Wednesday, 15 May 2013

Wednesday, 15 May 2013

Wednesday, 15 May 2013

Mr Speaker took the Chair at 2 p.m.

Prayers.

Speaker’s Rulings

Questions for Written Answer—Ministerial Responsibility for Operational Matters

Mr SPEAKER: In recent weeks members have raised points of order about Ministers’ replies to questions for written answer. Written questions are primarily a matter between a member and a Minister. Where members are concerned about a reply, they should raise the matter with the Minister in the first instance. However, members have expressed a general concern about the number of replies that simply state that the matter is an operational one. Although a reply that something is an operational matter is strictly not out of order, I agree that on its own it is neither informative nor helpful. In practice, a wider view is taken of ministerial responsibility. There is no convention that Ministers are not answerable to the House for operational matters in the departments or agencies falling within their portfolio areas. Even though a Minister may not have legal control, the Minister assumes the political responsibility to the House to answer such questions. Legal responsibility and political responsibility are different things.

Ministers, in replying, may make it clear that they are transmitting information from the entity concerned in response to the question and do not have any legal or operational responsibility for the matter themselves, but it is my expectation that an informative reply is given if it can be given consistently with the public interest. If a Minister considers that a particular question does not disclose any ministerial responsibility, it is incumbent on the Minister to challenge the question’s validity rather than give an unhelpful reply.

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. Can I thank you for that. I think it is an important ruling and consistent with McGee. Can I also now ask you to add three more written questions to your examination list: questions for written answer Nos 5182, 5183, and 5184—three separate questions to the Minister of Justice that have been answered in a way that, in my opinion, trifles with the House. I ask you to come back either to me or to the House as to whether you consider the questions asked were addressed.

Mr SPEAKER: I will look into that matter for the member.

Questions for Oral Answer

Questions to Ministers

Budget 2013—Economic Programme and Comparisons with Australia

1. TODD McCLAY (National—Rotorua) to the Minister of Finance: How will the Budget continue the Government’s ongoing programme to deliver jobs and growth for the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): The Government will build on its four priorities for this term, including responsibly managing the Government’s finances and building a more productive and competitive economy to deliver jobs and growth. Over the last 4½ years we have taken a number of steps towards those priorities, including reducing company tax, reducing tax on work and savings, increasing tax on consumption and property, cutting red tape for business, and getting the Government’s own finances in shape to keep interest rates lower and take pressure off the exchange rate. The Budget will continue the practice over the last four Budgets of consistently investing in new infrastructure, in science and innovation, in our schools, and in health care, and continuing to provide further reduction in business costs.

Todd McClay: What reports has he received on employment and wage growth in the New Zealand economy?

Hon BILL ENGLISH: We have received moderately positive reports last week through the quarterly employment survey and the household labour force survey. Unemployment fell to 6.2 percent in the March quarter, with 15,000 fewer people unemployed, at the same time as there was an increase in the labour market participation rate. The quarterly employment survey shows around 30,000 more jobs in the last year and 50,000 more jobs in the last 2 years. Weekly earnings increased by 2.5 percent in the year to March, with the largest increase in manufacturing, where apparently there is a crisis, but earnings went up 4.3 percent. This compares with an increase in the cost of living of less than 1 percent over the same period.

Todd McClay: How does growth in New Zealand compare with the outlook in Australia?

Hon BILL ENGLISH: It is reasonably similar, despite the fact that Australia is benefiting from the highest terms of trade it has seen in many generations. Economic growth in Australia is forecast at around 3 percent over the next 4 years, which means that Australia is expected to do better than most of the developed world. This is encouraging because Australia is our largest trading partner, and we are expecting comparable growth in New Zealand. However, we are focused on what we need to do here in New Zealand, and tomorrow’s Budget will confirm that we are on track.

Hon David Parker: Is the reason he is no longer saying that he is “sticking to a plan that is working” that 200,000 people have left for Australia and only 8,000 jobs have been created of the 170,000 he promised at the last election?

Hon BILL ENGLISH: No, we are sticking to a plan that is working. In respect of jobs, there is no doubt that the 2012 job growth was weaker than we would have liked, and certainly weaker than those who were looking for new jobs would have liked. However, the prospects for job growth have picked up in 2013, and I guess that is the point. We are better to stick to a plan that involves expanding our productive sector and our exports and our savings, and to not take up a plan to spend more, tax more, and throttle our export industries, which is the Labour-Greens plan.

Andrew Williams: Is it part of the Government’s growth strategy to achieve pay parity with Australia, given that the earnings gap with Australia has increased by $58.18 under this National Government?

Hon BILL ENGLISH: Yes, we still do. We still are aiming—and I would expect New Zealand Governments will, for the next decade—to close the earnings gap with Australia. It is telling that in last night’s Budget, Australia put some of its tax cuts off for several years, which means that the gap in real after-tax incomes is likely to be closing a bit more over the next couple of years because our policy remains on track.

Hon Dr Pita Sharples: Given that Māori are disproportionately affected across unemployment, how will the Budget reduce Māori unemployment?

Hon BILL ENGLISH: In the first place, because the growth prospects in the economy look pretty positive, and in the most recent employment figures Māori unemployment began to drop; and, secondly, because the Government has invested in this Budget $43 million over the next 4 years, which is a major expansion of Māori and Pasifika trade training of 3,000 places. I want to give due credit to the Minister for his strong advocacy for this policy.

Andrew Williams: Does the Minister concede that the only real growth under this Government has been the growth in the number of New Zealanders going to Australia?

Hon BILL ENGLISH: No. Of course, as the member I think probably knows, the number of New Zealanders going to Australia is generally related to the difference in growth rates. So when we had a recession and Australia did not, more New Zealanders went to Australia. Now that the gap between our growth rates has closed right up, I think you would expect to see the outflow reduce reasonably substantially over the next 4 or 5 years.

Andrew Williams: What does he say to the 11 percent of 20 to 24-year-olds who, after 4 years under this Government, are still yet to see any of the jobs and growth promised by this Government?

Hon BILL ENGLISH: I would say to them that we can now look to the future with some optimism. Unfortunately, in their time since leaving school they have had to bear the burden of one of the worst recessions in a generation, but, compared with young people in almost any other developed country, their prospects are positive, and we are right behind them.

Todd McClay: What recent reports has he received about the Government’s economic programme?

Hon BILL ENGLISH: Just overnight the IMF put out its country report on New Zealand. That report is very favourable—well, it is favourable; I would not say very favourable, but it is favourable—about the approach that the New Zealand Government has taken to the management of the economy, and particularly to the management of the Government’s books. In fact, it believes that the speed at which we have reduced our deficit and headed to surplus is about right and that the actions the Government has taken are reinforcing the growth prospects for the economy.

Andrew Williams: What does he say to the people of Northland, who have an unemployment rate of 10 percent overall, and in the case of young Māori—[Interruption]

Mr SPEAKER: Order! Allow the member to ask his question.

Andrew Williams: Could I repeat the question?

Mr SPEAKER: The member can start his question again.

Andrew Williams: What does he say to the people of Northland, who have an unemployment rate of 10 percent and in the case of young Māori, where it is two or three times that level, in terms of what jobs and growth they will get promised by this Government?

Hon BILL ENGLISH: I think we would say to them that they will benefit from Government policies that would do two things. One is building a highway north of Auckland up to the North. The second thing is that they should support the Government’s oil and gas programme in the North and not support political parties that are trying to stop the highway to the North and are trying to stop the oil and gas programme, because Labour, the Greens, and the Mana party are trying to destroy jobs in Northland; not create them.

Andrew Williams: So how can he give this series of answers, when under this Government the number of children living in benefit-dependent households has increased by 32,000?

Mr SPEAKER: Hon Bill English, in so far as he is responsible.

Hon BILL ENGLISH: In the first place, there was an increase in benefit numbers when we had a recession. I might say that was in contrast to what was going on under the previous Government, when, even though the economy was booming, benefit numbers went up. [Interruption] The Government’s welfare reforms and housing reforms are focused strongly on reducing that dependency, and there will be more evidence of that in the Budget tomorrow.

Skycity, Convention Centre—Negotiation of Agreement and Provision for Compensation

2. METIRIA TUREI (Co-Leader—Green) to the Minister for Economic Development: On what date did the issue of compensation in the event of future reform of gambling law first arise in the negotiations over the SkyCity Convention Centre; and which party raised it?

Hon STEVEN JOYCE (Minister for Economic Development): Negotiations with Skycity began in June 2011 and they were undertaken on a commercial basis by ministry officials and advisers with the company. As the member may appreciate, the nature of negotiations is such that issues are often raised in an informal way around a negotiating table and are not necessarily recorded. As Minister for Economic Development I was not involved directly in those negotiations and am therefore not aware of every suggestion that was made or when it was made. However, in order to be of assistance to the member, I think it is fair to observe that, given that the company was being asked to build a very large convention centre and operate it for 35 years, the issue of what compensation would arise if Parliament subsequently altered the concessions would have come up fairly early on.

Metiria Turei: I raise a point of order, Mr Speaker. I appreciate that there was a partial answer to this question, but this question was put on notice. It asked on what date. That was not answered. When I asked this question of the Prime Minister yesterday he expressly referred me to Minister Joyce as the person who would know the answer to that question. I expect an answer. On what date did the issue first arise?

Mr SPEAKER: The difficulty the member has with the question is—and I accept she asked for a specific date—that the Minister quite clearly in his answer said he was unable to provide a specific date, because the discussions occurred over a long period of time and they moved from informal-type discussions to more formal, and therefore there is no specific date recorded.

Dr Russel Norman: I raise a point of order, Mr Speaker. The issue is that the Minister has previously made public statements identifying that it was Skycity that raised this question, not the Government, and hence the Minister is already on the public record identifying the answer to at least one part of this question; presumably, he must have information about the other part of the question as well. It is not consistent for him to argue both sides of the coin.

Mr SPEAKER: I am sorry, but I do not accept the point the member is making. I was listening very carefully. The Minister was quite careful in explaining why he was unable to give the specific date that the member asked for. The member has further supplementary questions if she wishes to use them.

Metiria Turei: Given the Minister’s answer that the issue was raised some time ago, does he then agree that Nigel Morrison of Skycity was incorrect when he blamed the NZ Power announcement 4 weeks ago for supposedly spooking him into seeking compensation, when, in fact, as the Minister has confirmed, compensation had already been on the table for some time?

Hon STEVEN JOYCE: I can confirm a couple of things for the member. Firstly, the general concept of compensation has been there for some time. If the member has had a look at the heads of agreement, she will note that one aspect of the compensation is in regard to the gambling levy while the convention centre is being built, which is over a different time frame—until up to 4 years after the convention centre is built. My understanding is that that particular element came up quite late in the process. I cannot give you the exact date, but nor would I necessarily be able to contradict Mr Morrison in that regard.

Hon Trevor Mallard: Has his department given up keeping file notes of important meetings and requests?

Hon STEVEN JOYCE: As far as I am aware, it has not given up keeping those notes—

Grant Robertson: Just on this.

Hon STEVEN JOYCE: No, it was asked to check and could not identify a specific date.

Metiria Turei: Given that the issue of compensation has been on the negotiating table for some time, does he not believe that the public have had the right to know that the price of this deal was 35 years’ worth of compensation if the public decided they wanted to change gambling law?

Hon STEVEN JOYCE: I am not quite sure what the problem is that the member has raised. The point is that the discussions took place over a period of time. We did not discuss how those discussions were going, or I think certain members of the media might have committed us to a larger number of pokie machines than eventually was agreed, so we said we would talk about that at the end, and we have now presented the arrangements to the public. Parliament will get an opportunity to debate those arrangements and then we will make a decision as to whether or not to pass them.

Metiria Turei: Was the Minister deliberately keeping the compensation provision secret until this past Monday because he knows that there is likely to be serious public concern that the public’s right to make gambling law reform in the future will now come with a multimillion-dollar price tag for the next 35 years?

Hon STEVEN JOYCE: The member is incorrect, and I think it is important that I point that out to her, because she has made these statements a number of times in the media and she is wrong. The reality is that the compensation relates to the specific concessions that are identified in the agreement. They do not relate to harm minimisation and other aspects of gambling policies. For example—[Interruption] Do you want to hear about it or not? For example, the problem—

Grant Robertson: Rubbish! Cashless gambling machines?

Hon STEVEN JOYCE: Well, you will learn something, Grant. The problem gambling levy—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It is absolutely inappropriate for the Minister to bring you into the debate and ask you whether you want to hear about it. [Interruption] And I ask you whether it is appropriate for the Minister who has just breached to breach again by interjecting during a point of order.

Mr SPEAKER: The member is quite right. Points of order should be heard in silence and no member of Parliament should bring the Speaker into the debate. But to be fair to the Minister, he was responding to a level of interjection from the Opposition benches. A further supplementary question?

Hon STEVEN JOYCE: I raise a point of order, Mr Speaker. I would like the opportunity to complete my answer—

Mr SPEAKER: Absolutely.

Hon STEVEN JOYCE: —because it is a very important point.

Mr SPEAKER: The Minister can continue with his answer.

Hon STEVEN JOYCE: As I was saying to the member, it is important to note that the issue of compensation is in relation only to the specific concessions laid down in the agreement. In terms of items such as further changes to harm minimisation, further changes, for example, to money-laundering laws, and further changes to the problem gambling levy—all of those are able to be made for the entire 35-year period without any recourse by Skycity.

Metiria Turei: Under the heads of agreement, how much money would New Zealanders have to pay Skycity if they wanted to outlaw cashless gaming technology, such as ticket-in, ticket-out, which is currently illegal in New Zealand, because, for example, it increases money-laundering? How much would the taxpayer have to front up with if they wanted to outlaw cashless gaming under this deal?

Hon STEVEN JOYCE: Well, the member has listed one of the concessions that of course does apply for compensation. I would point out to the member, though—

Grant Robertson: Right, so why did you say it didn’t?

Hon STEVEN JOYCE: Well, that is exactly what I said at the front. I said that apart from these specific items raised, all other aspects can actually be changed. In terms of changing ticket-in, ticket-out—or cashless gaming, as the member puts it—which, of course, is available not only here in New Zealand now but also across all Australian states, the reality is that of course Parliament can choose to change that, and there would be an element of compensation, because that is part of the concessions granted to Skycity.

Hon Members: How much?

Hon STEVEN JOYCE: I do not have the number in front of me, but it is part of the concessions granted. It is laid down in the KordaMentha report.

Metiria Turei: Can the Minister confirm, then, that as the Minister responsible for this deal he cannot tell the New Zealand public what their potential financial liability will be under the heads of agreement for any future changes in gambling law reform that affect the concessions provided to Skycity by him under this deal? He does not know how much it will cost.

Hon STEVEN JOYCE: I could but it would take up a fair bit of the House’s time because it is quite a KordaMentha report. If the member wants to make some specific requests—if she is unable to deduce from that report—and if she wants to put them down in writing I am more than happy to address them for her.

Metiria Turei: Why was the independent consultant KordaMentha not instructed to also consider the costs of the social impacts of increased gambling harm caused by the gambling law concessions in the deal, as it has specifically noted were excluded in its report?

Hon STEVEN JOYCE: Because that is Cabinet’s responsibility to make that assessment, relative to all other aspects. The specific requirement that we asked of KordaMentha was to assess the economic considerations to ensure that at the economic level, between Skycity and the Government the arrangements were fair to both parties. The social considerations are very much a matter for Cabinet to consider when weighing up the decision.

Metiria Turei: What has the advice to Cabinet been, then, as to the financial and social costs to New Zealand from the gambling law concessions that are part of this deal; and if he does not have this figure, how does he justify telling New Zealanders that this is a good deal if he cannot tell them how much it will cost both from the compensation and from the financial and social costs of increased gambling harm?

Hon STEVEN JOYCE: There is not an actual number, and the reason for that is that nobody has been able to define, for example, how any element of gaming necessarily increases the amount of problem-gambling harm in the community. That is the reality of it.

David Shearer: Like cigarettes 40 years ago.

Hon STEVEN JOYCE: Well, in actual fact it is a little bit different from cigarettes—for the somewhat challenged ones in the Opposition—because, actually, there are some people for whom any aspect of gaming actually causes a problem. They have access to a range in the community, and there is no evidence to suggest that adding or subtracting, for example, one individual pokie machine at a casino or anywhere else has any effect on its own on problem gambling.

Prime Minister—Statements on MMP Review and Skycity Convention Centre

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

Rt Hon JOHN KEY (Prime Minister): Yes.

David Shearer: Does he stand by his statement as to the question of whether the MMP review was dead in the water, when he answered: “As far as I’m concerned, yeah.”; if so, what does he say to the 1.27 million New Zealanders who voted to keep MMP on the law he passed requiring a review of MMP, and to the over 5,000 New Zealanders who submitted to that review?

Rt Hon JOHN KEY: In answer to the first part of the question, yes.

David Shearer: Is he aware that the last communication the Government sent to Labour on this issue said: “It hoped to progress a collaborative process for considering and responding to the commission’s recommendations.”; if so, how is unilaterally ending the process in any way collaborative?

Rt Hon JOHN KEY: No, because that matter was handled by the Minister of Justice, but what I can say is that the very helpful chart that she has put out indicates that right across Parliament there is a range of different views; there is clearly no consensus. Just because Labour and the Greens think something is good does not mean it should be rammed through—although we do know that the way Labour handles electoral law is just to ram the Electoral Finance Act down its throat because it suited them—

Mr SPEAKER: Order! That is quite a sufficient answer. [Interruption] Order!

David Shearer: Has he received advice on which of the commission’s recommendations on MMP National opposes; if so, which recommendations are they?

Rt Hon JOHN KEY: I cannot recall any particular advice; it may have been the case. What I can say is that National does not support—not that I have prime ministerial responsibility for this—a lowering of the threshold from 5 percent to 4 percent. The reason is that as soon as you went to 4 percent, the argument would be put up that it should be dropped to 3 percent. As soon as you do that, in my view, you get a very unstable democracy.

David Shearer: Did the Government have any discussion with John Banks or with any representatives of the ACT Party before deciding to kill off the review’s recommendations; if so, was it over a cup of tea?

Rt Hon JOHN KEY: I did not. If any other member of the Government did, you would have to direct the question to them.

David Shearer: Further to his comments on the casino deal, is acquisition of land owned by TVNZ part of the deal?

Rt Hon JOHN KEY: That is a matter ultimately for the parties, which is clearly Skycity, as the member will know. In terms of what the status of that is and whether there is a willing buyer or a willing seller is a matter for the parties, not for me.

David Shearer: So is the Prime Minister saying that the land is for sale and Skycity will be purchasing it, or not?

Rt Hon JOHN KEY: The Minister advises me that, apparently, Television New Zealand is interested in engaging in discussions with Skycity, but I am not involved in that.

David Shearer: In that case, why then, as of yesterday, has TVNZ still not been approached about the sale of that land, which is essential for building the Skycity convention centre?

Rt Hon JOHN KEY: The member would need to direct that question to Skycity. I am not the one holding negotiations.

Tertiary Institutions—Financial Performance in 2012 and Funding

4. SIMON O’CONNOR (National—Tāmaki) to the Minister for Tertiary Education, Skills and Employment: How well has the tertiary sector performed financially in 2012?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Very well indeed. Indicative figures released today show that the publicly owned tertiary education institutions have collectively recorded record revenues and record levels of overall Government funding in 2012. Together their revenues totalled $4.56 billion, and they have had a sector-wide surplus, before unusual and non-recurring items, of $157.9 million, or 3.5 percent of their income. It is pleasing to note that while Government funding overall has increased by 13.4 percent since 2008, total income across the sector from all sources has also gone up, by 16.8 percent. It shows that our universities, our polytechnics, and wānanga have had another successful year financially, as well as educationally, despite the toughest economic times since the Great Depression.

Simon O’Connor: By how much has the Government funding of public tertiary institutions increased since 2008?

Hon STEVEN JOYCE: Overall Government funding of publicly owned tertiary education institutions has risen by 13.4 percent since 2008, reaching more than $2.2 billion in the 2012 year. University funding has increased by 16 percent over that 4-year period. Polytechnic funding has increased by 8.7 percent over the 4 years, and Government funding of wānanga has gone up by 10.7 percent over the same period. The Government has continued to improve the quality of its overall tertiary spending, including student support, so that it can keep growing its investment in quality tertiary institutions.

Simon O’Connor: How has the income of tertiary education institutions increased overall?

Hon STEVEN JOYCE: Total income across the public tertiary sector from all sources has risen by 16.8 percent since 2008. This has contributed to healthy financial surpluses across the sector, and these surpluses in turn have contributed to very healthy balance sheets at most institutions. The Government has worked hard to assist institutions to achieve better educational and financial results over the last 4 years. We have introduced performance-linked funding to provide a financial incentive to providers to increase their educational outcomes; we have changed the model for polytechnic governance to introduce smaller, more skills-focused and industry-focused councils; and we have made a number of highly skilled and experienced appointments to university councils.

Economy—Sustainable Growth and Commentary

5. Hon DAVID PARKER (Labour) to the Minister of Finance: Does he agree that New Zealand is currently operating as a two-speed economy and that the current growth mix is not sustainable; if not, why not?

Hon BILL ENGLISH (Minister of Finance): No. In some respects the Government, of course, does not get to pick the current growth mix. The Canterbury earthquake was not forecast. It will have an impact on New Zealand’s growth mix for the next 6 or 7 years. The other reason that I do not agree, though, is that in the December quarter, 15 of the 16 measured industries, including manufacturing, showed growth. We are not seeing that growth leading to general inflation or interest rate pressures as yet. Auckland and Christchurch property markets are showing significant price increases, and that is some concern, which is why the Government is taking steps to free up the supply of housing and reduce pressure on rising house prices. Overall, we are seeing reasonably broad-based and balanced growth—certainly more balanced and sustainable than it was in 2008, before the global financial crisis—but we have some way to go to get an economy that is more sustainably driven by export growth and strong savings and investment.

Hon David Parker: Does the Minister agree with Westpac Chief Economist, Dominick Stephens, that “We also continue to see big regional disparities, reflecting New Zealand’s two-speed economy.”?

Hon BILL ENGLISH: The Government has itself just published some regional GDP figures, which are creating some debate. I do not agree with the economist that there are big regional disparities. But, certainly, those that have strength in industries such as oil and gas and the dairy industry are doing well. They would be worried about Labour-Green policies, which are aimed at shutting down those industries.

Hon David Parker: Has he seen the International Monetary Fund’s forecast that New Zealand will have the worst current account deficit in the developed world this year and every year through to 2018, and, if the IMF is anywhere close to the mark, does not that prove absolutely he has failed in his stated ambition to rebalance the economy?

Hon BILL ENGLISH: No. I do not agree with that. I have seen the IMF figures. Of course, the irony of this criticism from the Opposition, as pointed out in the Business and Economic Research report that Opposition members were waving around a few days ago, is that if the economy did adjust faster to exports and savings, it would be at the expense of household consumption and household incomes. So they cannot have it both ways, saying that the Government is not doing enough to ensure households have better incomes, and then turn round and say it has not rebalanced the economy fast enough by cutting household consumption and incomes.

Hon David Parker: Well, if he does not think having the worst current account deficit in the world is a problem, is he aware that the forecast in his last Budget—

Hon Steven Joyce: Oh, what! That was when you were in charge.

Hon David Parker: Actually, it was not, Mr Joyce. You need to check your facts.

Mr SPEAKER: Order! Would the member—

Hon David Parker: Is he aware that the forecast in the last Budget was that unemployment would presently be 5.7 percent, that his Budget 2 years ago predicted unemployment would now be 4.8 percent, and, given that unemployment is now above 6 percent nationally and 7 percent in Auckland, does he consider that to be successful management of the New Zealand economy?

Hon BILL ENGLISH: Well, if it is a measure of it, the worst current account deficit under this Government, which is what it is today, is less than half what it was for the last 3 years that the Labour Government was in power.

Hon David Parker: Does the Minister of Finance agree that a capital gains tax would reduce distortions in investment signals and drive investment from rental house price speculation into productive export industries?

Hon BILL ENGLISH: The one proposition we have seen for a capital gains tax is the proposition put forward by the Labour Party, and, of course, what it does is exempt most housing stock, so it would have no impact. In fact it remains a tax—

Hon David Parker: I raise a point of order, Mr Speaker. That was not my question. My question, and I am happy to repeat it—

Mr SPEAKER: Order! I think on this occasion the best way forward is for the member to repeat the question.

Hon David Parker: Does he agree that a capital gains tax would reduce distortions in investment signals and drive investment from rental house price speculation into productive export industries?

Hon BILL ENGLISH: No, I do not. The proposition we have seen, which is Labour’s proposition, exempts most housing, not rental housing. It remains, in effect, a tax on the growth of businesses; that is actually what it is. It will not have much impact on the housing market, but it will certainly tax all gains from growing a business, reinvesting the profits, and employing people. In that context, it is an anti-jobs tax.

Accident Compensation—Discount Programmes for Small Businesses

6. CHRIS AUCHINVOLE (National) to the Minister for ACC: What benefits does ACC provide small businesses that have a good workplace injury record?

Hon JUDITH COLLINS (Minister of Justice): ACC has in place the workplace safety discount programme to recognise small to medium sized businesses that can demonstrate that they have health and safety policies in place. This allows for a 10 percent discount for successful applicants.

Chris Auchinvole: Can all small businesses access ACC’s workplace safety discount programme?

Hon JUDITH COLLINS: This programme originally targeted seven high-risk industries such as agriculture, construction, and forestry, for example. In 2012 Cabinet agreed to expand the workplace safety discount programme to include all industry groups, to encourage small businesses to increase their awareness of health and safety practices and their capability to implement safety management practices. A newly developed assessment tool was launched on 1 April 2013 to help them with this.

Chris Auchinvole: Does ACC have any other benefits for small businesses with good workplace records?

Hon JUDITH COLLINS: Yes, ACC offers a no-claims discount programme, which was introduced with experience rating on 1 April 2011. Businesses that pay less than $10,000 a year in levies are eligible for this programme and qualify for a 10 percent levy discount if no weekly compensation or fatal claims have been lodged for their businesses in the previous 3 years.

Question No. 7 to Minister

ANDREW WILLIAMS (NZ First): I raise a point of order, Mr Speaker. According to the forward schedule we were provided with for Parliament, question No. 7 was to be in the name of Brendan Horan. We would like to know why that is not the case.

Mr SPEAKER: There was no question lodged by Mr Horan.

BRENDAN HORAN (Independent): I raise a point of order, Mr Speaker. I would like to reply to that gratuitous and uncalled-for interjection. The fact is that the House is—

Mr SPEAKER: Order! This is not a point of order.

Child, Youth and Family—Response to Neglect or Abuse Cases and Iwi Leaders Forum Recommendations

7. JACINDA ARDERN (Labour) to the Minister for Social Development: How many notifications did Child, Youth and Family Services receive regarding the four neglected children found dirty, malnourished, with head lice infestations and open scabies wounds, prior to their removal by Police in January this year?

Hon PAULA BENNETT (Minister for Social Development): This is a complex case, and I have asked Child, Youth and Family for a report. Because of the family’s transience—living in a number of regions—I am unable to give detailed information and an actual number at this time. What I can say is there has been previous Child, Youth and Family involvement and notifications over many years, but Child, Youth and Family was unaware that they were at that residence until 4 January, when the police were involved. However, these matters are also still before the courts, and I cannot prejudice those proceedings in any way.

Jacinda Ardern: How is it possible that Child, Youth and Family received several notifications of neglect or abuse—in what has been described by police as one of the worst cases they had seen—against a parent who had existing convictions for leaving children unsupervised, and yet the children were removed only after the police visited the home?

Hon PAULA BENNETT: What I can say is that, unfortunately, in this country, we have literally thousands of substantiated cases like this. They are incredibly complex—

Hon Ruth Dyson: Like this? That’s nonsense.

Hon PAULA BENNETT: Well, we do. We have got more than 22,000 substantiated cases of abuse, neglect, or emotional abuse in this country a year. That is the reality of it. We have more than 6,000 children who are removed each year. We will go back and look at the reports from Child, Youth and Family. It has had a lot of intervention for some time, and a lot of community organisations have been involved as well, but, at the end of the day, I think the actions that have been taken are right.

Jacinda Ardern: Why did Child, Youth and Family provide no oversight of the children once they had been placed with a family member, resulting in the children simply being returned to their parents and to a continued state of neglect as early as 3 days later?

Hon PAULA BENNETT: In light of my still getting more information, I will give the member as much as I have at this time, but I am cognisant that it may change over the next couple of days while I am getting more. From what I understand, there were multiple children at the address on the night of 4 January, on the Friday night. At that point, the police removed the children. Child, Youth and Family was involved. It was the police and Child, Youth and Family that placed them in what they thought was a safe environment. Child, Youth and Family was then involved the next day. It was the understanding that the children were going to stay there, and they would then go through a process of where they were placed and what happens to them. When Child, Youth and Family went back on the Monday to do that, the children were gone. It then spent the next 3 days with the police looking for those children, and they were found on 10 January by the police at that address.

Jacinda Ardern: Why were there further delays before the children were removed a second time from the house when the police are reported to have found them in the parents’ home not once but twice?

Hon PAULA BENNETT: I am not aware of there being delays a second time. So, as I pointed out—as I did—they were removed on that Friday night. Child, Youth and Family was there on the Saturday. It went back there on the Monday. At that point, the children were back with the parents. It was then actively looking for them, as were the police, and they were found 3 days later. So they were not placed back with the family at all, and they were removed at that time and taken to hospital. That is my understanding.

Jacinda Ardern: Can the Minister guarantee to the House that this will be an isolated case when in answers to written questions she recently advised that of the more than 100,000 substantiated notifications her department has received in the last 5 years, approximately a quarter were the second, third, fourth, or even fifth substantiated notification of abuse or neglect of a child—or is she presiding over an under-resourced, under-staffed, and highly stressed department?

Hon PAULA BENNETT: What I can assure the member of is that we spend nearly half a billion dollars on Child, Youth and Family in a year. We have increased its funding under this Government by 15 percent over the last 4 years. We have increased the number of extra front-line workers, so we have an extra 96 of them, and an extra 149 social workers in schools. We have also introduced up to $50 million that will be going into gateway assessments. But let me put it this way to the member: in 2006 we had 1,089 unallocated cases; in 2012 there were only 95. Actually, the department is responding better than it ever has before, but, unfortunately, we have parents who are incredibly neglectful, and we get incredibly sad cases like this.

Hon Dr Pita Sharples: What progress has been made with regard to the Iwi Leaders Forum request to return their children home by Child, Youth and Family to their iwi whānau?

Hon PAULA BENNETT: We have been working on memoranda of understanding with iwi. We have signed our first one, and we are seeing developments there. What we are most interested in is whether we can have pre-assessments done so that we know that those children, if they do have to be removed, are staying within their iwi and are in a safe environment. We are taking it one step further than that and we are now looking at prevention. We also have whānau finders. We have started them, and that has certainly been at the behest of my Associate Minister Turia there, who is constantly trying to get us better connected with knowing where these children are and how they can stay within their iwi and still be in a safe environment.

Budget 2013—Māngere Refugee Resettlement Centre

8. JAMI-LEE ROSS (National—Botany) to the Minister of Immigration: What announcements has he made on the future of the Māngere Refugee Resettlement Centre?

Hon MICHAEL WOODHOUSE (Minister of Immigration): On Friday I announced that Budget 2013 will include funding to enable the Māngere Refugee Resettlement Centre to be rebuilt by the end of next year. For decades the Māngere centre has played a crucial role in helping tens of thousands of refugees from the world’s trouble spots adapt to a new life in New Zealand, but many of the ageing buildings are beyond repair. The decision to rebuild the centre demonstrates the Government’s strong commitment—

Le’aufa’amulia Asenati Lole-Taylor: Why Māngere?

Hon MICHAEL WOODHOUSE: —is that nimbyism over there—to preparing refugees for New Zealand life and their move into the community.

Jami-Lee Ross: Can the Minister tell the House how is the rebuild to occur and what will this mean for the centre?

