my opinion perhaps the best and most accurate title is the first of those I have suggested, which is the “Missed Opportunity for Vulnerable Children Bill”.

Hon DAVID CUNLIFFE (Labour—New Lynn): We are here to debate the title and commencement of the Child Support Amendment Bill. It is an opportunity for members to draw together the overall themes of the debate in the Committee stage. The title is often the focus for that tying together of ideas. I think the bill should be called the “Child Support Almost Amendment Bill”, because it has been an almost process over the almost 5 years that this Government has been working on it. It almost created a meaningful reform, but it did not quite, and that is why we are voting against this bill.

It is a huge lost opportunity. It is a lost opportunity to address the plight—and I got this wrong in earlier contributions—of 133,000 children who are dependent upon child support. I thought there was a proportion of that total of dependants who were in sole parent families, but I now know that that is the total number of children dependent upon child support: 133,000 children. That is a staggering amount of vulnerable kids in our community and our country who are dependent upon what this Committee does tonight. The problem is that the Government is not doing enough. It is just not doing enough. It could have written the interests of those children into the law for good and always. It could have reflected the United Nations Convention on the Rights of the Child in this law, but it did not. It almost did, but it did not.

It could have restated that the overriding goal in the event of a separation is to provide for the well-being of the children of the partnership, because the adults are the ones making the decisions and the children have no choice. The adults have choices. The children are dependent. The adults created the problems. The children pay the price. So to the 133,000 youngsters who are in that challenged situation, Labour members say we are sorry. We worked hard in the Social Services Committee to bring the Government to the point where it could include their interests as a legislative priority, but National members voted against even consulting their Minister on that international best practice. I find it so disappointing that they would be prepared to march in lock step with the executive rather than represent in this Parliament the interests of 133,000 faultless, vulnerable young New Zealanders.

It could be called the “Inadequacy of Payments Bill”, as that issue is another part of the “Child Support Almost Amendment Bill”. Submitters raised concerns about the adequacy of payments because of the formula in the legislation, particularly given the fact that the baseline here is that so many of those children are living in poverty. What we do know about when families break up is that most often, despite the fact that these laws exist, the mother, who is usually the custodial parent, and the kids are the ones doing it tough. Most often the dads are able to recover financially, and find it easier to move on with their lives, because they do not have the primary burden of childcare.

And worse than that, the system that we have had—which is only partially, only almost addressed by this bill, which we cannot yet support—has locked out parents who may have had the best of intentions but were unable to keep up with their payments and have then been slammed with penalties that have locked them out of the system. Too many of them have left huge holes in the hearts of their kids and ruined their own lives by fleeing the country. It is a human tragedy on a vast scale. This Parliament could have almost fixed it, but it did not—

Hon John Banks: A late leadership bid.

Hon DAVID CUNLIFFE: —“Mr Dotcom”, it did not. It did not.

There is no pass-on mechanism in this bill. It could almost have fixed the problem of pass-on, but it did not. The select committee was confronted by extensive international evidence that liable parents—international best practice is very clear on the point that, where parents know that the finance that they are providing goes straight to the children, they are more likely to pay it. They are more likely to meet their obligations. That has also been set out very clearly in the Labour Party’s and Green Party’s minority views in the select committee report. We hope that the public and the courts will have regard to those minority views. The adequacy of the payments is not strong enough.

National members say that—this has been their overriding rebuttal, I suppose—this bill is not about child poverty. Well, hello! For 133,000 New Zealand children this bill represents their lifeline. Because if it was not for this bill, they would be entirely dependent on the taxpayer, whom this Government says it is thrifty and frugal to protect. It cannot have it both ways. This bill contains a $42 million extra price tag to the taxpayer and less money going to mothers and dependent children. It is a conjuring act of such stupidity that it is hard to credit that it took 4 years to get there. So no wonder we cannot support it.

The implication for women of this “Child Support Almost Amendment Bill” is that as, on average, women earn less than men, they are more likely to be the primary caregivers, they are more likely to be vulnerable, and they are more likely to struggle in a post-separation environment, many women will be worse off as a result of these changes.

