Wednesday, 11 February 2015

WEDNESDAY, 11 FEBRUARY 2015

WEDNESDAY, 11 FEBRUARY 2015

Mr Speaker took the Chair at 2 p.m.

Prayers.

Motions

Egypt—Imprisonment of Al Jazeera Journalists

CLARE CURRAN (Labour—Dunedin South): I seek leave to move a motion without notice or debate on the continued imprisonment of two Al Jazeera journalists in Egypt.

Mr SPEAKER: Is there any objection to that course of action being followed? There is none.

CLARE CURRAN: I move, That this House condemn the continued imprisonment of two Al Jazeera journalists in Egypt—Canadian-Egyptian Mohamad Fahmy, and Egyptian Baher Mohammad—and further condemn Egypt’s suppression of the free press, which is the cornerstone of a just and stable society, and call on the Egyptian Government to release these journalists following the release of their colleague, Australian Peter Greste.

Motion agreed to.

Oral Questions

Questions to Ministers

Skycity Convention Centre—Proposed Government Funding

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his promise to New Zealanders that “the construction of the new convention centre will not cost taxpayers or ratepayers a cent”; if not, why not?

Rt Hon JOHN KEY (Prime Minister): I stand by my statement in relation to a $402 million convention centre as agreed on 5 July 2013. Following the completion of preliminary design work by Skycity, which includes enhancements to previous designs, Skycity notified us that the cost of the centre would be higher than the agreed $402 million. The Government is now negotiating with Skycity on a range of options, which include holding them to the original agreement of a $402 million convention centre.

Andrew Little: Why did he promise New Zealanders a free convention centre when he knew that clause 11.47 of the Skycity deal says “either party may pay the other cash” if construction costs change?

Rt Hon JOHN KEY: The contract has been in the public domain for a very long period of time and anyone can read that. The Government’s preferred position is that Skycity completes a convention centre for $402 million. The contract has always been there and the parties are free to walk away from it if they want to.

Andrew Little: Why is he talking about giving Skycity more money when his own finance Minister told a select committee today that he would rather walk away from the deal?

Rt Hon JOHN KEY: What we have confirmed is what we know, which is that there is an agreement to build a convention centre for $402 million, and that is the Government’s preferred position. What we also know is that on 19 December 2014 Skycity lodged its resource consent application, and it indicated at the time that the construction costs were larger than what it had thought—$470 million to $530 million. Skycity clearly indicated there is a hole. The Government’s preferred position is that Skycity builds it for $402 million.

Andrew Little: Whose advice will he take on this issue: Bill English, who is trying to save the Budget, or Steven Joyce, who is trying to save his backside?

Rt Hon JOHN KEY: I do not like to choose between the children, so I will probably take both their advice.

Andrew Little: In light of the huge benefits to Skycity from this deal, including a 28-year exclusive licence extension and 230 more pokies, why has he failed to keep his promise to New Zealanders for a free convention centre that is not an eyesore?

Rt Hon JOHN KEY: We have not failed to keep our promise. In fact, actually, the member seems to be making the point that we have been making for a very long period of time, which is that the preference of the Government is to build a convention centre that actually has no cost from the Crown. Interestingly enough, even though Labour members publicly come and say that in this House, that does not stop them going off to their box for entertainment, or quietly behind the bike sheds telling them they support it.

Andrew Little: Why will he not be straight with New Zealanders for once and just admit that the deal has blown up in his face?

Rt Hon JOHN KEY: The member is getting a little tiring with those sorts of things. The reality is that the Government’s preferred option is that a $402 million convention centre is built. The Government’s preference is that there is no Crown money to be put in. Skycity has indicated that it would prefer to build a convention centre that is a bit bigger, with slightly different designs, and it is claiming that there are escalating costs that are slightly higher during the time it has taken place. The Government therefore is having those discussions, but at the core of the whole argument the question that has to be asked is whether New Zealand is better if it has an international convention centre in Auckland. In my view the answer to that is yes.

Andrew Little: In light of that answer, will he rule out giving more money to Skycity for its convention centre?

Rt Hon JOHN KEY: I am not going to conduct negotiations for the convention centre here in the House, but what I can say is that the Government’s preferred position is that Skycity pay for the convention centre at $402 million. But we will see how that goes, and assuming that we get there at $402 million, I will look forward to the Labour Party supporting the deal.

Economic Programme—2015 Priorities and Performance

2. JAMI-LEE ROSS (National—Botany) to the Minister of Finance: What are the main priorities for the Government’s economic programme in 2015?

Hon BILL ENGLISH (Minister of Finance): We will pursue four priorities that we believe will underpin a stronger economy and a stronger community. They are responsibly managing the Government’s finances, building a more productive and competitive economy, delivering better public services, and continuing to support the rebuilding of Christchurch. The Government’s next steps, consistent with these priorities, will be outlined in the Budget, which will be delivered on 21 May. Building on the current momentum, it is important that we focus on achieving not just solid economic growth but sustainable economic growth year after year.

Jami-Lee Ross: Under the Government’s economic plan, how is New Zealand performing compared with other developed economies?

Hon BILL ENGLISH: We perform reasonably well due to the hard work and positive attitude of New Zealanders over recent years. Our economy is growing, employment is increasing, wages are rising faster than the cost of living, and New Zealanders are benefiting from a period of stable lower interest rates. We are growing new industries such as information and communications technology and high-tech manufacturing, and strengthening existing industries successfully such as the food industry, tourism, and international education. This is a much more positive picture than most other developed economies, and New Zealanders should be proud of what they have achieved.

Jami-Lee Ross: Since Treasury issued its Half Year Economic and Fiscal Update in December, what updated data has been issued about economic growth, commodity prices, and inflation?

Hon BILL ENGLISH: The progress of the New Zealand economy is against the background where there are significant fluctuations in data across the global economy. Since the Half Year Economic and Fiscal Update before Christmas, which forecast further strong growth for New Zealand, we have seen oil prices fall by 40 percent, taking retail petrol prices to their lowest level in 4 years, and annual inflation dropping to less than 1 percent—that is, 0.8—and could be headed lower. Despite an upward correction in the past week, petrol prices remain low, suggesting that inflation can stay subdued. We have also seen a turn-round in the persistent drop in dairy prices, which is consistent with the forecasts—at least the Government’s forecasts—for the dairy sector. Low inflation combined with low interest rates and weak global commodity prices are generally good for households, but they will make it a bit harder for the Government to balance this Budget.

Jami-Lee Ross: What examples does he have of particular sectors of the economy contributing to growth, more jobs, and higher incomes?

Hon BILL ENGLISH: The data would indicate that the manufacturing sector continues to make an important contribution to more jobs and higher incomes. The performance of the manufacturing index is up since November by 2.1, currently at 57.7. A number above 50 means the sector is growing. So despite claims of a manufacturing crisis, manufacturing has now been in solid expansion for 27 consecutive months, which is delivering some of the 80,000 new jobs in the last year and rising real incomes.

Skycity Convention Centre—Negotiation of Costs

3. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Metiria Turei: Why on earth should New Zealanders have to pay $130 million to make Skycity’s privately owned convention centre “bigger and more flasher”, as he said yesterday?

Rt Hon JOHN KEY: New Zealanders will not be paying $130 million for that.

Metiria Turei: How much does he expect New Zealanders will have to pay to make Skycity’s privately owned convention centre “bigger and more flasher”?

Rt Hon JOHN KEY: The Government’s preference is that it pays nothing and that is why it was surprised that the Green Party did not support the deal, because now she seems to be very attracted to a convention centre that does not cost anything.

Metiria Turei: What other benefits to Skycity is his Government negotiating other than cash or gambling concessions to help Skycity meet its shortfall for its bigger and flasher convention centre?

Rt Hon JOHN KEY: I am not going to go into the negotiations that are being held with Skycity because that would not be beneficial to anybody, except to say that the Government’s preferred position is that the Crown does not have to make any contribution to a $402 million convention centre.

Metiria Turei: When did the Government lift the restricted covenant on the Television New Zealand (TVNZ) land that prevented Skycity from building anything other than a convention centre on that land?

Rt Hon JOHN KEY: I do not have those details with me. You would need to refer that to the Minister who has been responsible, Steven Joyce.

Metiria Turei: Why did his Government ignore advice from officials that the TVNZ land was more valuable to Skycity if it was being used for a hotel and therefore Ministers should recalculate the value of the deal to Skycity?

Rt Hon JOHN KEY: I just simply do not have those details. You would need to ask the Minister responsible.

Metiria Turei: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! [Interruption] Order! I have a point of order and I wish to hear it in silence.

Metiria Turei: I seek leave to table advice to Ministers obtained by the Green Party showing that officials advised them in January last year that the TVNZ land is more valuable to—[Interruption]

Mr SPEAKER: Order! I just need—[Interruption] It has been explained enough. I need the source.

Metiria Turei: The source is Official Information Act information provided to the Green Party.

Hon Gerry Brownlee: Oh, it’s on the website.

Metiria Turei: No, it is not publicly available.

Mr SPEAKER: I will—[Interruption] Order! I will put the leave and the House can decide. Leave is sought to table that particular Official Information Act document. Is there any objection? There is none. It can be tabled.

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

Metiria Turei: How could the Prime Minister have possibly negotiated a worse deal than one that increases gambling harm to New Zealanders, virtually gifts a casino a prime piece of public land to build a glitzy hotel on, and now leaves taxpayers with a bill of $130 million just to make Skycity’s building “more flasher”?

Rt Hon JOHN KEY: I would reject the basis of the member’s questions, but what I would say is that as the Minister of Tourism I can say that the evidence supports strongly the view that an international convention centre in Auckland would not only create a lot of jobs during the construction phase but actually bring tens of thousands—arguably hundreds of thousands—of people to New Zealand over time to go to conventions. The evidence shows that those convention dwellers spend more than the average tourist when they come to New Zealand. We know that people who come to conventions come back with their families and travel around New Zealand. That is the reason why if you look at pretty much every state in Australia they have an international convention centre. Personally, I happen to think that if a convention centre can be built in Auckland along with another big hotel there, that would add to what would be an impressive part of downtown Auckland and service the economy well. But we know the member is opposed to economic growth—

Mr SPEAKER: Order! [Interruption] Order! The answer—[Interruption] Order!

Jobs—Reports and Availability

4. ANDREW BAYLY (National—Hunua) to the Minister for Tertiary Education, Skills and Employment: What reports has he received on employment growth in New Zealand in the last year?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Very good reports. Last week the household labour force survey for the December quarter of 2014 was released. It shows employment was up by 1.2 percent, or 28,000 people, in the December quarter. For the year of 2014, 80,000 more jobs were added to the New Zealand economy. That is an increase of 3.5 percent. That growth continues the trend of recent years. Over the last 2 years 146,000 extra new jobs have been added to the New Zealand economy. That is the strongest job growth over 2 years in a decade. In fact, 180,000 more people are in work than when we came into Government in 2008, despite the global financial crisis. This Government is focused on creating opportunities for investments that grow jobs in the New Zealand economy.

Andrew Bayly: What other progress in the labour market did the household labour force survey show?

Hon STEVEN JOYCE: The survey showed a record high participation in the labour market of 69.7 percent. That is the highest since figures began in 1986. This means that unemployment rose slightly to 5.7 percent despite the strong job growth. It shows more people entering the workforce. It also showed broad-based job growth continuing in a range of regions and industries around the country, with 22,300 more jobs in Auckland over the year, 17,400 in the Waikato, 15,800 in Christchurch, 15,600 in the Bay of Plenty, and 7,500 more in Northland. Other highlights included strong growth in wages, with hourly wages up 2.6 percent over the year, ahead of inflation at 0.8 percent, and a continuing improving story for Māori and Pasifika peoples, with 10,000 more Māori in employment over the year and the unemployment rate for Pasifika people falling 2.5 percent.

Andrew Bayly: How does New Zealand’s unemployment rate compare with the OECD average?

Hon STEVEN JOYCE: It is an interesting question the member raises, given that it was alluded to in the House yesterday. Our unemployment rate of 5.7 percent for quarter 4 is well below the OECD average of 7.2 percent, and ranks us as 10th equal. I should note for the House that, contrary to some claims made yesterday that New Zealand was No. 1 in the OECD before the global financial crisis, 10th is actually exactly the same ranking held in the quarter prior to the global financial crisis commencing in 2008. It is a slightly strange thing. It is also the same as when Labour left office. I would also note that the same member who made this reference in the House yesterday described, in a press release last week, the situation that we are seeing in New Zealand as a jobless recovery, despite the strongest job growth over 2 years that New Zealand has seen in a decade. So I think that member might want to be a bit more careful with his facts.

Rt Hon Winston Peters: Exactly how does job growth help the New Zealand people when he and his colleagues dished out approximately 70,000 foreign student work visas last year, and who is the new work going to—New Zealanders or somebody else?

Hon STEVEN JOYCE: It did not take long to bang that drum.

Mr SPEAKER: Order! Answer the question.

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

Mr SPEAKER: Order! This is a point of order. I wish to hear it in silence.

Rt Hon Winston Peters: Seeing this is a new year, you are very loath to tolerate any questioner loading up their questions with such comment. I think that to make sure this year starts off in the right vein he should be stopped in his tracks right now.

Mr SPEAKER: Order! The member may not have heard, but I did immediately stop the Minister and told him to answer the question.

Hon STEVEN JOYCE: The point I would make to the member is that, actually, the international students coming to New Zealand create something like 30,000 extra jobs in the New Zealand economy on their own—

Hon Member: Which they do themselves.

Hon STEVEN JOYCE: No. In fact, when we have tested that proposition of the member, we have found that, actually, there are more jobs created by having the international students in the New Zealand economy than by the work that they do themselves. So the international education story for New Zealand is a very positive story that creates about $2.85 billion of value in New Zealand on an annual basis.

Skycity Convention Centre—Negotiation of Costs and Proposed Government Funding

5. Dr DAVID CLARK (Labour—Dunedin North) to the Minister for Economic Development: How much extra money, if any, is the Government prepared to give SkyCity as part of the convention centre deal?

Hon STEVEN JOYCE (Minister for Economic Development): I have been clear all the way through that our least preferred option is to provide any funding to Skycity for the convention centre. We are in the process of discussions, and I am not prepared to conduct those discussions in the public domain, as that would undermine our position. However, obviously, the outcome of any such negotiations and discussions would be reported publicly, and I will advise the member at the time.

Dr David Clark: When will he front up and tell taxpayers how much of their money he is planning to spend to save a deal that he promised would be free?

Hon STEVEN JOYCE: The deal that we are talking about, of course, is a deal to build a $402 million convention centre—which the Labour Party opposed, by the way, but now suddenly seems weirdly in favour of. In due course I will advise the member—

Dr David Clark: I raise a point of order, Mr Speaker. I have tried to make my questions particularly straight today. It was a question about the time frame. The Minister has gone off on a tangent—

Mr SPEAKER: Order! There was so much noise coming from there. I apologise to the member—I did not hear his point of order when he raised it. By the time the point of order was recognised, the Minister was about to, I think, answer the question. So if we can allow the Minister to complete—[Interruption] Order! The level of interjections coming from my left is getting to a very unsatisfactory stage. I do not want to start this year by asking members to leave, but if we are going to have members interjecting while I am on my feet, those members leave me little choice. I am going to ask the Hon Steven Joyce to complete his answer, at which stage I will determine whether that answer has been addressed.

Hon STEVEN JOYCE: What I was saying is that there is no formal timetable at this stage for the conclusion of discussions; nor is there any commitment to pay any money at this time.

Dr David Clark: Why should taxpayer money be given to a casino company that in the last 6 months alone made a net profit of $66.6 million?

Hon STEVEN JOYCE: There is no requirement to do so at all, but the discussion is about the construction of a convention centre. It has agreed to build one for $402 million. It has come to us with a concern about extra costs. We are currently evaluating those. We are currently discussing with it its process of procurement, and so on. Any change to the agreement would be agreed by the parties when they decide to do so, and in the meantime the agreement that is afoot is at $402 million.

Dr David Clark: Is he aware that the value of Skycity shares surged by $76 million yesterday on the back of comments about a taxpayer-funded bailout, and does this not just show that Skycity knows it has the Government over a barrel of its own making?

Hon STEVEN JOYCE: I would be very surprised if the price of a Skycity share went up by $76 million in 1 day, but I know that the member is a very clever Treasury analyst, so maybe he knows a little bit more about it than we do.

Dr David Clark: I seek leave to table a document showing that the market capitalisation of Skycity rose by $76 million on the day of the Prime Minister’s announcement—

Mr SPEAKER: Order! I need the source of the document.

Dr David Clark: The source is the Parliamentary Library.

Mr SPEAKER: I do not want to hear—[Interruption] Order! I will put the leave on this occasion, but the point of tabling is for further information for members; it is not to make a political point. On the basis that this could better inform members, I will put the leave. Leave is sought to—

Hon STEVEN JOYCE: Speaking to the point of order—

Mr SPEAKER: No, I am putting the—[Interruption] Order! [Interruption] Order! Leave has been sought to table a document. I therefore need to put the leave, and then I can hear a point of order subsequent to that, if you wish to raise one. Leave has been sought to table this particular document. Is there any objection? There is objection.

Hon STEVEN JOYCE: I raise a point of order, Mr Speaker. The point of order was that the member was talking about the share price of the company—

Hon Member: How is this a point of order?

Hon STEVEN JOYCE: Well, I am just getting to the point.

Mr SPEAKER: Order! This is a point of order.

Hon STEVEN JOYCE: Then he sought to give some information that was in relation to a separate matter, which is the overall market capitalisation of the company, and that is actually a different item, which is why I did not expand on the answer to the question as to why we felt the need to deny leave.

Mr SPEAKER: Order! That was not strictly a point of order, but I accept that the description within the question and the subsequent tabling of the document probably did not tally as well as I might have hoped. But, anyway, we are moving forward.

Dr David Clark: When he proudly announced in July 2013 that Skycity will meet the full costs of the convention centre, was he meaning full costs in a strict legal sense or more in a pretty legal kind of way?

Hon STEVEN JOYCE: I was referring to the fact that Skycity would pay the full cost of building a $402 million convention centre, and that is still the case. It has proposed that there are some additional costs, and it has come to us to discuss those costs, so we are discussing them. But let us be clear: we know that under the Opposition the $402 million would have been left on the table.

Skycity Convention Centre—Transparency of Negotiation Process and Proposed Government Funding

6. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes, especially that one when I said yesterday that “There’s no dye in these locks, baby.”

Rt Hon Winston Peters: Well, how come the curtains don’t match the carpet? [Interruption]

Mr SPEAKER: Order! If the member managed to hear it, I will—

Rt Hon JOHN KEY: I take offence that the member is telling New Zealand he has seen my carpet. [Interruption]

Mr SPEAKER: Order! I expect the House now to return to some sort of decorum.

Rt Hon Winston Peters: Does he stand by his statement in regard to the Skycity convention centre when he said: “It’s a day of celebration, actually, for Auckland and for New Zealand.”?

Rt Hon JOHN KEY: Yes.

Rt Hon Winston Peters: What is there to celebrate when the Auditor-General found Skycity receives special treatment and stated that there were “inappropriate considerations” and “connections between political and business leaders”, with even Treasury expressing “strong concerns that private benefits to Skycity will exceed public benefits to New Zealanders”, now exacerbated by his recent promise?

Rt Hon JOHN KEY: Well, the point of celebration is that if a convention centre of world-class standards can be built in Auckland without taxpayers putting in any money, then, as I said back then, I think that is a moment of celebration.

Rt Hon Winston Peters: Does he think it is fair that when the nation’s books are in the red and Skycity has just recorded a $66 million half-year profit—even though it looks like it was subsidising the Adelaide development—it should be taxpayers who have to stump up the cash for the convention centre?

Rt Hon JOHN KEY: My preferred position is that Skycity pay. It seems to be today that Opposition members are defeating themselves, having spent 2 years, if not longer, telling the Government how wrong it is that it sought to find a way to fund a convention centre without putting in taxpayers’ money. Today they are outraged that there could be any taxpayers’ money. They cannot have it both ways.

Rt Hon Winston Peters: If that is the Prime Minister’s new position, what happened to this statement, which reads as follows: “… what the Government spends in its budget is not the Government’s money; it is money the Government has taken out of the pay packets of hard-working New Zealanders. It is money that could otherwise be used to pay the mortgage, buy kids’ shoes, or pay the power bill.”—guess who said that—if so, why?

Rt Hon JOHN KEY: Well, clearly a very intelligent and sensible person said that, because it is quite correct. That is the reason the Government’s preferred option is that it does not put any money into the Skycity convention centre.

Prime Minister—Human Rights

7. CATHERINE DELAHUNTY (Green) to the Prime Minister: Does he stand by his statement “we’re actually going to stand up for human rights …”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Catherine Delahunty: Will the Prime Minister be instructing his Associate Minister of Trade, Todd McClay, who is in Saudi Arabia this week negotiating a trade deal, to make any deal conditional on stopping human rights abuses such as the 83 beheadings last year for so-called crimes including homosexuality and blasphemy?

Rt Hon JOHN KEY: I would be surprised if the Government made that a condition, but what the Government does do through its Ministry of Foreign Affairs and through its representations by embassy staff in the region is to continuously indicate that we are opposed and outraged by human rights abuses.

Catherine Delahunty: If his Government is standing up for human rights, why did it invite former Sri Lankan President Mahinda Rajapaksa to the Cricket World Cup when he is under investigation by the United Nations and when his regime was responsible for the torture and killing of thousands of Tamil civilians?

Rt Hon JOHN KEY: I am advised that one of the Ministers invited him when he was in Sri Lanka. That would have been because at the time he was the President of Sri Lanka. He was democratically elected by the people of Sri Lanka. We recognise that Government and it is quite normal to invite people under those circumstances.

Catherine Delahunty: Will he be calling on Sri Lanka to allow the independent United Nations investigators into the country to investigate war crimes, or does he only care about human rights when asked to go to war by the United States Government, which uses torture such as waterboarding?

Rt Hon JOHN KEY: The Government has not been asked by the United States to go to war. The Government, to the best of my knowledge, has not even been asked by the United States to provide people to support training of Iraqi forces in Iraq. The Government is considering what it can do to try to stand up against the threat from the Islamic State of Iraq and the Levant. I think many New Zealanders would support my view, which is that to have a terrorist group that is as brutal as this, New Zealand cannot just turn a blind eye to that. I am amazed that that member is opposed to that, but maybe she needs to watch the news a little bit more.

Mike Sabin—Police Briefings

8. KELVIN DAVIS (Labour—Te Tai Tokerau) to the Minister of Police: On what date, if any, was the first of any briefings given by the Commissioner of Police or his staff to him, his predecessor, the Prime Minister, or any of their offices in relation to the reported investigation into Mike Sabin?

Hon MICHAEL WOODHOUSE (Minister of Police): Responsibility for police investigations rests solely with the police, not the executive, and it is important that this constabulary independence is maintained. Any comment on the existence or otherwise of any particular investigation is for the police to comment on. Despite widespread speculation in the media and from the Opposition, the police advise me that they have declined to confirm to media any investigation regarding Mr Sabin, and it is not for the Minister to get ahead of the police in discussing unconfirmed operational matters. It is not appropriate nor in the public interest for me to discuss details relating to whether I may have received or provided details on a specific police matter.

Kelvin Davis: I raise a point of order, Mr Speaker. The question was about a date that he received the briefing, which he is responsible for—a briefing from the police commissioner.

Mr SPEAKER: Yes, but as I listened very carefully to the Minister’s answers, he is effectively saying to this House that he is declining to give that information because he does not feel it is in the public interest. That—[Interruption] Order! That is a judgment call that the Minister has the right to make, and I accept and respect the Minister in making that judgment call. You have the right to ask further supplementaries.

Grant Robertson: I raise a point of order, Mr Speaker. I take that that is the judgment that you have made about what the Minister said. The issue for us on this side of the House is that the Minister did not actually say that he did not believe it was in the public interest. He made a number of other statements about why he did not want to answer, but if that is what is being invoked, we on this side of the House need to be very clear about that, and I certainly was not from the Minister’s answer.

Mr SPEAKER: Certainly what I took from the Minister’s—[Interruption] I will allow the Minister to clarify.

Hon MICHAEL WOODHOUSE: I can confirm that the last sentence of my reply said that it was not appropriate nor in the public interest, etc., etc.

Mr SPEAKER: That is what I heard as well. Moving forward, we will ask for supplementary questions from Kelvin Davis.

Kelvin Davis: Why is it not in the public interest for him to disclose when the first briefing to the Government occurred?

Hon MICHAEL WOODHOUSE: I refer to my primary answer. I think I made it very clear why I thought that, and I maintain that.

Kelvin Davis: On what date did he or his predecessor or the officers first inform the Prime Minister’s office?

Hon MICHAEL WOODHOUSE: I refer to my primary answer and I have nothing further to add.

Kelvin Davis: Did he or his predecessor, when they knew an MP was the subject of a police investigation, seek and/or receive an assurance that the MP was not a Minister; if not, why not?

Hon MICHAEL WOODHOUSE: I refer the member to my primary answer. I have no further comment as it would not be in the public interest.

Rt Hon Winston Peters: Does the Minister agree with this statement: “People should be able to be safe in their home, and it’s a very serious issue for the country. It’s a really serious question when you start saying that 89,000 to 90,000 homes are visited every year because there’s a domestic violence,”; or further: “Often what had happened in the past was that if you had a domestic situation—say the husband was drunk and looked like he was going to be abusive to his wife or the children—the police had to go through quite a process to get a restraining order. We changed the law to allow that to be a much more rapid, fast process”—his words—“so it could happen instantly.” Those are words from the Prime Minister. Do you agree with them?

Mr SPEAKER: This question is a long way from the primary. I will allow the Minister to answer it, but he has leeway in doing so.

Hon MICHAEL WOODHOUSE: The question strays a long way from the primary question, and without understanding the context in which the comments were made, it would be inappropriate for me to make a detailed response, but, generally speaking, yes.

Kelvin Davis: Is it still the practice of the commissioner or his staff to brief the Minister on cases of significant public interest as part of the weekly briefing?

Hon MICHAEL WOODHOUSE: In accordance with Cabinet guidelines, yes.

Housing Affordability and Availability—Reports and Government Initiatives to Address

9. SARAH DOWIE (National—Invercargill) to the Minister for Building and Housing: What progress is the Government making in increasing the pace of new house construction and expanding Government support for first home buyers?

Hon Dr NICK SMITH (Minister for Building and Housing): The number of new homes consented in 2014 topped 24,000, or over 2,000 per month. This is double the rate of 1,000 per month when we became the Government in November 2008, and is the highest number in years. The $9.5 billion investment in residential construction last year is the highest on record in both real and nominal terms. The biggest increase has been in Auckland and greater Christchurch, where we are now building over 600 new homes per month in each. This rate in Auckland is treble the rate of 200 per month when Labour left office. The rate of house builds in Christchurch is at an all-time high and has doubled since 2012, showing the momentum of Christchurch’s housing recovery. The next step is our KiwiSaver HomeStart scheme, which will assist 90,000 young families into their first homes. This $430 million programme starts on 1 April and doubles the support for buying a new home.

Sarah Dowie: What other reports has the Minister received confirming the strong growth in residential construction?

Hon Dr NICK SMITH: The GDP data for the construction sector shows growth of 12 percent in 2014 to a record $14 billion per year. The National Construction Pipeline report shows growth expected this year of a further $4 billion, a further $3 billion in 2016, and another $2 billion on top of that to an expected all-time high in 2017. The household labour force survey data is equally positive. This has shown job growth in the construction sector of 21,000 additional building staff over the past 3 years. We now have 136,000 people working in the building industry, which is the highest number ever for New Zealand. I am also encouraged by the growth in building apprenticeships, which saw an all-time high last year of 5,500 new apprenticeships. This is up 70 percent on 2013 and more than double the number of the average under the previous Government.

Sarah Dowie: Does the Minister agree with the conclusions of the Productivity Commission in 2012, and the Motu study, and the Registered Master Builders Federation study this year on house prices that the largest cost increase over the past two decades has been in the price of land and sections; if so, what steps is the Government taking to address this?

Hon Dr NICK SMITH: Yes, the Government does agree that the biggest problem is around land and section prices. That is why in 2013 we passed the Housing Accords and Special Housing Areas Act, which has now seen 100 special housing areas gazetted, with a capacity of over 43,000 homes. The longer-term response has to be reform of the Resource Management Act. It is the primary legislation that governs subdivision, the supply of sections and rules controlling intensification, and also redevelopment. Our proposed amendments will speed up the plan-making process, give greater weight to housing supply and affordability, and streamline the consenting process.

Housing Affordability and Availability—Measurement

10. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: Does he stand by his statement that the Massey University home affordability index is the “comprehensive” and “neutral” measure?

Hon Dr NICK SMITH (Minister for Building and Housing): Yes, there are three housing affordability indices: from Demographia, from Roost Mortgage Brokers, and from Massey University. The key difference is that the Roost and Massey indexes include interest rates, whereas Demographia includes only house prices and incomes. I appreciate that members opposite would prefer to exclude interest rates from the equation. They are at a 40-year low and half what they were when we came into Government. I note that interest rates have consistently been lower under National Governments over the last 50 years.

Phil Twyford: Is he aware that the Massey University housing affordability index declined by 14 percent last year, that Auckland is now among the 10 most unaffordable cities in the world, and that average Auckland house prices went up $80,000 last year according to Quotable Value New Zealand—all on his watch—and how many extra affordable homes will be built now that we have three Ministers paid to fix the mess that his policies created?

Hon Dr NICK SMITH: I note that last year we built over 24,000 homes, the highest number in years, which shows that progress is being made. In respect of the Massey University housing index, the most interesting factor is this: the worst index was recorded in 2008 when housing affordability was 26 percent worse than what it is today—so there goes that. It was 26 percent worse in 2008. I will not be so uncharitable as to mention which party might have been in Government in 2008.