Hon MICHAEL WOODHOUSE: The Government will contract with the private sector to construct new facilities, with the Government leasing the buildings back over the long term. The $5.5 million to be set aside is part of the cost to lease and maintain the new buildings over the next 4 years. This arrangement will result in a $15 million upgrade for the refugee centre, and will see the facility increase its capacity from 160 to 192 individuals, with the provision to accommodate up to 300 individuals in the event of a mass arrival.

Hon Peter Dunne: Does the Minister’s last answer mean that earlier proposals to use other centres such as the Waiōuru Military Camp and other equally grim places as ways of detaining mass arrivals now no longer applies because these people will be able to be processed through the Māngere centre?

Hon MICHAEL WOODHOUSE: To the Waiōuru example, I can assure the member that that option is off the table, but the policy in the event of a mass arrival will be, as it is now, that people will be housed in centres that are commensurate with their risk and need. If that security level is higher, it may well be a high level of detention is required.

Community Health Services—Provision and Funding

9. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Health: What progress, if any, has been made towards providing more health care in the community?

Hon TONY RYALL (Minister of Health): Very good progress has been made—for example, in relation to home support in the community. The Government expects to spend $251 million on home support for older people in the 2012-13 year—that is $30 million more than in 2008-09. Although most district health boards are delivering more hours and one or two are delivering fewer, overall in 2012 district health boards purchased over approximately 10 million hours of home support, which is 1.4 million more than in 2008. However, like so much in the work that we do there is always room for improvement for New Zealand patients.

Hon Annette King: Is Dr Paul Ockelford of the New Zealand Medical Association correct when he said this morning that if the Government wants doctors to provide more health care in the community rather than in hospitals, Government funding should follow?

Hon TONY RYALL: Mr Ockelford certainly presents a view that if additional services are to be purchased from doctors and general practices, then funding should follow. In many ways, that is why the Government has invested so much in the public health service over the last few years, and New Zealanders will see tomorrow that this Government remains very strongly committed to protecting and growing the New Zealand public health service.

Hon Annette King: Does he intend to inform New Zealanders that, in fact, moving health care into the community can actually mean moving the cost on to the community, which is happening now under his policy and impacting on older people in particular?

Hon TONY RYALL: The Government remains very committed to improving services in the community. I can tell that member that, for example, we have been increasing the funding that is made available to general practices. We have made funding available so that doctors and nurses have additional time to provide mental health services in the community. We are actually seeing quite a lot of additional services provided for New Zealanders across a whole range of areas.

Hon Annette King: Is he aware that the impact of moving health care from hospitals into the community without funding has meant that Mr David McFarlane, a 75-year-old pensioner from Kaiapoi, has to pay $200 to his general practitioner to have skin cancer removed—a procedure previously carried out without cost in the public hospital?

Hon TONY RYALL: In many parts of the country people may pay for some skin lesion services; in many parts of the country they may not. But certainly what we are doing is providing more services in our public hospitals. We are providing more operations than at any other time in the history of New Zealand. We have increased the funding, and more services are being provided, unlike the situation in the 2000s when the budget doubled and fewer people got operations.

Hon Annette King: Is it the Government’s intention that New Zealanders now pick up the cost of health care provided in the community that was provided free of charge in public hospitals?

Hon TONY RYALL: The vast majority of services provided in our public hospitals—in fact, virtually all of them—are provided free. This Government is very focused on making sure that the services that New Zealanders receive are improved. They will see in the Budget tomorrow continuing strong commitment—

Hon Annette King: I raise a point of order, Mr Speaker. I am sure you listened to the question. I did not ask whether they were provided free in the public hospital; I asked whether the community is now going to pick up the cost of health care that was provided free in the public hospital.

Mr SPEAKER: Order! That is not the way the question was originally asked, but if the Minister—

Hon Annette King: Mr Speaker, I will repeat it if you would like, so you can see exactly how—

Mr SPEAKER: No, that is not necessary at all. Does the Minister now want to answer further? No.

Hon Annette King: I seek leave to table a letter from Mr David McFarlane, with his approval, saying that he now has to pay $200—

Mr SPEAKER: Leave is sought to table that letter. Is there any objection? There is none. It can be tabled.

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

Hon Annette King: I seek leave to table a report from his doctor, saying that he needs to have these skin cancers removed because if they are not removed they will invade surrounding tissues.

Mr SPEAKER: Order! And, again, that is with the patient’s approval?

Hon Annette King: It is all with his approval.

Mr SPEAKER: Leave is sought to table the doctor’s report as well. Is there any objection? There appears to be none.

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

Hon Annette King: I seek leave to also table two receipts from Mr McFarlane showing that he paid $200 to have skin cancer lesions removed.

Mr SPEAKER: Leave is sought to also table the receipts. Is there any objection? There appears to be none.

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

Brendan Horan: What would the—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! Would the member just proceed with his supplementary question.

Brendan Horan: What would the Minister say to the Bay of Plenty mother who approached me yesterday, concerned when told—[Interruption]

Mr SPEAKER: Order! The member has every right to ask his question. Would the member please ask his supplementary question. [Interruption]

Brendan Horan: How dull some of their comments are on that side, but never mind.

Mr SPEAKER: Order! If the member just proceeds to ask his supplementary question, we will get to the further business of the House far more quickly.

Brendan Horan: What would the Minister say to the Bay of Plenty mother who approached me yesterday, concerned when told by her doctor that her 11-year-old son will have to wait 6 months to see an ear, nose, and throat specialist for treatment for a respiratory condition, which will likely require an operation, and whose condition may worsen, with risk of infection, whilst on the waiting list? What would the Minister say to that Bay of Plenty mother?

Hon TONY RYALL: I would say to that Bay of Plenty mother to make sure that the general practitioner refers her to Tauranga Hospital, because I could tell that mother that more services are being provided to children and adults in the Bay of Plenty District Health Board region than ever before, and the services are being provided faster than they were before. This Government has invested strongly in the Bay of Plenty District Health Board, unlike the previous Government, when the budget doubled and fewer people got operations. We are providing record numbers of specialist appointments and a record number of operations, and that mum should be very happy with the increased services we have provided.

Electoral System, MMP Review—Response to Recommendations

10. HOLLY WALKER (Green) to the Minister of Justice: Did she receive a response from the National Party following her request for party views on the Electoral Commission’s recommendations for changes to MMP; if so, what was that response?

Hon JUDITH COLLINS (Minister of Justice): Yes, this morning I have publicly released a summary of all party responses. As the member will now know, the National Party did not agree with key changes suggested by the Electoral Commission.

Holly Walker: Given the Minister’s own stated preference to adopt the recommendations as a package, and the fact that the Green Party had committed to vote for legislation doing that, is the only reason she could not get 61 votes that her own party blocked it?

Hon JUDITH COLLINS: It is wonderful that the member thinks she can read my mind, but I do not think I have ever stated that. I have said that if there should be change, then generally it is better to have all the changes together, unlike under the royal commission response in 1986 from the then Labour Government, when it did nothing on it for many years, and it was a National Government that had to bring it through.

Holly Walker: Is the real reason she will not introduce legislation that the National Government needs the hugely unpopular one-seat threshold in place to keep John Banks and Peter Dunne on side?

Hon JUDITH COLLINS: I think the member does not realise that the member she has just referred to is actually an electorate MP. I know that that is not something that is known of in the Green Party, but, actually, it carries quite a sway in the electorate.

Holly Walker: In her view, is writing one letter to political parties 5 months after the MMP review report came out a genuine attempt to get cross-party agreement, or was that just window dressing, given that her Government never intended to do anything?

Hon JUDITH COLLINS: To the first part of the question, yes.

Hon Lianne Dalziel: What did she mean when she said in her letter to David Shearer “… I hope to progress a collaborative process for considering and responding to the Commission’s recommendations.”, when in fact she meant “Unless everyone agrees with the National Party, we won’t respond to anything.”?

Hon JUDITH COLLINS: That is a highly political question, really. The member is trying to—[Interruption] And I think it deserves a response. Quite frankly, what it does not mean is that we will put forward only two proposals, which is what that member’s party decided to do, which just happened to suit it. And, no, it actually meant that if parties could come back with some form of consensus, then I would be happy to progress it. There is not consensus. It is not going anywhere.

Hon Lianne Dalziel: I seek leave that the Electoral (Adjustment of Thresholds) Amendment Bill, in my name, be introduced and set down for first reading next sitting day.

Mr SPEAKER: Leave is so sought. Is there any objection? There is.

Holly Walker: Does she stand by her statement on Radio New Zealand National this morning that she would prefer to see all the changes implemented together; if so, given that the Green and Labour parties have now both publicly committed to support such legislation, will she now introduce it to the House to implement the changes in time for the next election?

Hon JUDITH COLLINS: Again the member has taken a little bit of what I have said and not the rest of it. If I were supporting change, then, obviously, I would want to see—it is always best to have all of the changes brought forward together. But surely that member can count: Labour and the Greens is not 61.

Holly Walker: I seek leave to table a letter dated 25 March 2013 from the Minister to the Green Party co-leaders seeking feedback on the MMP review’s recommendations.

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

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

Holly Walker: I seek leave to table the Green Party’s response to that letter, stating that the Green Party would vote for legislation to implement the changes as a package.

Mr SPEAKER: Leave is sought to table the response. Is there any objection? There is none. It can be tabled.

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

Laser Pointers—Regulation of Import and Use

11. Dr CAM CALDER (National) to the Associate Minister of Health: What announcements has she made regarding controls on high-power laser pointers?

Hon JO GOODHEW (Associate Minister of Health): Today I announced that the Government will introduce new import, sale, and supply measures for the high-power laser pointers under health and customs legislation. The new regulations will control the importation of these dangerous devices, and restrict their use to authorised users who have a legitimate purpose, such as astronomers and the New Zealand Defence Force.

Dr Cam Calder: Why is the Government moving to control these devices?

Hon JO GOODHEW: Powerful hand-held laser pointers are currently cheap, easy to obtain, and can be sold or supplied with little information regarding hazards and safe use. They can cause eye injuries and skin burns, for which ACC accepts about 10 claims a year. They can also cause temporary flash blindness, which poses a serious risk if a person affected is a pilot or is in charge of a vehicle or equipment. The Civil Aviation Authority reports around 100 laser strike incidents on planes each year.

Dr Cam Calder: When will the new controls be introduced?

Hon JO GOODHEW: An order under the Customs and Excise Act 1996 and regulations under the Health Act 1956 to control these devices are being drafted. I expect the new controls will be in effect by the end of this year.

General Debate

General Debate

Hon TIM GROSER (Minister of Trade): I move, That the House take note of miscellaneous business. I have been doing a bit of travel recently—rather more than any sane person would want to do—but it has at least given me one opportunity to look at the political process through the fractured lens of the Labour and Green parties, and then to look at the reality facing New Zealand. So, without wanting to sort of caricature it too much, the argument from the Green-Labour side of the House is: “The country is going nowhere. The Government does not have a plan.” OK? But let us just look at the facts—let us just look at the underlying facts.

This country, along with Australia, is growing faster than any developed country in the world, and has excellent growth prospects. This country has got a cost of living increase of less than 1 percent. That is about as low as we have had in three decades. And if we drill down into the highly sensitive issue of food prices, I wonder whether members on the Opposition benches saw the figure for the increase in food prices in the 12 months to April 2013. I wonder whether they saw what the increase was. It was zero—actually, I am not quite correct; it was negative 0.1 percent, all right? Does that not make the Labour Opposition look foolish for its stupid, botched strategy of trying to eviscerate GST by removing GST from fruit and vegetables? It was prepared to butcher a well-constructed policy to solve a non-existent problem.

We are looking at unemployment, which is too high for the more disadvantaged elements of our society, but the unemployment rate is half—is half—the unemployment rate of 17 countries in the eurozone. We are looking at after-tax wages, which have increased by 20 percent—20 percent—since 2008, which is twice the increase in the cost of living over that time. We are looking at mortgage interest rates, which are the lowest for 50 years. Sure, if you buy a house in an upper-income area of Auckland, you will not see the full benefit of this. But roughly 90 percent of New Zealanders who live in their own houses are living in houses they have owned for more than 2 years. If they are paying off a $300,000 mortgage, they are $230 a week better off—$230 a week, which would be over $300 in pre-tax terms. That is what this Government is delivering through sound, orthodox policies that are trying to fix problems at the root, not this rinky-dinky stuff coming out of the Opposition.

New Zealanders are in their homes, enjoying the benefits of a stable Government, and crime is lower than in the last 30 years. New Zealanders are safe in their homes because of the policies of this Government. What does that tell us? It tells us that this Government is focusing on things that matter to New Zealanders, that it is not obsessed with its own political navel, that we have isolated the problems that need fixing in this country, and that we are laying the foundations both in the Budget tomorrow—and I am looking forward to Mr English’s fifth Budget; it will be a great Budget and it will track the way forward for the next 12 months—and in the progress we are making on a sustained plan called the Business Growth Agenda, which is going to lay the foundations for more progress of the type that I have just outlined. This Government knows what it is doing and it has a set of Ministers, backed by strong support from our caucus, who are focusing on the problems that matter to this country. If you just comb through some of the statements that have been made just in the last 3 days, what you get is a picture of Ministers who are working to a concerted plan, know exactly what they are doing, and are focusing on real issues.

In the social policy area, there is the decision to turbocharge the scheme to provide trades training for young Māori and Pasifika people. Six hundred places were established in 2011. We are going to turbocharge that to 3,000. The Minister of Housing has just announced $377 million worth of new housing for 500 State houses, and, to accommodate the larger families of today, another 3,000 bedrooms. This is a Government that knows exactly what it is doing, has got a very firm plan to put that in place, and is making great progress.

GRANT ROBERTSON (Deputy Leader—Labour): I would like to thank the National Party’s visiting international guest speaker whom we have just heard from. Mike Moore once said about Tim Groser that the problem with Tim Groser is he did not get enough credit for splitting the atom. There is one thing we know for sure about tomorrow’s Budget: whatever crumbs National might decide to throw out to New Zealanders, whatever tinkering around and robbing Peter to pay Paul that National will do, this will be a Budget for National’s mates, not for the people of New Zealand, because that is the record of this Government. While our economy drifts along—the Government promised 175,000 more jobs; that is about as likely as a Christmas card from Steven Joyce to Judith Collins—it is focused on a narrow set of vested interests.

This is never more obvious than the shameful and shabby deal done by this Government with Skycity. It is casino politics from the gambler-in-chief, John Key. This deal has stunk from day one. The Auditor-General said it was flawed, it was not transparent, it was not even-handed. The moment that John Key wrote “close off the SkyCity angle” on those papers, that is what those officials did—that is what they did. They went into a deal that was not transparent and even-handed. Let us remember that there were options for this. The Government did not have to go down this path to build this convention centre, but it chose to. It chose to do a dirty, shabby deal off the back of problem gamblers.

When we look at that deal, there are 230 extra pokie machines, 40 extra gaming tables, cashless gaming machines, more high-denomination notes, and the kicker—a 35-year deal, a 35-year extension. If this side of the House chooses to pass laws that change something about gambling that is included in this deal, we will have to pay for that on behalf of taxpayers. That will be John Key’s legacy to New Zealand. If we want to change our own laws, we have to pay for it. That is the legacy of this Government. We have to pay an Aussie-owned corporate if we want to change our own gambling law. That is a shameful, shameful thing.

As the Dominion Post said, John Key’s legacy is a shrine of misery. It also said in the same editorial: “Every pharaoh deserves a pyramid.” and John Key will get one. That is what the Dominion Post said. Well, if I can mix up my metaphors, this pharaoh has got no clothes. He has got not only naked self-interest but empty promises that were not kept about jobs and wages and the cost of living.

John Key is right: there is something dying in Wellington—it is his Government. It is his decaying Government, because there is no brighter future for New Zealanders as wealth concentrates in the hands of the 2.5 percent who could afford shares in our energy company. There is no brighter future for the 146,000 New Zealanders out of work and out of hope. There is no future for the 270,000 kids in poverty. The only people who have got a brighter future under this Government are the mates and cronies of this Government—the vested interests who have made super-profits off power consumers, and the corporates who get laws written for them, all at the expense of problem gamblers.

If the Budget tomorrow were a Labour Budget from David Parker, it would be one that changes the settings of our economy to build and create jobs and prosperity for all New Zealand. It would build a fairer tax system. It would give hard-working people a break with cheaper power. It would invest in regional development that protects and supports our environment. It would be a Budget for the people from a Government that is proud of, and has faith in, our people. That would be a Labour Budget. But, instead, what we will get is a Budget from a Government mired in its own scandal and focused on deals, selling off our laws, jobs for its mates, and governing in vested interests, running a casino economy where the house wins and the ordinary people suffer. New Zealanders know this and the demise of this tawdry Government has begun.

Hon AMY ADAMS (Minister for the Environment): It seems to me that it is becoming clearer and clearer that we have two types of Opposition party in this House now. We have the type whose members inhabit “Planet Labour”, who should know better, actually. They have been in Government—heaven knows how they got there, but they have been in Government—they do know what it takes to run a country, they do know what is involved, yet they will just say anything to get back in power. They know better and they should do better, but, frankly, for them, being back in power means that they will sell their souls and do what it takes to get there.

Then we have their friends the Greens—we have their friends the Greens. The Greens patently have no understanding—no understanding—of what it takes to run a country, no understanding of how an economy works. They patently have no idea about how you create jobs and what you actually have to do to create opportunity and prospects, and no idea that the path out of poverty—the only path—is to get into work, to create jobs, and to help people into those jobs. They clearly have no idea what they are doing or what it takes to run a country, and that is becoming clearer by the day.

The reality is that if you want to make an actual difference to the lives of New Zealanders, you have to do something as a Government. You cannot spend 9 years, as Labour did, issuing reports, working out strategies, empowering working groups, and sitting around and talking about what you might do one day. You have to actually make a difference, and that is what this Government has spent the last 4½ years doing. Tomorrow’s fifth Budget from Bill English will be a continuation of that.

Increasingly, we have a very obvious difference between the Government and the parties that support the National-led Government, and the Opposition—the Labour-Green Opposition. Increasingly, it is clear that what used to be a party of the centre-left is now swinging out to a Chávez-style Opposition controlled by Russel Norman and Metiria Turei. That is the clear difference now facing New Zealand.

We have an Opposition that is totally unconcerned about the damage it does to New Zealand—totally unconcerned. It does not care about our reputation and how it damages it. It does not care about our attractiveness to investment. It does not care about our ability to create opportunities. It is all about Opposition members doing whatever they have to do to get their hands back on the levers. They are shameless, self-serving, power hungry, and indulgent—and that is just David Cunliffe. Labour is a party that has shown that it is totally unfit to lead.

Meanwhile, we are getting on with it. We are getting on with it every day, as we have done since 8 November 2008, and tomorrow’s Budget will continue to do that. We understand that to have jobs, to have opportunities, and to raise incomes, you have to create an environment where business is able to invest, where investment wants to put down roots in New Zealand, and we are doing what we can to make that happen. Every time we do—every single initiative that creates jobs—the Opposition opposes it. Every time we come up with sensible strategies that will mean more jobs, more opportunities for New Zealanders here in New Zealand, and better outcomes for our people to stay in New Zealand, Labour and the Greens oppose it.

One of the big changes that we are looking to make is reforming the Resource Management Act, not to lower environmental protections but to ensure that there is much greater certainty and that it does not take years and years and years, and millions and millions of dollars, to get decisions. Just recently we have had the Statistics New Zealand report come out. That indicated that in the last 2 years alone up to $800 million worth of projects had been cancelled, mostly due to concerns about the uncertainty with the process. They know what the rules are, they know what the standards are that they have to meet, but there is a complete lack of clarity and too much time and cost involved in the process. That means less choice for New Zealanders.

Getting the Resource Management Act right is about more jobs, cheaper houses, and more certainty for communities, and it is not about throwing moneys into the pockets of consultants, lawyers, and planners. It is about ensuring that the system works for us and looks after the needs of New Zealanders. We are prioritising it. This is a Government of action. We have done more in environmental protection and freshwater management than any Government has ever done. That is the difference between a John Key - led Government that makes a difference and a Labour-Green Opposition that cares about nothing but itself.

HONE HARAWIRA (Leader—Mana): Tēnā koe, Mr Speaker. Tēnā tātou katoa. Yesterday the House debated ACT’s charter schools bill, which Māori Party members voted for. They did not speak to it—heck no. They were too embarrassed to do that. Hell, they were not even in the House for it. They must have cringed when their National and ACT Party buddies sang their praises over it, but they still voted for it.

So what is all the fuss about? It is that the Māori Party is backing charter schools over kura kaupapa Māori. That is what the fuss is all about. It knows what it is doing, too, because Pete Sharples—Associate Minister of Education with responsibility for Māori-medium education and co-leader of the Māori Party—is supposed to be the big daddy of kura kaupapa Māori. The Māori Party knows that Governments have starved kura of funding and imposed rules on them that no other school has to adhere to, yet kura kaupapa Māori remain one of the most successful educational initiatives for Māori by Māori of the last 100 years. But last night the Māori Party voted with ACT to spend massive amounts of money on charter schools while kura kaupapa get bugger all. That is what the fuss is all about.

Massey University professor of education John O’Neill said that early indications are that charter schools will get more than twice the level of funding that mainstream schools and kura kaupapa Māori get, Mr Bennett. It is one thing to watch the rich white boys give their mates all the lollies, while the poor little Māori kids get by on scraps, but it is bloody embarrassing having to watch their Māori mates cheer them on. The Māori Party members should be ashamed about turning their backs on kura kaupapa Māori. That is what the fuss is all about.

Māori fought long and hard to establish kōhanga reo and kura kaupapa Māori, because we know that making a commitment to Te Reo, to whānau, and to kaupapa Māori is critical to providing for successful outcomes for Māori students. The kura have proven that to be the case time and time again—and that is a quote from Mr Henare. But will the charter schools that the Māori Party supports make those same commitments? Hell no. Charter schools will have no accountability to whānau, no commitment to Te Reo, no responsibility to Te Aho Matua, no obligation to put registered teachers in front of our kids, and no transparency under the Official Information Act, and they are going to get heaps more money than kura kaupapa Māori ever got. And the Māori Party supports that? That is what the fuss is all about, Mr Bennett.

Charter schools will not have to worry about the Office of the Auditor-General, either. Te Rūnanga o Ngāi Tahu’s submission on the bill says: “Overseas experience shows that Charter schools are highly susceptible to fraud, waste and abuse ...”. Dr Bronwyn Hayward, a political scientist and senior lecturer at the University of Canterbury, referred in her submission to the problems of crony capitalism, tax evasion, fraud, and corruption that have plagued charter schools elsewhere. She described them as “a naive and reckless governance model”—and the Māori Party is voting for them! That is what the fuss is all about.

Mainstream schools are not exactly pathways to high achievement for Māori students, and clearly there is much to be done to change that, but that is what the Associate Minister of Education is supposed to be doing—identifying and promoting better models, not backing expensive, high-risk, low-accountability charter school ventures that, as 20 years of research shows, achieve nothing that cannot be done without them. [Interruption] That is what the fuss is all about, Mr Henare.

The Māori Party talks about how important it is to be at the top table. Well, tomorrow we will find out whether that is true or whether it is just a big, fat lie to keep those members on their big, fat salaries and in their big, fat limos while delivering a big, fat zero on Māori education. If tomorrow the Māori Party can get for kura kaupapa all that it is giving to charter schools, if it can get an extension in mainstream schools on the Te Kotahitanga programme that it brags so much about, and if it can get manaaki tauira reinstated to help all Māori students get a tertiary education, then it deserves a pat on the back. If, on the other hand, it does not achieve these things, then it will have failed, its mantra about being at the top table will have been exposed, and its support for charter schools will be shown up for what it really is—a plea for scraps from a Government whose actions prove that Māori issues rank with the Government somewhere between nowhere and obscurity.

That is what this fuss is really all about, because our kids—all our kids—deserve the very best in education, not the failed experiment that charter schools have proven to be. Kia ora tātou.

GRANT ROBERTSON (Deputy Leader—Labour): I raise a point of order, Mr Speaker. I appreciate that the general debate is a robust debate, but I have actually got some concerns about Mr Henare, given the amount of time he has spent yelling through two of the three speeches we have had—almost continuously in mine and then almost continuously in Mr Harawira’s speech.

Mr SPEAKER: I thank the member for his contribution. There has been quite a lot of interjection throughout this debate. The Hon Tau Henare has not been the only one to raise a very loud voice.

EUGENIE SAGE (Green): Tēnā koe. Tomorrow we will have a Budget that shows that National has forgotten that New Zealanders care about the environment. It will be a Budget that shows that National has forgotten that New Zealanders are proud of our country, our stunning landscapes, and our distinctive plants and wildlife, from the melodic kōkako—[Interruption]—which is much more melodic than Mr Henare—to the kauri, and that it has forgotten that New Zealanders want our lands, our waters, and our coasts well looked after. This Government has shown that it does not care about our environment. It has got very weak policies, like the National Policy Statement for Freshwater Management.

This Government shows that it does not care by its attacks on one of our most important environmental laws, the Resource Management Act. The Minister for the Environment claims that it is not about lowering environmental protection. That is not what the Parliamentary Commissioner for the Environment has said. With the emphasis on quick decisions rather than sound decisions, the Government is reducing the ability of local communities to have their say. With its proposals to gut the heart of the Act by stripping out the environmental criteria that are supposed to guide decisions, it is turning the Act into one that promotes economic development at the environment’s expense. The Government is weakening our environmental laws so that high-impact development projects get less scrutiny by councils, get less scrutiny by the community, and get a faster and easier ride through the resource consent process.

At the same time as it is weakening the regulatory regime, it is giving more handouts to intensive agriculture. Tomorrow’s Budget will subsidise irrigators by an $80 million grant to the Government’s new irrigation company, to spend on large regional water schemes. This is despite the fact that nearly every study on water quality shows that land-use intensification leads to water pollution. The Government is proposing to provide further handouts to irrigators by spending some $400 million from the proceeds of selling our energy companies. The Mighty River Power share deal will mean that New Zealanders lose the dividends that that company provided, so that dairy farmers—and in areas like Hawke’s Bay it will be dairy farmers, because they will be the only ones who can afford the water—can take over on the Ruataniwha Plains rather than horticulture and other more varied land uses.

This will not be a Budget about sustainable development, because that is not a concept that this Government understands; it will be a Budget about debt. It will be about increasing the ecological debt on present and future generations because of this Government’s focus on exploiting nature for short-term gains. We have seen that in Minister Joyce’s Business Growth Agenda and the regional report he put out recently. We have got petroleum block offers in Northland and Taranaki; minerals exploration permits in Northland; irrigation development in Hawke’s Bay, Canterbury, and the Wairarapa; and the commercialisation of conservation land in Tasman, Nelson, and Marlborough as the route to economic nirvana for the regions. It is a Budget that burdens present and future generations with more water pollution, with polluted waters and aquifers, because the Government has not noticed that its promotion of irrigation has a huge cost to the environment and to people. In Selwyn District—the Minister for the Environment’s own electorate, the centre of dairying, with a big Fonterra factory—there have been dozens of problems with gastroenteritis in Darfield, and communities in Arthur’s Pass, Springfield, Sheffield, and Rolleston have had to or are having to boil their water.

This is going to be a Budget that does not recognise that we need to invest in the environment as a basis for a healthy economy and a healthy society. We have seen the Franz Josef Development Society telling the Minister of Conservation that we need to invest in conservation because of the importance of conservation to the West Coast economy, and that we need well-resourced Department of Conservation offices. Yet what we see is the Government finding $158 million for tourism promotion but a paltry $5 million for the Department of Conservation, despite the protection of those conservation assets being central to the “100% Pure New Zealand” brand. The Green Party believes that we need a Budget and a Government that look after our environment and look after all New Zealanders, not just the top 2 percent.

Hon CHESTER BORROWS (National—Whanganui): The country is looking forward to the delivery of another Budget tomorrow, Bill English’s fifth Budget, and I am looking forward to it too. It is going to be a Budget that is built around four principles. Firstly, it is about responsibly managing the taxpayer’s dollar. On this side of the House we understand that the Government does not have any money of its own; it takes it from the taxpayer. It is not an endless source, and if we are taking too much from taxpayers, there is not enough for them to be able to make ends meet. That is why this Government lowered taxes, and that is why this Government has been frugal in the way it spends them.

The Budget is also about building a more competitive and productive economy. What we know is that over nearly a decade when members opposite were in Government the productive part of this economy did not grow at all. It did not grow a single job. The Budget is about delivering better public services. What that party, the Labour Party, did when it was in Government was to grow the Public Service so big that it was like a millstone around the neck of the New Zealand taxpayer. We are setting about putting that right.

The Budget is about supporting the Christchurch rebuild, because as the second-biggest city in this country, that has to be a priority. What the parties on that side of the House have never understood is that a Budget is about jobs and growth if it is about nothing else. What they absolutely hate is that in the last quarter unemployment fell by 6.2 percent. They hate it. They absolutely hate it.

In my electorate of Whanganui, which includes South Taranaki, we see firsthand that this country is built on pastoral farming, and the Greens hate that. I want to ask the Greens a question, and the question is this: how much free education, health, and welfare would you have in this country without pastoral farming and, principally, without dairying? The answer is stuff-all. And they do not care. They do not care where it comes from. They believe that farmers involved in dairying are dirty dairyers. They hate all that sort of stuff. They have no recipe whatsoever to replace the income that we would lose if they had their way. In Taranaki we have got 480,000 dairy cows—in the Taranaki province. The contribution—

Grant Robertson: Name them.

Hon CHESTER BORROWS: Well, I will start with Blossom and Elizabeth, and I will get to your ones after that. On a single site at Whareroa we produce 2.5 percent of this country’s gross national product. How well do you think this country would do without a site like the Whareroa Fonterra site?

Shortly, in the next 18 months or so, Todd Energy will be drilling 41 more wells around Taranaki, and I say “Good on them!”. Todd Energy is building a rig right now to be able to do that. In Taranaki, for instance, and in Whanganui, within my electorate, with dairying and oil and gas we add to this country’s growth. We add money into the taxpayers’ coffers, because, of course, those people are paying tax and they are paying royalties on these things. And what does that do? That educates our young people. It keeps people well and healthy so that they can work, and Labour and the Greens hate it. We know that they hate it.

If, God forbid, Labour and the Greens gain power in this country, what are they going to do? They are going to introduce a capital gains tax. That is one thing they are going to do. They are going to raise personal tax rates. They have said that they are going to raise personal tax rates. The hard-case thing is that one day they believed you are rich in this country and on the top tax rate if you are earning $60,000 a year, and the very next day, with no explanation whatsoever, they doubled it and said: “Oh no, you’re not rich unless you are earning $130,000 a year, and we’ll charge you the top tax rate after that.”

They are going to increase the carbon tax, and through that they are going to make it more expensive to do business. They are going to purchase generating capacity, which will lead to higher power prices as well. The other answer they have, which they may well do, is to print money. God help us if they ever get the opportunity to do that. Then they are going to put up the minimum wage to $15 an hour, so on any public holiday any little dairy owner is going to have to earn $52.50 just to make ends meet. It is absolutely dumb and ridiculous. Let us look forward to this Budget to be announced tomorrow. Jobs and growth—that is what it is all about.

CLARE CURRAN (Labour—Dunedin South): How can the New Zealand public be expected to believe, when such a big deal as the Skycity deal is announced by the Prime Minister on television on a Monday morning, and a few minutes later the Minister for Economic Development briefs the media, who trumpet the deal, that the very basis of that deal—the footprint on which it is being built: the land and the ownership of the land—is not complete? The deal on part of that land, which was announced for this big project on Monday, has not been done. The land is owned by another organisation, Television New Zealand (TVNZ), which says that it has not been approached. If you want to look at this picture I have here of the new design, you will see that a critical part of that building that is integral to its design is actually owned at the moment by another organisation. It is like signing a deal to buy a whole house from someone who owns only a bit of it.

Skycity is not silly. It would not be signing a deal to invest $402 million in a new casino, with lots of sweeteners chucked in to make it worth its while, if it was not sure that it had the land to do it with. The Government may be sneaky, underhand, and even downright corrupt, but it is not silly. It wants the casino built, and it is not going to let anything get in the way of that. But I took TVNZ at its word when I was told last night that it had not been contacted about this issue, which was backed up by its public relations person. It was reported in the media yesterday that TVNZ had not been contacted about selling this land. TVNZ is saying that publicly. Somebody is not telling the truth.

