Wednesday, 22 July 2015

WEDNESDAY, 22 JULY 2015

WEDNESDAY, 22 JULY 2015

Mr Speaker took the Chair at 2 p.m.

Prayers.

Oral Questions

Questions to Ministers

Economic Outlook—Fitch Ratings Report

1. Dr JIAN YANG (National) to the Minister of Finance: What recent reports has he received on the performance of the New Zealand economy and the Government’s management of its finances?

Hon BILL ENGLISH (Minister of Finance): I recently saw the report of international credit-rating agency Fitch Ratings. This assessment affirmed New Zealand’s long-term foreign and New Zealand dollar Issuer Default Ratings at AA and AA+, respectively, and the outlook on both is positive. This rating reflects the resilience of the New Zealand economy. Kiwi households have been saving rather than over-borrowing for 5 consecutive years now. Our net international investment position, which measures our international indebtedness, has strengthened from 85 percent of GDP in 2009 to 64 percent of GDP today. The Reserve Bank has also strengthened, crucially, the resilience requirements on our banking system.

Dr Jian Yang: What are some of the factors that Fitch Ratings identified when making its assessment?

Hon BILL ENGLISH: There were a number, but I will mention just one or two. It pointed out that the Government’s annual operating deficits have continued to narrow, and it pointed out that the New Zealand public sector has relatively low debt, which stood at—according to its methods—35.7 percent of GDP in 2014, compared with a median of 72 percent of GDP across OECD developed countries. The Government is getting on top of the deficit, and we will begin to reduce debt as we achieve surpluses.

Dr Jian Yang: What is Fitch Ratings’ view on the outlook for the Government’s finances and for New Zealand?

Hon BILL ENGLISH: In terms of the outlook for New Zealand, Fitch Ratings noted that our growth was 3.3 percent in 2014, ahead of other AA category countries. It noted lower agricultural production due to drought earlier this year and weaker demand following the fall in dairy prices, and it expects that the pace of economic growth in New Zealand will ease to around 2.8 percent in 2015. That is not surprising, but it does show that we are on track for sustainable moderate growth.

Dr Jian Yang: Does that mean that there are no risks to New Zealand arising from recent international developments such as those negotiations occurring between the Greek Government and other eurozone Governments?

Hon BILL ENGLISH: No. The rating agency assesses, essentially, the capacity of New Zealand to be resilient in the face of those kinds of risks eventuating. And it is good news for the economy that Fitch Ratings believes the New Zealand economy is resilient, partly because of its relatively low debt levels and partly because of the flexible microeconomic policies that this Government is pursuing.

Flag Referendums—Cost and Support

2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his justification for the $26 million process to consider changing the flag that “It’s just sheer confusion with Australia. Even at APEC they tried to take me to Abbott’s seat”?

Rt Hon JOHN KEY (Prime Minister): I do. If the member was watching Television New Zealand a few weeks ago, he may have seen a reporter conduct an experiment in Times Square, New York, where only two out of 50 people correctly identified our flag; almost everyone else identified it as the Australian flag. I also stand by all the other reasons I have put forward for changing the flag, including that “Our flag is the most important symbol of our national identity and I believe that this is the right time for New Zealanders to consider changing the design to one that better reflects our status as a modern, independent nation,”.

Andrew Little: Was it worth spending over $8 million so far on the flag referenda when only 739 people attended the meetings and 99 percent of the “What do you stand for?” postcards he sent to Kiwi homes went straight in the bin?

Rt Hon JOHN KEY: I do. As I said yesterday to the co-leader of the Greens, of course some people turned up to the roadshow, but there have been 10,291 alternative designs. There has been 1.18 million people reached by Facebook. There have been 146,000 views of the New Zealand flag history. But one political party—one political party in this Parliament—as of an hour ago has as its policy: “review the design of the New Zealand flag involving flag design [experiments] … and with full public consultation and involvement.” That was the Labour Party, as of an hour ago. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! Before I call the member, the House will settle.

Andrew Little: Was it worth paying over $2,000 for each member of the public who attended the meetings, given that one of the attendees said he “came for the free cookies”?

Rt Hon JOHN KEY: I do think it is actually worth spending, potentially, $26 million—I suspect it will be a little bit less. But I do think it is worth spending that money on such an important constitutional issue. If the member is now telling New Zealanders that if he was Prime Minister of New Zealand he would potentially change the length of the parliamentary term, the flag of New Zealand, or other constitutional issues with no involvement with New Zealanders, then I think that is a very interesting thing he should be saying.

Andrew Little: In light of that answer, and bringing things back to reality, has he actually read the public submissions on the standfor.co.nz website and seen that most of them say either “Keep the flag we’ve got.” or “Stop wasting our money on this vanity project.”?

Rt Hon JOHN KEY: Yes, I have seen some of those comments. It is interesting: if it is so much my project and my idea, why the hell is it Labour Party policy then? That is all I can say.

Tim Macindoe: What strong endorsements has the Prime Minister seen in support of changing the New Zealand flag?

Grant Robertson: No, he’s already used that one.

Rt Hon JOHN KEY: No, no, this is a different one. There have been many endorsements, but one of the strongest I have heard has come from a prominent New Zealander, and I like to listen to prominent New Zealanders. This person said: “My personal opinion is we should have something more relevant to an independent, small Asia/Pacific nation. I think a referendum is a suitable way to deal with an issue that can be very polarising. The elements I’d like to see in the flag are the Southern Cross, blue for the sea, green for the land and mountains, and a reference to our Māori heritage.” I am grateful for that support and those suggestions from Mr Andrew Little of—[Interruption]

Mr SPEAKER: Order! Would the House settle.

Rt Hon Winston Peters: Is it not a fact that we designed our flag in 1904, well before the Aussies copied it, and that there is only one—

Hon Member: You were there.

Rt Hon Winston Peters: Yes, but you look like you were there; I do not.

Mr SPEAKER: Order! Finish the question.

Rt Hon Winston Peters: Well, it was a terrible interruption. Is it not a fact that we designed our flag in 1904, well before the Aussies copied it, and that there is only one political party that would not join his flag committee, because we were opposed to changing our flag, and that that party is New Zealand First?

Mr SPEAKER: Either of those two supplementary questions.

Rt Hon JOHN KEY: I acknowledge that the member was involved in the debate in 1904 at the time. Secondly, I make this point. That is actually our third flag here in New Zealand. And, actually, if we want to have a symbol that probably represents New Zealand, in my view that is the silver fern. That is actually what is on the gravestones of those very brave men who were buried overseas prior to 1978. I do think a change of flag would be a great way of not only unifying our country but also taking a view to the world that New Zealand is an outward-looking, internationally competitive, great country with its own identity.

Andrew Little: Which of the following flag designs is his favourite, given his Government has spent over $800 on each of them: kiwi with a rainbow out its rear; whale—not Whale Oil Beef Hooked—with kiwi, sheep, and rainbow; laser kiwi; buzzy bee seen from above; or “Aotearoa: blow on the pie”?

Rt Hon JOHN KEY: Well, I accept that a whale is a mammal and not a fish, but the last Labour leader who came to Parliament dangling those out like that leader has was gone by lunchtime; I reckon he might be too.

Tim Macindoe: What documents has the Prime Minister seen in support of a change to New Zealand’s flag?

Rt Hon JOHN KEY: I have seen a document from a group that aims to “enhance knowledge, appreciation and pride in New Zealand’s identity, history, biculturalism, multiculturalism and other diversity, community resilience, distinctiveness, accomplishments and nationhood … through a review of the design of the New Zealand flag involving flag design experts and with full public consultation and involvement.” That was the policy of and remains the policy of the Labour Party.

Andrew Little: Rather than wasting money on meetings no one attends, postcards no one returns, and flags no one takes seriously, why not admit the truth that Kiwis do not want this—they do not want their money wasted on prime ministerial vanity projects?

Rt Hon JOHN KEY: If nobody wants this and it is a waste of money, then why was it Labour Party policy? That is the naked politics of this. The Labour Party wants to change the flag; it just does not want a National Government to do it.

Mr SPEAKER: Supplementary question—[Interruption] Order! Before the member—[Interruption] Order! I am trying to call for order and I am not getting much assistance from one person on my left.

Rt Hon Winston Peters: Is it not a fact that the reason he is so keen on changing the flag is that he spent so much time selling out the old one?

Rt Hon JOHN KEY: No. The reason I want to change the flag is that you can look at other Commonwealth countries that in their history have changed their flag. Let us take Canada, which did exactly that in 1965. Let us look at what Canada put on the gravestones of their brave men when they died in World War I and the likes. The answer is the maple leaf. Show me a single Canadian who would go back to the old flag that they had, which looked very much like our flag except it was red. This is a party and a country, I believe, of progress and change—a multicultural country that is outward looking, not a bunch of dinosaurs like them over there.

Andrew Little: Is this what he meant by being focused on the issues that matter: at a time when the New Zealand economy is rapidly going down the toilet, he wastes $26 million of taxpayers’ money on doomed referenda because he was once sat under the Australian flag?

Rt Hon JOHN KEY: Let us be blunt. If we want to have a discussion about being focused on the issues that matter, Andrew Little would be asking a question about housing, but he is embarrassed—he is embarrassed—about his use of Chinese names and the dodgy way he cooked the books. He might ask a question about prisons, but he knows that his member over there has overcooked things. He might even ask a question about partnership schools. But, no, this is called a squirrel—talk about anything other than the issues that matter, because he is so embarrassed about his own performance.

Rt Hon Winston Peters: Can I seek leave to table some research that shows—[Interruption]

Mr SPEAKER: Order! [Interruption] Order! The member will resume his seat. The member is seeking now to table a document. I cannot hear what it is in order to know what to decide. So I am asking the member now to repeat his point of order.

Rt Hon Winston Peters: I seek leave to table some research that demonstrates that Canada did not have an official flag until they adopted the maple leaf.

Mr SPEAKER: No, that information is, effectively, what is—[Interruption] Order! What the member is attempting to do is to table that document now to make a political point. That is not the point of tabling documents. If members want to research it, I am sure they can do so.

Rt Hon Winston Peters: Come down half prepared—

Mr SPEAKER: Order! Question No. 3.

Rt Hon Winston Peters: Well done, Mr Speaker. Thank you very much.

Mr SPEAKER: My pleasure.

Russia—Market Access

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

Rt Hon JOHN KEY (Prime Minister): The member nearly needed to flag away his question. The answer is yes.

Rt Hon Winston Peters: Well, if that is the case, does he stand by his statement with regard to trade with the Russian Federation: “Free trade deals offer real benefits with jobs and economic growth in New Zealand”; if so, why did he warn struggling New Zealand dairy exporters, many going broke, against trading with Russia?

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

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The question was not “did he warn”; I said “why did he warn”.

Mr SPEAKER: The member has been here a very long time. There were two parts to that supplementary question. The Prime Minister chose to answer the first part. That addressed the question. Further supplementary questions?

Rt Hon Winston Peters: Does he stand by his statement “Russia offers a wealth of opportunities for New Zealand exporters. Its food imports exceeded US$30 billion in 2008, making Russia the world’s fifth-largest food import market.”; if so, how can he stand by that statement when his Government has done worse than nothing to ensure that the Russian market is open to struggling New Zealand dairy exporters?

Rt Hon JOHN KEY: I do not have that quote with me. It sounds like it is fairly historic, but in answer to the first part of the question: if that is the case—and I will take the member’s word for it—yes.

Rt Hon Winston Peters: Given that his Government does not have any trade sanctions against Russia, does he not think that in the interests of struggling Kiwi farmers, his Government should prioritise access to the Russian market, and now—and it should have done it months ago—and, in the Security Council, a resolution to the Ukrainian crisis?

Rt Hon JOHN KEY: In answer to the first part of the question, no. I actually think that New Zealand should show solidarity with other countries that have applied sanctions on Russia because of the actions that it has undertaken. The reason that we do not have bilateral sanctions on Russia is to do with the fact that, actually, this Parliament will not give the Government the authority to do that, because it is blocked by the Labour Party.

Rental Properties—Legislative Changes

4. Dr PARMJEET PARMAR (National) to the Minister for Building and Housing: What are the costs and benefits of the recently announced changes to the Residential Tenancies Act 1986 that will require homes to be insulated and to have smoke alarms?

Hon Dr NICK SMITH (Minister for Building and Housing): The new requirements will see 180,000 homes insulated, at an estimated cost of $600 million. The benefits are reduced hospitalisations from both circulatory and respiratory illnesses, and reduced pharmaceutical costs, as well as fewer days off school and work. There are also savings in power bills from insulation. I am advised that the benefits equate to $2.10 for each dollar of cost. The legal requirement for smoke alarms is a no-brainer. It will affect 120,000 rental properties that currently do not have them, at a cost of $7 million. The record of fire fatalities shows a greater proportion in rental properties, and this measure is expected to save three lives per year. It is also expected to deliver benefits of $15.10 for each dollar of cost.

Dr Parmjeet Parmar: How do these changes to the Residential Tenancies Act build on previous initiatives to improve the insulation of homes?

Hon Dr NICK SMITH: The first priority of this Government was getting on and insulating all State houses. There were 30,000 of them. The second step was in respect of Warm Up New Zealand, where the Government provided subsidies for insulating homes, and that is on schedule to deliver 290,000 houses with retrofitting of insulation. This further initiative is 180,000 homes. So through initiatives from this John Key - led Government, that is insulating 500,000 homes. That will provide 1.2 million New Zealanders with a warmer and healthier home.

Phil Twyford: What about the heating in private rentals?

Hon Dr NICK SMITH: I make the comparison—for the member who interjects—that that is 500,000 homes. The previous Government insulated fewer than 20,000 homes in its 9 years.

Dr Parmjeet Parmar: Why did the Government decide not to proceed with a comprehensive housing warrant of fitness?

Hon Dr NICK SMITH: Our work showed that it was neither cost-effective nor practical. The cost of inspections alone was estimated at $225 per property per year, which would be added on to rents. We found that the really important standards—like a home being waterproof, being free from damp, and having safe electrical fittings—were already covered in the regulations, and the issue was one of enforcement. We found on the lesser issues—the likes of safety stays and safety visibility strips on windows—that it would have been overkill to prohibit the renting of a house where those measures were not there and that a better tool was education. Our approach of focusing on insulation and on the issue of smoke alarms, in our view, delivers the best gains at the least cost.

Dairy Price—Forecasts

5. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: When did he first become aware that there was an international glut of dairy products and does he stand by his reported comments that he has no plans to take active steps to diversify the economy in response to falling dairy prices?

Hon BILL ENGLISH (Minister of Finance): In respect of the first question, around the same time as everyone else. One of the clear signals of expanded supply in the global dairy market was when prices started dropping in the global dairy trade. In respect of diversifying the economy, I would say that, first of all, under the excellent leadership of the Hon Steven Joyce, the Government’s programme through the Business Growth Agenda is encouraging a range of industries to develop in New Zealand. Secondly, right now I would say the relative price signals for the dairy industry in respect of any other investment in New Zealand are probably doing a pretty good job of diversifying the economy.

Grant Robertson: Did he miss the Goldman Sachs report in July last year that said there was going to be a 5-year international dairy glut, or, like his colleague the Minister for Economic Development, did he just think that was a laughing matter at the time?

Hon BILL ENGLISH: I would be surprised if I had not read that particular piece of commentary, but, of course, there is always a range of opinions in the market, and recent experience with the dairy price has been that almost all of that opinion has underestimated the extent of excess supply and, therefore, the short-term drop in the prices. But, unlike the member, we have a positive outlook for the dairy industry in the future. Unlike the Labour Party, we do not believe that New Zealand has far too much dairy and that the industry ought to shrink, which appears to be what that member thinks.

Grant Robertson: Is he aware that dairy, at 20 percent of New Zealand’s exports, represents the same percentage of exports as iron ore is for Australia, and, given what has happened to the Australian economy, does he not think he should be just a little bit more energised in his response to the collapse in dairy prices?

Hon BILL ENGLISH: The fact is that if the dairy industry is 20 percent of exports—and, actually, it is a bit less than that—it is because it has been a successful, globally competitive industry. It would be a bit like asking why New Zealand does not diversify from rugby because the All Blacks are too successful. We have got all our eggs in the All Black basket. The fact is that if it is a well-performing industry, we would hope that it would keep performing. If you think that having too much dairy is a problem, look what happens when you have a bit too little.

Grant Robertson: In light of that answer, does he therefore believe that today’s forecast from the BNZ of a payout of $3.80 per kilo for 2015-16, and a downside scenario payment of $2.80 per kilo, represents a serious problem for the health of the New Zealand economy, or is it like John Key said on Monday, and it does not really affect 95 percent of people?

Hon BILL ENGLISH: Of course it is of concern, but this is an industry that has characteristics that the member would not be familiar with, because he has always worked in the public sector, and that is that it has developed the resilience and the flexibility to deal with commodity cycles. Unlike that member, we have confidence that the industry will deal with the cash-flow problems—quite serious cash-flow problems—that flow from these very low dairy prices. In any case, the lower exchange rate will cushion the effect on the dairy industry, but also encourage the expansion of tourism, in particular, along with international education, and underpin the profitability of meat and wool, horticulture, and the film industry—all industries that are succeeding reasonably well at the moment.

Grant Robertson: Is it correct that the NZX dairy futures today predict a further 16 percent drop in August to a US$1,550 a tonne price for milk solids—only $50 more than the price that would see a $2.80 a kilogram payout?

Hon BILL ENGLISH: That may be the case and if that eventuality became a reality, of course that would be of concern. But the member seems to be suggesting that the New Zealand Government can take some action about the price, which it cannot because it is a world price. It is not a Fonterra problem or a Fonterra price; it is a world price. Secondly, I would have thought that if the member is concerned about diversification in the New Zealand economy, then the lower the dairy price the more likely you are to get diversification of investment into other sectors. That is pretty self-evident.

Grant Robertson: So in light of that answer, can the Minister of Finance confirm that his only path to real diversification of the economy is the collapse of the dairy industry?

Hon BILL ENGLISH: No, I am simply pointing out that unlike the Labour Party and the Greens, we are not pleased about low dairy prices. We actually like our dairy industry to be big and strong and successful, and in the long run we believe it will be. Alongside the market pricing, the Hon Steven Joyce is leading a programme that is having a positive effect on diversifying the New Zealand economy. But the strongest signal for diversification is the uplift in profitability around tourism, around horticulture, and around IT, which is occurring because of the drop in the exchange rate over the last 2 or 3 months.

Grant Robertson: How does he think that the success of Steven Joyce’s great diversification strategy is reflected in the lowest levels of business confidence, consumer confidence, and employer confidence that we have seen in New Zealand in many years; how is that successful strategy going?

Hon BILL ENGLISH: Of course prices go up and down, and confidence goes up and down often in relation to prices and in relation to what people are reading in the media about the prospects for the world economy and the New Zealand economy. Diversification amounts to people making risky investments in new industries or expanding industries. Unlike the member, they take a view longer than 2 or 3 months. In fact, some of those investments have to be 20-year investments. That is how a good economy runs.