Phil Twyford: When the Reserve Bank Governor recently warned the Government that much more needed to be done to build more houses, was he referring to the fact that consent numbers in Auckland are only a little more than half of what the city needs just to stand still, and that 18 months after he announced his special housing areas only 20 houses have been completed as a result of his accord; or is the housing crisis just someone else’s fault?

Hon Dr NICK SMITH: Last year in Auckland we built 600 houses per month. When we became the Government only 200 houses per month were being built in Auckland, so we are making three times the progress. In respect of whether we need to do more to improve housing supply and affordability, members on this side of the House say yes. That is why we are introducing HomeStart on 1 April, and that is why, with the ACT Party, a key priority is Resource Management Act reform this year. It will be interesting to see whether members opposite are interested just in hot air or in further legislative reform that will help Kiwis who want to buy a home.

David Seymour: Given that it is important to learn from the past, could the member reflect on some of the factors that may have led to the Massey University index deteriorating every year but one from 1999 to 2008?

Hon Dr NICK SMITH: Over that period house prices in New Zealand doubled. Over that same period interest rates went through the roof. So in all of New Zealand’s 150-year history, in all of the 23 Governments that have been privileged to sit on this side of the House, the worst record of all in respect of homeownership and affordability was the last Labour Government. [Interruption] That is absolutely true. Interest rates went through the roof, house prices doubled, and that is why this Government’s reform agenda with support parties is so important for giving Kiwis a fair shake at being able to own their own home.

Phil Twyford: Why are homeownership rates dropping, and why does the Minister continue to blame the Resource Management Act for National’s housing crisis when under the last Labour Government we were building twice as many houses as he is currently building under the same Resource Management Act?

Hon Dr NICK SMITH: Let us get some facts right. The member has just claimed that Labour was building twice as many houses as we are. Last year we built 24,000. Two times 20 is 48,000. I challenge the member to tell me what year New Zealand built 48,000 houses, because my officials tell me it has never happened and he is dreaming.

Accelerated Regional Roading Programme—Progress

11. Dr SHANE RETI (National—Whangarei) to the Minister of Transport: What progress has been made on delivering the Government’s Accelerated Regional Roading Programme?

Hon SIMON BRIDGES (Minister of Transport): Excellent progress. I was delighted recently to announce that work is set to start on the long-awaited Normanby overbridge realignment project between Hāwera and Eltham in Taranaki, which is one of the first to get under way as part of the Government’s $212 million Accelerated Regional Roading Package. The Normanby overbridge and its approaches have been the site of a high number of crashes over the years, with too many ending tragically. That is why the Government has sped up the realignment by fully funding this $10 million project.

Dr Shane Reti: How is the Government’s Accelerated Regional Roading Package supporting Northland?

Hon SIMON BRIDGES: Well, I am glad you asked. The Government has committed funding of $10.5 million to bring forward by 5 to 6 years the Akerama curves realignment and passing lane project on State Highway 1 north of Whangarei. Construction on the project will get under way this year, and once completed it will improve journey time and reliability for freight, and will significantly reduce deaths and serious injuries. The Government has also committed $15 million to $20 million of funding, subject to the usual investigations, to bring forward the loop road north to Smeatons Hill safety improvements project on State Highway 1 south of Whangarei. The stretch of road is a major one for logging trucks and is very narrow in some sections. The project will improve journey time and reduce the risk of crashes—

Hon Gerry Brownlee: Does the candidate know where that is?

Hon SIMON BRIDGES: —at the intersection. I doubt it. With hundreds of millions’ worth of roading projects committed, the message to the people of the north is clear: unlike the Opposition, this Government backs them.

Rt Hon Winston Peters: Supplementary question.

Mr SPEAKER: I am sorry but the member has used his allocation of supplementary questions today.

Defence, Minister—Deployment of Troops to Iraq

12. Hon PHIL GOFF (Labour—Mt Roskill) to the Minister of Defence: Does he stand by his statement this morning that comments about sending troops to Iraq being the price of being part of the club were “unfortunate”?

Hon GERRY BROWNLEE (Minister of Defence): The comment that the questioner refers to was from a Radio New Zealand interview this morning. The topic of the interview was related to the possible contribution New Zealand might make to the fight against ISIL (Islamic State of Iraq and the Levant), and I made it clear that my comment referred to comments made by the British Foreign Secretary, clearly confusing “club” for “family”. I stand by my comments.

Hon Phil Goff: When this morning on radio he described the comments of his leader, the Prime Minister, as being unfortunate, was that because currying favour with other club members is a poor reason to give for putting the lives of New Zealand soldiers at risk?

Hon Gerry Brownlee: As I have just said, that was not my intention. I misunderstood the intent of the question from the radio interviewer, and I confused two things: club and family. I stand by my comment—which was meant to be that the British Foreign Secretary’s comment last week, saying that we were part of the family and expected to turn up, was inappropriate.

Hon Phil Goff: If it is not for the reason of being part of the club, what is the justification for putting Kiwi soldiers in harm’s way to train the Iraqi army when 10 years and $25 billion worth of efforts by the United States to train that army has failed to end the incompetence, the poor leadership, and the corruption of that army?

Hon GERRY BROWNLEE: For a start, there has been no decision to do any of the things that Mr Goff is suggesting. We have been very open with the public that we are looking at how we might contribute to the fight against ISIL, and if anybody wonders why we are even looking at it, they have only to look at events in Sydney this morning.

Hon Phil Goff: Why do human rights abuses by the Islamic State of Iraq and Syria apparently require our military intervention when years of similarly appalling abuses by Boko Haram and by President al-Assad of Syria have attracted so little comment and no action from his Government?

Hon GERRY BROWNLEE: The first point would be that this Government does condemn those atrocities committed by the people the member lists. There is no question about that. But when there is an opportunity to do something, as there may be, as we conduct our investigations, then that becomes a point where you do something about nipping in the bud the very organisation that appears to be funding a lot of these other ratbags around the world.

Hon Phil Goff: Why was he pretending yesterday that contingency training for an Iraq deployment was about to begin when his own office admitted more than 2 months ago, on 2 December, that that contingency training for deployment was already under way?

Hon GERRY BROWNLEE: That is the popular interpretation Mr Goff likes to put on things. What happened before Christmas, I am informed, is that the Chief of Defence Force did say he wanted some people trained for a general mission to the Middle East. We have made it specific that they should train for Iraq. New Zealand troops are very good at training and becoming familiar with the culture they are going to be entering into, and that is why they have such a good reputation around the world. It is appropriate that they make some preparations, but I stress again that no decision has been made. The information we need to make that decision is not available at this point.

Hon Phil Goff: I seek to table a quote from the Minister’s own office, by his spokesman, saying that the contingency had already started for—

Mr SPEAKER: Order! It is effectively a press release the member is seeking to table.

Hon Phil Goff: Oh, it would have been quoted in the media. I probably got it from the Parliamentary Library.

Mr SPEAKER: I am not prepared to put the leave.

Hon GERRY BROWNLEE: I raise a point of order, Mr Speaker. Unlike a previous Minister of Defence, I am not led by the nose by staff in my office.

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

Urgent Debates Declined

GCSB—Resignation of Director

Mr SPEAKER: I have received a letter from the Rt Hon Winston Peters seeking to debate under Standing Order 389 the resignation of Ian Fletcher as Director of the Government Communications Security Bureau (GCSB).

Although the resignation was announced on 13 January 2015, today is the first opportunity on which an urgent debate application can be considered, despite the House sitting yesterday. It is therefore a case of recent occurrence and it does involve ministerial responsibility. The resignation of a senior public servant may warrant an urgent debate, but there would need to be something exceptional or urgent about the case when the House has before it such a wide-ranging debate as that on the Prime Minister’s statement. This provides ample opportunity for members to debate the GCSB if they wish to do so. In these circumstances, I am not convinced that the business of the House should be set aside today. The application is therefore declined.

Debate on Prime Minister’s Statement

Debate on Prime Minister’s Statement

Debate resumed from 10 February.

Hon BILL ENGLISH (Deputy Prime Minister): I am pleased to resume the debate on the Prime Minister’s statement as part of an energetic Government with a wide-ranging reform programme. You would think we had just got in, there is so much going on with this Government—for instance, the most comprehensive reforms of the Resource Management Act; the regulation of water quality and the necessary changes in farming practice that will unfold over the next few years at the core of our productive economy; changes in housing, which will lead to greater supply for more low and middle income families; and continued efforts to implement the changes in workplace safety, flowing back to the original Pike River tragedy.

On 1 April, despite the fact that the Government is running the tightest control on expenditure we have seen in several decades, there will be more paid parental leave. On 1 April there will be further significant reductions in ACC levies. And what does that mean? Well, it means that for all those people on lower incomes who register their car and license it, they will get that done for about $100 a year less. Many of them have had an increase in benefits or national superannuation. Just one small change and a raft of improvements are coming on 1 April, including free doctors visits for children under the age of 13. These are issues we campaigned on successfully, and I am proud that we will have the opportunity now to implement those changes.

Can I welcome back Opposition members. I thought they would make a coherent start to the year, but the Prime Minister summed it up in a sentence yesterday when he said that after we have done Rātana and Waitangi, Labour’s position now is that Māori can make their own laws but they are not allowed to buy a State house. They can write their own constitution but they are not allowed to own homes. How did Labour end up with such a confusing position over its core constituency? Well, I will tell you how, because I have been listening at Rātana and Waitangi. It is that Māori who always voted for Labour are saying: “Don’t undo National’s policies. We’re getting our settlements done and our grievances settled. More of our kids are getting educated. We’re going to get the opportunity to have more homeownership individually or through our iwi. There is less crime. We have fewer victims of crime, and fewer of our young people are in the courts. Thousands of them eat less each year. So don’t talk about changing National’s policies.”

That left Labour with only Māori sovereignty. I thought Labour leaders have been well out of touch with most people about most things for most of their leaders—of whom there seem to have been several over recent years—but sovereignty is 1970s, Mr Little. In the 1970s there were Māori angry about that and protesting on it, and you would think that the Labour Party, which pretends to represent that bloc of voters—more so now than it did at any time in the last 20 years, if you look at its MPs—is so out of touch with their aspirations. It would not matter so much, I suppose, if it was just that small group of voters, but, actually, the Labour Party is out of touch with most voters—with most voters. It still does not understand that the steady, sustainable growth of this economy is awakening a degree of aspiration and confidence in New Zealanders that only this Government seems to understand and foster and grow.

And what is a piece of information that shows that? Well, we have the highest workforce participation rate ever—ever. What does that mean? That means there is a bigger than ever proportion of the working-age population available for work. So while the Labour Party is trying to find out again what work is, mainly because it has not done any for 6 years while the rest of the country has been busy, more people who are older, more women, and more people who were on benefits are putting up their hands and saying: “We have confidence that if we get into the workforce we can get a job.” And that is what the higher participation rate is—the highest ever and, as I might just comment, about 5 percent higher than it is in Australia.

There are a couple of features of the economic situation at the moment that are promising—and I would not say more than promising—such as the prospect of sustainable growth. One is that both the Reserve Bank and Treasury have lifted their estimates of the speed limits of this economy—that is, the rate at which it can grow without causing excessive inflation. It was only a bit over 2 percent; now, in fact, it is close to 3 percent. In fact, economic forecasts show that we are likely to grow at just under 3 percent for the next 5 years on average. Just imagine the impact of that. In the last year there were 80,000 new jobs, and if we have 5 more years of anything like that rate of job creation, with the rising real incomes we will have a community in pretty good shape.

Another aspect of this recovery that is starting to work well is business investment. There has been a lot of focus on the upsurge of residential investment. That is really important because we need a lot more houses, but business investment is steady and growing year after year. We have now had about 4 years of growing business investment contribution to growth and it is forecast to continue. That capital deepening, that investment in better plant and equipment, better gear, better marketing offshore—that is what underpins the growth in our incomes. The other is the stadium full of people who were lining up at the airport with their tickets booked to Australia, who have decided to stay here and not catch the plane.

Everyone, I think, is surprised but should be pleased at the way that our net migration has held up—our positive net migration. Twelve months ago they would have thought: “Yep, there is a bit of a surge here, a few more people coming in, a lot of Kiwis coming home, New Zealanders staying home.”, but actually, it has kept on going. It is one of the reasons we have, for instance, lower cost escalation in Christchurch than we expected, because the supply side of the economy is showing it can deliver the labour and the skills that we need.

The rate of job creation and growth in real incomes is the product of a programme this Government executed in its first two terms and will continue to execute in its next two terms—that is, ongoing microeconomic reform that underpins business confidence. There is no growth until someone invests another dollar and employs another person, and that is what is happening.

Finally, can I just indicate that we will certainly be continuing our focus on cracking long-term dependency through welfare, through the justice system, and through our changes in housing because that is what drives Government expenditure. What drives Government expenditure is social dysfunction that we have not been able to fix yet. I want to compliment the Public Service on the results it has achieved: less crime, more educational achievement, digging out the problems around rheumatic fever and child violence, and bringing them into the daylight so we can solve them.

This Government will be focused on results and will measure itself by results, not just on the books but in the community, because we figured out that what works for the community works for the Government’s books, and we look forward to working with the Public Service to achieve even more over the next 3 years. We have done some of the easy stuff and now we are starting to get to the real complexity: the 500 families in Rotorua who have a parent with a custodial sentence and have been subject to a Child, Youth and Family notification and have spent at least three-quarters of their life on a benefit. We need effective action with those families if we are going to have them participating in the workforce, like many others have put up their hand to do, and if we want to have a better community. So we certainly approach this confidence motion with some real confidence.

GRANT ROBERTSON (Labour—Wellington Central): We know we live in strange times when the “Mayor of Messines Road”, old “Double Dipton” over there, is the person upholding probity on the National Government side, because that is what is going on today. Steven Joyce and Bill English are at war for the attention of their daddy, John Key. They are at war for him. We have the surly middle child, Bill English, who today at the Finance and Expenditure Committee could not have run farther away from the Skycity deal—it had nothing to do with him; he was not part of the negotiations—as he desperately tried to cling on to the last scrap of fiscal credibility. And then over there is the problem older child, Steven Joyce, wanting to go out there and do deals with everybody—

Hon Steven Joyce: I’m younger than him.

GRANT ROBERTSON: —wanting to protect the deal that he did. You certainly look a lot older than he does.

Mr SPEAKER: Order!

GRANT ROBERTSON: Not you, Mr Speaker. He is trying to do deals out there. Well, what we have to say on this side of the House is that the Government’s chickens have come home to roost on Skycity. This brings together everything that is wrong with this Government: cronyism, incompetence, and lack of concern for the social harm that that will cause. There is an extra $130 million up for Skycity. What could that be used for? It could build 500 State houses. Instead, it is going in corporate welfare from Steven Joyce to the people whom he got done over by in a deal, and Bill English knows that—this from the Government that is meant to be the great negotiator, the great manager of our economy. And here we have a deal for what we now know was a $402 million convention centre; not this whole other convention centre that is being talked about now—a $402 million convention centre that was meant to be free to the taxpayer—and straight away Steven Joyce is done over.

But that is no surprise, coming from the man who contracted a defective payroll system in Novopay. His solution to that? Buy it. Buy the thing—buy the thing. The brilliant negotiation skills of Steven Joyce—when he contracts a defective payroll system, his solution is to buy it. That is this Government’s track record. It does a deal with Rio Tinto. It spends $30 million of taxpayers’ money, and there is not a guarantee of one single extra job or one job guaranteed for the long term. That is the kind of economic development that this Government puts forward. Every time the Government gets itself into a negotiation—be it with Chorus; be it with MediaWorks, Mr Joyce’s friendly old company—the Government gets done over and the taxpayer of New Zealand gets done over. It is time for this Government to front up to its failure to negotiate deals on behalf of the taxpayer or to actually think of the best interests of the taxpayer.

The Minister of Finance has just spoken in rosy terms about the economy, but it is important to dig into the promises that have been made. The promise that has been made by this Government, year in, year out, is that we are on our way to surplus. Every single time we do not see that surplus. We know that Bill English will come to this House with a Budget in May. He will fiddle the figures again. He will fudge the numbers one more time. He will make sure that New Zealanders pay more on their ACC than they need to. He will make sure that the money is shifted about so it looks like there is a surplus. But that is it. That is the one-trick pony that we have in our finance Minister. There is no plan to diversify the economy. There is no plan for long-term growth in this economy, beyond the Christchurch rebuild. This is what John Key and Bill English have brought to New Zealand.

But at the same time the level of debt grows. Of course debt was going to grow out of the global financial crisis, but the extent of borrowing by this Government outstrips borrowing by any Government in New Zealand’s history. Since this Government got into office it has borrowed a million dollars an hour, every hour, every day that it has been in Government—a million dollars an hour, every hour, every day that it has been in Government. And the Government tells us it is the responsible fiscal manager. The Government tells us we do not know how to run the economy. We ran surpluses. That finance Minister has not run one, and he borrows a million dollars an hour, every hour.

More than that, $10 million a day in interest is being paid out on behalf of the taxpayer by a Government that does not have a plan to grow the economy, by a Government that does not know how to negotiate a good deal for the taxpayer and spends its time doing dodgy deals with its mates. That is the legacy of this Government. If extra money does come in for the Skycity convention centre, that will be the political epitaph of Steven Joyce and John Key. The wide boys from Auckland, up against Bill English and Gerry Brownlee from down south, know it is not working. Bill English sat in the select committee today and he said that his preferred option was to walk away from the Skycity deal—to walk away.

So watch this space—watch this space to see whether it is Bill English or Steven Joyce who wins the day with John Key. If it is Steven Joyce, it is testament to the fact that this Government cannot negotiate a deal and is more interested in covering its political backside than it is in doing what is right for New Zealanders.

The unemployment figures came out last week and they made for very sobering reading—up to 5.7 percent. [Interruption] They laugh, but they are up. Everywhere else around the world, in countries we like to compare ourselves to, unemployment goes down, but not under this Government’s watch. But within those figures are some very instructive lessons. In Wanganui today 9 percent of people are unemployed. That is more now than in Northland at 8.5 percent, and 8 percent in Gisborne. It is the regions of New Zealand that are being neglected by this Government. It is the people who work hard in the small businesses in those towns who know that the Government is not there to support them. Steven Joyce likes to fiddle the figures, wave around his charts, and have his laminated cards on his desk. But the reality for the life of those people in Wanganui is that they know unemployment is rising. Any trip down the main street of Wanganui today would tell Mr Joyce that those shops have shut. You can play the game of trying to guess what shop used to be there. The regions of New Zealand are being neglected by this Government and unemployment is growing.

Speaking of Wanganui, 46,000 more people in New Zealand are unemployed than when National took office. That is more than the population of Wanganui. There are 46,000 extra people unemployed. Years after John Key and Bill English declared the global financial crisis over, there has not been an improvement in the lives of many New Zealanders. Whatever economic growth there might be out there is not being shared fairly in this country. We know that, as the gap between the rich and the rest grows.

On this side of the House we want to give priority to the issues that New Zealanders are talking to us about—to grow sustainable jobs. I can tell members on that side of the House that as we have been going around on the Future of Work Commission, the main piece of feedback we are getting is that National is not interested. It is not interested in looking ahead to the kinds of decent, sustainable jobs that New Zealanders want. National is not interested in making sure that people are getting the skills and training for those future jobs. The small-business people especially are saying they are welcoming Andrew Little’s words—that small-business people will be at the centre of Labour’s policy—because they are not seeing that from National. They want more skilled staff. They want fewer compliance costs. The Labour Party will be delivering to them on that.

On this side of the House we believe that it is time for a conversation in New Zealand about how we ensure decent, sustainable work with growing wages for New Zealanders that reduces inequality. That is our focus, and this Government is failing to deliver in that area.

Hon STEVEN JOYCE (Minister for Economic Development): That was an interesting contribution from the member in charge of “What is work?”—the member whose job it is to wander around the country and ask the world: “What is work? What is it about? What’s a job? What’s a job going to be?”. These are the questions that Grant Robertson is asking himself as he travels his whimsical way around the country, working on a statement of the bleedingly obvious—working on a statement of the bleedingly obvious. Although you would have to say it is not all Grant’s own work because there were shades of David Parker in that speech, it is fair to say. And before that, I even heard hints of David Cunliffe—hints of David Cunliffe, which just goes to show that you can change the finance spokesperson in the Labour Party, but the drivel remains the same; the drivel continues. Actually, I do believe that you can change the leader of the Labour Party but the words do not change. That is the weird thing.

We had some state of the nation address from the new Labour leader, that chap Mr Little, at the beginning of the year and I thought to myself, as one of the 10 listeners to that speech, that some of that sounds a bit like something I might have heard before. So let us have a look at some of the lines from the speech of Mr Little. For example, “We need a bold new approach to creating jobs and increasing incomes.” sounds like Mr Little, does it not—“creating jobs”?

Tim Macindoe: It does—it does sound like him.

Hon STEVEN JOYCE: Well, actually, it was Phil Goff—Phil Goff in May 2010. Mr Little said: “The Labour Party I lead is about jobs—good jobs, skilled jobs, well-paid jobs.” So that is good. Cunliffe, of course—his was slightly different. He said: “A job is more than a weekly wage. It gives people a purpose and pride in themselves. That is why I am focusing on jobs”. That was Mr—no, it was not Mr Cunliffe; it was Mr Shearer. It was Mr Shearer.

Since Labour has been in Opposition, those members have talked like nothing else about creating jobs, and the only job they have created is a job for Grant Robertson to find out what a job is. That is the only one. But it is not just jobs. Labour members are big on small business these days. They have suddenly discovered small business.

Chris Bishop: Small party, small business.

Hon STEVEN JOYCE: Yes, small party, small business. Mr Little said: “Small business success is a priority for Labour.” That was what Mr—no, it was not; it was Mr Cunliffe. What Mr Little said was that Labour will now make small business a priority, and so on and so on.

Of course, the trouble with Labour’s new-found focus on small business is that, actually, it does not have any interest in promoting small business at all. Mr Little wanders out there and says: “Oh I am very interested in small business.”, but what Labour wants to do is about what it wants to do to small business, rather than what it will do for small business. So he says: “I want to go out and help small business, but oh, by the way, I want to drop the 90-day trial for new employees.” That is still off. Dropping the starting out wage—that is still a problem. There is still a massive big increase in the minimum wage and he has not ruled out the KiwiSaver contribution increases or the comprehensive capital gains tax. He is still talking about that, sitting on a fence, and it is getting uncomfortable—the pales in his backside. There is a much more expensive emissions trading scheme, tough new taxes on water use, and, of course, the national pay awards system was actually designed by Mr Little. So he is out there, as was Mr Cunliffe before him, saying: “I love small business.”, putting his arms around small business, and choking it to death. That is the plan of the Labour Party for small business.

Nothing has changed—nothing has changed at all. We have a new megaphone but the same language, just like we had the last time and just like we had the time before that. And weirdly—

Hon Bill English: And the time before that.

Hon STEVEN JOYCE: The time before that and the time before that. Weirdly, an election was only 3 months ago—just imagine how weird it is to members on this side to get up and hear a speech from Grant Robertson today that was virtually identical to one by David Parker 3 months before the election and identical to another one by David Cunliffe a couple of years before that.

This Government is focused on creating jobs for New Zealanders. Unlike the Opposition, which is still trying to work out what a job is, we are out there encouraging investment that creates jobs—28,000 jobs in the last quarter, 80,000 in the last year, and 146,000 in the last 2 years. That is the strongest job growth in 2 years in a decade, and yet the Labour leader put out a press release last week saying that there is a jobless recovery in this country—a jobless recovery. Well, if that is a jobless recovery, then he really does not know what he is talking about. There were 146,000 additional new jobs in the New Zealand economy over the last 2 years.

That is what this Government is focused on, not yacking on about what is work, who needs workers really, and do workers need organisations more than organisations—that was one of Grant’s theories the other day. Yes, it is all very exciting stuff—all theory; all a million miles from what is reality. Meanwhile, this Government is getting on with the job of doing the things that encourage people to invest in the New Zealand economy, hire more people, and grow more jobs. That is what is going on with this Government, and the Opposition on the other side is pretending that all that is not happening. Thank you.

Mr SPEAKER: I understand that this will be a split, 5-minute call.

DAVID CLENDON (Green): I was pleased yesterday that the beautiful region of Northland got a mention in the debate on the Prime Minister’s statement. I notice that it got another mention today. It could be that a by-election is what it takes to finally get some Government attention for a region that has been neglected for the last 30 or 40 years at least. It is an unexpected by-product, perhaps, of an unfortunate situation.

Unfortunately, the PM’s comment was in the context of a particular stretch of motorway that, for his information, will not actually enter Northland. The “Holiday Highway” to Wellsford actually will not deliver benefits to Northland on anything like the scale of what was being proposed. Northland actually does not particularly need, and will not benefit from, a billion-dollar investment in a gold-plated “Holiday Highway” to Wellsford. What Northland does need is a reliable roading and rail network. We need to build resilience into that roading and rail network, for very sound economic, social, and indeed environmental reasons.

We saw last year, in the middle of a particularly wet winter, that it rained for 4 days in a row and the roading network in Northland collapsed. It is interesting to note that 9 months later a major diversion on State Highway 1 still has a sign that says “Temporary Bypass”. We are seeing no investment in building resilience into the roading network that is critical for the ongoing economic and, indeed, social well-being of Northland. A lot of the products coming out of Northland, be they primary production or manufactured goods, are time-critical products. If we cannot reliably get to ports and if we cannot reliably export from the region to the markets, then our economic well-being will be stalled, if not doomed, for the foreseeable future.

We did see a useful contribution to the debate—a document released jointly by the Ministry of Business, Innovation and Employment and the Ministry for Primary Industries, grandly titled Tai Tokerau Northland Growth Study: Opportunities Report, which is actually a very useful piece of work. Some of the analysis, some of the extrapolation from the data in it, is questionable and debatable, and that is not unusual, but it is a very useful snapshot. There is a lot of useful data in it. We were particularly pleased to see that the document does acknowledge, and overtly recognises, that we must build the reality of climate change into any future strategy for Northland, as with our other regions. If we do not recognise the reality of that, then we are doomed to get it wrong, and otherwise we will be planning for some past situation rather than making sensible plans for what we know will be our future.

The report talks about the possibilities around horticulture, a more diverse horticulture—higher-value horticultural products, apiculture, bee-keeping. Mānuka honey is the new liquid gold, and hopefully there is a sustainable industry to be built around that. It also talks about an indigenous forestry to convert low-value, price-taking softwoods into high-value hardwoods, where we can start setting prices on that. All of these potential, very positive industries—economically and socially for Northland—are actually climate dependent, so it is critical that we build that reality into our thinking or we will get it wrong.

What we know Northland does not need is offshore drilling or a commitment to mineral extraction. Those were perhaps appropriate industries for the 19th century and the early 20th century; they have no part in the 21st century. Oil drilling, as we are told, will bring a bonanza in jobs. That is actually at odds with what a senior director of State Oil said at a public meeting in Kaitāia last year—that if there were any jobs for locals emerging from the offshore drilling programme, it would be at least 6 years from now and they would be low-value jobs: truck drivers, cooks, and cleaners. That is not what the north needs. We need investment in social infrastructure, access to health care, access to education, access to those basic social services, access to high-quality, affordable homes. We see nothing from this Government that will assure that those opportunities exist for Northlanders.

The future of this country will depend heavily on the well-being of the regions. If the regions are not performing, then the country will not perform well. We will continue to see negative social statistics. We will continue to underperform economically, and environmentally we will see degradation, which we simply do not need to experience. We are moving into a new low-carbon future. We need to recognise the reality of that. We need to create policies and investments that will seek to close, rather than widen, the inequality gap in New Zealand. We need to acknowledge the reality of climate change in Northland as well as elsewhere. Thank you.

JAMES SHAW (Green): The Prime Minister talked a lot about business in his speech. The National Party sees itself as the party of business. National Party members tell us that they are good for business and good for the economy. If you go to the National Party website and you look at National’s values, you will find—actually, you will mostly find pictures of John Key. But if you increase the font size and you squint real hard, you will find a list of National’s values. One of them is competitive enterprise and reward for achievement. As we all know, our Prime Minister embodies these values of enterprise and achievement. He is the transubstantiation of these values—enterprise and achievement made flesh—which is presumably why his image features so heavily on the values page of the National Party website. He made his fortune at Merrill Lynch, becoming one of its senior executives and mastering the secrets of negotiation and wealth creation that made Merrill Lynch one of the most successful, profitable companies in the world, right up until it went bankrupt, crashing the global economy and costing taxpayers in the United States $5.8 billion worth of bailout money. Mr Key, of course, had left Merrill Lynch by then, so he cannot be blamed for that. He had come back to New Zealand to put those values of commercial enterprise that he learnt there back at the service of the economy, where he now runs New Zealand like a business and wields his wealth creation and negotiation skills on behalf of the taxpayer.

I would like to give you some examples of the Prime Minister’s business acumen. The full brilliance of the Prime Minister’s business plan regarding Skycity is not quite clear to me yet. What I do understand is that he overrode an open tender process in which a series of companies were competing to negotiate a deal with a casino company, giving them a law change worth tens of millions of dollars to build a free convention centre that the taxpayer will now have to pay several hundred million dollars for. I am led to believe that the Prime Minister and the Minister for Economic Development even let Skycity draft the terms of the contract. Now that is negotiation!

We already know about the partial privatisation of the energy sector. The Government sold $7 billion worth of assets for $4.7 billion and spent $640 million doing so. That might sound pretty bad to the business illiterate—those who do not understand high finance. I mean, if you had a house that was worth $700,000 and you paid $64,000 to a real estate agent and they sold it for $470,000, you probably would not be very happy. But the Prime Minister understands that the partial privatisation was about growing the New Zealand economy and building our capital markets. That is why money from the cost of this sale went to good Kiwi companies like Deutsche Bank and Goldman Sachs Group. The shares, which by the end of the sales process the Government was literally giving away, went to Kiwi mums and dads, like the Weinbergs of South Carolina.

