Tuesday, 11 June 2013

Tuesday, 11 June 2013

Tuesday, 11 June 2013

Mr Speaker took the Chair at 2 p.m.

Prayers.

Points of Order

Personal Reflections and Unparliamentary Language—Withdrawal and Apology

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. Pursuant to Speaker’s ruling 18/3, I hereby withdraw and apologise.

Hon JOHN BANKS (Leader—ACT): I raise a point of order, Mr Speaker. What was the apology about by the member T Mallard?

Mr SPEAKER: Order! That is not a—[Interruption] Order! That matter was dealt with. The member has to go back and look at Hansard from last week. The matter has now been tidied up.

Privilege—Speaker’s Notification of Decision

Hon JOHN BANKS (Leader—ACT): I raise a point of order, Mr Speaker. When is your office going to deal with the breach of privilege complaint laid by me against T Mallard?

Mr SPEAKER: There is a process now by which I will be seeking comments from the member who has been accused of a breach of privilege.

Questions for Oral Answer

Questions to Ministers

Electoral Commission—2013 Māori Electoral Option and Engagement

1. TE URUROA FLAVELL (Māori Party—Waiariki) to the Minister of Justice: Is she satisfied with the Electoral Commission’s engagement with whanau, hapū, iwi and marae around the 2013 Māori Electoral Option; if so, what advice has she received that would explain why halfway through the process there are only 5,000 new enrolments?

Hon JUDITH COLLINS (Minister of Justice): I have received four reports from the Electoral Commission on progress for the Māori electoral option. It is fair to say that the uptake from Māori for enrolment on the Māori roll has not been great. The Electoral Commission has run a 4-month campaign over radio, television, and print media, as well as setting up a Facebook page, which has reached over 200,000 people and received over 13,000 likes. I am advised by the Electoral Commission that the response for this campaign is similar to the response in 2006, when there were around 6,000 new enrolments.

Te Ururoa Flavell: Can I ask what assurances can she give that the Electoral Commission has prioritised kanohi ki te kanohi, or face to face, communications with Māori constituents in informing them of the Māori electoral option?

Hon JUDITH COLLINS: I understand from the Electoral Commission that it has, in fact, undertaken that. I also understand that it has met this morning with the Māori Party to discuss the Māori Party’s stated concerns. I am sure that many people would say that there are not enough Māori on the electoral roll, and that anything we can do to assist should be done if we can.

Te Ururoa Flavell: As only 73 percent of young people are enrolled to vote, with the proportion of rangatahi Māori even less, what responsibility does she have to ensure that 100 percent of New Zealanders are enrolled, and how does she plan to reach those people who are not enrolled?

Hon JUDITH COLLINS: Short of actually prosecuting people for not being enrolled, which I am not prepared to consider as something that this Government—or any Government—should prioritise, I would say that even in Australia, where there is compulsory voting, only 95 percent of people generally turn out. In this country, the average turnout is 81 percent. In fact, that number tends to go up when there is a possibility of a change of Government. I am happy to say that one of the good things from such a low turnout at the last election was that it was because people did not want to have a change from the fabulous current Government that we have.

Government Communications Security Bureau, Review of Compliance—Investigation into Leak

2. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: On what date was he, his office or the Department of Prime Minister and Cabinet first informed that David Henry would not meet his deadline of the end of May as set out in the terms of reference for reporting back and what reason did Mr Henry provide for the delay?

Rt Hon JOHN KEY (Prime Minister): The terms of reference anticipated that Mr Henry would present his findings to Mr Kibblewhite and Mr Fletcher by 31 May. This was not strictly a deadline. The report was delivered 2 working days after that date. I am advised that Mr Henry indicated to the Chief Executive of the Department of the Prime Minister and Cabinet and the Director of the Government Communications Security Bureau earlier in the week ending 31 May that there was some risk to the anticipated timetable. He formally confirmed on 31 May that he would likely need to take an extra week to complete the report. As it happened, he took only 2 more working days. The reason given for the extra time was that Mr Henry was continuing discussions with one individual. Mr Henry said he needed to complete an interview, and then finalise his report.

David Shearer: Does he stand by his statement on 29 May that “He does not believe for a moment that his Ministers or their offices leaked the report …”?

Rt Hon JOHN KEY: I did at the time I made that statement.

David Shearer: Does he know who leaked the Kitteridge report, and who was it?

Rt Hon JOHN KEY: For certain? No, I do not know.

David Shearer: Why is he not taking all possible steps to firmly establish what Mr Dunne leaked?

Rt Hon JOHN KEY: Firstly, I think Mr Henry is to be congratulated on an extremely thorough report. Secondly, that report has led to an outcome, which is the resignation of a Minister. Thirdly, the only point I could do is I could go and reconstitute the inquiry, arguably subpoena the emails, and to do so I would subpoena the emails of Andrea Vance.

Hon Members: No.

Rt Hon JOHN KEY: That is what the member wants. [Interruption]

Mr SPEAKER: Order!

Rt Hon JOHN KEY: That is what the member wants. Just as long as the gallery understands that Labour wants to be able to forage around in their emails.

David Shearer: Does he understand that there is an important difference between Ministers’ duties to hold confidences and the role of the media and the Opposition to highlight information that has been disclosed to them, and why does he continue to confuse the two?

Rt Hon JOHN KEY: Why does the member believe that it is OK to have one side of the story—

David Shearer: I raise a point of order, Mr Speaker. I ask the questions and he is supposed to answer them, I thought.

Mr SPEAKER: Order! I am going to ask the member to repeat his question, please.

David Shearer: Does he understand that there is an important difference between Ministers’ duties to hold confidences and the role of the media or Opposition to highlight information that has been disclosed to them, and why does he confuse the two?

Rt Hon JOHN KEY: I understand completely my responsibilities as Prime Minister—that was, to try to get an answer to the matter. I commissioned a full report. Secondly, I understand the need for balance. So if we are going to have a full understanding of everything in those emails that Mr Dunne is not prepared to release himself, then we need to see both sides, and while we are at it we will get Phil Goff’s emails about the Ministry of Foreign Affairs, as well.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Why did you allow the Prime Minister to add on that last part when it is not part of the question, or any inquiry, or, above all, the severe embarrassment the Government is now under?

Mr SPEAKER: Because, as I interpreted the answer from the Prime Minister, I did not think it was out of order at the time.

David Shearer: Does he believe his Ministers should be held accountable for leaking information that they have a duty to hold confidential, and, given Mr Dunne’s continued denials, how can he leave the matter there?

Rt Hon JOHN KEY: It is quite clear that the Minister has been held to account. He has been asked to comply with the inquiry, he has failed to do so, and he has lost his ministerial warrant. But there is a simple way of clearing this up. Apparently, Mr Peters has got the emails. Maybe he could give them to Mr Shearer.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! I have a point of order from the Rt Hon Winston Peters, and it will be heard in silence.

Rt Hon Winston Peters: That was totally outside the Standing Orders. The Prime Minister is meant to be terse and to the point. The last time that challenge came and he was told by me that his Minister was gone, he laughed then, but he is not laughing now. The fact is that on the question of disclosure, of the five different electronic records there are, the Prime Minister is the person responsible for that. So we all have a true and full picture, and thank you for that point of order.

Mr SPEAKER: And it was not a point of order.

Economic Growth and Job Creation—Progress and Forecasts

Mr SPEAKER: Question No. 3, Katrina Shanks. [Interruption] Order!

KATRINA SHANKS (National): To the Minister of Finance. What do recent indicators show about the economy’s performance this year and its outlook for the next 3 to 4 years?

Mr SPEAKER: Has the Minister adequately heard the question?

Hon BILL ENGLISH (Minister of Finance): No. [Interruption]

Mr SPEAKER: Order! There was so much noise in the House that I could not hear Katrina Shanks reading that question. Would she please commence again.

3. KATRINA SHANKS (National) to the Minister of Finance: What do recent indicators show about the economy’s performance this year and its outlook for the next three to four years?

Hon BILL ENGLISH (Minister of Finance): The New Zealand economy grew 3 percent in the calendar year 2012, among the fastest-growing in the OECD. Growth was broad-based, and by the end of 2012, 15 of the 16 measured industries were showing growth. The outlook for the next 3 to 4 years is growth of 2 to 3 percent. This is based on increased private consumption supported by higher business and consumer confidence, increased business investment, increased residential investment, and a continuing wider recovery. Elevated terms of trade and increased dairy and commodity exports are also expected to be long-term drivers of income growth. This is good for families, because it means more jobs, lower unemployment, higher incomes, and more opportunities.

Katrina Shanks: What has been the basis for the economy’s stronger performance this year?

Hon BILL ENGLISH: Recent economic data is reasonably encouraging. Tax revenue is ahead of forecasts. The indexes that measure the growth of the manufacturing sector and the very large service sector are both showing growth. Business and consumer confidence are at 3-year highs. Employment has increased and unemployment is falling, although it still remains too high, at 6.2 percent. Last week building consents were reported as being up by 43 percent in a year, reaching a 5-year high. This is not related just to the rebuild of Canterbury but also to reasonable growth outside that. Dairy prices remain well above long-term averages, and they may be supported by the recent welcome falls in the New Zealand dollar against the US dollar.

Katrina Shanks: How does New Zealand’s economic growth compare with that of other developed countries?

Hon BILL ENGLISH: At 3 percent for the 12 months to the end of 2012 it compares favourably with most other developed economies—that is, a higher growth rate than the US, Canada, Japan, the UK, and the eurozone, and comparable with Australia. On current trends it is likely that over the next year or two, New Zealand will grow at similar, if not slightly better, rates than Australia.

Katrina Shanks: What reports has he seen on New Zealand’s economic programme and the Government’s approach to turning round the economy?

Hon BILL ENGLISH: I recently read a report from the Australian Financial Review that says: “What immediately stands out is Wellington’s grown-up and stable Government,”. It also says that New Zealand’s bad luck is about to take a turn for the better, and it will reap the benefits of disciplined policy making. The Australian Financial Review, which is not noted for being a cheerleader for New Zealand, notes that New Zealand did not have a mining boom to shield it from the global financial crisis. But it acknowledges that we did have a devastating earthquake in Christchurch and a drought this year. It notes: “John Key’s National Government also had to deal with the legacy of nearly a decade of a back-sliding and big-spending Labour Government.”

Grant Robertson: Is it correct that his 2013 Budget says that his Government will fall 61,000 jobs short of his election promise of a 170,000 extra jobs?

Hon BILL ENGLISH: I cannot remember the exact numbers, but the number of new jobs has been fewer than was expected. Over the next couple of years though, we expect that will pick up. As I just pointed out to the member, we have had to deal—and I will quote the Australian Financial Review—“with the legacy of nearly a decade of a back-sliding and big-spending”—

Grant Robertson: I raise a point of order, Mr Speaker. It was a specific question. Remarkably the Minister of Finance could not remember his own Budget, but he did show—

Mr SPEAKER: Order! I gather the point of order. The question has certainly been adequately addressed.

Intelligence Agencies—Legislation and Information Sharing with Overseas Agencies

4. DAVID SHEARER (Leader of the Opposition) to the Prime Minister: Has he received any information that shows foreign intelligence agencies are routinely collecting emails, other communication or location data on New Zealand citizens and residents while they are in New Zealand; if so, has the resulting information been passed on to the Government Communications Security Bureau?

Rt Hon JOHN KEY (Prime Minister): No.

David Shearer: Do New Zealand intelligence agencies use or have access to the PRISM system, developed by the US National Security Agency?

Rt Hon JOHN KEY: I do not believe that it is in the public interest to go into the operational programmes used by the Government Communications Security Bureau or the Security Intelligence Service, but what I can say is that I have sought an assurance from the Government Communications Security Bureau that it is acting in accordance with New Zealand law and that it does not ask Government agencies in other countries to circumvent that law.

David Shearer: Will he give New Zealanders an assurance that information collected on them by non - New Zealand intelligence agencies has not been and is not being used by New Zealand authorities without them having the legal authority to do so?

Rt Hon JOHN KEY: I can assure the House that we do not use our partners to circumvent New Zealand laws. We do not ask them to do that. I cannot speak for other international agencies; I simply do not know what they do. But I know that from our perspective and from the Government Communications Security Bureau’s perspective we do not use foreign partners to circumvent the law.

David Shearer: Why is he passing legislation extending the powers of the Government Communications Security Bureau without the opportunity for a thorough examination of the technological changes in cyber-security that would be covered by an independent, wide-ranging inquiry?

Rt Hon JOHN KEY: Firstly, it is quite clear that the law needs to be clarified. That is as a result of the Kitteridge report and the work done by Justice Neazor—that is the first thing. The second thing is, without clarifying the law, the assistance work provided by the Government Communications Security Bureau to other agencies actually cannot continue. Thirdly, in my view there was an extremely thorough piece of work done by Rebecca Kitteridge, so we have a good understanding of what has taken place there. But I do find myself in a bizarre situation now, answering a question from a man who wants to protect privacy—

Mr SPEAKER: Order!

David Shearer: Why is he refusing to conduct an independent inquiry into New Zealand’s intelligence and security agencies, when the public has lost confidence in our intelligence agencies at a time when serious concerns are being raised about whether the privacy of New Zealanders has been breached?

Rt Hon JOHN KEY: I do not believe for a moment that the public has actually lost confidence in New Zealand’s intelligence agencies. I think it is quite clear that there was a mistake made by the Government Communications Security Bureau when it came to using its foreign intelligence powers with regard to Mr Kim Dotcom. But, actually, beyond that, what the Kitteridge report highlighted was a significant amount of work that needs to be undertaken. It was an extremely thorough review.

Grant Robertson: A very narrow review—a very narrow review.

Rt Hon JOHN KEY: The director of the Government Communications Security Bureau is actually undertaking that inquiry. Well, actually, I know for a fact that Mr Shearer does not think that it was narrow. He is looking for a different reason to not vote for it.

Steffan Browning: Has the Government Communications Security Bureau ever made requests to the United States that have resulted in intelligence being gathered and provided using the PRISM system, and did the Government Communications Security Bureau seek approval from you or other Ministers before doing so?

Mr SPEAKER: Order! Do not bring the Speaker into the debate.

Rt Hon JOHN KEY: I am not going to go into the operational matters or techniques used by the Government Communications Security Bureau, but what I can give people an absolute assurance on is that we do not ask foreign intelligence agencies to act in any way that circumvents the law. Any assistance that may have been provided by other agencies will be because it is both lawful—that means signed off both by me as the Minister in charge of the NZ Security Intelligence Service and by the Commissioner of Security Warrants—and, importantly, in the national interest for us to do so.

Steffan Browning: On the basis of that, was PRISM data used in the cases identified in the Kitteridge report, where metadata or other intelligence was collected illegally on 88 New Zealanders?

Rt Hon JOHN KEY: As I said, firstly, I am not in a position to go into the techniques that are deployed by the Government Communications Security Bureau. I do not think any Prime Minister has done that. Secondly, I would challenge the member to go away and read the report from Justice Neazor. Actually, it did not find that the 88 cases were illegal.

Steffan Browning: Under the Government’s proposed law changes, when the Government Communications Security Bureau spies on New Zealanders, can that include it requesting surveillance by the US National Security Agency and, thus, potentially the PRISM system?

Rt Hon JOHN KEY: I think I have actually answered that question, but, for clarity reasons, let me give it to the member again. I have sought assurances from the Government Communications Security Bureau that it acts in accordance with New Zealand law and does not ask Government agencies in another country to circumvent the law. There would be no reason to do that if the person was in New Zealand and there was a legal warranted—

Steffan Browning: Point of order—

Rt Hon JOHN KEY: Let me finish the answer—a legal warranted activity to be conducted.

Steffan Browning: I raise a point of order, Mr Speaker. The question was not really answered, because I said “can that include it requesting surveillance by the US National Security Agency and, thus, potentially the PRISM system?”. That was not answered.

Mr SPEAKER: Order! I think on this occasion the Prime Minister has very adequately addressed the question.

Education, National Standards—2012 Assessment Data and Moderation

5. ALFRED NGARO (National) to the Minister of Education: What recent announcement has she made about achievement against National Standards?

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. Today I released the second year of national standards aggregate data and, for the first time, data on the achievement of students in Māori medium schools. The 2012 national standards data shows small positive gains in reported achievement overall. Overall, achievement is strongest against the national standards for reading, followed by mathematics and then writing. The information released today also includes, for the first time, data on achievement by year level. We have an education system that is amongst the best in the world, but we can do better. Good-quality data on student achievement at all levels is essential if we are going to achieve a system-wide lift. Under this Government we have started to collect such data.

Alfred Ngaro: What is the value of the achievement data that has been reported?

Hon HEKIA PARATA: Tēnā koe. In the words of Andreas Schleicher, education director at the OECD: “Without data, you are just another person with an opinion.” Achievement data is extremely powerful. [Interruption] Achievement data is extremely powerful. At a school level it helps principals and teachers to target resources where they are most needed. At a system level we will be using it to continue to get resources to those schools that need it most. Public Achievement Information allows parents to see how their child and their child’s school are performing and will allow the Government to see how well the system as a whole is doing in order to raise achievement for all students. Public Achievement Information includes national standards, Ngā Whanaketanga Rumaki Māori data, Education Review Office reports, schools’ annual reports, National Certificate of Educational Achievement data, and relevant national and international reports.

Hon Trevor Mallard: I know it is really unusual for an Opposition member to do this for a Government question, but my view is it was a very good question that actually was not addressed, and I wonder whether the question could be repeated so the Minister could address it.

Mr SPEAKER: Order! No. On this occasion the question was clear, and the answer addressed the question.

Chris Hipkins: Supplementary question.

Mr SPEAKER: Supplementary question, Metiria Turei. Oh, sorry.

Chris Hipkins: That’s new!

Mr SPEAKER: Again, I humbly withdraw and apologise and hope that I will be forgiven. Supplementary question, Chris Hipkins.

Chris Hipkins: Thank you. Thank you, Mr Speaker. [Interruption]

Mr SPEAKER: Order! I have done all I can do, and that is humbly apologise. Now, supplementary question, Chris Hipkins.

Chris Hipkins: Can she—[Interruption]

Mr SPEAKER: Order! The member has a right to have his question heard.

Chris Hipkins: Can she guarantee that the national standards are being applied consistently across all schools and that the same student being assessed in one school would not get a different result if assessed in a different school; if not, why not?

Hon HEKIA PARATA: The New Zealand education system runs on a high-trust model, which is based on the overall teacher judgments made by teachers. Teachers use a whole range of tools to make those assessments. They do that in every school across New Zealand. As we get better at this process—the moderation that will be involved—the judgments will become more consistent. This is the second year of national standards data, and so there will be some variation.

Chris Hipkins: I raise a point of order, Mr Speaker. The question that I asked was whether she could—

Mr SPEAKER: Order! Can the member just repeat the question.

Chris Hipkins: Can she guarantee that the national standards are being applied consistently across all schools and that the same student being assessed in one school would not get a different result if assessed in a different school; if not, why not?

Hon HEKIA PARATA: No, I cannot guarantee that. In the same way, the National Certificate of Educational Achievement has taken 10 years to develop the robustness that it has, and it has been applauded by the international systems with whom we compare ourselves. That is why we are in the process of investing in skills for teachers for consistency and progress in national standards.

Chris Hipkins: What is the moderation process for national standards?

Hon HEKIA PARATA: The Public Achievement Information framework over the next 5 years was published on the education website last year. It sets out the approach over the next 5 years of investing in exactly that—how we can ensure that the quality of judgments made by individual teachers across the school system will become more consistent over time. In the same way that the national curriculum has taken 12 years and the National Certificate of Educational Achievement has taken 10 years, this is only the second year of national standards data reporting.

Chris Hipkins: I raise a point of order, Mr Speaker. It was a very short and simple question: what is the moderation process for national standards?

Mr SPEAKER: And I understood that the Minister has referred you to the website, and the information will be available.

Chris Hipkins: I raise a point of order, Mr Speaker. This is question time, when we ask questions and Ministers answer them.

Mr SPEAKER: I am aware that this is question time, Mr Hipkins.

Chris Hipkins: So can I have the answer to the question?

Mr SPEAKER: You cannot expect an answer to the satisfaction of the member. The Minister responded and adequately addressed the question by saying that the detailed information the member needs is available for the member on the website.

Chris Hipkins: I raise a point of order, Mr Speaker. Is it acceptable for any Minister to answer any question that the Opposition puts to them by saying that the information is available on a website somewhere?

Mr SPEAKER: No, it is clearly not acceptable on all occasions, but on this occasion to expect the Minister to have the detail at her fingertips, I think, is not reasonable, and I took it from the Minister’s answer that she did not have the information to satisfy the member and therefore she referred the member to the website. So on this occasion I think it is acceptable, but I certainly accept the point that the member is making—that if on all occasions a Minister simply got up and said to refer to a website, we would not have a very functional question time.

Chris Hipkins: Does the Ministry of Education website outline a moderation process to ensure consistency in this year’s national standards results?

Hon HEKIA PARATA: Overall teacher judgment is the approach to use for assessment of the national standards. “Overall” means that it takes into account the deployment of a number of tools, which are at the choice of the teachers and the schools in particular. The Public Achievement Information framework sets out the 5-year plan on how we will increasingly improve the consistency of judgment—that is, moderation within schools and between schools is set out in that plan. This is the second year. The data this year is better than last year’s. Next year’s data will be better than this year’s. This is a standard process of development of our education system, which is world-class for that reason among many others, because of the high-trust model we operate by trusting the over 30,000 teachers across the 2,100 schools, working with the 475,000 primary school students to reach these data decisions.

Chris Hipkins: I raise a point of order, Mr Speaker. In the supplementary question that I first contested with you the Minister referred me to the Ministry of Education website.

Mr SPEAKER: Correct.

Chris Hipkins: I then asked her quite a specific question about what that website information would contain, and the Minister has not addressed that. She has not answered it; she certainly has not even addressed it.

Mr SPEAKER: On this occasion Chris Hipkins raises a reasonable point. The Minister did not have a categoric answer to the first question, and told the member to refer to the website. The member then asked a simple question about whether that information would be available on the website, and I am actually none the wiser as to whether it is available. Would it help the Minister if the question was repeated?

Hon HEKIA PARATA: No. There are a range of tools used by schools, and they are described on the website. In order to achieve consistency in the judgments used by teachers in respect of students it is a process of investment over time. The specific tool that has been designed to work in this specific area is the progression and consistency tool. It has been piloted in a number of schools this year, with the intention that it will be refined and applied—

Hon Annette King: Is it on the website?

Hon HEKIA PARATA: Yes, a description of it is on the website. It will be applied in schools, and as it is tested and found to be successful it will be used next year and the year after.

Chris Hipkins: I raise a point of order, Mr Speaker. The Minister has given quite a lot of information about what is going to happen in the future, but my question actually asked whether the website contained the process that was used to ensure consistency in the data this year. The Minister has talked about what is going to happen in the future, but I actually asked her about what had happened this year to ensure consistency in the data she has released today.

Mr SPEAKER: If the Minister could answer just that final point around this year, it would help the House move on. The Minister, I think, gave a very genuine attempt to answer that question quite fully for the member. But that bit of information, if it can be given, would assist, as to whether the information will be utilised this year. Am I correct?

Grant Robertson: For this year’s standards.

Hon Trevor Mallard: The moderation for this year’s standards.

Mr SPEAKER: Order! I am going to get the question repeated. The only aspect that still remains to be clarified is the timetable for this year.

Chris Hipkins: Does the Ministry of Education website outline the moderation process to ensure consistency in the national standards data that has been released this year?

Hon HEKIA PARATA: Yes.

Mr SPEAKER: I appreciate it.

Skycity, Convention Centre—Terms of Agreement and Implications

6. METIRIA TUREI (Co-Leader—Green) to the Minister for Economic Development: Will the Government sign the legal contract between it and SkyCity for the SkyCity Convention Centre this week; if not, when will it sign this agreement?

Hon STEVEN JOYCE (Minister for Economic Development): I am advised that negotiations for the final agreement are progressing with Skycity. While they are progressing, it would not be helpful or appropriate for me to discuss the nature and progress of negotiations until such a final agreement has been finalised. The heads of agreement anticipate that a final agreement will be signed on or before 14 June 2013. However, both sides may agree to extend this to a later date and, depending on how things progress this week, we may or may not do so.

Metiria Turei: Does the Minister agree with leading constitutional lawyer Stephen Franks that signing this agreement is “arguably unlawful”; if not, why not?

Hon STEVEN JOYCE: No, I do not necessarily agree with everything in Mr Franks’ publicised opinion, although there are some things I do agree with. For example, he states that this sort of law is not unprecedented in New Zealand practice. Recent examples include the Rugby World Cup 2011 (Empowering) Act 2010 and qualified exemptions from certain provisions of the Commerce Act 1986 for Fonterra, under the Dairy Industry Restructuring Act 2001. So I think he suggested it is arguable, but then goes on to state some examples.

Metiria Turei: Did the Minister seek any specific advice on the implications of the decision of Fitzgerald v Muldoon before signing the heads of agreement; if so, what was that advice?

Hon STEVEN JOYCE: No, I did not.

Metiria Turei: Has the Minister sought advice on the New Zealand Bill of Rights Act implications of signing a deal to amend the Gambling Act 2003 before there is legislation before the House to do so; if so, what was that advice?

Hon STEVEN JOYCE: Sorry, I did not quite get that.

Mr SPEAKER: Hon Steven Joyce, do you want the question repeated?

Hon STEVEN JOYCE: Yes, that is right.

Mr SPEAKER: Could the member, please, repeat the question.

Metiria Turei: Has the Minister sought advice on the New Zealand Bill of Rights Act implications of signing a deal to amend the Gambling Act 2003 before there is legislation before the House to do so; if so, what was that advice?

Hon STEVEN JOYCE: No, I have not, but I would point out to the member that in many examples of legislation the agreements go on to be then put before the House—for example, in an agreement. So you can take, just for example, Treaty settlements with the Treaty of Waitangi, and also international trade agreements, where agreements are signed and then put before the House for the House to consider and decide whether to endorse those agreements.

Metiria Turei: I raise a point of order, Mr Speaker. I take personal offence at the comparison of a Treaty settlement that provides for the rightful compensation to iwi and hapū with this dirty deal about gambling.

Mr SPEAKER: Order! No. It is not reasonable to take offence at that answer given by the Minister.

Metiria Turei: Could a select committee amend the concessions in the intended legislation concerning this deal, without affecting the contract and triggering a compensation requirement?

Hon STEVEN JOYCE: I am sorry; I did not get that.

Mr SPEAKER: Again, we are having trouble hearing. Can the member actually speak directly into her mike so that—

Metiria Turei: I will turn it round.

Mr SPEAKER: That would help, I am sure.

Metiria Turei: Could a select committee amend the concessions in the intended bill concerning this deal, without affecting the contract and triggering compensation?

Hon STEVEN JOYCE: The intention—and I stress again that this matter has not been brought before the House in any way yet—is that the bill that comes before the House would seek the House’s endorsement in terms of the agreement. So, obviously, no compensation would apply if a select committee and then the House subsequently rejected the terms of that agreement. That is what the House will have the opportunity to assess—whether it decides to proceed with the legislation that would give effect to the agreement.

Metiria Turei: Will Skycity be entitled to any compensation if the legislation enacting the Gambling Act concession does not pass, and is he concerned that the future of this whole deal relies on two MPs who are teetering on the edge of political oblivion?

Hon STEVEN JOYCE: I think that the point that the member sort of seeks to raise is: “Are we dependent on Parliament?”, and the answer is “Yes.” Governments are always dependent on Parliament in terms of passing legislation. So I do not think this is anything new. But if the Greens decided to move in favour of supporting jobs and growth in the New Zealand economy—which I know would be rare—I would welcome their support as well.

Metiria Turei: Will Skycity get compensation if his Government fails to get the numbers to pass this dirty deal?

Hon STEVEN JOYCE: I have no idea what dirty deal the member is referring to. As far as I am concerned, the member is trying to offer a characterisation that probably applies much more to Green Party policy than to National Party policy.

Metiria Turei: I raise a point of order, Mr Speaker. I have in fact asked this question twice now. At neither of those times did the Minister answer it. I was very specific in my final question: will Skycity get compensation if the legislation does not pass—

Mr SPEAKER: Order! If the member wanted that answer, she should have asked it without the political implications.

Question No. 3 to Minister

Rt Hon WINSTON PETERS (Leader—NZ First): I seek to table an OECD document that totally refutes the claim by Mr English in answer to question No. 3 that New Zealand’s growth rate is the highest in the OECD. It is just plain false.

Mr SPEAKER: Leave is sought to table the OECD document, which I take it is not readily available to members. On that basis, I will put the leave. Is there any objection to it being tabled? There is none. It will be tabled.

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

Housing, Affordable—Reports, Response, and Land Supply Policies

7. JAMI-LEE ROSS (National—Botany) to the Minister of Housing: What policy conclusions, if any, does the Government draw from Priced Out - How New Zealand Lost its Housing Affordability and how consistent are its findings with those of the 2012 Productivity Commission Report on housing affordability?

Hon Dr NICK SMITH (Minister of Housing): The most important conclusion is that we must address restrictive land policies if we are to improve housing affordability. It notes that section prices have soared way ahead of building costs over the past decade, and now make up more than 60 percent of the cost of a house in Auckland. The report also notes that Auckland’s metropolitan urban limit “favours the old and the rich, and punishes the young and the poor.” The Government is taking action on the full range of issues identified in the Productivity Commission’s report, covering the costs of building materials infrastructure, and sector productivity, as well as consenting, because there is a high level of consistency in these reports.

Jami-Lee Ross: Can the Minister cite any examples of how restrictive land supply policies are allowing very large profits to be made at the expense of homeowners?

Hon Dr NICK SMITH: Yes. There was a very good example reported in the New Zealand Herald, where a 29-hectare rural property at Flat Bush in Auckland was bought for $890,000 in 1995, but is still undeveloped and is now on the market for $112 million. This profit is coming at the expense of ordinary families trying to afford a home. We must tackle the restrictive and unresponsive land supply policies if we are to address the root causes of housing affordability.

Jami-Lee Ross: Have any of these substantive reports on housing affordability from the OECD, the IMF, the New Zealand Initiative, or the Productivity Commission concluded that the answer is for the State to embark on a massive housebuilding programme?

Hon Dr NICK SMITH: In fact none of these substantive reports recommend a massive State housebuilding programme. It is simply not credible to claim that you can build a three-bedroom house in Auckland for $300,000, when the section price in Auckland is now over $325,000—particularly when the advocates for this approach oppose any steps to free up the supply of land. If the answer to less expensive houses is to have the Government build them all, I suspect we will next want to lower food prices by having the Government running all the supermarkets.

District Health Boards—Waiting Times for Emergency Departments and Diagnostic Testing

8. Hon ANNETTE KING (Labour—Rongotai) to the Minister of Health: Does he stand by all his statements on health; if not, why not?

Hon TONY RYALL (Minister of Health): Yes, within the context that they were given. This Government has increased funding of health by an average of $500 million a year, but has always said that district health boards will sometimes have to slow, scale, or stop programmes to meet the changing needs of New Zealanders.

Hon Annette King: Does he stand by his statement: “Many hospitals struggle to even see patients with immediate or imminent threat to life or limb.”; if not, why is it now acceptable for 3,900 patients in one district health board alone, who were assessed as being needed to be seen within 10 minutes in an emergency department, not being seen in that time although their conditions could include serious head injuries, massive bleeding, or suspected heart attacks?

Hon TONY RYALL: The member, of course, is referring to some triage times that are measured in hospital emergency departments. What we know is that performance across district health boards within emergency departments has improved dramatically from the time when that member opposite was the Minister and people waited in the North Shore Hospital under bright fluorescent lights on trolleys for 3 days on end.

Hon Annette King: Why is it now acceptable for 25,000 patients in one district health board alone in the last year not to be seen within the best-practice benchmark of 30 minutes at the emergency department, even though they had what he called in Opposition “quite serious conditions”?

Hon TONY RYALL: I am sure that number was a lot worse under the previous Government. What I can tell the member is that the time she is quoting measures the time that people wait until they see a doctor or a senior nurse. What this Government measures in its hospital emergency department waiting-time, which was recommended by clinicians, was how long it takes until patients are treated, discharged, or returned home. We do not think it is acceptable that patients wait days on end on hospital emergency department trolleys under bright fluorescent lights, as happened when Annette King was Minister of Health.

Hon Annette King: Why did he dump the public reporting of triage times in emergency departments—something that he called in Opposition “best-practice benchmarks”, and which are still used by Australian emergency medicine—before a suitable replacement had been developed?

Hon TONY RYALL: A suitable replacement is out there. It is called the publication of the hospital emergency department waiting-time performance against the 6-hour target to be treated. I think my response to any question from Annette King on hospital emergency department waiting times involving patients is summed up in three words: North Shore Hospital, where people waited 3 days on end under bright fluorescent lights. This Government is providing more patients with faster treatment sooner.

Hon Annette King: Why do patients have to wait until 2015 before district health boards meet his new so-called gold standard of 6 weeks’ wait for an ultrasound or a magnetic resonance imaging scan, when doctors are saying that some of the current waiting-times pose a danger to patients right now?

Hon TONY RYALL: I did read some of those comments in the media last week. What I would say is that the Government is making that information available to the public; it was not previously. It contrasts with, for example, when that member was a Minister of Health, when 1,000 patients in Christchurch were waiting more than 9 months for a magnetic imaging scan. When that member was Minister of Health, she had 500 patients in Christchurch waiting more than 1 year. When she was Minister of Health, they had patients waiting for CT scans—1,300 patients waiting more than 8 weeks. And when she was Minister of Health—

Mr SPEAKER: Order! That is quite a sufficiently long answer.

Hon Annette King: I seek leave to table a 2007 press release by Tony Ryall, claiming many hospitals—

Mr SPEAKER: Order! That press release will be freely available to members. It will still be available.

Hon Annette King: That was 2007.

Mr SPEAKER: Well, the easiest way to put it is I will put the leave. There is a 2007 press release by the Hon Tony Ryall. Is there any objection to it being tabled?

Hon Gerry Brownlee: Absolutely. I’ve got it framed on my wall!

Mr SPEAKER: There we go.

Hon Annette King: I seek leave to table a report in the New Zealand Herald of 2007—

Mr SPEAKER: No, that is—[Interruption] Order! That is definitely something that members can get back if they want.

Hon Annette King: In 2007?

Mr SPEAKER: Yes, they can.

Christchurch, Recovery—Public Service Presence in Central Business District

9. NICKY WAGNER (National—Christchurch Central) to the Minister for Canterbury Earthquake Recovery: How will the Government support the redevelopment and repopulation of the Christchurch Central Business District following the Canterbury earthquakes?

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): Yesterday with the Minister of State Services, the Hon Dr Jonathan Coleman, I confirmed that the public sector will be locating facilities in the heart of the city as an integral part of developing the Christchurch Central Recovery Plan. The Government is committed to bringing Crown agencies back into the central business district as part of the revitalisation of Christchurch. These core tenancies will provide confidence for developers and investors to undertake new building projects. The Public Service workforce will also be attractive to retailers and service providers to encourage them back into the central business district. The project builds on the ongoing work of the Christchurch Central Development Unit’s blueprint for a smart, green, productive city.

Nicky Wagner: What has been the response to the call for proposals for public sector office accommodation in the central business district?

Hon GERRY BROWNLEE: The Government Property Management Centre of Expertise and the Canterbury Earthquake Recovery Authority put out a request for proposal for the Christchurch accommodation project. In response, 24 different parties indicated they could provide office space in new or refurbished buildings in the central business district. Across 20 Government agencies, the process remains on track to select preferred suppliers in the third quarter of this year. Space is being sought for nearly 2,000 public servants. This excludes the almost 1,000 employees who will also be based in the justice centre, meaning that the city can look forward to the tenancies accommodating 3,000 civil servants.

Nicky Wagner: What are the benefits of this project for public servants?

Hon GERRY BROWNLEE: The Public Service performed superbly throughout the Canterbury earthquakes. As Canterbury continues to recover, we will move Government agencies from temporary or patched-up facilities into modern, high-quality buildings. The project aims to provide long-term, quality office accommodation solutions for Government agencies in Christchurch. It will have a commensurate effect on private sector development as well.

Education, National Standards—2012 Assessment Data

10. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Is she confident that the National Standards data being released today gives an accurate picture of student progress; if not, why not?

Hon HEKIA PARATA (Minister of Education): Tēnā koe, Mr Speaker. Yes, I am confident that the data released today provides an accurate overall representation of student achievement. This is because I trust the collective professional judgment of around 30,000 teachers working in more than 2,100 schools and teaching more than 475,000 students. In the words of Philip Harding, president of the New Zealand Principals Federation: “Value your teachers, trust your teachers, and let them do the work.”

Chris Hipkins: Did the Ministry of Education alter the results of this year’s individual term 1 student writing assessments without telling the schools and teachers of the change; if so, what was the effect of that change?

Hon HEKIA PARATA: No.

Chris Hipkins: Was the assessment data in the e-asTTle tool for this year’s term 1 writing assessment adjusted by the Ministry of Education?

Hon HEKIA PARATA: No.

Chris Hipkins: Has the Ministry of Education informed schools that it has adjusted or scaled the results of term 1 student writing assessments this year?

Hon HEKIA PARATA: The Ministry of Education has advised that the e-asTTle tool has been refreshed—

Hon Clayton Cosgrove: What does “refreshed” mean?

Hon HEKIA PARATA: —in line with the concerns raised by teachers themselves. It is a norm-referenced tool, the norm changes over time, and in response to the concerns that it was not completely referenced to the curriculum levels, the ministry took action together with the sector.

Question No. 11 to Minister

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Mr Speaker. I seek to table section 7 of the Intelligence and Security Committee Act 1996, which totally rebuts the Prime Minister’s statement that—

Mr SPEAKER: Order! We do not table bits of legislation in this Parliament.

Rt Hon Winston Peters: Well, he has not read it.

Mr SPEAKER: Order! The member will ask his question.

Government Communications Security Bureau, Review of Compliance—Investigation into Leak and Access to Electronic Records

11. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Did he discuss with David Henry the requirement for Mr Henry to see the full unedited electronic record connected with the Kitteridge report leak; if not, why not?

Rt Hon JOHN KEY (Prime Minister): And there I was thinking he was going to table the emails. No, I did not speak with Mr Henry during the proceedings of the inquiry.

Rt Hon Winston Peters: I know he wants to see them.

Mr SPEAKER: Is the member asking a supplementary question?

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My point of order is very clear. Could he possibly just answer the question rather than act like a giggly schoolboy?

Mr SPEAKER: That is a very acceptable point of order. Would the Prime Minister please address the question.

Hon Clayton Cosgrove: Why didn’t you do something about it without being called to account?

Rt Hon JOHN KEY: I did not speak—

Mr SPEAKER: Order! I am sorry to interrupt. Would the member the Hon Clayton Cosgrove stand, withdraw, and apologise.

Hon Clayton Cosgrove: I withdraw and apologise.

Rt Hon JOHN KEY: Sorry. For the third time, I did not speak with—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. Could you advise me, under the Standing Orders, when a Minister begins a question that is outside the Standing Orders is it incumbent upon the questioner or another member to raise that breach, or is it incumbent upon you to act in your own right to call the Minister to account.

Mr SPEAKER: That depends on the circumstances. In this case, because we now have such a disjunction between the question being asked and the answer, I am going to ask the right honourable Prime Minister to start the question again. [Interruption] I apologise again.

Rt Hon Winston Peters: Many a true word said in jest.

Mr SPEAKER: Order! We will return to some normality. The right honourable Prime Minister—[Interruption] The right honourable Winston Peters has been called to ask question No. 11.

Rt Hon Winston Peters: Did he discuss with David Henry the requirement for Mr Henry to see the full, unedited electronic record connected with the Kitteridge report leak; if not, why not?

Rt Hon JOHN KEY: I did not speak with Mr Henry during the proceedings of the inquiry.

Rt Hon Winston Peters: If that is the case, why was Mr Henry able to say that in respect of this inquiry he was acting with “the support of the Prime Minister”?

Rt Hon JOHN KEY: Because we set the terms of inquiry.

Rt Hon Winston Peters: When the Prime Minister set up this inquiry, did he intend for it to get to the whole truth?

Rt Hon JOHN KEY: That was certainly my aim, and I think what the inquiry has demonstrated is that a Minister has paid a very high price by resigning from his portfolio.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My question was very clear. It asked the Prime Minister whether, when he set the inquiry up, he intended to get to the whole truth, not the ramifications of what—

Mr SPEAKER: Order! The Prime Minister very adequately addressed the question. Does the member have further supplementary questions?

Rt Hon Winston Peters: I most certainly do, yes.

Mr SPEAKER: Well, the member can ask them.

Rt Hon Winston Peters: What was the Prime Minister’s response to Mr Henry when Mr Henry informed him—as he surely did, either in person or by that report—that Mr Dunne would not cooperate in releasing all of his electronic records?

Rt Hon JOHN KEY: For the purposes of clarification, at no stage have I had a discussion with Mr Henry. I have seen his report, as the member noted. Clearly, I wanted to ensure that all people who were subject to the inquiry engaged fully, and that was why my chief of staff sent out an email to senior private secretaries, ensuring that they and other people around them complied with the inquiry. That is why Mr Kibblewhite sent a report to everybody who was subject to the inquiry instructing them to comply.

Rt Hon Winston Peters: If Mr Henry felt confident that he would have had the appropriate powers from the State Services Commissioner, why did he not give Mr Henry the appropriate powers, as the Prime Minister?

Rt Hon JOHN KEY: Could the member repeat the question?

Rt Hon Winston Peters: If Mr Henry, an investigator appointed by the Prime Minister, refers specifically, on page 2, at point 7, to the confidence that he had the appropriate powers, if he had wanted them, from the State Services Commissioner, why did the Prime Minister—because he was dealing with Ministers—not give this investigator the appropriate powers to get to the full truth?

Rt Hon JOHN KEY: Because the Minister, firstly, was a support party Minister, but it would be the same, actually, probably, for any Minister. It is not my practice to go through their emails any more than it would be my practice to go through the emails of a journalist like Andrea Vance. What I do expect them to do, though, is comply with the inquiry, and that was why the instruction to comply was made quite clear. If a Minister did not comply, then that speaks for itself. But, in reality, Mr Peters does not need this. Mr Peters has the emails—so he tells us. He can just read them out.

Hon Dr Nick Smith: He’s bluffing.

Rt Hon Winston Peters: Why did the Prime Minister—oh, it is going so good now, is it not?

Mr SPEAKER: Order! Can the member just ask the supplementary question.

Rt Hon Winston Peters: Well, you know, “Nancy” over there said I was bluffing.

Mr SPEAKER: Order! Would the member please ask his question. I would be grateful if there were not the interjections coming from the right-hand side of the House.

Rt Hon Winston Peters: Supplementary question—

Hon Member: The emails are in the wine box.

Rt Hon Winston Peters: Yes. Why did the Prime Minister not give Mr Henry—[Interruption] Mr Speaker, I cannot actually ask this question with all this hysterical laughing down the back, nervous as it is.

Mr SPEAKER: I think that Mr Peters and I would both appreciate it if there was less interjection coming from the right-hand side of the House so that we can have this supplementary question asked.

Rt Hon Winston Peters: Why did the Prime Minister not give Mr Henry the power to access all of Mr Dunne’s electronic records when it became necessary for Mr Henry to access those records to get to the truth, knowing, as he did, that it was the records that the inquirer needed, not publication after he had got the information?

Rt Hon JOHN KEY: Quite simply, because Mr Henry did not ask for more powers. At the end of the day I think everyone can see for themselves that if a Minister fails to comply with an inquiry, then that has serious ramifications. It has had serious ramifications—

Grant Robertson: Well, we still don’t know who leaked, do we, John?

Rt Hon JOHN KEY: Well, Mr Peters knows, because he has got all the emails, remember? And he can read them.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Why are you allowing the Prime Minister to behave like that? [Interruption]

Mr SPEAKER: Order! It is meant to be a point of order and, therefore, it will be heard in silence, but I do not yet know what the point of order is.

Rt Hon Winston Peters: To constantly demand of a member of Parliament that he fulfil the duties that the Prime Minister is responsible for. It is not within the Standing Orders.

Mr SPEAKER: Order! The question for me to ascertain is whether the question asked by the member the Rt Hon Winston Peters was adequately addressed, and I believe it was. The member may have further supplementary questions. Has he?

Rt Hon Winston Peters: Why is the Prime Minister standing in this House and saying that he is falling short of finding out the truth, the whole truth, which he said at the start he wanted when he set the inquiry up, or is it that he is just embarrassed by what is in all five sets of electronic records and it points out his incompetence?

Rt Hon JOHN KEY: Firstly, the inquiry was set up in such a way for expediency, to make sure that it was quick and that we could get a result. We actually know that where an inquiry has gone to positions of oath, for instance, and the like, it has taken a long time, it is before the courts—and, actually, the Opposition has criticised it, remember? So, basically, this was a document that was not distributed to that many people—about 30-odd, in total. My view was that Mr Henry had wide-ranging powers. In fact, a Minister has resigned because he has failed to comply with those, so—

Grant Robertson: So did he leak the report, did he? Did he leak the report?

Rt Hon JOHN KEY: Well, he has failed to comply, and that, as I have said publicly many times, says something about Mr Dunne. But in the end it is for him to comply.

Border Control, SmartGate System—Passengers Processed and SmartGate Plus

12. JOHN HAYES (National—Wairarapa) to the Minister of Customs: What information has he received regarding the success of automated passenger processing systems at the border?

Hon MAURICE WILLIAMSON (Minister of Customs): SmartGate has gone from strength to strength since it was—

Hon Member: More good news.