Carbon Emissions—Target Setting and Potential Initiatives to Address

6. JAMES SHAW (Co-Leader—Green) to the Prime Minister: Does he stand by his answers to Oral Question No. 4 yesterday?

Rt Hon JOHN KEY (Prime Minister): Yes.

James Shaw: Will he be prepared to adopt a more ambitious climate target if it can be shown how New Zealand can achieve greater emissions reductions than 11 percent by 2030 even without including agriculture?

Rt Hon JOHN KEY: As I said in the House yesterday, the Government has set what I think is a fair and balanced target of the 30 percent reduction of the 2005 base by 2030. I have indicated to Parliament that the Government is prepared to do more if we can find an answer to our agricultural emissions, which represent about half of the emissions that New Zealand has. I think that is set in about the right place.

James Shaw: Does he accept that an increase in renewable electricity generation from 80 percent to 100 percent can reduce New Zealand’s emissions by approximately 5 megatons and therefore enable New Zealand to take a more ambitious climate target to Paris?

Rt Hon JOHN KEY: I do not have those details with me, but I will accept the member’s word that it is probably right. What I would say is that we are one of the countries in the world with the highest levels of renewable energy already. The Government’s stated goal is to get to 90 percent, and we will be working hard to do that. Whether we can get to 100 percent, and what the cost implications of that would be, I do not know, but I suspect if you look at the fact that you would have to close the Huntly power station and you would not even be able to replace Huntly with combined-cycle gas, that could be a very expensive process.

James Shaw: So does he agree with Ministry of Transport advice that if one-third of New Zealanders switched to electric cars we could reduce carbon emissions from transport by over 20 percent and therefore enable New Zealand to take a more ambitious climate target to Paris?

Rt Hon JOHN KEY: Yes, the Government supports the view that electric cars have a strong place in New Zealand society, and I suspect that as they get a bit cheaper, you will see more people actually taking up electric cars. New Zealand is well placed for that because the electricity that would drive those cars is largely going to be renewable. So, again, that makes sense. But you have to look at the overall costs to consumers. We have to get to a point where they make that choice that it is economic for them to do that. We have to get to the point where we can have enough of that electricity generation coming from renewable sources. But I think the Government is working on a plan to get there on all of these matters. I stand by the view I said earlier: the Treasury advice the Government has received is that the target we have set is actually a bigger cost share to New Zealand businesses and consumers than, for instance, the Europeans, who arguably have a bigger reduction target because it is easier for them to achieve that.

James Shaw: Does he accept that if we planted half our marginal pastoral land in pine forest while letting the other half revert back to native forest, we can capture up to 24 megatons of carbon, thereby enabling New Zealand to get to take a more ambitious climate target to Paris?

Rt Hon JOHN KEY: Again, they are the member’s numbers, but I will accept them at face value. Again, there comes a cost with doing all of those things, and the Government has been involved in assisting with, and having, programmes that lead to marginal planting.

James Shaw: In light of the evidence that there are plenty of practical, pragmatic steps that New Zealand can take, using existing technology and even without including agriculture, will he now work with us to ensure that New Zealand can take a more ambitious climate target to Paris?

Rt Hon JOHN KEY: No, because as I said yesterday, it is quite legitimate for the Greens to have their own policies and to take those to the next general election. I think they should be honest, actually, with New Zealanders about the cost of those. The member says that here are all these things that you could do, but he does not say what the actual costs to businesses and consumers would be, and the answer is that the cost would actually be considerable. The member stands up and tells us to get more renewable energy and a lower emissions profile from agriculture, and yet in the same breath I know he is deeply opposed to changes to the Resource Management Act that will allow us to convert Huntly from coal to combined-cycle gas. He cannot have it both ways.

James Shaw: Is it not time for National to get up to speed on the numerous economic studies, the latest being from the London School of Economics, which shows that the majority of emissions reduction can be achieved in a way that has a net economic benefit to New Zealand?

Rt Hon JOHN KEY: I think the member does a disservice to the New Zealand Treasury. We have a lot of very bright people who work there alongside many other agencies that have looked at that matter. The member should look at the official advice that the Government received, but the official advice from Treasury, as I last recall it, is that the cost of New Zealand carrying out a target of even a 30 percent reduction off the 2005 level comes with a greater cost than in comparable countries.

Overseas Investment Rules—Register of Property Buyers

7. RICHARD PROSSER (NZ First) to the Minister of Finance: Is he still sceptical about how effective a register of foreign property buyers would be; if so, why?

Hon BILL ENGLISH (Minister of Finance): Yes, I am sceptical, because a real-time, full register of who owns all the property in New Zealand would be an expensive and high-compliance method for getting sufficient data on which to make policy decisions. We think it is reasonable that we collect more information that is useful but not onerous in property transactions. That is why from 1 October all buyers of property other than the main home will have to have an IRD number, and non-residents will have to have a New Zealand bank account and provide their country’s tax ID number. We believe that this is a lower compliance way of collecting data that we would actually use.

Richard Prosser: Given that answer, is he aware that a number of other jurisdictions have implemented such registers without apparent difficulty?

Hon BILL ENGLISH: In the jurisdictions where it sounds like they have got a register, it is not evident that it is actually having any impact. For instance, in Australia, despite nominally having a register—or having a list of foreign buyers at least, which is a different thing—there seems to have been mass non-compliance with the related policy. It simply proves that a register on its own makes no impact on who buys what; but it is a very expensive way of knowing who has already bought something.

Richard Prosser: Will he instruct Landcorp, which is currently managing the former Crafar farms on behalf of Shanghai Pengxin, to tender for the acquisition of those farms in order to bring them back into New Zealand ownership; if not, why not?

Mr SPEAKER: It is a long way from the original question but I will allow it.

Hon BILL ENGLISH: No, it is not obvious that that would be an advantage either to Landcorp or to the New Zealand economy.

Richard Prosser: Does he agree that New Zealand farmland is better in the ownership of New Zealand - resident local farmers rather than foreign corporations; if not, why not?

Hon BILL ENGLISH: Fortunately, politicians do not get to decide exactly who owns what in an open-market economy. But I would point out to the member that there has been a cycle over the past 30 or 40 years of both foreign ownership and corporate ownership of farmland being at times popular and then becoming unpopular. In the long run, the New Zealand owner-operated model—those who live it and love it—tends to be the only one that can make money out of New Zealand farmland.

Better Public Services Targets—National Immunisation Schedule

8. Dr SHANE RETI (National—Whangarei) to the Minister of Health: What recent reports has he received on the effectiveness of the child immunisation programme?

Hon Dr JONATHAN COLEMAN (Minister of Health): The Government has made the immunisation of young children a top priority. The pneumococcal vaccine, which forms part of the free National Immunisation Schedule for babies and young children, is proving to be very effective. The latest data from Environmental Science and Research shows the rate of pneumococcal disease has decreased by 62 percent between 2007 and 2014 for children under 5. Most of the pneumococcal strains covered by the vaccine have now been almost completely eliminated in New Zealand children, which means fewer kids with ear infections, pneumonia, septicaemia, and meningitis.

Dr Shane Reti: How does this fit into the Government’s Better Public Services programme?

Hon Dr JONATHAN COLEMAN: In 2007 our immunisation rates were amongst the worst in the developed world. That is why this Government has made increasing immunisation rates one of its 10 Better Public Services result areas. The latest immunisation results show that 93 percent of children aged 8 months have been fully immunised. That compares with a shocking rate of 67 percent in 2007. We are on track to meet later this year the 95 percent target of children aged 8 months who are immunised, which is great news for Kiwi families.

Housing Market—Property Speculation

9. PHIL TWYFORD (Labour—Te Atatū) to the Minister of Finance: Does he stand by his statement about whether inequality was a problem in the Auckland housing market, “We’ve been concerned about that for some time, that there’s part of Auckland where there’s been really no new supply of lower value houses that low and middle-income families can afford”?

Hon BILL ENGLISH (Minister of Finance): Yes, and it is time that the member agreed with this. As I have said for some time, council planning rules increase inequality because of land use rules that limit heights, prevent subdivisions, increase land costs, and impose delays on the provision of new housing. Of course, the lower the value of that housing, the more impact it has. As the Productivity Commission recently pointed out, it is affordable housing that is most affected by these rules. That is why the Government is working with the councils that are the deciders and regulators in respect of housing supply to cut red tape, free up land and infrastructure constraints, and get more houses built.

Phil Twyford: What advice has he had on whether inequality will be increased or decreased by high levels of property speculation, reducing the opportunity for young New Zealanders to get into their first home?

Hon BILL ENGLISH: High levels of property speculation are a very obvious symptom of constrained supply. There are not high levels of property speculation in Upper Hutt or Invercargill because there is not much evidence of constrained supply relative to demand. The best response to high levels of speculation, if that is what is occurring, is to expand supply as quickly as possible. In that respect the member’s cooperation in persuading the Auckland Council to act decisively on this matter would be appreciated, but, actually, the Labour Party does not really want to help out.

Phil Twyford: Why should people have any confidence in his main housing supply initiative, the special housing areas, when only 5 percent to 10 percent of the houses built are affordable—at current prices, that means $560,000—and fewer than 300 houses have been built in those special housing areas in nearly 2 years?

Hon BILL ENGLISH: It is possible that the member does not have all the facts, but, in any case, the special housing areas were a response to the fact that the core Auckland planning process simply could not deliver any new supply of any scale because it was designed to stop new supply—with the support of that member and the councillors from his party on that council, who have spent the last 15 years making sure Auckland did not grow. That is why we had to have special housing areas. They are not perfect but they are a lot better than what was there.

Phil Twyford: What are the advantages to New Zealanders, if any, of allowing non-resident foreigners to trade our houses for capital gain?

Hon BILL ENGLISH: I do not know why the member is so scared of repeating his definition of non-resident traders in houses. Last week he was very clear who they were. But, of course, foreign investors make some contribution, because if they invest in housing that expands supply, that is good, and, in fact, when the price is pushed higher, it encourages more development and more supply. However, we are getting on with building houses; we are not sitting there going through the phone book trying to decide which migrants should remain homeless.

Phil Twyford: Why is his Government willing to implement anti - money-laundering rules at the request of the President of China, but unwilling to restrict non-resident foreign buyers, as the majority of New Zealanders want?

Hon BILL ENGLISH: The anti - money-laundering rules are not being made at the request of the President of China. In fact, it has been a global effort to slow down the flows of dirty and corrupt money around the world, and the anti - money-laundering rules were put in place some years ago—

Hon Gerry Brownlee: By Labour.

Hon BILL ENGLISH: —in fact, probably by the previous Government. We are simply requiring any foreign buyer to open a bank account so that they have to go through those thorough processes of identification. That may stop some foreigners buying houses in New Zealand.

Offenders—Deported Offenders Register and Other Initiatives

10. JONO NAYLOR (National) to the Minister of Justice: What announcements has she made about improving the oversight and supervision for offenders deported to New Zealand?

Hon AMY ADAMS (Minister of Justice): Last week I announced the completion of work to establish a register of offenders deported to New Zealand after being convicted of a crime overseas. The register, operated by Police, will improve on the current efforts to manage deported offenders by providing a central, systematic source of information for all justice sector agencies to work from. It will help to ensure that relevant information on New Zealanders who have committed crimes overseas and are then returned to live in our communities is available to those who need it.

Jono Naylor: What other measures is the Government working on to improve the way that we manage offenders deported back to New Zealand?

Hon AMY ADAMS: The deported offenders register is one of three streams of work under way to improve the way that we respond to offenders being deported back to New Zealand. Work is also well under way to improve information sharing with Australia, where the majority of deported offenders come from. Last week my colleague Hon Peseta Sam Lotu-Iiga signed a memorandum of cooperation with his Australian state-level colleagues to advance this work. Finally, we are also developing measures that will enable monitoring conditions to be imposed on deported offenders similar to those that we impose on prisoners released from New Zealand prisons, in order to better protect the public and help the offender to reintegrate into society. I look forward to updating the House further as this work progresses.

Housing Market—Low-income Households

11. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his statement that “You certainly wouldn’t want to say to a low-income family they can never own a home, because I believe that they can own a home.”?

Rt Hon JOHN KEY (Prime Minister): I stand by my full statement. I was asked how realistic it was for people on low and middle incomes to aspire to own a home in Auckland, and I said that it depends on their circumstances, and they are many and varied. It depends on their family make-up, and what sort of property they would buy. It depends on where they are prepared to live. It depends, long-term, on interest rates. But you certainly would not want to say to a low-income family that they will never own their own home, because I believe that they can own a home, but we will have to work hard to make sure we produce as much supply as we can.

Metiria Turei: How does the Prime Minister seriously believe that low-income families in Auckland can own their own home—notwithstanding all the conditions he wrapped around that statement—when more than 80 percent of the homes sold in June in Auckland went for more than $500,000, pushing them well out of the reach of low-income families there?

Rt Hon JOHN KEY: Of course it is far more difficult for a low-income family, and the Government acknowledges that. But there are plenty of low-income families that buy homes. You only need to go and ask the Tindall Foundation, the housing foundation that is helping a lot of low-income families into homes.

Metiria Turei: Well, can the Prime Minister tell the House how he believes a low-income family—that is, one earning less than $700 a week—can, first, afford to save a 20 percent deposit of $90,000 for a house worth $450,000, then meet the weekly mortgage repayments of around $446 a week, and still feed and clothe their family?

Rt Hon JOHN KEY: I am glad that member is not running the country, because, quite frankly, firstly, she does not understand the policies—for a start off, it is 10 percent under a Welcome Home Loan—and, secondly, she lacks horribly in ambition. If the member wants to go and tell every low-income family in New Zealand that they should have no ambition to do better in life, to be able to own their own home and to try to achieve that goal, she is welcome to it. I think it is possible for people to be able to do that. I accept that it is extremely difficult, and more difficult for low-income families, but there are some very inexpensive homes, even in a place like Auckland.

Metiria Turei: Is this not just yet another example of a Prime Minister entirely out of touch with the reality of the lives of low-income families, and of his Government being simply uninterested and, worse, incapable of delivering policies that will enable these families to own their own home?

Rt Hon JOHN KEY: No, I think the member is just so negative and so toxic for the Greens’ brand that it will not be very long before she is replaced by Julie Anne Genter.

Mt Eden Corrections Facility—Serco’s Performance and Incident Reporting

12. KELVIN DAVIS (Labour—Te Tai Tokerau) to the Minister of Corrections: Does he stand by his statement in regards to the July 2014 report on fight clubs in Mt Eden Corrections Facility, that he “became aware of the report’s existence only late last week”?

Hon Peseta SAM LOTU-IIGA (Minister of Corrections): Yes.

Kelvin Davis: Is he confident that Serco is accurately reporting all assaults at Mt Eden Corrections Facility; if so, why?

Hon Peseta SAM LOTU-IIGA: I get my information from the department, through Serco, and I have no reason not to believe that the information that is conferred on me is accurate; so yes.

Kelvin Davis: Was the Department of Corrections visiting Mt Eden Corrections Facility to investigate allegations of fight clubs a year ago; if so, does he accept Serco’s claim that it became aware of the issues only recently?

Hon Peseta SAM LOTU-IIGA: Yes, I accept the chief executive’s claim that he received that report just last week; just as I received that report just last week, too.

Kelvin Davis: Will he investigate the fact that Serco is transferring injured prisoners out of Mt Eden Corrections Facility to keep its data looking clean, as he admitted to Sean Plunket on Radio Live today?

Hon Peseta SAM LOTU-IIGA: The review that we instituted early this week is quite wide—quite wide—and it will look at all matters relating to contraband and violence at Mt Eden prison, and that should encompass what that member has just asked.

Kelvin Davis: Has he asked corrections to check whether the number of incident reports filed by Serco covers all of the incidents recorded on YouTube videos; if not, how can he be confident that Serco is reporting all assaults accurately?

Hon Peseta SAM LOTU-IIGA: I have asked for a wide-ranging review, which will encompass all incidents that have happened at Mt Eden Corrections Facility relating to violence in the past few years.

Kelvin Davis: What action did he take when he first became aware of the Nick Evans dropping case?

Hon Peseta SAM LOTU-IIGA: When I heard of Nick Evans’ death, we ordered the chief inspectorate’s investigation immediately, which is normal for a death in custody. Obviously, a coroner’s inquest was also demanded.

Chris Hipkins: I raise a point of order, Mr Speaker. With respect, my colleague Kelvin Davis’ question was not about when the Minister became aware of the death; it was about when he first became aware of the case.

Mr SPEAKER: No, no—it was not.

Chris Hipkins: He has not addressed that.

Mr SPEAKER: No, it was not.

Chris Hipkins: It was when he first became aware of the dropping case.

Mr SPEAKER: Order! With respect, that was not the question. The question was: what action did the Minister then take?

Chris Hipkins: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! I hope the member is not now—I have made a decision. I have listened to the question. The member is wrong. If he wants to raise a fresh point of order, I will hear it, but I am not prepared to entertain him relitigating a ruling that I have made.

Chris Hipkins: Point of order, Mr Speaker.

Mr SPEAKER: Is it a fresh point of order?

Chris Hipkins: The question was—

Mr SPEAKER: Order! The member will resume his seat. I will repeat it for the benefit of the member. I listened to the question. The way that the point of order was raised by the member, he is wrong. If he wants to raise a fresh point of order, that is OK, but if he is attempting to relitigate the decision that I have made that the question has been addressed, that is not OK. Is it a fresh point of order?

Chris Hipkins: Yes, Mr Speaker. First of all, my apologies; my point of order was, in fact, correct, and I had misphrased Kelvin Davis’ question, which was when he first became aware of the case—sorry, what action he took when he first became aware of the case—

Mr SPEAKER: What is the point of order that the member is now raising?

Chris Hipkins: —not what action he took when he became aware of the death. The Minister has indicated what he did when he became aware of the death, but that was not the question. The question is what action he took when he became aware of the case. He may well have become aware of the case prior to becoming aware of the death.

Hon Gerry Brownlee: It may help the shadow Leader of the House, who seems to be rather pedantic, to know that a case is unlikely to be in the ether until the death has occurred, so I think the Minister is in the right space. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I have listened to quite enough from both members on this occasion. My job is to adjudicate as to whether the question has been addressed. There is no doubt in my mind that the question has been addressed. Does the member have further supplementary questions? Then we move to questions to members. Question No. 1.

Questions to Members

New Zealand International Convention Centre Act 2013 Repeal Bill—Purpose

1. MAHESH BINDRA (NZ First) to the Member in charge of the New Zealand International Convention Centre Act 2013 Repeal Bill: What is the intention of the New Zealand International Convention Centre Act 2013 Repeal Bill?

TRACEY MARTIN (Member in charge of the New Zealand International Convention Centre Act 2013 Repeal Bill): The intention of the New Zealand International Convention Centre Act 2013 Repeal Bill is self-evident. It is to repeal this controversial 2013 slap-on-the-back deal that exchanged—

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I assume that you heard that the member’s response was that the point of the bill is self-evident. She need not say any more.

Mr SPEAKER: I certainly heard the answer.

Rt Hon Winston Peters: Point of order.

Mr SPEAKER: Is it a fresh point of order the member is raising?