Then there is South Canterbury Finance. For an entire year before this company went bankrupt, Treasury warned the Prime Minister that the company was insolvent and that it was in breach of the Government guarantee agreement. But like all great business people, the Prime Minister knows that it is sometimes wise to wait until the right moment to act, so he did nothing, and when South Canterbury Finance went bankrupt, he struck. Unfortunately, he struck $1.7 billion of taxpayer money off the Government’s balance sheet.

The Prime Minister knows that you have to spend money to make money, which is why this Government has spent something like $1 billion on corporate welfare since it came to power in 2008. More and more businesses in New Zealand know that the best way to make money is not to add value or to deliver a product or service that is better than their competitors. The way to make money is to hire lobbyists. Get the Government to change the law for you or just write you a cheque. This is crony capitalism. It is the antithesis of free, open, and transparent markets in which businesses compete on merit rather than on political connections. National claims to stand for competitive enterprise and achievement. Hiring a lobbyist is not competitive enterprise and getting a payout from the taxpayer is not an achievement. So this year the Greens will be providing an alternative to the Government’s so-called Business Growth Agenda, and I look forward to promoting that in this House.

Hon NATHAN GUY (Minister for Primary Industries): Happy New Year to you, Mr Speaker, and to all of Parliament. Welcome back for an exciting 2015. I look forward to debating some of the issues with regard to the Business Growth Agenda that the member just resuming his seat, from the Green Party, has talked about. Importantly, this is about confirming the Prime Minister’s statement, which was given to the House yesterday. When we look back we have just come through a very successful election on 20 September. It was successful for us in the National Party; not so good for those across the House in the Labour Party. It was its worst result since 1922, I think it was. It was the worst result for 92 years. Of course, it was the best result for the National Party since 1951.

We look forward to providing a very strong and stable Government for the next 3-year term, under the leadership of the Prime Minister, the Rt Hon John Key, who started the year extremely well. We are excited about Treasury’s forecast of economic growth of around 3 percent for the next 3 years. Of course, on the other side of the House, they do not like hearing that in the last 12 months 80,000 jobs were created. We have positive net migration, low inflation, and pretty stable interest rates, and ACC reductions of around $135 for the average car registration are coming. Of course, we have low fuel prices, giving every family in New Zealand a lot of confidence.

We are expected to be one of the first countries in the OECD to achieve surplus since the global financial crisis, which is fantastic. I need to acknowledge the leadership of our Minister of Finance, Bill English. It has been a great start to the year. I was with the Prime Minister at Waitangi. A fantastic speech on the lower marae was well received. Just prior to that, I was with Minister Flavell and Minister Joyce when we released the Northland Regional Growth Study. I know that the Green Party member Mr Clendon was talking a little bit about that previously. He was talking about the things in that study that the Green Party agreed with, but the Greens do not agree with providing roads so that we can get our goods to the ports and to the airports, and, of course, the Greens do not agree with any offshore drilling and job creation.

Importantly, this report—and it is well worth having a look at—talked about the potential of the Northland economy. It is a region that offers so much potential in agribusiness and a region that offers potential for Māori agribusiness. There are 116,000 hectares of land owned by Māori and they are offering a huge amount of potential. Dairy capability in Northland is huge. Dairy is an important industry for Northland and one of the leading lights, with more potential. If we can move the average dairy farmer up into the top 25 percent, that is worth $50 million in Northland. There is an opportunity for more technology transfer in the dairy industry, working closely with Dairy New Zealand. There are opportunities in forestry up there as well—exciting ones. At Ngāwhā there is an opportunity for geothermal power, and potentially a new mill, creating, it is believed, an extra 450 jobs.

In this term of Government a focus on skills in the primary industries is also going to be important. It is hugely important in Northland. We have got to attract the youngest and brightest into our primary industries. There are opportunities with kingfish in Northland as well. There is a study being done with the National Institute of Water and Atmospheric Research Ltd at Bream Bay. Some capital is required but it is an opportunity to grow more kingfish, and, particularly, to grow onshore aquaculture opportunities. Opportunity is pretty topical at the moment, such as the opportunity for water storage in Northland, and, actually, up and down the country as well. The Ministry for Primary Industries and I will be working closely with the regional council, exploring some greater opportunities for Northland, which came through pretty severe droughts in the last couple of summers.

Also, there are opportunities to develop mānuka honey at about $35 a kilo. Extra tonnage there means more money for the Northland region economy and, importantly, more jobs. And we should not forget horticulture in Northland, because it is the best producer of kumara. In fact, it produces all the kumara for all New Zealand. It produces about a third of the avocado crop, and about a quarter of the citrus crop comes from Northland. So this study is well worth picking up for any candidates who have an aspiration of standing in the Northland by-election. They should make sure that they read this study. They should get on board and support the Ministry of Business, Innovation and Employment, the Ministry for Primary Industries, and the regional leaders to deliver greater prosperity for the Northland economy. But, importantly, part of ensuring that we support the regional economy is the Primary Growth Partnership.

The Office of the Auditor-General released its report today. This is a review that covered the last 14 or 15 months. It was a 40-page report with three recommendations. The Ministry for Primary Industries agrees with those recommendations and will make those necessary adjustments. They are: a more easy to follow trail of how criteria is applied for each programme; ensuring that work already under way on tracking and evaluation of long-term outcomes continues; and an easy to understand format to publicly report the progress and achievements of the Primary Growth Partnership.

There is no shortage of public reporting with the Primary Growth Partnership already. There is a detailed website. There are quarterly reports. There are financial reviews. There are regular newsletters. There are annual expos. Even at the national Fieldays at Mystery Creek last year the then leader of the Labour Party, David Cunliffe, came on to the Ministry for Primary Industries site. It had an audiovisual running of the Primary Growth Partnership programme. There on the screen was Precision Seafood Harvesting, a fantastic net design that is allowing fish to be caught alive. Sustainability and economic considerations are to the fore, allowing the fishing industry to export fish alive. David Cunliffe came on to the Ministry for Primary Industries site and said it was a fantastic programme.

I hope that now that this audit is out of the way, the Labour Party gets on board and supports the Primary Growth Partnership and supports the investment that is being made in research and development in the primary industries, but we will wait to see whether that occurs or not. The Primary Growth Partnership is delivering and will continue to deliver. The New Zealand Institute of Economic Research did a report on the Primary Growth Partnership last year and confirmed there is a potential $6.4 billion a year by 2025. That could stretch to $11.1 billion as well. Because politicians like us love talking in big numbers, let us break that down for those who might be interested. That is $270 a hectare for the average hill country farmer. That is $600 per cow, $370 per tonne for the seafood exporters, and $190 per hectare for forestry.

Importantly, we are coming through what has been a very dry period, particularly for the east coast of the South Island—Otago, North Otago, through Canterbury, and Marlborough. That just goes to show the importance of water storage projects. Across the House the Greens are not too sure about water storage projects. They are not too sure about irrigation. The Labour Party would prefer to have a tax on water. So on the other side of the House, they do not care that we store only 2 percent of the rain that falls in this country. They do not care about managing our streams more efficiently—and that is, of course, good for the environment. We know that there is a huge amount of upside from water storage projects in this country. Everyone feels for our farmers who are going through a bit of a tough time right now, but more water storage projects have to be encouraged, and I will be working hard with my officials to ensure that we can deliver more in this space.

Also, the Prime Minister in his statement outlined the importance of infrastructure. Roads of national significance are delivering for many regions up and down the country. In my local electorate, they are making a huge difference. The Kāpiti Expressway is providing 400 to 500 jobs. It is a $630 million project that is going to mean that we can get our exporters’ produce into the port, into the airport, and into those very important export markets. I endorse the Prime Minister’s statement. I look forward to the work programme. It is going to be hugely exciting for 2015 and beyond.

Dr DAVID CLARK (Labour—Dunedin North): Well, John Key has lost his new car smell. We heard today a very lacklustre performance in the House. That man is no longer the energetic Prime Minister he was when he was first elected. His responses to questions today revealed that he is tired. He is part of a tired, arrogant third-term Government that has lost its way and that has no new ideas other than bailing out its corporate mates. It has been putting the Armor All on—do not get me wrong. We heard the carpet’s fading a little, but the Government will be putting the Armor All on. It will be trying to convince New Zealanders that it has that new car smell.

But mark my words, New Zealanders are not stupid. New Zealanders know that John Key is losing his touch. He is losing his grip. He is tired, and the arrogance that is creeping into his Government is being seen by all New Zealanders for what it is. What we want to talk about here, of course, is the lemon that taxpayers are being asked to suck in the Skycity deal. Ninety-seven percent of the New Zealanders who responded to the Campbell Live poll last night were very clear that they do not think they want to suck the lemon that John Key is asking them to suck for this deal—for Skycity to bail him out of the political hole that he has built for himself.

So New Zealanders will be asking themselves two questions today. They will be asking themselves why John Key and Steven Joyce insisted that this convention centre would be built at no cost to taxpayers, and why they said that before the election. Why did they say that, and why are they now refusing to promise that that is true? Those are the two questions New Zealanders will be asking.

Andrew Little asked John Key about that today in the House. He said: “Does the Prime Minister stand by his promise to New Zealanders that ‘the construction of the new convention centre will not cost taxpayers or ratepayers a cent’ … [?]”—that is a direct quote from the Prime Minister: “the construction of the new convention centre will not cost taxpayers or ratepayers a cent”. John Key shuffled around. He refused to stand by that promise. He tried to pretend that was a promise about some other type of kind convention centre somewhere else—some mysterious convention centre that John Key had not talked about before the election. No, he might not stand by that promise; he is talking about a different convention centre. It might actually cost the taxpayer money. He is refusing to rule out some money going into it.

And Steven Joyce in July 2013 said: “Under the final agreement, and consistent with the Heads of Agreement signed in May, Skycity will meet the full project costs of the convention centre …”. I asked Steven Joyce whether he understood that to be the strictly legal understanding of full costs or the pretty legal understanding of full costs for the convention centre. He shuffled his feet, also he looked tired, but he was arrogant enough to stand there and try to pretend that that is not what he had meant at the time. New Zealanders are seeing through it. They do not want to suck the lemon that John Key is asking them to suck—97 percent of New Zealanders said that they do not want to suck the lemon that John Key in his fading, carpeted, Armor All-ed car is trying to sell them as something to suck on.

Today the Labour Party launched an online petition to get a clear message to John Key to say that we do not want this taxpayer bailout to go ahead. It has had a rapid take-up, and anybody watching at home or listening on the wireless might like to have a look—if they can get broadband in their area, I might add—to see whether they can sign that petition and make sure that they send a clear message to the Government that the taxpayers are not responsible for bailing John Key out of the political hot water that he has put himself into. They are not responsible for pulling the Minister Steven Joyce off the barrel that he has put himself over. It is not the taxpayer’s responsibility to cover up for their political gaffes and the way that they told taxpayers that things would be free before the election, from which they are creeping away now.

So Steven Joyce and John Key say that they wanted to proceed, but today we also heard from Bill English that his preferred option was to walk away from the deal. He said that he had not been consulted by the Prime Minister on this. He said that he had not been consulted. His preference was to walk away from the Skycity deal. That is where Bill English is. He is the naughty child, the black sheep of the family. He is distancing himself from this dodgy deal, and I am not surprised. He is trying to get to his maiden surplus. That is the pledge he has made to New Zealanders. He has not got there. He might not get there but he is trying his damnedest to get there. Meanwhile John Key and Steven Joyce are writing cheques on his behalf for political purposes that are fiscally irresponsible, that are corporate bailouts, and that cannot be described as anything else.

So let us have a look at the other things that have gone on in the last few days. Yesterday, in fact, we heard that $6.66 million—yes, $6.66 million—was the net profit for Skycity for the 6 months prior. That came the same day as John Key announced that there was going to be a bailout, that it was likely that he was going to consider a bailout. What conclusions can we draw from that? I am going to leave that to those listening at home. There was a $76 million rise in market capitalisation yesterday for Skycity off the back of the news that the Prime Minister is considering a bailout. That is disgraceful—a $76 million market capitalisation increase. Skycity knows that it has got the Government over a barrel. Skycity is maximising it, and the Government does not seem to have the guts to say no, to stand by the promise it made to New Zealanders that this would be a free convention centre. The Government is walking away. John Key and Steven Joyce are shuffling their feet. I can see them now shuffling their feet. That is what they do when they are uncomfortable, when they have told New Zealanders porkies, and they are stepping away from that deal.

So New Zealanders will not stand for it. They do not want to suck the lemon that John Key is asking them to suck. They do not want the taxpayer to bail the Government out of its political hole. All this was foreseeable, of course. It was all in the original deal. The only reason New Zealanders believed that the convention centre deal would be free was that the Government gave assurances, but in the original deal it said that either party may come back to the other for cash. It is in the contract. I pointed this out in September 2013 and it was reported in the New Zealand Herald. The Government said: “No, no, no, no. It won’t ever happen. It’s a free convention centre.” Well, it has changed its story now and New Zealanders know that that was not honest. It was not upfront. This Government is tired and arrogant and thinks it can get away with telling half-truths, with trying to pretend it was a different convention centre it was talking about back then. Well, New Zealanders do not believe it, Mr Key.

Let us examine some of the history here. The convention centre was paid for originally—the original $402 million convention centre, not the other one—out of problem gambling. Eight thousand more people would be affected by the effects of problem gambling, we were told by Treasury. Eighteen more jobs would be the net effect on the economy, we were told by an independent report, because jobs would be sucked out of Rotorua and Taupō to fill the convention centre in Auckland when the international visitors come. So I do not know what the MPs in Taupō and Rotorua are saying, but I bet they are not happy that the Prime Minister is favouring an Auckland convention centre at great cost to the taxpayer, now we are hearing, and at the expense of their electorates as well. It goes from bad to worse. But this is a deal that the Government itself put over.

The Auditor-General said that this deal was neither transparent nor even-handed—neither transparent nor even-handed. It does not get much stronger from the Auditor-General. That was in response to things like the Prime Minister meeting behind closed doors with Skycity’s executives and giving Skycity information that other bidders did not have. This was not a transparent deal. Once it was under way, once that had been pointed out, the political imperative came from the National Government. It had the arrogance to say: “Get the deal done. Get the deal done before the election. We will tell New Zealanders it will be free. Get it off the table. They can come back for more money later.” Well, New Zealanders are seeing through this, and that tired, arrogant third-term Government is going to be called to account, as we saw in the poll result on Campbell Live last night—97 percent of New Zealanders not wanting to suck this lemon.

Treasury said it was not convinced by the cost-benefit analysis. It was clear from the start. It said it had “strong concerns that private benefits to Sky City will exceed public benefits to New Zealanders.”—a quote from Treasury. Public costs will flow to private gain once the centre is paid off. It is a dodgy deal. But that was September 2013. Now we are seeing what is really happening as a consequence of the deal that was signed back then to get it off the political table before the election—to get a deal that was supposed to be free for New Zealanders, which we now learn is likely to cost taxpayers money. Well, New Zealanders are not standing for it, and I urge everybody to go and sign that petition online, to make it clear that New Zealanders will not tolerate this and will not put up with John Key’s changing position on the Skycity convention centre.

It is typical. We know that when it comes to corporate bailouts there is a history there. There is Novopay. When it goes wrong, buy it. In the convention centre contract it says if it goes wrong, buy it. It is in the contract. We have had Rio Tinto, and no guarantee of jobs. There are white elephants—there is MediaWorks, there is Chorus—and there are lots of dodgy deals from a tired third-term Government. This Government is going its own way and New Zealanders are not happy about it.

DAVID BENNETT (National—Hamilton East): When we are debating the Prime Minister’s statement, it is not about the convention centre that the last member, David Clark, talked about. This is a conversation and a debate about the future of New Zealand and what we want this country to look like. When we look at the future of New Zealand, we have a clear choice. There is a contrast between what the political parties in this House represent. On this side you have a free and open country that is part of the world. On that side you have a very divisive party that wishes to make New Zealand closed and not part of an open economy. Those members want a controlled economy. We have a positive, inclusive outlook on this side. They have a negative and defensive one on that side. This is the choice that New Zealanders have. They have a choice between a future that is open, positive, and part of the world, and those who are against anything and everything that can be done to help this country.

Hon Member: They’re not against trying new taxes, though.

DAVID BENNETT: They are not against that, are they? This is a country that needs to believe in itself and have a vision for the future, and trust itself and trust its position in the world. We live in a great part of this wonderful world, which is growing, and the growth that you see in New Zealand is part of that growth you are seeing around the world. We cannot afford to turn our back on that world and go back to the days when we were an exclusive and very defensive country that did not allow other New Zealanders to become part of this great country. We want to be open and free, not restricted and held back by political ideology. That is the difference that New Zealanders understand and accept. That is the difference that New Zealanders have voted for in continuous elections.

Tracey Martin: You didn’t tell them the truth.

DAVID BENNETT: Telling the truth, coming from New Zealand First—that would be lovely to hear. We would love to see that happen from you, Tracey. Perhaps you need to talk to your leader about that at some stage. New Zealand First is a great example of how those members are trying to hold New Zealand back. Immigration, for example, is something that many people on the Labour and New Zealand First side of this House have been against.

Hon Members: Sell the country.

DAVID BENNETT: “Sell the country.”—that is what they are saying. It is not actually the case. It is opening New Zealand up so that people can come here and make their future in this county. What is the problem with that? What is the problem with people wanting to come to New Zealand and bring their families up in this country? What is the problem with their wanting to make New Zealand their home? What is the problem with wanting to make New Zealand stronger? That is the question you should really be asking, not trying to pit people against each other—not trying to make people look at each other and say that those differences are reasons they should not be in New Zealand. That is the disgusting side of that party.

Brett Hudson: Diversity brings strength, Mr Bennett.

DAVID BENNETT: Diversity does bring strength. But beyond that, we also need a balanced approach that actually enables this country to grow in the way that we look at our economic structure.

Our economic structure is one that is in the free, open world. We are not in a world that is dominated by European-type economics any more. It is not a world that is dominated by the powers that used to control this world a hundred years ago. It is a world that is dominated by the influence of competition, hard work, and education. That is the modern world, and we have an economy that is doing very well in that modern world. We have an economy that is growing beyond the growth rates of other Western countries. We have an economy that is taking its rightful place in that world order.

New Zealanders should not and do not want to give that up. They do not want to go back to being some island State that has some de facto communist basis that the left wants to bring into New Zealand. We look forward to being a place where children can grow up, get a good education, go to university, and work and play in this beautiful country. That is the choice that we have. That is why this Government is delivering the infrastructure and the resources for that to happen.

Come to Hamilton. No one from New Zealand First ever will, but come to Hamilton and you will see that in the last 2 weeks we have opened two new schools. We have opened a primary school and turned the sod on the new secondary school in Hamilton.

Sue Moroney: No, that isn’t open. When did it open?

DAVID BENNETT: It is going to open in 2016. We turned the sod—turned the sod, which is more than Sue Moroney did. When Sue Moroney was in Hamilton, which was many years ago, Sue Moroney came to this hill and said: “This would be a great place for a school.” She got the newspaper to take a photo of her at that hill and she said: “This would be a great place for a school.” She did not mention the fact that there was no money for it and that it had not actually been designed, or anything like that. Sue Moroney campaigned on the platform that she had delivered a school when she had not actually delivered anything other than a photo to the paper. That is the nature of the Labour left. It just goes out there all smoke and mirrors, with no reality, no ability to go out there and try things, no substance, and no delivery, and people do not like “no delivery”.

Sue Moroney: That’s what people do say about you, David—you’re quite right.

DAVID BENNETT: I am quite right. Thank you, Sue. We are quite right because we have delivered for Hamilton, and that is true.

Hamiltonians are smart people. Hamiltonians want to see a diverse city. We live in a part of the world that is growing strongly. We do have good growth rates. We have a city that has new suburbs popping up all the time. We have so many new suburbs that we gave some to the Hamilton West electorate, and that really helped it as well. In the end, the people of Hamilton are the barometer of New Zealand. It is a city that is diverse. We have a lot of migrants. We accept and we understand, and people get on well and enjoy our migrants and all the people in our community.

It is a city that delivers for New Zealand. We deliver export returns. We have a large manufacturing base in our city. The Green members may laugh because they have never actually been to a manufacturing site or a dairy farm, but it would be lovely to see a Green member at a dairy farm and have them actually work out how we pay for you to sit in that seat, because it does not happen by smelling the roses, OK?

It is a part of New Zealand that actually works in the modern world. We have growth. We have diversity. We have an economic structure that is based on exports and delivery. We have a strong economic base through our education system, which gives all New Zealanders, and especially all Hamiltonians, that real opportunity.

We have the investment in infrastructure—the roading and expressway, for example, that is being delivered there—and also housing and schooling networks. Those are the investments that are made in people. They are the investments made by a Government in its people to get the success that they deserve. People understand that. They do not want to hear the rhetoric from the left about trying to close New Zealand down. They do not want to hear the rhetoric about how we should make New Zealand divisive and should pit person against person. They want to see a positive Government and a positive delivery of messages. That is what they get, and they understand that, and they see that in people like John Key and Bill English and the National team.

Tracey Martin: Rich white men.

DAVID BENNETT: They understand it is positive. It is actually about working together. I think you would want to take those comments back, Tracey, because you do not—

Tracey Martin: A hundred years ago, and it hasn’t changed at all—rich white men.

DAVID BENNETT: It takes one to say that, if you were saying those sort of things, Tracey.

In this country and in our city of Hamilton we have a choice. You can choose the left, which is going to hold your city and your country back and pit people against each other, or you can hold to a vision of a New Zealand that is open, free, and part of the modern world. That is something that New Zealanders will always chose because they know it is the right choice to make. They know in their heart of hearts that that is the way that they will actually be able to succeed and develop as a country and as a city. We look forward to that continuing under this Prime Minister’s leadership. Thank you.

DARROCH BALL (NZ First): It is with pleasure that I rise to speak on behalf of New Zealand First in this debate. I think it is, most important, a good chance to bring some common sense into the debate, especially after that last speaker, David Bennett. Like many, I would like to wish colleagues my sincere best wishes for this year, although I am biased so I would like to wish the New Zealand First members an even better year. I also want the good people of Northland to know that we are all here for you.

Tim Macindoe: Which one of you?

DARROCH BALL: All of us—the entire party, of course.

Apparently, according to the Prime Minister, business confidence is high, but if business confidence is high, then perhaps he has not seen the Federated Farmers latest farm confidence survey. It is stark for two-thirds of our exporters. But we do not have a Prime Minister. What we do have is a “President Business”. He sits there, surrounded by his doe-eyed micromanagers chanting “Everything is Awesome”—that is the song from The Lego Movie; that got their attention—except we all know that everything is not awesome. Our farmers and our exporters know it is not. The people of Northland and my home region of Manawatū know that it is not. Everything is not awesome when nearly a quarter of our young people are without a job—they know it is not awesome—and when our Government is ignoring their plight, at New Zealand’s peril.

Young people who experience early and prolonged periods of unemployment are at risk of long-term benefit dependency. The Salvation Army’s state of the nation report released today highlights an association between child poverty rates and rates of benefit dependency. This is why New Zealand First wants so much more focus placed on youth employment. New Zealanders want to be sure that our young people are given every chance to succeed, no matter what life circumstances they are facing. What we do now to support our youth into work will make all the difference to child poverty levels in the future and it is an essential step we must take if we are to address the endless cycle of poverty. That is why we need fewer micromanagers who love zero tolerance and a lot more economic and social management led by master builders who want New Zealand to own and prosper from the riches at our feet and what falls from our sky.

We need to look at the way the Westminster tradition operates in this House. These days Ministers and select committee chairs do not even bother to resign. They get promoted or considered for Cabinet. That is actually the Rena school of management, because scum seems to rise to the top of the surface. Take the $140 million corporate welfarism for Skycity to prettify its convention centre. Here is a company that made $66 million net profit over the past 6 months holding out a corporate begging bowl.

David Bennett: Get over it.

DARROCH BALL: Get over it? Is that what you say to the public of New Zealand, the taxpayers: “Get over it.”? It is on the Hansard record now; you can quote it.

How far would $140 million go to alleviate child poverty, I ask that member. It could fund the SuperGold Health Check Bill, buy another warship for the navy to hunt down pirate fishing vessels, or even buy 25-millimetre rounds and fuel for HMNZS Wellington—that ship clearly did not sail with either of much of those.

If we are talking monuments, then what about this ridiculous flag referendum. A former British Deputy Prime Minister, John Prescott, was once called John “Two Jags” Prescott. We, of course, have another John: John “Two Flags” Key, who not only green-lighted the national Māori flag but now wants to change the New Zealand flag. That is another $25.5 million. But that is only the start, and New Zealand First will be delighted to share that later in the year. But here is a big hint—check out the New Zealand coat of arms. How much is that going to cost? John “Two Flags” Key was keen on a black background until parodied on American television—a laughing stock.

Since the flag was adopted in 1902, 350,000 Kiwis have served under it, with 30,000 of those paying the ultimate sacrifice. It is shameful to their memory and to all who have served our country that this flag has become the Government’s plaything. It is shameful in this the centennial year of Gallipoli that it is being used as nothing but a distraction. It is no wonder this Government is spinning faster than a Fisher and Paykel washing machine when we have a forecast of a $572 million Budget deficit. That is an almost $1 billion negative reversal of what Mr English predicted last May—a $1 billion reversal.

So this Government has never made a Budget surplus and based on this it never will. I guess we have had Rogernomics, we have had “Ruthanomics”, but this Government has perfected “Ponzinomics”. You could also call it an “OBE”—other blighters’ effort—strategy because the dollar’s recent fall has had absolutely nothing to do with anything this Government has done. It is down to the Australian, European, and Canadian central banks. It has everything to do with the US oil industry, and nothing to do with this Government. Yet everything is awesome, according to those members.

We do not have an inflation problem but we are staring down the barrel of a deflation crisis. Shannon in the Manawatū does not have a housing bubble but it is treated exactly like St Heliers. Everything is not awesome in the way this House is being treated over the Islamic State of Iraq and Syria (ISIS) in Iraq. Even Al Jazeera, I am told, is speculating on where we will be located in Iraq, but this House has not been given the decency of a debate because Government members know that they will lose. They know that they will look like fools.

New Zealand First does not believe that Iraq will be solved by a family group conference and cups of ginseng tea. Although we are revolted by ISIS, the legitimate concerns of this party are being met by a brick wall called Gerry Brownlee, who is less a Minister of Defence and more a Minister on the fence—or is he more a bull in a diplomatic china shop? Mr Brownlee described the Prime Minister’s statement: “It is the price of being in the club.”—his comment on Iraq—as an unfortunate statement, before wrongly attributing it to the British Foreign Secretary, Philip Hammond. If we are revolted by ISIS, what about Boko Haram and their ilk in South-east Asia? Defence needs to be properly funded.

So how are we going economically? National’s big idea from the Job Summit has been a cycle trail and heaps of red tape while it takes the credit for the efforts of our farmers, our manufacturers, and our tourist operators—people who have laboured under the high dollar. As my leader told Northland yesterday, help is on its way.

This party believes in the storage of rainwater. We believe that roads in the Manawatū and elsewhere, not just those in Auckland, are truly roads of national significance. We believe in harvesting our resources and ensuring our regions get their fair share of minerals through a royalties for regions programme. We believe in “Made in New Zealand”, not “Made in China”.

Only New Zealand First’s Land Transfer (Foreign Ownership of Land Register) Amendment Bill will bring in a register of foreign land and housing ownership, and it is great that Labour is following our leadership on this. Even Federated Farmers support this register. The National Government has blithely allowed the sale of a million hectares of land into foreign ownership and now our largest dairy and sheep processor is Chinese-owned.

Auckland’s housing crisis is led by immigration but this Government does not want to know. Instead of tackling it we get Resource Management Act reform, except this Government was elected in 2008. What year is it now? 2015. We know that the Overseas Investment Office ticks off nearly all of its applications and is only a flow meter. Most property sales, including houses, do not even come on to its radar.

We need to act in the interests of New Zealand and put New Zealanders first. Take the Rt Hon Winston Peters’ SuperGold Health Check Bill, which is simple, as any good policy should be. It strengthens primary health care—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. His time has expired. The next call is a split call. Chris Bishop—5 minutes.

CHRIS BISHOP (National): Happy New Year to everybody. It is great to be back for another year in Government. I do not know what Andrew Little was up to over the break but he accused me of going kayaking down the Hutt River. I just want to put on record for the House that that did not actually happen, but I did explore the beautiful vistas and surrounds of the Hutt Valley over the break. It is great to be back.

New Zealand starts 2015 in great shape. There are challenges—no doubt about it—but we are appreciably better off as a country than we were when the National-led Government took office in 2008. The statistics have been well canvassed. We have one of the fastest growth rates in the developed world: 217,000 new jobs were created over the last 4 years. The members opposite used to mock the Government about Treasury forecasts of 170,000 jobs in 4 years. We have smashed that target as a Government and as a country. There is the highest labour force participation rate ever. In particular, I am really happy that we have the highest female labour force participation rate ever.

But it is deeper than that and I want to point to three particular phenomena that prove that the New Zealand economy is on the right track. The first is that household savings have been positive now for 5 years in a row. Again, members opposite used to talk a lot about creating a savings culture in New Zealand and making sure New Zealanders saved more. Well, New Zealanders are saving more and, no doubt, one of the reasons for that is the tax changes that we introduced in 2010. The second point I would point to is positive migration, which we have massively turned round from the situation we inherited. People are literally voting with their feet and moving back to New Zealand and, more important, not leaving New Zealand for places like Australia.

The third thing I would point out is that, as Mr English, the Minister of Finance, pointed out in his contribution to the debate, the speed limit for the economy—the natural growth limit that Treasury and the other economic boffins think the economy can grow at without inflation taking off—has been revised upwards. That is extremely important, because as you grow faster for longer you have a bigger impact on people’s wages and you have a bigger impact on household wealth and household disposable income. So if we can grow for the next 4 to 5 years at 3 percent or 4 percent or more, rather than the limit we previously thought, which was 2 percent, that will have an appreciable impact on New Zealanders’ lives, and we get that growth only through sustained economic reform.