Hon MAURICE WILLIAMSON: —yes, more good news for the House—first introduced about 4 years ago, when we were processing only about 40 percent of all eligible passengers. Last week we had a milestone and SmartGate is now processing 70 percent of all eligible arrivals into the country. By the end of this month we are expected to process 6 million passengers through the automated processing. It is delivering on the Government’s commitment to making it easier and faster for travellers at the border to use modern technology.

John Hayes: What is being done to further enhance border processing?

Hon MAURICE WILLIAMSON: Yesterday we began trialling at Auckland Airport a new technology called SmartGate Plus. I know the Opposition does not like this because it never had a technology project that worked, but let me tell the Opposition about it. SmartGate Plus cuts out the middle man, which is the kiosk, and now you can walk up to the gate, put your passport on the glass screen, and the door lets you through. The average processing time is now 9 seconds—9 seconds. The hundreds of people who used the trial machine yesterday at Auckland Airport had nothing but good things to say about it.

Points of Order

Questions for Oral Answer—Questions to Members

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. I am assuming we have come to the end of questions to Ministers, and I want to raise with you a decision by your office not to accept a question today, and to raise the interpretation of Standing Order 376(1) with regard to the Intelligence and Security Committee and the role of the Prime Minister.

The first point I would like to make is that there is not a requirement for the Prime Minister to chair this committee. In fact it is something that the Prime Minister can nominate another person, another member of Parliament, to do. I would like to point out to you that there is probably a similar position with the Privileges Committee, where it is currently chaired by a Minister but does not have to be chaired by a Minister. The important question, I think, for the House—and it may be something that ends up before the Standing Orders Committee for review—arises where there is a matter that is a matter of process before a select committee or where a Minister is in charge of a bill that is not a Government bill. Of course, Ministers cannot be in charge of members’ bills because any bill that is in a Minister’s name in that circumstance is a Government bill, but they can be in charge of local and private bills.

One of the important things in this House is that there is someone responsible to the House both for the substance of legislation and for the process that is being followed. In this particular case the question was a relatively simple one asking about submissions to the Intelligence and Security Committee on legislation that is currently before it. We were told by the Clerk’s Office that a question could not be lodged, but I would like to refer you to Hansard of 7 December 2010, and the comments of Mr Speaker, Dr The Rt Hon Lockwood Smith, on that occasion in relation to a bill before the very same committee that indicated that a question was being ruled out, not because it was to the Prime Minister but in fact because the bill had not got to the committee at that point. Of course, being a thorough Speaker, Dr Smith would have ruled it out on the other basis if that was available to him.

The point that I want to leave you with is a request to refer this matter to the Standing Orders Committee so that the House can have someone responsible for this committee, for the Privileges Committee, for private bills, and for local bills where the Minister happens to be someone who is currently in charge of them.

Mr SPEAKER: I thank the member. I took some advice on this matter prior to 2 o’clock. Where the Prime Minister chairs a committee, a question relating to the business before that committee must be put down as a question to a Minister. The Prime Minister chairs the committee in his capacity as the Prime Minister and answers to the House in that capacity.

Standing Order 376 provides for questions to members. It is quite clear that questions may be put to members not being a Minister, and, in fact, also not being the Speaker. There is not a special category for questions to chairpersons. Questions to chairpersons are a subset of questions to Ministers. Where a Minister chairs a committee, a question relating to a matter for which the committee has charge must be put down as a question to a Minister. The fact that legislation may provide for Ministers and members to be acting in their capacity as a member does not change Standing Order 376; it merely establishes, for the avoidance of doubt, that something has to be done as if it were being done for a parliamentary purpose. This does not alter ministerial accountability to the House. [Interruption] Order! But I accept the point that the member makes. I will certainly have a look at the Hansard to which the member has referred me. I do acknowledge that if a matter like this needs to be considered, the appropriate place for it to be considered is before the Standing Orders Committee, which now has other matters before it, following a decision last week.

Urgent Debates

Hon Peter Dunne—Report on Investigation of Review of Compliance Leak and Resignation as Minister

Mr SPEAKER: Honourable members, I have received letters from David Shearer and the Rt Hon Winston Peters seeking to debate under Standing Order 386 the resignation of the Hon Peter Dunne and the release of the report on the inquiry into the unauthorised release of information relating to the Government Communications Security Bureau compliance review. Both letters relate to particular cases of recent occurrence involving ministerial responsibility. The two cases are interrelated and members will be able to refer to the inquiry report in debating the resignation of the Minister. In these circumstances, the application received first by me is the one to take priority. Mr Shearer’s letter was received first, and I therefore accept his application. I call on the Leader of the Opposition to move that the House take note of an urgent matter of public importance.

DAVID SHEARER (Leader of the Opposition): I move, That the House take note of a matter of urgent public importance. John Key must put aside his own self-interest and finish the job that he started. The public deserves an answer to the question that John Key actually asked himself: who leaked the Kitteridge report? Because, frankly, we still do not know. A Minister resigned last week and we do not know why yet. The stakes for John Key are very high, and we need to get to the truth of the matter.

The leaking of sensitive documents is serious enough, but, actually, this goes to the heart of the Government’s stability. How much longer can this Government continue to be propped up by someone who has been accused, and looks to be guilty, of leaking the report, and also by somebody who is currently before the courts?

Hon John Banks: I raise a point of order, Mr Speaker. Is there not a well-known Standing Order about matters that are before the courts and members who are before the courts? Otherwise, we will talk about the money-laundering account in New York.

The ASSISTANT SPEAKER (H V Ross Robertson): Order! The member will resume his seat. It is a debatable issue.

Hon John Banks: I raise a point of order, Mr Speaker. Is there not a long-held Standing Order that says that matters before the courts cannot be debated in this Parliament by members who are associated with a matter before the court?

Hon Trevor Mallard: There is a longstanding Standing Order about debating matters that are before the court. There is a difference between debating a matter and going to the question of judgment involved and referring to that fact. The member shares my unfortunate—I am an unfortunate predecessor. There was plenty of reference to the McCready matter when I was appearing before the courts. The reason for not referring to it might be that it might be seen that people were moving on a question of judgment. I hate referring to Mr Terris for a ruling, but in this case Speaker’s ruling 31/3 states: “There are no grounds for ruling against a member making a statement that there is a legal action in existence, but the member should refrain from giving emphasis to the likely outcome.” I think that was actually the Terris drunk-driving case, but I think the ruling is a good one.

The ASSISTANT SPEAKER (H V Ross Robertson): I thank the honourable member for that. It is not out of order to refer to the fact that a case is before the courts, but it is out of order to refer to the details of the case.

DAVID SHEARER: I acknowledge the member for bringing that to the House’s attention. [Interruption]

Hon John Banks: I raise a point of order, Mr Speaker.

The ASSISTANT SPEAKER (H V Ross Robertson): Order! We have a point of order on the floor.

Hon John Banks: It is the money-laundering—

The ASSISTANT SPEAKER (H V Ross Robertson): Order! That is a frivolous interjection designed to break up a speech. The member has his first yellow card.

DAVID SHEARER: Let us look at the facts. David Henry’s report threw up three suspects. Two of those suspects were cleared and one, Peter Dunne, remained. Peter Dunne resigned as a Minister. Peter Dunne has told this Parliament and the New Zealand public that he had nothing to do with the leaking of the Kitteridge report. In the Finance and Expenditure Committee, Peter Dunne could not have been clearer. When he was asked directly whether he leaked the report, he said categorically no.

Here is the problem for Mr Key: the Prime Minister’s own investigation leaves Mr Dunne as the only suspect. That is why we need an investigation. This matter raises the most serious of questions. Did Peter Dunne leak the sensitive report? Has he lied to the New Zealand public and this House? I do not know. I do not know the answer to that; neither do the people of New Zealand. It cannot simply rest there. Mr Key cannot simply walk away from this report and not get to the bottom of what is actually going on here.

Peter Dunne is the only one who had the report and who exchanged that quantity of emails with a political reporter. He did that on a ministerial computer, which is subject to the Official Information Act. Peter Dunne is one of our most experienced Ministers in this Government, and one of the longest-serving MPs in this House. He knows that he is covered by the Official Information Act. He knows that the emails could have been requested by any member of the public and any member of the media. I am sure that most of the media agencies have an Official Information Act request in right now to see those emails. Mr Dunne went in with his eyes wide open to this, and now he claims that the emails might clear him, but he will not show them, certainly not to David Henry, who could have seen them confidentially.

He will not show them to Mr Key, who is the only man in New Zealand who appears to trust Peter Dunne—or we suppose he does, because yesterday the Prime Minister kicked him off the Intelligence and Security Committee. Mr Key said that that was because he needed to be a Minister. In fact, that is not true. If you look at the Act, that is simply not true. The real reason is that Mr Key cannot actually trust him to sit on that committee, where we listen to confidential information. But he will trust him to prop up his Government—he will trust him to prop up his Government.

We have a Government that is now propped up by a rorter of electoral law and by somebody who is leaking. That is a joke, and New Zealand knows it. Mr Key knows it as well, and it is why Mr Key has simply walked right away from that report and its investigation. His only concern is to prop up Mr Dunne and to prop up John Banks. That is where the matter stops and starts for him.

If you look through that lens, all of a sudden everything becomes very, very clear. This is not the first time that Mr Key has done this. Can anybody remember the teapot tapes? That was when John Key desperately called in the police in the middle of the teapot tapes saga to get to the bottom of what was going on. It was because of John Key that search warrants—search warrants—were issued to search the contents of four media agencies. That is how big a defender of the media Mr Key is. He did not think twice when calling in the police to give him the sort of political protection that he needed. Back then he claimed that that was a matter of principle, but where is that sense of principle today? Where is that responsibility to get to the truth? It is nowhere to be seen, and it is a complete and utter double standard.

The public deserves answers, and this House should be left in no doubt that this is an issue that is as serious as it gets. It involves one of the Government’s support parties and one of John Key’s most senior and trusted members. The report was considered so sensitive that it was held in a highly restricted electronic system within the Government Communications Security Bureau. No electronic copies were distributed; just 35 copies of the report were circulated. The report was a matter of our national security—the most sensitive information we have. Two months ago—just 2 months ago—John Key agreed. Two months ago, leaking the report was so serious it demanded an inquiry. Two months ago John Key said that these leaks “undermine the integrity of the entire Public Service.” Two months ago he said that he had a responsibility to get to the bottom of it if he could.

Today all of that has mysteriously changed. Today he is trying to spin it that it is no big deal. Today he is trying to say that leaking it was nothing more than transgressing or breaking an embargo. Today he does not want to get to know about it. Today John Key will not go the extra step to finish the job. The truth behind that is very, very simple: it has become a matter of political expedience. All we want is to get to the bottom of it. We do not need to go as far as the teapot tapes and bring in the police; we just want to know the truth. We want him to get to the bottom of what went on, and he will not do that because his support partner now is in the gun and the stability of his Government is at stake. His own political skin is on the line. Once again we are seeing his self-interest being put above everything else.

Propping up John Banks and Peter Dunne is more important than getting to the truth. For John Key, when it comes to Peter Dunne and John Banks, it is better the devil beast you know than the devil beast you do not know. I can tell you that we had the finger pointed at us a few weeks ago, and all you need to do is look behind you to see just how stable that Government is. John Key needs Peter Dunne to prop him up. Peter Dunne has the casting vote that put Mighty River Power, Meridian, and Genesis on the block. John Key needs Peter Dunne to pass the Skycity deal—that sleazy deal—because all he needs is one vote, and that is coming from Peter Dunne.

That is not good enough. New Zealanders expect much more from their Prime Minister than that. He promised higher standards, but, instead, we are being dragged from one scandal to another to another. He will not even look at the police report that refers to John Banks because he does not want to know. We have to ask the questions, and he says he does not know because he has not read the report, because he does not want to know what is actually in that report. He knows that as soon as he does, he will have to fire John Banks as well.

Turning a blind eye is not leadership. We saw it again in the response to the MMP review. Let us remember what happened to that review. That review was meant to be about ensuring that people who voted for MMP got a chance to improve the system, but Judith Collins turned around and said: “No, we don’t want to hear about that.”, and absolutely cancelled it. And why? Because the Government was standing up and protecting John Banks and Peter Dunne—that is the reason why. It was not because it wanted to improve the system; it had to prop up its mates. If you want to move on to more scandal, Skycity was given an even better deal—better access to Ministers than any other tenderer in that deal. That is what I call a sleazy deal. Even Stephen Franks, a former National Party candidate, believe it or not—he actually stood against Grant Robertson—

Grant Robertson: He lost.

DAVID SHEARER: —and he lost comprehensively—thinks it is wrong to sell a 35-year exemption under the law. John Key had invested so much into that deal that he had to get something out of it no matter how much it cost New Zealanders.

The Government is certainly concerned only with its own survival. New Zealanders deserve much more than that from this Government, and that is why we need to get to the bottom of what went on here. It is not good enough simply to walk away from it and wipe our hands of it. We need to know what happened. We need to know the truth, and I am tired of John Key standing up and ignoring what he needs to face up to—absolutely ignoring it.

This Government is propped up by two phoneys—two phoneys. That man needs to face up and tell New Zealanders the truth. Thank you.

Hon BILL ENGLISH (Deputy Prime Minister): Last week it was Labour being led by the nose by the Greens, and this week it is Labour being led by the nose by New Zealand First. There is no doubt about that.

The previous speech, by David Shearer, would be much more credible if the Leader of the Opposition showed the same enthusiasm for the investigation into the leak of Ministry of Foreign Affairs and Trade material to Phil Goff. I did not hear him say that Prime Minister John Key has to get to the bottom of what happened with the leak of Ministry of Foreign Affairs and Trade material to Phil Goff. I did not hear him say that Prime Minister John Key should be going through the emails and the phone records of Phil Goff to find out how a leak to him from a public servant occurred. I did not hear the Leader of the Opposition pleading with the Government to get to the bottom of that investigation, which, of course, those members characterised at the time as a witch-hunt against those who want to bring transparency to the Government. Well, of course, when they give that speech, then I will believe it.

The other reason we would find that speech credible would be if the Leader of the Opposition had addressed most of it to the leader of New Zealand First and said something like this: “We want to get to the bottom of this, Mr Peters. Give us the emails.” After all, Labour is in full-on courting mode, so why did David Shearer not take this opportunity in the House to ask Winston Peters for the emails that Winston Peters says he holds?

The ASSISTANT SPEAKER (H V Ross Robertson): Order! Order! Mr English is making a hard-hitting speech, and some interjection can be expected, but not so much that it drowns out the speaker. The Speaker will not allow that.

Hon BILL ENGLISH: None of the interjections were a satisfactory answer to that question. Why does Winston Peters not give the Labour Party the emails so that David Shearer then knows what happened? Mr Peters might take the opportunity to table them when he speaks in this debate. He said he has got them—

Hon Member: He’s got them.

Hon Member: Look at the envelope.

Hon BILL ENGLISH: He is opening the envelope as we speak. He is opening the envelope; the emails are coming. Would that not be a fine thing?

What is going on in the Opposition is the manoeuvring between New Zealand First and the Greens. That is really what is going on. The Labour Party is sitting there with the Greens being a much more effective Opposition. They bared their teeth and it was a snarl, not a smile. We now know the true nature of what the Greens would be like in any kind of Government. Mr Peters has spied this growing relationship, and he has realised that he needs to reposition so that he could be a potential partner in 2024 for the incoming Labour Government. So he has decided that the way to reposition for 2024—

Hon John Banks: 2024?

Hon BILL ENGLISH: —he will be only 85—is to look tough on security. And, actually, he is being tougher on security, much more so than what used to be the mainstream Labour Party. Winston Peters has addressed the Government Communications Security Bureau legislation in a much more serious and considered manner than the Labour Party has. The Labour Party members have just decided that whatever it is, it is a Government bill, so it will vote against it. Even a bitter partisan like Helen Clark did not do that in Opposition. Labour considered national security issues seriously. This Labour Party is incapable of doing so. But that is a bit of a side issue that will play itself out over the next 6 months.

Mr Peters has decided, on the basis of a whim last week, to pretend that he knows what happened with the Henry inquiry and that he has the emails, but he cannot produce them. Now he has pushed the Labour Party into putting in a privileges letter. Well, is the Labour Party willing to answer the question the media are now asking? Does it really want a committee of Parliament to fashion a legal or parliamentary procedure that would allow anyone who leaks on the Government, including MPs, to have their whole phone and email correspondence wide open to public inquiry? I think Labour Party members this week are trying to get off the hook. They rushed at it on Sunday, led by the nose by Winston, got the privileges letter in, and now they are going to find that their friends in the media are turning on them, because the media do not want the emails of the Fairfax journalist in front of the Privileges Committee. They have made it absolutely clear that they will use every legal means possible to protect their sources and their journalist, and we would not expect anything else.

You would think that a media-savvy Labour Party would know that being led by the nose by Mr Peters takes it to the same place as him. He is always at loggerheads with the media. That is his business. That is his brand. But the Labour Party members are just realising this afternoon, after reading the Dominion Post editorial, that they are headed for a titanic clash with the media.

The next issue is this: is the Labour Party in Opposition indicating that when in Government it would have the legal or parliamentary procedure to inquire into the personal communications of every member of Parliament if they are under suspicion of a leak? I invite—

Grant Robertson: What about a Minister?

Hon BILL ENGLISH: Well, he is no longer a Minister—that is the point. He is no longer a Minister.

Hon Phil Goff: He was when he leaked it.

Hon BILL ENGLISH: Peter Dunne is a member of Parliament. OK. So this is the proposition of the Labour Party to the media now: any journalist who corresponds with any Minister in any Labour Government needs to know that their emails and voice messages will be open to scrutiny by the Prime Minister whenever they feel like it. That is the Labour Party proposition to the media. Well, let us just watch over the next couple of weeks. Those members might shout it in here, but out there they are going to be working very hard to get off that hook, because their relationship with the media is now at stake, and when you are in Opposition you need to be able to communicate with the media. You need to have free flow of information. You do in Government too, actually.

Hon John Banks: You need to do a lot of leaking.

Hon BILL ENGLISH: You need to do a lot of leaking to be in Opposition. The Opposition members are now saying they want a parliamentary legal procedure so that if they get some leak and make it to the media, the Prime Minister must get to the bottom of it. He must get their emails—from Trevor Mallard, from Chris Hipkins, from Kris Faafoi—

Hon Phil Goff: You don’t have to do that. You put Peter Dunne on oath.

Hon BILL ENGLISH: —from Phil Goff—

Hon Phil Goff: You put MFAT on oath. You won’t put Peter Dunne on oath.

Hon BILL ENGLISH: Mr Goff could save the Government and the taxpayer a lot of time and money by handing over—

Hon Phil Goff: Double standards. Put Peter Dunne on oath.

Hon BILL ENGLISH: Here is a challenge for Mr Goff. Mr Goff, hand over your emails and your phone records so that we can get to the bottom of the leak from the Ministry of Foreign Affairs and Trade to the Labour Party. I invite Labour to get up in this debate and table in the House Phil Goff’s emails, Phil Goff’s phone records—

Hon John Banks: And the bank account from New York.

Hon BILL ENGLISH: —and the bank account from New York. Let us get to the bottom of that. What a great idea. [Interruption] That is a very good idea.

The ASSISTANT SPEAKER (H V Ross Robertson): Order! Can I just remind members that interjections are to be relevant and reasonable, but a running commentary is out of order. If members want to speak they can do so when the opportunity arises.

Grant Robertson: I raise a point of order, Mr Speaker. I appreciate that. I guess that on this side of the House our feeling is that if Mr English is simply going to make things up continually through his speech, it is very difficult for us to be able to restrain ourselves.

The ASSISTANT SPEAKER (H V Ross Robertson): Order! Understood.

Hon BILL ENGLISH: Here is the opportunity for the Labour Party to back up the credibility of its leader: one, ask Winston Peters for the emails; two, table Phil Goff’s emails and phone records from the period during which he received leaks from the Ministry of Foreign Affairs and Trade; and, three, table David Shearer’s bank account, because we want to get to the bottom of what was actually a substantial undeclared asset. It is of parliamentary interest. It is of parliamentary interest. These are the three things we want the Labour Party to do: ask Winston for the emails, table the emails and phone records from Phil Goff, and table David Shearer’s bank account. Those are all items of personal information relevant to this leak, or another leak, or a breach of parliamentary requirements about the members’ register of interests.

That all sounds pretty simple to me, and we look forward to those things happening this afternoon. Otherwise we would have to come to the conclusion that Labour was stampeded into its privileges complaint by Winston Peters and by the kind of shallow advice that Grant Robertson gives his leader, which is undermining his leader, and which is pitching him at his worst, not his best. That kind of shallow advice has led the Labour Party to now be on the hook as the people who are threatening Parliament and the media with powers of intervention into the personal communications of MPs that we have simply never had before.

The facts are pretty simple. There was an inquiry into a leak and a Minister subject to that inquiry has resigned. The Prime Minister has done his job, and now we look forward to the Labour Party doing its job and producing the documents that we have invited it to table.

The ASSISTANT SPEAKER (H V Ross Robertson): The member called?

Metiria Turei: Yes, Mr Assistant Speaker.

The ASSISTANT SPEAKER (H V Ross Robertson): I could not hear, actually. There was so much noise.

METIRIA TUREI (Co-Leader—Green): That is all right, Mr Assistant Speaker. Tēnā koe. The question is, and it has been said before, how low John Key will stoop to keep this little Government cobbled together. That is what we are seeing happen with this scandal around Peter Dunne. John Key is desperate to cling on to power and to keep people inside his tent, despite the serious concerns about their integrity. This is certainly not the first example of this. It was certainly the case in the previous National Government, and it is certainly the case in this one, that John Key will do anything to cling on to power, even if it puts the public at risk and there are serious questions of integrity for his Ministers.

John Key needs Peter Dunne to keep supporting his unstable and unethical Government. He needs Peter Dunne for bills like the Skycity convention centre dirty deal. He needs Peter Dunne’s vote to get that thing through. He knows that it is unethical. He knows that the New Zealand public are opposed to it. He knows it will cause harm to hundreds of New Zealanders and to small businesses and community organisations, but he is desperate to keep alive this $400 million monument to John Key. He will do anything, including keeping Peter Dunne on side, in order to see that it proceeds. That is a Prime Minister who has no understanding of the effects of his actions on ordinary New Zealanders in their everyday lives.

John Key has said that Mr Dunne was replaced on the Intelligence and Security Committee because he is no longer a Minister. We would have seen that on television, with John Key saying that it did not really have anything to do with the issue of trust; it was to do with the issue of no longer being a Minister. That is just not the truth—that is just not the case. In fact, for membership on the Intelligence and Security Committee it is required that every person who nominates someone for membership of this committee, this particular Intelligence and Security Committee, “shall have regard to the requirements of security”—shall have regard to the requirements of security.

Peter Dunne has not been tossed off this committee because he is no longer a Minister; he has been thrown off this committee because he is not trusted by this Prime Minister. The Prime Minister’s job is to nominate someone for this committee. He has removed that nomination because Peter Dunne cannot be trusted with the security that is required for this committee. That is a clear implication from John Key, the Prime Minister, that he does not trust Peter Dunne any more. Despite that, and despite that clear statement, he will keep him on in some form in the agreement that National has with United Future, in order to be able to keep Peter Dunne’s vote—despite the fact that he no longer has any trust in Peter Dunne.

The Prime Minister has to be up front and honest with the New Zealand public. That is his job. He has primary responsibility to the well-being of the New Zealand public—not to another person in his Cabinet, not even to his own party, but primarily to the people of New Zealand—and John Key is failing in that duty.

It is interesting, actually, when you think about when that rule did change, because we have other members on that committee—the public may not know this—who are not Ministers either. So, for example, Russel Norman and David Shearer, who are not Ministers, are on that committee. They are trusted with the requirements of security, and they will continue to be members of that committee because they are trustworthy. Peter Dunne has been thrown off the committee by the Prime Minister because the Prime Minister no longer trusts him.

I want to just raise an issue that has not been discussed, actually, very widely at all in the debate around Peter Dunne and his actions and his reasons for resigning as a Minister. Peter Dunne has been very clear that he himself cannot explain his behaviour or why it is that he is still withholding information from the Henry inquiry. As a result, there has been a lot of speculation about this being a salacious issue, about this being an infatuation, as it has been described. The person who has no voice in this debate—the person who is subject to all of this rumour and innuendo—is the journalist involved. That journalist cannot talk about her sources. She is unable to defend herself against the accusations and innuendo that are being made against her. We have people like Michelle Boag, a National Party toady, making defamatory statements about the journalist on television—

Rt Hon Winston Peters: And me.

METIRIA TUREI: Well, Winston Peters does have a voice in this debate, so I would not consider Winston Peters to be a victim of what is going on here, but the journalist, I think, is a victim. Because the journalist is a woman and because the journalist is young, that means that there has been a deliberate inference that somehow that journalist has behaved unethically in the relationships that she has with members of this House. That accusation must be put down. It is not the case that this innuendo is accurate. This journalist has a real problem now, because her reputation is at stake and she has very little opportunity to defend herself against the accusation. I would implore the rest of the media who are dealing with this issue to bear in mind what is happening here with one of their own, and that this would not be acceptable to them if it was them or one of their own in their own media.

Hon Gerry Brownlee: What about the Privileges Committee?

METIRIA TUREI: Mr Brownlee talks about the Privileges Committee. The Privileges Committee is, quite rightly, investigating this issue. If there is an issue of a breach of the Standing Orders, then absolutely the Privileges Committee should be investigating it. That does not give the journalist involved in this case a genuine voice to defend herself against the salacious and defamatory comments, particularly from the National side, about her behaviour. She does not have an option here.

In essence, this is a very clear story. John Key is desperate to keep his Government going because he has all sorts of legislation that he is desperate to get through, on the basis of two votes from two MPs, who have both had their integrity questioned and who are both teetering, as I have said earlier, on the edge of political oblivion. There is John Banks, as a result of allegations that he lied about his donations return—he is currently in court over that issue—and, of course, now Peter Dunne, who has resigned as a Minister but the policy agreement that he made, in order for the Government to continue, does continue. So he will keep on supporting this Government, even though John Key has effectively said that he no longer trusts Peter Dunne with any matters of security or consideration.

This Government is unstable, it is unethical, and it relies on the votes of disgraced men. Just like the last days of the Shipley Government—for those who are here and remember those times—John Key is having to cobble together another National Party coalition of the disgraced. Thank you.

Rt Hon WINSTON PETERS (Leader—NZ First): There is a sword of Damocles that hangs over the Prime Minister and the head of this Government. Those members seem to have learnt nothing. Whether it was back when we had the Māori loans affair, the BNZ, the wine-box inquiry, the tea party tapes—they sit there and scream out “Where’s your evidence?”, and when it is all over, they are the ones who have been severely damaged by their behaviour. It puts you in mind of Walter Scott’s famous quote, when he said: “O, what a tangled web we weave, When we first practise to deceive!”. It had all the marks of a whodunit. And if Dunne had not done it, who had?

Oh, how things have changed. Back just before the time he ordered the inquiry, Mr Key was the anti-politician—the fellow who could be trusted because he did not behave like the rest of us. He had standards that were high, he said. He was someone above the ruck of politics. Of course, he thought that matters like this—proven when he sent the police in after the teapot tapes—were things that were justified from a Government and from the Prime Minister of a country. Remember that? That was 2 months ago. Back then he was going to make sure that no one undermined the integrity of the entire Public Service. How laudable was that? He was going to get to the proverbial bottom of it. Now he is condemned by his own words. Now he can parachute out of the bottom of a snake and still have some room.

It looks like John Key never had any intention of finding out what really happened. There was no public servant, alas, to carry the can, like they did over Novopay. Three Ministers were responsible but, oh no, they found a civil servant. And the meat shipments left on the wharf in China—has any Minister been called to account? No.

The finger of suspicion came on Mr Dunne. The Prime Minister had a dual responsibility over this matter. He is the Minister responsible for security. He is the Minister above all Ministers responsible for the actions of those who are his Ministers. The leak of the Kitteridge report was not an isolated incident. That demonstrates how incompetent this Prime Minister is, and how irresponsible his behaviour is. This was not an isolated incident. There was the leak about morale at the Government Communications Security Bureau, there was the leak about the new head of the bureau, there were leaks about the briefing on the bureau, there was a leak about the security of the Intelligence and Security Committee itself, and there were other leaks. The secretary of the committee warned the members in writing to shut up. All five members were now under suspicion. But one was responsible. There are five sets of electronic records, Mr Key, and we want to see the complete package. There are five sets of electronic records—

Hon John Banks: Well, table them—table them.

Rt Hon WINSTON PETERS: —and it is the responsibility, Mr Banks, of your Prime Minister to show the country what they mean. There are over five leaks with one department alone, the Government Communications Security Bureau. And Mr Banks has the temerity to shout out to a backbench MP: “You table them.” Well, I can see why someone who would forget 42 out of 42 texts would say that. But a rational, sane person would not say that—that the responsibility lay with a backbench MP. No, Prime Minister, the reason why you have on your CV the Prime Minister’s job is that with the job and the status and the office goes a terrible thing called responsibility, transparency, openness, and honesty.

You know, national security is the first duty of any and every MP. What are our allies thinking? The member Peter Dunne broke the terms of his warrant when he was a Minister. He leaked security matters to a journalist. This was no stand over matters of principle. This was no stand to make the world a better and safer place, or to make New Zealand a better and safer place. Maybe years of looking at the tax tables made him flip. Maybe they caused him to want to get some excitement into his life. Whatever it is—it may be a human explanation—it is not what the nation needs to know, which is what was leaked to whom and when, and it was far wider than the Kitteridge report was looking into. He is given life, though, simply because National needs his vote to sell off our assets, and he let the shonky casino deal go ahead and Mighty River Power—

Hon John Banks: Ha, ha!

Rt Hon WINSTON PETERS: No, no, Mr Banks. I have seen that nervous laugh, and it gives me enormous confidence that one day I will wipe it off your face.

You know, yesterday Prime News at 5.30 carried Fairfax’s outing of Mr Dunne, with information that I knew at the time that I said in the select committee: “Mr Dunne, you’re the leak, aren’t you?”.

Hon John Banks: How did you know that?

Rt Hon WINSTON PETERS: Oh, great question. My job is to be good at my job. My job, and my colleagues’ job—everybody who votes for New Zealand First knows one thing profoundly: we will keep the system honest. That is why they are coming out in their droves, because New Zealand First keeps the system honest. This is just one more example. I know that members would love to know how we know. Well, you know, I suppose we would all like to know that, but we cannot divulge the source.

Hon John Banks: What about Owen Glenn’s cheque?

Rt Hon WINSTON PETERS: That was not behaving illegally. That is the difference over here. That is the difference over here.

Why did David Henry stop investigating the leak of the Kitteridge report? It is all on page 2 of his report. “I’ve got the powers in the State Services Commission.”, he says. “I’ve got the support of the Prime Minister. I’ve got a Minister out of Cabinet who is not a civil servant. I remain of the view that I need to have full access to all 86 emails.” It is all there.

What is the National Party’s devious and bound-to-fail excuse? “Oh, all of a sudden we cannot entertain any breach of privacy issues.” Mr Banks and Mr Brownlee, where in the report from Mr Henry has he disclosed the 44 emails already seen by him, highly edited as they are? There is no privacy issue. I personally am not concerned about the emails from Andrea Vance; I am concerned about the far more than 86 emails that were on this issue and others as well.

Some members here should learn how to do their research and homework. Perhaps if they knew a few people around town, they might find out what is going on downtown. Let us demolish the argument that there is a privacy issue. Mr Henry has not given over the 44 emails. There goes the excuse. Why did Mr Henry not get the powers to see all the emails and ensure a thorough and complete investigation? The Prime Minister was asked today: “When you set up the inquiry, did you want to get at the full truth?”. “Yes.”, he said. Really? Well, he is exposed by his own words, and shibboleths and deceit. Why, for example, is this reeking of double deals? Had it been a civil servant, it would have been not just demotion—not just demotion—but demotion and then dismissal instantly. But here we have got Mr Dunne—he stays on. The whole affair is smelling like a giant cover-up.

The Prime Minister goes on to tell the media yesterday at a press conference that Mr Dunne has been removed from the Intelligence and Security Committee because he is no longer a Minister. Here is the Intelligence and Security Committee Act 1996. This is section 7 of the Act, and it shows that after 24 hours the Prime Minister still cannot tell the truth. The media might fall for it, but we did not. Peter Dunne is entitled, as an MP, to be on that committee, so why did you get up in front of the press and say that, when you knew you had to be not telling what were the facts?

Every day there is more obfuscation and evasion. And let me tell you this: this is not a case of whether New Zealand First or an MP in New Zealand First should do the Prime Minister’s job, but we are going to carry on until this cover-up is totally exposed for what it is. It has one valuable asset for New Zealand, apart from correcting our national security. Do you know what it is? People are going to find over the ensuing days and weeks exactly what the Prime Minister of their country, alas, is like.

Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery): Can I say at the outset of my comments that I have known Peter Dunne for the better part of almost 50 years. I know him to be an honourable person, and I accept that when he says that he has had an inexplicable moment or moments in his life that have led to this, he does so from a genuine perspective. It gives me no particular pleasure to speak in this debate, but I think when you listen to the speech that we just heard from Winston Peters, and listen to the speech of the speaker from the Green Party, Metiria Turei, and, for that matter, the small bits that I picked up from the leader of the Labour Party, there seems to be a desire here to suggest that there is something out there that the public has not been told about.

I want to make it very clear, very clear to this House, that there was absolutely nothing—absolutely nothing—in the speech by Winston Peters today that is not already in the public arena. In the 1980s that sort of speech would have been a sensation, because the reach of the media and the reach of the public to information were so much limited. But now, of course, all of that out there, brought in to New Zealand First as if it was some pile of special information delivered to Winston Peters, because he is the only man in Parliament who can make something of it, is actually quite plain and quite normal and quite well known by everyone.

I say to Winston Peters’ party members that the leader of their party might like to say that New Zealand First members make a habit in this House of keeping the place honest, but they also make a habit of not sticking around too long. In the time that New Zealand First has been here, it has burnt off almost as many MPs as any other party in here during that time, and there is no reason to believe that the situation next year will be any different.

A couple of things here, I think, are pretty relevant. Firstly, when Mr Henry’s report was released last week, the last paragraph in that report really says it all. He makes the point that he could not continue the investigation because Mr Dunne did not release all of the email traffic that he would have liked to look at. But he certainly leaves it very, very clear that there is nothing else to investigate.

So what this comes down to is a very, very simple matter. Firstly, Mr Dunne has resigned, because the Prime Minister made it clear that if he did not release those emails, there was no choice but for him to resign. So then this mad case being pursued by the Greens, that he should have remained on the Intelligence and Security Committee, falls apart because when one has lost the confidence of the Prime Minister, there is certainly no place on the country’s most important security committee.

The issue then becomes, when do the emails between Mr Dunne and the reporter become public and, indeed, should they become public? The question for the Labour Party is whether the Labour Party will insist, should there be a Privileges Committee hearing—and I think there is a big doubt about whether there should be, in the first place—that Miss Vance’s emails are released to the committee and become part of the record of the committee. If that is the case, then the rules for operation in this House and the long-held desire by all members to keep private communications between them as elected members and constituents and other people who come with information is long gone.

There is no doubt about it: the only way that Mr Shearer escaped the axe earlier this year over his failure to disclose his very substantial secret bank account was the fact that he was able to simply take a position, knowing that no one could investigate any information that he might have had or been in possession of that would have meant he had made a very, very big mistake. I simply think we need to understand that there is a lot more at stake here than just the situation relating to a Minister who got himself into bad circumstances and has had to resign as a consequence.

Hon TREVOR MALLARD (Labour—Hutt South): I want to make a few brief comments on this matter. The first one I want to make is that we still do not know for sure who leaked this document. The next point I would like to make is that if this inquiry was properly set up, or, in fact—I want to say—if Mr Henry did his job properly, we would know. The Prime Minister could have asked the State Services Commissioner to set up this inquiry. At that point the inquirer would have effectively used the Commissions of Inquiry Act and the powers thereof in order to take evidence under oath. The Prime Minister chose not to do that. But even then, Mr Henry could have come back to the Prime Minister and asked the Prime Minister for extra powers and for it to be properly set up, so I do want to somewhat criticise Mr Henry for his approach.

The other thing that Mr Henry could have done, because these were emails to and from a Minister, is to ask Mr Dunne to release them under the Official Information Act. These documents—these electronic documents—if there is anything to do with his role as a Minister within them, are subject to the Official Information Act, and most of us are pretty sure that they will eventually come out. In fact, I would be very surprised if there were not half a dozen new agencies and a number of members of Parliament who have already asked Ministerial Services for these emails under the Official Information Act.

Hon Gerry Brownlee: All traffic?

Hon TREVOR MALLARD: Well, if a journalist writes to a Minister by email, then that journalist knows that that email is subject to the Official Information Act. If someone went to Miss Vance’s in-box and took an email out of there, that would be wrong. But something that is received by a Minister, and, more important, the messages that were sent by a Minister are also subject to the Official Information Act, and eventually they will come out.

I want to contrast that with the case that that Prime Minister keeps on bringing up to do with my colleague the Hon Phil Goff. Phil Goff received documents that had been leaked. They were sent or given to him. Mr Goff has made it clear that if the Prime Minister puts Dunne under oath, then Mr Goff will release all relevant emails—he will release all relevant emails—and give access to ensuring that all relevant emails are released. But what do I hear from the Prime Minister? Not a word. Not a word from the Prime Minister. The Prime Minister did not have—we are not allowed to say “balls”, are we? He did not have the—

Grant Robertson: Intestinal fortitude.

Hon TREVOR MALLARD: —we are not allowed to say that either—spine to stand up in this debate. He did not have the spine to stand up in this debate and to try to justify his position.

Hon Chester Borrows: I raise a point of order, Mr Speaker. The member used a term to describe the Prime Minister that is unparliamentary.

Mr DEPUTY SPEAKER: The member made a lot of insinuations and I guess the extension of those is that they were unparliamentary, but he kind of, I think, stopped short. When we are talking about skeletal matters, if that is what the member was referring to, that has been used in this House before. I am not sure whether that makes it right or wrong. I would certainly prefer not to see it used.

Hon Gerry Brownlee: Mr Speaker.

Mr DEPUTY SPEAKER: Did you want to help, Mr Brownlee?

Hon Gerry Brownlee: I think you have quite rightly identified the bound between what might have been totally offensive and otherwise. I understand the case that you were speaking of before. It was where a former Prime Minister accused the Leader of the Opposition of being a spine looking for a chill to run up—

Hon Members: A shiver.

Hon Gerry Brownlee: —a shiver to run up. It is the sort of description that could be offered to the current Leader of the Opposition.

Mr DEPUTY SPEAKER: Let us just park it all and say let us keep to the debate, all right?

Hon TREVOR MALLARD: Helen Clark, Jim Bolger, Rob Muldoon, and David Lange in this circumstance would be on their feet and defending their position, and I want to know why John Key is not defending his, but I think I do know. I think I do. It is because he will not defend the indefensible. There is a stink coming from the cross benches. There is a stink coming from over there. There is something rotten. There is Banks and there is Dunne, and they are the ones who are holding this Government together: the man who is in and out of the dock regularly for getting brown paper bags full of money during his mayoral campaign, and Peter Dunne, who will not tell the truth in these matters. This Government is being held together by a pair of individuals who stink and should not be in this Parliament.

LOUISE UPSTON (National—Taupō): It is not really a pleasure to speak in this debate, and I have to say I find quite detestable some of the language that has been used and the personal attacks that have occurred.

The Labour Party is really kind of indicating quite a significant turning point in terms of the access to personal information of MPs, of journalists, and of a range of people who currently have some protections. I was interested in the Green Party contribution, because the Green Party speaker was quite concerned about this journalist and the vulnerability of this particular reporter. Perhaps that speaker had not been talking to their friends in the Labour Party about exactly what this privileges complaint will lead to. There will be no protection for that vulnerable reporter—there will be absolutely no protection for that reporter—because of what the Labour Party wants to do with laying a privileges complaint. So all of a sudden we move into this completely new space because of the Labour Party’s actions.

The thing that makes it even more despicable is the fact that there are just such double standards in this House, and that is the thing that I found absolutely despicable. I want to follow up and I want to remind the House of the Hon Bill English’s words. The Hon Bill English said quite clearly that there are three things. If the Labour Party wants to get to the bottom of things, there are three very clear opportunities for what it can do. The first one was—remember—to encourage Mr Peters to table in the House all of those emails that he has.

Kris Faafoi: It’s your inquiry.

LOUISE UPSTON: You want to get to the bottom of it? He is your mate, he wants to get into bed with you guys instead of the Greens, so lay it on the Table, and that will mean we can get to the bottom of it.

The second thing is quite simple, again, with Mr Goff: if you want to release personal records and if you want to release your personal emails—oh, but that is right, there is an individual called “Person A” whom Mr Goff has an interest in protecting. You are doing all you possibly can to protect “Person A”, but you are actually quite willing to leave a reporter and hang them out to dry. It is quite interesting—double standards again from that side of the House. The third one, of course, that Mr English said quite clearly was the release of some bank statements that would also help the House get to the bottom of some other matters.

So, you know, it is about putting things on the record. It is about getting to the bottom of things. That is where this debate started at quarter past 3. Mr Shearer, as the Leader of the Opposition, was very clear about wanting to get to the bottom of things, but, actually, in this House you cannot have those sorts of double standards.

Another double standard that is being demonstrated today is what I think is actually quite a level of contempt for a very highly respected public servant. I find it quite despicable, in this House, that a public servant of David Henry’s stature is criticised to the extent that he has been in this House. I am confident that a very professional and thorough inquiry has been undertaken—it has been undertaken. Some parties in this House would actually want the Prime Minister to interfere in what is an independent inquiry. That is right—this side of the House recognises what independence is, but that side of the House is used to having a Prime Minister who interferes and has their sticky fingers on everything. I am not pleased to speak in this debate, but it is important to get some things on the record.

Hon STEVEN JOYCE (Minister for Economic Development): The so-called urgent debate from the Labour Party this afternoon has actually been pretty appalling. The leader of the Labour Party could not even devote 15 minutes to the issue. He had to—

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I just want to seek an assurance that there is a written undertaking for this member to take the call that belongs to the Hon Peter Dunne.

Mr DEPUTY SPEAKER: This, according to my schedule, is an either/or call.

Hon STEVEN JOYCE: As I was saying, in this so-called urgent debate, the leader of the Labour Party could not even devote 15 minutes of his speech to the issue at hand. He had to trail off down the Skycity path, which, of course, is a path that certain Labour MPs trod on the weekend, on Saturday night, at a certain rugby match—

Hon Gerry Brownlee: Oh no!

Hon STEVEN JOYCE: Yes, certain Labour Party MPs were treading off down the Skycity path and enjoying the hospitality of Skycity. That is actually a little like the “h” word we are not allowed to use in this Chamber, and that is what we see out of this debate with the Labour Party today. Actually, I think it would be very helpful if Labour MPs could rule themselves out as to whether they attended the Skycity box on Saturday night, because that would prove they were not being “h”—hypocritical—and they would then have the opportunity to show that they had the courage of their convictions.

But we need to have an assessment of how the relevant people involved in this particular issue have performed—the Prime Minister, first of all. The Prime Minister has once again upheld the highest standards in his ministry. There is no Taito Phillip Field issue here. There is no trying to pretend it is not happening, for months on end, as the Labour Party did—trying to pretend that Taito Phillip Field was not an issue, as the Labour Party did for months and months on end. The Prime Minister has an issue, he calls an inquiry, the inquiry reports, the Minister refuses to cooperate with the inquiry, and the Minister resigns. That is the quality of the leadership of this Prime Minister in this Parliament, which is way higher than what actually occurred under the Labour Government of the previous 9 years, which was absolutely shonky the entire time.

Then we have Mr Dunne. Mr Dunne has made mistakes—there is no doubt about that—and he has paid for those mistakes. He has paid for those mistakes and I am sure, wherever he is this week, he is contemplating those mistakes. But, of course, he has had a proud 29 years in this Parliament. He has accepted his punishment and he has resigned from the ministry. He has actually done that, and he has done it without complaint, which is appropriate in this situation.

So those two people involved in this—the Prime Minister with his high standards, and, in fact, the person who was directly involved—have actually done their jobs. So what about the rest? What about David Shearer? Well, I am sorry, David Shearer and his party have been hysterical and also completely hypocritical in terms of the way this has happened. The reality of it is that the Labour Party sat there, and, in fact, Grant Robertson said on the The Nation on the weekend that Peter Dunne should leave Parliament altogether—he should leave Parliament altogether.

Well, do not Labour members have short memories? Back in 2004 Lianne Dalziel leaked legally privileged case notes to the media about a refugee. She repeatedly denied that she had done this. And what was her punishment for this? She was sacked as a Minister. She did not leave Parliament. You did not hear Grant Robertson in the leader’s office declaring that she should resign. She actually stood in the 2005 election and was reappointed again after the election. So the problem for the Labour Party is that it is completely double standard on this—completely double standard. Of course, it is trying to quietly back away a little bit now in terms of the issue, because it does not even want to know, because it knows Phil Goff is in the gun. Phil Goff is in the gun for his leak. I could quote all the comments about Phil Goff, saying that it was ridiculous to have an inquiry into the leaks at the Ministry of Foreign Affairs and Trade, which, of course, he did.

But the other one that needs to be mentioned—well, there are two. One is Winston Peters. Winston Peters—I am sorry; it is just like a rerun of everything I have watched on TV for the last 25 years. You may not have yet seen the new Sky television channel called JONES!, but I tell you what, that speech this afternoon was like being on JONES! TV. It could have slotted in between It Ain’t Half Hot Mum and Cheers. It was that relevant, it was that modern, and it was that much of a rerun of every speech he has made over the last 30 years. It was appalling, just like his performance on Campbell Live last night. Then we have Russel Norman—“Rusty”—who in his race to be the Leader of the Opposition races towards the cliff of requiring the emails of every MP to be made available to the Prime Minister of the day, and then, like a late-realising lemming, actually stops just prior to the cliff and backs away. Meanwhile, all his friends on the left are calling him illiberal and an authoritarian. The problem is that these parties have not considered what they want and have done an appalling job on this issue.