Rt Hon Winston Peters: It is a fresh point of order.

Mr SPEAKER: I will listen to the Rt Hon Winston Peters.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. My fresh point of order is that the member who just got to his feet and raised a point of order with you is being childish and pedantic. It was self-evident to a person like him is what we are saying.

Mr SPEAKER: No, I think Mr Brownlee raises a reasonable point. I was then interested in the further answer, and I think on this occasion I am quite happy to allow the member to repeat her answer for the benefit of the House.

TRACEY MARTIN: Kia ora, Mr Speaker. The intention of the New Zealand International Convention Centre Act 2013 Repeal Bill is to repeal this controversial 2013 slap-on-the-back deal—

Mr SPEAKER: Order! No, I have now heard enough of the answer.

Mahesh Bindra: How will the New Zealand International Convention Centre Act 2013 Repeal Bill benefit New Zealanders?

Mr SPEAKER: Marginal, but I will allow it.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Questions to members under Standing Orders are very, very tight, and that is a speculative question that does not meet the test in any way, shape, or form.

Mr SPEAKER: I think the member is probably right on this occasion, but I am going to be lenient. The point of the supplementary question must be something for which—[Interruption] Order! I am on my feet—the member must be responsible. I am adopting a very lenient interpretation of that. The member has put a bill forward, probably with a great deal of enthusiasm for the particular legislation. I will allow her to briefly explain what she sees to be the benefits of the bill, if it was to be successful.

TRACEY MARTIN: Kia ora, Mr Speaker.

Mr SPEAKER: But briefly.

TRACEY MARTIN: When the New Zealand International Convention Centre Act 2013 Repeal Bill passes into law, it will enhance New Zealand’s international reputation as a country where business can be conducted above the table and in public view. It will also remove the very real possibility of a gambling monopoly in the heart of Auckland and put negotiations—

Mr SPEAKER: Order! No. The answer must also be brief. I warned the member before.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I am not sure it is a good thing to allow leniency when a member goes to make those sorts of allegations. If I was to start talking about people receiving large bundles of cash in brown paper bags at fish restaurants, I would get in some trouble. But I do not think that—

Mr SPEAKER: Order!

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. I paid very careful attention to Gerry Brownlee’s protest there, because we all remember he was a director of a Christchurch casino—

Mr SPEAKER: Order! That is certainly not a point of order, and the one before was marginal as well. [Interruption] Order! You can see the difficulty with me attempting to be generous to members.

Fighting Foreign Corporate Control Bill—Purpose

2. CLAYTON MITCHELL (NZ First) to the Member in charge of the Fighting Foreign Corporate Control Bill: What is the intention of the Fighting Foreign Corporate Control Bill?

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I am really questioning why this question even got on the Order Paper when the bill itself has not been read a first time. It is not business before the House until it is read a first time, and therefore speculation about a bill that is not before the House does not fit the Standing Orders.

Mr SPEAKER: No, I think on this occasion—I could seek some further advice, but it is on the Order Paper and it is scheduled to be debated today. I am going to allow the question to start, but I warn the member, in answering the question, to keep the answer particularly brief; otherwise, it will be closed down.

FLETCHER TABUTEAU (Member in charge of the Fighting Foreign Corporate Control Bill): Thank you, Mr Speaker, for that generosity. This is one of the most simple and yet profound bills to come before this House. The intention of the bill is to ensure that future trade agreements do not include the investor-State disputes settlement provision.

Mr SPEAKER: That is fine. [Interruption] Order! Before calling the member, the supplementary question now must relate to something for which the member promoting the bill is responsible.

Clayton Mitchell: How will the Fighting Foreign Corporate Control Bill benefit New Zealanders, and has he got some examples that he could share with us?

Mr SPEAKER: Order! He can very briefly answer the first part; the second part is completely out of order.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. There is—[Interruption]

Mr SPEAKER: Order! This is a point of order, so some members in one particular corner of the House will be leaving if they interject throughout the point of order. I will hear the point of order.

Hon Gerry Brownlee: You gave a very clear direction to the asker of the question about what should be in the question. It is impossible for that question to be answered without there being debatable material introduced, and that is not appropriate for members’ questions.

Mr SPEAKER: I think that is a reasonable point that the member is making, but I now must establish a pattern because I was fair in respect of the previous question and allowed a very brief description of the benefit of the bill. I am going to do the same, but certainly the subsequent part of that question that was asked is out of order. The member Fletcher Tabuteau can briefly attempt to describe the benefits of his proposed legislation—briefly.

FLETCHER TABUTEAU: Thank you again, Mr Speaker. When the Fighting Foreign Corporate Control Bill passes into law, the intent is to ensure that future Governments will be free to legislate for the protection of the people of this country whom they would presume to represent. Thank you.

General Debate

General Debate

Hon BILL ENGLISH (Deputy Prime Minister): I move, That the House take note of miscellaneous business. There is no doubt that the last few weeks have been a test of whether the Labour Party has any confidence in the New Zealand economy and in New Zealanders, and no one will be surprised to know that it has failed that test. It cannot be better summed up than in its contradictory attitudes to the dairy industry. We have been lectured for years that New Zealand is too dependent on the dairy industry, because it has been so successful. Now we are finding out that if there is one thing that is worse, apparently, in the Labour Party’s world than a successful dairy industry, it is an unsuccessful one. So it was wrong when the prices were too high, and now it is wrong when the prices are too low. That, I think, sums up the shallowness of, particularly, the Opposition finance spokesman, Grant Robertson, which is such that when the dairy industry is going well that is bad, and when the dairy industry is going badly that is bad.

Actually, if you want diversification, then—if you want to be a bit cynical about it—there is no doubt that low prices in one industry encourage people to go and invest in another one. That is how diversification actually happens in an open capitalist economy. But, of course, I made the mistake of thinking the Labour Party believes in an open capitalist economy, but clearly it does not. If we were to follow the advice of the Labour Party, we would open the paper and see that the Global Dairy Trade milk powder auction price was down and we would order up another industry—one that had high prices this week, instead of low prices. Well, you might be able to do that in a student union, which is where he learnt his economics, but actually in the global open economy you cannot do that.

We have confidence in the New Zealand economy, the dairy industry, and New Zealanders’ resilience. Yes, dairy prices are low. That will have an impact on the broader economy and on the Government’s revenue, but not quite as big an impact as most people might assume, simply because in the broader economy the New Zealand dairy industry is significant—it has been successful—but it is less than 6 percent of the total output of the New Zealand economy. In any case, it is a resilient industry. It has been through downturns before. It has been through some very high prices, of course, too, which most farmers handled sensibly by reducing debt and improving the quality of the operation of their farms. That is how most New Zealanders understand it. They know that there are economic cycles. It is just the Labour Party that does not understand that.

So we are on track for sustainable, moderate growth. The balanced picture of the New Zealand economy will tell you that, yes, the dairy industry is under pressure, but others are not under pressure. In fact, others are quite successful, particularly in light of the fact that the automatic stabilisers that go with lower commodity prices are operating—they are operating. The New Zealand dollar was NZ88c against the United States dollar just 3 or 4 months ago. Today it is NZ65c, and that means that exporters who are selling in United States dollars, which most of them do, are getting significantly bigger New Zealand dollar margins on their products, and that will encourage investment. That is a much stronger signal for diversification, for growth, and for more employment than anything that the Labour Opposition finance spokesman might cook up in his office.

So alongside those price signals the Government is pursuing a programme, under the excellent leadership of the Hon Steven Joyce, that is working with a whole range of industries, more of which are becoming more successful as the months go by and as they start to see the pay-off from Government investment in research and development, Government support and investment in their skills pipelines, and the Government’s assistance for them in overseas markets. So we are seeing a range of industries growing reasonably strongly, and no doubt the Minister will want to talk about that.

The other features of the economy that are underpinning growth are, for instance, strong migration. I know that is unpopular in the Labour Party. The Labour Party is the party that supports—

METIRIA TUREI (Co-Leader—Green): I think Auckland families on very low incomes will feel so inspired by John Key telling everybody in the country that he believes that low-income families can buy a home. What an aspirational goal he has for the country.

Denis O’Rourke: How would he know?

METIRIA TUREI: He believes that low-income families can buy a home—and my colleague over here asks how he would know. Well, that is a very good question, because not only does he believe; it is a conditional belief, as he set out today. It depends on how much money you earn, the interest rates, where you want to live, the cost of the mortgage, and how much deposit you need. It is a conditional belief, so let us not get ahead of ourselves on this. I think Auckland families who are on very low incomes, who are part locked into Generation Rent, who are struggling to put food on the table, who are struggling to make sure their houses are warm and dry enough to keep their kids well—I am sure they are terribly inspired by John Key’s belief. Because the reality for these families is that they are locked out.

John Key proves over and over again just how entirely out of touch he is with the real lives of New Zealanders, because although John Key might believe, Auckland families know that they are locked out of the housing market. Eighty percent of the homes sold in June this year cost more than $500,000—half a million dollars—in Auckland. There are suggestions that it could get to a million dollars in a year or so, the average price. Values are rising by a thousand dollars a week. Wages are nothing like that, so families simply cannot keep up. They are locked out and John Key is totally out of touch.

Low-income families, from the research that we have been able to get from the Parliamentary Library, have an income of around about less than $700 a week—about half the median income. They simply cannot afford to save the $90,000 that is needed for a deposit, let alone then repay the mortgage payments of more than half their income. Those people are locked out. They are the abandoned generation. They are Generation Rent.

Rather than sitting here and saying that he believes they can do better and they should all feel aspirational about that, what we need from John Key is action. Phil Twyford just said today that there have been only 300 homes built in the special housing areas. It is an inadequate response, given this Government has known since 2010 that this country then had 70,000 too few homes for the population here. What is the Government doing? It is not bothering to really invest in a State house building programme to increase supply; what it is focused on is selling off those State houses. It is selling off those State houses desperately. It will sell them to anybody, including to anyone from Australia, including to UK agencies—desperate to sell them off. What the Government needs to be doing is making sure that those homes are available to the families who need them—first and foremost, the most vulnerable families, who have the lowest incomes and who need to be housed securely, and warmly, and dryly.

But, also, if the Government does want to see New Zealanders owning their own homes, particularly low-income families who struggle to save for a deposit and get access to a mortgage, there is an alternative. It is called progressive ownership. The Green Party has long been proposing progressive ownership as a rent-to-own scheme for low-income families to buy the house that they live in—the State-built house that they live in. Do not sell the State houses to an Australian agency. Sell them to New Zealand families—low-income families who desperately need them. If you want to sell off the homes, sell them to the families who need them.

Progressive ownership means that a family does not have to get a mortgage, so they do not have to save for a deposit. They do not have a debt. They have a relationship with Housing New Zealand, with the State, and with the Crown that enables them to pay off that home over time, just like you would with a mortgage, but without all of the stress of debt and the deposit saving, and it means those families have a safe, secure home to live in.

But no, this Government does not want New Zealanders to have access to their own homes. It wants to sell off the State houses to other agencies so it can wash its hands of the needs of vulnerable families. There are Auckland families—New Zealand families do not need John Key’s belief; they need him to act as a Prime Minister for everyone, and not be so totally out of touch. Thank you.

Hon STEVEN JOYCE (Minister for Economic Development): You have to start wondering I think, not for the first time, who are the strategic geniuses in the Labour Party headquarters. I think it is not the first time we have been worrying about this in the last 7 years, but you do have to worry about it.

Fresh from the strategic success of last week, there was the great project: all people with Chinese-sounding names must be foreigners. That was last week’s success—all people with Chinese-sounding names are foreigners. Those members have been casting around for this week’s strategic success. Well, they tried the flag. They ran that up the flagpole, but nobody saluted today, and that did not work. They also flirted with the idea of looking at the pie awards. I do not know whether you have seen this, but there are some very Chinese-sounding bakers who have won the New Zealand pie awards this week. So those members thought maybe about a campaign of getting back all our pies from the foreigners.

But they actually decided that what they might go with is something along the lines of “National’s not diversifying the New Zealand economy.” They thought they might give that one a go. Still, they were having a discussion—“National’s not doing anything to diversify the New Zealand economy.” They were talking it around, and then somebody said: “Well, that’s not quite true, though, is it, because National has actually lifted quite a lot of research and development spend in this country—that’s true. So, aside from research and development spending, National is doing nothing to diversify the economy. Well, actually, there is Callaghan Innovation. National set that up. And there is the Primary Growth Partnership. National set up that. But, besides the Primary Growth Partnership, besides the lifted research and development spend, and besides Callaghan Innovation, National has done nothing to diversify the economy. Well, actually, National has done the ultra-fast broadband as well—that’s true. That’s broadband, but that helps to diversify the economy.

Oh, well, there’s also the investment in tourism marketing. But aside from tourism marketing, education investment—because it is doing international education—the Primary Growth Partnership, Callaghan Innovation, and a big lift in research and development spend, it is doing nothing to diversify the economy. Well, that is just not quite true, because as well as the broadband, there are the roads of national significance, linking our regions to the big ports. So it is doing that. So, you know, we’re a little bit concerned about that.”

They said: “You’ve got to park the infrastructure, you’ve got to park the research and development, you’ve definitely got to park the tourism marketing and the education, but aside from that—aside from that—there has been nothing that National has done to diversify. Well, actually, there has. There is the Korean free-trade agreement. Oh, there’s that. And there is the World Trade Organization global procurement agreement for manufacturers—so it has done that. So we have to give it that.

We have to give it the ultra-fast broadband, we have to give it the Korean free-trade agreement, we have to give it the information and communications technology students—the investment it has made. We have to give it the engineering investment to create more engineering students—so we’ll give it that. And we’ll give it the tourism, and we’ll give it the investment in international education. We’ll give it the Primary Growth Partnership, we’ll give it the research and development, we’ll give it the broadband, we’ll give it Callaghan Innovation. But, aside from that, what has National done to diversify New Zealand’s economy? Absolutely—absolutely—nothing. Let’s send Robertson out with that. Let’s send Robertson out with that. Don’t tell him that there’s a few things that National has done; just send him out and say it has done nothing to diversify the New Zealand economy.” And those members wonder why New Zealanders think they are shallow and they do not do any work. Thank you.

KELVIN DAVIS (Labour—Te Tai Tokerau): Today I have to talk about the ongoing scandal at Serco. Today I am calling for a police investigation into the death of Nick Evans. Today the Minister of Corrections has confirmed that Nick Evans was treated at Mt Eden prison before he was transferred up to Ngāwhā prison. Yesterday it was all about: “Put up or shut up, Kelvin Davis. Put up or shut up. You don’t have any evidence.” Well, today, exhibit A is the Minister himself on Sean Plunket’s show, when he said—where he admitted—exactly what he denied yesterday, which was that Nick Evans was treated at Mt Eden prison before he was transferred up to Ngāwhā.

What sort of organisation, I ask, transfers somebody who is so ill? He had a ruptured lung. Imagine the pain that man must have been in. When he got to Ngāwhā it is alleged that he was so ill he could not walk. It is alleged that it was just obvious he was damaged goods. What sort of organisation allows a person to be transferred for 3 or 4 hours in that sort of condition? According to my sources, there is no way that those injuries could have happened in transit, but they would have been exacerbated in transit.

New Zealanders around the country have been horrified to learn about what is going on at Serco. My in-box has been inundated. My texts and my Facebook have been inundated with people who want to tell their story or the story of their son or daughter who has been inside under Serco.

Today I would like to reveal new details about life on the inside, given to me by a former inmate who is one of my many sources. In fact, today at the Law and Order Committee I tried to get answers by asking the select committee to invite the head of Serco to give us a briefing around his organisation. That was blocked by National. The New Zealand First member tried to get an investigation into what is happening at Serco. That was all blocked. This is the National Party being soft on Serco.

But let me tell you what I have been told today. The former inmate said that gang violence—and I need to say this because the Minister himself does not know what is going on in his portfolio and in the prisons that he is responsible for. This former inmate said he believes the gang violence and the droppings are isolated in two units primarily. The Delta unit is where the accused are held on remand. He said: “I’ve spoken to other inmates who tell me that as soon as they enter the unit they are dragged into a cell and beaten and extorted for information about assets that they have on the outside.” Alpha unit—he said that is the gang unit. It is supposed to be the worst unit in Mt Eden. He said: “I know a lot of the dangerous criminals are put into segregation units when they are not supposed to be.” People who are vulnerable go into segregation, but he said that “some of the most dangerous criminals go into segregation. They don’t qualify for segregation but they put them there anyway.”

Charlie and Foxtrot units are both segregation units, and by all accounts they are completely safe, but the mainstream units are operated by gangs. He said: “The Killer Beez run all the gang units generally, and as soon as the door opens they line up and drag the inmate into a cell.” I asked him: “What do you mean ‘as soon as the door opens’.”? He said: “The main door to the unit opens when new prisoners come in, and the inmate is just pushed in”—and these are his words—“and left to the dogs because it’s just too unsafe for the screws to enter. They never use their take-down team. They just let the unit run itself.”

Get this—he said that invariably you can hear banging all night from two storeys below, from Delta unit, because down there the inmates are getting drunk. He went on to explain how they actually make their alcohol. He explained how they get drugs. He explained a whole heap of things. And this is going on in the Serco prison. Yesterday I was told to put up or shut up. Like I say, my exhibit A was in fact the Minister on Sean Plunket’s show on Radio Live today, where he basically admitted everything that I alleged yesterday. Thank you.

Hon PAULA BENNETT (Minister of Local Government): I think I would like to clarify one thing just before I start. Steven Joyce, on behalf of the Labour Party, apart from everything you are doing, you are doing nothing, OK? That is pretty much what it is. Apart from all of the interventions that you are implementing through the Business Growth Agenda—

Hon Steven Joyce: Apart from all of them.

Hon PAULA BENNETT: Apart from all of them, really, there is just nothing, and there is no diversification. It is as simple as that. Also, to the rest of New Zealand, on behalf of the Labour Party, the regions are completely broken, it is all going to hell in a handbasket, and it is absolutely terrible out there.

Denis O’Rourke: It’s true. It’s absolutely true.

Hon PAULA BENNETT: It is absolutely true, yells the Opposition.

Well, I would like to stand here and say that I am offended on behalf of those who live in the regions, who are working hard, who are innovative, who are employing people, who are getting jobs themselves, and who are getting ahead. I tell you what. I will be offended on behalf of pretty much the entire South Island, which has an unemployment rate of 3.6 percent—3.6 percent—compared with the national figure of 5.8 percent. I ask people in Southland, which has an 11 percent growth rate, how they feel about it.

Let us go to the Waikato, or let us go to Marlborough, both of which have 10 percent growth rates when you actually start looking around it and seeing where they are. The Bay of Plenty, Tauranga—boy, that Tauranga is doing appallingly, is it not, with its—

Alastair Scott: Kiwifruit.

Hon PAULA BENNETT: —growth rates and the kiwifruit that is coming back on and how fantastically it is going? [Interruption] Oh, my colleague Alastair Scott is sitting behind me—the wine industry. Oh, yeah. I would not know much about that; I would not want to talk too much about how fantastically the wine industry is actually going in this country.