Usually, third-term Governments slow down, become insular, and run out of ideas. The Clark Government certainly did that. In fact, it ran out of ideas well before the third term but it certainly ran out in its third term. The Muldoon Government did that. But this is a Government that is active, that is vibrant, and that is energetic. It has been renewed a little bit by myself and my colleagues from the class of 2014, and we are resolutely focused on jobs and growth for Kiwis, internationalising our economy, and making us more outward looking, and not only that but also driving better public services for New Zealanders.

We are going to focus on two particularly important things this year and going forward into this parliamentary term. Those things are the reform of the Resource Management Act to make sure it works for New Zealanders and actually delivers the outcomes we want, and, in particular, social housing. Social housing reforms outlined by the Prime Minister in his statement to Parliament, in his speech, are very important. We are going to grow the number of social housing places available in New Zealand. If you listen to members opposite, they would say that we are ripping the heart out of social housing, but, actually, we are investing more money and 3,000 more places so that people can move into social housing.

Brett Hudson: How many more?

CHRIS BISHOP: Three thousand more places. We are also moving people into independence and off the State. At the moment there are around 3,300 people who pay market rents for their State house. They are in a Housing New Zealand house and they pay a market rent because their income is too high to access income-related rent subsidies. Those people are taking up a house that could go to somebody who cannot afford to move into a private house by themselves. So we are genuinely and in an appropriate and respectful way going to move those people on.

We are also going to make sure that State housing is in the right place and is the right size. Thirty percent of people on the Housing New Zealand waiting list require a one-bedroom house, but that is just 9 percent of Housing New Zealand stock. That makes no sense. If the members opposite who always talk about equity and fairness were genuinely in favour of those things, they would back these reforms. These reforms outlined by the Prime Minister and the trio of housing Ministers are socially progressive, they are socially equitable, and they are fair for New Zealanders. They are focused on tenants rather than on who actually owns the house. That is the obsession of the Labour Party. They are stuck in the 1970s focusing on how many houses there are and who owns them, rather than on what is actually best for tenants.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Alastair Scott—5 minutes.

ALASTAIR SCOTT (National—Wairarapa): As you have heard from the Deputy Prime Minister this afternoon, the economy is in good shape. Interest rates are low, GDP growth is in good order, and jobs are being created. Social statistics are also heading in the right direction. Crime is down, education statistics are good, and waiting lists in the health sector are shrinking. All those things are heading in the right direction. The number of jobs created is at a record high. The number of sole parents is falling dramatically. Tourism dollars are up. In my electorate of Wairarapa, tourism dollars spent are at a 6-year high. Why is that? We have a cycle network, on and off-road. We have balloon festivals, we have wine festivals, and we have vintage car and plane festivals. These are initiatives created not by a Government but by the Wairarapa community. More cars were purchased in the Wairarapa than in the previous 12 months. This is a sign of a growing economy—more dollars being spent and more jobs created. According to Paymark’s statistics, $41.9 million was spent in Wairarapa in January. That is 6 percent more than the previous January and well above the national average.

I am telling you this because Wairarapa is just an example of what regional New Zealand is heading towards. It is just one of the prosperous regions that are working under this Government.

Darroch Ball: Give us one more example.

ALASTAIR SCOTT: I have just given you some examples. The question, of course, is: how does this happen? How does a Government manage to pull all this together? How did the Government win the last election with such a strong mandate? Part of the reason is the policies, because they are good. Part of it is to do with our experienced and capable Cabinet. Its members are also very good. Part of it is to do with the rejuvenation of the caucus. There are 14 new members in our caucus, and they are talented members, if I may say so myself. Part of it, of course, is due to our popular and extremely capable Prime Minister. But the most important factor and the reason it is working is that we are working together. All of these things are coming together. We are facing the same direction at the same time for the betterment of all New Zealanders. The people of New Zealand know this to be true. They know that we are working for them.

Brett Hudson: They have confidence.

ALASTAIR SCOTT: You have taken the words out of my mouth. This builds confidence—confidence in the economy, confidence in their families, and confidence in their businesses. This confidence enables them to take risks and enables them to invest further in their businesses, creating more jobs and more wealth. So that is why the results are good. Kiwis know we are a team that gets results for them.

Of course, the opposite is also true. A team without inclusiveness, a team with two or more factions, and a team with public disagreement will never gain the confidence of the New Zealand public. Imagine if Conrad Smith or Ben Franks publicly said they wanted Richie McCaw’s job. Imagine if Richie McCaw said: “Right, boys, we’re going to be playing a free-flowing game of footy this weekend.” and then Sam Cane said: “I’m not happy with that statement. I think we’re going to have to discuss this in caucus.” So too the Labour Party continues to be segregated and dysfunctional. Andrew Little’s policy of Māori sovereignty—note that it is Andrew Little’s policy and not Labour policy—is rightly questioned and labelled to be out of touch by his own caucus. No wonder the New Zealand public gave the Labour Party such a hiding at the last election and rightly voted back the National Party, which has a united team doing lots of little things well, working well, and getting the results for all New Zealanders.

Dr MEGAN WOODS (Labour—Wigram): I think it was quite telling that in question time today the Prime Minister informed the Leader of the Opposition that he was getting tired of being asked to be straight-up. Our Prime Minister does not want to be reminded to be straight with the New Zealand public. I think it is a bit of a theme of how this year is going to run. We have a Prime Minister who is slippery, we have a Government that is arrogant, and we have a Government that is out of touch. I think that nowhere was this divide between the Government and the Opposition drawn more sharply than in the two state of the nation speeches that we heard from John Key and from the Labour leader, Andrew Little. Labour stands for jobs. Labour wants to create jobs, and National wants to flog off our State houses. That is where the divide is drawn, and that is where we have put the gauntlet down.

Labour believes that we can do better as a country, and National is labouring under the mistaken belief that you can create more houses by reducing the number. I am interested to see the arithmetic. Nick Smith showed us that 20 plus 20 equal 44—

Hon Annette King: Forty-eight.

Dr MEGAN WOODS: Forty-eight, I am sorry, Mrs King. Forty-eight was his answer in question time today as an interjection across the House, and it is this kind of arithmetic that is lying at the heart of the housing Minister’s changes to our housing stock—a man who cannot add 20 plus 20. So we will be watching this with great interest as we go through. National’s State housing sell-off is a mess, and it does carry a huge risk that National will not build a single new house. National is failing New Zealand families when it comes to housing, but Labour has a plan. Labour is raring to go. We started this 51st Parliament holding this Government to account—holding this Government to account on its arrogance, on its inability to tell the truth, and on the way it conducted itself—and we will not resile from that. It is our job to hold this ailing Government, which is suffering from a severe bout of “third-term-itis”, to account and to tell it that the time is up and New Zealanders want a change.

When the current Government came to office, there were fewer than 100,000 unemployed New Zealanders. There are now 46,000 more New Zealanders unemployed compared with when this Government took office. Simply putting in your speech notes and chanting over and over again that you are about jobs and growth is not enough. You need to show the evidence and you need to show New Zealanders that you are about well-paid, sustainable—sorry, Mr Assistant Speaker; I know that you do. The Government needs to show New Zealanders that it is about creating jobs and well-paid jobs that are fit for the 21st century. In the last quarter alone, the number of out-of-work Kiwis grew by 8,000, and that is simply not good enough. This needs to be turned round and this will be a priority for a Labour Government in 2017. When Labour maintained unemployment at 4 percent or lower for 4 years from 2004 through to 2008, we had the lowest unemployment figures in the OECD, and today we have fallen to 10th. This is not good enough for us. This is something we want to turn round.

This is a Government that is not doing its job. It is a Government that has let standards fall so far, and it is showing that it is absolutely not up to the task. And then we have the great story of the deal of the century from the Government, from the master negotiators John Key and Steven Joyce, who went in to get a deal for New Zealanders. They are the same deal makers who brought you buying Novopay when you could not fix it, the same deal makers who ended up with a pretty bum deal down south, the same deal makers for whom everything they touch turns to custard. So what do we have? We have a free convention centre that is no longer free, but we are told that it is still a good deal for New Zealanders. But the stitch-up is unravelling. It was a shoddy deal whereby John Key and Steven Joyce stitched up the deal on the quiet without any proper competitive bidding, and this was always going to come back to bite them. But for the free convention centre that we were offered, all we had to do—and it was not much to ask—was sell off our gambling laws, those pesky laws that would control how we could regulate gambling in our country. That is all we had to do and, hey presto, we would have a free convention centre. Well, that is going to cost the New Zealand taxpayers $130 million out of their pockets, as well as a downgrading of their gambling laws. What kind of deal is this? What we have is corporate welfare going on from the people who promised to make sure that taxpayer money was well guarded.

But what we are also having is a lot of protesting from the National backbench in particular, I would think, about what unity there is in the National caucus. We had what sounded like a spill speech yesterday from Jonathan Young. I think he is getting excited about the prospect of leaders from New Plymouth and thinking that he might have a crack. We are hearing that they are all united, they are all standing together. I think they are worried that a bit of “Abbott-itis” might spread over the Tasman, and it may be that everything is coming undone. And we saw that today in the Finance and Expenditure Committee, with Bill English running a million miles from the Skycity deal, not wanting to have anything to do with it. As my colleague Grant Robertson said, the Southern Man wanted to show that he could put together a much better deal than the wide boy negotiators from Auckland.

But 2015 is panning out to be a year of the musical in this House. We had constant mentioning yesterday about Winston Peters’ Little River Band refrain to Northland that help was on its way. But what have we had from the National Party? Well, we have had Bill English telling us that he wanted to walk away. He wanted to walk away from the deal. The Southern Man, the Kenny Rogers of the National Party, knew when to fold ’em. He knew when to walk away. But I implore Bill English to come over here to a different kind of tune, because under Andrew Little we are singing a very different song from the wide boy negotiators of Steven Joyce and John Key. Well, there might be shonky deals and massaging of the truth, to put it nicely, but over here with Andrew Little it is all straight talking, three chords, and the truth. That is the kind of music that we are making over here, and that is what we will continue to have. We have a Government that has no answers.

We have the great State house sell-off as one solution that has been put up for housing, but then we do have another solution from the housing Minister, one of the “Holy Trinity” of housing Ministers, as they have been described today—from Nick Smith—and that is when all else fails, say you are going to change the Resource Management Act. Give some numbers, say that is the only thing holding up housing, and change the Resource Management Act. Well, what we have to be very aware of is Trojan horses creeping in when we are not going to see this as a solution to our housing problem. What we have—

Dr David Clark: It’s not a musical; it’s a charade.

Dr MEGAN WOODS: That is right. That is right, Dr Clark. It is not a musical. It is not a musical at all.

Hon Annette King: It’s a pantomime.

Dr MEGAN WOODS: A pantomime played out by Dr Nick Smith. What we are going to see—

Iain Lees-Galloway: He’s behind you.

Dr MEGAN WOODS: Watch out! What we are seeing are some numbers that have been made up and that are not going to decrease the cost of housing in this country at all. This is an arrogant and an out-of-touch Government that does not have the answers that we need. We have got a Government whose only solution is to sell off State houses. The Government is telling us that we are obsessed with who owns the houses. Well, I would say that its ideologically driven agenda about selling off State houses to property developers in the private sector is about an ideologically directed agenda when it comes to housing. So let us see some straight talking and getting back to three chords and the truth, as we are over here.

Hon PAULA BENNETT (Minister of Local Government): I move, That this debate be now adjourned.

Motion agreed to.

Debate interrupted.

Bills

Energy (Fuels, Levies, and References) Amendment Bill

In Committee

Part 1 Amendments to Part 3 (Levies)

IAIN LEES-GALLOWAY (Labour—Palmerston North): It is a pleasure to take part in this Committee stage of the Energy (Fuels, Levies, and References) Amendment Bill. The purpose of this bill is that it seeks to amend the Energy (Fuels, Levies, and References) Act 1989. That is because New Zealand has an oil stockholding treaty obligation under the Agreement on an International Energy Program. The bill proposes to expand the purpose of the petroleum or engine fuel monitoring levy to include the cost of meeting the oil stockholding treaty obligation. Although it is important to meet our international obligations, it is also concerning that this could see petrol costs rise higher and it highlights the Government’s inaction on developing alternative energy sources.

We know that we need to have security of energy supply and we appreciate on this side of the House that that is what this bill seeks to achieve: to ensure that we have a stockpile of fuel resources in the event that some crisis should befall us and our supply of fuels and energy is somehow cut off, and that we have an appropriate stockpile of fuel so that the country can carry on. In the interests of good economic management, this is a treaty that New Zealand has signed up to. So, yes, we have been happy to work alongside the Government to ensure that we do meet our international treaty obligations. We have had situations in the past where this Government has failed to move quickly enough on international treaty obligations. Of course, probably the example of that that the public knows best is the CV Rena disaster, when we ended up carrying far more cost that we ought to have, had we passed legislation to ensure that we met our treaty obligations.

This is an important piece of legislation. It is important because it secures our economic well-being, and it is important because it ensures that New Zealand is a good international operator and that we meet our international obligations. But it is a bit of a concern that it may force fuel prices up. Right here and now, your ordinary New Zealander on the street might not think that that is too much of a concern, because as we drive past BP, Mobil, and Caltex, we are seeing some numbers up there that we have not seen for quite some time—numbers that do not start with a 2, which is probably quite pleasing to the New Zealand public. I have not yet heard the Government try to take responsibility for that. I am sure it will at some point in time, because it is the only good economic news that any New Zealander is seeing right now. But the price of fuel is certainly lower than it has been for some time. So a little bit of an increase in the price of fuel might not be something that right now is too much of a concern.

But, of course, we know that this Government has hiked the fuel taxes up to pay for its unaffordable roads of national significance, that in recent times fuel prices have been extraordinarily expensive, and that an increase in the price of fuel can be a significant constraint on our economy and it can put a lot of pressure on families, particularly vulnerable families whose income is unstable and insecure and who need to know that they are going to be able to afford the basics in life, such as being able to fill up a car so that they can get the kids to school. So although it is important that we do meet our treaty obligations and although it is important that we do have security of supply, we do note that one of the consequences of passing this legislation could be the rising cost of fuel. We implore the Government to ensure that ordinary working families have enough income and stability of income to be able to afford those types of additional costs that come with the passing of legislation like this.

New Zealand does have a treaty obligation under an international energy programme to contribute 90 days of net oil imports to the Agreement on an International Energy Program oil stockholding. The collective stockholding mitigates the market power of oil producing countries, and releasing stock during an Agreement on an International Energy Program - declared oil supply emergency helps to moderate extreme oil price spikes. As I said, the price of oil does move around quite a lot. It is not too bad at the moment, but when OPEC decides to exert its power, that can have significant impacts on the New Zealand economy.

GARETH HUGHES (Green): Kia ora, Mr Chair. Ngā mihi nui ki a koutou, kia ora. I rise to support this bill. Part 1 of this legislation essentially is the guts of the matter, the heart of the bill, which basically sets up that the Government has the ability under regulations to set an oil levy to recoup the income. Just a slight point from the speech of the last member, Iain Lees-Galloway: this legislation and the debate around it is not really a question of whether we should have an oil stock; it is of how we fund it. And what this legislation empowers is the ability for the Government to gain revenue from the Customs Service via a charge per litre of oil instead of the current expense coming out of the consolidated account.

The Green Party supports that entirely; there are a number of reasons. But let us go to the big picture, which is that we know how important oil is to our economy. I know that the National members have probably heard me rattle on and on about the risks of deep-sea oil drilling. What the Greens have always said, though, is that it is an important part of our economy. We have never said that we are opposed to shallow or onshore drilling, where the data clearly shows that there is a much lower chance of an accident or a spill occurring. You know, it is clear, based on US data, that the deeper you drill, the greater the risk of the spills. What I have always said is that we need a planned out, staged transitional strategy, because everyone from the International Energy Agency through to the OECD are saying we are going to have to leave oil before oil leaves us. So let us do it in a planned manner. Although I have often talked about the risks of deep-sea drilling, I am the first to acknowledge the importance of the role that oil does play, and has played, in our economy.

What we have seen—and I wish I had brought my graphs with me to the Chamber—is that when you chart the global recessions in the last 50 years, all of them have been preceded by a sharp oil shock. We saw the most recent of this in 2008. So the point of this legislation, in Part 1 of this bill, is to deal with the global or the developed world response to those oil shocks—which led to global economic recessions and, in some cases, to depressions in some countries—and the international energy agencies oil stock treaties, of which we are a member. We have empowering legislation sitting on our statute book to deal with carless days or other events or other strategies the Government may adopt to deal with it.

In New Zealand a few years back, my office undertook a study of the New Zealand economy, and what we found was that for every US$1 price increase in the barrel of oil, it shaved off between $40 million and $60 million from our gross domestic product. We know it is important. We know it has played a key role in driving recessions in the past for a country. In fact, despite our high percentage of renewables—three-quarters—New Zealand is one of the most oil-dependent developed world economies in the world. We import around $8 billion per annum of oil despite exporting about $2 billion to $3 billion. Our vehicle fleet is one of the oldest in the OECD, so per capita we are one of the largest consumers of oil in the developed world despite the high percentage of renewables. It may not be a fact that many New Zealanders or members are aware of, but it means we are particularly vulnerable. Given we are a country that needs to export our products around the world, the Green Party believes that enacting the provisions to actually set a charge on it, as in Part 1 of this legislation, is critically important.

So we support this bill and the imposition of a charge. I want to address the point made by the member Iain Lees-Galloway about the cost, but first we need to look at the raw facts, which is that this is simply about recouping the costs of maintaining the oil stocks. It is not a question of should we have oil stocks, although I note that one submitter did recommend that we should actually store all this oil in New Zealand, but I understand the estimate there of cost would be about $20 million. Already the costs of the 90-day oil stocks are rising from between $5 billion to $10 billion, or doubling, by 2016-2017 from 2012-2013. So it is a clear cost that needs to be borne by the taxpayer. We think costs should fall where they lie.

Secondly, it is a question of transparency. There are all sorts of costs and expenses the Government has got to account for. We think it is fair that the taxpayers should be able to see exactly where it is coming from and where it is going. So we think it is fair that there is an element of transparency for any petroleum customer or user in New Zealand to see the costs of maintaining that oil security stock supply overseas. Thirdly, it is an economic signal. It is not exactly a huge one. I understand that it is in the order of 0.045c per litre of oil. It is not really going to have an impact, particularly not on the scale of the price reductions we have seen over the previous few months. So I think it is fair and appropriate that there is an economic signal for the cost of maintaining the oil stocks.

I do want to pick up on the point that fuel poverty is a genuine and real issue in New Zealand. The data is a lot more common for electricity, where, potentially, up to a quarter of New Zealand families are in energy poverty, spending more than 10 percent of their disposable income just to keep the lights on or keep warm. I am not aware of any data for oil consumption, but I am sure many members read the recent story about the worker, I think from Auckland, who was literally walking for about 5 hours a day to get to work. We know energy poverty is a real issue, but I would not say that subsidising energy, as other countries are doing—the International Energy Agency is actually recommending against it—is the answer. I do not think we want to spend taxpayers’ money to make oil cheaper. What we want to do is give people choice. We want to give people options to get around their cities or towns or regions safely, cheaply, and fast.

What we did see in the last recession was very little choice for Kiwis. In my home town of Wellington they literally went to the National Railway Museum and pulled a unit out of stock, because of the demand on the railway because of the price of oil. In my home town of Gisborne, where I grew up, people wanted to export their products on the rail line to avoid the high oil costs but could not because the rail line had shut and there was no funding to reinstate it. So we support the legislation and the idea of costs falling where they lie because it is fair and it is transparent.

I would note an issue of equity for, say, those superannuitants who cannot or will not drive, those students who cannot afford a car and prefer to bus or train, or those people who, as a lifestyle choice, have decided not to purchase a car or use oil. I think it is important that they are not the ones bearing the cost of all the oil stocks. I think it is an issue of equity, sending a price signal, and that is why I just wish this Part 1 was more substantial. As The Economist magazine points out, this is a fantastic opportunity, with the low oil price, to actually address some of our structural dependencies on oil. We are one of the most oil-dependent countries on an oil-dependent planet, yet we have got one of the least-effective emission trading schemes in the world, sending that price signal view.

Sadly, Part 1 does not deal with biofuels, which is an issue that was not addressed at the Commerce Committee. Biofuels will be covered in this legislation and face the same charge, despite the fact that biofuels support the energy resiliency of New Zealand and lessen our dependence on foreign offshore oil stocks. I note the submission of the likes of Z Energy saying that it was a counter-productive measure. I note from the latest data that has just come out, which I have received from the Parliamentary Library, that the percentage of New Zealand biofuels has actually fallen catastrophically in the last 7 years, from a high of 1.2 million litres to less than a quarter of that today. I think policies have played a role. The lack of an effective carbon price has played a role and this further, more punitive measure is further going to dampen demand.

All members in this Parliament and all parties should be able to agree that if it is sustainable, if it is not competing with food, we should be encouraging biofuels if they have a net reduction of carbon emissions. It is good for Kiwi workers, it is good for Kiwi farmers, and it is good for Kiwi petroleum users. I think this is a point that may be picked up in the debate today. Why have biofuels not been exempted from this charge, given other products have? I think of bitumen and liquefied petroleum gas, but biofuels are not exempted. It would be good to get a contribution from the Minister or the National members to address this point. Thank you.

JAMI-LEE ROSS (Junior Whip—National): I seek leave for all questions on the Energy (Fuels, Levies, and References) Amendment Bill to be debated as one question.

The CHAIRPERSON (Hon Chester Borrows): The member seeks leave to debate all questions as one. Is there any objection? The question therefore is that Parts 1 and 2 and clauses 1 to 3 stand part.

Part 1 Amendments to Part 3 (Levies) (continued), Part 2, and clauses 1 to 3

STUART NASH (Labour—Napier): I would like to talk about clause 4 in Part 1, which inserts after section 14(2): “(3) Levies recovered under section 24 may be applied for the purpose of meeting the reasonable costs and expenses incurred by the Crown … set out in subsection (2)(ba)”, etc. The thing that always concerns me about wording in these sorts of clauses—we are supporting this bill. Let us make no bones about that. We do support it. But sometimes you come across a clause, and the wording just does not sound right.

The reason I have a concern with this is the use of the word “may”. What this section says is that “Levies recovered under section 24 may be applied for the purpose …” of this. The reason I have such concerns about the word “may” is that it means that they may not be applied. So what could theoretically happen is that this levy raises more money than is needed to meet our international obligations, and the Government then decides: “You know what? Let’s just put this into the consolidated fund. Let’s just put this into a bank account to pay for the Skycity Casino, or whatever.” I would really like to see—and I am interested in why it says “may”. The Minister may be able to tell us.

What I would really like to see in legislation like this, especially in something that is imposing a cost on taxpayers—and we all acknowledge that it is a very small cost, but it is a cost. The Government, I think, is hoping to raise $10 million. The section should read: “Levies recovered under section 24 must be applied for the purpose of meeting the reasonable costs and expenses incurred by the Crown.”

What that does is it takes the ambiguity out of the legislation and it ensures that in fact every cent that is raised as part of this levy will go towards the purpose for which the bill is before the House. Without a “must”, with just the word “may”, it creates uncertainty and it means that the Government, or the Minister of Energy and Resources, or the Minister of Transport, or the Minister of Finance has wiggle room to apply that money elsewhere. That would be outside the legislative intent of the bill, and outside any sort of reasonable interpretation of the bill.

We just need to tighten up this legislation, when we are considering it at the select committee. What I would urge other select committees to do, when there is such a tight thing like this, is use a word like “must” so there is no ambiguity.

There are a couple of other things I would also like to talk about in clause 5. Section 24(2)(b), in clause 5, states: “when any excise duty or excise-equivalent duty would be paid if any were payable.” The interesting thing about this is I have had a look through the bill. It is an amendment bill. It is not very big at all. But it does not set out when it has to be paid. There is a general assumption we can make that when your tax is due, whether it is quarterly, monthly, annually, or whenever it is due, you pay it. But again, just to remove that ambiguity in fees for lawyers, and this sort of stuff, I say that it is good just to set down when the tax is due.

The reason I say that is that it says here: “Section 28 (which provides a penalty for late payment of a levy) does not apply in respect of the levy.” I am looking at this, going: “Why would you not have a penalty for the late payment of this levy, when most other legislation to do with tax or excise duties, or anything like this, actually has a late payment regime in place?”. Again, maybe the Minister in the chair, the Hon Nicky Wagner, might be able to enlighten us on this. But I would have thought it is just good practice to make sure that levies are paid on time. The reason that there are penalties for the late payment of levies is just to facilitate on-time payment. I just do not know why they have decided to remove the late penalty. It may be—and I am making an assumption here—that it is because the levy is so small that in the scheme of things any penalty would be negligible. In fact, it may cost more to enforce a penalty or to chase a penalty than it would be worth to actually pick up the levy that is due.

As mentioned, we do want to raise about $10 million. As Iain Lees-Galloway, I believe, alluded to, we do support this. The New Zealand Government has to be a good citizen when it comes to all of our international treaties, and this is part of the Agreement on an International Energy Program, so there is no contention. We are not saying this should not be paid. I am just bringing up a couple of questions that I have some concerns about, which I think should have been addressed at the select committee. It is possibly a little late to address them now, but it is stuff we need to look at when we are writing other legislation on this.

Also, if we go down to clause 8—[Bell rung] Mr Chair?

The CHAIRPERSON (Hon Chester Borrows): Stuart Nash.

STUART NASH: There are just a couple more points I want to make on this. If we go down to clause 8—and again I am unsure why they have changed the wording. The wording used to be—this is where we talk, obviously, about the payment of the levy—“Payment into Departmental Bank Account”. It has changed to say “Payment of levy into account”. I do not know whether we are going to see a raft of legislation where all the wording is changed from departmental bank account to account, but the sort of conspiracy theorist in me goes back to the “may be used for levies” and “must be paid into a Government account” and, again, I wonder whether this is a way to sort of get around the fact that the Government needs $10 million to meet its obligations under the international energy agreement. It is going to collect, in a good year, maybe $15 million, so what it can say is: “Let’s just take that other $5 million and use it in the consolidated account.” But I am unsure why it has changed it from a “Departmental Bank Account” into an “account”.

There is something else in the legislation I would like to bring up and it is not a criticism of the Ministry of Business, Innovation and Employment, but it is really a point of process. What it says here, in section 33(3) in clause 9, is: “Before recommending that regulations be made under this section, the Minister must consult persons or organisations considered by the Minister to represent the persons affected by the levy concerned.”, and that is fantastic. I mean, consultation is part of making good legislation, and getting feedback from key stakeholders is a vital part of ensuring that legislation is robust and meets the needs of the taxpayer as well as the Government.

So I had a look at the ministry report and it talks about external consultation. I actually think that because it is in this legislation, there is compulsion to consult—we all agree with that. I look at the report and I would have liked the ministry to actually list whom it consulted with. All it has said is: “15 submissions were received and of these 10 contained direct comments on issues relating to the IEA obligation.” Then it says: “The vast majority of submitters …”. When you have got 15 submitters, is the vast majority 13? Is it 10? I do not know what “the vast majority” means.

Then it says: “Prior to the release of the discussion document, the Ministry discussed the levy proposal with a number of key stakeholders.” I would have thought that in this instance, in a Government ministry the size of the Ministry of Business, Innovation and Employment—and it is a large, large ministry—it would at least put down the people whom it had consulted with so that members of Parliament and members of the public could say: “Oh, OK, it did talk to the Automobile Association as a wide-ranging advocate for motorists.” I am assuming it talked to the Automobile Association, but one thing we do know with legislation, and one thing we do know with this Government, is that you can never assume anything. So one thing I would have liked to know is whom did it consult with, because it is a legislative requirement to consult.

Obviously, when we are developing legislation, we can argue that the select committee process is in fact legislative consultation, and we get that. But because this is actually a legislative requirement for the Minister to consult—because the bill does regard levies and it does regard money raised by an Order in Council at a time that the Minister may deem necessary. Consultation is important, but we just need to know—in fact, I think we have the right to know—who actually has been consulted with so that we know that it was not just Joe down the road and Bill round the corner and Joan up the hill.

There are a number of agencies. You know what I mean. That do a fantastic advocacy job on behalf of motorists and taxpayers, and with 15 submissions it would have taken, I suspect, a third of a page to list who the submitters were. It might have been Joe and Jane and Bill, but it also might have been the Automobile Association and the road transport authority and all these other ones. But the other thing is, more important, even if the ministry did not list the submitters, I actually think that it should have listed the key stakeholders that it consulted with, because then at least we would have known whom it considers the key stakeholders to be.

So just to sum up on this—I am talking about Part 1; I do know, thank you, Jami-Lee Ross, that we are now taking this debate as one question—we do support this bill. It is a pragmatic step, actually. I think the cost, if I am not wrong, is 0.05c for every full litre of petrol, or other type of fuel that goes into an engine, except biofuel. But we can talk about that later. Thank you very much.

FLETCHER TABUTEAU (NZ First): I stand on behalf of New Zealand First and I just start by noting that I think New Zealand First is the only party that has opposed this bill from the start. I just take note of Part 1, new section 14(2)(ba), in clause 4, which states that the Crown must comply with our obligations under article 2 of the Agreement on an International Energy Programme to maintain the emergency reserves commitment. The party has always said from the start that that is an absolute necessity. However, there are a few factors that I would like to outline whilst referencing the parts within the legislation, but perhaps if you bear with me initially.

I agree that the timing of another tax on New Zealand citizens through a petrol levy is perhaps a good one. We were told by the Green Party that it supported all parts. I note with some humour that the National members did squirm in their seats when the Green Party acknowledged that it agreed with all parts of National legislation—I am being snide. The legislation is essentially a regressive tax. I just wanted to point out, for example, that 42 percent of Rotorua household incomes are below $50,000, and 58 percent of personal incomes in Rotorua are below $30,000. So although I want to determine the actual figure of the levy itself, which is discussed as being a very small number, I would suggest that the levy itself is a regressive tax and unfairly and unnecessarily puts undue pressure on low-income earners. I will talk to some of these parts here where we could suggest alternative methods, other than a levy, that would ensure that we comply with our international commitments.