GRANT ROBERTSON (Deputy Leader—Labour): I presume that Judith Collins will be down shortly, because she knows that the National Party leadership is within her grasp after that speech from Steven Joyce. He tried to tell us that throughout this episode John Key has shown what high standards he has. His standards are so high that he still cannot say today who leaked the Kitteridge report. He set up an inquiry—

Hon Dr Nick Smith: Can the member?

GRANT ROBERTSON: —to find out who leaked the Kitteridge report, and, as we stand here today—Nick Smith, who leaked the Kitteridge report?

Hon Dr Nick Smith: You tell me.

GRANT ROBERTSON: Who leaked the Kitteridge report? I am not in the Government, Dr Smith. John Key is the Prime Minister, he set the inquiry up, and he is the person who should be able to tell New Zealanders who leaked the Kitteridge report. The obvious conclusion that New Zealanders can draw is that John Key does not really want to know. John Key does not want to know, because if he finds out, and if New Zealanders find out the truth—which they deserve to know here—that puts the stability of his Government at risk.

Political expediency is what is at play here, because John Banks and Peter Dunne are the reason that National can pass legislation like that concerning the Skycity deal and the sale of State assets. It is those two votes. John Key has a record of wilful blindness to the actions of his support parties and Ministers. He is the person who would not even read the police report on John Banks, so that he did not have to know that John Banks had lied to him. That is why he did not read the report. Now he will not actually get to the bottom of who leaked the Kitteridge report, because he does not want to see his other support party go out of Parliament.

That is what is at play here. What this is about is a Government that is tawdry, that is held together by tawdry deals, and that acts not in the interests of New Zealanders but in its own self-interest. And it is John Key’s self-interest that has fundamentally driven his approach to this. We have seen it with the Skycity deal and we have seen it with appointments like those of Jackie Blue and Susan Devoy. Process means nothing to this Government. Process means nothing to this Government, and the rule of law means nothing to this Government. This Government will drive issues through this Parliament against the interests of New Zealand and in its own vested interests. What this report and what this decision are about is that having set up an inquiry to find out who leaked the Kitteridge report, John Key cannot tell New Zealanders the answer to that today. He wants the matter to end there, and that is not good enough. That is what this is about.

I want to say what it is not about. It is not about National adopting its usual divert and diminish tactics. That is what is going on here. Phil Goff was the recipient of a leak. He did not leak—

Hon Dr Jonathan Coleman: You don’t have to defend him, Grant.

GRANT ROBERTSON: —Jonathan Coleman—Phil Goff was the recipient of a leak. Peter Dunne leaked the document. That is the difference. It is a very, very clear difference. As Mr Dunne said at his press conference, he still denies that he leaked the report. Jonathan Coleman cannot tell me who leaked the report. Peter Dunne still denies it. If Peter Dunne wanted to give David Henry his end of the emails to show that he did not leak the report, he could have done that. He could have done that in confidence, but he did not.

Having set this inquiry up, John Key owes it to New Zealanders to get to the truth, but, once again, John Key is letting New Zealanders down. He came into office telling New Zealanders that there would be higher standards, and telling New Zealanders that he would hold his Government to higher standards, and the opposite has happened. What we have seen from this Government is scandal after scandal and deal after deal where this Government does not have high standards. It has some of the lowest standards it is possible to see.

I will tell you what this is also not about. Bill English stood up and said that this Government and this Prime Minister take national security seriously. No, he does not, because the way the Government Communications Security Bureau and national security issues have been run under this Government is appalling. John Key is the person who having been told that there was illegal spying going on, sat on that information for months. John Key is the person who has covered up and misled around the Kim Dotcom case. And now John Key is the person who cannot be bothered getting to the truth of a national security issue—the leak of a highly sensitive document—because in all of these cases it would expose his self-interest, and it would ensure that the interests of New Zealanders went ahead of John Key’s interests. That is what we know about this Prime Minister, that the interests of New Zealanders are gone. The great promises from when he came into office are gone. John Key is now governing solely in his own interests and those of the vested interests that support him. He does this propped up by discredited members. He is propped up by John Banks, who is in court, and we have heard in Parliament the reasons why that is. The reason why that is is that he has not told the truth about donations he got. Now John Key is propped up by Peter Dunne, and that is the reason why New Zealanders currently do not know who leaked the Kitteridge report. The convenient situation John Key has created for himself is “Don’t ask, don’t tell.” If John Key actually asked the questions he is responsible for asking, then he would have his Government in trouble. He would have the loss of a coalition partner. That is what is going on here.

National likes to say that it is Winston Peters’ job to release the emails, and that Labour is doing terrible things by referring this issue to the Privileges Committee. None of that is relevant to this. John Key set the inquiry up, it is his Government, and it is the leak—it seems—by a Minister in his Government that is at issue here. He is the one who is responsible. National’s divert and diminish strategy—that the report was going to be released anyway and that it is Winston Peters’ fault—is typical of the way this Government operates: dodgily. It follows that up with a divert and diminish and then demean strategy with the personal attacks coming out from John Key. That is not good enough. That is not good enough for New Zealanders, who expect more of their Government. This Government is so out of touch with New Zealanders and so mired in scandals and deals that it is unable to govern in the interests of New Zealanders. It is left governing in its own vested interests. That is a huge letdown for those New Zealanders who put their trust and confidence in this National Government. What they are left with is a tawdry Government propped up by support party leaders who are discredited and disgraced. That is what New Zealanders are left with.

This Government and the way that it goes about its business have now become the subject of ridicule. We are here again in an urgent debate in the House, having to deal with a scandal from this Government—an incomplete report because the Prime Minister does not want to know the real answers. For all of the diversion and diminishing from this Government that will go on over the coming days, the truth is that it is the one that has to answer. John Key has to answer that critical question of who leaked the report. He set the inquiry up, and he is the person who said it was serious enough to undertake this inquiry, but when he gets to the point where it looks like it is his support party that is in the gun, he pulls up and says that there is nothing to see here any more. That is not acceptable. New Zealanders deserve the truth from this Government, they deserve to have this inquiry completed, and the only conclusion that New Zealanders are left to draw is that, once again, John Key has put his own interests and the vested interests that support him ahead of New Zealanders’ interests, their right to the truth, and their right to a transparent Government. That is the legacy of the John Key - led Government: ride roughshod over process, mislead, obfuscate, divert, diminish, and hope that it will all go away. It will not go away, because New Zealanders need to know the truth, and John Key will be held to account for this tawdry Government that he leads.

Hon Dr JONATHAN COLEMAN (Minister of Defence): That was a very entertaining speech; the only problem was that none of it was true. Grant Robertson has just put in a very good audition for leader of the Labour Party. I do have to hand it to him. That was a lot better than his leader managed this afternoon. But, quite frankly, trying to actually put that up as debate when all it amounts to is a scurrilous attack on the Prime Minister—well, I hate to say it, but I think Grant Robertson is actually better than that, and he knows that. What he knows is that the Prime Minister acted quickly. He acted decisively. He called for an investigation and the matter was dealt with very quickly. Sadly, a Minister resigned on Friday, but, in the end, David Henry said that he could not take the inquiry any further. I know that those members over there will have read the inquiry, and it is spelt out quite clearly there.

I would also like to say that no one in this House takes any pleasure in what has happened over the past few days. It is a very sad turn of affairs. Peter Dunne, a member who has served here for many, many years and is well-known to the House, is a man of honour, and he cannot explain his behaviour either. What has gone on is, I think, beyond explanation, but, sadly, a career of service to New Zealand has been brought to an end. I even forgive Mr Dunne for handing me the wrong speech to read on his behalf while he skived off to a school prize-giving one night, but that is a long time ago.

But Labour cannot have it all ways. You know, David Shearer today is calling for greater emphasis on privacy and talking about PRISM. He is very, very concerned about the implications of that for New Zealanders’ privacy, and privacy is a serious matter. But then, in the next breath, he is wanting all these emails tabled and released. His naivety, I think, has been highlighted in the Dominion Post editorial this morning, which just shows how naive David Shearer is being in calling for that. But it is even worse than that, because, actually, David Shearer has been conned by Winston Speakers. He has taken the sucker punch—

Andrew Williams: “Winston Speakers”? Who’s “Winston Speakers”?

Hon Dr JONATHAN COLEMAN: He has been convinced by Winston Peters—Winston Peters; well, Winston Peters thinks he is the Speaker—to put—

Hon Maurice Williamson: He thinks he’s the Prime Minister.

Hon Dr JONATHAN COLEMAN: Well, the Speaker thinks Winston Peters is the Prime Minister. He has been convinced by David Shearer to put in a letter to the Privileges Committee, and he wants Peter Dunne put under oath and all those emails and his phone calls to be revealed in their full entirety.

Well, there are some serious implications to that. If you look at the sad case of Phil Goff, a member who has been leaking sensitive Ministry of Foreign Affairs and Trade and Defence Force documents for a long, long time—and I would love to see Mr Goff’s emails, and I would love to see his phone logs, because I would like to know what conversations he had when he leaked to the media pages from the court of inquiry relating to the death of a New Zealand soldier. I think that if David Shearer was not working to a double standard, he would say to Mr Goff: “You know, in the interests of this new age of transparency that Labour is calling for, please table your phone logs; please table your emails and their contents.”, so that we can know where Phil Goff gets his information from. When Phil Goff undermines national security, when he undermines the morale of the Defence Force, he knows that he is doing the New Zealand Defence Force and the people of New Zealand a great disservice.

But there is more coming for Phil Goff, because, of course, about a year ago Phil Goff tabled leaked documents from the Ministry of Foreign Affairs and Trade. He tabled pages from a Cabinet paper, and I want to know who Phil Goff’s source was. I would love to see the content of Phil Goff’s emails, and I would love to see his phone logs, but, of course, Phil Goff thinks it is OK for Peter Dunne to be called to account under oath and be made to table his emails—to be made to table the full content—but Phil Goff never will. Of course, when David Shearer actually connects his neurons together and gets some synapses firing, he will realise that what he is calling for in this House will have very, very grave consequences.

We heard from Winston Peters today, and, of course, we all know about the 2008 Privileges Committee hearing. Winston Peters was found guilty at that hearing. Would we not love to see the full content of his phone logs? Would we not love to see the content of his emails? I think that would be very, very revealing. So David Shearer and Winston Peters should be very wary of what they ask for, because if they are going to hold Peter Dunne to one standard, they will have to hold Phil Goff—the Ministry of Foreign Affairs and Trade leaker, who has undermined the morale of the Ministry of Foreign Affairs and Trade and the New Zealand Defence Force—to exactly the same standard, and I think it is really going to unravel pretty badly. Someone with the ethics of Phil Goff, who will seek out leakers and who will go out there and publish that information, would not like to be held accountable.

Hon Phil Goff: Just ask any member of the Defence Force who was responsible, they’ll say the Minister. They’ll say the Minister let them down.

Hon Dr JONATHAN COLEMAN: You can tell by the fact that Phil Goff is raving and shouting that he has lost it here in the House. A raw nerve has been hit, because Phil Goff is the biggest leaker in the New Zealand Parliament. Of that, there is no doubt.

Hon Member: I thought that was Andrew Williams.

Hon Dr JONATHAN COLEMAN: Well, no, we are talking information leaks. So I can tell you, Phil Goff’s day of accountability is coming. I would love Phil Goff, if he believes in transparency, to get up in this House and tell us who “Person A” is and tell us who his contact is who leaked the information to him, and I think you will find he is very loath to do that. Transparency goes both ways. Ministerial resignations and MP resignations go both ways. So when you are calling for Peter Dunne to be put under oath, be prepared for Phil Goff to go under oath as well, because you might not like what you find.

Hon Phil Goff: Why can’t they come clean on that—did Peter Dunne leak the paper?

Hon Dr JONATHAN COLEMAN: You can tell by Phil Goff’s yelling and shouting and raving here, and the barrage of completely non-witty interjections, that he knows we are on to him and that his day is coming very, very soon.

Of course, there is the police complaint again Phil Goff, as well. We greatly await the police complaint—

Hon Maurice Williamson: What?

Hon Dr JONATHAN COLEMAN: Yes, apparently someone has made a police complaint because Phil Goff leaked those details of the dead soldier to the media. It was a court of inquiry, it was a suppressed report—

Hon Phil Goff: I raise a point of order, Mr Speaker. I think you were in the House when the Minister had to withdraw and apologise for making an allegation that was not true and that I found offensive, and he has just done it again. I will ask you again to ask him to withdraw and apologise.

Hon Dr JONATHAN COLEMAN: Speaking to the point of order—

Mr DEPUTY SPEAKER: I will hear the member.

Hon Phil Goff: Well, you—

Mr DEPUTY SPEAKER: No. Order!

Hon Dr JONATHAN COLEMAN: Mr Deputy Speaker, you know that that is a debating point. It is not something he can take offence at. I could say that I take offence at the way he characterises—

Mr DEPUTY SPEAKER: Order! I do not believe I was here when the decision the member refers to was made, but I think we can be more productive and just move on with the debate.

Hon Phil Goff: I raise a point of order, Mr Speaker. The Speaker ruled last Thursday that the Minister making that statement had committed a breach of the Standing Orders in making an offensive statement, the more so because it is not true. I ask that you do what the Speaker did last week in exactly the same circumstances and require the Minister to withdraw and apologise, because I take offence at the untruth that he has just told.

Mr DEPUTY SPEAKER: All right—[Interruption] Order! All members are honourable members and the member has taken offence. The member will withdraw and apologise, and then continue with his speech.

Hon Dr JONATHAN COLEMAN: I withdraw and apologise. To get back to the facts, what Phil Goff did was he took—

Hon Phil Goff: You’ve done it twice now, and if you lie again you’ll have to do it again.

Mr DEPUTY SPEAKER: Order! The member has just breached the Standing Orders himself by implying that that member did something that is not acceptable. So the member will now withdraw and apologise.

Hon Phil Goff: I withdraw and apologise.

Hon Dr JONATHAN COLEMAN: I have got a far thicker skin than Phil Goff. What Phil Goff did—OK, so Phil Goff took a suppressed report. The coroner had suppressed this court of inquiry. It was a court of inquiry relating to the death of a New Zealand soldier in Afghanistan. Phil Goff broke that suppression order and he took pages from that inquiry and emailed them to the media, and that is now the subject of a police complaint. Not only did he do that, but a year ago he took sensitive Ministry of Foreign Affairs and Trade documents and Cabinet papers and released them publicly. So I want David Shearer to go out and say to Phil Goff: “Phil Goff, we want Peter Dunne to table his emails. We want transparency. But to do that, so that we don’t look like hypocrites, we need you, Phil, to table all your emails and to make available your phone records in exactly the same way we are calling for.”

So you see, when you tie all this together and you go back to that Dominion Post editorial today, what you see is the Prime Minister has acted very, very decisively and quickly. Dunne was gone that day. That did not happen in the Clark era. I mean, it took years and police investigations—incredible pressure—to get rid of Taito Phillip Field. But John Key, a man of high integrity, acts in a totally different manner. He acts decisively. If Phil Goff and David Shearer et al. really want to get to the bottom of this in the way they say, all they have to do is get their mate Winston Peters to publish the emails that he claims he has. But, of course, we do not reckon he has them. Once he tables them, we will all know what David Shearer thinks he wants us to know. We want to see Phil Goff’s emails and his phone calls, but, most of all, I would love to see the emails relating to David Shearer’s secret bank account, because this is a man constantly calling for transparency, and we would not want to see hypocrisy in this House.

So the summary of it is to be careful what you ask for, because it really could backfire. There are no winners in this. I feel sorry for Peter Dunne. He was a man of integrity. I still believe he is. He has had some sort of very unfortunate brain explosion, and I do not think it is reflecting very well at all on David Shearer and his ill-judged, crazy calls for a total change to accepted parliamentary practice.

The debate having concluded, the motion lapsed.

Extended Sittings

Extended Sittings

Hon GERRY BROWNLEE (Leader of the House): I move, That the sitting of the House today be extended to consider the first reading of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill, the first reading of the Construction Contracts Amendment Bill, and the Committee stage of the Local Electoral Amendment Bill (No 2).

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

Ayes 64

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

Noes 56

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

Motion agreed to.

Debate on Crown Entities, Public Organisations, and State Enterprises

In Committee

Debate resumed from 14 May.

New Zealand Qualifications Authority (continued)

Report noted.

New Zealand Teachers Council

CATHERINE DELAHUNTY (Green): This speech will not be as melodramatic as those in the previous debate. There will be no offence, I think, no personal abuse, and no—

Chris Hipkins: I am going to speak in it.

CATHERINE DELAHUNTY: True, true. Mr Hipkins, alias Metiria Turei, is speaking today so anything could happen, that is true. There seems to be a bit of identity confusion in Parliament today.

I would like to speak about the Teachers Council. Despite its lack of Shakespearean drama, I do think it is an important issue. The Teachers Council has been reviewed in the past year, and this review appears to be welcome across the education sector and across the parties. Everybody felt that this was a useful thing to do, although not all the 24 recommendations from the Teachers Council review are acceptable. The debates that have come through about the work of the Teachers Council in the past year are around whether we should create an independent statutory body such as the Medical Council of New Zealand, for example, where doctors basically look after the issues of doctors—teachers would be more than capable of doing something like that—or whether we should just improve the existing Teachers Council. I think there is a lot of support for the idea of an independent statutory body because it would recognise the importance of the profession.

The Teachers Council, as it exists right now, is about the protection of professionalism, mainly through registration and the discipline of registered teachers. The Government has said that this is ineffective. However, the Government’s response to this supposed ineffectiveness, which may have grounds, is curious. There is an opportunity for the Teachers Council to do some interesting professional work around teacher appraisal, registered teacher criteria, and professional standards, but what has been suggested for one of the recommendations is quite strange, and it relates to the underlying privatisation agenda of the Government. The Government says that professionalism, registration, and standards are extremely vital, but it is now suggesting a whole new category of unregistered staff in schools, which can undermine the whole raison d’être of having a teachers council that looks after registration and professionalism. So it is actually quite a contradictory situation.

This new authority to educate, which is broader than the current limited authority to teach, may not appear to mean anything, but, actually, like many things in the education sector, it has a strong drive towards policy that the Government is pushing through around privatisation and the lack of recognition of what a teacher actually does. This broader authority to educate can include scenarios such as this one where a former teacher who has been deregistered, possibly for serious misdemeanours, can now apply for a broader authority to educate if they have “proven expertise”. The examples that were discussed at our select committee with this Crown entity were alarming because the entity itself did not raise these issues, but some of the committee members talked about how anyone who might have a degree in physics, for example, would be suitable for teaching in a primary school.

Presumably under charter schools, or using the authority to educate in its broader sense, a lecturer can be a teacher. This is a fundamental destruction of the profession if it says that no skills in teaching are actually required; all you need to do is know how to lecture. As for myself, having been a tutor, like many other people here, I would never call myself a teacher. The point about this is that people can have knowledge and have expertise in tutoring adults, as some of us do, but that is very, very different from having the pedagogical process that teacher training offers. I am all for improvement. I think there is more we could do to improve the pedagogy, but definitely allowing more deregistered teachers under the Teachers Council and making this Crown entity responsible for a contradiction is not going to be an improvement. It was really concerning when we heard that idea. The idea that teaching is not a skilled and dynamic process that relies on a pedagogical background is very scary.

Of course, what is behind this, in terms of this Crown entity, is that it is now being possibly asked to have oversight over the new charter schools—the legislation for which passed through the House last week—where you could have up to 100 percent unregistered teachers. I would suspect that they probably will not have 100 percent unregistered teachers, but they will have some staff who are under the Teachers Council who are registered properly, meeting professional standards, and who will be managed by the Teachers Council in that form, and then they will have a category of people who are not registered and who are not required to meet those same standards. This is going to create division, confusion, irregularity, conflict, and practice that by no means—even in the Government’s own terminology, the idea of “national” or “standard”—means there will be a national standard for teachers. There will not be consistency.

CHRIS HIPKINS (Labour—Rimutaka): There are few areas of Government operation that highlight the contradiction of this National Government in education more than the Teachers Council. On the one hand we have got a Government that says it is focused on the quality of teaching and on improving educational outcomes, yet it does so many things that go completely the other way.

The review of the Teachers Council came back and argued that teaching should be a postgraduate profession, that in order to enter the teaching profession someone should have a postgraduate teaching qualification. I think that is something that is very worthy of discussion. Yet this Government went the other way with charter schools, and said: “Actually, you don’t need to have any qualification at all. Anyone can go and teach in a charter school, and that’s OK.” So we have got a review of the Teachers Council that says all of the international evidence tells us that the quality of teaching is the thing that makes the most difference, and the Government turns round and says it will ignore all of that, and have charter schools that do not have to have qualified teachers at all. I think that is wrong.

In the early childhood area, where we were moving towards a system where we would have fully qualified and fully registered teachers, again the Government went the other way, and it has abandoned the targets that would have seen us moving to a more qualified early childhood workforce. It has simply scrapped that altogether. Actually, what we should be saying is that early childhood education is vitally important, we should have qualified and registered teachers in early childhood centres, and we should fund them in order to cover the cost of that. This Government is not doing that.

It is a double standard for Hekia Parata, the Minister of Education, to come to the House during question time today and talk about the importance of trusting in teachers’ judgments, when it is very, very clear that the national standards policy was designed because the Government does not trust teachers’ judgments. The Government says to parents that they cannot trust what teachers tell them, and it has to set these arbitrary standards in place instead. Even then, after it has set the standards in place, it is going to manipulate the results to get the outcomes that it wants.

In the case of the national standards in writing, there is only one standardised assessment tool. That is the e-asTTle assessment tool. This year, in term 1, when that produced results that the Government did not like or that the Government did not think were reliable, it simply went in and scaled the results. It went in and changed the results, to give it the outcome that it expected. So how is that in any way a national standard? How does that reflect a national standard, when the Government is going to just change the results of the assessment in order to get the outcome that it thinks it should have got in the first place? It is an absolute hoax.

National standards are neither national nor standard. Although we can have an enormous amount of faith in the professionalism of teachers, teachers exercising their professional judgment against a pretty vague standard in one school are going to make a different judgment from teachers exercising their professional judgment against a vague standard in another school. Unless there is something in place that ensures consistency across those, it is not the professionalism of the teachers that is at question. It is the very concept of the standards in the first place that undermines our education system and that means that parents cannot have faith in the information that they are being provided.

National standards are not a reliable indicator of a student’s achievement, they are not a reliable indicator of a teacher’s professionalism or the quality of the teachers, and they are certainly not a reliable indicator of how successful and effective a school is.

John Hayes: So you don’t want any standards?

CHRIS HIPKINS: No, I absolutely think there should be standards, but these are not national, nor are they standard. In fact, good schools already were reporting quality information to parents, and, in fact, some schools are now reporting less information to parents as a result of national standards, because they are reporting only the standards and they are not reporting all the other information that they used to give parents.

So parents are being duped by national standards, because the information they are getting is unreliable. It is not consistent. There is no guarantee that a child being assessed at one school against a standard is going to get the same result if the parents take them and have them assessed at a different school, because the standards themselves are vague, they are inconsistent, and there is no moderation process. For Hekia Parata to try to draw a comparison between national standards and the National Certificate of Educational Achievement (NCEA) is absolute hogwash, because NCEA has a moderation process in place. There is no such moderation process in place for national standards.

National standards are not an exercise about lifting student achievement or about education; they are bad for education. Internationally they have not worked. They are not working here in New Zealand. We should be focused on making sure that we have a system that works for Kiwi kids. National standards do not.

Dr MEGAN WOODS (Labour—Wigram): I am very happy to take a call on the Teachers Council, to talk about the Teachers Council review and pick up where my colleague Chris Hipkins finished off. I want to focus on two aspects of the review. One is the independent statutory body, and what was asked for there, and also the postgraduate teaching qualification that was mooted. I think the postgraduate teaching qualification shows demonstrably how all over the place this Government is when it comes to education. It does not have a consistent plan. It is not about educational outcomes.

At about the same time that we were talking about the need for greater qualification for teachers in our schools, the Government talked about undervaluing postgraduate education in this country, by withdrawing student support for those students wanting to undertake it. On this side of the Chamber we have talked at great depth about the contradictory nature of the moves around postgraduate student support and how they undermine the Government’s rhetoric around an innovation-led economy and the knowledge economy. Well, it shows very much how contradictory that is even within the portfolio of education and how there is just no coherent plan around what is needed.

One thing that we on this side of the Chamber are absolutely sure of is that qualified and registered teachers are absolutely key to the success of our education system. That is why, to us, the Teachers Council is so important as the body that carries the register of teachers in this country. It is why, when the council came to the Education and Science Committee and submitted on the issue of charter schools, we were so interested in what it had to say. Government members were not in the least bit interested in what the council had to say, because it said the idea of having unqualified and non-registered teachers was not at all a good idea.

The New Zealand teacher register has not only national but international recognition. It ensures that our education system is relevant within the global context. This is vitally important. Actually, Treasury has advised that quality teaching is the most important factor in student achievement and that teacher registration, although not perfect, gives some assurance of quality. That is what we are very concerned about, and it is what is missing in the mode of education in charter schools that this Government set up last week. We do not have that mode of assurance that teacher registration gives us.

This is something that we view with great alarm, because it is qualified and trained professionals who provide the foundation for a high-quality education system. We need not look very far for the fine examples of Finland, Singapore, the Netherlands, Australia, Canada, and Scotland, where successful teachers require a depth of specialist professional knowledge in areas such as curriculum assessment, pedagogy, and learning. With teacher registration, the need to keep your registration up to date is absolutely vital to ensuring that we have this. This body in the Teachers Council, through the register, ensures that we have the most important aspect of quality going into our education system, and that is quality teachers.

We on this side of the Chamber very much value the teachers we have in this country and the expertise they bring, so we listened when they and their bodies came to our select committee and told us that they were really alarmed around the notion of teachers not needing to be qualified and not needing to be registered when it came to being entrusted with the education of young New Zealanders in charter schools.

So we think that the review of the Teachers Council is a vital document for us to reflect on as this Government makes fundamental changes to our education system. This is not small tinkering around the edges; this is fundamentally different. We are saying that you do not need to be a qualified or registered teacher to now stand in front of our children and teach them. You do not need to follow the curriculum either, although we know that one of the things that the Teachers Council is vitally concerned about is making sure that teachers have access to professional development where they can keep up with curriculum development. These are all things that the Teachers Council needs to be the administering body for, because one of the things that I think many of the parties that have looked at the review of the Teachers Council have said, actually, is that in terms of this independent statutory body, the new professional body does need to have much oversight over the profession.

Report noted.

New Zealand Antarctic Institute

The CHAIRPERSON (Lindsay Tisch): I call John Hayes.

Grant Robertson: Here’s a polar bear himself!

JOHN HAYES (National—Wairarapa): For the benefit of my colleague across the House, there are no polar bears in the Antarctic. I know that. I do not know what school you went to and how good your teachers were, but there are no polar bears in the Antarctic.

I will just take you back a bit, because you do not seem to know much about the Antarctic. A review back in 1994 recognised that the Antarctic was strategically important to New Zealand, and this led to the establishment of the New Zealand Antarctic Institute, known as Antarctica New Zealand. That was sorted through in 1996. I think it would be fair to say that Antarctica is seen as the last pristine area in the world, and all of us in New Zealand see that preserving and protecting Antarctica is a vital role of the Government.

Antarctica New Zealand is the Crown entity responsible for developing, managing, and executing New Zealand’s activities in Antarctica and in the Ross Dependency, and it reports to the Foreign Affairs, Defence and Trade Committee annually on its performance. Antarctica New Zealand manages Scott Base, which is New Zealand’s Antarctic research station, and it maintains—without sun at this time of the year—New Zealand’s operational presence in the Ross Dependency for the benefit of present and future generations of Kiwis. Key activities include supporting scientific research, conserving the intrinsic values of Antarctica and the Southern Ocean, and raising public awareness of the international significance of the continent.

I think the Antarctic Institute is well rated in both financial and service performance terms, and its operational presence, environmental stewardship, and public engagement has been very good. The Crown provides annual revenue of around just under $14 million, and in this last financial year under review it had a net operating surplus of $400,000. Most important, it achieved a cost saving of 30 percent of its budget, and it met that. It also made very significant savings in fuel, something like, in the financial year under review, 666,000 litres of fuel that it did not need to use down in the Antarctic, and that is 44 percent more than the target fuel savings for last year.

The installation of wind-driven generators has contributed to this outcome and particularly to the future energy security both of the American McMurdo Station and New Zealand’s Scott Base. I think that this relationship around the supply of energy to both stations reinforces a long and a very successful relationship with the United States Antarctic Program.

I have just a couple of words about the New Zealand Antarctic Research Institute. This was launched by the Prime Minister earlier this year, and it will lead to multidisciplinary, multinational research down in the Antarctic. This vehicle has been established as a means to attract new international funding, working in collaboration with the private sector. The public-private partnership is an innovative new model for science funding and will ensure we continue to build capacity in New Zealand’s polar science community.

That institute has already completed the first international study on Antarctic tourism impact, and it has partnered with Landcare Research to lead international development of an Antarctic environmental portal to better manage ecosystems. It has also undertaken a joint recovery with the United States of a 763-metre-long core from Roosevelt Island, a world-leading climate record of the last 30,000 years.

Finally, I think it is also worth thinking about the importance of the Antarctic industry to Christchurch, because it contributes around about $280 million every year to the Canterbury economy. That really imposes, I think, a particular obligation on the chief executive Lou Sanson and his team, and the chair Rob Fenwick and his board, to be thinking creatively about how to expand their vision to generate significant benefits for future generations.

Report noted.

Housing New Zealand Corporation

Hon Dr NICK SMITH (Minister of Housing): I am pleased to be speaking on the review from the Social Services Committee of Housing New Zealand, because we are embarking as a Government on the most exciting and positive changes in social housing in a generation. I want to just briefly talk about both the review and what those changes mean. The long-term assumption about Housing New Zealand is that it is the sole provider of social housing. In 2010 the Government received the vision on social housing, which is all about expanding the provision of social housing to beyond just the State. We have seen, with the Budget announcements this year, this ambition to expand the community provision of social housing up to 20 percent.

I know that in Australia—actually, I would ask members opposite to talk to their Labor colleagues in Australia about the success of expanding social housing beyond being just a State entity, because the programme that the Government is embarking on is mirrored in Australia.

Grant Robertson: Who began third-sector housing funding? We did.

Hon Dr NICK SMITH: Well, Mr Robertson interjects and says: “Oh, these reforms all started with Labour.” Well, let us just look for a moment and say: “Well, what percentage of housing—after 9 years of a Labour administration, how much community social housing was there?”. It was less than a teeny-weeny 1 percent. The second challenge I have got for the deputy leader of the Labour Party is that if he really believes in the report of the expansion of community social housing, why did his party vote against the bill in the Budget that enables community social housing providers to be able to have access to the income-related rent subsidy? Why did you vote against it? If you are so committed to the community social housing sector, why would you say that the State subsidy is available only to Housing New Zealand?

Equally, I would draw the Committee’s attention to the huge boost that this Government is giving to improving the quality of our social housing with Housing New Zealand and others, and to making sure that houses are in the right place and are the right size. I reflect, Mr Robertson, on the decisions of the previous Labour Government, which robbed the funding for actually maintaining State houses and saw them deteriorate to an appalling quality simply because Labour played a cynical game of just making a count of the number of State houses.

Dr Rajen Prasad: Ha!

Hon Dr NICK SMITH: I say to this Committee quite straight, and I say to Mr Prasad, who is interjecting, that this Government is committed to the quality of those houses not just the quantity. Actually, having tens of thousands of State houses that are uninsulated and are the wrong size is not the best way in which we can get the right social dividend for New Zealand from its $15 billion investment in Housing New Zealand.

Dr Rajen Prasad: When did that start, Nick?

Hon Dr NICK SMITH: I ask the member whether he supports the Government’s exciting initiative announced in the Budget called Project 324&5, where we are going to take thousands of portable bedrooms and add them on to houses. We are going to change them from being three-bedroom houses into four or five-bedroom houses and reduce the over-crowding for those needy families. We will reduce the incidence of diseases like tuberculosis and rheumatic fever, which we know are connected to over-crowding, and yet we have not heard a squeak from Labour members in support of that initiative from the Government.

The last point I want to make is this. Over the next 3 years this Government is going to invest $2.9 billion into the improvement of Housing New Zealand.

Chris Auchinvole: $2.9 billion?

Hon Dr NICK SMITH: Yes, $2.9 billion. That is almost a billion dollars a year, for the benefit of my colleague from the West Coast. What was the average during the affluent years when money came easy prior to the global financial crisis? The previous Labour Government committed less than a third of that—less than a third of that. That speaks louder than words and shows the level of commitment this Government has to a better housing outcome.

Report noted.

Environmental Protection Authority

JACQUI DEAN (National—Waitaki): The Environmental Protection Authority is a Crown agent, and it is responsible for functions concerning New Zealand’s environmental management. The authority is new. It was established by the National Government in 2011. What it does is bring together the various functions previously part of the Environmental Risk Management Authority, the Ministry of Economic Development, and the Ministry for the Environment.

The Environmental Protection Authority was established to be New Zealand’s national environmental regulator with responsibilities under several different pieces of legislation. It is responsible, under the Resource Management Act, for proposals of national significance. It is responsible, under the Hazardous Substances and New Organisms Act, for the regulation of hazardous substances and new organisms. It is responsible for the administration of the emissions trading scheme and the regulation of ozone-depleting substances and hazardous waste. It is also the agency nominated to manage marine consents monitoring, compliance, and enforcement within the exclusive economic zone. During the first year of operation, we were told, the organisation was focusing on—

The CHAIRPERSON (Lindsay Tisch): I am sorry to interrupt the honourable member. The time for this debate has expired. The debate on the performance in 2011-12 and the current operations of Crown entities, public organisations, and State enterprises has therefore concluded. I will report the debate to the House presently.

Debate to be reported presently.

Bills

Immigration Amendment Bill

In Committee

Debate resumed from 30 May.

Part 1 Substantive amendments (continued)

Hon MICHAEL WOODHOUSE (Minister of Immigration): This is my first call in the Committee stage of this bill, the Immigration Amendment Bill, whose passage I am responsible for, and I had hoped to answer the probing technical questions that had been raised by members of the Committee when the Committee stage started, but, sadly, the debate so far has not been replete with such erudite technical questions. Nevertheless, there are elements of the bill that I do want to touch on, including its background.

But before I do, I just want to acknowledge the many hundreds, perhaps more than a thousand, emails I have received expressing concern about this bill, and, in particular, that it may be in breach of our obligations under UN conventions on refugees, and specifically the 1951 convention. I have done my best to reply to all of those emails—I may have missed a few—and I have certainly been appreciative of the further feedback I have been getting in correspondence about this. The point I want to reassure members of the public and members of this House about is that the Government takes its obligations in respect of those conventions very, very seriously and is satisfied, as is the Attorney-General, that this bill, when passed, will not constitute a breach of those conventions. I must say it does not help when organisations like Amnesty International make comments about unlimited detention under this bill, which are simply not correct. It is not possible for somebody to be detained indefinitely, as was stated in a recent report that Amnesty International released.

I just want to remind the Committee of the background to this bill. In 2011 an exercise was undertaken to assess New Zealand’s preparedness for an irregular maritime arrival—a mass arrival by boat. This exercise, known as Exercise Barrier, was a very helpful exercise. It identified a number of issues requiring improvement, and this bill is one part of those. It firstly seeks to deter a mass arrival. The simple fact is this: we do not want these people to come. We do not want them to come for the simple, singular reason that they are putting their lives at risk. They are paying money to thugs and thieves. They are in desperate situations; we understand that. There are many millions of people who are economic and political refugees around the world, but getting on a boat and sailing across the ocean, as so many people are doing right now, is not the answer. There is no doubt—and I make no apology for it—that this bill contains provisions to make New Zealand less attractive as a destination for those people. Exercise Barrier certainly identified some administrative challenges in respect of the management of a mass arrival should one occur, and this bill will also include steps to take in order to identify and remedy those, including the ability for a judge to issue a group warrant to house and detain people until their security status—their health issues and the validity of their asylum claim—is sought.

One issue that has been raised, certainly with our confidence and supply partners, has been the definition of “mass arrival”. This was also touched on. I want to acknowledge the support and cooperation of Peter Dunne, and the very good grace with which he cooperated with me on the progression of this bill. I also acknowledge the Māori Party, who are also supporting the bill at this point. The definition of “mass arrival” has been proposed by Mr Dunne to increase from the number 10 to 30, and the Government will support that amendment.

It will not support the other amendments that have been put forward, but I do want to acknowledge the Supplementary Order Paper in the name of the Rt Hon Winston Peters. He, indeed, spoke on this point in the second reading while supporting the bill, which I certainly acknowledge. The issue around this was, in fact—you know, we have competing objectives in respect of the appropriate place for detention of irregular maritime arrivals—that it seemed on the face of Mr Peters’ second reading speech that he wanted to go a little bit harder than the Government was going. I am not quite sure that was actually what was reflected in the Supplementary Order Paper, but, nevertheless, it is an appropriate concern to ensure that those people arriving by boat in this way are detained in a place that is appropriate for, and commensurate with, their risk and their need. I think that is what is behind the right honourable member’s Supplementary Order Paper and I want to acknowledge that. The Immigration Act itself does not specify exactly what those places of detention might be, but it does go on to name certain forms of detention, which might be a police station, a prison, premises approved by the Ministry of Business, Innovation and Employment, other residences, or domestic residences, and all of that would be in accordance with the risk that has been identified.

The Government has made a commitment to invest a significant amount of money in the upgrade of the Māngere Refugee Resettlement Centre in South Auckland, and that is likely to be the place where the vast majority of refugees, irregular or not, are going to be located. It is not appropriate, and it is not possible, for those detained at Māngere to simply come and go. There are severe restrictions on their freedom of movement while their asylum claims are assessed. However, it is not a prison. Nevertheless, on boats there are going to be three types of occupants. There are going to be those who have paid to be there—the victims of people smuggling. There are going to be the traffickers—the people who are piloting the ships. Then, of course, there are going to be people who are known by other nations as terrorist suspects, and those people need to be weeded out. Where it is appropriate, there will be a higher level of detention. So while acknowledging New Zealand First’s concern and the Supplementary Order Paper that has been put forward, the Government will not be supporting it.

I have a Supplementary Order Paper, and it is in response to a very technical error in the omission of three words in the 2009 Act when it was passed. Members may recall the case known as the Konsaijan case. A Thai national was charged with aiding the flow into New Zealand of people for the purposes of working in breach of the terms of their visa, but because of three words that were left out of the 2009 Act, it was not possible to prosecute. I have committed to putting those three words back in—in fact, those who have read the Supplementary Order Paper will see there are a great deal more words than that. I think it is going to be as watertight as possible. If people who have legitimate visas are coming here with the intention of not complying with the terms of those visas, then anybody who facilitates that process will be subject to conviction.

The last thing that I want to just say at this time is in respect of some rather nonsensical speeches that we heard when this Committee stage started. We heard references to ghost ships. We heard references from Mr Cunliffe that it was more likely that somebody would come from Mars than Indonesia or “Wogistan”. I think, frankly, that that is not only wrong, I believe it is deliberately so. I wonder whether those people know they might not be here by the time a ship arrives, so that they do not have to account for the nonsense statements that they have been making. I can go through a number of publicly known attempts by irregular maritime arrivals who have New Zealand as their destination. They date back 10 years and they are continuing. As we know, in April this year a rickety 14-metre wooden-hulled vessel with about 60 people arrived at the West Australian port of Geraldton, and the Australian customs and border protection officers in their report confirmed that the target was New Zealand—the vessel’s intended destination was New Zealand. They knew that because of the testimony of the master of the vessel and an analysis of data onboard that confirmed the vessel was heading for New Zealand. It was a 14-metre wooden well-resourced, well-fuelled vessel. It had GPS on board, obviously, or satnav, because they had onboard data that confirmed that was the target.

Anybody who believes that that could not have occurred forgets that most of our ancestors came here on wooden-hulled sailing ships and waka. To say that nobody could cross the Tasman—we have members of our country who have rowed across the Tasman when they are well resourced and they have the right technology. Anybody who thinks this could not happen is being either deliberately evasive or naive. I think this bill deserves better than that. This is an important bill. It sends a very strong signal to those people who would exploit vulnerable people that New Zealand is not a soft touch and that when they get here, they will be detained in a place commensurate while their status is determined, and they may well be turned around, like the 80 percent of asylum seekers in this country are.

Dr DAVID CLARK (Labour—Dunedin North): Following that speech—that typically generous speech—from the Minister of Immigration, I would like to suggest that perhaps we could send him out as a one-person welcoming committee. If any of these boats turn up, I can assure the House that the boat would likely turn round and head for the hills. The Immigration Amendment Bill is a scurrilous bill. It is an outrage, it is unnecessary, and it introduces into New Zealand law provisions that are designed to distract from the current parlous state of this Government and designed to provide the kind of set-up that exists in Guantanamo Bay. This is an outrage. We do not need this in New Zealand. It is absolutely clear that we do not need this. The people on these boats, whom Michael Woodhouse refers to, on the tattered boat, present no threat to New Zealand.

I want to, firstly, commend the excellent Supplementary Order Paper in the name of my colleague Darien Fenton that seeks to provide a solution to appease the fears of the Minister by encouraging a mass arrival group set-up to be in the facilities that are already existing at the Māngere Refugee Resettlement Centre. Problem solved—problem solved! If this problem, which is so big in the Minister’s mind that he spends so many hours every night worrying about such that he cannot get to sleep, really exists, this excellent Supplementary Order Paper would surely be a sensible solution to this perceived problem. But we in this House all know that this problem does not really exist.

The representation of this problem is intended to distract from the scandals in the current Government. We have a Government that is propped up by one man who is appearing in court and by another who has sought to resign from his ministerial posts, and we have a Government that has had to release one of its own recently, because it just could not cope. So what we have here is a distraction. It is not a bill that is intended to address a real issue. It is a waste, in my view, of parliamentary time. It is a serious waste of very expensive parliamentary time, and that needs to be said. That needs to be put on record. There is over a million dollars in time if you add up all of the contributors to the debate and you add up the time and salaries of the staff here to run this Parliament. You realise that there is a huge cost to passing legislation like this that does nothing for our country.

I hope, nevertheless, that the Minister will give serious consideration to the Supplementary Order Papers in the name of my colleague Darien Fenton, because they do provide a humane way of dealing with such a problem, if a problem were to ever exist in the future. If we are going to pass this jolly bill and use the time of this Parliament, at least we could set up a humane solution that would withstand the test of time so that if this issue became an issue in 150 years’ time, we would have a law on our books that dealt with it in a humane way.

It is important also to note that this particular distraction in the space of immigration is but one problem in that field. We know that Immigration New Zealand is proposing, for example, to shut down the very, very proficient office in Dunedin North, in the electorate that I represent, in the electorate that that Minister the Hon Michael Woodhouse seeks to represent each time there is an election. That highly performing office is proposed to be shut down and I think this is an outrage. We know that the staff in Dunedin Public Service offices are very efficient on all measures. The staff in Dunedin tend to be cheaper, more loyal, hard-working, and productive, and that is something this Government seems to have no concern for. It seems to have no concern whatsoever for the people in the regions who are losing their jobs for no gain for this Government. In fact, if we examine the statistics, we see that the performance of Immigration New Zealand is in decline. That is an outrage, and I think it is an outrage that this Government and that this Minister, in particular, is trying to gut Dunedin of jobs that are there in a time when there is so much unemployment. But back to this bill, because this is an important issue. This is indeed an important issue—

JAN LOGIE (Green): This bill, the Immigration Amendment Bill, enables the courts to detain any group of 10 or more people, though there is in front of this Committee, of course, a Supplementary Order Paper from Peter Dunne, Supplementary Order Paper 239, to extend that number to 30. I have not heard the Minister of Immigration speak to that in terms of whether the Government will still be supporting that—I missed that. That is one of the things that this bill does.

This bill also limits family reunification to immediate family for those claiming refugee status after a mass arrival. I hope to speak more on that point later. This bill provides the power for suspending processing of all refugee and protection claims by regulation, without the oversight of this House. This bill removes the right of some claims to be heard before the Immigration and Protection Tribunal, for subsequent claims, along with the removal of certain rights of judicial review. In short, this bill breaches the refugee convention, international law, and our own New Zealand Bill of Rights Act.

The Transport and Industrial Relations Committee heard amazing submissions through the select committee process from a very wide range of experts in this area—New Zealand - based groups, internationally based groups, and Australian groups, who all too tragically have in-depth knowledge of policies that treat asylum seekers as if they are something to fear, who seek to say that in their country they have seen the really high consequences of treating asylum seekers in the way that, in my belief, this bill frames asylum seekers.

We heard from the Human Rights Commission after this bill was reported back. When the Government is saying that maybe there were some criticisms earlier, but it has made some amendments, and, actually, the bill does not do those terrible things we are suggesting in this Chamber that it does—well, let me tell you what the Human Rights Commission has said on the amended bill. It has said: “the Bill and associated policy changes unduly penalise asylum seekers for irregular entry to New Zealand in clear breach of Article 31 of the Refugee Convention. The detention provisions in the Bill will result in arbitrary detention in breach of both New Zealand’s obligations under the International Covenant on Civil and Political Rights and section 22 of the New Zealand Bill of Rights Act. The suspension of applications from nationals of specific countries without providing them protection is discriminatory and may violate the right to seek asylum as guaranteed by international law. Restrictions on the right of judicial review proposed by the Bill goes against the basic and longstanding constitutional right to challenge the legal validity of government actions as protected by … the New Zealand Bill of Rights Act.”