It was almost a reform bill in the sense that the Government almost had the opportunity to come up with a formula that people could actually understand, but it did not. This House has not. It has come up with a formula so opaque that I am told it took an extensive whiteboard session with multiple explanations by officials to the highly qualified members of the select committee, who after a while could almost grasp it. If it took a bunch of tertiary qualified members of Parliament half a day to get their heads around an arithmetic formula—even investment bankers like the “Earl of Ōtāhuhu” over there—then it is no wonder that parents would find it extremely difficult to see their way clear to voluntary arrangements that would protect their families when the counterfactual requires a crystal ball to stare into to be seen.

Thirdly, it is an opt-out system replacing an opt-in system. That matters because it was almost an amendment that could have protected natural justice, but it was not. And it was not, because this bill requires people to be proactive in telling their employers why they cannot have access to their personal financial details. It should be the other way round. Every working New Zealander knows it should be the other way round. Our personal information should be private until and unless we choose to make it not. Otherwise you get the Paula Bennett phenomenon where people’s personal Government-held information is put in the public domain for the purpose of suppressing dissent, and that is a shame. That is almost as good—and I may be slightly tangential to the title of this bill—as the Prime Minister’s memory when he has meetings with casinos. But we will not go there in this debate.

The adequacy of the Inland Revenue Department’s computer systems is the next issue with this almost amendment, because if we could almost get the community’s head around the formula, if we could almost see our way clear to the interests of the children, and if we could almost protect the women of the country, the Inland Revenue Department’s computer could not deliver, because it needs $1.2 billion worth of upgrades.

Finally, this was almost consistent policy making. I say “almost” because my mind is drawn back to 2005, when Judith Collins said writing off debts sends the worst possible message to absent liable parents, and 2007, when she demanded that action be taken against parents so that they are stopped at the border if they have an outstanding liability. Then she went further, because she does not like being too subtle, apparently. She supported making avoiding child support an arrestable offence, and now the Government is writing down penalties. Almost consistent.

MELISSA LEE (National): I move, That the question be now put.

JACINDA ARDERN (Labour): I want to speak to some elements of the commencement dates in the Child Support Amendment Bill at the beginning of what will be a short address. I do think that quite a bit of thought has gone into the transitional provisions and the commencement dates, based on some of the factors that have already been pointed out by my colleagues around the additional burden on the Inland Revenue Department system that this new formula will provide. I think it is only right that we give the system time to creak under the weight of this new, complex system.

We, as the Social Services Committee, did recommend an amendment that would allow deferring the implementation of this child support formula from 1 April 2013 to 1 April 2014, and we suggested a movement of payment and penalty charges that saw it going out to April 2015. We very explicitly stated in the commentary on the bill that we consider this delay by 1 year necessary to accommodate the bill’s legislative time line, because, of course, if we were implementing it in April 2014, that would not be a lot of time from the time that it will have its final reading. Also, it was to allow the Inland Revenue Department sufficient time to prepare. I would say that was probably the weightier of the reasons.

I am also interested, based on these commencement dates, in the amount of time the department needs to prepare. That will be computer systems, but, obviously, in the bill we have also talked about the extra burden on staff—the 15 percent increase in the amount of time that staff will be spending on these new provisions. My question to the Minister of Revenue would be whether that will be coming out of baselines for the Inland Revenue Department, or whether we will be seeing an extra investment into the department to enable it to deal with these changes, because it is not like there is any capacity in many of our front-line services to take that extra strain. The Government has been very vigilant in its so-called value-for-money exercise. This basically means that the departments themselves are straining under the weight of continuing a full agenda of work, be it policy development or just carrying out the requirements of day-to-day governance, whilst also slashing back their ability to have any capacity to deal with extra things like this.

So I would be really interested if the Minister could tell us, given that we have needed to switch our commencement date by a year, given that we know it will cost $91 million to implement, and given that we know it will increase the strain on staff by 15 percent, how we are dealing with that—and that $91 million. I have not yet asked a question on whether or not that has been budgeted for, and in which budget we will be seeing those transitional provisions.