What I would like to point out at this stage is that when we saw petrol go over $2—and I do not think anyone in this room would debate with me on the fact that it will do so again; the timing may be an issue, I think, and I hope that it stays low for a while—and what I was personally seeing in some of my studies was that petrol was becoming price-sensitive. There was an elastic response in terms of consumer demand to the change in petrol prices. That reinforces what I was saying about people being unnecessarily put under undue pressure with regard to the price of petrol. So New Zealand First just wants to stand in front of Parliament and say that the mechanism that we—I do not know—seem to have come to without much regard to consultation or consideration of alternatives seems an unnecessary burden on the New Zealand taxpayer.

I want to talk about that because New Zealand First campaigned, for example, on the tax-on-tax issue. So, for example, right there the GST component on the levies, which is nearly a third of the tax cost to consumers at the moment, has a GST component to it. So when I originally spoke on the bill in earlier readings, I suggested—and I do so again—that the Commerce Committee was perhaps in want of establishing alternative funding mechanisms in order to meet our international obligations.

Did this Government explore also the fact that, given some of the submissions, the ticket price was described as fluctuating, and when the discussion was taking place, the ticket price was becoming quite high? I asked the committee what the consideration was other than the submission from an oil supplier around the holding of physical stocks in New Zealand. The oil supplier said that it would be prohibitively expensive, and I imagine that the cost would be quite expensive. But what was the case? What was the research and what was the conversation that the committee entered into to understand what those prohibitive costs were? In those same submissions the conversation arose that we must meet our petrol stock commitments—this 90-day reserve—out of a need to maintain a level of safety, as it were, in case of some kind of worldwide emergency. So the stock levels were an absolute necessity. What we have said here is that we will buy tickets and that stock will be held overseas.

I would suggest to the Committee and to the members here today that that does not actually answer or solve the problem that we could potentially face if there was a worldwide crisis. I would even go so far as to suggest that we would kindly hear the words: “Oh, sorry, we don’t have the stocks to send you. I know you have your tickets but, unfortunately, there’s no oil to be sent down to New Zealand.” So I beg the question of the Committee: how in depth was that situation, that alternative, around physical stocks taken into account?

The other alternative that I would like to point out is actually putting the burden through legislation on the oil companies. I know invariably that oil companies will raise their prices, but as I alluded to before, there is some measure of an elastic response. I do not know whether you noticed in your summer holidays, whilst you were driving around the country, that this oligopoly market structure is starting to compete on price. It is something we have never seen before. What I would suggest to the Committee is that the producer surplus versus consumer surplus would be such that the burden of the extra cost would be taken up by the supplier more so than being passed on to the consumer. I wonder whether the select committee investigated that fact.

New section 33 in clause 9 outlines the setting of the levy. Thank you for your forbearance. I come to some very specific points. I note that in new section 33 there is actually no specified cap. I think it has been mentioned before that what we are discussing here is a levy that we do not know when we will stop charging. We know we have to hold a 90-day stock, but when do we stop charging the levy to maintain our 90-day stock? There is no actual description within the legislation to tell us that now is the time to stop using this levy.

In the same section the Minister must consult only with those whom he would deign to consult with. It seems to be a precedent with a bit of legislation that I have personally noted coming through the Committee stage through the House—that the Minister can consult with whom he decides to consult with. It was talked about by my colleagues on this side of the Chamber that it is important that we talk to all of those who are involved, not those whom the Minister decides are relevant. The reality is that the Minister’s opinion of relevance may not necessarily be that of this Parliament or the people of New Zealand. So it is concerning that that has been seen to be a precedent that has arisen in quite a few pieces of legislation that I have personally spoken to over the last few months.

Actually, in the legislation—please, if the Minister can correct me—there seems to be no specificity as to the purpose of the levy in the legislation. It seems like it is some kind of assumption that the levy will be used for the purpose of complying with our international obligations. Forgive me if I have missed something there, but there is definitely no specificity as to the value or the rate at which the levy will be collected. It has talked about the Minister’s proposed value or a formula used, but the ambiguity there is a dangerous one. It has been noticed previously that there also seems to be no cap.

CLARE CURRAN (Labour—Dunedin South): Speaking as a member of the select committee that discussed this bill, it was, I suppose you could say, a relatively uncontroversial bill at the select committee. There were four submissions provided to the Commerce Committee. There were some changes made in the select committee to the bill, most notably that the committee recommended limiting the scope of the levy by clarifying that it was for the Crown to meet the reasonable costs and expenses of compliance with New Zealand’s obligation under article 2 of the International Energy Agency to maintain the emergency reserve commitments that are set out in that article. So that is quite an important amendment that was made.

There has been some quite good debate so far in the Committee stage on this bill. I do note that there has been a number of questions put forward for the Minister in the chair, Nicky Wagner, to answer or to clarify, and I have got a few more to put tonight. It would be useful if they were actually addressed by the Minister in the Committee stage, but in the absence of that happening, I will do my best tonight to actually address some of the things that have been raised by other members in the Committee stage. I note that the debate has been via the Opposition benches and that there has not been any participation from the Government’s side so far.

I have gone back and looked quite closely at the second reading speech by the Minister of Energy and Resources. I suppose there was a relatively important statement made by him when he said that “the Government continues to undertake a range of initiatives to improve the operating environment for the oil and gas sector,”, and he said that the priorities for the Government were to promote “energy efficiency measures to help make our fuel use more efficient,”. Well, this bill does not go to that. It deals with ensuring that we have certainty of imported sources of oil and security around that. Unfortunately, though, it does not actually address the wider issues of energy security generally in New Zealand or the wider issues of an alternative fuel production and where we are going as a nation on that. Those are two really glaring gaps. I would hope that the Minister, given that this is a new year and it is the beginning of a new term of Government, would be able to give us some indications of where he is intending to go in this area, and this would be a really good opportunity for that to happen.

I do want to take the Committee back, actually, a little bit further than what happened at the select committee, because the fact that this bill actually exists comes from a process where you have to dig a little bit into the process and actually dig into the documents to find out the information about this. There was a consultation that went on by the Ministry of Business, Innovation and Employment that released a discussion document back in October 2012. Yes, there were 15 submissions, as my colleague Stuart Nash has noted, but you do have to look a bit under the surface to actually find out this information. There were some very interesting submissions given during that process, and it is a real pity that those submitters did not take their submissions through to the select committee so that there perhaps could have been a bit more of an in-depth debate around some of those issues.

For the benefit of the New Zealand First speaker, there were questions raised in that process around whether host countries would actually release ticketed stock to New Zealand during an international supply disruption—so, whether or not the oil would actually come, even if there were tickets. The ministry noted at the time that the tickets were backed by Government to Government agreements, with a number of them being international treaties. So I suppose there is a reliance on that treaty relationship being fulfilled, and the Government would import stock to New Zealand only if oil companies in New Zealand were unable to secure their own stock. It was Z Energy that raised that issue during that discussion process. The ministry considered that the most likely scenario following an emergency declared by the International Energy Agency would be that the Government would release the stock to the foreign company holding it on the Government’s behalf, thereby fulfilling its obligations. There was a trust assumption. The select committee did ask and it was given assurances around that.

The select committee also asked whether or not there should be—well, this discussion paper certainly canvassed these issues—more domestic stockholding to cope with supply disruptions. This issue was also raised during the select committee discussion, and the ministry noted that “the New Zealand Institute of Economic Research study [said] that the discussion document [it] is based on found that building further domestic stockholding in New Zealand was not an economic way to mitigate the risk of supply disruptions.” It said that it was keeping a watching brief on this issue but that it was not economic, essentially, to do it. So those were the answers that were given to us as well during the select committee discussion around whether or not this would be a problem.

I just want to raise one more submitter to this discussion process, which, unfortunately, did not submit to the select committee. The Sustainable Energy Forum “recommended that New Zealand should take steps to reduce its reliance on oil imports. It suggested that longer-term issues such as climate change and ‘peak oil’ should be considered in the analysis of oil security.” Unfortunately, when we received the report to the select committee on this, this issue was not part of that discussion. I note, as I said at the beginning, that the Government did not consider it relevant to raise those issues or give any signals around those things when it brought this bill back to the House. I would make the point that there is a far more serious issue highlighted that sits behind this bill, which is future energy security for New Zealand. I am very pleased the Sustainable Energy Forum raised this issue back in 2012 during the discussion process, but, unfortunately, it was not considered to be a part of the discussion in the select committee.

As I said, Labour supports this bill. I note the issues that have been raised by other colleagues across the Chamber during the Committee discussion on this bill. I think it would be good practice for the Government to be taking notice and for there to be a response on some of the issues that have been raised tonight. It might be an uncontroversial bill, but it does raise some significant issues that do need to be addressed around our treaty obligations and how they are being met, around the costs, and around the wider strategy for New Zealand around future energy security and growing our alternative sources of fuels. The concerns about our international reputation are valid. This Government is, however, prepared to act only on protecting our reputation.

It is a pity, as I said before, that there were not more submissions on this bill, but there has been a good discussion tonight. I think that there will be further discussion in the Committee stage.

BRETT HUDSON (National): It is a pleasure to rise and speak on this bill, particularly because it is a bill that has very broad support across the House, although we might disagree on some perspectives. It has been well canvassed, of course, that this is all about New Zealand meeting its oil stockholding treaty obligations.

I think a very positive sign on it—and I will come to what Mr Tabuteau had to say about how it might be paid for—and the fundamental change here that is very important is that not only does it bring about a more sustainable way of funding our obligation, it is actually a far fairer way, because it is actually setting the costs of that obligation against the users of the product, the fuels. If you take the current way we have done it for some time under general taxation—and I take the point that Mr Hughes raised earlier, that you have got people riding on electric trains or electric buses or who are using shared transport like a bus, so their actual consumption of these fuels is much lower. But because it is through general taxation, they are actually being taxed disproportionately to pay for it, so making it a user-pays thing on fuel is a very sensible way of doing it.

It is a 90-day stockpile—the stockpile in this case is not a physical stockpile, but a virtual stockpile—that is, based on your actual consumption needs. By tying it to the litres that are consumed, we are actually matching our expenditure on the 90-day stockpiling with our actual consumption. That changes over time. You need only look at the gas-guzzlers of the 1970s and compare them with the nippy little fuel-efficient cars of today to know these things change over time. I tell you what, I am unfortunate enough that I can remember the gas-guzzlers of the 1970s like the Mark III Zephyrs, the Mark III Cortinas, and also the little Escorts, which did not take too much fuel but were nowhere near as efficient as the modern cars of today. So I think it is a very, very good thing that we are moving to a per-litre based charge.

I would now like to cover this part that Mr Tabuteau raised about who should pay for that. Obviously, if you look at pretty much anything else that is consumed, the consumer pays for what they consume. But New Zealand First seems to be saying that it thinks it is the producer that should pay for the thing that you are going to consume, so it is a very interesting 1970s way of approaching the problem.

In itself it would have some inherent unfairness, because not all oil companies in New Zealand and not all retailers are the same. They do not all produce or import the same amount of fuels into New Zealand, and they certainly do not all sell the same, so the only way the New Zealand First model could actually work is if it regulated precisely how many litres of what type of fuel each of the oil companies and/or retailers could actually sell. This is really going back to the days of the very visible hand of Government, where you think you can control the entire economy. You certainly cannot.

Stuart Nash: But they’ve got all that data already.

BRETT HUDSON: Putting a small levy against those who consume the fuels is definitely the right way to go. But thank you, Mr Nash, because I would like to speak to the point that you raised. In Part 1, Section 14 amended (Purpose of levies), new section 14(3), inserted by clause 4(2), to change that word “may” to “must” would serve no practical purpose other than to constrain Governments, current and into the future. If it is a must, then any levy collected over any time can be applied only without further legislative amendment to that specific purpose. You need only look at the point of where we are today and you need only look at what has happened in the market for oil and petrol at the pump over the last recent months to know that it can be quite a volatile thing.

We could have a situation, Mr Nash, where we could accumulate quite a bit of levy—levy that we are not actually having to consume in total—and it sits there in an account doing nothing. Well, it is not really the best use of an accumulation of Government funds. But what the word “may” means is that it can be applied to that very purpose, which is exactly what we want. Changing it to “must” would achieve nothing except to place an unnecessary constraint upon the Government.

The other point I would like to just touch upon briefly—because again it was raised by Mr Tabuteau—is the regulations that can be made by Order in Council. Quite frankly, we have a system here, and these fuels are going to remain a part of our landscape—our “drivescape”—for many, many years to come. It makes complete sense that we do not want to be tinkering with legislation every 12 months or so. By permitting certain regulations to be made by Order in Council it allows the Government, the Government of the day—I hope it remains us; we are certainly working very hard and will continue working very hard to continue with that—to make changes to the levy, the rate of the levy, or the formula for the levy in a way that best suits the nature of the consumption of the day, the usage of the day, and the requirements of the day. It makes absolute sense, as, in fact, do, I think, the provisions across Part 1. Having said the part that I wanted to say, I will stop there and allow other members to speak on the other part.

JAMI-LEE ROSS (Junior Whip—National): I seek leave for the Gambling Amendment Bill (No 2) to be taken as one question.

The CHAIRPERSON (Lindsay Tisch): Leave was actually approved when we last debated the bill, and so there is actually no need to do it again. The point has been made. I am keen to hear Dr Megan Woods.

Dr MEGAN WOODS (Labour—Wigram): Thank you, Mr Chair—I am very keen to speak. I want to speak to Supplementary Order Paper 45 in my name. It amends clause 10 and to be specific, it amends section 35(1)(fa), in clause 10(2), by inserting after “petroleum of engine fuels”, the words “other than biofuel or biofuel blend, as defined in the Customs and Excise Act 1996,”. The purpose of this is to send a very clear signal about the importance of biofuels and the importance of transitioning away from a complete reliance on fossil fuels to different types of energy. It is a different way of thinking about New Zealand’s energy security, as my colleague Clare Curran talked about in her contribution on this bill.

One of the things that we do have to be prepared for is the fact that if we are going to encourage a biofuel industry in New Zealand, we have to have the Government behind it. My colleague Stuart Nash talked about the very low contribution in reality that this excise puts on fuels. What exempting biofuels and biofuel blends from this levy does is it shores up the very tight economics that exist around the viability of the biofuel market at this stage. What we know from history and from the companies that are commercially involved in biofuels is that every few cents or part of a cent matters in terms of whether or not we can have biofuel as a real alternative to fossil fuels.

When Labour was last in Government it took its responsibilities around encouraging a biofuels industry very seriously. Unfortunately, a lot of the measures we put in place were repealed by the current Government, but we would like to use this opportunity to send a clear message that once again we do want to look to our future. We want to look to a future that is grounded in the 21st century, a future that acknowledges that our planet is changing and that we need to do things very differently.

What Labour did in 2008 was to place an obligation on fuel retailers that ensured that a small percentage of the fuel that they sold was indeed biofuel. This provided certainty for biofuel companies that were considering whether or not to invest in New Zealand and whether or not there would be a market for their product. So this Supplementary Order Paper is in much the same vein. It is about providing that incentive and it is about providing the certainty for that to be done.

The New Zealand Bioenergy Strategy prepared by the Bioenergy Association indicated that 30 percent of our transport fuels could be from biomass by 2040. This is quite a long range. We are looking out to our future, but we really could be moving towards 30 percent at this date. But it does need encouragement, and we do need to signal very strongly that this is the kind of future that we are looking for. Some research has indicated that we could actually be a whole lot more aspirational around this.

Scion, our wood Crown research institute, which has done a lot of work in the use of biomass from wood and forestry products, has shown that long-term we theoretically could do 100 percent of our fuels from our biomass. Of course, as Gareth Hughes pointed out in his contribution, we do have to ensure that we are not infringing on our food supply in our rush to produce fuels, but what we do have to realise is that there really is an opportunity here for New Zealand. There is not only an opportunity to do better for our planet but there is also a commercial opportunity for New Zealand companies to do very well in this. What we do know is that in New Zealand we are very well placed to do this because of the amount of biomass that we produce, because we are primarily a primary-producing country, and we do have quite a large waste stream from our biomass that can be utilised as well.

What is more, New Zealand has a flourishing biological sector and a biotech sector that has become very skilled, which really could make this industry succeed in New Zealand, because the reality at this stage is that the economics of producing biofuels or biofuel blends—whichever you like—is likely to be carried through by the co-products that are extracted through the production of these biofuels. We have a very strong history and a very strong record of a number of very innovative companies in New Zealand that have made very good use of very strong science in this area, made very good use of very strong knowledge, and indeed have become some of our biotech success stories, which we are all very proud of. But it is not only small start-ups that are seeing the opportunities here. In fact, just last year, Z Energy, one of the largest energy players in our market place announced plans to spend $21 million on a biodiesel plant at Wiri in order to process tallow from the meat industry. Again, what we have is the utilisation of a waste stream from another of our primary industries.

I think that what we see is a real opportunity here for New Zealand. We see an opportunity for New Zealand to move away from a sole reliance on fossil fuels, and I think there is, maybe even across on the Government benches, a growing realisation that that is what the 21st century is going to need to be about and that we are going to have to look at different ways of doing things. It may be rather symbolic, but we have the opportunity in this piece of legislation to exempt biofuels and biofuel blends from this extra levy, to make the economics of it stack up just that little bit more—to make it something that really is a goer, something that we can give a real opportunity to, and we can invest not only in our innovative companies but also in our future, and transition ourselves into what we know is coming.

I would like to hear the Minister in the chair, Nicky Wagner, respond to my suggestion in Supplementary Order Paper 45 that we do exclude biofuels and biofuel blends from this. I would like to hear the Minister talk about what she thinks and, if this is not the correct way to do it, what the correct kinds of signals to give to this industry are, and what plans the Government has to ensure that we are preparing for a future in the 21st century. If the Government were not to support this, I would like to hear from the Minister in the chair as to why it will not support this, why it will not make this very symbolic gesture, which, as we have already heard from colleagues who have spoken, is, in reality, very low level.

At the moment we have very low levels of biofuels, so we are not talking about great revenue streams here. But what we are doing is talking about backing our future—backing our companies that excel in this area and backing our planet for the 21st century. We know that this is what the future has to bring. I would like to see the Government come on board and support a measure that is about planning for that future. Thank you very much.

GARETH HUGHES (Green): Kia ora, Mr Chair, ngā mihi nui ki a koutou, kia ora. I want to pick up on the member Dr Megan Woods’ point on biofuels and support her Supplementary Order Paper 45 on the Energy (Fuels, Levies, and References) Amendment Bill, and urge the National members to support this. I was privy to the discussions on it on the Commerce Committee and I am trying to recall the reasons for opposing it, so I am going to pick up on a couple and urge the National members to support it, because biofuels, as Dr Woods said, are a fantastic opportunity for us. It was one of the parts of the Pure Advantage report that picked out a $6 trillion market that we could be accessing, something that PricewaterhouseCoopers says is potentially a $22 billion annual economic opportunity for us. In a carbon-constrained world, where even the International Energy Agency is advising Governments like ours we cannot afford to burn two-thirds of the proven fossil fuel reserves we have already discovered let alone try to find some more deep off our coasts, the world is crying out for sustainable solutions like biofuels. When I was in Beijing many years ago there were 550 cars per day entering Beijing’s congested roads. We are seeing a Chinese automotive market that could be the largest in the entire world in a matter of years. Finding sustainable solutions to power people to get around their cities, towns, or countries is critically important, and I like the idea that our country could be playing a role.

I urge members to support this Supplementary Order Paper because what we are sending is a very important price signal to those people like Z Energy contemplating or committing to tens of millions of dollars of capital investment in biofuel infrastructure, and others around the country that are being picked up on. Those entrepreneurs, those researchers, and those people who are maybe thinking about getting a Callaghan research and development grant will be negatively affected by the uncertainty that this signal sends.

As I said before, the latest data is showing that the production of biodiesel has declined massively from 1.2 million litres in 2007 to only 0.24 million litres—so less than 1 million litres—in 2013. Over the same period we have seen the production of bio-ethanol increase marginally, but down from its heyday. We have seen the production of biofuels obviously increase and total consumption decrease over that period. We have seen successive policy changes over the time add uncertainty. Adding a price signal by exempting other forms of fuels but not biofuels is a counter-productive step. Members over on this side acknowledge that there is a price signal. I pointed out how minuscule it was, but I would also want to challenge some of the logic. If we are trying to make oil cheaper artificially—be it subsidies or some sort of command and control regulation—what we are doing is sending a very strong signal to people to consume more of it, which, of course, is going to cost more in the future. This is why the International Energy Agency is calling on parliaments like ours to cut some of the $610 billion annually spent on fossil fuel subsidies, because what we are seeing is a perverse negative feedback loop where more fossil fuels are burnt, more carbon emitted, and there are more negative impacts.

So I would urge members to support this Supplementary Order Paper. What we want to do is support a flourishing biofuel industry where we can export some of the intellectual properties, some of the products, potentially. With the world counting down the months to the all-important Paris climate talks, biofuels can play a critical role, as long as those criteria I elucidated earlier are met. These are net negative emissions, that they do not compete with agricultural land and food production, and that they are actually sustainable. There is great work being done by Kiwis across the country to invest in biofuels. We want to support them, and that is why I would urge National members to support it.

I want to challenge the logic of the opposition by the National members, because one of the arguments at the select committee, I understand from officials, was that biofuels are still a liquid fuel, requiring oil stocks to be stored overseas so it is fair and commensurate that biofuels should pay this levy to supply the tickets. That does not make sense. We know that biofuels reduce our dependence on imported oil. We know that biofuels increase our resiliency. We know that biofuels support flourishing regional economies and local jobs being created. I also challenge you because there is quite a contradiction. When you look at electric vehicles, the National Government—to its credit; and I give it credit—has removed the road-user charges from electric vehicles. Electric vehicles are another significant opportunity for New Zealand to save money, to save carbon, and to grow jobs. When it comes to eliminating the road-user charges—

STUART NASH (Labour—Napier): I did not quite understand the speech of the last member, Gareth Hughes. He was supporting our Supplementary Order Paper 45 and then challenged our logic. I do not know quite where that fitted in, but maybe I missed something along the line.

The other thing I would like to talk about is Mr Brett Hudson. His speech actually epitomised everything that is wrong with this Government. Let me give an example. I talked about the fact that this legislation says that this levy “may” be allocated to meeting our international obligations, whereas it should say “must”, because the purpose of this bill is—and I will read it—the objective of the “Energy blah-blah-blah Bill” is to allow for the costs of New Zealand’s oil stockholding treaty obligation under the agreement on the international energy programme to be met through a levy on fuel. This is the very reason why this piece of legislation has been brought before the Committee. Mr Hudson stands up and has the nerve to say “Well, you know, if we raise more money, then we may apply it elsewhere.”—like to Skycity’s $130 million and that sort of carry-on. That is exactly what is wrong with the Government, Mr Hudson. What the people of New Zealand want to know with a level of certainty is that if they end up paying for this—and I suspect that, actually, it will be the producer who will end up paying for this—that it goes directly into an account that meets our international obligations as per the intent of the legislation. That is what they need to know. I am astounded.

The other thing, and I agree with the New Zealand First speaker to an extent—and we support the bill—is that what we do not want to see is this legislation enacted and then a day afterwards the price of fuel goes up by 3c a litre and the oil companies saying that they have just got another levy to pay and therefore that gives them an excuse to raise the price. As we have alluded to, the cost of this on every consumer is about 3c over a 60-litre tank of gas—in fact, I suspect that they will not put up the price because there will be a little bit of controversy. In fact, we will go hard and work together on this. We will go really hard. If they whack up the price of petrol because of this levy, then we will hold them to account for that.

But I do understand what you are talking about. The reason I say that is that the amount of tax on petrol in New Zealand is substantial. You have got your excise tax, you have got your GST, and you have got this. You know, one of the fundamental principles of tax is that there should not be a tax upon a tax. It occurs a lot in New Zealand because we do have excise taxes and we do have GST, so the GST is always a tax on a tax when there is an excise tax in place.

But one of the things I want to have a look at is that the New Zealand First member Fletcher Tabuteau said—and the reason why, fundamentally, I do not support what he said—that it should be paid by the supplier, i.e., the guy who owns the pump. Well, I have been told by the petrol guys that they make about 4c a litre. Let us have a look at what the importers have been making on this. From 2005 to 2010 importer margins were around 13c a litre. From 2010 to 2015 importer margins were 26c a litre. In late December importer margins were as high as 40c a litre. They were as low as 9c a litre in that 2005 to 2010 period. I do not know whether 9c a litre is sustainable or 40c a litre is sustainable. What I have tried to do as our energy spokesperson is have a look at all the costs along that supply chain. I cannot for the life of me determine who is being ripped off. I suspect the New Zealand motorist is—there is no doubt about that, because at a 40c a litre margin someone is making an inordinate amount of money there. There is no doubt about that.

But I have worked in this game. I imported and traded petrochemical derivatives for 8 years. I know how this works. It really annoys me when petrol companies, as soon as the dollar moves or as soon as the price of crude moves, go “Whoops, our costs have gone up.” and they whack the price up, and yet when it comes down they are incredibly slow. And let us not be generous with these guys. I tell you what: the price has dropped, but the last time the price of crude was US$50 a barrel, our exchange rate was about 0.63 and the price of petrol at the pump was about $1.40. So somewhere along that supply chain someone is making extraordinary profits. I think that as a Parliament we need to take a good hard look at it.

Clare Curran: At the airlines.

STUART NASH: Clare Curran is dead right—the airlines. If Air New Zealand comes out with record profits this time, any MP who comes from the provinces and gets absolutely reamed by Air New Zealand will, I think, challenge them on this. The profits those guys are making are obscene. Thank you very much.

DAVID SHEARER (Labour—Mt Albert): I want to just carry on where Stuart Nash left off because I think he is absolutely right. There is an enormous amount of sensitivity around putting up petrol prices. Yes, it is only 0.045c a litre—it is only 3c a tank of gas, or if you have one of the gas-guzzlers like the National Party members drive, probably closer to 10c—and it is, nevertheless, a small amount, but it is very sensitive right at the moment. We have seen in recent weeks the price of petrol falling, but falling slowly. When the New Zealand dollar fell, immediately—the day after the New Zealand dollar corrected—the price of petrol went up again. I think there is something that we need to be looking very, very closely at here. We need to look at exactly who is extracting that margin—the petrol companies, the retailers, the wholesalers, whoever it is—and make sure that the consumer is getting a decent deal, because I do not believe that right at the moment they are.

The AA—the Automobile Association not Alcoholics Anonymous—has been following this very closely and has been doing a great deal of work in this area, and due credit to it for doing that. Even the Automobile Association was saying, particularly with the price of diesel, that it could not understand why the price of diesel had not come down further and why the price of diesel had gone up as quickly as it had once the New Zealand dollar had started to fall, and, therefore, the cost of our imports started to rise. So this is a very sensitive issue.

I want to agree again with Stuart Nash when he said that we need to watch this very closely. What we do not want to see is that the next minute we turn around and say that, actually, petrol prices have gone up and it was partly due to the Government, to Parliament, agreeing to put an extra condition or an extra tax or an extra levy on our petrol. That is certainly not the case when we are looking at 0.045 cents a litre—less than half a cent a litre.

The Labour Party has supported this bill because it is part of our treaty obligation. We acknowledge that. We acknowledge, as part of our agreement with the International Energy Agency, and article 2 in particular, that we need to have in place a 3-month buffer, effectively, that will enable us to have the safety of supply that we need. But it also goes a little bit further than that. It also enables New Zealand, along with other countries, to be able to, effectively, look after ourselves so that oil-producing countries do not spike supply as they have done in the past, certainly in the 1970s. So this gives us a little bit of a breathing space while action can be taken, should that happen with one particular big supplier, for example.

So it is part of our international obligation. As an international citizen we adhere to that, we play a big part in that, and we will go ahead with it, and that is the reason. Certainly, as foreign affairs spokesperson, I am in agreement with why we should sign up to this and agree with the Government on this. This is not a club. This is not one of those clubs you join when you want to embark on an international expedition into a war zone. It is not a club; it is a treaty, and we have obligations under that treaty. Just on that, I think that in the debate on the Prime Minister’s statement the Minister of Defence today was wholly—wholly—unconvincing about the rationale for wanting to go into Iraq, not understanding whether they could make a difference—

The CHAIRPERSON (Lindsay Tisch): Order!

DAVID SHEARER: —or have any idea of how they were going to get out.

But coming back to the bill, as I say, the costs of maintaining this degree of backup in this treaty have gone up. This bill provides a smoother way of being able to recognise the way that those costs have gone up by allowing an Order in Council and the Minister to be able to set the levy rather than it having to come before Parliament. It is a much more efficient way of doing it. However, of course we will be keeping a close eye on what the Minister does because we do not want to give the Minister carte blanche to just raise prices whenever he fancies doing that.

I thought the regulatory impact statement was a good one. It was thorough and it went and looked at many of the other options besides this particular option to increase the levies. I just want to run through those really to reassure the public that this has been looked at. We understand we have these obligations and we understand we want to be part of this treaty; therefore, we must meet those obligations. The various options that were looked at were whether we should embark on this treaty through ticket contracts, effectively through a process of ensuring that we have the requisite amount of fuel, essentially, stockpiled, or whether we should do that domestically. That was looked at and it was decided that the domestic stockholding was not a feasible option. It was not as efficient as using the ticket contracts. It certainly had much greater overhead costs in terms of what it would have imposed on New Zealanders and so, as a result of that, the Ministry of Business, Innovation and Employment went with the ticket contracts.

The ministry then looked at the obligations and who should be responsible for fulfilling those International Energy Agency agreement obligations—whether it should be the oil industry or whether it should be the Government. It was decided that, given that the Government was able to enter easily into international treaties and for various other reasons, it was a much better way of going about this rather than imposing those costs on the oil industry, which obviously in turn would pass them on to consumers. The ministry then looked at how the costs of these obligations, our agreement obligations, should be funded and whether we just pass it through Crown funding or a fuel monitoring levy. The best system was that it would go through a funding ticketed regime generated by a monitoring levy.

