Thursday, 28 February 2013

Volume 687

Sitting date: 28 February 2013

Mr Speaker took the Chair at 2 p.m.

Prayers.

Business Statement

Hon GERRY BROWNLEE (Leader of the House): Next week the House is in a 1-week adjournment. When the House resumes on Tuesday, 12 March the Government will look to progress the Appropriation (2011/12 Financial Review) Bill, the Student Loan Scheme Amendment Bill (No 2), and the Minimum Wage (Starting-out Wage) Amendment Bill. Wednesday, 13 March is a members’ day.

Hon TREVOR MALLARD (Labour—Hutt South): I have three questions, and a couple of them are related. We understand that there is some relatively urgent legislation in the name of Mr Williamson. Is it proposed that that be introduced in the next sitting week? Related to that, does the Minister intend to share a copy of that legislation with other parties soon? The other, unrelated question is to check who is the Minister for Primary Industries as far as House duty today is concerned?

Hon GERRY BROWNLEE (Leader of the House): On the matter of the bill that might be coming through from the Minister for Building and Construction, that is currently being written. As soon as it is written it will be circulated, so that other parties can see what is in it. It is a small validation bill, and at that point we can discuss an appropriate time for it to come into the House. On the matter of the Minister acting on behalf of the Minister for Primary Industries today, I am not familiar with who that is, but I will have someone phone the member in a few minutes to keep him up to date with exactly who will be representing the Government’s very strong position in that particular portfolio.

Questions for Oral Answer

Questions to Ministers

Question No. 1 to Minister

Hon CLAYTON COSGROVE (Labour): I seek leave to have this question held over until the Minister for State Owned Enterprises is present in the Chamber. I am also advised that my colleague the health spokesperson would also like the—

Mr SPEAKER: Order! Leave is sought to hold this question over. Is there any objection to that course of action? There is. The member can ask his question.

Solid Energy—Governance, Management, and Financial Performance

1. Hon CLAYTON COSGROVE (Labour) to the Minister for State Owned Enterprises: Does he take any responsibility as a shareholding Minister for Solid Energy’s precarious financial position?

Hon BILL ENGLISH (Deputy Prime Minister) on behalf of the Minister for State Owned Enterprises: Yes, the Minister is responsible for exercising the powers of the shareholding Minister under the State-Owned Enterprises Act. The State-Owned Enterprises Act also lays out that the responsibility for the operational and financial performance of all State-owned enterprises, including Solid Energy, lies primarily with the boards of those companies, although shareholders and the Government are ultimately held accountable by the House and the public. The Minister is not responsible for the significant commercial risks faced by Government-owned businesses, and, in the case of Solid Energy, a 40 percent drop in the coal price and a substantial drop in orders for its export coal.

Hon Clayton Cosgrove: At the no-surprises meeting that he, along with Ministers English and Joyce, had with the then chair of Solid Energy, John Palmer, was he advised that the contract of the then chief executive of Solid Energy was to be signed off by Mr Palmer prior to his official departure date from office?

Hon BILL ENGLISH: The Minister met with the chair of Solid Energy on a number of occasions and, in the absence of a date, I do not know which meeting that member is referring to.

Hon Clayton Cosgrove: At the no-surprises meeting on 21 August 2012 did he make any inquiries as to the then chief executive of Solid Energy’s terms of employment; if he did not, how does he expect the New Zealand public to believe that he was not, yet again, asleep at the wheel as the shareholding Minister?

Hon BILL ENGLISH: I can only refer to the answers that the Minister gave yesterday, when he told the House that he was advised that Dr Elder’s contract was last updated for employment law changes on 31 August 2012, and that that would normally be considered an operational matter, not a matter for Ministers, and that he was advised there were no changes made to pay or entitlements.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. That answer refers to what the Minister was advised. I know it is a subtle difference. My question was what inquiries the Minister made at that specific meeting.

Mr SPEAKER: And I heard the question, and, considering that the Minister is answering on behalf of another Minister, I think the question was very adequately addressed.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I will invite you to—

Mr SPEAKER: Order! [Interruption] Order! Would the member please resume his seat. What the member is now attempting to do is litigate the quality of the answer by using the point of order system, and that is not acceptable. That will lead to disorder. If the member has further supplementary questions, I invite him to ask them; otherwise we will move to the next question.

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

Mr SPEAKER: No. If it is a fresh point of order, I will happily hear it, but if it is any attempt to relitigate a ruling I have made as to the satisfactory nature of that answer, then I will not allow further supplementary questions from the member. So the choice is his. Does he have a further point of order, or a supplementary question? Supplementary question, the Hon Clayton Cosgrove—[Interruption] Order! I certainly want to hear the question.

Hon Clayton Cosgrove: Did any additional benefits accrue to Dr Elder as a consequence of his contract being signed off on 31 August 2012?

Hon BILL ENGLISH: I think for the fourth time I can state this in the House: I am advised, on behalf of the Minister, that no changes were made to pay or entitlements. In fact, this has been confirmed by the previous chair and the current chair. I think that is the fourth time the Government has answered that question.

Hon Clayton Cosgrove: When he became Minister did he read each and every quarterly report of Solid Energy since 2009, which show the steady decline in the financial position of the company; if he did read each and every quarterly report of Solid Energy since 2009, why did he not act earlier?

Hon BILL ENGLISH: I imagine he did read the quarterly reports. Where the member’s assertion is incorrect is that it does not show from 2009 a steady decline in the operations of Solid Energy. I might also point out that when one decision was made to close the Spring Creek Mine, that member and his party bitterly accused the Government of abandoning workers and their jobs, but that was one of the early decisions to try to get this company back under control.

Hon Clayton Cosgrove: Given that the Government knew when it received the scoping study on 4 November 2011 that Solid Energy was in a precarious financial position, why has he and other Ministers continued to claim ever since that asset sales would raise $5 billion to $7 billion, when he and other Ministers knew full well that Solid Energy was not in any state to sell?

Hon BILL ENGLISH: The $5 billion to $7 billion was an estimate made, I think, perhaps 3 years ago now—certainly 2 years ago—and, as I will point out to the member, $5 billion to $7 billion is a range of $2 billion. The reason there was a range was that it allowed for the fact that these are commercial businesses that face market risks. In the case of Solid Energy some of those risks have eventuated, and unfortunately the taxpayer has to bear the costs of those risks because we own the company. Perhaps if it had been sold 3 years ago and we had collected a couple of billion for it, we would all be a lot better off.

State-owned Energy Companies, Sales—Purpose and Progress of Share Offer

2. MAGGIE BARRY (National—North Shore) to the Minister of Finance: What progress is the Government making in its programme to offer New Zealanders minority shareholdings in energy companies?

Hon BILL ENGLISH (Minister of Finance): The Government share offer programme is on track. The Supreme Court yesterday ruled in favour of the Crown regarding the sale of shares in Mighty River Power. This confirms that the Government can proceed to sell up to 49 percent of the shares in Mighty River in the first half of this year, in line with legislation passed by Parliament and promises made by National in the last election. On Monday Cabinet will consider a timetable and other details of the share offer. This will include laying out how New Zealanders will be at the front of the queue for the shares. We would expect, when the shares are sold, that the company will remain 85 to 90 percent in New Zealand ownership.

Maggie Barry: What are the main benefits of proceeding with the Government’s share offer programme?

Hon BILL ENGLISH: In the first place, it will free up $5 billion to $7 billion of cash, which we can use to invest in the Government’s other priorities. Secondly, it means that we will be able to avoid borrowing that $5 billion to $7 billion. Thirdly, it will give New Zealanders the opportunity to invest in these companies at a time when their savings have increased and they may want to diversify their growing savings. Fourthly, it will enable us to reduce the potential for the taxpayers to carry the burden of commercial risks that go wrong, as they sometimes can, as in the case of Solid Energy.

Maggie Barry: What proportion of these energy companies does the Government expect to be held by New Zealanders after the share offers?

Hon BILL ENGLISH: The Government has made it clear that New Zealanders will be at the front of the queue for shares. Including the Government’s majority stake of 51 percent, Ministers expect 85 to 90 percent of the shares will be held by New Zealanders after the public offerings. I am confident that we can achieve that. As of last December Kiwis had $115 billion in bank deposits. More than 2 million New Zealanders have amassed $14 billion in their KiwiSaver funds. They may be interested in buying shares.

Maggie Barry: What impact will the share offer programme have on the $240 billion of total assets that the Government holds on behalf of the taxpayers?

Hon BILL ENGLISH: The Government’s ownership of assets will continue to grow consistently. The taxpayer currently owns $240 billion worth of assets. The Half Year Economic and Fiscal Update in December shows that even after the sale of this $5 billion to $7 billion of assets taxpayer wealth will be $270 billion by 2017. That is an increase of $30 billion in assets, and some may argue that that is too rapid a growth in Government ownership of assets in a small economy.

Hon David Parker: Does Treasury advice show whether the loss of up to 49 percent of dividends and retained earnings from the sale of State assets make a Government surplus—operating balance before gains and losses—easier or harder to achieve?

Hon BILL ENGLISH: As we have discussed in this House before, there is a number of measures of the impact of the sales on the Government accounts, and the measure on the operating balance before gains and losses shows that we will be a bit behind on it—about $80 million in the first year in a Budget of $70 billion. But the driving reasons for this are not just the accounting. The Government believes that the mixed-ownership model is a better way to manage the substantial commercial risks faced by taxpayers, a better way to build our public markets, and enables us to avoid $5 billion to $7 billion of debt—of extra debt—in a world that is increasingly hostile to debt.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Tēnā tātou katoa. What will the Minister do to ensure that any investment statement for a mixed-ownership model company will clearly and prominently explain that the Crown’s decision regarding its 51 percent shareholding must be “consistent with the principles of the Treaty”, otherwise the courts are able to review those decisions?

Hon BILL ENGLISH: The offer document will have to reach the current quite high legal standard of disclosure on all material risks that Mighty River Power might face. I would expect that in the light of the attention that has been given to the Supreme Court case, that issue will be covered in the offer document.

Hon David Parker: Given that net debt in 2020 is now forecast to be around 26 percent of GDP, an increase of around $15 billion over forecast in May last year, with the difference being due to downgrades in economic and job growth, does that not prove that growing the economy and jobs is the best way to pay down debt, rather than flogging off State assets like power companies?

Hon BILL ENGLISH: What it proves is that we need to do both—both grow the economy and use the Government’s very large balance sheet more effectively than we have done in the past. The Government’s debt target remains at 20 percent of GDP by 2020. We have fallen behind that target and we are going to have to work hard to make that target, because that would give us a reasonable level of debt to enable us to deal with the next recession whenever that comes along.

State-owned Energy Companies, Sales—Power Prices

3. ANDREW WILLIAMS (NZ First) to the Minister of Energy and Resources: Does he agree with Grey Power New Zealand that “Privatisation means not only higher prices, but suppression of energy efficiency and household energy options that reduce electricity sales and profits”; if not, why not?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery) on behalf of the Minister of Energy and Resources: No, the Minister does not agree. Regardless of ownership, electricity prices are set in a competitive market, and all suppliers face the same competitive pressures and constraints, no matter what their ownership is. I note that in the latest quarterly survey Contact Energy, the largest privately owned electricity company in New Zealand, has the lowest national-weighted average for electricity retailers. As for energy efficiency, New Zealanders have embraced energy efficiency over the past few years, as evidenced by the 200,000-plus households that have insulated their homes under the Government’s programme. I note also the very favourable response to the Energy Efficiency and Conservation Authority Energy Spot advertorials, which screen seven times a week across a number of channels. To date 82 percent of New Zealanders have seen those programmes and recall them, and 41 percent report taking action on them. They are very good results.

Andrew Williams: Does he accept the research findings of Geoff Bertram of Victoria University that, relatively, New Zealand power prices have escalated far more rapidly than power prices in the United States, the UK, Japan, France, and South Korea; if so, what action will the Government be taking to address the rate at which electricity companies can increase prices?

Hon GERRY BROWNLEE: I note the irony that those prices have increased at a time when the industry is largely in public ownership, when we look at the fact that New Zealand’s largest privately owned electricity retailer, Contact Energy, currently offers the cheapest prices, and when, in that same survey, 15 out of 21 regions in which the Powerswitch website operates reported that it is private companies that are offering the cheapest prices. So I think, Mr Williams, you are on to it and we are on the right track.

Andrew Williams: Why are New Zealanders paying substantially more for power than consumers in many other developed countries?

Hon GERRY BROWNLEE: That is an assertion the member may make that I do not particularly agree with. What I do know is that under 9 years of a Labour Government we had an annual increase in excess of 8 percent. Since the National Government came into office, it has slowed to 4.5 percent.

Andrew Williams: I raise a point of order, Mr Speaker. I asked why New Zealanders are paying substantially right now. I did not want to hear about what happened under the Labour Government 4 or 5 years ago. I want to know about now.

Mr SPEAKER: Order! And the Minister, having received the question, has every right to answer it. Have the members got further supplementary questions?

Andrew Williams: What specific steps, if any, is the Government taking to reduce household electricity prices?

Hon GERRY BROWNLEE: I will resume where I was before, because the trend when we came to Government was for rapidly escalating electricity prices. Under the 9 years of the previous Government—I will not name those members; they are your friends—we had an 8 percent per annum price increase. But under this Government, where we have reformed the market and put into place some forward sales, redistributed assets, and made switching power companies a strong possibility for New Zealanders, those prices have increased on average by 4.5 percent. That is a huge reduction, and we will continue looking at ways in which you can do that. I have to say the member points out very successfully to the House that the mixed-ownership model is likely to contribute to that trend in the years ahead.

Andrew Williams: Will the Government support New Zealand First’s policy of an electricity discount for SuperGold cardholders during winter months; if not, why not?

Hon GERRY BROWNLEE: That is a prospect that I personally have not considered.

Andrew Williams: What protection for household consumers will the Government provide as part of its mixed-ownership model programme, given these companies will no longer be subject to the social responsibility clause that currently binds other State-owned enterprises?

Hon GERRY BROWNLEE: Let me make it clear again. Right now, and for a while now, the cheapest electricity available to retail consumers has been supplied by Contact Energy, New Zealand’s largest privately owned company. During the 9 years of the previous Government it was the State-owned companies that led the price rises, at a rate of 8 percent per year. I think we are doing very well on this particular part of the New Zealand economy, and the member will do well to support more of it.

Andrew Williams: I raise a point of order, Mr Speaker. The Minister is not answering the aspect of the social responsibility clause of State-owned enterprises. He is deliberately—

Mr SPEAKER: I invite the member to repeat his question.

Andrew Williams: I will repeat the question. What protection—I say that again: what protection—for household consumers will the Government provide as part of its mixed-ownership model programme, given these companies will no longer be subject to the social responsibility clause that binds other State-owned enterprises?

Hon GERRY BROWNLEE: The assertion behind the member’s question is that State-owned enterprises have acted in a socially responsible way, when clearly the evidence is demonstrably that they did not. I notice that one of the worst incidents that happened of cutting off power to anybody was done by a State-owned company. State-owned enterprises have not exercised that provision to any great advantage to New Zealanders. It is now the private sector that provides the cheapest electricity in this country.

State-owned Assets, Sales—Impact on Government Financial Position and Public Consultation

4. Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister of Finance: Does the Half Year Economic and Fiscal Update 2012 state that the Government’s operating balance before gains and losses will be worse off by $441 million over the next five years if the Government proceeds with the partial sale of state owned assets; if so, why does his asset sale programme increase the Government’s budget deficit?

Hon BILL ENGLISH (Minister of Finance): Yes, it does show that. That is one measure of the impact of the sale of the assets on the Government’s books. Other measures show the Government in a slightly better-off position. For instance, in terms of straight cash, we will get more cash in than we forgo. However, any of those calculations are based on the assumption that interest rates on Government debt stay at 50-year lows, and that these companies continue to make the currently predicted profits. I think we have all learnt in the last couple of weeks that there is no guarantee of that just because these companies are owned by the Government. As in the case of Solid Energy, the forecast profits and dividends are not going to show up, so if we did not own it we would actually be much better off.

Dr Russel Norman: I raise a point of order, Mr Speaker. The primary question had two legs. It has been previous Speakers’ rulings that both parts of a primary question are to be answered. The second part of the question—why the asset sales programme will increase the Budget deficit—was not answered, in my opinion.

Mr SPEAKER: I invite the Minister of Finance to address the second part of that question more specifically.

Hon BILL ENGLISH: It shows that because, on that particular measure, if you assume that current interest rates on Government debt remain the same and that the companies continue to make the currently forecast profits and dividends, then on the operating balance before gains and losses measure—I will not go into all the explanations of what that is—the Government’s books would be slightly behind. We, of course, have weighed that up against other facts, like the fact that we will avoid having to borrow another $5 billion to $7 billion. The logic of the member’s question is that the Government would be better off—

Dr Russel Norman: I raise a point of order, Mr Speaker. Standing Order 383(2) is very clear: “The reply to any question must be concise and confined to the subject-matter of the question asked,”. The Minister had answered the question.

Mr SPEAKER: And so must the question be. The Minister has now very adequately addressed the question, and it is over to the member whether he has further supplementary questions.

Hon David Parker: I raise a point of order, Mr Speaker. I ask the Speaker to consider why, when the member Russel Norman raised the point of order, which you accepted, you took a flick at him.

Mr SPEAKER: I did not. I acknowledged that questions need to be concise, and answers need to be concise. The question had been answered very satisfactorily, and I invited the member, if he wished to, to raise further supplementary questions.

Dr Russel Norman: Does the Minister agree that the operating balance before gains and losses measure is the main conventional measure of a Government’s deficit, and that asset sales increase the Government’s deficit, using that measure?

Hon BILL ENGLISH: It is the current measure, although I have to say it has got arbitrary elements to it, as any measure does. Whatever measure you pick—and the calculations are done against three or four different measures—in some the Government is a bit ahead, in some it is a bit behind. But the logic of the member’s question is that the Government should go—

Dr Russel Norman: I raise a point of order, Mr Speaker. The question was very specific. It asked whether the operating balance before gains and losses was the usual measure used. The Minister agreed with that. He answered that question, and he agreed that the $400 million is a deficit increase. He has finished answering the question.

Mr SPEAKER: No. If the Minister goes on for an unnecessarily long period of time, I will bring that to order. On that occasion, the Minister was very satisfactorily answering the question for the benefit of the member, and I think the Minister should have been allowed to continue his answer. We are going to get nowhere in this House today if every time a question is not answered to the satisfaction of the member asking the question, a point of order is raised that the answer is too long. If the member has further supplementary questions, I invite him to ask them.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I think the point of order was not that it was too long; it was that it was out of order because the answer had been completed.

Mr SPEAKER: That is certainly not the way I took the point of order from the member. I took it that Dr Russel Norman had decided to his satisfaction that the question had been answered and did not need any further addition. But we are moving on. I am inviting the member to have further supplementary questions if he so desires.

Dr Russel Norman: I raise a point of order, Mr Speaker. The reason why I am insisting on a black and white interpretation of the Standing Orders is that on Tuesday you told us that Ministers would be kept to the black and white interpretation of the Standing Orders that they must only address the question, not answer it. So I am insisting that you apply the Standing Orders fairly.

