Tuesday, 9 July 2013

Tuesday, 9 July 2013

Tuesday, 9 July 2013

Mr Speaker took the Chair at 2 p.m.

Prayers.

Points of Order

Questions for Oral Answer—Leave to Amend Answer

Hon Dr NICK SMITH (Minister of Conservation): I raise a point of order, Mr Speaker. I seek leave to make a quick correction to an answer I gave last Thursday.

Mr SPEAKER: Leave is sought for that purpose. Is there any objection? There is objection.

Questions for Oral Answer

Questions to Ministers

Skycity, Convention Centre—Advice on Gambling-related Harm

1. METIRIA TUREI (Co-Leader—Green) to the Minister for Economic Development: Does he agree with the Department of Internal Affairs’ advice to his officials on the proposed international convention centre that “virtually any of these proposed concessions would almost certainly be followed by an increase in the number of people seeking help citing problems linked with casino machines or casino table games”; if not, why not?

Hon STEVEN JOYCE (Minister for Economic Development): No, not necessarily; for three reasons. The first point is that the paper the member is referring to considers a theoretical increase in pokie machines of 850; the eventual agreement between Skycity and the Crown provides for only 230. The second important point is that the paper is advice from 2011. So, of course, it is not aware of the significant harm reduction measures negotiated in the agreement. The third point is that the number of pokie machines in New Zealand is currently falling, and is continuing to fall, by around 500 per year. This deal would only slow that reduction by around 6 months.

Metiria Turei: Did the Minister read the warnings from the Department of Internal Affairs’ manager of gambling policy, Mr John Markland, that thousands of children would “almost certainly” be harmed from the increased gambling caused by this deal, including being inadequately clothed and fed and suffering other examples of deprivation and poor parenting, and why did he then pursue the deal?

Hon STEVEN JOYCE: I do not recall that specific advice, but I have read a range of advice with various propositions along those lines. Again, I would make the point to the member that there are two or three things that mitigate against that. Firstly, it is by no means clear at all that a marginal increase in machines in one casino would increase gambling harm overall, especially when the total number of machines across the country and across Auckland continues to decline. Secondly, the negotiated, significant additional harm minimisation measures that apply to all gambling machines in that casino will together act to reduce harm. Thirdly, once the concessions are in place, there is absolutely nothing to stop the regulatory authorities introducing new harm minimisation measures over time.

Metiria Turei: Has the Minister read his own regulatory impact statement containing evidence that gamblers do not keep to their own limits when using voluntary pre-commit cards—in short, a voluntary pre-commit card is something like a voluntary seatbelt—and is he not making a nonsense of the sinking-lid policy by guaranteeing that Auckland will have at least 2,000 pokie machines for the next 35 years despite the hard work of community groups, like the Ōtara Gambling and Alcohol Action Group, to reduce the number of pokies in Auckland City?

Hon STEVEN JOYCE: To answer the last question first, the reality of it is that the number of machines is continuing to decline, and, of course, we are talking about only a marginal increase in the number of machines at that casino. The member also singles out one harm minimisation measure. Yes, I have read the regulatory impact statement, which makes it quite clear that it is difficult to actually determine whether there will be additional risk caused by these additional machines or not, just as it is difficult to quantify the potential size of any increased risk of harm. It notes that most gambling does not cause harm, either to the gambler or to others.

Metiria Turei: I seek leave to table a document compiled by my office of information from Auckland Council showing that there has been a reduction of 1,189 pokie machines since 2004, soon to be increased, as a result of this deal, by 470 automated machines.

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

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

Metiria Turei: Did the Minister and John Key consider financing an international convention centre in a way that would not pose the risk of harm to thousands of children; if not, why not?

Hon STEVEN JOYCE: Cabinet actually did discuss, of course, the various matters around this arrangement before it made its decision—I suppose in much the same way that the Green Party might have done back in 2001 when deciding not to publicly oppose a similar arrangement that took place under the previous Labour Government in 2001 and 2002. They did not call that a dirty deal.

Metiria Turei: How did—[Interruption]

Mr SPEAKER: Order!

Metiria Turei: I raise a point of order, Mr Speaker. It is difficult to hear with the shouting over the other side.

Mr SPEAKER: Order! [Interruption] Order!

Metiria Turei: How did the Minister weigh up the increased risk of problem gambling - related suicide when deciding to pursue this deal?

Hon STEVEN JOYCE: I think it is quite clear in the papers that Cabinet assessed all those risks, as I said, in much the same way as previous Governments would have when they endorsed and encouraged a much smaller convention centre to be built in 2003 with a very similar number of gambling machines.

Metiria Turei: Given the warnings about the harm it poses, the obvious moral element in this legislation referring to gambling—[Interruption]

Mr SPEAKER: Order! The member can start that question again.

Metiria Turei: Given the warnings about the harm it poses, the obvious moral elements in this legislation as it refers to gambling law, and the comments of David McGee that non-party voting is designed for issues like gambling, will he support a personal vote on this legislation to allow MPs to vote with their conscience?

Hon STEVEN JOYCE: No. This is a Government measure, and it is my belief that parties in favour of investments, jobs, and growth for New Zealanders will vote in favour of this bill. Parties that are against those things will vote against it, just like they voted against the Resource Management Act changes, the Crown minerals changes, the exclusive economic zone legislation, and the ultra-fast broadband legislation.

Metiria Turei: Will the Minister now assure the House that no child will suffer ill treatment as a result of the regulatory concessions in this deal, and that no adult will harm themselves as a result of the increased gambling opportunities it creates?

Hon STEVEN JOYCE: No Minister can give that assurance, in the same way they cannot in regard to any other human activity that potentially causes social harm if the harm is not minimised properly—and this Government is seeking to do that. If the Greens had a strong principle on this, why are they worried about just these 230 machines? Why are they not calling immediately for all gambling to be closed down and for the 3,500 people in Skycity to no longer have a job?

Metiria Turei: I seek leave to table advice received by me under the Official Information Act from the Ministry of Economic Development from April 2013 showing that there are some 71,500 people who are negatively affected by casino gambling, of whom half are children.

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

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

Government Financial Position—Financial Statements for 11 Months Ended 31 May 2013

2. JAMI-LEE ROSS (National—Botany) to the Minister of Finance: What reports has he received on the Government’s financial position—particularly progress in reaching its target of returning to fiscal surplus in 2014/15?

Hon BILL ENGLISH (Minister of Finance): Treasury last week published the Crown Financial Statements for the 11 months to 31 May 2013. They show an improvement in Government tax revenue on the back of a moderately stronger economy, combined with the Government’s responsible control over spending. These two factors leave the operating deficit for gains and losses at $3.26 billion for the 11 months. If this improvement continues for the final month of the fiscal year, that is, to 30 June, along with the usual historical patterns of spending, then the deficit will likely be somewhere around $5.5 billion for the year, rather than $7.5 billion as forecast in Budget 2012, 12 months ago.

Jami-Lee Ross: What were the main reasons for the improvement in the Government’s accounts for the 11 months to May, compared with previous forecasts?

Hon BILL ENGLISH: There were two main reasons. Over the past few years the Government has focused on understanding and managing the main drivers of Government expenditure, after it had jumped by 50 percent—that is 50 percent—in the 5 years to 2008. Core Crown expenses are forecast to drop to below 31 percent of GDP in 2014-15, and that is down from 35 percent of GDP just 2 years ago. The second reason is higher revenue. The Government is supporting this growth through its comprehensive programme to build competitiveness, encourage investment, and support jobs. Compared with May 2012, tax revenue is $3.5 billion higher for the 11 months to May this year, reflecting wage growth and an increase in the effective tax rate on sole traders’ trusts and other individuals as a result of the Government’s tax reforms in 2010, which appear to be collecting more tax even at lower rates.

Jami-Lee Ross: What implications can be drawn from the Government’s latest financial statements in terms of its target of returning to surplus in 2014-15?

Hon BILL ENGLISH: These accounts confirm the Government is on track to return to surplus in 2014-15, but also to achieve a deficit in this last financial year around $2 billion lower than we budgeted, which is a significant tribute particularly to the Public Service, which has really applied itself to managing the drivers of Government spending. Bear in mind that the deficit was $18.4 billion just 2 years ago. Of course, when we get to surplus we will have choices about repaying debt or investing in more public services for New Zealanders.

Jami-Lee Ross: What contribution is the Government’s Better Public Services programme making to the improvement in the Government’s finances?

Hon BILL ENGLISH: We believe that effective public services and good performance in the public sector is the key to getting back to surplus and managing the Government’s finances. Yesterday, Ministers issued the first annual progress report on the 10 Better Public Services results, which set out to address some of New Zealand’s most challenging issues. It confirms that we are making good progress in areas such as reducing crime, reducing long-term welfare dependence, and improving educational achievement. In several areas the Government is making significant upfront investment to achieve better results. For example, it is investing more than $470 million over two Budgets to support more New Zealanders off welfare and into work. We are making that investment because we believe it will lead to less welfare dependency and, therefore, less fiscal cost in the long term.

Hon David Parker: Is the Minister of Finance ready to concede that he has failed in his objective to rebalance the economy towards exports and export jobs, given that there is significant house price inflation, significant debt-fuelled speculation in housing, and the IMF says that we will have the worst current account deficit in the developed world this year and every year through to 2017?

Hon BILL ENGLISH: No, I do not concede that at all. In fact a principal component of the rebalancing is to shrink the excessive Government spending that the previous Labour Government got involved in, and, as I have pointed out, Government spending will shrink from 35 percent of GDP to 31 percent in a couple of years’ time. Secondly, I simply disagree with the IMF over its view about New Zealand’s current account balance.

Power Prices—Increases and Electricity Market Dividends

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

Rt Hon JOHN KEY (Prime Minister): Yes.

David Shearer: Does he stand by his statement on the prices New Zealanders are paying for their power: “I think that they are paying a price … in relation to the environment we find ourselves in,”; if so, why?

Rt Hon JOHN KEY: Yes, in the context I made it.

David Shearer: With electricity prices rising over five times faster than the rate of inflation in the past year, why has his Government insisted that Transpower pay $1.16 billion in dividends?

Rt Hon JOHN KEY: At least the member has correctly identified what the root of most of the increase is, which is transmission. Some time ago I remember the member actually being on his feet arguing that dividends were such a great thing and the Government should be getting a lot more of them.

David Shearer: Is it correct that as a result of those $1.16 billion in dividends being paid to the Government, each New Zealand householder will pay an extra $370 for power?

Rt Hon JOHN KEY: I cannot confirm those numbers. What I can say is that power prices went up 72 percent under Labour. They are going up much more slowly under a National-led Government. I also know that under a Labour Government the emissions trading scheme charges would be much more significant than they are under National.

David Shearer: Does he think it is fair that New Zealand households have to pay an additional $370 for power because of his Government’s decision to collect the dividends?

Rt Hon JOHN KEY: The member is making an assumption that I cannot be sure is correct. I would need to go and check those details. But what I can say is that Transpower has been making substantial investments in recent times. I think Aucklanders, who suffered significant blackouts at one point, will remember what impact that had on the city. So those investments are absolutely necessary.

David Shearer: If he is questioning the figures, is he saying that the Transpower statement of intent tabled by his Minister is inaccurate—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! The interchange between the front benches of both National and Labour is so loud that it is difficult for me to hear the question that has been raised by David Shearer. Would he please repeat the question. [Interruption] Order!

David Shearer: If he is disputing the figures, is he saying that the Transpower statement of intent tabled by his Minister is actually wrong?

Rt Hon JOHN KEY: No, what I am saying is that the member is potentially extrapolating data that is not correct.

David Shearer: Given the figure that householders are paying an additional $370 for their power, does he concede that his Government has directly increased power prices?

Rt Hon JOHN KEY: No, those prices are, obviously, set by the particular companies that sell the power. What the Government has done is look to strengthen the network in New Zealand. I think that is a sensible thing to happen. I know that the member is desperate to talk about anything but his—

Mr SPEAKER: Order! [Interruption] Order!

David Shearer: Does he think it is acceptable that despite—[Interruption]

Mr SPEAKER: Order! Again, would members please refrain from interjecting. Would the member now please start his question again.

David Shearer: Does he think it is acceptable that despite having some of the cheapest electricity generation in the world, and despite having flat demand or declining demand, prices increased $118 in the last year for the average household?

Rt Hon JOHN KEY: Firstly—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I am very reluctant to raise this point of order, but down this end we cannot hear a thing, because of people screaming out from the National Party about a man ban, which we all know they have had in place in their party for a long time.

Mr SPEAKER: The latter part is not a point of order. The first part is a legitimate point of order, and—[Interruption] Order! If the member at the back of the Chamber is claiming he could not hear the question, I invite Mr Shearer to say it again.

David Shearer: Does he think it is acceptable that despite having some of the cheapest electricity in the world, and despite our declining or flat demand, prices continue to increase by up to $118 in the last year for the average household, when we actually should be facing some of the lowest power prices in the world?

Rt Hon JOHN KEY: Firstly, let us put the facts on the table. Power prices went up much more rapidly under Labour than under the National Government. Secondly, it is always important to invest in infrastructure, and that means making sure that the networks are robust. Thirdly, the Labour Party was not so long ago arguing about the merits of dividends and why they are important. Fourthly, to the Rt Hon Winston Peters: I am amazed that he thinks that the National Party has had a ban on men, given that he joined the National Party—

Mr SPEAKER: Order! That part is unnecessary. Question No. 4—[Interruption] Order! I would be reluctant to see the Leader of the House have to leave the Chamber for interjecting.

Hon Gerry Brownlee: So would I.

Mr SPEAKER: Well, if the member is reluctant to leave, he should tone down his interjections.

Skycity, Convention Centre—Signing of Agreement, Benefits, and Harm Minimisation Plan

4. CLAUDETTE HAUITI (National) to the Minister for Economic Development: What progress has the Government made on establishing an international standard convention centre in Auckland?

Hon STEVEN JOYCE (Minister for Economic Development): I thank the member for her question. I am pleased to advise the House that on Saturday I announced that the Government and Skycity have completed negotiations and signed an agreement for Skycity to design, build, and operate the New Zealand International Convention Centre in Auckland. Skycity will invest $402 million designing and building the convention centre, which will cater for 3,500 international conference delegates at any one time. The New Zealand tourism industry and business sector have been seeking an international-sized convention centre to be built in New Zealand for many years, to tap into the growing market of high-value business visitors that we are currently missing out on. The Government is once again delivering on this objective.

Claudette Hauiti: What economic benefits will the New Zealand International Convention Centre bring to Auckland and New Zealand?

Hon STEVEN JOYCE: The New Zealand International Convention Centre will create jobs, boost tourism, and bring significant economic benefits to Auckland and New Zealand. It is estimated that 33,000 more conference delegates will visit New Zealand each year, and we know that conference delegates spend more on average than other visitors. Overall, the New Zealand International Convention Centre is projected to inject $90 million into the economy, create an estimated 1,000 jobs during construction, and 800 jobs once it is up and running. This is a good deal for Auckland and for New Zealand.

Claudette Hauiti: What measures has the Government agreed will be put in place to deter problem gambling and to help with harm reduction?

Hon STEVEN JOYCE: Under the agreement Skycity will have to introduce a predictive modelling tool to analyse data and identify players at risk of problem gambling, as well as a voluntary pre-commitment system where players elect to restrict the amount of time they play or the amount they spend. It will also have to introduce player identification requirements when amounts over $500 are being put on to, or cashed from, ticket-in and ticket-out machines in non-restricted areas, as well as double the number of host responsibility specialists in order to deliver 24-hour-a-day, 7-day-a-week coverage. It is also worth noting that the 230 new pokie machines that have been focused on is the exact same number granted to Skycity under the Labour Government in 2001 for the development of a much smaller convention centre. Overall, the number of pokie machines in New Zealand is falling by around 500 a year. This arrangement will slow that reduction by just 6 months.

Solid Energy—Financial Position and Potential for Assistance

5. Hon CLAYTON COSGROVE (Labour) to the Prime Minister: Does he stand by his statements regarding Solid Energy and the Future Investment Fund “Well, again I think he’s saying that technically it was in the rules it might be possible. I haven’t actually seen—can’t recall either seeing [indistinct] and marked those things that are in the budget is an allocation process” and “If Bill’s saying it’s there, there might be a [indistinct] allocation”?

Rt Hon JOHN KEY (Prime Minister): Yes. For the benefit of members, Ministers have agreed to a facility of up to $100 million to provide liquidity support for Solid Energy if it is needed, and so far it has not been—

Grant Robertson: I thought you said yesterday they had it.

Rt Hon JOHN KEY: Well, wait till to we get to the end of the answer. Secondly, the facility cannot be used as a capital injection, so it is not about bailing out Solid Energy as Mr Cosgrove claims. A range of options for this facility was put to Ministers but the only one they have considered is a secured loan, repayable in the short term. Officials advised a secured loan would not be a charge against the Future Investment Fund.

Hon Clayton Cosgrove: Despite that answer, could the Prime Minister, given that he stands by that statement, explain to the House exactly what he meant by that statement?

Rt Hon JOHN KEY: Yes, because the member is a bit slow I will do it for him.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! A point of order has been raised by the Hon Trevor Mallard.

Hon Trevor Mallard: I think you indicated either last week or the week before that you were going to tighten up on Ministers to get them when they are asked relatively non-political questions not to abuse members. I think that has just been breached, and I would note that there have now been five interjections since I restarted the point of order.

Mr SPEAKER: I appreciate the point the member is making. I do not think he can argue to my satisfaction that it was a non-political question. Having said that, it would be helpful if the Prime Minister would simply address the question without, equally, adding politics at the start.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. Your ruling is interesting in that the Prime Minister and your office accepted the primary question. My supplementary question could not have been ruled political. It simply asked him to explain what he meant. Could you point out to me what is political about that?

Mr SPEAKER: Would the member please resume his seat.

Rt Hon JOHN KEY: Ministers were asked to consider a facility that could be used for Solid Energy to pay for wages and things in the short term if—

Hon Clayton Cosgrove: Why didn’t you tell the truth?

Rt Hon JOHN KEY: —the company actually went broke and could not achieve that.

Hon Clayton Cosgrove: Why did you black out the figures?

Rt Hon JOHN KEY: That was actually something I remember—the member actually running around saying exactly that.

Hon Clayton Cosgrove: Why did you black out only one set of figures?

Rt Hon JOHN KEY: Well, I am not going to bother answering if you are going to carry on like that.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I wanted to inquire whether the Prime Minister has finished his answer.

Mr SPEAKER: Order! He decided not to because of the interjections that were coming from the member. If the member wants to continue raising points of order that I do not consider are appropriate or relevant, then he will not get the ability to ask further supplementary questions.

Hon Clayton Cosgrove: Does he stand by his statement this morning on Firstline regarding loans to Solid Energy that Bill English could “if he wanted to do it unsecured, he could do that as well”; if so, does he also stand by his statement yesterday at his post-Cabinet press conference that “we’ve never, ever considered giving [Solid Energy] an unsecured loan”—which is it?

Rt Hon JOHN KEY: Yes.

Hon Clayton Cosgrove: Why did he say yesterday morning on Newstalk ZB that asset sales money was not going to be used to support Solid Energy and that I was making it up, then 10 minutes later on Radio Live he said that there might be an allocation of $100 million for Solid Energy, when an hour beforehand on yet another radio station Bill English confirmed that asset sales money has been appropriated for Solid Energy recovery facilities, saying “the Government decides what the Future Investment Fund is spent on.”?

Rt Hon JOHN KEY: Because, in answer to the first part of the question, it is true: we are not putting money out of the Future Investment Fund into Solid Energy, and, secondly, the member was making it up.

Hon Clayton Cosgrove: I seek leave to table the Cabinet and Treasury documents, signed off by Cabinet and the Prime Minister, that show that Cabinet has set aside $100 million from the Future Investment Fund for so-called “Solid Energy recovery facilities”.

Mr SPEAKER: Leave is sought to table those documents. Is there any objection? Yes, there is.

Hon Clayton Cosgrove: Is he aware that his Cabinet has approved $10 million of spending from the Future Investment Fund on the National War Memorial; if he can recall that, how is it plausible that he can remember a $10 million spending item approved by the Cabinet that he chairs, but he cannot recall a $100 million item derived from the same source, the Future Investment Fund, and noted in his own Cabinet documents that he signed off on?

Rt Hon JOHN KEY: In answer to the first part of the question, yes; in answer to the second part of the question, the member is just plain wrong. What Cabinet has done is establish an authority to allow the Government to lend money if it wants to. If it was done on a secured basis, it would not come out of the Future Investment Fund. The only way that the Government would lend money to Solid Energy would be on a secured basis, but because the accountants are truly conservative and because we gave ourselves a range of options, that was the way they accounted for it. No $100 million has been there. But what is interesting now, actually, is Clayton Cosgrove is telling the people—

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. You may anticipate my point of order. He had a lengthy—

Mr SPEAKER: I could not possibly anticipate a point of order from that member at all.

Hon Clayton Cosgrove: I am very happy to enlighten you. The Prime Minister gave a lengthy answer, and now he is starting to attack me. He has given a lengthy answer—

Mr SPEAKER: Order! I do not think that that was a significant enough attack to worry the member. He is bigger than that.

Hon Clayton Cosgrove: I raise a point of order. [Interruption] Not as big as you, Gerry. [Interruption]

Mr SPEAKER: Order! A point of order has been called, and it will, on this occasion, be heard in silence.

Hon Clayton Cosgrove: This is a serious point of order. Is it, then, your ruling that a member needs to be subjected to the attack before you will then pull the Minister up?

Mr SPEAKER: No, that is not my ruling. Question No. 6, Kanwaljit Singh Bakshi. [Interruption] Order! [Interruption] Order! Would members on all sides of the House settle down so we can hear from Kanwaljit Singh Bakshi. Question No. 6.

Better Public Services Targets—Progress

6. KANWALJIT SINGH BAKSHI (National) to the Minister of State Services: What progress is being made toward the achievement of the Government’s Better Public Services targets?

Hon Dr JONATHAN COLEMAN (Minister of State Services): Yesterday the Government announced the 1-year update on Better Public Services results. I am pleased to advise the House that the Government has made progress in all 10 results areas. The Government is delivering on its commitments to reduce crime, improve the health of children, reduce long-term welfare dependency, boost skills, and enable online interactions with the Government.

Kanwaljit Singh Bakshi: What is the Government doing to support the Public Service in delivering results that matter to New Zealanders?

Hon Dr JONATHAN COLEMAN: The State Sector and Public Finance Reform Bill, which is currently before the House, will enable the State Services Commissioner, as head of State services, to move key people and money around the Public Service so that resources are focused on achieving results. This approach will also ensure that our most talented civil servants get the broad range of experience required to develop their careers.

Kanwaljit Singh Bakshi: What is the public response to the Government’s focus on services that matter to Kiwis?

Hon Dr JONATHAN COLEMAN: The State Services Commission conducts the Kiwis Count quarterly survey on public satisfaction with public services. The Government’s focus on shifting resources to the front line and our commitment to delivering results that matter has seen a significant improvement in New Zealanders’ satisfaction with public services since the National Government took office. This Government is focused on delivering better public services in a tight fiscal environment, and New Zealanders are recognising the improvement in services.

Future Investment Fund—Potential Financial Support for Solid Energy

7. Hon DAVID PARKER (Labour) to the Minister of Finance: Does he stand by his statement “The Government decides what the Future Investment Fund is spent on”?

Hon BILL ENGLISH (Minister of Finance): Yes.

Hon David Parker: Given that Treasury documents from March 2013, recently released under the Official Information Act, state that Cabinet has already agreed to spend $616 million against the Budget 2013 Future Investment Fund’s spending profile, then list Christchurch hospitals, irrigation infrastructure, and the National War Memorial, at a total of $516 million, was the other $100 million blanked out for Solid Energy?

Hon BILL ENGLISH: I understand that it was, but Treasury is wrong. The Government has not committed to $100 million from the Future Investment Fund, as the member asked in the first question. The Government decides what the Future Investment Fund is spent on, not Treasury accountants.

Hon David Parker: I seek leave to table the document called Finalising the Budget 2013 Future Investment Fund Package, which has Solid Energy blanked out.

Mr SPEAKER: Leave is sought to table that. Is there any objection? Yes, there is.

Hon David Parker: Why have he and his colleagues been so enthusiastic to promote uses for the proceeds of assets sales—such as subsidising irrigation schemes, Minister Guy; building schools and hospitals, Mr Key; rebuilding Christchurch, Mr Brownlee; capitalising Kiwibank so he can sell it off, paying down debt, and KiwiRail, Mr Joyce; the war memorial, Finlayson; the city rail link—yet have failed to publicly mention the $100 million for the bailout of Solid Energy?

Hon BILL ENGLISH: Because there is no $100 million bailout of Solid Energy. It does not matter how often the Opposition says it; it is simply not the case. But the rest of the list highlights the flexibility that the asset sales programme gives the Government. We have $1.7 billion cash in the bank, and if there is one thing that gets up the Opposition’s nose, it is our willingness to spend it on public assets.

Hon David Parker: Then is the reason he tried to hide appropriating asset sale proceeds for Solid Energy that it again highlights how Solid Energy was mismanaged under his Government, which encouraged Solid Energy, in the face of a falling coal price, to expand and to increase debt by hundreds of millions of dollars while demanding higher dividends, all of which led to the downfall of Solid Energy?

Hon BILL ENGLISH: Solid Energy was another example of where the incoming National Government had to clean up a mess left by the previous Government. One could argue that we should have acted a bit more quickly, but when we did take action, that party was out on the steps of Parliament protesting against it.

Hon David Parker: I seek leave to table a copy of the letter sent on behalf of Mr English asking for higher debts and more dividends from Solid Energy, in the face of falling coal prices.

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

Hon David Parker: Then is the reason he tried to hide spending asset sale proceeds on Solid Energy that, after using the Future Investment Fund for projects costing tens of billions of dollars, another hundred million dollars would seem a bit over the top?

Hon BILL ENGLISH: As I said to the member, the Government has not spent a dollar of anything on Solid Energy, actually. That has not occurred. The option that the Government has considered is a secured loan, and a secured loan would not come from the Future Investment Fund. The Government is hiding nothing. What it is trying to do is clean up messes, of which this is one of many, left by the previous Labour Government, which drove up spending, wasted public capital, and left this economy in a mess.

Hon Clayton Cosgrove: I seek leave to table two documents. The first is recommendation No. 1 in the note to Cabinet, spending $616 million, where note 6.9, referring to the Solid Energy allocation, has—

Mr SPEAKER: The source of the document, please.

Hon Clayton Cosgrove: —it is a Cabinet document—been blanked out.

Mr SPEAKER: There are two documents.

Hon Clayton Cosgrove: I am seeking leave for the first one.

Mr SPEAKER: Leave is sought to table those particular couple of pages. Is there any objection? There is objection.

Hon Clayton Cosgrove: The second document I wish to table is Table 5, Future Investment Fund spending in the Budget, $616 million—

Mr SPEAKER: Order! Is that a Budget document? [Interruption] Order! Is that a Budget document the member has?

Hon Clayton Cosgrove: It is Table 5 from the Future Investment Fund, where the Solid Energy item is not blanked out.

Mr SPEAKER: Is it a Budget document?

Hon Clayton Cosgrove: It is Table 5.

Mr SPEAKER: It is a Budget document; it will not be tabled.

Dotcom Case—Prime Minister’s Statements

8. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements on the recent controversies around the GCSB; if so, why?

Rt Hon JOHN KEY (Prime Minister): Yes, because, to the best of my knowledge, I believe them all to be true.

Rt Hon Winston Peters: Does he stand by his statement that “We’ve gone through every record my office holds, there’s no evidence we can point to that we’ve heard of this guy prior to January 19, 2012.”?

Rt Hon JOHN KEY: Yes.

Rt Hon Winston Peters: How does he reconcile that statement with the answer he gave to written parliamentary question No. 8130 in 2012 that “In July 2011 one of my staff was advised by Hon Simon Power’s office by phone that Hon Power was declining an OIO application from Kim Dotcom.”?

Rt Hon JOHN KEY: One was in relation to whether I had heard of Kim Dotcom prior to 19 January 2012. There is no documentation in my office to support that I had. The other was a phone call. As has been well documented, it was made by Simon Power’s office to my deputy chief of staff. That information was not passed on to me.

Rt Hon Winston Peters: Given that the Prime Minister does not seem to understand what the word “we” means, did he say on 24 January 2012 that “I was aware [of] a German resident living in that house … but I didn’t know [his] name was Kim Dotcom.”, and can he tell the House whether he knew the German resident was the subject of a criminal investigation?

Rt Hon JOHN KEY: No, I did not know he was subject to that.

Rt Hon Winston Peters: Well, who told him about the “German resident” prior to 19 January 2012?

Rt Hon JOHN KEY: I cannot recall. To the best of my knowledge it was some time in 2011. Someone in my electorate had mentioned it to me.

Rt Hon Winston Peters: Has the Prime Minister’s office ordered the destruction—[Interruption]

Mr SPEAKER: Order!

Rt Hon Winston Peters: Has the Prime—[Interruption] Mr Speaker, I would like to get going on this question.

Mr SPEAKER: Order! If the member would just carry on—[Interruption] Order!

Rt Hon Winston Peters: Has the Prime Minister’s office destroyed, or given instructions to destroy, any documents relating to Kim Dotcom; if so, what were those documents?

Rt Hon JOHN KEY: No. I do not know what it was like when Winston Peters was a Minister, but maybe they did destroy documents all the time. I suggest that the member has absolutely nothing—just like Kim Dotcom. Maybe those documents are buried inside Peter Dunne’s emails, if you would like to produce those as well.