This is commentary on the bill in front of this Committee from the experts in human rights in this country. That is the bill that we are now discussing—a bill that clearly breaches Acts and conventions that we have had consensus on for 50 years. This is a big deal. It is not something to be taken lightly. It is not something to be done at all.

This bill is being promoted by the Government as a deterrent to people-smuggling, and as a just and sensible pre-planning initiative to enable it to process a group of asylum seekers. Well, that is clearly—very, very clearly—contrary to the evidence that we were given in the select committee. It does not do those things, and even if it did, it would still be breaching those fundamental rights, and there is no justification for that in this area. The only mention of people-smugglers has now been added in Supplementary Order Paper 232, an amendment at a later date—except in the text justifying the bill. It was not in the content of the bill, and it does nothing fundamentally to address people-smuggling.

If this Government or any party in the House that wants to support this bill disagrees with the Human Rights Commission’s analysis of this bill, or disagrees with my position on this bill, then I challenge them to support my Supplementary Order Paper 243, which will put consistency—

CAROL BEAUMONT (Labour): I appreciate the opportunity to join with colleagues in opposing this bill, the Immigration Amendment Bill. It was very interesting listening to the Minister of Immigration’s explanation, and I hope that during the course of what I am sure will be a very long Committee stage we will get down to some of the nitty-gritty, as he talks about.

Essentially, the aim of this bill is supposedly to amend the Immigration Act 2009 to enhance New Zealand’s ability to deter people-smuggling to New Zealand, and then it defines a mass arrival group and allows for mandatory detention. I intend, in speaking on Part 1, to focus primarily on clause 12, but before I do that I just want to say that the underlying reasons that we will not be supporting this bill are quite important ones, as others have said. We believe that it is punitive and unnecessary. We believe that it is a significant shift in direction from New Zealand’s longstanding support of the 1951 refugee convention, and that this bill will undermine New Zealand’s reputation as a positive and constructive global player. That is a reputation that we, I think, as New Zealanders are proud of, and this kind of bill will undermine that reputation.

The other thing I think is interesting is that our Prime Minister, John Key, has said that New Zealand was ready to deal with a boatload of asylum seekers. We have got quotes of him saying exactly that. He said that we did not need to change any legislation, that we already had any provisions we needed in place. That is what he said in July 2011, Minister. I do not know why he or you have suddenly decided that this is so urgent, but I do have to question what this Government prioritises in its legislative agenda. I want to come back to that because, actually, this bill is unnecessary, but there are many important bills that are languishing on the Order Paper that we should be dealing with.

To talk again about our international reputation, one of the areas particularly has been that we have been highly regarded internationally for our refugee policies. In comparison with our neighbours across the Tasman, our reputation is a good one, and I think most New Zealanders, even people who do not follow these matters very closely, will know that Australia’s reputation has been severely tarnished and damaged by the way that it has treated people and by the mandatory detention provisions that are in place in that country. That has cost Australia’s reputation internationally, and the cost of that detention in 2011 was $137,317 per year per person. It is not an option that we want to look at in this country. I, like others, will be talking about my colleague Darien Fenton’s Supplementary Order Papers.

Clause 12 is the operative clause in this part. It is the one that actually sets in place the various provisions to put this into effect. In clause 12 we have all of the provisions around actually obtaining the detention orders. It is the most significant clause, and it provides for a mass arrival warrant to be issued. As my colleague David Clark has mentioned, Darien Fenton has Supplementary Order Paper 244, which would amend the section in clause 12 to make detentions at the Māngere Refugee Resettlement Centre in the first instance, and to ensure that refugees are not housed together with prisoners. If this bill is going to go through, there are things that the Minister could do to mitigate some of the worst provisions.

Another Supplementary Order Paper in the name of my colleague Darien Fenton, Supplementary Order Paper 246, inserts a new section 317BA to require adequate health care and psychological support services to be available to refugees. Again, I think about what we all see and know about the Australian situation: absolute psychological problems, the suicides, the mental illness, and all of those other things. Again, most New Zealanders, even those who do not follow this sort of thing closely, would know they happen to people who are already stressed, who are already in terrible, terrible situations, who have arrived in a terrible state, and then are put into detention. What is the cost of that—the human cost of that? This Supplementary Order Paper 246 is also one that we will be supporting. We think it is a sensible suggestion, which the Minister did not comment on when he was talking about the various amendments that are on the Table.

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

IAIN LEES-GALLOWAY (Labour—Palmerston North): Sometimes it is an interjection during the debate that can be most instructive about exactly what a party’s motivation is for a particular piece of legislation. While the Green Party member Jan Logie was speaking, the member for Wairarapa, John Hayes, made the comment: “They’re not refugees; they’re economic”—what was the word—“opportunists.” He said: “They’re not refugees; they’re economic opportunists.” In that one line, John Hayes has dismantled all the arguments that the National Party members are making in favour of the Immigration Amendment Bill. They are trying to make out as though they are interested in the pastoral care of asylum seekers, and want to set up a framework that is so Draconian that it will deter people from embarking upon the dangerous journey not only from Asia down to Australia but then the particularly dangerous part from Australia across the Tasman Sea to New Zealand—the part that, of course, is so dangerous that nobody has actually done it. Nobody has actually done that. In fact, the Tasman Sea will provide more of a barrier to people wanting to try to come to New Zealand by boat than any piece of legislation ever will.

But I want New Zealanders to reflect on what John Hayes said. The National Party views people who are seeking asylum not as people who are escaping dangerous situations, not as people who would put themselves and their families at risk in order to escape a life that is such a nightmare, that is so dangerous, and that is so life threatening that they are prepared to put themselves at the mercy of those scurrilous people-smugglers to set themselves to sea in vessels that are utterly unseaworthy and to put themselves at the mercy of the Australian authorities—or maybe even the New Zealand authorities—but as people who would go through that because they are simply trying to jump the queue or they are simply trying to advantage themselves economically. That is the most outrageous aspect of this—that the National Party is trying to dress up this legislation as somehow being interested in the welfare and well-being of those asylum seekers. John Hayes revealed tonight that that is a lie, that that is an absolute lie. I think it is important that we understand what we are debating and we understand the motivation behind what we are debating, and I thank John Hayes, the member of Parliament for Wairarapa, for telling the truth. It is an unusual characteristic in the National caucus, but I am very, very pleased that John Hayes was prepared to tell the truth.

I would like to address the amendments in the name of Darien Fenton. Supplementary Order Paper 244 actually sets in law what the Minister of Immigration said he expected to be the situation. So why not lay it out in law—that is, that asylum seekers who arrive in New Zealand would, in the first instance, be sent to the Māngere Refugee Resettlement Centre, which is actually set up to deal with refugees and asylum seekers and their specific needs. Sending them to a police cell or a prison, or some other detention centre, built possibly by Serco, I do not know, is not the appropriate—

Simon O’Connor: They’re performing very well.

IAIN LEES-GALLOWAY: Well, it might be performing very well in that member’s estimation, but that member might want to consider why the New Zealand Superannuation Fund has just excluded Serco because of its policy regarding ethical investment. I want that member to go away and have a read about why Serco has been excluded because of its unethical behaviour—

The CHAIRPERSON (Lindsay Tisch): Order!

IAIN LEES-GALLOWAY: I agree we should be talking about the bill, but that member over there brought up the subject. I believe we should have it placed in legislation that, in the first instance, asylum seekers should go to Māngere, because that is where they will be best looked after and that is the facility that is best placed to take care of those asylum seekers. The Minister himself said that that is what he expects to happen, so let us codify it in law. Let us just codify that in law so that it is unambiguous and the authorities understand exactly what the Government expects. I support Darien Fenton’s amendment.

DARIEN FENTON (Labour): I am happy to have an opportunity to talk to my Supplementary Order Papers, but it is really important to remember where this Immigration Amendment Bill came from, and Part 1 in particular. It actually started with a cabbage boat. It started with a cabbage boat, when it started as a cover-up by this Government, as a dog whistle when John Banks’ donations from Kim Dotcom were in the news and were causing embarrassment—

The CHAIRPERSON (Lindsay Tisch): Order! Part 1.

DARIEN FENTON: I am talking about boats in Part 1—it is very important to know. Also, talking about mass arrivals, it would be very interesting to know—

Iain Lees-Galloway: The ACT Party will never again be a mass arrival.

DARIEN FENTON: No, that is true, and it would be interesting to know whether a cabbage boat could actually contain enough cabbages to be considered a mass arrival under Part 1 of this bill. It would be interesting to hear from the Minister of Immigration on his view.

Having mentioned the Minister, I do want to say that I was very disappointed in his comments. He was not a Minister at the time when this bill was going through the select committee process, so he was there and heard from 33 submitters who opposed this bill. [Interruption] Oh, he was not there. I do apologise, Minister. But, anyway, it is important for the Minister to know and be reminded that 33 submitters opposed this bill—particularly the definition of “mass arrivals” and “detention”—and they were people who were very qualified to oppose this bill.

But I would like to ask the Minister of Immigration what his objection is—and this is a genuine question, Minister—to my Supplementary Order Paper 246, which would actually require that “where detention is deemed necessary, all persons deprived of their liberty shall be treated with humanity and with respect for the inherent dignity of the person.” That actually comes from the International Covenant on Civil and Political Rights and from section 23(5) of the New Zealand Bill of Rights Act, so it is putting in the legislation some comfort. If this bill passes and people make it to New Zealand—and there are a lot of ifs there, may I say—and the Government is determined that detention is necessary, what is wrong with treating people with humanity and with respect? What is wrong with that? I genuinely would like to hear from the Minister about why there is a problem with that. It certainly would give some comfort to many of the people who are opposed to this bill, including the members on this side of the Chamber.

I also want to mention again my Supplementary Order Paper 244, which is saying that where it is strictly necessary, where there is a mass warrant for detention, and where it is adopted as a last resort, asylum seekers are housed in the Māngere Refugee Resettlement Centre. The Minister mentioned before that the Government has put some money into rebuilding the Māngere Refugee Resettlement Centre—although I will mention that it is a public-private partnership, and it will be interesting to know—

Hon Member: Serco.

DARIEN FENTON: It will be interesting to know whether Serco is going to be part of that and exactly how that is going to be. Somebody is going to be making money out of the refugees who arrive on our shores under the United Nations convention, which we have signed up to. We have agreed that 750 refugees can come to New Zealand, and they actually go there to be cared for in their first 6 weeks—and, may I say while I have the opportunity that they do an excellent job at the Māngere Refugee Resettlement Centre. To the member Mr Hayes, who talked about—what was it—“economic opportunists”, and anyone in the National Party who believes that, I really, really strongly recommend that they go to the Māngere Refugee Resettlement Centre. I strongly recommend they meet the children who have been in camps for years and years—

Iain Lees-Galloway: Born in camps.

DARIEN FENTON: —born in camps; babies, some of them—and meet the people who have never been to school, meet the people who have had to fight over food, and meet the people who have been waiting for years and years and years. They are refugees, but they are also asylum seekers, and I want to be very clear that when we are talking about asylum seekers, we are not talking about economic refugees. We are not talking about queue jumpers. We are talking about people who have the right to seek asylum. That is a major human right. People have the right to seek asylum in any country, and this bill completely undermines that right and treats them as criminals before they even get off the boat, and that is outrageous. It was designed as a cover-up with all—

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

DENIS O’ROURKE (NZ First): New Zealand cannot afford to be seen as a soft touch by would-be people-smugglers or illegal immigrants. We accept that there is, in fact, a risk that mass arrivals are possible, as they have been in Australia. We agree with Labour that that risk is small, but we still must be prepared for it. New Zealand First has a strict regime approach to the whole issue of immigration, which we think is currently too lax in too many ways. We are especially concerned in respect of all cases of illegal entry, and more especially, again, if New Zealand is faced with illegal mass arrivals, however remote the possibility may be. But notwithstanding New Zealand First’s hard-line approach, we are committed to meeting New Zealand’s international obligations under the United Nations’ quota programme, providing for properly processed entry into New Zealand. But illegal immigration puts strain on our ability to meet those obligations, and illegal arrivals must not be rewarded at the expense of those who follow a correct process.

The Immigration Amendment Bill, as it is, assumes that the New Zealand authorities have the capacity and facilities required to deal with a mass arrival, as defined in the bill, and this means that the relevant Government departments and agencies must have the facilities to set up one or more centres for illegal refugees soon after their arrival. We do not feel that there is any guarantee that such systems or plans are in place, and the bill, in its present form, places no expectations on the authorities to develop them. We do not feel that the current facility, Māngere Refugee Resettlement Centre, fits that bill, either. So New Zealand First, therefore, deplores the failure of the Government to support Winston Peters’ Supplementary Order Paper 219, which would ensure that proper systems are in place to deal with mass arrivals—as defined—as they happen, and if or when they happen, and which specifically requires the Chief Executive of the Department of Corrections, with the authority of the Prime Minister, within 24 hours of the issue of a mass arrival warrant, to provide facilities for the secure detention of a mass arrivals group. This does not mean a prison. It means suitable, good-quality, humanitarian accommodation, but which is secure. So I think we see that quite differently from Labour.

New Zealand First, therefore, cannot support Supplementary Order Paper 239 in the name of Peter Dunne or 243 in the name of Jan Logie, nor Supplementary Order Papers 244 and 247 in the name of Darien Fenton. All of those, we feel, would have us adopt a soft approach to the whole issue of illegal mass arrivals. Peter Dunne would have us believe, also, that 30 people or fewer are not a mass arrival, and most New Zealanders, we think, would disagree with that. But we can support and will support Darien Fenton’s Supplementary Order Paper 246 in relation to the provision of health services, which we would certainly wish to see. Parties in this House should set aside their differences and do what is in the national interest, rather than playing politics. Protecting our national borders is paramount, protecting the integrity of our immigration system is paramount, and New Zealand’s international reputation is also paramount. So, assuming Winston Peters’ Supplementary Order Paper 219 is not passed because of Government opposition, New Zealand First will be obliged to vote against the bill.

Hon DAVID CUNLIFFE (Labour—New Lynn): I rise, albeit a bit burdened with flu, to take a call on the Immigration Amendment Bill, because I think it is a very important bill. We all know that it was dreamed up as a public relations stunt to provide cover for a beleaguered Government, to get the public’s mind off scandals like the Dotcom issue.

But, actually, it is part of a much more disturbing trend that is underlying some of the recent actions by this Government. It is no surprise, Minister Michael Woodhouse, that you are wearing your dark blue tie today, because this is a dark blue bill; it really is, and it is part of a trend. It is part of a trend that is seeing the progressive erosion of civil liberties in this country. Here, the target group is some fantasised multitude of boat people, speeding their way on rickety rafts through the Tasman Sea to land on our West Coast beaches—a more ridiculous prospect I have hardly heard of before. But it is part of a very serious matter. This bill, as advised by the Human Rights Commission, breaches our international obligations under the International Covenant on Civil and Political Rights. It may breach the New Zealand Bill of Rights Act. It is not common in this House, I say for the viewers, that we would have an unmitigated breach of the New Zealand Bill of Rights Act. Never in my time as Minister of Immigration did I assent to a bill going to the House that breached the New Zealand Bill of Rights Act in this way. This should not stand.

The backdrop to this is a trend. There has been so much discussion in the last few weeks about the Government’s surveillance powers—about 88 cases of illegal spying where the Government’s response has been to say: “Problem? No problem. We’ll simply make it legal now.”, and there goes another civil liberty; or making it illegal for New Zealanders to exercise their democratic right of protest over international oil and gas companies doing offshore drilling; or even seemingly more mundane things like the unpicking of jurisprudence on the Resource Management Act or the Housing Accords and Special Housing Areas Bill, which completely wreck the judicial process. And here—no surprise—in this bill, a first claim can go through with very limited rights of appeal, with no second or third claims, and appeals to the High Court are only by leave. The traditional protections against arbitrary Government action have been thrown out by the stroke of a pen in a bill that may breach the New Zealand Bill of Rights Act.

New Zealanders should be very concerned, because that which is done to the least of them, the most vulnerable of them, can be done to all. It is just too easy for this Government to say: “Oh well, it’s about these boat people, these phantom masses who simply do not exist, who can barely cross to northern Australia, and who don’t show a dog’s chance of getting to New Zealand shores alive.” If they did, they should be welcomed with open arms and put straight into hospital, because they would be near dead. This bill is not only unnecessary, it is not only a travesty of a public relations stunt, but it is part of a deeply disturbing trend that is seeing the progressive erosion of the civil liberties and democratic protections that generations of our forefathers have fought and died for. New Zealanders should be very concerned. That which we do to the least of them can be done to us, and this dark blue Government has no hesitation about taking away the rights of others or the rights of New Zealand citizens. How long will it take before New Zealanders are—

The CHAIRPERSON (Lindsay Tisch): Sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break. This debate is interrupted. I shall resume the Chair at 7.30 p.m.

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

Hon DAVID CUNLIFFE: Before the dinner break, as members will recall, we were debating the fact that this Immigration Amendment Bill breaches the New Zealand Bill of Rights Act and breaches the International Covenant on Civil and Political Rights. It is a sham, it is a stunt, it is designed to cover up some of the tawdry scandals that are enmeshing this Government, but it does so at the price of the sacrifice of some of the fundamental civil liberties that this country has long stood for. As such, New Zealanders should take it seriously. As such, they should be ashamed. I challenge the Minister of Immigration to take a call and to explain why he has sent a bill to the House that breaches the New Zealand Bill of Rights Act and why he has put a bill before the House that, with no proximate cause, sacrifices so much in terms of the jurisprudence that we hold dear.

SIMON O’CONNOR (National—Tāmaki): I move, That the question be now put.

Dr RAJEN PRASAD (Labour): I am pleased to take a call on Part 1 of the Immigration Amendment Bill and really try to interrogate what the reasons are behind this particular system that Part 1 sets up for mass arrivals of boat people.

It has been interesting to listen to the Minister of Immigration and members opposite provide some explanations. Today we heard that the Māori canoes made it here. That was a serious argument that the Minister put up: the Māori canoes made it here. But there was another one a little after that: Abel Tasman made it here so, therefore, boat people could make it. If the Minister did not say that, somebody did on the other side. I will stand corrected, Minister, if it was not you. So the arguments for this particular system are not there.

The case has been built up around the possibility of a boat with 500 people on board coming here, and the costings have been done on that. But, indeed, the figure that this bill talks about is 11—a minimum of 11 people and then this system will be triggered. Well, that is hardly credible. I know there is an Supplementary Order Paper to make it 30. The arguments have not been made by the Minister nor by the members opposite. We ask what the real risk is to New Zealand. None has been demonstrated, so why is there is a need for such a law?

There is another argument members opposite have been putting forward as well. This is that New Zealand must develop a deterrent—a deterrent for boats that would come, I assume, out of Asia and into New Zealand. Having a Draconian system of this type will be a deterrent. Well, I say that really does demonstrate a very poor understanding of the history of refugees around the world and New Zealand’s experience in that, because that, indeed, has not happened. If deterrents are what we are talking about, then it is quite interesting that the Australians also made the same argument. When you look at their evidence, between 2000 and 2001, 94 boats came with 8,455 people on board. We know that that was the greatest increase since 1976—the 2 years, 1976 and 2008. When we look at those figures, we can see that the Australian example shows that there is no deterrent—in fact, their figures have kept on going up. There is something about their geographical location and their proximity to the refugee-producing areas of Asia, and that is why that works. We do not have a risk and we do not have a need for Draconian legislation like this.

New Zealand has a great record in responding to refugees around the world. It is a leader. It was one of the earliest ones to set up a quota system. It has lived with that for a long time. It does respect the UN conventions, it does understand basic human rights, and it delivers on those really, really well. So why is it that this Government has brought this kind of legislation to the House, when there is little need for it? We wonder. We have been asking this. Was it designed only to detract from what was happening at the time?

The issue of 500 boat people, which is the modal number that has been used—there has been no explanation provided for that, as to why that number is being used and why that sized boat could come and that is the system we must guard against and prepare for. This bill therefore sets up, having built that kind of case—and there is something irresponsible about building a case around scare tactics like that; saying that that could happen and, therefore, we need a system of this nature—6 months’ detention, which is quite Draconian, a further 28 days that can be extended, and rights taken away. The responsible State that New Zealand has been in this particular area is acting quite irresponsibly when it comes to this particular bill.

There are other reasons why we ought not to create a system similar to that of the Australians. Even the Australians say that their system has not worked, that it has not reduced the number of refugees. Many of them come, get settled, and become Australian citizens anyway.

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

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

Ayes 63

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

Noes 56

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

Motion agreed to.

The question was put that the amendment set out on Supplementary Order Paper 232 in the name of the Hon Michael Woodhouse to insert new clause 14A be agreed to.

Amendment agreed to.

The question was put that the amendment set out on Supplementary Order Paper 239 in the name of the Hon Peter Dunne to clause 5 be agreed to.

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

Ayes 61

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

Noes 58

New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.

Amendment agreed to.

The question was put that the amendment set out on Supplementary Order Paper 243 in the name of Jan Logie to insert new clause 3A be agreed to.

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

Ayes 50

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

Noes 69

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

Amendment not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 243 in the name of Jan Logie to clause 12 be agreed to.

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

Ayes 50

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

Noes 69

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

Amendments not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 244 in the name of Darien Fenton to clause 12 be agreed to.

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

Ayes 49

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

Noes 70

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

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 246 in the name of Darien Fenton to clause 12 be agreed to.

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

Ayes 56

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

Noes 63

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

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 219 in the name of the Rt Hon Winston Peters to clause 12 be agreed to.

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

Ayes 7

New Zealand First 7.

Noes 112

New Zealand National 59; New Zealand Labour 33; Green Party 14; Māori Party 2; ACT New Zealand 1; Mana 1; United Future 1; Independent: Horan.

Amendment not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 247 in the name of Darien Fenton to clause 12 be agreed to.

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

Ayes 49

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

Noes 70

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

Amendments not agreed to.

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

Ayes 63

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

Noes 56

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

Part 1 as amended agreed to.

Part 2 Consequential amendments

The CHAIRPERSON (Eric Roy): We come to the debate on Part 2, which is clauses 16 and 17 and schedules 1 and 2.

Hon MICHAEL WOODHOUSE (Minister of Immigration): I want to take a very short call on what is a very short part, which should not require too much detailed debate, given that the substantive effect that this is giving agreement to has already been addressed in Part 1. But I do want to take the opportunity to address some of the comments made by members Logie and Cunliffe in respect of how the detention provisions, the warrants to which Part 2 refers, are in some way a breach of the New Zealand Bill of Rights Act. Ms Logie mentioned that they were also contrary to the Human Rights Act and the refugee convention. I think Mr Cunliffe mentioned the heinous or egregious breach of the New Zealand Bill of Rights Act, which I find rather interesting, because, of course, the Attorney-General is required to make such a comment if, indeed, it is felt by the finest legal minds in the nation that that were the case.

In pointing this out, I am under no illusions that I am going to change the minds of Ms Logie and Mr Cunliffe—a mind of sanctimony is a hard one to change. But indeed the Attorney-General, having given very, very careful consideration to whether the Immigration Amendment Bill did breach the New Zealand Bill of Rights Act, as he is required to under section 7 of that Act, did not do so, nor did the justice officials, nor did any of the other officials supplying the information to the Transport and Industrial Relations Committee. What Mr Cunliffe is saying is that he knows better than the finest legal minds in the country. He knows better than all of them.

I do not think anybody could say that Mr Finlayson is anything other than straight up and down the line when it comes to his obligations under section 7 of the New Zealand Bill of Rights Act. And yet he, having taken the best advice and having looked at this bill in its entirety, decided that it was not a breach. Indeed when the bill was reviewed, the Ministry of Justice pointed out that detention is not and does not become arbitrary. A District Court judge has to be satisfied that detention is necessary. It enables the judge to issue a warrant for a shorter period of time than sought, or to revert—and I think this was a recommendation of the committee—back to an individual warrant of commitment when the judge is not satisfied that a group warrant is necessary.

So I utterly reject the members’ supposition, and all the shaking of the heads is not going to change that. And certainly I do not expect I will change Ms Logie’s mind, because I rely on better legal advice than the skewed opinion of Ms Logie and certainly Mr Cunliffe, who I believe is a lawyer and should know better. This—

Hon Judith Collins: No, he’s not. He’s not a lawyer.

Hon MICHAEL WOODHOUSE: He is not? Well, thank goodness for that. At least he has got some out because that would be a bit of a travesty on the legal profession if that was the extent of his legal knowledge. This is not a breach of the New Zealand Bill of Rights Act. This is not a breach of any of those conventions that this Government takes extremely seriously.

DARIEN FENTON (Labour): I want to make a contribution to Part 2, but I start by responding to the Minister of Immigration. I find it very interesting that he thinks he knows better than the United Nations High Commissioner for Refugees, the Human Rights Commission, various refugee organisations, and a range of people who came to the Transport and Industrial Relations Committee and opposed this Immigration Amendment Bill very strenuously and who have been ignored, as we expected they would be, and, sadly, as they expected they would be as well. Whether or not it is a breach of the convention no doubt will be tested in time. I look forward to that occasion, and to that Minister having to front up in international fora and justify this bill.

Part 2 deals with just one issue really, which is changing one of the forms from the Immigration Act 2009 to deal with supplying a warrant for mass arrivals. I wanted to go over the issue of mass arrivals and the definition of “mass arrivals” again. If we go right back to the very beginning of this bill, the justification for it was, as included in the regulatory impact statement, that a mass arrival for the purpose of this bill: “means an arrival: by a substantial group of people (by sea or air)”. Then it went on to talk about assumptions around the bill that were made in the regulatory impact statement, including that “500 people would be involved in a mass arrival”. This was when it first came to Parliament. It was over a year ago, and it was around about the time when there had been a steel-hulled vessel arrive in Canada with 500 people in it. That sent our Ministers into overdrive to find an excuse to introduce this bill to cover up for the cabbage boat issue that was happening at the time. It was coming down the river or going up the river—I cannot remember exactly what it was.

Then when the bill actually arrived in front of the Parliament the mass arrival that is referred to in the warrant was 11 people. That does not constitute a substantial group of people arriving by sea or air—11 people. That is ridiculous. It is a joke. Surely it is a joke. A mass arrival is 11 people! New Zealand, under this bill, could not cope with 11 people arriving by boat or by air and claiming asylum, when we actually cope every year with something like 300 asylum seekers who come by plane. So that was crazy, and then we moved on to the last part of the joke, which was Peter Dunne proposing, which has just been passed in Part 1, that the mass arrival definition be moved to 30. Now what we are saying in the bill—

The CHAIRPERSON (Eric Roy): Order! I am listening very carefully, and Part 2 is about consequential amendments. I am just waiting for the member to draw this debate in to the subject matter of Part 2.

DARIEN FENTON: I raise a point of order, Mr Chairperson. Perhaps you can help me with this, because the Minister of Immigration started off the debate with a fairly wide-ranging discussion on Part 2.

David Bennett: No, he didn’t.

DARIEN FENTON: He did. I am concentrating on mass arrivals, which is what the warrant is about, so I thought that, actually, I was addressing Part 2 in a way that the Minister had not.

The CHAIRPERSON (Eric Roy): I was kicking his shin under the table. Look, let us not try to justify where we are. We will try to keep this debate focused on Part 2.

DARIEN FENTON: OK. Well, I am concentrating on the warrant, which is in Part 2. If you read the bill, everybody, you will see that the schedules are about altering the warrant that applies to a mass arrival. That is the major amendment here. That is what I have been talking about—mass arrivals; what is a mass arrival. Under this bill it started at 500, then it went to 11, and now it is 30. It is really confusing.

Dr Rajen Prasad: When is a boat a boat?

DARIEN FENTON: Well, when is a mass arrival a mass arrival? Is it 500? No, obviously not—obviously not. In the meantime we have all sorts of other mass arrivals, if I may say so, and I wanted to mention them—in particular, a mass arrival of something like 1,000 workers being employed by Weta Digital, overseas workers—

The CHAIRPERSON (Eric Roy): Oh no, look—[Interruption] Order! [Interruption] Order! Come on. The member is drawing an extremely long bow, and the changing of a form under the consequential amendments is—the member has gotten outside the scope of what Part 2 is. So I just remind her and ask her to come back.

DARIEN FENTON: OK, well, I will come back to mass arrivals, if I may, because that is the major change in the form in schedule 2. The only reason we have got schedule 2 is that we have a bill that deals with mass arrivals, and form 5 is the “Warrant of commitment (mass arrival warrant)”. The whole reason that we have this form in schedule 2 is that we have a bill that describes what a mass arrival is. I go back to my earlier point that I am still very, very unclear about the original justification.

Dr DAVID CLARK (Labour—Dunedin North): I confess that I was looking to hear what Darien Fenton was going to say. She was on the cusp of really, kind of, getting to the grips of what the mass arrival issue was. That is something that has been troubling me, just how it will be defined. I hope she has another opportunity in the debate to further expound on it because this is an important debate.

I made the point in Part 1, so I will not labour it now, that this Immigration Amendment Bill is attempting to distract from the scandals in the Government. I guess I want to carry that on in so far as in Part 2 we actually have the practical application of that. We have the consequential amendments in Part 2, which give effect to things through other legislation. If we imagined for a minute that some of those things were different in Part 2, we would get to a different outcome. We would actually get a bit more chaos if the consequential amendments were not followed through. Arguably, that would actually be a better outcome than having a consequential amendment that reflected the legislation, because this is such a poor piece of legislation—it is such a poor piece of legislation.

We see, for example, that the amendment to section 116 states: “in the case of a person detained under a mass arrival warrant … section 317B”. If that number was wrong, then this legislation would not be able to be enacted in the same way. I am interested in whether the Minister of Immigration will get to his feet to suggest otherwise, because these amendments in here—for example in section 117, to replace the word “earlier” with “earliest”—put a different emphasis in the legislation. This is all designed to ensure that this legislation is effective when it is put in place. We in the Labour Party think this is a bad piece of legislation. It seems that the actual best outcome would be for Part 2 to be ineffectual because that would lead to a fairer and better outcome.

There are plenty of opportunities. My colleague Darien Fenton’s Supplementary Order Paper 244 would see people referred to a refugee centre—the current arrangement that is in place—and a much more humane way of dealing with the issue, rather than the hysteria being cranked up by this Minister, following others in his caucus, in order to distract from the real issues in the country.

This is a Government that is propped up by support parties that are troubled—one that is in court at the moment, one that is being stepped back from a ministerial post, and another party that is squabbling amongst itself about who is leader. We have a mess in the Government—and, of course, there was Aaron Gilmore, who has just gone. This is a Government that is struggling, so we see it prioritising legislation that is actually not good for New Zealand. [Interruption] Government members across there do not like it. You can hear them interjecting because they know it is true. I would be embarrassed, too. If you look across there, you will see some red faces on some of those backbenchers. They are embarrassed about this legislation. They are embarrassed about Part 2. They know what will happen when Part 2 gets enacted. They know that they sign their names to this kind of legislation—this kind of knee-jerk response—that is actually not good for our country and is not good for our reputation as a humane and hospitable place where refugees are treated with respect and integrated into the culture. To those people across the Chamber there, I tell them that this is a bit of a day of shame. This is John Key’s attempt to channel John Howard with a bill that politicises the treatment of refugees and asylum seekers. It is divisive, it is destructive, and it does nothing to address the real issue.

We have got to ask ourselves what has changed. What has changed? In 2011 John Key said that New Zealand was ready to deal with a boatload of asylum seekers—ready should one make it to our waters—and he knew that was never going to happen. What has changed since 2011, apart from John Key’s plummeting popularity? That is why Government members are exercised over there. They know that John Key is becoming unpopular, because this kind of knee-jerk reaction—this kind of knee-jerk legislation—is the only thing that is going through the House. There is actually not anything that is qualitatively changing things. We know this Government has got the worst economic record in 50 years, and there is no legislation being progressed to address that very important issue. Government members know it is true—across the Chamber they know it is true—and that is why they are exercised. That is why they are embarrassed about this legislation.

John Key said: “Look, we’ve upgraded our operating manual. We can deal with this immigration issue. We’re confident we understand our legal position.” Well, something has changed since—something has changed since—and it is the popularity of the Government. That is why this legislation is being pushed through—to try to distract from the real issues.

The CHAIRPERSON (Eric Roy): I want to make a contribution about where the debate is going. Just because the Immigration Amendment Bill mentions mass arrivals—the debate is about the consequential effects of clauses 16 and 17—it does not open up a whole debate about mass arrivals. Part 2 is about consequential amendments.

SUE MORONEY (Labour): In speaking to Part 2 of the Immigration Amendment Bill, I do want to speak to the issue about the form that is actually in schedule 2, which is referred to in Part 2. There is now a new form in this country. How good do we feel about this as New Zealanders that the Government has had to create a new form? It is called “Form 5” in this legislation. The title of this new piece of bureaucracy that we in New Zealand should all feel so proud about is “Warrant of commitment (mass arrival warrant)”. What a fabulous new form that is for New Zealand to have, and what a fabulous new form that is for New Zealand’s international reputation. We will have a new form, a new piece of bureaucracy, which can be filled out to issue a warrant about mass arrivals.

I note that this new form—which is quite hard to describe to the public because it is in front of us in writing—starts off saying that the form is “To every constable”, and it names the constable, and “To manager(s)”. It says that the form is going to go “To Person(s) in charge of [specified premises]”. The next part is the part that really interests me, because it says that they are going to be required to put down the names of the people who are going to be detained—the names. Remember that when the Government first proposed this piece of legislation a mass arrival was going to be 500 people. So the names of 500 people were going to be written on this form before it could it actually be lodged. But then the Government decided “Oh no, not 500, that’s not a mass arrival. It’s only 30.” But by the time we get down to this form, which is actually in the schedule attached to Part 2, we know that they have only to come up with more than 10 names before this particular form can be validated—more than 10 names.

That reminds me of a Get Smart skit. I do not know whether people remember Get Smart, but it used to have an ongoing gag that Maxwell Smart when he was cornered would say “Would you believe the entire building is surrounded by the FBI?”, and, of course, the baddies would go “Nah, don’t believe that.”; and he would go “Well, would you believe that the boy scouts have got the building surrounded?”; and they would go “Nah, don’t believe that.”; “Would you believe my grandmother’s outside?”; “Nah, don’t believe that.” Well, that is what has happened with this bill. The Government started out with a big scary concept of 500 people coming in this mass arrival, and we were going to have 500 names on this form in schedule 2 under Part 2—500 names the authorities were going to have to come up with before they could issue this form. What has it scaled down to? Apparently, this big scary mass arrival is going to be 10 or more people—or is it more than 10? It is more than 10—I am exaggerating, as I am prone to do. It is actually the names of 11 people that they will have to have down here. So, sorry for that gross exaggeration.

The point that I am trying to make is that we will now have a new form in our bureaucracy. That is what this is creating. It is just more bureaucratic form filling. Authorities will have to track down 11 people, whose names are going to have to go on this form before it can actually fit the definition under the legislation, and then they will have to fill out all the rest of this form in order to do what? Basically, it is in order to protect our shores from John Key’s ghost ships. That is what it is all about. It is all about ghost ships, as a distraction from all of the scandals that this Government has been involved in. Is it not surprising, the timing of our debating Part 2 today? The Government has another scandal on its hands and—hello, hello—what pops up on the Order Paper again but Part 2 of the Immigration Amendment Bill, the mechanism it has been using since last Christmas to distract us from any political problem that it has.

I will be very interested to know, in 1 or 2 years’ time, whether this form has ever seen the light of day. Has creating this form in this schedule been a complete and utter waste of time? Will it ever be used, Minister? Is there any situation that the Minister of Immigration can see where this form is going to be filled out with those 11 names?

Hon DAVID CUNLIFFE (Labour—New Lynn): I wish to begin by responding to the earlier intervention of the Minister of Immigration. The Minister was unclear in his comments as to whether or not, in fact, a full New Zealand Bill of Rights Act vet had been obtained from the Attorney-General. The Minister read to the Committee some words, by which the Attorney-General indicated he was not unhappy with certain processes in the Immigration Amendment Bill. I seek the Minister’s clarification as to whether that amounted to a full New Zealand Bill of Rights Act vet. If he does not have a signed New Zealand Bill of Rights Act vet, he should disclose that to the Committee. That is the first matter.

The second matter, in relation to your own intervention, Mr Chairman, is quite simple. It is that in debating the consequential amendments it is, in our view, necessary to go back to the principles that those amendments give effect to. Therefore, in the balance of my remarks I will stray somewhat towards the purpose of the bill.

I do so by firstly taking up the issue of the mass arrival group. There were amendments, which were rejected by the Committee in debate on the previous part, to extend the number. The issue of mass arrival is germane to this, and the consequential amendments, because it is simply highly unlikely that the country is going to face such a mass arrival. It would require a large vessel to navigate a very, very long distance in hostile and very difficult climatic waters to get to New Zealand. That would be a very, very unlikely thing, and that brings the Committee to the point of why we are debating this bill. It comes to the point that this bill is nothing more than a distraction—a distraction from the scandals and a distraction from the fraying of this Government’s majority.

Hon Members: Oh!

Hon DAVID CUNLIFFE: The Government backbenchers can sit at the back and bray, but they know in their heart of hearts that the last couple of weeks have seen the beginning of the end of this Government. This is a Government that is teetering on the brink of losing its majority. How careless to lose a Minister; how much more careless to lose a member of Parliament. I will return back to the bill. You never know, the current MP for Ōhariu might find that he is a refugee in some other country before long. Perhaps he will be taking a boat back the other way and be deemed a mass arrival by members—perhaps a mass departure.

Why is there no reciprocal clause in this bill about mass departures? What is clear under this Government is that there has been a massive departure—something like 54,000 Kiwis to Australia in the last 12 months, an all-time record. But there is no clause in this bill to prevent mass departures. A Government that is exporting people as fast as the Key National Government is ought to be glad that a few people want to come to New Zealand, especially if they have had to weather the hardships of travel as boat people. We must not make light of a terrible human tragedy, and, obviously, nobody would find themselves by choice in the situation of being a boat person.

New Zealand has a very strong reputation in regard to upholding its obligations to the United Nations and the global community in respect of the refugee take. We have had bipartisan consensus for many years around the fact that we would take 700 to 800—I think usually 750—United Nations High Commissioner for Refugees quota refugees. We have maintained the highest standards in terms of having an asylum vetting system that has allowed us to uphold our international obligations. If it is the Government’s position that we will continue to do that, why did it vote against the honourable Darien Fenton’s Supplementary Order Papers, which actually required that in this law?

Simon O’Connor: They’re amendments to Part 1.

Hon DAVID CUNLIFFE: Yes, they were amendments to Part 1, but these are consequential amendments that follow from that part. If it is the Government’s position that it will be abiding by international law, why was it unwilling to put provisions in this bill that undertook to do exactly that?

This is a shoddy piece of legislation, and, all House banter aside, it is one step further down the road of corroding the standards of New Zealand’s rights, New Zealand jurisprudence, and New Zealand’s civil liberties, which this Government is making a hallmark of in its second term as it stampedes towards electoral defeat and the torrid mess that will be known as the National caucus. I see the Minister of Justice there sharpening the knives already.

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

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

Ayes 63

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

Noes 56

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

Motion agreed to.

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

Ayes 63

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

Noes 56

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

Part 2 agreed to.

Schedule 1

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

Ayes 63

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

Noes 56

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

Schedule 1 agreed to.

Schedule 2

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

Ayes 63

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

Noes 56

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

Schedule 2 agreed to.

Clauses 1 to 3

Dr RAJEN PRASAD (Labour): I am pleased to take a call in the Committee stage of this bill and really reflect on the title of the bill. Although calling it the Immigration Amendment Bill is putting it into a wider context, this bill creates a different category, called protected persons, and they are not refugees. If you look at schedule 1, which we just passed, there are refugees and protected persons, and protected persons are really not to be protected. So if I were to give this bill a proper name, it would be something like the “Protected Persons Bill” or the “How Not to Protect Protected Persons Bill”, because it does create this crazy dilemma that we have now created in this bill a new category, called protected persons. To all intents and purposes they are refugees, but we will not deliver to them the kinds of services we are delivering to refugees. Refugees come to the border not categorised as refugees, but they claim refugee status. They get treated quite differently, but in respect of this particular group of protected persons that we have created in this new category it makes no difference to their plight. We take no responsibility, really, because what this bill does, this “Protected Persons Bill”, as I am now calling it, is ensure we do not protect them, because we will put them in situations where they will be in danger of mental health difficulties and the other kinds of difficulties that the Australian example shows us.

We are really giving a very clear signal that we do not intend to honour our obligations to the refugee convention. The convention dictates how we are to behave, and yet we will take them, we will lock them up, and we will treat them quite differently for long periods of time. So I think that something like the “Protected Persons Bill” or the “How Not to Protect Refugees Bill” might be appropriate names for this, because this bill gives that very clear signal that we will not be protecting them.

That leads me to perhaps another name, and it could be something like “The National Party’s Disinterest in Refugees Bill”. One has to wonder what it is about the National Party that it does not like refugees. I wonder whether the present refugee population of New Zealand actually understands that and appreciates that, because here are Government members taking groups of people like them—like the present refugees but at an earlier stage—and treating them in this vile and objectionable way. So this actually shows the National Party’s antipathy towards refugees.

Hon Michael Woodhouse: They are not refugees; they are asylum seekers.

Dr RAJEN PRASAD: Well, we treat the others who come seeking asylum much better. We do not lock them up. We actually provide services to them, Minister, so why is it for this group, of maybe only 30—the Minister originally intended it to be a group of only 11—that we lock them up in that kind of way? Minister, we have presented argument after argument that there is no evidence for the need for this. [Interruption] There is not. No boat has come this far. Despite Abel Tasman and despite the Māori canoes getting here, as speakers on this side have said, there is no need for this bill. It has not happened yet, and there are other ways of dealing with this situation if it occurs. The Minister defends that by saying that this bill is not National against refugees, but in fact that is the effect of it. When people become refugees, they become part of our refugee population. The Minister is dancing on the head of a pin when he says these people are not refugees. We have responsibilities under the convention to make sure that we treat them properly. There are guarantees in the system the Minister has designed here that they will not get that fair treatment.

Look at the mental health statistics out of the Australian example, Minister, and look at what those examples tell us. Listen to the Australian examples. But, no, another name for this bill is the “John Howard Lookalike Bill”, because this is, indeed, what John Howard did. Look at what happened to him in the end. He might have won an election, but he told lies to the Australian people. [Interruption] Mr Howard did—the Australian Prime Minister did. Remember what he said about children being thrown back into the water? He lied about that. There is something similar about this particular bill in that, in a sense, it is intellectually dishonest to say that they will come.

ANDREW LITTLE (Labour): Thank you, Mr Chairman, for the opportunity to take a call on this bill, the Immigration Amendment Bill, which is probably one of the most insidious pieces of legislation this House has had to consider since last Wednesday, when we had the first reading of the dreadful Employment Relations Amendment Bill. Now we come back to this. This is a time of electoral desperation for this Government. Anything it can do to divert and distract attention, it will do. So it will trot in all these dreadful pieces of legislation when it suits, and now, tonight, it is the turn of the Immigration Amendment Bill. It deals with so-called mass arrivals. The most unusual thing, however—I just want to make this observation—is that so many pieces of legislation that have come through this House in the last few weeks or months have created injustice upon injustice. So it is refreshing, at least, to see that it is the Minister of Immigration, as opposed to the Minister of Justice, who has introduced this latest piece of legislation, which creates the latest dreadful injustice we have to contend with.

There is no question that this bill is absolutely and utterly meaningless. It will apply to nothing. There is no risk for it to address. There is no remedy that it can provide to any meaningful problem. Passing this legislation is taking up the time of this Committee, its energy, and, I might add, its intellectual capacity, although that is really affecting only this side of the Chamber. Mr Woodhouse looks at me quizzically and curiously. He is sitting there thinking: “Intellectual capacity? I’m an accountant. I’ve never heard of that before.” So a more suitable name for this piece of legislation would be, as my colleague Rajen Prasad suggested, the “Immigration (John Howard Reprise) Bill”. This bill is a throwback to an age of political chicanery, duplicity, and manipulation that we have not seen for a long, long time. We certainly have not seen it under the Julia Gillard Government—that straight-shooting Labor Government across the Tasman. We have not seen anything like this for some years.

This bill might otherwise be named the “Immigration (Electoral Desperation) Amendment Bill”. Whenever you are in trouble, when your coalition partners are floundering around and evaporating before you, what do you do? You create a distraction. The only mass arrival that this Government has been looking forward to—and that has not happened—is the people turning up to the United Future membership recruitment office. There is no one turning up there to sign up any more. That party is history, and its one and only member is history as well. This Government is desperate to cobble together something that looks like a stable and credible Government. Well, it is not happening, and it is disappearing fast.

The only other suggestion I have for this piece of legislation—because, humour aside, it is embarrassing, frankly, for the Committee to be spending its time on legislation of this nature; it runs counter to the international obligations and commitments that we have made—is an alternative title, which is the “Immigration (Degradation of International Reputation) Amendment Bill”. This is a bill that cuts across our reputation as a country that has established itself firmly as one that offers the hand of solicitude, support, and succour when it is needed to our international friends—those who are left stateless, those who are, by the circumstances in their countries, left to flee for a better life and a better time. This legislation does not reflect that value, that approach, of this country and its role as an international citizen. It is an embarrassment, and as politicians of this country travel the world over the next few months and years, they will be collared and asked how on earth a nasty, insidious piece of legislation like this could get passed. And we will have to respond that it is because of the nasty, insidious Government that put it through.

CAROL BEAUMONT (Labour): I want to pick up where my colleague Andrew Little left off. I would like to think of another name for this bill, because the title “Immigration Amendment Bill” does not really cut it, does it? It does not really describe what this bill is about.