Mr SPEAKER: The member has no right through either the Standing Orders or Speakers’ rulings to insist on a black and white answer. Does the member have further supplementary questions? Otherwise, I intend to move to the next question.

Dr Russel Norman: How can the Minister claim to be fiscally prudent when he intends to spend over $440 million on this particular Government programme?

Hon BILL ENGLISH: I do not know whether I can emphasise any more that although there is a calculation that has been made, the number is uncertain. According to the member’s logic, the Government could fix its accounts by buying every business in New Zealand, because they might make a return greater than the cost of debt. So why do we not borrow $100 billion and buy all the supermarkets and farms? Of course, the Greens will not have to do that; they will just print the money to fill the gap.

Dr Russel Norman: I raise a point of order, Mr Speaker. I ask you once again to apply the Standing Orders to the Minister. These are the orders of the House; I do not make them up—right. They say—

Mr SPEAKER: The member is now attempting to use the point of order process to debate the quality of the answer. If he continues to do that, we will move to the next question.

Dr Russel Norman: Can the Minister confirm that the claim of a $441 million cost to the asset sale programme by increasing the Budget deficit is not a claim made by the Green Party; it is made by his own department, called Treasury?

Hon BILL ENGLISH: Yes, I can confirm that Treasury has done that calculation, but, of course, that is uncertain. Last year it did a calculation about Solid Energy that has proven to be spectacularly wrong, OK? So we have not made a lot of money by keeping Solid Energy. These businesses are all risky, and if we were to follow the member’s logic, we could solve the Government’s Budget problem by printing $100 billion and buying every business in New Zealand.

Dr Russel Norman: Point of order, Mr Speaker.

Mr SPEAKER: Supplementary question?

Dr Russel Norman: Supplementary question, Mr Speaker.

Mr SPEAKER: Thank you.

Tracey Martin: I raise a point of order, Mr Speaker. Sorry, Mr Speaker, I know I am new, but I understood that points of order were to be heard in silence.

Mr SPEAKER: Yes, they are, and the member is now asking a supplementary question; otherwise, we are moving on.

Dr Russel Norman: Has the Minister seen the other Treasury estimate—if he reads Treasury papers—that shows that 95 percent of New Zealanders will not be able to buy shares in his newly privatised State-owned enterprises?

Hon BILL ENGLISH: I do not recall that estimate. If that was in a Treasury paper, I do not agree with it. We will get to find out over the next few weeks, when the Government offers the opportunity for pre-registration. Of course, there will be thousands of New Zealanders who are able to buy the shares who will decide not to because they think they have got better ways of spending the money, and that is one thing National believes in—Kiwis making their own choices about how to spend their own money.

Dr Russel Norman: I seek leave to table the Treasury request for proposal—[Interruption] I raise a point of order, Mr Speaker. We have had yelling—

Mr SPEAKER: Order! It is a point of order and it will be heard in silence. The member may start again.

Dr Russel Norman: I seek leave to table the Treasury request for proposal dated 24 May 2012, which says—

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

Dr Russel Norman: Will the Minister pledge to listen to the results of a specific referendum on asset sales, now that we have the numbers needed to have a citizens initiated referendum, or are we now living in a country where the board of Skycity Casino has the ear of the Prime Minister but this Government does not listen to ordinary New Zealanders?

Hon BILL ENGLISH: Well, the referendum that we think is the most credible one—and the Greens might have a different reason, because they prefer referendums where they pay their parliamentary staff to collect the signatures. However, we prefer the referendum—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! The tone of the question was very political; a political answer has been given in return.

Hon BILL ENGLISH: There was a referendum in 2011, where we did not have to go and pay people to sign up. It was called the election. As I recall it, National and its coalition partners won the election. That member had had 12 months to persuade New Zealanders that asset sales were a bad thing, and he failed.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. Far from disputing your ruling, I am agreeing with your last ruling, but could I just ask you this question. Is it correct that that member asked, I think, at least three very specific and straight questions, with no political loading in them by my count, and on each and every occasion you allowed flicks, political comment, and irrelevant information to be hurled back at that member? I simply ask you this: are you going to be consistent with your last ruling—which I endorse—or are you going to be inconsistent, as you have been, in my view, with that member? [Interruption]

Mr SPEAKER: Order! That is quite a dangerous point of order, where you are questioning the ruling of the Speaker. I am attempting to be consistent with all my rulings. You must acknowledge that every question, every answer, has difficult connotations, but I gave my assurance on my election to this position that I would operate in an absolutely unbiased fashion, and I am genuinely attempting to do that. I thank the member for his point.

Welfare Reforms—Progress and Beneficiary Numbers

5. JACINDA ARDERN (Labour) to the Minister for Social Development: Does she stand by all her statements on Tuesday, 26 February 2013 in relation to her welfare reform programme?

Hon PAULA BENNETT (Minister for Social Development): Yes.

Jacinda Ardern: How can she claim her welfare reforms are a success when the number of people on all main benefits has increased by more than 60,000 since her reforms were introduced?

Hon PAULA BENNETT: As I said on Tuesday, I do not think anyone is surprised that benefit numbers have gone up when we were faced with the worst global recession, and, quite frankly, we should have a system that is there to support those who need it most. But as I also pointed out, since those reforms have come in, and in the last 2 years, we have actually seen benefit numbers going down for those on the unemployment benefit and considerably down, I think, which is significant, for those youth—

Hon David Parker: They’ve gone to Australia.

Hon PAULA BENNETT: —who are on the unemployment benefit. The member yells out that it was because they have gone to Australia. Well, less than 3 percent have actually gone to Australia who have gone off benefits, so that is not factually correct, either.

Jacinda Ardern: How can she claim her welfare reforms are a success when the number of people she claims did not reapply for an unemployment benefit because they got a job was exceeded by the number of people who did not reapply because they left the country in desperation?

Hon PAULA BENNETT: The member likes to try to make this number seem bigger than it is. I have given it to her factually in the House again, so bear with me while I get the number for her so that she can have it specifically. But, actually, less than 3 percent of those—

Hon Trevor Mallard: Fewer—“fewer than 3 percent”.

Hon PAULA BENNETT: —who have left the benefit have gone overseas. So—yep, “fewer than”; thank you for that. So it is quite clear. It is not the big number that she keeps trying to kind of throw around, and that is where it is at.

Jacinda Ardern: How can she claim her welfare reforms are a success by boasting that 21,000 left the unemployment benefit because they did not reapply, when double that number left simply because they moved to another benefit category?

Hon PAULA BENNETT: In some respects I am pleased the member has raised it, because the reality is that in the last 2 years under this Government we have seen the unemployment benefit numbers go down, and we are seeing fewer youth on the unemployment benefit. However, under that Government we saw the sickness benefit numbers increase by nearly 50 percent, we saw the invalids benefit numbers increase by 50 percent, we saw a significant increase in transfers between benefit—

Chris Hipkins: I raise a point of order, Mr Speaker. That was a very straightforward question from my colleague, asking the Minister to reconcile two different things. There was nothing to do with the—

Mr SPEAKER: Order! I invite the member to have a look at the Hansard as to how that question was initiated, how the question was started, by Jacinda Ardern.

Jacinda Ardern: How can she claim her welfare reforms are a success by boasting that 5,100 people have left the sickness benefit since her reforms, but in that same period another 7,684 went on, meaning the figures are worse now than when she started?

Hon PAULA BENNETT: The member can choose to cut and dice it how she likes, but I think we deal with the facts. She does not like the good news, that actually more people are in work now and off the benefit than they were 2 years ago, and that we are seeing good news happening. We can look at the ANZ Business Outlook today, which I just saw, which said that New Zealand business is at a 19-month high of confidence, and we can look at Fisher and Paykel, which says that another 100 new jobs are coming on board. I know the member does not like the good news, that actually maybe people are getting off benefits and having bigger and better lives—

Jacinda Ardern: I raise a point of order, Mr Speaker. I think that answer went on long enough. Obviously she—

Mr SPEAKER: I will determine whether answers go on for too long.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Although it is your responsibility, in the end, to determine whether or not that is the case, members do have the right to ask you to apply Standing Orders and Speakers’ rulings, as the member did when you dismissed her in a very rude manner. [Interruption]

Mr SPEAKER: Order! I appreciate it is the last day of term. If some members want to leave early and they continue to make noise throughout a point of order, they will be leaving early.

Jacinda Ardern: How can she—[Interruption]

Mr SPEAKER: Order! Someone will certainly be leaving very shortly. [Interruption] I am not picking which side, at this stage. Has the member got another supplementary question?

Jacinda Ardern: How can she give this House her criteria for success when it comes to her welfare reforms; if so, do these criteria include a greater use of sanctions, more people leaving the country, a reduction in training opportunities, fewer jobs, and 60,000 more people on main benefits than when her welfare reforms started?

Hon PAULA BENNETT: That member is not factually correct. The reality is there are New Zealanders who are better off today than they were 2 years ago, due to our welfare reforms. I encourage that, and I see the positivity in it.

Chris Hipkins: I raise a point of order, Mr Speaker. My colleague Jacinda Ardern asked the Minister what her criteria for success were, and she did not address that question.

Mr SPEAKER: I think, if you recall, she opened her question by asking how the Minister can claim success of the reforms, etc., and then went on with a very lengthy question.

Chris Hipkins: No, she asked whether she can give the House her criteria for success.

Mr SPEAKER: It is very hard now to relitigate the issue. That is not the way I recall the question being asked.

Hon Trevor Mallard: Have a look at the video replay.

Mr SPEAKER: I certainly will. Thank you very much for your help, Mr Mallard.

Mental Health Services, Youth—Prime Minister’s Project and Social Media Innovations Fund

6. MELISSA LEE (National) to the Minister for Social Development: What announcements has she made on the Social Media Innovations Fund, part of the Prime Minister’s Youth Mental Health package?

Hon PAULA BENNETT (Minister for Social Development): Today the Prime Minister and I will be launching the Social Media Innovations Fund, which is part of the Prime Minister’s Youth Mental Health Project. The Social Media Innovations Fund will support organisations to connect with young people, getting them the help when they need it. For most young people, Facebook, Twitter, texting, YouTube, and probably a whole lot of other things that I do not even know about, are a significant part of day-to-day life. Youth mental health can be a difficult topic for young people to talk about, so we need to communicate with them on their terms.

Melissa Lee: What sorts of projects will this initiative fund to target young people?

Hon PAULA BENNETT: Later today we will announce five projects, which will receive one-off grants totalling $100,000. There will also be weekends held where young people will get together with some pretty amazing entrepreneurs and talk about other initiatives that could also help. But one of these clever projects is a smartphone app where young people can actually put in their mood. If over time there is some concern with it, they can automatically be told to get help, where to go for it, and how to access services that they might need.

Melissa Lee: How is the Prime Minister’s Youth Mental Health Project giving greater access to improved youth mental health?

Hon PAULA BENNETT: The project in its entirety is about doing things differently to how we have done them in the past. We are building on existing programmes in schools, online, in families and communities, and in the health system, and taking an innovative approach that takes into account the unique needs of our young people.

Roading, Wellington—Cost of Transmission Gully Public-private Partnership

7. JULIE ANNE GENTER (Green) to the Minister of Transport: Why did he agree to building Transmission Gully as a Public Private Partnership, which would treble the cost to over $3.4 billion, as confirmed by NZTA CEO Geoff Dangerfield?

Hon GERRY BROWNLEE (Minister of Transport): I have not, it does not, and he did not in the context the member asserts.

Julie Anne Genter: I seek leave to table the unofficial transcript from the financial review of the New Zealand Transport Agency that was completed last Thursday, where Geoff Dangerfield did confirm that it was going—

Mr SPEAKER: Has it been tabled in the House? [Interruption] Has it been tabled? I think—I am just checking with the Clerk—there is some difficulty in the tabling of that document. It was given in public, so it is not strictly confidential. If the member wants to seek leave to do so, I ask the member to put the leave again, and we will see what the House decides.

Julie Anne Genter: I seek leave to table the unofficial transcript of the financial review of the New Zealand Transport Agency last Thursday in the Transport and Industrial Relations Committee.

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

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

Julie Anne Genter: Why will it cost taxpayers over $30 million just to sign the contract for the Transmission Gully public-private partnership, as confirmed in answers to written questions from the Minister of Transport?

Hon GERRY BROWNLEE: The preliminary stages of any large motorway project like that are going to be an expensive process. That has always been the case. It was no different, for example, when the northern corridor was built up in Auckland, or the Christchurch Southern Motorway, or the Victoria Park Tunnel. There is a certain amount of cost involved up front. Sadly, an enormous amount seems to get paid to traffic consultants.

Julie Anne Genter: How can the public-private partnership structure possibly be value for money when it will cost taxpayers over $30 million just to sign the contract and an additional $2.4 billion in interest payments over the lifetime of the project?

Hon GERRY BROWNLEE: No, the member needs to understand that you cannot compare the one-off construction costs with no maintenance costs by adding up 25 years of financing repayments and operational costs for a public-private partnership arrangement, and then say that it trebles the cost. That is like trying to compare apples with pineapples—they are not the same thing. Although you can make that assertion and it sounds good, it simply will not work. I note that the Greens were very happy when the Government loaned Auckland Transport $500 million to buy its new trains. Then, apparently, it is good, but if it is to get some roading for people, it is not so good.

Julie Anne Genter: What justifications can he offer for spending $2.4 billion of road users’ money just to pay back a private loan for a motorway that cannot even pass Treasury’s Better Business Cases for Capital Proposals guidelines instead of prioritising the Auckland City rail link, which is essential for Auckland’s future economic development?

Hon GERRY BROWNLEE: Well, because one of those locations is Auckland, and the other is Wellington, and it will be good for Wellington’s economic well-being.

Julie Anne Genter: I seek leave to table the City Centre Future Access Study, which demonstrates that Auckland’s economic development is essential—

Mr SPEAKER: The source of the document?

Julie Anne Genter: It is from the Auckland Transport—

Mr SPEAKER: Is it available on the internet and easily obtained?

Julie Anne Genter: It probably is available on the internet.

Mr SPEAKER: It probably is. No, we are not putting leave.

Julie Anne Genter: I seek leave to table a letter from the Minister of Transport to Auckland Council, which says that he is happy with the terms of reference for the City Centre Future Access Study.

Mr SPEAKER: Leave is sought to table that letter. Is there any objection? There is no objection, and it can be so tabled.

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

Resource Management Act Reforms—Discussion Document

8. IAN McKELVIE (National—Rangitīkei) to the Minister for the Environment: What announcements has the Government made today aimed at improving our resource management system?

Hon AMY ADAMS (Minister for the Environment): Today I have launched a discussion document detailing an extensive programme of potential reforms focused on revamping our resource management system. The package aims to improve our planning, consenting, and appeal processes to increase certainty and predictability, attract investment, and reduce unnecessary duplication and cost while continuing to protect the environment. As well as proposing a number of changes to consent processes, the reforms consider the appropriate roles of central government and local government, as well as the courts system, and propose more central guidance aimed at promoting consistency and ensuring national objectives are given effect to.

Ian McKelvie: What are the key objectives of the proposed reforms?

Hon AMY ADAMS: The overall objective for the proposed resource management reforms is to ensure the Act is meeting the needs of New Zealand, and to address the unreasonable time and cost of many Resource Management Act processes. Those delays have real impacts on Kiwi households and businesses. They can be a barrier to new jobs. They mean houses are more expensive and that communities do not know what they can expect in their neighbourhoods. We want a system where New Zealanders know what they can and cannot do with their land, businesses have the certainty they need to grow and create jobs, and communities do not find themselves having to fight consent by consent to protect their local values.

Ian McKelvie: What will the next steps be in advancing these proposals?

Hon AMY ADAMS: The proposed reforms represent a significant revamp of the Resource Management Act. I am looking forward to the debate that will be had on each of the proposals in the discussion document. The difficulties with Resource Management Act processes are well known to councils, communities, and businesses alike. I will be very interested to hear what alternative suggestions opponents of the proposals come up with. There will be a number of public meetings and hui taking place across the country during March. Public submissions are open now and can be made any time until 2 April. Final policy decisions will be made only once we have had the opportunity to consider all submissions and feedback.

Hon Maryan Street: Is giving the Minister the power to direct councils to change plans, remove consultation requirements by regulation, and prevent people making submissions on matters relating to consents aimed at improving the Resource Management Act, or is it just another power grab by this Government at the expense of local communities?

Hon AMY ADAMS: Well, I welcome that member to the portfolio, and, as she is new to it, she may not be aware that the power to do—

Mr SPEAKER: The Minister will start the answer again and simply answer the question.

Hon AMY ADAMS: I point out to the member that the power to direct plan changes was introduced to the Resource Management Act by the Labour Government in 2005. The power to dictate through regulations what proposals should be subject to consultation is already in the Resource Management Act. I do accept that there is no requirement to have public consultation on proposals such as the need to extend a deck, which is what the majority of consents in this country are.

Nelson Marlborough District Health Board—Financial Plan and Review of Services

9. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Health: Does he stand by his requirement for District Health Boards to operate within their agreed financial plans; if not, why not?

Hon JO GOODHEW (Associate Minister of Health) on behalf of the Minister of Health: Yes. This is not an unusual position and has been required by Ministers of Health for many years. Times are, however, tight and district health boards will continue to face challenging decisions about how to meet growing health needs.

Hon Annette King: What influence has his non-negotiable requirements for district health boards to improve their financial performance had on the decision of the Nelson Marlborough District Health Board to review surgical and orthopaedic services because “the current scenario of service provision is not sustainable”?

Hon JO GOODHEW: I am advised that the Minister has been to Wairau Hospital and believes it is a great hospital—in fact, he had the privilege of opening it. There is a consultation currently taking place regarding the services that are happening at that hospital. What I would like to fill in for the member is that over the last 4 years the Nelson Marlborough District Health Board has had a funding increase of some $48 million.

Hon Annette King: Was he aware that the Nelson Marlborough District Health Board intended to review the surgical and orthopaedic services at Wairau Hospital when he signed off its annual plan on 2 July 2012; if so, why did he agree to a plan that failed to tell the people of Blenheim that their surgical and orthopaedic services were up for grabs again; and did he tell Colin King 7 months ago that he would have to front the public on the threat to his health services?

Hon JO GOODHEW: I think the member opposite is jumping the gun. This is a consultation process. I have already pointed out to the member that there has been a $48 million increase in funding to that district health board, and I would remind the member that just 11 years ago to the day—

Hon Annette King: I raise a point of order, Mr Speaker. You recall that I asked the Minister whether he was aware—

Mr SPEAKER: Order! I invite the member to ask her question again.

Mr SPEAKER: The Hon Jo Goodhew can answer any one of those many supplementary questions.

Hon JO GOODHEW: Yes, there are three questions there, two of which I have—well, I certainly alluded to the increase in funding and the consultation plan. I think the member is really desperately wanting me to answer whether the member was aware that this district health board, like many district health boards, will be consulted on services within that district health board. Unfortunately, I am not sure whether that part of the plan for that district health board was something the Minister was aware of at the time or not.