Conservation, Department—Restructuring and Minister’s Statements

9. EUGENIE SAGE (Green) to the Minister of Conservation: Does he agree with former Otago Conservation Board chairwoman, Associate Professor Abby Smith, who said restructuring at the Department of Conservation has left it “dead in the water”; if not, why not?

Hon Dr NICK SMITH (Minister of Conservation): No, but I accept that the restructuring is unsettling for staff of the department. The former chair was particularly concerned about the lack of progress on marine protection, which is ironic when we are this year set to gazette a record 10 marine reserves around New Zealand. However, Otago is the only conservancy to have no marine protection, and her criticisms reflect 10 years of frustration as board chair in not being able to establish any.

Eugenie Sage: When he talked about our tourism industry’s reliance on “breathtaking landscapes and a stunning variety of unique flora and fauna.” in his Valuing Nature Conference speech this morning, why did he not mention the Department of Conservation’s own 4-year plan, which states: “The number and condition of many native plants, animals, and ecosystems continues to decline.”?

Hon Dr NICK SMITH: One of the points I made at the Valuing Nature Conference this morning was the huge commitment by the Department of Conservation to the work in protecting a whole number of species and four steps that we need to take to improve in that performance. I would welcome the Green Party’s support for that sensible vision for conservation.

Eugenie Sage: How can he say that the National Government values nature when it has slashed Department of Conservation funding, with the loss of more than 160 conservation jobs, and it has left the department—as it says in Treasury papers and the department’s 4-year report—in a position where it will have to do less from 2015-16?

Hon Dr NICK SMITH: The Green Party’s rhetoric about the Department of Conservation budget being slashed is just not credible. Let me give the member the numbers. In 2008-09, the last year of the previous Government, the Department of Conservation budget was $304 million. This year the Department of Conservation budget is $334 million. It is true that the Department of Conservation, like all Government agencies, is not able to enjoy the massive increases in public spending that got New Zealand into a heap of economic pickle, but this Government is committed to an efficient, pragmatic, and effective department.

Eugenie Sage: In his Valuing Nature Conference speech this morning, when he talked about our successful dairy industry relying on “copious volumes of fresh, clean water”, why did he not mention that under the National Government 50 percent of our waterways are no longer fit for swimming or that New Zealand fell from second to 43rd in the world, according to Yale University’s water rankings?

Hon Dr NICK SMITH: The Green Party’s assertion that 50 percent of New Zealand waterways are unfit to swim in just shows the gross exaggeration by that party and is wrong. I would further point out that this Government has increased by threefold the increase in protection and restoration of waterways. I give just one example. Take Lake Rotoiti, one of the iconic lakes of the North Island. It is cleaner than it has been for more than 30 or 40 years, because of the funding that this Government has committed to its clean-up.

Eugenie Sage: I seek leave to table a news centre transcript of a Radio New Zealand interview with Associate Professor Abby Smith yesterday—

Mr SPEAKER: If it is a transcript of a radio interview, it is available to members if they want to search for it.

Eugenie Sage: A transcript is not publicly available. It was commissioned by the Green Party from the news centre.

Mr SPEAKER: If members want to get hold of it, I am sure they can.

Crime Proceeds—Allocation to Crime Prevention and Drug Addiction Treatment

10. MIKE SABIN (National—Northland) to the Minister of Justice: What new initiative is the Government undertaking to fight crime and drug addiction?

Hon JUDITH COLLINS (Minister of Justice): I have recently announced that money seized from drug crime will be allocated to directly fight crime and drug addiction. The Government has received about $8.6 million since the Criminal Proceeds (Recovery) Act came into force in December 2009. The decision to allocate the proceeds of crime to fighting drug addiction was part of the Methamphetamine Action Plan so that profits from the drug trade will be used to reduce the harm from drug addiction. Reducing drug addiction directly supports crime reduction and helps to make our community safer.

Mike Sabin: How will the funds from the proceeds of crime be allocated?

Hon JUDITH COLLINS: The Interagency Committee on Drugs will assess bids from Government agencies and will make recommendations. The Prime Minister will make the final decision on which projects are to be funded. The Ministry of Health, the Ministry of Justice, and the Department of Corrections will be able to bid for funding for drug treatment projects, while the Police and the Customs Service will be able to bid for funding of law enforcement initiatives. Agencies will need to show how their proposed initiative will reduce drug harm and break the drug supply chains by tackling organised criminal groups that are dealing in drugs.

Mike Sabin: How does this initiative contribute to the Government’s Better Public Services targets?

Hon JUDITH COLLINS: This Government is making excellent progress towards achieving its Better Public Services targets. The justice sector targets aim to reduce the crime rate by 15 percent, reduce the violent crime rate by 20 percent, reduce the youth crime rate by 5 percent, and reduce the reoffending rate by 25 percent. Combating drug addiction and organised crime will directly assist the justice sector in its efforts to achieve these targets and to help make New Zealand a safer place for all of us.

Gambling—Harm Minimisation and Skycity Convention Centre Agreement

Hon TREVOR MALLARD (Labour—Hutt South): My question is to the Minister of Internal Affairs—[Interruption]

Mr SPEAKER: Order!

Hon TREVOR MALLARD: What actions is he taking to—

Mr SPEAKER: Order!

Hon TREVOR MALLARD: —minimise the harm from gambling?

Mr SPEAKER: I am going to ask the member to start again, please.

Hon TREVOR MALLARD: Well, Mr Speaker, everyone—

Mr SPEAKER: Order! Order!

11. Hon TREVOR MALLARD (Labour—Hutt South) to the Minister of Internal Affairs: What actions is he taking to minimise the harm from gambling?

Hon CHRIS TREMAIN (Minister of Internal Affairs): I have recently acted, together with the Associate Minister of Health, to put in place a $55.3 million 3-year gambling harm strategy. The 3-year package includes $25.3 million for front-line intervention services and $20.5 million for public health services. These services help families with members who have gambling addictions. The Government also supported the Māori Party’s Gambling (Gambling Harm Reduction) Amendment Bill this week at its second reading. I have supported the Commerce Committee’s improvements to the bill, which will enable the transfer of gambling venues out of low socio-economic areas. The bill will also enable regulations to make sensible harm-minimisation technologies mandatory in class 4 gambling venues nationwide.

Hon Trevor Mallard: Why did he suppress for over a year the advice that there would be over 8,000 extra problem gamblers as a result of the deal of the size of the Skycity one?

Hon CHRIS TREMAIN: I did not suppress that advice. The advice was part of a negotiation that was being undertaken by the Government, which had commercial sensitivities. That was the reason.

Hon Trevor Mallard: Which aspects of the regulatory concessions raise the risk of money-laundering through Skycity, as outlined in paragraph 97 of the regulatory impact statement?

Hon CHRIS TREMAIN: The aspects of the harm-minimisation package that deal with, certainly, harm minimisation and anti - money-laundering include the ticket-in ticket-out provisions in there, which actually limit the amount of money that someone can put through a machine without identification.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a very straight question. It asked: “Which aspects”—

Mr SPEAKER: Order! There was quite a lot of noise at the time the question was asked. To be fair to the Minister, would the member please repeat the question.

Hon Trevor Mallard: Which aspects of the regulatory concessions raise the risk of money-laundering through Skycity, as outlined in paragraph 97 of the regulatory impact statement?

Hon CHRIS TREMAIN: The aspects of the package that we have put together, particularly including the ticket-in ticket-out initiatives, actually reduce the risk of money-laundering.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a very straight question. Paragraph 97 of the regulatory impact statement indicates that there is risk of extra money-laundering as a result of the concessions. All I asked is which aspects of the concessions. They are this Minister’s responsibility.

Mr SPEAKER: The Minister has answered it not by talking about the ways the risks were raised but the way the risks will be lessened. I think on that particular case—

Hon CHRIS TREMAIN: I raise a point of order, Mr Speaker. The primary question talks about harm minimisation; it does not talk about anti - money-laundering. So in terms of a specific part of the regulatory impact statement, I do not have that particular detail in front of me today.

Hon Trevor Mallard: Point of order, Mr Speaker.

Mr SPEAKER: I think the Minister addressed the question in the first place. He has now certainly answered it through a point of order, which is an odd way of doing things. The member has further supplementary questions if he wants use them.

Hon Trevor Mallard: Did the regulatory impact statement reject the option of amending the Gambling Act because it would “… involve wider consultation, increased scrutiny and therefore more public input.”; if so, why does he believe that this proposal could not withstand wider consultation, increased scrutiny, and more public input?

Hon CHRIS TREMAIN: The bill proposed by the Minister for Economic Development will go through a full hearing at the select committee, which will enable submissions to be heard, and it will enable wide scrutiny of the Act.

Hon Trevor Mallard: Does he agree with the regulatory impact statement that the impact is that the bill “is inconsistent with the fundamental common law principle of equality before the law”; if not, why not?

Hon CHRIS TREMAIN: I am more than confident that when the bill goes before the select committee it will have the opportunity for submitters to be heard in terms of any concerns that they have about the bill, and for any changes from the select committee.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. It was a very direct question—

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

Hon Trevor Mallard: Does he agree with the regulatory impact statement that the bill “is inconsistent with the fundamental common law principle of equality before the law”; if not, why not?

Hon Annette King: Yes or no?

Hon CHRIS TREMAIN: No.

Hon Trevor Mallard: Will he rule out using similar amendments to the Gambling Act to develop convention centres in Christchurch and Queenstown?

Hon Steven Joyce: It’s a hypothetical.

Hon CHRIS TREMAIN: It is a hypothetical question—[Interruption]

Hon Trevor Mallard: I raise a point of order, Mr Speaker. [Interruption]

Mr SPEAKER: Order! There is a point of order from the Hon Trevor Mallard.

Hon Trevor Mallard: It was a very direct question about the area that that Minister has responsibility for, asking him whether he would rule something out. Saying that it is hypothetical is not an answer.

Mr SPEAKER: Order! The Minister then added further to his answer, but because of the noise coming from around the member asking the question, I am not sure what the Minister added subsequently. Would the Minister just like to repeat his answer?

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I think it is worth pointing out that a decision like that would rest with the whole Cabinet, not necessarily with the Minister of Internal Affairs.

Hon Trevor Mallard: This is the Minister responsible for the Gambling Act. The question was about the Gambling Act.

Mr SPEAKER: The easiest way to resolve this is for me to ask the Minister to repeat his answer to the question.

Hon CHRIS TREMAIN: I can extend the answer. There are no proposals in front of me for those hypothetical situations that you have put. We will deal with that situation at the time.

Mr SPEAKER: Supplementary question, Te Ururoa Flavell. [Interruption] Order! [Interruption] Order! I have called a supplementary question from Te Ururoa Flavell.

Te Ururoa Flavell: Tēnā koe, Mr Speaker. Kia ora tātou. Does he agree with the Māori Party that it is important to minimise the harm done to communities by gambling; if so, how will he ensure that the provisions around local distribution and harm-minimisation technology, introduced in the Gambling (Gambling Harm Reduction) Amendment Bill, are taken up?

Hon CHRIS TREMAIN: I agree that minimising harm is important. Once Te Ururoa Flavell’s bill has passed, it will be possible to introduce regulations to introduce mandatory harm-minimisation devices in class 4 gambling venues nationwide. The original bill said that these requirements may be introduced only through individual licence conditions. I believe that our changes to the bill actually enhance the situation.

Hon Trevor Mallard: I raise a point of order, Mr Speaker. I just wanted to check there had not been any changes to the Standing Orders or Speakers’ rulings to do with the transfer of questions. I think that seven times during my question to the Minister of Internal Affairs, Minister Joyce said that the question should go to him and that he wanted to answer it. If the Government wanted that to be the case, could it have transferred the question?

Mr SPEAKER: In this particular case there was no doubt in my mind that the question was addressed to the correct Minister, and there was no attempt by the Government to transfer it.

Better Public Services Targets—Online Interaction with Government

12. CHRIS AUCHINVOLE (National) to the Minister of Internal Affairs: What progress has been made toward the Government’s targets for delivering more services online?

Chris Hipkins: It’s his big day today. A big day.

Hon CHRIS TREMAIN (Minister of Internal Affairs): A big day—a big day. The Government is using a basket of 10 services to measure progress towards our target of 70 percent of New Zealanders’ most common transactions with Government being done online. We have made good progress: 68 percent of Ministry of Social Development applications for assistance, up from 48 percent; 93 percent of individual tax returns, up from 75 percent; and 40 percent of police fines paid online, up from 27 percent.

Chris Auchinvole: How is the Government making it easier for New Zealanders to access online services?

Hon CHRIS TREMAIN: We are rolling out the RealMe service, which lets New Zealanders easily prove who they are when accessing online services. RealMe is the online equivalent of a passport or a driver’s licence, which will enable New Zealanders to prove over the internet who they are to a high degree of trust. New Zealanders can now sign up for a RealMe verified account at a participating post shop.

Chris Auchinvole: How many online Government services will be delivered using RealMe?

Hon CHRIS TREMAIN: RealMe is an all-of-Government service. We expect most of the Government’s online transactional services to eventually use RealMe log-ins. RealMe can also be used by commercial organisations, and a number of banks are very keen to start using this service. I encourage all members of Parliament to understand the RealMe service and to embrace that service.

Points of Order

Land Transfer (Foreign Ownership of Land Register) Amendment Bill—Leave for Introduction and First Reading

Rt Hon WINSTON PETERS (Leader—NZ First): I raise a point of order, Mr Speaker. I seek the leave of the House for the Land Transfer (Foreign Ownership of Land Register) Amendment Bill to be uplifted from the ballot and be set down for first reading forthwith, in order to provide New Zealanders with a comprehensive register of all foreign-owned land and housing in our country, which has become pandemic and needing urgent action.

Mr SPEAKER: Leave is sought for that course of action. Is there any objection? There is.

Urgent Debates Declined

Skycity, Convention Centre—Signing of Agreement

Christchurch City Council—Building Consent Accreditation and Appointment of Crown Manager

Primary Industries, Ministry—Suspension of Meat Exports to China

Mr SPEAKER: Honourable members—[Interruption] Order! I have received a letter from David Shearer seeking to debate under Standing Order 386 the completion of the negotiations between the Government and Skycity and the signing by these two parties of a final agreement to build a convention centre in Auckland. This is a particular case of recent occurrence involving ministerial responsibility. I would have been inclined to accept this application, except for the fact that legislation is required to give effect to the final agreement. A Government bill was introduced yesterday and I understand that its first reading may be debated later this week. In these circumstances I am not convinced that I would be justified in setting aside the business of the House for a debate today. The application is therefore declined.

I have also received a letter from the Hon Lianne Dalziel seeking to debate under Standing Order 386 the Government’s appointment of a Crown manager to oversee the Christchurch City Council building consent authority. The appointment of a Crown manager is a particular case of recent occurrence involving ministerial responsibility. The test for whether a particular case requires the immediate attention of the House is a high one. Not every ministerial announcement of an appointment will give sufficient grounds for an urgent debate to be held. The purpose of an urgent debate is to hold the Government accountable for its actions. An appointment has been made, terms of reference established, and an initial plan of action is to be put in place over the next 4 weeks.

Although the decision to appoint a Crown manager is an important one, working through what needs to be done will take some time. An urgent debate is a way of holding the Government accountable for matters that have occurred. I am not convinced that the situation has reached the stage where, in terms of the Government’s responsibility, an urgent debate is warranted. The application is therefore declined.

I have further received an application from the Hon Damien O’Connor seeking to debate the cessation of the importation of New Zealand meat shipped to China since 1 June 2013 and the failure of the Minister for Primary Industries and his ministry to respond to the issue. The member has provided no authentication with his application. This is, in itself, a reason not to accept it. The urgent debate is an opportunity to hold the Government accountable for its action, where it is responsible. The member’s application does not make out a clear case for holding the Government to account. Furthermore, the absence of action on the part of the Government is not a particular case of recent occurrence that can be raised under Standing Order 386. The application is therefore declined.

Bills

Psychoactive Substances Bill

In Committee

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

Hon Clayton Cosgrove: Konnichiwa, Ross.

The CHAIRPERSON (H V Ross Robertson): I will not get into Japanese, Mr Cosgrove, at this stage. We are considering, honourable members, the Psychoactive Substances Bill. The question before the Committee is that Part 1 stand part. This is to advise members that it is a debate on clauses 3 through to 11A.

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Chairperson. When was the decision made that they be taken together, and not clause by clause?

The CHAIRPERSON (H V Ross Robertson): I am not aware of that.

Hon Trevor Mallard: I have just had a discussion—

The CHAIRPERSON (H V Ross Robertson): All I can suggest is that if that is in fact the case, then something needs to happen, but unless it does I am going to call the honourable member Iain Lees-Galloway.

Part 1 Preliminary provisions

IAIN LEES-GALLOWAY (Labour—Palmerston North): Just to clarify, we are debating Part 1, beginning at clause 3—is that correct?

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

IAIN LEES-GALLOWAY: Right—very good. I am very pleased to be able to take a call on Part 1, the preliminary provisions. Let members not be led into any false sense of what the preliminary provisions part of the bill might mean. This is a substantive section of the bill. Each part of this bill, actually, is substantive in its own right, and I think is worthy of considerable debate. I have got no doubt that there will be lengthy debate on aspects of Part 1.

Part 1 covers the purpose, the principles, the interpretation, the meaning of psychoactive substance, which was something that we considered at length, the establishment of the Psychoactive Substances Regulatory Authority and the Psychoactive Substances Expert Advisory Committee, and indeed clause 11A, which I have no doubt will be the subject of considerable attention, which is the duty of the advisory committee relating to the use of animals when evaluating a psychoactive product for approval.

I would like to start at the beginning of the bill—a very good place to start—and that is with the purpose. With what appears to be a small amendment, I think the Health Committee has made a significant change to the purpose of this bill. The purpose now reads that “The purpose of this Act is to regulate the availability of psychoactive substances in New Zealand”—which is essentially what it originally said, and we have added the words—“to protect the health of, and minimise harm to, individuals who use psychoactive substances.”

This was the subject of many of the submissions that we heard at the select committee. I know that many members spoke in the first reading about the need to have this concept that this bill is about reducing harm right there at the beginning of the bill, in the purpose, because this is about a lot more than just regulating these substances. If we wanted just to regulate them we could have perhaps proposed to ban them. We could have come up with all sorts of very simple things. But really what this is about is reducing the harm caused by drugs. It has been the Government’s policy, and it has been the policy of various Governments for a long time, to take a harm-reduction approach to our drug regulations and the way that we approach drug use, both in the legal framework and in the health and treatment response to drug use. However, it has been missing from the legislation relating to drug regulation.

I think it is a really important step that this new piece of legislation that relates to drug regulation includes this in the purpose; that the purpose of the legislation is in fact to reduce harm. I think a lot of people will probably hear this time and time again, that this bill is a good step forward in terms of drug regulation, and that it may prove to be a good template for how we might approach the regulation of other substances as well. This concept of harm reduction actually appearing in our legislation I think is one of the most important steps forward. It was disappointing, actually, that it was not in the original bill, but it was clear from the outset that all members of the Health Committee thought that including that sentence about harm reduction in the purpose was important for us to do.

One of the issues that we considered at length was the definition of a psychoactive substance. We had a range of different views at the select committee about whether or not there should be a definition of psychoactive substance, and how we might define psychoactive substance. I know this was something that tested the officials as to exactly how we would define a psychoactive substance. I think what the select committee has done is exactly the right thing, in terms of leaving the definition of a psychoactive substance sufficiently broad. The bill now says that “In this Act, unless the context otherwise requires, psychoactive substance means a substance, mixture, preparation, article, device, or thing that is capable of inducing a psychoactive effect (by any means) in an individual who uses the psychoactive substance.”

That definition, that meaning, of psychoactive substance is deliberately broad in order to capture all potential new substances, or even devices, that may have a psychoactive effect. This is a response to exactly the problem that this legislation is trying to deal with, and that is the fact that the Misuse of Drugs Act, which was perfectly adequate in 1975 but is utterly inadequate in the 21st century, was very narrow in its definition of exactly what substances fell under the Misuse of Drugs Act. Therefore, as time went on and the technology became available to develop the novel substances that this bill covers, we constantly found ourselves in Parliament trying to add to the Misuse of Drugs Act to regulate all the new substances as they arrived. It was just impossible to keep up. So this meaning of “psychoactive substance” is deliberately broad, to capture all of those new substances as they potentially come on to the market.

I have been asked by a number of people whether people will be able to get around this bill by simply labelling a substance that could potentially be used or could be ingested by a person for psychoactive effect as something else, like incense or bath salts, or by labelling it as having some other purpose. The intention of this clause is to overcome that problem where there is a deliberately misleading name given to a substance that tries to distract from the point that it can be used as a psychoactive substance. It does not matter what people call something—this clause is designed to capture it. So anybody out there who thinks they can be a bit cute and try to call something by another name, and everybody knows it can be used as a psychoactive substance and can be ingested by a human being as a drug for a psychoactive effect—this clause will capture it. It does not matter what they call it. The hope from Parliament is that that kind of workaround will not be possible, given the broad nature of that clause.

Probably one of the most vexed questions that will no doubt get some considerable debate today is exactly what information the expert advisory committee can receive from clinical trials, and the nature of clinical trials that can be conducted. This all hangs off the issue of animal testing. I am quite sure that members from around the Chamber will address this issue at length, but I want to make a really important point that I want New Zealanders to understand. The reason we have got ourselves into this position—where we are debating the amendment from the Greens—is the very, very poor process from the Government and the National Party. They have done two things that have absolutely overridden democracy, in the consideration of this bill. The first was to delay the introduction of the bill. Actually, the introduction of the bill was delayed, but then once it was introduced it remained languishing on the Table and did not receive its first reading debate for months after it was initially introduced. That goes to show the New Zealand public just what a low priority the sorting out of the regulation of legal highs has been to this Government. Because the Government wasted time and dithered, it insisted that the Health Committee had a shortened period of time to consider this bill.

Then when we got the numerous submissions on animal testing, the National members voted not to hear those submissions on animal testing. That was not a matter of scope, which is what Paul Hutchison is going to try to tell the Committee. That was not a matter of scope; that was a decision for the National members. The Labour, Green, and New Zealand First Party members voted in favour of hearing those submissions. The National members voted against it and blocked it. We could not hear all sides of the debate, and that limited our ability to consider this issue properly. The second thing that the National members did in order to block this was to limit that debate. The first thing they did was not introduce the bill in time. The second thing they did was stop us from hearing those submissions.

I was really pleased, actually, when it became clear that National would not support any changes on animal testing, that the Labour Party members at the committee managed to actually get National members to reach a compromised position. It is not the position that we would like to have. It is not the position that we support; we support the Green Party amendment that would rule out animal testing. But in order to get National to move at all, we worked with National members at the select committee. The clause that now sits in the bill that says animal testing can be used only in the event that no other suitable forms of testing are available is a long way—

Dr PAUL HUTCHISON (National—Hunua): Thank you for the opportunity to speak on Part 1 of this Psychoactive Substances Bill. I think that all members of all parties agree on the main purpose of this bill, which is, indeed, to regulate the availability of psychoactive substances in order to protect the health of, and minimise harm to, those who use them. That is the main point about this bill, and it is a great pity to hear the porkies that I do hear from none other than Iain Lees-Galloway, the drugs spokesperson for the Labour side, when it comes to other issues.

It was, indeed, the Health Committee that listened to the submitters and added the amendments in order to protect the health of the public and to minimise harm. They were not there in the original bill. After all, there are tens of thousands of young people and not-so-young people who use these substances. For the young people, their brains are growing and they are highly sensitive to these substances. The requirement of this bill for manufacturers and importers is, indeed, now to demonstrate minimal risk. This is novel and it is world leading, but it requires the same rigour in testing as any other medicine to demonstrate minimal risk. I think it does, indeed, behove the Labour Party, a mainstream party, to recognise that that rigour of testing is required.

No doubt the controversy and mischief of this bill does revolve around clause 11A, which refers to the duty of the expert advisory committee relating to the use of animals when evaluating these substances. In essence, no one wants to have animal testing if it can be avoided, and the select committee did go to extensive lengths to arrive at an amendment that would not rely on animal testing if suitable alternatives exist. I think the members of the select committee worked hard at this. They worked consensually on this and they all voted for that amendment—they all voted for that amendment.

The expert advisory committee recognised that in order to demonstrate that substances are of minimal risk, in order to protect health and minimise harm, it is likely that some animal testing is necessary, although the amendment is worded so that it would be minimised and not done if at all possible. The expert advisory committee’s advice is backed up by best-practice mainstream scientific evidence from around the world. It is extraordinary that the Greens choose to follow best-practice scientific evidence when it suits them, as in climate change, but that when it comes to protecting the health of human beings, and particularly young adults and sometimes children, they say: “Oh, no, in Europe there’s no animal testing for cosmetics.”. But cosmetics clearly are not ingested; these substances are ingested. So we do have a difficulty in the credibility of the Greens. The argument is contrary to the aims of the bill, which are to protect the health of, and minimise harm to, the user, let alone the mechanism with which the bill has its intent, and that is about completely demonstrating minimal risk.

Sadly, the Labour Party’s stand and vote on animal testing goes to the very heart of why the Labour Party is not fit to govern and why the Labour Party is in such a shambles at present. The Labour caucus has literally rolled the health team and its health spokesperson, the Hon Annette King. It has literally made Iain Lees-Galloway feel extremely uncomfortable—or else he is not showing it in the House—as well as Louisa Wall. When it comes to the Labour leader, Mr Shearer, he should have supported his health team—we are talking about clause 11A. He should have supported science, because he is Labour’s science spokesperson. So what has happened? Almost certainly, the Mallard faction of the caucus has taken over, and I do not know what has happened to Mr Mallard recently. I do not think he has suddenly become soft and cuddly. They have either rolled David Shearer, or David Shearer is basically being utterly irresponsible and caving in to fringe science. David Shearer, as the Opposition spokesperson on science and the leader of the Labour Party, is clearly not demonstrating the responsibility he should for a mainstream party. I am very sad that the Hon Annette King, who voted with her health team to support this amendment, is now also caving in after the pressure of their dysfunctional caucus.

I think that it is excellent that the National Government has gone to such lengths to bring out a scientifically based, pertinent, and appropriate amendment dealing with this controversial area.

Hon ANNETTE KING (Labour—Rongotai): I was looking forward to this debate because I had thought that, apart from the Psychoactive Substances Bill being a very interesting and different bill for us to have handled, and to handle in such a short time, in the Health Committee, there has been across this bill very good cooperation. But Dr Hutchison wishes to take it to a lower level, so if that is what he wishes to do, then let us have a look at how long we waited for a bill that we are now told is so important. Perhaps I would like to just tell Dr Hutchison that it was in 2007 that the Government invited the Law Commission to review the Misuse of Drugs—

Hon Dr Nick Smith: What were you doing for 7 years?

Hon ANNETTE KING: For the benefit of the Minister who is chirping over there, I say that in 2007, a year before the election, we asked the Law Commission to undertake a review of the Misuse of Drugs Act 1975 and respond to the concerns about the new psychoactive substances.

Hon Dr Nick Smith: Seven years of doing nothing.

Hon ANNETTE KING: So the Law Commission put out its first-principles review with a mandate to make proposals for a new legislative regime, Dr Smith, in February 2010. The National Government has had this since 2010, so when it finally responded to it, it was 2011.

Hon Dr Nick Smith: Nine years, did nothing.

Hon ANNETTE KING: There were not substances like this 9 years ago, Dr Smith, so get up and get with the programme. In 2007 the Law Commission did a proper review, in 2010 it reported, in 2011 the National Government responded, in 2013 we finally got a piece of legislation, and now we are told that it is really urgent. Well, it has been urgent for 2 or 3 years, Dr Smith, and we know it is urgent from the impact it has had on mental health and the impact it has had on violence in society. It was something that we needed.

So I am disappointed in Dr Hutchison’s comments, because we did work hard on this bill in a very short time frame, and quite significant changes to improve the bill have been made. I suppose the one real sticking point was around animal testing, and I will get to that in a moment. But I think we struck it right when we looked at what the purpose of this bill is all about, and that is “to protect the health of, and minimise harm to, individuals who use psychoactive substances.” That principle and that purpose should run right through the decisions that we make within this bill. There are some conflicts, I have to say, and we will no doubt get on to those a little later, but I think that we got the purpose absolutely right.

Then we need to look at what the bill is actually going to do. We know that it is going to ensure that before people use them, psychoactive substances will have gone through a process—a process to ensure, as much as possible, that they are of low risk. The evidence goes on showing they are low risk before somebody consumes them and uses them, which is a quite different approach from what we have now, where they use them, we have problems, and then we try to fix the problem up.

I think one of the important clauses in this part of this bill, however, is around requiring the Ministry of Health to conduct a review of the policy and the operation, and we have changed it to be no later than 5 years. It was originally to be after 5 years, but we changed it to no later than 5 years after the commencement of this Act. I think that is a very sensible thing for us to be doing, because we are not altogether sure that everything in this bill is right and that it is going to work. It is really, at this stage, suck and see, because it is so new in terms of legislation. I totally support the idea that we would review, we would look at how it worked, and we would see what changes we would make to make it the best possible legislation that we could.

Another area in this bill that I think is important to mention in this part is also around the setting up of the Psychoactive Substances Regulatory Authority—and that regulatory authority is actually the Director-General of Health—and the Psychoactive Substances Expert Advisory Committee. This expert advisory committee can be made up of up to six members, and this committee is going to have the functions of evaluating, with regard to the results of pre-clinical and clinical trials, the psychoactive products to assess whether they should be approved for individual use, to advise the authority about whether a psychoactive product should or should not be approved, and to increase public awareness of the advisory committee’s work in relation to the psychoactive substances by releasing reports and so on.