I am also interested in speaking to the title of this bill. I am always aware that anyone listening to this part of a debate in the Committee will be somewhat confused by this tradition we have at the end of the debate on a bill of then suddenly talking about random, separate names for titles for a bill.

Mike Sabin: Suddenly waste time filibustering and belittling it.

JACINDA ARDERN: There is a very good purpose for it that Mr Sabin does not seem willing to accept at this point in the debate. It does enable us to try to capture the essence of what a bill should be about. It gives us a chance to say whether or not a bill has achieved what might be the expectations of the public—the bill’s objective.

Mr Sabin is now making gagging faces. I do not know whether or not the camera has captured some of the facial expressions we seem to be receiving on this side of the Chamber.

Speaking to the bill’s title gives us an opportunity to see whether or not we have actually achieved the objectives we set out to achieve. There was a bit of debate at the beginning as to whether or not, if this bill is truly about the welfare of the child, we are achieving that through this Child Support Amendment Bill. Unfortunately, it is Labour’s contention that we do not believe we have achieved that. The focus, despite the bill being called the Child Support Amendment Bill, is very much on setting a mediation process that is based on a calculation regime for parents who are unable to resolve, outside of the Inland Revenue Department, their own payment system.

As I have already said, there is a greater level of satisfaction with arrangements that are able to be set up outside the department’s system. We know that from survey work that has been done. So is this really solely about child support? If it were, we have already contended that we would have probably seen a paramountcy principle in this bill. In a sense, then, could we almost rename it the “Child Liability Bill” because that is how it feels like we have treated kids in this bill? It is more like they are a liability—that we must make an assessment on whom the greater liability sits with—rather than the bill being about the support of the child and the welfare of the child.

Dr CAM CALDER (National): I move, That the question be now put.

The CHAIRPERSON (H V Ross Robertson): No. I am going to call the honourable member Dr Rajen Prasad. He was on the Social Services Committee.

Dr RAJEN PRASAD (Labour): Just a reflection first: there have been so many interjections from members opposite, and most of them have been quite inane. I wish they had simply taken the time, throughout the second reading of this bill, the Child Support Amendment Bill, to actually debate the issues. It would be much easier to have more respect for that point of view than when they simply chip away with inane comments and do not debate the issues. Throughout all of this, many, many questions have been posed to members opposite. Even the members of the Social Services Committee from that side of the Chamber have hardly taken any calls, yet you would think that they would.

In keeping with the theme from this side of the Chamber, I note that this bill is another missed opportunity. The title of the bill is quite important. I started my second reading speech on this bill yesterday by asking whether this bill was for child support or not. Yesterday and today, time after time, speaker after speaker has said it is not about child support. It is not about what is in the title. The title is quite inappropriate. We can ask a number of questions as to what a title including the words “child support” would actually signal. Are children placed at the centre of this? Any child support system or method would do that. Does it? No. Children are hardly mentioned except as relating to some pathway to finances or money.

Melissa Lee: It’s child support.

Dr RAJEN PRASAD: Yes, Melissa Lee, it is child support, and I do not know what that member understands by child support. What they have been arguing is that this is not about child support. Children are not being put at the centre, and the member might have taken a call or two to actually defend it.

Melissa Lee: It’s intrinsic in the bill.

Dr RAJEN PRASAD: Well, it is not, because the basic principles of supporting children are just not there. The interests of children are not paramount. If Melissa Lee had been listening to all the submissions, she would have argued that the title should be changed. Most of the credible witnesses that came to the select committee actually talked about children being at the centre, etc.

Melissa Lee: Who are the credible witnesses?

Dr RAJEN PRASAD: The Children’s Commissioner, the Families Commission, the Human Rights Commission, and many others. They came to ask why children were not being placed at the centre. They argued that the pass-on system would be a much better system to actually support children. That one change, that one provision in this bill, would have convinced me that this was a child support bill, but, no, it did not happen—nowhere near it.