Hon Annette King: Why has a National Party member and a likely challenger for the Kaikōura seat set up a new organisation in Blenheim called Save Our Services—something that has not been necessary since 1998, the last time the National Government tried to reduce services at this hospital—and is holding a public meeting on Tuesday night in an effort to save their valuable services?

Hon JO GOODHEW: I do not believe that the Minister of Health has any responsibility whatsoever for that.

Mr SPEAKER: Supplementary question, the Hon Annette King. [Interruption] Order! I am trying to help the member ask her supplementary question, but it requires a bit of assistance.

Hon Annette King: Does he agree with Dr Tom Miller, a doctor from Blenheim, who wrote in the Marlborough Express recently that 14 years ago the hospital was under threat and the loss of secondary services looms again, and that if general and orthopaedic services are transferred to Nelson it would be only a matter of time before other services are axed and it would eventually leave Blenheim as a health facility with no other than accident and emergency and other ancillary services?

Hon JO GOODHEW: When health services are discussed by communities, these are very anxious times for communities, and therefore I would suggest to the member that she convey to the doctor that he should take part in the consultation process. But I could also add for the member’s interest that when the member herself made erroneous claims about Ashburton Hospital cutting its services—

Hon Annette King: I raise a point of order, Mr Speaker. The member has answered the question, and anything else has nothing to do with this question.

Hon Dr Nick Smith: Can the Minister advise the House—[Interruption]

Mr SPEAKER: Order! The member on his feet has every right to ask a supplementary question.

Hon Dr Nick Smith: Can the Minister advise the House of the six different services that were transferred from Wairau Hospital to Nelson Hospital when a Mrs Annette King was the Minister, and can she recall whether Annette King at the time expressed concerns about that for the people of Marlborough? [Interruption]

Mr SPEAKER: Order! The Minister can answer the question in regard to whether she is aware, but she is certainly not accepting responsibility for any action of a former health Minister.

Hon JO GOODHEW: I have no ministerial responsibility, but I certainly take that member’s word, if it happened. [Interruption]

Mr SPEAKER: I cannot hear a word above the Hon Trevor Mallard, so when he is silent we will hear what—

Hon Annette King: Is the Minister—

Mr SPEAKER: Is this a supplementary question, or a point of order?

Hon Annette King: It is a supplementary question. Is the Minister aware that the former Minister of Health Annette King stopped that hospital being closed and had it rebuilt so that the hospital remained in Blenheim, and that it was under threat by a National Government?

Hon JO GOODHEW: What I am aware of regarding the former Minister of Health Annette King is that she urged, some 11 years ago today, New Zealanders to be realistic on health: “New Zealand is not rich enough to have the kind of health system found in Australia, Canada, Britain, or the United States.” It is clear that even 11 years ago, that member as health Minister had given up on New Zealand’s health system.

Mr SPEAKER: Question No.—[Interruption] Is Mr Hipkins finished? Thank you.

Aquaculture and Marine Farming Applications—King Salmon and Changes to Process

COLIN KING (National—Kaikōura): Thank you—[Interruption]

Mr SPEAKER: Order! Now this member has every right to have his question heard.

10. COLIN KING (National—Kaikōura) to the Minister of Conservation: Has he received the final report from the Board of Inquiry on King Salmon’s application for additional space in the Marlborough Sounds?

Hon Dr NICK SMITH (Minister of Conservation): The final decision, and report, was received today. It provides for four new farms that will enable King Salmon to double its production to 15,000 tonnes, provide an additional 170 jobs, and increase New Zealand exports of fine foods by $60 million per year. The surface area of water space approved is 6 hectares of over 100,000 hectares within the Marlborough Sounds. Today’s decision is a very practical expression of how the member for Kaikōura and this Government support jobs and growth.

Colin King: How many additional marine aquaculture areas were approved between 2000 and 2010, and what steps has the Government taken to get a better balance between conservation and job opportunities in aquaculture?

Hon Dr NICK SMITH: I am advised that not one—

Hon Gerry Brownlee: What?

Hon Dr NICK SMITH: —not one new aquaculture area was approved in the years from 2000 to 2010, because the previous Government imposed a moratorium and then passed legislation that was so cumbersome that not a single farm was able to be approved. This Government changed the national Coastal Policy Statement to specifically recognise aquaculture. The Resource Management Act in its first round of reforms enabled these national applications, and I am delighted to see a further phase of reforms that will enable jobs for New Zealanders.

Question No. 9 to Minister

Hon ANNETTE KING (Labour—Rongotai): I should have sought leave to table a document after the end of my question.

Mr SPEAKER: Let us check what the document is.

Hon ANNETTE KING: The document is the review document from the Nelson Marlborough District Health Board entitled: The Future of General Surgical and Orthopaedic Service Delivery from Wairau Hospital.

Mr SPEAKER: Is it freely available?

Hon ANNETTE KING: No it is not. I do not think many people have got it at all.

Mr SPEAKER: Let us see whether there is any objection to that document being tabled. No? There is no objection. The document may be tabled.

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

Health Targets—District Health Board Performance and Hospital Readmission Rates

11. KEVIN HAGUE (Green) to the Minister of Health: Is he satisfied with District Health Boards’ performance against his targets for the health sector?

Hon JO GOODHEW (Associate Minister of Health) on behalf of the Minister of Health: Overall, yes, but we can always do better.

Kevin Hague: Why has he not made unexpected readmissions a national health target when these are internationally recognised as the standard measure of overall hospital service performance?

Hon JO GOODHEW: Under the previous Government there was a plethora of targets. This Government has chosen to have just six targets and those six targets are for the concentration of district health boards and are reported on. So instead of some 42 targets under the previous Government we have narrowed down the targets and we believe that those six targets represent a start. However, the member raises a good point, because there are always other things we can be working on, and pathways and integrating care certainly go to the heart of the suggestion that the member has made.

Kevin Hague: I seek leave to table a graph showing readmission rates rising sharply. The graph is actually from the Ministry of Health, but it is sourced here from a document from the Association of—

Mr SPEAKER: I will allow leave to be put. Is there any objection to that graph being tabled? There is not.

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

Kevin Hague: What evidence does he have for his assertion that senior doctors are wrong when they say that part of the reason that unexpected hospital readmission rates are increasing is that New Zealand has the second-highest rate of emigration by medical specialists?

Hon JO GOODHEW: What I am able to answer on behalf of the Minister is that we now have 1,000 more doctors working in our hospitals around New Zealand. I believe that the member is quoting from an Association of Salaried Medical Specialists report that has been released quite recently—timed to coincide with its negotiations over salaries.

Kevin Hague: I seek leave to table data that shows that only 141 more senior medical specialists—

Mr SPEAKER: The source of that document?

Kevin Hague: It is from the Association of Salaried Medical Specialists report that the Associate Minister—

Mr SPEAKER: Leave is sought to table that document. Is there any objection? There appears to be none.

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

Kevin Hague: I seek leave to table research showing New Zealand needs an additional 285 senior medical officers.

Mr SPEAKER: And the source of the document?

Kevin Hague: It is from that same document.

Mr SPEAKER: How many more documents are you seeking to table from the same document?

Kevin Hague: That would be it.

Mr SPEAKER: That would be it? Let us put leave. Leave is sought to table that document. There is objection.

Kevin Hague: Is the Minister not concerned that unexpected hospital readmission rates are increasing, especially for Māori and Pasifika people, because money and resources are instead going to the areas that he has incentivised through his narrow health targets?

Hon JO GOODHEW: I actually refute the member’s assertion, when district health board increases in funding are across the board under this Government and when there has been a priority to put additional funding into health and primary care in terms of children getting free visits after hours and children getting free visits to their doctors. I could actually provide for the member a huge list of additional funding to address health care issues.

Kevin Hague: I seek leave to table the findings of a new study, published in the International Journal of Quality in Health Care, that Māori had 16 percent higher odds of readmission or death compared with European New Zealanders.

Mr SPEAKER: Leave is sought to table that new research document. Is there any objection? There appears to be none.

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

New Zealand Defence Force, Civilianisation—Effect, Morale, and Attrition Rates

12. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Defence: Does he take responsibility for Defence Force morale reaching the lowest level since surveys began, attrition rates soaring to over 21 percent and reduced Defence Force capability; if not, why not?

Hon ANNE TOLLEY (Minister of Police) on behalf of the Minister of Defence: No; the member is using historical data. Morale is going up, attrition is going down, and both measures are forecast to continue improving. To deal with the three issues raised by the member, I note that attrition for the New Zealand Defence Force regular force today is less than 17 percent—well below the 19 percent high reached in 2001. Army attrition is less than the level in 2005, and air force attrition is less than half of the 24 percent reached in February 2002. On capability, to quote the Chief of Defence Force’s last report to the Foreign Affairs, Defence and Trade Committee on recent events, there has been no “effect on our ability to generate immediate capability, … no reduction in our … ability to respond to any contingencies … or our ability to sustain operations.” Finally, morale has been on the rise for the last three quarters, and four out of five people do not have an issue with their morale.

Hon Phil Goff: Since the Minister’s answer was no, I seek the leave of the House to table documents authenticating each of the statements in the question as factual, and accepted as such by the Clerk’s Office.

Mr SPEAKER: The source of those documents?

Hon Phil Goff: There are three documents. One is the Office of the Auditor-General financial review, another is a document—let me just find it for you—the Vote Defence Force estimates for Vote Defence—

Mr SPEAKER: At this stage all of these are readily available to members. What is the third document?

Hon Phil Goff: I am making the point—

Mr SPEAKER: The third document?

Hon Phil Goff: —that the Minister denied these reports were factual.

Mr SPEAKER: That is not purpose of tabling a document.

Hon Phil Goff: Well, actually, not all of these—

Mr SPEAKER: The member has further supplementary questions. I have not heard what the third document is.

Hon Phil Goff: I raise a point of order, Mr Speaker. Just to answer your question, I do not believe that the document from the Office of the Auditor-General, the financial review, is a public document. It sets out clearly that the attrition rate—

Mr SPEAKER: That is a fair call. What is the third document?

Hon Phil Goff: The third document—let me find it, once again—is a document that was actually given to the select committee this morning, showing that satisfaction rates had declined from 65 percent in the Defence Force in 2010—

Mr SPEAKER: The easiest way to sort this out is to put the request for leave that those two documents be tabled. Is there any objection to that?

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

Hon Phil Goff: Is the Chief of Defence Force right in saying that the Government required the Defence Force to implement the civilianisation project, which caused such low morale and soaring attrition rates, and that he as Chief of Defence Force could not avoid it, and does that not place the responsibility for the failure of that project squarely on the Minister’s shoulders and those of his Government?

Hon ANNE TOLLEY: I refute the assertion in that question that the civilianisation has failed; in fact, it has been extremely successful. The point that I made to the member on his original question is that the data that he is using is out of date.

Hon Phil Goff: I seek the leave of the House to table a memo from the Chief of Defence Force—and I can assure the House this is not in the public arena—where the Chief of Defence Force makes it absolutely clear that civilianisation was the responsibility of the Government.

Mr SPEAKER: A member is asking for clarification on the date of that memo.

Hon Phil Goff: 30 January 2013.

Mr SPEAKER: Leave is sought to table the memo. Is there any objection? There is none.

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

Hon Phil Goff: Was it a deliberate policy by the National Government last year to slash Defence Force numbers by over 1,000 to the lowest level in at least 11 years, and probably longer, or was it an inadvertent response to the failed and disastrous policies of the Government that led to a quarter of the Defence Force leaving and another 40 percent in the Defence Force survey saying they intended to leave?

Hon ANNE TOLLEY: I say again to that member there has been high attrition in the past. However, the figure today is less than 17 percent—less than 17 percent. That is well below the 19 percent reached in 2001. If we want to talk about cuts, then the biggest cut to the Defence Force was the cut of the air combat part by the former Labour Government.

Hon Phil Goff: Why did the Minister ignore clear warnings from the army in 2011 that the policy of cutting numbers, as I have pointed out, would “significantly impact on their ability to sustain operations”, and warnings from the navy that the cuts would mean it could not put its ships to sea, something that has been borne out this year in practice?

Hon ANNE TOLLEY: Again, I refute the assertions made in that question. The Chief of Defence—

Hon Phil Goff: I raise a point of order, Mr Speaker. Is it in order for the Minister to challenge assertions that I have quoted from the Auditor-General’s report?

Mr SPEAKER: Yes, it is certainly in order for the Minister to do that.

Hon Member: Does it have credibility?

Mr SPEAKER: That is for the House to determine.

Hon ANNE TOLLEY: Yes. I have not even said which assertions I was challenging.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. Continuing from the comments you and my colleague Phil Goff have made, my understanding is that, certainly, the convention of the House is that you do not bring the word of the Auditor-General, who is an Officer of Parliament, into doubt, either in debate or in question time, and the Minister did.

Hon Gerry Brownlee: If that were the case, then the member should never have used those comments in questions without making it very clear where they had come from, which he did not.

Mr SPEAKER: I think it would be an odd situation where every comment ever written by the Auditor-General was accepted as gospel by every member of the House.

Hon Phil Goff: How does the Minister justify over 300 staff who were made redundant solely because the Government needed to cut numbers being told that they were being made redundant because they were not up to their job—something refuted by the New Zealand Defence Force staff itself and by the Auditor-General, who said that that was effectively telling good people they were bad? How does he justify that slur on the character of people he dismissed?

Hon ANNE TOLLEY: I think it is fair to say that the New Zealand Defence Force acknowledged over a year ago that the civilianisation project could have been handled better. It acknowledged that publicly. However, the important thing is that attrition is falling, morale is improving, and we have an outstanding Defence Force in New Zealand.

Point of Order—Urgent Questions

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. I understand from my colleague the Hon Damien O’Connor that you have declined an urgent question on the Auditor-General’s report on biosecurity. I would like to refer you to three things.

One is Speaker’s ruling 182/3, which makes it clear that a member would normally get an answer in 48 hours, but where an adjournment is due special consideration should be given. We are going into a period of adjournment. I would like to refer you to McGee’s Parliamentary Practice, third edition, page 553, where he says in relation to urgent questions: “When an urgent question has been submitted to the Clerk, it is for the Speaker to consider whether it should be allowed to be asked on the ground that it is one which, in the public interest, should be answered immediately. For a member to be able to bypass the normal [practice] for questions, there has to be a need inherent in the question for it to be answered on that day or before the member could [normally get] an answer by submitting it through the normal channels.”, which, of course, would be Tuesday of next week. And I refer you to the overview statement from the Auditor-General, where she says: “Plans for responding to potential incursions from some high-risk organisms are not yet complete. For example, the plan for dealing with a foot and mouth disease outbreak is inadequate.”

It seems to us that we have a very real situation now where we have a gap in our system. The Minister for Primary Industries might have an explanation as to how that gap, which appears to have been there for a little bit of time, could be closed in the next 12 days. Because of the very serious nature of, for example, foot-and-mouth disease to our agricultural system, it is a question on which, really, the whole country and our economic future hangs on the answer. Therefore, I submit that the question does, in fact, meet the test. Of course, we cannot guarantee that there will be an incursion in the next 12 days, but I would invite you, Mr Speaker, not to rule that there cannot be.

Hon GERRY BROWNLEE (Leader of the House): In no circumstances would you be in a position of having to make such a ruling as sought in the final comment from that member. But what I would say is that I think the whole issue around urgent questions—and particularly in this case—falls to one side and in favour of your decision, because the member himself has said that these conditions have existed for quite some time. Although he quotes Speaker’s ruling 182(3), the fact is that Speakers’ rulings 182(6), 182(5), and 182(4) lend a huge amount of weight to the decision you have made. We are going into what effectively is a 1-week adjournment, not a 2-week adjournment, and the circumstances that the member is trying to suggest are hypothetical. No doubt, during the time we are in adjournment officials will look at the hypothetical position being put before the House today, and will be able to give a better explanation of why for some time this gap has existed and how they expect to fill it.

Mr SPEAKER: I thank both members for their contribution. An urgent question has been lodged. Urgent questions are allowed to deal with matters that require the absolute, immediate attention of the House. They may be asked where the Speaker considers that it is in the public interest that they be answered immediately. A classic circumstance is where an irrevocable course of events is about to happen before the House sits next. I fully accept that the question lodged by the Hon Damien O’Connor raises a serious matter, but biosecurity protection does not relate to any identified, specific, immediate risk. I have taken guidance from the Clerk. I have had a look at the Standing Orders. I refer the Hon Trevor Mallard to Speaker’s ruling 182(6), which reads: “The guidance used in deciding whether a question is urgent is to ask whether it needs to be answered today, tomorrow, or next week.”

Hon Trevor Mallard: Well, it can’t be any of those.

Mr SPEAKER: Or the week after. In my opinion, the member’s question does not raise an irrevocable turn of events, and that is the test. There is no greater risk now than there was earlier today as a result of that report. I therefore rule that I am not allowing an urgent question.

Bills

Student Loan Scheme Amendment Bill (No 2)

Second Reading

Hon PETER DUNNE (Minister of Revenue): I move, That the Student Loan Scheme Amendment Bill (No 2) be now read a second time. The changes that are contained in this bill build upon earlier legislation aimed at bringing greater value, efficiency, and fairness to the student loan scheme. Along with a number of administrative measures that are being undertaken, the changes in this bill are a reflection of the Government’s continued commitment to the proper governance of what is a major Crown asset.

The first of the measures contained in the bill proposes to broaden the definition of the term “income” that is used to determine the loan amount that a New Zealand based borrower has to repay each year. Under the proposed changes, the definition of income that will be used for student loans will be broadly in line with that used for the purposes of Working for Families tax credits and for other social policy programmes, so we are bringing a measure of consistency into this area. The effect of the change will be both greater fairness and greater transparency across the student loan scheme by ensuring that the repayment obligations of New Zealand based borrowers are determined on an equitable basis, irrespective of the type of income they earn. In particular, these changes will ensure that income that currently lies outside the current definition of income, such as income from trusts, as an example, will now be taken into account when determining a borrower’s repayment levels.

The second important change contained in the bill proposes an information match with the New Zealand Customs Service to identify borrowers at the border who are in serious default on their loan repayments. Customs will then be able to forward the current contact details of those borrowers to the Inland Revenue Department, so that it can, in turn, discuss with them, by following up with them, their particular situation. I should point out that there is a vast gulf between the repayment activity of domestically based borrowers and that of overseas-based borrowers. Typically, our overseas-based borrowers take about three or four times as long to pay back their student loans as our domestic borrowers do. In many senses, our domestic borrowers proceed relatively quickly and effectively to repay their loans. Our major problem with defaulters is with our overseas-based borrowers, and the measures regarding data matching are an important way of ensuring that we can track them and start to ensure that they meet their obligations.

The bill contains a number of other measures. They are largely administrative in nature, and they are designed really to correct inconsistencies or to improve the operation of the current legislation. These changes include clarifying the repayment obligation rules for new borrowers in the first year of borrowing, confirming the current late-payment interest rules, and repealing changes from earlier legislation that are no longer needed following some changes that the Inland Revenue Department has made to the way it administers the scheme. I would also like to make members aware that I intend to introduce a Supplementary Order Paper at the Committee of the whole House stage. The amendments in this bill are very complex. As a result, a number of drafting oversights and errors have been identified, and the Supplementary Order Paper will correct these so that the legislation operates as intended.