In February, when TVNZ appeared before the Commerce Committee, it insisted—four times it insisted—that there were no discussions with the Government or Skycity about it getting access to or selling that land. Under intense questioning TVNZ eventually revealed: “Oh, wait a minute, but we have engaged an architect to have a look at the building and what the options might be for the future.” But apart from a very brief conversation, admitted to by the chair of TVNZ, with the broadcasting Minister some time last year in which the Minister denied knowing anything about the issue, both the chair and the chief executive officer of TVNZ denied that they had been approached about this issue.

Contrast this with what John Key had said on the very day TVNZ appeared before the select committee. He put three statements on the record, saying that there were discussions in train and that it was all going ahead. But—surprise, surprise—the very next day he said that he was happy to accept the assurances from TVNZ that no approach had been made. It was all very fishy. And yet we see now from the Deputy Auditor-General’s report that Skycity had indeed been in discussions with the Government about acquiring that land. Somebody is not being upfront. Somebody is not telling the truth. There are two options here: either Skycity knew and the Government knew but somebody forgot to talk to TVNZ or somebody is not telling the truth.

So let us have a look at who is on the board of TVNZ. Mr Barrie Saunders—he is the co-founder of Saunders Unsworth. He is a former editor of the National Business Review, and guess what? His business partner, Mark Unsworth, is Skycity’s lobbyist. Guess who else is on the board. Mr Richard Long—Mr Richard Long, who spent 2 years working as chief of staff in the National leader’s office. Both men are very cosy with the Government. Both men are very cosy with National Ministers.

I put it to you that it is simply unthinkable that the Government would have announced a deal with Skycity to build a $402 million casino and convention centre, with fanfare and huge concessions and with it nodding and agreeing, if it had not sewn up the land. Yet TVNZ insists that it has not been approached. Who has shaken on this deal? Who are the shadowy figures in the background? Who is paying for the land? Is it Skycity or is it a sweetheart deal with the Government trading the land for a new casino and convention centre? What say has TVNZ had? This is prime inner-city land. If there is a price being paid, who gets the money: TVNZ or the Government via a special dividend?

DAVID BENNETT (National—Hamilton East): I once had respect for the Labour Party. I once thought of it as a party that had principles and stood for what it believed in. But I have lost that respect for the Labour Party. It is a meek group of weak individuals who cannot put up a decent fight in this House. It has been taken over by the Green Party. The great Labour Party of old is gone. The Labour Party of today is a faceless group of factions that has been slaughtered by the Norman invaders. The Normans have come and they have slaughtered the Labour Party, and look at it. Look at the policies that the Labour Party has fallen over on in the last couple of months. No. 1 is economic policy. The Normans now govern the economic policy of the Labour Party. The Labour Party is going to print money. It is something that it does not need to do, but it has been forced to do it because it has been told by the Green Party what to do. The Green Party would put up the capital gains tax. Do not let any Labour member ever say that they wanted a capital gains tax. It is a Green Party idea. The Green Party wanted it, and the Labour Party took it on board because it has got nothing else.

Let us talk about another issue: energy—that great energy issue. The Labour Party has given up to the Green Party again. The Green Party’s nationalisation idea has been accepted by the Labour Party.

Hon Member: Who is Labour’s energy spokesman?

DAVID BENNETT: Actually, I had a look at that. It is Gareth Hughes—that great young man from the Green Party! I had to look up who the Labour Party’s spokesperson on energy is. Who is it?

Hon Members: I don’t know.

DAVID BENNETT: I do not know. I could not find it. It was Moana Mackey. Tell me that. I have never seen her doing anything.

The next one is transport—Iain Lees-Galloway. He has got a great future, but he has given in to Julie Anne Genter. I do not know why. I do not know why Julie Anne Genter has got it over Iain Lees-Galloway, but she has. The Labour Party is giving up on the roads of national significance. It is saying to the people of the Waikato and Hamilton: “We don’t want your votes. Don’t vote for us. Vote for National.” And we in Hamilton are going to say: “Good on them.”

But the best is yet to come. The best is yet to come because the next policy off the rank is foreign affairs. Guess who is going to govern that?

Hon Members: Who?

DAVID BENNETT: Kennedy Graham. Kennedy Graham is the next Minister of Foreign Affairs under a Labour-Green Government. Kennedy Graham is going to bore the North Koreans out of war. Kennedy Graham will be setting up offices in Damascus for this country. That is the next step for the Labour Party policy.

But there is more. Tell me who the Labour Party spokesperson on foreign affairs will be. Nobody knows. Here is the next one. Who will be the Labour Party spokesperson on agriculture? Steffan Browning has got it—Steffan Browning has it. He is going to make everybody go back to the communes on the farms, and we are going to have these great 10-year plans that the Labour Party will fall into bed with. That is the future of the Labour Party.

Treaty negotiations—who should we give that to? I think Catherine Delahunty. I think Catherine Delahunty has served this Parliament well—more than any Labour Party member has—in regard to Treaty negotiations. The Labour Party will give in to Catherine Delahunty. Catherine Delahunty will be setting up the Treaty negotiations policy for the next Labour Party.

That is a shame. It is a real shame for that Labour Party—a Labour Party I once thought great things about, but now I cannot see why anyone would vote for it. It is the Green Party in drag. The Labour Party is not the real Opposition here; the Green Party is. That is something that is very sad for those Labour members. Look how meek and quiet they are, and they have given up. They have got no fight in them. They have got nothing left in the belly. They have got nothing in the tank. They have got nothing there. Mr Cunliffe is smiling. He is smiling because he knows that if they have got nothing in the tank, he is next in line. The Labour Party is over. It is a good thing for New Zealand, but it is a sad thing for those members over there. For people like Mr Little sitting there, who had such a future in this House, it is over—it is over. The Green Party is the real Opposition. Thank you.

Hon DAVID CUNLIFFE (Labour—New Lynn): It is always amusing when National puts up its D-team in the general debate. “Little National-no-friends” is what we are looking at over there. There is no John Banks, or at least not for long; there is no Māori Party, or not for long; there is already no Mana, in more ways than one; and now not even Aaron Gilmore can be bothered sticking around as National’s polling inexorably sinks towards the magic number of 39 percent. Beware two things: the first is “Bring Back Winston”, and the second, as they shudder in their twinsets and pearls—remember this, gentlemen and ladies—is if Judith Collins is the answer, what on earth is the question?

Today the Labour Opposition has got to note a very sad day in New Zealand politics. It is the announcement of an extremely dodgy deal around the Skycity convention centre. The convention centre deal is built on a foundation of—and I do not use this word lightly—dishonesty. It is dishonesty that it would not cost taxpayers a cent when there was a multimillion-dollar slush-fund subsidy for Skycity in the design, and dishonesty in the fact that the Ministry of Economic Development would not release the records of its multiple meetings with Skycity. It was behind closed doors, just like John Key’s meeting with the Skycity board. It was dishonesty about nothing being dodgy in how John Key personally suspended the proper process, which had four bidders, and only Skycity got a look in. That was dishonesty in the words of the Auditor-General’s office, which said it was “flawed” and “unfair”, that “the SkyCity proposal was always going to be the most attractive”, that it was not “transparent or even-handed.”, and that that applied to both Ministers and officials.

It is dishonest to say that there is going to be a sinking lid on pokies in Auckland, when they have just voted for another 230 of them and 20 more gaming tables. It is dishonest to say that the criminal ticket-in, ticket-out technology will reduce problem gambling. The reason it is illegal is that it gives the casino so much information about the gamblers, so that it knows what buttons to push to get them addicted. It is dishonest to say that there will be no cost to the country to plonk the hulking pokie palace right on top of Television New Zealand. Who is paying for that? It is dishonest of Peter Dunne to feign concern, saying that the Government “did play very fast and loose at times.” with the deal, when he holds the casting vote. This is Peter Dunne’s palace as well as John Key’s.

There is egregious dishonesty in claiming that Labour did the same thing in 2001, because it was none other than Judith Collins who was the then chair of the Casino Control Authority, which used a law that National passed and Labour abolished—just like her office—to put through the last increase in pokie machines. There is one more dishonesty that tops them all. It is the mother of all rorts, and that is the dishonesty of using Government legislation to give a gold-plated guarantee of compensation to a private company. That is a slippery slope in our constitution. There is dishonesty in the numbers. As David Shearer has said, Skycity has hit the jackpot. By KordaMentha’s estimates, it can make up to $530 million on a $402 million outlay. That is a 32 percent premium for a no-risk investment, and it still owns the building at the end of the 35-year gold-plated period.

This is a very sad day for New Zealand’s democracy. The Government has already sold the law on The Hobbit to Warner Bros. It has already sold the rules about spectrum licensing to MediaWorks. Now it is selling the gambling laws about casinos to a casino. It is giving the casino a gold-plated guarantee. It is selling our law. It is compromising the sovereignty of Parliament. But I have got news for this Government: those laws that can be made can be unmade. Any future Government can repeal the compensation provisions and deal with the issues in the interests of New Zealanders, as it is required to do. Let us be very clear. The Labour Party has no truck with the dishonesty that is on display from this Government. We are willing to bet that neither do New Zealanders.

JONATHAN YOUNG (National—New Plymouth): I would like to just commend my colleague David Bennett for a great speech. I looked across the House and saw Kevin Hague, and he smiled more than once, and I think he agreed with that speech. Then I looked across to that side of the House and saw David Cunliffe smile more than once, and I think he agreed with that speech, because he knows his day will yet come. He knows that Labour is desperate, and he knows that the Greens are gleeful and that we are seeing Labour’s desperation to find traction with the New Zealand public. We see that it is making Labour vulnerable to the Greens’ ultra-socialistic policies.

Labour over there believes that it can enhance competitive power pricing by becoming the monopolistic buyer of wholesale electricity in the country. It will not be a free market any more; it will be constrained with generators and retailers brought to their knees, and Labour loves it. It is a daft idea, and we welcome all Labour’s daft ideas, because it just goes to prove to New Zealand how sensible and how solid the National-led Government really is. Colin Espiner, no friend of the Government, calls this “Third World, funny-money stuff.” Nationalising electricity has been likened by the New Zealand Herald to a 1930s command economy solution, not unlike what Soviet Russia would employ. These comments are from people out there who are commentators; they are not people who are taking political sides.

We know that Shane Jones is a political survivor, but, Shane, this is one big dead rat that you have to swallow. We have always thought that you were smarter than the rest of them, but it is sad to see you trying to convince yourself that this is good policy. Shane, this is just the beginning of the dance, and there are lots of rats coming. This is the classic “rearranging the deckchairs on the Titanic” policy of the Labour Party—lower power prices and a reduced dividend to Government. Labour will have to jack up and rearrange taxes to compensate. Its power policy requires a taxation increase that is similar to the reduction in electricity bills. Will Labour lift taxes? You have got it. This is the dark cloud in its silver lining. It is redistribution of wealth—it is plain to see. Labour would fund the Government’s loss of dividend revenue with increased taxation from the growth sector of the economy. That is what it is going to do.

Expect company tax to increase. Expect capital gains tax to come into play. Businesses and farms will be paying more through the nose. Expect the marginal tax rates to increase, especially for the top half of earners. Expect emissions trading scheme increases. Labour will strip the private sector of capital through excessive taxation and obstructive regulation, and by necessity the Government will become the bailout investor in the electricity infrastructure, simply because at reduced rates of revenue generators will not develop new generation assets. We know that. The revenue from those assets will not cover the costs of building them, so it is going to be the Government that is going to bail them out. And guess what, everybody? That means higher taxes. The final responsibility of security of supply will fall on the Government.

You would have thought that David Parker understood this after the debacle in 2008, when, as the Minister of Energy, he was calling for 15 percent cuts in electricity consumption. Back then the New Zealand Herald criticised the planning and management of electricity supply, describing it as a maze to get through. This is the cartoon by Mr Body. Right there in the middle, there is the maze—there is the maze of the Labour Government’s management of electricity. The scary thing is that you will go into that maze and you will find Trevor Mallard in there. You will find Phil Goff in there. You will find David Parker in there, and David Shearer in there. That is the frightening thing. And they are all lost.

What we need to acknowledge is that 2008 was the second-driest year in the last 81 years. It was a drought time for New Zealand. [Interruption] It was a tough time, David. But what many people do not know is that the single driest year in the last 81 years was last year, 2012, and no one knew about it. Congratulations, Mr Brownlee, on your 2010 electricity reforms. You took us through a very difficult time. National has got the policies that will lead this country; Labour and the Greens continue to have daft ideas.

ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First, and I ask the question: what do New Zealanders want from the Budget? That is the big question—what do New Zealanders want from the Budget? Tomorrow is a critical Budget, and New Zealanders will be watching it with interest.

New Zealanders do not want more empty phrases and self-promoting rhetoric. They are sick of that. Their patience is wearing thin. After 4½ years of a National Government, they are asking themselves: “OK, after 4½ years, when are we going to get the brighter future we were promised—when are we going to get the brighter future we were promised?”, because they are waiting for it. New Zealanders are waiting for that brighter future. They want to see more than words. They are looking for a Budget that will deliver real improvement in their lives. So what do they want to see?

First, they want to see a Government that actually has a plan—a Government that has a plan. They do not want to hear comments such as those the Prime Minister made about Wellington, when he said that he did not really have any idea what to do to improve Wellington. They do not want to hear words like that. New Zealanders want to know that this Government has a plan. They want to know that this Government is capable and is not just meddling along, stumbling along, in a piecemeal fashion. They do not want that. They want a plan and they want to know that it is a positive—positive—outlook for the country.

But what have they been hearing from this Government in recent times? Basically, what they have mainly been hearing about is deals. New Zealanders are getting tired of just hearing about the deals. Typically, the deals are corporate deals. They are deals that normally involve foreign interests and foreign interests doing well out of the deals put forward by this Government.

Kiwis deserve more than a Government that survives just by doing deals with the likes of Warner Bros, China Southern Airlines—allowing visas for high-rolling Chinese gamblers to come to this country—Mighty River Power, and the list goes on. Kiwis do not want to see these sorts of deals going on in this country. The Skycity deal is just the latest example of how easily the public interest is traded off in a back-room deal. That deal will create enormous social harm, a cost this country will have to bear for the next 35 years.

So tomorrow Bill English must present a plan—a real plan with numbers, with times, and with targets. That plan must address unemployment, which is running at unacceptable levels.

Simon O’Connor: It’s dropping.

ANDREW WILLIAMS: They keep saying that it is down 6.2 percent, but out in the provinces in the areas where it is really, really affecting everyday New Zealanders, such as in Northland—where it is 10 percent on average, but for young Northlanders it is significantly higher than that—that is where it is really hurting New Zealanders. It is hurting young Māori and young Pacific Islanders—young people who simply do not have work, cannot get work, and see no future. They see their only future as being somewhere other than in New Zealand.

Right now there are 150,000 people who are unemployed. What we do not see is the other, similar figure of underemployed people in this country. People who have only 1 hour or more of work a week are classified as having a job. But many of these people would like to work a lot longer, a lot more, and would like to actually have a decent job, but if they have more than 1 hour a week, they are not classified as being unemployed. But they certainly are underemployed. In many cases, they are on the minimum wage and are not doing particularly well at all.

This Budget must deliver jobs, particularly for the younger workers. It must deliver on things such as electricity. The Government does assert that the electricity system is efficient, but back in the real world Kiwis are struggling with the cost of power bills. The elderly are struggling with the cost of power bills. So in tomorrow’s Budget, let us hope this Government does something about the cost of power. Let us also hope that it does something about the fact that there are 40,000 fewer manufacturing jobs in this country since this Government came to power—40,000 fewer manufacturing jobs. Let us hope it does something about that, because we have New Zealanders who are talented and enterprising, and we have the climate and the resources in this country. Let us hope that this Government puts something on the table tomorrow with a proper plan, and not just cuts, cuts, cuts, and more cuts.

SIMON O’CONNOR (National—Tāmaki): It has been interesting, as we have listened across the House to the Opposition, that we are blaming the Chinese, as I think we just heard at the start of Mr Williams’ speech. We have had people make accusations and impugning, if you wish, the reputations of people who sit on boards. We have had people jumping up and down about how we dare allow a business to actually build a convention centre in the city of Auckland that will bring jobs and opportunity. It is an incredible amount of negativity.

But I want to talk around a different aspect today. As many of you will know, I have spent an awful lot of time in university—fortunately, most of it while also working. Because of those years in university, I have become an advocate of lifelong learning, and I am thrilled to be in Parliament, a place where so much learning is possible. From the National Party you can learn all about good government and sensible economic management. From the Labour Party, well, you can learn how a green tail can wag a red dog. From the Green Party itself, well, look, my stars—to use a quote—the things you can learn from the Green Party. Maybe we in this House sometimes take for granted the fascinating things that the Green Party says, given how often we hear from it, so I thought we would just reminisce a little.

We hear from Dr Russel Norman. He has delivered some extraordinary lectures on “Harry Potter economics”. From what I understand, his theory is that most economic problems can be solved with the judicious use of magic. With a wave of his wand he can create money out of thin air. I have learnt from him that quantitative easing is a way to make photocopying money seem like an economic policy.

But he does not just make money appear. He can make money disappear as well. For example, he and David Shearer, the “deputy leader of the Green Party”, made $500 million disappear from the New Zealand stock exchange overnight—overnight—with only a few words. They made $500 million disappear from ordinary Kiwis’ savings in the likes of KiwiSaver and the New Zealand Superannuation Fund. It was an amazing magical feat. But, you see, Dr Russel Norman has also found a way to make power prices disappear. His plan is to nationalise the energy sector, following in the footsteps of such great economic luminaries as Marx, Lenin, and Mao. Yes, Dr Norman never fails to delight when pulling rabbits out of his hat.

Todd McClay: Out of his what?

SIMON O’CONNOR: Out of his hat.

But he is not the only Green Party member to have graduated from the “Hogwash School of Witchcraft and Wizardry”. It sounds like Metiria Turei is fairly similar, with puffs of smoke as well. You see, “Professor Turei” has taught all of us about enterprise and initiative with her small-business programme. It is entitled, if I read the lecture notes correctly, “Growing the economy by growing marijuana”. This past April she actually said, and I am quoting, that “There’s some real skills [in growing the drug] … some real entrepreneurial skills, some real horticulture skills …”. I understand that in the next semester “Professor Turei” will be teaching graduates of those classes advanced chemistry, in a course called “P labs: our path to prosperity”. Yes, children—you listening in—the Green Party believes that you too can grow up to be a drug dealer.

Sometimes when I listen to the lectures the Greens put forward, I am not entirely convinced—I am not entirely convinced. But learning is about being exposed to new ideas, and so I have listened. The word that comes to mind when I listen to the Greens is “ideology”. There are few political parties around the world as committed to their ideology as the Greens are. In the face of all the facts, despite all the evidence that says that their extremism will not work in the real world, the Greens stick to their ideology. And do you know what? You have to kind of admire that sort of dogged commitment. It reminded me of the lost Japanese soldiers in the 1970s who refused to accept that World War II was over. Like them, the Greens refuse to surrender to logic, to reason, and to progress. So I say “Soldier on.” to the Green Party educators. Bestow your wisdom on this House, let nothing stand in your way, and the Labour Party will be right there to support you to do whatever you tell it to do. I cannot wait to see what the Greens will teach us next.

The debate having concluded, the motion lapsed.

Bills

Prohibition of Gang Insignia in Government Premises Bill

Second Reading

TODD McCLAY (National—Rotorua): I move, That the Prohibition of Gang Insignia in Government Premises Bill be now read a second time. The bill restricts the display of gang insignia in central government and local government premises. It makes the display of gang insignia in government premises an offence and empowers the police to arrest the person who wears it and to seize the offending article. I would like to thank the chair and members of the Law and Order Committee for their work on the bill and for the amendments they have recommended to include every school and police building and their grounds and premises in New Zealand in the scope of this legislation.

Gangs are a scourge on society. Every political party in this Parliament recognises this. Gangs commit crime, peddle poisonous drugs to our children, and create victims in vulnerable communities. The gang patch is not a patriotic flag or a symbol of honour and respect; it is a symbol of intimidation by gang members who wear it. It announces to the world that they engage in criminal behaviour and that they are proud to intimidate law-abiding citizens.

The select committee heard from submitters throughout the country. I want to touch briefly on some of the submissions the committee heard, and I do hope members opposite will listen. The Murupara Area School made the forceful point that children at school do not need to be exposed to gang insignia: “they need to be protected from it.” Ōpōtiki District Council said that the bill sets the right boundary to reduce gang intimidation of our communities. Whakatāne District Council told the committee that the bill will help reduce levels of intimidation of the public. The Whitireia Community Law Centre, in Kris Faafoi’s electorate of Mana, spoke courageously about the chilling effects of gang violence and intimidation in Porirua. It has been at the coalface of protecting victims of crime from gang harassment. It said that members of the public have a right to visit Government premises without fear.

I call on Mr Faafoi, who received that submission in the committee, to listen to his own community, which is telling him to support this bill. You see, the Labour Party has said that it does not think the bill is necessary. Phil Goff talked boldly in the dying days of the last Government about banning gangs, but when it comes to supporting measures to do something important, Labour’s voice falls short. Phil Goff and Kris Faafoi sat on the select committee. They heard the submissions from the Kawerau District Council, which said: “A legislated ban will not only protect frontline staff and customers from the intimidation ... but will also prevent intimidation of ... staff who may otherwise have initiated and/or had to enforce such bans case by case.”

It is wrong to put the onus on Work and Income case officers or a school teacher to issue a trespass notice to individual members of the Mongrel Mob after they walk into a public building. We need to recognise the gang patch for what it is. It is an intention to intimidate. A blanket ban that criminalises this intimidating behaviour protects our hard-working public officials, as well as the citizens who use our public services.

I call on the Labour Party to put aside this rhetoric and listen to the evidence that was presented to the select committee. I call on it to get back in touch with the people on the front line. They deal with the consequences of gang violence, gang intimidation in vulnerable communities, and gang recruitment of young people. These communities are asking us to introduce these measures.

Across the world, from Britain to the United States to Australia, legislators are acknowledging the problems that gangs create and are empowering their law enforcement agencies to take action against them. Just last month Prime Minister Julia Gillard announced across the Tasman plans to crack down on gangs. Some of these measures, including the confiscation of proceeds of criminal gang activity, are already available in New Zealand. Australia realises the threats that gangs pose to society and, unlike other parties in this Parliament here in New Zealand, is prepared to take action.

Over the past 4½ years, putting the interests of victims of crime and law-abiding citizens first has been the guiding principle of this Government’s law and order policy. We have increased sentences for our worst offenders. We have improved victims’ rights. We have put 600 more police on to the front line. We have made it harder for offenders to get bail. We are giving the police the technology to spend more time on the beat and less time at their desks. Police patrols are up by 70 percent. We have improved technology to intercept gang communications and we have the powers to dismantle gang fortifications. These policies are successful, because we are now seeing the lowest levels of crime for some 24 years. Violent crime has dropped by 17 percent in the last 4 years, after steadily increasing under the previous Government.

There is not much about the Mongrel Mob that my electorate of Rotorua is proud of, but we were proud that the first ever seizure of assets under the Criminal Proceeds (Recovery) Act involved the Mongrel Mob in Maketū. Valentine Barclay Nicholas, the local chapter boss who had violent criminal convictions going back some 30 years, had all of his beachfront property seized. Nine cars and his treasured Harley-Davidson were confiscated from him. Just a few weeks ago, we announced the seizure of $150 million from criminals since the Government passed this very important legislation. For the first time ever, gangs are starting to hurt, and it is because we are arming our enforcement agencies with the right tools.

At the same time we must be aware that gangs will change and adapt. There are indications that gangs are becoming more sophisticated in their transportation and manufacture of drugs, and in how they transfer assets, how they intimidate people, and how they communicate with each other. But criminals are not always very smart. The police are now using their powers effectively to intercept communications between gang members—their phone calls, their text messages, and their emails can now be intercepted. For those criminal masterminds who freely parade their gang patches on the internet, it is not just their Facebook friends who now know what they are up to. As a Parliament we cannot stop technology, but we must be vigilant about how gangs are using technology and we must support the fine work the police do by giving them the tools to respond to this. We must constantly update these tools.

This bill will make it harder for gangs to intimidate New Zealanders. It is not a silver bullet to ban gangs in New Zealand, but it is another important tool to make law-abiding New Zealanders feel safe in their communities. I look forward to the House supporting this bill through to the Committee stage. Thank you.

KRIS FAAFOI (Labour—Mana): I would like to thank the member for Rotorua for laying down that challenge to listen to the Whitireia Community Law Centre, which is a very good law centre in Porirua, and a law centre that I respect a lot. But I am not going to meet that challenge. I am going to throw another challenge back to the member here: if he really cares about what the Whitireia Community Law Centre thinks about intimidation in our community of Porirua, he should go and put a decent piece of legislation in this House that would actually be effective in doing something about the intimidation by gangs in our communities.

Do not bring this window-dressing piece of legislation, the Prohibition of Gang Insignia in Government Premises Bill, through to this House. Do not come into this House and challenge me about my constituents and a law centre that I have a duty to, and say that this bill is going to do something about it, because it is not. It is not going to make one bit of difference to gang intimidation in our communities. So, Mr McClay, if you want to come to Porirua, let us go and see the Whitireia Community Law Centre. Withdraw this bill from the House, and let us put something in front of this Parliament that is actually going to deal effectively with the issue of gang insignias and gang intimidation in our communities. If you are truthful about it, let us go and do that, and let us put a piece of decent legislation in front of this House.

It is funny, because the most passionate part of this bill that has come back from the Law and Order Committee actually comes from the Labour Party. We actually say: “Labour has no truck with gangs with a culture that promotes, encourages, facilitates, or tolerates criminal activity collectively or individually among its members.” Well, that is 100 percent right. The member who just took his seat, Todd McClay, was right. No party in this House has any tolerance for gangs, the intimidation that they do play in our communities, the criminal activity that they organise and carry out, and the grief that they create in our families and communities. But, as I said before, this bill goes nowhere near effectively dealing with the problem of gangs in our communities. It fails to deal with the substantial problem. It fails on the test of being clear and consistent to deal with gang problems and the questions of why people are joining gangs and why they commit crime. This bill does little or nothing.

It does succeed in a few things, though. It succeeds in terms of the illusion of tackling crime, which is one of the things that the National Party definitely wants to do. It succeeds in terms of maximum exposure for trying to look like it is doing something, with minimum effort—with minimum effort. It certainly succeeds in the National Party looking like it is doing something or being tough on something where there is going to be no practical difference.

This bill adds nothing to the powers that already exist, and that certainly is the point in case in my electorate of Mana. The member said that the select committee added police stations on to the list of Government premises that are covered under this bill. Mr McClay, I will take you out to Porirua right now and I will show you at the entrance to the police station, where it says: “No gang patches allowed in this station.” The police are already taking action to make sure there are no gang patches on their premises, so why do we need to bring this in? The legislation already exists—the legislation already exists—to make sure that any intimidatory behaviour is policed.

Hon Anne Tolley: The police love it. They think it’s fantastic.

KRIS FAAFOI: But the problem here is that it is not being enforced. It is interesting that the Minister of Police is piping up, because the police, who are under huge pressure because of the budget cuts that this Government has brought in, cannot police things like this—they cannot police things like this. So the police Minister might want to think about why they have to bring in this piece of legislation and about the ability of the police to enforce the current laws.

I would have to say that the stretched police resources—we heard yesterday Radio New Zealand saying that there are 213 fewer front-line police staff on the front line right now than there were in June last year. The police Minister can say whatever she likes over here—but that is a Government that said it was going to get tough on law and order and beef up police numbers—but we know that there are 213 fewer police because of the budget pressure that this Government has put the police under. It is an absolute fact. The numbers coming from the police Minister’s own office, own department, are that there are fewer police officers on the front line. In black and white, this is a Government that says it backs police, but it does not, because there are fewer police officers on our front line at the moment.

What is more, because of the budget pressure that the Government has put the police under, there are fewer police trainees going through the Police College.

Hon Anne Tolley: Rubbish.

KRIS FAAFOI: There are.

Hon Member: Table them now.

KRIS FAAFOI: I will table the written parliamentary questions I get from—roughly, I think, in 2011 there were 450 trainees going through the Royal New Zealand Police College, then last year it was roughly 265. So half the number of police trainees went through the Police College in the previous year.

Let us look at the Ten One magazines at the moment. If you look at the Ten One magazines at the moment, at the back of the magazine it starts listing who has left the police force. I am sure the police officers who are in this House will see—Mark Mitchell will be watching that closely, and Chester Borrows—that a lot of their mates whom they know through long-time policing are starting to resign. The numbers are starting to creep up. So what is going on with the police at the moment when experienced officers like Grant Coward out of New Plymouth are saying: “OK, I have had enough of this place; I’m out of here.”? He had 20 years of policing experience, and this Government is letting experienced police officers go, all because that Minister is starting to cut the budgets.

The truth hurts; the truth hurts that Government. That is exactly what the truth is. Our police are stretched, and this is one of the plethora of things that they can no longer manage to keep an eye on. So why is the Government making these cuts, and why is it bringing in this window-dressing piece of legislation? Nothing good is going to come out of this piece of legislation.

Hon Annette King: The Minister’s agitated. You’ve got her good.

KRIS FAAFOI: She is—the truth hurts, unfortunately. Let me go back to the bill. Let me go back to the bill, because I did want to acknowledge some of the submitters, and the one that Mr McClay did mention, because I think they did make a very good submission. That was the Murupara Area School. It did make two points why it supported the bill. The first one was that children and students did not want to see gang insignias plastered around their school and that they needed to be protected from them, and also that the introduction of gang insignia into the school’s premises: “would create tensions and unnecessary negative behaviour and we want to discourage that type of behaviour from our school.”

Jami-Lee Ross: It was a good submission.

KRIS FAAFOI: It was a good submission. I will say that. It was a good submission. But the message that we sent to that school at the time, in terms of the Opposition members, was that there are laws already in place—

Todd McClay: You weren’t there when they came in.

KRIS FAAFOI: I beg your pardon?

Todd McClay: Were you there when they came in?

KRIS FAAFOI: I was there—were you there?

Todd McClay: Yes, I was there.

KRIS FAAFOI: OK, good. We were both there. Thanks for establishing that—thanks for establishing that. I was there. I listened to it. I actually knew one of the submitters. So—

Todd McClay: You weren’t there when I submitted.

KRIS FAAFOI: Just pipe down for a second. It was a very good submission in the fact that we said to the submitters that there are already laws that exist to make sure that their concerns are already catered for. This bill certainly does not do anything new, and will not be effective in making sure that the threat of gang intimidation will be stamped out in our communities.

There are also a number of anomalies in this bill about who can do what and where. One of them is that you can wear a gang patch on Government premises, but that does not apply to things that could also be considered offensive, like a swastika. I think that is a strange anomaly in this bill. I think most people would wonder why you can not get away with a gang patch, but something highly offensive, like a swastika, is not captured in the bill.

Todd McClay: Put a Supplementary Order Paper, Kris.

KRIS FAAFOI: Maybe we will put in a Supplementary Order Paper. We will probably put a few Supplementary Order Papers in, to get rid of most of the things in this bill.

There was also another anomaly—that you could be wearing a gang patch on a covered footpath that is operated by a council or owned by the Government, and that was a no-go area for anyone who was wearing a gang patch, but you could certainly be on an uncovered footpath and you would be fine being there. Another anomaly is that you could be at a bus station or a train station, and that could be a covered building or premises, but then if you were in an uncovered bus station or train station, well, that would be a go area. So there are holes in this piece of legislation, right through it, that mean that we on this side of the House cannot support it.

What the Government should do is take a good look at a decent piece of legislation, look at what some of the factors are, and at the reason why some of these youngsters are joining gangs—factors like youth unemployment, which is at a high level. Maybe, just for the benefit of the Minister of Police, the Government should look at some of the harm that her budget cuts have done to the police and are causing some of the issues, so that the laws that are currently in place are not being enforced. If this Government talks tough on law and order, it should back it up with a budget and some legislation to do that, but it has not.