Tim Macindoe: This is a horrible valedictory, Raj.

Dr RAJEN PRASAD: I did not hear that, sorry.

Tim Macindoe: I said this is a horrible valedictory.

Dr RAJEN PRASAD: Mr Macindoe! I am surprised that that member would make that kind of statement. I suspect that the member is trying to be funny, and if he is, it was a failure. If he is trying to predict my future, then I do not know where the member is coming from. I hope that member’s own family is listening, because they would expect better of you, Mr Macindoe. And if you take a call after this, maybe the member might be able to respond to what I am saying, because the member has not responded—and parents’ privacy would have been protected.

So I agree with what this side of the Committee has been saying, that this bill is a missed opportunity. It is the “Missed Opportunity for Vulnerable Children Bill”. So the title is absolutely wrong. The title should be changed to reflect both the arguments that can be made against the provisions that the Government has come up with in this particular bill and, indeed, how it has lacked any defence of the lines it has taken.

The other side of this is that the system for supporting children has still not been developed, and we have been saying that, you know, it is amazing that here we are pushing out the dates for the implementation of this particular bill because the systems that support it have not been put in place, and in this clause of the bill, those provisions also are being argued for. So those are the comments I want to make. I hope that Mr Macindoe will take a call, or make a personal explanation of whatever kind, tonight to kind of put the record right, to see what he was talking about, because I think that would be not just the charitable thing to do, but the gentlemanly thing to do. Thank you.

Dr JIAN YANG (National): I move, That the question be now put.

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

The CHAIRPERSON (H V Ross Robertson): Order! Order! Both of the members know, and they have been here long enough, that you cannot interject during a vote being taken. I will repeat that it amounts to intimidation, and a member could find himself before the Privileges Committee.

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

Ayes 63

New Zealand National 59; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 57

New Zealand Labour 34; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.

Motion agreed to.

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

Ayes 69

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Clause 1 agreed to.

The question was put that the amendment set out on Supplementary Order Paper 181 in the name of the Hon Peter Dunne to clause 2 be agreed to.

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

Ayes 69

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Amendment agreed to.

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

Ayes 69

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Clause 2 as amended agreed to.

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

Ayes 69

New Zealand National 59; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 51

New Zealand Labour 34; Green Party 14; Māori Party 2; Mana 1.

Clause 3 agreed to.

The result corrected after originally being announced as Ayes 71, Noes 49.

TIM MACINDOE (Junior Whip—National): I beg your pardon. I may have inadvertently cast the Māori Party votes in favour of clause 3. I apologise. Could I seek the leave of the Committee to correct that vote, which should have been two opposed to clause 3.

The CHAIRPERSON (H V Ross Robertson): The member may seek leave of the Committee. Is there any objection to that course of action being taken? There is none. So they will change the vote. Honourable members, as a result of the change the Ayes are 69, the Noes are 51. Clause 3 is agreed to.

Bill to be reported with amendment presently.

House resumed.

The Chairperson reported the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill without amendment and the Child Support Amendment Bill with amendment.

Report adopted.

Bills

Building Amendment Bill (No 4)

Second Reading

Hon MAURICE WILLIAMSON (Minister for Building and Construction): I move, That the Building Amendment Bill (No 4) be now read a second time. The Building Amendment Bill (No 4) has now been considered by the Local Government and Environment Committee, chaired by the very, very good member Nicky Wagner, and I thank the committee for its careful consideration of the bill. I also want to acknowledge the work of all of the members—all of the members—of that committee, who, I believe, have brought back to the House some well-thought-out amendments, which I think will both refine and improve the original bill that was introduced. The committee received 47 written submissions and heard 23 oral submissions. Overall, there was very much support for the fundamental policies in the bill—support that demonstrates the importance of these changes, which reflect the efforts the Government has made during its extensive consultation on the review of the Building Act to listen to the voices of all those participating in the building and construction sector.