When I bring this bill to the House, I acknowledge and thank the Finance and Expenditure Committee for the pragmatic way in which it dealt with the technical detail of the bill, and for the recommendations it has made to ease the transitional and administrative processes involved in bringing the proposed changes in the bill into operation. I think the select committee has done a good job, and I acknowledge the work of all members of that committee as they considered this bill. On that note, I commend the bill to the House for its second reading.

Hon DAVID CUNLIFFE (Labour—New Lynn): Two bills in 2 days from the Minister of Revenue, the “Minister for Small Things”, the “Minister for Small Changes”, who yesterday tinkered with child support while 133,000 children struggle in poverty, and who brought in a Supplementary Order Paper late in order to correct changes and fill in gaps. Today he brings in another small, tinkering bill, the Student Loan Scheme Amendment Bill (No 2), which is hardly worth the House’s time, with another Supplementary Order Paper because of late mistakes. This is another at best missed opportunity. A tanked economy, a shameful level of unemployment, record migration to Australia from young graduates, and a growing intergenerational swindle between the baby boomers and the younger generation, and we seem to be able to do no more than to dob them in to the Inland Revenue Department. However, of the two changes in this bill, Labour will be supporting this bill because we believe that, in so far as they go, they are necessary steps to ensure the operation of the scheme. But the bill gets an epic fail for what it does not do.

By way of illustration, let us consider two individual cases, hypothetical though they may be. The first is Old Peter, the current Minister of Revenue, who was born on 17 March 1954. He is a good bloke. He is 58 years and 11 months old. He is an older baby boomer, and because of that good fortune he likely paid nothing at all for his tertiary education. Old Peter has been drawing a Minister’s salary for 7 long years now, and in just over 6 years he will also be pocketing national superannuation. Like many of his generation, it is a charmed life, certainly when compared with students currently struggling in his Ōhariu electorate who are mortgaged to the hilt before their adult lives have even begun. And for what? Because the current Minister does not believe in paying forward the same advantages that his generation has received in life.

Let us for a moment imagine that Peter Dunne was born in 1995, and not 41 years earlier. Let us assume that this hypothetical Young Peter wanted to get to the same place in life as his predecessor namesake with the same education. Peter Dunne has a 3-year BA, 1-year honours, and an MA from Canterbury University—that is 5 years’ full-time study for Young Peter if he is especially diligent—and all in political science, if the House really wants to know. Canterbury’s undergraduate arts fees are $5,512 for a single year, and postgraduate $6,248 per annum. So Young Peter would be staring down a $30,000 student debt for fees alone—$30,000. Let us be clear: there are no living costs involved in that. The whole 30 grand goes to the university. Young Peter would almost certainly need a part-time job, and that does not cover things like textbooks, photocopying, internet bandwidth, buses to the now wrecked campus, and bizarre surcharges like compulsory materials costs and library benefits, whatever they are. So forget about board, rent, or eating, Young Peter; we are talking here about the absolute minimum funds needed for his degrees.

Todd McClay: Why doesn’t he get a job?

Hon DAVID CUNLIFFE: However, if Young Peter could not get a job, as the insensitive member—“Cue ball” is at it again—over there suggested, and we all know there are not many jobs around, then he would be forced to borrow his living costs as well as fees.

At the maximum of $172.51 and a conservative 40 weeks per study year, he would have racked up another $34,500 by graduation. So poor Young Peter will be $64,500 in debt before he starts trying to find a mate, or graduating, or getting a home or a mortgage, or feeding his family. Do not ask Young Peter to take an OE. He is not allowed to travel overseas for more than 6 months, otherwise the National - United Future Government—in which Old Peter is a rotating Minister—will apply 6.4 percent to his loan. That is $4,128 interest in a year on top of the $64,500 he already owes. And after just 1 year away, Young Peter would have to pay, of course, the $3,000 minimum towards his loan in New Zealand, whether he has a job or whether it will bankrupt him and his first campaign for Ōhariu.

Of course, the apologists on the opposite benches will point out that Young Peter could stay in New Zealand and his loan would be interest-free, thanks to the good and great previous Labour Government, in which Old Peter was a rotating Minister. But, of course, even if Young Peter stays, and in the unlikely event, in this environment, that he can get a full-time job, he will certainly not be able to have a family and save for a house too. In just over a month, the domestic compulsory repayment obligation is going up again. That is another 2c in every single dollar over the repayment threshold that he has got to make room in his budget for. Even if Young Peter did pay off the enormous student debt and save a house deposit, maybe some time in his late 30s or early 40s, when Old Peter was already a member of Parliament, Young Peter would find that he cannot even get on the housing ladder, because people born decades ago in 1954 who did not pay for their education have created a horrible house price bubble by investing in a capital gains tax - free property market.

But fair credit to Peter Dunne. I am sure he would be happy to tell you how much more gifted and talented he is than the majority of internet-savvy young people born today. So let us be fair to the leader of the party of one and assume that Young Peter realises his dreams and eventually becomes a highly paid Cabinet Minister for years and years and years, no matter what Government is in power. Even then, Young Peter is unlikely to have cleared the mortgage before retirement age, and even if he did, he probably would not have any savings of his own, because taxes will have dramatically risen to pay for Old Peter’s superannuation, no matter how many houses Old Peter might be earning his capital gains tax - free profits from. In reality, Young Peter would not achieve what Old Peter has been able to achieve on the back of his parents’ generation’s largesse and the compulsory transfers from today’s young.

These are tough problems. These are intergenerational problems. These are not problems of Young Peter’s making; they are not even problems of Old Peter’s making. Let us be fair. They are problems that have built up over a generation—a generation in which the baby boomers have done quite nicely, thank you, and our young people today are bolting for the departure gates because they do not share the same opportunities. In the face of that intergenerational cheat, what have we got? In response to a student loan scheme that is creaking to the point of failure, and after years of hard work—this Minister has been toiling at it across successive Governments—we have today’s bill. What does it do? Two minor, tinkering changes, which, of course, although they require the assent of the House, are barely worth the time of debate, while the underlying issues go unaddressed by a Government that has got the worst economic record in 50 years, high unemployment, high emigration, a generation without hope, and a baby boomer who is complacent, slumbering on the Government benches while New Zealand slips and slides its way to perdition.

Todd McClay: Oh, this is like his speech on top of a bus in South Auckland.

Hon DAVID CUNLIFFE: Never was on top of the bus—you should look more carefully.

Old Peter received a subsidised, free education from the State. Old Peter has had a successful career. Old Peter had the free education. Old Peter will have gold-plated superannuation. Young Peter will have to struggle his way through university. Young Peter has been loaded up with a mortgage before he has bought his first house. Young Peter will be no better off after the changes made by the House today. We have a generation of young people growing up in this country who expect better from their Government, and in less than 2 years they will get it.

TODD McCLAY (National—Rotorua): I think that last speech from David Cunliffe was exactly what Charles Chauvel was talking about in his valedictory speech last night—a plea to the Labour Party to give the party both of its wings back because it needs to fly. You see, there is such a difference between the view on that side of the House and the realistic outcome on this side of the House. The student loan scheme in New Zealand is one of the most generous schemes for tertiary education anywhere in the world, and it is possible only because this Government supports it, and it is possible only because hard-working New Zealanders pay their tax and allow the Government to lend that money to students so that they can get degrees and extra education, so that they can work hard, raising skill levels in New Zealand, and do much more for New Zealand society. The member opposite and the Labour Party opposite just want to throw that away and say to hard-working New Zealanders: “These people who are borrowing money based on the taxes you’ve paid from your hard work have no obligation to you, at all.”

Indeed, we have campaigned on saying that we believe the student loan scheme is important. We are committed to it staying here, but we must make it efficient, we must make it fair, and we must make it deliver for the New Zealand taxpayer, as well. I believe that we are doing that. You see, in the changes that have been made over the last three Budgets by this Government in New Zealand, I can say to the New Zealand taxpayer that the money that is being lent to students in New Zealand is being used better and it is being repaid at a faster rate. That means we can borrow less as a Government and we can also put more back into the student loan scheme, so that your sons and daughters, and others, be it Young Peter or Old Peter—it was a lovely story by the previous member. It is a pity that he did not spend more time reading the bill and what it actually achieves than unnecessarily making up stories about a hard-working Minister, who, yet again, is bringing a bill to this House that actually helps New Zealanders. So what we know is that this is doing very good things to support the hard-working New Zealanders who pay their tax.

Very briefly, the Student Loan Scheme Amendment Bill (No 2) does a couple of things. It broadens the definition of “income” for student loan repayment purposes. It aligns with a number of other pieces of legislation and the way that income is treated when it comes to working out what people’s obligations are. This is a loan. It is a contract between the New Zealand taxpayer and the student. Young Peter one day will go and be able to afford to buy a house under this Government, because we are doing things that actually will have an effect upon homeownership. We are not saying that we will go out and build 100,000 homes in about a year and that you will be able to buy them all over Auckland for less than $300,000, but we are doing actual things. Well, just as Young Peter would go out and get a mortgage from a bank, and he would have a contractual obligation to that bank to repay the money he has borrowed. In this case, not only is there a contractual agreement with the Government to repay but also there is a moral obligation on the part of students to repay money to the taxpayer, who has lent that to them under very important circumstances so that they can study and get ahead. So that is what we are doing there.

There are administrative efficiencies being found, and also there is the ability to match information between the Inland Revenue Department and the New Zealand Customs Service, so that in respect of people who go overseas or who are overseas and who have not met their obligation to the Government and their moral obligation to the New Zealand taxpayer, when they return, information can be sought and gathered, and we can find ways to help them realise that the only reason the New Zealand Government can lend taxpayers’ money to students to study is that they, in turn, will pay it back.

I want to say here, finally, that over the last three Budgets the changes the Government has made have brought the cost of the student loan scheme from 48c in the dollar to 39c in the dollar. We campaigned and said that we would bring it back to 40c in the dollar, and now we have surpassed that. Indeed, in Budget 2012 the forecast student support changes would have provided a one-off saving of about $250 million and then annual savings of $60 million to $70 million. Well, indeed, at 30 June 2012 the actual saving was $286 million. Again, the Government has surpassed the commitment it made to New Zealanders in the Budget.

Finally, this is the most important point. This is what the Opposition should be focusing on, not the petty politics of those members wanting to chuck money at people just to buy votes, but actually looking after all New Zealanders. Since we came to Government there has been an 11 percent increase in student loan repayments—an 11 percent increase—so that New Zealanders are repaying their debt to the Government, meeting that contractual obligation, just as many of them are when they are paying back their loans to banks if they buy houses or cars, and so on. But at the same time, they are meeting that moral obligation to New Zealand mums and dads who work hard and pay their taxes. I say to the Minister of Revenue, who has brought this bill to the House, that it is a job well done. Thank you.

Dr MEGAN WOODS (Labour—Wigram): Labour is supporting this bill, the Student Loan Scheme Amendment Bill (No 2). We are doing that because we think it does some useful administrative things. It makes two changes to the student loan scheme. First, it broadens the definition of “income”, and we think that this is actually quite a useful administrative change, because what it does is it broadens this definition to include income from trusts, companies, superannuation schemes, etc., as well as income. We think this actually is quite a useful thing to do, because what it does is it means the borrowers’ repayments will be based on their whole income, and not just on the income received from wages. The second thing that this bill does, and I am talking about very small things—the second change that it makes—is it allows information sharing between the Customs Service and the Inland Revenue Department, so the Inland Revenue Department can have access to the contact details of overseas-based borrowers who are in serious default. Labour is supporting the bill because we think that these small changes will make the scheme fairer, but we are not supporting the amendment that ended up at the Finance and Expenditure Committee inserting clause 39(4), which gives the Minister the power to make regulations in order to smooth the transition of the bill. We are not supporting this subclause of the bill, because we think that it gives the Minister unnecessary power and it lacks the transparency needed for borrowers to have surety of where they are at.

So what we have, and my colleague before me alluded to some of this, is a bill that does some very small tinkering around the edges. We do not have a bill that addresses the big issues of the day or indeed even addresses the big issues of the need for student support. There are some very real issues that we need to address on the issue of student support and we think that the bill fails to address these. We think that we need more people in tertiary education, gaining qualifications that are about making New Zealand a better place if we are to succeed. What we are doing in this bill does absolutely nothing to address these issues.

We can start with what the bill is not doing, in terms of the big issues of the day, because there are some connections to it and my colleague did allude to some of these. We have an economy that is in serious trouble. We have a serious number of people, and, in particular, young people, leaving our country, and this bill does nothing to support them doing that—Labour has consistently supported many efforts to improve the repayment of debt from overseas-based borrowers, but we did not support the Government’s last major change, which cut the repayment holiday for overseas-based borrowers from 3 years to 1 year. There was a very good reason why we did not support this. We thought that the cutting of the repayment holiday by the Government made no sense at all. It was not just Labour that thought that. In fact, advice from both Treasury and the Ministry of Education said that it would not make a blind bit of difference in terms of repayments. In fact, it was likely to increase the debt held by overseas borrowers, because without that 3-year repayment holiday what happened was that people just gave up trying to pay their loans. All Labour is asking for is that we have some fairness and some equity with our student loan system.

We had the previous National speaker, Todd McClay, tell us that this was about using Government money, using it better, to support students. But unfortunately that is not the case, because what we have standing are the attacks on student support that we have had from National over the last 4 years. If we just run through these, we can see that none of the measures in this bill that we have before us will do anything to address those. We had National cut the eligibility so that people aged over 55 could not access the student loan. They could not borrow. In Labour we do not think that it is particularly fair that you would say to someone who has reached the age of 55 and wanted either to continue their studies or to retrain: “No. We’re not even going to give you the chance to borrow that money.” So when we hear the rhetoric from the benches opposite about paying it back and how people need to take responsibility, this is a Government that will not even give those aged over 55 the opportunity to do that. We certainly did not see that as a better use of our education budget.

Part-time students—the way in which many people re-enter tertiary education—are no longer allowed to borrow for their course-related costs, as of Budget 2010. For many people who are retraining or come from a background where tertiary education is not their natural progression, part-time access to tertiary education is vital. To be able to access the element of the loan where you can borrow for your course-related costs, which are absolutely essential for many of these courses, is something that is not considered a better use of the money. Budget 2010 also imposed a 2-year stand-down on new residents accessing the student loan scheme. What we said to people coming into New Zealand, who came here to make their life here, was that they could not access the loan, that we did not back them into higher education, we did not back these people into getting tertiary qualifications, and we did not back their upskilling. What that does, what we think that this Government is failing to do in this piece of legislation, and what it did with this change, is it fails to seize the opportunity that tertiary education can give us in turning our country round.

But I think perhaps the most short-sighted measure that this Government has taken, in terms of tertiary support, and one that this bill does absolutely nothing to address, was last year’s Budget announcement—and what we have been living with for a year now and we have students all over the country, or potential students, making decisions based on this—when it cut the allowances for those doing postgraduate study. So what we have is a Government that talks very big on innovation. We have a Government that talks very big about the role of research in our economy. We have a Government that talks big about the need for and the place of this. But what we saw in the Budget last year was a Government that would not back our young people to get the qualifications necessary to be part of that future for New Zealand. The Government said: “You know what? We don’t value postgraduate education. We don’t think this is something that has sufficient good for us as a nation, for us to pay you an allowance.” This is not something that Labour sees as sustainable. We think that if you are going to address the issue of student support, which is what this bill before us does, you absolutely have to address that issue of allowances in postgraduate education. This is the place. Anyone will tell you that the ideas machines in so many labs and so many groups around the country are indeed our postgraduate students—whether that be at master’s degree or at PhD level. This is so crucial to our future and our innovation-led future that we just cannot ignore it.

These are some of the things that we are absolutely not seeing in the bill that we have before us. We think that it is a real lost opportunity that we have there, that what we are seeing is a piece of legislation that is not going to increase participation in tertiary education. What we would rather see, rather than the piecemeal and small administrative changes like we are seeing in this piece of legislation before us, is an overview review of the scheme to ensure that there is a fair approach and that people who need support to continue and participate in tertiary education can get that support. Tertiary education is not something that we can just tinker with around the edges. When we introduced a user-pays education system in this country the loan scheme was put there to ensure people did have access to it. What we see are actually growing inequalities under the present loan scheme. We see that people—because of age, because of the type of study, because of their time in New Zealand—do not have access to this loan scheme, and this does not address the issues of equity that the loan scheme was initially put in place to address.

So Labour supports this bill. It supports the small administrative changes that are contained in this bill, but, as I mentioned at the beginning of my speech, it does not support the powers given to the Minister to make regulation under this. What we would like to see is a broader review of the student loan scheme.

HOLLY WALKER (Green): The Green Party will continue to oppose this Student Loan Scheme Amendment Bill (No 2), as we did at the first reading. In our view, this bill is part of a gradual process of tinkering with the student loan scheme through a series of amendments, all of which are slowly eroding any good things about the student loan scheme and locking us into a more punitive, individualised model of tertiary education. Although the provisions in any one of these amendment bills alone might seem minor and technical, when they are taken together we are seeing a very damaging trend in the way we approach and administer student loans—one that is likely to be harmful to students and graduates and likely to disincentivise both tertiary study and graduates to stay in New Zealand and contribute after they have completed their studies.

In a timely intervention to this debate, the Parliamentary Library this week produced a research paper on the student loan scheme, which has now been in operation for 20 years. The Ministry of Education also recently produced a paper summarising changes to the student loan scheme between 1993 and 2011. I thought it might be useful to the House to hear some of the facts presented within these papers, including some of the incremental changes that have been introduced by this Government, which are slowly eroding the fairness of the scheme. I might start—because I would like to address a straw man argument put up by one of the earlier speakers, Todd McClay—with the write-down rate that the Government receives for the student loan scheme. He said that it has had this great policy of bringing it down from 48c in the dollar to 40c, and it actually managed to get it down to 39c in the last 3 years. But, of course, what he neglected to tell the House was that when National came into Government, it was at 40c in the dollar. It increased under National’s watch, and all it has managed to do is bring it back down to what it was when it came into office.

More fundamentally, I want to run through some of the incremental changes that this Government has made to the student loan scheme that have eroded the fairness of that scheme. These include, first of all, introducing a lifetime limit of 7 years of equivalent full-time studies—or roughly 7 years—of borrowing per student under the student loan scheme, so that a student who has completed a 4-year Bachelor’s degree with honours and a 2-year Master’s degree and has started a 3-year PhD would lose access to their student loan funding part-way through their doctoral study.

The Government also reintroduced the academic requirement that a borrower has to have passed at least half of their previous 2 years of study in order to continue to qualify for a student loan. That is a manifestly unfair measure that was abolished way back in 1993 but was reintroduced by this Government.

The Government has restricted access so that students over 55 can no longer borrow under the student loan scheme, as we heard from the previous speaker, Megan Woods. This is nonsensically making it more difficult for older people to upskill and retrain during a period of global economic recession. The Government has also made it more difficult for new immigrants to qualify for the student loan scheme.

David Bennett: Rubbish!

HOLLY WALKER: It is true. It is true.

David Bennett: How?