So I think there has been a good deal of work done on this, as Clare Curran said, in the Commerce Committee. There were some good, although very few, submissions made to the select committee. The bill was looked at in some depth. There were good questions asked and in front of us here we have the end result of that in the Committee stage. I think we have reached a pretty good point with where we are and that is the reason the Labour Party has supported it.

But I just want to add, before I finish, my support for Dr Megan Woods’ Supplementary Order Paper 45 to exempt biofuels, because I think she is absolutely right. Biofuels are the answer. They might not be seen by this Government as being the answer but this Government is, unfortunately, intractably tied to tired old thinking when it comes to the oil industry and alternative fuels. Unfortunately, the support for biofuels was cut immediately when this Government came into office in 2009 and that effectively killed our biofuel industry. As Dr Woods said, Scion, our forestry research institute, has done some extraordinarily good work in turning forestry waste and forest land into an ability to produce a biomass that would be able to support a biofuels industry. I think that that should get as much encouragement as it possibly can and that by giving an exemption to the biofuels industry in this bill, as we have done for jet fuels—85 percent of all fuels, I think, are covered by this levy, but jet fuels are not—we could do exactly the same with biofuels with very little problem and that would enable us to send a very strong signal to the biofuels industry that this is an industry of the future, it is something that New Zealand has comparative advantage in, and we should be able to support it.

JAMI-LEE ROSS (Junior Whip—National): I move, That the question be now put.

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

Ayes 77

New Zealand National 59; Green Party 14; ACT New Zealand 1; Māori Party 2; United Future 1.

Noes 43

New Zealand Labour 32; New Zealand First 11.

Motion agreed to.

The CHAIRPERSON (Lindsay Tisch): We move to the vote. [Interruption] Order, please, when we are doing votes—[Interruption] Order! There is no talking when I am speaking.

The question was put that the amendment set out on Supplementary Order Paper 45 in the name of Dr Megan Woods to clause 10 be agreed to.

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

Ayes 57

New Zealand Labour 32; Green Party 14; New Zealand First 11.

Noes 63

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

Amendment not agreed to.

Parts 1 and 2 and clauses 1 to 3 agreed to.

Bill to be reported without amendment presently.

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

Bills

Gambling Amendment Bill (No 2)

In Committee

Debate resumed from 2 December 2014.

Parts 1 to 4 and clauses 1 to 3 (continued)

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe, Mr Chair. Ka nui te mihi atu ki a koe i tēnei rā. It is a privilege for me to stand and speak to the Gambling Amendment Bill (No 2). In particular, I want to speak to clause 54, which inserts new section 115A, “Duty on grant recipients”. My overall view is that this bill is a good bill. It addresses a number of issues around minimising gambling harm but it also addresses other issues as well, and this is the one that I wanted to start off with. I think it is important that the Gambling Act is amended by this bill to explicitly state the obligations on grant recipients and the consequences of contravening those obligations. There is a raft of issues like this one that, in each one of these clauses, takes that clause and improves on the Act that was passed in 2004 and subsequently in being amended by this bill.

I speak in support of that particular clause mainly because, from the perspective of a number of providers that provide services for those people who present with gambling problems, one of the good things about this type of gambling—although they would say to me that they were against this type of gambling, but the one ray of hope—is that funds are redistributed to the community. From their and my point of view, it would be far better for those funds to stay in the pockets of those people who have lost them, because to distribute those funds is actually distributing money that has actually been lost. The loss of those funds can in some part be returned to the community but it is really important that when they are returned to those grant recipients they are used in the way that they were intended for. I have heard too many stories about how certain grants to certain recipients have not been used in the way they were intended. This clause is a good thing because it explicitly states that and it states what the consequences of contravening those obligations are.

In clause 82 there is the insertion of the new section 309A, “Duty to assist problem gambler if an ongoing concern exists”. Operators and venue managers must take all reasonable steps to make sure that they are following up with problem gamblers who are presenting on a regular basis. It is not good enough to approach them just once and think that by giving them information about problem gambling they have done their duty. In this instance they have not, because if that person comes back again on a number of occasions and they just sit back and think to themselves “Well, I have done my bit. I have told them about it.”, that it is not good enough. This new section addresses that issue. I think it is important because providers have also told me that the people who present to them as clients are mostly self-referred or referred by family. They have very few clients—problem gamblers—who are referred to them through the venue managers and the operators. I think that this clause here is really important because it potentially addresses that issue, where the responsibility of the venue manager is much more enhanced. As I was saying, it gives the opportunity, I think, for more responsibility to be put on the venue managers and operators to refer and to give ongoing advice to someone who presents often. That is really important.

The other issue that is often raised with me and is addressed by the Minister of Internal Affairs’ Supplementary Order Paper 454 is around increasing the minimum rate of return from 37.12 percent to 42 percent. It is often seen in the community that far too much of the money that is expended on gambling does not come back to the community. That is an issue that has been raised with me on a number of occasions as well. Addressing that is good. I have to say again that it would be fantastic, because that money was lost by someone, if that money actually stayed in the pockets of those people who lost it. Quite often it is the people who can least afford to lose it who actually lose it. Another issue related to this that has often been brought up with me is where exactly in the community that money goes. I think that too often it is lost in one part of the community, as I said earlier, that can least afford to lose it, and then distributed to recipients in an area that maybe does not really need to be the recipient of that kind of money. I will not name names but you can imagine different suburbs where there are lots of these pokies, these machines, this type of gambling, and then you read in the newspaper of who exactly has received the grants through those clubs and foundations, etc., and they bear no resemblance to where the money was lost.

I think my overall impression of this amendment bill is that it is a good one. I am pleased to support this particular bill. There are a number of other clauses as well that are really good for making certain that gambling harm is minimised, but I think there is more work to be done. That is probably why we have got a third amendment coming through the House and further opportunity for providers and others in the community to make their submissions on this particular area—gambling harm. That is my contribution.

CLAYTON MITCHELL (NZ First): It gives me great pleasure to stand up in front of the Committee after a fabulous scheduled meal break to talk about the Gambling Amendment Bill (No 2). It is not the first time we have spoken about a gambling amendment bill. It is the first time that I have had a chance to talk about the Gambling Amendment Bill (No 2). The last time was actually the Gambling Amendment Bill (No 3), and it created quite a stir in the House, to the point where before I came in this evening I had to check to make sure we had a defibrillator on hand to make sure that there was not going to be anybody passing out through the pressures of this afternoon’s conversation.

I would like to start off by going to Part 3 of the bill and talking about that specifically, and that is clearly harm minimisation. When I talk about harm minimisation—and it is a word that gets used readily—I do not think the essence of where we are actually sitting in this country is being put into consideration. In actual fact, we are sitting in a harm minimisation period when it comes to gaming machines—specifically class 4 gaming machines and the likes of pokie machines. I think if this Government was truly trying to represent the people by saying “Let’s do some good about minimising harm to those people who have got problems with gambling.”, it would not be doing deals with the likes of Skycity Casino, which we have heard—

The CHAIRPERSON (Hon Chester Borrows): The member will resume his seat. The debate around this bill is very narrow. Members will confine themselves to the narrow nature of the clauses that we are debating. Other members of the House have done exactly the same, and this is not a place for—[Interruption] I am sorry; I am on my feet. And so I remind the member that he is to stick to the narrow nature of the clauses of this bill.

Denise Roche: I raise a point of order, Mr Chairperson. I just would like to draw to your attention that Part 3 in the bill does actually refer to casinos and talks about age restriction on gambling in casinos, and presumably also about issues relating to problem gambling with casinos as well.

The CHAIRPERSON (Hon Chester Borrows): Thank you. I have the gist of the member’s point of order. My ruling remains exactly the same. The fact that casinos are mentioned and pokies are mentioned is implicit in what this legislation is trying to achieve. Members will remain narrowly focused on the clauses that are under debate.

CLAYTON MITCHELL: Mr Chair, I appreciate your response and I was actually hoping to get through today’s conversation without having a point of order and being sat down. I certainly will not make a habit of it. It was not intentional.

The CHAIRPERSON (Hon Chester Borrows): Have another go.

CLAYTON MITCHELL: I do have to go back to harm minimisation, though, because it is a big focus of what I am here to talk about today. If I look at yesterday’s release of the Salvation Army Social Policy and Parliamentary Unit’s state of the nation report, which came out, in fact, this morning, it was saying that pokie machine numbers have sunk to a 14-year low. It also goes on to say that the decline in gaming machine numbers has translated into the decline in losses by gamblers. This represents to me that we are in a positive decline when it comes to harm minimisation for gambling. And I get back to something simple that we learnt: if you do not want to fix something that is not broken, do not fix it. It does not need to be fixed. We do not need this piece of legislation in here to tighten up on an industry that is currently under siege. When we talk about harm minimisation, we do not factor in the good that we get out of our communities, the money that gets represented for our Government—some near $300 million in taxes, $300 million that goes into our local communities.

I am telling you that when I look around here at the members who are looking up at me who are members of tennis clubs, sports clubs, cultural clubs, schools, and surf lifesaving communities, they rely heavily on the money and the good that class 4 gambling does associate itself with. When I go back to the casinos and the likes, where they have been given 500 more machines, if that was truly about harm minimisation, they would not be allowing that to go ahead. It is actually about making money for an organisation that is much larger than the small pubs and clubs and associated groups that actually do have gaming within their societies, to actually put back directly into their communities. For example, last year Skycity Casino returned $3 million—yes, I am coming back, Mr Chair—to its local community, as opposed to the $300 million that these class 4 gaming machines throughout the country bring in.

You know, over the years we have seen Player Information Displays and pods; we have reduced gaming machine spending from $100 notes and $50 notes down to $20 notes, which has obviously helped control the gambling and the way people are actually spending their money; we have now got timeouts; and we have got staff intervention, where we have taken away the responsibility of the person who is actually gambling and making that choice to put some money in, whether it be for relaxation or whether it be for just enjoyment. We have taken that responsibility away and we have put it in the hands of operators, staff, and managers. And this new legislation goes a long way from giving that responsibility to the people who are making that choice to put that money into that machine, and making it the responsibility of those owners and their operators.

I think this legislation in part we do not support. There are parts, however, that we do support, and I will talk about those parts shortly. We need to get back to the part about self-exclusion orders. That is absolutely vital for our people to be able to say to themselves: “I’ve got a problem. I need help, and in order to get that help, I need to stay away from licensed gambling machine areas.” It is an absolutely fantastic piece of legislation. This new piece of legislation is going to allow those people to come on to licensed premises providing they do not go into those gaming machine areas. What a load of nonsense! We must absolutely uphold their right to stay away from gambling areas and say to them: “No, you can’t enter that licensed premises.” Otherwise, you have got extra costs that will be applied to those small businesses and those pubs and clubs around the country to have security not only at their front door to make sure that there are no intoxicated persons entering the premises and to make sure there are no under-agers entering the premises, but also to make sure that those people who have self-excluded themselves do not secretly sneak themselves in or lead themselves to temptation to go back into those rooms.

The Problem Gambling Foundation has actually put a lot of money in through gambling levies to actually minimise harm to take away some of that risk, and yet when I look at some of these figures that are put forward here, the help is not there. The money that is put in is actually not getting to the people who need it the most. In actual fact—and here is an article from a Queenstown observer—“Counsellors say a lack of services for problem gamblers and people who need addiction-related help in Queenstown Lakes and Central Otago is ‘outrageous’.” They just do not have the on-hand support. In fact, what I am saying here is that the money that is being gathered by the gambling levy for harm minimisation is actually being misspent. That money is actually being spent lobbying against—heavily lobbying against—the organisations that are actually funding them, when in actual fact they should not be standing up placarding the gaming machines.

They should actually be saying that the 0.03 percent of the population who have a gambling problem—and we are talking about gambling problems to do with Lotto and the Daily Keno, we are talking about casinos, we are talking about the TAB, and we are talking about some of the parts of this country where betting is going up on a steady incline. We are not talking about gambling with class 4 machines, which are actually on a decline. In actual fact, if the foundation spent that money in the right place, we would find that we would get that number right down, instead of spending it on lobbying against the groups that are there to support it.

I would like to stand up and speak now again on Part 1 of the bill. This is the part that we do support. Racing in New Zealand has been a huge part of our society for a very, very long time. We cast our minds way back, long before we were born, to one of our greatest exports this country has ever had, and that is Phar Lap. This was a young horse—a thoroughbred—that was sold off to Australia. It created a worldwide storm. In fact, at one point it was the third-largest grossing horse in the world—up there against some of the other greats. They do not come to mind at the moment. I think Man o’ War was one of them. By not allowing class 4 gaming machine proceeds to go into one of our greatest export regions for our country—and let us talk about that for just a second. We are talking about an export group where last year, in 2012-13, there were 1,500 overseas sales of our thoroughbred racing horses, totalling some $130 million in export sales for our country. That comes purely from racing.

Racing is under siege. We need to take a positive, proactive approach. We need to be putting in funds, like what they done with the Melbourne Cup and made it the richest race in the southern hemisphere. We could actually have that at our fingertips. We could actually have the largest race in New Zealand if we were able to put moneys into funding that. That outstrips a conference centre. I mean, this is going to bring in huge amounts of wealth throughout our country, and to cut the hand that has been feeding this country for such a long time is an inappropriate position for the Government and this bill to take.

I want to say, just to finish off, that one of the positive things we have seen the gambling class 4 gaming machines do is—I have just got a CD that I believe every single MP got late last year. Just to cast your eyes—this is 13 to 18-year-olds and this was a national competition that was funded by class 4 gaming machines. This is the 2014 Lion Foundation songwriting competition. This is talking about 13 to 18-year-old children who are in our schools, who have been empowered to stand up, write songs, and sing their songs. I would like to actually take this time to congratulate Talia Dalton from Ōtūmoetai College in Tauranga for getting that award. That is very important when it comes to the opposition to harm minimisation. This is talking about the good that gambling does. Thank you.

CHRIS HIPKINS (Labour—Rimutaka): It is a pleasure to take a call on the Gambling Amendment Bill (No 2). Can I first of all congratulate the Minister in charge of the bill, who is listed on the top of the bill as the Hon Rick Barker. Of course, Rick Barker has not been a member of the House for about 3½ years now, and it is about 8½ years since he introduced the legislation in the first place. Such is the present Government’s commitment to addressing problem gambling that the bill has sat for that long on the Order Paper without any action to try to address it. Can I congratulate the Minister currently in the chair, the Hon Peter Dunne. I believe he is about the fifth or the sixth Minister to be given responsibility for progressing this legislation, and can I also note that he has had significantly more success in doing so than many of the Ministers who have sat in the chair prior to him. I want to say that I think that that is important because I support the intention of the Gambling Act, as it was passed at the time, which is to reduce problem gambling in New Zealand, to crack down on the abuse of class 4 gambling, and, of course, to put in place a mechanism in the form of the Gambling Commission, which creates an arm’s length relationship from the Government and puts some independence into the decision making that takes place with regard to gambling.

I want to refer in particular to the provisions in Part 2, which members will find on page 10, and to clause 8 in particular, which talks about an increase in casino gambling. It gives the Gambling Commission the absolute authority to determine what constitutes an increase in the opportunities for casino gambling. Why does the bill do that? The bill does that because we believe as a Parliament that it is important that those decisions are made independently of the Government—that decisions around the increase in casino gambling are made independently of the Government.

This Government has no regard for that. It is absolutely ridiculous that this Committee is making changes to those provisions at a time when the Government is unilaterally increasing opportunities for casino gambling, and, therefore, increasing opportunities for gambling harm, in order to get a dodgy deal with the Skycity Casino. This bill specifically gives that responsibility around decisions for increasing casino gambling to the Gambling Commission. It removes it from the Government. It says that the Government should not be involved in those things, and yet we know that this Government has been actively involved in those things because that was the trade-off that it made to get a free—

The CHAIRPERSON (Hon Chester Borrows): Order! Sorry, but the member will sit down. The member may or may not have been in the Chamber at the time when we had an earlier discussion when I sat the previous member down for broadening out the level of this debate. The debate is very narrow. The clauses are very narrow. Other speakers have kept it narrow, and members are expected to maintain that level. Thank you.

CHRIS HIPKINS: I raise a point of order, Mr Chairperson. I refer you specifically to Part 2, clause 8, new section 12(1), which says: “Decisions on what constitutes an increase in the opportunities for casino gambling are a function of the Gambling Commission.” That is exactly the clause that I am talking about and it is directly relevant—

The CHAIRPERSON (Hon Chester Borrows): Thank you. The reference to such things as “dodgy” dealings between the Government and Skycity that the member made is not appropriate for a debate that is kept this narrow. Please maintain the narrowness of the debate and the clauses under debate.

CHRIS HIPKINS: I raise a point of order, Mr Chairperson. In my comments I was referring to the need for independence, which is exactly what this clause deals with. It specifically gives the Gambling Commission the authority for those things, and it is perfectly in order to discuss—

The CHAIRPERSON (Hon Chester Borrows): The member will regain his seat. I will not be taking any more advice from the member on this matter. I am in the Chair at the moment. The member will respect the ruling that I have given. Thank you.

CHRIS HIPKINS: Thank you, Mr Chair. It is important that the Gambling Commission has a discretion and an arm’s length independence from the Government when it makes decisions about increasing the opportunities for casino gambling, because if that were not the case, then the rest of the clauses in this bill that are about reducing problem gambling in casinos would simply be redundant because it would mean that the Government would be able to override that at will without any reference back to the Gambling Commission. That would simply be an abuse of the position, and would mean that the provisions that are being passed in this bill are meaningless. It would mean that the Government is paying lip service to reducing problem gambling, but it does not actually walk the talk. It does not walk the talk, and that perhaps is one of the reasons that this bill has been sitting on the Order Paper for nearly a decade. The Government is not actually interested in reducing problem gambling if that gets in the way of other deals that it wants to do.

I want to talk as well about class 4 gambling because I acknowledge that class 4 gambling is where some of the worst problem-gambling takes place. It is also where—if we go back to the history of why the Gambling Act was passed in the first place—some of the biggest rorts in terms of the proceeds of gambling took place.

I was the president of a students association before the passage of the Gambling Act. In that time I was involved in trying to get money out of the pokie trusts for sponsoring different events, including the University Games. One of the deals that the pokie trusts used to do was to say to a student sports team, say, because it was all run out the back of the pub and there was very little accountability: “We will give you money for your new uniforms”—or whatever—“but they will have to have our name on them, and we want half of the money that you are being given coming back across our bar. And if you don’t do that, we’re not going to give you the money.” The reason that the primary legislation for the bill that we are debating was passed in the first place was to try to cut down on some of those things, because that was simply wrong. That was a rorting of the system and it was wrong, and the first legislation was an attempt to eliminate that. What, of course, has become abundantly clear since that time is that it was very successful, but it was not completely successful, and there are still rorts in the system that this bill seeks to address.

I think that these amendments are very welcome because we do not want to have those kinds of arrangements. That is not what the whole intention around this was. You know, if we go back right to the beginning, when pokie machines were introduced in New Zealand in the first place, some would look back on that and say that doing that was a big mistake and that, in fact, if we could turn the clock back, we would not have introduced the pokie machines because of the problems that have gone with them. But they were introduced to be charitable—basically, to generate revenue for charitable activities. That was the purpose of introducing the pokie machines in the first place.

The type of arrangement that I have just mentioned was not really charitable. In fact, it was a rort, and it was designed to increase the profits of the business hosting the pokie machines, rather than to put the proceeds of the pokie machines to the charitable purpose that it was intended for. So I think that cracking down on that and the further refinements that this bill makes to crack down on that are welcome.

I want to refer to the select committee report, which is published at the beginning of the bill. I want to say that I regret that the select committee at the time—and we are going back three or four Parliaments ago now, to when the bill was considered by the Government Administration Committee—was unable to reach an agreement when it came to pokie machines in outdoor areas. That was a direct intention to flout the smoke-free provisions of legislation that was passed by Parliament. It meant that venues could put pokie machines outside. People could sit there and smoke on them when they were outside, and it was one of those things—you know, smoking and gambling are two very addictive things, and it meant that people could meet both of their addictions at the same time.

It is very regrettable that the committee was unable to get a majority to make a recommendation to deal with that practice, because I think that that is wrong. I hope that time has moved on. There is more broad support across Parliament for smoke-free measures now than there was 8 years ago when the matter was discussed by the select committee, and I hope that we can actually get some agreement on that, either in this bill or in a future bill. I think that dealing with problem gambling means breaking the cycle to some extent, and actually forcing someone to go outside to take a cigarette—if they are that addicted to cigarettes that they have to have a break to go out and have a ciggie—at least breaks up their sitting in front of the pokie machine for that continuous period of time. That is a good thing. I hope that the House will at some point—in voting on amendments and so on, either to this bill or to another bill—deal with that issue, because I think that is very important.

Overall the Labour Party is in support of many of the provisions in this legislation because we want to deal with problem gambling and gambling harm. We introduced the legislation when Rick Barker was the Minister of Internal Affairs, and there are very important provisions in this bill. I personally believe that they do not go far enough and there is a lot more work to be done in this area. I acknowledge that there are other bills coming before the House that are also going to be dealing with the issue of problem gambling and I look forward to taking part in the debate on those.

SARAH DOWIE (National—Invercargill): Thank you for the opportunity to speak on the Gambling Amendment Bill (No 2). As we have already heard, this is a bill that follows the Gambling Act 2003, which took effect in 2004. That parent Act brought about major reforms to the gambling sector, and I think this bill following on from that Act is extremely important, even though it makes technical changes. The parent Act was basically an acknowledgment that there are some people who are badly affected by gambling. In other words, they do not have the shut-off gene. But there are some who can gamble appropriately and have fun. This is about technical changes that will refine the parent Act and help to balance the rights of those who want to gamble safely while minimising harm to those who cannot do so. This particular amendment is one of a series of amendments that, like I say, make technical changes that clarify the legislation since the passing of some case law. In particular, this bill, as we have heard, relates to class 4 gambling, which is non-casino gaming machines, or pokies, as they are more commonly known.

There are a couple of things that I want to focus on in this bill that I think particularly make a difference to minimising harm. The first is in clause 80(1AA), where a venue manager, rather than the licensee of a class 4 venue licence, is now liable for any failure to display a notice in the gambling area advertising to customers that the venue has a policy for identifying problem gamblers. Immediately, the manager, the person who is in charge of the operation on the ground, is on notice, and there is a compulsion to display that information is readily available to gamblers. It basically puts that venue and those people gambling on notice that the venue is a responsible venue and that questions will be asked, and that if a problem gambler is identified, that person will be steered in the right direction.

The second thing I want to focus on in this bill, which follows directly on from that, is clause 86(8), which restricts the availability of eftpos machines close to pokies themselves. Although eftpos machines are not prohibited, the clause will require a player, as the member opposite has already alluded to, to step away from the machine and have time out, basically forcing a time of reflection to give them time out and hopefully keep them away from destroying their lives. I think this is an extremely practical measure, a common-sense measure, that has been brought into this bill to help clarify the parent Act and hopefully add to the avoidance of situations where people may experience devastating consequences to their lives.

As the newly elected deputy chair of the Government Administration Committee I was not privy to the process that was heard in respect of the bill, but I want to thank the previous committee for the work that it has done. I think it is important work. Even though they are technical changes, they go towards creating practical solutions to minimise harm. I think that is commendable. As such, I support this bill.

DENISE ROCHE (Green): I rise to take a call on Part 2 and possibly Part 3 of this bill in the Committee of the whole House. I think I would like to comment on some of the issues that have already been raised. I am particularly concerned about the tenor of some of the comments from the New Zealand First speaker, Clayton Mitchell, and also from the speaker who has just resumed her seat, Sarah Dowie. These were about the issue of problem gambling and problem gamblers. I do seriously believe that we need to move away from pathologising the person who is gambling and direct our attention to what is essentially a dangerous product.

This bill does talk about minimising gambling harm, and therefore it recognises that gambling machines, particularly in class 4 venues, are dangerous. They are a dangerous product. So when you blame the person who is using the product, you are actually letting the people who reap the benefits of the machine off the hook. I think we need to accept that there are mechanisms that we can put in place, and that we should be putting in place, that can make gambling on pokie machines or electronic gaming machines much safer.

This brings me to Supplementary Order Paper 84, which we are putting forward in the name of Kevin Hague, which talks about introducing real-time player tracking and pre-commit cards to all gamblers. What this would do is give an absolute assurance that anybody who is even starting to display behaviour that looks like it may be getting out of control can be taken aside straight away, which can absolutely minimise the harm that could happen from gambling. It is like having seatbelts and an airbag in a car. It would make the product safe.

However, we need to recognise that this is an industry that is washing in money. There was $2.09 billion lost in gambling in the 2013-14 financial year. The Department of Internal Affairs suggests that around 40 percent of that came from class 4 gambling, which is the gambling and pokies in clubs and pubs. As one of my colleagues in the House who has spoken previously said, that money from class 4 gambling is specifically for community purposes. That is the only reason we can have clubs and pubs with pokie machines in them. That money does have to be distributed in the community, which is one of the issues that I think has been quite problematic since the time that this bill was introduced and one of the underlying reasons the Act was introduced in the first place.

The distribution of those funds is constantly subject to rorts and disgraceful conduct. We saw quite recently a multidisciplinary investigation involving the Serious Fraud Office, the Department of Internal Affairs, and the police. That resulted in the arrest of four people who were associated with the racing industry over what could probably be considered a “money-go-round” in terms of the grants that come from class 4 gambling. I recognise that the bill does talk about racing being a community purpose where money from class 4 gambling can go. However, I think we should recognise that if we allow that to continue—and we have a Supplementary Order Paper that puts a cap on the amount of money that could go to racing purposes—we are essentially allowing one form of gambling to subsidise another form of gambling. I do not recall racing or racehorse owners ever being a registered charity, which is where this money is supposed to go. So we support strengthening transparency around the distribution of funds.

I also just want to touch on the fact that we do need to strengthen our problem-gambling and host responsibility reform in this country. We have still got this situation where, even though there are requirements under the Act—and strengthened, presumably, in this bill—for host responsibility programmes to be in place and notices to be put up in venues where pokie machines are being played, frequently the host responsibility is not being monitored or even adhered to at all.

We can see the evidence of that in the sting that the Department of Internal Affairs operated at the end of last year. Essentially, it set up a mystery shopper type of scenario where mystery shoppers went into class 4 gambling venues and sat at pokie machines. They sat there for considerable time and said things like “I am meant to go home to the kids, but another few minutes won’t hurt.”, or “I can’t really afford it, but I think I’m getting close to a win.”, or “I need to go, but I need to win some money back.” They displayed distress while they were sitting there, and they did this in front of the staff. The department checked and did this in 102 different venues. And do you know what? One hundred and one of them ignored those problem-gambling displays. I think we can say that the industry is not complying voluntarily with problem-gambling harm minimisation. That is why we need regulation and that is why we should actually ask the Minister of Internal Affairs to accept the Supplementary Order Paper that Kevin Hague is putting forward. That would make the machines safe and would eradicate completely the issue of problem gambling because the seatbelts and the air bags would work.

I also want to touch on the issue of problem gambling in casinos and at pokie machines there. In the beginning of the year last year, in 2014, Television One showed an article where it had sent a pensioner into the casino at Skycity in Auckland and said to that person to just stay there and gamble for as long as it takes before someone comes and intervenes and notices that they had been sitting there. That pensioner stayed in front of that pokie machine for 14 hours before they left. There was no intervention whatsoever from any Skycity staff. As a result of that, I wrote to the Department of Internal Affairs’ gambling compliance unit and asked that it investigate. I made an official complaint. In July, 6 months after the original incident, I received a notice from the Department of Internal Affairs—a response saying that basically it was working with Skycity to improve its host responsibility practice. If this is the type of censure a venue is going to get for flouting the law, then we are seriously, seriously irresponsible in the way we are making our laws, because we need to have regulation that brings these organisations, these companies, and these trusts into line.

International evidence suggests that 40 percent of all the money that is lost on pokie machines—so that is 40 percent of the 40 percent of the $2.09 billion that was lost in gambling last year; 40 percent of 40 percent of that—basically comes from people with limited control over their gambling behaviour.

Clayton Mitchell: That’s not class 4 gambling, though.

DENISE ROCHE: No, that is actually—

Clayton Mitchell: All gambling.

DENISE ROCHE: Yes—no, that is from pokie gaming.

Clayton Mitchell: Includes Lotto—that includes everything.

DENISE ROCHE: Yes, that is what I said—40 percent of the $2.09 billion that was lost. According to the Department of Internal Affairs today that is what was lost at class 4 gaming venues. So 40 percent of that, Mr Mitchell, is what came from problem gambling and problem gamblers. So, if we consider that that is an awful lot of money going into the coffers of both the trusts and the venues—and, in the case—

Dr DAVID CLARK (Labour—Dunedin North): Labour will support this bill, which was first introduced in 2007 by Rick Barker, who has now retired as a member of Parliament. I think, as previous speakers have noted, it is in many ways shocking that it has taken so long to get this legislation moving properly through the House.

The bill was first introduced in 2004 and was solid legislation to make sure that the harms of problem gambling were reduced. Of course, immediately when a new bill is introduced, it is tested in the real world, and it is shown that there are corners that need to be sanded, there are holes that need to be plugged, and so on. I do not want to stretch the metaphor too far, you will understand, but a bill needs to be road-tested. Then this bill has come back to the House to make some improvements upon the original bill to make sure that it is roadworthy, to make sure that it is fit for purpose, and to make sure that it achieves the goals it sets out to achieve.

So I say for those watching at home who have been following the debate that it is not a huge bill, nor is it just a couple of pages. We have got about 48 sides of text that we as parliamentarians can look through to make sure as best as we can judge that it is going to achieve the purposes of the original bill and to make sure that it does not need to come back yet again. It may well do as the situation changes. So here we find ourselves arguing the case for a bill across the Committee, where it enjoys wide support, because it is trying to achieve the purposes of the bill.