I think those are two very good parts of this bill, which put the braces and belts around what we are trying to achieve. So we have got the authority and we also have the expert advisory committee.

I do want to move on now to the issue of animal testing. This probably was the most testing part of this bill. There were very strong views about animal testing. I think it was a shame that the submissions on this were not able to be heard. That is something that has already been raised by Iain Lees-Galloway, and I know that Kevin Hague felt very strongly about it. It was ruled by the chair that the submissions on animal testing were not within the scope of the bill. In fact, we did find out later from the Clerk of the House that they could have been in the scope of the bill. [Interruption] Had the chair—yes—decided so to rule, they could have been within the scope of the bill.

What I believe happened was not necessarily the chairman’s choice. I would say the chairman had Hobson’s choice. I believe the directive not to hear the submission on animal testing was not one made by him, but one where he was given a directive that there would not be submissions heard on this, and that came from the top. It came from, not the new Associate Minister of Health—I believe the new Minister came in after that and tried to find a resolution around the animal testing—but from the former Associate Minister and from Cabinet. They did not want to hear submissions on animal testing. I do not know why. It would not have mattered. In fact, it would have enhanced our decision making, and we would not have had this wrangling about animal testing. It would have given us the opportunity to have heard also those who supported animal testing and the scientific reasons that they put forward.

What we did was we looked at how we could change the bill to put as much protection around animals as possible, and it is true that at the select committee all members said that this was a good compromise. We now have Supplementary Order Paper 260 from the Greens that bans it, and the Labour Party will vote with the Greens on the Supplementary Order Paper. Then, if it is not passed, we will support the amendment that the Associate Minister finally put forward at the last moment.

We believe that there could have been a much, much better process around this. It is not like the chairman to have run a process like this because, actually, he is a pretty good chair, I have to say—one of the better ones in the National Government. But in this area he did make a mistake. He made a mistake, or he was told that he should not hear those submissions.

So for this part, there are some very good things in it. We have made some significant changes to this part of the bill to improve it, and I think, with the exception of the animal testing, this part is in better shape than it was when it came into the House.

Hon TODD McCLAY (Associate Minister of Health): I thought I would take a brief call at this stage, really only to recognise the work of the Health Committee. Before I became the Minister with responsibility for this bill, the Psychoactive Substances Bill, I had the opportunity, the honour, to sit through one small part of a committee meeting when this issue was being discussed. I can tell you that once I became a Minister, I was not hopeful that we would reach resolution earlier because, you see, it was evident to me, and it was obvious at all stages in the committee, that there was a lot of passion, a lot of determination, and a lot of thought being put into different positions. But what also was apparent was that all members were looking to do what is best for New Zealanders.

So I want to recognise that all parties in the House are putting aside some of the issues that are more challenging for us, and we will be able to talk about those a little bit more later in the stage. Certainly, we recognise that when it comes to the safety of New Zealanders, and when it comes to having good rules around these products, we all know from our interactions with our constituents, with parents, and through reading newspapers and reports from doctors and nurses, that these products are causing significant harm all over this country, and we have been able to come together and, I think, do what is right.

Indeed, the legislation’s passing in this House will be a world first. I do know there are many countries of the world that have been grappling with the challenges of psychoactive substances and so-called legal highs for as long as, if not longer than, we have been grappling with them in New Zealand. Some have tried to ban them outright, which we looked at doing a year or two ago. We know that those chemists sitting in laboratories around the world move faster than we are able to make the changes to take these harmful products out of circulation. Much of the world now is looking at us in New Zealand and in this House for leadership, and I would guarantee that all over the world—certainly it is the case in New Zealand—there are mums and dads hoping that we will do our job properly, and we will get this into law as quickly as we can so that no more New Zealanders are harmed by these products.

Again, I want to recognise the work that has been done. Indeed, the Minister who was last responsible for the portfolio, Peter Dunne, did a great amount of work and gave this priority. I come at the very late stages of this legislation to finish the job that was started by Mr Dunne, whom I have great respect for and who has made it easier for this House to come to this position.

I too want to recognise the chairman of the committee, who had a very difficult job because there was great passion, not only amongst members of Parliament but also amongst submitters, and we are all receiving emails at the moment. I am yet to have an email from anybody who I view as being credible that says we should do nothing at all, so what we are now debating is the finer points of how we make this fair and reasonable, and give certainty to New Zealanders and greater protection to young New Zealanders. So I would like to recognise Paul Hutchison as the chair and also thank him for this work.

I have a number of Supplementary Order Papers that we are bringing forward, and I do accept that they are later in the stage than the Committee might otherwise want. In part, that is because I am a Minister who has taken responsibility only a short time ago. The Hon Annette King mentioned that I tried to broker a position that was acceptable to the Committee around the testing regime. Indeed, I think I was in only my second day as a Minister at the time that I was faced with that decision. So I have had to rely upon the advice of officials, but I have also taken time over the last month to go around the country and talk to doctors and nurses, our police force, experts, and individuals about their concerns. Some of the changes that I am bringing in by way of the amendments in Supplementary Order Paper 268 are based upon my learnings over this last month, and are also based upon suggestions that have been brought to me from experts in the field about how we need to make sure that the rules that this Parliament is about to adopt are going to have the effect that we want.

Finally, the issue of animal testing is one that there is a lot of passion about. As a member of Parliament, and certainly as a Minister, I do not want any animal to have these products tested on it where that is not absolutely necessary. But as an Associate Minister of Health with responsibility, I must accept the scientific advice that has been brought to me, and it is that a degree of testing will be necessary to ensure that these products are safe and acceptable and will not harm people. But that is not enough for me, and I thank the committee for its work on agreeing to a compromise that says that where there is a test that gives the same certainty and does not require the use of animals, then that test must be used; the test that includes the use of animals cannot be used. To those who are saying that it is possible to bring these products to market without testing them on animals at all, I point out that the amendment put forward and accepted by the committee means that no tests on animals can be used. In that case, actually, I think we are very close to what many members of this Committee want.

The advice that I have received tells me that there will be some degree of testing needed, and I believe that I need to accept that advice rather than overrule it. We have an expert committee—not members of this Parliament—that is going to look at exactly what tests should be in place, what tests are acceptable, which ones are not, and which will give certainty. But the select committee’s decision—and the message that this Parliament will be sending should the select committee’s position that was adopted stand as part of the bill when it becomes an Act—says that where there is a test that does not require the use of animals, then it must be used; a test on animals cannot be used.

I hope that the advice that I have received is not correct. I hope that those who have come to the select committee and who have been emailing us to say that it is possible to bring these products to market and ensure their safety so that people will not be harmed without the use of a single test upon an animal are correct, because if they are, there will be no tests upon animals. But if they are not correct, as an Associate Minister of Health, it is my responsibility to ensure that New Zealanders of all ages will not be harmed by any product that makes it to the market. Therefore, I believe that the compromise that was reached in the select committee is one that is as far as we can go at this time.

What we are also doing in the Supplementary Order Paper is saying to the experts and the committees—these experts whom we need to put trust in—that they need to keep assessing these tests and their validity and acceptability on a frequent basis, and at least annually. There is another Supplementary Order Paper from a member of the House who I think has brought something to this legislation that says that a report from that committee must be brought back to the Minister at least once a year, so that the Minister can be assured of the work that has been done, and so that the Minister can be assured that the committee is taking its responsibilities seriously and that where greater changes are needed, the Minister can consider that with his colleagues and the rest of the House.

I will leave it there. We will have a chance to talk about this at greater length as we go on. To finish where I started, I thank all members of the Committee of the whole House who will put aside some of the feelings they have when it comes to the final vote to do what is right for New Zealanders. They will make sure that New Zealanders have certainty, that mums and dads do not need to worry as much, and that every New Zealander—particularly every younger New Zealander—is protected from the considerable harm that so many of these products are causing.

KEVIN HAGUE (Green): This is a good point for me to pick up from, after the contribution from the Associate Minister of Health, Todd McClay, which I welcome and thank him for. Indeed, I thank him in general for what he has added to this bill, the Psychoactive Substances Bill, because it is a better bill than the bill that the Hon Peter Dunne introduced to this House.

Indeed, what the Minister says is quite right. I am sure that no member of this Committee is interested in passing legislation that increases the risk to New Zealanders—that sees unsafe products on the shelves. This issue of animal testing, I think, highlights an error of logic on the part of the Government, and I am going to come to that shortly.

As Iain Lees-Galloway has said, the amendment made by the select committee to the purpose statement of the bill is a very good one. We now clearly set out with the objective of protecting the health of, and minimising harm to, individuals who use psychoactive substances. That is a great step forward, and, indeed, that should be the prism by which we evaluate the rest of what is in the bill. Actually, through consideration of the rest of the bill, by means of that prism, some errors, in fact, emerge. Those are errors around the issues of animal testing, and they come up in Part 1 and Part 2 and around possession offences in Part 3.

I want to briefly touch on clause 9 also, which relates to the meaning of “psychoactive substance”. That meaning needs to be read against the offences for possession that are in Part 3. I am going to come to that later, when the Committee is discussing Part 3, but I want to highlight clause 9, because that definition of psychoactive substances is pivotal to determining whether or not a person actually is in possession of an unapproved psychoactive substance, and it goes to the heart of a fundamental problem with that possession offence as it is cast.

In this contribution I want to speak specifically about clauses 11 and 11A in relation to the expert advisory committee, and in particular about the provision in subclause 11A(2) and in clause 11A generally that is made for there to be no animal testing, provided that a suitable alternative exists. What I want to say to the Committee is that this is a clause that, although superficially attractive, in fact ensures that the meaning of our law will be determined by the courts and not by this House. I believe that that is not the certainty that Kiwi mums and dads and users of psychoactive substances actually need. It is not the certainty that the manufacturers, importers, and retailers of psychoactive substances need. What this Committee needs to do instead is actually be clear about what kind of testing is or is not permitted. Given that we are all concerned about safety, it seems to me that those who are opposed to animal testing are not saying we oppose animal testing and that therefore an increased range of substances not tested on animals should hit the shelves. What we are instead saying is that there should be a higher standard, a narrower range, of tests that are appropriate. That, in fact, imposes a higher standard on the manufacturers, importers, and retailers of such substances.

Dr Hutchison, chair of the Health Committee, has referred to the response from the interim expert advisory committee. I have to say that the select committee was taken rather by surprise on receiving the letter from this interim expert advisory committee. It was a letter addressed to a previous Associate Minister of Health, the Hon Peter Dunne, in response to a letter that he had sent to the committee seeking advice. It is important, when we consider what that group had to say, that we acknowledge that the group did not have in front of it the submissions that had been made by members of the public, by experts, and, indeed, by animal welfare organisations in relation to this. It did not have in front of it any of those submissions.

What had occurred was that the chair had ruled all issues related to animal testing out of scope. The National members of the select committee had refused a motion that I had moved and that had been supported by members from Labour and from New Zealand First to hear those submissions none the less. The National members and, in particular, the National chair of that select committee, Dr Paul Hutchison, ruled all of that evidence out of scope. It was not heard by the select committee, by the Government, by the Associate Minister, or by the interim expert advisory committee.

It is a bit rich for the chair of the select committee to then come to this Chamber and talk about the consideration that had been given to expert advice, because actually so much of the advice, so much of the evidence, that would have been available was ruled out of order and not even considered. I need to address the excuse that has been given by the chairman of the select committee, Dr Paul Hutchison. He says—and he said it at the second reading also—that the Clerk of the House actually gave advice that forced him to rule those submissions out of order. In fact, when the Clerk came to the select committee she was very specific that that was not the case. She said to us that any amendment to the Supplementary Order Paper that sought to amend the Animal Welfare Act would be out of scope for the bill, but that did not mean that any submission that had been made to the select committee was automatically out of scope.

I point out to this Committee of the whole House that, in fact, we now have in front of us an amendment made to the bill as introduced that very extensively deals with the issue of animal testing. Those amendments in clause 11A are not out of scope, and therefore submissions that could have led to those very same clauses or improved clauses would have been very useful indeed to the select committee. I draw members’ attention to the submission of the New Zealand Anti-Vivisection Society in particular, which is addressed in the Green Party’s minority view in the select committee report and which sets out all of the suitable alternatives to animal testing that could have been used. I have to say that in the Chamber this afternoon, today, we have already heard that the National Government members will be voting against Mojo Mathers’ Supplementary Order Paper 260, but we have yet to hear a single argument as to why that Supplementary Order Paper is not a useful addition to the bill. I think that is a major problem.

In my time remaining, I wish to deal with one extra problem with clause 11A, which relates to animal testing that occurs overseas. The reality is that this clause, which is now in the bill, will not result in no animals being tested; it will result in animal testing, and much of that will occur in other countries. Although the clause as drafted actually puts a requirement on the authority to ensure that such overseas animal testing complies with New Zealand’s Animal Welfare Act, in fact there is no realistic way in which the authority can ensure that that takes place.

Clause 11A is certainly a major advance on the bill as introduced, but it contains very major issues around monitoring and compliance, and it ensures that on the pivotal issue of whether or not animals are actually harmed in order to determine whether or not these recreational drugs hit our shelves—on that very pivotal issue—it ducks responsibility. What it will ensure is that it is the courts that actually make that decision. I believe that that is not the correct way for Parliament to go about this. There is no requirement for us to do that—no requirement at all. Thank you.

BRENDAN HORAN (Independent): I appreciate being given the opportunity to partake in this process of democracy. As anyone who has worked with affected youth would attest, this Psychoactive Substances Bill is probably one of the more noble bills to come through this Parliament. Speaking to Part 1 of the bill, Supplementary Order Paper 271 in my name, and also the honourable Mojo Mathers’ Supplementary Order Paper 260, which would delete clause 11A in this part—

Hon Trevor Mallard: Why does the member want to sacrifice puppies?

BRENDAN HORAN: —and turning first to the principles—I have heard that line before somewhere, and it is thrown across to the other side. I would have that member know that I own two dogs, and they love me unconditionally, as, I am sure—[Interruption]

Since the introduction of synthetic cannabinoids in 2002 there has been a steady increase in work-related incidents, near misses, and accidents requiring investigation or disciplinary action. It is rather ironic so much emphasis is placed on companies complying with occupational health and safety regulations to minimise risk in the workplace, only to allow our workers and children direct access via the corner dairy to a dangerous chemical mix of mind-altering substances. Synthetic designer drugs have been identified as causing a multitude of medical and psychiatric symptoms, including hallucinations, fearfulness, paranoia, insomnia, depression, bizarre behaviour, anxiety, psychosis, schizophrenia, aggression, hostility, and, in some of the more severe cases, kidney failure and even stroke.

Last Tuesday I arrived in Wellington and I drove straight away to Foxton, at the behest of local people who invited me. One of those people was a mother whose adult son is currently in prison for crimes committed whilst under the influence of synthetic and psychoactive substances. I am pleased to say that, thanks to the visit that I had to two local dairies, those dairy owners in Foxton have committed to cease selling these synthetic substances, so the entire Horowhenua is now free from dairies selling psychoactive substances. I am very proud of that.

This bill requires commitment by the Minister. It is just the beginning. I must say to the Minister that that includes also getting other Ministers on board. Twelve months ago, for instance, the Hon Simon Bridges said that the Government would not be supporting random drug-testing on our roads, so where is the commitment? I must say it is great that finally the cowboy era, this wild west time, of psychoactive substances, synthetic cannabinoids, being openly sold with no controls is coming to an end. We are putting in place a regulatory framework, with broad support across Parliament. Before a psychoactive substance can be sold, it must be tested and be shown to be safe. I congratulate the Minister in charge of the bill, the Hon Todd McClay, on being willing to make changes to make this a better law.

My amendment on Supplementary Order Paper 271 makes a change to clause 11, which establishes the Psychoactive Substances Expert Advisory Committee and sets the parameters for the committee. The amendment would add a new clause 11(10) requiring a comprehensive annual report. That is a change that I hope the Committee can support. The change will have an important and ongoing impact. Many advisory committees and other similar entities are required, in their enabling legislation, to produce an annual report. This is good practice. It results in open and transparent government. Annual reports of such bodies provide a comprehensive report of the operations over each year. Interested people and various groups seize on the information and use it, quite properly. The media can, and do, provide coverage of these reports. It is all about letting in the disinfectant of sunshine on the work of this new committee. It is about bringing awareness to families and communities that dangerous psychoactive substances cannot and will not be tolerated in New Zealand. If this Supplementary Order Paper is adopted, New Zealanders will be able to become informed about the work of this new committee as it produces its report in each year of operation. I ask the Committee for its support.

The honourable Mojo Mathers’ Supplementary Order Paper 260 proposes to delete new clause 11A. I initially thought that I would be supporting that Supplementary Order Paper, and, in good faith, I indicated that I would. However, the Health Committee then reported with the first version of the new clause 11A, and that has since been updated by the Minister’s Supplementary Order Papers, which are being considered now.

I believe it is vital that we address all the provisions before us—that we keep our eye on the most important aspect, which is that we must get dangerous, untested, unproven drugs off the streets and out of our communities. Safer communities mean safe families and safe children. This is war. What happens in America—

Hon Trevor Mallard: The member’s making it easier, not harder.

BRENDAN HORAN: —mirrors more or less what happens in New Zealand in the fight against psychoactive substances. Although that member may go on about murdering puppies and carrying on and distracting us from this bill, the truth is that our children are being hurt. Our children are being harmed.

During the weekends we have children who are going over and having what are called “pillowcase parties”—that member probably does not know what a “pillowcase party” is. These young people stuff all the designer drugs they can into pillowcases and they go and make a dangerous cocktail mix at somebody’s house and they get high. That is happening. In the States at the moment, psychoactive substances are being marketed to the young as lollies. So this is war. When it comes to animal testing, I am actually confident that New Zealand has a robust—

Hon Trevor Mallard: Why is the member on the side of the drug dealer?

BRENDAN HORAN: —system under the Animal Welfare Act. That member has been in this Parliament for over 30 years and I thought he would have made sure that animals are safe in New Zealand.

I would say that annual reporting by the National Animal Ethics Advisory Committee is also in here. [Interruption] Again, I resent being called names. As I said before, I love animals and, generally, they love me. I hope also that the name-calling of the Minister will disappear. I benefit from the unconditional love of the two dogs that I own, but, on balance, I actually prefer the Minister’s approach to changes made to the bill. We need to stop cruelty to people. We have to get the dangerous drugs out of our communities. We need to keep people safe. We need to get these drugs off our roads, off our streets.

The process for an annual report will over time inform us and may well bring about change in the activities of the expert committee, but I would again reiterate that this is actually a beginning; it is not an end. It needs the commitment of all Ministers. I support this part and this bill.

LOUISA WALL (Labour—Manurewa): It is my pleasure, as a member of the Health Committee, to speak on Part 1 of the Psychoactive Substances Bill. To begin, I want to communicate my interpretation of the process that happened within our select committee. I think that really there has to be an acknowledgment that the chair did seek some advice. He received some advice and the select committee had a vote. It is fair to say that all of us from the Opposition wanted to hear from submitters who were particularly interested in the relevance to animals of this piece of legislation. I know about the integrity that the chair has, and I too want to acknowledge the working relationship we have had on this bill and agree that that process took place, and that it was in fact the National members of the committee who then decided that we would not hear submissions.

I think that has been a flaw in this process, but, other than that, what we have been through as a committee has been robust. We have allowed all sectors of society that have a particular interest in this bill to have their say. That is one aspect of this bill that, I think, if we reflect upon it, and if we could do it again, we probably would have allowed them the opportunity to formally be part of the select committee process.

What we have done as a group of parliamentarians is acknowledge what New Zealanders have known for a long time—that the unregulated use of these psychoactive substances has particularly influenced negatively on many sectors of our community, particularly the young members of our community. So I am really keen, like many of us, for this bill to be passed.

I want to take the opportunity to commend the Associate Minister of Health for his new role. I have seen him actively engaging particularly with his dairy owners, with the police, and with health officials. I think the critical challenge, once this piece of legislation goes through, is to make sure that the police, the ministry, and everybody involved in the administration of this piece of legislation are ready to hit the streets running. Obviously, like many of us, I have been very active in my community, because for me the purpose of this piece of legislation is to regulate and to go through a process of deeming some substances safe. What I would like to state for the record is that we have basically treated these low-risk psychoactive substances as alcohol or tobacco. We have said as a Parliament that these substances are akin to alcohol and tobacco. We did not want to differentiate, particularly for young people—to encourage them that this was a better substance for them to take—but I think that the intention of all of us is to make sure that we protect the community and that we provide the tools for our communities so that they can decide whether or not, and where, they want these substances to be sold.

I want to focus very much on clause 11, which establishes the Psychoactive Substances Expert Advisory Committee, and to note the expertise around that committee. We will have a pharmacologist, we will have a toxicologist, and we will have somebody with neuroscience expertise, medical expertise, and anything that we deem, or they deem, to be relevant—maybe addiction expertise is something that we think is relevant.

What I really wanted to highlight in the formation of this expert advisory committee is one of their mandates, when we look at the risks to public health. For me it is the ongoing, I guess, assessment about some of these products that are going to go through the testing regime. They will be deemed safe—but, actually, are they? That is one aspect of this piece of legislation that I would like to highlight, because we did specifically talk about the requirement within emergency departments for medical experts to categorise an incident, but also to look at whether or not we could be very specific about the actual psychoactive substance that had been consumed. When this bill goes through, I think all of us know that it is not the end of psychoactive substances; it is really the beginning. What we are all concerned about is making sure that this piece of legislation is fit for purpose, and that purpose is to protect the community and particularly the young people of New Zealand.

I am also incredibly interested in the relevance and the appeal of certain products to vulnerable populations. I know that historically, for example, Māori males have been overrepresented in the use of “PZP”, I think, or benzylpiperazine (BZP)—somebody can correct me if I have got the terminology wrong—but, obviously, if these substances are being used by a specific group of people in our society, I hope that there will be an ability to identify who these people are and ensure that they get the help where it is needed.

One of the other things I wanted to clarify is in clause 9, “Meaning of psychoactive substance”, and I am going to be very interested in Kevin Hague’s use of that definition. Essentially what we have said is that a psychoactive substance is a substance that induces a psychoactive effect. We said it was not a food and it was not a herbal product. I guess the relevance of that definition will be interesting when we do look at clause 63. The committee initially chose collectively to delete it, and then, again, the National members of the Health Committee thought that it should be reintroduced, in spite of the overwhelming evidence, particularly from the police, that said this was going to be incredibly difficult to administer because of the need to test the particular product and the long time frame between testing it and then laying an offence against those over 18. My colleague Iain Lees-Galloway will speak to that specifically because it is something that he has proposed a Supplementary Order Paper to address.

I would like to also contribute to the whole discussion around animal testing. I think as a select committee we have to acknowledge that there was nothing said about animal testing in the beginning and that there has been really good, collaborative movement towards creating a piece of legislation that will ensure that if other tests exist, we will not, in fact, test any of these products on animals. But I think the fundamental question is really about the dignity and ability for us to not put any animals at harm in testing these products. If they are, in fact, low risk, we do have to question why we would have to test products on animals in the first place, and I think my colleague Kevin Hague has been very clear about outlining what those alternatives are.

So we in the Labour Party have moved. We have moved because, as I highlighted before, there was a flaw in the select committee process. If we had been able to listen to those experts, those people who are engaged particularly in those fields, who could have let us know what alternatives there were, maybe the consensus around our select committee table would have been that we would agree with Mojo Mathers and it would have been in the amended bill that is before us today. My contribution to that part of the discussion is really to highlight that it was a flawed process that could have been rectified at the beginning.

My concluding comment is to thank all the dairy owners around the country who have not been selling these products. They have not been selling these products because they are members of our community and they, in fact, took it upon themselves to protect, particularly, young people. Some of them could have been making thousands of dollars, and they chose not to do that. So I would like to congratulate them on being the leaders in our community, and on having a sense of social responsibility within the context of this Parliament not providing the appropriate tools to protect the community. I thank the people right around the country who have made the effort. That effort now will complement what we are doing in the Committee today. I look forward to the swift passage of this bill and, again, I thank the Minister for his leadership. Kia ora.

SHANE ARDERN (National—Taranaki - King Country): It is a pleasure to rise to speak on the Psychoactive Substances Bill, particularly after the previous speaker, Louisa Wall, who I know is genuine in her desire to see this drug brought under control, although I would suggest to her that sometimes those who are in Opposition tend to rewrite history in a way that may not be exactly as I myself remember it in the Health Committee. One of the things that I think the member might be careful to not allow herself to be drawn into in Opposition is trying to manage the process in the select committee to delay the passage of the bill, which is entirely what was intended by the proposals brought forward when the chairman tried to rule out—

Hon Members: That’s not true.

SHANE ARDERN: I have listened to the puppy-dog campaign from the other side of the Chamber for the last three debates on this, and I can see straight through it, and you can see by their reaction that I am absolutely right in what I am saying. The only reason that they were trying to introduce these new submissions, which were clearly outside of what was intended in this process, was to delay the process through the House and delay the passage of this bill.

Hon Trevor Mallard: What a lie. Tell the truth.

SHANE ARDERN: Then to listen to them—the Hon Trevor Mallard talking about his newly found concern for puppy-dogs. My goodness! We have stooped to a new political low in this House when that starts to happen. The reality is—

Hon Trevor Mallard: I’ve bred dogs for nearly 40 years.

SHANE ARDERN: Read the bill, Trevor—read the bill. What it says is that there will be an expert panel that will decide what testing is required and not required—

Hon Trevor Mallard: I didn’t need anyone to read it to me, unlike the member.

SHANE ARDERN: If you have a look at that for a moment, Mr Mallard, you will find that one of that expert panel—conveniently left out by the previous speaker, who highlighted all of the expertise that will be brought to that panel in regard to the medical background, but she did not mention the expertise that is going to be brought to that expert panel in regard to animal welfare, and that the panel will decide whether or not there is a need for animal testing. What I am understanding the suggestion to be from the other side of the Chamber is that if the drugs cannot be proven to be of minimum harm, then they will rule out animal testing. They will rule that out by supporting a Supplementary Order Paper from the Green Party. To me, that is beyond comprehension.

Regarding the reference to puppy-dogs, I understand that most of this testing is done on rats and mice and other animals like guinea pigs. But, of course, puppy-dogs are going to stir the emotions of everyone to achieve the goal that the Opposition wants to achieve, which is to slow this process down—to slow the process down. What the member needs to go and have a look at is what the expert panel’s job is and what it intends to do in regard to how it decides what drugs may or may not be determined as being of minimum risk, and how it is going to go about that. I would suggest to the members who have raised this white herring that they go and have a look at that. Go and have a read of that. Look at the science and have a look at how that process will take place.

Further, the suggestion that the chairman somehow or other controlled or manipulated the process so that some expert submitters could not be heard is about as far from the mark as it is possible to be. To suggest that the honourable Paul Hutchison would do such a thing is beyond comprehension, and I think most people would accept what I am putting forward. That is not what happened. What was deliberately being set up was a delay of the process by allowing a range of submitters that had nothing to do with the core of this bill, and that is exactly what the members were trying to achieve. I say to the new members that this is not a new process; this is a common theme amongst Opposition members of Parliament.

Louisa Wall: How many submissions did we have that were ruled out of order?

SHANE ARDERN: Well, how many were there?

Louisa Wall: Over 200 from—

SHANE ARDERN: Right. What does that suggest to the member? What would that suggest to the member? That over 200 people were concerned about animal welfare, not about young people’s welfare. That is what it would suggest to me. So go and have a look at what the expert panel would suggest, and then come back and have a look at some of the other things that this bill will do. It will stop the sale of these products in places where children can get access to it. It will minimise the harm that is inflicted on society.

STEFFAN BROWNING (Green): I was really concerned to hear some of that rhetoric from the other side of the Chamber, and it went through all three speakers. Whether it is a mouse, a guinea pig, or, as some call it, a puppy-dog, no animal needs to be tested under the testing for these psychoactive drugs. If the Health Committee had actually listened to those submitters—the ones whom we heard only because we needed to, because they were being let down totally by the chair of the committee—those members would not even be differentiating between the size of animals; they would be saying: “No animal testing.”

Earlier we heard from Dr Paul Hutchison talking about science and suggesting that the Green Party did not understand science or that it was particularly selective. He insinuated that we had it all wrong regarding the science around this testing. It is quite the contrary. Again, if he had listened, and maybe even if he had read the report from the committee that the Green Party set up to hear those submitters and he had then gone through the submissions—because, of course, he had access to them—he would have had no grounds to be saying that. It is science-based, and the science says that you do not need to animal test at all.

Shane Ardern: Well, then, it won’t happen, Steffan. If that’s the case, it won’t happen.

STEFFAN BROWNING: Well, I do not have total confidence in the Psychoactive Substances Expert Advisory Committee. We can have hope, but do not have any absolute confidence or proof. I was looking through the bill and thinking, where does it give me confidence that it will come out really certain in that? Maybe it is lost in Supplementary Order Paper 268. But I did feel very assured by Associate Minister of Health Todd McClay, who was very helpful in saying that, effectively, when a suitable alternative exists, there will not be animal testing. He was very, very adamant about that. That is heavily on record, and I appreciate that. In fact, I do not think there will be any excuse for the Psychoactive Substances Expert Advisory Committee to ever allow animal testing. If it did, it would be in direct contradiction of the science that is available.