HOLLY WALKER: You restricted the children of permanent residents from being able to borrow under the student loan scheme. [Interruption] It is true, you did it. Your Government did that.

David Bennett: Oh, that is rubbish.

HOLLY WALKER: It is not rubbish. You look it up. The Government also restricted part-time students from being able to borrow for course-related costs, which is something that was also referred to by the previous speaker. Again, that is making it very difficult for people to upskill and retrain.

It increased the administration fee on the student loan scheme from $50 to $60 per year, and introduced an annual Inland Revenue Department administration fee of $40 for graduates paying off their loan. It reduced the 3-year repayment holiday for graduates overseas to just 1 year. It abolished the 10 percent voluntary repayment bonus, and it increased the automatic student loan repayment rate from 10c to 12c in the dollar.

In short, this is a series of amendments that restricts access to student loans, makes it harder for key parts of the population to upskill and retrain, increases the cost of the scheme, disincentivises graduates to repay their loans faster, increases the likelihood of overseas borrowers defaulting on their student loans, and hits graduates harder in their back pocket as soon as they graduate by forcing them to pay back 12 percent of their income on their student loan, even if they earn less than the full-time equivalent of the minimum wage.

Meanwhile, the nominal value of the student loan debt reached $12 billion in 2012, and, as we have heard, we have cut student allowances for postgraduate students, forcing them to borrow under this scheme and increase their total student debt to pay for their living costs or, as many have done, to drop out of their courses. All in all, this is not a particularly rosy picture. So within that context, we have this Student Loan Scheme Amendment Bill (No 2), which gives effect to yet more of the Government’s punitive tinkering with the student loan scheme that it announced in Budget 2012.

As we have heard, the bill essentially makes two changes. Firstly, it aligns the definition of “income” for student loan purposes with that used for Working for Families, and it makes it easier for customs officials to share information with the Inland Revenue Department to track down borrowers who are overseas and make them repay their loans. On the first point, the Green Party’s major objection to the alignment of “income” is that this is a missed opportunity to correct an unfair element of the definition of income for student loan purposes. This was highlighted last year when the Government introduced changes to increase the student loan repayment rate.

Just to explain why that is, because Working for Families entitlements are currently calculated on net income before student loan repayments are taken into account or deducted, increasing the student loan repayment rate, as was done in the Budget, has had a real, detrimental effect on the weekly budgets of many families, because the higher student loan repayment rate is not taken into account when their Working for Families entitlements are calculated. So basically this means that the higher student loan repayment rate operates as a tax increase for those families, but with no corresponding increase in their Working for Families entitlements. The net result is bad for the weekly budget of those families and bad for their back pockets, and many of these families have young children.

A previous speaker, Mr McClay, talked a lot about hard-working taxpayers and New Zealand mums and dads who resent the fact that students and graduates borrow and have to pay back. Well, I will tell you what: I am 30 years old and I have a student loan debt, and so do just about all the mum and dad New Zealanders whom I know who have young children. They are taxpayers. They are also graduates with student loans. They are paying it back, and it is slowing them down from being able to qualify to buy a house, to start their lives, and to have children. Those mum and dad New Zealanders all have student loans in this day and age. They did not get a free tertiary education, like those guys over there.

Although this bill aligns the definition of income for student loan purposes with the definition under Working for Families, we need a corresponding change that means that Working for Families entitlements get calculated after student loan repayments have been taken into account. Until that happens, the Green Party cannot support the changes in this bill.

Secondly, on the matter of information sharing between the Customs Service and the Inland Revenue Department to chase up overseas borrowers, we have a real problem with such a policy being pursued in the context of the reduction of the repayment holiday for overseas borrowers from 3 years to 1 year that has already taken place. Although we have no problem per se with measures designed to encourage overseas borrowers to keep up with their student loan repayments, we cannot support punitive measures to track them down at the border unless we have a corresponding enabling provision that recognises the importance of spending some time overseas and the experience and skills that doing that gives to an individual, and the fact that many New Zealanders do so when they take their OE. These gains have been very well documented, and what we do not want to do is discourage people from returning to New Zealand when they have spent time living overseas.

That is why the repayment holiday was such a good idea when it was 3 years. It allowed individuals to spend time overseas for a period in which they were not required to meet their student loan repayments, and they did not rack up penalties and fines that might put them off returning to New Zealand. Introducing this information-sharing provision means that there is a much greater chance of them being pinged with huge penalties and extra debt when they return. That, in turn, means that there is a very real risk that those borrowers will decide not to return to New Zealand. At a time when more New Zealanders are moving overseas than ever before, it is vital that we design policy that maximises the incentive for young New Zealanders to stay in the country and contribute to our economy and society, and this bill does the opposite of that.

Finally, if I might turn the House’s attention to the transitional provisions introduced in this bill by the Finance and Expenditure Committee to enable the Inland Revenue Department to administer the changes. What we heard at the committee is that as a result of the large number of small, but complicated, technical changes made to the student loan scheme over the years, the department’s computer systems are now struggling to keep up and administer the scheme. It is the same problem we were talking about in the House yesterday with regard to the department’s ability to administer the new child support formula. Here, clearly, is an IT system that is in urgent need of an upgrade. It is groaning under the weight of a student loan scheme that has been tampered with so much over the years that it cannot cope any more, and the Government’s answer is to give wide-ranging regulation-making powers by Order in Council to enable this scheme to be fixed up progressively over time. It is neither fair nor transparent, and it is consistent with a theme we have seen from this Government of giving these kinds of wide-ranging regulatory powers—

The ASSISTANT SPEAKER (Lindsay Tisch): Sorry to interrupt the honourable member. Her time has expired.

PAUL GOLDSMITH (National): It is my pleasure to speak on this Student Loan Scheme Amendment Bill (No 2). There is no question that the student loan scheme that this Government inherited was excessively generous. It gave out money for free with very few checks and balances, just as in so many other areas of Government under the previous administration. We have heard more of the same from speakers on the other side saying that we should just keep pouring the money in with no regard or little sense of the context that we live in, at a time when we are trying to rein in Government spending and massive debt.

National is taking the student loan scheme and making it sustainable into the future, reducing the need for more Government borrowing, and preparing students for the jobs of the future. Our interest-free student loan scheme, let us not forget, is one of the most generous in the world and we want to keep it that way, and to have it as a sustainable scheme. It represents a major financial commitment by the Government to support people in tertiary education. You look at any of the figures around the world, and New Zealand’s student support within our tertiary education budget is very high indeed.

This bill aims to improve the value and the fairness of the scheme, and to ensure student loans are administered as fairly as possible. The result that we have seen of the scheme we inherited at the start of this Government was that every dollar lent immediately was written down to 50c. Who paid it? Well, it was other taxpayers, many of whom are struggling in their own way. This Government has not drastically altered the arrangements, but it has focused on restoring some basic disciplines to the scheme.

Earlier in Budget 2012, as we have seen, two major changes were introduced increasing the repayment rate from 10 percent to 12 percent and also reducing the voluntary payment bonus, which was repealed. This bill goes further and looks at the question of the two main areas of defining “income” in a broader sense to catch the full income that students may receive and also to match information with the Inland Revenue Department and the Customs Service.

This is all absolutely common sense. We need to make sure that this information matching is done properly. Why do we do this? Because this is about people paying back their debts to other New Zealanders. That is only fitting and proper. On that basis I commend this bill to the House. Thank you very much.

TRACEY MARTIN (NZ First): Kia ora, Mr Assistant Speaker Tisch. Thank you very much. Firstly, just to make a comment on some of the issues raised by other speakers, it is always a joy to listen to David Cunliffe wax lyrical about hypothetical Young Peter. Although it is amusing on many levels, the reality is that there is a lot of truth in what he said. I actually resent that member’s assertions that our older generation are mean-spirited and greedy, that they seek to starve our young people of their future, and that that is the reason why this bill, the Student Loan Scheme Amendment Bill (No 2), is a bad thing, even though the Labour Party is going to continue to support it. I would not like the country to forget—because most of us have not forgotten—that it was actually a Labour Government that set our feet upon this path, that took away the free education that my generation and the generation before me had the opportunity to avail themselves of. I also do not want to forget that it was a National Government that then slipped its feet into those shoes and started to run down that pathway to bring us to the point where we are at today, where it is now being suggested that Young Peter blames Old Peter for his circumstances instead of actually saying that these are the two parties in this House that brought Young Peter and Old Peter to this place. Let us not forget that. The divide and rule that goes on between our young and our old is not constructive for the country as we move forward.

With regard to this bill, though, New Zealand First will support this bill, as it supported it at the first reading. It is a technical little bill. It does two very sensible things, in our opinion. It had an opportunity to do a couple of other sensible things, and there are Supplementary Order Papers being prepared now. I mentioned in my first reading speech that we supported the Minister of Revenue when the repayment holiday for overseas-based borrowers was condensed from 3 years to 1 year. We did that because of what we believed was one of the intents of the bill, which was actually fairness, but that fairness is still not here in the legislation. New Zealand based borrowers receive no recognition for circumstance changes that mean there are times in their lives when they may need 1-year repayment holidays. I gave examples of young New Zealanders in situations where they may have such financial pressures. They may still be in employment and so still meet the criteria by which they should be making those repayments, but their personal circumstances are such that, as a State, we should allow them to take a 12-month recess from their payments so they are able to reorganise their financial lives and then come back. This is about supporting our citizens. This is not supposed to be about punishing them; it is supposed to be about supporting them for the good of the country.

The other small, technical piece that could have been addressed—and another Supplementary Order Paper will come through for the Committee of the whole House to discuss—is actually about attaching any repayment holiday to the loan rather than to the person. It is an anomaly to me, as a previous debt collector, that when a person has shown that they are a responsible citizen, that they take their debt seriously, and that they have sought to repay it, they are then penalised by never, ever, ever being able to access another loan with another repayment holiday. It does not make sense to me. They are the very people whom you want to encourage to participate in this sort of process, as opposed to the constant conversation about people going overseas, never coming back, and buying Maseratis or whatever, which we used to have around the student loan repayment scheme. So there will be some Supplementary Order Papers coming through.

I did not sit on the Finance and Expenditure Committee. It is not one that I was available for—

John Hayes: That’s a pity.

TRACEY MARTIN: I take on board your disappointment, sir. When I can, I will try to get on to that select committee. I note, however, that many submitters did actually take note of those exact points in my first reading speech, and I thank those submitters for their obvious high standard of involvement in the submission process. I note, however, that most of the submissions on behalf of those who have loans were on behalf of those who have university loans. I do not want us to forget that, actually, every baker, every tradesman, and every young apprentice is in this scheme. This is the StudyLink scheme. This is all about those young people who most often do not have unionised representation, and so we do not hear their voice in this process. Those are the workers of tomorrow—not those who can access high incomes because of a PhD, but those on whom we rely on an everyday basis when we go to the bread shop or when we go to the car mechanic. They are also affected by this bill, so let us not talk about this as if it is only the elite who can afford it. These are real people, real young people, on whom we rely on an everyday basis.

I also want to pick up on the New Zealand Medical Students’ Association submission—an excellent submission. It addressed many of the points in the first student loan scheme amendment bill. There is nothing that New Zealand First can do on this bill, in reality, to support the concerns the association had, but we do take on board its comment around the restricting of access to student allowances for those who study for over 7 years. Again, it does not seem logical or sensible to New Zealand First to penalise those students, particularly in the area of medicine, to such a point where either they do not continue to study in that field of endeavour or they feel so disenfranchised by their own State that they take their skills somewhere else. New Zealand First does not buy into the argument that at the end of their study these students have greater access to income so therefore they should get more debt now. We do not argue that they probably do have greater access to creating income for themselves, but the argument that one day a person might be rich so while that person is poor they should gain debt does not seem to make any sense to us. They are still New Zealand citizens, and the purpose of the State, the purpose of StudyLink, was to support New Zealanders to study. Again, New Zealand First could not do anything about that in this particular bill, but I wanted to make sure that the New Zealand Medical Students’ Association and other students associations that presented to the select committee—and I have read all of their submissions—know that New Zealand First will continue to address this issue.

We will continue to seek ways to bring us back to a point where there is recognition about the public good that supporting young people to study does for your country. We would advocate a stronger social contract between the young who are studying and the support that is given by the older generation. I am not sure the older generation is so terribly outraged by supporting its young people. Remember, the young people we are supporting are their children and their grandchildren. Although I think there is often a whipping up of this division between the ages, when I speak to older citizens in public meetings, and when I go to the universities and talk to young people, when they speak of their own families there is none of this aggression towards supporting each other. They just want their Government to make a system that is fair and that is reasonable.

But, as I say, these are small, little amendments in this bill. They are logical, they are reasonable, and at the moment there is nothing wrong with them, so New Zealand First will be voting for this bill. Kia ora.

JOHN HAYES (National—Wairarapa): It was the Labour - New Zealand First Government that brought in the SuperGold Card and had to pay for it, so it put a price on student loans. A fundamental way of running this country is that the money that comes in has got to be equated with the money that goes out.

I have got to say to this House that there were two interesting speeches this week: one by Charles Chauvel, about 3 days ago, and one by David Cunliffe. I would just say to them that there is a Māori proverb that says it is the feathers that make the bird fly. They represent the broken left wing of the Labour Party.

The changes that have been introduced by this Government over the last 3 years have been to make the student loan scheme sustainable. We said we would reduce the costs from 38c in the dollar to 40c in the dollar. In fact, it is down to 39c in the dollar, so we have surpassed that. We made a one-off saving in 2012. We said we would save $250 million. In fact, we have managed to increase that to $286 million.

I absolutely support the Student Loan Scheme Amendment Bill (No 2) and the intention of giving everybody a good education. Even if people go off overseas, we are educating them for humanity, and that is excellent. This is a demonstration of National delivering on one of our key priorities of responsibly managing the Government finances. But it is unacceptable that some people go overseas and do not meet that obligation of paying the money back—about $2 billion is in this category. I think that it is really important that we encourage those people to meet their obligations to this country, even if it means looking down the track, if the changes in this bill do not work, of tying the obligation to future passports—that is my personal view. Thank you. It is a good bill.

Dr DAVID CLARK (Labour—Dunedin North): It is a pleasure to speak following that member of the Finance and Expenditure Committee, John Hayes. That was definitely one of his stronger contributions of late.

Labour does support the Student Loan Scheme Amendment Bill (No 2), and it does so for the reason that it is making sure that we do collect the money that is rightfully due to taxpayers. Labour believes in the value of the student loan scheme. After all, it was a Labour Government that made it interest-free, after the National Government introduced the expensive system for students. National, of course, subsequently has introduced charges, and so on, but we believe fundamentally in the student loan scheme and the way in which it creates access for people of all backgrounds to tertiary education.

In this bill we see a tightening up of measures to collect overdue debt and that can only be lauded. It is good to see the Government taking some action on that front. Of course, it is motivated to do that, particularly, because the tax take is dropping. This Government in its first term saw the tax take drop by 4 percent, and its own officials, its own officials, said that—

David Bennett: It’s not actually dropping.

Dr DAVID CLARK: Mr Bennett, I invite you to look at the projections your Minister of Finance is generating and listen to him when he is in the select committee saying that the tax take is dropping. I think he would be disappointed to know that you were not listening when he was there. The Minister of Finance, I think, is right when he says the tax take is dropping and the projections are going down.

The 4 percent drop in its first term in Government consisted of 1.5 percent that the officials said could be attributed to the global financial crisis and 2.5 percent that officials told us could be down to Government policy changes, like the 2010 tax cuts where all the money went to the wealthiest New Zealanders—an overbearing proportion—and those at the bottom of the heap, the bottom 20 percent, got just 2 percent of the value of those cuts. So we recognise that this Government has a problem. It put those tax cuts in place to try to get the economy going, and it has “Stolpered”.

In fact, the economy has been growing in small measure because the population has been growing, but wages are not keeping up. People are struggling, and this Government is scrambling to tax paper boys and paper girls and after-school cleaners to make up the gap. It is trying to stop the gaps, in this bill, and that is a commendable thing, but it also in this bill is tidying up a whole bunch of other messes, and this is something I would like to draw attention to.

It is good that there is some positive in this bill, and that is why we will support it, but actually this bill is an embarrassment for the Government—this bill is an embarrassment. The majority of this bill is about repealing decisions that it already brought to this Parliament in order to improve the student loan scheme, in its view. We have four measures in this bill that are exact about-turns by this Government because it has failed to implement them. It has brought them through the House. It has wasted House time, it transpires, because then it has failed to deliver on them. That is what the majority of this bill is about and that needs to be pointed out to the House, that what we are doing here is tidying up after the Government’s own mess.

David Bennett: Can’t accept success—can’t accept success.

Dr DAVID CLARK: So if we read the notes to the bill here, Mr Bennett, if you have not had the opportunity to have a look at it, we see that there are four measures provided for in the 2011 Act that should also be cancelled. These are the measures that are being wound back as a result of the Inland Revenue Department’s current computer system, and perhaps the lack of resourcing for the department, and the failure of the Minister to get on and fix that problem, which has been acknowledged for quite some time. Certainly, for the 7 years he has been Minister, there has been an acknowledged problem with the computer system there and some challenges to overcome.

It is a 20-year-old computer system. I think today there is $7.8 billion in outstanding debt owed to the Inland Revenue Department that it has not been able to collect to date. There are a billion unprocessed returns—I think a billion; somebody correct me if I am wrong on that—a significant number of unprocessed returns. We have a real crisis in that department—a high staff turnover, lowering morale, and lowering voluntary compliance. This Student Loan Scheme Amendment Bill (No 2) is designed to clean up some of the mess that this Government created for that department by putting expectations on those poor officials, when it was not willing to pitch in and upgrade the system in a timely fashion, so that we would have a proper tax system like everybody else in the Western World. This Government has failed—failed—in its duty to collect taxes in a fair and consistent way, as it should do.

The measures being cancelled in this bill include relief for small amounts of loan obligations, which seems like a pretty fair thing to do. But the Government is stepping away from that, saying: “No, we’re no longer going to do that; we can’t. We’ve got our hands tied. We’ve failed. We’ve failed.” This Government has failed. So it is saying that it will wind that back and will not give relief for small amounts of loan obligations that are outstanding. So there we go. It is reinstating that.

In regard to the loan interest calculation method, there was thought to be a fairer way of doing that but that is being done away with, because this Government has failed to implement the changes it put through in 2011. There is also, in regard to the payment allocation, the removal of clause 59 of the bill as introduced, in order to retain the existing way in which payments are allocated to repayment obligations and debt.

So what we see here is a Government that is going backwards—going backwards. It is doing its tidy-up here, through this House, after failing to implement the changes it brought with great ceremony to the House in 2011. We have in this bill some things that have merit—and I am quite certain that they are in there for cosmetic reasons—but primarily the bill is focused on back-pedalling, because the Government has a tired, worn-out computer system and has failed to prioritise that.

Mr English is on record as saying that $700 million from the asset sales proceeds would go towards that. I wonder whether he had Solid Energy in mind when he said that number. That company is now not worth anything, we think, as a result of this Government’s mismanagement and poor oversight of Solid Energy. What we have is a clearly identified problem with the computer system in the Inland Revenue Department, we have a department under pressure, and we have revenue needing to be found.