I want to refer to some things in Part 2 that relate to the increase in casino gambling. Specifically, at the start of Part 2 we have clause 8—subclauses (1) and (2)—which talks about how the bill decides that it is going to ensure that problem gambling does not increase. My colleague Chris Hipkins indicated earlier that the effect of this is to put the judgments about casino gambling in the hands of the Gambling Commission, an independent body that will ensure over time that problem gambling is reduced and that society as a whole does not bear more costs than it should when gambling takes place. You know, basically it is seeking to make sure that the bill operates as it is intended and that there are not unforeseen costs, unintended consequences, and a broader societal cost.

It would be deeply ironic if we were passing this bill, which reduces problem gambling, through the House at the same time as legislation was being put through that would increase the harm from problem gambling, and yet that is what we find has been the case through this Parliament with another bill that is set down to increase the number of pokie machines at Skycity. I do not want to talk specifically about that—the Chair has made it clear that that will not be tolerated—but I want to go through some of the clauses and just acknowledge that they have been put there so that there are more powers in the hands of the Chief Gambling Commissioner to reduce problem gambling.

So we see in the description around “Renewal of class 4 operator’s licence” in clause 22A and in the application for a licence on the following page how words are changed to make sure that everything is covered off. Likewise, we see a clause slipping in there that gives more powers to the Secretary of Internal Affairs to categorise gambling. We can be sure that those things that are harmful, such as if the nature of gambling changes, or if there are technical changes in the nature of gambling machines and so on, that might not otherwise be captured by the legislation, as I read this—and the Minister in the chair can correct me if I am wrong—it gives the Secretary of Internal Affairs powers to classify what is and what is not likely to be captured as problem gambling under the different types of gambling described in this bill. So it would be, indeed, deeply ironic if at the same time we were proposing to pass a bill through Parliament that facilitated 8,000 more people to be affected by problem gambling, that put 230 more pokie machines in the hands of a casino, we were extending the powers in the other direction in a bill.

This is what the bill does. This bill does restrict problem gambling. It does close those loopholes where we might hope that it would. We see that elsewhere the Government is looking at perhaps doing completely the opposite, and that does pain us on this side of the House, where we do believe that it is important to curb the harms to society, as laid out in this bill. It is important to restrict the category of who can hold a gambling licence and even to have retrospective clauses that we find in here that give increased powers to restrict gambling licences for those who may not currently be in breach but who may have historically been in breach. So there are all of these specifics in this bill that we commend and we support. It would be fairly meaningless were we to be introducing measures to restrict problem gambling, only to find that elsewhere, indeed, it was being increased.

I have already mentioned the licences that are exercised in respect of a past breach. The bill provides also, as I have mentioned in passing, the express obligation to incur only actual, reasonable, and necessary costs of gambling. That is about, in my reading, avoiding unnecessary and unintended consequences where the law is not quite sharp enough, giving those additional powers, and also making sure that there are no problem-gambling situations that go unchallenged or unpunished.

The bill also provides that returns to the Crown, in terms of tax deductions and so on, and depreciation charges, are not offset against profits in gambling situations, so that the bodies using gambling pay their fair share, as I read this. I am sure the Chair will correct me if I have got that part wrong. And it provides that the problem gambling levy may be calculated by a specific formula that really covers the costs that are necessary to address problem gambling.

I commend members to the Supplementary Order Papers that have been put forward—to give them full and worthy consideration. It is good that this bill is going through the House. I congratulate the Minister on making some progress in this regard, and I challenge members opposite to consider very closely and very carefully the other legislation that might be before the House that would increase problem gambling and the harm to our society. I invite them to consider whether it is conscionable to do that at the same time as we hear past legislation that restricts problem gambling.

Thank you for the opportunity to speak on this bill. I congratulate, again, Rick Barker on introducing it. I congratulate the Minister on progressing it after its first introduction in 2004. It is good to see it moving again, finally, and I hope it does get through the House. Labour will certainly be supporting it because we do support the reduction of harm and the reduction of problem gambling in New Zealand.

CLAYTON MITCHELL (NZ First): Thank you, Mr Chair, for my third rise. Listening to the Greens member Denise Roche speak earlier, I sat back and I listened to the whole of New Zealand just sigh with disappointment that we are talking about this “harm minimisation”, and the fact that they use those words, and that this “dangerous product” that we are using needs to be actioned in such a way that we need to take away people’s choice—that we need to take away people’s personal responsibility to be able to decide for themselves what needs to be fixed in their lives, and then we need to make sure that we actually fix that problem. I mean, when we start hearing words like this, we are going to be fencing our whole ocean off. We are going to start putting doilies and soft cushions on everything that might have a sharp edge, and we will cut down our trees at 2 metres so that kids cannot climb trees, fall out, and break their arm, and learn how to fall properly.

The point being that there is only so much we can do. We are not condoning gambling. We are not saying that this is the thing that is going to make your life better. We are not suggesting that at all. But we should not be here to restrict people’s choice—their personal choice—to be able to go there and put some money in the gaming machine and sit back and relax. I get back to the good things that this is doing for our society. It is actually putting money back into our communities—[Interruption] Money that we otherwise would not have, Denise Roche. We would not have our sporting groups. We would not have our culture groups. We would not have the support that we get in our schools, without the good things that nobody seems to be picking up on that we get from class 4 gaming machines. We are not allowed to go into the casinos; that is a different realm.

The reality of the way we live is that we have to give people that choice. When they have made the choice to give up gambling, if they have got a problem with it—many things have got addictions to them. Obesity—food can be bad for us. Sugar is the latest thing on the radar now that everybody has got to be aware of. It is the white devil. But there are things around everywhere that you have to take responsibility for yourself to fix, and this is what we are saying. Once you have made that decision, we need to make sure that you have got the best care that money can buy, because the money is available. The money is actually being captured now to help out people who are in need, but they are not getting the support that they need. They are getting a gambling line, which is now amalgamated with Lifeline Aotearoa because the gambling line has not got enough work coming in. That suggests to me that the 0.03 percent of problem gamblers in this country is on the decline. Gambling machines from 2002 went from 27,000 machines down to 17,000 machines, and that is just in 10 years. We are down 5 percent in gambling totals from the year.

What I am telling people here is that people need to make the choice, and the support needs to be there for them from this Government. And the money that is being paid should not be lobbied—it should not be going against gambling; it should be there to give genuine support to help people through their need, like we have got Weight Watchers for people who have issues with obesity, like we have got other forms of health and recreational things to help people out in their need. We have got swimming classes for people who need to learn to swim. People need to learn to swim. If we fix something, we might not be happy with the outcome, and we have to ask ourselves: what is it that we are going to try to fix?

This will be the death knell for gambling throughout New Zealand and for our community good that comes out of social gambling, because it is a perfect storm. Here we are talking about real-time player tracking. That is cost-prohibitive. Let us get real. These gaming machine sites that have got nine or 18 machines—we are not talking about the big casinos that can afford $66 million of their half-yearly returns. They can afford to put in facial tracking recognition. They can put in real-time tracking situations. The moment you bring in that legislation, 90 percent of all gaming machine areas around the country will close down and that will have a direct impact—a direct impact—on all of our social networking: our sports, our recreation, our social engagement. Think about the good that that does. Think about the good. Take responsibility and we will be there to pick up the pieces to help you through your time of need. But to bring in this legislation in its entirety, as it stands here before me, gives me shudders—to think what New Zealand will look like without that social and financial support that we get for our communities. Thank you.

STUART NASH (Labour—Napier): With all due respect to the last speaker, I think what he needs to do is go and spend about an hour with the Problem Gambling Foundation in his community, and he will understand the level of harm that problem gambling actually causes. In my home town of Napier, which is Mr Mitchell’s home town as well, I have spent a number of visits with people at the Problem Gambling Foundation, and what they tell me—I know we are in the Committee stage but I just need to respond to this, Mr Chair—is that they know that the vast majority of this money comes from those communities that cannot afford it. It goes to the sporting clubs that Mr Mitchell talks about, but it goes to the clubs that are empowered enough to actually fill in the application forms and jump through the hoops to get this money. So it is taken from one—it is like a tax, in essence—group who really cannot afford it and given to another who can.

The problem we have got here is that this is not limiting people’s choice. If people want to go and play the pokies, if people want to go to the casino, they can do that. They can do that. But what we are saying is that there needs to be restrictions around this industry to stop people from harming themselves. This is not aimed necessarily at the responsible gambler. I know that sounds like a little bit of an oxymoron. This is aimed at regulating an industry that will take advantage of people, given an inch.

A number of people have alluded to the fact that Rick Barker introduced this, and this is where part of the problem is with this bill. It was introduced in 2007. Since 2007, 8 years ago, there has been a huge technological revolution in the way people interact, in the way they game. What we have here is a definition of “gaming machine”. This is Part 1, clause 5(5A), and it talks about: “a device, whether totally or partly mechanically or electronically operated, that (i) is adapted or designed and constructed for gambling; and (ii) is played or confers a right to participate, whether totally or partly, by the insertion of money into it or by the direct or indirect payment of money by any other means;”.

What this piece of legislation did pick up is the fact that people can put an eftpos card in, or can put some sort of credit card in. The Minister of Internal Affairs may have the figures; I am not too sure. I suspect that a lot of people are actually gambling at home on their own PCs over the internet. This causes a whole raft of problems in an unregulated industry. It is not just the harm that is caused; it is the fact that these guys do not pay tax or any of that sort of carry-on, and this is where we need to update the law yet again. I suspect during this term there will be a Gambling Amendment Bill No 3, 4, 5, whatever we are up to, to take into account the transition from having to go into a venue to sitting at home over your machine.

One of the things I looked at—and I could not quite understand until I read the Gambling Act itself—was Part 2, clause 9 of the bill: “Advertising overseas gambling prohibited”. It has taken out the words “overseas gambling”. In fact—this is section 16 in the Act itself—the title of that section is: “Advertising overseas gambling prohibited”. It outlines the reasons why or the methods by which you cannot advertise overseas gambling. Anyone can go on to a vast number of websites in this country and there are a number of advertisements for overseas gambling. I am not too sure how you regulate that, what we have to do, or what sort of legislation can stop that, but I think this is causing just as much harm, in fact, as the premises that this bill is trying to regulate. This does come back to personal choice and that sort of carry-on, but we are operating in a whole new era that I think perhaps Parliament has not come to grips with, and certainly our legislation is going to have to address that, going forward, as mentioned, not just from the perspective of minimisation or flouting of our laws, but from a tax perspective, which I know the Minister has had a lot to do with in the past.

There are a couple of questions I have got, and I have not had the time to take a good, hard look at the bill. In Part 2, clause 38, we talk about “Ministerial discretion to permit more gaming machines if clubs merge”. I am not too sure whether this means that if club A has 10 machines, club B has 10 machines, and they merge, they have a total of 20 machines or you have to take only the licence operating from one of the clubs. But the fact that we have ministerial discretion—again, we look at clause 39: “… to permit more than 9 machines at certain class 4 venues”. Why is there ministerial discretion when there should be just legislative certainty? My view is that it takes away the certainty that clubs and societies have and actually puts it back in the hands of a Minister to make a decision based on any number of variables that are not necessarily transparent to the general public.

But then when I look at clause 40, it talks about when territorial authority consent is required. It says: “if a corporate society”—which is basically the new venue here—“proposes to increase the number of gaming machines that may be operated at a class 4 venue (whether by way of an application for, or amendment to, a class 4 venue licence, and whether or not in association with an application for ministerial discretion under section 95 or 96):”. Again, I am a little bit confused around whether a venue just needs ministerial discretion full stop versus when ministerial discretion and territorial authority consent is required. It is my personal view that territorial authority consent should always be required because it is often councils and council organisations that are left to pick up the mess when these things go wrong. The social harm caused by problem gambling has been talked about by a number of speakers, but it is not just the social harm; it is the sort of people who are sometimes attracted to these venues. So there is a whole lot of stuff that territorial authorities have to deal with.

There is one other thing as well, and I am not too sure why this is put in here, but maybe the Minister could allude to it. There is a new section 17A inserted, and it talks about how the “Retail value of non-cash prize must be stated” as opposed to the “Cash value of a non-cash prize must be stated”. This just substitutes the word “cash” with “retail value”. Is there a difference? I am not too sure, but there must be a reason why that was inserted. There are a couple of questions, perhaps, for the Minister to answer there. That is all I would like to say.

I would just like to reiterate the point that society is moving and technology is advancing at such a rate that we need to find legislative ways to protect those who need protection and to stop exploitation of those who are open to be exploited by those who operate outside the sort of 20th century jurisdiction. Thank you very much.

Hon PETER DUNNE (Minister of Internal Affairs): Can I just make a couple of points in response to the previous speaker, Stuart Nash. I agree with him about the rate of change that is occurring. This legislation and the Gambling Amendment Bill (No 3), which is currently before the Government Administration Committee, deal with terrestrial-based gambling. Online gambling is rapidly increasing, and I have already signalled that there will be a review of the whole class 4 system over the next little while to try to address that. You come at it from two perspectives. There is one set of interests trying to preserve what it has at the moment. Other groups are saying: “This is the way of the future. How do we regulate it?”. So it is going to be the challenge over the next few years.

Can I just also make some comments about Mr Nash’s questions, really, relating to clauses 38 to 40. There is nothing sinister contained here. This is not some new discretionary power given to the Minister of Internal Affairs to increase the number of machines. It is more to do with the situation where clubs merge and become a different entity and the procedures that then kick in for the registration of those entities in terms of getting a licence. If you take what actually happens, once one entity ceases to be and then becomes another entity, the Secretary for Internal Affairs is obliged to cancel the existing licences and then the new entity is required to seek approval through the local authority for its existence and the capacity to take on those additional licences. That process can be lengthy. It can take up to 6 months, so you get a whole change in the pattern, the service, of those entities. And, really, what these clauses are about is giving the Minister the discretion in that situation, upon appropriate application being made by the organisations, to say you can transfer over the number of machines without having to go through the procedure required for the registration of new entities.

I do not know whether the member thought there might be some sinister plot afoot here. I can assure him there is not; it is purely a procedural mechanism to get around the situation, which I think we are going to see more of in the future—clubs and societies merging and then wanting to merge their licences but being confronted with the procedure operated by the local authority that might see objection, might see delay, and might see the thrust of their intent thwarted by other bureaucratic provisions. So, in those circumstances, upon application the Minister will have the authority to say: “Yes, look, this is clearly a merged entity. They’ve got however many machines available to them. We can simply transfer them over and they can carry on with their business in the normal way.”

Hon RUTH DYSON (Labour—Port Hills): Mr Chairman, it gave me a huge surprise that you chose to call me at this stage of the debate. I think I will probably be the final contributor in the Committee stage of this bill. I want to begin by just lending a bit of support and sympathy, actually, to the Hon Gerry Brownlee for what has been a pretty bad start to the parliamentary year. Today he called a comment from the Prime Minister “unfortunate”, which is not a career-enhancing move. And he put on the Order Paper the debate on this bill, the Gambling Amendment Bill (No 2), at a time when—for reasons, puzzling though it is, we are not allowed to refer to during the debate on gambling legislation. But who would want to challenge the Chairman on that ruling? It will not be me, at the moment, anyway. There could not have been worse timing for the Minister to have chosen to put this debate on the Order Paper, so my sympathy to the Hon Gerry Brownlee for what is a double blow in his first week back in Parliament.

I want to congratulate the Minister in the chair, the Hon Peter Dunne, for being either the fourth or fifth Minister, I think, if you count him twice—

Hon Peter Dunne: At least.

Hon RUTH DYSON: At least, yes. I think he has had responsibility for this bill twice, on two separate occasions.

Hon Peter Dunne: No, no, no. Earlier life.

Hon RUTH DYSON: OK. In an earlier life. Yes, well, that was still you, though. You may have looked different, but it was still—

Hon Peter Dunne: 20 years ago.

Hon RUTH DYSON: Oh, 20 years ago—no, not that long ago. So I want to congratulate the Minister. However many Ministers have been before him, none of them have succeeded in getting it back to the House in this time. So that is good work.

But, also, I want to acknowledge the Minister’s contribution to the debate. Some Ministers sit in the chair and you would not know whether they were asleep or dead, and, frankly, you would not know whether it would make much difference. The Minister clearly listened, and did not answer every single question that was raised tonight, but I think did give a very good perspective on the bigger picture and the challenges that lie ahead. I want to just note my appreciation and, I think, that of others in the Committee as well.

I want to acknowledge the Minister whose name is on the bill, the Hon Rick Barker, who is not a Minister any more—he is a member of the Hawke’s Bay Regional Council—and say that at the time of this bill’s being introduced in 2007, it was clearly needed. There had been quite a short time, only 4 years, between the first ever major gambling reform legislation of 2003, when New Zealand as a society said: “Gambling in some parts of our society is getting out of control, we need some regulation, and we need to recognise that there has to be transparency for the distribution of funds. There has to be recognition of harm, and there has to be accountability to the public from those who administer it.” This bill—the second attempt at that regime of harm minimisation but also at ensuring there is honesty and accountability in the sector—was, I think, a really good move forward.

As the Minister and others have noted, there is a Gambling Amendment Bill (No 3) before the Government Administration Committee now. There are a couple of puzzling things in that bill. I will not refer to them in this debate, because, of course, it is outside the scope and I will be sat down before I have concluded the contribution that I want to make. I am keen to ensure that we stay on a path where our gambling legislation is evidence-driven and has recognition of the public health impacts. I think that is important. There are parts of the Gambling Amendment Bill (No 3) that go outside that.

The Minister might be thinking “This is the eighth year of this blimmin bill—let’s just get it over with.”, but I am a little disappointed that some of the improvements in the Supplementary Order Papers are not, I think, going to be agreed to. Denise Roche from the Green Party referred in passing to what I think is worthy of mention again, in terms of what is actually needed in further amendments to the legislation. One piece of evidence that this bill does not actually go far enough, and evidence of why some of the Supplementary Order Papers should be supported, is in relation to the mystery shopper survey that was done prior to Christmas by the Department of Internal Affairs. Ninety percent of class 4 venues were failing to comply with the regulatory regime that we have currently—90 percent. That is an indication of a major problem. I commend the Department of Internal Affairs. It knows that it has not got enough staff to monitor class 4 venues 24/7, however long the individual venue is open for, so it was quite an innovative approach to get the mystery shopper over so many venues. But to have that level of non-compliance—90 percent—I think is a real indictment on the sector, and I certainly think that the assurances that we have been given by internal affairs officials that the sector is now buying into a high level of compliance is really important.

I know there is an agreement on the time of concluding this debate and I want to honour that agreement, but I just want to conclude with a comment about an issue that I found quite puzzling. That is in relation to two Supplementary Order Papers. It may well be the first time that this has occurred in this Parliament or it may be a clerical error, and I would like the clerks to just review the situation. My reading of Supplementary Order Paper 478, which was introduced on 2 July last year by the Rt Hon Winston Peters, and Supplementary Order Paper 84, which was introduced on Tuesday, 13 October 2009 by Kevin Hague, seem to be exactly the same. I just want to check that the amendments moved in the two members’ names, as I noted—Kevin Hague, from October 2009 and the Rt Hon Winston Peters from July 2014—appear to be exactly the same. If it is not a clerical error, then I think it is indeed the first time that that situation may have arisen in this Parliament. If Kevin Hague and the Rt Hon Winston Peters both agree on the amendment in regard to racing, then I certainly think it should be supported.

With those concluding comments I want to again acknowledge the Minister, thank him for getting the bill to this—[Interruption] Sorry?

Hon Peter Dunne: Five Ministers.

Hon RUTH DYSON: I was told 8.45 p.m.; I am going to stick to what I agreed to.

Hon Peter Dunne: No, five Ministers.

Hon RUTH DYSON: Oh, five Ministers. I congratulate him on being the fifth Minister and the only one who has got it back to the Committee stage. Thank you.

The question was put that the amendments set out on Supplementary Order Paper 84 in the name of Kevin Hague be agreed to.

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

Ayes 47

New Zealand Labour 32; Green Party 13; Māori Party 2.

Noes 72

New Zealand National 59; New Zealand First 11; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 478 in the name of the Rt Hon Winston Peters be agreed to.

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

Ayes 43

New Zealand Labour 32; New Zealand First 11.

Noes 76

New Zealand National 59; Green Party 13; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the following amendments in the name of the Hon Peter Dunne to the proposed amendments set out on Supplementary Order Paper 454 in his name be agreed to:

replace clause 5(17) with:

(17) The definition of “venue operator” in section 4(1) is repealed and the following definition substituted:

“ ‘venue operator’ means the occupier of a class 4 venue for which the licence application was required under section 65(3) to be accompanied by a class 4 venue agreement where the occupier owns the primary business at the venue”.;

in the amendment to clause 22A, new clause 22C, new section 58(1)(b), replace “section 69A” with “section 53A”;

replace the amendment to clause 45 with:

Clause 45, new section 105(1)in clause 45, new section 105(1), replace “the proceeds from the sale of any fittings, chattels, or gambling equipment purchased from those profits” with “any gain above the book value from the sale of gambling assets”.;

replace the amendment to clause 46, new section 105A(3) with:

Clause 46, new section 105Ain clause 46, new section 105A(2), replace “proceeds” with “any gain above the book value from the sale of gambling assets”.;

in clause 46, new section 105A(2)(a), replace “proceeds” with “any gain above the book value from the sale of gambling assets”.;

in clause 46, replace new section 105A(2)(b) with:“(b) applies the gaming machine profits, interest, investment return, and any gain above the book value from the sale of gambling assets to, or distributes the gaming machine profits, interest, investment return, and any gain above the book value from the sale of gambling assets for, authorised purposes.”;

in clause 46, new section 105(A)(3), delete “summary”.; and

after the amendment to clause 46, insert:

Clause 51In clause 51, new section 111(1)(a), delete “on the relevant standard form,”;

In clause 51, replace new section 111(1)(b) with:

“(b) promptly sell all gambling assets and apply or distribute any gain above the book value from the sale of gambling assets to or for authorised purposes; and”.;

In clause 51, replace new section 111(1A)(a) with:

“(a) any gain above the book value from the sale of gambling assets; and”.

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

Ayes 108

New Zealand National 59; New Zealand Labour 32; Green Party 13; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 11

New Zealand First 11.

Amendments to the amendments agreed to.

The result corrected after originally being announced as Ayes 98, Noes 11.

The question was put that the amendments set out on Supplementary Order Paper 454 in the name of the Hon Peter Dunne as amended be agreed to.

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

Ayes 108

New Zealand National 59; New Zealand Labour 32; Green Party 13; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 11

New Zealand First 11.

Amendments as amended agreed to.

The CHAIRPERSON (Lindsay Tisch): Previously on the vote on the Minister’s typescript amendments, the result should be Ayes 108, Noes 11. The amendments are agreed to. The record will be corrected accordingly.

Parts 1 to 4 and clauses 1 to 3 as amended agreed to.

Bill to be reported with amendment presently.

Bills

Parole Amendment Bill

In Committee

Part 1 Amendments to Part 1 of Parole Act 2002

KELVIN DAVIS (Labour—Te Tai Tokerau): It is a pleasure to talk on the Parole Amendment Bill. I would just like to preface my opening comments by reading from an article from Mana magazine. It is an article by reporter Aaron Smale. The article is called “Inside out” and it looks at the reasons why Māori tend to be incarcerated more often than they should be. There is a reference to Judge Sir David Carruthers that I would like to read out. Judge Sir David Carruthers has worked in virtually every area of the system. He has been the Principal Youth Court Judge, the Chief District Court Judge, the head of the Parole Board, and is currently the chair of the Independent Police Conduct Authority. It says: “He well knows from his time at the Parole Board that parole is often portrayed as a risk to the community, but the whole purpose of parole is to reduce the risk by managing an offender’s reintegration into society. The alternative is to simply kick them out of the gate without any of those support structures in place. The international research shows that release on parole is something like four to five times more successful at preventing reoffending than automatic release at the end of the term.” I think that is a very apt start to the Committee stage of this bill.

This bill requires the board, when it declines to release an offender on parole, to specify when the offender will next be considered for parole. The bill also gives the Parole Board the power, when it is setting the date of the next hearing, to identify any milestones relating to the risk of the offender. That is a great segue into the first clause that I would like to touch on, this whole risk milestone that was referenced in the Bills Digest. They have removed that term “risk milestone” from the bill and have replaced it with what they call “relevant activities”. So a relevant activity is an activity or a programme for the rehabilitation or reintegration of offenders that is specified by the board. I think “risk milestone” is too much of a negative term and had negative connotations. It said that prisoners had to pass certain milestones, and if they did not, then they were at a bit of a risk. I think that has rightly been corrected and that “relevant activities” is better terminology. As I have said, these are programmes for rehabilitation or reintegration.

You may ask what programmes for rehabilitation or reintegration into society would look like. For example, there are drug and alcohol programmes that are available for prisoners. When prisoners go into prison now, they are assessed for their needs around whether they have a drug or alcohol problem and they are given these programmes to address that need. It is appropriate that these drug and alcohol programmes are there for them. There are also employment activities, like participation in employment training, so that they can actually be prepared for their release or reintegration into society and, hopefully, reduce their risk of offending.

I would like to move on now to clause 5, which amends section 13A. Funnily enough, this is about epidemic preparedness. You might wonder what on earth preparedness for an epidemic has got to do with parole. Funnily enough, if there happens to be an epidemic—swine flu or pig flu or bird flu or man flu or whatever epidemic there is going around—prisoners are entitled on their release date to be released back into the community. It would be inappropriate for something such as an epidemic to stop people from being released on the appropriate day.

If you have a Parole Board meeting, people from around the country come in and have the right to attend the Parole Board meeting. If they come from an area where there happens to be one of these epidemics, such as swine flu or whatever, there is facility here for that Parole Board hearing to actually not go ahead in the usual form but instead for documents and documentation to be the basis on which the board makes its decisions. I think that that is fair because, as I have said, we do not want people to be denied the opportunity to be released on the day that their sentence ends.

I know that there are organisations in New Zealand such as the Sensible Sentencing Trust that would not care less if people were locked up and the key thrown away and if none of their needs were ever addressed. I think that is a very sad indictment on the sort of society that those people wish to live in. They really do not care about the imminent rehabilitation and reintegration of people into our society.

Clause 5A amends section 14, which is around standard release conditions. Standard release conditions are the conditions that an offender who is subject to release conditions must comply with. After section 14(3) a new section 14(4) is inserted. For example, when an offender is released, they need to report to a probation officer not later than 72 hours after their release. You can understand why that is needed. They are released from prison and they need to see their probation officer to make sure that they are adhering to any conditions. The offender must notify the probation officer of his or her residential address, obviously so that where they are living can be checked to make sure that they are living in an appropriate place.

Another standard release condition is that the offender must not move to another residential address in another probation area. So if they are released to one probation area they cannot just up and move into another probation area and set up shop there without the probation officer knowing. They can apply for that and, if the probation officer gives them permission to do so, they may move and then they need to notify the new probation officer in the new probation area that that is actually the case.

So there are all these sorts of standard release conditions that they must adhere to. A few others that they must adhere to include when a probation officer has directed that they do not engage with any specified person—and you can understand that. There might be somebody who would be a bad influence on the offender or who may have been involved in the crime or may be a relation of the victim of the crime and they are not to go near or associate with those people. And that is another appropriate release condition.

New section 14(4) inserted by clause 5A states: “For the purposes of any provision of this Act relating to the imposition of standard release conditions, those conditions must be treated as if they were imposed by the Board.” This means that even though the probation officer imposes the conditions, they must be treated as if it is in fact the Parole Board that has imposed these conditions, not just the parole officer, though the parole officer is acting under the direct line of the Parole Board.

As we go through and debate this bill there are going to be a number of further clauses that we discuss as we get into the nitty-gritty of it, so I will leave my initial contribution there and I look forward to some contributions from other members around the Chamber. I think we really do need to address these amendments so that we do actually make sure that people are released into the community, they are rehabilitated, and they do have opportunities for education and upskilling and growing before they are released.

JAMI-LEE ROSS (Junior Whip—National): I seek leave for the Parole Amendment Bill to be taken as one question.

The CHAIRPERSON (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is none.

Part 1 Amendments to Part 1 of Parole Act 2002 (continued), Part 2, and clauses 1 to 3

JACINDA ARDERN (Labour): It is my pleasure to take a call in the Committee stage of the Parole Amendment Bill. I thought it would be helpful to backtrack slightly just to cover off—before I come to some specific clauses that the Law and Order Committee considered at greater length—the overall issue that this bill, as a whole, is seeking to tackle.

The Parole Act is, I guess, relatively speaking, a newish Act. Well, it feels new to me because I remember its introduction. It probably feels very new to the Hon Phil Goff, who, obviously, was the Minister in charge at the time. The Parole Act 2002, the Act we are seeking to amend, sets out some core principles that remain unaltered in the way that the Parole Board operates, the most key of which is that the Parole Board when considering parole for offenders will give paramount consideration to the safety of the community. Amongst all of the other competing issues that the Parole Board considers, the No. 1 consideration when determining the release of an offender, and, indeed, when determining when the board meets again to consider the release of that offender, is the safety of the community. So that continues to be the guiding principle of the Parole Board in that consideration.

Having said that, the Parole Board obviously has a number of offenders that it is continually having to review in order to determine whether or not they have reached that threshold. Under the status quo the board is required once every 12 months to give consideration to an offender who is eligible for parole—that is, once every 12 months for a general sentence, but if there is an indeterminate sentence for an offender, that is every 3 years. The bill seeks to extend this to 5 years, as a possibility for the Parole Board if it so chooses. That, however, does mean that we have a reasonable number of Parole Board hearings.

The regulatory impact statement sets out that in 2010-11 the board held around 5,000 parole hearings. However, given that this bill as a whole seeks to check the efficiency of that number of hearings, it is interesting to see that those are not all parole hearings where the potential release of an offender is considered. As the regulatory impact statement sets out, 500 are recall hearings, 200 are variation of condition hearings, and 500 hearings are where the board’s only role is to set conditions because an offender has reached their statutory release date. We now know, however, obviously with some of the additional bills that have recently been passed through the House, that a statutory release date does not now necessarily mean the end of supervision or necessarily the end of imprisonment.