I would like to suggest that we call this bill the “Immigration (National’s Shame) Amendment Bill”. That is for three main reasons. First and foremost is the fact that the actual content of this bill—this is where I am picking up from my colleague Andrew Little—is shameful. The suggestion of how we might treat these people is shameful—people who are already in the worst possible situations, people who risk their lives and their families’ lives to try to escape terrible situations. For these people to come to a country and be detained in the manner described in this bill is shameful. It is shameful that our country’s reputation is being dragged through the mud by this National Government. It is a reputation that many of us, and many people listening to Parliament, are very proud of. It is a reputation that is well deserved, because New Zealand has been a country that has treated people well and has played a role in all sorts of international forums.

The bill is shameful in that regard, but, secondly, it is shameful in the sense that I actually do not think anybody across the Chamber believes it is necessary. It is shameful because we are wasting the time of this House putting through legislation that almost inevitably is not going to be used, because we are not going to have mass arrivals in this county. We have not had any such situation arise. Others this afternoon and this evening have described the reasons for that. We are a long way from anywhere. We have a very hostile climate to get through in order to reach this country by boat. The expectation is that we will not need to use this legislation. There will not be mass arrival groups for us to detain, thankfully.

None the less, it is still shameful. It is shameful that the Government is using this bill, as others have said, to disguise some of the other things it is doing, as a distraction to try to do the dog whistle politics, to try to appeal to the lowest common denominator—the anti-foreigner, anti-immigrant kind of mentality that exists and that this Government likes to manipulate.

But also this bill is shameful because this is legislation that has been prioritised over other legislation. It is shameful because there is really important legislation that this House should be dealing with. I would say, for argument’s sake, that legislation trying to regulate loan sharks would be very important legislation for this Parliament to be dealing with, because it would actually make a real difference in people’s lives. But despite promising that prior to the last election—cynically, in fact, in November of 2011—and then a whole suite of backbench National MPs talking about getting tough on loan sharks, at the end of April we finally had a bill introduced to this House, and it is still awaiting first reading. We could profitably be dealing with something like that, which we have already said we would support going to select committee because it is a real issue. It is an issue that I have been talking to budgeting services about over the last 2 months. Thousands of New Zealand families are getting stung by high interest rates, high fees—

The CHAIRPERSON (Eric Roy): Order!

CAROL BEAUMONT: —getting into a spiral of debt—

The CHAIRPERSON (Eric Roy): Order!

CAROL BEAUMONT: Well, Mr Chairperson, it is about the title of this bill, which is the “Immigration (National’s Shame) Amendment Bill”, and this is the third part of why this is National’s shame. Not only is it offensive in content, not only is it a shame because it is unnecessary, it is a shame because we are doing this instead of doing things that we actually need to be doing and that are worthwhile. I think that it fits within the title “Immigration (National’s Shame) Amendment Bill”.

I do not think that anybody in this Committee has presented any argument. Certainly those members opposite have not, nor has the Minister of Immigration, presented any really compelling reason for this legislation—

Dr Rajen Prasad: Not one call.

CAROL BEAUMONT: Not one call—exactly—as my colleague says. Apart from the Minister, we have just had National MPs sitting across the Chamber moving closure motions. This is a pattern. This is a pattern we see all too often. Why are members opposite not willing to actually stand up and debate the bill? If this is such an important issue, if this is so necessary, get up and say something about it. You have an opportunity. We are still on the title clause. Get up and explain to us why this is such an important bill. Thank you.

MARK MITCHELL (National—Rodney): I move, That the question be now put.

JAN LOGIE (Green): Thank you, Mr Chairperson.

Hon Member: Good choice.

JAN LOGIE: Good choice, indeed. I would like to speak and also offer my opposition to the title of the Immigration Amendment Bill, which I do not think describes what is happening here at all. There are many things I would like to call this bill, but most of them I am not allowed to say in this Chamber, I must say. So I will constrain myself to polite language in alternative titles, though, to be honest, they will not reflect how I actually feel about this bill. The Minister of Immigration may have called me sanctimonious for quoting the Human Rights Commission. You know, it was not actually my opinion I was offering; it was the Human Rights Commission’s opinion. If that makes me sanctimonious, well, I will live with that.

Being on the side of the Human Rights Commission, of the United Nations High Commissioner for Refugees, of people working with refugees in Australia—you know, I am OK siding with those people and their views of this bill. I am sure they would come up with quite a few titles for this bill that were not “Immigration Amendment Bill”. I think one title maybe would be the “Needless Fearmongering Bill”. I do want to speak to that title a little bit, because it speaks to some of the heart of this for me, around the difficulty of speaking to this bill. It is difficult because when we talk about that, in fact, there is not going to be a mass arrival, because—despite the fact that, you know, waka arrived here from the Pacific a while ago and we had some large boats—the world is different now.

We know that the boat that made it to Canada that had 500 people on it was a multimillion-dollar boat, I think, and was funded by a very wealthy Tamil community in Canada. We know that in New Zealand we have had advice from the officials that we have no such wealthy refugee community in New Zealand who would be capable of funding such a venture. So it is incredibly, incredibly unlikely.

The fact that a boat made it to Australia carrying people who said they wanted to come to New Zealand means nothing—nothing at all—because your first point of arrival is where you seek refuge. And to say you want to go somewhere else means nothing. But in speaking the way I am speaking right now, I am really conscious that it creates a sense of fear that, actually, we would not want an arrival of people, that it is something we need to shore ourselves up against and we need to create barriers to prevent these people from coming here. That is not an impression that I want to give, because these are people who are fleeing wars, who are fleeing persecution. Many are people who are trying to do the right thing, who may be going against their military and the call from their Government to kill people, which they find morally repugnant, and they are fleeing for their lives in the belief of doing something right. These are not people we should be shoring ourselves up against and creating barriers for in order to prevent them from entering our country.

Our country does very, very little, actually, globally, in terms of supporting asylum seekers. In terms of Australia, actually we are talking about not wanting the terrible situation that is happening in Australia. Globally, Australia takes in very few asylum seekers compared with other countries. Look at what is happening in Lebanon at the moment and how it is welcoming refugees and asylum seekers into its country, into its systems. It is not setting up camps. In fact, it is just allowing people to integrate, because it recognises its role in the global community, in protection, and that fundamental value of us having a place to go in a time of strife. That is what we should be striving for. That is what the convention committed us to. This bill should be titled the “National Day of Shame Bill”, the “Bill Lacking in Humanity Bill”, the “Not Doing Our Fair Share in the World Bill”, or the “Ruining our International Reputation Bill”. I can list off flippant titles, but this is not a flippant matter. This does come down to the leadership we are going to take in the world in terms of ensuring people’s safety and being able to stand up and say that we have a role to be able to ensure people’s safety, we need to sort out the UN systems, and we need to sort out the refugee camp systems. I went to a refugee camp this year for the first time in my life, and they are no life.

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

SUE MORONEY (Labour): Thank you, Mr Chairperson. A very good choice indeed, Mr Chairperson, because when it comes to debating the title of this bill, the Immigration Amendment Bill, it causes me to internalise a complicated situation, I have got to say.

Hon Members: Oh!

SUE MORONEY: It does. When I am contemplating the name and the title of this bill, it causes me to say that I am internalising a complicated situation, because I am trying to work out how I can get the phrase “ghost ships” into the title of this bill. I think if we were able to get, you know, “Immigration (Ghost Ship) Amendment Bill”—and I should just say, so that people listening to this debate understand, that I am talking about ships: s-h-i-p-s. I just want to make it crystal clear that I am talking about ghost ships.

If we had that in brackets as part of the title of this bill, every time that people looked at this bill, when it becomes an Act, they would remember the background to what actually brought this about. They would remember that during the Christmas break last year—no, sorry, not the one just gone but the one prior to that. I think the Minister at the time might have been Simon Bridges, I think it was, who is well-known for bringing before this House lots of pieces of legislation that do not have a New Zealand Bill of Rights clean bill of health, if you like. He is actually becoming quite known for that. It was Simon Bridges, who was the Minister at the time, who said: “Look, look over there. Don’t look here at the National Party scandals. Look over there. Somewhere out in the world a long, long way away, in a land far, far away, there are 500 people on a boat and they want to come to New Zealand. They want to take our country over.”

It was like—what is it that John Key says these days? He says: “Oh, nothing to see here.” That is right. That is what he says: “Move along, nothing to see here.” Well, Simon Bridges was trying to copy that sort of stance: “Move along, nothing to see here. Stop looking at the scandals.” I cannot remember exactly which one it was at the time, but this Government is constantly embroiled in scandals. It is a bit hard to keep up, but there was one going on at the time that caused Simon Bridges to do the “Nothing to see here. Move along. Look over there; way, way away over the other side of the world”—and I think, in fact, over to Canada. That is how far away it was. There was a boat with 500 people on it apparently going via Canada to get to New Zealand, because that was where they really wanted to come! He was trying to convince New Zealanders that this boat was on its way here and that not only would it arrive here but also when it arrived here our way of life would be threatened. Our way of life would be threatened by these 500 people. And, of course, we know now that this mass arrival of 500 people then turned out to be 30 people, and has now been reduced to more than 10 people. So the whole sort of scaremongering thing that has gone on should be reflected in the title. I would like to get “ghost ships” in there in brackets, but if I cannot do that—if we cannot actually get an amendment to get “ghost ships” in there in that way—then I would like to get the phrase “scaremongering” into the title, because I think that this is exactly what this bill has been designed to do.

I notice that when there have been members from the Labour Party or the Green Party taking calls, the members opposite have wanted to bellow and call out and bray from their seats—well, not even their own seats, quite frankly, but that is another matter—but they will not take a call. They will not actually get up and take a call to express their views. They will only yell across the Chamber, instead of actually getting on their feet and telling us why it is that they believe that this is such an important measure that should be taking up the House’s time. But they have no way of actually being able to describe that.

I join with Jan Logie in looking in wonder at a Minister of Immigration who got to his feet during the debate to sanctimoniously declare that Jan Logie was sanctimonious. I thought it was actually quite comical to see the sanctimony coming from that Minister as he sanctimoniously had a go at another member for apparently being sanctimonious. And how was that member being sanctimonious? She was being sanctimonious by pointing out the human rights abuses inherent in this piece of legislation. Well, I join with her, and I say that Jan Logie should wear that as a badge of honour, quite frankly. If that is what it takes to be called sanctimonious—

MIKE SABIN (National—Northland): I move, That the question be now put.

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

Ayes 63

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

Noes 56

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

Motion agreed to.

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

Ayes 63

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

Noes 56

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

Clause 1 agreed to.

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

Ayes 63

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

Noes 56

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

Clause 2 agreed to.

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

Ayes 63

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

Noes 56

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

Clause 3 agreed to.

Bill to be reported with amendment presently.

Bills

Legal Assistance Amendment Bill

In Committee

Part 1 Amendments to Legal Services Act 2011

Hon PHIL GOFF (Labour—Mt Roskill): This bill was introduced initially by the former Minister of Justice Simon Power. It would be easy to blame him for the absolute disgrace that that original legislation represented. It would be easy to blame him, but for the fact that every member of the National Party in Government and its disgraced acolytes that support it in this House voted for that bill. That bill went to the Justice and Electoral Committee and it received, first of all, the regulatory impact statement, which said that the legislation introduced by that National Government would have denied people the basic right that every individual who lives in this country should have, which is about access to justice. Legal aid is designed to ensure that those with insufficient means are not denied access to justice.

You see, it is probably pretty hard for the National Party to understand that justice is not a commodity. It is not a commodity that can be bought by those who can afford it and be denied to those who cannot afford it. But that is exactly what the Legal Assistance (Sustainability) Amendment Bill would have done. And what we have here in this legislation, the Legal Assistance Amendment Bill, is a nine-page apology from the National Government about the nature of the changes that it originally sought to make, which would have denied justice to people in this country. It would not only have denied justice to those who could not afford it and not only put at huge disadvantage one person of lesser means in a civil proceedings against somebody of greater means but it would have ended up clogging up the system and costing more, because when a person is forced to be a self-represented litigant, that requires more costs at every stage of the justice system.

What is more, the regulatory impact statement pointed out that this would put huge pressure, for example, on social agencies. It would increase the level of stress on people who were facing domestic violence, and those problems would not be resolved, because there was not a mechanism to resolve them. It said that the fundamental principle of a decent society, which is justice available to all, would be taken away.

Judith Collins, in the second reading of this bill, and Simon Power before her, said that the reason that this bill was being introduced was that the cost of legal aid had soared. The cost had gone up. It had gone up because in 2007, for the first time in 20 years, the rates of payment to legal aid providers were actually adjusted. Of course, the cost went up, but the result of this legislation, as introduced and probably as it still is amended by the committee, is that fewer and fewer providers will be willing to lose money by representing people on legal aid, and that would create a huge injustice in this country. It is not that legal aid is generous. To qualify for legal aid as a single person, you have got to earn less than $22,000 a year. That is about $425 a week. It is $10.60 an hour. Do you know what this bill and the requirements of the threshold of legal aid do? They prevent any working person earning more than the minimum wage from being eligible for legal aid.

Hon David Cunliffe: That is outrageous.

Hon PHIL GOFF: That is outrageous, as my colleague has just said. It is outrageous, because the people who cannot afford the cost of legal representation are often those really hard-working people on low incomes, and they would be denied the right to get legal aid. This would be a system purely for those who were on social welfare benefits and I believe that justice should not be denied to those low-income people who cannot, even though they work hard, actually afford legal representation.

So what we saw in this bill was a measure that would make our society, growing in inequality, even less fair by denying more and more people the right to justice. You know, it is not about unaffordability at all, Minister; it is about your priorities. This Government’s priority was very clearly that it would cut tax on those on the highest income levels. So you can give the Prime Minister a six-figure tax cut a year, but you refuse to give people who cannot afford legal representation the right to have their position represented in court. And we are talking about people who are often in no situation—no situation—to be able to represent themselves. This was the bill as introduced—

John Hayes: Not true.

Hon PHIL GOFF: —Mr Hayes, and you know it, and it was so appalling that even the National members on the Justice and Electoral Committee had to take a knife through most of the provisions and cut them out. I want to know in the Committee of the whole House from the Minister of Justice why it was that every one of her colleagues voted for that bill as introduced, why they did not do their homework, and why they did not give a damn about justice.

I was sitting on the plane this morning between two businessmen—nice guys, actually—but they were talking about their kids going to the school ball. They were saying it was terrible. One of them said: “You know, my daughter’s dress cost $3,000.” He said it was $3,000 for her dress for the school ball for St Cuthbert’s College. I thought to myself, and I actually pointed it out to them, that that sounded a bit strange to me, representing a low-income electorate, that here we have people who cannot afford to put shoes on their kids’ feet and that businessman was spending $3,000 on his kid’s school ball dress.

I want to say this: the bill as introduced was going to take into account in terms of asset testing things like your refrigerator and your washing machine and your vacuum cleaner. You know, it was so mean and miserable that it was going to take into account the value of your electric wheelchair if you were disabled. What a disgrace. I want to know why it was that the National caucus approved this bill and the National Cabinet put it to the House to come in. Only at the select committee deliberation did they run away with their tail between their legs and say that even a hard-hearted, cold-hearted National Government could not possibly produce the injustice that this original legislation was going to produce.

But I have got to say that there are still things that are wrong with this bill, even with the changes that have been made. An application can be turned down, for example, if a person getting legal aid is in arrears. Well, the nature of poverty and the nature of being on a low income is that you live from wage packet to wage packet. If you have got a bill owing because you are paying for legal aid because it becomes a loan rather than a grant, you are not going to be able to keep that up and still meet the other costs that you are struggling to pay out when you are living on the edge. You know, ask any reasonable parent and they will say that they will put shoes on their kid’s feet and food in their stomach before they will pay the arrears in the legal aid bill. So this Government in its wisdom says that if you are falling behind in your arrears and you cannot pay them, then we will deny you further legal aid and therefore we will deny you justice. Well, they had to qualify that by saying that maybe there should be an interests of justice argument and a test there, but there is a very clear rule that should be set in this, and that is that you do not deny people legal aid if they are not paying their arrears because of the hardship they are facing. For God’s sake, the members of the National Party surely have enough humanity to see that there are situations of gross injustice that will arise from their legislation.

Then they decided that the user charge that they brought in of $100—another discredited idea that they took from the Ruth Richardson years—was not really going to work because that would be a barrier to people, so they made it $50. Well, why is $50 right if $100 was wrong? Why are they nickel-and-diming that sort of thing, when even the select committee report to the House indicates that that could still be a barrier?

And not only were they going to deny people who were in arrears of legal aid any further access but they were going to charge interest on arrears of legal aid, and that is still in the bill. Again, they have left some room for discretion, but there should be some more clear-cut test that that should not be required if hardship would result. What they have done effectively is said that even in the event of hardship—

Hon JUDITH COLLINS (Minister of Justice): I must say that that speech has been an interesting historical lesson from the Hon Phil Goff, who has talked an awful lot about my predecessor—and of course my predecessor is not here to defend himself. But I will take it as a compliment that Mr Goff is obviously quite pleased with some of the changes that we have brought about. I would actually like to come back to the Legal Assistance Amendment Bill and Part 1 of the bill, rather than history.

Part 1 of the bill amends the principal Act. It reclassifies certain eligible proceedings before the Parole Board as criminal matters rather than civil matters as they are now. This is a largely administrative change, but it will make it easier to obtain legal aid for these proceedings. Part 1 also tightens the criteria by which applicants can receive civil legal aid when their income and assets exceed the relevant threshold specified in regulations. This will ensure that civil legal aid is limited to those who genuinely cannot afford a lawyer. I, for one, am one of the people who look in horror as we see some of these failed finance company directors on legal aid, with all their money tied up in trusts, laughing at the taxpayer. Some members may not find that very, very sad, but I certainly do.

However, special protections have been put in place in the case of asylum proceedings, care and protection applications, and some domestic violence applications. In these cases the means test will be less stringent. When a legally aided person is in arrears on previous civil legal aid debt, Part 1 provides that the Legal Services Commissioner may refuse to grant further legal aid unless the interests of justice require otherwise. This provision balances access to justice with the responsibility of legal aid recipients to repay their debts. Criminal legal aid will not be affected and this provision will not apply to vulnerable people in certain types of proceedings.

Provision is made in Part 1 for a user charge to be payable to the legal aid provider in civil proceedings. Providers will be able to decline to provide services until the charge is paid, or to recover the charge if the services have already been provided. The user charge is a small but significant contribution from the applicant to ensure that the legal aid system remains financially viable in the long term. Again, certain proceedings involving vulnerable people will be exempt, to ensure continued access to justice. Clause 11A makes it clear that legal aid amounts payable under conditions of grant are debts due to the commissioner. This will allow the commissioner to recover debts more efficiently, including in any relevant court or tribunal if this becomes necessary. Interest will now accrue on all legal aid debt 6 months after the debt is finalised. The commissioner will have additional powers to collect legal aid debt from benefits, wages, salaries, and bank accounts by issuing deduction notices. However, for those who are unable to pay, Part 1 protects a minimum amount of earnings to ensure the debt is repaid without causing financial hardship to legal aid debtors. It also extends current provisions, allowing debt to be written off to include any interest associated with that debt.

Clause 14 creates a deputy review authority to assist the existing review authority in examining the commissioner’s decisions and appointing legal aid providers. This will assist the legal aid providers, or lawyers, by ensuring any review applications are examined and resolved promptly. Existing legislative provisions allow caveats to be lodged against property or interests owned by a legally aided person. This ensures that legal aid debts are repaid when the property or interest are disposed of, and Part 1 allows the commissioner to recover any costs, such as solicitors’ fees, incurred in lodging caveats before the commencement of these reforms. This will ensure the caveat provisions are used appropriately to secure legal aid debt owed to the taxpayer. Finally, Part 1 clarifies that the commissioner must decline claims from legal aid providers that exceed the maximum grant amount, that are not of a type approved by the commissioner, or that are excessive or inaccurate, and this will further bolster appropriate cost control in the legal aid area and will encourage quality and predictability in the system.

I have, in fact, tabled today Supplementary Order Paper 250 in relation to this particular part of the bill, to make provision for electronic processing of applications for legal aid in criminal cases where no discretion is required. This change will allow aid to be granted automatically if the appropriate statutory criteria are met, or referred to a legal aid grants officer for further consideration if they are not met.

Grants of legal aid made under proposed new section 16A are not subject to the conditions referred to in section 18 of the Act—for example, the condition that the grant must be repaid. They will, however, be subject to a maximum grant, the level of which we notified in the Gazette. Grants made through electronic processing will otherwise be as if they were made under the standard process, and the Legal Services Commissioner will retain her or his ability to cancel or correct the grant if an error is made. This change is an administrative improvement, which will have no impact on eligibility for legal aid. It affects only internal Ministry of Justice processes. The likely impact on legally aided people and legal aid providers is that decisions are made more quickly.

Supplementary Order Paper 250 also amends Part 1 of the bill to clarify the operation of certain regulation-making powers in the Act. Currently, section 114(1)(b) provides that regulations can be made to prescribe methods for calculating maximum grants of legal aid. Following the Court of Appeal’s query around regulations, the Government believes there would be merit in further clarifying the circumstances in which Parliament intends for such regulations to be made. This Supplementary Order Paper therefore amends section 114(1) so that regulations can prescribe fees to be paid for legal aid work, the circumstances in which they would apply, and criteria that would be needed to depart from the fees. This change will allow clarification of the boundaries within which Parliament expects the commissioner to exercise his or her discretion. The Government considers this a reasonable and appropriate step, as it ensures that the commissioner retains his or her independent discretion to depart from prescribed rates where appropriate in a particular case.

The effectiveness of this provision is supported by two other changes contained in the Supplementary Order Paper. Section 99 is amended to enable the commissioner to decline any claim to the extent that it exceeds the fees set in regulations. Section 52 is amended to give applicants for legal aid the right to seek review of the commissioner’s decision to depart from or refuse to depart from fees set in regulations in their particular case. These changes combine to ensure that not only does the commissioner retain his or her discretion to depart from prescribed fees but also there are appropriate pathways for legal aid applicants to seek review of such decisions. Thank you. I believe that Part 1 is the substantial part of this bill. It is a very sensible amendment to the primary Act, and I think it is one that this Committee should support.

DENIS O’ROURKE (NZ First): The original purpose of the Legal Assistance Amendment Bill, especially as set out in Part 1, was actually to wrench cost savings out of the legal aid scheme, without properly considering the effect on low-income New Zealanders’ ability to have effective legal representation. The result would have been many more self-representation cases, more appeals, less effective justice, and, as a result, in fact, more, not less, costs.

The Minister of Justice did not want to talk about history because, I think, the history of this particular bill is a little bit embarrassing for the Government. Out of necessity, the Government has rethought the amendments, and the proposed cuts, I am glad to see, have mostly been abandoned. The Minister referred us to Supplementary Order Paper 134 and the amendments that that puts alongside the bill. That Supplementary Order Paper did address many of the concerns raised in the proposals, including, first of all, removing the proposal to use Orders in Council to change proceedings for which civil legal aid is available, which was far too excessive; removing the tighter financial means test for serious criminal cases, which was another very concerning issue; and removing household goods from the calculation for eligibility for legal aid, which was a perfectly ridiculous provision. The Minister also indicated changes to be introduced in the regulations, including the reduction of the proposed user charge from $100 now to $50, which I will refer to later, and also the charging of interest, now 6 months after legal aid debt is finalised, rather than immediately.

These changes are welcome, but New Zealand First will still not be able to support the bill as a whole for three good reasons. Firstly, New Zealand First will vote against the bill with new section 10(3A), inserted by clause 7(2), in it. The Justice and Electoral Committee recommended allowing the commissioner to refuse civil legal aid if the applicant is in arrears for repayments on previous legal aid grants, but subject to an interests-of-justice test. The committee’s proposed clause would further amend the eligibility criteria for civil legal aid to encourage legally aided people to recommence payments, and, once they began making repayments, to become eligible again for legal aid. The majority said this provision would be unlikely to reduce significantly the number of people receiving legal aid, but I am not convinced of that at all, and I think it is likely to cause injustice, even if only in a few cases, by making legal aid unavailable to people. I do not particularly trust the commissioner’s discretion being exercised in this way.

The majority also said that they had carefully considered the likely effects of this provision on vulnerable people, and we are assured that domestic violence, mental health, refugee, and protection cases would be exempt from the provision, but I remain concerned that such people would in fact be denied legal aid, and, again, I do not particularly accept the assurance given. The point is this: that eligibility should not rely on the commissioner’s discretion at all in that way—simply to deny or not to deny legal aid because of a past legal aid debt, especially where domestic violence, protection cases, and suchlike are concerned.

Secondly, the bill’s original purpose for the reintroduction of a user charge remains, although it is now $50 rather than $100. Most of us know that in many cases legal aid providers simply paid that charge, as their clients could not afford it. That should not be necessary, and in my experience on the Legal Aid Review Panel for several years, I could see from reading the files that that happened in a large number of cases, so what this provision is going to achieve I do not know. At a time when more and more providers are exiting the business of providing legal aid, this seems to be self-defeating and bad public policy.

The third reason is this: the bill’s provision is that interest be charged on legal aid. The majority of the committee, in amending clause 12, said that it should be paid on all unpaid final legal aid debt to ensure that the “amount payable”, as defined in the principal Act, captures all final debt. The intention was to incentivise prompt repayment, but that, I think, is very unlikely, given the financial position of most legally aided people. So, again, we have an utterly pointless provision that is going to achieve nothing whatsoever.

I am pleased, of course, that there is an amendment to delay the imposition of interest for 6 months from the final determination of what the debt would be, but the point is that the principle itself is wrong. People who qualify for legal aid are, by definition, not easily able to afford it. Charging interest will make their position even worse. The State should get repayment for legal aid, because that is the basis of the scheme, but the State should make a contribution by bearing the interest—not the person who gets the grant. The State, of course, actually pays no interest itself; the scheme is provided from taxation. In some cases the imposition of interest will itself create hardship. We are told that there is a discretion so that the interest and, in some cases, the debt itself, can be waived, but this is likely to be too often withheld. Again, I refer to my experience on the Legal Aid Review Panel, where I read many files and cases where people complained that it had been withheld in inappropriate cases, and that was true in many cases.

This bill was badly conceived at the outset. It is nothing more, really, than another attack on the lowest-income people in the community. It is penny-pinching at the expense of an effective legal aid system. Many amendments have been needed to the bill—and these are welcome—but there are still some fundamental problems with it, especially those three that I have set out. The Government would be best to scrub this bill altogether, and, for those reasons, New Zealand First will certainly vote against it.

Hon LIANNE DALZIEL (Labour—Christchurch East): I would like to add weight to the comments made by my colleague Denis O’Rourke in respect of the Legal Assistance (Sustainability) Amendment Bill, as it was introduced, but now to be known as the Legal Assistance Amendment Bill. The reason that, I think, the Government has taken the word “sustainability” out of the bill’s title is, really, to take away from our reflections the legislation’s real focus, which is actually about cost cutting. To use the word “sustainability” when actually you mean “cost cutting” is, I think, unfortunate, so I certainly approve of the removal of the word “sustainability”. But I question whether it was put there in the first place for reasons that are unhelpful to a public discourse around something that perhaps is not a very popular subject, which is access to justice. Obviously there are people who are very easy targets when one is looking for cost-cutting measures, and those who face criminal charges in our courts are the very easiest of targets.

I want to remind the Committee why this legislation was introduced in the original format that it was. Again, it was not a desire to address the overall issue of sustainability; it was to look to where cuts could be made to legal aid that would be acceptable in terms of the public eye. I want to remind the Committee what one risks when one goes down this track, helpfully summarised in the original regulatory impact statement that was prepared for the original legislation. I do think it is important to place on record when we are dealing with Part 1, because this is the substantive part of the legislation, what the particular risks were that were discerned right from the outset. The first one was that “A change of purchase approach is required, but is likely to be resisted by some parts of the legal profession, particularly those who may feel that it will reduce their incomes or curb the choices they can make when managing cases. This is likely to lead to an increase in the number of legal challenges of legal aid grants, as well as public concern.”

I just want to unpack that language a little bit. What it is about is actually blaming the legal profession, who devote their lives to supporting people through the criminal courts, particularly those at the lower end of the offending range, who day in, day out, in the courts in South Auckland provide a level of service that most of the legal profession who are their colleagues do not have anything to do with and can have no understanding of. My former colleague Charles Chauvel and I both met with the South Auckland Bar, and we were incredibly impressed with the commitment and the work that people were prepared to do for clients who do not fit the normal corporate lawyer’s waiting room, shall we say.

The examples that they gave us were of clients who could not keep appointments because they were not out of bed before 10 o’clock in the morning. They had clients who could not communicate easily in English because that was not their first language. They talked about clients who were so disoriented and confused and really excluded from wider society because of their drug and alcohol addictions and by the way that they had been disenfranchised from their communities and from their families, and, in many respects, were lost in a city that really did not feel like home. They talked about people who got themselves in trouble very early on, who did not have good lawyers representing their interests, and who ended up on a trajectory that was a never-ending trajectory to prison. They would end up taking on these cases and, as one of my colleagues mentioned, paying the $50, if there was a fee that needed to be paid from the outset, just to get them in the ball park.

The number of times that they told us about the examples of young men—in particular, Māori and Pasifika—who pleaded guilty to offences that they were not guilty of, because they did not know that there was a difference between an action and an intention and who ended up in a place where they were down this track and potentially, under the three-strike legislation, facing very, very serious charges. They talked about the commitment that they made to people whom we really would rather we did not have to deal with. The thing is that this legislation was all about making sure that those lawyers did not get to talk about how it might reduce their incomes or curb the choices they can make when managing cases. I am sorry, but the regulatory impact statement advice does not match the reality of lawyers working in South Auckland.

And then the regulatory impact statement talked about how “Reductions in the price paid to lawyers could create gaps in provision, particularly in the family and civil jurisdictions where there is more choice of private work and in some smaller centres where there are already supply issues.” Well, actually, that is a risk that has already been realised, and we know that. “The introduction of income and asset thresholds for the criminal means test …”—which we know has been addressed—“will be in tension with section 24(f) of the New Zealand Bill of Rights Act, providing for the right to an affordable defence. It could also delay some court cases if judges defer proceedings because of inadequate representation.” I think we must remember these things; that the New Zealand Bill of Rights Act exists with these protections for a reason. It is about access to justice. It is about people who require adequate representation. “Restrictions to eligibility will disadvantage people on low incomes, who have few options to find legal services elsewhere. Generally this includes young Māori men in the criminal jurisdiction and women and children in the family jurisdiction.” Then the regulatory impact statement goes on to say: “Withdrawing legal aid for low income groups is likely to lead to additional costs elsewhere in the justice system. In particular, it may increase the number of self-represented litigants,”—which we have heard are all the way through the Family Court cases—“with flow on costs due to delays, additional assistance required from court staff and the judiciary, and higher numbers of appeals of decisions.”

These were the risks. They were all calculated, they were all assessed, they were all set out in the regulatory impact statement, and the truth is that they are really important risks. There are things that we do not like to say in this country, but I am going to say one of them here and now: if you are Māori you are much more likely to be stopped and questioned; if you are Māori and you are stopped and questioned you are much more likely to be arrested; if you are Māori you are much more likely, if you are arrested, to be charged; if you are Māori you are much more likely to be charged with a much more serious offence or a higher number of offences; if you are Māori you are much more likely to be found guilty; and if you are Māori you are much more likely to end up in prison. We cannot allow that to continue to happen, and I believe that this piece of legislation is part of a package of measures that continues to perpetuate the problem that we have in this country. It does not address the problem; it only perpetuates it, and, unfortunately, it is another wasted opportunity to address the real issues that we must confront as a country if we are really to move on and to address things that are important.

I want to agree entirely with my colleague Denis O’Rourke, who talked about the fact that this bill continues to propose that an application for legal assistance may be turned down if the applicant is in arrears and repaying any part of a previous grant of aid that he or she may have received. I believe that this could be the opportunity, in the Committee stage, in the Chamber, to actually redress that problem—to actually address that problem, to fix what we have in front of us, and to make it good. That would help us to see this bill pass, but we cannot support it in the way that it is drafted.

DAVID CLENDON (Green): The report back on the Legal Assistance Amendment Bill from the Justice and Electoral Committee—that is, the majority report from the Government members, predominantly—makes interesting reading. I have never read a majority report in a select committee report where the Government members on a committee have been so willing—indeed, eager—to overturn some of the original provisions of the bill as it was first drafted. To their considerable credit, they have recognised that many of the provisions in that original bill were utterly untenable. They were unacceptable to New Zealanders. The severity of what was proposed in that original drafting was a disgrace, and, as I say, it is a credit to the Government members on the select committee that they, along with the Opposition members, saw that those provisions were untenable. They were unacceptable to New Zealanders, indeed.

Unfortunately, what continues in this bill, which obviously the Greens are opposing, is the unacceptably low income thresholds for eligibility for assistance. The proposition that somebody earning the minimum wage should not be eligible for legal assistance reflects a complete lack of awareness, a disconnect between what are the lifestyles, shall we say, or the lived experience of people making such propositions and those who are actually caught up in the legal process. We know that the minimum wage is significantly less than a living wage in New Zealand. It is not sufficient for somebody to have a decent standard of life, a decent quality of living. It suggests, however, in this bill that that is sufficient for people to afford an appropriate and decent defence if they find themselves in a situation where they need legal representation.

We heard from the Minister of Justice earlier a proposition that this bill will somehow deter those who might be in possession of significant wealth, who might be using family trusts or some other mechanisms to disguise that wealth and thereby become eligible. I would be delighted if the Minister could point us to provisions in this bill that will remedy that situation of a person—I think she referred to a failed finance company director—still sitting on considerable personal wealth but managing to conceal that wealth. I would be delighted to have it shown to me where in this bill that situation would be remedied—where that person would be obliged to pay for their own defence, rather than be able to appeal for legal aid.

I think the low point of the original drafting was the proposition that in order to be eligible for legal aid, a person’s so-called capital goods would be valued—people’s clothing, their household goods. For me, my personal bête noire is the notion that tools of trade should have to come into that calculation. The proposition that a person should be obliged to sell their tools of trade, the means by which they earn their living, in order to become eligible for legal aid is simply a nonsense. It is abhorrent, and it is to the credit of the committee that that at least has been thrown out of this legislation.

The point is made in the Green-Labour minority report that in pursuit of the cost savings of this legal aid scheme, there is scant regard for the catastrophic effect on low-income New Zealanders and their ability to access the justice system, and the extent to which these propositions can potentially be seen to contravene the New Zealand Bill of Rights Act has already been observed and noted.

It is not only low-income people who need to have concerns about this legislation. Middle New Zealand—people who are earning what might be deemed a living income but who, for whatever reasons, are not well-to-do people. There are a significant number of middle-income New Zealanders who would struggle to afford decent representation in a court of law, and this legislation does nothing to recognise their situation. It does nothing to alleviate or in any way deal with that situation that they could find themselves in.

The proposition that a person can be denied legal assistance if they have not yet repaid obligations or debts from some former use of legal aid in itself seems not unreasonable, except that it overlooks a whole bunch of situations an individual might find themselves in where they are simply not able to afford to repay that obligation at the point at which it is made. I think some of the conditions that appear in Supplementary Order Paper 134 are interesting, particularly, for me, the proposition that a deduction from a person’s income, from their salary, wages, or whatever it might be, can occur.

The proposition is that a person is no longer entitled to legal aid at the point at which a reminder notice is sent to that person. In new section 41B(1), as proposed in Supplementary Order Paper 134, “This section”—in terms of the deduction of overdue amounts—“applies whenever the Commissioner has reminded an aided person in writing of the person’s obligation to pay an overdue amount …”. One thing we know about low-income people is that they tend to be very transient. They tend not to be in one place for very long. It is entirely reasonable to assume that people may not be aware of their obligation. Somebody who does not see a reminder notice may nevertheless suddenly discover that their income is having significant deductions taken from it.

We are told further on in the Supplementary Order Paper—new section 41H, “Protected earnings”, so-called—that 60 percent of a person’s net income may be protected. Turn that round. A person could lose 40 percent of their net income. It could be deducted in order to repay this so-called debt from some prior use of legal assistance. For a person on a low income, or even a moderate income, that could be disastrous in terms of taking away from them the ability to pay basic living costs—their rent, their power bill, their grocery bill. Deducting 40 percent of income from a low-income person, or even a moderate-income person, could just lead to the complete financial collapse of a household. Whose interests are then served when that person is no longer able to provide the basic necessities for themselves and for the household they may well be supporting? That is an extraordinarily high provision, a very high bar, to enable the commissioner to take 40 percent of a person’s net income.

I will not dwell on it here, but we have had some significant submissions to this bill, of course, in the process of the select committee hearings. The Criminal Bar Association pointed to the fact that, in its view, the bill as drafted systematically deconstructs safety nets available to those vulnerable people charged with criminal offences. It refers to the bill’s improper balance between access to justice and the cost of a legal aid system, which will be at the cost of justice in a large number of cases.

These are not trivial objections, from a group of people who are right at the sharp edge. On a day-to-day basis their members see the reality, as Ms Dalziel described, of places like the Manukau court, the west Auckland courts, and so on, where it is not a matter of wealthy people concealing their wealth. It is a situation of people completely adrift in a system of which they have very little understanding, who need representation, and who will not be able to afford it.

We know in respect of self-litigants—and again this came through in a number of the submissions—that the denial of legal aid will lead to more self-litigation, so the penny saved will result in a pound more cost further down the track. Self-litigation slows the processes of courts. Judges become, by default, purveyors of legal advice. Court staff will be obliged or asked consistently and routinely to provide legal advice, which is actually not what they are there to do. Self-litigation is recommended against at various points on the Ministry of Justice’s own website. The failures, the difficulties, and the dangers to the accused person, the costs to the courts, and the costs in terms of time to the judge and the whole judicial process are clearly out of step and have not been taken account of in this. Inevitably we will see more people try to represent themselves who do not have the skills, the information, and the wherewithal to do so. So any money saved by this quite Draconian denial of access to legal aid will very quickly be hoovered up by other costs that are imposed further down the track.

Unfortunately, that is a phenomenon we have seen all too much of recently. In the Government’s absolute determination to get this elusive Budget surplus it is looking for line-by-line cost reductions without looking at the bigger picture. When the big picture is the justice sector, that is untenable. It is not just a matter of financial impropriety. This is talking about absolute basic rights, basic access to the justice system. We ought not to be denying our citizens that.

ANDREW LITTLE (Labour): It is hardly surprising, really, that we are considering a bill, the Legal Assistance Amendment Bill, that involves yet again another denial of due process, potentially another denial of access to justice, because this Government—and, indeed, this Minister of Justice—is establishing a very strong track record on exactly that issue. We most recently had the New Zealand Public Health and Disability Amendment Act (No 2), which was at least explicit about denying access to the courts for a group of people who were desperately in need of it. Now we have legislation that deals with the process end of trying to get access to justice, and it starts putting up the barriers and the humps to get in the way.

The Minister may well consider that she has done a good job at watering down some of the worst aspects of the legislation as it was introduced, but there are still barriers and there are still problems with this legislation. I think it is instructive to note that since the present legal aid regime was commenced—was put in place—the number not only of lawyers doing legal aid since the beginning of last year but also of law firms now allowing their lawyers, their solicitors, and their partners to do legal aid has been dropping consistently and dramatically.

You hear it from lawyers too. Law partners now say that whereas once upon a time a lawyer with 2 or 3 years’ post-qualification experience could be put on to some legal aid cases—it builds up their experience, gets them a bit of court access and court time—they no longer do it, because with the fixed-fee regime and with the administrative process that it now entails it is getting harder and, frankly, less viable for law firms to do it. Lawyers, particularly those practising on their own account, are now saying it is just too much, and they are getting out of it. It is interesting to note now that the Ministry of Justice is having to put together a programme specifically to attract senior counsel back into doing legal aid work because the present regime is not working. Well, this bill is not going to help. If anything, it is going to make it worse.

We should not, when we are thinking about those who are dependent on legal aid, overlook just what sort of a barrier $50 is in terms of making an application or contributing to those initial costs or legal costs that are required. For the impecunious, the destitute, and the poor, those who find themselves facing the full force of the police and the coercive arm of the State and having to defend themselves and most importantly their liberties against it, actually having access to legal aid is very important. And if you do not have $50, you do not have $50.

Whereas before, a lawyer who was making the application representing their client could in reality absorb that $50 in terms of the charge they pass on to the Ministry of Justice, they cannot do that under the fixed-fee regime that now applies to legal aid. Unless there is a change there—and who knows what will happen there—it is simply going to get harder for those who are dependent on legal aid to stump up that $50. They will be dependent on the generosity of legal counsel, who are themselves making the applications for legal aid in order to represent that client, to either pay it themselves or in effect accept even less than the specified fees regime that is in place at the moment. That is the insidious nature of just that part of this bill. That is why this bill continues to create a barrier that we can all foresee will have very real effects for those who would otherwise be dependent upon it.

Then there is the arrears issue, this insidious notion when you are needing legal assistance, particularly if you are facing a criminal charge. We claim that in our system, our constitution, where the State can come after people with prosecutions and put their liberty at risk, we say: “Yes, you can get access to court and get your case heard.” To put in place a situation where a previous grant of legal aid may give rise to a debt that then, if it is unpaid, may count against a future legal aid grant goes against a fundamental constitutional principle that when the State is coming after you and putting your liberty at risk, you must be allowed access to the court to be heard. And it is not only access to the court, but also adequate representation—representation of a quality and nature that befits the charge that the person is facing. That particular provision, innocuous as it may seem on paper and as the Minister may make it out, we can foresee is going to also create a barrier to access to legal representation at a time when a person who is dependent on legal aid is going to need it most. That is yet another reason why we will be opposing this bill.

We have already seen in the consideration to date of the Family Court Proceedings Reform Bill—and it is not complete yet—just how difficult it is going to get for people in the civil jurisdiction to get access to legal aid. In that particular case, it is going to get harder for parents going through a family dispute, mainly a separation, to get access to legal aid, and certainly legal representation, at a time when they most need it, which is when their particular situation and the legal ramifications of it are being talked about. Also, disturbingly, counsel for the child are now going to find it much harder to get State support to play their important role, because that role is more or less legislated out under that particular bill. It all ties in with what this bill is trying to do, which is to once again minimise and reduce the cost of legal aid to the State.

The Minister makes very fine statements about the importance of legal aid. Legal aid is a big cost—about 50 percent of the cost—of the Justice vote. But we have that in a civilised country like ours because it is important. It is important for people to have access to adequate representation when they are in court. When we think about legal aid, it is an area in which we should proceed with caution, with care, and with respect for that constitutional right of people to be represented in Her Majesty’s courts. When issues of rights are being determined and when issues of liberty are at stake, then there is no cost too great to ensure that a person’s rights are fully observed and respected, that they can get an audience, and that a judge can make a considered decision on the basis of good quality representation.

There are some respects in which if we do not meet the proper cost of legal aid, the proper cost of representation of people when they are before the courts, that cost will be picked up elsewhere. It will be picked up, as my colleague Lianne Dalziel referred to, as unrepresented people making guilty pleas that, with proper consideration and access to legal aid, they would not otherwise make. That may have implications then for the application of other legislation, like the three-strikes legislation, that may see people serving extensive sentences—sentences of up to 14 years—for what might otherwise be considered to be trivial acts of street thuggery or street burglary. We take this seriously. Notwithstanding the positive changes and the general direction that this bill has taken, we still see in the provisions in this part of the bill some real problems and some real concerns about access to justice and the observance of people’s rights.

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

CAROL BEAUMONT (Labour): It is a privilege to rise to speak on the Legal Assistance Amendment Bill. I have listened to all of the contributions made so far on this bill, and I have to say that there have been some extremely interesting and very thoughtful contributions made by all of the speakers tonight on what was the Legal Assistance (Sustainability) Amendment Bill, which is, as others have noted, now being renamed the Legal Assistance Amendment Bill.

I guess I will start by saying that, despite changes—and a number of people have commented that, if you like, this is being clawed back to something a little better—it still does not mean that this is a bill we can support. Labour does oppose this bill. We oppose it because its net effect is still a denial of access to justice. As others have put more eloquently than I will be able to, I am sure, representation is fundamental to access to justice in our system. Having access to legal representation is vital. So many people are not able to represent themselves and are, for a range of reasons, perhaps even unaware of their own rights. So having decent representation is fundamental, especially when the consequences are potentially very significant. Whether they be financial penalties or loss of liberty, the fact of the matter is that people can suffer very severe consequences, and they have the right to have access to justice and decent representation.

We oppose this bill because it still places a number of limitations on New Zealanders’ rights to access to justice. It is part of a concern that we have about the general direction of the Government in relation to the justice system. In relation to the bill, as originally introduced, certainly the contributions from a variety of people on it have been very interesting in realising the full extent of what was proposed and how serious those changes were. My colleague the Hon Lianne Dalziel does make the comment that the Minister of Justice, rather than members of the Justice and Electoral Committee from the other side of the Chamber, was probably most likely to be responsible for the improvements that were made. There is a significant number—pages, in fact—of changes made under Supplementary Order Paper 134. But despite that—despite that—there are still a number of significant areas that we are concerned about, and if we were to sum them up, they are in four main areas.

Firstly, the application for legal assistance may be turned down if the applicant is in arrears for repaying any part of a previous grant of aid that he or she may have received. I think it is important that we look at this in the context that New Zealanders are currently living in, which is that it is extremely difficult for many New Zealanders to make ends meet, that, actually, the budget does not stack up for people, with the income they have and the expenses they have, and that, frankly, it is quite likely that people will be in situations of not being able to repay arrears because they are trying to live. If you talk to budgeting services, they will tell you just how hard people are struggling. That is the first of the four main concerns. Also still of concern are, secondly, the reintroduction of a user charge, although the figure has now been reduced; thirdly, the provision that interest is to be charged on arrears of legal aid; and, fourthly, the provisions having retrospective effect. Those are the four main areas that we are concerned about.