The bill itself makes provision for information sharing with the Customs Service. I want to say that is an excellent idea, which we examined on the Finance and Expenditure Committee. Unfortunately, the Government did not actually know how much money this is likely to generate. You know, we have some rough estimates about “if this much money was collected”, “if the people are really where they say they are”, and so on. This is a bit of a waffly bill, but it is a positive thing, and we support the effort to make sure that people repay what they are due to repay.

That aspect of the bill we support, even though it is largely cosmetic in light of the major repeals contained in the bill. We also support the widening of the definition of “income” for student loan repayment purposes, so that a borrower’s repayment obligation more accurately reflects their ability to pay. Again, that is a common-sense measure. It is hard to disagree with that. One suspects that these things—certainly that latter measure—could have been done with the discretion of the Commissioner of Inland Revenue anyway. Nevertheless, we are glad that the Government is getting on with that.

The other thing that we had a problem with in this bill is the concern we have about proposed new section 17 in clause 39(4), which inserts a regulation-making power. We oppose that clause in the bill. We have noticed that it is part of a wider pattern. It is part of a pattern that this Government has not tidied things up properly, and now it is inserting “Henry VIII” clauses. We saw one with the “earthquake czar” in Christchurch. There we supported it, because we saw an urgent situation and a need to get on with things in an emergency situation. You give the executive some special powers in that situation, and that is understandable. However, with this bill here before us, suddenly we are giving more powers to the Government because it has not quite worked out how all this stuff is going to work and the computer system might go wrong again. So the few positive changes that are actually in this bill may get backed out of again, and we are saving the Government the embarrassment of coming back to the House yet again to repeal legislation that it has put through to cover up repealing legislation that it passed before.

What we see here is a pattern. We see a Government that is tinkering with trying to get little bits of tax here and there, but is failing to properly manage behind the scenes the tax collection method, keeping the software up to date, and making sure that it has relevant policy. It is a Government that is tinkering, and at the same time the economy is puttering along, going backwards. In fact, real wages have dropped.

David Bennett: Oh, rubbish!

Dr DAVID CLARK: We have got the worst inequality that New Zealand has ever had. This Government—it is true—has the worst economic record of any Government in New Zealand in the last 50 years. It is absolutely true. If we look at the economic growth rates over time, we will see that under Labour Governments the economic growth rate was higher. Members opposite do not like it, but they know it is true. Members opposite know, because they can have a look at the figures. They can see that under National Governments the average growth rate in the last 50 years has been about 2.7 percent, under Labour it has been 3.9 percent, and this Government is the worst of all.

DAVID BENNETT (National—Hamilton East): It gives me great pleasure to speak after the last speaker, David Clark, who represents the Labour Party, which has the worst political record in 50 years. He would know about backtracking, being dumped from the Finance and Expenditure Committee, and trying to tell this House what is happening in the finance markets. He is just not in there.

This bill, the Student Loan Scheme Amendment Bill (No 2), is good. It is what we need to do. We need to make sure that we recover money from those people who are lent money, go overseas, and do not repay. This bill is part of that process. I look forward to the bill passing through the House.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Raymond Huo. This is a 5-minute call.

RAYMOND HUO (Labour): It is a 5-minute call. Thank you. I rise to take a call in support of the Student Loan Scheme Amendment Bill (No 2) and to register a concern in relation to unnecessary regulation-making powers in proposed new section 17 in clause 39(4) of the bill, which we do not support. We supported this bill because we supported the principle of fairness. We are happy to see that some loopholes in the student loan scheme are being closed under this bill.

This bill makes two key changes to the student loan scheme. First, it broadens the definition of “income” to include income from trusts, companies, superannuation schemes, etc. This means that borrowers’ repayments will reflect all income, not just wages. The second key change is to allow information sharing between the Customs Service and the Inland Revenue Department so that the Inland Revenue Department can have access to the contact details of overseas-based borrowers who are in serious default.

Labour is supporting this bill as these changes should make the repayment of student loans fairer. Student loan repayments are a huge burden on hundreds of thousands of Kiwis. For those struggling to pay off student debt while paying the bills and saving for a house, it is galling to hear of overseas-based borrowers making no attempt whatsoever to pay back loans. Labour expects every borrower to make an equal effort to pay back their student loan, no matter whether they are overseas or at home.

A similar principle of fairness applies to this bill’s measures to expand the definition of “income”—as some of my colleagues covered earlier in this House—to include business profits, income from trusts, and other sources of income. Those who receive income from a company, a trust, a superannuation scheme, or other sources should be treated in the same way as those who earn a weekly wage. According to Treasury, broadening the definition of “income” will save the Crown approximately $7.5 million over the next 5 years.

Regarding subclause 39(4), which inserts an unnecessary regulation-making power, there is a good opinion article by Professor John Burrows, and I urge members across the board—especially the Government members—to have a good look at the article to appreciate the nature and scope of this regulation-making power. It states: “Some of those regulation-making powers simply allow for the addition of new transitional provisions to those already existing, but many of them are what we call ‘Henry VIII clauses’, in that they enable a regulation to change or override the words of the Act itself. Such clauses enable the executive to override the word of a Parliament. Parliament makes laws by an open and transparent process, with opportunity for scrutiny in select committee public submissions and debates in the House by which those opposing the bill can express their views. A Henry VIII clause allows the executive to override statutory provisions passed by Parliament with none of these safeguards.”

Although—borrowing Professor John Burrows’ words—sometimes transitional regulation-making powers are a necessary evil in this modern, complex legislative world, we should discipline ourselves to ensure that Parliament makes laws by open and transparent processes. Thank you.

JAN LOGIE (Green): Tonight I add another Green Party voice to our opposition to this bill, the Student Loan Scheme Amendment Bill (No 2)—this technical little tidying-up bill. We are opposing it primarily because of its interaction with the existing system, which, as my colleague Holly Walker pointed out very ably in her speech previously, has been significantly eroded by this current Government. The provisions of fairness in this system have been significantly eroded.

I need to add my voice to the position that the initial system was not exactly fair in the first place. It represented a massive transference of collected debt to the individual in this country, and has entrenched and exacerbated the inequalities that exist by individualising that debt, rather than taking the opportunity for us as a country to share that burden, as well as the benefits of educating our entire population.

We believe this bill misses the boat, and although we can say that the changes are technical and small by the interaction with the existing system, they do not help us as a country, and, therefore, we will be opposing it.

Essentially, there are two main changes in the bill. One aligns the definition of “income” for student loan purposes with that being used for Working for Families. The second makes it easier for customs officials to share information with the Inland Revenue Department to track down borrowers who are overseas, and to make it easier for them to repay their loans, which sounds fine.

To go into a bit more detail to explain why we are not supporting the bill, I should say, for us, it is in regard to the Working for Families definition of income alignment. The primary reason for not supporting it is that it is such a glaringly lost opportunity to rectify an injustice that is unfairly reducing money in the wallets of families who are trying to study and improve their situation.

Although the bill aligns the definition for student loan purposes with the definition for Working for Families, a corresponding change is desperately needed so that Working for Families entitlements can be calculated after student loan repayments are taken into account. Until that happens, the Green Party cannot support the changes in this bill.

All too many families in New Zealand at the moment are living in poverty, and all too many of these families are locked into unemployment and low-paid work because of the policies of this Government, one of which has been the limiting of access, and the increase in disincentives, to higher study. Calculating Working for Families entitlements before student loan repayments is a very clear example of locking people out of higher education, which is a key tool in furthering their position in life. So this we clearly cannot support.

Secondly, on the matter of sharing information between the Customs Service and the Inland Revenue Department to chase up overseas borrowers—of course we support people following through on their commitments. Entering into a loan agreement is a commitment, so we support people following through on paying those debts. However, we do note that the Government has reduced the repayment holiday from 3 years to 1 year, and that is something we did not support, because we recognise the value of overseas travel to New Zealanders, and the real importance to our economy of ensuring that people can come back easily. The sharing of this information, when we do not have good systems in place to enable people to interact with our Government agencies here from overseas, actually increases the potential of people not coming back. They have not been able to set up those systems, and now those people are scared to come back because they are going to be caught at the border.

MAGGIE BARRY (National—North Shore): New Zealand has one of the most generous student loan schemes in the world. It is interest-free and we want to keep it that way. Our very able chair of the Finance and Expenditure Committee, Todd McClay, has already detailed the main provisions of the Student Loan Scheme Amendment Bill (No 2), the amendments, and the recommendations as made by the select committee, of which I am a member. In a nutshell, this is a bill that aims to improve the value and the fairness of this scheme, to ensure that student loans are administered as efficiently as possible. In my view, that is a commendable aim.

Labour supports it—sort of, in that grudging, mean-spirited way we have come to expect from it—and in the never-never land of the Greens, their philosophy is at least consistent on this bill: borrow as much as possible and take as long as possible to pay it back, in the meantime living off the hard work of others. The Greens are at least consistent, I suppose, and their predictable negativity remains at the core of their lacklustre contribution to this Parliament. I commend this bill to the House.

The question was put that the amendments recommended by the Finance and Expenditure Committee by majority be agreed to.

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

Ayes 104

New Zealand National 59; New Zealand Labour 34; New Zealand First 7; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 15

Green Party 14; Mana 1.

Question agreed to.

A party vote was called for on the question, That the Student Loan Scheme Amendment Bill (No 2) be now read a second time.

Ayes 104

New Zealand National 59; New Zealand Labour 34; New Zealand First 7; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 15

Green Party 14; Mana 1.

Bill read a second time.

Bills

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

Third Reading

Hon MICHAEL WOODHOUSE (Minister of Immigration) on behalf of the Minister of Local Government: I move, That the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill be now read a third time. This bill amends the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act 2010. It implements the Government’s decision to extend the Environment Canterbury regional council’s governance arrangements. It provides the necessary powers to complete and implement the region’s resource management framework. This bill is about continuing to provide the Canterbury region with the stable and effective governance it needs to provide a platform for future economic growth and to assist the earthquake recovery. The bill does this by extending commissioner-led governance of Environment Canterbury until the 2016 local authority elections. The bill also retains existing provisions that provide Environment Canterbury with additional resource management powers and functions.

In 2010 the elected members of Environment Canterbury were replaced by seven Government-appointed commissioners under the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act. This followed a critical external review of the council’s performance in exercising its powers and responsibilities under the Resource Management Act 1991, and its inadequate freshwater management. This was a serious situation, and the Government acted to address it. Since 2010 the commissioners, with their specialist expertise, have proved highly effective in turning round Environment Canterbury’s performance. They have continued to make strong progress in resolving systemic issues within the council and in addressing vital water management and infrastructure issues.

The commissioners have also been very effective in developing a clear vision for the future and the sustainable management of the natural resources in the Canterbury region. They have achieved new levels of community collaboration in implementing the Canterbury Water Management Strategy through the innovative use of catchment-based zone committees. They have also made successful applications to the Government’s Fresh Start for Fresh Water Clean-up Fund for Lake Ellesmere and the Wainono Lagoon.

The commission has strengthened the relationship with Ngāi Tahu, which includes establishing a partnership framework that ensures enduring engagement beyond the term of the commissioners. Consent processing time frame compliance has substantially increased from 28 percent in 2008 to the current figure of 93 percent, and overall rates increases have averaged just 2.98 percent since the commissioners were appointed, compared with 5.2 percent in the previous 3 years. Clearly, the commissioners are doing an excellent job.

However, their work is not yet done. Through this bill the commissioners are being given the opportunity to complete their turn-round of the Canterbury situation. Given the decades of division and inertia that characterised regional planning in Canterbury before their appointment, there is a real risk that the work could come undone otherwise. The second-generation land and water regional plan and other plans will not be adopted by late 2013. The land and water regional plan gives effect to the National Policy Statement for Freshwater Management and implements the Canterbury Water Management Strategy. These initiatives are critical for freshwater decision-making and unlocking Canterbury’s economic potential in an environmentally sustainable manner. The plan was notified last year, and hearings of submissions on it are due to start shortly. The commissioners are also leading the preparation of a natural environment recovery plan and a land use recovery plan. Important work on restoring Greater Christchurch’s public transport systems is also occurring. All of this underlines the importance of continued strong and effective leadership by the commissioners until the 2016 local elections.

I acknowledge the concerns expressed by many submitters on the bill about the decision not to hold a regional council election in 2013. I would again like to assure them that the decision was not taken lightly. There are good reasons for it, and we have been up front about them. It is the Government’s intention to transition the regional governance of Canterbury back to elections by 2016. An important step in this process is the bill’s requirement for a ministerial review to start in March 2014. While the review is under way we will continue to do as much as we can to ensure that the Canterbury region realises its significant economic potential. This is what the bill is all about. It is also about providing the region with a strong, collaborative, and effective leadership team to ensure that the job that has been started is successfully finished. I commend this bill to the House.

Su’a WILLIAM SIO (Labour—Māngere): I rise to take a call in the third and final reading of the Government’s Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. During last night’s debate on this bill, Labour put forward that we thought the new Minister of Local Government, the Hon Chris Tremain, has been landed a shocker of a bill. The bill denies basic democratic rights to the people of Canterbury. The bill will break a promise made by this Government that Cantabrians would hold free and democratic elections in 2013 after this Government replaced Environment Canterbury’s elected representatives with seven Government-appointed commissioners in 2010. The people of Canterbury did not ask this Government to interfere and remove their elected representatives in 2010. The people of Canterbury did not seek a promise from this Government that Environment Canterbury could hold its election this year. The Government made that promise freely and without coercion. The Government even legislated for that promise: after removing elected representatives in 2010 it said in the original Act, the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act, that elections would be held in 2013. Alas, that is not to be. In passing this bill, the Government breaks a solemn and legal obligation that it made voluntarily to the people of Canterbury. This bill extends for a further 3 years the loss of local government democracy in Canterbury, thus extending the term of non-elected commissioners to 6½ years. And their service is to be paid for by the Canterbury ratepayers.

The people of Canterbury have responded overwhelmingly, opposing this bill. They have said in submissions made to the Government that this bill denies their right to local democracy. It is a breach of the rule of law, they said. It is a bloody outrage and an affront on democracy, they said.

Mr DEPUTY SPEAKER: Order!

Su’a WILLIAM SIO: I am merely quoting, Mr Deputy Speaker, a submitter.

Mr DEPUTY SPEAKER: It is not acceptable to just quote in a verbatim manner in the way the member has. I understand what he is trying to do. But just continue.

Su’a WILLIAM SIO: I think the quote I have put forward reflects truly the feeling of people on the ground in Canterbury. Another quote is that it is “a disgracefully antidemocratic proposal which should not be allowed to proceed.” Another quote, by the Human Rights Commissioner, submitted that this bill breaches New Zealand’s “international obligations and its commitment in the [International Covenant on Civil and Political Rights] to protect, promote, and fulfil the rights of people in New Zealand.” The New Zealand Law Society opposes this bill. It rightly submits that this Government does not have sufficient justification for suspending local democracy. The Beckenham Neighbourhood Association opposes this bill. The Environment and Conservation Organisations of New Zealand opposes this bill. Through submissions, through thousands of people who went out on the streets, the people of Canterbury have overwhelmingly sought to send the strongest message possible to this Government to stop this madness. After a litany of broken promises on jobs, on housing, on health, and on education, the people of Canterbury have no confidence that this Government will allow them to hold elections in 2016. How can the people of Canterbury trust another promise, when promise after promise has been broken?

If the people of Canterbury have any doubt whatsoever that this Government has no intention whatsoever of keeping its promises, have a look and consider the announcement made today by this Government of further changes to the Resource Management Act. The people of Canterbury can look at those reforms and find out for themselves that there is no way that this Government intends to keep its promise for 2016. It has broken the promise of 2013. It will break it again—it will break it again. In the recent announcement of the reforms, we find that this pattern will now extend outside of Canterbury and will extend to all local government if the Government gets away with the changes in the recent work on the Resource Management Act.

We cannot blame the people of Canterbury for feeling the way that they feel now, because it is an outrage, particularly when you have had the then Minister of Local Government, the Minister Nick Smith, who clearly said in March 2010, “whatever the circumstances,” that the next Environment Canterbury elections would be in 2013. He said: “whatever the circumstances,”—whatever the circumstances—“the next regional council elections in Canterbury will take place no later than those scheduled for late 2013.” In this House I have learnt that Ministers’ words are law. We call them honourable members, because it is our expectation that they keep their word. This bodes badly for all politicians, the way that this Government has just made promises and broken them by law. That does not bode well for any of the members of this House. Not only did Nick Smith say those words but also Cabinet papers presented by David Carter, the previous Minister of Local Government, and presented by Amy Adams reinforced that elections would be held in 2013, so the passing of this bill reinforces what I am saying. There has been broken promise after broken promise.

It has been broken because—and people might ask: “Well, what is the purpose?”. Well, I think the people of Canterbury have some very real concerns, some very real fears, because if they are not going to be given the opportunity to elect their own representatives, yet are forced to continually pay for the efforts of their Government-appointed commissioners, what sort of message does that send about our democracy? If I look around this room, I see symbols of wreaths and I see names of various countries that many people fought for in wars and died for. They did this freely, and gave their lives in many cases, as a sacrifice because of their belief that democracy is important, that democracy should be the foundation of our country. I have to say that this bill is a spit in those people’s faces. This shows that their sacrifice was not worth it.

Just because this Government is in power, it does not give it the right to ram things down people’s throats without taking the people with it. I have to say that consistently since this Government came into power, I have no doubt that the people in Canterbury who are listening to this debate and observing how this Government has behaved would be sorely disappointed, because I suspect that many of them thought that this Government would be a saviour. Particularly by electing some of the individuals representing them from that part of the country, they might have thought that somehow their interests would be protected. Sadly, they will now find out, by the passing of this bill and through further bills that are to come, that local democracy means nothing in terms of this Government.

If it can do this to Canterbury, what, then, is going to happen to other local authorities? I would say that come election 2014, I think it is incumbent upon every New Zealander, if they do not like the way that this Government is treating them and is trampling on the rights of individuals, the rights of our citizens, that they need to vote this group out. Vote ’em out—that is the only way that you can bring about good change. As David Shearer said last year, if Labour was in Government, we would hold these elections for Canterbury right now. We would hold those elections right now, because Labour upholds the principles of democracy. We know the value of democracy. We know the value of democracy, but this group here does not.

NICKY WAGNER (National—Christchurch Central): I rise to speak to the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. We have been hearing a lot of heated debate over this bill. There is no doubt that in an ideal world, installing commissioners in the place of the elected Canterbury Regional Council would be unnecessary, but back in 2010 the council was struggling to perform its duties effectively. It was bogged down with the enormous challenges of managing water in Canterbury and it had lost the confidence of the people of Canterbury, and that was no good for the environment and it was no good for the people of Canterbury. It was interesting that back in 2010, when submitters submitted on the original bill, they were deeply concerned about the dangers of having commissioners. They were very fearful about Environment Canterbury’s role going forward and they forecast all sorts of dire consequences. As we hear those submitters once again now, in 2013, they are mostly respectful and pleased with the work that the commissioners have done. They do not like the loss of democracy, but they know that the commissioners have done a good job.