On that basis, I would suggest that the parties or members who are prevaricating around Mojo Mathers’ Supplementary Order Paper 260 should reconsider. There is time—it has not come up. There is time to reconsider. I am really disappointed in the parties that may be sitting on the fence or those that are totally opposed, and I suggest that they quickly reconsider and do the honourable thing, because, as we have said, this bill is potentially a world first in terms of what it is doing around psychoactive substances, but it would be even better if that Supplementary Order Paper was given the nod.

I found it, I suppose, a privilege to hear the submissions from those people, who had put them together very, very professionally. They had put together very, very good evidence, but they had been disadvantaged. They had been left out of the democratic process. In fact, I think about the time that they had put in, and then they had the rug pulled out from under them because of what I would suggest is the National Government looking at the costs and thinking: “Have we got mates in there who are going to actually end up having to pay a little bit more”—in fact, a reasonable bit more—“to do testing that is not on animals?”. Instead, we can do the cheap one and effectively torture some animals to get the effective protection.

If a drug is to be allowed—and it will be allowed only if it passes certain tests—is cost really the issue here? I would suggest that it is not. I would suggest that it should not be about the cost; it should be about the ethics, and this bill can really get down into that. We are concerned about our young people. We do not want young people to be admitted to hospitals with psychotic episodes and to have their lives destroyed—of course we do not. So it is not an either/or here; it is about both. We can have an ethical result in terms of our young people, and we can have an ethical result in terms of animal welfare.

I will speak further on the bill, but I implore those parties and members who are at the moment prevaricating about, or opposing at the moment, that Supplementary Order Paper to reconsider, because this could be a wonderful day. Thank you.

Hon JOHN BANKS (Leader—ACT): The original sponsor of this Psychoactive Substances Bill, the Hon Peter Dunne, said that it was not the intention to have these fun drugs—these mind-changing chemicals, these Sunday afternoon recreational highs—tested on animals. If that is not the intention, then let us put it in the bill by way of accepting Mojo Mathers’ Supplementary Order Paper 260. I do not think there is anyone in this Parliament who really believes in torturing animals. I do not think there is anyone in this Parliament who really wants to put any animal, whether it is a mouse, a rabbit, or a beagle puppy, to any pain or suffering. I do not believe there is anyone in this Parliament who is like that. I would be terribly surprised and disappointed if there was. But if we want to call this world-class legislation, and if it was not the intention of the original sponsor of the bill—not my friend the Associate Minister of Health, Todd McClay, who is the Minister in the chair now, but the original sponsor of the bill—to test these mind-changing drugs on animals, let us put it in the bill and seal it up once and for all in the name of protecting those creatures that live with us in this world and cannot protect themselves.

It was not so long ago that the EU said it would put an end to a generational regime of testing cosmetics on rabbits. Let me just give you the story on that. The reason rabbits are put on to gurneys and tested by cosmetic laboratories across the world—which is now banned in Europe—is because, as you know, rabbits do not blink, so you can drip the chemicals into their eyes. The efficacy of cosmetics can be tested in terms of causes of harm to humans by dripping them with needles into the eyes of rabbits, which do not blink. The EU said that this is palpably wrong, it is a generation of maltreatment of these creatures, and it was going to stop it.

These animals that will be tested are growing puppies—beagle puppies are the animals of choice—mainly in countries like India and others in Asia, where there is no standard of animal ethics whatsoever. I can recite chapter and verse where these places are and what is done in the name of testing drugs on animals at cut prices and cheap rates. I say to the drug dealers and the drug manufacturers that if you want or need to test these drugs on animals, well, we say do not bother. Do not bother; it is not needed. If you cannot prove your fun drug of choice is safe without putting animals into abject misery, then you cannot sell your drug. You cannot sell your drug.

I say to the Committee today that I condemn the use of these mind-altering substances on a Sunday afternoon by those of the fun-loving fraternity who think that it might be good to get high. But if they want to use these, and if they are their drugs of choice, well, so they can, but they should not subject animals—whether it be mice, whether it be rats, whether it be rabbits, or whether it be puppies—to the testing of their safety. The reality is that the bill could well result in drugs being tested on animals in places like China and India where animal welfare is shamefully non-existent.

Even worse, these animals are man’s best friends. There is not one single member of this Parliament who will put up their hand right now and tell me that their much-loved puppy at home, dog at home, cat at home, or rabbit at home would be available for the testing of these chemicals—the fun chemicals for a Sunday afternoon. There would not be one member who would say “My dog, Fido, would be a candidate for these people who want to take these drugs and want to test that they are safe.” Is there one person who would volunteer their poodle pup, or, more important, their hapless little beagle pup, which happens to be one of the best creatures ever invented? There is no reason to put animals to extreme pain. If we want this to be world-class legislation, then this Parliament should take a step back and say that this afternoon we are going to put in place world-class legislation to test the safety of mind-altering chemicals for our young people, but we are going to make sure that there is no possibility at all that animals will be used to test these substances. And we would go up in lights around the world.

I care about young people, and I say from this Parliament that we should not have young people taking these substances. But I care about animals, their welfare, and their rights just as much. I want to put on record today that I like animals quite a lot better than I like a lot of people. I feel it is my responsibility while I am here in this Parliament to get up and speak on behalf of those creatures that we live with together on this earth and that cannot speak on their own behalf.

This afternoon this is not about animal testing for lifesaving cancer research. It is not about that. We have to tolerate that in some form, although we do not like it, and I have been fighting the torture of rhesus monkeys for the purposes of drug testing for years across the world. That is another story for another day. But we could have world-class legislation because the sponsoring Minister, the original Minister, the Hon Peter Dunne, said: “It’s not our intention and it won’t be necessary on many occasions”—

Shane Ardern: Most.

Hon JOHN BANKS: Most occasions, my friend and colleague for a long time says here—most occasions. Well, on the occasions when it is not “most”, why do we not say to the drug peddlers that no, this is not a substance we are going to have, because we want to be ethical, we want to be world leaders, we want to respect animals. But we want safety for our young kids with these mind-altering drugs and we can have that by accepting Mojo Mathers’ Supplementary Order Paper today.

Finally, I say this to my Green Party friends. Do what I am going to do. If this is defeated in this Parliament, represent your credentials, which are good on these issues. Represent your policies, your philosophies, and your concepts about animal protection and animal rights, which are time-honoured in this House, and say no to this bill in its entirety, and take a stand, because that is how I feel about this today. It is important that we in this Parliament clearly understand that we have a responsibility to protect animals at every turn, at every corner, on every day. We are sacrificing animals at the altar of recreational drug-use, albeit in a minority, albeit it is not our intention, albeit it will not be often. Often is too often when it comes to sacrificing a beagle puppy.

CLARE CURRAN (Labour—Dunedin South): Well, the world has gone mad the day that I actually agree with John Banks on one thing that he said, because, I tell you what, most of his logic is sheer claptrap. In that 10-minute speech, helping young people, which is the purpose of the Psychoactive Substances Bill, got a mention once—just once. There has been an enormous amount of claptrap come from the backbenchers over there this afternoon accusing this side of the Chamber of porkies. Well, there is an enormous porky that will be revealed in this Chamber, from the former Minister who was responsible for this bill. It has been members on this side of the Chamber who have done the hard work in their communities to make this issue into the issue that has been pushed before the House—to get this bill before the House as soon as possible. It has been members on this side of the Chamber who have done the heavy lifting in the Health Committee on hearing those submissions and coming up with a good piece of legislation.

It is a good piece of legislation except for just one piece of it and that is the piece around animal testing. The reason that that is not in the legislation is that the evidence could not be heard. Government members on that side of the Chamber refused to have it, so the evidence could not be brought before the select committee.

Let me just tell you that there was a very strange thing that occurred in the second reading of this bill during the speech by Peter Dunne, who was the original sponsor of this. He told a rather large porky and delivered that porky during his second reading speech when he called into question the reputation of a highly regarded health specialist in Dunedin. I wish to put the record straight on that. In his speech in the second reading, he talked about a red herring of the debate: the animal testing issue. He said that there was never any intention to embark on a programme of animal testing. He said: “Late last year an Official Information Act request was lodged with the Ministry of Health for a whole range of papers relating to this new regime. One of [those new] papers was a paper prepared by Dr Leo Schep of the National Poisons Centre in Dunedin.” Mr Dunne acknowledged that “Dr Schep has done a huge amount of work in this area, but is at one end of the spectrum in terms of the debate. He is a purist. … He is an exceptional toxicologist,”—which he certainly is. Dr Schep “produced a paper that was headed ‘Report to the New Zealand Government on Animal Testing’. It was his initiative.”

That report was commissioned by the Ministry of Health, from Mark Heffernan, on 9 December 2011, who requested that Dr Schep write a report detailing the necessary toxicology tests for this bill. The report was titled Regulations Governing the Control of Novel Psychoactive Drugs—defining parameters associated with toxicity. Here is that report. It is a peer-reviewed report. It is not an “own initiative” report; it was requested by the Ministry of Health, presumably one of a number of reports that contributed to the preparation of that bill. In that report, it set out the law that requires pharmaceutical companies to prove that drugs are both safe and effective before they can be registered for human use. It set out the process that you go through in those current tests, which include some animal testing. It did not advocate for it. It set out the process as was requested in this report commissioned by the Ministry of Health. Unfortunately, Mr Dunne has defiled the name of Dr Schep, who is one of our prominent toxicologists in this country and has done a huge amount of work on the effect of synthetic cannabinoids.

Dr Schep is currently running a study in three hospital emergency departments recruiting patients who are seeking medical attention following recreational use of these drugs. He writes monthly reports to the Government and to Government agencies, including the police and the New Zealand Defence Force, on calls to the National Poisons Centre. I would like to show you a copy of one of those reports. This is a copy of the report from October 2010 to May 2013, which sets out the number of calls to the National Poisons Centre for synthetic cannabinoids. What it shows is that the number of calls has shot up. It has shot up absolutely. This report is by one of the men who has been doing the really important work behind the scenes, and I want to read to you some of what this report contains, because what Mr Dunne said in the House during his second reading speech last week was a slur on this prominent specialist and it really does need to be corrected. He said that increasing rates of calls to the National Poisons Centre have continued into May with a 50 percent increase from April. Of those calls, 71 percent were associated with poison exposure, 21 percent with users suffering withdrawal effects, and 8 percent were poison inquiries. Such a substantial increase in calls may be explained in part by the increased media attention on synthetic cannabinoids, some of which were centred on interviews from the National Poisons Centre. Nevertheless, it suggests increased use of these products has resulted in increased incidence of adverse effects requiring medical attention. Discussions with emergency departments reinforce this observation.

Then he went on to detail what some of those adverse effects are and how serious they are becoming. He said that the National Poisons Centre is concerned by the increased incidence of adverse effects following exposure to these analogues. Nevertheless, it welcomes the Government’s initiative to bring forward the new legislation to July rather than August. I would like to ask the Minister in the chair, Associate Minister of Health McClay, during the course of this debate just what increased resources are going to be put into the health system, into our mental health system, into our emergency departments, for the people who are responding to these adverse health effects. What extra resources are being put in to counter the effects once this legislation takes place and the effects that are occurring now in our health system?

In my second reading speech in this House I outlined the concern that is coming from the health community on those increased effects that are occurring in our community at this very moment. I would like to know just what extra resources are going to be committed, or are we turning a blind eye to this? Because along with legislation comes the responsibility for the impact of the issue in the community. We have got it right here. We have the National Poisons Centre showing just how many extra calls are coming in about this issue. We are having detailed information now coming to light about the impact on mental health, on physical health, on crime, and on the effect on our young people in the community. The police are telling us that when these substances go off the shelves in our dairies they might go underground. What will happen to the people who are addicted to it and do not have a ready supply any more? What extra resources are going to be put in to counter the impact of this legislation?

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): I will take the opportunity to speak on this bill, the Psychoactive Substances Bill, for one reason, and that is to protect kids in this country. It is not the adolescents but it is the unborn children—often of young girls who will take these drugs, and who will be encouraged to take these drugs. We have absolutely no idea what will be the impacts on that unborn child. To sit in this Chamber I had to restrain myself from leaping up and attacking the Hon John Banks, who was going on about puppy dogs, and mentioned kids once or twice, I think.

Iain Lees-Galloway: Once.

Hon DAMIEN O’CONNOR: Once—once he mentioned kids. Look, I am here for kids first. I do not like to see any animals harmed either, but I do believe that there are some priorities, and the kids come first, in my view.

I guess if you were to take an ACT philosophy to this you would say: “Well, the market will sort it out. In fact we should not have regulation.” Is that not what the ACT Party stands for? Let the market sort it out. I have to say, to be fair, there is a little bit of that happening around the place where communities are marching on places where these drugs are being sold, and good on them. If you buy your goods at the local dairy and the dairy is continuing to sell them, do not go there—do not go there. There are, I accept—not because of Mr Banks—some accepted wisdoms around the market. If those shopkeepers hear the message very clearly that people are not going to buy their milk, bread, biscuits, or their ice creams from your store because you are selling those drugs, maybe they will get the message. But for the ones who do not get the message, there must be legislation.

For Mr Banks to say “Well, if it is not perfect according to me, do not vote for it.”, how bizarre! How outrageous, and what a dereliction of duty as a parliamentarian to protect the young kids in this country. That is what we are here for. It is not perfect. In fact, very few pieces of legislation are perfect. But politics is the art of the possible, and it is about numbers as well, and Mr Banks likes to play the numbers at times. Funnily enough, he is supporting the Skycity legislation. Do you know what that is going to do? That is going to increase the number of pokie machines, and science says it will increase the harm to kids in this country, and he is going to vote for it. There is a word. It is called hypocrisy. It is a word—

The CHAIRPERSON (Eric Roy): Order! Order! I am going to red card the member—well, a yellow card warning. The member has strayed into two areas. He is getting off the bill that we are on, and using those words is going to bring disorder. I do not care how cleverly or obliquely the member is using them, it will bring disorder.

Hon DAMIEN O’CONNOR: Thank you, Mr Chairperson. I appreciate that. If we are going to be genuine in our care through legislation for New Zealanders, and for animals as well, then let us be consistent. But there is too much inconsistency here, and I have to say to the member who says “If I do not get my way over puppy dogs”—it is, in fact, over rats and mice if the truth be known—“then I am not going to do anything to protect the kids and the young people of New Zealand.”, what a ridiculous position to be in.

So I say that we do support the bill. We need to. Indeed, my colleague has been calling for this piece of legislation for some time. The Government has been delaying, sitting on its hands and thinking, probably, in its own naive way that the market might deal with this—the market might deal with this—and people will just stop selling them, because good, wise people should not buy them. The reality is that these are drugs—people buy them for God knows what reasons. They are highly addictive. I have had a friend whose brother is a general practitioner say: “Please support Peter Dunne’s initiative in this area.” Although it has been slow, it is progress. The most important thing we can do here is shut down the supply of these drugs as quickly as we can, and protect many, many young New Zealanders from firstly, taking them, and secondly, being addicted to them.

Hon ANNETTE KING (Labour—Rongotai): I would like to pick up on a number of points that have been made in this part of the debate on the Psychoactive Substances Bill. But the first part is to continue on where Louisa Wall left off, and also Clare Curran, and that is around the possible increase for health demands, particularly because of banning these substances for people who have become addicted to them, and the fact that they may well need to have increased health services.

I would draw members’ attention to the front of this bill, to the commentary, where the Labour members of the Health Committee put forward that we would identify this as an issue. In the report from the committee we said: “We acknowledge that with the banning of some substances currently available there could be increased demand on mental health and drug and alcohol services, which health providers will need to make provision for.” Obviously, we will be ensuring at a future date that we ask questions about what provision is made because it was acknowledged at the committee that this could well be the case. Therefore, if there is increased demand you cannot ask overstretched services to provide within the resources they have got. So we have identified it as an issue, and we would be looking to ensure that, in fact, there were some resources to follow what could be increased demand for mental health and alcohol and drug services.

I was very disappointed with Shane Ardern’s contribution. He was full of bucolic noises, I thought. He was one of those members who did not see any evil, did not hear any evil, and did not speak any evil. In fact, at the select committee he did none of those things. He did not see, he did not hear, and he did not speak. So to come into the Chamber now and try to tell this Committee that it was a delaying tactic by the members of the committee who wanted to hear submissions is an outrage. He said: “Well, what do you think they want to hear them for?”. Let me get the words he said. “What does it mean that there were 200 submissions?”, he yelled out. What does it mean? Well, let me tell the member what it means. Two hundred people wanted to put a submission in. They are called the public. Good, the Minister in the chair, Maurice Williamson, always acknowledges that there is a public out there. But, unfortunately, the rural member for Taranaki, or wherever he comes from, does not recognise that there are more than cows out there.

You see, the public wanted to be heard on this part of the bill. To say that the fact that we might have wanted to hear submissions was a delaying tactic is a slap in the face to the public. Is not the select committee process about allowing the public to have a say—to have their voices heard? Is that not what the democratic process is about? So for the hapless member for Taranaki to say: “Well, what does it mean when 200 people submit?”, I say to him to listen to the public now and then, because they sometimes get it right. It is our duty and obligation to hear the public at a select committee. We have one House in our Parliament. We do not have an Upper Chamber. We use the select committee to be able to decide what changes we are going to make. One of the ways we make changes is to listen to submissions.

Can I just say also to Brendan Horan, who has brought forward an amendment in Supplementary Order Paper 271, good on him for bringing forward an amendment. The amendment that he brought forward is to say that the Psychoactive Substances Expert Advisory Committee must provide the Minister with a written annual report of its operations. Well, I went and spoke to the Minister, and I gather he is inclined to support this amendment, and, obviously, we are interested in it. We like transparency and openness about what is happening within advisory committees. What I would ask the member Brendan Horan, if he takes a call, is why he would have the advisory committee report to the Minister, and why he would not have it report to the authority. It is the authority that appoints the members of the advisory committee after consultation with the Minister, and it is the Director-General of Health who can report every year, in an annual report to the select committee, on what is happening to any advisory committee. So I am wondering why, if the authority is the Director-General of Health, the member would not have considered requiring the reporting to be directly to the authority, which is established under this bill. So good on him for coming up with an amendment, and I suspect that he will probably get his first win in this Chamber—[Bell rung] Mr Chairman—his first win in this Chamber—

The CHAIRPERSON (Eric Roy): I am not sure I am going to grant the member an extension. You have finished? Right. I think it is Iain Lees-Galloway’s turn.

IAIN LEES-GALLOWAY (Labour—Palmerston North): I think it is too. Thank you very much. I feel the need to respond to a couple of the speakers on the other side of the Chamber. The first is the Hon John Banks. Let us be absolutely clear about what the Hon John Banks is advocating. If he does not get his way—if the Green Party’s amendment, Supplementary Order Paper 260, which we on this side of the Chamber support, and which John Banks supports, is not passed—he wants the status quo to continue. He wants unregulated, untested, unknown drugs available in your corner dairy. That is what John Banks wants if he does not get his way. He wants to continue the sorry tales that we are hearing from mental health centres and addiction treatment wards up and down the country, of the horrific impacts of some of these substances that are the result of the fact that we do not know what is in them and that our current drug law is not robust enough to deal with these new substances. That is what John Banks wants. I want the public to be absolutely clear about that.

This Psychoactive Substances Bill is a good bill. It is a really good piece of legislation, which I support wholeheartedly. I have been asking the Government to get on with this for a long time, actually. It is a really good bill. Unfortunately, the debate has been completely derailed. I see members opposite nodding, and I think we have some agreement here about the fact that it has been derailed. It certainly has not been helped by the Government’s intransigence on this issue. I think that for John Banks to get up and say that he will block this bill if he does not get his own way, and let young people continue to be harmed by these substances, sums up John Banks’ philosophy quite well. I do not think that it is actually the ACT Party’s philosophy all that much—

Hon Trevor Mallard: Oh, I think it is.

IAIN LEES-GALLOWAY: —but it is John Banks’ philosophy. Well, it might be the ACT Party’s philosophy. John Banks’ philosophy is clearly to take more interest in animals’ welfare than in people’s welfare, particularly young people’s welfare. I really object to that from John Banks.

I also object to the statements made by Shane Ardern. Shane Ardern was on the Health Committee. He watched the way it operated. He watched the really constructive approach—

Hon Annette King: He said nothing.

IAIN LEES-GALLOWAY: Yes, he was a casual observer of the process. He watched as members from around the House—members from different parties—tried to work constructively. But let us unpick what Shane Ardern said. He said that the only reason Opposition members wanted to hear the submissions about animal welfare was that we wanted to slow down this process. He used that emotive statement deliberately, because he knows how much the public actually wants Parliament to get on with passing this legislation.

Let us just show how nothing could be further from the truth. This bill was originally introduced in the House in February. That was already 2 long years after the Law Commission reported back with a comprehensive report, one chapter of which has turned into this legislation. So the Government took 2 years to get the legislation before the House. It then let the bill sit on the table for months before it got before the select committee, and then when the Government finally took it to the select committee, it told us that we had only 2 months to get through the job of considering all those submissions, getting the legislation right, and getting the crafting of it right so we could bring it back to the House in a good form.

Guess what! The Minister got up and said: “I do not think there are going to be any problems here. Not too many people are going to want to submit.” Hundreds of people wanted to submit on this bill, and they got blocked because the National Party actually knew that it had got itself into trouble, and that if it listened to all those people—if it allowed the democratic process, which we think is so fundamental to life here in New Zealand, to go ahead as it is designed to do—there is no way we would have got this bill back to the House in time. That is purely a function of the Government’s failure to prioritise these issues and get this bill to the House before this year. That is why we had the issue of whether or not we could hear submissions.

The chairman took advice, and I appreciate that the chairman got advice that the issues of animal welfare were out of scope. That did not stop the select committee from hearing the submissions. It did not stop the select committee from hearing the submissions. The thing that stopped the select committee from hearing the submissions was the National Party members voting against it. We then did not hear those submissions. We then got advice, and this is where—

KEVIN HAGUE (Green): The issues of animal testing addressed by Mojo Mathers’ Supplementary Order Paper 260 are primarily related to Part 2 of the Psychoactive Substances Bill, so I will return to that theme later on. In the meantime, I wanted to address several issues in Part 1 and to respond to several of the other contributions that have been made. Firstly, Brendan Horan’s Supplementary Order Paper 271, requiring the Psychoactive Substances Expert Advisory Committee to report annually, is a Supplementary Order Paper that the Green Party will support, but I acknowledge and support the queries made by the Hon Annette King in relation to that point, which is around whom exactly that expert advisory committee ought to be reporting to. Like the Hon Annette King, I invite Brendan Horan to take another call to explain his reasoning and to consider making the adjustment that she suggested.

I want to address, as some others have, the defence mounted by Shane Ardern of Paul Hutchison’s decision to rule out of order hundreds of submissions that touched on the issue of animal welfare—in particular, Shane Ardern’s outrageous allegation that those people and other members of the select committee were, in effect, colluding to stall the progress of this bill. As Iain Lees-Galloway has been saying, this is a bill that members of the Opposition have been calling for for years and years, and, actually, the stop-start nature of the Government’s treatment of this issue and of this bill is the cause of the problem. That is the problem. It is not actually those submitters or the members of the Opposition. In fact, I think it would be fair to say that I have seldom seen more sincere and genuine submissions to a select committee than those that were ruled out of order. And as for the claim that those submissions all related to matters that were outside the scope of this bill, I give this thought experiment. A submitter to the committee might have advocated precisely the wording that is covered in clause 11A of this bill. They might have done that, and that submission would have been ruled out of order by Paul Hutchison. That gives the lie to the reasoning that has been advanced to support that decision.

One of the Minister’s now many Supplementary Order Papers to the bill expands clause 11A to define what a suitable alternative test would be. I believe—and I invite the Minister to take a call to explain his reasoning about this—that that introduces a new problem, which is that it, essentially, says that a suitable alternative test will be one that the expert advisory committee has publicly notified as being a suitable alternative test. And that is a problem because—

Hon Trevor Mallard: It’s a bit circular.

KEVIN HAGUE: There is absolutely a circular reasoning, but also, as the select committee has heard and as Paul Hutchison has previously advised the Committee, the interim expert advisory committee already has a predetermined view that animal testing will always be necessary. In other words, we have an interim expert advisory committee, at least—it may become the Psychoactive Substances Expert Advisory Committee—that believes animal testing is always necessary. In other words, it is introducing a de facto requirement for animal testing, and certainly on the basis of what we have already seen, we are never going to see an alternative test publicly notified by that group.

I also want to address the absolute nonsense that we have heard from a number of speakers so far today that there is, in some sense, a choice to be made between animal testing and testing on our kids. That is a false dichotomy. Nobody is arguing that psychoactive substances that pose more than a low risk ought to make it through this process to get on to the shelves. No one is arguing that. What is at issue is the process by which a substance is found to be low risk, and what Mojo Mathers’ Supplementary Order Paper 260 sets out is a narrower range of testing that will be acceptable to establish that. It will most likely result in a smaller range of substances actually making it to the shelves, because ruling out animal testing means that only those substances that actually survive a non-animal testing regime—which, as I am going to set out in the debate on Part 2, are more expensive; that is why they tend not to be used at present—will make to the shelves. It will rule out substances that rely on animal tests. So we are presented in the House today with the delicious irony that the National Government and those other parties that are not supporting Mojo Mathers’ Supplementary Order Paper are in fact advocating for a more liberal regime of establishing the safety and low risk of psychoactive substances. That strikes me as kind of an interesting irony.

The other matter that I want to address is a matter that the Hon John Banks raised in his contribution to this debate on Part 1, and in particular a challenge that he made to the Green Party towards the end of his contribution. He said that the Green Party ought to do as he is doing if Mojo Mathers’ Supplementary Order Paper does not become part of this bill—that is, we ought to oppose the bill. We do not do that. We believe that this is a very important bill. It is one that we have been calling for for a long time. It is, on balance, a good bill, but it is not a great bill. It is a bill that could have been great. Actually, I appeal to the Minister in the chair, the Associate Minister of Health, the Hon Todd McClay, because this bill still could become great by just a few adjustments made by the Government to make it a more logical bill and one that actually meets those highest standards. We hope that he will take the opportunity to do that. But it is a bill that is necessary. It is a bill that is necessary if we are to achieve the purpose that is set out in Part 1 of the bill—minimising harm and protecting the users of psychoactive substances.

What I say finally in response to the Hon John Banks is that I acknowledge the challenge he has made to us, and I politely decline that challenge and say that the Green Party will be voting in favour of this bill regardless of whether we can improve it or not. But I point out to him that his is a vote that the Government relies on for confidence and supply. So if we are, indeed, to look at who actually has leverage to achieve a great bill, he might look to his own house. Thank you.

Hon TREVOR MALLARD (Labour—Hutt South): I want to first of all say that, like all Labour members, I am going to vote for this bill. This bill, the Psychoactive Substances Bill, is overall a very good bill. There have been discussions around the timing, and it is wrong that it took a couple of years after the Law Commission report for the bill to come to the House, and it is particularly wrong that the Government did not prioritise it such that it could have its first reading and referral to a select committee in time to have a proper select committee process and hear those people who want to be heard. I am informed that my colleague Paul Hutchison, who chaired the Health Committee and went to a very good school, was not quite well educated enough at that school to ask the right questions, and as a result of that got a bum steer, and hearings that should have been taken place did not occur. I think that is sad because if they had taken place, we could have been in a position to take a different decision.

I have another preliminary comment. I have bred dogs. I have had a dog in my household for the vast majority of my adult life. My kids have had, and have, dogs. I care lot about them. To me they are important. Countering that, it is no secret to most members of the House that a close family member of mine is a research scientist and is doing the sort of research science that involves animal experimentation. The area that is being worked on has the potential to make an enormous difference as far as human lives are concerned. So I am not a person who is adamantly against animal testing where there are circumstances where, through ethical processes, it can be established that there are no alternatives and it is for a good cause. In my view, the improvement of human life—or even, actually, the improvement of animals’ lives—can be a good reason for that.

But what we are looking at now is a bill with a clause that, without Mojo Mathers’ amendment, has an out and allows animal testing for one reason and that is to make it easier for drug dealers to make bigger profits. I just make it absolutely clear. What this bill’s approach does means that it is easier and cheaper to get approvals, to have these psychoactive drugs approved. That is what it is for, that is what it is designed to do, and I think that is wrong. Frankly, if they cannot do the bench-based science—and I accept that that can be more expensive than killing puppies. I accept the view that it is cheaper and easier on occasions to use animals, and that that will be the case in a number of countries that have ethical standards that differ from ours. I accept that that will occur. But why should we accept that? Why should we lower ourselves to the standards of China and India and their approach to animal life, as we pass this legislation? Why should we do that, especially when it is to approve a drug that most of us, when we are asked about it pretty carefully—and even with that sort of approval—would think it better they were not approved anyway? A psychoactive drug is a mind-bending drug, and the idea that animals are killed for that is just wrong.

I want to say that although I agree with the vast majority of what the Hon John Banks says, and I admire his emotion, I think that those of us who have been around this House for the time that John Banks and I have been have seen him emotional about this sort of issue only on one issue before. He was emotional about an issue that we were on opposite sides of, and I deplored his emotive approach at the time. But what Mr Banks has shown is that within the ACT Party, at least on this issue, there is something that is caring.

The second to last point that I want to make—and I could come back again with a few others—is one that was often made by prominent National Cabinet Minister Ruth Richardson. She would ask the question: “What is the mischief?”. What is the mischief? I want to ask National Party members what the mischief is in the Green Party amendment. What is wrong with it? Who is going to be hurt by it? It might be, I agree, that slightly fewer drugs are approved to bend young people’s minds. Well, what is the mischief in that? It might be that the drug dealers have to pay more to get approvals. What is the mischief in that? I am yet to hear anyone on the other side tell me what the problem is, other than a bunch of self-interested professional experimenters and one other person who apparently used to be involved in the SPCA who thinks what they are doing, their approach, is right. I just cannot agree with it.