I would just like to say that the Minister talked about, and somebody else has mentioned, people being concerned about seeing white-collar criminals—you know, the finance company rip-off merchants—using legal aid, but the fact of the matter is that it is not they who, overwhelmingly, use the legal aid system.

I want to also refer to the regulatory impact statement. The Hon Lianne Dalziel referred to it earlier, but I want to particularly talk about how it is not white-collar criminals—it is not middle-aged white men—who are going to be hurt by restrictions and the denial of access to justice. Let me just reread those two sentences: “Restrictions to eligibility will disadvantage people on low incomes, who have few options to find legal services elsewhere. Generally this includes young Māori men in the criminal jurisdiction, and women and children in the family jurisdiction.” So even with the changes, it will still disadvantage those people.

JOHN HAYES (National—Wairarapa): I move, That the question be now put.

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

Ayes 63

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

Noes 56

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

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 250 in the name of the Hon Judith Collins to Part 1 be agreed to.

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

Ayes 61

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

Noes 58

New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.

Amendments agreed to.

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

Ayes 61

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

Noes 58

New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 2; Mana 1; Independent: Horan.

Part 1 as amended agreed to.

Part 2 Amendments to other Acts

Hon LIANNE DALZIEL (Labour—Christchurch East): I want to comment in particular about the amendments in this Legal Assistance Amendment Bill as they relate to the Care of Children Act 2004. I know that this is directly linked to a piece of legislation that we will be dealing with in the House at some stage in the near future. This whole question around the transfer of the payment for the lawyer for the children and also the court-appointed counsel to assist in Family Court proceedings will be traversed, I think, in a great deal of detail when that particular piece of legislation is dealt with, but the legal assistance or the legal aid aspects of it are dealt with in this bill.

There are a number of issues that I think we should be concerned about. I really would like the Minister to take an early call on this particular part in order to work us through the particular issues, because many of the issues that were raised when we were dealing with this bill were raised again when we were dealing with the Family Court legislation. In some respects, some of the changes that were made to that piece of legislation directly impact on this and vice versa. I have to say that, in fact, I think some of the delay and some of the rethinking that was done, which I do give the Minister some credit for—I think that her predecessor probably went a little further than I think even National members felt comfortable with, and we are certainly grateful that this Minister has seen fit to take a step back and have another look. I think the Family Court provisions were one of the areas that created a significant amount of difficulty, because I know that the Family Court judges submitted, even though with a different head of bench, on both bills.

It was, I think, unusual, certainly in my long experience in this place, to have Family Court judges come and make submissions. They were very careful, from their knowledge of how the bill would impact on their work as members of the judiciary, not to cross that line in terms of policy, which is appropriately the work of the Government. They were very clear about that and I thought they handled themselves exceptionally well. What they were concerned about was that some of the changes that the Government was making would not necessarily produce the result the Government was trying to achieve. I thought they were trying to be helpful in that regard.

I think that in this area of the Family Court we have significant problems, and one of the main problems relates to requiring refunded payments in respect of a lawyer acting for a child, and this is referred to in clause 27, which introduces new sections 131A to 131C. What we have in that area is new section 131A, “Order requiring refund of payments in respect of lawyer acting for child”. I will just highlight what the concerns are. Section 131A(1) states: “An order referred to in section 131(5)”, which is dealt with later on, “must order the parties to refund to the Crown the prescribed proportion of the amount paid by the Crown, under section 131(1)(b), in respect of the appointment of a lawyer appointed under section 7(1).” Each party must pay an equal share of the prescribed proportion. So we had some discussion at the select committee about what that prescribed proportion would be. I think it would be really good for the Minister to place on the record of the House what that prescribed proportion will be, because the way it is set out in the legislation here is that the definition, in new subsection (6), states that “prescribed proportion means the proportion that is prescribed by regulations made under section 147 for the purpose of this section”. A regulation-making power in respect of the proportion that is going to be set really does give a lot of power to the executive—

The CHAIRPERSON (Lindsay Tisch): Sorry to interrupt the honourable member. The time has come for me to report progress.

House resumed.

The Chairperson reported the debate on the financial performance in 2011-12 and current operations of Crown entities, public organisations, and State enterprises; the Immigration Amendment Bill with amendment, progress on the Legal Assistance Amendment Bill, and no progress on the Airports (Cost Recovery for Processing of International Travellers) Bill and the Plumbers, Gasfitters, and Drainlayers Amendment Bill.

Report adopted.

Sitting suspended from 9.57 p.m. to 9 a.m. (Wednesday)

Tuesday, 11 June 2013

(continued on Wednesday, 12 June 2013)

Bills

Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill

First Reading

Hon TODD McCLAY (Minister of Revenue): I move, That the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider this bill. The Government is committed to fostering growth and building on the gains we have already made towards a more secure economic future for New Zealand. The tax system plays a part by ensuring that the Government can continue to perform its function by efficiently and fairly raising revenue. The Government aims to raise the revenue it requires not through raising tax rates but by ensuring that the existing tax bases are fairly applied. An important aspect of fairness in the tax system is that taxpayers must be able to understand and comply with rules, and it is necessary for tax rules to be cohesive, fair, and applied consistently.

This bill aims to continue with the work of further rationalising the tax system. For New Zealand residents with interests in foreign superannuation schemes, the current tax treatment of withdrawals from such tax schemes can be complex. It is not always clear that the rules result in a fair outcome, particularly for lump-sum amounts. For example, a person with an interest in a foreign superannuation scheme might be taxed on accrual under the foreign investment fund rules. In other cases, a person may be taxed when they withdraw or transfer funds from their foreign superannuation scheme. As a result, some people pay more tax than others, depending on how the foreign scheme is structured. This bill provides a much simpler and more even-handed approach to taxing foreign superannuation interests held by New Zealand residents.

From 1 April 2014 a new, cohesive set of rules will replace the current rules. Under the proposed changes, the foreign investment fund rules will no longer apply for foreign superannuation schemes. Lump sums from foreign superannuation schemes will be taxed only when they are received, or ultimately transferred to a New Zealand or an Australian superannuation scheme. The proposed rules for lump sums aim to tax only the investment gains that the person would have made during the time they were resident in New Zealand. Periodic pensions will continue to be taxed in full on receipt, as most periodic pensions currently are. The rules will make it easier for people to transfer their superannuation. In general, no tax will need to be paid if the person is simply transferring from one foreign superannuation scheme to another foreign superannuation scheme. The KiwiSaver rules will also be amended to make it easier for taxpayers who transfer their funds to New Zealand to pay their tax on the transfer. The bill contains a limited amnesty for migrants who have transferred their superannuation funds to New Zealand in past years but not complied with existing tax rules. They will be able to pay a tax on only 15 percent of the value of the transfer, which equates to an effective tax rate of 5 percent. This strikes a balance between helping these taxpayers meet their tax obligations while being fair to those taxpayers who did comply with the rules.

The bill also addresses another aspect of the tax system in need of rationalisation. The current tax treatment of the mining of specified minerals, such as gold and silver, and ironsands activities is concessionary. Although the Government acknowledges that mining is an important sector and part of our economy, we must ensure that tax rates applied here do not advantage one sector over another. It has been a particular focus of the Government to remove distortions in the tax system. The current tax rules allow mineral miners a tax deduction for prospecting, exploration, and development expenditure, including expenditure on capital items such as plant machinery and production facilities. The rules also allow for amounts set aside for mining exploration or mining development to be deducted in advance. Deductions for expenses of this nature are not in line with business expenses for other industries. The proposals in the bill, therefore, will make the tax treatment related to the mining of specified minerals broadly consistent with the rules that apply to other business activities, while still recognising some of the more distinctive aspects of the mining industry. The proposed changes to mineral mining will apply from the beginning of the 2014-15 income year.

This bill also proposes amendments to the financial reporting that dovetail with the proposals in the Financial Reporting Bill. The Financial Reporting Bill proposes that most small and medium sized companies will not need to prepare general purpose financial statements. However, as New Zealand’s biggest user of financial statements, the Inland Revenue Department does have some financial reporting requirements. This bill therefore proposes a framework for minimum reporting requirements for companies and potentially other taxpayers that meets the department’s requirements but minimises the compliance costs.

Other measures in the bill include changes to the tax rules relating to bad debt deductions for holders of debt to make them fairer, changes to the general and life insurance business tax rules to ensure that they work as intended, and further improving the integrity of the Working for Families tax credit provisions.

In addition, donee status is proposed for three new charitable organisations—namely, the Kailakuri Health Care Project’s NZ Link Group, Marama Global Education, and Marama Global Health. Donors to these charities will be eligible for tax benefits on their donations.

I commend the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill to the House.

Hon DAVID CUNLIFFE (Labour—New Lynn): I am pleased to take this opportunity to say that the Labour Opposition will be supporting this Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill, the maiden bill of the new Minister of Revenue, the bright and shiny Todd McClay, who has got up early this morning to come to the House to read the speech that one of his officials has, clearly, written for him, and we compliment the officials for their excellent work in that regard. What a fine start he has made! He has gone where Jonathan Coleman did not go and he has actually picked up the right speech notes and read the right speech. What a brilliant start! I have to say that the member opposite was a pretty decent chairman of the Finance and Expenditure Committee and we wish him well for the 2 or 3 weeks that it takes for us to bring his ministerial career to an end.

Why is he here? Why is he here? The answer to that is very, very simple. It is because the Hon Peter Dunne is not here. Why is the Hon Peter Dunne not here? It is because he is no longer a Minister. Why is he no longer a Minister? Well, he assured the Finance and Expenditure Committee that he did not leak sensitive Government Communications Security Bureau documents to a journalist. He gave a point-blank assurance. Unfortunately, when he gave the same point-blank assurance to the Prime Minister, the Prime Minister said: “Well, I’d love to believe you, but you’re gone.” So he has gone and Todd McClay is here.

That will be a very interesting ride for him, because he has got his work cut out. While Peter Dunne was busy thinking about matters of the ether, the revenue portfolio was going to rack and ruin before his very eyes. Todd McClay has got a huge job to tidy up the portfolio before it unravels. Nit-picking taxes like the car-park tax, like the iPad tax—imagine applying fringe benefit tax to the personal use of computers or cellphones. The cost of working out which calls were private and which were public would have been far more than the tax was worth. What about applying fringe benefit tax to car-parks for shift workers or only for businesses in the central business district but not two streets further over? Those are the kinds of bizarre tax ideas that emanated from the Inland Revenue Department from the previous hapless Minister—hopefully, not under this hapless Minister.

They were withdrawn under pressure from the Labour Opposition, from labour unions, from business groups, and it has caused a great deal of push-back, because we all know that the word went out from the Minister of Finance’s office to the Minister of Revenue and to the Inland Revenue Department officials, and it went something like this: “If it can get $5 million or more, for God’s sake, tax it, because we are desperate to get to a Budget surplus and we will use any tool in the tool box to get there, real or imagined.” In the Budget debate we uncovered the fact that so many of the fiscal and revenue tools being used by this Government were straining credibility, were in the realm of the fictitious—like a $400 million tax spike in the year 2014-15 alone due to the magical appearance of some redeemed tax credits, or a $1 billion spike in corporate tax revenue, or a $1.2 billion spike in personal tax revenue. So the Minister is going to have to establish some credibility pretty quickly to tidy up those kinds of rubber numbers that have infected the fiscals.

The Inland Revenue Department’s mainframe computer system is in tatters, and the officials have recommended an open cheque book of $1 billion to $1.5 billion to rebuild their pet computer. Well, it is important. The Labour Government that is coming in will have to fix it up, too. But we will not be writing a blank cheque to the officials for a billion-dollar computer. I have no idea how you could pay a billion dollars for a computer. Let me just say that Cabinet and the outgoing honourable Minister were so unsure of themselves that they had to build in a teeny-weeny contingency margin. How much? It was $500 million of contingency margin. So on his first day in the House as Minister of Revenue, I say to the Hon Todd McClay to get out your pencil, get out the ruler, and measure up that $500 million grey area and fix it up, because we are going to be coming after it. If you do not fix it, Minister, we will be coming after you.

While we are on it, the time is now, Minister, that you should be worrying about the erosion of the tax base. Please do not do what the Hon Peter Dunne did and say: “Look, we know multinational companies are laying waste to our tax base by shifting profits across internet sales. We know Google, Apple, and the other multinational giants are really hard to tax, but don’t worry, the OECD is working on it.” Well, the OECD is doing good work, and we commend that. We would agree that we should be participating in it. But here is the difference. Those clowns over there are happy to wait for Paris to do something in the springtime. We are not. We are saying that the Government is negligent if it does not pursue domestic initiatives in parallel. For example, the Labour Opposition is actively looking at the issue of the threshold for GST on purchases online of foreign-sourced goods, because that is creating an incentive to disembowel the New Zealand retail sector, and that needs very serious consideration. But base erosion and multinational taxation cannot wait for some thinktank in Europe to get its act together in 3 or 4 years, because hundreds of millions of dollars of New Zealand revenue is at stake in the meantime.

While we are on that theme, and following the Minister’s maiden recitation of what the officials have given him, let me mention two mega issues that revenue must play a part in. The first is the growing inequality of income in New Zealand. There is a little thing called the Gini coefficient and it measures the difference between the 20th percentile and the 80th percentile, and the gap is getting wider. There are some revenue purists who say that people should never consider the role of the tax system in income distribution, and I say “Bunkum!”. Tax is always a matter of revenue redistribution, and the Government’s major tax steps in this term of Parliament were to take from the poor and give to the rich in an iniquitous tax switch that gave 40 percent of the winnings to the top 10 percent of income earners. It is still the case, Minister, that three-quarters of the wealthiest 100 New Zealanders are not on the top tax rate. They declare an income of $70,000 or less per annum, and that is a national scandal. So if you want to pay for food in schools, and if you want to pay for roads of national significance, do your job and make sure all New Zealanders pay their fair and legal share of tax. Do not turn a blind eye just because they are your big-business mates—not you, Mr Deputy Speaker, the incoming honourable Minister.

This bill is a small part of the tax work programme. This bill is a useful step forward in clarifying the superannuation rules. We have no dispute with the objective of this bill. I will, however, mention several factors that are very important in its construction, which we will be looking at in the Finance and Expenditure Committee. The first is that by the Minister’s own admission the mining sector has had a free and advantageous run in the tax system. This bill goes some way towards re-equalising that. Does it go far enough? Well, that will be a very interesting question to test.

This bill tries to simplify the taxation of foreign-held superannuation funds for New Zealand residents, and in doing so it looks at imputation credits and Australian dividends. It uses the fact that there is a double tax treaty to convey a particular exemption for our Aussie mates. Well, that is very good, but when is this Government going to do something about the fact that the New Zealand corporate sector is being rorted by the Australians over the non-convergence of the taxation of corporate dividend imputation? Why is the Government sitting on its hands while there is a tax advantage to Australian business over New Zealand business that it has been unwilling or unable to negotiate a solution to, despite the urgings of the Productivity Commission? We will ask whether that issue can be picked up in this bill. Whether the bill makes sufficient difference between contributory and non-contributory schemes, whether it addresses the interpretation of KiwiSaver and other portfolio investment entities, and how it interfaces with the broader foreign investment fund rules are all second-tier issues that will merit the select committee’s consideration. But today, for now, in this maiden speech of the bright and shiny new Minister, who, unfortunately, inherits a very non-bright—

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

JOHN HAYES (National—Wairarapa): I join the last speaker, David Cunliffe, in congratulating the bright and shiny new Minister of Revenue on his new portfolio. I would just point out that the most important contribution the tax system can provide to our economy is to be an efficient system. To be efficient, it needs to be much more simple than it is, and that is why this Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill is a good bill, because it is getting rid of complexity and it is making the system fairer and simpler—fairer and simpler.

Why do we need it to be fairer and simpler? Because it is part of the Government’s process of making a more competitive and productive economy. This is one of our Government’s key priorities, because it is only by lifting economic performance that we can create jobs, we can boost incomes, we can improve living standards across the Wairarapa, and we can provide world-class services like those that come out of Masterton hospital.

The Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill is the latest piece of tax legislation that is aimed, as I said, at making the system fairer and simpler, and it will help strengthen our economy. This Government aims to raise revenue not through hiking tax rates, as those goons on that side of the House would do, but by ensuring that the tax bases are applied fairly. I support this bill.

Hon DAVID PARKER (Labour): To the Hon Todd McClay, congratulations on your appointment and I hope it goes well for you. The Labour Party is supporting this Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill to go to the Finance and Expenditure Committee. There are some issues that we want to check on, particularly around the retrospective nature of the changes to the taxation of foreign superannuation vehicles. The case against retrospectivity is normally very, very high, and we want to make sure that what is happening here is proper. Both the last speaker, John Hayes, and Todd McClay in his opening address said that the taxation system should be efficient and fair, and then said that this bill achieved that.

It is interesting to reflect upon what the OECD said in respect of New Zealand’s tax system in the OECD Economic Surveys: New Zealand 2013 in June, just this month. It is the latest in the advice from a number of international agencies like the IMF and the OECD to critique New Zealand’s taxation system. I want to read out what it says, because it says the opposite of what the Minister and the last speaker said. It says that tax changes should be considered “to make the tax system more conducive to both growth and equity:”. The changes that it proposes, which are supported by the Labour Party, are very, very significant. It is interesting that the changes go to both improving equity in our country and increasing the wealth of our country through more growth. But before it sets out its prescription, it notes that New Zealand now has one of the least redistributive tax systems in the OECD—one of the least. That is one of the reasons that it says that the rate of growth in inequality in New Zealand has been amongst the highest in the OECD in the last two decades. I say those two things slowly, because I think it would shock most New Zealanders to realise that the rate of growth of inequality in New Zealand is worse than in most OECD developed countries, and that we as a country, as a consequence, are becoming less equal.

What it does not go down to is how this Government has made it worse, because it is a prospective-looking document, rather than criticising the Government’s recent policy platform. But of course inequality has gotten worse in New Zealand under this Government, when 40 percent of its income tax cuts went to the top 10 percent. The Government says: “Oh, but we increased GST.” Of course, GST is effectively a tax on wages if you are a low or middle-income person and you spend all your income. You pay GST on everything except your interest and your rent. So you pay quite a high effective rate of GST in relation to your income. But if you are a wealthy person and you save a lot of your income, you do not use up all of your income on GST-related services, and your effective rate of GST is lower as a proportion of your income than it is for a low or middle-income person. So the effect of those tax cuts, which gave 40 percent of the income tax cuts to the top 10 percent of income earners and then effectively replaced it with some GST, which proportionately fell more on low and middle-income groups, was to increase inequality markedly—and I say markedly.

We see the effect of that in Auckland’s property prices. The Government, as its centrepiece of this Budget, says: “Oh, we have now got to do something about unaffordable house prices.” But it is driving them, both with the tax system—which is what I am going to come back to next—and with the increase in inequality as a consequence of more and more of New Zealand’s resources, New Zealand’s wealth, being captured by the top 5 percent or 10 percent of New Zealand. They, of course, are the people who are out there bidding for a third or fourth home, while younger people are closed out of owning even one.

So what does the OECD say in terms of reforms that could make this better—that could, in its words: “make the tax system more conducive to both growth and equity:”? I will read it out. It says: “New Zealand belongs to a group of five OECD countries with particularly high pre-tax capital-income inequality … As much of this income, especially at the top levels, takes the form of capital gains, the lack of a capital gains tax in New Zealand exacerbates inequality (by reducing the redistributive power of taxation). It also reinforces a bias toward speculative housing investments and undermines housing affordability, as argued in the 2011 Survey.”, which is a wee flick at the Government, saying: “Why do you ask us for these reviews and pay for them if you are going to ignore them like you did the 2011 one?”. So it is saying that we are one of only five OECD countries that have this capital income inequality, because we tax a subset of economic income based on a statutory definition of income, not an economic definition of income. We are one of five OECD countries that do that.

Then it says that as much of this capital income takes the form of capital gains, the lack of a capital gains tax in New Zealand exacerbates inequality. Well, I thought the Minister of Revenue told us that that is what it is aiming for—a fair tax system, rather than an unfair one. Then it says that it also reinforces a bias toward speculative housing, which we know is probably one of the largest economic problems that we have in New Zealand. We over-invest in speculative land-based investments and we under-invest in the productive economy—the manufacturers and the like—that export products that pay for our imports and interests. Then the OECD says let us talk about this in respect of growth, and the OECD says: “that recurrent taxes on immovable property are the tax category least harmful to long-term growth,”. The OECD is saying that taxing capital—that is effectively what it is saying—has fewer negative effects on growth than other forms of taxation. So it is saying that the thing that New Zealand could do—and it stands out clearly; effectively, its stand-out recommendation is how to improve both the economy and inequality—is to fix this glaring hole in our tax system, where capital income is not taxed, despite the fact that it is economic income.

Really, I should sit down now, because that points to the most glaring hole in New Zealand’s economic settings. There is nothing more important that this Government could do economically than to get the investment signal right, so that people invest on the basis of the productivity of their investment, rather than on the basis of a tax bias, because there is a tax bias there. No one disagrees now that there is a tax bias. The Prime Minister stands up and says that we have got a capital gains tax on people who are traders in property. No, we have not. They are paying income tax on their trading activities. They are not paying taxes on their capital gains. They are paying income tax on the change in value of their trading stock, because they are traders—just like someone who buys and sells shoes pays income tax on trading shoes, or supermarkets on the goods they sell. If you are a trader in property, it is your stock-in-trade, and you pay taxes on your profits on your trading as income tax, not as a capital gains tax.

New Zealand’s tax system is fundamentally flawed. We face a higher cost of capital in New Zealand because of our prolonged current account deficit and our dissavings. And, again, what would the OECD and the IMF say is the right thing to get New Zealand people saving, rather than over-investing in property and fooling themselves that they are wealthier because the price of the asset has gone up, even though it is just the same asset, and the country is no wealthier as a consequence? It is the same thing that existed at the start of the year; it is just that the number that is attached to it has changed. They would say that to fix that, you need a capital gains tax. So you come back to this absolutely central thing that is important both from an economic growth perspective and from an equity system perspective, and this bill does nothing about it.

One more thing: this bill does nothing to remove the over-taxation that New Zealanders are facing through ACC. ACC is meant to be a levy that reflects costs. It is being used as a tax. It is being used by the Government to over-tax New Zealanders by $700 million over the next 2 years, the effect of which allows it to squeak into surplus. It is good that we are getting back to surplus, but the Government should not pretend that it is using ACC as anything other than taxation, when it is meant to be a levy that reflects cost. It has already announced that in those out-years—around the time of the election, somewhat coincidentally—it is going to drop those levies, after it gets back to surplus. We are supporting this bill going to the select committee, but it does not make the changes that the New Zealand economy needs.

JULIE ANNE GENTER (Green): Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. Good morning. It gives me great pleasure to speak on behalf of the Green Party on the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill. The Green Party will be supporting this bill going to the Finance and Expenditure Committee. It would like to congratulate the Government on taking a very small but not insignificant step to improving the fairness of our tax system by removing some of the favourable tax treatments that have existed for the mining industry, which may well be worth $30 million. It is a nice change to see the Government actually moving towards fair tax treatment, particularly for an industry like mining, which we know is a favoured industry of this Government.

However, the Government does not completely level the playing field. It is still picking winners. My colleague the Hon David Parker mentioned the recent report from the OECD, the OECD Economic Surveys: New Zealand 2013. What the OECD found was that the use of environmental taxes in New Zealand is very, very low by OECD standards. Their increased use would enhance the quality of future economic productivity growth. And the OECD recommended the creation of a sovereign wealth fund, as Norway has, to manage any mining royalties much more equitably. The OECD has found that mining royalties and access charges are still extremely low New Zealand, as is the carbon price signal.

The Greens have in our taxation policy a number of principles. Basically, we think that taxes should come from a broad base to avoid excessive reliance on income tax and, in particular, that the tax base should include personal and business taxes that reward sustainable activities and enterprise. We would like consumption and expenditure taxes that discourage wasteful use of energy and finite resources, targeted environmental taxes designed to reduce and eliminate behaviours that simply are not sustainable in a finite world, and taxes that acknowledge the value of common property through resource rentals and that encourage long-term, sustainable business practices. Of course, those principles are very much in line with what is recommended internationally by organisations like the OECD.

We think that investment income from different sources should be treated equally for tax purposes. I would like to congratulate the Labour Party on finally coming on board with support for the capital gains tax. I think the Hon David Parker gave an excellent explanation of why a capital gains tax is so important for rebalancing New Zealand’s economy and for ensuring that we do have high-quality economic productivity rather than just speculative investment that does not actually increase the wealth of New Zealand.

Of course, the lack of a capital gains tax is just one of the factors in the housing affordability problems that are being faced in Auckland. There are other factors, such as an unknown quantity of foreign capital coming in because there is no restriction to New Zealand residents and citizens on the purchasing of property. We have foreign capital coming in and bidding up the price of houses, the lack of a capital gains tax, and quite an easy or a loose credit situation where it is quite easy to get credit that is leading to it being more favourable to purchase as opposed to rent. What we have seen in Auckland is that it is much less a supply problem that is causing the housing unaffordability, and that is indicated by the gap that has opened up between house price inflation and rent inflation in Auckland.

So the Green Party has as its priorities three basic areas. One is the economy. I think it is really important to look at rebalancing the economy and reducing our current account deficit, and there are many easy ways that we could be implementing policy that would do that. Unfortunately, the Government is doing the opposite of most of these. For example, in its transport policy it is spending a lot of money on a few projects that tend to aggravate our reliance on private vehicles rather than giving New Zealanders real choices. That means that New Zealand households and businesses have to spend well over $12 billion a year on vehicles and fuel to run them while the Government spends $4 billion of our taxes on a few motorways that have extremely poor benefit-cost ratios. These will not actually reduce transport costs for New Zealand households and businesses but will mean that New Zealand households still have to rely on their cars for trips. That means they have to go fill up the tank, and they are paying a lot of money for petrol. They would be paying even more if the New Zealand dollar came down to a level that would be more appropriate for it. Of course, all of that contributes to our current account deficit.

The other priority for the Green Party is protecting our natural environment and our natural capital. The fact is that the planet is finite. We have finite resources. If one accepts that we have finite resources, it makes sense that we cannot count on extracting resources for ever and infinitely polluting the atmosphere in order to achieve a higher quality of life. It is simply not possible. On the one hand, we are being told that if we want to have a high quality of life, if we want wealth, we have to dig up our precious minerals, we have to dig up our forests, like on the Denniston Plateau, and we have to encroach upon these precious areas that are actually of very high value to New Zealanders in order to extract the minerals beneath them so that we can sell them.

But that is not a sustainable strategy for long-term wealth creation, because once that place is gone, it is gone for ever. And once we have sold the minerals, or the coal, as the case may be, what is our strategy after that? Once we have sold the coal, then what do we do to earn a living in the world? The sooner we recognise that there are sustainable industries that we could be cultivating and that we should focus our attention on those, the less it is going to cost us and the easier it is going to be to achieve a higher standard of living for all New Zealanders.

It is also important to reduce inequality, as David Parker mentioned earlier. New Zealand has one of the fastest-growing rates of inequality in the OECD. Not only is that not fair, it is also not sustainable. It is not good for the economy. One of the factors in the global economic crisis was growing inequality. We are in this together. There has been a lot of research that shows that when the gap between those who have a lot and those who have very little increases, then everybody is worse off. The entire country ends up paying more in terms of increased crime rates and having to put people in prison, and we end up paying more because of worse health outcomes. If we have an economy that looks after our people and our environment, that is going to be the best thing for all New Zealanders, and that is the priority of the Green Party.

So the Greens support a tax policy that can contribute to the overall quality of life of New Zealanders, and one of the most obvious ways to do that is through ecological taxes. We want to see a real price on carbon. The OECD has criticised New Zealand for not having a meaningful price on greenhouse gas emissions. We know we are going to have to reduce our greenhouse gas emissions. We know we are going to have to transition to a low-carbon economy. The sooner we do that, the less it will cost us. The sooner we face up and say that we are going to have to develop new ways of doing business that do not rely on activities that pollute the atmosphere, the easier it is going to be for us to make that transition. The sooner we put a tax on capital gains, the better it is going to be from an investment perspective. We are going to have people investing in productive industries in New Zealand, hopefully, and at the very least it should dampen the housing speculation that is driving up prices in Auckland.

There are many other ways we can have a more direct, fair, and transparent tax system. We congratulate the Government on its tiny move in that direction by removing favourable tax treatment of the mining industry in this bill, but we would very much like to see, and we ask for, a greater move towards ecological taxes.

MAGGIE BARRY (National—North Shore): I rise to speak to the first reading of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill. This is a very straightforward piece of legislation, and it, potentially at least, enjoys the support of the political allies we have in this House, and oftentimes foes. Even the Greens, not known for being particularly positive, have supported it because it is a very straightforward piece of legislation in its purpose. It is simply this: to protect the tax base changes to make the tax system fairer and the economy stronger.

Our very eloquent new Minister of Revenue, Todd McClay, has already outlined the three main provisions of the bill, so I will not waste the House’s time by going over them again. Just to recap, though, the changes in the taxation of foreign superannuation to make it simpler and fairer both for New Zealanders returning from overseas and for migrants, with a limited amnesty for foreigners, are a very good thing. The bill also sets up a framework for the specifications of minimum requirements for company financial reports.

I am concerned too with the change that is happening with regard to mining, because bringing the tax treatment of the mining of specified minerals—such as gold, silver, and ironsands—into line with general business tax principles really has to be done. Looking at that in more detail, we know, of course, that mining is a very important sector, but we have to ensure that tax rules do not advantage one sector over another. So this proposal to remove the concessionary tax treatment that currently applies to the mining of scheduled minerals like the ones I just mentioned, by replacing it with rules that are more consistent with those that apply to the rest of us—other taxpayers more generally—while still creating space for some of the unique aspects of the industry, is, in fact, a very fair thing to do. At the moment the tax on mining effectively allows a tax deduction for capital expenditure in the year that the expenditure is incurred and, in certain circumstances, after that expenditure is to be deducted in anticipation of its being incurred. That is something that needs to be tidied up, and this piece of legislation does just that. Thank you.

ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First, and we also congratulate the new Minister of Revenue, the Hon Todd McClay, the former chairman of the Finance and Expenditure Committee, who is now taking up where the Hon Peter Dunne left off. In this respect, New Zealand First also supports the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill. There is a lot of good, sensible, sound policy in this bill that will help tidy up aspects of our taxation system and simplify areas of filing requirements for individuals and record-keeping requirements for businesses. It will also provide that taxpayers who choose to file a tax return also need to file their returns from the previous 4 tax years, so they cannot, basically, cherry-pick a particular year. If they are going to file a tax return, it must also include the tax returns of the previous 4 years, to ensure that it is fully covered.

We are pleased that the Government has seen fit to move in the direction of KiwiSaver to increase employer contributions and employee contributions back up from 2 to 3 per cent, which we believe is, again, a positive thing for long-term savings in this country. We were very disappointed when the Government reduced its own contribution in July 2011. It reduced the annual Government contribution, halving it from $1,042, or $20 a week, down to $521, or $10 a week. We thought that was a negative way of addressing the problem of savings in this country. The Government reducing its contribution to KiwiSaver did send the wrong message.

Just recently I was reading—I do not have the figures in front of me—that the impact on that KiwiSaver fund in the next 10 to 20 years, as a result of the reductions of the Government contribution, is into the tens of billions of dollars that New Zealanders will not have in the long term, and that is a great shame. It is a great shame that the Government could see fit to give $2 billion in tax cuts to its wealthy, rich mates, and could provide $2 billion in tax cuts for those who do not need it—$5,000 a week in tax cuts for the likes of Paul Reynolds, the head of Telecom; $1,000 a week for the likes of John Key; and goodness knows how many other thousands of dollars a week for very wealthy people in this country who simply did not need it. Those tax cuts gave them the opportunity to buy a new boat at Westhaven and that sort of thing, or a new bach at Ōmaha, but for the people who actually could have done with tax cuts and could have done with the ongoing significant contribution to their KiwiSaver schemes, it was a pity that the Government had its priorities wrong and saw fit to take $2 billion out of the tax revenue coffers to give to the wealthy, while reducing the KiwiSaver contributions.

It is also interesting that in this bill it talks about taxing bonus shares issued by companies under profit distribution plans. Is that not interesting? I wonder whether that would include Mighty River Power bonus scheme shares, because it almost seems like the Government is putting out the little carrot, putting out the tempter, for people to buy Mighty River Power shares, and saying: “If you keep them for 2 years, you will get”—

Hon Clayton Cosgrove: Just after the election.

ANDREW WILLIAMS: —yes, that is just after the election—“a bonus just after the election next year in your shares of Mighty River Power.” But here in this bill it says that it will be taxing bonus shares issued by companies under profit distribution plans. So it is bad news for New Zealanders. You have not been given the full story, it would seem, by this Government, because it is giving with one hand while at the same time it is ripping your other hand off with the other.

It will be very interesting if the Government makes a little bit more of a feature of this when it tries to launch the Meridian Energy shares with a similar bonus scheme. Will it be telling the people of New Zealand, when it tries to sell off Meridian Energy: “Oh, by the way, the bonus shares come with a little bit of a tag to them—that you will get taxed on those as well.”? It is clear here that the Government does not always necessarily tell the full truth, but we have understood that in the last week on many other issues as well.

One of the areas where New Zealand First is in support is where the bill talks about foreign superannuation and different tax regimes around the world, and assisting people to bring their superannuation back to New Zealand. In this respect, this lines up very nicely with New Zealand First’s superannuation policy, which we put out in just the last month or so, in relation to keeping the superannuation age at 65 years. Some parties in this House would see the superannuation age sliding up to 67 or an even greater age than that in the future, while others would keep it at 65 as long as the current Prime Minister is at the helm. Once he is gone from the helm, I am sure that Steven Joyce, Judith Collins, and Bill English will be just chomping at the bit to move the age out to 67 or higher, in order to try to balance the books.

In that respect, the New Zealand First policy—and we have put it out this month—is that we would have a graduated superannuation scheme based on the length of time a person has been living and working in New Zealand. If a person has in the 45 years between the ages of 20 and 65 lived and worked in this country—and when I say “worked”, that could include non-paid work in terms of a spouse, a husband or wife, taking care of the family; they are still contributing in a non-paid situation—for the full 45 years, then, under the policy of New Zealand First, at age 65 you would get 100 percent of the universal superannuation. However, if you have been out of the country for a period of that time, you would get that percentage of time taken off your superannuation payment. Perhaps you had worked overseas for 10 years. You would then get 10 years taken off the 45 years, and therefore you would get 10/45ths taken off your superannuation when turning 65.

What this also means is that where we have a lot of repatriation of people coming back to New Zealand who have worked a huge amount of their time overseas and have contributed very little in the way of tax to New Zealand, they will not come back and just get on the bandwagon and take the hard-earned taxes that all those people who have been in this country and who have worked most of their lives in this country have contributed to the scheme. Similarly, those who come to join their family when in their senior years of life, who arrive here and stay the minimum requirement of 10 years, would not then suddenly get the full 100 percent of superannuation, either. If they have come here and had 10 years in this country, then they would get 10/45ths of the superannuation for themselves. They would not get the full 45/45ths of superannuation. Therefore, they would get some form of payment, but they would not be stepping over the New Zealanders who have contributed all their lives to the scheme.

In that respect, that fits in with this bill, because we would also permit them to transfer and bring back to New Zealand their own superannuation from schemes that they may have been paying into overseas. They could therefore keep the payment from their scheme, plus take a percentage from the New Zealand scheme on the basis of the years that they have been in this country. We believe that that is a very sound and solid policy, which New Zealand First will be pushing, and will certainly be pushing into the next election. It will mean that New Zealanders will be able to keep a superannuation scheme at age 65 going on for many, many decades to come, whereas, under the current situation, that is looking increasingly perilous while the New Zealand tax base does not have a bright future in many areas.

In closing, New Zealand First supports this bill. We believe that much of this bill is very much technical. Much of it is just tightening up loopholes. It does improve the tax system in a great many areas. New Zealand First has always said in this House that we will support good, sound, solid policy and we will oppose bad policy. In that respect, there is good policy in this bill, and New Zealand First will be supporting it.

JONATHAN YOUNG (National—New Plymouth): I am very pleased to stand in support of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill, here in its first reading. When it comes to taxation bills, it is all about how we are going to carve up the golden egg. Sometimes I think members on the other side want to kill the goose and divide that up.

Hon Amy Adams: Just sometimes?

JONATHAN YOUNG: Just sometimes. It is very important to get the balance right so that we are actually able to raise taxation but also maintain and build a sustainable base for that taxation as well so that going forward New Zealanders can receive the benefit of that income source.

We have heard today the old story, the old criticism, of those people who received tax cuts, but many people forget, and certainly do not bring it up, that in order to have received a substantial tax cut, you were a substantial taxpayer in the first instance. So perhaps there are some people in our nation who have received that cut, but they were paying in the vicinity of about $350,000 per annum in tax, and now they might be paying $285,000 per annum. Of course, their contribution sustains probably about 20 superannuitant families in our country, so it is a matter of actually understanding the whole story and getting some perspective around these sorts of things.

Certainly, in this instance—[Interruption]

Hon Amy Adams: Oh, they’ve woken up.

JONATHAN YOUNG: —yes, I have woken them up—we believe that we have got our taxation system working far, far better than it has done in the past under the stewardship of those members. What we are seeing is that we are addressing issues around education and skills training in order to enable people to be self-determining, to have choice in their lives, and to not be dependent upon only the State for an income and a life.

So it is important to get these matters right, and I believe that as a Government we are working in a multifaceted, holistic way in order to improve New Zealanders’ way of life here in this country. So with that said, and with those points made—bringing some reality back to those members’ argument—I am very pleased to speak in support of this bill. Thank you.

Hon CLAYTON COSGROVE (Labour): You have just heard the age-old sort of explanation for providing massive tax cuts for the wealthy and providing very few cuts, or little assistance, for the middle and low-income earners. It is called trickle-down. It did not work for Thatcher and it did not work for Reagan, and these geniuses over there are sort of clawing back into history, because they have not got any innovative vision or policy, to the old trickle-down theory, which, for the uninitiated, goes like this—so I am told. You fund massive tax cuts to those on the top—first step. So what did those members do? The top 10 percent got 40 percent of the tax cuts, so they put a tick next to “income tax”—they put a tick in the box there. The theory goes that if you give massive income tax cuts to those on the top, then somehow, in some quasi-religious, beneficial way, those at the top will shell out these wonderful hundred-dollar notes and they will trickle down to the masses, the proletariat, those poor souls at the bottom, who have very little income, who scrape for it every day, and who cannot make ends meet. And from this great trickle-down theory, nirvana will occur. Everybody will be rich. Everybody will be better off. Unemployment will disappear. Economic growth will be sparked. The veil will fall from the temple—as I am sure Mr Clark would know from his religious experience—and all will be well.

Well, there is a wee problem with that: it has not actually worked. It did not work for Margaret Thatcher. It did not work for Ronald Reagan. George Bush had a crack as well. It just does not work. It is a bankrupt, invalid economic policy. But, oh no, these guys are dusting it off yet again—for the last 4 years—and having another crack. They are having another crack. John Hayes, who with a haircut like that looks like he is sort of morphing into, or sort of channelling, Peter Dunne, I have to say—

Dr David Clark: He’s lost the bow tie.

Hon CLAYTON COSGROVE: He has lost the bow tie, though—that is true. This bill, the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill, comes on the back of a series of botched tax proposals—botched tax proposals—like, as my colleague said, the car-park tax. John Hayes, I have got to say—he will not thank me for saying it, but I have got to pay tribute to him—showed a tonne of guts, did our Johnny. He opposed the car-park tax in the privacy of the select committee room, where it was not public. He opposed it on principled grounds, and I admire him for that. He always shows a ton of guts, does John Hayes. He opposed the iPad tax. He had some real problems with the student loan tax, of course. I think he also opposed the paper boy tax—these groundbreaking reforms that National bring into this House.

Well, it just shows how bankrupt these people are, because on the back of those botch-ups, on the back of that, we have this sort of trickle-down theory, which is not working. Those members talk about how they gave a bit in GST, so they dropped the tax rates down. The top 10 percent get 40 percent of the tax cuts. John Key gets a thousand bucks a week. The new Minister, who—forgive me, I should congratulate Mr McClay, who was not a bad chair of the Finance and Expenditure Committee. I wish him well, in a limited way, but a hundred bucks a week Mr McClay did get. Now he has gone up a bit because his salary has doubled. Those on the middle and low incomes, those who actually spend money and actually grow the economy because they have no choice but to spend their income, they have not got any spare money to save. They cannot ferret it away. Often they have mortgages and debt. They actually have to spend their money on school shoes, school fees, food, and basic things like that, and electricity, of course, which, apparently, is very competitive, and no one is paying too much for their electricity, according to the National Government, in its small, myopic bubble of a little world, which no one believes. But if you actually want to grow the economy, what these guys could have done is—

Dr David Clark: Geniuses!

Hon CLAYTON COSGROVE: —geniuses, yes—do what the Aussies did, and that is target the tax cuts, one, at those who need it, and, two, at those who are going to spend it and those who are going to create jobs by spending that money that they get back—their own money—not give it to the top, as these guys did, because the most wealthy do two things. They have got a ton of dough anyway. So what do they do? They either retire debt with their tax cut, or they save it and put it in the bank.

Andrew Williams: Or buy more champagne.

Hon CLAYTON COSGROVE: Or buy more champagne. So they are not actually providing the juice and the lifeblood that the economy needs by getting those dollars moving. But, of course, over there, National looks after its mates.

It is interesting that in this bill there is talk of a limited amnesty. Well, Peter Dunne was in charge of the bill, and had Peter Dunne been the Minister today, I would be asking a simple question: will that amnesty extend beyond the realm of tax to perhaps Mr Dunne’s own misdemeanours and difficulties? Will the Government extend or accept an amendment, or will somebody propose one from that side, that will give Mr Dunne an amnesty for the deeds that he has committed in the last few days, or is this confined to just tax? Or is the fact that he has been removed from the revenue portfolio because the Government is going to extend an amnesty, and there would be an inherent conflict of interest if he stayed as the Minister? I do not know. I know this is a simple question. I am sure somebody can perhaps answer that.

We will support this bill to the Finance and Expenditure Committee. We have some reservations over a number of aspects, but we do believe in simplicity. We do believe in transparency in respect of tax. The other thing that you have got to have in tax is confidence in the system. So GST as a tax is a pretty simple tax. It is a transparent tax and people generally have confidence in it, apart from when they are told in an election that it is going to stay at the level it was, and then they are lied to after an election and it is bumped up, as this crew did, for middle incomes and the lower incomes, of course, because they are the ones who pay the most of that. So it has got to be transparent, it has got to be simplistic, and people have to have confidence in it. But I argue that it also has to be fair.

Mr Hayes got up and had a bit of a crack, trying to talk about equity and fairness in taxation. Well, this bill simplifies a whole series of processes, but I do not see anything in it that corrects the mass inequity where Mr Hayes’ Government gave the top 10 percent 40 percent of the tax cuts. Does anybody over there across the aisle—I am not an economist—think that it is equitable to provide the top 10 percent, who are the wealthiest in our society, with 40 percent of the tax cuts and give certain folk a thousand bucks a week, while others languish down the other end and get a few cents, the odd crumb, off the National Party table? Do the colleagues across the aisle think that is equitable? Will anybody stand up over there—maybe I am going deaf. There is silence. Does anybody think that is an equitable proposition? Presumably, they talk about equity and they talk about fairness. They have all these high and mighty visionary words, but when it comes to actually finding some spine, a bit of backbone, and standing up for their own policy, I just simply ask them again—

Jonathan Young: Sorry, we weren’t listening.

Hon CLAYTON COSGROVE: I am happy to yield to them, if they would like. Does Mr Young, who has woken from his slumber, think that giving 40 percent of the tax cuts to the top 10 percent—the top 10 percent getting 40 percent of the tax cuts—while those on the bottom languish is equitable? Oh, I do not know whether the mikes are not working, or maybe I have gone deaf, or something has happened, but there is silence. They cannot even stand up—even the Minister over there who is guarding the shop cannot stand up, and we will love the Hansard around this next year—and support the proposition that they have put forward, that they believe their own tax policy is equitable and fair. I know that in the privacy of his own room Johnny Hayes will be grinding his teeth, saying that this is not fair and this is not equitable, but the whips will not let the reins off him so he can go public on it.

So although these tax changes will provide some simplicity—some of them are positive, but there is a gap in the detail in some of the superannuation propositions in them—the point about it is there is nothing in this legislation that corrects the mass inequity, the mass unfairness, that we now know even Government Ministers and members will not stand up for. Even Maggie Barry, who is known for dishing it out around the place and being very vocal, will not stand up in this House and say that giving 40 percent of the tax cut—revenue and income—to the top 10 percent is equitable or fair. Even she knows that over the bridge, in her patch, no one will believe her, just like no one believes the Government proposition that says people are not paying too much for power. If those members really believe that, and they really believe that their tax policy is fair and equitable, I argue they should go out and make those claims publicly, on the stump, on every street corner and in every hall in the land, especially about the electricity price issue, and see what sort of a response they get.

I invite Mr Hayes to continue to show a tonne of guts and oppose some of these tax proposals. I would like him to do it publicly, but I give him credit for at least doing it privately. I invite some of his other colleagues, perhaps, who believe the same way he does, to maybe use his example and step up to the plate.

Dr JIAN YANG (National): It is a pleasure to take a call on the first reading of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill. After listening to the speeches from Labour members, I have come to the conclusion that what Labour wants is a society where everyone is equal, but everyone is poor. That is the society it wants to live in. That society has been abandoned in China, and China is now developing very well, basically based on what we call the market economy.