It does not go well for that story that talks about how, actually, the regions are doing so poorly when growth is the reality for so many of them. I just spent the last couple of days at the Local Government New Zealand conference with mayors from throughout the country, and they are the ones who have good stories when you start talking to them about the growth that is happening. [Interruption] Well, they actually do. They live in the regions. They are the ones who are living it every day and going there.

So let us be clear: there are areas within New Zealand and within some of those regions that are doing it tough. Actually, there are some areas within Auckland that are doing it tough, and some suburbs that we, by all means, would say are seeing their own set of challenges. We know the streets that are; we know where those small areas are. To actually go out there and talk about the regions as if they are one, to talk about a region as if it is just one holistic region and that is all it is—a homogeneous sort of group, and that is it how it goes—is absolute rubbish. There are patches within New Zealand where we are the first ones to stand up and say work is going on in a considered way across education, health, economic growth—which means real jobs, by the way. You know, you can cut it down to everything, but it means supporting a business so that it can employ someone else, which gets them into an opportunity to get ahead in life and buy the very houses that one of the members was talking about a bit earlier. It is about supporting those areas of growth, but also those who can get into their own small businesses.

Tourism is one area that is particularly close to my heart, having that portfolio. In the last 12 months $8.3 billion was spent within tourism, and over half of that went outside the three main cities—so over half of that was actually spent throughout New Zealand. Its opportunities are huge and significant, not just for those who can work in the sector across accommodation and food and beverage—across those very big operators—but equally for those who can start their own businesses and see those kinds of opportunities that are happening everywhere.

I would like to take a moment here, as you do sometimes when you have left a portfolio but can look back, to say that part of whether we hit surplus, and when we do, will be because of the savings that we are making as we see more and more people coming off benefit and off welfare and living real lives. Members opposite do not like to talk too much about the 42,000 children who are no longer in benefit households, but, significantly, it is they, throughout all of New Zealand, who will see a change, and the savings from that mean that the Government is, obviously, spending more where it wants to. You can see it in social investment. This is a fantastic country with awesome opportunities. New Zealanders are getting ahead. It is a National plan that is working.

RON MARK (Deputy Leader—NZ First): Well, having listened to those paltry contributions from the Government members it strikes me that probably “paltry” does indeed sum up the flap that this Government is currently in. This is something our MP from the Wairarapa, Alastair Scott, is in, who, incidentally, used to run a chook farm and who is now infamous, given his chicken run from South Wairarapa young farmers, when he told them that foreigners buying up farms ahead of Kiwi couples was a good thing—

Rt Hon Winston Peters: Who said that?

RON MARK: Alastair Scott. He actually told young farmers that, and I thank him for that because I got all of their votes, Alastair—thank you very much for that. But that is right. That is Alastair Scott, our Wairarapa commuter MP who last night referred to the Wairarapa people, his constituents, as “the locals” in Wairarapa. I am told he also thinks Wairarapa Bush is a forest somewhere out the back of Carterton.

Of course in recent days poultry has figured high on the menu for Ministers such as Nathan Guy and Amy Adams who tasted something that I have never had the opportunity to taste, in the form of kererū. If anything, judging by the fact that they were deep-frozen roadkill apparently and the fact that the Ministers are still with us, it perhaps proves that our food safety laws, Minister Adams, probably may be a little bit overcooked or maybe undercooked, depending whether you are Māori or not Māori—but there you go.

It is interesting—the views of Dame Tariana Turia of the Māori Party on kererū. She has our party wondering whether we will see a launch of a new iwi-fried kererū brand featuring a kererū Double Down, but obviously only for a limited time because, as we know, this view was supported by Te Ururoa Flavell when he went out to bat for his former co-leader, saying a kererū could be eaten in some circumstances. I quote from him for the benefit of the National Party members who support this sort of thinking, especially Minister Maggie Barry who is sitting over there. I quote Mr Flavell “You know, we have our customs, our own tikanga about ensuring the preservation of kererū and within that ground I then—ah—we could understand that it’s OK by our people to take responsible decisions around that.”—responsible decisions around that. I guess it is one rule for Māori and another rule for everybody else. What we would like to know is what the Minister Maggie Barry’s rule is.

It is interesting also when you look at the flagging polls of ACT and the Māori Party. Maybe they should join up because it was Gerry Eckhoff from the ACT Party who wanted to farm kiwis and create the kiwiburger as well. It would be interesting to see—a Māori Party - ACT alliance—but Maggie Barry might have a comment on it.

But, seriously, tomorrow the Reserve Bank will cut interest rates as the economy cools and the debt chickens will come home to roost, but only New Zealand First has a bill to help stop farmers from being crushed by foreign banks. We know right now that the banking vultures are circling above our dairy farmers and young farming couples who are struggling under a debt burden. We know that as land values fall and as stock values fall on these dairy farms those banking vultures will move in. The only thing standing between those young couples farming and the banks, the foreign-owned banks, is New Zealand First and our debt mediation bill. Is it not an irony that the very people who seek to stop us from rescuing those farmers from the banking vultures who are circling are the National Party, the National Government, and the Wairarapa MP, Alastair Scott?

ALASTAIR SCOTT (National—Wairarapa): How can anyone take that member, Ron Mark, seriously as far as being a decent and reasonable Opposition member? He had absolutely nothing constructive to say. All he could talk about for most of his speech was my background—my business background, my reasonable and practical background. That member had nothing to say. He just had a crack at everyone here around kererū-eating. There was no policy about business, how we are going to grow the economy, how we are going to get people into work, and how we are going to continue to focus on employment.

Last night, alongside three other MPs in this room, I spoke at a meeting of the National Council of Women, the Wellington branch of the Federation of Graduate Women, and Zonta International regarding domestic violence and the economic effect of domestic violence. I want to quote something from the authors of the report Productivity Gains from Workplace Protection of Victims of Domestic Violence, Sherilee Kahui, Bryan Ku, and Suzanne Snively: “Employment is a key pathway out of domestic violence. … staying in employment is critical to reducing the effects of violence.”

Employment is the key. It is a powerful antidote to many of our social ills: depression, alcoholism, gambling addiction—all serious issues. Employment brings pride to the family, it gives independence, and it motivates people—it gets people out of bed in the morning—and it gives a social and supportive environment to those people in employment. And, of course, it creates role models for our next generation. So high employment is a result—it is a measure of the success of an economy.

We know that we have low—low—numbers of people not in employment, education, or training. That figure is lower than ever. Unemployment is heading downwards. It will be below 5 percent within a couple of years, and we have heard Minister Bennett talk about South Island unemployment being at 3.8 percent. These are the numbers, in fact, that we want to talk about. The Opposition members have no interest in facts. They are all rhetoric and do not understand the way markets work. Having the flexible market place that we have today is sending the appropriate signals to the players in the market place. Despite the doom and gloom from the Opposition, we do have a flexible and resilient economy.

Fitch Ratings has just given us a re-rating of “stable and positive” going forward. So, despite the drought and despite the low dairy payouts, we are still expecting growth of 2.8 percent GDP over the next 4 years. That is because the dairy farmers and the businessmen and the people on this side of the House understand how markets work. We understand that prices go up and prices go down. Dairy farmers understand that there are price fluctuations. Winegrowers understand that there are price fluctuations. Since 2009 the oil price in US dollars has doubled and halved. This is what happens in the real world. Dairy prices have gone up, and now they are coming down. This should be no surprise. There are no surprises on this side of the House, but it is all news to the Opposition.

This flexibility in the market place is important because it allows the economy to reallocate resources to where they are required. The markets are working, as is demonstrated by the lower New Zealand dollar. The New Zealand dollar has weakened on the basis of the strong US dollar, and today the exporters of any of our products, whether it be sheep and beef or logs—those producers also understand volatile markets. Those producers are also now receiving 25-odd percent more for every foreign dollar earned. That is a good thing. That is the way the market works: flexibility and resilience.

From the other side those members are saying: “Do something, do something, do something.” But what practical, reasonable, and understandable policies do they have? Not a single policy change, not a single option—subsidies, tariffs, growing money on trees. Money does not grow on trees; it must be earned.

SUE MORONEY (Labour): Well, New Zealand should be very nervous after hearing that speech from Alastair Scott, because that was a National Party member exposing that the party just thinks that the market fixes everything, that National members can sit there and do nothing, and be the do-nothing Government that they have been, and they plan to continue to be, and she’ll just magically be right. Well, New Zealanders are looking for leadership and they are looking for a plan. That speech exposed that the Government has neither leadership nor a plan for fixing the growth in the economy that we need to get going, so New Zealand is going to have to look to this side of the House for that.

But I want to speak about something that you will not hear the Government members speak about any time soon but should be speaking about, and that is the ACC motor vehicle levies. That should be a good-news story for the Government. It should have been one where they said: “Hey, isn’t it great! Everyone’s got a cut in their levies.” But it has been a slow-motion car wreck instead, and that is why you will not hear them talking about it.

The truth is that their shambolic model has meant that the owners of a million vehicles are paying on average $40 more a year than what they would have if the Minister had left the system alone and not meddled with it. But, boy, has she ever meddled with it, and she has meddled with it in a way where it is in complete and utter chaos. Already, within the first week of it being implemented, 22 different makes and models of cars have had to be reclassified and have their levies dropped as a result, and that is just in the first week alone.

In order to get that change, the Minister—this is Nikki Kaye—had made such a mess of bringing the regulation in that she had to take it back through Cabinet and get the Governor-General to agree to every single one of those 22 models being changed. And she is going to have to do that time and time again, because now already that has increased to 24 models and I confidently predict that it is going to climb from there.

I keep getting emails from people telling me of the battles that they are having with ACC over their vehicles that they know are safer than what the levy system that Nikki Kaye has put in place would suggest. I know that she is getting those emails again. There are hundreds of people who are laying complaints with ACC over this shambles. Why are they doing that? Because it is confusing, it is flawed, and it is unfair.

It is unfair in this way. It actually penalises people who cannot afford the latest, safest model of car, and it makes them pay more. It transfers the benefit, $41 million in total, from that group of people to a saving of $40 million in total for the people who can afford the latest, greatest model of car. That is simply what is happening. It is a shift in funding. It does not do one thing to improve safety on our roads—that is the debacle of it—but it is a cost-shifting measure from one group of New Zealanders to another. So who are those groups of New Zealanders? It is actually taking money out of the pockets of our elderly people, of our youngest people, of our people who live in regional New Zealand, and placing that in the pockets of people who can afford the latest, greatest cars.

Is the National Party back up to its old tricks again? No one is fooled by it. Certainly, the writer of The Dog and Lemon Guide, Clive Matthew-Wilson, is not fooled by it. He is an expert in these matters and he has called for the whole system to be scrapped. He has called for the whole system to be scrapped. He cannot work out whether it is a dog or a lemon or it is both, but he knows it needs to be scrapped.

We have also had Fair Go do two exposés, two separate investigations, on this alone. Fair Go is a TV programme that looks out for consumers, and on two occasions already it has done exposés on how rotten this system is. Fair Go has even worked out the system. They said “Good on the Government for changing the mess that it has made so far.”, but they also said “Here’s the other models that they haven’t even got to yet: the Hyundai Getz, the Kia Sportage, the Mazda Demio, the Nissan Dualis, the Daihatsu Terios, and the Subaru Tribeca.”, and I can add on 10 or 20 more model names to those ones.

So good luck to the Minister. She is going to spend a lot of time going back and talking to her Cabinet Ministers on a frequent basis, bringing forward model after model after model that she is going to have to get them to change and she is going to have to get the Governor-General to change, and then she is going to have to account for the loss in revenue in ACC levies as a result of her botch-up.

ANDREW BAYLY (National—Hunua): Well, what a shambles from the Opposition members today. We heard them at question time today, when all their questions just fell flat, and then we have had to sit through a whole range of speeches this afternoon. Honestly, I am struggling with some of the issues that have been raised. What I want to focus on is not the negativity that I have heard but some of the positive stuff, and so what I thought I might just talk about are economic conditions and where New Zealand fits internationally.

We have been talking about the Budget surplus. When the Budget was announced, all these Opposition members were saying that we were not going to hit surplus, that everything was bad, and that we had broken our promises. Well, actually, at the 11 months to 31 May, our operating budget, or operating balance before gains and losses, was sitting at $1.2 billion surplus—$1.2 billion surplus. We have got only 1 month to go now and we may still get to our surplus, which the Opposition members said continually that we would not. We cannot count our chickens, but it is still a great outcome where we are.

Also, if we think about our debt position, which, again, our Opposition members love to talk about, let us talk about some facts. Let us talk about some facts. As at 31 May, the same period again, our net debt stood at just on $60 billion—$60 billion—which represents just over 25 percent of our GDP. That sounds high, but let us just have a discussion about what that seems like when you compare it internationally. Bear in mind that we have got a target of getting our net debt down to 20 percent by 2020. So let us turn to Australia. Australia’s current debt is just above ours at the moment, on an equivalent GDP basis. By 2020, when we expect to be at 20 percent, Australia will be close to 40 percent. The UK is another example. It is currently at 90 percent of debt to GDP. That is expected to fall to about 80 percent of debt to GDP by 2020. Let us think about Europe—well, actually, it is about the same as the UK. It will be about 80 percent. In the US it is actually about 110 percent at the moment and will still be over 100 percent by 2020. So our 20 percent by 2020 is looking, internationally, like a fantastic outcome, and it will position us strongly to deal with any future issues that we may have to contend with.

What about going forward? Let us talk about growth rates. In the year to March 2015, New Zealand achieved a very credible growth rate of just under 3 percent—about 2.6 percent. The Reserve Bank’s forecast over the next 3 years is that we are going to average 3 percent per annum. Let us compare that internationally, which, again, our Opposition members do not seem to do, because they do not seem to be able to get the numbers by asking the Parliamentary Library. But this is interesting. China—Mr Bill English has been there just recently—is currently sitting at about 6 or 7 percent, although there is a view that it takes inflation into account for that figure. Australia is achieving a mere 2.3 percent, and that is what it recorded for the March quarter, which is close to America’s 2.5 percent and Europe’s anaemic 2 percent. Again, New Zealand’s growth rates are even higher than in all of those main countries that we all look up to and quote.

The other thing that I want to talk about is this diversification. For some reason Labour cannot understand this, and I do not know why it is so difficult to understand. We do have a robust economy. We have a very diversified economy. Let us get some statistics fresh from the Parliamentary Library, because, again, we seem to have a problem with this. Did you know that the agriculture sector accounts for only 6 percent—6 percent—of our GDP? When you take into account manufacturing, which I always hear Labour in particular decrying, it accounts currently for about 11 percent of our GDP. Construction is 7 percent. And when you take into account all that is normally called goods produced in the component part of our economy, it is roughly about 28 percent. The balance is made up of goods and services. And here we go. This is why New Zealand has a robust economy: tourism is 7 percent—we heard Mr Joyce talking about that earlier—retail is 7 percent, finance and insurance is 6 percent, health care—

Mr SPEAKER: The member’s time has expired.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Yesterday we heard in this House from the Hon Anne Tolley, who said: “… the privately run prison in Mt Eden is exceeding the record of our State-run prisons.” I want to talk about why she might think that. She is wrong, of course, and here are the issues about the Serco-run prison in Mt Eden.

I have been talking to some corrections officers, and they tell me that this has been a hot topic of conversation over the last 2 weeks. I want to follow on from my colleague Kelvin Davis and reinforce what he has said, but give information from corrections officers. They tell me that it is an unfair comparison because Serco has the ability to transfer prisoners, inmates, out of the Mt Eden Corrections Facility for whatever reason it wants. If it has a difficult inmate, all it has to do is transfer that inmate to another prison. It can transfer inmates for being injured in a fight club; it can do that. When you are giving the information that the Minister gave yesterday, that presents an unbalanced view of what is actually happening in the Serco-run prison.

Here is some more information. I am told that the ratio in low-level security State-run prisons is 1:20, in high-security prisons it is 1:15, and in the Serco-run prison it is 1:50. Serco can get away with that because it does not do everything that State-run prisons do. For example, when the inmates in the Serco prison are let out into the exercise area, the doors are automatically opened, the inmates come out, and there are no staff on the floor with them. In State-run prisons there is a requirement that the officers be in the exercise area. In that way they can see what the inmates are up to. They can monitor what is going on. This is a problem with the Serco-run prison in Mt Eden. The officers are not there to see what is going on. That is a problem that this Government has failed to address. So we find ourselves in the situation today where these things have come to light, and the Minister, who is on the back foot on this issue, is trying to manage what is happening out there in the media.

I say to members opposite that that is just not good enough for our people who are in those prisons. They deserve better. They do not deserve, as Kelvin Davis pointed out, to be dropped over a balcony unsighted because the staff are just not in that area to see it. I am also told the officers do not incident-report on everything. There is a requirement in State-run prisons that for every situation that the officers encounter, if there is a suspicion of communication with cellphones, etc., if there is a suspicion of contraband, they have to report it. It is little wonder that we see that Minister Tolley can stand in this House and say what she said, but I say to the House that it is a manipulation of the figures, because there is not a fair playing field. Thank you.

MATT DOOCEY (National—Waimakariri): The Labour Party wants to talk about housing. Explain this to me. The annual house price percentage in New Zealand is 7.7 percent. In Canterbury we have 5.2 percent, and in my electorate we have 3.5 percent. It is 7.7 percent for New Zealand and 3.5 percent in the “Waimak”. The Waimakariri electorate is the third-fastest growing by population. The reason why is that we have freed up land and we have increased supply, and that has equalled demand. I think the people of New Zealand will be happy to know that we will not be making housing policy based on people’s surnames. It is great to live in a country that has strong economic growth. It is great to live in a country that has a strong economy. It is great to live in a country that has strong economic management.

When we look at job creation, in 2011 we forecasted 171,000 new jobs. I am happy to say we are on track to create 193,000 new jobs. That is 23,000 extra jobs. We are forecasting that by 2019 there will be another 150,000 new jobs. It is great. The reasons why are the strong economy, strong economic growth, and strong economic management. But the reason we do this is for the well-being of our people. We know we are promoting well-being. In the New Zealand General Social Survey, the biggest social survey outside the 5-yearly census, 83 percent of people rated themselves as being highly satisfied with their lives and 87 percent of people rated their sense of purpose as high. If we look at a region like Canterbury, with the CERA Wellbeing Survey, 77 percent of people rated their lives as good or very good. That is an extra 20 percent increase on last year.

We know that that is because we have a strong economy, strong economic growth, and strong economic management. We know that under Budget 2015 we were able to give low-income earners and the most vulnerable $12 to $25 more a week. That is because we care. We listen to people and we work hard for them. We are the working people’s party. We are the workers’ party. New Zealand First members did not even vote to give the most vulnerable $12 to $25 more a week. They are not putting New Zealand first; they are putting their party first.