I am going to tell you what I suspect, and what I suspect in this particular case is that Associate Minister of Health McClay—and, you know, I am told he was a good chair of a select committee; he is not making a great start as far as this legislation is concerned—has been detailed to look after a fragile vote for confidence and supply, and that is Peter Dunne. And who is surprised? All of us—well, not all of us—quite a few of us have some sympathy for Peter Dunne. Although much of his problems are of his own making, I think we all make mistakes and he has clearly made a set of them now, which have resulted in him losing his ministerial arrangements. But at the moment, he is clearly someone who has to be managed for the next year and a bit until the next election, when, I think, we all know that he will not be a member of Parliament. He has to be managed with kid gloves. My view on the reason for the National Government taking what is such an illogical position on this—there has been no logic expounded by any National member—is that it is doing it in order to handle Peter Dunne, in order to ensure that it continues to have a majority for supply in the likely event that the Māori Party splinters going forward.

BRENDAN HORAN (Independent): In speaking to Part 1, clauses 4 and 6, of the Psychoactive Substances Bill, and also on the Supplementary Order Paper in my name, I would just say that I am happy with the wording of that Supplementary Order Paper 271. The wording is very similar to legislation of other advisory bodies such as the National Ethics Advisory Committee, the Office for Disability Issues, the Advisory Committee on Assisted Reproductive Technology, and the Health Quality and Safety Commission.

What I would like to do is draw the Committee’s attention to a letter that I received from somebody who is currently serving time in Manawatū Prison. If you will allow me, I will read this letter. “Hi, my name is”—and he does not want his name to be known. “I am currently in Manawatū Prison doing a 19-month sentence. I am writing to the Government about the effects of legal highs. I started legal highs about 2 years ago so I could stop smoking weed. While I was smoking weed, the only thing that made me want to stop smoking weed was to pass a drug test for my job; it wasn’t any effects from it. Then I started buying legals. At the start of smoking, I would only need one or two cones, which is about the size of my fingernail, so not much at all, and then I would be completely smashed. So this happened for about 2 weeks, then after it, I started doing nothing or close to nothing, so I started smoking more of it. Now this is where I started to notice that I needed more to get a hit, so I was buying at least two bags a day and smoking it all very quickly.”

“Then I tried to stop smoking it, and this is when I noticed I couldn’t. I was 100 percent addicted to it and was no longer smoking it for a buzz, but was because I didn’t have any, I would become very angry, and it was easy for me to just flip out. I was having cold sweats every night and having to run to the toilet to spew up. This went on every day and every night. If I didn’t have any money, I would become nervous and lie to my family just to get $20. So now I went from smoking weed, which I was smoking ever since I was 14 and had no problems at all, to smoking this so-called legal weed, which changed my life, as for me to do anything—and I mean anything, like eat, drink, go to courses, sleep, leave my house, etc.—I would need to have a cone of legals, and as soon as I did, I wouldn’t feel sick or anything and could then get on with whatever it was. But it didn’t last long till I needed more, and also had to live with spewing up every day and feeling like”—and I will take a little poetic licence here—“[faecal excrement] when I didn’t have it. I am only one of thousands that this is happening to, and every one of my mates smoke it too, and they tell me the shops—by stopping legal highs from being available, it will stop the same things happening to them. But the thing is, we don’t want to smoke it any more, but it’s so hard to stop when it’s as easy as walking into a dairy and buying it over the counter.”

“I know making it illegal won’t stop it from being sold but will make it harder to get. It only takes up to 1 or 2 weeks of not smoking it and you can get your life back. But the only reason I have managed to stop is that my partner died, and I had to go from her funeral then straight to jail. Now I have been in jail for 1½ months, and I feel super good and off legal highs, and if I never was sent to jail, I don’t think I could have stopped smoking it by myself, because the craving for it is so strong. So I am begging you, please, help my family and my friends and all the New Zealanders that are stuck and don’t know what to do by stopping legal highs from being sold at our shops. And I know for a fact that everyone that is addicted will be thankful and be able to get their lives back. I don’t think the Government actually knows how bad it is until it happens to their kids or friends, so please get this [faecal excrement] banned and at least harder to get. Thank you for your time.” I think that sums it up. This is a good bill and I support it.

The CHAIRPERSON (Lindsay Tisch): Members, we come to the vote on Part 1. Before we put the Minister’s amendments, I will just explain what will happen. If the Minister’s amendments are passed, then part of Mojo Mathers’ amendments on Supplementary Order Paper 260 will be ruled out as being inconsistent. I am just making that point now. The question is that the Minister’s amendments to Supplementary Order Paper 268—

Kevin Hague: I raise a point of order, Mr Chairperson. I wonder whether you could explain for the Committee which parts of Mojo Mathers’ Supplementary Order Paper will be ruled out.

The CHAIRPERSON (Lindsay Tisch): Well, I will come to that at the time because some of them are still in order, and some of them will be inconsistent. I am just making that point, but I will explain it at the time when we come to vote on those.

Hon Trevor Mallard: I raise a point of order, Mr Chairperson. I have a further point of order. Your explanation could well influence our vote on the Minister’s amendments. Can I just seek the indulgence of the Committee to ask you to do the explanation slightly prematurely.

The CHAIRPERSON (Lindsay Tisch): Members, I sought advice on this matter because it has been a possibly contentious issue, and I just felt it would be fair to the Committee as a whole if we knew what the process was and what the consequences would be in terms of an affirmative vote for the Minister’s amendments. I will answer the question that Kevin Hague has asked, which I think explains this to the Hon Trevor Mallard. In Mojo Mathers’ amendments the clauses that would be ruled out as being inconsistent would be 11A, 35, and 31—that is, 11A, 31, and 35. The other amendments would still be put to the vote.

Hon Trevor Mallard: I raise a point of order, Mr Chairperson. I am not as familiar with the bill as Kevin Hague is, and he might be having a look at this as we do it. But I think that the Minister’s amendments are quite different and separate. They deal with different issues. There are trial periods, and there is a penalty clause change in there, I think, for clause 29, which is more technical, as is clause 48. I think it is hard to say that clause 83 is a substantive amendment, but it is a distinct amendment. I am happy to seek the leave. I want to make the point that we are going to end up in the same place in the end, but, I think, especially given the discussion, it would be a real pity if any substantive part of Mojo Mathers’ amendment did not get a proper, individual vote. I am wondering whether the Committee could be better served by my seeking leave for the Mathers amendment to be voted on first and dealt with, and then the Minister’s amendments after that, because I think there is a general view that the Minister’s amendments will, other than for that question, be supported. I am looking to Kevin Hague and Brendan Horan to make sure that they are—I know that people have a different view on the substance. We will end up at the same point, but I think that people will get the sense of being dealt with fairly if the Mathers amendment is put first, and I seek leave for that.

The CHAIRPERSON (Lindsay Tisch): Sure. The leave to have Mojo Mathers’ amendment put before the Minister’s amendments is a matter for the Minister to decide. The Minister has indicated to me that he would accept that, and so we will put Mojo Mathers’ amendment first, and then we will go through the process of that. We do not need leave for that. The Minister has agreed.

The question was put that the amendment set out on Supplementary Order Paper 260 in the name of Mojo Mathers to Part 1 be agreed to.

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

Ayes 51

New Zealand Labour 33; Green Party 14; Māori Party 2; ACT New Zealand 1; Mana 1.

Noes 61

New Zealand National 59; Independents: Dunne, Horan.

Abstentions 7

New Zealand First 7.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 277 in the name of the Hon Todd McClay to the proposed amendments set out on Supplementary Order Paper 268 in the name of the Hon Todd McClay to Part 1 be agreed to.

Amendment to the amendment agreed to.

The question was put that the amendments set out on Supplementary Order Paper 268 as amended in the name of the Hon Todd McClay to Part 1 be agreed to.

Amendments as amended agreed to.

The question was put that the amendment set out on Supplementary Order Paper 271 in the name of Brendan Horan to Part 1 be agreed to.

Amendment agreed to.

Part 1 as amended agreed to.

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Chairperson. This is me just trying to be a little bit helpful. I thought we had an indication in the Committee earlier that a member indicated that he wanted a vote recorded against it. I am just sort of reminding the National whips who are exercising that vote of that. Mr Banks?

The CHAIRPERSON (Lindsay Tisch): Well, it is up to the whip of the Government to inform me if that is the case. It is not the case? No. OK.

Part 2 Psychoactive substances and approved products

IAIN LEES-GALLOWAY (Labour—Palmerston North): There is a range of matters dealt with in Part 2. Can I say that it is excellent to be getting into some of the substance of the Psychoactive Substances Bill and some of the more constructive aspects of this legislation.

Part 2 deals with the range of licences that various participants in the manufacture and supply of psychoactive substances need to acquire. It also deals with the process by which products can be approved. Further, it deals with the register of products that are considered by the expert advisory committee. I would like to address each of those matters.

The first—and it is somewhat at the heart of this legislation—is the process for approving products. This, just quietly, is the big step forward in drug regulation in New Zealand, because up until now, every time we have seen a new drug, except for alcohol and tobacco, we have wanted to ban it. Ban it, ban it, ban it—that is the only reaction, the only response, that our legislation over the decades has been able to come up with. It is a rather blunt approach, and, in the 21st century, a less and less effective approach. So for the first time in our drug regulation laws there is a mechanism for approving a psychoactive substance.

Why would we want to do that? A lot of people have said: “Oh, just ban them—ban them. Get them out of the dairies.”, which, of course, this bill does do—

Denis O’Rourke: I say that.

IAIN LEES-GALLOWAY: Well, I am glad to hear that New Zealand First thinks that. Its members can get up and explain why they think that. People say: “Look, just ban them. Get rid of them, and that will make the problem go away.” That has been so effective for cannabis, has it not! It was so effective for alcohol as well—it worked really, really well! It has worked really, really well for a whole range of other substances too! So the people who say “Just ban it and the problem will go away.” simply need to open their eyes and look around them to see all the harms that are actually caused by prohibition itself. I am not saying that prohibition is not appropriate for some substances, but I think it is absolutely certain that prohibition is inappropriate for a number of substances.

What this bill seeks to do is to create a legal regulated market for substances that have been proven to be of low risk. That is what clause 35, headed “Granting of approval”, is all about. The most important of the grounds for approving a product is that the degree of harm that the product poses to individuals using the product is no more than a low risk of harm. Those final words are important. Nobody is claiming that any of these substances are safe. That is not the intention here at all. The intention is to create a process through which certain substances can be proven to be low risk in comparison with other substances, and those substances, those products, can go on the market.

What we know is that people prefer to buy their drugs from a legal market. There really is not a legal regulated market at the moment, except for alcohol and tobacco, of course. These so-called legal highs have existed in a legal and unregulated market. But what countless submitters came and told us at the Health Committee, and, indeed, what I have learnt from going and visiting people who work in the mental health and addiction treatment sector, is that people who use cannabis have been replacing that substance with these legal highs because they prefer to go to a legal market. They do not want to go to the gangs, they do not want to go to the dodgy drug dealers who engage in criminal activity, they do not want to have to interact with criminals to buy these products, but they do still want to buy them. What we are creating here is an opportunity for people who do want to use psychoactive substances to be able to obtain those that are of lowest risk and those that have been proven to be of low risk. What that means is that, instead of the current situation, in which people are replacing cannabis with substances that are, in fact, higher risk than cannabis, people can replace that drug with substances that have been proven through clinical trials, which can now be undertaken, to be of lower risk.

That will be a significant improvement on the current situation. What we know right now is that our addiction treatment centres are dealing with people who were previously using cannabis—and that comes with a certain level of risk—and have replaced it with higher-risk substances because they are legal. We actually now know the mechanism as to why these substances are higher risk. They adhere at a much greater rate to the receptors in the brain that the active ingredients in these drugs adhere to, and because they adhere at a higher rate, the high occurs much more quickly, it is much harder, it is much faster, and these drugs are far more addictive. Trying to get off these drugs is a far greater challenge to people, and it is a far greater challenge to the professionals trying to support people who are trying to get off these drugs than it has been trying to support people who want to give up cannabis use. I think that is an important thing for us to be mindful of.

One of the changes that we made to the legislation following submissions by many of the submitters is to the register of products. Originally, this was going to be a register just of approved products, so that people could see all the products that had been approved and what the active ingredients in them were. The significant change that we have made is to say that this will now be a register of all the products. Every single product for which a manufacturer applies to the authority for approval, even if it is turned down, will now appear in the register. That means that people can actually see the facts about the substances that have been turned down: the harms that may be related to them and the reasons why they were turned down. I think that just having that knowledge available to people will help achieve the purpose of this legislation, which is to reduce the harm associated with psychoactive substances.

At the beginning of Part 2, in clause 12, we deal with the licences that are available and the licences that it is necessary to hold in order to be a manufacturer, an importer, or a supplier of these substances. What I think was one of the glaring mistakes in the original drafting was that there was no need for a licence to be a retailer of these substances. You have to hold a licence if you are to be a retailer of alcohol. It makes absolute sense that you must hold a licence in order to be a retailer of psychoactive substances.

That really achieves two things. The first is that in order to hold one of these licences you have to be a person of good character. Ultimately, that is a subjective statement, but it is analogous to the situation with the sale of alcohol, for which someone has to prove that they like to act within the law, they are a careful person who is mindful of the activity that they are engaged in. It is important that we have only the right people selling these substances to youngsters. The other thing is that, hopefully, they should actually know something about the substances that they are selling and they will be able to provide factual, evidence-based information to the people who are purchasing these substances. That, again, is an important step in trying to achieve harm reduction.

I think that is something that was missing from the original legislation that everybody on the committee instantly recognised needed to be included. Paul Hutchison, the chairman, indeed, instantly recognised that there was a need to include licences for retailers. I think that also recognises around about where these substances lie in terms of relative harms. If it is appropriate for the sellers of alcohol to hold a licence, then it is also appropriate for the sellers of these substances to hold a licence. I can say that on this side of the Chamber we wholeheartedly support those amendments to the legislation.

Dr JIAN YANG (National): I am delighted to speak briefly on the Psychoactive Substances Bill. First of all, let me say a few words about the importance of the bill generally. We have all heard about the harms of legal highs—harms done to individuals, families, and communities. Much has been done to regulate the legal high industry, but not enough. According to a new study published in the New Zealand Medical Journal, a growing number of synthetic cannabis users are being admitted to psychiatric care, and this is consistent with the observations of those in the health services. Patients relating to synthetic cannabis are delaying the treatment of more worthy cases. I am pleased that New Zealand Lotteries has recently decided to demand its retailers stop selling party pills and synthetic cannabis alongside Lotto products, but we need to do more, and sooner rather than later.

This bill sets up a sophisticated mechanism to regulate licences to import, manufacture, research, and sell psychoactive substances. A person who commits an offence in respect of an application for a licence is liable on conviction to a term of imprisonment not exceeding 3 months or a fine not exceeding $500,000, or both. What is more important is that the onus of proof will be on manufacturers, not the Government. This is a game-changer. In essence, it ends the dangerous game of cat and mouse that Governments have been forced to play with the legal high industry.

New Zealanders deserve to know that products available to them are safe. They should not be exposed to untested, risky psychoactive substances. Young people are particularly vulnerable to such substances, so this bill is particularly important for protecting our young people. Thank you.

Hon ANNETTE KING (Labour—Rongotai): I want to continue on from where my colleague Iain Lees-Galloway left off. This Part 2 deals with a licensing regime. I think this is a very sensible approach that is being taken in this bill, the Psychoactive Substances Bill. We did include, as Iain Lees-Galloway said, that we are going to have people who must have licences not only to import these psychoactive substances and to manufacture them and to research on them but also to sell them and to sell them at retail and at wholesale. So this is a very interesting approach to these particular drugs, and I am wondering whether we are not putting in place a very, very good regime for the future for the selling of tobacco, because we know that these substances, when they finally hit the market, would have to be shown to be very low risk. This is the whole tenor of this bill. So, having been found to be low risk, we are then requiring a licence to be able to sell them at retail, wholesale, etc.

What we do know is that tobacco is a much, much more dangerous product. In fact, not one cigarette is good for you. We know the dangers of tobacco—we have known for many, many years—and we have seen the impact of tobacco on health and on mortality in New Zealand. I am wondering whether this is a very good opening for us to have licensing of tobacco sellers. At the moment you can buy tobacco at a supermarket, in a dairy at the corner—it is freely available to people of the right age. We say that there is an age to buy these low-risk products and we license them and we run a licensing regime. I think the time will come to consider a similar regime for tobacco, and I am thinking that maybe our committee, in our recommendation to licensed retailers, is groundbreaking in our approach for the future.

What this licensing regime does is ensure that you have a fit and proper person, or a body corporate that is a fit and proper body corporate, to be able to apply for a licence. I think that there will be those who will be looking at what the meaning is of that “fit and proper person”. There is a feeling that some of those who have sold legal highs are not really particularly concerned about what the impact is of those legal highs on the people to whom they are selling. They are not all that concerned about what is in them, so long as they are turning over a quick buck. I think the idea that when the application is by an individual, the person must be a fit and proper person to have that licence, and that is regardless of what they are doing—whether it is the body corporate or whether it is the individual, for me, I want to know what that “fit and proper” test is going to be. It does set out whether they have had a conviction and so on, but are they able to get around that by getting somebody else to apply for their licence? This will be a part that we will need to keep an eye on.

There are also going to be penalties—and they are quite stiff penalties in this legislation—for those offences relating to importation of psychoactive substances without a licence. If someone thinks that they are going to be able to bring in a substance and they are not going to have to have a licence, they are going to find that they are hit by a pretty big fine indeed. In fact, if they are an individual, they will find that they could be in line for a term of imprisonment not exceeding 2 years, or, in the case of a body corporate, a fine not exceeding $500,000. So what we have put in this bill are pretty strong penalties for those who decide to import psychoactive substances without that licence. I think that is also a very good move.

We do also in this bill require there to be a code of manufacturing practice. This was an area I was interested in because quite a number of these legal highs will be manufactured overseas. They will not be manufactured in New Zealand; they will be done on premises in different parts of the world. So what this bill does, first of all, is establish a code of practice that must be adhered to, and that code is what that manufacturer will be audited against. So there will be an audit and the ability to audit a manufacturing premises and practices outside New Zealand. I can see how easy it would be to have an authorised person, or persons, within New Zealand to do an audit, but I was concerned that it would be a very costly exercise to do an audit outside New Zealand. What we have been informed is that, in fact, the cost of that audit outside New Zealand has to be borne by the manufacturer of that product. So taxpayers do not need to feel concerned that they are going to be up for the cost of flying authorised people from New Zealand to the backblocks of China, India, Denmark, or wherever the substances are going to be made. In fact, this cost is going to fall on to the manufacturer who has to have that audit carried out.

We also made an amendment in this bill, which I am desperately trying to find, and it was around changing the date for the code to come in force. The code was going to come into force after 1 year. This is the code that you would have to audit against the manufacturing of these products. We in the Health Committee decided that it should come into force much sooner than that. In fact, we amended it so that it comes into force within 6 months. I think that work has to be done in getting everything in place, and we acknowledge that work will need to be done, but we are making sure that within 6 months there will be a code that goes alongside all the other changes so that we can audit the manufacturing of these products both inside and outside New Zealand.

Another part here in Part 2 that I think is worth mentioning is that this part also sets up a Psychoactive Substances Appeal Committee. The function of this committee is to determine appeals against the decisions of the authority. This is seen to be having to have a natural justice course for appeals against decisions an authority makes. Of course, in any of these things, there does have to be the ability to appeal decisions—they are not always right; they do not get everything 100 percent right—so there does need to be an appeals committee. It is a three-member committee and one of the members of that committee must be a lawyer with not less than 7 years of legal experience, so that there can be a legal eye put over some of the decisions if there is an appeal to this authority.

This part is very much the working part, if you like—the nuts and bolts of how this legislation is going to work. The other part that is in here is the approval of products and what sorts of products would be approved. It goes into some detail about the information that would be required and so on. I think we made this better at the select committee. I think we are going to make it work better, and I certainly support the changes and the way that we are going about this whole regime, by having a licensing regime and requiring there to be a high standard in terms of the manufacturing, the selling, the wholesale, retail, etc. of these products.

Hon TODD McCLAY (Associate Minister of Health): Part 2 is an important part of the Psychoactive Substances Bill, and I agree with the Hon Annette King that this is the part that gives us the ability to make it work, to provide certainty to New Zealanders around the products that may in the future be available to them because the regime will show they have a low risk of harm.

This part is around licensing, and I just want to read from the bill so that it is clear to all those who will be paying attention to this, because it is such an important piece of legislation. There will be a requirement for people to hold licences to import psychoactive substances, to manufacture these substances, to research them, to sell a product that is not approved, to sell approved products by way of retail, and to sell approved products by way of wholesale. So from the conception of one of these products until finally it is approved and able to be sold, there will need to be licences. The reason this is important is that it is the way that our health authorities, with the support of our police force and justice force, will be able to control this. I believe that the Health Committee has done an important amount of work for us to help clarify a number of provisions here.

Contravention of these licensing provisions in many cases will be quite severe—up to 2 years’ imprisonment and up to a half-million-dollar fine. The reason we are doing this is that we need to get it right. To give you an example, we all know about the harm that we suspect, anecdotally, and we are observing is happening around New Zealand at the moment. What is to stop, through this regulated procedure, people ignoring it and manufacturing these products anyway or importing them and selling them—selling them all over New Zealand, just as we know illicit drugs are sold?

The first thing that will be important is that we are giving authority to our services to apply sanctions. Sanctions for importation of a psychoactive substance, with or without an approval for that substance, outside of a licence—somebody without a licence—will be up to 2 years’ imprisonment and a half-million-dollar fine. Some would say that might seem heavy-handed, but in laboratories—

Hon Trevor Mallard: No, soft on it—soft on the crime.

Hon TODD McCLAY: Well, I would agree with Mr Mallard. It is soft on crime in some respects. He could put up a Supplementary Order Paper to make it stronger. I will certainly talk to my side to support it. But that there are laboratories around the world that can synthesise almost anything that we might imagine—almost anything at all—and therefore the cost of this production is not what it would have been many years ago, when people used to have to grow crops and change them, and so on, in different parts of the world. So we need to take this seriously and there needs to be a penalty for those who transgress these rules today and in the future with products that we know are probably going to be much more harmful. For manufacturing without a licence—that is, importation and manufacturing without a licence—there will also be a fine of up to half a million dollars and 2 years of imprisonment.

I am making two amendments to Supplementary Order Paper 268 that I want to touch on briefly, and the first is around retail. I am glad that the committee looked at this and decided that we do need licensing when it comes to retail outlets. I think, in fact, these rules would not work well without that. We are aligning them very much with the Sale and Supply of Alcohol Act. Parliament went through an extended period of time—the last Parliament and some of this one—to look at ways that we will get this right. So one of my amendments to Supplementary Order Paper 268 is to make it an offence to sell an approved product without a licence. What that means is that if you do not have a licence to sell an approved product—the product has been attested to be OK, at low risk of causing harm; it has gone through the full procedure—as with alcohol, if you do that in premises or in a way that is not licensed, then it will be up to 3 months’ imprisonment and a $40,000 fine. That is aligning the rules with alcohol.

The second amendment that I want to make to my Supplementary Order Paper 268 is around clause 48(1). I know there was some discussion of this at the select committee. This is around the offence of providing an authorised product to a minor. Indeed, as drafted from the committee, the bill said it was an offence to provide one of these authorised products to a minor in a public place. Well, I think that should just be an offence. It does not make sense that it is against the law to sell to a minor anywhere in the country and to give to a minor on the street outside a house, but it is not against the law to invite that minor in—even the neighbour’s kid, who is 6 years of age—to stand on your front porch to give it to them. The moment that that young person receives it, they are breaking the law, but to give it to them is not breaking the law and to sell it to them is not, either. I want to align this and just say that anywhere in this country that you provide one of these products to a minor will be a contravention. I hope the Committee will support that.

Indeed, it is important today because of the products that are available, but let us just say in the future that somebody synthesises drugs that are so much worse than these that are already on our schedules to the Misuse of Drugs Act and it is not against the law to give that to a young person in the home. I just think that sends the wrong message.

Finally, in summation, the licensing provisions are important, but I want to make it very clear, and it is spelt out in the legislation, that anything contained in the Misuse of Drugs Act, schedules 1 through 4, and alcohol is not covered by this regime. That could be a debate that Parliament might want to have in the future, but as a new member and an Associate Minister of Health who is responsible for drug and alcohol policy, this bill is about cleaning up a problem that is causing great harm to New Zealanders. But anything that is scheduled currently or in the future under the Misuse of Drugs Act and around alcohol and some other products that are described in the bill will not be able to rely upon these processes, and I think that is most appropriate. Thank you.

KEVIN HAGUE (Green): I thank the Associate Minister of Health, Todd McClay, for his contribution, and I take this opportunity to thank him for his gracious concession around the voting order for the Part 1 votes on this bill, the Psychoactive Substances Bill. The contribution he has just made and, indeed, that from the Hon Annette King offer quite a good point of departure for me, because the first set of points I want to make about Part 2—I am mindful of the time; these may be the only ones before the dinner break—are around the fact that we have some incoherence in our New Zealand law.

There is a range of substances that people consume because it is fun to do so or they derive some personal benefit or utility from doing so, but they pose some risk of harm, and they are the substances that are regulated under the Misuse of Drugs Act. There is alcohol, which is regulated under a separate statute, and there is tobacco, which, again, has a separate and different regulatory regime. And we are actually adding, in this bill, a fourth strand.

For this to be a useful addition, I think one of the characteristics that we need to look for is a way forward for converging those various strands into a single rational regulatory framework. I am very pleased to say—and I think there is probably violent agreement around the House on this—that this bill actually does provide a path forward for that convergence.

To that end, we have taken, I guess, provisions certainly from the tobacco framework and from the alcohol framework and pulled them into this bill. Indeed, there could potentially be elements of the Misuse of Drugs Act—you know, in fact, I think there are even elements of that Act that we have used in this framework. One of those elements is the licensing regime and that is what is set out here in Part 2. It draws, as the Minister has said, quite heavily on the regime that we have in place for alcohol, and it provides, I guess, a template for reform in those other strands.

So both here in Part 2 under the licensing regime and, indeed, in Part 3, where we look at some of the regulatory responses that would be available to the authority, we see aspects that could be applied to those other strands. Gradually, over time, it will make sense for this House to pull those strands further and further together, to actually converge them in a single framework that regulates all of those substances.

One of the things, as speakers have mentioned, that Part 2 does is provide the retail licences—an innovation from the Health Committee and one that is certainly very valuable. It is interesting that the select committee rejected only a few years earlier the prospect of using a licensing regime for tobacco retailers.

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

KEVIN HAGUE: As I was saying before the dinner break, this bill represents a great opportunity for us to be moving towards convergence of the way that we regulate various kinds of substances. Some of the particular features in Part 2 that are useful are the licensing of retailers, which is, of course, something that we have done in relation to alcohol but which we still need to do in relation to tobacco. Similarly, the opportunity for councils to develop their own plans as to where retailers may be located is another innovation that we have made in relation to alcohol, and maybe that indicates the kind of direction that we need to be taking in relation to tobacco.

The register of products, as others have mentioned, is a very, very good innovation. In particular, the change made by the select committee to incorporate into the register products for which applications had been made but were declined is a very important opportunity for us to have more information about these substances. Otherwise there would be substances around that people would have no information about at all. As others have said, the manufacturing code of practice is another important element of Part 2 of the bill and another very good change made by the select committee, bringing forward the establishment of that code of practice from 1 year to 6 months.

I want to remind the Committee of the whole House about the important balance to be struck here. It is important that this bill does not end up being prohibition by stealth. Some of these substances must get through this process, must get licences, for this to be meaningful, because if it is prohibition by stealth, what will happen is that we will force this market into a black market, and the concerns that everyone from right around the House has been expressing around the health and welfare of New Zealanders, and particularly young people, will be magnified in a black market situation.

As I indicated in the debate on Part 1, most of Supplementary Order Paper 260 put forward by my colleague Mojo Mathers in fact relates to elements of Part 2. I just want to recap some of the basic points here. One is that had the select committee been able to consider the submissions, this House would have been able to see evidence of alternatives to animal testing. Those alternatives are at least as good as—and maybe better, in fact—than animal testing for determining safety.

The approach that is advocated in the Supplementary Order Paper is one of saying that when someone applies for a licence the information that they use to support that application may not include data derived from animal testing, except historical animal testing. What that does is it actually then puts the onus on those applying for licences to invest in and support alternative approaches to animal testing.

Nobody is saying “Well, you don’t get to use animal testing, therefore there will be no testing; therefore all of these products should just simply come to the shelves and be available for sale.” No one at all is suggesting that. What is instead being suggested is that there is a narrower range of tests—only the non-animal tests—that can be used for the licences that people apply for in Part 2. So, effectively, what we would be saying is the person applying for a licence still has to prove that their product is no more than low risk, but they have to do it without using animal testing. The reason that this is so important is that the alternatives to animal testing, although at least as effective, are not used currently because of expense. They are a much more expensive test than the animal testing equivalent.

So although the select committee did hear some submissions from manufacturers and importers of the products saying that they oppose the use of animal testing, the economic, cold, hard fact is that some of those applying for licences in those categories will choose to use animal testing if the regime allows them to, simply because it is cheaper—simply because it is cheaper.

So it is in their interest, and we can understand their argument for wanting to continue to be able to use animal testing. What we cannot understand is the Government’s argument, because the reality is that both the Government and ourselves are saying we want there to be no more than low risk; only we—those who are supporting Mojo Mathers’ Supplementary Order Paper—are saying that in addition to that we want animals not to be harmed.