This bill will make the tax system fairer and simpler, and it will strengthen our economy. The National-led Government has been focusing on returning our Budget to surplus and growing our economy. It is building its record as a responsible economic manager that taxpayers can rely on. It will provide the steady hand our economy needs.

Taxation is a key component of our economic package. This Government aims to raise the revenue it requires not through a hike in tax rates but by ensuring that the existing tax bases are applied fairly. An important aspect of fairness in the tax system is that taxpayers must be able to understand and comply with the rules. It is necessary for the tax rules to be cohesive, fair, and applied consistently, and this bill does just that. For instance, it makes changes to the taxation of foreign superannuation to make it easier and fairer for both New Zealanders returning from having worked overseas and migrants. This is a timely bill. I commend it to the House. Thank you.

Dr DAVID CLARK (Labour—Dunedin North): Kiwi power bills are too high. John Key is on the side of the energy companies, and Kiwis are hurting. Labour will reduce power bills. These are the big issues—these are the big issues. We know that power bills are too high, we know that John Key is on the side of the energy companies, and we know that Labour has a plan to reduce those power bills. And what are we debating here? We are debating a remedial tax matters bill again—again. We are debating the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill.

This is not the first time we have debated minor tax law in the last 12 months. My colleague the Hon David Cunliffe will agree that we have spent a lot of time in this House debating minor amendments to the tax legislation when the fundamentals of this economy are wrong. But this Government is not prioritising correcting the big things that are wrong in the economy. We have to ask ourselves why. Why are we debating these matters when the economy is struggling, when ordinary Kiwis workers are struggling, and when the fundamental settings of our economy are wrong?

The IMF says that New Zealand has the worst current account deficit in the developed world. It is worse than that of Greece. What is this Government doing about it? I asked the Minister of Finance when he came down to Dunedin, on a rare visit by the National Party to Dunedin, what he would do about addressing this fundamental imbalance in our economy. He did not give a straight answer to that question. This Government does not have a plan. It is so focused on bringing down Government debt, which is not the real problem. This Government inherited zero net Government debt; that is not the real problem. Labour would bring us into surplus in the same time frame that this Government would. The Government is hoping to get there next year or the year after, and we think it probably will. That is not the real issue.

The real issue is that New Zealand is continuing to spend more than it is earning. That means, long term, that borrowing in New Zealand will become more expensive and that will hurt Kiwi businesses. This Government does not like business. This Government does not like small business, because small business has to borrow. Everything is setting itself up against small business. I do not understand why this Government does not like small business, but it does not. How can we get there? How can we correct those things that are wrong in our economy? Well, I will come back to those things. First I want to say a few things about this bill.

There are some good things in this bill. It is attempting to address some of the minor problems with the taxation system, and we will not oppose it going to the select committee, because we want to see these minor things fixed up too. But we are frustrated that the big issues are not being tackled, and they are not being tackled, of course, because this Government does not want to tackle them. It benefits from having its supporters benefiting from an unjust regime.

One of the big issues dealt with in the bill is that of foreign superannuation charges. As a former tax spokesperson for the Labour Party, I have had plenty of phone calls from those who are experts in the field, and they are asking why the Government is doing it in this way. The proposal is preposterous. The first issue that is dealt with here is that all transfers—from British schemes, in particular, and this is where people are the most het up—will be locked in, made to enter a locked-in scheme such as the KiwiSaver fund, and they will attract an expectation of a tax payment. So in this case it is proposed to allow the taxpayer to withdraw an amount up to the value of the tax due from their KiwiSaver scheme. It sounds good, but it ignores the fact that where the transfer is made from a UK pension fund, withdrawing funds would possibly either invalidate the transfer or trigger a 55 percent tax charge in the UK. The two systems are different, and this legislation does not deal with that.

I am fairly certain that we will have some fairly substantive and energised submissions to the select committee on this particular issue, because there are a lot of New Zealanders who are returning from overseas and have money in UK pension funds, or immigrants who are coming here and are going to be treated in a really rough way by this Government. These people also have a lot invested, and their life-savings are under threat because of a system that is set up to be unfair.

According to the regulatory impact statement, an “amnesty is not recommended as it would create an unfair advantage”—and I am quoting here—“for non-compliant people over people who have complied with the law and fulfilled any resulting tax obligations.” I would like members of this Parliament to contrast this with the leeway given by the Speaker to Peter Dunne, leader of the deregistered United Future party. He has been given time to get his affairs in order while still claiming Parliamentary Service funding for his party with no penalty. By contrast, taxpayers are expected to pay tax on transactions involving law that is, in the Inland Revenue Department’s own words, “complex and difficult to understand …”, and about which the department has offered no guidance.

Hon David Cunliffe: There’s 70 percent non-compliance

Dr DAVID CLARK: There is 70 percent non-compliance, as my colleague here says—this is a lot of people who are affected. The Inland Revenue Department has given no guidance. If the Inland Revenue Department is concerned about equity, it could either allow those taxpayers who previously paid tax in relation to a transfer to reassess their position using the proposed 15 percent option, or refund the tax paid. The fact that it will not do so, demonstrating its desire to raise revenue, has triumphed against equity in this case.

I am quite certain we will get some full submissions on this. I have talked to some people who are very exercised about this. Where you have a situation where an unfair rule is proposed, one that will disadvantage the 70 percent who are non-compliant—and they are non-compliant not because they are intending to be that way; it is because they have had advice that they did not need to do things this way, or that it was too complex, or the Inland Revenue Department could not give them guidance—we will see those people come back and say that this is just simply not fair. I am sure that once this bill gets to the select committee this matter will need to be addressed.

I hope members opposite will give the matter the attention that it deserves. There are a lot of people out there who face bankruptcy because of this legislation, and that is not fair. The Inland Revenue Department is there to collect what is due to it—that is quite correct—but it is not there to send people to the wall through unfair systems and unfair treatments. So I think that is something we will hear more of in the select committee.

In the bill there are a number of other measures that, although worthy, are minor. They do not address, as I said at the beginning, the fundamentals that are wrong with our economy. What we need to be seeing in bills like this is measures that bring about pro-growth tax reform. We need research and development tax credits. The OECD says we need a capital gains tax. The Labour Party says this. The OECD says this. The IMF says this. Almost every single OECD country has one. New Zealand does not have one, and that creates a distortion in our system. We know, from recent statistics, that of those people in New Zealand with net assets over $50 million—with assets over $50 million—75 percent of them are not on the top tax rate. That is not fair.

I beg one member opposite to say that that is a fair system, when 75 percent of those in New Zealand with assets over $50 million are not declaring income of more than $70,000. There is silence on the other side of the House—silence. None of them are willing to defend that. They all know that the tax system is not just, and that the gap between rich and poor is growing at a frightening rate in New Zealand. But they will not do anything about it, because their mates are benefiting. They are not willing to tackle these issues. They do not care about the equity issues. They do not care about the future of society and investing in all citizens. They are prepared to let those who have got the money now build more money through an unfair system. The OECD says it is unfair, and, what is more, it says that the economy will suffer because of it.

This inequality is not just a social bad; it is hurting our economy. It is part of the reason why this Government has the worst economic record of any Government in the last 50 years. I will repeat that: this Government has the worst economic growth record of any Government in the last 50 years. Mr Henare knows it is true.

Hon Tau Henare: Boring.

Dr DAVID CLARK: He is saying it is boring. He does not care about growth. That party does not care about economic growth, and that is part of the problem—that is part of the problem. It is concerned only about looking after those who have already got the money. That was clear from the 2010 tax cuts, where 40 percent of the value of those tax cuts went to the top 10 percent of earners in New Zealand. Just 2 percent of the value of those 2010 tax cuts went to those in the bottom 20 percent, and that is an outrage, but it tells you where this Government is coming from. It wants to make sure that the privileged few are looked after. The middle classes, who are being hollowed out, who are suffering, are not getting any relief. It is bad for society, and it is bad for our economy. Our economy will not grow unless these issues are addressed.

SCOTT SIMPSON (National—Coromandel): It is a pleasure to take a brief and short call in the final slot on this Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill. I want to join with previous speakers in congratulating the new Minister of Revenue, the Hon Todd McClay, on his maiden piece of legislation. I thought he gave a very eloquent and good introduction speech. He is going to make a very good and fine Minister of Revenue and I am looking forward to working with him.

This bill is a bill that on the face of it makes great common sense. It is a bill with a number of measures in it. There are three points in it. It really instils a further view for the public, who are watching this morning, that this is a Government that is careful about taxation measures, that does not want to hike taxes unnecessarily, and that wants to keep a careful and controlled approach to fiscal management. This bill goes a long way to ensuring a continuation of that guidance under the very capable leadership of our finance Minister, Bill English.

This Government is all about making sure that our revenue tax take is taken from citizens carefully and judiciously, and that we do so in a way that does not promote extra tax hikes of the sorts that the Labour Party and the Greens would want. I do not think the Greens, in particular, have yet figured out that every time they mention a capital gains tax it takes the Labour Party’s polling down by several points.

This is a good bill. It is one that I think the Finance and Expenditure Committee is going to give very due and full consideration to. I commend it to the House.

A party vote was called for on the question, That the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Bill be now read a first time.

Ayes 119

New Zealand National 59; New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 3; ACT New Zealand 1; United Future 1; Independent: Horan.

Noes 1

Mana 1.

Bill read a first time.

Bill referred to the Finance and Expenditure Committee.

Bills

Construction Contracts Amendment Bill

First Reading

Hon CRAIG FOSS (Minister of Commerce) on behalf of the Minister for Building and Construction: I move, That the Construction Contracts Amendment Bill be now read a first time. I nominate that the Commerce Committee consider the bill. The Construction Contracts Act 2002 provides for the timely and cost-effective resolution of disputes in the construction sector. The processes in the Act are a lower-cost alternative to going to court. The building and construction sector is vital to our economy. It employs around 8 percent of our workforce and contributes around 4 percent of our gross domestic product. This House has already considered amendments to the Building Act 2004 over the past 2 years. In speeches on the Building Act amendments the Minister for Building and Construction, Maurice Williamson, has referred to the wider context for the proposed amendments. That context is also relevant to the Construction Contracts Amendment Bill, so it is worth repeating some of that information.

The National-led Government reviewed the Building Act 2004 during 2009 and 2010. The review was carried out in an environment where productivity in the construction sector was low, and some of the criticisms for low productivity were being directed at legislation and associated compliance costs. The review found that current regulatory systems were not broken, but they were more costly than necessary and less efficient than they could be. This was having an impact on productivity. This Government is committed to regulatory reform, but not at the expense of quality. It is vitally important that we get the balance right between reducing compliance costs and providing adequate assurances that building work is up to standard. The amendments to the Building Act 2004 that have been considered by this House seek to achieve that balance.

To support the amendments to the Building Act, a package of other changes and initiatives is necessary to achieve the Government’s goal of a sector that has the necessary skills and capability to build it right the first time and that takes pride in its work, and a sector that delivers good-quality, affordable homes and buildings and contributes to a prosperous economy. The goal is a well-informed sector that shares information and quickly identifies problems, where everyone involved in the building work knows what they are responsible for and what they can rely on others to do, and where consumers can make informed decisions and understand the risks and consequences of their decisions. Some of these changes are non-regulatory, and the Ministry of Business, Innovation and Employment has a significant programme of work under way addressing matters such as consumer education and advice, maintaining the skills of licensed building practitioners, and making the building code more accessible.

The Construction Contracts Amendment Bill is one of the regulatory changes that supports the amendments to the Building Act 2004. This bill will support the Government’s goal of achieving a more efficient and productive construction sector that stands behind the quality of its work. A detailed review of the Construction Contracts Act was carried out in 2010 and was reported to Cabinet in early 2011. Like the findings of the Building Act review, the review of the Construction Contracts Act found that the system was working well but could be improved by reducing some costs and clarifying some processes.

I will now outline the key changes contained in the Construction Contracts Amendment Bill. The bill will remove the distinction between how the Act applies to residential and commercial construction contracts. Currently, the Act is unclear about the jurisdiction to deal with disputes under residential construction contracts. This is a barrier to parties to residential construction contracts accessing and using the processes under the Act. The bill will consolidate the processes in the Act so that one process applies regardless of the type of work the construction contract is for.

One distinction will be retained in relation to residential construction contracts. Obtaining a charging order in relation to a dispute under a residential construction contract will not be possible, because a charging order may create inappropriate risks for a homeowner, such as possible default on mortgage obligations. The bill will also remove the distinction between the two different types of decisions that can be adjudicated under the Construction Contracts Act 2002. Current decisions on payment disputes can be more readily and easily enforced than decisions on disputes about rights and obligations. The bill will streamline the enforcement process so that it is the same, regardless of the subject matter of the dispute.

The scope of the Act is currently limited to contracts relating to construction work. The definition of that term in the Act is limited to ordinary building work and does not capture related services such as design and quantity surveying work. The bill will expand the scope of the Act to include construction-related services. Parties to contracts for the performance of these services will then be able to access the payment and dispute resolution processes in the Act. This amendment will be of particular benefit to consumers, helping them to hold architects, engineers, and quantity surveyors to account for their work, and will also benefit designers and quantity surveyors in enabling them to use the payment provisions under the Act to ensure that they are paid for their services in a timely manner.

Resolving disputes can be a lengthy and costly process. This is particularly the case in the construction sector, where issues can be technically complex and involve multiple parties. In response to the Construction Contracts Act 2002, the private adjudication market has developed the skills and experience to effectively and efficiently resolve construction contract disputes. It is working well. The Government does not need to intervene significantly in this market. What the Government needs to do is to continue to ensure that the legislation is fit for its purpose and does not create barriers or impediments for a well-functioning market. The Construction Contracts Amendment Bill will fulfil the Government’s obligations in this regard.

I should also inform the House that the bill contains some other less significant amendments to the Construction Contracts Act 2002 to streamline processes and reduce costs. These include reducing some of the time periods in the adjudication and enforcement processes; clarifying some procedural steps, such as how to seek an extension of time; a new power for the Chief Executive of the Ministry of Business, Innovation and Employment to obtain information for research and monitoring purposes; and consequential amendments to the definition of “residential occupier”. Also, there are amendments requiring a pre-adjudication conference to be held to deal with process issues, if there are any, and amendments clarifying how an adjudication order can be appealed, contested, or reheard.

This bill will speed up dispute resolution in the construction sector, support the Building Act reform programme by making improvements to accountability in the construction sector, and maintain efficient functioning of the private dispute resolution market. Thank you.

RAYMOND HUO (Labour): I rise to take a call to support the Construction Contracts Amendment Bill, which is to be referred to the Commerce Committee. According to Statistics New Zealand, from 2000 to 2008 the building and construction industry contributed around 5 percent to New Zealand’s GDP, comprised over 50,000 businesses, and employed around 7 percent of New Zealand workers. All these indicators will trend upwards with the Christchurch rebuild. Labour supports the referral of this bill to the select committee because it is important to listen to any concerns that submitters may have about the bill at the select committee.

This bill provides an opportunity for Labour to highlight that it is already taking steps to ensure that in the event of a construction company collapse, subcontractors are protected and paid for the work they have done. From the departmental report on the Building Amendment Bill (No 4) we have learnt that the building sector’s failure rate is higher than the rate for all businesses before 2003 and after 2008. As we have seen with Mainzeal Property and Construction, it is the subcontractors who are hit the hardest when a construction company fails. Subcontractors are nearly always last in the creditor queue, and often miss out on money they are owed. That is not fair. We need to take action so that it does not happen again.

Labour leader, David Shearer, and commerce spokesperson for Labour, Clayton Cosgrove, have been looking at sensible, cost-effective options that offer a fair deal without loading costs on to the sector. Clayton Cosgrove has been undertaking a series of visits throughout the regions to discuss these proposals with those at the coalface and with industry associations. We have developed two options, contractors’ liens and statutory construction trusts, and are taking these options to the industry for assessment and comment. The first option, contractors’ liens, means that contractors would be required to retain a portion of money they owe. The second option is statutory construction trusts, where money would flow through a trust to ensure that subcontractors get paid first, should a construction company collapse.

Our solutions will apply to significant commercial construction projects and will not interfere with contractors’ arrangements. We will also clarify and tighten the law to ensure that in the event of a construction company failure, subcontractors can get access to their tools as fast as possible, so that they can get back to work and earn a living. Labour MPs have written to trade industry workers to seek their feedback on the options, and have asked them for ideas on any other options that could benefit and protect the industry.

Back to this bill, the Construction Contracts Act 2002, the primary Act, creates default progress payment provisions for construction contracts, provides an adjudication framework for disputes involving construction contracts, and provides remedies for recovering payments under construction contracts. In 2009 the Government undertook a review of the Building Act 2004. The building review was initiated by the Labour Government and won cross-party support. Submissions on the review indicated broad support for the adjudication process under the Construction Contracts Act 2002 for resolving a range of building disputes. However, submitters identified areas in which the Act could be improved to help parties to resolve disputes, particularly in relation to residential construction contracts and disputes over the quality of work or rights and obligations under contracts.

The building and construction sector is vital for New Zealand’s economic performance and prosperity. The Government is making changes to legislation across the sector to provide incentives for building professionals and tradespeople to take responsibility for the quality of their work—changes that are expected to deliver a productive, efficient, and accountable building sector. Improving the adjudication process under the Act is important in the context of these changes. The amendments in this bill aim to make the existing adjudication process a faster, more cost-effective, and efficient option for people with disputes under construction contracts.

The amendment bill, as outlined by the Minister, will remove most of the distinctions between how the Act applies to residential and commercial construction contracts, except in relation to the use of charging orders as a remedy for non-payment. The Government has also widened the definition of “construction work” to include design, engineering, and quantity surveying work, and has removed the distinction between enforcement of payment determinations and rights and obligations determinations. Also, the amendment bill will speed up enforcement processes by reducing the amount of time a defendant has to oppose an application to have a determination entered as a judgment.

As I said, we are talking to the industry about options, and we are keen to hear its ideas as to how we can ensure that contractors’ incomes are protected without adding to Government red tape or an additional administrative burden to hard-working businesses. Under a trust fund model, the process is relatively simple. Instead of payments going to the head contractor, they go to the trust, which then makes payments. No other contractual terms are affected. Head contractors should be passing through progress payments to fund subcontractors. Any profit over and above what is owed to subcontractors is paid out to the head contractor. The construction trust, or a liens model, will ensure that any risky behaviour does not occur. Under a trust fund model, the flow of the payments being passed through occurs at the same speed as it currently does, it just goes through different players to ensure that a portion of the funding owed to the subcontractors is protected.

As to who would run the trust, who would be the trustees, and what it would cost to set up and run a trust, there are a range of options that could be investigated. For example, the Public Trust is a well-respected and safe institution. The trustees could be independently selected from a range of professional trustees. The trust would be self-funding from the interest received. For example, if the trust invests its funds into safe bonds, a percentage of the interest earned would be used for the day-to-day running of the trust. We will also investigate options to ensure that if the head contractor goes into receivership, subcontractors are able to go on-site to retrieve from the site any tools and materials they own. If the law is ambiguous, we will clarify the process through legislative change.

The construction industry has a high level of vulnerable subcontractors compared with other industries, and the problem of a payment to subcontractors in the case of a head contractor going into receivership has been most apparent in the construction industry. I commend the bill to the House. Thank you.

JONATHAN YOUNG (National—New Plymouth): Although the previous speaker, Raymond Huo, proposed some very interesting ideas, I do suggest that this is a very complex area, and one of the difficulties that a contractor has if they do not receive payment is that the value of what they have contributed is often built into a building, and you cannot retrieve it. If somebody sells a motor vehicle and does not get payment, certainly they can go and repossess that vehicle. So there is a lot of complexity around this, and there is a lot of complexity around retentions.

We know, as the previous speaker raised regarding the major construction company collapse at the beginning of this year, that this issue has caused a lot of pain. But it is a very complex issue and a very complex area, and if it could have been easily fixed in the past, it would have been. So although these ideas have a sense, a resonance, of logic to them, I think the working-out of them is quite difficult, otherwise they would have already been worked out, I am sure. However, it is good to think on these things. I think that what is needed, particularly in the construction contracts area, is as much certainty as possible. You can never take away business risk, but certainly having a contract in place creates certainty for not only the contractor but also the consumer, so that everybody is getting a fair deal.

This is what this bill, the Construction Contracts Amendment Bill, is about. It is about removing uncertainty, and it is about creating some clear understandings around jurisdictions in order to deal with disputes under residential construction contracts. What this bill does is remove the distinction between the two different types of decisions that can be adjudicated under the Construction Contracts Act. Currently, decisions on payment disputes can be more easily enforced than decisions on disputes about rights and obligations. The bill will streamline the enforcement process so that it is the same regardless of what the dispute is over.

So I think that this is a bill that is timely, and I do congratulate the Minister for Building and Construction, the Hon Maurice Williamson, on bringing it to the House, and I do trust that we can have good progress through the House and Committee stage so that we get the sort of certainty that will bring confidence into the construction industry around disputes. Thank you.

ANDREW LITTLE (Labour): I take this call on the Construction Contracts Amendment Bill and I make the point, in light of what the last speaker, Jonathan Young, has just said, that he said there is actually a case for doing nothing in an area that is crying out for attention. It is very easy to say that this is all too hard and it is all too complex, that there is business risk wherever you look, but, actually, what is happening in this industry today is that good people and good businesses are being ripped off by the shysters, the snake oil salesmen, the shiny arses—if I can use that term, which is well known in the industry—who are not interested in a good-quality industry but are interested only in ripping people off.

The only challenge for this Government when considering this bill is whether it has got the cojones to stand up to that type of conduct and do something meaningful that is going to be good for the trades, the tradespeople, the trades businesses, and the small subcontractors who at the moment are the victims of the ever-rapacious corporate shysters who are operating in this industry day in, day out.

There is only one rule that counts, and it is not about business and about business risk. It is called the “golden rule”, and it is very simple: who has the gold makes the rules. That party, if any, knows it, because it lives it and breathes it every day: who has the gold makes the rules. Tau Henare has woken up now, because he understands that rule. If you have got the money, if you have got the dosh, you decide what happens. That is what it comes down to.

That is why small-business people, tradespeople who work their guts out, work to get their trade and go off to set up their little business. They want a slice of the action, and they want to help out. They want to do good things. They love their craft, they love their trade, they love making stuff, especially when it is a building. They like to know that what they are doing is helping business or helping families. But, hey, go into business and they then cannot get paid the contractor price. That is what is happening.

When we have a look at Mainzeal Property and Construction, we see a symptom of a bigger problem. It is a giant corporate business run by shysters. The directors, we know, are National Party acolytes from way back, and they care not what happens to the small man. They do not care what happens to the little man, but I, in name and in deed, stand for the little bloke. That is me, and that is what the Labour Party is.

Hon Member: That’s why they call you Mr Little.

ANDREW LITTLE: That is right. They call me “Mr Little for the little man”—not just across New Zealand but in Taranaki especially.

In fact, it was only yesterday that I received a letter from a Wanganui businessman who at the age of 23 went out and set up his own business. He got his trade, and at the age of 23 went out and set up his own construction-related business. He has done very well, but the big complaint, he says, is that when it is time to send the invoice and get paid, what do the big construction companies do? They say “Oh, no.”, and they will nit-pick and fiddle around. They will fiddle-faddle, and they fudge, and they will mudge and say: “Oh, no, we’re not going to pay the full price, because you were 1 hour overdue or because you did not use this particular material.”

Never mind that the job is perfectly good, a good-quality job, and never mind that he and his employees have put their hearts and souls into it and got the job done; the big companies will fiddle-faddle around, nickel-and-dime it, and try to squeeze down the price. The small-business man knows he has to pay his staff and pay his bills and he wants to get the cash as quickly as possible, so he is forced, compelled, stood over, to discount the job just so he can get the cash going. That is how the industry operates.

We are left wondering whether there is anything in this bill that is actually going to fix that problem. More adjudication in the existing system is not going to help that problem. What needs to happen is that control needs to be taken over the cash for the job, so that it is held independently and so that if there is dispute, the owner of the job, or the developer, or the head contractor does not have an interest in holding on to the cash for as long as possible—because they will not have it. Likewise, if there is a genuine dispute over the quality of the work, let the holder of the cash—an escrow account holder or a trustee holder—determine it. They have no interest in holding on to the cash unnecessarily, so let them become the referee.

That is what the Labour Party is proposing. Labour members will vote for the bill to get it in front of a select committee so we can have this debate and hear from all the businessmen from Wanganui and all the small-business people—the little people whom I represent. We will call them all in to let them have their say and be part of that debate. Let us hear from them. Let us hear what they want to see happen so they can get access to the cash that is properly owed to them, and so that when they tender for a job with an acceptable margin on it and employ people as a result, with confidence they are going to get paid for the job, they are not then held over a barrel and made to negotiate after the job is done from a position of weakness because you have got shysters and shonky head contractors who operate in this business, as they do at the moment.

That is the answer to the problem: follow the money. Follow the golden rule—who has the gold rules—and hand over the contract of the cash for the job to an independent party. If the developers are bold enough to enter contracts and get into the job, it means they have got the credit lines open. It means they have got their money sorted out or they can draw down on their credit lines and place the money into an escrow account. Let the job get done and then, if there is an argument, have an argument with a genuinely independent third party who has got control of the cash and can make sensible decisions in the interests not only of the developer, the owner, or the head contractor but also of the subbie as well.

The thing about the Labour Party is that it wants to see good business. The members on the other side always talk of Labour not being the party of business. Labour is a party of business. The difference is that Labour is the party of ethical business, of good business. Labour is not opposed to the market, but it reserves its right to criticise bad practices in the market.

The construction industry at the moment is full of bad and shonky practices, and Labour wants legislation that is going to address that and is going to give the little guy a chance to get into their business, get started, and enter contracts with confidence, reliably understanding, knowing, and being sure that they are going to get paid at the end of it—paid a fair price for the work they do. That will help to give confidence in the industry. It will help to lift quality in the industry, and nothing less than that is needed.

We have had the experience—up to 1987, when the then Labour Government changed the law at the time—of the contractors’ lien, and the lien over work and over labour. It was honoured in its breach. Head contractors were meant to reserve a part of the construction price and keep it aside. In reality, it simply became a cheap way of head contractors funding their own cash flow and it did not work. Many subcontractors were critical of it at the time—funny how many of them are not so critical today. But, actually, it was a provision in the old legislation—from 1947, I think it was—that simply was not utilised extensively and was, if anything, honoured in its breach, and so it was repealed at the time.

It was thought that that was a good idea. We, in our party, have revisited that, and we know that problems still exist and that something needs to be done about them. Having a piece of legislation that adds to or creates some special avenues in relation to adjudicated disputes, as this does, does not go far enough, in our view. But we have a Minister for Building and Construction who at least appears to be open to new ideas—less so on plumbers and gasfitters, as we see. But perhaps when it comes to the broader construction industry, he may be open to more radical ideas. And let us face it: the Minister for Building and Construction is a man of radical ideas. He does not get them through his own caucus very often, but here is an occasion where he has got the bill up this far, and he may well be open to ideas that are actually going to help the small players in the industry, help the small subcontractors make a difference, keep the cash flowing, and keep people in work.

This is at a time where our construction industry needs every bit of help it can get, in terms of a good-quality regulatory framework. We have massive construction now under way in Christchurch, and construction now picking up out of Auckland and across the country, but the businesses, the enterprises, and the workers in the industry need to know that this House takes seriously having in place a regulatory framework that will keep the cash flowing, give integrity to the system, and give people confidence, so that we can all proceed to know that we have a construction industry that is good for the economy at large.

JULIE ANNE GENTER (Green): Tēnā koe, Mr Speaker. Tēnā koutou e te Whare. I rise to speak on the Construction Contracts Amendment Bill in its first reading. The Green Party will be supporting this bill, at least to the Commerce Committee. I would like to note that most of the changes in the bill are actually relatively minor. Many of them are neutral. Some positive changes in the bill include the requirement for adjudicators to hold a pre-adjudication conference to answer questions about the process, and a requirement for all adjudication notices to contain a statement of the respondent’s rights and obligations, and a brief explanation of the adjudication process. These measures will make the process more transparent and understandable to participants. We think that is a desirable and good outcome.

One negative change we are concerned about that we will be exploring in the select committee is the move to shorten from 15 working days to 5 working days the amount of time defendants have to apply to the District Court to oppose a plaintiff’s application for a determination to be in force by entry as judgment. Although the clause would require adjudicators to give a respondent additional time to serve a written response on the claimant, if additional time is necessary owing to the size and complexity of the claim, the shortening of time could have negative impacts on the fairness of adjudication, and that is what we are concerned about, particularly where a claimant is unable to hire a legal representative for financial or other reasons.

One of the things I would like to bring up is what is not in this bill. Back in 2010 the Government undertook a review of the Construction Contracts Act 2002, and there were two significant recommendations out of that review that have not been taken up by the Government for legislative change. Those two exceptions were strengthening remedies for non-payment and ensuring a mandatory scheme for security of payment. Both of those actually became very relevant earlier this year when Mainzeal Property and Construction went into receivership. Of course, one of the reasons that Mainzeal Property and Construction went into receivership was poor corporate governance by people like Dame Jenny Shipley and other friends of the National Party. It turns out that it looks like annual reports had not been sent to shareholders for several years, and there are certainly none publicly available, so it is impossible to know what sorts of directors’ fees the board of directors were receiving right up until the time that they exited the board. That was right at the end of last year or early this year.

Another reason for Mainzeal Property and Construction’s problems was the leaky buildings. Of course, that is as it should be. It was involved in a number of buildings that turned out to have significant problems. But I think that is worth pointing out, because this Government seems to be opposed to all types of regulation and seems to be on the side of “Oh, well, less regulation is always going to get a better outcome.” The leaky building problem, which has been enormously costly to taxpayers and to homeowners, is a perfect example of where light-handed regulation actually ends up costing society and the economy quite a lot more in the long run. So it is much better to have that regulation in place to ensure that the problem does not start, rather than to say: “Oh, well, look, we want to reduce compliance costs and we want to free up red tape.” It is like the Housing Accords and Special Housing Areas Bill, which is currently before the House. The Government wants to get rid of any oversight by the Resource Management Act and wants to remove any requirement to comply with district plan regulations in order to get houses built cheaply and quickly, with no consideration of what the long-term impacts will be, and there will be long-term impacts.

The Green Party is not supportive of regulation for the sake of regulation, but let us be honest: it does serve a purpose, and it serves an important economic purpose. It is not just a cost imposed on business; it actually can be there to ensure that there are better long-term outcomes. In the economy as it currently exists there is a huge incentive for players to maximise their short-term profit, with no consideration of the long-term impacts on people, the environment, or, indeed, the economy. It is really the role of Government to have that oversight. When Government gets too close to vested interests—as we have here in New Zealand at the moment; we have a Government that is very clearly looking out for its mates and a number of vested interests—then the lawmaking suddenly is not providing long-term oversights in the interests of “New Zealand Inc.” but rather is under pressure from vested interests to remove regulations that in many cases might be useful and important, economically important, in order that those vested interests might make another big profit this year, and never mind what is going to happen in the future.

So, to go back to Mainzeal Property and Construction, the problem with Mainzeal is that we have subcontractors, hard-working tradespeople, who are likely not going to be paid, because of that company going under. This was flagged as a problem during the review of the Construction Contracts Act 2002. The Building Research Association of New Zealand commissioned market research in September 2010 to scope the nature and extent of contractors not getting paid. The key findings of the research included that 61 percent of respondents had instances of non-payment in the previous 5 years. That is pretty significant—61 percent of respondents had had instances of non-payment in the previous 5 years. Most respondents indicated that the total amount of non-payments was under $50,000, but there were cases of non-payments of over $500,000. Here in this Construction Contracts Amendment Bill we have the opportunity to ensure that there are mechanisms available to address this problem.

One of these could be a mandatory security of payment scheme. The Government came back and said: “Oh, well, security of payment measures are already available in the market, and people can freely engage in them or not.” But that really misses the point that the purpose of a mandatory scheme would be to ensure that nobody is disadvantaged by other people being willing to not accept security of payment. If one were a subcontractor and going for a job for a big construction company like Fletcher’s, which is pretty much a dominant player in the market, that company could say to the subcontractor: “Well, there’s someone else who will do your job without security of payment.” We do not want to have to go in for that, because it is going to cost us more money. So the competitive incentive means that people are less likely to choose to have the security of payment measure, and that is the purpose of making that mandatory. We need some insurance, because it is simply not fair that when large property management construction companies go under, subcontractors do not get paid. They are the guys who actually have to feed their families. They are not the guys who are jet-setting around like the corporate boards of directors, hanging out in the Koru Club.

The Green Party would like to see what comes out of the select committee submissions process, in terms of what the public has to say, what the stakeholders have to say, and whether, indeed, the stakeholders do feel that there is scope within this bill to address this issue of non-payment. We would then like to see some amendments to the bill to deal with that problem, because it has been a problem this year, in 2013, and it will doubtless continue to be a problem in the future. We need to look after the workers and people of New Zealand. Thank you.

Hon TAU HENARE (National): I want to talk about the punters, the real punters—that is, the mums and dads who get a house built—

Sue Moroney: What if they haven’t got children? You’re not worried about them; only mums and dads.

Hon TAU HENARE: Oh, here we go. Goodness gracious me, would the woman just be quiet, for just once—for once in this House could she just be quiet and show the House a bit of respect. That is what we did for Mr Little, and Mr Little gave a good speech about workers, about workers’ rights. If I had closed my eyes, I would have thought I was back in the 1970s. But that is OK—but that is OK. He talked about the big corporations, and Julie Anne Genter, she talked about Mainzeal Property and Construction. Both of them sort of let out the obligatory dog-whistle politics of the left: “Blame it on Jenny Shipley. Blame it on National’s mates.” That is what they did. That is fine, that is their politics. People can buy into that if they want to.

But who talks on behalf of the person, the mum and dad, who actually has a building project, either a house or an extension to that house, and is in a bit of a dispute with the contractor? That is what this Construction Contracts Amendment Bill does. To the punter, what they want in the building industry is trust from their builder, whomever that builder may be. So this is what this bill does: it protects the punter and it also protects the builder. That is why I cannot wait for this bill to get to the Commerce Committee. I commend this bill to the House.

ANDREW WILLIAMS (NZ First): I take a call on behalf of New Zealand First on the Construction Contracts Amendment Bill. We will be supporting this through to the Commerce Committee. We do see merit in some aspects of the bill. However, we do have some reservations in others.

Certainly where the bill says that amendments will remove most of the distinctions between how the legislation applies to residential and to commercial construction contracts, it is, we believe, sensible. There are some grey areas between the residential and commercial construction sectors, and often there are loopholes there that could be closed up. The bill also widens the definition of “construction work” to include the design or engineering work and the quantity surveying work. Again, often there are those other contract elements of any construction project that perhaps are not necessarily deemed to be part of the project. However, they provide a vital component in a good outcome of the particular construction in question, and therefore we do believe that that has merit too, to include the design and quantity surveying.

It also mentions here that it would be “reducing the amount of time a defendant has to oppose an application to have a determination entered as a judgment:”. I guess in some respects we have some reservations about that—whether reducing from 15 days to 5 days is a good thing—because it does perhaps limit the opportunity to have a proper defence and proper legal advice on the matter, and to have the correct professionals able to have input into it. That will be something that I guess will be fleshed out at the select committee level, and we will have an opportunity to see whether reducing that to 5 days is a practical, workable solution.

The requirement for adjudicators to convene a pre-adjudication conference is a good thing in many of these areas. If it can be worked through in pre-adjudication meetings and conferences before it gets into the thick of legal wranglings, then that is very positive. Certainly, in many areas, and indeed with other Acts such as the Resource Management Act and other areas of the Local Government Act and various things, if there can be pre-adjudication conferences, often some of the problems can go away before it actually gets into the final negotiation.

In this respect we also would like to see something considered in all this, and perhaps we will be putting forward a Supplementary Order Paper in this regard at a later date. We believe that it is time that New Zealand had a proper construction bond system. Perhaps that would be one way of working through this. It does occur in many other jurisdictions around the world where there is a requirement for a performance bond.

In terms of that, a performance bond is a surety bond issued by either an insurance company or a bank to guarantee satisfactory completion of a project by a contractor. Perhaps that would be a good way through so that you do not have the situation, as has occurred in the recent past, where people register a company as, say, Joe Bloggs 2010 Ltd, and as soon as the project is finished, Joe Bloggs 2010 Ltd is wound up and they move on to Joe Bloggs 2011 Ltd, and then nobody can actually find the original company in order to go after it. If there was a system that included performance bonds that are tied directly back to the directors and to those who have signed the bonds, there might be more certainty in the market and we would not have some of the cowboy activity that has been seen in years gone by. That particularly relates to many instances with leaky buildings and leaky homes, where now the last man standing often tends to be the local authority and council, simply because the original builders can no longer be found or are no longer in business under the particular name they had when they built the building.

I also note that in this Construction Contracts Amendment Bill clause 13 will insert a new section 31, which will also prohibit charging orders where a construction site is owned by a family trust and occupied by a beneficiary of the trust. That is an interesting one. I think in recent times it has been noted that the large mansion being built by the Hotchins on Paritai Drive in Auckland, I understand, is under some form of trust arrangement. Again, there have been great difficulties in terms of many of the contractors and others completing the work there and completing payment, because it has been done through other mechanisms and through other trust mechanisms, and now the trustees themselves are trying to get money out of the trust to the tune of very significant amounts and are hiding behind that particular guise. Therefore, if this bill does include making it more difficult for people to have some of these smoke-and-mirrors trusts to hide behind in terms of construction projects, then that would also be a good thing.

New Zealand First sees a great deal of merit in this bill. This tidies up aspects of the original 2002 Construction Contracts Act. It received quite a bit of input over the last year or so while the Government drew up this amendment bill. It has had significant input from all sorts of sources. There is some very good merit to many aspects of it. New Zealand First will support it through to the select committee stage, and we hope that as a result we will get some good legislation coming out of this.

COLIN KING (National—Kaikōura): It is highly appropriate that we are considering this bill, the Construction Contracts Amendment Bill, in light of how important the construction industry is to New Zealand. It is also very important when you consider the number of people who can be affected parties. We have had that canvassed this morning during the first reading speeches of other members, but, again, generally underpinning this whole process is the level of uncertainty that can exist around what is a suitable solution or a suitable setting for a resolution around an issue.

One is often touched, as a member of Parliament, by people who are affected in a negative way when somebody fails in a business sense, and we have heard Tau Henare talking before about the punter—“Joe Public”. Sure, you have subcontractors, and probably the most highly profiled side of things when it has been in the media is when a company fails and is unable to pay its subcontractors. But, again, we have all had related to us situations where a building firm has failed and then there has to be the process of having a new contractor come in to complete a job, and there is that level of uncertainty that surrounds the whole matter. So it is highly appropriate that this bill is here and that it is going to further clarify the distinction between the residential and the commercial construction contracts. These things have been barriers to speedy resolution and completion of situations. So it is a very, very broad subject, a very critical subject, and it is one that is close to the hearts of us all.

Likewise, the distinction between the two different kinds of disputes around payments, the rights and obligations, means that decisions on some disputes will take longer than decisions on others. However, the purpose of this particular bill is to improve what is there already. It is an amendment bill. We have a disputes resolution process, but it needs further clarification. The building industry is such a large part of this country’s economy, and it is just so crucial at this time that we have a very clear understanding of what everybody’s responsibilities are, and that the process is resourced well enough and given a successful framework so that people understand the situation clearly. This will only go towards improving the situation.

It gives me great pleasure to support this bill during the first reading, and it is good to see that across the House—

Dr David Clark: What does it clarify?

COLIN KING: —there is wide support for it, even from the member from Dunedin. You can hear him there just salivating over the qualities of this bill. Thank you very much. It is a pleasure to support this bill.

Dr DAVID CLARK (Labour—Dunedin North): Well, “salivating” may be an exaggeration, I fear, from Colin King, the member opposite, but it is a pleasure to rise to speak to this bill, the Construction Contracts Amendment Bill, which is an attempt to accelerate the adjudication process. It falls woefully short of what is possible, and members opposite know that. They know that this is not a strong bill. We heard from the member Colin King that they need to get a grip on how to do this better, that it is an important issue, and so on. He did not say how they were going to do it, because that is lacking in this bill. It is not really there. He has got nothing much to talk about. I feel a bit sorry for him being asked to stand up and speak on this bill when it is a bill that does not really get to where we need to go.

New Zealanders are paying far too much for power at the moment—New Zealanders are paying far too much for power.

Hon Tau Henare: So what’s that got to do with this bill?

Dr DAVID CLARK: This member may ask what that has got to do with this bill, and that is the right question to ask, Mr Henare. That is the right question to ask, because that is where I am going and that is what I want to talk about. This bill does nothing to correct that. In fact, it is going to make the problem worse—it is going to make the problem worse. John Key is on the side of the big energy companies, New Zealanders are paying too much for power, and what is this bill going to do?

I want to take you through a thought experiment. Imagine a construction project—let us say a major dam—for building more energy capacity for our country. What happens when we build a major dam? Of course, there is a principal contractor—

Hon Tau Henare: Oh, I don’t know. Do you add water?

Dr DAVID CLARK: Mr Henare says we add water. Well, you know, that is an enlightened contribution. We might leave it at that for the moment, but we add water. We add water—we certainly do. But we have got a main contractor when we build a dam. We also have many, many, many subcontractors, who hire employees, and who set out to put their backs into a major construction project, believing that they are making a difference for New Zealand because we know that energy is essential to run so many businesses and that we cannot afford to have blackouts in this country. They are doing something because they think they are making a contribution.

The sad thing is that those energy companies are still going to charge too much, because the model is broken, because this Government has done nothing to correct for the rising power prices. When the rest of the world’s power prices have remained flat since the recession, they have been rising in New Zealand, rising faster than inflation for a very long time, and this Government is on the side of the energy companies. John Key says that we are paying what is appropriate for power. Well, no New Zealander thinks that is true. No New Zealander believes that. Power prices are rising too fast.

This bill attempts to speed up adjudication processes. So let us say that there is a dispute while the Government is building another power plant to charge New Zealanders too much for power, because that is what it likes to do. By the way, I should mention that the Labour Party has an excellent solution to this rising power price problem, called NZ Power. I would encourage members opposite, and also any members of the public at home watching, to look up the Labour Party website, search for NZ Power, and see just how their power bills will come down—by between $230 and $330 per family, per year—under a Labour Party policy. We care that New Zealanders are paying too much for power. We care that New Zealanders are paying too much for power, unlike them opposite.

So let us go through this thought experiment. Come back to the building of this construction project, which is a dam, as it happens—Mr Assistant Speaker, you are reminding me to come back to that point, and I will. What happens when there is a dispute? Well, currently—there is silence opposite. Many of the members opposite do not understand what would happen.

Hon Member: They’re wondering what would happen.

Dr DAVID CLARK: They are wondering what would happen. They know that the power prices will go up; they are embarrassed about it. But what actually happens is that there is an adjudication if there is a dispute, and, currently, the small players—the subcontractors—end up settling because they cannot afford to be without cash. This is a very real problem in our economy. The little guy always gets squeezed. We have seen it with Mainzeal Property and Construction, and several speakers referred to Mainzeal before. This bill is an attempt to address a serious problem, and that is why the Labour Party will be supporting its referral to a select committee.

The adjudication of disputes is the material covered in clause 11 onwards in Part 2 of the bill. It lays out the compliance with the Act. It lays out the appointment of an adjudicator, how a pre-adjudication conference would work, how the response to the adjudication claim would work, and how the special provisions for adjudication—if approved—for charging for an order sought by a claimant would all work. You know, there are serious matters dealt with in this bill under these clauses, but it will not work. That is the point. That is what is wrong with this legislation. It needs some serious work. That is why we are sending it to a select committee, so that it can have the serious work it needs to actually make a difference.

We have proposed a solution to these issues. Labour is consulting on two options. Clayton Cosgrove has done some very good work on this—my colleague the Hon Clayton Cosgrove. One is contractors’ liens and the other is the statutory construction trusts proposal. We are taking these options out to the industry for assessment and comment. We, as Labour Party people, can see that the solutions—so-called—proposed by this Government are not going to work, so we are developing a response from the Opposition.

We are trying to help those guys opposite out. They cannot seem to find a way through. Maybe they do not want to. Maybe they are actually incredibly happy with the rising power prices and with the inefficient system for solving disputes, because they are not on the side of the little guy. They do not care if the little guy gets beaten up in the disputes. Maybe that is what really sits under it all. Those members are quite happy with the situation where the little guy gets squashed and the big company powers through—excuse the terrible pun—because they want to see the big guys get ahead. We have seen that with the way they have done their tax policy, where all of the value of the 2010 tax cuts went to the top earners, and very little went to those at the bottom—40 percent went to the top 10 percent of earners in those 2010 tax cuts, and just 2 percent of the value of them went to the bottom 20 percent of earners in New Zealand.

But this bill provides an opportunity for Labour to highlight that we are already taking steps to ensure that subcontractors are protected and paid for the work they have done, in the event of a construction company collapse. We have seen it with Mainzeal. It is the subcontractors who are hit the hardest when a construction company fails. Subcontractors are nearly always the last in the queue. They are the last in the creditor queue, and they often miss out on the money they are owed. So this process, where they are trying to reach an agreement so that they get some of the cash as quickly as they can, and they settle because they cannot do the court costs—all of those things—really does not solve the problem. This is a halfway measure. It is a halfway, kind of typical National Party solution. Those members want to be seen to be doing something. They want to be seen to be doing something in this area because the public recognises it is a problem. It is typical, timid National Party policy.

We can look at the Labour solutions. The NZ Power one I have already talked about—the way in which the rising power prices will be tackled by Labour. Again, you see the same thing in the housing affordability area. You hear Nick Smith talking about a big gain, but only Labour has a plan to build 10,000 houses a year to address this housing problem.

Hon Tau Henare: I thought it was 100,000.