May I take this moment to pre-empt Raymond Huo, because he will get up and tell everybody that everybody out there in the building sector is opposed. All I ask Mr Huo to do is to name one—name one. Is it the Registered Master Builders Federation? No, that body is in favour. Is it the Certified Builders Association? No. Is it the Building Industry Advisory Council? No, the council supports it. So when Mr Huo speaks I hope everyone listening to him speaking will temper his statement that everyone is opposed by saying: “Name one. Name one who is opposed.” However, I divert from the written speech, so I shall go back to it.

The select committee listened closely to concerns raised about whether the drafting of the bill would achieve the outcomes that the Government seeks to achieve. Particular areas of concern raised in submissions were the clarity of the proposed new consumer protection provisions and the changes to the Dam Safety Scheme. As a result of submissions, the select committee has recommended a number of improvements and clarifications to the drafting, to better achieve the Government’s policy intent and address the concerns that actually were raised at the committee. I have to say that I fully support the recommendations that the select committee brought back to the House. I would like to thank all the people who took time to make submissions and express their views on the bill. I also want to thank my officials, who have worked diligently and effectively on the drafting of the bill and in giving advice to the select committee. I am proud to commend this bill and the select committee amendments to the House.

This bill is a key part of a package of reforms designed to achieve a significant cultural and behavioural shift in the building and construction sector. Together with changes already made in the Building Amendment Act 2012, the enactment of this bill will enable the Government to lead the sector to a stable platform from which we can build the skills of practitioners, have confidence that buildings will be built right the first time, and be sure that designers and builders will stand behind the quality of their work. Achieving these objectives is important to help with the rebuilding of Christchurch, of course, but also it is important for increasing the productivity of the entire building sector. The building sector is a significant part of our economy. It employs about 8 percent of our workforce, and contributes about 4 percent of our gross domestic product. Increased productivity in this sector will contribute significantly to this Government’s Business Growth Agenda.

I would like to outline some of the key changes that have been made to the bill by the select committee. The major reform in the bill is in the new provisions for consumer protection. The establishment of improved consumer rights is an important precondition for introducing risk-based consenting. If we are going to allow builders to take more responsibility for their work, and reduce the involvement of councils to cut bureaucratic costs, we need to ensure that consumers have the necessary tools to hold builders to account. The consumer protection provisions in the bill as introduced were not completely clear about who can use the provisions and what types of building work are covered. Although the policy intent of the consumer protection provisions was supported by the people who made submissions, some issues were raised in relation to the clarity and the detail of the new provisions. For example, builders were not sure whether their subcontractors could use the provisions against them, and designers were not sure whether their work would be subject to the new provisions. Some submissions also asked for more detail to be included in the bill about information to be given to the client by building contractors and about the content of the mandatory written contracts.

The select committee has recommended changes to clarify the following issues. The consumer protection provisions do not apply to the relationship between head contractors and subcontractors. The provisions are intended for the benefit of the client—that is, the homeowner. The commercial trade arrangements between a head contractor and their subcontractors are not regulated under the Building Act. Design work is not subject to the consumer protection provisions. The bill does not limit the application of other consumer protection legislation that relates to the provision of design services. The purposes of the checklist and disclosure information required to be given to the client have now been clarified. This includes listing in the bill some of the topics that could be included in those documents, though the topics will be set out in detail in regulations later. The checklist and disclosure information are required to be given only if the building work is over a certain value, but if the work is less than that value, the client can still request, and the building contractor must provide, the checklist and the disclosure information. The matters that should be covered by the mandatory written contracts, further clarifying when a contract does not contain a matter required by the regulations, will be deemed to include any clauses stipulated in the regulations. This allows parties the freedom to contract as they please, but ensures crucial topics, such as disputes resolutions, are always covered by the contract.