LOUISA WALL (Labour—Manurewa): Kia ora, Mr Chair. It is my pleasure to talk to Part 2 of the Psychoactive Substances Bill, which is really about licensing to import, to manufacture, to sell, and, in addition, to research psychoactive substances. I want to highlight that addition, the research addition, because that was absolutely something that submitters made clear—and I thank them for highlighting it to us—was a requirement to enable them to continue to research the impacts of psychoactive substances, particularly the addiction and mental health researchers at Auckland University. So I thank them for that addition.

I would like to highlight clause 15, which is really about the grounds for granting a licence. Throughout this process we wanted to make sure that fit and proper persons are able to get these licences. So if you have had a dishonesty offence or if you have had any offence against the misuse of drugs legislation, then it automatically disqualifies you from being able to hold a licence. I absolutely agree with that.

Clause 16 is really about ensuring that when you do have a licence to import, there is going to be a requirement for you to name the product that you are bringing into the country and the quantity of that substance being imported. I think those requirements are incredibly helpful and beneficial to an ongoing monitoring of these products. I think we all would agree that we are entering into a new space where we are trying to regulate a substance that in any other circumstance possibly would be classified as a drug, and therefore you would be unable to use it. So having these requirements about knowing what is coming in, in what quantities, and, hopefully, then also knowing what region of the country and what communities these substances are going to be consumed within is, I think, also part of an ongoing requirement of us to ensure that we negate any negative consequences of this piece of legislation.

One of the things I wanted to highlight too through this process is that clause 24 will make it an offence to import psychoactive substances without a licence. It is incredibly important that we have measures in place that are going to absolutely deal to people who try to manipulate our systems and bring in substances that they know they can sell for quite a bit of profit. So a $500,000 fine as the penalty for that offence is, I think, absolutely congruent with the message that we want out there.

This regime that we are entering into really is one where we are creating the law as we progress through the implementation of the bill. I think nobody is naive to the fact that many communities being affected by these psychoactive substances have had to contend with many of the current importers of those psychoactive substances trying to sell as much of them into our communities as possible. It is one thing that I know is on the agenda of the Minister of Health and, obviously, the Minister of Police, because I think we have to be vigilant about the consequences of this bill going through. We know already that shopkeepers have been encouraged to stockpile psychoactive substances, and that there have been attempts to discount the product to get it out into our communities. We know that we are going to have to be vigilant, once this legislation goes through, to confiscate as much of the product that is out there as possible, so I think these monitoring regimes, these signals to the psychoactive substances business community, are really, really important. Obviously, we support these regimes 100 percent.

The only other thing I really wanted to highlight in Part 2 is clause 41, which is about the registering of those products that go through the process and that our expert committee deem to be sufficiently low risk to be granted a licence for sale. But, in addition to that, we are also going to make sure that the public are aware of the products that have been through the process but are not approved. I think that was a really good requirement that the Health Committee made in the interests of the public good, so that everybody has some transparency around the process and we know what products have been through the process of being verified or certified as being of sufficiently low risk to be sold within our communities, but also that the non-approved products will also be listed.

Again, I want to highlight that the distinction between some of these products is very difficult. Obviously, if the packaging of some of the non-approved substances ends up out into the community, or, in fact, some of the manufacturers just sell it in spite of it not being approved, I think that what we need to make sure of is that this process educates our communities, and that we have constructive conversations with our communities, as we all have attempted to do. I can say that in my community in Manurewa, Manurewa Local Board member Colleen Brown and I visited our 32 dairies. We identified six dairies that were selling psychoactive substances. We informed them about the legislation that is going through the House. We said to them that it was likely that the manufacturers would try to sell those products to them at discounted rates. We warned them about stockpiling. We were also very clear that these products are hurting our community.

What I would like to acknowledge again, which I did during Part 1 of this Committee stage debate, is the community members, the dairy owners, who through their own recognition of the harms have chosen not to sell these substances. Twenty-two percent of my community dairy owners sell these products, but what I want to focus on are the 78 percent who do not. What I see as an ongoing process from here is that I would prefer that none of these products were sold in my community, but I am a realist and I also stand up for the rights of adults to choose to partake in these types of products that are akin to both cigarettes and alcohol. That concludes my contribution. Thank you.

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): I rise to take a call on Part 2 of the Psychoactive Substances Bill. I refer to clause 35, “Grounds for approving product”, which states: “The Authority may approve a psychoactive product as an approved product only if the Authority is satisfied that …”—and there are a number of conditions. I could not help but think of that in relation to the Food Bill. I hold before me the Food Bill, which is quite a substantive document, and I ask why we have got ourselves into this dilemma.

When it comes to food—the good stuff that we need every day to live and to survive—we have got, or the Government is about to pass, a bill that is this thick on the conditions pertaining to the production, the sale, and the safety of food. For the most part food is ingested. I do not think there is any way of injecting it or any other way; most of it is eaten. So I have gone to the meaning of “safety” and “suitability” right at the start of the bill here and I want to draw the comparisons, because in some ways this Psychoactive Substances Bill is ludicrous. What we have got is a substance that people are going to ingest or take. I do not know—they might smoke it, but most of them probably pop pills in the same way that we eat food.

In the Food Bill it has the “Meaning of safety and suitability”. So if it is not safe and it is not suitable in the Food Bill, you cannot sell it. Clause 11(1) states: “In this Act, unless the context otherwise requires, safety and suitability, in relation to food, have the meanings set out in subsections (2) and (3) …”. Clause 11(2) states that safety (a) “means a condition in which food, in terms of its intended use, is unlikely to cause or lead to illness or injury to human life or public health; and (b) includes a condition in which hazards are identified, controlled, managed, eliminated, or minimised.” The point being is that if you sell a banana that has decomposed or has got a bit old, that is illegal, but if you sell a substance that is likely to deliver psychoactive results to someone, it is going to be legal. The contradictions astound me.

The point is that it is probably a bit late in the process to be pointing out that contradiction there—I appreciate that. We are supporting the bill, but I think we have to get serious here about what we are doing. There are those people who are not supporting the bill for whatever reason—some of them because of possible human testing. It is simply ludicrous in my view, because if we know that we need this kind of legislation in the Food Bill to protect people from unsafe food, then how is it that we need a small piece of legislation to protect them from what are dangerous products? There is no debate about that. So perhaps as a Parliament we should be a bit more consistent, or perhaps the Government should be a bit more consistent. The only excuse it has got is that it has taken the Food Bill a hell of a lot longer to make progress in this House than the Psychoactive Substances Bill has taken, so I guess the Government is moving on it somewhat slowly.

Can I just say that it is really important that we do get this right. Part 2 of the Psychoactive Substances Bill specifies a whole lot of technical issues relating to products and I hope that the Minister in the chair, the Associate Minister of Health, can maybe take a call and give us some assurance on this. Clause 35(b) states: “the degree of harm that the product poses to individuals using the product is no more than a low risk of harm.” I do not think there is anywhere in the Food Bill that we have accepted a low risk of harm. Maybe the Minister can come back and clarify that. If there is harm identified, we are simply not allowed to sell food. But if there is harm identified in a psychoactive substance, then it is OK. And although I guess it does in some way relate to alcohol, or perhaps caffeine—who knows what might be down the track—the bottom line is that we are currently selling products that are dangerous and there is no way in the world that they would get anywhere near the shelves under the Food Bill, but we are having to bring in a separate piece of legislation to deal with them here. So I welcome the legislation, but think we should refer back to the Food Bill when we need to. [Bell rung]

Thank you very much. I will not take the full call, but thank you very much, Mr Chairman. I think that we as a nation, of course, understand that our reputation for food production is one of the critical things for our future. But so too should be the management of the social ills and some of the problems within our society. So although we are making good progress on this the questions, of course, always come back to: why so long? Why so reluctant? It is perhaps an admission by the Government, finally, that the market was not going to address this. In fact, attempts to make one product illegal just resulted in the development of a whole lot of other products that, as I say, under the Food Bill, of course, would not be allowed to be sold.

I think there was, I guess, glib reference to the food police. These would be people who go around stopping people having barbecues and the such like. So if you do not have your gloves on and go through the proper process, you are not allowed to go—

Hon Dr Jonathan Coleman: Like a Phil Goff barbecue. You want to stop that.

Hon DAMIEN O’CONNOR: Yes, it was a good barbecue way back then. Can I say that there was this bizarre situation where there was potential for food police, yet we have been allowing this to continue.

The CHAIRPERSON (Eric Roy): Part 2. Please go to Part 2

Hon DAMIEN O’CONNOR: I know. I will get back to Part 2. Part 2 of the bill goes to a product of no more than a low risk of harm able to be sold here. I would say that a sausage on a barbeque is a far lesser risk, yet under the Food Bill—and I acknowledge the Government is actually going to make some changes to allow the barbecue food to proceed—we would have, without the changes, ended up with a bizarre situation that barbecues were out because there was low risk but psychoactive substances were in. I will just say that it is good that we are making progress. Let us be consistent in this. Let us make sure that the legislation that we do finally pass here does provide the measure of protection that we need. Kia ora.

STEFFAN BROWNING (Green): I would just like to take a short call on this Part 2 of the Psychoactive Substances Bill. It again touches on the animal testing and when someone is going for their licence for a particular substance. Again, I would just like to reiterate some of the aspects around that, and the fact that some producers and manufacturers will still push for animal testing. One person was quoted $10,000 for testing a product on rats, compared with a $30,000 cost for in vitro testing. Clearly, there is going to be that level of pressure when they are going for their licence for a particular drug to do it on rats. I would say that because of the nature of these products, if it is that big a difference, if it is $20,000, then that is too bad, because I am sure, with the nature of these drugs, that they will make that up very quick—pronto, as such.

One other thing that came up during the submissions that I heard with Mojo Mathers was that the National Animal Welfare Advisory Committee, and the chair of that, in fact, in this country, and her equivalent in the United Kingdom, showed that the UK was banning animal testing also on psychoactive substances, because they were already banning it on cosmetics. So it is not, in a way, that we would be frontrunners, but that other places are already taking the lead in that sense. What would be world leading would be this total combination of what we are doing around psychoactive substances, and the fact that we would also have that high level of animal welfare at the same time.

The New Zealand Anti-Vivisection Society brought very expert evidence as to what would be being used in the testing to get the licences through. It went through a whole number of things. It used different products that are already being used in pharmaceuticals, and it showed how they were being done, using different viable human cells to achieve it. The society went through it with oral toxicity if it is going to be swallowed, it did it with inhalation if it is going to be a smoked product, and I think there were some dermatologicals, as well. It went into the geno-toxicity and the carcinogenicity. We really should have had that almost word for word in front of the Health Committee, so that when we look at this stuff, we are looking to see how that is going to be managed, and that it would be fully, fully considered. I am hoping that there have been some changes in the Committee and I am hoping that there will be support for Mojo Mather’s Supplementary Order Paper 260 as we go through this.

One other point, and my colleague mentioned it just before, is that it is very, very important that this bill is not a Trojan Horse for prohibition. I was well aware in my youth, in my 20s, of what the black market around drugs was about. I saw the hideous stuff when heroin was very available, when a number of other substances were very available, but they were on the black market, and there was a lack of information out there around those and the way that whole issue was worked. This actually gives a chance to manage substances in what we call a more responsible way. It is probably not the be-all and end-all of how that is done, but at least it is a step in the right direction.

I will leave it at that. Again, as I say, I support the Associate Minister of Health’s move in the statement earlier that animal testing will not be used where there are alternatives. Those alternatives will be thrust under your nose, I am quite sure, frequently from now on. Thank you very much.

The CHAIRPERSON (Eric Roy): We will deal with the questions, and the first is the Minister’s amendments on Supplementary Order Paper 268.

KEVIN HAGUE (Green): I raise a point of order, Mr Chairperson. When we came to the voting on Part 1, the Minister very graciously agreed to take the vote on Mojo Mathers’ Supplementary Order Paper first because the Minister’s Supplementary Order Paper 268, in fact, if passed will cause to be ruled out of order some of Mojo Mathers’ Supplementary Order Paper. So if it is possible it would be good to be able to take—

The CHAIRPERSON (Eric Roy): I hear the member, and I am aware of what happened, but the consequential impact of passing the Minister’s amendments in Part 1 as related to the amendment on clause 11A, even though it is in Part 2, still applies. The Mojo Mathers amendment to clause 11A is consequentially ruled out. So we cannot actually put it at any stage.

KEVIN HAGUE (Green): I raise a point of order, Mr Chairperson. No, no—Mojo Mathers’ Supplementary Order Paper is very substantially about Part 2.

The CHAIRPERSON (Eric Roy): Right. So the member is seeking—have we sought leave to do that?

Kevin Hague: I am seeking the Minister’s—

The CHAIRPERSON (Eric Roy): The Minister agreed, so let us do it. Thank you.

The question was put that the amendments set out on Supplementary Order Paper 260 in the name of Mojo Mathers to clauses 12 and 15 be agreed to.

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

Ayes 51

New Zealand Labour 33; Green Party 14; Māori Party 2; ACT New Zealand 1; Mana 1.

Noes 61

New Zealand National 59; Independents: Dunne, Horan.

Abstentions 7

New Zealand First 7.

Amendments not agreed to.

The CHAIRPERSON (Eric Roy): As I related earlier, the amendments in the name of Mojo Mathers to clauses 31 and 35 are inconsistent with the previous decision. So we now move to the Minister’s amendments to Supplementary Order Paper 268 set out on Supplementary Order Paper 277.

The question was put that the amendments set out on Supplementary Order Paper 277 in the name of the Hon Todd McClay to the proposed amendments set out on Supplementary Order Paper 268 in his name be agreed to.

Amendments to the amendments agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 268 in the name of the Hon Todd McClay to Part 2 be agreed to.

Amendments as amended agreed to.

TIM MACINDOE (Junior Whip—National): I raise a point of order, Mr Chairperson. Is it possible for me to record the ACT Party’s opposition to both of those?

The CHAIRPERSON (Eric Roy): Well, you will now need leave to do that—

TIM MACINDOE: I was asking whether there was a way of doing that. I will not seek leave.

The CHAIRPERSON (Eric Roy): OK. Once we have passed the point of declaring the vote, leave is required.

Part 2 as amended agreed to.

Part 3 Control of approved products and other matters

IAIN LEES-GALLOWAY (Labour—Palmerston North): Part 3 of the Psychoactive Substances Bill does lots of things, actually. It is probably the most substantial part of the bill. I want to focus on just a couple of aspects of it, and I have no doubt that my colleagues will want to traverse some of the other matters contained in Part 3. Part 3 has clause 50, and clause 50, I think, out amongst the public, is probably one of the most important clauses in the bill. It is the clause that prohibits and restricts where these substances can actually be sold from. Again, this is an example of a really progressive change that was made by the Health Committee. The original bill certainly contained provisions for restricting the sale of substances and for regulation-making powers to determine where these legal high products could be sold from. But we really felt that to give the public the surety that the result would be what they anticipated, we needed to bring this into the primary legislation, and that is what we have done.

I am really, really pleased to be able to report to people who might be listening to this that once this bill is passed, from the moment this bill becomes law, regardless of any transition periods, which we will also discuss during Part 3, from day one it will not be legal to sell a psychoactive substance from a dairy, from a convenience store, from a supermarket, from a petrol station, or from a liquor store. It will not be legal to sell them from a non-permanent structure—i.e., flea markets, or at music festivals or what have you. It will not be legal to sell them from a vehicle. So, again, they cannot be sold from tents, or marquees, or vehicles. And, actually, if we have not managed to capture in the paragraphs of clause 50 all the places that we do not think they should be sold from, then we have got clause 50(1)(h), which is: “any other place or premises specified or described in the regulations.” So there is a catch-all paragraph there. So should we find that some clever person finds some other place that is not the type of place that we want these to be sold from, then regulations can be made to shut that down quickly.

I suppose the question then to be asked is where these products can be sold from. We have got a long list of places that they cannot be sold from. Where can they be sold from?

Sue Moroney: Barbecues.

IAIN LEES-GALLOWAY: No, not barbecues, Sue Moroney. That would be a temporary location, so, no, they could not be sold at barbecues. I am sure that people can have cigars at barbecues, but they cannot purchase legal highs.

Actually, just yesterday I saw a very good example in Associate Minister of Health McClay’s own electorate of exactly the type of place that they could be sold from. I was visiting Rotorua yesterday. I met some excellent people, some good Labour supporters, in the Rotorua electorate, and one of the things I did was—

Hon Dr Jonathan Coleman: Oh, you met Steve Chadwick.

IAIN LEES-GALLOWAY: No, I did not meet Stevie Chadwick, but I understand that she is a shoo-in to be the next Mayor of Rotorua. What I did was to go and visit a couple of places where I had been informed that legal highs were still for sale. I am pleased to say that neither of them was a dairy. It appears that if there were any dairies selling legal highs in Rotorua, they have all got out of that business. The places that I went to were exactly the places where I imagine these substances will be for sale in the future. There was absolutely no indication outside the store that legal highs were for sale inside. One of the stores was absolutely clear that it was R18, and it appeared to be enforcing that. I never once saw a youngster go into the store. The name of the store really did not indicate that it was a tobacconist or a retailer of legal highs. When you went in, all the tobacco was hidden, of course—because that is already a change that we have made—and the legal highs were not actually out on display. There was not any overt marketing. There were other products for sale there, but they were the kinds of products that go with the sale of tobacco and other psychoactive substances. There certainly was not any bread, there was not any milk, and there were not any lollies, and, as I said, I never once saw anybody go through the door who appeared to be under the age of 18. So there is that kind of responsible retailing that I think we want to support.

The only question mark that I would have had over that one particular store was its location. That is another change that we have made in Part 3, and that is to give local communities the ability to have a say about where those outlets can be. I imagine there might be some folks in Rotorua who would have a say about where that store was. Although, I have to say, from what I saw it was exactly the type of responsible retailing that we hope this legislation will support.

I just want to quickly talk about clause 51 as well, which relates to internet sales. I have to say that I am somewhat uncomfortable with the idea of psychoactive substances being sold on the internet, but alcohol is already able to be sold on the internet, and, actually, you can buy tobacco products over the internet as well. Actually, the advice that we got was that if we banned internet sales in New Zealand, all we would be doing would be opening up overseas-based sites that we would not have jurisdiction over, and it would be harder to regulate those overseas-based sites. So internet sales have exactly the same regulations applied to them for retail as permanent stores that you would find in towns.

The other area that I want to talk about is the question of possession. This is one that the committee considered at length, and I have to say that I think the committee came to what was still an inelegant solution but a solution that everybody around the table was comfortable with—until the Minister came back and told the National Party MPs to revise their position—and that was to say that possession of a substance for someone who is under the age of 18 is an infringement offence. That was on the advice of the police, who need it to be an offence in order for them to be able to conduct the type of early intervention measures that they want to be able to conduct. I must say, I was not entirely comfortable with it. I am not comfortable with the idea of possession being an offence. It is certainly an improvement that in this legislation possession of a substance—any substance for someone who is under 18, or a non-approved substance for someone who is over 18—is an infringement offence. It does not carry with it a criminal conviction. It is akin, really, to a speeding fine with a maximum fine of $500. That is an improvement on the possession offences for substances controlled by the Misuse of Drugs Act, but still imperfect, in my mind. I cannot see how criminalising possession actually helps to achieve the purpose, which is to reduce harm.

I propose that we go back to the position that the select committee reached, which is to accept—uncomfortably—the infringement offence for people under the age of 18 possessing any psychoactive substance, but to remove the offence for anyone over 18 being in possession of an unapproved substance, not only because I do not think that it helps reach that purpose of reducing harm but also because it is going to be absolutely impossible to enforce. The whole point is that the police should be able to give an on-the-spot fine. It is going to be impossible to give an on-the-spot fine if the police officer takes possession of the psychoactive substance, because they are not going to know whether it is an approved substance or an unapproved substance, and to test the substance to find out whether it is an approved substance or an unapproved substance is going to take several months. It is not possible for a police officer to deliver an on-the-spot fine for being in possession of an unapproved substance, because it will be a considerable amount of time before anybody knows whether it was or was not an approved substance. The rigmarole that people are going to have to go through to prove this does not, I think, relate to what we are trying to achieve here, which is just a simple, on-the-spot, early-intervention fine.

So I hope that members will support my Supplementary Order Paper, which would remove clause 63 and remove the offence of being in possession of a non-approved substance. We should be focused on the manufacturers and the suppliers. It is absolutely right for there to be heavy penalties for supplying or manufacturing an unapproved substance. That is where we should be focusing our attention. That is where we should be focusing the police resources. There is absolutely nothing to be gained from criminalising young people who are in possession of an unapproved substance.

Dr PAUL HUTCHISON (National—Hunua): I wish to take a very short call to say that certainly the substance of this bill, the Psychoactive Substances Bill, is very much contained in Part 3.

I could not agree more with Iain Lees-Galloway that clause 50—“Prohibitions and restrictions on place of sale of approved products”—is very comprehensive and over and above the various other places specified in subclause (1), where it says: “(h) any other place or premises specified or described in the regulations.”, so it gives tremendous leeway. But then we go to clause 61A—“Territorial authority may have local approved product policy”—and this is very relevant in Manurewa where a shop called High Zone is next to a doctor’s surgery, next to a shopping centre, and the people there are very, very concerned, but they now have the mechanism to be able to remove it from that area. I think that is very satisfactory. It is something that the Health Committee did indeed amend appropriately.

Lastly, I do take issue with Mr Iain Lees-Galloway in terms of clause 63. Undoubtedly, the police gave us a very constructive submission, and said it is very helpful for them to be able to have sanctions whether a person is over 18 or under 18. Surely there must be consistency, and I think it is right and proper that the Government has come up with this amendment.

Hon TODD McCLAY (Associate Minister of Health): I want to take a brief call here because I know that other members also want to speak on this Part 3 of the Psychoactive Substances Bill. I really want to say that this too is a very important part. This is what the public are probably most interested in. At least they are going to see on day one what changes this Parliament is about to make.

Firstly is that these products will not be available to people under the age of 18. I think that the evidence is probably becoming clearer on a daily basis that anybody who takes many of these products is being harmed. I do know from speaking to parents, and particularly mothers, around the country over the last few weeks, about the significant harm that seems to be caused to young people through addiction, through withdrawal, and through all sorts of other horrible things we would not wish upon any family at all. So on day one no under-18s will be able to possess these or have them sold to them, and I think that is very important.

Secondly is where people will get hold of them. So there will be very strict restrictions around availability. We have heard other members speak in the debate earlier, so there will be no more dairies and no petrol stations selling them. There is a very exhaustive list, and I think the Health Committee has done a good job here in helping define where these products cannot be sold.

Most important, also, are some rules around labelling. Any product that is approved will have to have clear information on it. Yesterday in Dannevirke a mother gave me the empty packets of a 6-week supply of this product, which her young son had been consuming. These ones I am holding are the ones she could find, and there were probably 70 packets. She told a heartbreaking story about a bright young man who was very engaged in school, a good academic student who loved sport, and whose life had changed so very quickly. He sold everything and stole everything and could not stop this. Sadly, when that mother went down to the dairy to tell the dairy owner, who did not really know he was doing anything wrong, of the harm that was being caused, there was a suggestion that the boy owed $45 and that his mum should stump up. Well, actually, quite quickly the dairy owner realised the harm when he spoke to others, and he went and apologised, and that community is now working through that as a community.

On one of the products this young man took it says: “Not for human consumption. Do not purchase if your health is impaired in any shape or form. Do not purchase if you are pregnant or breastfeeding. Keep the product out of the reach of children. Restricted to adults over the age of 18.” That is it—that is all that is on there, and that is just absolutely frightening. So we will ensure through this legislation that adequate labelling is there, with health warnings, with information about where to get help, but also with information about who is importing, about the manufacturer, and about who is distributing. That is going to help the Ministry of Health keep an eye on these products but it is also going to help the consumer.

There are also restrictions around promotion. Here is another product. I will not mention the name because these guys have had enough promotion as it is. It says on here: “For a limited time only send 10 empty” of these “packets to” such-and-such address, and a country, “with your name and return address details and we will send you 2 grams of this product for free.” Well, it is not actually free because it is doing harm, so that will not be possible either. So these are very important rules that we are putting in place.

One of the important areas that gives local communities a greater say through this part of the bill is an extra tool for local councils, should they wish, individually or collectively, to place further restrictions on availability. This is, again, certainly the Government but also the Health Committee and Parliament backing local communities to have a bigger say. I think that we will now see communities all over the country speaking up on this issue and local government—not only because it is election time for them—and mayors deciding that actually we need to do something about it and they need to do something about it. I would expect that there will be restriction orders consulted on and put in place quite widely, and that is appropriate because this is about local people.

Finally, I have a Supplementary Order Paper 277, which I introduced today, and I apologise to the Committee that it is so late. Last night I was at a public meeting in Invercargill, the electorate of the hard-working member Eric Roy. A couple of hundred people turned up and they were passionate and they were angry, but their anger was not directed at this House or the Government; it was directed at the people who had been harming their community, and it was about their desire to do something about it. They made a case that made me come back and actually question officials, and in consultation with parties in the House we have reached agreement. So what this Supplementary Order Paper says in the schedule is that where a product is currently on the market—if it is currently possible to sell it, so it is not illegal—an application for approval can be made and can be granted on a temporary basis. It says that as soon as practicable, after the date on which the regulation around the type of testing it will need comes into effect, information shall be given, or no later than 18 months after the regulation comes into force, and they must come forward and they must present their full application.

I think that is far too long for the mother whose son took these 70-odd products. So in agreement I am putting forward a Supplementary Order Paper that says that within 3 months—not 18 months—of the regulations coming into force, anybody who wants a temporary application must come forward with detailed information, some clinical information, so we can have greater certainty about what is in these products. I would hope we can apply a precautionary principle to this because this House wants, and has put on record to the importers, these dangerous products off our streets, out of our shops, and away from our young people. This amendment will give us the ability to ensure that any product that an importer or a manufacturer wants to bring to market is as safe as it can be and ensures that those importers and manufacturers take their responsibility seriously, and that they are doing the studies and the tests that our expert committee says are appropriate. Where they are not, we will have the ability to take it away. If they cannot do that within 3 months, then they are not serious about reducing harm and they do not deserve to be able to sell, to peddle, this muck to our young people. Thank you.

LOUISA WALL (Labour—Manurewa): It is my pleasure to speak to Part 3,which is really about the controls around how approved substances can be purchased, enforcement matters, and regulation-making powers, particularly of local communities.

I just want to pick up on the point about clause 46 and contrast that with clause 63. I think we were all clear, from the evidence that the police presented to us, of the compelling reason why we, in the end, enabled them, through an offence, to engage with those under 18. It was primarily because if you are under 18 it does not matter whether or not the substance in your possession is regulated or unregulated. The reality is that if you are under 18 you should not have these substances at all. So that was the primary reason we created an offence with the maximum penalty of a fine of $500—to provide the police with the tools so that they could engage specifically with young people, and, hopefully, work with those young people, identify the young people at risk, and then provide the services to help them and assist them, given their age.

For the over-18s, the police again were very clear that it would be very difficult for them to determine the difference between an approved substance and an unapproved substance, which is why we did get consensus in our Health Committee to delete that particular section of the bill. And it is for the Government to determine. It wanted some congruency. I guess technically if you are over 18 and you have got an unregulated substance, then maybe it should be a fine. But the reality, from what the police told us, is that this is going to be very difficult to implement. It may be a law on the books, but actually, in practice, it is going to be very difficult to prosecute anybody, because of the testing regime.

I wanted to also highlight clause 47 of the bill. Our emphasis, again, is in the right place. If you sell to somebody under 18 and you provide that product to an under-18-year-old, you will be fined $5,000. If you sell that product and you belong to an organisation—so you are technically a body corporate—you will be fined $10,000. I think they are a very good signal to the community. It is a very good signal particularly to dairy owners, or anybody who is in possession of these substances, thinking that they can sell them after this legislation goes through. So we are obviously very pleased with those particular aspects in Part 3.

I now want to highlight clauses 52A and 53. For me, these are wonderful, because they also show some congruency with tobacco legislation. We will not let these substances become substances that are associated with sports, for example, because we will not allow them to sponsor different events, and there will be no advertising [Interruption]—Trevor, are you going to tell me that I have not got much time—of these products on TV, radio, or newspapers.

I do have a question for the Minister. Clause 53A of the bill is very, very specific, and it was put into this piece of legislation to absolutely deal with the issue that we have in Manurewa. On the main street, at the same place as a bus stop where young people travel to and from school, between two primary schools, we have a High Zone, or a legal highs shop. The advertising around that property is absolutely outrageous in the middle of our community. What this clause does is say that there is a “Restriction on retailer’s name using words, expressions, or trademarks etc, associated with approved products”. What I want some guarantee about, from the Minister, is that the day after this gets assent and becomes law, it becomes illegal for that shop to advertise the products in the manner that it does, and I want to make sure of that, not only for myself but also my community.

I want to acknowledge Angela Dalton, who is the chair of the Manurewa Local Board. I want to acknowledge Toa Greening, Colleen Brown, and Simeon Brown, who all made submissions. We are all trying as hard we can to help protect our community, so I particularly would like some comment about what tools are available to them to immediately ensure that this particular provision empowers them to shut down the advertising around that particular shop.

Finally, I do also want to highlight clause 61A of the bill, which is empowering our local communities to approve where our products can be sold. I mean, this is very much—

Hon Judith Collins: Come on, we’ll never get through.