Dr DAVID CLARK: Yes, it is. Mr Henare says that he thought it was 100,000. It is 100,000 over 10 years, Mr Henare. It is an excellent policy, and I hope he will consider crossing the floor to support it, because I know that deep down he is concerned about housing in New Zealand. He is concerned about it. There are members opposite, earnest backbenchers, hard-working backbenchers, who are embarrassed to support these halfway measures because they realise that this is about an issue of fairness. It is about fairness for the little guy, making sure those subcontractors are not the last ones in the queue and are not the ones who are missing out.

The thing I would say to them—those ones who share that concern—is that it is a real concern to share. But there are ways of doing something about it. There are ways of doing something about it, as the Labour Party has demonstrated—the contractors’ liens and the statutory construction trusts. We are going around the country, talking with the industries, actually engaging with them, and asking: “What would work for you? How do we make sure that the little guy is looked after? How do we make sure that you get the money that’s owed to you and you’re not done over by the major contractor who secures the big end of the deal?”—the ones who are making all the money, the ones who are charging the high power prices that Mr Key thinks are just fine for New Zealanders.

We are on the side of those small businesses that are trying to grow, because they are the heart and soul of our economy, those small businesses. They are ordinary New Zealanders, working hard every day because they think it is the right thing to do and because they want to improve our economy. But this Government will not even address the fundamentals. It will not put pro-growth tax reforms through. It will not look at having a universal KiwiSaver. It will not address monetary policy. Everything is stacked against small business—those exporters who want to help address the balance of trade deficit that New Zealand suffers under. It is the worst current account deficit in the developed world. It is worse than that of Greece now, and it is projected to be worse than Greece for a long time to come.

These things all hurt small businesses, because the cost of borrowing goes up. Then we have this halfway measure of legislation put forward by this Government, which will not speed up adjudication processes in any kind of meaningful way. What we see is people wanting to be seen to be doing something but not actually doing anything. They do not want to do anything, and that is the problem with this Government. It is not prepared to tackle the big issues. It is not prepared to tackle power prices, which are crippling businesses. It is not prepared to tackle housing affordability. And here it is not prepared to attack the issue of proper adjudication processes.

Dr Cam Calder: What a pleasure it is to rise—

The ASSISTANT SPEAKER (H V Ross Robertson): Hang on. I have not called the member yet. The member must wait to be called, but the member can stand and seek the call.

Dr Cam Calder: Mr Assistant Speaker.

The ASSISTANT SPEAKER (H V Ross Robertson): I call the honourable member Cam Calder.

Dr CAM CALDER (National): What an absolute pleasure to rise and take a brief call, after Dr David Clark’s at times electrifying address—not often. It was more low voltage and low energy. He tried to cast a light on, of all things, electricity energy. In fact, his speech reminded me of a moth circling around an electric light bulb, as it weaves its way around, trying to find a purpose. But the purpose of this debate, in fact, is the Construction Contracts Amendment Bill.

The previous speaker said: “What does it do?”. Well, it amends the Construction Contracts Act of 2002 to clarify the jurisdiction of the Act and streamline the disputes process. This is it, in a nutshell. It is a matter of amending the Act to remove the distinction between how the Act applies to residential and commercial construction contracts. The Act is currently unclear about the jurisdiction to deal with disputes under residential construction contracts. So we are trying to clarify that, and this bill will do that. It will remove the distinction between the two different types of decisions that can be adjudicated under the Act. Currently, decisions on payment disputes can be more easily enforced than decisions on disputes about rights and obligations.

We are going to expand the scope of the Act to include construction-related services, and these include design, engineering, and quantity surveying. There are three main areas of clarity that will be provided by this bill. I commend it to the House.

DARIEN FENTON (Labour): I rise to take a call—

The ASSISTANT SPEAKER (H V Ross Robertson): It is a split call. I am sorry to interrupt the member. It is actually a split call.

DARIEN FENTON: No, it is not a split call.

The ASSISTANT SPEAKER (H V Ross Robertson): It is not a split call. Thank you.

DARIEN FENTON: I am pleased to take a call on the Construction Contracts Amendment Bill. As my colleagues have said, we will be supporting this bill and voting for this bill to go to the Commerce Committee. However, I also agree with my colleagues when they say that this is a weak bill. It does very little. But we think that during the select committee process there will be an opportunity to canvass a range of issues in the construction industry, because, frankly, the construction industry is in a bit of a mess. It is in a bit of a mess and we see that no more clearly than we do in Christchurch at the moment, where the failure of this Government over several years to train skilled workers, to provide for trade training, is coming to a head in Christchurch, where we are going to need something like up to 18,000 workers in the next few years. We are going to be relying on bringing in skilled migrants from overseas, and that has already begun.

I think that what we will hear in the select committee process are the many disputes that are coming out of the Christchurch construction process. We are already hearing some of the stories where large companies are employing contractors, subcontractors, and sub-subcontractors, and about abuses of migrant workers, where they are being put into accommodation where 12 of them are supposed to live in four rooms and there is no attention to their rights, as far as I can see. As far as I can tell, the Ministry of Business, Innovation and Employment has not put any extra resources into the enforcement of workers’ rights around the construction projects in Canterbury. It is not just workers who are employed in employment relations; it is workers who are employed as contractors. We all know that there is a huge problem there that needs a lot more work. Labour is committed to doing a lot more work around the small guy—whom Tau Henare says he is standing up for—to make sure that they actually have some protection, because, quite frankly, at the moment they have very little.

When a company like Mainzeal Property and Construction fails, it is, as David Clark said, the little guy at the bottom of the chain who ends up getting nothing. Let us remember what it is like to be a sub-subcontractor. You are not an employee. You do not have rights to holidays or sick leave. If a family member is sick, well, you just have to take a day off and go without pay. You do not have the rights that other employees do. At the bottom of the construction chain we are talking about some very vulnerable workers. I think those issues need to come to the fore as well in this select committee process.

The other disgrace going on in the construction industry is health and safety. Look, I give credit to the Government for its Independent Taskforce on Workplace Health and Safety, but we do know that one of the high-risk industries is the construction industry. Why is that? It is because of the deregulation that has gone on over the last 20 years. In fact, the taskforce pinpointed the deregulation of the labour market that happened in the 1990s as the beginning of the problem that we have with health and safety. Construction workers get killed. They get injured. They get killed and injured in numbers that happen only in other high-risk industries like forestry. The Government is saying that it has a code around that and that it is going to work. Well, the truth is that we are going to have to do an awful lot more in construction. It goes to the heart of the little guy and the relationships they have, the pressure on them to earn a living, and the pressure on them to work when, perhaps, they should not, and to take risks. That is the heart of the problem in the construction industry as well as in other industries like forestry.

The other thing about contracting, of course, is that it is full of rorts. It is full of rorts. It is good that this bill is going forward and that there will be some mild—very mild—amendments to provide for dispute resolution, but, as we have seen with Mainzeal Property and Construction, there needs to be a lot more done as well. It is not only just what happens to the sub-subcontractors and their rights and what happens in health and safety; it is also how they are protected. It is the subcontractors and the ones at the lowest level who are hit the hardest when a construction company fails. They are always last in the creditor queue. They often miss out on money they are owed. If you take that in conjunction with the fact that they do not get holiday pay, they do not get sick leave, and they have no savings, mostly, because they are working from job to job, often on jobs that go for a couple of weeks or that might go for a month, and then their company goes bust and they end up with nothing—

Hon Christopher Finlayson: You’re off on a tangent again. Concentrate.

DARIEN FENTON: Chris Finlayson will not know anything about that, because he has never been near a construction site. He would not have—

Hon Christopher Finlayson: I was the Acting Minister of Labour and did a great job.

DARIEN FENTON: I beg your pardon?

Hon Christopher Finlayson: I was the Acting Minister of Labour and started the report.

DARIEN FENTON: Oh, you were Minister of Labour for about 2 weeks, and what did that Minister do? He defended health and safety in the forestry industry and a code of practice that is hopeless—that is hopeless, absolutely hopeless. But as I was saying, the subcontractors are almost always last in the creditor queue. They miss out on money. When you put that together with the fact that they have so few rights, they are trying to run their business, they do not even get a holiday, and they do not even get holiday pay or sick pay or any of the other things that employees get, it is not fair. It is not fair, and that is why Labour has been doing something about it by talking to the industry to look at some sensible, cost-effective options that offer a fair deal without loading cost on to the sector.

As we heard, a lot of people were dismissive of the fact that the Hon Clayton Cosgrove has been going around the country, but may I tell the House that he has had an excellent reception, as have all of us in Labour who have reached out to contractors, who have actually met with them and spoken with them, had meetings, had breakfast meetings, and talked about the issues. There has been a very good reception. It has been interesting because they have said to us: “Well, at least someone is listening.” At least someone is listening, because that Government is not listening to the issues that are going on in the construction industry and the issues that are going on for contractors. So we have done a whole lot of visits around that, and we have looked at some proposals: one is contractors’ liens, and the other one is statutory construction trusts. We are taking those options to the industry for assessment and comment.

We are being constructive about this. We are being constructive in that we are supporting this bill to go to the select committee, but there are many issues that need to be canvassed, apart from the very narrow purpose of this bill. There are very many issues that need to be canvassed. One of the other ones that I think may come through—and I have talked about the immigration issues in Christchurch—will be other immigration issues that come through as well. Once again, I was pleased last week that Simon Bridges took the credit for the fact that we are seeing more abuses of migrant workers being dealt with, but I have had construction workers come to see me. They have talked to me about the fact that they have been lured to New Zealand and they are stuck. They are stuck on a work permit that is tied to a job. They are being exploited. They are not even getting their entitlements—they are not even getting their entitlements. So I think those issues will come through too. Yes, let us hear about the issues in the bill, but let us also talk about what is really going on in the construction industry. Let us talk about what it is really like for contractors and get some more protections for them. Let us talk about health and safety. Let us do something real for a change.

LOUISE UPSTON (National—Taupō): I am pleased to take the final call from this side of the House on the Construction Contracts Amendment Bill. One of the things that is really rewarding as a member of Parliament is being able to deal with constituents who have problems, which you are able to then see eventually in a piece of legislation. So if that is not listening to what the public are concerned about, I am not sure what is. The important thing, if we look ahead with our two largest cities, Auckland and Christchurch, is that construction will be the significant boom there for many years to come. What we want to make sure is that those who are in the construction sector can focus on building and focus on getting the job done, and not have days and weeks and months tied up in disputes.

This nice, tidy piece of legislation just basically clarifies how that dispute resolution process works and speeds up the enforcement. We know that, for small businesses, cash is really important to them, so if there is a dispute, they want to make sure that any enforcements and any payments associated with that are received quickly and promptly. All of those things enable those working in the construction sector to get back on to the job. So this is just another example of a significant piece of work that this side of the House is doing to improve the building industry and the construction industry, and to make sure that businesses are efficient, are effective, and are getting on with the job. Thank you.

A party vote was called for on the question, That the Construction Contracts Amendment Bill be now read a first time.

Ayes 119

New Zealand National 59; New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 3; ACT New Zealand 1; Mana 1; United Future 1.

Noes 1

Independent: Horan.

Bill read a first time.

Bill referred to the Commerce Committee.

Bills

Local Electoral Amendment Bill (No 2)

In Committee

Debate resumed from 26 March.

Part 1 Amendments to principal Act (continued)

ANDREW LITTLE (Labour): I rise to speak, as other Labour Party members have, in support of the Local Electoral Amendment Bill (No 2), and remind the Committee just how important this piece of legislation is. I am somewhat surprised that here in nearly the middle of June in a year in which we are having local body elections we are dealing with more changes that arose out of the last set of local body elections more than 2½ years ago. We are now, frankly, down to the wire, making changes that will have a bearing upon this year’s elections, at least in relation to candidates’ returns in terms of their election expenses and residential declarations.

We know why this is important. It is because there were aspects of the 2010 local body elections that were, frankly, a disgrace. There are consequences to that election that have been played out not only in the great city of Auckland—the super-city of Auckland, as some have described it—but also in this House because of the conduct of some individuals arising out that election. What has become patently clear is that we now have a Government that, even on important legislation like this, is propped up by shabby and tawdry members who have muddled around and mucked around at the local body level, caused disgrace to themselves and their so-called parties—or what is left of them—and shone a very poor light on the Government of the day. Frankly, the people of New Zealand expect better.

The people of New Zealand expect that in the Government of the day not only the members of the party that leads the Government but also those who support it through agreements, formal and informal, are people of good character, and that they are people who act with integrity and, indeed, with honesty, and act in a way that is befitting of members of a Government. But we have a Government that is increasingly supported by people who can be described only as shonky, as lacking in integrity, and as lacking in credibility, and yet this Government is utterly and totally dependent and reliant upon them.

What sort of shabby Government do we have now? The answer to that question is pretty obvious. The Minister in the chair, the Minister of Conservation, who only this morning defended his role in local government and in relation to housing by enunciating an entirely new philosophy of trickle-down housing philosophy—trickle-down housing philosophy—wants to impose that philosophy on every local government in this country. Well, it just shows you what a pretty pass we have come to—what a pretty pass we have come to.

This bill will make differences to the declaration of campaign expenditure. They are long overdue. We simply should never have been put in the position where a candidate—any candidate in any local body election—can be the recipient of brown paper envelopes stuffed with cash from large corporate donors that can then, apparently, credibly—

Hon Chester Borrows: Union members, sneaking around in the dead of night.

ANDREW LITTLE: Here we go. Here comes Mr Borrows and the anti-union rhetoric. They are union-haters—the union-haters and union-wreckers opposite. They hate the idea of people acting collectively. They hate the idea of people exercising their freedom of choice to act collectively. That is the nature of this Government. It is not enough to be propped up by the tawdry, shabby people and their informal confidence and supply agreements. It acts as it has always done. The anti-union wreckers and haters of old have come back. Well, if it was not enough for Tau Henare to express the values of the 1950s here earlier this morning, now we have them back again—the “fifty-oners” of the National Government. They hate unions and hate working people who exercise their freedom of choice. That is why they bridle at and resist any attempt to regulate local government.

Mr Borrows of all people knows that, because of the Cold Creek water supply agreement, which we had rammed through this House and rammed through the South Taranaki District Council at his and Shane Ardern’s behest. They know all about local government. They have never shown any respect for it at all, and that is why they uncomfortably and grudgingly pass this legislation, which will tidy up just an element of it and ensure that those who stand for local government and for office in local government at least meet some test of good character, integrity, and probity.

When passed, this bill will ensure that the declarations made by candidates for local government shine a proper light on their expenditure and those who have supported them and that campaign managers cannot be prevailed upon to make declarations that clearly are not credible and that clearly are not honest. When passed, this bill will provide thresholds that, by and large, are meaningful and credible—except, of course, for those campaigning in the super-city of Auckland. My good colleague Phil Twyford will have a Supplementary Order Paper that will deal with the issue of campaign spending limits, which under this bill are set extraordinarily high—at an extraordinarily high level—when that is not necessary and, indeed, when the most recent candidates in Auckland attested that the levels at which they are set are clearly not necessary if they are to run a credible campaign. So those are all good things in this bill.

We welcome the opportunity to tidy up this piece of legislation. Many members who come to this House come through the local government channel. They come through having cut their teeth on local government, and understand what Government processes are. They learn about regulation at a local level. They learn that local government has an important role to play in ensuring good peace and good order in the community, that one ratepayer’s freedom invariably cannot be exercised if it is at the expense of another, and therefore that we have local government to play an appropriately moderating and mediating role when it comes to regulation at a local government level.

But we need to make sure that those who stand for public office, even at that local government level, do so under a system, a framework, that is appropriate and that ensures integrity, credibility, and honesty; that we do not have people who are sponsored by corporates or the rich and the wealthy; and that we do not allow Tammany Hall politics to infect local government in this country. We do not want the situation where local government can be controlled by a small elite, a plutocracy, or an oligarchy. We need to allow proper freedom and democracy to operate at the level of local government, so that people who stand for public office open themselves up and open up their spending to a proper process of scrutiny. This bill will allow that in its provisions. It is for that reason that we support it.

GRANT ROBERTSON (Deputy Leader—Labour): It is a pleasure to rise and speak in the Committee stage of Part 1 of the Local Electoral Amendment Bill (No 2). Just picking up where my colleague Andrew Little left off, the Labour Party is pleased to be able to support a piece of legislation, which, within Part 1, has the goal of limiting the amount or value of anonymous donations; refining the definition of “anonymous” and “donation”; enhancing the obligations of candidates for the disclosure, reporting, and recording of electoral donations; and introducing penalties for non-compliance for those matters. This is the kind of transparency that has been missing from local electoral law. Sitting alongside that is the importance of making this consistent with the Electoral Act 1993. I think that is welcomed by all members of the House because there have been serious issues in this area that need to be addressed. In fact, the driving force behind some of the changes here is the issues that have arisen in this House and elsewhere around donations to local body election campaigns. I think it is important to illustrate why the changes in Part 1 are important by aligning them with specific and real situations.

In that regard, I want to talk about the definition of “anonymous” and the definition of “donation”, because we have certainly seen in the past the grey area of this being exploited. I think the obvious situation that we have to refer to here is Mr John Banks and his situation in the Auckland mayoral election campaign of 2010. I want to specifically refer here to the question of the definition of “anonymous” and “donation”.

I wonder whether members of the Committee would consider the following type of donation to be one that could be regarded as anonymous. This is where an entity—in this case Skycity—agreed to make a donation to a mayoral campaign for John Banks. I have in front of me here the formal written statements of a staff member of Skycity and of the chief executive of Skycity, Nigel Morrison. Mr Morrison recalls attending a meeting with John Banks in his office, and this is what he said in his statement: “This meeting lasted only about 10 minutes during which time I handed to John Banks the cheque in a SKYCITY envelope,”. That is what it says. That is what it says in the witness statement from Nigel Morrison, the chief executive of Skycity. He handed Mr Banks a cheque in a Skycity envelope. John Banks declared that donation as anonymous. He said he did not know who gave him a $15,000 cheque. A $15,000 cheque was handed to him in a Skycity envelope. It will have been one of those white envelopes—those DLE envelopes—with the Skycity logo on the left-hand bottom corner. I am sure that will be the envelope that Mr Banks received the cheque in. Nigel Morrison said that in a sworn affidavit to the police.

Another staff member from Skycity also indicated that his organisation had received a receipt from Team Banksie—a receipt from Team Banksie—for the said $15,000 cheque. So let us just be absolutely clear here. The situation we have got is that a $15,000 cheque is handed to Mr Banks in a Skycity envelope, his treasurer from Team Banksie receipts that, and Mr Banks declares it as anonymous—Mr Banks declares that donation as anonymous. That is the kind of cover-up, the kind of evasion of the law, that we on this side of the House have come to expect from Mr Banks, and that is why this law is needed.

However, the problem we have got is that John Banks has not been fully held to account for that. John Banks has not been fully held to account, because, although the police were able to find him guilty of having breached the law in one particular part of his donation regimes—that is the fact that he signed a false return—the time period in which he was able to be convicted for that had expired. So although they said that he absolutely broke the law in that regard, the time period for that conviction has expired. John Key, of course, had said that he would sack John Banks if it was discovered that he had broken the law, but he backed off from that very, very quickly once he realised that, and refused to read the police report.

The other part of Mr Banks’ donation that is relevant to Part 1 here is whether or not Mr Banks knowingly signed off on a false return. The police in the end said that they were unable to come to a decision as to whether Mr Banks had knowingly done that. If Mr Banks had knowingly done that, then he would be subject to a conviction with a prison term of up to 2 years, and I think the people in the Chamber know what that means—that would mean that Mr Banks could no longer serve as an MP. So it is certainly in the interests of the Government not to see that go to its full fruition. One of the reasons I suspect that the police were unable to decide whether Mr Banks had knowingly signed a false return for that donation is because of what Mr Banks might have said to them when he was interviewed. I am in receipt of the police file on Mr Banks’ case under the Local Electoral Act, and all of the witness statements for that case have been provided to me, bar one. The one witness statement that is missing is John Banks’. I am holding the police report about their interview with John Banks. Here it is.

Andrew Little: Oh, one of those again.

GRANT ROBERTSON: Yes, one of those.

Andrew Little: Seen those before somewhere.

GRANT ROBERTSON: Yes, it is very familiar. It is blacked out here and on the back page as well. So Mr Banks, who said he had nothing to fear and nothing to hide, has hidden this because he is very afraid of what it says. He is very afraid that what it will show is that of course those donations were not anonymous. He knew about the donations he was getting.

I have been able in this call so far to refer only to the Skycity donation. There are Kim Dotcom donations—two of them at $25,000 each. Mr Dotcom has given extensive evidence in this inquiry to indicate that he was very well aware he was giving those donations to Mr Banks. Mr Banks came in a helicopter to his mansion and indicated that he would be gratefully receiving of this $50,000. He specifically asked for the donation to be split into two $25,000 amounts, and he did that because he had a number of other $25,000 donations. So what he was doing was using the provisions of the Local Electoral Act as they were at that time. He said: “If you give me this in a $25,000 lot, I can put it alongside all the other donations of $25,000 and magically claim that I don’t know who they came from.”

That is why these changes are required—because people like John Banks are prepared to exploit any loophole in the law that they can find. They are prepared to do anything that is possible not to be upfront with New Zealanders. It is very important to know that it is John Banks—a person who is thoroughly disgraced and discredited, a person who is now in court on these matters—who is propping up this National Government. He is the person propping up this Government. He is the person who has exploited the Local Electoral Act beyond what any reasonable person would believe that these sections should allow. The idea that he could declare these donations as anonymous is not just ridiculous, I would allege that it is also corrupt. He has done this knowingly. We cannot see what Mr Banks said to the police, but Mr Banks has done this knowingly. He knew he did this. He used the Local Electoral Act in the form it was in to ensure that New Zealanders could not see who had donated to him. That is bad enough, but then he covered it up, and he has covered it up day after day.

Today I stand here waiting for Mr Banks to allow the release of his witness statement, because if he said he had nothing to fear and nothing to hide, then he should release that witness statement. I know why he does not want it released. It is because it will show that he has lied to the Prime Minister, and the Prime Minister said that if he found that out, John Banks was gone. But the Prime Minister knows he cannot do that, because his Government is propped up by disgraced MPs—MPs like John Banks, who has knowingly breached the Local Electoral Act.

We on the Labour Party side of the House do support this bill. We believe that it is high time that local electoral matters were made clearer, that they were made consistent with the Electoral Act. But although we support this bill, we cannot support the fact that the Government continues to be propped up by somebody who used the loopholes in the Local Electoral Act, and who deliberately misled New Zealanders and the New Zealand public about the donations he received. That is unacceptable, and the changes to this Act are high time coming, so that people like John Banks cannot get away with it.

EUGENIE SAGE (Green): Tēnā koe, Mr Chair. I am pleased to take a short call in the Committee stage of the Local Electoral Amendment Bill (No 2), which the Green Party is supporting, and that is because the Local Electoral Act is about ensuring a transparent local body electoral process and ensuring that the public can be confident in that process. So we certainly support the thrust of the bill to align the practice at local authority elections with that of general elections and to make those local electoral processes more robust. Certainly, capping anonymous donations at $1,500 is one example of making them compatible, and requiring a third party who receives a donation on behalf of a candidate to disclose the identity of the donor if he or she knows it is another.

But I would like to speak to Supplementary Order Paper 215 in my name, which would provide for greater consultation when decisions are made to adjourn elections. Clause 21 of the bill inserts new section 73A in the principal Act, and it would enable electoral processes to be adjourned in the case of a local or national emergency so that electors are not denied the opportunity to cast a valid vote to nominate a candidate or to accept nomination. The current Act allows elections to be postponed for 14 days, and this bill proposes to extend this to 6 weeks and allow that to be rolled over. It is a very serious decision to deprive citizens of the right to vote, or to postpone it, and we have seen that in Environment Canterbury with the lack of an ability to vote for councillors, and with the fact that elections have been postponed indefinitely, it seems. The bill as drafted provides for the decision to postpone a local authority election to be made by the Minister of Local Government by Order in Council after consulting the affected local authorities and the affected electoral officer. The Supplementary Order Paper retains this provision, but it requires that each affected local authority and its electoral officers must have agreed to the decision to postpone the election and must have advised the Minister of their agreement before an Order in Council can be issued postponing the election.

We need this Supplementary Order Paper because Ministers under this National Government have been far too ready to take and keep power to themselves, and to wade in and direct councils, so that decisions important to local communities are being made increasingly by Ministers rather than by the local councillors whom that community elected. We have certainly seen that in the very sweeping powers that the Minister for Canterbury Earthquake Recovery continues to hold in Canterbury, and he, not the councils, ends up signing off on final decisions on a raft of plans, programmes, and strategies that are critical for the rebuild of Christchurch. We have also seen it in the broken ministerial promise—and I am pleased that the Minister in the chair, the Minister for Conservation, is the same Minister who was involved in removing democracy in Canterbury—to reinstate elections for Environment Canterbury this year, and the decision to introduce legislation that further postpones those elections.

So this Supplementary Order Paper provides a check on this ministerial power, and it underlines the importance of not depriving our citizens of their right to vote without a very, very good reason. This Supplementary Order Paper, with the requirement that councils agree to elections being postponed, represents a partnership approach to local government, which the Green Party believes is absolutely crucial to a healthy and functioning relationship between central and local government, unlike this Government, which has got a bullying relationship with local government and seems intent on directing local councils to do what Ministers please. So this Supplementary Order Paper, which makes sure that councils actually agree to postpone elections, brings much more of a partnership approach.

Talking briefly about some other clauses in the bill, we certainly support the proposed insertion of a requirement that voting papers must include a warning that it is an offence to interfere in any way with anyone who is about to vote. We often take it for granted that there will not be interference with voting, but it is appropriate that it is in this bill. But it is very ironic that the Government is sponsoring this bill, a bill that highlights that it is an offence to interfere with a person who is about to vote, when it has been National and ACT who have so grossly interfered with the right of Cantabrians to vote for their regional council by cancelling that opportunity and extending the term of appointed commissioners. One of the disappointing aspects of the bill is that the Government Supplementary Order Paper 198 does not take the advice of the Justice and Electoral Committee to strengthen new section 103A in clause 27 and ensure that it catches cases where an individual or a company provides discounted advertising to one candidate and then charges everybody else the regular rate, and ensures that such donations are disclosed.

One of the big gaps in the bill where the Green Party has a concern is the bill’s failure to regulate and modernise the rules governing third-party spending on local body elections. In its report, the select committee noted that the bill as introduced did not cover these third-party donations and expenditures, and that left a potential gap for third parties to receive donations and use the funds to promote a candidate, and potentially to denigrate other candidates, without appropriate regulation and without the candidate’s permission. At the moment third parties can spend an unlimited amount to campaign for or against certain candidates, and the bill does nothing about that. The select committee concluded that there was not time to implement the changes before the local body elections in October, but the Green Party remains disappointed by this major gap in the legislation and commends a member’s bill in the name of my colleague Denise Roche, the Local Electoral (Finance) Amendment Bill, which would impose a $5,000 cap on donations by any person or group. It would regulate third-party donations and it would ban overseas donations.

But the Green Party is supporting the Local Electoral Amendment Bill because it does make some improvements to the principal Act, and we commend Supplementary Order Paper 215 to implement much more of a partnership arrangement with local government in relation to any postponing of elections. Thank you.

DENIS O’ROURKE (NZ First): Although the Local Electoral Amendment Bill (No 2) does some very good things and will be supported by New Zealand First, it is far from perfect and it is incomplete. However, it is just enough and just in time for this year’s local government elections.

Clause 15 inserts a good new section, section 61(2)(ca), requiring a candidate profile statement to include whether or not the candidate’s principal place of residence is in the local government area in question. That is a desirable provision because voters ought to have that information, but it does not preclude a candidate from living outside the area and does not preclude him or her stating what connections he or she has with the area. Of course, some people who do live within the area may, in fact, have very little genuine connection with it, so voters need to be aware of that too.

Most important, however, are the provisions, which are long needed, concerning anonymous donations. The need for those, of course, was well demonstrated by the John Banks issues in relation to his last unsuccessful Auckland mayoralty campaign. This is an important issue for transparency and democracy in local government. The bill addresses the matter that the John Banks electoral return from the 2010 local body elections highlighted. It revealed a gap in the existing legislation that allowed candidates to call donations “anonymous” that they knew, or ought to have known, were not, in fact, anonymous donations.

New section 103(F), inserted by clause 27, says: “If any person involved in the administration of the affairs of a candidate in relation to his or her election campaign knows the identity of the donor of an anonymous donation exceeding $1,500, the person must disclose the identity of the donor to the candidate.” Many New Zealanders will welcome that new provision. I worry a little that it will be necessary to prove actual knowledge, which may be difficult, and perhaps we ought to have added the words “or ought to have known” in the section as well. Nevertheless, it is a satisfactory section as it is, and it will help solve the Banks problem, at least as far as legislation can go.

The bill provides in new section 103(H), inserted by clause 27, that anonymous donations may not exceed $1,500 and that “If an anonymous donation exceeding $1,500 is received by a candidate in relation to an election campaign, the candidate must, within 20 working days of receiving the donation, pay to the electoral officer responsible for the conduct of the election to which that campaign relates the amount of the donation, or its value, less $1,500.” I think that will also be a welcome provision to most New Zealanders.

New section 103(I), inserted by clause 27, provides for offences relating to contravention of section 103(H): “A person who enters into an agreement, arrangement, or understanding with any other person that has the effect of circumventing section 103H(1) or (2) commits an offence ...” and so on. That is a very important provision as well.

I also want to mention new section 103CA, proposed to be inserted in clause 27 by Supplementary Order Paper 198, which is also supported by New Zealand First: “This section applies to a donation (other than an anonymous donation) that is made up of, includes, or is wholly or partly funded from 1 or more contributions. … the donor must, at the time of making the donation, disclose—(a) the fact that the donation is funded from contributions;” and disclose the details around it. This, of course, applies only to contributions over $1,500. New Zealand First will support that, but we would have preferred to see it apply to all donations, or at least be limited in the way that Holly Walker recommends in her Supplementary Order Paper 200, which New Zealand First will also support.

The bill also provides for postponement of a local election—and Eugenie Sage has just spoken about that—so that in the case of a natural disaster or an emergency there can be an Order in Council for postponement of up to 6 weeks at the discretion of the Minister. But I note that new section 73A(6), inserted by clause 21, says: “Before recommending the making of the Order in Council, the Minister—(a) must be satisfied on reasonable grounds that the order is necessary … and (b) must have consulted every local authority and electoral officer that will be affected.” I think subsection (6) does sufficiently limit the Minister’s discretion about postponement, and that this would preclude the Environment Canterbury situation, which many of us are so concerned about. So New Zealand First could not support Supplementary Order Paper 201 or 215 in the name of Eugenie Sage. Supplementary Order Paper 201 gives postponement power to an electoral officer, and we think that would be an excessive power to be administered by an official. Supplementary Order Paper 215 requires the agreement of local authorities, in addition to consultation, and New Zealand First feels that that would be excessive and unnecessary, and would unnecessarily limit the overall thrust of the section.

However, there is one very serious defect in the bill by omission. As I have said, the bill does need to do more than it does. The bill that we see now does not cover third-party donations and expenditure, and we in New Zealand First think it should. There is a potential gap for third-party campaigners to receive donations and use funds to promote a candidate without the candidate’s permission, and appropriate regulations should be necessary for that. We accept that it is a complex policy area, and one that, perhaps, we do not have time to deal with in this legislation. It is one that New Zealand First wants to see in future legislation on these matters.

Overall, the bill is a good one and does deserve support, but we think it is still a work in progress, in the way that I have described. For that reason, New Zealand First will be happy to support the bill, and we hope that other parties in the House will all do the same.

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

PHIL TWYFORD (Labour—Te Atatū): I want to talk to my Supplementary Order Paper 252, which is on the Table. It proposes an amendment to the Local Electoral Amendment Bill (No 2) that would change the formula for determining the campaign spending limits. It would have a very specific effect only for Auckland, for the Auckland mayoralty. It would have the effect of reducing the campaign spending limit for the Auckland mayoral campaign, which is currently at about $580,000, down to, on the current figures, $376,000. So I want to speak to that Supplementary Order Paper and, really, invite members in the Chamber today to look seriously at this amendment and consider giving it their support.

When the Auckland Council and the Auckland super-city were established, in that legislation the campaign spending limits were set at a level that I believe is way too high. For a contender in a mayoral contest to be able to spend more than half a million dollars—in fact, close to $600,000—in the last 3 months of the election campaign, I think, sets the bar far too high. It sends a signal that our democracy in Auckland is for sale. The Auckland mayoralty has, I think, been recognised as one of the most powerful positions of elected office in the country, and to deter possible candidates who do not have pockets deep enough to spend that kind of money in the last 3 months is, I think, bad for democracy. It is a blemish on the legislation and the rules that surround the Auckland Council and electoral arrangements. Labour members argued then that that figure was far too high, and we said at the time that it would be much better if a lower limit had been set. What we suggested was a limit of around $380,000. That would have been approximately the total of all the campaign spending limits from the legacy councils that were dissolved to make way for the new Auckland Council.

This bill has some really important provisions in it. Although it is not perfect by any means, Labour is supporting this bill. There are important principles of disclosure, transparency, and limits on political donations. Those are all fundamental principles important to a healthy democracy, but it is also important that we have limits on campaign spending. We do have them for parliamentary elections—both at the national level and at the electorate level—and not only is it appropriate, it is essential that for an office like the Auckland mayoralty there are some limits, so that the office of the Auckland mayor is not just up for sale to the highest bidder. That would be, I think, a travesty of our democracy.

The amount currently that a candidate could spend in the last 3 months of an Auckland mayoral campaign is $580,000. That is just too much. It is not reasonable to expect that the full range of candidates that we would want to see contesting the Auckland mayoralty would have to raise nearly $600,000 to run their campaign. That is bad for democracy. My Supplementary Order Paper proposes a new formula. It uses the current structure that you see in the current legislation, but it reduces the amount. The formula is based on both population and the number of electors, and my Supplementary Order Paper would reduce the amount in the formula to $70,000 plus 30c for each elector. If you apply that to the number of electors that we have in Auckland at the moment, it would basically allow candidates to spend about $376,000. Coincidentally, that is approximate to the total of the spending limits for the seven legacy councils that made way for the Auckland Council.

I want to note also in this debate that in the last Auckland mayoralty race, both candidates—the successful candidate, Len Brown, and John Banks, who features so large in this debate—advocated for campaign spending limits substantially less than the limit that is in the current legislation. Len Brown argued that the limit, instead of being nearly $600,000, should actually be in the region of $150,000 to $200,000. John Banks told Michael Field of Fairfax that he would have preferred a threshold of $100,000. So John Banks, who has many years of experience in local government, who was a mayor of the former Auckland City, and who was the unsuccessful candidate in the last Auckland mayoral election, proposed a threshold of $100,000. He said: “The problem is that if you put the threshold of expenditure too high, you put the elections out of the reach of candidates.”, and that “The problem is that I want to encourage as many people as possible to stand for the Auckland mayoralty. It is in the best interests of the democratic process.”

So I call on Mr Banks to vote for this amendment, to be consistent with what he said in 2009. John Banks is a politician who knows a thing or two about redemption. He has been transmogrified—he has been transmogrified, reincarnated. He is the master of political reinvention. I put it to Mr Banks that supporting this amendment would be a way of snatching redemption from the jaws of disgrace.

There is a question, if we believe in limits, of whether it should go lower. I believe that my amendment strikes an appropriate balance. It is important that in an electorate the size of Auckland, a city of 1.4 million people, candidates are able to spend the resources that they need to put up billboards, to print direct mail letters, and so on. But the limit must not be so high that a rich candidate with deep pockets can simply buy their way into the mayoralty by spending millions of dollars on television advertising and the like. It is important that we strike a balance between putting limits on big money in politics, but it is also important that we ensure that we do not disadvantage future challengers in the mayoral race. It is true that there are certain benefits of incumbency, particularly for popular mayors. They have staff, they have the name awareness of having spent time in office, and they have a media profile. It is important that challengers can spend enough money on their campaigns to make an impact and register their candidacy with the public.

I do not propose that the limit be set any lower, and I would submit to this Committee, to members, that it be about $376,000 across Auckland. We are talking of an area, a jurisdiction, that is about the same as 20 parliamentary electorates, and members will know that local parliamentary campaigns are able to spend up to $25,000, including GST, on their election campaigns at electorate level. So the limit that I am proposing in this amendment would be of an order of the parliamentary limits. Also, as I have already said, it is about the same as the total of the spending limits from all the old legacy councils, whereas the spending limit that Rodney Hide inserted into the current legislation is almost twice that amount. It is unreasonable and it does not pay enough attention to the important principle of limiting the influence of big money in politics.

If you look at the spending limits from the old legacy councils, Auckland City had a limit of $70,000, Manukau had a limit of $70,000, Waitakere had $60,000, Papakura had $30,000, Rodney had $50,000, North Shore had $60,000, and Franklin had $40,000. There are no other cities in New Zealand that have a limit on campaign spending of more than $70,000—

COLIN KING (National—Kaikōura): I move, That the question be now put.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): I am pleased to be able to support the Labour people who spoke before me, who have said that we are supporting this bill, the Local Electoral Amendment Bill (No 2), because participatory democracy benefits a lot when there are ongoing improvements to the transparency and accountability of legislation affecting candidates who seek office at local body elections.

I also want to carry on from the point that Phil Twyford made with regard to his proposed Supplementary Order Paper 252, because if we want to continue down the road of participatory democracy, then campaign spending limits actually have a great bearing on that. If people cannot afford to seek office, or if the ways in which their campaigns are funded are not fully transparent, that will have a bearing, I think, on the quality of the candidates who will put themselves forward in local body elections. So for that reason I think the Supplementary Order Paper is a sensible suggestion. It is a suggestion that ensures that the process of candidates putting themselves forward to seek office is achievable and transparent and does not discriminate against anybody.

I listened carefully to the debate and read the Justice and Electoral Committee’s report. I do want to highlight things that have not already been mentioned, and they are some of the issues that have been identified as outstanding matters to be considered that could not be changed for this particular bill in time for the 2013 local body elections—in particular, the efficiency gains to the unpublished roll.

I think there is some merit in continuing to consider having the opportunity of processing, for ease of voting, those who find themselves on the unpublished roll but who could place an ordinary vote at a local body election. It makes sense. It will save money. It can be better streamlined to ensure that on the day people are not kind of left thinking: “Can I or can’t I?”.

There is also the residency disclosure, which is a great amendment there, because when people know that their local candidates are living in or out of an electorate, it will undoubtedly have a bearing on how they cast their vote. For some people it does not matter, but in New Zealand we are a small enough country that in our communities we take a lot of pride in knowing our local councillor, our local board member—knowing who they are, tapping them on the shoulder, being able to rock up and express a view. It is of some concern that in larger cities the people who seek office do not reside in the ward for which they are standing, so I think the residency disclosure will be informative to the discerning voter, and that can be only a good thing.

I think all the issues around anonymous donations and greater clarity in that area, for all the reasons that Grant Robertson raised and many more, are the types of improvements that will ensure again that if we want a participatory democracy where candidates can be assured that there is no kind of secret bankrolling of interests in local body elections, it will only be improved by this type of provision.

We are heading into the local body election phase, so it is really important that the amendments are practical, that they are going to achieve what they set out to do, and that they are going to be able to ensure that people can get on with voting. But I want to make this general statement: it concerns me that there has been an ongoing decline in participation in local body elections over a period of time now. No one person is to blame, but it is certainly a worry when we can see, in both the general elections and the local body elections, the declining rates of participation. It is nothing to be proud of. So the more we can do to ensure that civics education instils in our children and our young people the necessity to cast their vote, have a say in what is happening in their local community, and be assured that there are some robust and transparent processes that assure every citizen that their rights and interests in participating in the voting process are clear, then I think we will see some confidence being reflected back by more people participating.

TIM MACINDOE (Junior Whip—National): I move, That the question be now put.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 198 in the name of the Hon Chris Tremain to Part 1 be agreed to.

Amendments agreed to.

The question was put that the following amendment in the name of the Hon Chris Tremain to clause 27 be agreed to:

in new section 103D(2), replace “subsection (1)(b)” with “subsection (1)”.

Amendment agreed to.

The question was put that the amendment set out on Supplementary Order Paper 215 in the name of Eugenie Sage to clause 21 be agreed to.

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

Ayes 49

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

Noes 71

New Zealand National 59; New Zealand First 7; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 200 in the name of Holly Walker to Part 1 be agreed to.

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

Ayes 23

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

Noes 97

New Zealand National 59; New Zealand Labour 33; Māori Party 3; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 252 in the name of Phil Twyford to insert new clause 30AA be agreed to.

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

Ayes 59

New Zealand Labour 33; Green Party 14; New Zealand First 7; Māori Party 3; Mana 1; Independent: Horan.

Noes 61

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

Amendment not agreed to.

Part 1 as amended agreed to.

Part 2 Amendments to regulations

GRANT ROBERTSON (Deputy Leader—Labour): I just want to take a brief call on Part 2, and in particular the new “Return of electoral donations and expenses” in schedule 2. I just want to reflect on a couple of elements of this new return form. As with the rest of the bill, the Labour Party certainly supports the changes that are being made here. In particular, obviously, this reinforces the fact that any donation that exceeds $1,500 now has to be declared, and that is, obviously, a useful and important change. The donation form then goes on to talk about what has to be said about the donor who is making that donation of a greater value than $1,500. The things that need to be written down are the name of the donor; the address of the donor; the amount of the donation or, in the case of aggregated donations, the total amount; and the date the donation was received or, in the case of the aggregated donations, the date that each donation was received.

As I discussed in my contribution on Part 1 of this bill, the Local Electoral Amendment Bill (No 2), it is useful to put these new clauses alongside the practice that has come up in the past and see why such change is needed. Let us take the example of the donation from Skycity in 2010 to John Banks’ mayoral campaign. How would Mr Banks go about filling out this form? The name of the donor—well, John Banks knew the name of the donor, Skycity, because he went to a meeting at Skycity, where he met the chief executive of Skycity, and that person handed him an envelope, with Skycity’s logo on the outside, with a cheque for $15,000 from a Skycity bank account. So I think we can tick off the first of the requirements under the new Part A in schedule 2 of the Act, set out in schedule 1, which is the name of the donor. It was Skycity.

The address of the donor is the second requirement. We can make an assumption that Mr Banks would have known where he was. That is a big assumption, because he does have some issues—

Denis O’Rourke: In a helicopter.

GRANT ROBERTSON: —that is right—remembering exactly where he was. He did not go there in a helicopter, Mr O’Rourke—

Hon Tau Henare: I raise a point of order, Mr Chairperson. I am just wondering whether I could get a steer from you. Currently the Hon John Banks, and so on and so forth, is before the courts over this matter, so I am just wondering whether we are not covered by the sub judice, blah, blah, blah.

GRANT ROBERTSON: That is a perfect legal term.

Hon Tau Henare: The last bit was “blah, blah, blah”.

GRANT ROBERTSON: Speaking to the point of order—

The CHAIRPERSON (Eric Roy): I will hear Grant Robertson.

GRANT ROBERTSON: This matter arose yesterday as well, during the Committee stage, I think it was, and it was clarified. I was just looking for the Speaker’s ruling. It was a ruling from Speaker Terris, and it made clear that reference can still be made to the matters that are concerned, but not any judgment on it.

The CHAIRPERSON (Eric Roy): The point of order is a valid one, in that we need to be very careful about what we do. It is my understanding that certainly a private prosecution is taking place and the subject matter pertaining to that is off limits. There is a police complaint, I think, that the member was referring to as well, which at this stage has not moved to a court proceeding. But the member’s point is well made and we need to be very conscious that we do not transgress into areas that are sub judice, so I will continue to monitor the member.

GRANT ROBERTSON: As I said, we were looking at a practical example here of new Part A in schedule 2. So we have the name of the donor established. That is Skycity. Could Mr Banks have reasonably known where he was? Well, as we have said, he does have some issues with that, but it is a very large tower in the middle of Auckland and I reckon he would have got there, so he could have fulfilled the second criteria, the address of the donor.

The amount of the donation—there is no doubt here whatsoever. Skycity, in its statement in the police report, is very clear it gave $15,000 to both mayoral campaigns, to that of Len Brown and that of John Banks. So there was no confusion there about the amount of money that was on the cheque. They communicated that. The treasurer of Team Banksie was able to write back a receipt to Skycity for the amount of $15,000. So Mr Banks would be able to fulfil the third criteria, the amount of the donation.

The date the donation was received—this is an interesting one, because the donation was clearly received on a particular day. Could Mr Banks reasonably be expected to remember what date that was? I am going to cut him some slack here, because we have seen some fading in his memory over time and he may not have known what day it was. However, the people at Skycity certainly did, and when they requested that receipt they no doubt would have communicated to Mr Banks the fact that he had received a donation.

So there we are: in those four criteria for donations that exceed $1,500, we can now see that John Banks should have been able to fill out a form that said “Yes, I got $15,000.”, and he failed to do that. What is not at issue in any current proceedings is the question of whether or not the police found that Mr Banks had signed a false return. They actually said in their report that Mr Banks did do that. The difficulty they have was that the time had elapsed within which they were allowed to mount a prosecution. There is actually no doubt about that. This form change is a good thing, but it just highlights the fact that if someone like Mr Banks wanted to come along and rort the Local Electoral Act, which is exactly what he did, that was open to him. These law changes will thankfully mean that people like Mr Banks cannot get away with that any more.

Part 2 agreed to.

Schedule 1

The question was put that the amendment set out on Supplementary Order Paper 198 in the name of the Hon Chris Tremain to schedule 1 be agreed to.

Amendment agreed to.

Schedule 1 as amended agreed to.

Schedule 2 agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Bill reported with amendment.

Report adopted.

The House adjourned at 12.36 p.m. (Wednesday)