JACQUI DEAN (National—Waitaki): We have just had to endure a 10-minute speech from Kris Faafoi, and only 2 minutes of it was devoted to the bill at hand, the Prohibition of Gang Insignia in Government Premises, because I believe that Todd McClay, the author of this most excellent bill, has touched a really raw nerve with Mr Kris Faafoi. He is beside himself because he knows that the submission from the Whitireia Community Law Centre is absolutely right. This bill is making a huge contribution to tackling the problem of gangs in New Zealand. Mr Kris Faafoi knows it, and we have this submission from the law centre that absolutely backs this bill and backs Todd McClay’s position. It has utterly destroyed the reputation of Kris Faafoi in his electorate, and he is very, very worried—

Hon Member: Not hard to do.

JACQUI DEAN: That is not hard to do. He is very worried about that because Kris Faafoi knows that anything that this Parliament can do to tackle the gang problem in New Zealand is a good thing.

The bill has been widely supported by the submitters who came to the Law and Order Committee, and it will do its bit to tackle the scourge of gangs in his electorate. That is what is biting and eating away at Kris Faafoi so much—he knows that that is the truth. Kris Faafoi knows that there will be people out there in Porirua, his electorate, who are looking at this debate today and who will be absolutely dismayed at the fact that their member of Parliament, who is meant to be representing their interests in this place and who should be supporting this bill, is finding himself in a policy no-man’s land where he is forced to espouse a position that in his heart he does not believe. In his heart he knows that it will be eroding the popularity that he enjoys a little bit of in Porirua, his electorate.

The Whitireia Community Law Centre said some things to us that were very compelling and were in support of Todd McClay’s bill. It had this to say, by way of a submission to us: “In the early 1970’s, the Mongrel Mob moved into the Porirua Area and since then they have had a strong presence in our community.” You see, these are people who really care about their community. “With high unemployment, increased availability to drugs and a rise in poverty the Mongrel Mob offers an alternative to young men who are often estranged from their families, products of broken homes and/or had long associations with Child Youth and Family.”

So this law centre cares about and represents vulnerable people in Kris Faafoi’s constituency. They are the ones who care about the constituency. They are supporting the bill. Why is Kris Faafoi not supporting a bill that does just a bit to help tackle the gang problem in New Zealand, which this Government is so focused on doing? In his 8-minute rant about the New Zealand police what Kris Faafoi did not say was that crime is dropping in New Zealand. Kris Faafoi ignored the inconvenient truth that there are more police on the streets in New Zealand and in Porirua, and that crime is dropping in his own constituency. What is eating him up so much about Todd McClay’s excellent bill is that he knows it is the right thing to do, but he cannot do a damn thing about it because he is being told to oppose it, for ideologically bereft reasons.

Labour members can find no real reason to oppose this bill, except that maybe, when somebody walks along an open walkway they are not covered by the bill, but when they are in an enclosed walkway they are covered. Well, come on! What kind of logic is that? I mean, we are going to hear that kind of logic from Phil Goff and that is not going to be very convincing. So poor old Kris Faafoi has found himself having to oppose this bill against the wishes of his own community. Man, it must suck to be him.

Debate interrupted.

Tabling of Documents

Inter-Parliamentary Union—Agenda

Hon TAU HENARE (National): I seek leave to table the agenda for the Inter-Parliamentary Union meeting at 4.30 this afternoon.

Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is there anyone opposed to that course of action? There appears not. Leave is granted.

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

Bills

Prohibition of Gang Insignia in Government Premises Bill

Second Reading

Debate resumed.

Hon PHIL GOFF (Labour—Mt Roskill): The chair of the Law and Order Committee, Jacqui Dean, who has just resumed her seat is a master of overstatement. She said that this is a bill that does “just a bit” to help tackle the gang problem in New Zealand. I regret to say that “just a bit” is a gross exaggeration. This Prohibition of Gang Insignia in Government Premises Bill does precisely nothing—nothing. That is why Todd McClay, the mover of the bill, 2 minutes into his speech had to go off and talk about something else, and Jacqui Dean could not last the distance—she could not last the distance. They know in their hearts that this is a BS bill—a BS bill—that will do nothing to protect New Zealanders and nothing to damage the gang culture in this country.

I asked the officials at the select committee a very simple question. I asked: “Is there anything in this bill that the Government departments and schools can’t already do?”. Do you know what the answer to that was? “No.” There was nothing in this bill, according to the officials, that Ministers cannot do already. I say to Jacqui Dean that if there is a problem with patched gang members going into schools and Government departments now, every Minister in this House has the power, has the ability, to issue an instruction that no patched member will be allowed on school-grounds or in Government premises. That is the fact right now, so once again we will spend an hour of parliamentary time debating a piece of legislation that does precisely nothing—precisely nothing. [Interruption] That was the answer, Mark Mitchell, that the officials gave to the committee.

I put the question this way. I asked: “If a gang member goes into a Government department, can you remove that person, refuse to serve him, get rid of him?”. They said: “Yes.” I said: “What about if the gang member is loitering around the entrance to the school or the Government department, what can you do about it?”. They said: “We can’t do anything.” I said: “Is there anything in this legislation that deals with that situation?”. They said: “No.” So here we have got the irony. You have already got the power to do what this bill says they will do, within the Government offices. There is no power to deal with the gang member loitering outside, and this bill does absolutely nothing to deal with that problem.

I want to say, and put it absolutely and clearly on record, that I have—and I used the word in the minority report—no truck with a gang culture that encourages, promotes, facilitates, or even tolerates its members committing crime. Too many of our gangs in this country are organisations put together for the purpose of committing crime. But what I want in regard to the organised crime that gangs are involved in is not phoney legislation like this—phoney legislation that does nothing. I want real legislation that actually makes an impact on those gangs and their criminal behaviour.

Ian McKelvie: You had 9 years to sort that out.

Hon PHIL GOFF: I stand in this House, Mr McKelvie, very proudly to say that I introduced, as Minister of Justice, a bill called the Proceeds of Crime Bill. Do you know what that legislation does, Mr McKelvie? It enables the courts to go in and to strip the assets—every asset—that a gang controls or owns if it cannot prove that those assets are the proceeds of other than criminal activity. That made a real difference. Let me read what the newspaper said about it at the time. Within 2 months of this coming in the police had seized $7.4 million worth of criminal assets from the gangs. A year later even the now National Minister of Justice and then Minister of Police was skiting about legislation that was not her legislation but was my legislation and Annette King’s legislation. She bragged that: “Among the assets seized were cash and bank accounts worth $13.5 million, 38 residential and commercial properties worth $15.5 million, nine lifestyle blocks and farms worth $8.4 million, and vehicles worth $600,000.”

That is the result of legislation that I introduced after going to the United Kingdom and seeing how effective its proceeds of crime legislation was. That is real legislation. That hurt the gangs where they could least tolerate the pain. They lost the proceeds of their criminal activity. They did not have the resources to promote their criminal organisations. That is real legislation; not phoney legislation like this, Mr McClay. You knew when you brought this legislation into the House that this bill does precisely nothing. It does nothing that Ministers and departments and schools are not already empowered to do. That is a disgrace because if we waste our time on phoney solutions, we are not spending our time on finding real solutions to real problems like organised criminal activity through gangs.

The other thing about gangs that is of concern to me is that gangs by their appearance and by their behaviour—and particularly their behaviour—can be intimidating. There is nobody in this House who has anything other than zero tolerance for intimidatory criminal behaviour. But we already have legislation on the books that deals with intimidatory behaviour. It is called the Summary Offences Act. Mark Mitchell will know this. I think he would be familiar with the sections from when he was with the police. Section 3 makes threatening behaviour imprisonable, as it should be. Section 21 makes intimidation imprisonable. What I say to this Government is: “Don’t worry about the superficial. Don’t put in statute laws that already exist, but do something to enforce the legislation you already have on the statute book. There should be no tolerance of intimidatory behaviour. The laws are in place. Enforce the laws.”

But I heard the National Government bragging before about police numbers. I will let National know that Annette King as Minister of Police added 1,000 additional police officers to our police force. That included 240 of the 600 that National is claiming now. But the worst thing was that news on Radio New Zealand yesterday, drawn to the attention of the House by Kris Faafoi: we have in the last year seen a drop in front-line police officers of 213. We want to deal with organised crime. You do not deal with it by cutting the number of front-line officers, and that is precisely what that National Government, complete with its former policemen, has actually allowed to happen.

Mike Sabin: We’ve put more of them into surveillance. More of it’s undercover and surveillance work.

Hon PHIL GOFF: I will let the member Mr Sabin know that we had promises at the Law and Order Committee last year there would be no closure of police stations. What about Blockhouse Bay? What about Point Chevalier? What about downtown Auckland? What about the range of police bases that this National Government has closed? It comes to the House with phoney legislation that does nothing, while it cuts the police numbers and it closes the police stations.

It is worse than that. There are huge anomalies in this legislation. You know, under this legislation I can put on a greasy jacket with a swastika on it and walk into a school-ground, and nothing in this legislation touches me—nothing. I can wear a swastika, the most offensive and the most intimidating symbol that there is, into a school-ground and nothing in this legislation prevents me from doing that. If I put on a Headhunters patch I am covered by the legislation, but if I wear the swastika that is OK. If this legislation was really about intimidation and offensive behaviour, why would it not cover a symbol like the swastika?

Let us have another look at how this legislation is going to be enforced. You know, I can wear my patch at a bus stop, unless there is a shelter there. If there is a shelter the police can come and arrest me, but if there is a bus stop without a shelter they cannot. I could walk into a swimming pool with my patch on and I would be arrested, but I could walk on to a sports field and they could not touch me. I can walk down the footpath and if it is covered I might be breaking this law, and if it is not covered then I am not breaking it.

Even Mr McClay had to come in to the select committee to find out what was in and what was not in his bill. This legislation does not meet the basic requirements of good legislation: being clear and being consistent. My last point is that if I have got “Mongrel Mob” tattooed all over my face I am not breaking this legislation, but if it is in fine print on my jacket, I am. This bill does nothing. It is a nonsense, it is rubbish, and that is why we are opposing it. Do something real about the gangs. Stop pretending.

Mr DEPUTY SPEAKER: David Clendon.

Mike Sabin: The Green Party will be in support of this.

DAVID CLENDON (Green): Unfortunately, Mr Sabin, I am going to disappoint you, as I am sure I so often do. We have heard a lot already about some of the difficulties and the problems with the Prohibition of Gang Insignia in Government Premises Bill. To begin on a positive note, I would have to say that the bill appears to be well intentioned. It does identify a real problem. Essentially, that problem is one of intimidation. People feel intimidated by young men—and, indeed, not-so-young men—strutting around wearing gang patches, specifically inside public buildings and Government buildings, places where people who might be going around their legitimate business and where staff members have a right to feel protected and safe. This bill may be well intentioned. There is a real problem there. It is, by no means, a new problem. In fact, the problem is at least 40 years old. That is worth repeating: the problem of gangs has been around for something like 40 years. Unfortunately, we see nothing in this draft legislation that will take us anywhere near solving that problem or removing that problem of intimidation. It is not so much about what a person may or may not be wearing; it is about attitude, and it is about behaviour. This bill goes nowhere towards solving the deep-seated, real, underlying causes of those behaviours. It is very superficial and will not work, and we see no reason to support it.

The essence of the bill is found in clause 6, which makes a fairly straightforward statement. It says: “No person may display gang insignia at any time in Government premises.”, and anyone doing so is subject to up to a $2,000 fine. That seems like a pretty reasonable and a fairly straightforward proposition, but, unfortunately, it is far from it. This law, as has been pointed out by previous Labour speakers, borders on the absurd in the sense that it would, if not become unenforceable, put the police in a ridiculous situation of having to arrest somebody who is sitting quietly at a bus stop if they happen to be wearing a patch.

There are major issues about identifying what actually is gang insignia. Although we have heard a great deal from the Government benches about one submission, we have not heard so much about the very good and comprehensive submission, for example, from Steven Rollo, who presented the Law and Order Committee with a large number of images, photographs, of insignia and other forms of decoration, if you like, that might appear to look like insignia to the layperson. A person working in a Work and Income New Zealand office in Masterton or a Housing New Zealand office in Manukau would have no idea how to distinguish between gang insignia that is barred according to this legislation and the number of gangs listed in it, and a garment, a T-shirt, a cap, a badge, or a buckle, which one could buy and wear perfectly legally. It is incredibly difficult for people—for non-experts, if you like—for laypeople, including Government employees, to identify what is gang insignia and what is not. The likelihood of provoking responses from people, undesirable responses, if you challenge them for the garments they are wearing if they are legally wearing those garments is not worth the candle. There is simply not enough benefit in this bill. There is not sufficient in this bill.

Mike Sabin: Well, if it’s a wrist strap or an innocuous bandana around the ankle, is it really a problem?

DAVID CLENDON: I invite Mr Sabin to look at Steven Rollo’s submission and look at the reality of the problem. The police officer who was there said the police have no problem identifying gang insignia. It is not an issue for the police. It is about public servants and members of the public who will have no idea what is gang insignia and what is not.

There is the notion of Government premises. Again, this has been traversed already; I will not dwell on it. But there is the absurdity of a person breaking the law by quite innocently wearing a patch while standing on a footpath under a verandah or sitting in a bus shelter. They can be subject to arrest, their vehicles can be searched, and so on. This is bad law. It makes no sense to write law that puts police in ridiculous situations where they are obliged to prosecute behaviour that is not intended to be covered in the legislation.

The list of unintended consequences of this bill could go on at some length. I have made the point that the problem of gangs has been with us for some time. I recommend to anybody with a genuine interest in gangs in New Zealand and an interest in solving the problem or the suite of problems around them that they have a read of this book recently published by Dr Jarrod Gilbert called Patched: The History of Gangs in New Zealand. It was the basis of a PhD thesis and is now converted into a very readable book, and I commend it to anybody who is genuinely interested in the problem of gangs and the solutions to gangs. It is an excellent social history, a political history, and it outlines from a person who has had very close relationships with gangs the nature of the problem.

There is a quotation in the book that I would like to read from a former member of this House, in fact. In the context of talking about gangs and gang violence, he said this: “The problems of gangs will not be solved by throwing a law at it.” I think that is something we should keep in our minds in our day-to-day work as MPs—problems cannot necessarily be solved by throwing a law at it. That former MP and former Minister went on to say that alienation and lack of job opportunities were two key drivers of this gang behaviour. I suspect the members of the Government will be wondering who this MP was, assuming he was some left-leaning—[Interruption] close, not quite—left liberal, but in fact it was Jim McLay in 1979. As Minister of Justice, he said: “The problems of gangs will not be solved by throwing a law at it.”

We are seeing, with this legislation, unfortunately, an attempt to throw a law at the problem. The law will simply bounce off. We can put our hands up to certain behaviours and say “thou shalt not”, but if we do not remove the underlying causes of that behaviour, we are simply dealing with symptoms, not causes, and, unfortunately, that is what this bill does.

I would like to quote another former politician also referenced in respect of this bill, who said: “Parliament must examine closely the social, economic, and community climate that breeds and fosters the kind of alienation and brutal desperation that we saw last weekend.” That was in 1979. It was Bill Rowling talking about an incident in Moerewa—an incredibly violent incident where a number of police officers and firefighters were seriously hurt as a result of gang violence. In 1979—

Mark Mitchell: By gang members.

DAVID CLENDON: —by gang members. Already the problem then was 10 years old. Policemen were carried away seriously hurt. We have not resolved that problem. This legislation may be a worthy attempt but it does not get to the core of the issue. It makes no pretence of dealing with the underlying causes of gang violence and gang behaviours, which we want to drive out.

Robert Muldoon made some commentary on gangs in his day and sought to resolve the problem by creating work opportunities—the detached youth workers. Essentially, they were mostly former—and, indeed, existing—gang members who brought groups of gang members together, found work contracts for them, kept them busy, and gave them a source of income. They did not rely on drugs, intimidation, and other forms of offending. It was a rather enlightened approach, I have to say, and that is the sort of response we need.

We need to drill down to the real causes of offending. We need to look at what is actually going on here. This bill creates so many perverse incentives. I believe that having a particular gang name listed in the legislation, in the regulations, will become something of a moniker—it will be something gang members are proud of. They will actually behave in ways that will ensure that their gang insignia gets named in the legislation. It will be point of pride with them, which is an incredibly perverse incentive to put into law.

I would like to give the last word, in this speech at least, to Jarrod Gilbert, the author of this very good book. He says: “As long as New Zealand has communities faced with poor education, overcrowded housing, unemployment, family abuse, poverty, the country will always have gangs. Steam is the inevitable result of water being boiled and gangs are the clear result of certain social conditions.” This legislation, perhaps, takes us one step forward, but will, in fact, put us two steps back. It is not readily enforceable legislation. It does not address core issues. It does not address causes of behaviour. It does not address causes of offending. It has been described as window dressing and, sadly, we cannot see anything in it beyond that and will not be supporting the bill.

Debate interrupted.

Sittings of the House

Sittings of the House

TIM MACINDOE (Junior Whip—National): Following discussion in the Business Committee, I seek leave for the House to suspend for the dinner break at the conclusion of Dr Jackie Blue’s valedictory speech this evening.

Mr DEPUTY SPEAKER: Leave is sought for that purpose. Is anyone opposed to that course of action? There appears not. Leave is granted.

Bills

Prohibition of Gang Insignia in Government Premises Bill

Second Reading

Debate resumed.

MARK MITCHELL (National—Rodney): It is a pleasure to stand and take a call on this Prohibition of Gang Insignia in Government Premises Bill. I would like to acknowledge, first of all, my colleague Todd McClay for bringing this bill to the House. He is a member of the National caucus, obviously, and the reason that a bill like this is generated is that the National caucus in support of our Government is focused on making New Zealand a safer place for all Kiwis. He also understands his electorate very well. We have seen examples in the House of earlier speakers who appear to be out of touch with their electorates; he is not. He understands that there is a real issue with gangs, not just in Rotorua, not just in his electorate, but nationally.

I would just like to talk about one of my first contacts with gangs. It was as a police dog handler working in Rotorua. Those who have lived in Rotorua, either as the police or even just as residents and members of the community, will be very aware of the old Mongrel Mob headquarters on Sala Street. When I first started there we had two young ladies come to the police station obviously in a terribly distressed state. In fact, one of them probably to this day has not recovered from what she had to endure at the hands of the Mongrel Mob at their pad on Sala Street. What had happened to them is that the Mongrel Mob had two young prospects and one of them was her cousin. As part of their initiation, as part of their pathway towards earning a gang patch, they had been instructed to entice these two young girls—15 and 16—down to the gang pad. Once they got them down there, they then proceeded to put them on what the gang members called the block, and they were gang-raped by patched gang members and the prospects were forced or encouraged to rape them also.

So I just want to be very clear, when we are in this House and we are talking about gang patches, that we actually understand clearly what a gang patch means and what it signifies. What it means is that when you see a gang member walking around patched up with a gang patch on, it is telling you, it is telling us, and it is telling the rest of the people in the community that they have committed crimes against us, and that they have probably committed violent crimes against us. They have made impacts on and affected people, victims who will probably never fully recover. So when a gang member walks into a Government building or walks into a premise wearing a gang patch, what he is really doing is telling everyone that he has committed crimes against us and he is prepared to continue to do that.

I just want to talk about my own electorate as well, because in my electorate of Rodney we have the communities of Wainui, Waitoki, Silverdale, Hibiscus Coast, Ōrewa, Pūhoi, and Warkworth. They are generally good, solid, law-abiding communities. But we are not immune to gang problems, and we have gangs called the Headhunters and the Hell’s Angels, which are both extremely active inside our communities in Rodney.

I want to acknowledge our police leadership, actually. I would like to acknowledge our police area commander, Scott Webb; the guy in charge of our Criminal Investigation Branch, Detective Sergeant Brett Batty; and the sergeants who run the stations, Bede Haughey, Mark Ovington, and especially Sergeant Kellie Bissett. Kellie is the sergeant in Wellsford and she has a team of nine up there. She is working very, very hard to try to put as much pressure as possible on the Headhunters, who have arrived in Wellsford, who have set up a pad, and who are committing crimes, actually, not just in Wellsford but throughout the whole electorate. Her team is actually using a cross-governmental approach. They have got the council involved. The council is supporting them in trying to apply as much pressure as possible to those gangs to try to get them and push them out of the area. I take my hat off to them and I want to acknowledge the great work and the service that they are providing to the people of Rodney.

But the thing that we are doing down here to help them is we have got Todd McClay’s bill in this House. It is passing through this House now and it will give them another tool. It will allow them to take action against a patched gang member when they walk into, or when they are present in, a Government building. In fact, I was up there with them 2 weeks ago. Their biggest complaint, I think—the issue that was swirling around at the time—was the fact that we had just celebrated our Anzacs, and at their dawn ceremony up there they had had patched gang members, Headhunter gang members, turn up to the Dawn Parade. They wished, actually, that this bill could cover something like that. Unfortunately it does not, but that is what they would have liked to see. I am not saying that anyone cannot turn up to a Dawn Parade, but I tell you what, I do not think that it shows a lot of respect to our veterans, past and present, to have patches arrive when all a patch says, as I have said, is that those patched members have offended and caused harm in the community. That is not what our Anzacs went offshore and fought for. That is not what they stood for.

There are just a couple of other things before I finish that I would like to address. One is this: Mr Goff got up and said that currently there are laws available to deal with gang members who decide to wear their patches and intimidate people. He quoted the Trespass Act. Well, what happens with the Trespass Act is that someone has to trespass a gang member, and I am telling you now that people are intimidated. Who is going to stand up and say: “I am going to take a step and I am going to trespass someone.”? We are removing that from them. We are removing the intimidation and fear from that person with this piece of legislation.

The other thing is intimidatory behaviour. Yes, that is right. That is a very good piece of legislation that the police have available to them, but what it requires is a physical act of intimidation. So what Mr McClay has done with his bill is he has allowed the police, and given the police another tool—and let us be clear. In his speech he said this is not the silver bullet—this is not the silver bullet. This is not the panacea. But it is a step in the right direction in giving the police another tool to be able to put pressure on gangs. What it allows the police to do is that they do not have to worry about a member of the public having to make a trespass complaint. It means that they do not have to worry about whether the actions being taken fit within the current legislation for intimidatory behaviour. It allows the police to come in and say: “Remove your patches and don’t wear them around members of the public.”

I would like to finish just by saying that we did hear many submissions. There is one submission that I do want to refer back to. It was made by Jacob Te Kurapa, from Murupara Area School. Murupara, of course, is in Mr McClay’s electorate. Murupara has got social issues that it is constantly facing and tackling. It has a big gang presence down there with the Black Power, the Tribesmen, the Mongrel Mob. In his submission he said: “Children and students do not need to see gang insignia plastered about our school they need to be protected from it. The introduction of gang insignia into our premises would create tensions and unnecessary negative behaviour and we want to discourage that type of behaviour from our school.” He wants the ability to protect his students, to give his students one place where they are free from the intimidation of gangs.

I know for a fact that in my own home electorate Kate Shevland, the principal of Orewa College; James Thomas, the principal of Whangaparaoa College; David Macleod, the principal of Mahurangi College; and Francine Bennett, the principal from KingsWay School, would all welcome the ability to prevent having gang patches in their schools and around their students.

There is one other point that I would like to make. It was brought to my notice by the Hon Chester Borrows and it is a very good point. Mr Goff said that the gangs are not worried or concerned. If the gangs are not worried or concerned about this legislation, then why did they spend tens of thousands of dollars trying to defeat it against the Wanganui District Council? If they are not worried about it, then why have they got their two-bit lawyers turning up to our Law and Order Committee to make submissions on their behalf? Thank you.

RICHARD PROSSER (NZ First): It is a pleasure to rise and take a call on this bill, the Prohibition of Gang Insignia in Government Premises Bill. It is an honour, I have to say, to follow the wise and sober discourse of Mr Mitchell. New Zealand First is proud to be in support of this bill. It is a fine bill. It is a fine member’s bill from a fine and honourable member indeed, and we are pleased to be able to offer the member, Todd McClay, our wholehearted support for his bill as it traverses its way through the House and into law. If we have any quibbles about the bill at all, it would perhaps be only to express the reservation that the bill does not go far enough. New Zealand First would like to see the banning of gang patches altogether, along with gangs themselves. But we accept the member’s bill as it stands on its own merits, and we are happy to support it as far as it does go.

Perhaps this bill will be the first of many, the first of a line, the beginning of a process of law by which the scourge of gang culture, gang behaviour, and gang criminality is erased from New Zealand life and society. We hope this bill will become the inspiration for courageous Governments in New Zealand to take up the challenge of ridding the nation of the menace of gangs altogether, following the lead already established by state Governments in South Australia, Western Australia, Queensland, and New South Wales in banning outlaw gangs outright.

We do not agree with the positions of the Labour Party and the Green Party with regard to the potential effectiveness, or, in their estimation, the lack of it, as far as this bill and its ability to curtail the intimidatory activities of gangs and of gang members is concerned. We believe, rather, that this bill will serve as a very useful and welcome tool in the range of resources available to the police, when it comes to dealing with gang members. We do not accept claims by other parties and by some submitters that sufficient and suitable measures, such as trespass notices, are already available to the staff of Government agencies as a means by which gang members in their patches can be excluded from such places.

Trespass notices can only be imposed after the fact. The terms and conditions covered by them are very specific, and their enforcement is limited by the ability of complainants to correctly identify the named individuals in question and the allocation of available police resources, based on the perceived degree of risk. Staff at Government agencies should not be placed in the position of having to make such calls and decisions, especially when threat or menace may be present. It is, after all, the menace—the deliberate and intentional menace—accompanying the presence of the patch that this bill seeks to remove.

Staff of Government agencies should not and must not be placed in that position, and once this bill is passed into law—this fine bill, which will become fine law—they will not be forced to be subjected to the stress and discomfort of the threat and the menace that a patch encompasses. Rather, it is the gang members themselves who will be living under threat. The tables will be turned by this bill. It is the gang members who will have to spend their days looking over their shoulders, wondering at every turn whether the police are watching, whether the building they are about to enter is one covered by the ban, or whether they may in fact be better off leaving their ridiculous rag patches at home rather than displaying them like a target on their backs.

Mr McClay’s bill is the beginning of a process. It is the beginning of a change in New Zealand society, a sea change, a shift in attitude towards criminal gangs and the place they have held in the nation’s psyche these past four decades or so. Time was that the gang patch was something to fear, and it still is, and for good reason. The patch signifies someone who has offended against society and against one or more individuals. The patch is won by a gang member who has committed a sufficiently vile crime to have earned the twisted respect of the fellow reprobates and moral perverts with whom he associates.

Gang members have imposed a measure of caution on the rest of society through the promotion of their willingness to engage in violent and criminal behaviour. No longer. Through this bill the tide will begin to turn. In time, and not much of it, society’s attitude to gangs will change from one of caution to one of derision. In the near future the patch will not say: “Look at me. I’m a tough guy. Fear me.” Instead it will say: “Look at me. I’m a criminal, an idiot, a loser, a coward who can’t stand alone on my own two feet, who needs 20 or 30 or however many other like-minded criminal losers around me to make me feel like a tough guy. Pity me.”

The patch will be reviled, and its wearers will be rejected by society and apprehended by the law. Patches will be seized and destroyed, shredded and burnt, indeed crushed, as the gangs themselves will come to be, by the weight of public opinion and the power of this, the people’s Parliament, to pass this bill and enact this law, and others that I am certain will follow. We will see gangs banned outright in this country. This bill is the beginning of that journey.

We note the concern held by the Labour Opposition that there are some inconsistencies in the bill. Indeed there are. Some of this is unavoidable. Covered footpaths, for example, can be included in the bill’s ambit but not uncovered footpaths. Bus and train stations may be included if they have a shelter incorporated, but not otherwise. The Labour minority view in the select committee’s report comments that swimming pools are included but not playing fields. This is because Mr McClay’s bill specifies premises as being the places from which gang patches will be excluded. A premise is defined in the bill as somewhere that has been built; it includes a structure of some kind.

In the light of this and as a measure both to clarify the extent of the bill in order to allay some of the concerns raised by my erstwhile colleagues from the Labour benches, and, of course, to attempt to extend the reach of the bill as much as is possible within the constraints intended by the sponsoring member, I have suggested to the honourable member Mr McClay that perhaps the definition of premise could be amended to include an area defined by or included within a suitable structure, such as a fence. This would, of course, bring playing fields quite sensibly within the ambit of the bill.

It is my intention to put forward a Supplementary Order Paper to this effect at the Committee stage of the bill, and I hope and trust that the sponsoring member does not feel that I am treading on his toes by doing so. I would like this to be seen as a gesture of cooperation, and I would hope that the member and his caucus would view it in that light. New Zealand First favours consensus politics wherever possible, and we like nothing better than to work constructively together with other parties on matters where we share common ground and compatible values. Mr McClay’s bill is certainly one such area of common purpose.

In the select committee on which I sit, some members and submitters contended that the removal of patches by gang members, voluntarily or otherwise, would have the effect of making them harder to identify. That may be so, but it will also have the effect of making it harder for those gang members to draw on the so-called power of the patch and its ability to intimidate. This can only be a good thing, in our estimation. Indeed, some gangs, notably some of the motorcycle enthusiasts, already, in fact, choose to be effectively de-patched most of the time anyway. But they are also less likely to be on Government premises and availing themselves of governmental services than some of their non - motorcycle enthusiast brethren because, unlike those gangs, most bikies do, in fact, actually work for a living along with undertaking their other extracurricular activities. In saying that, I am not suggesting that these mischievous biker boys are somehow less bad than other gang members; only that Mr McClay’s bill deals solely with Government premises and there have to be horses for courses.

In closing I would reiterate that New Zealand First’s only disappointment, if it could be called such, with this bill is that it does not go far enough. However, we fully accept that it is the member’s bill and this is what he desires of it, and we fully support him in that. Again, we hope and trust that this bill will be the beginning of a process culminating ultimately in the removal of gangs from the fabric of New Zealand society in their entirety. New Zealand First is very happy to support this fine piece of legislation, and we commend it to the House. Thank you.

IAN McKELVIE (National—Rangitīkei): I was very tempted, listening to the previous speech, to seek the leave of the House to give Richard Prosser my 10 minutes, but I will not. Firstly, I wish to—

Hon Ruth Dyson: Oh, go on.

IAN McKELVIE: You would be bored by the end of it, Ruth. You would be bored by the end of it. Firstly, I wish to congratulate Todd McClay on bringing this bill, the Prohibition of Gang Insignia in Government Premises Bill, to the House. I can fully understand his reasons for doing so. I have been in Government offices when these patched gang members have arrived at the door. There is no doubt they are intimidating, and they intend to be. I have witnessed the unease of the people attempting to assist them, and I think this bill is an outstanding addition to the tool kit that will allow the police and our communities to lessen the impact that gangs have on our society.

I do not understand the vehement opposition to this bill by Labour and the Greens. They talk about what we should have done and what we should be doing. They have had years to do it in, and did nothing. They have also had the opportunity to put these great ideas into members’ bills; they have not done that either.

Andrew Little: This is not one of our ideas.

IAN McKELVIE: I did not say this is one of your ideas. Your compatriots said it was one of their ideas.

I am going to concentrate on the intimidation factor as I speak tonight, as I realise that in itself this bill will not put an end to gang activity. It will not stop people joining gangs, it will not get them into legitimate work, and it will not prevent crime. It will be a disincentive to all those things, however. But, more important, it will make the lives of the people who work behind the counters in our hospitals, schools, Housing New Zealand offices, and other Government departments a little more pleasant as they deal with the requests of these people. It will make fellow parents of the local school a little more comfortable.

Surprising as it may seem, the Rangitīkei electorate is not immune to gangs. Odd as it may seem, I have schools in my electorate that have asked gang members to remove their gang insignia when they come on to the school grounds. Fortunately for those schools and the children in those schools, those gang members have complied out of respect for the school. Had they not complied, this bill would have given the school the ability to exclude them, forcing them to comply. I think that is a great opportunity for our community and great for all the law-abiding citizens of New Zealand. I do not think that it is in the interests of our young people to be exposed to the gang influence, and every little thing we can do to limit that exposure or the visual presence of gangs in our community is positive.