LOUISA WALL: —Hon Judith Collins—in the same thinking as the local alcohol policies. I am here to support this bill, after being a member of this committee, and I thank you very much. Kia ora.

KEVIN HAGUE (Green): In relation to Part 2 of the Psychoactive Substances Bill, I spoke about the congruence we were seeking between the ways that we dealt with different sorts of psychoactive or recreational substances, and Part 3, indeed, provides much of the machinery for the regulation. It introduces the very, very important principle that the regulation is proportional to the harm, which is very important, and it covers off those bases that we have discussed in this Chamber in relation to alcohol—location of outlets, sponsorship, advertising, labelling, and so on. It stops short of introducing a tax on these products, but only for the reason that it was not, at this point, possible to determine what level such a tax should have. We want to come back to that in the very near future. This is the part of the bill that actually provides those tools that, again, we hope will lead to greater congruence.

I want to give most of my time, however, to this issue of possession. Paul Hutchison indicated that the National MPs decided to vote to support a possession charge after the evidence given by a couple of police officers to the Health Committee. There was an intriguing gap of some months between the police officers doing that and the National MPs changing their position to support such a possession charge. Indeed, I draw the Committee’s attention to the Green minority view on the bill, which makes no mention of the clause 63 issue and the possession charge, and that is because, up until that point, there was no possession charge in the bill. That was introduced at the very last moment by the Government MPs.

Mr Lees-Galloway has a Supplementary Order Paper that the Green Party will be very pleased to support, Supplementary Order Paper 267. We think that, as he has said, the existence of this charge does not contribute to the purpose of the bill. It does not, in any way, assist harm minimisation or the promotion of the health of the people who use these psychoactive substances. The existence of possession charges under the Misuse of Drugs Act has not contributed to any kind of reduction in consumption or addiction, nor any kind of increase in the use of treatment services by people who use those drugs. There is no evidence to suggest that it would be any different in relation to psychoactive substances. So that is point one.

The second point is, as Mr Lees-Galloway has pointed out, that infringement offences are intended to follow the actual infringement by an immediate penalty—an immediate minor penalty. That is pretty much never going to be possible in the case of clause 63, because at the very least the substance that person A, who is pulled over by the police, searched, and found to have a substance on them—the police will not know what that substance is. They will not know unless and until that substance is tested. When it is tested, in most cases, I think it is pretty clear that that substance will turn out to be an approved substance, because once we have a legalised supply of some psychoactive substances with low risk, actually, that is going to tend to be what most people have. In most cases, that is what will tend to be the case. So a person will have been deprived of their legally acquired and possessed substance for a period of some months before getting it returned in most cases.

There will be other cases where the person is found to be carrying a substance that is not an approved psychoactive substance, but the point that I want to make to the Committee is this: substances that are not approved psychoactive substances still actually constitute two categories of things. The first of those categories is psychoactive substances for which an application has been made for approval and has been declined. It is pretty clear in that case that we are dealing with a psychoactive substance that has not been approved, and I think everyone would say it is probably not legitimate for that substance to continue to be in someone’s possession. There is no legal way they could have acquired it.

But there will be other substances. If I have a powder or some pills and those turn out not to be of a substance that has ever been subject to an application, then, first of all, we do not know whether it is a psychoactive substance or not. What that means is that the police are suddenly in a position of needing to make an assessment of whether or not my powder or my pills are a psychoactive substance when, according to clause 9 of this bill, whether or not something is a psychoactive substance is determined, in fact, by the authority. They will not have done so. So what we arrive at is an absolute mess—an absolute mess in which the police cannot possibly make sensible decisions, and we cannot know from this bill what ought to happen to the person who possessed that or to the substance that they possessed, because, very likely, the substance they possessed was possessed entirely lawfully. So there is a really fundamental flaw with clause 63. This business, actually, of determining whether or not something is a psychoactive substance also applies to clause 46, and it is, in my view, a fatal flaw with this bill.

I want to just very briefly touch on clause 46 as well, just to highlight the point made in our minority view, which is that although, very reluctantly, we have come to support the inclusion of that clause in the bill, we do so with some fear that that clause may, in fact, be used to harass, in particular, young people from particular minority groups. That would be a most unfortunate consequence, which certainly the Green Party will be monitoring and will be looking for in the review of the bill. Thank you.

The question was put that the amendments set out on Supplementary Order Paper 277 in the name of the Hon Todd McClay to the proposed amendments set out on Supplementary Order Paper 268 in his name to Part 3 be agreed to.

Amendments to the amendments agreed to.

The question was put that the amendments set out on Supplementary Order Paper 268 as amended in the name of the Hon Todd McClay to Part 3 be agreed to.

Amendments as amended agreed to.

The question was put that the amendments set out on Supplementary Order Paper 267 in the name of Iain Lees-Galloway to Part 3 be agreed to.

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

Ayes 48

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

Noes 71

New Zealand National 59; New Zealand First 7; Māori Party 2; ACT New Zealand 1; Independents: Dunne, Horan.

Amendments not agreed to.

Part 3 as amended agreed to.

Schedule 1

The question was put that the amendments set out on Supplementary Order Paper 277 in the name of the Hon Todd McClay to the proposed amendments set out on Supplementary Order Paper 268 in his name to schedule 1, and the following amendment in the name of the Hon Todd McClay, be agreed to:

in clause 6(4)(b) of Schedule 1 of SOP 268, replace “18” with “3”.

Amendments to the amendments agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 268 in the name of the Hon Todd McClay to schedule 1 be agreed to.

Amendments as amended agreed to.

Schedule 1 as amended agreed to.

Schedule 2

The question was put that the amendments set out on Supplementary Order Paper 268 in the name of the Hon Todd McClay to schedule 2 be agreed to.

Amendments agreed to.

Schedule 2 as amended agreed to.

Clause 1 agreed to.

Clause 2

The question was put that the amendment set out on Supplementary Order Paper 268 in the name of the Hon Todd McClay to clause 2 be agreed to.

Amendment agreed to.

Clause 2 as amended agreed to.

Bill reported with amendment.

Report adopted.

Third Readings

Third Readings

Hon JUDITH COLLINS (Minister of Justice): I move, That the Legal Services Amendment Bill, the Accident Compensation Amendment Bill, the Care of Children Amendment Bill, the Child Support Amendment Bill (No 2), the Family Proceedings Amendment Bill, and the Property (Relationships) Amendment Bill be now read a third time. These six bills have been divided from the Legal Assistance Amendment Bill.

Access to justice is a fundamental principle of our justice system, and this Government is committed to ensuring that those who require legal assistance can access it. Granting legal aid requires an assessment of the ability to pay for representation, which the Legal Services Act 2011 manages through means testing. Although legal aid may be provided to a single person with no dependants on an annual income of $22,000, it can also be provided to a person with an annual income of $72,000 and several dependent children. The means test responds to the personal circumstances of each applicant.

Administering legal aid is a balancing act. It is important to ensure legal representation is available to those who cannot afford it, but also that the spending of public funds on legal aid is done effectively and efficiently. We must closely assess expenditure on legal aid and prioritise how legal aid money is spent. Legal aid expenditure increased by 55 percent between the 2006-07 and the 2009-11 years. That was from $111 million a year to $173 million a year, placing the legal aid budget under extreme pressure. This growth was expected to result in a $402 million gap over 5 years between forecast expenditure and available funding. The Government had to act to bring this growth under control, and did so through a comprehensive set of reforms to legal aid.

There are three main ways that legal aid expenditure can be controlled. The first is to reduce the number of grants, which has the largest impact on those people who rely on legal aid to fund their representation. The Government has been extremely careful in seeking savings in this area, particularly for the criminal justice system. The Legal Services Amendment Bill makes fair changes to reduce the number of grants. These include tightening the criteria by which applicants can receive legal aid for civil proceedings when their income exceeds the prescribed thresholds. Special protections have been put in place in the case of asylum proceedings, care and protection applications, and domestic violence applications. In these cases, the means test will be less stringent.

The second method by which legal aid expenditure can be controlled, reducing the cost of each grant, has a smaller impact on legally aided people and largely affects the legal profession. Reducing the costs of grants ensures that limited taxpayer funds are spent as efficiently and effectively as possible.

The third method by which legal aid expenditure can be controlled is by recouping a large proportion of legal aid debt. For 75 percent of those who receive legal aid the requirement to repay their debt is waived, because they cannot afford to repay the debt, because the debt is so small it is not worth collecting, or because it would not be just or equitable to enforce it. The 25 percent of legally aided people who are required to repay their debt are those who have been assessed as having the means to do so.

The Legal Services Amendment Bill puts in place mechanisms to ensure that a greater proportion of this legal aid debt is repaid in as prompt and as efficient a manner as possible. The bill extends provisions to allow interest to be charged on all finalised debt, although the Government has decided to delay the imposition of interest for 6 months after debt is finalised. The bill streamlines the use of deduction notices to allow the use of this more efficient method of repaying debt by deducting money direct from people’s wages, benefit, or bank account. The bill also allows the Legal Services Commissioner to refuse to grant civil legal aid to applicants who are in arrears on repayments of a previous grant of legal aid, unless the interests of justice require otherwise. Applicants will become eligible again once they have undertaken to restart their payments.

The exception to this focus on increasing repayments of legal aid debt from those who can afford to do so is the reintroduction of the user charge for civil legal aid. The user charge was introduced in 1970 but was removed in 2006 due to an inefficient administrative process preventing it from being cost-effective. A more straightforward process has now been developed, allowing for the reintroduction of the user charge, which regulations will set at $50.

The changes made by this legislation and the earlier reforms in 2011 are consistent with the obligation of the New Zealand Bill of Rights Act 1990, and maintain protections for vulnerable people who require legal assistance. While the Legal Services Amendment Bill makes changes to the legal aid framework, its supporting bills focus on sharing between the State and private parties the costs of court-appointed lawyers for children. By default the court will order the relevant parties to refund the Crown two-thirds of the cost of lawyer for child. The court has discretion to lower the proportion a party pays or waive it entirely if it would cause serious hardship to that party or their dependent child. The majority of these orders will be made under the Care of Children Act, which requires the court to promote the welfare and best interests of the child.

The Legal Services Amendment Bill and its supporting bills represent the best compromise between ensuring that legal aid expenditure is sustainable and ensuring that people without the means to fund their own legal representation receive any necessary advice. The bills ensure the legal aid scheme will be viable into the future. If a person is eligible for legal aid and associated legal assistance, they will receive it. I commend this legislation to the House.

ANDREW LITTLE (Labour): Rising as I do to speak on the legislation arising from the Legal Assistance Amendment Bill, let me begin by saying that if the Minister of Justice has demonstrated one thing tonight, it is her uncanny ability to speak through both sides of her mouth. That was an outrageous speech. That was an outrageous set of propositions that that Minister put up to justify this unjust, hopeless, and very unfair legislation. You cannot talk about access to justice in one breath and then talk about all the measures you have got in place in this legislation to cut access to justice. That is unconscionable and it is irreconcilable. That Minister has tried to do it, and it just totally lacks credibility. Members opposite know that, which is why they sit there in their seats crowing and bleating away. They know that the Legal Services Amendment Bill is designed to do one thing, and that is solely to cut the funding to legal aid. It is not about justice. It never was about justice. It is about cutting funding to legal aid. If there is one thing that has become demonstrably clear about this Government, it is that it has no interest in justice, it has even less interest in the rule of law, and it simply does not respect the fact that people are finding it harder and harder to make ends meet and that those who are imposed upon or who face an injustice are finding it harder to get access to court and to court representation.

Let us look at the measures that this bill puts up—let us just look at those measures. Now the Legal Services Commissioner will have the power to charge interest on unpaid legal aid debt. Let us remember that the people who get access to legal aid, by and large, are the poorest, those on the lowest incomes. That is why they get legal aid. This Government wants to make it even tougher for them now, and to say: “If you have the temerity, in your low-income status, to put your hand out to the State for even more assistance because you have to front up to the court, whether on a criminal matter or a civil matter, we are going to make it tougher for you because where that legal assistance is in the form of a loan, we are going to charge your assets and we are going to charge interest on that grant. We are going to charge interest on that grant.” Far from making it easier to get access to justice, this will make it harder.

Then this bill goes on to give the Legal Services Commissioner the power to authorise deductions from a legal aid claimant’s sources of income, whether it is their pay, whether it is their benefit, or whether it is any other source of income. The Legal Services Commissioner will have that power. That is a huge power. The power is not over just small little bits of money, small contributions; that power extends to the Legal Services Commissioner being able to deduct up to 40 percent of a legal aid claimant’s after-tax income—40 percent of a legal aid claimant’s after-tax income. And that Minister has the cheek to come here and say: “We are improving access to justice.” There is no improvement in access to justice in this legislation. This is an outrage.

Then, if that were not enough, there is this. What the Minister has proposed in the bill is that if a legal aid claimant has moneys owing on previous legal aid grants, they can be denied further legal aid. Never mind that they need it, and never mind that they may be compelled to go to court to answer a charge, or they may be placed in a situation where justice demands that they take a claim to court, and they need the assistance of the State to do it. Never mind any of that. If they have a previous grant to which they are required to contribute in part or in whole, if they have not made those payments, they can be denied further legal aid. This is on top of the interest that will be charged, this is on top of any deductions that have already been made, and it is also on top of any user charge that has already been levied.

Let us be very clear. Legal aid in this country is under threat. This Government has already introduced a fixed fee system for legal aid that is making it harder for lawyers to provide the quality of service and the extent of the service that once they were able to. Their time is constrained because the fee is constrained. And whereas once upon a time the user charge may have been able to be absorbed and the lawyer act on legal aid for a client, that is much less likely to be the case. So the pressure is coming from all sides. The pressure is coming from all sides, and this Minister says that this legislation is about improving access to justice. This will not improve access to justice.

This is about a Government that has spent years spinning a yarn that it cannot afford some things, things like justice and things like looking after people. It can afford other things, like bailing out Solid Energy and like spending up its fast mover improvement fund—what does it call it, the fund it set up from the sale of State assets, which it has spent six times over already—

Sue Moroney: The Future Investment Fund.

ANDREW LITTLE: The Future Investment Fund, that is it—the Future Investment Fund. The Government can spend money. It can spray money around on all sorts of things that suits it. It can spend it six times over. But for the little people of this country who look to the State for assistance when they most need it, when they need to go to court, when they need to defend charges, when they need to deal with family proceedings, they will not get it—not from this Government, not from this lot. This Government just does not care about those people who every day face struggle, face hardship, face poverty, and look to the Government for support and assistance.

This Government is driven solely to drive down the cost of legal aid. It is not about the demands of justice. It is not about the fact that we live in a society now that is more litigious than it was 10, 15, or 20 years ago. The Government does not care about the fact that more people are more aware of their legal rights, whether they are fathers or mothers or whether they are people facing the sanctions of the criminal law. More people insist on their right to be heard in court, which is their right, and they do look to legal aid to ensure that that happens. There is nothing wrong with that. So when this Government says that it is concerned about access to justice, we know for a fact that under this legislation it does not care one little bit.

We see in the Family Court reforms, which this bill will have a bearing on, that this Government is rapidly reducing the right and access to legal aid for those who need it most, in a very difficult time in their lives. The point is this. The Family Court reforms are about removing access to legal representation for people when they need it most. The Government in that legislation is enacting a process that means that people will not be able to get access to legal representation and therefore will not make claims on legal aid. The one concession that has been made in that legislation will cost very little in terms of legal aid. This Government is driven solely by the savings it wants to achieve. Of course, the other aspect that legal aid has funded is counsel for the child. That is being cut. That will be much harder to get now. That is being almost totally cut, and so that will drive down the cost of legal aid.

This Government, in order to achieve its surplus in 2014-15, does not care who pays for that. It does not care who pays for its boast when it goes into 2014-15 that the books look good. It does not matter that there are people in hardship who cannot get the representation they need in court. This Government does not care about that. What it cares about is a set of figures that look good for its mates whom they cosy up to for the purposes of an election. That is all that is about—that is all that is about. This is about driving down cost and making the books look good so they can cosy up to their corporate business mates and say: “Look, we know how to cook the figures. We can cook the books and we can show a surplus.” And it will not be a surplus at all. The deficit will be in the working lives—or at least in the lived lives—of the working poor and the beneficiaries and the other low-income people in this country. They are the ones who are paying the price of this bad Government, of this immoral Government. They are the ones who will pay the price of legislation like this, which will deprive them of their rights.

The other ones who will pay the price are every New Zealander, because our reputation will suffer. We will no longer be able to go around the world and say that we are a country that understands the rule of law and understands that the rule of law means that anybody, irrespective of their means, can have access to the justice system and can be supported in doing so if they need it, because this Government is taking that away. It is taking away that support, it is taking away access to justice, and our country will be poorer for it because there will be people who will not be able to get their legal rights determined and sorted out. For that reason we are deeply opposed to what this Government is doing on legal aid, and deeply opposed to this legislation.

SCOTT SIMPSON (National—Coromandel): It is a pleasure to rise and take a brief call in the third reading of this Legal Assistance Amendment Bill and the associated bills—the Legal Services Amendment Bill, the Accident Compensation Amendment Bill, the Care of Children Amendment Bill, the Child Support Amendment Bill (No 2), the Family Proceedings Amendment Bill, and the Property (Relationships) Amendment Bill—that go with it.

These bills make changes to the way that legal aid and Crown-funded legal aid services are to be provided. I want to congratulate the Minister of Justice on bringing this legislation to the House, because the prudent and careful management of taxpayer money is a cornerstone of good Government, and that is a hallmark of this John Key - National-led Government. I am delighted that the Minister has brought this legislation to the House.

Specifically, the legislation will ensure that legal aid and the provision for lawyer for the child and youth advocacy services remain affordable and accessible in the future. The Minister has made it clear that we will be ensuring that that is the case. These changes will not affect cases involving vulnerable parties, the care and protection of children, and serious criminal matters; they will be protected. These measures are designed to get parties to resolve minor matters between themselves rather than through the courts, wherever that is possible, while making sure that legal aid is there for those who most need it.

This legislation strikes the balance between ensuring the viability of the legal aid scheme and prioritising funding to people who have the highest need within our legal system. This is very good legislation. I again commend the Minister for bringing it to the House, and I commend it to the House for very favourable consideration.

Hon LIANNE DALZIEL (Labour—Christchurch East): I too rise to speak on the third reading of the Legal Services Amendment Bill, with the word “Sustainability” having dropped out of the title. The reason for that is that, of course, the proposal that originally came to the House was not sustainable, and that is why we have had to drop any reference to it.

There were a number of submissions to this bill that I have referred to in various stages of the bill, and I want to particularly refer to elements of the Criminal Bar Association’s submission. But the first thing I want to do is again remind the House of the regulatory impact analysis, which provided a degree of warning to us about what happens when we do not take into account some of the potential problems that arise when we pass legislation. I do not think that after we see the implementation of this legislation—and I do accept that it is nowhere near as bad as it originally was, but that does not mean that it is perfect—we can in the future say that there were unintended consequences.

This Parliament is voting for intended consequences, and they are spelt out in the regulatory impact statement. The first of these—these are the risks that were highlighted—is that a change of purchase approach is required but is likely to be resisted by some parts of the legal profession, and this is likely to lead to an increase in a number of legal challenges of legal aid grants, as well as public concern. We have already got a tick on that one. We know that that is the case, and we know indeed that there are going to be many, many more costs associated with the increased concern around the legal challenges of legal aid grants.

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. We have already seen that. I went up to Whangarei with my colleague Andrew Little, and we heard very clearly that there were issues already in that area, and I know that in other parts of the country that has been the case.

The people who will actually suffer as a result of that are not the lawyers. In fact, it is the people whom they would otherwise serve. As I said in one of the other readings—and, I think, in the Committee stage—a lawyer came before the Justice and Electoral Committee in respect of the Family Court proceedings legislation, and it was her decision to leave the law practice she was working for at the time and set up her own independent practice, because the larger firm that she worked for prior to that decided that it would stop doing all legal aid work.

She felt in all good conscience that she could not stop serving the needs of our migrant and refugee community. She felt that they would be incredibly disadvantaged if her experience was no longer available to them, and, as a result, she had to leave that firm. It was a very, very brave decision for somebody in post-earthquake Christchurch to leave the comfort of an established, well-respected law firm and set up on her own, and that is what she has done. I take my hat off to her. I felt that her submission was incredibly powerful because not only was it made to the Family Court proceedings legislation but it reached right across to this legislation here—the one that we are considering in the third reading tonight.

The introduction of income and asset thresholds for the criminal means test 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. We have had those examples brought to us already both in the context of this law and also in the context of the Family Court proceedings legislation. We have heard so many times about the problems that are confronted by courts that have to deal with so-called self-represented litigants. Self-represented litigants cause a real problem, often in terms of the time delays that they can cause, but also in terms of their completely unrealistic expectation of what the court is there to do. Also, they may not be completely au fait with all of the background to the particular case they may be arguing.

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. I did notice that the Māori Party, I believe, is not voting for this bill, and I believe that this is the reason why it is not voting for this bill.

As I did describe in one of the readings—I think, in my second reading speech—we all know that young Māori men are exposed to far greater risk of being stopped in the street, of being questioned, of being arrested, of being charged, of being charged with more serious offences, of being charged with more offences, of ending up in court having to defend them, of ending up being convicted, and of ending up in jail. That is a matter of fact. I mean, it is on the record. You only need to look at it.

I know nobody likes to talk about systemic racism. It is not a judgmental statement; it is just a statement of fact. It is what happens when you have systemic system failure, and that is what we have in this country. We will continue to have it until somebody has got the courage to stand up and deal with it. The regulatory impact statement says: “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, with flow on costs due to delays, additional assistance required from court staff and the judiciary, and higher numbers of appeals of decisions.”

In here, in the regulatory impact statement, it does not say “as described, self-represented litigants”. It just says “self-represented litigants”. Can I just do away with that myth? This was the point that was made at the select committee on more than one occasion. These people are not self-represented. They are unrepresented—completely unrepresented. No one is standing up with them—nobody with the legal background, the experience, and the knowledge to defend their case. Nobody stands there with the legal knowledge and experience to present their case. Nobody is on their side. They are not self-represented; they are unrepresented. The regulatory impact statement stands in defiance of common sense and proper interpretation of the English language by using that term.

I want to quote from the Criminal Bar Association’s submission, because it talked about a negative impact upon the judiciary. This is the long-term issue that nobody really sees when you are dealing with a short-term problem. The Government has got a short-term problem—it wants to cut the Budget. This is about money; it is about nothing else. Here is a quote from the Lord Chief Justice, Lord Judge: “The longer-term problem arises in the context of legal aid, which we are talking about now. I am not going into the whys and wherefores of the legal aid issue in terms of cuts, but can I just address one long-term consequence? A lot of people working in the criminal world and on family work do so on the basis of legal aid. There are shining men and women who go into the commercial court world. They do fine—they do the Chancery Division. But an awful lot of the judicial work at the coalface—the sentencing of the rapists; the trial of the terrorists; and so on and so forth—is done by people whose background is legal aid criminal work, prosecuting criminal cases and family work.

If we cannot attract young men and women of real talent into doing criminal and family work on the basis of what is available on legal aid, we shall lose a significant part of the practising Bar, which is from minority ethnic backgrounds and women. If we lose them or don’t collect them, in 20 years’ time the Judicial Appointments Commission will have fewer applicants from these backgrounds than they have at present, which will in its turn stultify the progress towards a more diverse judiciary. I see those two questions running side by side, although one is a much longer-term problem.”

Nobody has talked about the longer-term impact on our entire legal system when we actually discourage those whom we need to be encouraging into taking up these positions. That, unfortunately, is one of the unforeseen consequences of this legislation.

DAVID CLENDON (Green): It is no great pleasure to speak to the third reading of this legal assistance legislation. There is a great deal one can discover about the legislation simply by looking at the evolution of the naming of the legislation, which, of course, started out in life as the Legal Assistance (Sustainability) Amendment Bill and has now been divided into a number of other bills.

The reason why that name was dropped and why the word “Sustainability” dropped out is quite remarkable, and it is reflected in the report back from the Justice and Electoral Committee. This is not the minority report; this is actually the report from the majority—from the Government members. The recommendation in that report recommends a change in the name of the bill to the “Legal Assistance Amendment Bill”. It goes on to say: “The intention of this change is to reflect extensive amendments proposed to the bill in response to submissions.” That is a good thing for a select committee to do, clearly, but it goes on to say: “These proposed amendments reflect the refocusing of the bill on the outcomes for legal aid clients, rather than solely on the financial savings to be achieved.” I commend the honesty in that statement, but what an extraordinary admission for a Government to make—that, in fact, this bill was first drafted solely in order to save money, to make some short-term financial cost saving with no thought to the outcomes for legal aid clients, those people who are in need of the services in order to see that they are fairly represented in court.

As I say, that is a very honest and open admission, but it just reflects a very narrow scope, a lack of an integrated approach to lawmaking. Sadly, it is a theme that runs through a great deal of the legislation we are seeing from this Government: an absolutely singular focus on cutting costs in the short term with no recognition of the longer-term consequences of the fact that, in fact, you are making false economies and that saving a dollar in one place is very likely to lead to increased cost elsewhere. And it is not only financial costs. In this instance the social cost, the cost in terms of access to justice, is simply unacceptable. It is a very thoughtless piece of drafting, focused on that singular attention to saving money, and that is a very poor way to make legislation.

The fact is that the original drafting contained what is known, of course, as a “Henry VIII” clause—that is, effectively a power for the Minister to actually change the law, to make amendments in a way really to exercise the power of Parliament. Again, to me, that reflects—with no ill will towards the drafters, clearly, those very hard-working officials who do the work—the fact that the public sector is being driven down to a point where it is scarcely able to fulfil its core functions. Again, it is this short-sighted, narrowly focused cost cutting, which simply leads to poor outcomes in the longer term.

Access to justice, clearly, is going to be limited by the fact that people will increasingly have difficulty getting access to legal aid. In respect of the fixed fee that is introduced in this legislation—the application charge of $50 or so—we know that will mean there will be fewer companies who are actually interested in providing legal aid services. We are hearing this already from larger legal practices—that they simply will not bother with legal aid work. I think within the legal profession there is a degree of corporate responsibility. There is some pro bono work done and all that, but, frankly, these people are running businesses, and on the fixed-fee scale that is proposed in this legislation or regulations, it simply will not be worth the candle for companies to involve themselves. There will be increasing demand for legal aid, a reducing supply, and fewer people who are able to get the representation in the courts that our constitutional basis really requires that they should have.

We will get this very unfortunate situation. We will have the best access to justice that money can buy. The quality of the representation people will receive in courts will be a function of their ability to pay for that. That is a very unhappy situation for New Zealand to be in. This country over the last 20-odd years has seen a widening inequality gap: a few people are doing very, very well and more people are actually not doing well at all and, in fact, are struggling simply to survive. Some members may have seen a presentation earlier this evening on a new book, edited by Max Rashbrooke, that has been published recently called Inequality: A New Zealand Crisis. Chapter after chapter describes how across the board in society in all sorts of sectors and all sorts of ways that inequality gap is opening up in New Zealand. And now we are seeing unequal access to justice, and that is simply unacceptable in a modern, liberal democracy.

We know that as that inequality gap widens, it disadvantages not only those at the bottom but even those who are best off in that situation financially. They are actually overall worse off because the quality of the norms of society degrade, and that is to nobody’s advantage. Everybody is worse off as we allow this inequality gap to expand and to open further. Unequal access to justice, unequal access to representation in our courts, is a serious matter. Unfortunately, this legislation makes that situation worse.

We have heard from one member at least who talked about this legislation striking a balance between saving money, cost cutting, efficiency—however you like to describe it—and access to justice. In fact, this legislation fails miserably in terms of balance. It is very unbalanced legislation. We can go back to the original point I made. The point of this legislation is to cut the cost, to take dollars off one or two lines in the justice budget, not actually accepting that what we are really doing is relocating cost. We are saving money in one point; we are upping the cost somewhere else. A lot of that will be felt by the most vulnerable, by the poorest. It will mean fewer people get decent representation, more people stay longer in the justice system, and an increase in people being convicted, paying fines, even being imprisoned, who ought not to be, arguably. This is a very poor piece of work. It is not a balanced approach to lawmaking. It is not a balanced approach to justice. The Greens will continue to oppose this.

Debate interrupted.

Points of Order

Education (Breakfast and Lunch Programmes in Schools) Amendment Bill—Leave to Postpone First Reading

Hon TREVOR MALLARD (Labour—Hutt South): I raise a point of order, Mr Speaker. I apologise to the member. Following the request of the member in charge of the Education (Breakfast and Lunch Programmes in Schools) Amendment Bill, Hone Harawira, and discussions behind your Chair, I seek leave for the bill, which is set down for first reading tomorrow, to be postponed and set down the following day as an order of the day after the Employment Relations (Continuity of Labour) Amendment Bill.

The ASSISTANT SPEAKER (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is no objection. Did I hear any? There is no objection.

Third Readings

Third Readings

Debate resumed on the Legal Services Amendment Bill, the Accident Compensation Amendment Bill, the Care of Children Amendment Bill, the Child Support Amendment Bill (No 2), the Family Proceedings Amendment Bill, and the Property (Relationships) Amendment Bill.

ALFRED NGARO (National): When one is an issues-based party it is very easy just to poke fun and actually criticise the roles and responsibility of governance, which is what the Government is about. We are about access to justice, but at the same time we are about responsibility in the use of public funds as well.

I take a brief call on this third reading of these bills, formerly part of the Legal Assistance Amendment Bill. What is really clear in the regulatory impact statement is that the current costs of legal aid are escalating out of control. It is clearly stated that the current growth in legal aid expenditure is not sustainable, and hence the reason for the original title was the Legal Assistance (Sustainability) Amendment Bill. It became very clear that it was not sustainable. This is not just about cutting costs. This is about making sure that the system is responsive.