Last week I visited North Canterbury with my colleagues Stuart Smith, the MP for Kaikōura, and Jacqui Dean, the Parliamentary Private Secretary to the Minister of Tourism. We were in North Canterbury because Stuart Smith and I, as the local MPs, are working hard for North Canterbury. We were focusing on tourism. We know that last year we had 3 million tourists in New Zealand—an extra 7 percent—and by 2021 we will have increased expenditure on tourism by 48 percent. We are expecting tourism to bring in $11 billion. We know that in Waimakariri tourism has grown by 7 percent. We visited the Waimak Alpine Jet. It was great to see their ecotourism and their adventure-based tourism, using a great environmental resource like the “Waimak” to show international tourists how beautiful this region is.

We also visited the Waipara region, the wine region. It was great to hear about the vineyards and the wine tourism. We know wine exports from New Zealand are going gangbusters as well. It was great to see tourism being promoted in North Canterbury by the local vineyards. But the gem of the visit was a visit to a small organisation called Farm to Farm Agricultural Tours, which delivers international inbound and outbound farm tourism, based in Rangiora. It just goes to show the importance of our farming community across all sectors in New Zealand.

We have a strong economy, strong economic growth, and strong economic management, which are promoting the well-being of our people. Thank you.

CATHERINE DELAHUNTY (Green): Tēnā koe, Mr Speaker. Kia ora e te Whare. It is really, really fantastic to hear that we are all so strong, but actually it means nothing if we do not have this stuff, the water. I want to talk just a little bit about two Ministers today, in my general debate speech. One Minister, the Minister for the Environment, said last week that we need to clean up water, that we can clean up water, and that the way to do it is to reduce agriculture intensification and cut nitrogen. The other Minister, the Minister for Primary Industries, is opposing the Green’s call for a moratorium and supporting more pollution of water by allowing the conversion of the farms in the upper Taupō and Waikato areas. All of this wonderful blah, blah, blah, workers’ party kōrero that we have just heard from the National Party members and how they support the workers, they are fabulous with the farmers, they are saving tourism, and it is all great—is all pretty meaningless when 60 percent of our rivers are too polluted to swim in. I am not even talking about drinking or gathering kai. I am talking about swimming.

When we get a strategy that the Minister for the Environment, quite rightly, went to Taupō last week and congratulated the Lake Taupō Protection Trust on—excellent work is happening around Taupō to reduce the pollution of that lake. It is long-term work because it takes many years to create an environmental disaster like this one, but there is good work going on. The trust is actually persuading farmers to reduce stock numbers, which is critical if you actually want to save the lake. So it is really important to listen to the Minister for the Environment—I just wish that Nathan Guy would do that. On one hand the Minister for the Environment is saying: “Let’s clean up the water, and these are the strategies.” Nick Smith said last week that chemical caps could work for other lakes—we are talking about the hydro lakes that turned pink during last summer—but, unfortunately, Nathan Guy cannot hear him. Nick Smith is saying that we need nitrogen caps, that in order to protect the waterways we really need to reduce animal numbers, and that means buying up farms to transition away from dairy—read my lips—and set caps that actually limit the number of animals people can have on their farms. He said that if the plan can work for Taupō, it can work for the rest of the country.

Well, what about just up the road? What about if you drive from Taupō, just up the road, and we find ourselves in the territory of Tūwharetoa and the headwaters of the hydro lakes and the Waikato River? If we do that we see a totally different story. This Government, through its State farmer, is promoting one of the worst environmental disasters this country has seen in a long time. It is converting forestry, which is a carbon sink—and I am not a fan of the way many pine forests are managed, but at least they store carbon. This Government farmer is cutting them down, one tree a minute, in order to create a new dairy farm, which, by 2020, will have, according to its owner, Wairākei Pastoral—for whom Landcorp, the Government farmer, manages it—43,000 more cows with their waste going into the hydro lakes and the rivers. We are already spending $210 million trying to clean up the Waikato River. We have got a solution at Lake Taupō but instead of applying that the Government is going to allow 43,000 more cows in that catchment. It is not about planting and fencing—it is great when people plant and fence waterways—it is about stopping the numbers of animals on the land. The Minister for the Environment nailed it in Taupō, but they are denying it just down the road at the top of the Waikato River.

This is an environmental disaster that is going to cost us as a nation, just as Rotorua and Taupō are costing us now. We are creating a new one. This Government is creating a new environmental disaster, from a climate perspective and from a water perspective. The farmers downstream are screaming because they are trying to live within their nitrogen limits, while the Government farmer, which is going to help to produce more methane, is undermining the very thing that keeps our entire life force and economy alive—water. Without clean water there is no tourism, no economy, and no wine industry. There are none of the things that the Government is trumpeting about. If we cannot look after water, we have got nothing. It is very obvious that the Government knows what the solution is but will not do it. So, clearly, the Minister for the Environment knows the answer but the Minister for Primary Industries will not listen. Through our petition for a moratorium 8,102 people called for this, and at the moment Nathan Guy still just cannot hear, which is going to cost us a great deal in terms of water quality.

The debate having concluded, the motion lapsed.

Bills

Environmental Protection Authority (Protection of Environment) Amendment Bill

First Reading

Debate resumed from 24 June.

SCOTT SIMPSON (National—Coromandel): Before I was interrupted in my last contribution on this bill, I was congratulating the member who has the bill in her name on the fortunate good luck she had received in terms of having the bill drawn from the ballot.

I do congratulate Meka Whaitiri on her good fortune, but I was also telling the House that after 9 long years of woeful neglect in terms of environmental matters from the last Labour Government, when it had its do-nothing approach, it was this National Government, led by John Key, that—actually, in its first year of Government—set up the Environmental Protection Authority. It came into effect in 2011, but we set the legislation up in our first year.

The Environmental Protection Authority was established to make the difficult decisions away from the arm’s length of Government—to make the decisions about our environment that need to be made in a purely independent way, away from the politics of the day—and that is why this Government will not be supporting this bill. Perversely, the bill would actually undermine the neutral and politically independent Environmental Protection Authority that is set in place to make those hard decisions.

The proposed amendment created by this bill would change the purpose of the Environmental Protection Authority beyond its original intent. This Government will not support this bill and we do not think it should proceed.

Dr MEGAN WOODS (Labour—Wigram): I would like to take this opportunity to congratulate my colleague Meka Whaitiri on having this bill drawn and to commend this bill as a very important piece of legislation.

In her contribution to the House, Meka Whaitiri described this bill as having seven very simple but very important words. Contrary to the contribution from the previous speaker, Scott Simpson, the chair of the Local Government and Environment Committee, this bill will not fundamentally change the purpose of the exclusive economic zone legislation. Rather, what this legislation does is clarify what the purpose should be. It shows the difference in the political winds, perhaps, in terms of what two members can say. Actually, in his initial contribution on this bill, I thought that Mr Simpson was very respectful, very congratulatory, and that he understood the purpose of what Ms Whaitiri is trying to do. What Mr Simpson argued in his previous contribution, if I remember correctly, was that there were other pieces of legislation—largely the Resource Management Act and the Climate Change Response Act—that provided the “definitional functionality”, I think he put it, that was required under this bill.

What the bill that we have before us here today does is provide this clarity. It provides some certainty around the kinds of criteria with which this independent and politically neutral body—the Environmental Protection Authority—should be making its decisions about what the right decisions are. All that this bill seeks to do is to say that the environment should be front and centre of that decision making. It in no way undermines political neutrality; it in no way undermines independence. What it does is what this Parliament is meant to do: provide guidance to an agency around how to make its decisions. These are very clear criteria that do put the care of our environment front and centre.

In many ways this is symbolic legislation, to make sure we enshrine in our legislation the fact that the environment has to be something that the Environmental Protection Authority is making its decision on, but in the last few weeks we have seen the reason as to exactly why it is that we need legislation such as this. We have seen something as important as the marine protection areas, which have historically been under the guidance of the Department of Conservation, taken away from that body and that Minister and handed over to the Minister for the Environment, with absolutely no obligation to provide that those areas will not fall under the jurisdiction of the primary legislation that this member’s bill is seeking to amend with this amendment. Could it be that there is a particular Minister entrusted to shepherd through legislation of that kind of importance, or could it be that this is signalling a change from this Government in how it intends to view the very important marine protection areas that we simply need to get in place and that are going to be coming very soon?

The other objections that Mr Simpson put up in his initial speech were, I thought, very simple objections. I think it would do well for this Government to support this bill’s referral to select committee and for us to examine these measures and see what can be done. What we have seen throughout the history of not only the primary legislation that this bill is seeking to amend but three or four other pieces of amending legislation that have had to sit alongside the exclusive economic zone legislation is that it has been the select committees that have come in and actually saved the day on very poorly drafted legislation. This bill is an exception to exclusive economic zone amending legislation in that it is very well drafted and it is a very well-crafted piece of legislation, unlike other offerings we have seen from the Government.

I think I would say to Government members that this is a very simple piece of legislation, and all it does is seek to insert seven very simple but very important words that clarify exactly what it is that we want our Environmental Protection Authority to base its decisions on—that is, putting the environment first. Thank you.

PAUL FOSTER-BELL (National): I rise to take a call on this member’s bill, the Environmental Protection Authority (Protection of Environment) Amendment Bill, which has been introduced in the name of Meka Whaitiri.

This Government has a proud track record on protecting the environment in New Zealand. After years of inactivity, years of mismanagement, and years of apathy from a Labour Government propped up by an impotent Green support partner, where they achieved nothing in terms of protecting the New Zealand environment, I am proud to be part of a Government that has introduced, for the first time in New Zealand, a comprehensive environmental reporting regime, bringing us in line with the majority of OECD countries that have such a regime in place. I am also proud to be part of a Government that, by introducing the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, has brought into place a regime for managing our offshore resources and protecting our offshore environment.

So this piece of legislation, well-intentioned as it is by the member who has introduced it in her name—and I do have considerable respect for the honourable member Meka Whaitiri, and I am sure this is well-intentioned—is unnecessary. It is not going to achieve its objective of actually enhancing the New Zealand environment, and that is why I will be speaking against this piece of legislation in this debate.

Over the past few months I have taken the opportunity to go out and see what is actually being done by New Zealand companies to make sure that their activities, whilst creating jobs and generating valuable export earnings, do not detract from those environmental values that we hold so dear in New Zealand. Just recently I took the opportunity to visit the King Salmon farms, which is a New Zealand - Malaysian joint venture that creates hundreds of jobs within the Nelson-Marlborough region, and it also gives us opportunities to generate valuable export earnings with a high-quality proprietary product that is exported to markets such as the United States to be used in the food service industry. King Salmon takes the utmost care with its management of its fisheries, from a fish health and disease management point of view to carefully monitoring fish excrement that goes into waterways to make sure that it is not having a detrimental effect on the beautiful Marlborough Sounds, which I think we can all agree is a national asset and taonga for our country that should be protected.

When we look at some recent decisions that have come out of the Environmental Protection Authority, and even court decisions such as the Supreme Court decision on King Salmon’s fishery—I for one was particularly disappointed with that, given it was by far the clear intention of lawmakers in this place, and of the executive, that the different environmental and economic criteria that are laid out in the Coastal Policy Statement were not presented hierarchically, and that was not the way that the court chose to interpret that particular document. So I think we have some disappointments around the current interpretations that have been given, but by and large we have a regime that is heavily tilted towards protecting the environment in New Zealand.

We have had recent decisions where Trans-Tasman Resources, which was investigating ironsand extraction from off the coast of Taranaki, was declined a permit under the current exclusive economic zone regime. We have had a situation where the Environmental Protection Authority has also declined Chatham Rock Phosphate the ability to extract phosphate nodules from around the Chatham Islands, which I know the honourable member Annette King takes considerable interest in as the local member for the area—

Hon Maggie Barry: Not as much as Chris Finlayson.

PAUL FOSTER-BELL: —but not as much as the Attorney-General, Christopher Finlayson, who is a very, very frequent visitor and takes a very close interest. In fact, he is a very good, warm friend of the Chathams.

But, in any case, this Government has done a huge amount to protect the environment. We have done a lot more than the previous Labour Government ever achieved, so when we see a bill like this, as well-intentioned as I am sure the member Meka Whaitiri is, I personally believe it is not necessary. It is a political act—I will not call it a stunt, but it is a political act—to try to perhaps resolve the issue. They have a few guilty consciences over on the other side for their 9 years of woeful inactivity.

EUGENIE SAGE (Green): Tēnā koe, Mr Assistant Speaker. I am pleased to take a call on the Environmental Protection Authority (Protection of Environment) Amendment Bill. It is interesting that the previous speaker, Paul Foster-Bell, said this bill is a political act. Well, actually, I thought we were involved in politics in this place.

The Green Party is very pleased to support the bill, because it was the absence of a purpose of protecting the environment that was controversial at the time the principal Act was passed, and this bill in Meka Whaitiri’s name seeks to rectify that. Certainly, the establishment of the Environmental Protection Authority was supposed to be a milestone for environmental management in New Zealand. At the time, back in June 2010, the Minister called it a strong independent regulatory agency to ensure the protection of the environment at a national level. It has got a very broad role and quite wide functions that regulate the use of hazardous substances and new organisms. It administers the New Zealand emissions trading scheme, it manages the effects of extractive activities in the exclusive economic zone, and it makes decisions on nationally significant proposals that are called in under the Resource Management Act.

So it is quite a small agency, but it has got a very wide-ranging statutory mandate. And it is a really challenging role for the Environmental Protection Authority because it cannot readily anticipate the scale of the work, because that is largely driven by the applications that come to it. This agency has got about 180 employees. It gets about $21 million annually from the Crown, and then gets another about $11 million from the recovery costs when it charges applicants for considering and deciding on applications.

It was interesting, in doing some research around this bill, that there was a directive from Cabinet that the Ministry for the Environment review the Environmental Protection Authority’s performance. That review focused on an evaluation of the efficiency and effectiveness of the authority, including its governance, and a review of the fiscal sustainability of the authority and an evaluation of its cost efficiency. There was nothing in that review, which was done in 2014, about how and whether the authority was actually contributing to an improvement in environmental management in New Zealand, or to an improvement in the state of our environment, and that highlights precisely the defect that this bill is intended to remedy by putting the protection, maintenance, and enhancement of New Zealand’s environment at the heart of the principal Act as part of the purpose of the authority.

The 2014 review focused on the quite mechanistic objective that the Environmental Protection Authority currently has, which is—in section 12 of the principal Act—to contribute “to the efficient, effective, and transparent management of New Zealand’s environment and natural and physical resources; and [to enable] New Zealand to meet its international obligations.” So it is quite troubling that we do not have a purpose of protecting and enhancing and maintaining the environment. That is why the Green Party is supporting this bill, because it recognises that that is crucial and that protecting the environment is at the heart of a healthy society and a healthy economy.

Mr Foster-Bell’s comments about the work of the Environmental Protection Authority and some of its decisions, and his sense of disappointment, were quite troubling, because in this review document it made the comment that the Environmental Protection Authority “risks becoming a bureaucratic process-driven regulator which is precautionary in delivery of its regulation because it isn’t accessing the best expertise, ensuring the excellence in its operational processes, nor does it have the right structural arrangement in its legislation.” That is troubling, because it suggests that the Government—in the light of the Environmental Protection Authority’s decision around the Chatham Rock Phosphate application, around the decision for seabed mining off the Taranaki coast, and around the board of inquiry’s decision on the nutrient limits in the Tukituki board of inquiry decision—may potentially be looking to amend the legislation to restrict the Environmental Protection Authority, to prevent it being an obstacle to the Government’s “extractivism” agenda: drill it, mine it, frack it, irrigate it.

So the fact that the Environmental Protection Authority has been implementing a precautionary approach on applications like that of Trans-Tasman Resources is because the exclusive economic zone legislation includes that. That is why this bill is important—because it is embedding a commitment to environmental protection at the heart of the principal Act—and the Green Party is pleased to support it.

JOANNE HAYES (National): I rise to take a short call on the Environmental Protection Authority (Protection of Environment) Amendment Bill in the name of Meka Whaitiri. I do not really understand why this bill actually came here, because at the end of the day the basis of the role of the Environmental Protection Authority is as a regulating body. It does protect and maintain and enhance the New Zealand environment from a number of perspectives. The previous speaker, Eugenie Sage, talked about what the Environmental Protection Authority actually did as a regulator. I am not going to repeat that, because it is pretty much clear: it is the overarching regulatory role that the authority actually carries out.

It works with a number of other enforcement agencies, because to protect and maintain and do all the things that this bill is purporting to say is actually a shared responsibility. The Environmental Protection Authority is the group that actually looks after and makes sure and monitors that all of these things are actually happening. So the other enforcement agencies that the authority works with are the Ministry for Primary Industries, WorkSafe New Zealand, the Ministry of Health, the Civil Aviation Authority, the New Zealand Customs Service, Maritime New Zealand, the New Zealand Police, the New Zealand Transport Agency, regional councils, and territorial authorities. This is all the responsibility of all of these agencies working together with the Environmental Protection Authority. To make it even more robust in the work that it does, it is overseen by the Ministry for the Environment.

The Environmental Protection Authority Act, as my colleague Scott Simpson said, came into force in 2011. The authority is an organisation that is at arm’s length to the Government. It is an organisation that provides a number of oversight reports that many of us in the Local Government and Environment Committee have already received to do with water and to do with air. Those are the things that this organisation does. To change that, to put this amendment in and to support this amendment, would change the actual role and the function of the Environmental Protection Authority. It would actually change it and make it very different and confusing for everybody who has been working with this authority to do with its objectives. This is not necessary. It is not necessary.

I want to just talk a little bit about a project that I was involved in just recently. It was a Business and Parliament Trust placement. I went to an organisation called the 3R Group Ltd. Its prime role, beside waste minimisation, is key to the protection of the environment. I can tell you that the work that it does in upholding—and this is what I am saying. It is about everyone’s responsibility. Reducing the amount of waste into landfills, into the waste—Resene Paints, etc.—is actually an example of how we can sit above there at the apex of looking after the environment. And that is why, with the Environmental Protection Authority doing its role in making sure that everything is being regulated and everybody is contributing, there is no need for Meka Whaitiri’s bill.

I think that to allow us to stand and speak about this seems to be a bit of a waste of parliamentary time when we have a lot of other important bills that need to come to this House and go through. Although it might have taken her a little bit of time to put it together, and all the people across the other side of the House are all talking and jabbering back to me, I can tell you right now that the work that this Government has done for protecting the environment goes a long way—much more than the 9 years of a Labour-led Government that did absolutely nothing. So, in wrapping up, I am proud of the work that this Government has done to do with protecting the environment. The Environmental Protection Authority does a wonderful job. I do not support this bill. Thank you.

DENIS O’ROURKE (NZ First): The objective of the Environmental Protection Authority in the Environmental Protection Authority Act is in section 12, which says: “(1) The objective of the EPA is to undertake its functions in a way that—(a) contributes to the efficient, effective, and transparent management of New Zealand’s environment and natural and physical resources; and (b) enables New Zealand to meet its international obligations.”

This bill would add a new subparagraph to section 12(1) by adding the words: “(c) protects, maintains, and enhances New Zealand’s environment.” But section 12(2) is also relevant. It says: “When undertaking its particular functions under an environmental Act, the EPA must also act in a way that furthers any objectives (or purposes) stated in respect of that Act.” So the Environmental Protection Authority must further the objectives under any environmental Act, or, to put it another way, the objectives of the Environmental Protection Authority Act are the objectives stated in “an environmental Act”, so then you have to look at those Acts to see what the objectives are.