The other key change in the bill is to dam safety provisions. These provisions are intended to improve the efficiency and effectiveness of the Dam Safety Scheme and reduce compliance costs for the owners of low-risk dams. The submissions received expressed support for the Dam Safety Scheme as a risk management scheme for large dams, but it raised issues relating to technical detail and requested further clarity about the application of the Dam Safety Scheme. The select committee has recommended changes that will provide consistency in the terminology used in the Dam Safety Scheme, provide a specific approach for classifying and managing the safety of canals under the Dam Safety Scheme, enable regional authorities to address critical issues in dam safety by reinstating references to earthquake-prone dams and flood-prone dams, allow regional authorities to refer dams for inclusion in the Dam Safety Scheme if they pose a risk to public safety because they are in a designated area, and, in the context of reporting dangerous dams, clarify that a recognised engineer is not required to act outside of what would normally be expected of their role. Collectively, these changes will further improve the targeting of higher-risk dams that should be subject to the requirements of the Dam Safety Scheme, and improve its administration.

The select committee also recommended other clarifications, such as refinements to schedule 1 to ensure potentially high-risk work is not exempt, and a new section 14G outlining the responsibilities of product manufacturers and suppliers under the principal Act, which is consistent with other responsibility provisions that are enacted in the Building Amendment Act 2012. The changes recommended by the select committee make clear the decisions made by the Cabinet on the Building Act review and resolves the issues raised in the submission. And, lastly, some sections have been amended by both this bill and also the Building Amendment Act 2012, because the Building Amendment Act 2012 is not yet fully in force. The select committee has recommended that the amendments be replicated in this bill. This will ensure the affected sections will read the same once both bills are in force. I support all the recommendations being made by the select committee and I would like to again thank the members of that select committee for their hard work in ensuring that we get this vital piece of legislation right for our building and construction sector.

So, in summary, I am pleased to see the support and the public interest the bill has received. Indeed, the view of most in the sector whom I have talked to in recent weeks is that a cultural and behavioural shift is needed to move this industry forward, and this bill provides that with the consumer protection elements in it. I understand the quality of submissions received from all participants in the sector was incredibly high, again reflecting the significance and the importance of delivering these reforms to the overall building sector. Finally, the effort that was put into helping the Government fine-tune the bill was well received by all of the members of that select committee, and certainly by me as Minister. I move that the Building Amendment Bill (No 4) be now read a second time.

RAYMOND HUO (Labour): I would like to start by thanking the officials and submitters for their contributions, and in reply to the Minister for Building and Construction’s questions, I would like to name not one, not two, not three, but 47 submitters. Particularly, I would like to urge the Minister to read again the submissions from Hawkins Construction, the Home Owners and Buyers Association, the Auckland Council, the Wellington City Council, the Christchurch City Council, and Local Government New Zealand.

I should reiterate that we support some good initiatives under this bill, the Building Amendment Bill (No 4). In particular, we have no problem in supporting provisions in relation to dams. Being a member of the Local Government and Environment Committee I have learnt a lot about issues in relation to classifiable and referable dams. Indeed, if this bill focused specifically on dams, making it the “Building Amendment (Dams) Bill”, we would support it all the way through. In that regard I would like to thank submitters such as Genesis Energy, the Greater Wellington Regional Council, Meridian Energy, the New Zealand Society on Large Dams, etc., for their thorough submissions.

We did support the Building Amendment Bill (No 4) to go to the select committee. However, listening to submitters and reflecting on the bill and, more important, the piecemeal approach this National-ACT Government has taken have led us to the view that this bill should not proceed. Labour supports the building law review process but cannot support the piecemeal and isolated approach, and therefore the passage of this particular bill.

The bill is the second of two bills to implement the building law review policy decisions. The review found weaknesses in consumer protection and a need to better allocate responsibility and accountability among building consent authorities, building professionals, and consumers. Since the introduction of the No. 3 bill, now the Building Amendment Act 2012, we, together with a large number of submitters, have urged the Government repeatedly that “In the absence of a more genuine reallocation of accountability, for example, through mandatory home warranties, the introduction of proportionate liability, and mandatory insurance, all parties (consumers, building professionals, and building consent authorities) will continue to be financially exposed, even for defects not of their making.”