The 25 submissions clearly highlighted their concerns, but at the same time those concerns were also addressed. There were concerns about the impact on access to justice, self-represented litigants and defendants, reductions in eligibility for criminal legal aid, and amending eligible proceedings by Order in Council. In response to the submissions on the legislation, the Government has approved Supplementary Order Paper 134, which removes from the legislation the clauses that submitters were most opposed to.

The Justice and Electoral Committee—and I want to commend the Minister of Justice as well—has heard the concerns, and has ensured that we have adjusted and amended the legislation so that it is looking at ensuring that access to justice is there for those who are most in need, but at the same time is being responsible in governance for the role that we have.

I do commend this legislation. It is good legislation. We have heard the submitters; we have responded. I commend this bill to the House.

DENIS O’ROURKE (NZ First): The bills formerly part of the Legal Assistance Amendment Bill are really just more of the bills being brought forward to wrench cost savings out of the overall justice budget. This time it is the legal aid scheme that is to suffer. The bills affect low-income New Zealanders’ ability to have effective legal representation for a range of matters for which such aid was previously available. The result will be many more self-represented cases, more appeals, less effective justice, and, as a flow-on effect, more, not less, cost. So if cost savings were the prime motivation, then they are a false economy.

There are several specific reasons why New Zealand First must vote against the bills. Firstly, new subsection 10(3A) in clause 7(2) of the Legal Services Amendment Bill says that the Legal Services Commissioner is to refuse legal aid if the applicant is in arrears for repayment on legal aid grants. That is subject to an interests of justice test. But this is intended, really, to encourage legally aided people to recommence payments on arrears relating to the payment of previous grants. Once they begin making repayments again, they would become eligible for legal aid again. But clause 4(3) exempts only these applications—firstly, those “by a patient … under the Mental Health (Compulsory Assessment and Treatment) Act 1992”; “proceedings under the Protection of Personal and Property Rights Act 1988;”, to enable “a person to apply for a protection order under … the Domestic Violence Act 1995”, and in respect of a proceeding that is or involves “recognition of a person as a refugee or protected person”. It has been argued that all these new provisions would be unlikely to reduce significantly the number of people receiving legal aid, but I am not convinced. I think it is likely to cause injustice, even if in only a few cases, by making legal aid unavailable.

I do not trust the commissioner’s discretion, as far as the interests of justice test is concerned. By far the main reason why people fall into arrears is that they cannot afford the repayments; that is obvious. It is, therefore, unfair in those circumstances to withhold legal aid on a new application. It may easily be that the application is to get representation to defend an action against the applicant, which this section could cause to be declined as far as legal aid is concerned. It seems to me, therefore, that the amount of money this will save makes the provision nothing less than penny-pinching of the worst kind. There are other and better ways of getting repayment than this Draconian measure. Clause 11A says that the amount owing is a debt and is, therefore, collectable as such under the general law. That should be enough. In addition, clause 12A inserts a new section to enable deductions from income from social welfare benefits, from State sector employees, and from funds held by third parties such as banks. The effects of these provisions to allow denial of legal aid where there are previous legal aid debts not being repaid as required are bad effects on vulnerable people and are disproportionate to the very minor benefit claim in terms of saving money.

I remain concerned that such people would, in fact, be denied legal aid unjustly, and that the commissioner’s discretion, perhaps administered by a relatively junior officer on the commissioner’s behalf, will too often not be adequately assessed as an interests of justice case. It is difficult to see, in fact, how this provision will work properly anyway, because if the applicant is eligible for legal aid under the principal Act because they have an arguable case and reasonable prospects of success, or are obliged to defend proceedings against them, then, ipso facto, the interests of justice test must have been satisfied anyway. Thus, this section, which is aimed at disqualifying the grant, can never apply logically for interests of justice reasons, so this is legal nonsense, I think.

Another defect in the bill is its reintroduction of a user charge for applications for legal assistance, although it is now only $50 and not $100, as originally proposed. In many cases, legal aid providers simply pay that charge, since their clients, on many occasions, simply cannot afford to do so. At a time when more and more providers are exiting the business of providing legal aid services, this seems like a self-defeating and bad public policy provision. Again, it shows penny-pinching, where the money saved by the Crown will be small, but the effect on low-income people likely to be involved will be disproportionately high.

Another reason why New Zealand First cannot support this bill is its introduction of interest to be charged on legal aid. Clause 12 requires that interest may be charged on all unpaid final legal aid debt. The intention is to incentivise prompt payment of legal aid debt, but this is very unlikely given the financial position of most legally aided people. So the real effect is just to increase the person’s debt by the addition of interest. In clause 12, new section 40(1) states as follows—and I will just find that new section in the bill. It “applies to any amount that is payable in respect of a grant of legal aid made on or after the commencement of this section”. New section 40(2) states that the person must pay interest on that amount owing, but new section 40(3), the following subsection, states that it “applies to a debt (a prior debt) that is owned by an aided person to the Commissioner in respect of grant of legal aid made before the commencement of this section”. And subsection (4) states: “The Commissioner may, by written notice, require the aided person to pay interest in respect of the prior debt”. So there is a discretion in that case regarding those prior debts. Why should this be so? It does not really make any sense to me. On what basis is such discretion to be exercised?

Parliament should avoid giving such unguided discretions. It is wrong in principle and it is not in accordance with general legal norms to impose such a provision retrospectively on prior legal aid debt. The people who signed up for legal aid did not sign up for that. They did not know that interest was going to be added later. That is wrong. The principle of charging interest at all is wrong in general. People who qualify for legal aid are, by definition, not able to afford it easily. Charging interest will make that even more difficult. The State should get repayment of legal aid, of course, but it should not be charging interest on top of that. The State actually pays no interest itself; the scheme is provided for from taxation. So the State should not be profiting from legal aid debts owed to it. In some cases, the addition of interest will itself create hardship. There is discretion to waive the interest, and the debt itself, for that matter, but this is likely to be too often withheld.

These bills were badly conceived at the outset. They are another attack on the lowest-income people in the community. They are penny-pinching at the expense of an effective legal aid system. The Government has lost its way as to what legal aid is really about. It is really about access to justice. It is really about a fair way to assist people who are unable to afford a lawyer without State assistance, or to assist people who have no choice but to defend proceedings brought against them. This bill will operate to make legal aid not available to some when it is most needed, and it will add costs and interest on legal aid debts that make them even worse. New Zealand First will certainly vote against this bill, because New Zealand First believes in fair access to justice; this Government clearly does not.

PAUL FOSTER-BELL (National): I rise to take a brief call on the third readings of the Legal Services Amendment Bill and the other bills arising from the Legal Assistance Amendment Bill. I back this legislation because it is adjusting the eligibility for legal aid to provide greater flexibility in the future, and I do not think that the Government should resile at all from the fact that this is designed to save $138 million worth of hard-working taxpayers’ money over the next 4 years. At the same time these changes are not going to affect the most vulnerable parties, including the care and protection of children and those who are involved in serious criminal matters.

This legislation is designed to get the parties to resolve more of those minor matters among themselves, rather than through the courts, while making sure that legal aid is there for those who need it most. It does strike a balance between ensuring the viability of the legal aid scheme and prioritising funding to those people who have the highest need for legal aid help. This legislation builds on what National has already done in the area of legal aid reform, which includes expanding the Public Defence Service to take up to half of all those criminal defence cases, making victims of serious crime eligible for legal aid for coronial inquests and parole hearings, and establishing performance standards for legal aid lawyers.

I would like to congratulate the Minister of Justice, who is probably the best Minister of Justice we have had in my lifetime, and the chairman of the Justice and Electoral Committee, Mr Scott Simpson from Coromandel, on shepherding this legislation through the select committee. I take pleasure in commending this legislation to the House.

Hon PHIL GOFF (Labour—Mt Roskill): It is amazing how you can misuse the English language. The word “flexibility”, which the member who has just resumed his seat, Paul Foster-Bell, used, actually translates to cutting $138 million out of ensuring access to justice for those who are least able to pay for it. He calls it flexibility.

Hon Maryan Street: Orwellian.

Hon PHIL GOFF: It is. It has tones of 1984. It is Orwellian. The Legal Assistance Amendment Bill was such a bad bill that it was voted for by the National Cabinet in 2011, then supported by the National caucus and introduced to the House that year with the unanimous support of National, and it comes to the House now as the Legal Services Amendment Bill with more deletions than any bill I have seen in recent times, because the National caucus and Cabinet got it so absolutely wrong. They are prepared to be shameless, but not so shameless that they could sustain a bill that fundamentally denies the right of justice to so many New Zealanders.

It is not simply the minority report in the report back of the original bill that condemns it; it is the majority commentary from the Justice and Electoral Committee that constitutes in this report back a nine-page apology for getting it absolutely wrong. Let me give you an example. This is on tightening the means test for people defending themselves against criminal charges. The majority of the committee said that this “would restrict access to justice too severely and could breach a person’s right to a fair trial,”. How much more basic a breach of fundamental human rights could that admission actually own up to? The bill, which is designed to save money, taking it out of the hides of those least able to look after themselves, constituted a fundamental breach of justice, and the member who just resumed his seat described that as flexibility. On and on it goes.

You know, the original bill was even going to means test people under the Protection of Personal and Property Rights Act. Do you know whom that means? It means mentally disabled people who have no ability to look after their own rights. Of course, when the submitters came to the select committee, the National Party members bowed their heads in shame and knew that they had to cut that out of the bill.

You know what else the bill was going to do? It was going to set up a means test on disposable capital. Does the member Mr Foster-Bell know what that involved? It was going to means test things like the family refrigerator and washing machine. It was going to means test the basic tools of trade of people who relied on those tools to go out and work. Most shameful, if you were in a wheelchair, the bill was going to means test the value of the wheelchair. That is how miserable this Government was. Why did every member of that National caucus come into this Chamber and vote for legislation that looked like that? No concept of social justice. No concept of the understanding that the decency of any society is based on whether you accord those people the right to justice.

You know, National also had an approval framework that it was going to change for court-appointed lawyers representing children, and it was going to charge foster parents for parenting orders that they had to get from court. The select committee, to be fair to the select committee, said that it could find no justification at all for changing a framework that was working well. I want to ask the Minister of Justice why it was that her Cabinet got it so wrong that it recommended things that the select committee, including her own backbenchers on that committee, threw out. How did it get it so wrong? Why was it so mean-minded that it was going to take it out of the hides of people not capable of protecting themselves?

You know what else the report back says? It says that this bill would increase the number of self-represented litigants. Well, as Lianne Dalziel said, that meant actually having no representation at all. People who do not understand the principles of justice, who do not understand the court procedures, were going to be denied the right to proper legal advice so that they understood what the principles of justice required, and understood the procedures that they were going through in court. In the end, does that save money? No, it costs money because it takes extra court time because the judge has to go through at each step and tell the person who is supposedly representing themselves what the court requires of those people.

One of the other things in the original bill, and National has not even changed this, is that if you had previous legal aid debts that you were not able to meet, you were going to be denied legal aid. If a person was sitting on their hands and sitting on their bank account and simply refusing to pay the debts, fair enough. But I guarantee to this House that most of the people who had legal aid debts had those debts because they did not have the means to pay that money back. Any decent parent, when it came to choosing between putting shoes on the feet of their kids and clothes on their back or repaying a legal aid bill, would put the priority on their own kids. So here we have this Government saying: “You are already so poor and downtrodden that you cannot repay the bill. Now we will deny you legal aid because you are not able to afford to repay the bill. And, what is more, we will charge you interest on the arrears.”

You know, I think I can understand why a Cabinet of 20 people, each on at least a quarter of a million dollars a year, has so lost touch with the situation of the average working New Zealander that it cannot understand that a low-income New Zealander cannot afford the thousands of dollars or the tens of thousands of dollars that legal bills require. I want to remind Mrs Collins and her Cabinet colleagues of what the regulatory impact statement on the original bill says about legal aid. This is what it says: “The purpose of the legal aid scheme is to provide access to justice by providing legal services to people of insufficient means.” The situation with legal aid is not that generous. I think the means test for a single person is $21,000. That is below the minimum wage. So a single person on a minimum wage cannot get access to assistance under this legislation. If you have got family dependants, it is a little bit more generous, as the threshold is about $51,000.

The regulatory impact analysis goes on to say this about legal aid: “It contributes to fairer outcomes by ensuring that parties with unequal financial resources have equal access to justice.” You know, at the moment, the justice system too often works only in the interests of the wealthy. The wealthy person who can afford to go out and pay the QC will get off the charges, sometimes without regard to the merit of their case. The low-income person will not be able to afford anyone to represent them at all unless they are so ground down that they are right at the bottom of the heap. How, Mr Foster-Bell, can that mean access to justice? How can that mean fairness in the system? Why is it fair that the wealthy person can escape charges or the wealthy person can push down the person whom they may be up against in court who does not have resources and does not even have representation? That is fundamentally unfair. It is fundamentally wrong. That is why this party is opposing this legislation.

The other thing the regulatory impact statement says is that “legal aid helps underpin confidence in the justice system.” Well, this legislation undermines confidence in the justice system because it puts cost cutting ahead of the interests of justice. You know, it is not simply that the Government cannot afford it. The Government can afford to give tax cuts to the most wealthy. John Key, the Prime Minister, had several hundred thousand dollars a year in tax cuts, but that is on the backs of the people who lose access to legal aid, who cannot afford to be represented in court. I ask this Government where its priorities lie. I ask this Government where its sense of justice is. This legislation lacks it.

CLAUDETTE HAUITI (National): Can I just say that that was such a wonderfully impassioned kōrero. It is so fabulous that nobody was here to listen to it. So let us get back to reality now.

I want to congratulate the Hon Judith Collins, Minister of Justice, on bringing this legislation to the House. The John Key - led National Government is committed to ensuring the legal aid system remains affordable in the future and that legal aid is available for those who need it most. The current legal aid system is unsustainable. Let us get past all the rhetoric and get to the facts—it is unsustainable. Legal aid expenditure increased by 55 percent between 2006-2007 and 2009-2010.

Let us get back to reality, and let us look at it logically. This growth would have resulted in a $402 million gap in legal aid funding over 5 years. So this Government has taken action to bring this under control. The legislation provides greater flexibility to adjust eligibility in the future and for improvements in the assessment of eligibility. The reforms include tightening the merits tests for family cases by no longer needing to take into account the interests of other vulnerable parties. I commend this legislation to the House. Kia ora.

The ASSISTANT SPEAKER (Lindsay Tisch): I understand the next call is a split call. Sue Moroney—5 minutes.

SUE MORONEY (Labour): I would like to say that it would be a pleasure to stand and speak on the legislation that was the Legal Assistance Amendment Bill, but I am afraid in this case it is not, because it is legislation that actually restricts the access to justice. The speaker who just resumed her seat, Claudette Hauiti—you know, I was really looking forward to the sort of difference that she might make to the kaupapa and the rhetoric coming from the National Party, but, unfortunately, all she has done is taken it in hook, line, and sinker. There she is saying that it is a good thing; that it is actually a good thing in her view that National is curtailing people’s access to actually ensure that they have got the resources to have a fair go.

That is what this legislation is about. It is about, as Labour believes, everyone’s right to have a fair go in our justice system. Is that not what the justice system is supposed to be all about? It is supposed to be about ensuring fair outcomes and that everyone has a fair go. Yet at the outset what this legislation is doing is curtailing, particularly for low-income people, the ability to actually have that fair go right from the word go. In particular, it has implications for women, because women are more frequently in that low-income area, and they do—[Interruption]

I know that Judith Collins and Hekia Parata do not think it is an important issue that we actually analyse these pieces of legislation from the perspective of what the impact is on women. I know that their party now does not even require some independent analysis of the gender impact of any piece of legislation, because it has—get this—“mainstreamed” gender analysis in the National Party. What that means is that the same ministry officials who came up with this legislation are the ones who get to analyse what the impact is on a gender basis. So the National Party has done away with the Ministry of Women’s Affairs having a role and having independent scrutiny over all of these pieces of legislation to say how they impact on women.

It is no surprise from the National Party that it actually does not care. It actually does not care about what the impact is on women and, in this instance, with this legislation, on children as well. The advice that it got from its own officials was that this bill does have a disproportionate effect—and a badly disproportionate effect—on women and children, particularly as they try to actually ensure that they get a fair go through the Family Court services. That is an area where many women come into contact with the justice system, and it is probably for them the first time that they are given cause to think about that very important issue of actually getting a fair go.

Getting a fair go means having equal access to representation, and having equal access to knowledge and information. That is where this legislation does not give them a fair go, because it actually limits the number of people who can get access to legal aid to ensure that they have got access to representation, access to information, and access to advice. That is a cornerstone of our justice system—or, at least, it once was. It once was a cornerstone of our justice system, until the National Party decided that cost-cutting was superior to actually having access to justice as a cornerstone of our justice system.

So it is with a heavy heart that I speak in opposition—in strong opposition—to this legislation, because, in the Labour Party, equality of access to justice is a fundamental principle. It is one that will not be supported by this legislation, and therefore we cannot and will not support this legislation.

METIRIA TUREI (Green): I agree with all of those who have spoken before in opposition to this legislation arising from the Legal Assistance Amendment Bill, which is just, frankly, mean-minded. It is just another set of provisions that will suck money out of the pockets of the poorest New Zealanders for no benefit to anyone, and it will not even make significant savings. I would like to check with the Hon Phil Goff that he said that there was, what, $138 million in savings being made?

Hon Phil Goff: That’s right.

METIRIA TUREI: That is right. So that is about the same amount of money that this Government has spent on selling Mighty River Power, and also about the same amount of money that it has now set aside for the bailout of Solid Energy. This Government has got the money to make sure that every New Zealander who is entitled to it gets access to the justice that they deserve. The Government just chooses not to give it to them. It just chooses to make sure that those who are the wealthiest get access to the public’s resources, and it will do everything it can to suck the money for that out of the pockets of the poor. This legislation comes hard on the heels of the Family Court Proceedings Reform Bill, which, as we also saw, was a deliberate cost-cutting measure—not saving huge amounts of money in the scheme of things, but certainly making it much, much more difficult for the most vulnerable, including women and their children, to access the justice and the protections that they deserve.

The legislation also comes just over a month, I think, after the Minister of Justice had to withdraw her appeal against a Court of Appeal decision on previous legal aid decisions that this Government had made—legal aid decisions that were declared, in part, to be unlawful. I refer to the criminal fixed fee and complex cases policy, where, actually, the Criminal Bar Association took the Government and this Minister to court and was found to be right—that part of that process was, indeed, unfair. The original legal aid changes to the fixed fee and complex cases policy were also designed as a deliberate attempt to suck some money back into the Government coffers so that it could spend it on wasteful produce like the sale of our State assets, of which another one is due to happen soon—more spending on that, like bailing out Solid Energy, and like the billion-dollar motorway madness that this Government is undertaking.

Where does all that money come from? Bit by bit, the Government is sucking it out of the poor. What does it mean? It means that those who have the very least are the ones who are paying the very most. If you just look at the changes that the Justice and Electoral Committee has made or at the provisions of the bill, there are three areas I would refer to. One is that those who are in arrears—those who have received legal aid at some point but who are in arrears—are subject to a potential declining of any further application for legal aid. I mean, that is not going to save the Government hundreds and hundreds of millions of dollars, but it is going to mean that those people will not get access to justice. It will mean that they are much more likely to suffer from unsafe convictions. It means that they are much more likely to get prison time, for example, that they should not be receiving. It means that the number of the currently 20,000 children of prisoners will significantly increase as more and more families find themselves subject to legal processes that they cannot defend themselves against, unable to get decent legal representation because of these cuts, and find themselves subject to unsafe and unfair convictions.

There is interest to be charged. Where does this Government come from when it thinks that the best thing to do with a family or person who is living in poverty is to charge them more money? If someone has no money, this Government seems to think that it will just keep on squeezing them and squeezing them dry with ridiculous provisions like charging interest, where clearly there are cases where these people do not have the money to pay. What is the point of that?

Richard Prosser: Beatings will continue until morale improves.

METIRIA TUREI: The beatings will continue until morale improves—that is right. Then, of course, you have the $50 fee. The select committee has brought that fee down, and for that we are very grateful, but by putting a financial barrier right at the very start of the process, you knock out those who simply cannot afford it. The whole point of the legal aid system is to provide access to justice for those who cannot afford it. So why use this legislation simply to put in place more financial barriers to those who have the least resources?

I can hear the Minister of Justice over there, sighing like a—I do not know; like something.

Sue Moroney: A panda.

METIRIA TUREI: Maybe that is right. She is just sighing away there, but that is because she is not one of those who will be subject to this legislation—

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

METIRIA TUREI (Co-Leader—Green): I raise a point of order, Mr Speaker. I take personal offence at Judith Collins calling me stupid—[Interruption]

The ASSISTANT SPEAKER (Lindsay Tisch): Order! There is a point of order before the House.

METIRIA TUREI: —across the House and I would ask that she be made to withdraw and apologise for that comment. [Interruption]

The ASSISTANT SPEAKER (Lindsay Tisch): Order! There is a point of order, and the Minister interrupted during a point of order. I ask the Minister just to withdraw the comment.

Hon Judith Collins: Oh yes, I withdraw the comment.

The ASSISTANT SPEAKER (Lindsay Tisch): This debate has concluded. We have dealt with six bills as one question. I can put the six bills as one question or they can be put individually.

Hon Member: One question.

The ASSISTANT SPEAKER (Lindsay Tisch): I will put them as one question. The question is that the motion be agreed to. Those that are of that opinion will say Aye, to the contrary No. The Ayes have it.

Bills read a third time.

METIRIA TUREI (Co-Leader—Green): I raise a point of order, Mr Speaker. My apologies—I appreciate that I have obviously got this wrong. I understood that you were calling for a vote as to whether or not the votes should be held as one, not the vote itself. Was I wrong in that?

The ASSISTANT SPEAKER (Lindsay Tisch): No, I certainly did not do that. I said that we had six bills and I would put them as one question or individually, and did parties wish to take them individually. No party said they wanted to take them individually, so I put the question. I put the vote to the House and it was voted on accordingly. No one called for a party vote on that, and that is why the Clerk has just read the third readings. The matter is now finished.

Bills

State Sector Amendment Bill

Public Finance Amendment Bill (No 2)

Crown Entities Amendment Bill

Third Readings

Hon Dr JONATHAN COLEMAN (Minister of State Services): I move, That the State Sector Amendment Bill, the Public Finance Amendment Bill (No 2), and the Crown Entities Amendment Bill be now read a third time. This legislation underpins what is the biggest transformation of the Public Service in a generation. These changes to the State Sector Act, the Public Finance Act, and the Crown Entities Act will support whole-of-system change, enabling the delivery of better public services and better outcomes for New Zealanders.

As the Minister of State Services I work with quality public servants who are committed to achieving results, as many colleagues on both sides of the House recognised during the Committee of the whole House stage. This Government wants to empower those public servants with the flexibility and the incentives to be responsive to the needs of the community. A high-performing public sector underpins our economic and social success as a country. In the year ended June 2012 core Crown expenditure represented one-third of New Zealand’s nominal gross domestic product. In addition to the expenses of Crown entities and State-owned enterprises, also during this period, the total Crown expenditure was $92.7 billion or 44.4 percent of our nominal GDP. With this level of financial responsibility, it is easy to see why Government agencies need to be allowed to develop new and different ways of working that deliver greater value and better results. Change is needed to bring out the best. As the Better Public Services Advisory Group said, the State agencies need to provide or fund services less as a collection of individual agencies in pursuit of their own singular objectives and more as a system that is focused on the results that will have the biggest positive impact on New Zealanders’ lives.

This Government has made it clear that the State sector needs to prove that it can perform better and represent value for money. We face challenges from the difficult international economic environment, changing public expectations of service design and delivery, and complex societal issues, many of which cannot be tackled by agencies working on their own. The key to doing more with less lies in innovation and agility. Public agencies need to be open to change, to developing new business models, and to harnessing new technologies in order to lift productivity and meet emerging challenges. If we continue to approach challenges in the same way, we will come up with the same old responses.

We can do better than that. This journey began in March last year, when this Government announced changes to focus on results that matter most while improving front-line services. There was a need for a set of results to get better traction on difficult issues like reducing crime, reducing long-term welfare dependency, and reducing educational underachievement. We lowered the cap on full-time staff in administration positions, and created a single dedicated department—the Ministry of Business, Innovation and Employment—from the resources of four existing Government agencies, in order to drive forward the Business Growth Agenda and make it easier for businesses to engage with the Government.

But just focusing on a number of results is not enough. From now on, enabled by these legislative amendments, we want to ensure that public services get the system working better as a whole to deliver on outcomes that matter. These amendments give agencies the tools to better break down silo behaviours. Responsiveness to the collective interests of Government will be an explicit responsibility of individual chief executives. This supports a greater responsiveness to New Zealanders’ needs and a commitment to continuous improvement. We want to ensure Government agencies work closer together, and also work with NGOs and the private sector. These legislative changes give agencies the ability to pool and use money and resources. It will enable agencies to develop, purchase, and share more common functions and services. Perhaps, most important, the changes strengthen leadership.

As head of State services in the corporate centre, the State Services Commissioner will have the explicit mandate for leadership and the ability to appoint leaders with the right skill set. The commissioner will also play a key role in making sure we have the right people in the right leadership positions across the system. This transformational approach needs to be spread and ingrained across the whole State sector. This is essential for achieving better results and for agencies to live within the tight fiscal restraints of the public purse. These changes also need to become business as usual for Government agencies. Delivering better services should be the normal way Government employees go about their jobs.

This Government has made it clear what a transformed and successful Public Service will look like. Within 5 years these changes will distinguish the New Zealand Public Service as functioning as a single system, rather than as a collection of individual agencies; as focusing effort, people, skills, and money on where it is most needed; and as being led by innovative chief executives and senior leadership adept at inspiring and getting the most out of staff, and achieving a collective impact across the public, private, and community sectors. Under this legislation, we will be proud of public agencies that design services with, and for, the people who use them; a public sector that uses technology expertly and safely to provide better services and increase efficiency; a Public Service that can transparently measure and report on its performance across the whole system to identify weaknesses and drive further improvement; and agencies that will use this data to help direct the resources and attention to where they are needed most, and that have the capability and resilience to meet not just the tasks of today, but also to meet the challenges of future change and grasp the opportunities.

The progress on the Government’s results shows that we are making good progress in achieving challenging targets. It demonstrates the significant cross-agency work under way to make headway in the most challenging areas in the lives of New Zealanders. This legislation provides the tools, the mandate, and the platform for the public sector to transform, to deliver, and to achieve the best possible outcomes—the ones that really make a difference to New Zealanders’ lives. I commend these bills to the House.

Hon PHIL GOFF (Labour—Mt Roskill): The theory of what the Minister of State Services has just outlined is all fine and good; the practice has been something totally different. As introduced, the legislation formerly part of the State Sector and Public Finance Reform Bill was actually opposed by the Labour Party. It was opposed because you cannot build a better Public Service by attacking the rights and devaluing the essential stakeholders in the Public Service, the people who work in it.

But, to give credit to the Finance and Expenditure Committee and then to the Minister, the problems that existed with the legislation as introduced were worked through by the select committee. Significant amendments were made, and the Minister agreed to accept those amendments. I am going to just outline those in a moment, but I do want to say that it does make a difference when a select committee is prepared to look independently at legislation and when a Minister is prepared to accept the results of its deliberation. That enables us to achieve much wider consensus within this House on pieces of legislation where we would hope there would be continuity between Governments, because we do need a strong, innovative, and creative Public Service, and we need the framework within which that can operate.

When this legislation was introduced there were real problems with it in terms of diminishing the rights of people who might be made redundant. When a person is made redundant that means they lose a job through no fault of their own. They should not be further punished by denying them the right to redundancy compensation. There should be a proper transition when changes are made, and we should not be disadvantaging those covered by a collective agreement as against those who are under individual contracts. We should not have a situation whereby the Government is able to make orders that unilaterally change the existing legal and bargaining rights that workers have.

The Labour Opposition raised each of those points in the select committee and, as a result, we have a change in the redundancy provisions of the State Sector Amendment Bill that protect the existing entitlements of people who are working within the Public Service. There will be one situation where workers will not be entitled to redundancy payments, and that is where they are provided with a job which is “no less favourable” than the existing one that they have. If a worker is in no way disadvantaged, if the work is as convenient, and if it provides the same rights and the same future prospects and opportunities, then, yes, we accept that that is not a redundancy situation. But where a genuine redundancy situation exists, workers should be appropriately compensated, and the change in the legislation enables that to happen.

There need to be proper transition provisions. This bill provides a sunset clause over agreements, both collective and individual, over the 3 years after the passage of this legislation. It puts people on collective agreements on the same footing as those under individual contracts. Finally, what were called Government Workforce Policy Orders have become “statements”. They will ensure that existing legal and bargaining rights are protected, and that is different from the legislation as introduced.

I said before that we support a framework that encourages an innovative, flexible, efficient Public Service, and we also support a framework that enables collaboration between the different agencies of the Government. Clause 5 of the State Sector Amendment Bill, which inserts a new section 1A, “Purpose”, is a commendable clause in terms of setting out the principles of the State sector: about the spirit of service to the community; about the collective interests of the Government; about appropriate standards of integrity and conduct; about political neutrality; about workforce and personnel matters being provided for properly; about good employer-employee obligations; as well as about a culture of excellence—

Debate interrupted.

The House adjourned at 10 p.m.