Mr McClay in his introduction talked of the gangs in Rotorua. I have first-hand knowledge of these people, and of the outstanding Rotorua police, who recovered my iPad intact from a Rotorua gang drug house. It had been stolen from my branded car—not a car with insignia—in the Taumarunui area. I think that just points out what a great job our New Zealand police do when dealing with these kinds of people. It is quite a challenge for our communities as well.

If banning the advertising and branding of cigarettes is going to have an effect on the number of smokers in society, then surely the same logic could be applied to this piece of legislation. I contest that the Opposition’s view, which is that this bill will not make a difference on that basis, is nonsense. We concentrate for a long time on banning things in this country, and we clearly ban them for good reason. I think exactly the same logic applies to this.

During the course of the select committee process on this bill, we had some very positive submissions. The Murupara Area School submission has been referred to at least three times now, even by one of the speakers in opposition to the bill. I would remind Mr Faafoi and Mr Goff that this bill does, in fact, have some teeth and it will make a difference. I do not believe that their communities have been done any favours by their opposing it.

Every activity that we undertake to make the activities of gangs a little more difficult makes a difference, and protecting people from intimidation is a very worthy ideal in life. It is akin to a dislike of bullying, as intimidation is, in fact, a form of bullying. Much has been said tonight about the measures contained in the bill, the naming of specific gangs covered in the bill, the way in which future gangs can be added, and the types of premises included in the bill, with a very clear definition of such, and I do not need to add to that further. Again, I want to congratulate Todd McClay and thank the fellow members of the Law and Order Committee, under the very capable leadership of Jacqui Dean, for the work they have done on this topic.

Gang issues in New Zealand will never be readily overcome. I do not think any of these issues with gangs that inflict misery on our society will be overcome, but every time that we chip away at their opportunity makes a big difference to our community. I congratulate Mr McClay again on bringing this bill to the House. I think it will do its little piece in impacting on the activities of gangs in our community. Thank you.

ANDREW LITTLE (Labour): I appreciate the opportunity to speak on the Prohibition of Gang Insignia in Government Premises Bill and to add my voice to those who say this is a complete waste of our time. This is a bill for the inadequate and, frankly, the flaccid, and the armchair toughies who sit back in the comfort of places like this to talk at length about the horror of the gangs without actually wanting to do anything meaningful about it. This will do nothing. This does nothing. It is cosmetic. It is literally cosmetic. It is about dealing with the outward appearance of a gang member. It does nothing about the underlying issues and realities of gangs.

We all know about the reality of gangs, and if there is anybody in this House who knows more than Mr Sabin about gangs, I would be most surprised. He has been at the forefront of the war on the drugs that have been peddled and pushed and run by gangs for many, many years. He knows the insidious effect that many gang members have. He knows, as does Mr Mitchell, that the primary reason we have gangs and that they behave the way they do is that they are a criminal enterprise. They are an issue that we ought to take seriously. They are an issue about which we need proper laws, effective laws, and effective enforcement. They are also an issue about which we need other effective policies, too, because gangs flourish and come into existence at times of poverty, deprivation, alienation, and disillusionment. We actually need measures about those sorts of things as well, to go hand in hand with effective criminal response and criminal enforcement. But this bill will do nothing. This will do nothing for any of those things.

Mr Prosser talks about eradicating gangs for ever. Well, politicians have been talking like that in this country for the last 40 years—about getting rid of gangs, about eliminating them, banging them all up, locking them up, and treating them in horrific sorts of ways. That continued, of course, until we had a Prime Minister named Rob Muldoon, who decided, as part of his style of political leadership, to offer the hand of support, engagement, and understanding. He provided work for gangs to do, with State support. And suddenly it made a difference. Some gangs actually went down a path of the straight and narrow. But, since then, gangs have become a repository of criminal wrongdoing and criminal enterprises, and they serve no useful purpose, by and large. So when we think about effective remedies for the gang problem and those who would go around intimidating, bullying, acting like thugs, and upsetting the citizenry and the good burghers of Whanganui or of Leigh or any of other part of the country, then what would we do? The last thing we would think about doing is taking their jackets off them. That is not going to change anything, as it did not change anything in Whanganui, when it had its gang patch prohibition. All that did was send the gangs out of the centre of the city. They just turned up somewhere else and carried on in their same, usual ways. It did not change the existence or the presence of gangs, and it did not change their conduct or behaviour.

So what will this bill do? If this law can be effectively enforced—and there is real doubt that it can, because of the definitions, and because of the vague applications and the vague boundaries that are now defined within it—what is it going to do? It will shift the problem round. It will not address the underlying issue of gangs. The only thing that the bill, as reported back from the Law and Order Committee does—the principal change—is to add some Government premises, foremost amongst them being police stations, because, apparently, this bill contemplates the real possibility that police at the moment cannot manage their own premises to keep gangs out of them. Well, that is just patently ridiculous. That illustrates how silly this bill has become, that the principal change to it as a result of the select committee is to say that police stations must be covered as one of the Government premises. Well, that is plainly ridiculous. The other principal addition is the adding of the letters “MC” after some of the named gangs, because suddenly the sponsor of the bill has discovered that all these gangs that were listed in the original bill are actually motorcycle gangs, so we had better add something that stands for “motorcycle” after it. Most of them will be motorcycle gangs; some of them will not be. Some of them will be other things. But then there is a catch-all change to the bill that says that anything that kind of looks like it is named this way will be covered by it. The other interesting aspect to the bill, I note, is the power of the police to give chase to somebody wearing a nominated gang patch. In order to give chase, and before they can pull over a gang patch - wearing citizen, the police officer or the constable him or herself has to “… be wearing a uniform or distinctive cap, hat, or helmet with a badge of authority …”. That might as well be paraphrased into the word “insignia”. We need police insignia on the police officer before they can give chase and stop the citizen who is wearing a gang-patched garment on their person.

That illustrates again the fruitless nature of this piece of legislation, the fruitless nature of this bill, and it illustrates again that the Government, whether its members are bringing members’ bills in their personal capacity or on behalf of the Government itself—actually, if we had a Government that was serious about the gang issue, we would have a Minister here bringing legislation that would deal with the problem. But the mere fact that this is a member’s bill being brought in on a members’ day, an ineffective piece of legislation being brought in for ineffective purposes on an issue that is actually quite important, illustrates how serious or not this Government takes this issue and issues associated with it. If this was a Government serious about dealing with a gang issue, not only would we have effective and effectively enforceable criminal legislation that would deal with it but we would have a Government that was dealing with the underlying social issues that drive people to gangs and to gang activity. We would have a set of criminal legislation that would deal with gangs embarking on criminal enterprises—the sort of legislation that the Hon Phil Goff introduced when he was a Minister of Justice, legislation that deals with the power of gangs and the wealth and the assets they accumulate, and starts taking it off them, not meaningless gestures like this bill, which deals with the clothes that they wear, because that does not change their behaviour.

This bill does not change them congregating and aggregating as citizens with a criminal motive and a criminal purpose. It will do nothing about that. It deals with the clothes that they wear. Well, that is not effective at all. And then it requires the police and the Minister to be constantly in touch with gang activity and what gangs are around, because this legislation deals with nominated gangs. If there is a new gang—and they do spring up from time to time—then the Minister has to seek an Order in Council to add whatever new gang there is to the list, and the Minister has to be satisfied that they are a gang and that they are criminal and do all this sort of stuff. The Minister has to be satisfied that the information and the evidence are there, before they can seek their Order in Council. This adds an entire rigmarole to deal with a cosmetic problem rather than the real problem that underpins it.

A Government that was serious about criminal activity, the criminal fraternity, and criminal enterprise would bring a piece of legislation through a Minister who was genuinely concerned about it. It would bring a piece of legislation that was directed to dealing with criminal activity and giving the police the means and the powers to deal with gangs, not to just take their patch off them, chase them because they have got a patch on, or arrest them because they wear a gang patch. That will do nothing, because one of the other badges of honour—if I could use that pun in this context—of gang members is to accumulate a criminal record, to cause the police inconvenience, and to draw themselves to the attention of the police, force them to take them through the courts, and do all those sorts of things.

This bill will do nothing for the gang problem. It will be another feather in their cap if they are caught by it and they cause inconvenience and an unnecessary waste of resources for the police. It will be another feather in their cap. They will brag about it, talk about it, and boast about it, but it will not fix the gang problem, it will not fix criminal activity, and it will not stop the criminal enterprises that are gangs. So that is why we are opposed to this bill. It is a meaningless gesture that is on an issue that actually ought to be taken seriously and to have something serious done about it. We are opposed to the bill.

JAMI-LEE ROSS (National—Botany): Andrew Little, Kris Faafoi, and Phil Goff should be hanging their heads in shame for coming to this House and arguing against this piece of legislation, the Prohibition of Gang Insignia in Government Premises Bill. What they are telling this Parliament is that the people out there in New Zealand who want to be kept free from gang intimidation and who want to be kept free from the threatening behaviour of gang members should not be protected by legislation like this, which will ensure that gang intimidation and threatening behaviour by gangs cannot take place in public places.

Those members over on the other side—and I include the Green Party members here—who oppose this piece of legislation are doing New Zealanders a disservice. They are doing New Zealanders a disservice, because New Zealanders want legislation like this. New Zealanders know that gangs are a huge problem in New Zealand, and they need to be tackled.

We know that Labour did not do enough. Labour failed. Labour let gangs run rampant around New Zealand, but this Government has passed multiple pieces of legislation to clamp down on gangs. This Government has put more police officers on to the streets of New Zealand, and more police officers into the hot spots where they are required. We have passed legislation that has clamped down on the likes of P, and we are seeing results.

We are seeing results that the Opposition never got when it was in Government. We are seeing results like crime rates at a 30-year low. We are seeing results where P is starting to disappear off the streets. This is another piece of legislation that will help with that situation. The Labour Party minority view, in the commentary on the bill, started off like this: “Labour has no truck with gangs with a culture that promotes, encourages, facilitates, or tolerates criminal activity collectively or individually among its members.” Never a more disingenuous statement have I heard. Never a more disingenuous statement have I heard, because nothing in the way in which they are planning on voting on this legislation and nothing they have said in the House today leads us to believe that they actually support that point of view.

The Greens are in a similar camp. They are not as strident as the Labour Party, but to quote Steven Rollo, who made a submission to the Law and Order Committee, and who just so happens to work for the gangs—he is a paid lawyer, paid to defend gang members—is appalling. To come into this House and quote somebody who acts in that capacity is something that I find appalling. I would not be listening to the lawyer of gang members, because that lawyer is coming to select committees promoting and defending gang activity.

Gang members and gang patches do not stand for anything good at all. The gang patch that a patched gang member wears stands for pride in what their organisation stands for, and that organisation is criminal. The gangs, sure, have an element of collectivity that some gang members benefit from, but predominantly gangs are causing crime. Gangs are intimidating New Zealanders. Gangs are threatening New Zealanders. Those very New Zealanders came to the Law and Order Committee. Murapara Area School has been quoted a number of times in this House so far. Todd McClay knows about Murapara Area School, because he is a good representative of his people. Murupara Area School told us that children and students do not need to see gang insignia plastered about their school, and they need to be protected from it.

The Labour Party and the Green Party do not believe that children should be protected from gang insignia. They are trying to say that they do not think the legislation is going far enough, but if they think something needs to be happening they should be voting for this legislation. Kawerau District Council also submitted to the committee. It is another area that Mr McClay represents, and he is a good member for that area. Kawerau District Council felt the need to put on record its views. Its view was around the fact that if you are to require council workers and public servants to enforce trespass orders and to serve trespass orders on gang members, then you are putting those very people at risk. The Opposition thinks there are enough laws at the moment to take action against gang patch - wearing individuals. Well, the very people who have to take that action and have to serve trespass orders on gang members feel intimidated. They feel threatened.

This side of the House wants to take greater action on crime. This side of the House wants to take greater action on gangs. The Opposition has told New Zealanders through the select committee process and through their comments in this House tonight that they support the gang members over the good, law-abiding members of the public.

Hon Phil Goff: That’s rubbish.

JAMI-LEE ROSS: It is not rubbish, Mr Goff. It is not rubbish, because I heard your speech. I heard you saying that this piece of legislation should not be passed. I heard what you had to say. Labour’s comments in its minority report say it supports New Zealanders, but, actually, Labour members are prepared to vote against the bill, and I find that hugely disingenuous.

I think that Mr McClay is the one who should be congratulated. Mr McClay is the one who is doing a good service for New Zealanders—his constituents know it and New Zealanders know it. This piece of legislation will be good for law-abiding people. Sure the gangs will suffer because they cannot wear their patches of pride, the patches they wear to promote criminal activity, but wearing those patches is what should be clamped down on. That is what the Labour Party members should be supporting. They should be supporting this bill.

BRENDAN HORAN (Independent): This Prohibition of Gang Insignia in Government Premises Bill reflects three truths: one, the economic policies of the National Government are a failure; two, those policies have led society to fail; and, three, that National over the last year or so has realised that looking tough on crime but weak on the causes of crime is a recipe for disaster. I see Mr Mitchell laughing away over there. I have got to say that I was bemused by that honourable member’s speech when he talked about the first time he saw gang members being when he was a dog handler. Well, it takes 5 years to be dog handler, so I wonder what that member was doing for those 4¾ years until he saw a patched gang member—unbelievable.

But let me expand. If National had been delivering effective and successful economic policies, we would have decent jobs for every man and woman who wanted to work. People would be able to do a fair day’s work for a fair day’s pay. They would learn the discipline and dignity of work. They would be able to raise their families in a dignified and well manner. But National’s policies rely on making a few people better off. Look at the chief executive officers of the banks who earn $5,000 extra a week thanks to National’s tax cuts, which the rest of this country has to pay for. Look at the Mighty River Power debacle, where less than 2 percent of New Zealanders are able to buy back what we already own. Meanwhile, we have 142,000 New Zealanders out of work, without the discipline or dignity of a job. Every week we come in here and we listen to that side of the House sprouting on about ghost jobs, because as they say in the provinces: “We can’t work your ghost jobs, bro.”

I am interested to see tomorrow’s Budget, because in last year’s Budget there we had the Hon Bill English talking about—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! We are on a bill that is talking about gang insignia, and I ask the member to come back to the contents of the bill.

BRENDAN HORAN: I am getting there, because what I am talking about is when is this Government going to stand up for children? In the Māori Affairs Committee we are doing a study on children. What is really appalling is that we look for aspiration in families. What we are seeing is that many children in towns such as Kawerau aspire to become a patched gang member. Something is seriously wrong with society when we have children in New Zealand aspiring to become patched gang members. This bill does not go anywhere near far enough.

On Sunday I was at Kawerau. I was watching children play sport. My own son and daughter were playing rugby league. Some who want to be gang members came up to me and they were screaming out for these children to hurt each other on the rugby field. Unlike some of those members over there, when I see something wrong, I stand up and say it. I said: “Shut up. How dare you come down here.” And then they wanted to heavy me out. It was quite funny really. They threatened to get their patched father to come and see to me, so I said “Well, go and get your patched father.”

Mark Mitchell: And then you woke up.

BRENDAN HORAN: This actually happened. I tell you what, I was struggling to wake myself up after hearing that member’s speech. You have got to work on your tonality a little bit.

I am prepared to stand up for children, as people on this side of the House are prepared to stand up for children, but what is that side doing for the children of New Zealand? I heard the honourable Todd McClay say that crime was down. Well, to that I say “Rubbish!”. Solved crime is down, police numbers and support is down, and police morale is down—it is at an all-time low. We have police officers leaving New Zealand hand over foot. There were 45 from Auckland alone last month. We have got police officers going to the Northern Territory. We have got them going to Queensland and Western Australia. We even have police officers working in security here—there are four of them. So who is going to enforce this law? I would say to these people on that side of the House to get out into the suburbs and get out into the provinces and see what is really happening.

I am going to support this bill, but I am going to support it because it is only a start. I would say to the honourable Todd McClay to go down—

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

JAN LOGIE (Green): I rise as the Green Party’s spokesperson on human rights to speak to the second reading of this Prohibition of Gang Insignia in Government Premises Bill. To be perfectly honest—and I do not mean any disrespect to the sponsoring member, Todd McClay—I do need to say that I had hoped this bill would be scuttled in the Law and Order Committee, and I am disappointed to see it back here when so much of the evidence has shown that this bill is unnecessary. For that and for significant other reasons, this bill is unlikely to help people feel safer in our communities, and it is even less likely to address gang-related harm.

This bill says that it “seeks to restrict the display of gang insignia in the premises of departments of the public service, statutory entities, and local authorities in New Zealand.”, and it defines gangs as “the gangs listed or any included by regulation.” Further, this bill allows police to, without warrant, “arrest a person whom the constable has good cause to suspect” has displayed a gang insignia on Government premises, and “seize and remove gang insignia … that has been or is being displayed …”. It also enables the police “to stop vehicle[s] to exercise powers of arrest or seizure”.

The Green Party is not pro-gang. I am sure that all of us in the House have seen far too much harm surrounding gangs in all of our communities to even countenance the thought of being pro-gang. I will say, though, that the evidence suggests that our being anti-gang is not particularly helpful. What we support in the Green Party is evidence-based policy-making. I would like to reference—I did not realise my colleague David Clendon was also going to reference this—one of the submitters to the select committee, Dr Jarrod Gilbert. He is a lecturer at the University of Canterbury and an expert on gang culture and gang control. He gave very clear evidence to the committee that this bill will not work.

I know that members on that side of the House have scoffed at us referencing evidence and said, you know, “Here we go again with another academic reference.”, as if we are not based in the real world. I would like just to push back on that and say that, particularly on emotive issues, we need sometimes to take some distance in order to have and consider the views of somebody outside of the system who can look at all perspectives and guide us in what is going to be most effective. Dr Gilbert is such a person. He acknowledged the will and the intent of the committee in considering this legislation, and the hope that that committee had, surely, of minimising harm. However—however—he noted that this legislation was doomed to failure, just like numerous other laws that have been ineffective in this area. He gave examples of the criminalising of gang membership under section 98A of the Crimes Act, and the targeting of gang fortifications under section 695A of the Local Government Act. He noted that both of these laws have failed to have any discernable impact on the problems of gangs, and that both those measures have had to be amended because they were not working, and still are not working.

He recognised that at the time of the introduction of those bills, this House and those who were promoting the bills felt the same way that the member does and that that side of the House feels now. They were adamant that this legislation would work. They were hopeful; they had the best intentions. But the evidence does not stack up that this type of approach will make a difference. We care about protecting people in our communities. There needs to be a substantive answer to it, and this bill does more harm than it does good.

MIKE SABIN (National—Northland): I am very pleased and proud to take a call in this debate and to support Todd McClay on this bill, the Prohibition of Gang Insignia in Government Premises Bill. It is not surprising that we hear that the Greens are opposing this, because New Zealand has got used to the idea that the Greens are very much a pro-criminal party—pro-criminal rights—so we know that they will not vote for this. But what does surprise me is the misjudgment that has come from the other side of the House with the Labour Party. Labour’s vote on this shows how out of touch it is with New Zealand. Other than the Labour Party and the Greens, I am not sure that we could find anyone out there in New Zealand society who would think that a gang member wearing a patch into a school or a Government building is a good thing. I can see the headlines in the Dominion Post tomorrow. I am just picturing what they may be: “Labour Party backs the gangs.” Possibly it would be: “Labour Party supports the rights of gangs to intimidate.” Possibly that is a little long. Maybe we should shorten it down to: “Labour stands behind organised crime.” I do not know. The Dominion Post, I am sure, will have fun with it.

As a former police officer, I was a detective for a number of years. I worked in the areas of undercover operations, surveillance jobs, electronic operations—the sort of stuff that those people vote against all the time. I saw and heard firsthand the disgraceful impact of gangs on New Zealand society. They exist for one reason and one reason alone, and that is to make financial gain from organised criminal activities. And what are they? Drug dealing tops the list, followed closely by prostitution, and let us throw a bit of money-laundering and standovers in there for good measure. They will pepper-pot whatever other crime they can fit in there, because gangs exist to perpetuate nothing but misery on the citizens of any country in which they exist.

Gangs are responsible for far more misery than most people will ever understand. In the year of 9/11, 3,000 people died in that terror attack, in that travesty that we remember and that has changed the world for ever. In that same year, 38,000 people died in the United States of drug overdose alone—38,000 people died of drug overdose. Where did they get their drugs from? Was it from the local Boy Scouts club? Was it from the bingo society? No, it was from gang members—gang members. Gangs exist for nothing other than to make money from the misery of others. They destroy society. They are like a cancer that is slowly devouring its host. For every member on that side and over there on the Greens side who sits by idly and does not vote for something like this, gangs get a little bit of a stronger claw-hold, and that cancer takes its impact that little bit deeper.

So what do gang members do to earn their patch? We have heard it from the Labour Party: “Oh, this’ll do nothing. It means nothing.” What do they do to earn their patch? Armed robbery. That is a nice starting place. They will pack rape to get a patch. Grievous bodily harm is a nice one to throw in there. That will earn you your patch—not you, Mr Speaker, of course, but a gang member. But if a gang member wants to go straight to the top of the pile in terms of getting a patch, they will kill someone. They will murder, and then they will plead guilty for that and they will earn their patch when they emerge from prison. It is a badge of honour. They will do anything to get it and they will do everything they can to prevent losing it. If anyone in this House doubts that, then I challenge them to go to a gang member and try to take the patch off their back and see what happens, because I have done that.

Phil Goff raised the point: “Oh, well, Government departments can do that now—they can do that now.” I investigated a young man who tried to do exactly that, and he had his face spread all over the floor of a public building because he tried to ask a gang member to take his patch off. So it is just completely unrealistic to suggest that they can do that now, because if they could, they would, and they cannot. There is a reason for that. It is because wearing a patch is about intimidation. That is what having a patch is all about. Patches are a tool of intimidation. That is why they do not have nice little embroidered pictures of their families on them, and things like that. They have crosses. They have skulls. They do have swastikas, Mr Goff. I am not sure which patched members he has been looking at. There is a reason that gang members wear patches, and it is to intimidate. It makes a bold statement.

What this legislation does is that it makes a more bold statement, and it will hurt gangs. They will loathe this legislation, and I commend the member for having the courage to actually bring it forward. They will loathe everything this stands for, because that patch that they have killed for, that patch that they have robbed and raped for, they will not be able to wear in Government buildings. They will not be able to wear it in schools. What does it do? It gives the police yet another reason to get in their face. And why is that? Because we should be getting in their faces. The police need these tools. This bill sends a message to gang members. It sends a very clear message that the community will not tolerate them. It sends a very clear message that this National Party—that this National Government—will not tolerate them, either.

What staggers me is that the Labour Party is so misguided in its judgment on this. I hope that the Dominion Post has a front page headline that says that Labour stands behind gangs, because that is what the Labour Party deserves. This is a good bill. I commend it to the House.

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

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

Ayes 69

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

Noes 51

New Zealand Labour 33; Green Party 14; Māori Party 3; Mana 1.

Question agreed to.

Bill read a second time.

Valedictory Statements

Valedictory Statements

Dr JACKIE BLUE (National): When I completed my medical degree back in the early 1980s, neither I nor anyone around me could have predicted that I would end up in politics and then move on to be the Equal Employment Opportunities Commissioner at the Human Rights Commission. But life is full of twists and turns and, most important, opportunities, though we may not recognise them as such at the time.

The opportunity to get involved with the National Party came in 2001. When advocating for breast physicians, a role that I had pioneered in New Zealand, I had a chance meeting with Bill and Mary English. I became actively involved in the party in 2002, after the general election. It was an exciting time to get involved. The party was regrouping and reviewing its constitution. After the encouragement of the National Party leader at the time, Dr Don Brash, I put my name forward as a candidate in the 2005 election. I was truly delighted when I was selected to stand in the Mt Roskill electorate.

With my health background, I joined National’s health team. Tony Ryall was the health spokesperson. Tony was, and is, a great mentor. I know many of our colleagues were very envious. Tony put the health team to work, giving us a range of health responsibilities. I had the access to medicines portfolio and, because of my background, breast cancer - related issues.

While I was a new MP in 2005, Herceptin became high-profile, with many countries funding a 12-month course for a particularly aggressive form of breast cancer. It was being used for treatment in metastatic breast cancer in New Zealand, but the trials were showing that it was reducing deaths in early stage, newly diagnosed breast cancer. I am grateful that Tony gave me the opportunity to advocate for 12-months’ Herceptin funding for women with breast cancer in New Zealand.

I was extraordinarily proud when John Key made this a National Party election promise in 2008. One of the most marvellous memories from my time in Parliament is of a meeting shortly after the November 2008 election, when I joined Tony, who was the new Minister of Health, and key officials from the Ministry of Health and Pharmac. The meeting was to work through the logistics of ensuring that the women who needed Herceptin had access to it by Christmas 2008. The timing was very tight, but it was a case of Yes, Minister at its very best. Everyone worked together to ensure that the policy rolled out smoothly. With the results of recent trials, time has proved that funding 12 months’ Herceptin was the right decision. Twelve months is considered to be the international gold standard. For Pharmac to continue to financially support a trial that offers a 9-week Herceptin course is, in my opinion, dubious and possibly unethical.

In my first term of Parliament Tony Ryall and I had the opportunity to advocate for enrolled nurses. This iconic nursing workforce had been increasingly marginalised. They had been forced out of acute hospital services, with their training limited to the very narrow scopes of long-term care and rehabilitation, as well as having undergone a name change to nurse assistant. The name change was detrimental. The nurses felt demeaned, undervalued, and demoted. A concerning consequence was that the numbers of students in training dropped significantly. There were reports that it had caused a loss of confidence and confusion with the public and prospective employers.

The New Zealand Nurses Organisation took the case to the Regulations Review Committee, which did support that the enrolled nurse name should be retained. In late September 2008 the Government moved a motion in Parliament that required the Nursing Council to change the name. Expanding the role and training of enrolled nurses became a 2008 election commitment for the National Party, and when Tony Ryall became the Minister of Health he set about implementing that policy.

I really connected with the enrolled nurses’ story. They had faced ignorance and prejudice. Their battles had been my battles when I was establishing breast physicians in New Zealand. Regrettably, the number of breast physicians in New Zealand has not grown as it should, and it is my sincere hope that this will change as professional colleges accept the huge contribution that breast physicians bring to the multidisciplinary breast cancer team.

Early in 2008 I met with a group of refugee and migrant doctors who were meeting regularly at the Auckland Regional Migrant Service, or ARMS, in Mount Roskill. The group had been struggling to get registration with the New Zealand Medical Council. They were frustrated that we did not have a bridging programme like Australia had. Over several years they had made successive approaches to health Ministers without getting any traction. They were meeting regularly at the Auckland Regional Migrant Service to study and to support each other, and I would like to acknowledge the amazing support that Dr Mary Dawson and Anna Fyfe-Rahal from the service have been providing to this group. Without their support and encouragement, I am quite sure that this group would have disbanded long ago.

My heart went out to these doctors. After the election I re-established contact with the group and began to meet with them each month. I went back to Tony Ryall and I said that we simply had to do something for them. Tony was very supportive and agreed that I could start investigating options, and I began discussions with the Ministry of Health and the Medical Council. However, when Professor Des Gorman, chair of Health Workforce New Zealand, got involved in the latter part of 2009, the project developed a momentum all of its own. The NZREX preparation placement programme began in 2011 and has been hugely successful, with 33 out of 38 migrant doctors passing the Medical Council registration exam. This programme has been truly life changing for those doctors and their families.

The public would be very interested to know that our Parliament exists in an alternative reality. This parallel Parliament is full of cross-party committees and friendship groups. It is a place I have inhabited since I have been an MP. It is a happy place. It is a place where MPs work collaboratively towards common objectives. I have found it immensely satisfying and stimulating. I recall a retired senior National Minister telling me that one of the most satisfying times of his career was when, as a result of a crisis, Government and Opposition MPs worked together to broker a solution. Of course, I knew exactly what he was talking about because this is my experience in the cross-party groups. The thing is, you do not need to wait for a crisis. The chance already exists.

The opportunity to chair three cross-party groups has been truly life changing for me. All three groups—the New Zealand Parliamentarians’ Group on Population and Development, or NZPPD, the Commonwealth Women Parliamentarians, or CWP, and Parliamentarians for Global Action, or PGA—have a strong human rights focus. The New Zealand Parliamentarians’ Group on Population and Development, in particular, specifically focused on women’s sexual and reproductive health and rights, domestic violence, and our overseas aid in Pacific countries. The Commonwealth Women Parliamentarians group is focused on improving the number of women in Pacific Parliaments. I co-chaired with Louisa Wall. The Parliamentarians for Global Action group has a strong focus on human rights, the rule of law, the International Criminal Court, gender, and democracy.

It has been the work of these committees that has left me utterly convinced that society must back its women and girls. Women make up one-half of the world’s human capital. No society can achieve its full potential when half the population is denied the opportunity to achieve theirs. Empowering and educating women and girls are fundamental to succeeding and prospering in the ever more competitive world. This is particularly true in developing countries, but it is also absolutely relevant in developed countries like New Zealand. As women progress, everyone in society progresses, including men and boys. Tapping into the potential of women and girls is not only the right thing; it is the smart thing. Sexual reproductive health and rights and education go hand in hand. When women have the opportunity to control their fertility and have access to reproductive health services they are more likely to stay in education, get employment, and provide for their families. Education leads to more choices and opportunities.

The cross-party groups that I am involved with are very excited about the Pacific Leaders Gender Equality Declaration that our Government signed along with other Pacific Parliaments last year in Rarotonga at the Pacific Islands Forum. All leaders—and that includes Australia’s and New Zealand’s—have agreed to implement specific national policy actions to progress gender equality in the areas of Government programmes, decision making, economic empowerment, health, education, and ending violence against women. The leaders agreed that progress in these areas should be reported on at each forum leaders meeting by way of a performance-monitoring framework. We are all looking forward to having a robust measure by which we can track New Zealand’s progress in gender equality.

We are a House of Representatives, but, unfortunately, as it is, we do not truly represent all New Zealanders. If our Parliament perfectly represented our diverse society, we would have eight Pacific MPs; we have five. We would have three Indian MPs; we have two. We would have eight Asian MPs; we have three. We would have one Middle Eastern, Latin American, or African MP; we have none. We would have 18 Māori MPs. We are doing well in this area—we have 22. And, of course, 50 percent of our MPs would be women. The fact is that only 33 percent are women MPs. This is unacceptable in the 21st century. We can, and we must, do better.

I am very appreciative that Maggie Barry will be taking over my member’s bill, the Marriage (Court Consent to Marriage of Minors) Amendment Bill, which proposes to change the Marriage Act such that minors—16 and 17-year-olds—who wish to marry would need to get the consent of the Family Court. The current situation is that minors require only parental consent. This bill arose out of the concern that some minors, predominantly young girls, are being coerced into marriage. I was very grateful that Judith Collins came out in strong support of this bill. In December last year an inter-agency response for victims of forced marriage in New Zealand was agreed upon to enable agencies to work together to support these young, vulnerable victims.

On a personal note, I would like to thank Judith for the support she gave me when I made the decision to promote the Shine organisation helpline by going public with my own experience of domestic violence. Thank you, Judith. She was, and is, a tower of strength.

I have talked a lot about opportunity, and I am so grateful that I have had the most extraordinary opportunities as an MP. I am tremendously excited about my new role as Equal Employment Opportunities Commissioner. I would like to acknowledge the former commissioner, Dr Judy McGregor. Her work in this area has been simply outstanding. Prime Minister, you will be pleased to know that the equal employment opportunities in the workplace policy fits perfectly with the Government’s Business Growth Agenda. There is strong, irrefutable evidence that it improves productivity and innovation. Our future workforce will be increasingly diverse, and the fact is that it is in our best interests to manage it well. Equal employment opportunities policy is mandated in the State sector, but it needs to become part of normal practice in the private sector. Indeed, many successful New Zealand businesses cite equal employment opportunities policy and practice as giving them the competitive edge.