To be fair to the Minister, Maurice Williamson, he might have good reasons for ignoring those issues. One of them is that he had referred almost all important matters to the Law Commission for review, such as the liability models and issues regarding mandatory home warranties or insurance-backed surety—fair enough, and I supported and would continue to support the Minister in doing so. But the problem is that the partial instalment will cause uncertainty and create false hopes for parties in the building and construction sector. This indicates that the Government is not ready to introduce a comprehensive reform package needed to genuinely achieve its stated goal.

For the second term and in its fifth year all we got was nothing but publicity gimmicks. Let me quote something to reinforce my position: “It is important to ensure the proposals are developed as an integrated package with a number of equally important and interdependent processes … To borrow the analogy of the discussion document—the building control engine will fail if all the cogs are not aligned and working effectively. A weakness in any of the processes will impact on others and result in an inefficient regime that is unbalanced and ineffective … [It] is disappointed that the Bill has been put forward in relation to a relatively narrow range of matters, although it recognises that the Bill is one component of a wider reform programme that Cabinet has approved. In [its] view, it would be preferable to delay legislative amendments until a broad range of changes to the Act (identified as part of the current reform package) can be promoted and consulted in an integrated way.” Where are the quotes from? From the Wellington City Council in its submission on the No. 3 bill. It is still valid because the Government is still taking the isolated and piecemeal approach. It is dangerous because if all these cogs are not aligned and working effectively, the building control engine will fail, and we cannot afford to have a repeat of the leaky building saga.

There are other issues I wish to touch upon at the bill’s second reading. Firstly, the purpose of this bill is to introduce “enhanced and more comprehensive consumer protection measures”. However, we note the frustration of some of the submitters and agree with them that the measures included under this bill provide no effective new protection for consumers. Rather, the protection the relevant parties now have is further reduced. I agree with those submitters, particularly structural engineer Mr John Scarry, that the explanatory note of this bill is misleading.

Secondly, regarding company failings, concerns were expressed about companies that are formed for the sole purpose of a single building project and then liquidated as soon as the work is completed, leaving no legal entity that can be directly held to account for defective work that is later discovered. The bill fails to offer consumers any effective remedies when left in the lurch by a $1 shell company, despite the fact that the building sector failure rate is higher than the rate for all businesses before 2003 and after 2008. Even legitimate contracting and subcontracting firms have often ceased to exist by the time defects have come to light.

Thirdly, regarding products warranty, we welcome an introduction of a responsibility provision for product manufacturers or suppliers. It is widely accepted that the leaky building saga was primarily caused by the use of inappropriate building products or systems, or incompetence in, or lack of adequate oversight of, their application. However, given the complexity of the issue, particularly where prescribed compliance with the building code is often difficult to establish, the provision in its current form fails to address the problem adequately. It is unclear what the implication is for competition between local and foreign product manufacturers.

Last but not least are drafting issues. There are drafting issues in terms of how provisions in this bill will be implemented. Many provisions in this bill are yet to be “prescribed” or “determined” by regulation. Without proper definition it is difficult to put the clauses into context, which hinders their interpretation and the implementation of the Act. It is unfortunate that in this time of a building sector crisis, New Zealanders are seeing an experienced Minister simply batting away critics rather than showing real leadership. Thank you.

The ASSISTANT SPEAKER (H V Ross Robertson): Is the member calling?

Nicky Wagner: Yes, I have called.

The ASSISTANT SPEAKER (H V Ross Robertson): I call the honourable member Nicky Wagner, and I will have no cheek from the member on my left.

NICKY WAGNER (National—Christchurch Central): I rise to support this Building Amendment Bill (No 4) at its second reading.

As we have heard from the Minister for Building and Construction and the previous speaker, Raymond Huo, this is the second of two bills to implement the Building Act review. It is the companion to the Building Amendment Act 2012, which came into force on 13 March 2012. What this bill does is it attempts to reduce compliance costs, to reduce complexity, and to reduce delays in the building process. It is also about protecting consumers.

Debate interrupted.

The House adjourned at 10 p.m.