So the problem is there is no definition in the Environmental Protection Authority Act of the words “an environmental Act”. Does it mean the Environment Act itself? You would think it would, because it is the Environment Act, and yet that Act has no specifically stated objectives at all. Is that not strange? So we have this legislation, the Environmental Protection Authority Act, that tells us to refer to legislation like the Environment Act, and yet that Act has no stated environmental purposes or objectives.

Does it mean the Resource Management Act? You would expect that it would. If so, then, contrary to the Environment Act, it has very comprehensively stated objectives. Section 5 says: “(1) The purpose of this Act is to promote the sustainable management of natural and physical resources. (2) In this Act, ‘sustainable management’ means managing the use, development, and protection of natural and physical resources in a way, or at a rate, which enables people and communities to provide for their social, economic, and cultural well-being and for their health and safety while—(a) sustaining the potential of natural and physical resources (excluding minerals) to meet the reasonably foreseeable needs of future generations; and (b) safeguarding the life-supporting capacity of air, water, soil, and ecosystems; and (c) avoiding, remedying, or mitigating any adverse effects of activities on the environment.”

So, contrary to the Environment Act, the Resource Management Act has a very comprehensive statement of purpose. So the purposes of the Environmental Protection Authority Act are those in other pieces of environmental legislation, only some of which, however, do have comprehensive statements of objectives. Some, like the Environment Act itself, have none at all. So that is a problem, I believe, with the Environmental Protection Authority Act.

In order to determine whether the Environmental Protection Authority Act has any adequately expressed objectives at all depends on whether the Environment Act has any adequately expressed environmental objectives. And it also depends, of course, on the interpretation of the words “an environmental Act” in section 12(2). There is no definition in the Act of those words. The most important Act thought to apply is, I believe, the Resource Management Act 1991. It has stated objectives, whereas the Environment Act itself has none.

So what we see, therefore, is that the Environmental Protection Authority Act has sloppy drafting when it comes to finding out what its objectives are. You have to refer to other legislation, some of which has environmental objective statements and some of which does not. For that reason alone, it is necessary this bill goes to a select committee to sort that out—to sort out how the objectives of the Environmental Protection Authority Act should be properly expressed in that Act and not expressed by reference to other pieces of legislation.

So the point here is that there is an issue to be fixed, and I am surprised that the Government members opposite do not even seem to advert to any of this. It is time they did. New Zealand First will support the bill going to the select committee for that purpose alone.

MATT DOOCEY (National—Waimakariri): I am rising to speak to the Environmental Protection Authority (Protection of Environment) Amendment Bill in its first reading. I will not be supporting this bill, but I would like to acknowledge Meka Whaitiri for her member’s bill being selected from the ballot. I know that for myself, having had a bill selected recently, it is a great excitement, and you look forward to it going through the legislative process. I must say how, unlike New Zealand First, I just discuss my member’s bill in my caucus. I do not need to raise it as a question in question time.

The purpose of this bill is to amend the Environmental Protection Authority Act 2011 to add an additional objective around protecting, maintaining, and enhancing New Zealand’s environment. So, as I have said, I am not supporting this bill, but I must say, in support of protecting, maintaining, and enhancing New Zealand’s environment, that I think that objective is intrinsic to being a New Zealander and it is intrinsic to being a Kiwi. We must, through legislation, policy, and just how we work on the ground, always look to protect our environment. Some in the Green Party will say it is only they who protect the environment, but, in fact, it is intrinsic to every New Zealander. Looking to protect our environment is part of being a New Zealander. At the end of the day, our environment is something that is very valuable to us.

There are two reasons for that, and they are especially very relevant to my electorate in Waimakariri. So it was disappointing when I read in this bill about protecting, maintaining, and enhancing New Zealand’s environment. I wanted to support it, but when I looked at the actual bill and at inserting those three words into the purpose of the Environmental Protection Authority Act I did not believe that that would actually achieve the outcome. It is important because in my electorate, if I use that as an example, the environment is important for tourism. We have great ecotourism and adventure-based tourism based on the mighty “Waimak” river, where many tourists come out from the cruise ships in Lyttelton and get taken through some breathtaking wilderness as they fly down the “Waimak” river on the Waimak Alpine Jet. We also use the environment for tourism on the “Waimak” for the great Waipara region of fantastic North Canterbury wines.

Also, there is a very big industry on the “Waimak” around primary industries and farming, and you will not find a person who knows that tension of protecting the environment and promoting the economy and productivity of their land better than a farmer. That is something that we struggle with on a daily, weekly, and yearly basis on the “Waimak”, around issues such as water management and nitrate leaching, but I must say that where that work gets done is on the ground between the stakeholders involved, such as in the zone committees that feed into Environment Canterbury. It is not in the legislation such as this. So I do not believe that by adding the words “protects, maintains, and enhances New Zealand’s environment.” the bill will do the job it says it does. It is in legislation like the Environmental Reporting Bill, which this Government recently discussed and passed in legislation, ensuring that we meet OECD standards around reporting about our environment, and that includes a range of domains. One domain I am specifically interested in as an asthmatic is around the domain of air. We must ensure that we have clean air and work through for clean energy to support clean air and reduce the asthma rates in New Zealand, which are very high.

In summing up, I would like to congratulate Meka Whaitiri on her bill. I believe in the aspiration of protecting, maintaining, and enhancing New Zealand’s environment, but I do not believe that this bill in its current form will do what it is expected to do, so I do not support this bill. Thank you.

GRANT ROBERTSON (Labour—Wellington Central): They say that in this place what goes around comes around, and I believe that I may well have been, long ago, the person who was responsible for this piece of legislation finding its way to being written up. Meka Whaitiri took it on and had better luck than I do, in terms of the members’ ballot, and had the bill drawn. I think that it is fantastic for Meka and good for the House to be debating this legislation right now.

I just want to start by responding to Joanne Hayes’ comment that the introduction of the words “protects, maintains, and enhances New Zealand’s environment.” to the objectives of the Environmental Protection Authority Act would be difficult and confusing. It is a little hard to believe that mentioning the importance of protecting, maintaining, and enhancing the environment would actually create enormous confusion among people working on something called the Environmental Protection Authority. That is a silly argument, and it is not actually what this is about whatsoever.

It is a very, very simple bill. It is a bill that tries to do something that I think the National Government always had a problem with when it came to the creation of this agency. When you read it, everything about the legislation is minimalist. It is as little as the Government can get away with in terms of protecting the environment. So when you look at section 12 of the Environmental Protection Authority Act, which is being amended substantively by this bill, the objective of the Environmental Protection Authority Act is to “undertake its functions in a way that—(a) contributes to the efficient, effective, and transparent management of New Zealand’s environment …”. That is not very ambitious. The party that was ambitious for New Zealand—the Bluegreens; Nick Smith’s little faction within the National Government—would have beavered away on the creation of the Environmental Protection Authority, and it celebrated its victory with the idea that the Environmental Protection Authority would contribute to the efficient, effective, and transparent management of New Zealand’s environment. The Act also goes on to say that it will enable New Zealand to meet its international obligations. Well, there are some interesting things that we could talk about there.

So the Act is minimalist. It is as little as the National Government could be seen to do to have some kind of agency whose job it was to–I do not know—protect, maintain, and enhance New Zealand’s environment. This is what the bill that Meka Whaitiri has brought before this House tries to do. It tries to lift the sights of the National Government. Pick up and say: “Nick Smith could have done better than just considering the effects on the environment; he could have a piece of legislation and an authority whose job it is actually to get out there and promote New Zealand’s environment—protect it, enhance it, and be ambitious for the place of the environment in our wider society.”, but no, the National Government is turning down that opportunity today because what it wants is an agency that does not have that ambition of protecting and enhancing the environment.

I think that is sad, because, as a rule, I believe that New Zealanders want that from their Government. If there is one thing that New Zealanders are proud of it is their attachment to their environment—be that in the broader sense of just being out in the environment tramping or being in the conservation estate, all the way through to how we stand up for ourselves in the world. Our clean, green image is the thing that drives so much of our economy. All of that is about the environment.

Fundamentally, New Zealanders want to be proud of their environment and want to see it protected, maintained, and enhanced, and the opportunity is here today for members in this House to insert a simple clause into the objectives of the Environmental Protection Authority Act to help add to that whole picture of how New Zealanders see themselves and of how we can be proud of ourselves here in New Zealand and around the world. [Interruption]. Mr Assistant Speaker tells me that I have 1 minute to go, and in that minute I will speak about a court case. That will not give him much time to make me sit down over that, but I will do so within the rules.

Right now in the High Court, there is a consideration of the Environmental Protection Authority board of inquiry’s decision about the Basin Reserve flyover, and the very thing that the New Zealand Transport Agency is arguing today is that the environmental impact of that flyover should not be the primary consideration—that is the very thing that it is arguing today. This legislation would give certainty to the fact that the importance of protecting, maintaining, and enhancing the environment should be one of the objectives of the Environmental Protection Authority. This bill should be supported.

Hon Dr NICK SMITH (Minister for the Environment): The Environmental Protection Authority (Protection of Environment) Amendment Bill exposes just how lazy Labour has been after 6 years in Opposition. This bill is the sum total of its contribution to improving New Zealand’s management of its environment. It is poor law and it is a vacant bill, and let me explain why. Somehow there is a view on Labour’s benches that adding the words “(Protection of the Environment)” will somehow save the planet. It is as shallow as saying: “Let’s just pass a bill that says: ‘Let’s Make Sure All the Children Don’t Go Hungry’. That’ll fix it. Let’s pass a law for workplace safety: ‘All Workplaces Will Be Safe’. Let’s pass a Health Act that says: ‘Nobody Will Get Sick’.” That is how pathetic this bill is in its contribution to improving the state of New Zealand’s environmental laws.

Let me share the legal advice from the Ministry for the Environment, because it too shows just what a pathetic bill this is. You see, the Environmental Protection Authority administers the Resource Management Act on a decision like the flyover. It administers the legislation on climate change. It administers the legislation on hazardous substances and new organisms. Each of those Acts has a very clear purpose about what it is about. What the Ministry for the Environment, rightly, says is that by somehow asking: “Is the purpose of the Resource Management Act sustainable management?”, that should make up the decision on a case like the flyover, or should it be this—can the member answer me?

Grant Robertson: Sorry, what was that?

Hon Dr NICK SMITH: Does the purpose of the Environmental Protection Authority, when it makes a decision on the flyover—should it be the purpose of the Resource Management Act, which is a purpose clause that has been debated extensively in the House, or should this bill be it?

Grant Robertson: No, the EPA has objectives, Nick, and that’s how they help make the decisions.

Hon Dr NICK SMITH: Oh, the member cannot give me a straight answer. He actually does not know the answer to that critical legal question. The point is that the Environmental Protection Authority makes its decisions under the climate change legislation, under the Resource Management Act, under the Hazardous Substances and New Organisms Act, and under the purposes that are contained within those Acts, and it just creates legal confusion and a mess if you then superimpose the provisions that are in this bill. It is sort of like saying that if we want to protect the environment, all we need to do is to repeat those two words 10 times and it will be better environmental protection. Well, why not put them into the Act 20 times, or 30 times? Of course the words “environmental protection” are in the Environmental Protection Act. Of course the words—

Grant Robertson: Where?

Hon Dr NICK SMITH: In the title. Of course the words “environmental protection” are a core part of the Environmental Protection Authority.

What sort of shallowness masquerades as good environmental policy by putting two extra words into the law? Is that the sum total of the intellectual rigour that Labour is prepared to give around the environmental challenges that our country has? Labour opposed the establishment of the Environmental Protection Authority, and if this bill is the sum total of Labour’s contribution to good environmental law in this country, it needs to spend another hundred years in Opposition to be able to make a contribution to better law in this area.

This is a pathetic bill. This bill will do absolutely zip for the protection of the environment. It is the sort of bill you have when you have no other ideas about how to make a contribution. This House should reject this bill, consistently with the sound advice that has come from the Ministry for the Environment. It does nought. It contributes nothing. It is the sort of policy you have when you have no policy.

A party vote was called for on the question, That the Environmental Protection Authority (Protection of Environment) Amendment Bill be now read a first time.

Ayes 61

New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2; United Future 1.

Noes 60

New Zealand National 59; ACT New Zealand 1.

Bill read a first time.

he question was put that the Environmental Protection Authority (Protection of Environment) Amendment Bill be referred to the Local Government and Environment Committee.

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

Ayes 61

New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2; United Future 1.

Noes 60

New Zealand National 59; ACT New Zealand 1.

Question agreed to.

Bills

New Zealand International Convention Centre Act 2013 Repeal Bill

First Reading

TRACEY MARTIN (NZ First): I move, That the New Zealand International Convention Centre Act 2013 Repeal Bill be now read a first time. I nominate the Commerce Committee to consider the bill. This bill could possibly be the most important piece of legislation that this House has had to consider since the last member’s bill of mine that was in this House not that long ago, which I managed to convince this Parliament was in the best interests of New Zealand and New Zealanders, and which passed into law. I have high hopes that members of this Parliament, once we have a robust debate—and I expect a robust debate but I expect common sense to prevail. I hope that possibly at least one member of a very, very minor party inside this Parliament will allow his initial reaction to this bill to prevail, grab hold of his gumption, not answer that phone, and come down and cast a vote in order to actually see this bill go through to the select committee. Go with your initial reaction, I say to that member, and he knows who he is—he knows who he is.

Just like my last bill, this is not a very substantial document. It is not hard to read. It is not difficult to understand. It is in plain English, so Dr Smith might be quite comfortable reading it and making sure that he does not have any problem with the language of it. The bill does a single thing. It repeals and gives this country the opportunity to go back to a fair and open and transparent discussion around the building of a convention centre in Auckland that would truly benefit New Zealand and New Zealanders. That is what this bill does. It provides this Parliament with an opportunity to undo an act that has been perpetrated on the New Zealand public. I am going to be walking a very fine line, Mr Assistant Speaker, and I know I am, so I will watch you very closely. There are things around what preceded the piece of legislation that this bill seeks to repeal that have given some people cause to reflect and to feel somewhat uncomfortable.

What we are seeking to do here is to repeal the New Zealand International Convention Centre Act 2013 and this would stop—this would 100 percent stop—the current plans that are being made by Skycity to build that convention centre. I have no doubt that members of the Government will stand and refer to the cost of stopping where the process is at, at the moment. I have no doubt that that is what the Government will do. But one would have to argue whether good money is worth throwing after bad, because what we have got now—I would argue—is that Skycity has already broken the deal that was entered into with this Government that created that piece of legislation.

The arrangement that was entered into—the contract that was entered into—by Skycity has several clauses in it. One of those clauses is around the size of the convention centre that would be built and the amount of money that it would be built for. Those things have changed, but it was on the basis of that contract that the current legislation, the New Zealand International Convention Centre Act 2013, was brought to this Parliament. It was brought here based on that contract, and the legislation—there is no getting away from what the legislation does—provided 230 extra pokie machines and an extended, exclusive licence to Skycity until 2048. It guaranteed to a private business the protection of this Parliament around its business until 2048. The arrangement was based on this contract over here, and yet the contract has not been delivered. Skycity has already broken that contract.

When this bill was pulled from the ballot in March, the New Zealand Herald quite correctly reported that this bill would pass if two things happened. The first was if Winston Peters won Northland. The second was if the ACT Party supported it. Well, we all know what happened in Northland—we all know what happened in Northland. The Rt Hon Winston Peters steamrolled home, overturned a massive majority held by the National Party, and sent a message—and one hopes regional New Zealand is watching, because it has been received. So that is what happened with point No. 1. So we have No. 1 lined up.

And we have No. 2 available to us, and it will be interesting to hear what Mr Seymour will say with regard to this bill. I hope that Mr Seymour is tired also, just as Northland was tired, of being taken for granted. I hope that Mr Seymour is tired of being taken for granted by this Government. I hope that Mr Seymour is tired of the National Party telling him that life is rosy and everything will be fine if he does what it says, in the same way that it told that to Northland for 70 years and that ended up in nothing. I hope that Mr Seymour is tired of being taken for granted. I hope that Mr Seymour will cast his vote today on his gut reaction—the gut reaction that he has gone on record and has recorded. I hope that he will do that.

Originally, this bill was actually in response to the request by Skycity for more taxpayers’ money. Since then, the design has been changed, which, as I said, is one of the reasons why we feel that the original contract has now been breached and, therefore, the repeal of this Act is quite justified. It has now made the convention centre smaller. The numbers that Skycity says it will be able to bring to New Zealand have changed, although it has confirmed that no new economic modelling has been done since the 2011 report. It is a totally different convention centre from the one that it mooted in 2011, when it edged out, supposedly, four other bids to build the centre, winning on the basis of a promise that it would cost taxpayers nothing but would require a change to the gambling law so that it could—I do not know—get more on its investment, I gather.

We do not know what the economic modelling is of the new centre that Skycity now says it is going to build. It is 19 percent smaller and it is going to have smaller conventions. We also do not know whether, even at the design stage, Skycity will have to come and say to the New Zealand public: “Hmm, sorry, can’t build it for that.” What happens if it gets halfway through and it says: “Hmm, sorry, can’t build it for that.”? We have no confidence that Skycity can actually continue to deliver even the amended criteria that it has put there, and we do not have a signed contract around that amended contract. The original contract and the original deal that brought in this legislation still stands. That is one of the reasons why this bill is here: to give this Parliament an opportunity. Let us put this deal back on the table. Let us put this deal, or arrangement—the possibility of a convention centre for Auckland—back out there into the public domain. Let us actually have a fair and honest process so that we can truly discuss whether that is the best thing for Auckland. Let us have a conversation about that.

There is one other little point too. It is one other little point, and that is around two pieces of overlapping and not quite connected pieces of policy area. What we have on one hand is Skycity with 230 more pokie machines and an extended licence protected by this Parliament until 2048. On the other hand, we have Auckland City with a policy of a sinking lid on pokie machines. So we have a Government that overrode the by-laws of a city, and yet everywhere outside that convention centre there is a sinking lid on pokie machines. Nobody can replace any pokie machines in any RSA or bar, or whatever, in Auckland City. Eventually, that will provide a monopoly for Skycity.

Those two pieces, independent of each other but overlapping in reality, will create a monopoly beyond 2048 that Skycity will have, and it will have it merely because this Government gave it to Skycity. And this Government gave it to Skycity merely because one person would not vote with his gut. One person would not actually take his initial reaction and support legislation—that is, if this gentleman chooses to go down this pathway. So if this gentleman chooses to go down this pathway, it will be upon that basis. So we know where the Government stands—we know where the Government stands. There is one opportunity here for one gentleman to make a difference, to stand up and be counted, and to say: “I’ve had enough of being taken for granted. I will not be taken for granted again. Don’t think you’ve got my vote just for the hell of it. I will stand up for what I believe in and I will allow this bill to go to a select committee.” Kia ora.