There are many people to thank. My gratitude goes to my team in Mt Roskill, the northern region National Party, and all the volunteers. I would particularly like to make a special mention of Ram Rai and Jim Stephens. My sincere thanks go to my parliamentary staff, Denise Tustin and Kristin White, who have given me the most wonderful support. I would like to thank all the parliamentary staff who keep this place functioning, particularly the Parliamentary Library and the travel centre, which provide amazing service. I would like to thank my taxi drivers Stefan—also known as the “Silver Fox”—and Artur, who got me safely and on time to many engagements.

Thank you to the “class of 2005” MPs for the wonderful friendship and support you have given me. It is something I will always treasure. Thank you to my friends who have made the special journey here to Wellington—and, on a special note, thank you to Mark, Karen, Spencer, and Nicholas Withers. My heartfelt thanks go to my husband Dave Miller and my beautiful daughters Jess and Paddy, whom I am just so very proud of. I honestly could not have done any of this without you being solidly by my side.

My husband Dave has a building background, and each election year he was in charge of hoardings. Dave has become quite famous in the northern region. The hoardings structures he built were indestructible. No matter if an Opposition hoarding built our one out; Dave would just rebuild ours taller than before. They were creatively built, and absolutely straight, as Dave insisted on a spirit level. I am sure many should have had a resource consent. I have always said that if I could leave Parliament with my family, health, and reputation intact, I was doing all right. I like to think I have achieved that.

I would like to thank the Prime Minister for his leadership over the last 4 years, which have been extremely tough. The economic recovery has had to take centre stage. There has been no one better placed to lead this recovery than you, Prime Minister. I am very proud of the National Party. I am proud that the vision and values of this party were founded on a strong human rights framework. The right to be safe, to have equal opportunity, to be free, and have choice are all fundamental freedoms. They remain as true today as they did 75 years ago when the party was formed. I wish you all well. Thank you.

Sitting suspended from 5.59 p.m. to 7.30 p.m.

Bills

Electronic Transactions (Contract Formation) Amendment Bill

First Reading

Debate resumed from 5 December 2012.

JONATHAN YOUNG (National—New Plymouth): I am very pleased to stand in support of the Electronic Transactions (Contract Formation) Amendment Bill, which is a bill in the name of my colleague the National MP Paul Goldsmith. Although this bill might be seen as a reasonably small, technical bill, in the modern age of transactions it is actually a very important bill because we know that any economy and any business economy is going to be successful only on the strength of the transactions that take place amongst traders and amongst business people. We live in this age when the internet is incredibly integrated in all of our business transactions, and indeed in all of our lives. So it is important that we understand that incorporating technology within the time-tested rudiments of business is very important, and it is very important to do it properly, do it well, and do it so there is certainty around transactions that take place via technology.

This bill clarifies the legal position on the time at which a contract is formed if the acceptance of the offer is sent by electronic communication. I am not sure whether the sponsor of the bill has thought about text messages, but perhaps at some point in time—

Paul Goldsmith: They’re included.

JONATHAN YOUNG: They are included as well, he tells me. That is very important. It is to do with every form of communication through electronic means, so that is good to see. The general rule of contract formation is that a contract is formed at the time that acceptance of the offer is communicated to the offeror. The general rule of contract formation is that there is that sending and receiving, and acknowledgment of that receipt. When someone says “Yes, I accept the offer.”, or the offerer and the acceptor shake hands, then the deal is done. We know that in terms of the face-to-face communications that take place.

I want to just touch on some of the aspects that the sponsor of the bill, Paul Goldsmith, touched on in his first reading, which was now some many months ago. People who are watching this at home on their TVs might just appreciate some of the background to this bill. An exception to the rule was created by acceptances by post. This goes back to the case of Adams v Lindsell, as far back as 1818. The case involved two parties to the sale of some wool. On 2 September 1818 the defendants wrote to the plaintiffs offering to sell them certain fleeces, and required an answer in the course of post. The defendants misdirected the letter, so the plaintiffs did not receive it until 5 September that year. The plaintiffs posted their acceptance on the same day, but it was not received until 9 September. Meanwhile, on 8 September the defendants, not having received an answer by 7 September, as they expected, sold the wool to somebody else. These are the sorts of confusions that take place.

The defendants argued that there could not be a binding contract until the answer was actually received, and that until then they were free to sell the wool to somebody else. The judge said that if that was true, it would be impossible to complete any contracts through the post, because if the defendants were not bound by their offer until the answer was received, then the plaintiffs would not be bound until they received word of that, and it would go on and on indefinitely. So it was decided that when the offeree placed his acceptance in the post, there was a fictional meeting of minds that concluded that the offer was done and gave effect to the acceptance. That idea was tidied up further into what is now referred to as the postal acceptance rule in the 1892 case of Henthorn v Fraser, where the court determined that the precise timing of the acceptance is the moment when the letter of acceptance is posted.

We understand, looking back in history, that the timing of such events and communications is incredibly important for the orderly transaction of business. What the member Paul Goldsmith has noticed and known is that in electronic communications we do not have that time stamp available, and what this bill is seeking to do is to establish that moment in time when the transaction becomes formalised. Thank you.

DARIEN FENTON (Labour): I rise on behalf of Labour to oppose the Electronic Data Safety Bill, and I note that our spokesperson is on her way to speak on this bill.

Hon Member: On what basis?

Hon Member: Anti-technology.

DARIEN FENTON: Pardon?

Hon Member: That’s right, they are a party of the past.

DARIEN FENTON: Yes, well, hang on. So, you know, I accept what the member says about a member of the public being able to download 7,000 documents from the Ministry of Social Development’s computer network. I am glad that he is concerned about that, and certainly Labour is concerned about the problems that we have with electronic data. That has been in many Government departments, actually. We have seen, I suppose, a year full of scandals on this issue, but I am not sure—I think our problem is that we do not believe the bill will deal with the issues by setting up a commission on this. I think we have other options that are included in other bills that, hopefully, we will get to debate at some time on a members’ day.

The purpose of this bill is to establish a special commission of inquiry, and that would look at the privacy breaches and any other similar significant or recent breaches—but I think I may have the wrong bill. [Interruption] Thank you very much. I do apologise. I say that as a whip we often get to do this. We often end up having to speak about bills that we know very little about, but, OK, I will keep speaking.

This bill, the Electronic Transactions (Contract Formation) Amendment Bill, is about what is known in the IT sector as spam, and the sole purpose of the bill is to fill the member’s ballot so that Opposition bills are less likely to be drawn and considered by the House in a timely manner. As to why Paul Goldsmith is the member in charge of this bill, rather than Amy Adams, the Minister for Communications and Information Technology, you would have to ask the other side of the House. I think that is a very interesting question. If it is such an important matter, we have to ask why the Minister is not, indeed, introducing this bill. Certainly, when the original bill was passed in 2002, the Hon Paul Swain was the responsible Minister, but, once again, Amy Adams is missing in action when it comes to information and communications technology.

This is simply another example of this Government undermining the processes of Parliament for its own end. This time could be used to debate matters of importance to New Zealanders, and instead we are standing here, talking about a piece of legislation that is completely pointless. Let me tell you why this bill is completely pointless. The other bill that I mistakenly began speaking about is not pointless, and we will get to debate that bill at some stage. I have no doubt that the National Party will stand up and oppose that bill, as it is wont to do. Actually, the Minister Amy Adams should be showing leadership in this sector, and is not.

What this bill tries to do is solve an issue that does not even exist. Apparently, the point at which an agreement comes into effect has been muddled by the growth of technology and its use in business negotiations. Currently, the law states that a contract comes into effect when the acceptance of the offer is communicated to the offeror. There is an exemption for postal communications, where the contract becomes effective once it leaves the offeree’s hands, as opposed to when the offeror receives it. However, this is not relevant to digital communications. The delay between sending a notice of acceptance and receipt of that notice of acceptance is so negligible as to be non-existent. So, in effect, what we are debating here today is whether it is the responsibility of the offeree to ensure that the email or digital message is read, or the responsibility of the offeror to check their inbox frequently.

This point could be quite interesting to a court of law. I understand that it has been raised in other jurisdictions, and precedent would indicate that the onus lies with the offeror to check their inbox. Unfortunately, this bill fails even to ask that question. So on those grounds, Labour is opposing the bill.

I congratulate the member on having a bill drawn from the ballot—I know it is a big deal—but Labour cannot support it. We think it is another example of ill-thought-out, badly researched, and hurriedly drafted legislation from the Government. If it were really serious about these issues, its Minister for Communications and Information Technology would be bringing to the House bills that would deal with the real issues that are happening in information and communications technology. Thank you.

DENISE ROCHE (Green): It is my great pleasure to rise to take a call for the Greens on this bill. First of all I would like to congratulate the member Paul Goldsmith on bringing this bill to the House. I imagine that when Mr Goldsmith was the chair of the community services committee on Auckland City Council and was working on the homelessness action plan, this was one of those crucial issues that kept him awake at night, the Electronic Transactions (Contract Formation) Amendment Bill. I imagine he was dreaming of this night and day, and of his opportunity to bring this bill to the House.

The purpose of this bill is all about postal acceptance and the postal acceptance rule. It has quite a lot of interesting aspects to it—well, actually, not really—but the bill makes clear that the archaic postal acceptance rule does not apply to electronic transactions, meaning that an electronic contract is formed at the time that acceptance of the offer is communicated to the offerer, the person who is offering the contract. The main effect of the old postal acceptance rule is that the risk of acceptance being delivered late or lost in the post is placed upon the person who is offering the contract, and if the person who is offering the contract is reluctant to accept that risk, then they can always get a receipt that they have posted it. But nowadays we have moved into modern times, when people send things by electronic mechanisms, i.e. the computer, and so I guess this bill is a good thing in that it is trying to bring us up to date with what happens when we send contracts to one another.

However, the explanatory note of the bill says: “The issue of whether the postal acceptance rule can be extended to electronic communications has not yet been considered by the courts.” So, although I commend Mr Goldsmith for thinking towards the future, I do kind of worry that maybe there was no great hurry to have this bill introduced.

As we know from New Zealand Post, postal use is declining, so it is timely, I guess, to bring this legislation to the House. However, one does have to ask oneself why the bill is being brought in as a member’s bill that has gone through the ballot rather than as a Government bill, which the Government could just push through. In fact, it could probably go through as part of an omnibus bill, because there is going to be very little dispute about it, so long as we all get the right bill that we are talking about. I can only assume that the reason it was put into the ballot was to take up some space in what is basically a raffle—a raffle for members’ bills—so that it could get pulled out and somebody else’s bill did not get pulled out.

It is members’ day tomorrow, so some more bills may be pulled out of the hat, which is really, really exciting because there are some really good ones in there. There are ones like, for example, the one that I will be putting in, the Charities (Charities as Advocates) Amendment Bill, which looks at the long-overdue definition of what “charitable purpose” means. In the last ballot there were things like the Care of Children (Adoption and Surrogacy Law Reform) Amendment Bill. There was Catherine Delahunty’s Citizenship (Acknowledgement of Te Tiriti o Waitangi) Amendment Bill. Mojo Mathers had a good one, the Consumers’ Rights to Know (Country of Origin of Food) Bill. In fact, there was the Copyright (Parody and Satire) Amendment Bill. There is a raft of bills that take up a bit of space in the ballot, which is actually a raffle. I know that I have some issues about gambling, but this is one gamble I am willing to take, because I want my bill to be drawn out. So it leaves me with a sense of dissatisfaction that the member has had his bill pulled out of the ballot, when actually this could have been done more or less overnight.

But I commend him. We will be supporting it. It is fairly inoffensive, and it is nice to have Mr Goldsmith thinking of the future. Just for the record, in case Hansard does not pick it up, I have had a huge tone of irony in my voice during this speech. Nō reira, tēnā koutou katoa.

DENIS O’ROURKE (NZ First): New Zealand First will support the Electronic Transactions (Contract Formation) Amendment Bill as far as passage to the Commerce Committee, because it at least deserves proper consideration. I congratulate the member Paul Goldsmith on having this bill selected from the ballot. However, the bill may prove to be not needed, because the general rule of contract formation is that a contract is formed at the time an acceptance of the offer is received by the offeror. That applies generally, unless an exception applies, and, as we know, there is no such exception for electronic transactions such as those formed by an exchange of emails.

As is also very well known, there is an exception for acceptances by post in the well-known case of Adams v Lindsell, so that the date and time of acceptance is when the letter is posted, not when it is received. The reliability of the postal system was considered to be so good that this rule could apply well in practice, and indeed it has served us well over a couple of centuries. Otherwise, of course, it would be difficult in practice to complete any contract through the post, because if the offeror were not bound by the offer until the answer was actually received, then the offeree would not be bound until they had received advice of that. Also, the offeror may simply decide to deny receipt of acceptance. So there were good and practical reasons for the rule in Adams v Lindsell.

I agree that the longstanding rule in that case is, however, not appropriate for all electronic transactions. Contractual offers by telex, as with the telephone or just face to face, of course, are simultaneous, so a contract is formed when the offeree accepts at the same time as the offeror gets the acceptance. Although it is correct that there is no clear authority on acceptance by way of email, there is no established exception either, so the general rule applies in favour of acceptance when it is received. This also is at the same time as when it is sent, if it is sent by electronic means such as email. Nevertheless, this bill would serve to clarify the law.

I accept that the position with telex differs from that with emails, and that is, of course, because communication by telex is generally acknowledged at each end—at the sending machine and the receiving machine—at the same time. With an email, however, as we are all very well aware, it is not known to the sender whether an email has been received unless some form of confirmation is received from the recipient. Although the sender of an email can obtain confirmation that a message has been received, that is not commonly done. So the issue here really is that emails are delivered by a variety of servers, and there is not the same assurance that an email will get to the intended recipient or be acknowledged as is the case with post.

For those reasons, I do believe that this bill deserves examination by the Commerce Committee, first of all to see whether it is needed. I think there is at least a prima facie case for it. If it is needed, we need to consider what the bill should provide, and that needs, I think, to be very carefully looked at. If indeed the bill is passed, it would clarify one small area of uncertainty and would assist business. Given the prevalence of electronic communications in society today, with emails, smartphones, and all sorts of other devices, it is useful that the current Act be amended to cover such areas. New Zealand First will therefore support the bill going to the select committee, and we look forward to the debate on all of those issues there.

Peseta SAM LOTU-IIGA (National—Maungakiekie): It is a privilege to speak on this bill, the Electronic Transactions (Contract Formation) Amendment Bill and I want to thank the member, Paul Goldsmith, for bringing it into the House. He always makes thoughtful contributions both in select committee and in the House and certainly this is another example of his making a contribution to our Parliament.

This bill is like its author: it is short, it is sharp, and it will have an impact on contract law and society in general. This bill clarifies the legal position on the time at which a contract is formed if the acceptance of the offer is sent by electronic communication. Of course, contract law is one of the fundamental cornerstones of our legal system. Contracts facilitate trade and commerce, as well as other business and social transactions where they are proof of the transaction having taken place for a promise to fulfil a certain obligation or set of obligations. A contract is important as it protects both parties from any surprises or changes to contracts and it helps the parties involved avoid any type of misunderstanding that may arise—and sometimes, indeed, contracts provide mechanisms for settling disputes that arise between parties.

A contract is an agreement that has a lawful object entered into voluntarily by two or more parties. Typically each of the parties intends to create legal obligations or legal relationships between them. The elements of a contract are an offer, an acceptance, normally between what would be considered competent persons who have legal capacity, who exchange consideration, and this can come in the form of money, where the terms of the contract between the parties must be certain. Contracts may be formed orally, by paper-based writing, through conduct, or through electronic means.

As explained in the explanatory note of this bill: “The general rule … is that a contract is formed at the time acceptance of the offer is communicated to the offeror.” We have already heard about the rule in Adams v Lindsell, which created an exception for acceptances conveyed by post. Basically, it stated that when an offer was accepted by post the offer was deemed to have formed from the moment the acceptance was posted and not when the contract was read by the offeror. So, although the issue of whether the postal acceptance rule can be extended to electronic communications has not been considered by the courts, this bill ensures that that postal rule will not apply to contracts accepted by electronic communications.

I want to thank the member who has just sat down, Denis O’Rourke. He alluded to a difference between the different forms of electronic communications, which may create some uncertainty around this clause. I must say also that the exception that was enunciated in Adams v Lindsell really was because when the defendant wrote to the claimant in that case offering to sell some wool, they asked for a reply that was “in the course of post”. So the letter, which was ultimately delayed in that case, was because the parties to the transaction actually required it, as part of the contract, to be “in the course of post”.

It is my view that the established rules around acceptance must still apply and the factors that must be taken into account must be that the acceptance must be communicated to the offeree, the terms of the acceptance must exactly match the terms of the offer, and the agreement—as with any contract formed, whether oral or written—must be certain. The general rule that the offeror must receive acceptance before a contract is accepted has been stated clearly in Entores Ltd v Miles Far East Corporation, where it was held that to amount to an effective acceptance, the acceptance needed to be communicated to the offeree and hence where the defendant in that particular case sent a telex, as the previous speaker mentioned regarding telex messages, it was—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. His time has expired.

CLARE CURRAN (Labour—Dunedin South): As you have heard tonight, Labour is opposing this Electronic Transactions (Contract Formation) Amendment Bill, and, if it does get to the Commerce Committee, then I am sure we are going to have an interesting time discussing the various legal cases for and against this particular issue. This bill actually amends legislation that Labour pioneered in 2002, which removed impediments to e-commerce and brought New Zealand into line with many other developed countries in the world. At that time it was part of Labour’s Digital Strategy—remember, it was 10 years ago. It was 10 years ago when there was a lot of work being done by the previous Labour Government to introduce a Digital Strategy. This work amends that. What we say tonight is that this should be a Government bill. It should not be a member’s bill; it should be a Government bill.

There is an inherent contradiction in it, which is why we are opposing it tonight. At the heart of it is the issue that there is a fundamental difference between snail mail and email, and, no doubt, if the bill does pass tonight, then that will be teased out. As we have said, we are describing this bill as spam. That is not meant to be a slur on the member, Paul Goldsmith, who has done the work on this bill, but it is a criticism of the fact that there are many other important issues that could be being debated in this House. If there needs to be a law change in this area, then the Government should have brought this bill to the House. The Minister for Communications and Information Technology should have actually done the work and provided the advice that would have brought this law change to the House.

What I would like to say about this bill is that there has been discussion over the years about whether the postal acceptance rule should be extended to online scenarios, but the prevailing view is that it should not. The issue was briefly considered in a 2009 Australian Federal Court case, in which the judge concluded to the effect that the postal acceptance rule could not—should not—apply to acceptance by email. We have discussed this issue around what happens when an email arrives in your in-box—if the members on the opposite side of the House remember—in other bills at the select committee, if they were paying attention. Is the person whose in-box it is liable for the contents of that email if they do not know it is there, if they have not looked at it, if they have not opened it? That is the question, because there is a great big difference between when you send a letter to somebody by snail mail and it arrives in a physical letter box, than when you send an electronic email to somebody and it goes within seconds. There are some considerable issues there to be determined.

Case law, based on the Brinkibon case, which was a leading decision of the House of Lords on the formation of a contract using telecommunication, and together with section 11 of the electronic transactions case law, suggests that the bill means that the contract is formed when an email arrives, rather than when it is read. But this is not clear in the bill itself. So perhaps, if Mr Goldsmith would like to clarify to the House what he actually intends the bill to do, then we would be able to make a more informed decision about this bill.

Labour is pushing ahead with a comprehensive digital strategy in our development of policy, which involves looking at the whole of the digital environment. A bill such as this, as I said, should have come before this House as a Government bill if the law needed to be changed, and that should have been on the advice of officials. There could be many other issues of great moment in the digital environment that we could have been discussing in this House tonight. Certainly, we do give congratulations to National for moving beyond quills and typewriters, and acknowledging the existence of the digital age, but there certainly are other major issues that could have been discussed tonight.

KANWALJIT SINGH BAKSHI (National): It is my pleasure to stand in support of the first reading of the Electronic Transactions (Contract Formation) Amendment Bill, introduced by my good friend Paul Goldsmith. Times have changed and we are living in a digital world, so our laws are to be updated. We have to update the laws that are obsolete.

The purpose of this bill is to clarify when a contract is formed where there is an electronic acceptance. The general position is that a contract is formed at the time of acceptance, if an offer is agreed upon. Clause 5 of the bill amends the Electronic Transactions Act by inserting new section 32A and thereby clarifying when a contract is formed when the acceptance of the offer is made through electronic communication.

For example, if a contract is posted, then regulations say that the contract has been established as soon as the acceptance is placed in the post. At present this regulation does not cover contracts accepted electronically. For example, if a person accepts a job offer by email, then there is no legal certainty over when the contract was created. In bygone eras, before emails, there was a term entitled “postal acceptance rule”. This rule created a directive, where an offer was deemed to be accepted when the acceptance was posted. Over the years the rule has been extended to include telegraphs, but has been held not to apply the acceptance by telephone, telex, or fax.

In these modern times, when email and smartphones are in regular use, it is paramount that the current Act is amended to cover such areas. Currently there is no mandate on acceptance by email, which is practically immediate, and the person who sends the email is usually in the best position to know whether it has not been delivered.

National is focused on building a more competitive and productive economy in the 21st century. We want to make the most use of other services, including ultra-fast broadband. This bill introduced by my friend Paul Goldsmith is in line with what the National Government wants to achieve. National has set a target that by 2017, on average, 70 percent of the transactions with Government departments will be completed digitally. At present it is 24 percent.

Filing individual tax returns has also been a popular resource online. It is more economical and very prompt. Another example is SmartGate, which has cut down on queues for air travellers and creates a more efficient and secure service at the airport. National is committed to making public services better for taxpayers, business people, and consumers. I commend this bill to the House.

Dr KENNEDY GRAHAM (Green): I rise to confirm that the Green Party will support this member’s bill, the Electronic Transactions (Contract Formation) Amendment Bill, but only through a spasm of exasperation with the increasing tendency on the part of Government members, such as Mr Goldsmith, who are putting this kind of bill in the form of a member’s bill into the ballot. Had it been a personal vote, I might be saying entirely different things. I do see from the first reading, when it was initiated by Mr Goldsmith back in November, that he asked rhetorically: “Why is this bill important?”. He said: “Well, on its own this bill is not going to bring about the brighter future to which we all aspire and to which this Government is so committed, but”—he added, endearingly—“it is a small and useful addition to the latter’s work.” I can only admire the gravitas and insight that buttresses those comments back in November, and I think the House is now well informed with that insight and we can proceed very quickly to despatch this bill to the Commerce Committee, if not to the void.

The essential provision, as he has drafted it with his own pen, is clause 5, which adds new section 32A. It says: “Contract formation—An offer that can be accepted by electronic communication is deemed to be accepted at the time of receipt of the acceptance by the offeror.” The difficulty is, and I think it has not gone unnoticed, that there is no definition of the act of receipt. Somehow this got through the parliamentary drafting process. I invite the author of the bill to return to his office at the end of tonight’s session and send an email to me as a parliamentary colleague on any subject that he wishes, and then he can telephone me at 7.45 tomorrow morning and ask me: “Have you received my email?”. I can be sitting there at my office, in front of my computer, and say to him yes and no. Yes, I have received an email from Paul Goldsmith. I see it here in my in-box. No, I have not clicked into it. Yes, I see the contents of the email in the window panel to the right. No, I have not clicked into it. How are we going to resolve this issue? Perhaps when it goes to the select committee and wise minds attend to it—

Hon Member: Just open the damn email.

Dr KENNEDY GRAHAM: But there may be no indication that I have or I may choose not to, and so I could leave it there for 6 months. He could ring me at 7.45 every morning and we could go through this routine. Let us pray that the select committee, led by the author of this bill with his diligence and skill, will add perhaps the following: “Section 32B—receipt of the electronic communication specified in section 32A must be signified by return of electronic communication to the offeree. Section 32C—receipt of the electronic communication by the offeree specified in section 32B must be signified by return electronic communication to the offeror.” At some stage—as the division bells ring—that would be the receipt of the email. There is a little bit of work to be done on this bill, and we will go in and treat it very positively in the select committee and in the second reading.

PAUL GOLDSMITH (National): It does fill me with pleasure and gratitude to know that the Greens are offering to support this bill, the Electronic Transactions (Contract Formation) Amendment Bill, as they did support me in the campaign during the election in Epsom. It is nice to recall some of those moments of bipartisanship, which I hoped to carry on when I got into Parliament. I know the Greens did very well.

This debate has indeed focused on the question of when exactly an electronic communication is received by the offeror. Is it when he or she opens an email in his or her in-box, or when it arrives in the server if there is a gap between the arrival in the server and when it is in the in-box, and similarly for text messages? Mr Mallard, way back when this bill was first brought to the House, was very strong on that point. I do defer to Mr Mallard on matters of criminal law, given his personal experiences there, but on matters of commercial law I am not so sure. So I just want to say that it may well be that it is best to include a definition of “receipt” in the legislation. Certainly, it is my expectation that receipt refers to the arrival of an email or a text in the in-box, rather than when the email or text is opened up. That would seem the logical way because it might be months—as, indeed, my colleague Mr Graham suggests—after they receive the email before it is actually opened.

However, this matter is not as simple as it seems. There was the episode in February this year, for example, when Telecom cancelled the passwords of more than 60,000 Yahoo XTRA email accounts because it believed that they had been compromised by a cyber-attack. Those people could not access their accounts for a few days, though presumably emails had arrived in the server and perhaps in the in-box, but they could not be accessed. So it may well be that it is best not to be too prescriptive in the legislation. I have had a few comments from legal practitioners on the topic and suggestions on how it may best be achieved, and I think the best thing to do is to send this bill off to the select committee to consider precisely how we deal with the question of receipt.

Some members have been so unkind as to suggest that this bill is rather minor in its ambition and perhaps not befitting a politician of such promise, but it is a small step and every little bit helps. This bill is about maintaining that intricate latticework of the rule of law that holds up and sustains capitalism in this country. It is a small piece, and on that basis I am very pleased that we have the support of the Greens and New Zealand First. I am shocked and dismayed that the Labour Party members do not see fit to even send it to the select committee to consider further, but that may perhaps reflect their rather negative mindset at the moment. Given the Budget that is coming tomorrow and the good story that this Government has, I am not surprised that they are a little bit lost, like sheep without a shepherd. But we will hear more about that tomorrow. Coming back to this bill, I am very pleased that it has such widespread support within the House. It will continue to maintain, grow, and sustain contract law, which is so essential to this economy continuing to grow. Thank you very much.

A party vote was called for on the question, That the Electronic Transactions (Contract Formation) Amendment Bill be now read a first time.

Ayes 83

New Zealand National 59; Green Party 14; New Zealand First 7; ACT New Zealand 1; Mana 1; United Future 1.

Noes 37

New Zealand Labour 33; Māori Party 3; Independent: Horan.

Bill read a first time.

Bill referred to the Commerce Committee.

Bills

Dairy Industry Restructuring Amendment Bill (No 2)

First Reading

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): I move, That the Dairy Industry Restructuring Amendment Bill (No 2) be now read a first time. I nominate the Primary Production Committee to consider the bill. The purpose of this bill is to place a legislative limit on the proportion of Fonterra Cooperative shares that can be sold by farmers into the new co-op unit fund. The bill provides that Fonterra must ensure that the new co-op fund does not constitute more than 20 percent of the total number of cooperative shares. If the 20 percent limit is reached, Fonterra must cease the sale of shares into the new co-op fund and take action to reduce the proportion of shares in the new co-op fund to below the 20 percent limit within 90 days. The current Dairy Industry Restructuring Act places no legislative limit on the proportion of Fonterra Cooperative shares that can be sold by farmers into this fund. I am proposing that a legislative limit is needed for this company.

Fonterra is our single largest company. It is a cooperative. It controls about 40 percent of the global trade in dairy products throughout the world. It is a cooperative, as I said, and it is owned by New Zealand dairy farmers. There are very few companies of any size that are owned by New Zealanders in this country. The dairy industry has been built through the wisdom of the Labour Party from the 1930s to the 1950s, through the 1950s, through the 1980s—

Hon Members: Ha, ha!

Hon DAMIEN O’CONNOR: Well, firstly, the Labour Party brought into place a price guarantee for dairy farmers; secondly, it created the Dairy Board; and, thirdly, in 2000 we created Fonterra in legislation. The successful dairy industry is being guided by wise legislation endorsed by parties across this House. What we had last year was a new capital restructure of Fonterra. It was called “Trading Among Foreigners”—no, Trading Among Farmers. The dairy industry is arguably, as I say, not only one of the most successful industries but also one of the most attractive industries for investors. Back in the 1990s, the New Zealand Dairy Group, the single largest cooperative processing company, was focused on a corporate strategy for the Dairy Board. That was rejected by most participants in the dairy industry, but, in the formation of Fonterra, I suggest, some of that corporate strategy continued on with the new management and governance of the company. There has been for many years a determination by some—Sir Henry van der Heyden has been on the record as saying that he wanted to restructure the capital of the cooperative Fonterra, and, indeed, to recognise his success, he has done just so.

The question is what that has done for Fonterra. In a relatively short space of time dairy farmers who are members of a cooperative that, in its pure form, has a nominal value share, have moved from a fair value share of about $4.50 up to a listed unit price of $5.50, and now, I think, today it is just short of $8 per unit, or $8 per share value. Many observers of the stock market might say: “What a wonderful success.” The problem for suppliers in a cooperative company who are obliged to buy one wet share for every kilogram of milk solids that they produce is that they have to front with a larger amount of capital to be active, participating shareholders and owners of the company Fonterra. On top of that we now have investors, about $500 million worth of investors—or it would be greater than that—who have the right to the dividend flow from the shares of Fonterra. They are not dairy farmers, and they have purchased the right through the purchase of units—a perfectly reasonable investment proposition allowed by the Trading Among Farmers legislation.

What that has started to do is unravel the cooperative that we have been so proud of. I am sure Mr Ardern will get up and endorse some of the things I say. There are now dairy farmers who want to continue to be shareholding owners of Fonterra and grow their supply, but they cannot afford to because paying $8 for every additional kilogram of milk solids is not a smart investment decision for them. I spoke today to a very astute farmer who has a number of farms and who has just signed a contract with Fonterra to supply them with just milk, without any corresponding wet share purchase. That might seem a good deal too to someone, but for the dairy industry and the success that it has been built on, this is the beginning of a new structure and, I say, an unravelling of the dairy industry and its success. The incentive to increase production—which some say is a negative in terms of environmental impact—has now gone. That has now gone because it is not a sound economic proposition for many dairy farmers.

The greatest beneficiaries of the Trading Among Farmers legislation have been foreign-owned companies and other dairy companies in this country, because the disincentive to supply additional milk to Fonterra has meant that they have sought out opportunities with Open Country Dairy, a privately owned company; with Synlait a Singaporean-owned company, which is about to list; and with Westland Milk Products, a cooperative company. Tātua has its doors closed, but now on the horizon we have Yashili and Yili, two companies that dwarf Fonterra in terms of their total size. They are Chinese-owned companies that have come down and started to invest in this country. Some might say that there is nothing wrong with that. I am certainly not opposed to Chinese investment in adding value to our economy. The problem is that their benefit may be off the back of Fonterra’s new capital structure and a shrinking supply of milk to our No. 1 company and the biggest participant in the biggest industry in this country. The jury is out on what that might mean over time.

What Fonterra did in the lead-up was to say many, many things to farmers, to convince them that Trading Among Farmers was good for them. Many of those things were not true. Fonterra has said that if Trading Among Farmers does not work for farmers within 2 years, it will close it down. That will not occur. It has said that it was not about capital raising. It has said that it will lock in ownership and control of Fonterra. Those things are not true, because we are starting to see that unravel. What my bill does is put in legislation a limit to the total amount of Fonterra shares and units that can be traded on the open stock market, because, as sure as night follows day, the chances are that those units, if traded on the stock market, will fall into foreign hands, and we will lose the dividend streams. If the constitution of Fonterra was to be changed by over 75 percent of farmers—and that may occur because of internal pressure—then the size of that fund could be extended.