They are particularly appreciative of the progress made with the Canterbury Water Management Strategy, and for those of you who do not know, this is a really exciting, new, collaborative process that has changed the way that people think about managing water in Canterbury. The local zone committees have worked very long and hard and have put a lot of time and energy into finding new solutions to ensure the outcomes of both water quantity and water quality. The first step of the Canterbury Water Management Strategy is almost complete, and we are now looking at stage two, which is a cohesive land and water plan that is under way with the ultimate aim of developing a statutory framework. It is true that things have taken a bit longer than expected, but that is not surprising considering the lives of everybody in Canterbury have been both disrupted and diverted by the Canterbury earthquakes, and so has Environment Canterbury’s. But progress is absolutely being made; it is just that the commissioners need a little bit longer to finalise their work.

The commissioners have also spent a lot of time repairing and strengthening relationships with stakeholders across Canterbury, and that has meant new partnerships are being developed to the benefit of the environment. There is a really interesting and exciting new partnership initiative around the cleaning up of Lake Te Waihora—Lake Ellesmere—that sees central government, Environment Canterbury, and Ngāi Tahu working hand in hand to restore that waterway. This bill also provides for a ministerial review. This has to be done by 1 March 2014. It will look at the membership of Environment Canterbury, the governance structure, the powers, and the functions. I think that is going to be a very important step forward.

So I would like to take the time to thank the commissioners for their work. I look forward to the completion of the Canterbury Water Management Strategy, I look forward to the improved status and the clean-up of Lake Te Waihora, and, of course, I look forward to the results of the ministerial review. I commend this bill to the House.

Hon CLAYTON COSGROVE (Labour): I would like to just touch for a moment on the last point that the previous speaker, Nicky Wagner, made, and that was about a ministerial review and that Environment Canterbury would be looked at. Part 2, of course, is about governance and about membership. The problem with that is we cannot believe these people any more. We cannot believe the Government any more, because Government members told us prior to the last election—there was a cast-iron guarantee from Nick Smith—that there would be an election on schedule this year. Now they say that is delayed some years out—democracy denied, yet again.

Now we sort of get all excited—we get all excited. “Isn’t it all lovely?”, says Ms Wagner. We are all excited about a ministerial review. Is it not going to be wonderful? The problem Ms Wagner has got is that nobody believes her. Nobody believes this Government, because the people of Canterbury were lied to—they were lied to. They were told that they would have an election, and they were lied to. That crew over there—Ms Wagner included—broke their promise to the people of Christchurch Central, broke their promise to the people of Canterbury, and now they talk about a governance review.

Well, I have to say to Ms Wagner that no one believes you—through you, Mr Deputy Speaker—no one believes you and believes the intent of this legislation. They do not believe that there will be a positive outcome of a review. They do not even believe that there will be elections on schedule, as scheduled in this piece of genius work, which was, of course, introduced to the House after the last election.

That is where we get to the rub. This crew are very, very good at talking about mandates. There ain’t a mandate for this. They could not prove there was a mandate, right through the debate. Right through the debate Ms Wagner claimed that there was the overwhelming support of Canterbury, and at every stage we pointed out to Ms Wagner that there were five submissions in support of the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill and 90 submissions against it. She cited Ngāi Tahu, an eminent organisation. She cited Federated Farmers—the National Party in gumboots. She cited Local Government New Zealand—a really grassroots organisation! There were two others, who were irrigators. There were five submitters in favour of this bill, and 90 submitters who were against it.

There is absolutely no mandate. This bill was introduced after the last election. The people of Canterbury were lied to again, and this Government stands up and the best it can do is put up “Daisy Chain”, who says: “Isn’t it all exciting? Isn’t it all wonderful? Isn’t it all fantastic?”.

I say to Ms Wagner: as she polled her electorate in the last 2 weeks—I ask her this question—I wonder whether she polled her electorate and asked them about this legislation, and also asked them about Phillipstown School and what she said and the promises she made to that school, which she went back on; the promises she made to Phillipstown School in terms of representation, which she never delivered on; and the fact that she never ever said to that school that she would back it to the hilt and fight to keep it open. I wonder whether she polled on that.

The people of Canterbury, let us be very, very clear about it, have been lied to, and lied to again with this piece of legislation. Nick Smith made a cast-iron promise: come hell or high water there would be an election. That was a broken promise.

Andrew Little: When was that election?

Hon CLAYTON COSGROVE: When was that election? Well, it was supposed to be later this year, Mr Little, as you would be aware—later this year.

The point I made time and time again, and that colleagues have made, throughout this debate is why is it that the Government refuses to have faith in the people of Canterbury—their leadership and their community—to draw from themselves sound men and women and sound leaders to represent them? Why does it have no faith? Why does Ms Wagner think that in Christchurch Central there is no one good enough—no one good enough—smart enough, or intelligent enough to lead our region as an elected person in Environment Canterbury? Why does Ms Wagner think that an unelected, unaccountable set of commissioners, installed by her and her ilk, who are accountable to no one in Canterbury apart from the boffins and her colleagues in Wellington—why does she think that is appropriate, and why does she think there is nobody with leadership qualities in Canterbury who could lead our region and contribute to it?

I say the reason is this: the reason that this crew do not want an elected Environment Canterbury this year is that that will provide another platform for the Canterbury community to stand up and elect leaders, and men and women, who might turn round to Ms Wagner, Gerry Brownlee, Amy Adams, Kate Wilkinson, and anybody else who sort of imposes their will down there and say: “I’m sorry, National Government. We disagree with you.” Government members do not like listening to people who disagree with them. They love listening to yes-men and yes-women. So if they do not have an election, they will have their puppets as commissioners, unaccountable to anyone in Canterbury, without a mandate, who will do their bidding, nod quite sweetly, and do what they are told, as they are patted on the head—as they are patted on the head. Do what Ms Wagner and Gerry Brownlee say—no opposition.

Here is the problem in a practical sense in the communities you have. There used to be a time—Jo Kane was a commissioner in Environment Canterbury. She is a good local person in the area in which I live—a great person. You could ring Jo up and you could say: “One of the ratepayers has got a problem, Jo. You’re elected. We need you to help to sort it out.”, and she would do her level best to do it, and she would get back to you, and she was accountable. Even if she could not deliver, she would be accountable to that community. Now what happens is that the puppets that the National Government have put in place, the commissioners who are not responsible, as Jo Kane was to her electors in her region—you cannot find them, you cannot get hold of them, and, by the way, there is no motivation on their side of the fence to engage in those practical solutions that the community needs.

But in fairness to the commissioners, their paymasters are not the people of Canterbury. Their paymasters, who dictate to them, sit on those benches over there. Their paymasters are the ones who lied to the people of Canterbury, promised them an election this year, lied to them, broke that promise, and now dress it up in all of Nicky Wagner’s fine words about how excited she is and how wonderful it is because we are going to have a governance review. When is it? It is in March 2014. Well, as I said at the start of this speech, no one believes Nicky Wagner that that review will involve the community, because there is no guarantee in this legislation that the community will be involved in that review. No one believes her. No one believes Amy Adams. No one believes Gerry Brownlee or Kate Wilkinson or that the community will get the authority back to have an election as scheduled in this extension bill. These people over here have no credibility.

The once-great National Party—in theory, in its own eyes, with its own ideology—believes in free markets, freedom of choice, freedom of expression, and, presumably, freedom of democracy. Well, I wonder what old “Kiwi Keith”, Keith Holyoake, would say about this crew over here. The only motivation behind keeping the vote away from the people of Canterbury is, one, to deny them the opportunity to elect leaders to represent them, and, two, to deny those leaders the opportunity, with a mandate, to voice opposition to some of the things that this crew are doing in Christchurch.

Andrew Williams: Bainimarama.

Hon CLAYTON COSGROVE: Yes, Bainimarama—a very good point. A very good point. A touch of Zimbabwe as well, I suspect—although even in Zimbabwe they get a vote now. They never used to, but they got a vote.

Peseta Sam Lotu-Iiga: Leadership speech.

Hon CLAYTON COSGROVE: But not this crew—not this crew. What was the interjection over there? Well, I say to Sam Lotu-Iiga that at least in Auckland that member and his constituency in Maungakiekie actually get a say. They have a vote, they get a say, they are allowed to—and he defended that mandate, I am sure.

Andrew Williams: They get two votes.

Hon CLAYTON COSGROVE: They get two says. They get two votes. They are allowed to have a crack. But these guys do not want that. They want to crush any opposition—not even opposition; they want to crush the ability of people to stand up and say: “We respectfully disagree with this Government. We believe there is a better way for our province. We believe that we should not be bullied, steamrolled, or bulldozed by Gerry Brownlee, Ms Wagner, Ms Wilkinson, and Amy Adams. We want to be part of our community. We want to elect leaders—fine men and women—in Canterbury who are not substandard, who are intelligent, who are community leaders, and who are damned well good enough to lead our province.” But Nicky Wagner—oh, and do not forget old what’s-his-face, Aaron Gilmore; they think they know best. They have no faith in the people of Canterbury and those community leaders—and at a time, also, when we have a dysfunctional Christchurch City Council. The mayor and Gerry Brownlee, the sort of human buttresses, are at each other throats, cannot agree on most things—cannot agree on most things. We need a functioning local government down here.

I say to this crew: remember and rue this day, because this was the day the National Government and the National Party members of Canterbury lied and lied again to the people of Christchurch and the Canterbury province.

EUGENIE SAGE (Green): It is a profoundly sad and shameful day in this House to be here considering the third reading and final stages of the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill.

We are here as members of Parliament because New Zealanders voted for us, and voted for our parties. We are here only because people were able to exercise that fundamental democratic right to vote, and yet this House is considering legislation that denies that right to vote, to elect their regional council, to over 400,000 Cantabrians.

This bill itself is a mere four pages long, but its effects are profound, because it extends the principal Act, which has the same euphemistic and inaccurate title—the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act—for another 3 years. So that means that Cantabrians are going to be denied their regional democracy and their right to vote for 6 long years.

Mrs Wagner said that Environment Canterbury was struggling, that people had lost confidence in the council. How did the Government know that people had lost confidence, when it did not ask anyone except Ngāi Tahu and the 10 Canterbury mayors? There was no public consultation. The organisation that had lost confidence in the council was Irrigation New Zealand. One of the reasons it had lost confidence in the council was that the council had increased the minimum flow in the Waimakariri River to better sustain that river’s health and functioning, and Irrigation New Zealand did not like it, because it impacted on proposals to take more water out of the river. That is who lost confidence—it was the irrigators, not the people of Canterbury.

Jacqui Dean: What about the mayors?

EUGENIE SAGE: And the 10 mayors, and they will be rueing that now, with Government proposals for unitary councils in Canterbury.

This is an indefensible bill, and that has been quite obvious in the short speeches we are hearing from Government members and the very short calls that Government MPs took during the Committee stage. It is indefensible, and that is obvious because the Minister of Local Government failed to take any calls to answer requests from several Opposition members to answer questions that we were asking.

So Government members gave up. They know that there is no justification for this bill. They know that they cannot speak truthfully about the reasons for this bill. They know that the excuses given by the Minister of Local Government and the Minister for the Environment are spurious—those reasons being the earthquake and the need for stable governance. It is strange how that does not affect the ability of the Christchurch City Council, the Waimakariri District Council, and the Selwyn District Council to get on with working with their communities and representing their citizens in major decisions about earthquake recovery, albeit constrained substantially by the sweeping powers of the Canterbury Earthquake Recovery Authority.

The real reason for this bill is to facilitate more irrigation and more dairy cows on the Canterbury Plains and elsewhere—the Central Plains Water irrigation scheme, and TrustPower’s irrigation scheme for the Rākaia River and Lake Coleridge. That is because irrigation, more cows, and more dairying are a key part of this Government’s tired and unimaginative apology for an economic plan—if it could be called that. That plan is to continue with a frontier-style mentality of increasing cow numbers and increasing milk production, without thinking about the cost of that to the environment and to other sectors of the economy such as tourism, food processing, and other industries that require clean water.

That is why this Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill is proceeding. It is proceeding against the advice of the Government’s own appointed commissioners that there should be a transitional council, which would have a mix of elected councillors and appointed members. So there is no substantive reason for the bill, except to promote irrigation.

We have not heard yet from National members the mistruths and inaccuracies that they have promoted in the past when we have debated the bill—that Environment Canterbury did not have a regional plan, when in fact there was a natural resources regional plan since 2004 guiding consent decisions. We have not heard yet, but I am sure we will, that the council was not processing consents in a timely manner. The former Minister Nick Smith loved to talk about that, when in fact if he had looked at the statistics in 2010-11, 80 percent of the resource consents were being processed by the council within the statutory deadlines. There was a total failure by the Government to recognise that Environment Canterbury was dealing with more applications for water permits than all the rest of New Zealand’s other regional councils. It was doing that without any help from the Government in the form of national policy statements or national standards.

This bill and what it represents are part of the profound changes that this Government is making to the relationship between central government and local government. This bill is one of the worst and most Draconian examples of that, by denying people the right to vote. National does not trust local government. It does not trust Cantabrians to elect councillors who would promote irrigation, and sign off on a very weak regional policy statement and an even weaker land and water plan, which is what the commissioners are doing. It is those weak statutory documents, under the Resource Management Act, that will allow irrigation to flourish and the environment to deteriorate.

National’s whole attitude to local government, which this bill highlights, is very different from that of previous Governments. National does not seem to recognise that local government is not a branch office of central government. It does not recognise that local councillors are elected by their local communities and derive their mandate from the exercise of that democratic right, and that local communities pay rates and therefore are entitled to elect their representatives to make decisions about how those rates are spent. This bill cuts right across that relationship.

Cantabrians are paying $84 million annually to the regional council, but have no councillors to represent them. And as others have noted, there is the ultimate indignity of Cantabrians paying the salaries of the commissioners rather than central government paying those salaries even though it appointed them.

Last year we saw National take an axe to the Local Government Act. It substantially increased the power of the Minister of Local Government to interfere with councils, to appoint Crown observers, Crown managers, Crown review teams, and commissioners so that in future, with other councils around New Zealand, we will not need special legislation like the principal Act and this bill in order for the Government to intervene and appoint commissioners. It now has the powers in the Local Government Act to do that.

Today we had the very disturbing proposals of the Minister for the Environment to attack the core of the Resource Management Act, the way in which sustainable management is defined, and to abrogate yet more powers from councils to central government. Those proposals would give the Minister the power to direct what councils should put in their plans, and to direct the outcomes that those plans should promote. So this is all about concentrating and centralising power in Wellington and, specifically, power in the Beehive. This Environment Canterbury bill is one of the worst examples of that.

In a healthy democracy you have the exercise of power and authority, subject to a range of checks and balances. When government is distributed to local government, as well as having checks like the judiciary, robust select committees, and government responsibilities are distributed, then you have got a healthy democracy, because local government is one of those important checks on central government. Yet this National Government, with this bill, with its proposals today, and with its changes to the Local Government Act, is wanting to centralise power and for Ministers to be able to dictate what local government does. That is despite local government in this country raising a good deal more of its revenue than occurs in many countries overseas. This bill is a profound attack on democracy, but it sits with a suite of measures that this Government is taking to cut across local government, to centralise power, and to undermine democracy generally.

JACQUI DEAN (National—Waitaki): When the Minister for the Environment, Nick Smith, took the brave move of sacking the councillors and appointing commissioners to Environment Canterbury, water policy in Canterbury was an absolute basket case. It did not even have an operative water plan. Consents were being made in a policy vacuum. Its overallocated catchments were being consented with no regard to the overall picture. Environment Canterbury councillors were a factionalised bunch more interested in fighting for their own interests than in the interests of the wider region. It is a bit like the Labour Party caucus, actually, if you ask me. Consenting times were the worst of any council in New Zealand. Every other local authority had lost confidence in Environment Canterbury. So the speaker from the Green Party, Eugenie Sage, should not tell me that all was wonderful during her time as an Environment Canterbury councillor. It was not.

During the time the commissioners have been in their role they have been highly successful and effective in addressing Environment Canterbury’s systemic problems and reforming its decision making and conduct. In particular I want to mention a couple of things. They have managed the Canterbury Natural Resources Regional Plan to an operative stage and started work on a second-generation land and water plan, which was notified in August of last year. They have made significant progress on the implementation of the Canterbury Water Management Strategy through collaborative processes. Praise the Lord for collaborative processes! And there has been development of zone implementation plans, which are now working their way into the statutory plan by way of plan change processes. That is progress. That is what matters to the constituents of Environment Canterbury.

The Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill gives effect to the continuation of that work. It is important work. It is important for the economic future of Canterbury. I commend the bill to the House.

ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First on the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. Has this not been an interesting week of undermining democracy in New Zealand? Many people around New Zealand watching this broadcast, and watching it over this last week, will be somewhat flabbergasted and in awe of this Parliament that the undermining of democracy could continue in this country in the manner that it has, particularly when the submissions on this particular bill came from so many different sectors that said it was time to return democracy to Canterbury, including even the commissioners themselves. Dame Margaret Bazley, a very eminent public servant who has headed up the commissioners there, and the other commissioners recommended that there be a transition back to a shared arrangement between the commissioners and elected representatives, with the intention to then get fully back to elected representatives in due course. That recommendation from Dame Margaret Bazley has been ignored by this Government. A sensible solution by this Government would have been to allow a transition back so that perhaps the knowledge and the expertise that the commissioners have had over the last year or two could be transitioned back to the newly elected people. And there would have been comfort from all sides that it was a proper process and that due course was being allowed to run in terms of democratic principles in Christchurch.

It was also interesting that the regulatory impact statements from the Department of Internal Affairs and from the Ministry for the Environment also recommended that democracy be returned to Canterbury. Again, the recommendations from those departments were ignored. Christchurch City Council itself, in its report, also called for the return of elections for Environment Canterbury. Again, the local authority, the second-largest local authority in New Zealand, which has been going through a huge amount of pain in the last couple of years, has also been ignored in this.

It was very interesting that one of the most compelling submissions that came to the Local Government and Environment Committee came from David Rutherford, the Chief Human Rights Commissioner. He stated: “The Commission considers that no good reason has been provided for extending the present legislation. The lack of public consultation about content—or the continuing need for the legislation—is an abuse of the democratic process and does not reflect the real needs of Cantabrians … In our view”—that is, the commission’s view—“the present legislation has the potential to further exacerbate the resentment that has arisen in Canterbury as a result …”. He also said: “Our view continues to be that the undemocratic way in which the original legislation was introduced, and its continuance, is simply wrong from a human rights perspective.”

Is it not interesting that when questioned at the Local Government and Environment Committee, the Chief Human Rights Commissioner said that New Zealand had gone to war to stop regimes denying people their democratic rights and denying the proper process of a democratic place for people to live in? In this respect he said we were somewhat hypocritical in this country to be pointing the finger at other regimes around the world—Fiji and Zimbabwe were mentioned—while at the same time denying those same principles here in our country, New Zealand. That was quite an eye-opener, so much so that the members from the National Party who sat there took some offence, got a little bit heated, and got a bit hot under the collar when the Chief Human Rights Commissioner mentioned that. In fact, we were almost wanting him to retract his words, but he would not. He stood by his words, and he said that New Zealand will have great difficulty in international forums in the future trying to point the finger at others about having the right of the vote for every person in their particular countries, when here in New Zealand those same principles are not upheld in Canterbury.