MELISSA LEE (National): I rise to take the first call from the Government benches opposing this bill by the list member from New Zealand First, Tracey Martin. I would like to give her a piece of advice, first of all, to maybe say that she should have protested perhaps that she was not going to take being voted down from her deputy’s role. She should have stood up, but I am not so sure whether that was actually heard in her caucus.

This is a bill that would effectively wreck and ruin all of the Government’s amazing efforts to develop public-private partnerships in Auckland and other parts of the country that are vital to the Government’s Business Growth Agenda to support hard-working families and develop a strong economy for our nation.

This bill, the New Zealand International Convention Centre Act 2013 Repeal Bill, is nothing more than an attempt by the member for New Zealand First on that side of the House to put a stopper—[Interruption]

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I just ask the member to resume her seat. I know that at the beginning of the member’s speech she did invite some response, and she got that response. I think now we will have a bit more decorum and a slightly better tone of interjection, thank you, Mr Mark.

MELISSA LEE: As I was saying, this bill is nothing more than an attempt by the member for New Zealand First on that side of the House to put a stopper on the excellence that will come out of understanding new enterprise, new opportunity, and the growth of modern facilities that can cater to international conferences, without the stress currently on the wider hospitality and event management system.

I would like to quote my colleague the Hon Bill English, back when the original legislation was read in 2013, when he said: “This is a bill that will provide jobs and better incomes for New Zealanders.” That is a fantastic thing—providing jobs for New Zealanders. Paraphrasing my colleagues, we know that there are at least 1,000 people employed in the construction process. The convention centre, when open, will employ 800 people servicing all those who go there when it is up and running.

This International Convention Centre, which the National Government has worked on with Skycity on, will be a great opportunity. Quite simply, the New Zealand International Convention Centre will cater to nearly 3,500 international conference delegates at any one time. If members in this House have been overseas to an international conference where there are thousands of delegates who are actually catered to, and have come back to New Zealand thinking that we do not have one of those—we do actually feel a little bit envious. This is going some way to addressing that need that this country has.

The convention centre is being built to a state-of-the-art design, and it will have state-of-the-art internal facilities, for cost by a private provider that is able to fund the project through Government support in a non-monetary fashion. This is the best sort of deal. This is the sort of contract we should see more of. The Government is not actually spending a cent on this. This convention centre will increase GDP, a great result for a zero-dollar investment by the Government. It will increase GDP by $49 million.

When we talk about the convention centre, we are talking jobs. We are talking growth. We are talking about the revitalisation of the City Rail Link, which I know some members in this House often talk about—public transport. We are talking about our Business Growth Agenda, the plan to get a strong economic growth programme in place that even the Labour Party cannot possibly fault.

To repeal the Act is to shout aloud that we do not want those visitors from overseas to New Zealand, that we do not want stable enterprise, and that we do not want those businesses willing to take the risk of coming to the most remote OCED nation to do business and trade. We are basically turning away people who are wanting to come to New Zealand, to spend money in New Zealand.

This bill talks about protecting New Zealanders from financial liability, and I am a little bit baffled as to what liability this bill is talking about, as under the current deal, actually, we have none. The member’s bill, however, creates a huge liability and it will hurl our Government into debt through legal negotiations, breach of contracts, and general bad faith, actually, on behalf of Parliament. The Government, as the taxpayers’ representative at large, would be liable, and all of New Zealand would lose on that value that the convention centre would offer by trading the non-monetary concessions that were negotiated in favour of Crown liability for the full debt.

We are managing the economy. We do not need $400 million of debt, as much as that member on that side might actually want it. This agreement will put New Zealand on the map as a world-class destination to hold conferences. At the moment we do not have one as such. Our capacity to host business tourism—let us actually get New Zealand talking on the world stage, in all fields. We need to get commercial and societal business into New Zealand, and this convention centre will create a means to do so. We are building a competitive economy. We are getting growth—over 150,000 jobs under the National Government. This project is just one part of that agenda, but it, like all parts, is important to the growth of the economy. [Interruption]

Members have actually sort of pointed out that we are talking about a serious issue here: we are talking about problem gamblers, too. There are problem gamblers in our community. We do know that, and this Government has asked Skycity to make a commitment to the people of New Zealand to actually ensure that it is addressing and implementing the recommendations that we have requested here in this House, to ensure that those who are problem gamblers can get the help that they need without strife or further concern.

Gambling is a nationwide concern. It is an issue that many people are concerned about, particularly in the ethnic communities, because there are quite a few ethnic community people who are, in fact, going to the casinos and have actually been identified as problem gamblers. One of the reasons why people actually become gamblers and get addicted to gambling is often they find that in the casinos they are treated like part of the community when, on the outside, they perhaps feel like an outcast—a feeling not helped by the Opposition’s lack of charity and kindness to ethnic communities, like the Labour Party showed in recent days.

This Government has ensured that to deter problem gambling and money-laundering, Skycity, as part of its responsibility to the people of New Zealand, must take practical steps to address issues of problem gambling. This will include a predictive modelling tool that analyses data to identify players at risk of problem gambling; a voluntary pre-commitment system, where players can elect to restrict the amount of time that they play or the amount that they spend; and doubling the number of host responsibility specialists to deliver 24-hour, 7 day-a-week coverage—people actually there to make sure that those using the services of Skycity can feel safe and that someone is there to support their decision if they choose that they have had enough.

So problem gambling will be an ongoing issue for communities. It is an addiction. No number of machines, pokies, or tables will be too few or too many for the problem gamblers to deal with. The measures are in place to support recovery and help New Zealanders in those situations where they may be in trouble. I say that, because Skycity is not the only gambling venue. Gambling is, in fact, a nationwide issue and concern. It is not just one company’s issue that we should be talking about.

Simply put, this bill by the New Zealand First member and the recommendation to abolish these innovative public-private partnerships is nothing more than just a knee-jerk reaction to a company with diversified interests wanting to move into areas where New Zealand as a whole can actually benefit, that our nation can benefit from. I expect we will hear more about lots of conferences being booked in New Zealand as a result of that—maybe even within New Zealand. Maybe people living in the South Island might possibly like to come up to Auckland, to book a convention. Let us not step back into the past and put New Zealand into debt. Let us get New Zealand on the right path and ensure we have a par excellence convention centre in the nation’s largest city.

DAVID SEYMOUR (Leader—ACT): I raise a point of order, Mr Speaker. During the previous member’s speech, a member made several unparliamentary accusations, particularly in breach of Standing Order 120—imputations of improper motives against the member who was speaking at the time. He ought to stand, withdraw, and apologise.

The ASSISTANT SPEAKER (Lindsay Tisch): I did not hear those comments. It would have been appropriate at the time to have bring them to my attention. If there were some accusations, as you allege, across the Chamber, it would have been appropriate to bring them to my attention. If the member is asserting that someone has made unparliamentary comments—[Interruption] No, no. If this is a matter where some member feels aggrieved, then I would ask the member concerned, if they feel that they have done something wrong, to withdraw any comments. Is there anyone? I do not know whom the allegation is made against. All right. Well, from now on, if there are allegations and there are unparliamentary comments being made, I ask you to bring them to my attention at the time, and then I can rule appropriately.

Dr DAVID CLARK (Labour—Dunedin North): The New Zealand International Convention Centre deal is a shoddy deal built on the back of problem gambling. When other bidders were knocked out of this process, the New Zealand International Convention Centre was talked about as hosting conferences of up to five—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! I am sorry. I do not want these interjections across the Chamber that have got nothing to do with the debate in hand. We have settled that matter. If this continues, then I will intervene at the time. That is the end of the story.

Dr DAVID CLARK: We need to preserve my voice. At the time the deal was struck they were talking about conventions of up to 5,000 people in the main plenary sessions. Now we have a convention centre that is a little over half that size: 2,850 people in the main plenary centre. The size of the convention centre, the world-class, iconic convention centre we were promised, has been halved. It has been halved—and that is since the other bidders were knocked out of the contest. The deal has not been transparent. It was a shoddy deal done behind closed doors between Mr Key and the executives at Skycity.

The Labour Party will support this bill to select committee because we think it needs the transparency of sunlight, the disinfectant of sunlight, on the deal to understand just to what extent the taxpayer has been put over a barrel by Mr Joyce and Mr Key. We know that the taxpayer has been put over a barrel. That was obvious from the start. I predicted it in 2013 and it was reported in the media. The original agreement was so poorly written—it was so poorly written—it was extremely obvious that Skycity would come back and ask for more money. Lo and behold—what happened? Just over a year later, Skycity came back and Mr Joyce was out there peddling the benefits of extra rates or taxes on New Zealanders to fund the centre. That is exactly what happened because that original deal was so poor.

The Auditor-General said the deal was neither transparent nor even-handed. I have never read anything the Auditor-General has said that has been so strong and clear about the actions of the Prime Minister and his Government—neither transparent nor even-handed. That is straight talk and it is accurate. This is a shoddy deal and it has been shoddy from the start. The Government’s own department told it that there would be 8,000 people—more than 8,000 people—affected by problem gambling, because it does not affect just the problem gamblers who are created. Although there will be hundreds more of them, the department says, it affects many other people too. This is a shoddy deal and New Zealanders will be paying for it for a long time to come.

Nobody thinks that an international convention centre is a bad idea. The concern is over the way it has been done. We think that a select committee process will give an opportunity for the real story to come to light, for New Zealanders to understand just how far this has gone and just what a position the taxpayer has been put in by an inept Government that is so out of touch and so arrogant that it thinks it can come back after saying it was a free convention centre and say that the ratepayers of Auckland should stump up. This is a Government that is so out of touch that when that does not happen it says: “We will not remove any concessions but we think Skycity can make the centre 10 percent smaller.” Fine, OK—go for it. Skycity’s bottom line is what it is protecting, not the taxpayers of New Zealand, and that has been true from the start. If we have a select committee process, if this Government does not block it, because it is afraid of the disinfectant of sunlight—and I suspect it will, but we will see—then we will hear the real story behind this deal. It will come out into the daylight and New Zealanders will be appalled. This Government is out of touch and arrogant if it thinks it can block this and that the questions will stop coming, because they will not. New Zealanders are not happy with what has happened here.

Of course, Treasury also advised that the cost-benefit analysis was dubious. It said it had strong concerns—“strong concerns that private benefits to SkyCity will exceed public benefits to New Zealanders”. This deal is from the Ministry of Business, Innovation and Employment, of course, which brought us the $140,000 TV screens, the $260,000 sundeck, the reception desk that cost $74,000, the sign out the front for $67,000, and the hair straighteners—that is right. This same ministry negotiated this deal. I do not blame the officials. This is a meddling Minister who directs deals in favour of his Government’s interests and not in favour of New Zealanders’ interests.

The independent report on how many jobs this would create was actually called for by the ministry, and on its website it says it would create a net 18 jobs for the economy at the end of all of this, once building and construction is over. Eighteen jobs—and that was when we had the bigger convention centre. How many now, Mr Joyce? I would be interested in an answer to that. It was net 18 jobs because the jobs are taken out of Hamilton, Taupō, and Rotorua. What are the people in those communities saying? What are they saying—

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

BRETT HUDSON (National): It is a pleasure to rise and speak on this member’s bill. I think it is only appropriate when the bill is introduced that we should reflect on its intention and its content before arriving at a decision whether or not to support it. Alas, it did not take terribly long to determine that this bill is certainly not worthy of support.

Let us look at the intention that was expressed as to what this bill would achieve. The explanatory note purports that the deal the Government struck with Skycity to build the convention centre would expose the taxpayer to risk and that repealing the provisions—that Skycity would build a convention centre with no outlay of taxpayer money in return for some regulatory concessions—reduces risk to the taxpayer. I am afraid the reality is that it would have the absolute opposite effect, because instead of a convention centre being built for an outlay of zero taxpayer dollars in return for those regulatory concessions, the taxpayer would, in fact, be in the gun for the $400 million full value of the centre. It is difficult to see how under any interpretation of English that that somehow places a lesser risk on taxpayers than spending nothing.

Further than that, if we were to pass this particular member’s bill we must also question what would happen to the reputational risk of New Zealand and the New Zealand Government if investors around the world—even our own citizens could not have confidence that a Government of theirs when entering into a commercial agreement would actually honour the terms of the agreement. So there is no question in my mind that the bill does not actually do what it would purport to do. For that reason alone it is not worthy of support. But I look even more broadly than that context and I look at why it is we even have the convention centre—what the impact of removing it or removing the way we can achieve that for zero taxpayer outlay would be.

This is a Government that is working hard to grow the economy, to provide more jobs, and to build opportunities for New Zealanders. This convention centre will deliver growth and jobs to New Zealanders and mainly in Auckland. It is one that would help to place Auckland on the international map for convention destinations and the flow-on impact of that, which we get from Tourism New Zealand, is a greater increase in tourism dollar spend in Auckland. This is because more than half of the convention-goers would have a partner or a spouse with them and the daily spend of groups like that is about $3,000 a head, so we get a higher-value tourist, a greater spend, and Auckland on the map as a destination. It would certainly boost tourism for Auckland and perhaps even more broadly as many tourists, when they visit Auckland, will also pay side visits to the other parts of New Zealand.

The convention centre itself, if we look at other infrastructure of a similar nature that might have been built in the past, would produce a capacity of about 3,150 maximum delegates, spinoff benefits of a projected annual injection into the economy of about $90 million, 1,000 jobs during construction, and 800 jobs ongoing once the convention centre is up and running.

It is worth noting that tourism is already 7 percent of our gross domestic product and this deal that we have reached would help to grow that further. We have heard in recent days members opposite trying to make a lot of noise about how our economy is exposed to one particular area of exports in terms of dairy, which is not performing as strongly at the moment as it has in the past, and they talk about diversification. Well, all the more reason, if they really meant what they were saying, that they would leap in behind and vote against this bill, in support of the deal the Government has done with Skycity to further raise growth in the tourism industry in New Zealand and help to provide that diversification.

The bill simply will not do what it states its intention is. It is a poorly drafted bill, a poorly directed bill, and I do not support it.

METIRIA TUREI (Co-Leader—Green): I want to thank Tracey Martin for the New Zealand International Convention Centre Act 2013 Repeal Bill and for the opportunity to vote in favour of it. It has long been Green Party policy to oppose and repeal the New Zealand convention centre legislation. You have to remember that the only reason the original legislation exists in the first place is that Skycity—which had been fighting for some 20 years for more pokie machines, more gambling tables, and an extended licence—finally managed to do a dirty deal with the National Government to make it happen, and the Government had to change the law. The legislation has nothing to do with a convention centre. Let us be really clear. The legislation just sets out how to change the law to give Skycity Casino 230 more pokie machines, 40 more gambling tables, cashless gaming opportunities—

Ron Mark: What do you call that?

METIRIA TUREI: —that is right; what do you call that—and a 35-year extension on its licence. That is what the first piece of legislation does, and what Tracey Martin’s bill does is repeal that, and quite rightly. We must remember that Skycity has spent a lot of money and fought the Gambling Commission for many years to get all of those concessions. The content of those concessions—the 230 pokies, the 40 gambling tables, the 35-year licence—essentially creates an entirely brand new casino in Auckland. It is the equivalent of the Dunedin and Queenstown casinos combined. So it is a very significant casino that will now be created in Auckland as a result of the original legislation. And Aucklanders do not want it. Aucklanders do not want a casino that large. They do not want that, and not only did they say they did not want that casino, they have now been locked out of the resource consent hearings for the convention centre that delivers that casino.

Let us remember: the convention centre is simply a cash delivery device to the casino. That is why it is going to do it this way. Skycity will build this convention centre and bring people in. Skycity now has the right to build a 300-bed hotel on highly valuable Television New Zealand land. Those people are going to come in; they are going to stay at Skycity’s hotel; they are going to walk through tunnels to the Skycity Casino, which will be expanded with even more retailers included within those four walls; and then they will go to the convention centre during the day—back past all the retailers within the Skycity envelope to the significantly expanded casino and back to the Skycity hotel. All that this original legislation on the convention centre does is deliver more customers and more money to Skycity.

What does it also deliver? It also delivers significantly more harm to Auckland families and Auckland businesses. For a number of years KPMG was recording gambling as one of the reasons for significant employee fraud. It did this for a number of years until, frankly, we started talking about it in the context of this legislation. It was recording the degree to which gambling—gambling was like fifth or fourth—was increasing, in the reasons as to why people were stealing from their businesses, and stealing from their employers. It was in order to gamble. It is an increasing problem in Auckland. We have seen so many examples of people who have spent hundreds of thousands of other people’s dollars at the casino in order to feed a gambling addiction. What does National, what does John Key deliver to Auckland? They deliver a smaller convention centre and a much bigger casino, which creates enormous problems for the families who live and work in Auckland and the businesses. Tracey Martin is doing the country—and Auckland in particular—an enormous favour, a great deal of good, by forcing us to yet again reflect on the dirty deal that was done between National and Skycity over the convention centre, which was always designed to deliver a larger casino for a longer licence to Skycity. Let us not ever forget that. Thank you.

Hon JUDITH COLLINS (National—Papakura): This bill is an interesting bill. It has been drafted with the full intellectual weight that New Zealand First has. It has three clauses and it has three sentences. In fact, the explanatory note, the clause by clause analysis, I see, has one extra sentence to that. So, clearly, the drafters in the Clerk’s Office have been helpful to New Zealand First by trying to make it look more substantial.

But I have to say that this is an interesting debate. I have been listening very carefully, and having myself previously been the chair of the Casino Control Authority, appointed in 1999 and having retained that position until I came to Parliament, I know something about casinos. One of the things I do not do is I do not gamble in them, unlike, of course, some of the New Zealand First appointees to that board, who did gamble in them all the time, outside of New Zealand, of course. I have to say that I have been listening all about the evils of gambling, and I wonder whether the people who have been calling out about the evils of gambling have themselves not gambled. Have they ever gambled? Would that be on racing, at the TAB, or on pokie machines? What about Mr Clayton Mitchell? That man had so many bars in Tauranga, which he owned with Mr Brad Shipton—you might have heard of him. I bet they had pokie machines too. Well, that is about as much as I will ever bet. That is probably pretty much what happened.

So when I listened to it I thought, gosh, why is it that only some gambling is all right but others are not? I mean, the casino in Auckland has well over 3,000 staff—3,000 staff who otherwise would not have a job. When we are looking at the New Zealand International Convention Centre itself, why should Auckland not have a convention centre? Of course, we cannot afford just to go off and buy it—not like, for instance, the last deal that Labour and New Zealand First did, which was in July 2008. That was the last time they did a real big deal, a business deal. That was when they paid $690 million for KiwiRail—$690 million for KiwiRail—which would have been great if the value had gone up, but, actually, what happened is that just a couple of months later Treasury came out with the facts that it had valued KiwiRail at a mere $369 million.

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

Hon JUDITH COLLINS: What that actually tells me is that when we are talking about doing a deal on the convention centre for the benefit of Auckland and for the benefit of New Zealand, New Zealand First members and Labour members are the last people we should be taking any notice of. The last time they did a deal supposedly for the betterment of New Zealand, they paid $300 million more to the American owners of Toll. That is what they did—$300 million more. I would have to say, if we are going to talk about that, why would you listen to those people?