Some will say that constitutional protection is enough. Banks will tell farmers what to do when the payout drops. The farmers will be demanding access to the full value of their shares on an open trading market, because they desperately need the money. That will be the pressure that ultimately unravels Fonterra. What I say through this bill is that before that happens, Fonterra should come back to Parliament, back to whatever Government is in power, and ask for a change in legislation before it unravels before our eyes. The 20 percent limit on the unit fund size in legislation is the least that Parliament can do to protect our single largest company, which is owned by New Zealand farmers and is the most outstanding performer in the world of international dairy trade. This is too valuable for us to lose. All I ask through this bill, and I hope that the National Party will support it, is that it step in and put in a legislative limit, just as we put in place legislation to form the successful dairy industry—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member.

SHANE ARDERN (National—Taranaki - King Country): It is a privilege to rise to speak in this debate tonight, but unfortunately for the previous speaker, Damien O’Connor, the National Party will not be supporting the member’s bill, the Dairy Industry Restructuring Amendment Bill (No 2). There is a range of reasons for that, but let us start right at the beginning with a little bit of history. Fonterra was not formed by the Labour Party, despite the comments of the previous speaker. Fonterra was formed because a group of farmers, if you go back far enough in time, came to the Government of the day, saying that they were struggling, as a lot of our colleagues in other industries in New Zealand do, with collective buying by massive buyers. In fact, most of those buyers at that stage were based in Tooley Street in London.

Hon Damien O’Connor: When was that, Shane?

SHANE ARDERN: They used to travel out to New Zealand—I think it was about 1936, Mr O’Connor, slightly before you were born. It may have been before you were born. Those buyers would come out to New Zealand. They used to trade one dairy company off against the other and drive the price down. Does this sound familiar? Does anyone know where they could find an industry in New Zealand today where similar types of tactics take place? That is exactly what was happening.

So the Government of the day said to the industry: “What would you like?”, and the industry said: “We would like to have a much more focused marketing structure.” History has a wonderful way of repeating itself. So from that, the New Zealand Dairy Board was formed. After a long period of trading under the name New Zealand Dairy Board, the industry itself again came back to the Government and said: “This is a very tiresome process. Every time we want to change or make some modification or change market structures or do something different, we are constantly coming back to the Government cap in hand for legislative change, and we think we can go it alone. We do not need the single-desk legislation, so we would like a reform of that.” And from that the 2001 Dairy Industry Restructuring Act was born. It crossed two Governments. It was first initiated under the Shipley Government—

Hon Damien O’Connor: Rubbish.

SHANE ARDERN: —and it was passed by the incoming Clark Labour Government, with Jim Sutton as the Minister. That is the history. Go back and check it to see whether I am right or wrong. That is the history. I remember it well. I served on both select committees in both Parliaments.

So at that point in time, around 10,000 shareholders of what was the combined industry across New Zealand decided that they could form critical mass by merging the two largest dairy companies in New Zealand, which were Kiwi Cooperative Dairies and the New Zealand Dairy Group, and form a new company, taking on board the Dairy Board, called Fonterra. It was called GlobalCo and then the Global Dairy Company I think originally, and in the legislation it is known as the “new co-op”. And the name Fonterra was born out of that.

As an end result of that we have seen unprecedented growth in that industry in the history of New Zealand, and, actually, as the previous speaker said, it has now become 40 percent of global traded dairy products. It is a success story. No matter how ideologically driven you are or what position you come from or how counter-intuitive the model might be to you or what other arguments someone might put up about it, it has been successful. The facts speak for themselves. And it is a New Zealand - owned company—entirely owned by New Zealanders; 10,500 shareholders—and so we did not want to see it broken up or destroyed or eaten away or floated off on the New Zealand Exchange, or whatever the argument of the moment might be.

But then it becomes a question of where the State stops and starts, and how much State intervention there should be. Some would argue from a pure point of view that the Dairy Industry Restructuring Act itself should go, and that there should be no legislative control or Government involvement or meddling in this. Instead of that we have a very complex Dairy Industry Restructuring Act that puts a whole lot of constraints on the behaviour of Fonterra and the requirements that it must meet. And that is where Parliament has reached a consensus, and, as the previous speaker said, pretty much with cross-party support. That is what is there at the moment.

So the question then becomes what other protections or other such things should the State have or should put in place, either for the consumer or for the company itself. The company itself, by 75 percent—this is a figure that Parliament does not understand. Give me a bit of a hint how many times you get 75 percent support in this Parliament for a piece of legislation or a policy position—

Sue Moroney: Actually, a lot.

SHANE ARDERN: It happens from time to time, but not that often.

Sue Moroney: It happens a lot.

SHANE ARDERN: It happens from time to time, I accept, but not that often. So 75 percent of those 10,500 shareholders voted at their annual general meeting to put a cap of 20 percent on the tradable amount of their shares, which is exactly what the member’s bill is asking to do. And, of course, if you do further analysis on that, what you will find is that the 20 percent can never actually be 20 percent; it is up to 20 percent. Because of the trading in and out that takes place in this Trading Among Farmers arrangement, the company itself has to make sure that it never exceeds around 18 percent—the last figure I saw—because otherwise it could momentarily be in breach of its own constitution.

So 20 percent is really a glass ceiling, if you like, that the company must pull up before it reaches that level. It currently sits at between 10 percent and 15 percent. I do not know that anyone could mount a vigorous argument that that is a dangerous position for the company to be in, and a position that could likely end up with the dissolution, breaking up, floating, or management takeover, etc. of the company. A further protection that the company has within its constitution is that the board must be made up predominantly of farmers. The last time I looked at it—and I stand to be corrected by the member—they have now voted for a nine-member board with three independent directors. I do not know whether that has actually been implemented yet, but that is the direction they are heading into, overwhelmingly controlled by the farmers themselves—elected from within their shareholder base. Are they going to go and do something that the farmers do not want? They have tried.

There have been times when the leadership of the company has decided that it is going to go off in a direction that its shareholders do not like. One thing that I can tell you as a shareholding farmer—and I declare that at this point—is when we get unhappy with the board we sack them. Or we certainly give them the message: “Change direction, or we will.” That has happened on a number of occasions. I understand the concerns that have been raised, but I think it is actually fair to say that right at this point in time the Fonterra structure is what the Fonterra board has asked for, what the Fonterra shareholders want to see, and I think the success of Fonterra speaks for itself.

It does frustrate me that I have to come back to this House time and time and time again and justify the success of this company to Parliament. It seems to me that it is overwhelming, but it does frustrate me that you have to come back. I guess it comes down to the final point, and that is: do you trust them, or not? Do you trust—and I am not talking about you, Mr Assistant Speaker, I am talking about Parliament; I am sorry to bring you into the debate—these 10,500 hard-working, dedicated farming families who have built this industry, or not? It is that simple. My money is with the farmers.

SUE MORONEY (Labour): It is a real pleasure to rise and speak on members’ day to support my colleague Damien O’Connor’s bill on dairy industry restructuring, the Dairy Industry Restructuring Amendment Bill (No 2). I do rise with some pleasure to support this, because we have just heard a speech from a member of the National Party, and, surprise, surprise, National is voting against it. But, after all, this is the party that brought us the sale of State assets—flogging off the family silver to overseas interests. We used to, actually, have 100 percent ownership of Mighty River Power. One-hundred percent of New Zealanders used to own Mighty River Power until very, very recently. Now only 2.5 percent of New Zealanders have an interest in owning Mighty River Power. So I think it is no surprise that when this very good bill comes before the House, where the aim is to ensure that our biggest and our most successful company stays in New Zealand hands, of course, the National Party votes against it.

In reality, the National Government does not believe that the New Zealand people have a role in actually designing their own future. It actually does not believe that. It thinks that the market is supreme, and that the market is the almighty that the Government must bow to. That is the fundamental reason why the National Party will not support this very sensible bill. What is the evil that the National Party sees in this bill, which supports the cooperative model that Fonterra has had through all of its different manifestations? Why is it that the National Party will not stand up for supporting the cooperative model? We have heard some of the history about the New Zealand Dairy Board and how Fonterra came to be, and, actually, it is a story that I think would be good to hear told in a lot more detail, because although we have had some to-ing and fro-ing about whether Labour was in power or National was in power, I think people clearly understand that that type of cooperative, New Zealand ownership model is fundamental to Labour principles and values. People can see how closely that is aligned with what Labour stands for, so people will get that. This is a New Zealand - grown concept. That is the exciting thing about it, and it is successful internationally. The only other thing that I think comes close to it—and, of course, it is not a commercial entity—is that other great New Zealand icon of Playcentre and the Playcentre movement. It is a New Zealand - grown model that we own and that the rest of the world looks at in awe and goes “Isn’t that great?”. Fonterra fits that exactly.

What this bill wants to do is ensure and enshrine in legislation certainty that there cannot be a private or a foreign takeover of that cooperative model. That is, quite simply, what we are aiming to do here. As much as the previous member might say: “Don’t worry your pretty little heads about it. It will never happen, because the market will ensure that it doesn’t happen.”, well, I would ask that member to tell me what happened in the situation of Fisher and Paykel Appliances. It started off with just a 20 percent—only a 20 percent—investment from a Chinese company called, I think, Haier. I am not sure exactly how you pronounce it. Haier originally had only a 20 percent investment in Fisher and Paykel Appliances. That, over time, ended up in an eventual complete takeover of Fisher and Paykel Appliances by that Chinese company. That is what concerns the Labour Party. We are not prepared to just wait and see what happens with Fonterra, because Fonterra is so fundamentally important to this country and its economy. We are not prepared just to let the market have its way. We want legislation in place that will protect Fonterra. This bill will definitely keep it as a cooperative in the hands of New Zealand farmers.

IAN McKELVIE (National—Rangitīkei): Firstly, I must congratulate my colleague from the Primary Production Committee and fellow rural New Zealander Damien O’Connor on having this Dairy Industry Restructuring Amendment Bill (No 2) drawn from the ballot. Drawn from the ballot may be a little rich, because we heard tonight from Denise Roche that it is, in fact, a raffle. I thought that was pretty rich coming from the party that does not really like gambling very much. I commiserate with Damien O’Connor, however, on the fact that I will not be able to support this bill. Contrary to what the previous speaker, Sue Moroney, said, we are not not supporting this bill because we believe in free markets and things like that. We are, in fact, not supporting this bill because we trust the 10,500 dairy farming families of Fonterra to get it right and to do the right thing by their company.

The bill originated out of concern that Fonterra may be sold down the road by the Trading Among Farmers policy, which was introduced after much consideration in order to enable Fonterra to achieve a stronger capital base. Capital, of course, is vital to the primary production sector. It is vital elsewhere in our economy. This fact has never been more apparent than it is in the discussions taking place in the meat industry, which Mr Ardern inadvertently referred to some time ago. Certainly, capital is a very important factor for our agricultural industry in New Zealand. Hence, the Trading Among Farmers initiative was brought to fruition as a result of the Dairy Industry Restructuring Act, an Act that had a complete and constructive select committee process at the time of its introduction. There was criticism of Trading Among Farmers, but you get criticism of anything in a democracy. It was well supported in the end, and I think has been well proven.

As the member for West Coast - Tasman stated, he was uneasy about the cap that Fonterra itself has since imposed on the fund, and introduced this member’s bill to place a cap at 20 percent of that fund. My recollection was that he introduced the member’s bill prior to Fonterra setting in its constitution its own cap of 25 percent of that fund. The result of this fund being established has seen spectacular growth in the value of these tradable units, from a list value of $5.50 to, I think, trading today at $7.97 or something like that.

Interestingly enough, the sale of farmers units predicted by many at the time of the launch or float has not occurred and, in fact, has considerably strengthened the balance sheet of our dairy farmers in New Zealand. Fonterra, of course, attracts about 80 percent of the milk in New Zealand, and, contrary to Mr O’Connor’s assertion that the price of $7 or $8, as it currently stands, will put off people entering the industry, I think the fact that the Fonterra shareholders have retained their shares, despite the very attractive price, really means that their capital base is built to a strong enough extent that they will continue to join and support their industry as it moves on. Interestingly, today we have also seen the next round in the life of Synlait, as it announces its intention to list on the New Zealand Exchange. Synlait is one of a number of players in the next tier of the dairy industry in New Zealand and, of course, is based in Canterbury.

All in all, the dairy sector, in good heart, has built a new level of resilience and confidence as a result of Trading Among Farmers, and is playing a greater role in our export receipts than ever before and, in fact, in New Zealand’s future. There were a number of other assertions made during the last couple of speeches, and I think they can demonstrably be proved to be untrue. I think that as the Fonterra company attracts the level of milk it does, at about 80 percent of the New Zealand production, production is rising at a greater rate than in fact can be swallowed up by the new companies coming into New Zealand. Fonterra is having to build a significant amount of new infrastructure itself to keep this going, and so I think we are seeing the dairy industry in extremely good heart at the moment. I think that Trading Among Farmers has played a very good role in strengthening the capital base of Fonterra. I also think that the price that the Trading Among Farmers shares has got to is probably well backed by the assets of Fonterra, and can be demonstrably proved to be a useful acquisition for the dairy industry. Thank you.

IAIN LEES-GALLOWAY (Labour—Palmerston North): I am slightly surprised to be taking a call at this stage, but I am very happy to take a call now and support my colleague from West Coast - Tasman, the Hon Damien O’Connor, with his Dairy Industry Restructuring Amendment Bill (No 2).

This is a re-imagining of a Supplementary Order Paper that Mr O’Connor put through when the changes that established the Trading Among Farmers system were passed through Parliament. I think what Damien O’Connor is doing here, because he is a decent bloke from the West Coast, is giving the Government another chance to get it right. It got it wrong the first time around, and, you know, fair is fair. He has been lucky enough to have his bill drawn from the ballot, and he is giving the Government another opportunity to get this right. Sadly, it does not seem to have learnt from its errors, and it is still refusing to support what is a perfectly sensible and logical piece of legislation that actually, in fact, reinforces in law, as Shane Ardern outlined, the position that the Fonterra shareholders—the farmers—actually support.

They have voted internally to keep a cap on the foreign shareholding, or the non-farmer shareholding, of Fonterra. Ought we not just reinforce that and give them some security by enshrining that in the law? Over the years what we have seen—and various members have discussed this—is that the dairy industry in New Zealand has required a hands-on Government. It has not been left to the market. Governments over the years, over the decades, have had to step in and create the structures that have supported the New Zealand dairy industry.

What this is, in fact, is a step back from the cooperative model, from the hands-on supported model that Governments have pursued over the decades, towards more of a market model. That just simply has not worked for our dairy industry. What we see here is, of course, a classic New Zealand story, where there is no point competing amongst ourselves within our tiny market. We have to cooperate in New Zealand to compete on a global scale. Really, what Damien O’Connor is doing is continuing that tradition of Parliament, Government, and the dairy sector working together to get the structure right so that Fonterra, the dairy industry, and New Zealand can effectively compete on a global scale.

I think there is another really important point here, and that is that Fonterra is essentially a single purchaser of raw dairy products in New Zealand. Single purchaser model—it can work very well. It really can.

Hon Ruth Dyson: Can it? Tell us about that.

IAIN LEES-GALLOWAY: Well, you could apply it to a range of industries. You could apply it to keeping the cost of medicines down, for instance, with Pharmac, or, indeed, to getting the price of electricity right, as the Labour Party has suggested and of which the National Party is so dismissive, of course.

What is really important is that if you have got a single purchaser that has a lot of market power, it has got to know who it is working for—it has got to know who it is working for. Pharmac knows that it is working for the people of New Zealand. It is owned by the people of New Zealand and it is working for the people of New Zealand. NZ Power, likewise, would be owned by the people of New Zealand and it would be working for the people of New Zealand. Fonterra is owned by the farmers and it is there to work for the farmers. But as we dilute that, and as we make it so that it is perhaps not owned by the Australians but the dividends from Fonterra start to go to them—those Trading Among Farmers shares have mainly gone to the Australians, not to domestic shareholders—then Fonterra has to start working for somebody else. It is a bit like this Government, actually. It is not working for New Zealanders; it is working for somebody else. It is working for Skycity and Warner Bros and what have you.

Fonterra has to start working for somebody else, not the farmers. But it has a lot of power—it has a lot of power—and it has been using that power to share the dividends of its success with farmers. We have to make sure that something like the single purchasing agency that Fonterra is is absolutely certain about who it is working for—absolutely certain about who it is working for. That is why we in the Labour Party, who know whom we are working for—we are working for New Zealanders, we are working for New Zealand farmers—support the excellent member from West Coast - Tasman, Damien O’Connor, with this superb bill.

Mr DEPUTY SPEAKER: Are you calling, Mr Browning?

Steffan Browning: Yes, I am.

Mr DEPUTY SPEAKER: I did not hear you. Speak louder.

STEFFAN BROWNING (Green): It was a quiet squeaking. Now that I have the voice back, I rise to speak to the Dairy Industry Restructuring Amendment Bill (No 2). I am very pleased to be supporting this bill. When the original bills around Trading Among Farmers were going through and in the discussions around that, I felt that the 20 percent cap was, in fact, too high. But our support of this bill is really showing that we are prepared to see a compromise because we regard this issue so seriously.

I think it is a very wise bill, and it seems to be very disappointing that National members could not achieve the agreement needed within their group to support this bill. I am sure there was some division, but not inside those walls, and it is very disappointing that you are voting en bloc against it.

The need for this bill is very high. The risk, as has been pointed out, of this being a thin end of a wedge towards the breakup of what is probably New Zealand’s most successful co-op, Fonterra, is high.

It has already been shown and it has been spoken of here tonight about the overseas ownership. I will also point out that in the fairly recent Farmers Weekly, when we are talking about unit prices on the stock exchange rising to above $8—the 15 percent rise in that particular week was 45 percent above the listing price. There are all sorts of pressures coming on around this. It could well be, in terms of a weakness around the issues of the shareholders’ fund, that farmers under pressure in a real crisis, or even in a crisis contrived by investors or traders, may change their stance on what the cap should be, although they have got a 75 percent farmer vote. What pressures have we seen come on to other co-ops or collectives in the past? We have seen what happened to ENZA. We saw a major crack in ENZA and then a major hurt to the pipfruit industry of this country, and it has not really recovered.

We see that this same possibility could hit Fonterra, and I think the Labour Party bill here was going some way towards ensuring that that could not run away very quickly. Sure, the farmers have votes within Fonterra, but, unfortunately, some of those on the board, and certainly in the executive, seem to have gone for a bit of a walk from where the real membership base has been, and that shows even more the need for putting a cap in under this bill.

I notice as well, in terms of the risks of weakening the co-op, the situation that the meat industry is in at the moment. It is clear that the meat industry is looking at models such as Fonterra as a possibility to deal with its woes, and it would be a shame to see the model that it might be looking at being weakened and not being strengthened by the possibility of this cap.

There were enough real solutions for Fonterra. It could have done more retentions. It over-exaggerated the redemption risk well and truly. That would have been solved, but it carried on and, unfortunately, the Government of the day bought into that and has allowed the Fonterra executive its way. The direction of Fonterra, I believe, needs questioning, but the fundamental thing is that the co-op needs protecting, and this bill would have gone some way towards doing that.

In terms of the overseas ownership, it is disappointing. What has happened was what we suggested might happen, and yes, it will just go the same way as the Mighty River Power thing. It seems that some would say that—

Mr DEPUTY SPEAKER: Order! The member’s time has expired.

JACQUI DEAN (National—Waitaki): I want to congratulate Damien O’Connor on having his bill drawn from the ballot—the Dairy Industry Restructuring Amendment Bill (No 2)—and I am very pleased to be speaking in its first reading. It is a little bit obvious, though, that this bill is doomed for failure. There is probably a very good reason for that, which is that it is an ill-conceived bill that really encapsulates why Labour hates farmers. It has really demonstrated that to New Zealand and to the farming community over a number of years, it has demonstrated it to the Waitaki electorate a couple of times, and everything that Labour has done subsequently, during my time in Parliament and when Labour was still in Government, has illustrated that it has no empathy with the agricultural sector. It, with the Greens, has no love for the agricultural sector. It actively campaigns and actively brings policies and bills to this House that are to the detriment of the productive agricultural sector in New Zealand.

So this bill, this dairy industry restructuring bill, is really a demonstration, through Damien O’Connor, of the strong desire of Labour and the Greens to have absolute State control over private business in New Zealand. It is the most interventionist little piece of member’s bill that I have seen coming through this House. What it seeks to do is tell and direct the directors of Fonterra how to go about their business, even though there has been the Dairy Industry Restructuring Amendment Act passed very recently through this House. I understand that the issue raised in this bill was considered in the Committee stage of that Dairy Industry Restructuring Amendment Bill. It was thoroughly canvassed, and the only people who thought it was a good idea were—I do not know—Labour and New Zealand First members, as it happens, and even the Greens in this instance thought that this particular idea of limiting the co-op fund to 20 percent of the total was a good idea. Everyone else considered it and put it in the waste-paper bin, where it belonged, with a lot of the other Green and Labour proposals that have come before this House.

It was a previous member on that side of the House who crowed very proudly about some of the other interventionist policies that those members would bring and foist on the New Zealand public if, by any sad chance, they ever happened to be the Government—a very faint chance—such as bulk-buying electricity, putting a price on water, and crippling the agricultural industry with an emissions trading scheme obligation that would absolutely cripple agriculture, industry, and the New Zealand economy, and they would even go so far as limiting stock numbers on farms. That would surely drive farming and agriculture into the ground.

Of course, Labour was also the party of David Parker, who sought to run high country farmers off the land by basing their rents on the view that the merino sheep had as they were grazing the pastures on the slopes overlooking Lake Wānaka.

Hon Ruth Dyson: How stupid.

JACQUI DEAN: I beg your pardon? Sorry?

Hon Ruth Dyson: Stupid.

JACQUI DEAN: Oh, right. So this is a most excellent bill because—and I am looking forward to Ruth Dyson’s contribution on this bill, because she is a well-known agricultural expert and I cannot wait to hear what she has to say—all that this bill does is try to intervene on Fonterra directors. Fonterra is a world-renowned, world-leading, and farmer-owned company. It has been through the process of the Dairy Industry Restructuring Amendment Act, which amended the Dairy Industry Restructuring Act, and all that this bill seeks to do is impose a little bit of Labour interventionism, a little bit of Labour-Greens State control, and this side of the House will not have a bar of it.

RICHARD PROSSER (NZ First): I am pleased to rise on behalf of New Zealand First to speak on this, the first reading of the Dairy Industry Restructuring Amendment Bill (No 2). New Zealand First is proud to support this fine member’s bill, and we commend the Hon Damien O’Connor for introducing it to the ballot and we congratulate him on having it drawn. This bill has come about because of the Dairy Industry Restructuring Amendment Bill, which was passed by this House last year. We spoke against that bill. We voted against it. New Zealand First voted against that bill because of the possible ramifications that we could see it having for New Zealand’s dairy industry.

Without wanting to relitigate that Act, or the entire process of that Act, we are happy to support Mr O’Connor’s bill. Indeed, we are grateful for the opportunity to support it, because we see it as having the potential to circumvent some of the worst possible effects, the most deleterious effects, that the Dairy Industry Restructuring Act could potentially see visited upon the dairy industry. The concerns we hold are essentially the same as those Mr O’Connor holds, and they are chiefly centred on the Trading Among Farmers scheme—the TAF scheme—which is one of the major planks, if not the major plank, of the Dairy Industry Restructuring Act.

Trading Among Farmers allows for the formation of what is somewhat euphemistically called the new co-op fund. The name “new co-op fund” gives the impression that it is a fund owned and controlled by the co-op—by the farmer shareholders who comprise and own Fonterra. The name gives that impression. In reality, however, it is anything but. In fact, it is almost the polar opposite of that. The new co-op fund is the fund into which existing Fonterra shares may be transferred, and into which farmer shareholders may sell their shares in the cooperative, which is Fonterra, so that external investors and speculators may trade in them and may receive dividends from them. External investors do not buy the shares themselves, of course. They buy the unit securities that are attached to each share, and they buy the dividend income stream that would normally be associated with the share. But the trade in the unit securities will dictate the value of all shares in the co-op, which, in turn, will affect the relative ease—or not—with which new suppliers may enter the cooperative, and may provide additional incentive for some farmers wishing to cash up their shares and exit the co-op.

This, in turn, will create further fiscal pressure on the company and its farmer shareholder owners. In either event, the Trading Among Farmers scheme will allow for the redirection of dividend stream revenue away from Fonterra’s New Zealand resident owners to offshore speculators and other foreign carpetbaggers. Indeed, the first tender of Fonterra unit securities was oversubscribed, and, already, more than 40 percent of units have gone to overseas buyers. We do not think this is a good thing. New Zealand First does not want to see Fonterra’s profits disappear overseas. We want to see them retained in New Zealand by the fine, hard-working, private business people who are the farmers who created the company.

Mr Ardern asks whether we the Parliament trust the farmers of New Zealand. Well, personally, yes I do, if they have all of the information. We do not believe that if Fonterra’s farmer shareholders had had all the relevant information to hand and sufficient time to digest the Trading Among Farmers scheme, to fully grasp and understand the potential ramifications of it, they would have voted in favour of it. New Zealand First believes that had the time given for the select committee to examine the bill not been truncated from 6 months to 4 weeks—3 weeks of which Parliament was in adjournment for—Fonterra’s shareholders would have had sufficient time, as well as all of the relevant information, much of which was provided only at the last minute, to see the scheme for what it is, and they would have voted it down. But that did not happen, and the Dairy Industry Restructuring Act with its Trading Among Farmers scheme is the result.

Fonterra claims that it has no plans to build a shareholder fund that is any larger than around 10 to 15 percent of the total number of shares in the co-op, but there is no provision in the Act to prevent the shareholder fund from growing larger than that. There is currently no protection against the size of the fund growing to any level at all, up to and including 100 percent, other than the provisions contained within Fonterra’s constitution, which can be changed by a 75 percent majority vote of shares held. This is an important distinction, because shares held and individual shareholders are not the same thing.

Mr O’Connor’s bill seeks to insert a measure of protection for Fonterra and its shareholders into legislation where currently there is none. It is a stopgap measure. It is handbrake on the drive to divest New Zealand of its dairy industry, and it would give some protection until a change of Government is able to reverse the folly that was and is the Dairy Industry Restructuring Act. New Zealand First congratulates Mr O’Connor on bringing this bill to the House. We commend it to the House, and we are proud to support it.

MAGGIE BARRY (National—North Shore): I rise to speak to the Dairy Industry Restructuring Amendment Bill (No 2). This is very much a bill whose time has passed. It probably ought never to have been put into the ballot. It has been drawn up after events have already overtaken it. From what I can gather from talking to members of the rural community, people are very happy with the status quo.

The way things are working out now with the 25 percent cap is something that farmers are very happy with. Why should legislators get involved in something that 10,500 dairy farmers who belong to Fonterra, and its shareholders, have already decided is a good cap at 25 percent? Let them be. What was the price today? It was $8 for milk today. They have had a huge capital injection. They are doing very well. They do not want this level of intervention. They do not need the legislation. This is not a piece of law that ever needs to be enacted. That is why National is not supporting it.

Fonterra has been able to progress with its capital restructuring proposal. It was a long time coming. It was knocked back on many occasions. There were many dairy farmers who were suspicious of change. They did not like the direction things were going in. They took a lot of persuading, actually, to arrive at the place they are at now. They have arrived at it, though—it is their decision, and they are happy with the way it is. From my perspective, as someone who does not live day to day with the dairy industry as some of my colleagues do—and they have shared their views with me—things are working very nicely. So to introduce a piece of legislation that requires a 20 percent cap when we already have a 25 percent cap, which the farmers have arrived at themselves, seems illogical, and foolish, and silly. I will not say that is typical of Labour, but, you know, one is forced to draw conclusions where one does.

There are a number of pieces of legislation that come before this House that are unnecessary and need to be knocked back. This is a bill that should probably never have been drawn out of the ballot and is not going to progress things very well. When I saw the Dairy Industry Restructuring Amendment Bill go through in July 2012, I thought it was a bill that actually put a regulatory regime in place that settled things down a lot. The dairy industry has been through a lot of restructuring. Fonterra, as New Zealand’s largest company, has managed the change, I think, very well. The level of consultation that has been done has been thorough—even, some farmers would say, exhaustive. There have been meetings all around the country to arrive at some of the developments that were enshrined in that piece of legislation that was passed a year or so ago.

When I look at this bill, as a person who lives in an urban environment, representing the North Shore as I do, where dairy farmers do not generally proliferate—they come to shop and to visit the lovely Devonport heritage areas and a bit of tourism—

Ian McKelvie: They might buy a house there.

MAGGIE BARRY: That is right—if they do well enough out of their shares, they will be able to buy a house in my electorate and come on holidays there. Would that not be fabulous? But, generally speaking, people on the North Shore look at these sorts of things and we think that if it is working well and the industry and the sector are happy with it, why on earth would you interfere? Why would you, as a legislator, come down hard and impose a cap when farmers have already arrived at their own decision?

As I look through this, look at the background to it, and consider the points—many of which have been made more eloquently than I am doing now by my colleague Ian McKelvie and others who know this stuff very well—I ask why we even bother debating this in the way that we are now. Damien, in good heart, no doubt, has put this bill into the ballot, but these things can be withdrawn without wasting Parliament’s time. Frankly, I would suggest that might be the best course of action for this, because it is a piece of legislation that is not needed by the people whom it is purporting to represent here.

The only people who think that the Dairy Industry Restructuring Amendment Bill (No 2) makes sense are in New Zealand First, which does not actually represent the farmers or the rural sector in any way at all—

Hon Member: How do you know?

MAGGIE BARRY: No, indeed you do not.

Richard Prosser: It’s cows we’re talking about, Ms Barry, not marigolds.

MAGGIE BARRY: Well, who amongst you are farmers, Mr Prosser? “Wogistan”? I do not think there is much farming going on on that particular planet. Labour is introducing legislation that is not needed. These are typical things, but they waste Parliament’s time. They waste the dairy sector’s time. This is not a piece of legislation that we would ever dream of supporting. So I sit down, not commending this bill to the House.

Dr JIAN YANG (National): Thank you for the opportunity to take a call on the first reading of the Hon Damien O’Connor’s Dairy Industry Restructuring Amendment Bill (No 2). This bill requires that Fonterra must ensure that the new co-op fund established as a result of the recent Dairy Industry Restructuring Act does not comprise more than 20 percent of the total number of cooperative shares. The bill then says that if the 20 percent limit is reached, Fonterra must stop the sale of shares to the new co-op fund and proceed to reduce the proportion of shares in the new co-op fund to below the 20 percent limit within 90 days.

There is no need to change the existing Dairy Industry Restructuring Act, because it delivers a transparent and efficient dairy market. It has enabled Fonterra to progress with its capital restructuring proposal, Trading Among Farmers, while ensuring that farmers retain their current ability to freely enter and exit Fonterra at a fair price. It is up to Fonterra shareholders to decide what limit they want on the fund, and they have decided. They currently have a constitutional limit of 25 percent. This member’s bill seeks to make a minor change to a complex piece of legislation. The issue was deliberated on in the Committee stage of the Dairy Industry Restructuring Amendment Bill, which became the Act in July last year. The issue was supported only by Labour and New Zealand First—even the Greens did not support it.

The bill wants the Government to interfere in the operational running of Fonterra. We do not support this approach. The Fonterra farmers and shareholders voted for a 25 percent limit, so we should not oppose their wishes. National is proud of the success of our primary sector, and it is proud of championing our farmers and growers, so I will not be supporting this bill. Thank you.

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): In summary, this Dairy Industry Restructuring Amendment Bill (No 2) seeks to put into legislation what the board of Fonterra says it is committed to. I say the board should support this through its National Party, and I challenge it to commit to this, even when this bill is voted down by the National Government, and commit to what it said.

I am not surprised that the National Party is not voting for this. Some of its members do not even appreciate that the dairy industry is a product of intervention back in the 1930s. I do not have a vested interest in the dairy industry, but my grandfather came here with a delegation of farmers in the 1930s to seek legislation to put in place the Dairy Board. I am somewhat ashamed to be in the House now when I see the industry’s destruction take one more step.