In that respect, New Zealand First has huge doubts about the integrity of this current Government. We have seen what it has done in areas like Auckland. We have seen what it has done in other parts of New Zealand. It does not listen to submitters, and we have seen that this week in this Parliament. I am absolutely appalled. For so many bills this week in this Parliament the Government has just wanted to close them down, shut them up, move them on, and not allow proper debate in the House of Representatives. This is the House of Representatives. Government members seem to forget that there are 121 members of Parliament who represent all of the people of New Zealand. They seem to forget that. And they seem to forget that the purpose of this Chamber is to fully debate and flesh out all the arguments, the pros and the cons of whatever is being put forward in legislation, to ensure that it does receive full, fair, frank, and robust debate. Yet time and time again this week, on so many bills of social importance and economic performance and of importance to the lives of people in New Zealand, the people sitting on the other side of this House, on the Treasury benches, have wanted just to stop the debate, shut the debate down, and not even put up a robust rebuttal or a defence of their position. It is appalling that Government members are not prepared to put to the people of this country any decent argument on so many issues this week, on so many bills this week. They are not prepared to defend their position, at all. That is arrogance. That is total arrogance.

The people of New Zealand are seeing the total arrogance, and it is appalling. People will remember. We are now 18 months out from an election. That clock is ticking and it is ticking very, very quickly. The wheels are falling off, and the true face of the National Party is coming through. The arrogance is coming through, and this is the latest and one of the worst examples of that. It is denying the people of Canterbury, who have gone through so much in the last couple of years, the basic, fundamental human right to vote.

Is it not incredible that we were celebrating the right for women to vote, which all started in the uprising in Canterbury, and how the women’s vote was so important that a hundred and—how many years ago was it? A hundred and—

Hon Member: 1896.

ANDREW WILLIAMS: It was 1896 or whatever that the women of Canterbury then fought to get the right to vote. They would be rolling in their graves, some of those women today—rolling in their graves—if they thought they went through all that to get the right to vote for women, only to find 120-odd years later that not only do the women not get the right to vote but also the men of Canterbury do not get a right to vote either. It is unbelievable. What a backward step under this National Government that is.

Well, I can assure you, New Zealand First can assure you, that under a different Government, which New Zealand First, hopefully, will be part of, there will be a return to democracy in Canterbury. We will return the right of every Cantabrian to ask for and have their elected people speak for them in Canterbury, not people brought in by the National Party on all sorts of high fees—former Prime Ministers on $1,000 a day, and the likes of, you know, the ring-ins from the National Party. That will stop, and the local people of Canterbury once again will have their men and women representing them and standing up for the best interests of Canterbury.

MAGGIE BARRY (National—North Shore): As the Hon Michael Woodhouse said at the beginning of this debate on the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill, we acknowledge the concerns of the submitters. We very much acknowledge the unease around these sorts of things. This, though, was a decision not taken lightly. We were very much of the view that we could have left it alone, except when you look at the facts—which is unknown territory for the Opposition ranks, particularly, I would have to say, the bellowing filibusterer—

Jacqui Dean: Bellicose.

MAGGIE BARRY: —bellicose as well, thank you—the former member for Waimakariri, charmless individual that he is.

Environment Canterbury’s performance, when we look at the facts, was ranked the worst out of the 84 councils in New Zealand. The review group stated that “the institutional failure in Environment Canterbury required comprehensive and rapid intervention on the part of central government.” Unfortunately, that is what we had to do. But do you know what? It has worked. The processing time frames for consents have gone from 28 percent in 2008 to 93 percent currently, and only a 2.9 percent increase in rates. This has worked very well. The collaborative approach of the commissioners has been commendable, and the elections will be held in 2016.

This is a piece of legislation that unfortunately is essential and I commend it to the House.

Hon LIANNE DALZIEL (Labour—Christchurch East): I am surprised that the Government’s National Party members from the Canterbury region have not dominated its contribution to this debate on the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill.

Hon Members: Where are they?

Hon Trevor Mallard: Yeah, where are they? They’re hiding in their rooms. They’re gutless.

Hon LIANNE DALZIEL: Well, I cannot refer to some of these matters. I know that my colleagues are trying to be extremely helpful in terms of my contribution to this debate.

The point is that this is an important issue in Canterbury, and I would have thought that every single National Canterbury member would be speaking on this particular bill. I actually think it is very important that they get up and speak in the House, but we have seen Aucklander after Aucklander and, I think, only one representative from the Canterbury region has actually spoken in the House. I think that is a pity.

I want to remind this House about the legislation that we are extending with this bill. I believe that it is important to continually remind ourselves of what was an utterly undemocratic bill that was passed through an undemocratic process that saw a Government predetermination become law through a sequence of events.

I want to just remind the House what that sequence of events relates to. One of them was the general election, obviously, in 2008 and the determination that the Government had to make significant changes in the area of our resource management legislative framework. But there was a problem in Canterbury that it needed to address as a matter of urgency, because the problem in Canterbury related to the allocation of water rights. That was a massive issue there because of the intensification of dairying on the Canterbury plains—parts of Canterbury that simply were never naturally resourced for dairying, because of the amount of water that it requires.

So the Government decided that it would do a review, but, very interestingly, that review did not come from the council itself. We faced a similar situation when we were in Government, with the Rodney District Council approaching us as we became the Government, asking us to continue the process of the review that it had written to the previous Government about. In fact, it was a unanimous decision of the council to have it replaced with commissioners so that the terrible issues that were arising in that area were able to be—[Interruption] Yes, it was a unanimous decision from the Rodney District Council. I have just noticed that Government members like to toss that across the House from time to time, so I just want to remind the House that that was a unanimous decision of the Rodney District Council for the Government to intervene.

So what did the Government do here? It appointed Wyatt Creech to undertake a review. Wyatt Creech has an association not only with the Government, a fairly obvious one, but also with the industry that demands so much of our water resources in Canterbury. So his selection to chair this review was utterly and completely inappropriate right from the outset. It was biased and—look, I have made the point before that for a conflict of interest to exist, it does not have to be a real conflict of interest. It is simply the perception. But this is real. It is a real conflict of interest when one is a dairy farmer and a former member of the Government and one is tasked with a role for which Government has set terms of reference; Environment Canterbury was not consulted.

In fact, the whole process was sparked off by the so-called letter, signed by all of the mayors in the region. I see that my colleague is nodding her head—she remembers that—because we all know what really happened. We know that Jo Goodhew in her role as the MP in Timaru approached the Mayor of Timaru in order to get all the mayors to sign up to a letter, which never went back to the individual councils for debate and was never signed off by any one of those councils for sending off to the Minister. But the mayors signed this letter, at the request of the Government, so that it would have the basis for this review—for this intervention—to occur.

I worry that we have lost sight of what really happened in those early days. We all understood very clearly from the Minister, Nick Smith, that—and I want to quote him into the record again, as I know others have done—“whatever the circumstances, the next regional council elections in Canterbury will take place no later than those scheduled for late 2013.” Here we are in the inevitable position of seeing this Government break yet another firm commitment to the people of Canterbury that it would stand alongside them in their hour of need. On this particular occasion it promised the restoration of democracy. There was an acceptance that democracy was being set aside—nobody on this side of the House accepted it for 1 minute. The Government acknowledged that that is what it was doing but said it was for a very limited period of time. But, no, it was not for a limited period of time. We are now facing a further 3 years without any democratic return.

What is extraordinary in this particular case is that not only was the original decision so fundamentally flawed—I have a copy of the Creech report here, and it is a report of two halves. It is absolutely a report of two halves. One part has been written as a political analysis to support the Government’s predetermined position, and the other part of it is written by an independent analyst, who has described Environment Canterbury’s improvements in the operation and the challenges that it faced with the water chapter, which, of course, was in a position to be implemented shortly after the commissioners took over. All of that work was completely ignored by the Government because it had a predetermined position.

Then we fast track to today, and we have got a regulatory impact statement that makes it absolutely clear that there has not been a Crown-led public consultation process with Canterbury stakeholders and communities on the options in the regulatory impact statement. It says: “This limits our ability to present community views on the options in this analysis.” I have to say that the two preferred options are those that are preferred by Environment Canterbury commissioners themselves—a mixed model of governance with one option being the legislation to establish a permanent mixed governing model, and the other option being to have to have a transitional mixed governing body, with the transfer back to a fully democratically elected council within a 3-year period beyond that—so the review of arrangements in 2017.

I think that if the Government had actually adopted the advice of the regulatory impact statement and of the advisers in that regard, then we would perhaps have been able to see our way clear to supporting some change in this area, even if it had been a transitional provision as opposed to a permanent transition. That, to me, is the fundamental flaw in this whole process. The Government has started with a position. As I said at the Committee stage, it is really the expression “improved water management” that sticks in people’s throats in Canterbury, because we know that this has got nothing to do with improved water management. This has got everything to do with access to the water, and, unfortunately, that is not necessarily in the interests of Canterbury.

PAUL GOLDSMITH (National): I rise to speak in favour of the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill. I appreciate that it is one that arouses great passion in the House. Suffice to say, I do not agree with the notion that democracy has been abandoned. It is appropriate that central government steps in when a failure has occurred at a council, and failure certainly did occur at Environment Canterbury. It was ranked worst out of 84 councils in New Zealand, and a review group stated that the institutional failure at Environment Canterbury required “comprehensive and rapid intervention on the part of central government to … enhance both regional and national well-being.” So we did have a failure. Commissioners were installed, and they have done an excellent job under the stewardship of Dame Margaret Bazley. This bill gives them time to finish the job, and on that basis I support it. Thank you.

Hon Ruth Dyson: Mr Speaker.

Mr DEPUTY SPEAKER: A split call?

Hon Ruth Dyson: A split call is correct.

Mr DEPUTY SPEAKER: The Hon Ruth Dyson.

Hon RUTH DYSON (Labour—Port Hills): Could I first of all acknowledge Paul Goldsmith, the member who has just resumed his seat, and thank him for acknowledging the fact that this issue has caused such a lot of concern in Canterbury. I think that was a fair acknowledgment. The member came as a member of the Local Government and Environment Committee and heard the very strongly put opposition to this bill by a large number of Cantabrians.

In fact, of the 95 submissions received on this bill, only five were in favour. They were from Federated Farmers, two irrigation companies, and Ngāi Tahu, which was significant, but significant because of their wish to have a better dialogue and engagement with our regional council, rather than their dissatisfaction. They did note that they had never had a good relationship with elected officers before, and I think that that is something that we certainly would not support. We wish that Ngāi Tahu would have a better relationship with all elected officials, but that does not justify not just sacking our elected representatives but sacking them for a further 3 years.

I suppose what I have been surprised about in listening to this debate through all stages of the bill, including quite a fair length of time in the Committee stage, is that not one member of the National Government found fit to justify why they had supported making a liar of their Minister who has recently returned to Cabinet, the Hon Dr Nick Smith. I think it is really offensive to have a Minister of Cabinet put on the public record—not just as an aside, but in a considered and serious way, as Dr Nick Smith is wont to do—“whatever the circumstances, the next regional council elections in Canterbury will take place no later than [the elections] scheduled for late 2013.” Nick Smith promised that when he was the Minister responsible for introducing the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act, which we are now amending. I think it is an outrage that members of his own party do not even acknowledge the fact that he said that in good faith.

People in Canterbury believed his promise to us. We thought it was bad enough that we were having our right to vote taken away for a little while, but this is just extraordinary. Our faith in Nick Smith has been shattered—not by him, but by members of his own party in Government.

The deceit and the unnecessary need for this legislation has carried on. The first Cabinet paper—which was signed by the Hon David Carter when he was Minister of Local Government, and by the Minister for the Environment, Amy Adams, who was very new to that job at the time—stated that any option except a return to a fully elected council would limit the democratic rights of residents of Canterbury compared with the rest of the country. That is true. They saw that as a problem.

The Government members do not seem to think it is an issue at all. Taking away our democratic right to vote does not seem to have occurred to them as being a problem. Their outrageous dismissal of our right to vote for our regional council, and their saying that the current commissioners are doing a good job, beggars belief. It is hard to accept in New Zealand, the country so proud of women winning the right to vote nearly 120 years ago, that we—an entire region—have had our right to vote taken away from us with this bland dismissal from the Government in such an arrogant and offensive way. It just beggars belief. It is certainly not the only way that Cantabrians—and the rest of the country, actually—are feeling stompled over by this Government.

The other issue that I just want to briefly mention, and I certainly have mentioned it in my earlier contributions, is the fact that in the regulatory impact statement, yet again, advice not just from one ministry, not just from two, but from all three ministries giving advice on this bill recommended that the water conservation orders be restored to the state that every other region has them in. Again, this bill takes away that standard process that we have had, and in Canterbury the protection of our water is more critical for us than it is for anywhere else in New Zealand. It is the biggest issue in Canterbury, and that is why we have seen the Government take away this democratic right. Some of us think that our water needs to be preserved and cared for and protected for future generations, because the way that the irrigators are using it up means that we now have rivers that are dry, we have aquifers that are polluted, and a treasure that we should be able to pass on to future generations is being lost.

MOJO MATHERS (Green): It comes as no surprise that the National-led Government justifies this appalling bill, the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill, which continues the suspension of democracy in Canterbury, by saying that Canterbury must realise its economic potential. It is extraordinary that the Government justifies its actions in this way, because the only economic vision it has for Canterbury is one of intensive dairying and massive irrigation schemes. The trouble with this vision is that Canterbury is already reaching the limit of what it can sustain in the way of intensive dairying.

Canterbury is already experiencing serious environmental impacts, and particularly downstream impacts on our water, from its existing levels of dairying. One of the reasons for this is that not only is irrigated dairying incredibly water hungry, with two large dairy farms using as much water as the whole city of Christchurch, but the impact of that number of cows is exacerbated by the fact that in Canterbury the gravel soils are not suited to dairying. The gravel soils readily leak the nitrates and other pollutants into the aquifers and into the downstream areas, polluting drinking water and causing areas to become very high in nitrates, with real concern for bottle-fed babies and so on. It is extremely serious.

One of the things that really strikes me is that those using this bill to justify the expansion of intensive dairying are showing that they value intensive dairying and irrigation ahead of democracy, ahead of the environment, and ahead of social cohesion and agreement about the way forward for Canterbury economically. It is utterly and completely unethical. I know that if we on this side of the House were to suggest that we should be removing democracy in order to protect the environment, there would be howls of outrage from irrigators and farmers, and that is the way it should be. The reality is that democracy is the foundation for a stable, cohesive society where we have to work together and work within the limits of what we can agree to move forward.

I am utterly appalled that the Government cannot trust the people of Canterbury to agree on what is the best economic vision for Canterbury that does not involve polluting our waters, draining our rivers dry, and building massive dams. That is not the vision that many people want for Canterbury, and the Government should not have to do it by removing democracy in order to pursue that vision. It is an extremely narrow, short-term vision for Canterbury. We can do better than that, and that is why the Green Party does not support this bill. It is an absolutely unethical, immoral bill. Thank you.

LOUISE UPSTON (National—Taupō): My colleagues on this side of the House have canvassed the issues well and summarised them succinctly, so I do not wish to add anything further in my support of the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill.

A party vote was called for on the question, That the Environment Canterbury (Temporary Commissioners and Improved Water Management) Amendment Bill be now read a third time.

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.

Bill read a third time.

Bills

Building Amendment Bill (No 4)

Second Reading

Debate resumed from 27 February.

NICKY WAGNER (National—Christchurch Central): I speak on the second reading of the Building Amendment Bill (No 4). Just to recap, this is a companion to the Building Amendment Act 2012, which came into force on 13 March 2012. This is the second of two bills to implement the Building Act review. What this bill does is it reduces compliance costs, it reduces complexity, and it reduces the delays in the building process. But it is also about protecting consumers, and it has got a number of provisions that will add to consumer protection. The first is that it makes contractors more accountable, and it makes them more accountable by requiring them to disclose a significant amount of information. The sort of information that they have to disclose to help people make a choice about their contractors is the legal status of the contractor and whether they are operating under a limited liability company. It needs to talk about the people who will carry out the work. It talks about their track record, their dispute history, their skills, and their qualifications, and also any financial backup or insurance that they have to cover the cost of fixing faults.

It also protects consumers by requiring written contracts for most residential building work. We heard quite a lot of stories from submitters about really complex situations that had come out of not having a contract that everybody could see, that was in writing, so that they could be sure of the quality of the work that they were going to get. These contracts must have specific information. First of all, they have to have information about the parties, about dispute resolution so that people know how they can go about a process if there is a dispute, and about the process for varying the contract. One of the stories we have heard, and we probably all know this, is that the costs of varying a contract tend to be very high. Sometimes people believe that a contractor will tender for a job, but if you make any changes to that, that is where they make their money. There needs to be a process laid out, so that people understand that. Also there is the time frame for the contract—basically, so they know when it will be finished—and what the payment process is. Often disputes are about how that payment works out in reality.

It also protects consumers even if the parties do not have a written contract. Of course, they are supposed to have a written contract. But just suppose you went ahead and started a building project without a written contract and it all turned to custard, there are regulations in this bill that will prescribe default clauses that will be taken as being included. So there will be no way for anybody to be able to escape just because it is not in writing.

The bill also has specific methods for enforcing warranties. The problem behind this is that often there are warranties but consumers have not necessarily read the fine print, and they have not got the peace of mind if something goes wrong and there is some shoddy building. This gives specific methods for enforcing those warranties. And building contractors will be expected to fix any defects in their work that are reported within 12 months of completion. They will have 12 months to discuss the project, and any damages or faults in the work must be fixed by the end of those 12 months.

The bill also increases the maximum penalty for failing to comply with building consent requirements. Up until now it has been a $100,000 fine, but this has been moved to a $200,000 fine just to show how serious we are about making sure that people get their building consents correctly done and that that protects consumers as well.

I have to say that the Local Government and Environment Committee worked hard on this bill and we did make a series of changes and, I think, improvements in response to submitters’ ideas. There are four or five key changes, and I would just like to work my way through them. First of all there is clarification about who is a building contractor and who is a client. That sounds pretty basic, but you would be amazed at the amount of confusion and the number of disputes that have arisen out of that. There is further detail on the purpose and the content of the checklist. The checklist is an important part of this bill. It means that both the contractor and the client will know what work is expected and they can work their way through the checklist to make sure that both are delivering on the contract. There is further detail on the content of the mandatory written contracts and how non-complying contracts will be dealt with. This is the idea that even if your contract is non-complying, there is a process to deal with that.

Andrew Little: What’s in this bill for the builders?

NICKY WAGNER: Finally, there is a new clause outlining what product manufacturers are responsible for under the bill. It is quite interesting to hear the question from the other side: “What’s in it for the builders?”. One of the problems that builders have had trouble dealing with is how much is their responsibility and how much is the product manufacturers’ responsibility. So there is a specific part of this bill that will outline what happens if a building product fails, even if the builders have done good work.

Debate interrupted.

The House adjourned at 6 p.m.