Having deducted those hearings, you are then left with roughly 3,800 Parole Board hearings where we can assume that there is, potentially, the consideration of an offender for release. Not all of those hearings—and we heard this at the select committee, and I think it is an important point to make—will necessarily involve a victim. Of course, not all of the offenders who are serving in our prisons will have a victim in the traditional sense of the word; their victim may have been an entity—it may be white-collar crime, for instance. So not all of these hearings will involve a victim, but a number certainly do. And in considering whether or not we are using the Parole Board most efficiently, we must also consider whether we are, inappropriately, re-traumatising victims unnecessarily because there simply is no prospect of an offender potentially being considered for parole. I am sure the Minister in the chair, the Hon Amy Adams, will correct me if I am wrong, but that does seem to be the primary driver of this legislation, and it is hard to deny that principle when that is at the heart of this bill.

But I think it is still important to note that some of these Parole Board hearings can, of course, be unattended—the Parole Board may make a decision that it does not require an offender to be there. That would, of course, from the perspective of a victim, change the nature of a Parole Board hearing. And there is the ability to delay a Parole Board hearing, but we heard at the committee that that can be litigated by an offender and that it can turn into quite a lengthy and drawn-out process, and one that benefits no one.

Also I think it is critically important to note that Parole Board hearings are not used by the Parole Board just to consider release. In fact, the Parole Board will often use hearings, when it views, itself, that an offender is simply not ready, in order to set down, for want of a better word, goals or milestones that it would like to see an offender achieve in order for them to be considered for release at the next board hearing. One concern we raised at the select committee regarding the idea of delaying adding lengthier times between Parole Board hearings was whether there would be a check against the goals the Parole Board is setting down for an offender to ensure that they were actually occurring.

Let me explain what I mean by that. It might be that the Parole Board does not consider an offender eligible for parole but sets out to the prison manager that its expectation is that the offender will be enrolled in a work-readiness programme or that they will undertake one of the many stopping violence programmes that our prison service offers. It is not a given that because a Parole Board makes that request, that programme will be undertaken. In fact, we heard a lot of evidence to suggest that many times the Parole Board would see that those milestones—although we are not using the word milestones because in the legislation we did not want to give the suggestion that if they were achieved it meant automatic release. We heard a lot of discussion about how, if those specified actions were set down, we would then check that they were completed by the prison management and ensure that they were taking place. That remains a concern. We even had a discussion as to whether we actually need an alternative mechanism that is not the Parole Board and is an independent body that ensures that the Department of Corrections is making sure that prisoners are fulfilling some of those milestones.

Some of us even had the opportunity to sit in on Parole Board hearings. A prime example: I sat in on a hearing where an offender had been before the board. The board had set down a number of things they wanted to be completed. They had all been completed bar one: appropriate housing had not been found for that offender. The Parole Board considered that offender to be ready for release but because no suitable housing had been found—and, of course, the Department of Corrections was involved in that—they refused to release that offender. It is not a good use of taxpayer resources to continue to imprison someone whom the Parole Board considers ready for release, because there are elements of the service that were just not being provided. That is something we continue to have a concern about; however, the principle of the bill, in terms of discretion for the board, we consider sound. Allowing that extra time delay between Parole Board hearings was, we think, something we could certainly support.

I want to look specifically at new section 21A, inserted by clause 10—in it we made an addition as a select committee. New section 21A says this: the board “(a) must specify a date (the specified date) by which the offender must be further considered for parole;”. This provision also gives the ability that where the date for the next parole hearing is beyond 12 months, if the Department of Corrections considers, or, as the bill states, if “the manager of the prison in which the offender is detained considers”—obviously, because the department does not run all of our prisons now—“that all of the relevant activities have been completed”, they can give notice to the offender that the board may consider hearing their application. So there is some discretion built into that. It is interesting that in new section 26, inserted by clause 11, again, we actually talk about the manager not of the department but of the prison, and there is no reference to the Department of Corrections. It does make you wonder whether or not this bill is in preparation for the further privatisation of our prison service.

We thought that was a sensible amendment for the select committee to make, and as I have already said, in those clauses it also sets out “relevant activities” rather than “milestones”, because it was certainly just too misleading to claim a milestone, because it does give the impression that if an offender were to reach it, it would mean there would be some kind of automatic release.

One of the other key considerations that came up as a by-product of hearing this bill—I see my time is possibly about to expire. I would happily take another call to expand on that issue.

KANWALJIT SINGH BAKSHI (National): This is one more example of how the National-led Government is working on reforming laws and legislation. The purpose of this legislation is to reduce the number of parole hearings where the offender has a minimal chance of being released. It is a fact that each parole hearing has a negative impact on the victims. We want to put victims at the heart of our justice system. By way of legislation, we want to ensure that we reduce the stress on the victims and their families.

The Law and Order Committee had good discussions on all elements of the legislation during its hearings. The committee felt that the words “risk milestone” should be replaced with the words “relevant activity”. Further, in the case of the Parole Board not specifying a time frame for standard release conditions, then the default time has to be 6 months. The committee recommended that the clause be inserted in the legislation. The committee also recommended that when a Parole Board application is declined, the board may specify a set of activities that an offender must complete before their application is reconsidered. In cases where the offender displays positive behaviour and completes the relevant activities, then the Parole Board hearing may be brought forward. By way of the above and other amendments proposed, this National-led Government wants to ensure less stress on the victims while also giving offenders an opportunity to improve their behaviour.

Other provisions in the bill provide that the victim, offender, or an authorised person can attend a parole hearing remotely, such as via video link or phone. It also provides that as with victims, the prison manager and police be notified of the hearing outcomes. They are also to be notified of the next parole hearing date and any other milestone the offender has set for them by the board. Based on the behaviour displayed by the offenders, the Parole Board may, of course, set an earlier date. Hearing dates can also be aligned with the completion of rehabilitation programmes. By way of making all the changes, we hope to save the Department of Corrections about $700,000. I am sure that this amount can be used towards improving the services elsewhere. Most of all, we are putting victims first, and our attempt is to reduce their stress in times to come.

Hon PHIL GOFF (Labour—Mt Roskill): The Labour Party supported this bill at its introduction, and it continues to support the bill. I think this bill makes small, but useful, changes to the major piece of reform legislation in this area, which is the Parole Act 2002, which I am very familiar with. I have got to say that when we look back over the period of 12 years that have elapsed since that legislation went through, I am very pleased with the results of the Parole Act of 2002.

The regulatory impact statement for this bill states clearly that consequent upon the passage of the Parole Act in 2002, the number of offenders who reoffended while on parole halved—halved. Mr Bakshi talked about the importance of victims. There is nothing more important than stopping a person from becoming a victim in the first place. The Parole Act 2002 not only halved the number of people offending while on parole but it also halved the seriousness of the offences that were committed. Both of those points were made in the regulatory impact statement. It was successful because we built into the Parole Act 2002 the principle that the safety of the community had to be the paramount consideration for the Parole Board. The Parole Board was not to act in a way that would subject the community to undue risk. I guess I copped a bit of flak from the Minister of Finance at the time that I passed this bill through Parliament, because the number of people in prison went up because people were staying there longer. But it did have an impact, and I do not think anybody would doubt that that Act has been effective.

The Act has also been effective because of the really good way in which the Parole Board has operated, first under Sir David Carruthers. I acknowledge the work that David Carruthers has done in this and so many areas. I think he has made a massive contribution to our justice system. But the select committee looking at this bill—Mr Chair, you will remember because you were on the committee—had Justice Warwick Gendall and former High Court judge the Hon Marion Frater before it. It was interesting that those making submissions on this bill, ranging from the Sensible Sentencing Trust at one end to people who wanted to reform prisons on the other, all had a good word to say about the way in which the Parole Board operated. I think most members of the committee actually had the unique opportunity, as outsiders, to sit in on the Parole Board’s hearings. I sat in on a couple of cases at Auckland Women’s Prison, where the people applying for parole were murderers, and I was incredibly impressed at the way the proceedings were conducted.

I think we have got a system that has worked really well—good people and good law—but after 12 years there was a need for change, and the predominant change that this legislation makes is to change the section in the original Act that requires parole hearings to be held within 12 months. It meant that, generally, they were held after 11 months. It also meant that there were a lot of people who were simply never going to be paroled the first or the second or the third time they were up for parole. The offender knew that, the victim probably knew that, and the system knew that. We wondered why we were putting people—particularly the victims—through the unnecessary trauma of fearing that perhaps the person would be released and might be a threat to their safety, and why we were raising false hope on the part of the offender. For about a third of the parolees, they had four or more parole hearings before they were released. It seemed to the Ministry of Justice, and it seemed to the members of the Law and Order Committee, that that was a sensible change to make.

Interestingly—and I refer to the Greens on this because the Greens’ minority report still opposes this legislation, although I do not think vehemently; I think they took a rational view on the committee—the interesting point that came out of the hearings in the committee and from the Parole Board itself was the statement by the Parole Board that the bill would probably result in people spending less time in prison rather than more time in prison. It would reduce the number of parole hearings by about 800. Yes, that does make a saving of $700,000-odd, but that is not the primary purpose of this legislation. The primary purpose of this legislation is to have a parole system that works more effectively and efficiently, and is fairer to all of the people who appear before it.

There are a lot of parole hearings. There are somewhere between 5,000 and 6,000 parole hearings a year, and that obviously does impose a lot of pressure on the Parole Board and on the people who service that board. So the major change in this legislation, which is sensible, is to give the Parole Board itself the ability to extend the time between hearings to up to 2 years, and that will result, as I said before, not in people spending longer in prison but in people having to attend fewer Parole Board hearings before they are actually released. It did not make sense to have somebody who had not yet completed their rehabilitation programme appear before the Parole Board when they and the Parole Board knew that they had not completed the programme, that they had not dealt with the causes of their offending, and that they were not going to be released. It was just time consuming, it interrupted the rehabilitative programmes, and it served no purpose.

In the original legislation, we recognised that there would be some people who simply were not going to be ready for release on parole, and therefore we allowed for the existence of what was called a “postponement order”, which meant that for people serving determinate sentences there could be a 2-year postponement between parole hearings, and for people on indeterminate sentences, life sentences, or preventive detention, it could be up to 3 years. Consequential upon the change to give more flexibility to the board to vary the period between hearings, postponement orders will now largely deal only with indeterminate sentences and with determinate sentences of more than 10 years, and in this case the bill allows for the period between parole hearings to be extended by as much as 5 years.

I have got to say that having been through every prison in the country and thinking that there is hope in most prisons, that people can change, that people can be released, and that the people there are not necessarily ogres, there was one prison where I had a totally different view, and that was Pāremoremo maximum security prison. Frankly, for the people I saw in the maximum security wing who were psychopaths, it did not actually need to be 5 years; there are people there who ought never to be released. I am not a person who says: “Lock ‘em up and throw away the key.” I think there is redemption in most people, but in some people there is no prospect of it and they will always be a threat. That is why it is important to have that postponement order, and that can and will be used, I am sure, for periods of up to 5 years.

The select committee did not make a lot of major changes to the legislation. We did replace the term “risk milestone” with the term “relevant activity”. That might seem a bit esoteric to those listening. The real problem with the term “risk milestone” was that it implied that if you said a person had passed the risk milestone, they had succeeded in all of the objectives, and the Parole Board itself said that that was not the right term to use, because it could be misleading. So we have changed that term.

In respect of the major recommendation—I bring it to the attention of the Minister in the chair, the Hon Amy Adams, because she was not the Minister whom we referred the initial advice to—the information we got from the Parole Board was that its decisions could only be as good as the information it received, and quite often it was not being given information on civil protection orders, which, because they were civil orders, were not within the criminal system, and it was not aware of things it should have known about when it was considering a person for release on parole. So if I can use this opportunity, Minister, just to draw that specifically to your attention—

Jacinda Ardern: In my speech.

Hon PHIL GOFF: —as Jacinda Ardern did—and say that, really, across the board in the select committee—it was not a partisan issue—we felt that that was an issue that needed to be addressed by your ministry, and we hope that action is taken on that.

Apart from those two things, there were no major changes that were made. I draw to the Committee’s attention that there can be early consideration for parole. You can bring parole hearings forward in cases where that is justified.

MAHESH BINDRA (NZ First): I have much pleasure in speaking on behalf of New Zealand First, the party for all New Zealanders, including those of Indian descent such as me. We are quite surprised that National seems to have come up with a bill that is, in the most part, logical—logical to the point that we support this bill, the Parole Amendment Bill. The intentions behind this bill are good. Even National has good intentions sometimes. However, there is not enough logic and there is not enough focus on the rights of victims. We want to see more of that.

Although we agree with the changes to sections 4, 13A, 14, and 15, we would like to see changes to section 17. Short-term sentences should be in full. It seems ridiculous to give someone a 12-month sentence and, by law, they serve only 6 months. What sort of deterrent is that? The chances of reoffending add stress on the victims and it is dangerous for other New Zealanders. We have had too many examples of this and it needs to stop. Although we agree with the changes to sections 18, 19, and 21, we especially agree with the new section 21A. In fact, we would go so far as to say that the first parole date should be determined at sentencing so that the offender is completely clear about expectations. That would be a logical addition to the Act.

We agree with the amendments to section 26, the replacement of section 27 with new section 27 and 27A and the renumbering of old section 27A as 27B, the replacement of old section 29 with new section 29 and 29AA, and the replacement of section 29B(4)(b). We agree with the amendments to sections 43 and 49 and we like the new sections 49A and B. It is interesting to see that sections 45 to 48 are to be repealed, but we are not overly upset about it. Although we agree with the amendments to sections 50, 50A, 50B, 60(5)(b), and 67, we would like to see changes to section 84(1). Non-parole periods should be a minimum of 2 years for long-term sentences. That is logical. Currently, the non-parole period is one-third of the sentence. If someone is sentenced to 4 years, that means they can be out in 2 years. That is not acceptable.

Our suggested changes will give greater certainty to the victims and offenders and will also act as a further deterrent to crime. Our suggested changes will focus on the rights of victims. After all, we all want to feel safe. Thank you.

The CHAIRPERSON (Lindsay Tisch): I call Kris Faafoi. I am calling you, but just for new members, if you stand and you want the call, you must call, because the person who calls gets the call.

KRIS FAAFOI (Labour—Mana): Thank you very much, Mr Chair, for your wise ruling. It is a pleasure to speak to this Parole Amendment Bill because I believe, having been a former member of the Law and Order Committee, that there were lots of variables that the select committee and, of course, the Government were trying to balance up—one of them obviously being the rights of the victims. We have heard of many, many cases. One of the considerations given under this bill was the revictimisation of victims who were made to go through what may be unnecessary Parole Board hearings.

On the other side of the equation, of course, were the rights of the offenders and their right to be heard for parole and to be assessed for their eligibility for parole and whether or not they were ready. Of course, there are some efficiencies trying to be gained here with trying to get rid of the unnecessary parole hearings that were being held, where there could have been instances where they were either unattended or there was absolutely no chance that an offender who was up for parole was going to be granted parole at all. So with those factors, and I am sure a number of others were considered by the Law and Order Committee, I think my former colleagues on that committee have come to the right balance in making sure that we do get the efficiencies right, and that the rights of the victims—we have heard some harrowing stories of many families. As Jacinda Ardern has pointed out, many organisations that have been offended against have had to go through the horror, or the pain, of the offending, and have been through that because of the process of the parole hearing. Also, I guess it is about making sure that the rights of those who are seeking parole are met as well.

This bill, in its purest and simplest form, gives the Parole Board the ability to increase the maximum time between hearings for parole hearings from 12 months to 2 years. I think I am right in referring to clause 10, which inserts new section 21A. If the Parole Board does not give an offender parole, it then has the ability to set a date for the next parole hearing if it does decline that parole. If that date is 12 months beyond the hearing that has taken place, I think what you do give there is an incentive for that offender—I guess, you know, in a crude way—to shape up and to have these activities that they are given as targets. This is to ensure that if they do come back at a later date—and I know the word “milestones” was not used in the legislation; it was changed to “relevant activities”—they have taken some action to get back on to, I guess, what you could call the road to redemption.

If some of those activities were fulfilled, then I guess the Parole Board would say: “Yes, you can come back to the Parole Board to have your eligibility assessed.” In some cases, if by some miracle someone before that date came forward and came through with these relevant activities well before 12 months, there is the ability for the Parole Board to bring that parole hearing forward. So I believe—and that is why we on this side of the Chamber are supporting this legislation—that the balance between those three main factors has been struck. I understand from some of my other colleagues that it was a relatively good working relationship between members on this side of the Chamber and members on the other side of the Chamber. I know there is some dissent from the Green Party, but all in all most members around that select committee table believe that the balance that was struck is the right one.

I know that there will be some people out there who would say that the offenders really do not deserve any more rights. As Kelvin Davis has said, that is probably the view of the Sensible Sentencing Trust. But we would say that the balance has been struck because there will be a lot fewer—

DAVID CLENDON (Green): As we clearly understand from people giving commentary on this bill, the primary purpose of the bill is to extend the permissible period between parole hearings when it is the judgment of the board that offenders are highly unlikely to be proven to be eligible for parole. I would just like to put a little bit of context around that, and it picks up on some commentary I heard a few moments ago.

I think it is worth reminding ourselves of the value of parole and of the importance of having parole available as a management tool, in a sense. It has been highlighted in recent days by the phenomenon, if you like, which has now got some public traction, of people who have offended seriously overseas—New Zealanders who have been sentenced internationally to long jail terms, in many cases—who complete their terms, who are put on aeroplanes, and who are then dropped back in New Zealand. That is something that has existed recently. There is one particular case that has excited some public commentary. Actually, I share the concern of those people who think it is entirely undesirable that a person does a long term in prison, is literally taken from their cell to the airport, and is, effectively, dropped in New Zealand with no further controls, no constraints on them, and no ability for the State—for the community—to impose any management on them.

I do not think the solution to that is a registry. I think that, as I say, the phenomenon, for want of a better word, does highlight the importance of parole and the value of parole as a means for us to facilitate the transition from custody back to reintegrating people into the community. In respect of what our colleague Kris Faafoi has just stated, the Greens would disagree, actually, that the correct balance has been struck in this legislation. We are not convinced that the provisions in it are actually the optimal provisions. Frankly, we think that there are three key drivers of the bill and of the technical provisions that are contained in it. One is cost saving, and, yes, it is expensive to run the parole process. Another is the importance—the value—of keeping people optimally managed, if you like. And, of course, there is the protection of victims to prevent the re-victimisation of people—and I do think that that is overstated.

Dealing with the first point first, I think the cost-saving argument is the argument that is put forward least often in respect of this legislation, for the reason that it is actually a very weak argument. I investigated this with some questions for written answer at an earlier process. I asked what the methodology was behind establishing the numbers we were given and determining what the cost savings were and the reduction in the likely number of parole hearings. Frankly, there was no methodology. The answers we got back indicated that there was a best guess made as to the percentage reduction in parole hearings that would be facilitated by this legislation. Then, as is beloved of economists, from that point on, having established a very shaky assumption, there was some sophisticated formula applied to that assumption, which generated what looked like some defensible numbers.

I think the matter of cost is a very weak justification for this legislation. It is not proven. If you save the cost of a hearing, which we think is around $1,000, give or take—it varies depending on circumstances—then for every 90 hearings that are not held unnecessarily, that is $90,000. You only have to end up, as a result of that process, with one inmate serving 1 year longer in jail than they might otherwise have, and that cost has gone away. It is in round figures, but I think the current cost of keeping somebody incarcerated is $95,000 or $97,000—that sort of figure.

The argument that we are protecting victims is a very powerful argument, and, yes, we do want to protect victims. We do not want people constantly revictimised. We have heard from individuals of the stresses imposed on them because they feel obliged to attend these parole hearings, which in some instances are coming around fairly regularly. In fact, it is only a very small percentage of people who take the opportunity to attend the hearings or to be involved in them. There is, I think, a popular misconception that the victims are obliged to face the person who offended against them, and that simply is not the reality. At no point is a victim obliged to confront an offender. The Parole Board is much more sensitive. It manages these people very carefully. But I think the key point is that, from memory—and I am relying only on memory; unfortunately I do not have the note here—something like 3 percent of victims actually attend Parole Board hearings. With all due respect to those people—

Hon Phil Goff: 7 percent.

DAVID CLENDON: —7 percent, thank you—and their obvious concerns, I think it is possible to overstate the extent to which their attendance at those hearings actually influences the decision of the Parole Board. I do say that with the greatest respect to the board and to the victims. Clearly, the Parole Board will expect that somebody who has been the victim of a horrendous crime, or the loss of a family member to a murder, or who has themselves been assaulted or grievously harmed, will, of course, want that person to stay in jail for the longest term possible. I do think the assumption that that carries significant weight with the Parole Board is possibly overstated.

I guess our compelling concern about this legislation is the process that is set up around what we no longer call milestone events but relevant activities. The bill rests on an assumption that inmates will be motivated to complete the various programmes, whatever they are, that the board says they need to complete before they can be considered for parole. We know, because the Department of Corrections has told us that it is already struggling to schedule inmates on available programmes. I have many letters on my files, and I am sure other MPs have similar letters, from inmates who are saying: “Look, I want to get on to this programme. I know I need it.” There is a benefit to the inmates and to wider society for these people to do these programmes, and they simply cannot get access to them because the programmes are oversubscribed. The scheduling difficulty, the Department of Corrections has said, is partly a technical one. It does not have the IT facility, and it is not on the horizon that it will get the technical IT capacity to facilitate that scheduling.

I support the work that has been done by the previous Minister, and I am sure the current Minister will continue it, to broaden the range of programmes available. I am pleased that the Government, over the last term particularly, actually started talking more the language of rehabilitation and reintegration. There is more goodwill being displayed towards dealing with these people, healing them, and dealing with the underlying causes of their offending. There is no point in putting these relevant activities requirements into legislation if, in all good conscience, inmates are being denied access to them because there is simply not the infrastructure behind them. Build the infrastructure, create the capacity within the system to deliver these very positive and helpful programmes, be they for drug and alcohol issues, mental health issues, basic literacy, or work skills, whatever they might be. Create that infrastructure first, and then put the obligation on inmates to pursue them.

We think that although there is some well-intentioned aspects and provisions in this bill, underpinning it are some false assumptions, we believe—some false expectations. We do know that the requirement that inmates must first accept guilt is one of the provisions before they can get into some of these programmes. On the one hand, yes, it does oblige people who have offended to confront their offending and to honestly accept that they do have a debt to pay. But there is also such a thing as people in prison who are innocent and who continue to express their innocence and, as a number of submitters have pointed out, the provisions in this bill put those people in a very difficult position. They are actually forced to lie, despite the fact that they genuinely believe themselves to be innocent, and there are examples we know of where we have incarcerated innocent people. It does not happen that often, but it does happen. It puts those people in an untenable situation. It is also contrary to our own New Zealand Bill of Rights Act, which says that people ought not to be compelled to make those sorts of false confessions, if you like, or to implicate themselves when they know very well they have not offended.

TODD BARCLAY (National—Clutha-Southland): As a new member on the Law and Order Committee, I would like to acknowledge the current and former members who have sat on the committee and considered this bill. I understand from hearing the contributions that have been made today that they have done a great job of trying to strike the right balance of interests from an administrative perspective, an offender’s perspective, and a victim’s perspective. However, the contribution of Green MP David Clendon tended to put more of an emphasis on the minority of offenders who may well be in an innocent position and who are being forced to go into some form of programme that they do not necessarily agree with. I think I would like to make my contribution more focused on the victims because this Government puts victims at the heart of the justice system, and our plan to reduce unnecessary parole hearings for offenders will reduce stress for the victims of these crimes.

As a party we take a strong stance on law and order, and the Parole Amendment Bill implements our post-election action plan to reduce the number of unnecessary parole hearings where the offender has little prospect of release. Each year there are about 5,000 parole hearings and, on average, offenders have about three hearings before they are granted parole. The Parole Act will be changed to extend the maximum postponement period for offenders serving life sentences, or indeterminate sentences, and determinate sentences of 10 years or more, from 3 years to 5 years for the most extreme cases. It will also extend the maximum interval between parole hearings from 1 year to 2 years.

I want to go back to victims because this is the main crux of my contribution tonight. The next point I want to make is around the fact that this bill provides for victims, offenders, and other authorised persons who attend parole hearings to do so remotely, such as via videoconferencing, because it is not a comfortable experience for all victims to appear before the Parole Board. I appreciate that it is not a requirement in all cases, but whether or not they are there in person, they are certainly there in emotion, knowing that the hearing is taking place. So, for victims of crimes, should they be faced with the very stressful prospect of parole hearings year after year when an offender is clearly not safe to release into the community and has made little or no effective rehabilitation? They should not be faced with this stressful prospect, and that is what the intention of this bill tries to bring forward.

This Government was elected to improve the justice system for those who find themselves in it through no fault of their own. We have received a clear mandate to do so, and over the last 6 years we have made a number of significant improvements to the justice system. We have put 600 extra police into the front line, we have seen a 155 percent increase in foot patrol police officers between 2011 and 2013, and we have given our police new tools such as Tasers, lock boxes in police cars, DNA testing of offenders, and smartphones and tablets. Just the rolling out of smartphones and tablets alone is saving more than half a million police hours each year, which is the equivalent of about 345 extra police officers. As a result we have seen the lowest crime rate in 35 years. Reoffending is down by more than 12 percent. This is partly because more prisoners are receiving drug and alcohol treatment before they leave prison, and it is also partly because all prisoners are now receiving education, with individual learning plans designed individually for them.

It is in the interests of taxpayers, prisoners, and victims that these prisoners will be integrated into society through these added social systems that are being put upon them while they are in prison to try to help them get back into a system where they can enter the workforce and enter society without feeling like they are ostracised before they enter back into society. So this Government is putting victims at the centre of the justice system with tougher punishments on offenders, new laws, and new services for victims. Although we can never legislate away the pain and suffering faced by victims, the changes proposed in this bill will certainly help ensure that victims are not revictimised by their participation in this process. Thank you.

Hon PHIL GOFF (Labour—Mt Roskill): I just want to pick up on a couple of points to concur, in some respects, with my friend and colleague David Clendon, but also to disagree in other respects. First of all, the critical thing about parole is that it is absolutely necessary in terms of reducing the risk of reoffending by those released from prison. We have had the phenomenon of people being returned from Australia who are not subject to parole conditions and about whom we do not have sufficient information. That is a real concern. That is something else that I hope the Minister can pick up. Good luck with that. I struggled with the state and federal level of the Australian Government to try to get that information—they said nice things but did very little—but it is something that we absolutely need to address.

I am saying that to highlight the fact that although some people say: “Truth in sentencing—if you’re sentenced to 6 years, you should serve right up to the last day.”, all of the evidence that is available to us, as David Clendon also pointed out, is that where people are released at the end of their sentence without provisions for parole and the conditions associated with parole, the level of reoffending by those individuals is much higher. The two huge advantages of parole are, one, that there are a lot of people in our prisons who when they have served a large part of their sentence and done the rehab courses are not going to reoffend. At that point, keeping them in prison serves very little purpose at a very high cost. If we abolish parole tomorrow, as sometimes the ACT Party and sometimes the right wing of the National Party recommended, that would come to hundreds of millions of dollars. Perhaps the reason the National Party is a little bit more reform-minded is that the Minister of Finance is conscious of how much the prison system costs to run.

The much more important thing is that when a person is released on parole, they are released on conditions. They must report weekly, for example, to their local parole office. They talk to their probation officer. They are under the oversight of the probation officer. They may be subject to conditions as to where they live, as to where they work, and to whom they can associate with. So the point about parole is that it actually enhances the safety of the community. And if you did not have parole and there was the so-called truth in sentencing, actually our reoffending rates would be higher, people would be less safe, and the system would be a whole lot more expensive.

Where I still have trouble coming to terms with the Green Party minority view is that I am not quite sure specifically what it is that the Green Party is objecting to in this legislation. As I pointed out before, the Parole Board, and the people on the Parole Board whom we would respect, very much supported this legislation and made the point, for any law and order warrior, that if you extend the period of time between parole hearings, this was not likely to result in longer periods in prison and, indeed, may well result, Justice Gendall said, in less time in prison.

I want to note too that the Parole Board does have the ability, and the inmate has the ability, to bring forward their parole hearing, within the flexibility that this system provides. Where a person has met the objective set for their rehabilitation, either the manager of the prison or the offender can apply to have an earlier parole hearing, and that makes sense as well. So flexibility works both ways, but the important thing about it is that with that flexibility there is one of the new requirements on the Parole Board, as set out in this bill, which is that the Parole Board must set the date for when the next hearing will be heard by and must also identify the activities that the offender needs to address. When they do that, they provide that information to not only the offender and the prison manager but also the police and the victim. So the victim is kept better informed about where the offender has got to and what they still need to achieve before they can be considered for release. I think that that is very positive.

I think that the other things that are set out in the bill are largely not designed to disadvantage the offender; they are designed to make the system more effective. So attendance at hearings can be by phone or video conference, and that applies more and more in the justice system, and that is a good thing.

JAMI-LEE ROSS (Junior Whip—National): I move, That the question be now put.

Motion agreed to.

A party vote was called for on the question, That Parts 1 and 2 and clauses 1 to 3 be agreed to.

Ayes 104

New Zealand National 59; New Zealand Labour 32; New Zealand First 11 ; ACT New Zealand 1; United Future 1.

Noes 16

Green Party 14; Māori Party 2.

Parts 1 and 2 and clauses 1 to 3 agreed to.

The result corrected after originally being announced as Ayes 94, Noes 16.

Bill to be reported without amendment presently.

House resumed.

The Chairperson reported the Energy (Fuels, Levies, and References) Amendment Bill without amendment, the Gambling Amendment Bill (No 2) with amendment, and the Parole Amendment Bill without amendment.

Report adopted.

The House adjourned at 9.56 p.m.