Trading Among Foreigners is what it will be; indeed, of the first $500 million traded, $300 million of units was offered to Australian institutional investors. Do not let the farmers think for a moment that this was some friendly float. Corporatisation has been on the agenda for some of those key people in Fonterra for some time. The National Government has been committed since it came into power to offering opportunities to investors. That is why it is selling down State-owned enterprises. That is why it assisted with the set-up of Fonterra and its trading on the NZX. It is in the top 50. This is a significant float.

What some farmers did not realise is that the first dairy industry bill introduced into this House had as part of its objective to “strengthen New Zealand’s capital markets”. This was not about supporting and further enhancing the opportunities for dairy farmers. Trading Among Farmers was about offering opportunities for people to buy into Fonterra and take the dividends. Well, it has been achieved. As I say, for a Government that wants to flog off everything and offer opportunities to its mates, it is little wonder it does not stand up for the dairy farmers who have supported that party loyally for many, many years.

I hope dairy farmers have listened to the last two or three speeches from the National Party. They will be horrified. The redemption risk, which we were told was the reason this must occur, has been replaced by supply risk. Farmers can no longer afford to increase the supply to Fonterra, and many are opting to supply other companies—two Chinese companies in particular. Synlait and Miraka are the beneficiaries of that as well. That is the reality that that member must wake up to if he talks to some farmers. I spoke today on the phone to a farmer who has opted not to buy shares, to contract supply, and if he had the option he would have gone somewhere else.

There is some view within the farming sector that $8 per share is too high. The dividend provided is about 30c at this point. The dividend does not justify the share price. I can tell the member over there that I spoke to someone who has in-depth knowledge of the dairy industry and of the foreign investment sector. What will happen when the unit price for Fonterra goes to $12 a unit? That is the question I ask. I put it to this House that without an intervention, without the oversight of Parliament through this legislative cap, as people know, the increase in the unit price and share price will create more internal tension in the No. 1 company in this country—in the company that is the most important for our economy.

Ultimately, it will be the farmers who ask for the change in the constitution because they will be forced to. Some say those farmers are now stranded. They cannot sell their $8 wet share, because there is not a market for it at the moment because farmers do not want to buy it on the basis of milk supply. But outside investors will be prepared to pay that on the basis that they get a dividend suitable to the share price they pay. That means that the milk price will be forced down and the dividend price will go up to match the expectations of the investors. It is as sure as night follows day. The people who are smiling over there are the incompetent managers of our economy, who have not shifted the economy on to the tradable sector and who have allowed the dollar to destroy the export sector.

Mr DEPUTY SPEAKER: Order! Time has expired. [Interruption] Mr O’Connor, time has expired. [Interruption] Order! Order! I have told the member his time has expired. Please sit down. Thank you.

A party vote was called for on the question, That the Dairy Industry Restructuring Amendment Bill (No 2) be now read a first time.

Ayes 56

New Zealand Labour 33; Green Party 14; New Zealand First 7; Mana 1; Independent: Horan.

Noes 64

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

Motion not agreed to.

Bills

Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill

First Reading

SUE MORONEY (Labour): I move, That the Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill be now read a first time. I nominate the Transport and Industrial Relations Committee to consider the bill. I want to dedicate the first reading of this bill to the late Parekura Horomia. I was not able to be present on the day that Parliament paid tribute to Parekura, so promoting this bill will be my tribute to him. I know that he supported this measure, because he was a kind and decent man who was fierce in his advocacy and support for working people and their families. He always stood up for the little guy.

They say that when it comes to politics, timing is everything. Sadly, the timing for this bill, which promotes redundancy protection for working people, could not be more timely. I do say that with a heavy heart. It could not be more timely, because the tsunami of redundancies continues to surge through this land, whether it be the almost 200 jobs gone from Summit Wools Spinners in Ōāmaru in February, to the mining jobs lost on the West Coast and in Huntly late last year, through to the hundreds who lost their jobs throughout New Zealand when Mainzeal Property and Construction collapsed. The surge just keeps on going, and momentum is building. We know that momentum is building because Telecom has warned it will be cutting hundreds of jobs later this year. Last week Fonterra announced it will cut 300 jobs, and New Zealand Post has also signalled the cutting of postal delivery services. Hundreds more jobs will be lost when that plan is unveiled. The members opposite seem to think that that is fine, and they do not seem to have any problem with it, but on this side of the House we do. Just like the tsunami delivered by mother Nature, we know that after the big surge there are others to come. We know this because when large numbers of jobs get sucked out of communities like Ōāmaru, Westport, and Huntly, less money is available to be spent there. When those wages go from those communities, that has a huge downstream effect on small and medium sized businesses, and then those businesses lose income and more jobs go there too. And so the cycle continues.

These are not the job losses that you will see announced on TV or in the newspapers. These are the jobs that are lost under the radar—a job here, three jobs there, another eight jobs more down the road. They are the jobs you will see reflected in the quarterly household labour force survey, which told us that the number of people employed decreased by 23,000 in the December 2012 quarter alone. That represents 23,000 jobs disappearing from our labour market. The statistics are depressing enough, but convert those numbers into people—hard-working people whose jobs have vanished through no fault of their own, people who have children and other dependent relatives relying on those wages, people who once spent those wages at their local businesses—and you will know that 23,000 is just the tip of the iceberg. The devastation caused by this tsunami of job loss is just as heart-wrenching and far-reaching as that caused by nature’s tsunamis.

However, in the aftermath of a natural disaster we all seem able to agree that the victims should be helped and compensated for their loss. This bill before the House today seeks that same safety net and security for the victims of this man-made disaster. Ordinary, hard-working New Zealanders deserve the right to be warned about the approaching tsunami, and they need some compensation to help them pick up the pieces and get on with their lives. Let us face it. Getting on with their lives is a tough proposition in New Zealand at present. If a job gets sucked from underneath you now, you are a long time between jobs in New Zealand because there are just not the new jobs out there. A net job loss of 23,000 jobs in 2012 makes job search an uphill battle. Just ask the 2,500 people who lined up for 150 minimum-wage supermarket jobs at Countdown in Manukau. The job market is dire.

While the young, the middle-aged, and the older workers—men, women, and teenagers—line up for jobs at minimum wage, this Government sits back and waits. It waits for the market to work its miracle. The Government sees the tsunami coming but pretends it is not happening. National is in denial—and have we not already heard that tonight? When the growing tsunami hits the land, the Government just watches the devastation it wreaks on the villages below and says that it cannot do anything about it. “The global financial crisis is causing the tsunami.” it says, and all it can do is sit, watch, and wait for the market.

Labour has a different view of this man-made tsunami. Labour sees it coming. We know the size of it, and we have a plan. Labour looks for the cause and plans to change that, but also we know that the damage can be mitigated—

Hon Steven Joyce: What is the plan?

SUE MORONEY: —by a Government that is prepared to act, Mr Joyce, a Government that is prepared to act. Labour in Government will not be “relaxed” about leaving its citizens at the mercy of this man-made tsunami, and this bill, Mr Joyce, is an example of the measures that Labour is prepared to take. The National Government will gnash its teeth—and are not National members doing that right now? They will be gnashing their teeth and telling us that imposing the cost of redundancy pay on employers will cause businesses to go under. Well, that is a bit rich from a Government that is deliberately overcharging every single business in New Zealand with hiked-up ACC levies that ought to be lowered. But the truth is that it is not workers’ rights or protections that are causing the tsunami of redundancies sweeping our land; it is a floundering economy—a floundering economy and a Government without a plan or any clues on what to do about it, by its own admission.

At its heart this bill is about fairness. The global financial crisis and this Government’s lack of a plan to get the economy moving are bad news for all of us, but why is it that the burden falls so heavily on workers and their families? Currently, an employer can keep their profit margin, their income, intact while making staff redundant. The employer can keep 100 percent of their income while their employee loses 100 percent of their income. That is just not fair. This bill requires a more even sharing of that burden. It does that by requiring the employer to give at least 4 weeks’ notice of an impending redundancy and by then requiring a redundancy payment of 4 weeks’ pay for the first year of service and 2 weeks’ pay for every year thereafter, up to a maximum of 26 weeks’ pay—not a lot to ask. Most people actually believe that this is a legal right now in New Zealand. The number of people who have said to me: “Oh, no, Sue, you don’t need to put that into law; everyone gets it anyway.”—well, they are quite wrong. It is what they expect of a country like New Zealand today, but it is not currently in the law, and that is not fair.

I also believe that this bill will also stop a whole lot of other unfair practices. In the last 4 weeks I have had two separate Hamilton people relay similar stories to me. One was a 17-year-old; the other a middle-aged mechanical engineer. In both instances they had been made redundant, but, in reality, others had been employed to do their jobs. In the instance of the 17-year-old, another person had been taken on to do the same job as him, just 2 weeks before he lost his job. The mechanical engineer was replaced after being made redundant. They have both been unfairly dismissed, illegally. They received no notice and no payment, and I do believe that if there were a statutory payment for genuine redundancy, then that illegal practice would cease.

Soon David Bennett from the National Party is going to get on his feet. He is going to weep and wail about this bill being about protecting unions, and he will show once again his ignorance—his ignorance in understanding of these issues—because that will be quite wrong. The truth is that people who belong to unions already get redundancy protection. They do not need to have this legislation. It is the people who do not belong to unions who miss out, and this bill will rectify that.

For those who say this will be bad for business, I ask them to take a good long look at what is happening in New Zealand now. Businesses have been going under in record numbers. Has that been caused by worker protections like redundancy pay? No. Has it been caused by big pay demands from unions? No. Has it been caused by inflexible employment laws? No. It is none of the above; it is quite the opposite. The cause has been the global financial crisis brought about by a lack of standards or regulation, and a Government that has no plan to grow the economy. What is National’s answer? It wants to reduce workers’ rights and wages, as it plans to do with a bill introduced to Parliament just a few weeks ago. Again it has come up with the wrong solutions, because it has not identified the cause of the problem it is trying to fix. The problem this bill is trying to fix is the lack of protection for ordinary hard-working New Zealanders who are losing their jobs and incomes every day, every week, through no fault of their own. I commend this bill to the House.

DAVID BENNETT (National—Hamilton East): Tonight there will be a revelation because I am actually going to agree with Sue Moroney for once. Sue Moroney said in her speech that David Bennett would stand up here next and say that this bill, the Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill, is about protecting unions. It is not about protecting unions. This bill hurts unions. This bill gives a compulsory requirement for employers to pay out a redundancy payment. That is the very thing people join a union for, to get that kind of protection in the negotiation process. This bill hurts unions.

How dare Labour Party members come to this House and attack unions? How dare they come into this House and take away the very right that unions try to deliver to their members? How dare that member, Sue Moroney, whom I have heard time and time again in Hamilton speak of her heritage in the union movement? She often says that when we go to public meetings. She talks about her involvement in unions and how she solved the world’s problems in the union movement. Today she is attacking unions—she is attacking unions through this bill. She wants to take away the fundamental right that unions negotiate for. Unions negotiate for terms and conditions. Sue Moroney knows better! Sue Moroney knows better than all the unions in New Zealand. She knows what will be the requirement for redundancy, and that is 4 weeks plus 2 weeks for each year.

Well, I talk to you and ask you: what about those unions that have negotiated more than that, more generous conditions than that? What about them? What about them? The Labour Party is saying that they should not have those generous conditions. The Labour Party is saying that this is the standard that they should be going for. What about all those people who have given years to the union movement, have worked on the picket lines, and have gone out there and worked for those unions, only to find that the Labour Party shafts them in this House? That is what Labour members do. They shaft their own people. Once they get in and sit in cushy chairs, they want to be in control of the power of their people, not the unions themselves. I find it disgraceful that a Labour Party would bring a bill like this to this House.

What is more disgraceful is the word that she used. I knew Sue was going to use this word; she always uses this word. It is the word “fairness”. Sue used the word “fairness”—the word “fairness”—after 7 minutes of that speech not talking about the bill but talking about people getting unemployed, and then saying that the reason for that is the global financial crisis, which it is. This bill is not about fairness, Sue. This is not about fairness; this is about the Sue Moroneys of this world telling people that they know better than those people do. It is about the Sue Moroneys of this world saying: “I know how much you’re entitled to.” How does Sue Moroney know what some worker is entitled to? That is what I want to know. How can you, Sue Moroney, say that you know what everybody is entitled to? Sue Moroney certainly does not know what everybody is entitled to; I can guarantee you that.

Iain Lees-Galloway: David Bennett thinks we should just get rid of the minimum wage.

DAVID BENNETT: The Labour Party is waking up. Iain Lees-Galloway, the man who gave away transport to Julie Anne Genter—it is good to see you in the House, Iain. Why are you here? I do not know. You are not representing the Labour Party transport policy.

Then there is Darien Fenton. Darien Fenton is a great member of the Labour Party. She is a person who stands up all the time at select committee hearings for members of the union movement. I want to see Darien Fenton support this bill, shafting the union movement. I want to see her stand up and do that. Then behind her is that great man from the south of the country Andrew Little. He wants State Highway 3, which Iain Lees-Galloway does not actually know is a road. Mr Little will be standing up soon and he will be shafting and putting the knife into the union movement—the very movement that he led. How can you do that when you come to this House—take advantage of your position and destroy the union movement?

This is not good legislation. It is not good for employers, it is not good for unions; it is Sue Moroney telling the world that she knows best. That is what this bill is. That is typical Labour left politics: it knows best, it will not let anyone negotiate. How dare somebody go into a contractual arrangement around their services? How dare somebody actually go and negotiate something like that? How dare we actually trust our people to have the strength to negotiate? Why would we trust our own people when we have 120 people in this room who know better because they have been in Sue Moroney’s position and they know what everybody deserves? That is a shameful, shameful approach by the Labour Party.

Sue Moroney: This is the minimum. It is just the minimum they deserve.

DAVID BENNETT: Oh, this is the minimum. This is the minimum that the Labour Party wants. That is just a disgrace. We hear the talk from the Labour Party about no plan. Well, I want Sue Moroney to say that in front of Tim Macindoe and me in the election campaign in Hamilton over the next year and a half, because we are looking forward to having you come to Hamilton and say that, Sue Moroney.

Iain Lees-Galloway is not going to support the Waikato Expressway, which is the biggest provider in the last 3 years of new jobs in Hamilton, which the Government provided. Iain Lees-Galloway will not be supporting that. Sue Moroney will not be supporting it. Will they be supporting the convention centre? No. Will they be supporting irrigation in Canterbury? No. Will they be supporting any growth in the New Zealand economy? No. All the plans that have been put forward by this Government, which are good for New Zealand infrastructure, and which provide jobs, are not supported by that side. Those members do not support them. Mr Iain Lees-Galloway wants a public-private partnership for the Waikato Expressway. That is not happening under this Government, mate.

This is a good Government. This is a Government that delivers for New Zealanders. This is a Government that trusts our people. We do not need a Sue Moroney to tell our people what they are entitled to, and we will not shaft the union movement like the Labour Party is doing here tonight. We will let the unions go into negotiations, as they have done for many, many a year, and we will let them have that role. It is a disgrace for the Labour Party. I do not know why you are wearing red, Sue. I do not think you should wear red in this House after shafting the union movement like that. It is not in the best interests of you or your party.

Personal choice is what it is really about, if you look at it. At the end of the day, we all know the difference between the left and the right, the good and the bad. It is very simple. On this side, the good side, we believe in giving people personal choice. We trust our people. We believe in our people. We believe in our country. On the left, they do not believe in our people, they do not believe in our country; they believe only in themselves. They believe that people like Sue Moroney can tell an employee how much they are entitled to get as their redundancy. Well, I did not know that Sue Moroney had those kinds of skills and strengths and attributes. I have learnt that tonight. I do not believe in them, but I have learnt tonight that Sue Moroney can just pick out of the bag what the minimum requirements are for redundancy. How do you have that power, Sue? What gives you that power to just set a minimum requirement? I believe she does not have that power. Nobody in this room has that power.

What we have is the ability to give our people the power to negotiate those rights and responsibilities. We have got the ability in this House to encourage the union movement to actually keep those negotiations going. It is a sad, sad day when Labour Party members come into this House—they are out of the unions now; they may be funded by them, but they are out of them—and try to take advantage of that movement, because they do not want to give away control. They still think they control those unions and this is their way of expressing control over the union movement, and that is a sad day for the Labour Party.

This bill does not deserve to go through the House and we will not be supporting it in that case.

DARIEN FENTON (Labour): I am very pleased to stand and support this Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill, but I must say that I am gobsmacked by that speech by David Bennett. I am almost speechless—although he did not quite manage to put in his best line, his best line ever, which is: “The Government is not here to make people’s lives better.”

Iain Lees-Galloway: That’s right. That’s what he thinks.

DARIEN FENTON: That is right—the best line. So the member did not quite meet his standard tonight. I am sure we will go back over Hansard and find some other pearls of wisdom, but I have never heard so much ridiculous nonsense in all my time in the House. Even 3 years ago when this bill was in front of Parliament, I did not hear anything quite so mad and ridiculous from that member, who, I suspect, probably said a whole lot of silly things along the same lines that year. Yes, I am gobsmacked.

You know, 3 years ago the Government did have a chance to do the right thing when this bill was in front of Parliament. They failed by voting down this bill and they are going to do it again tonight. What they are doing by doing that is failing the thousands of workers who have been laid off through no fault of their own, often without notice, and without compensation to get them through the hard times while they look for another job.

I would like to talk about choice and the allegation from the member David Bennett that people should be free to negotiate. Well, I have met a lot of workers who have been free to negotiate and who actually have been laid off with nothing. They get no compensation, no notice, and are expected to try to support their families through the hard times while they look for another job—no sympathy, no nothing. It is really humiliating. It is a tragedy, a personal tragedy for each of those workers and their families. It does have an awful impact. Anyone who has ever been made redundant—and I am sure that member is going to be made redundant next year—will understand the humiliation of redundancy for them and their families. [Interruption] He is over here. Here is over here.

Let us talk about those who can negotiate redundancy pay and why this bill is fair. Let us talk about Lesley Longstone. The incompetence of the Minister of Education meant—

Iain Lees-Galloway: Did she get the minimum rate?

DARIEN FENTON: No, she did not get 4 weeks pay plus 2 weeks for the half a year that she had been there. She got $425,000 in a golden handshake because Hekia Parata could not get on with her—$425,000. Why is that OK when other workers get nothing? Why is that OK, David Bennett? Let us think about some others here. Don Elder—how much did Don Elder get? Don Elder got a quarter of a million dollars extra pay plus gardening leave when he made a botch-up of Solid Energy.

Sue Moroney: Unbelievable.

DARIEN FENTON: Unbelievable. He got a quarter of a million dollars plus gardening leave—money to stay home and allegedly work—because he made a botch-up of Solid Energy. Then you look at people like Paul Reynolds in Telecom, who got $1.75 million in a golden handshake following his departure from Telecom. And Fonterra, which we have been talking about tonight—

Andrew Little: Facing severe hardship.

DARIEN FENTON: Facing severe hardship, that is right; he was trying to face the hardship that was coming. Then Fonterra paid its former chief executive, Andrew Ferrier, $8.2 million in a golden goodbye when he left the cooperative in 2011.

This bill is a very, very modest measure. The member David Bennett clearly does not understand minimums. He clearly does not support the minimum wage, because that is not about telling people what they should be paid, that is providing a floor for every worker in New Zealand, below which they cannot be paid. That is what this bill will do.

The National Government could do the right thing on the eve of the Budget. Tomorrow when it will be boasting about the jobs that it has not created, it needs to think about the people who have lost their jobs. It needs to think very hard about that, and do something right for a change. It had the chance to support this bill tonight and send it to a select committee.

MIKE SABIN (National—Northland): It is a pleasure to follow the previous speaker, that luminary of economic prosperity and business growth, the member Darien Fenton.

Darien Fenton: “Dah-rien” Fenton.

MIKE SABIN: Darien—oh I most apologise. I most apologise. Let us not take these things personally. The member Sue Moroney talks about the tsunami of something else and, oh, I could not really make much sense of it, other than the fact that I felt like I was drowning. However, the ironic factor in this, which is not actually lost on any New Zealander, is the fact that that party—in fact, everyone on that side of the House—virtually vote against everything that we are trying to do to create the business environment from which jobs will grow. We cannot just put seeds in a pot and miraculously make jobs grow; you actually have to do things to get the economic settings right.

The Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill is another very good example of how the Labour Party seems to think that businesses are some sort of bottomless pit of money and that they should just shower it around their employees, regardless of the relationship, effort, and engagement that those employees have had with the employer. Labour misses the fundamental cornerstone of business, and that is that businesses must produce a product, or provide a service, that no one else is providing that is either cheaper than someone else’s or is of better quality than someone else’s. They must provide it in a way in which they can actually make a profit. So they must sell it for more than what it cost them, and they must grow their market to have some sort of scale. That means they must invest and take risks. None of this seems to make sense to anyone on that side of the House, or the people over there in the old “watermelon patch”. At the end of the day, if a business does not do those things, it will not succeed. It is as plain and simple as that. It is not just the case that the employer can get out the old xerox and run off a few $100 bills just to take care of the needs of the sort of Labour Party fantasyland stuff. Of course, if the employer was the Green Party, it probably could, because we all know that Russel Norman is gearing up his photocopier, because as soon as he gets his hands on the Treasury benches, he wants to push “Go” on the old photocopier and fire out those $100 bills, all the while being supported by its friends in the Labour Party.

This sort of bill is really the economic business equivalent of pushing water uphill with a rake. It just does not make any sense whatsoever and you end up with a big mess on your hands. I understand that this bill was actually formerly introduced by the member Darien Fenton—Darien Fenton, the economic luminary of business growth and prosperity. It is no surprise to me that it lacks the ability to stand up to any economic scrutiny whatsoever. It is full of socialist, sort of, union ideology. Unlike my colleague David Bennett, I will not stand here in defence of the unions, but what I will stand in defence of is their ability to negotiate with employers for what is right for the employer-employee relationship. I will stand up for that. That is exactly what this bill does not do, so that member’s list ranking is plummeting through the floor as we speak. That is a terrible shame.

This bill would have employees receiving redundancy after 12 months of employment. If anything, if there is going to be a tsunami, there will be a tsunami across the small to medium sized enterprises in this country that just simply cannot sustain that sort of crazy talk. It just does not make sense—it just does not make sense. This is the loony Labour Party sort of nonsense that we have become so used to. New Zealanders love it. They lap it up. This disincentivises the hiring of staff. This is what the Public Advisory Group on Restructuring and Redundancy said: “It disincentivises the hiring of staff, reduces wages, and it will mean that there will be more temporary contracts and contract workers.”

Hon Tau Henare: What are the unions doing, anyway?

MIKE SABIN: What would the unions say about that—what would the unions say about that? It puts additional stress on businesses, it will run some businesses out of work altogether, and it reduces their competitiveness. That is my wingman—my wingman—Tau Henare over there. This bill undermines businesses and does not make any sense whatsoever. It is just another effort from the Labour Party that I think really expresses and sums up what the Labour Party of today is all about, and that is that it actually does not know what it is about. This bill will not be supported by the National Party.

DENISE ROCHE (Green): It is my pleasure to take a call on the Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill, and I congratulate the Labour member Sue Moroney on bringing this bill to the House.

The Greens will be supporting this bill. It is a bill that will provide compassionate and necessary minimum standards for those many workers who have lost their jobs and find themselves, through no fault of their own, made redundant from their workplaces. The previous speaker, Mike Sabin, was incredibly stingy in his approach about this.

The bill provides for 4 weeks’ notice of redundancy to the worker. That is really important. If a worker is about to lose their job—a job they have held for many years, say—then the more notice the better. It gives a bolster of time for the worker to be able to start the process of looking for another job. The bill also provides redundancy compensation of 4 weeks’ pay if the worker has worked there for at least a year, and 2 weeks’ pay for each extra year, up to a maximum of 26 weeks. So that means that the worker would get 26 weeks’ compensation only if they have worked at the same place for 12 years or more.

I am not sure whether many members in this House have ever experienced being made redundant, but I can assure you it is a traumatic experience. During the recent cross-party manufacturing inquiry, which did not include the other side of the House, I heard an incredibly moving and brave submission from a woman in a small town who had lost her job because the factory she worked in had to close down. She described how redundancy affected not just her financial stability but also her self-esteem, which undermined her ability to confidently apply for other jobs—not that there were many jobs available. She had to shift from the manufacturing sector, where she had worked for 17 years, into retail. She counted herself lucky to find a job at all, since they are very scarce in New Zealand and especially in small-town New Zealand.

This woman was one of over 40,000 or so people in New Zealand in the manufacturing sector who have lost their jobs in the last 4 years. She could easily have been one of the more than 5,000 Public Service employees who are no longer providing public services to us. This woman was luckier than many workers who are made redundant, because she belonged to a union, Mr Bennett. She had a collective employment agreement with her employer, and so she did receive some compensation to tide her over through the months that it took her to find another job in her small town. Her union had been able to bargain for those provisions. It is worth mentioning that this will become increasingly difficult when the Government introduces changes to the Employment Relations Act that include measures that will make it harder for workers to join a union and bargain collectively. In this type of employment relations environment that the Government is fostering, it becomes increasingly important to have minimum redundancy provisions enshrined in legislation.

This bill did not come out of nowhere. Most other OECD countries have some form of rights for workers to have notice of, and compensation for, redundancy. Many OECD countries have much better provisions for workers generally, which really does make us less of an attractive working environment for the skilled workers we desperately need to keep in New Zealand and attract to New Zealand. Without redundancy provisions, employees have less incentive to make long-term investments in their jobs, and the Government is left bearing the bulk of the cost of supporting and re-establishing them into new jobs. This is a recommendation from the public advisory group. There were employer representatives in that group who supported this and acknowledged that this is a basic right, and a cost to employers that they should bear. We will be supporting this bill.

CHRIS AUCHINVOLE (National): What interesting debates we have heard this evening on the Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill, some of them perhaps with the tongue slightly in the cheek. But there is truth and heartfelt concern in all that has been said on this side of the House, because—

Iain Lees-Galloway: What a load of cobblers.

CHRIS AUCHINVOLE: Here we go—here we go. It does not take the Labour members long to revert to type, does it? They climb into bed with the Greens, there is a touch of consideration over policy, they get it wrong, and then they go back to what they do best. They go back to what is safe for them: kicking employers and interfering with employment relations. Labour cannot resist it.

We saw this legislation—Andrew Little will remember; he has got a good sense of history—in the last three periods of Labour Governments: under Norman Kirk, under David Lange, and then under Helen Clark. Some of us are old enough to bear the scars of those dreadful periods of uncertainty, insecurity, and being told what to do by an overpowering Government. We saw this legislation then, and now, lest we forget, it comes galloping out from the same stable, this time as a member’s bill. It is a try-on. It is not real. It is to give the unions a fright. It is to give employees the idea that someone is on their side. Sue Moroney does it in the firm knowledge that it will not be passed, so she can do it comfortably, and the union sycophants—the four of them over there, sitting tensely, tensely—

Maggie Barry: In a bloc.

CHRIS AUCHINVOLE: In a bloc, yes—worry.

Honestly, this is just the same as when Bill English has to explain to Labour about its capital gains tax. This legislation will be applied only to businesses and will therefore discourage the productive sector from activity. It will have the effect of reducing job opportunities and destroying normal labour relations between employers and employees by removing any sense of independence or security from both parties. It is a classic case of Labour saying that it knows best and that this is what you must do.

National believes that employment law must expand job opportunities and provide an appropriate combination of flexibility and fairness both for employees and for employers. Both groups agree that it should be so, so why are we doing this? Why are we imposing this on people? This bill does not provide flexibility. It is as rigid as a waratah fencing standard. Fairness does not come into the calculation.

Let us see what it does. Let us do a little bit of analysis. All employees who work for more than 12 months are entitled to redundancy compensation. Every employee to whom the part—new Part 6E—applies is entitled to receive a notice of dismissal of no less than 4 weeks, and compensation for redundancy of 2 weeks’ remuneration for each subsequent full or partial year of continuous employment, up to a maximum entitlement of 26 weeks’ remuneration. The Minister of Labour must run the public education campaign on the minimum entitlements and report back to the House on the campaign.

What is all that about? What will this do, and what would the effect of this sort of proposal be should it ever become law? If it ever were to become law, what effect would it have on the unions? What about the collectives? What about the union negotiators who know the people, know the employers, and know what they can do? No, cut them right out of the deal. Let us picture just a few scenarios, because over there we have got the experience of the unions. Over here we have got people who have been both employees and employers. Over there—

Sue Moroney: And here.

CHRIS AUCHINVOLE: Well, I do not know. I do not know what Sue Moroney did before she came into Parliament. But I would say that the first thing that would happen is that this will be a big disincentive to hire more staff. Just think of it down on the West Coast, which is already knocked about. Employers are just getting some breaks. Tourism numbers are lifting. Employers are asking: “Shall we take on a new person in these somewhat shaky times, or shall we make do, take on temporary staff, maybe on contract, so that if things do go wrong, at least we will not be wiped out completely?”.

We have heard the sorts of figures that could be involved in terms of cost to business. This bill would create a disincentive for employers to retain and to promote staff. The levels that this legislation determines would make redundancy unaffordable for most businesses. For most businesses, redundancy is a last resort. Employers actually do like their staff. Why does Labour always paint employers as Dickensian, evil characters?

Finally, this bill is unnecessary. If it is so good, how come Labour did not see fit to bring it in during its—

Mr DEPUTY SPEAKER: Order! [Interruption] Order! Your time has expired. Thank you.

BARBARA STEWART (NZ First): What a pleasure it is to follow that eloquent member from the National Party, Chris Auchinvole. Usually he follows me, but this time I have the pleasure of being after him, which is very interesting. I must say he is on another planet from most of the workers whom I actually talk to. I was interested too to hear the interpretation of the Employment Relations (Statutory Minimum Redundancy Entitlements) Amendment Bill from the Transport and Industrial Relations Committee chair, David Bennett. What a unique interpretation! Obviously he has got a red banner high above his head that I did not know that he ever had. I must congratulate Sue Moroney on getting her bill drawn from the ballot. It is a hard job to get a bill drawn from the ballot.

New Zealand First is going to support this bill only to the select committee at this stage. We want to hear from employers. We want to hear from employees. We want to know whether or not this bill is workable in this economic climate that we actually find ourselves in. In years gone by people did not have to worry about redundancy, people did not have to worry about the price of groceries, and people did not have to worry about trying to find another job, but under this National Government jobs are scarcer than hen’s teeth. I know that when we look in our local papers the number of jobs that are available is minimal, and it is shrinking by the day. Today redundancy is a big word, a big factor that looms over every worker’s head. It is a heavy load. To be made redundant in this situation is a really life-changing event. It can mean the poverty line, sinking below the poverty line. The worst of it is that there is no legislated minimum level of compensation for people faced with redundancy. It is a sad indictment on New Zealand that we sit alone among First World countries in offering little assistance to workers who are faced with redundancy.

It is ironic that despite the workers facing hardship, the large corporates continue to pay out the corporate elite with their golden handshakes. Month after month we see this happening. We see it on the TV and we read about it in the newspapers: this one stepped down and got a huge payout; another one stepped down and got a huge payout. I know that Darien Fenton read out a long list of these people. Of course, at the top of that was Lesley Longstone from the Ministry of Education. It is almost as if there is one set of rules for the workers and another set for the fat cats at the top of the pile. We know that that is what is happening.

How can you reconcile this with the workers—the people who are battling, who get up every day and slog their intestines out for the minimum wage? There are lots and lots of them. In service stations and in kiwifruit packing houses there are a whole lot. These people have got no protection. They are our poorest and our most vulnerable workers. It is these workers who are disproportionately affected by this gap in the employment legislation. In the current financial climate we have witnessed huge job losses—redundancies from KiwiRail, Fonterra, the Department of Conservation, Mainzeal Property and Construction, Summit Wool Spinners, Telecom, and Tīwai Point, just to mention a few big organisations. We have not mentioned the small shops in our towns that we see closing up on a regular basis and having closing-down sales. These are all examples of businesses downscaling, cutting back, or going under in this economic environment. This is not the brighter future that people were anticipating, or families, or workers. Small businesses and medium-sized businesses are finding this environment tough—really tough. Up and down provincial New Zealand they are finding it tough.

Debate interrupted.

The House adjourned at 10 p.m.