Ron Mark: Two hundred and forty—that’s what you got.

Hon JUDITH COLLINS: I see that Mr Ron Mark has got a lot of noise today. It must be because of his new position as deputy leader of New Zealand First, after he very cruelly rolled my good friend Tracey Martin.

Let us talk about New Zealand investment. So many of us actually want to see New Zealand companies do well. [Interruption] Why are they so noisy and have so little to say? Why is that? It is, of course, because that is the combined intellectual brunt of New Zealand First. Having said that, Skycity is a New Zealand company that has been able to register on the Australian stock exchange as well as the New Zealand stock exchange. What it has been able to do as well is, for instance, in 2000 it bought the Adelaide Casino. In 2004 it bought the Darwin casino. This is a New Zealand company that is absolutely in extension mode. I would say, for anybody who wants to—[Bell rung]

Hon David Cunliffe: Mr Speaker.

Hon JUDITH COLLINS: Actually, sit down, Mr Cunliffe. Wait your turn. Having said that, Mrs Martin—and, I think, good on Mrs Martin—said that this is possibly the most important piece of legislation to be voted on in this House. I do not think so. I think it is possibly not the most important, but I have to say I like the fact that she backs herself. I like that, and I would say good on her. She has a marvellous sense of humour, as you would need to if you were a woman in the New Zealand First Party.

But to listen to what we have heard today, I have to say, the arguments are just pathetic. Basically it is that these people in the casino business are making money—oh, gosh, that is dreadful—and employing people and bringing people to New Zealand. Good on them.

Hon DAVID CUNLIFFE (Labour—New Lynn): What a pleasure it is to hear the honourable member who has just resumed her seat, the Hon Judith Collins. It has been such a long time since this House has been graced with the eloquence of her insults. It has been such a long time since we have been reminded of her first-person knowledge of the art of cruelty, so wrongly ascribed to the internal workings of another party. She did make one very important point, and she is probably, amongst all members of this House, uniquely qualified to speak about casinos. She was indeed, for many years, the chair of the Casino Control Authority, and that is relevant to this bill because the last time that Skycity twisted arms for a sweet deal, guess who signed off on that? Judith Collins, the chair of the Casino Control Authority. So if anybody in this House knows a murky deal, she does. She is the queen of murky deals. It is so clear it is like swimming in milk.

Hon Judith Collins: I raise a point of order, Mr Speaker. I take exception to the allegation and inference raised by that member. There was no murky deal with Skycity. It was actually a hearing under the law, and Labour was—

The ASSISTANT SPEAKER (Lindsay Tisch): No, no. [Interruption] Order! These are—[Interruption] Order! Who said that?

Ron Mark: I did.

The ASSISTANT SPEAKER (Lindsay Tisch): The member will stand, withdraw, and apologise for making that comment.

Ron Mark: I withdraw and apologise for making that comment.

The ASSISTANT SPEAKER (Lindsay Tisch): I am coming back to the point of order of the Hon Judith Collins. This is a debate, it is a robust debate, and I am not going to rule what the member said as out of order. Although he has put his own interpretation on the way he sees it, it is not a point that the House needs to concern itself with.

Ron Mark: I raise a point of order, Mr Speaker. I take offence to the comment made by Ms Judith Collins across the House at me. I ask that she also be instructed to withdraw and apologise.

Hon Judith Collins: Which one?

Ron Mark: You know damn well which one.

The ASSISTANT SPEAKER (Lindsay Tisch): Order! When the Speaker is on his feet there is silence. Once again, I did not hear what that comment was, but if the member made an unparliamentary comment I will ask her to withdraw the comment.

Hon Judith Collins: I didn’t make one.

The ASSISTANT SPEAKER (Lindsay Tisch): You did not make one. All right. We can only take the member at her word. [Interruption] Order! Look, this is a debate that I know is finely tuned and it has been robust and there are some sensitivities in it. But I would ask you to give consideration to all members and to come back to the substance of what this debate is about.

Ron Mark: I raise a point of order, Mr Speaker. If the Hansard records the comment of Ms Collins as an interjection and I present that back to you, what is the course of action beyond that?

The ASSISTANT SPEAKER (Lindsay Tisch): I have ruled. I asked a member whether they made a comment. They said they did not. I take the member at their word. I can only take a member at their word, and that is the end of the matter. So we are continuing with the debate.

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

The ASSISTANT SPEAKER (Lindsay Tisch): Is this a new point of order?

Hon Clayton Cosgrove: It is. Without rehearsing Mr Mark’s point, which you have ruled on, the question that is asked is, and I am not challenging your ruling, if evidence is presented later—

The ASSISTANT SPEAKER (Lindsay Tisch): No. I have ruled on the matter, and that is the end of the matter. The Hon David Cunliffe has the floor.

Hon Judith Collins: I raise a point of order, Mr Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): If this is a new point of order—

Hon Judith Collins: Yes, I just need clarification. If Mr Mark objected to me saying “Well, what about the SAS, Ron?”, that is not an unparliamentary comment.

The ASSISTANT SPEAKER (Lindsay Tisch): I have ruled on this matter. [Interruption] Order! I have ruled on this matter. That is the end of it. The next person who brings it up will be out.

Hon DAVID CUNLIFFE: I want to take up your invitation to return to the substance of the bill, and I want to hold the torchlight to the claims that have been made by members opposite in the previous two speeches.

This bill repeals the Skycity Casino legislation. It is a simple matter to repeal, and therefore there is no place for gratuitous insults about the length of somebody’s drafting. It is succinct, to the point, and does the job.

Why is the Act being repealed? Labour supports this bill to the select committee because we think that sunlight is the best disinfectant. It needs to be shone on this deal. We do so because we support good business practice. Business in Auckland has been asking itself why, since John Key met with the board of Skycity, miraculously all the other tenderers that were involved in the tender process were suddenly expunged from the books of the Ministry of Business, Innovation and Employment and only one tenderer’s tender was entertained. That is the heart of the flaw of this process. That is what this report from the Auditor-General said was unfair and improper.

Pita Paraone: That’s what the Government calls good business.

Hon DAVID CUNLIFFE: Well, that is the way National does business. But that is not the way that the decent business people of Auckland or of New Zealand want to see business conducted. I had a very senior chief executive officer say to me, after that occurred: “The rules have changed. How do you get business done in this town? You’ve got to know somebody who knows somebody in the National Party.”

That is no way to grow a strong economy or a fair and decent society. It is not what you know, but who you know. It is not whether the deal stacks up in terms of the numbers; it is whether you give some numbers to members opposite. That is not the way we should be conducting business. That is not my opinion. The flaws in this process are the considered judgment of an independent parliamentary officer—the Auditor-General no less. Members opposite should hang their heads in shame.

Ms Collins devoted half of her speech not to casinos but to railways. The only rails I can think of are the little things that go around a roulette table, but they are not owned by Toll Holdings, so why were we talking about Toll Holdings? The issue here is whether the process employed by the Government and given effect to in the Act is a fair one.

The member opposite claimed that 3,000 jobs would be created. Well, I am sorry but that is not what an independent report said. It said 18 net new jobs—one, eight. Mr Brett Hudson said that this was a diversification strategy by the Government because of the dairy slow-down. Well, here is the news to regional New Zealand. National’s answer to regional development is to suck your tourism business out of Taupō and Rotorua and Christchurch and Queenstown, and put it in Auckland, because poor old Auckland does not have enough business. That is National’s idea of regional development, from the list member who is such a political genius that he lost to Peter Dunne. So my last question—[Interruption] I think that speaks for itself.

DAVID SEYMOUR (Leader—ACT): This bill, the New Zealand International Convention Centre Act 2013 Repeal Bill, coming up the Order Paper has been a little bit like Christmas Eve—waiting, waiting, waiting for the opportunity to comment on Tracey Martin’s bill. I cannot help myself but comment that over the adjournment I read a profile of a couple of MPs who genuinely like each other, and I thought that whatever their cerebral shortcomings may be, at least they are decent guys. We just saw from the refusal to stand, withdraw, and apologise for unparliamentary language—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! I have ruled on this matter. When I have ruled on a matter, that is the end of it. I do not want it brought up again.

DAVID SEYMOUR: That is not the only privilege we have in this House. There is also the ability to put members’ bills into the ballot. Some of us toil away, research, consult, and work very, very hard in order to submit a decent member’s bill, instead of a single line. Mr Cunliffe said “Oh, well it’s succinct and it achieves the objective.”, and he may generally have a point, except that both of the New Zealand First members’ bills on the Order Paper today have that feature. You have to wonder whether that is not the common and causal element in those bills.

But it also has to be said to the members on my left—allegedly on my right, but today very much physically on my left—that this whole shebang is a disgrace. The purpose of legislation and regulation in respect of gambling is to prevent harm. Suddenly, we learn that some other public policy objective is to be pursued, namely a convention centre justified by the kind of Leontief modelling that would have made Lenin proud—and is it not sad to hear the members who supposedly believe in the market telling us precisely what the multiplier and the GDP and the employment benefits will be of a macroeconomic intervention into the economy.

Hon Member: Slow down, David.

DAVID SEYMOUR: Listen faster; listen faster. And is it not a disgrace to see those principles being abandoned. But not only do I have socialists on my left, but hypocrites on my right, because all them, given the opportunity, would be—

Carmel Sepuloni: I raise a point of order, Mr Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): I know what the member is going to say. I got that part. The member will withdraw that last comment. You cannot use a phrase in that context.

DAVID SEYMOUR: I raise a point of order, Mr Speaker. It is unfair to say that you know what Carmel Sepuloni is going to say.

The ASSISTANT SPEAKER (Lindsay Tisch): No, well—

DAVID SEYMOUR: She has a vivid imagination and she could have said anything.

The ASSISTANT SPEAKER (Lindsay Tisch): Ha, ha! I think I know what the points of order were and I am sure that I have got it right. So I will just ask the member to withdraw the phrase that he used and then carry on.

DAVID SEYMOUR: I withdraw and apologise for calling the members to my right hypocrites, but they are—

The ASSISTANT SPEAKER (Lindsay Tisch): No! Look, I have just asked you to withdraw that comment. I will give you one more chance—withdraw and apologise.

DAVID SEYMOUR: I withdraw and apologise.

The ASSISTANT SPEAKER (Lindsay Tisch): Now carry on, and that is the end of the matter.

Ron Mark: I raise a point of order, Mr Speaker. Can I ask you, in the interests of justice and fairness, to please consider what you have just said? That was blatant, deliberate defiance, and I have—

The ASSISTANT SPEAKER (Lindsay Tisch): I have ruled on the matter—[Interruption] The member will sit. [Interruption] The member will sit. Look, you are challenging the decision of the Speaker. [Interruption] Order! I have ruled. The member who was speaking has withdrawn and apologised. I said that next time it would be over. That is the end of the matter. I do not want any further comment on this, because all it is is a challenge to the Chair. We are moving on.

Hon David Cunliffe: I raise a point of order, Mr Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): If the member is relitigating this—

Hon David Cunliffe: No.

The ASSISTANT SPEAKER (Lindsay Tisch): I will hear David Cunliffe.

Hon David Cunliffe: Thank you. This is not a matter concerning trifling with the Chair, nor is it the repeating of the offensive word in the point of order, but a different matter. It appears that the member is some halfway through his speech. He has used a range of devices so far to avoid taking a position on the bill—

The ASSISTANT SPEAKER (Lindsay Tisch): No, that is not a point of order. The member will sit. You are trifling with the Chair.

DAVID SEYMOUR: Thank you, Mr Assistant Speaker. As I was saying, I believe that there is a philosophical inconsistency in picking apart one Government intervention in a deal when the same members, we all know very well, are in favour of rampant Government intervention in the economy, and would have so many of their own projects. For New Zealand First members I have one word, which is “railways”.

In actual fact, this bill would leave the Crown on the hook for, who knows, $400 million in fiscal cost, and it would undermine regulatory stability and New Zealand’s international reputation for regulatory stability. That is why the bill cannot pass. However, in this bill there is a salutary lesson for all members, which is that it is not simply that complex, ad hoc Government intervention is bad when the current Government does it—because that would bring out the “h” word—but that it is always wrong for Governments to mess ad hoc with regulations in place for one purpose, in order to pursue another objective, as the bill that would be repealed did. It is wrong for a Government to use modelling based on Leontief input-output modelling, which tries to anticipate the economic benefits or total welfare of a particular project, to justify a project. The consequences are that we now have a shonky contract leading to the construction of a convention centre that will compete with the Aotea Centre and not provide any of the benefits hoped for in diversifying the range of sizes of convention centres, but, rather, will intensify competition in one particular niche. That is why all of those things are wrong—because they lead to unintended consequences that are ultimately greater than the intended ones. I thank the member for putting the bill forward—sadly, 2 years too late—and let us hope that all members learn the salutary lesson that free markets and free minds beat ad hoc Government intervention any day of the week. Thank you.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): It is never too late—never ever too late—because this House has the ability to change the law. That is what our function is. I would like to say to the whole House that we are able to do that in this House.

I am pleased to speak on this bill, and I congratulate Tracey Martin on getting it to this stage. I think it is important that this bill goes to select committee. As my colleague Dr David Clark said earlier, there is nothing like a bit of sunlight on this to expose exactly what is in here, because there is a back story to this. The issue is that things have changed since the legislation was passed. That is what the issue is. So we come here today, and we should be allowing New Zealanders to submit on this bill. They deserve it.

I have heard some concerning things in this debate, particularly around the harm caused by gambling. It is a serious matter. Adding 230 pokie machines—the most insidious form of gambling in this country, I would say, and in the world—is a problem waiting for us, and we have to do something about it. Another part of that story is that Skycity gets to use these machines before the convention centre is even built. It is allowed to. These are changes that we should consider when we vote on this bill, to allow it to go to select committee. That is why I strongly suggest to the members opposite to have a think about the damage and harm that is caused by pokie machines.

I think that in addressing that issue we need to look at measures that address the harm caused by pokie machines. Only a few months ago, when hearing submissions on the Gambling Amendment Bill (No 3), we heard directly from gamblers, and they shared their story. It is a story about issues that they have to deal with. Adding 230 pokie machines—just one pokie machine can do a whole lot of damage to one person because there are very few mechanisms while they are sitting at that pokie machine. We need to use the technology that exists today to minimise the harm caused by those pokie machines.

That is why I really want to support this bill to select committee, because I think that New Zealanders deserve to have those mechanisms put in place so that there is an intervention within the technology that exists today. I strongly encourage all members of this House to go and talk to organisations that deal with harm caused by gambling.

This convention centre—we were promised an iconic, world-class convention centre. Since the legislation has passed into law there have been a number of adjustments that make the convention centre less iconic, a lot less world class, and, we would probably go so far as to say, not that impressive. The issue for me is that Skycity has received benefits based on the building of an iconic, world-class convention centre. I think that New Zealanders deserve the right to come to select committee and to say whether or not they agree that what we are receiving for the concessions we have made for Skycity—a 35-year licence, 230 extra pokie machines; that price—is worth it. If members vote against this bill they are denying the opportunity for New Zealanders to have their say, and that is why I support this bill.

SIMON O’CONNOR (National—Tāmaki): I want to begin by acknowledging Tracey Martin as the sponsor of this bill. It will be no surprise to her that I will not be supporting it.

Tracey Martin: Oh!

SIMON O’CONNOR: I know, shocker! For not only personal reasons but for constituency reasons, I have found, going throughout my electorate in Tāmaki, that there is support for this New Zealand International Convention Centre for a number of reasons. I will come to that. I think it is important to acknowledge the hard work that Ms Martin has put into this. She is the hardest-working in that party, and I think it is great that her bill has been drawn out and that we get a chance to acknowledge that tonight.

Pita Paraone: What are you after?

SIMON O’CONNOR: The Opposition—I am interested in truth, and it is good that your side begins to wake up and acknowledge some of the great work that your members are doing. But I oppose this bill, as other colleagues have done. Again, on reflection, I cannot help but think that there is a new entertainment troupe that could go to the convention centre, after we have heard some of the deliberations and sharings in the House today. I am not going to mention names, but even in the course of this particular discussion we have had, there were very entertaining, flamboyant qualities. Yes, we do not need a Blue Man Group or whatever at Skycity after this.

The agreement has been signed. It has been signed. It is unfortunate, in some ways, that this bill has come so late and after the fact. The reputation of the Government is incredibly important at any time, and certainly when it comes to anything to do with contracting. Having come from that background myself, your word is your honour, and how you articulate that in a written form is incredibly important. For the Government, the Crown, to repudiate that now, to turn on that, would be unfortunate and goes well beyond just simple costs. But costs themselves are important. The call for a convention centre, and a convention centre of a sufficient size, in Auckland has been there for a very long time. We are fully cognisant that the Labour Party has supported Skycity in the past—paradoxically, also allowing 230 pokie machines as part of the deal. But a convention centre that does not cut the mustard does not actually adequately support Auckland.

The National Party MPs in Auckland, like myself, want to see a convention centre that Aucklanders want, to actually help support our city. We think we have got an incredibly good deal here. Ultimately, for some changes in regulation and, yes, for more pokie machines, we are able to build and develop a world-class convention centre in Auckland. Even the current Mayor of Auckland is supportive of it. As I said a bit earlier, constituents of mine who work in the industry or who are associated with it are supportive of this. It is going to actually be good for the whole of New Zealand, because not every convention will ever be able to be held in Auckland, but through a great convention centre there I think it will actually highlight the convention centres in other places, like Queenstown. New Zealand is a small country; people can travel. So I do not see this as having any implications on the regional sector. I think, in fact, that this will highlight and further enhance New Zealand as a destination for conventions.

The other element around this is that we, as taxpayers, ultimately do not have to put forward one cent for this to be built. The risk is being taken on by a private firm, and I think there is always room for the Crown to stake the taxpayer to engage along with the private sector. This is a very positive step in this regard.

I think the last point that I want to raise, because there has been some sort of philosophical discussion around harms and how we balance those, is that in society there is always harm. There is harm to do with gambling, be it the pokies, Lotto, or horse racing. The quality of a Government is to balance those harms. We do not live in some sort of utopian world. No offence to my colleague from Epsom. The theories that various economists and the like will put forward are all well and nice, but our challenge here is to balance those harms.

So to Ms Martin and others who are supporting the bill, I think we do have the right balance in building this convention centre. We are putting in the checks and balances required around gambling, because we are aware that it causes harm, but we think that the benefits of having this convention centre far outweigh any other concerns, and I oppose the bill.

The ASSISTANT SPEAKER (Lindsay Tisch): Tracey Martin, 5 minutes in reply.

TRACEY MARTIN (NZ First): Kia ora, Mr Assistant Speaker, thank you very much. Well, that contribution was interesting. I think it certainly raised the blood pressure in here. We have had interesting dialogue. None of it was particularly surprising, bar one thing. There are a couple of things that I did not know before we started. One is that Judith Collins is my very good friend—and I appreciate that, Ms Collins. I appreciate that, and it is a joy to know. It is a joy to know that something like this can bring two sides closer together. So I appreciate that, Ms Collins. Thank you very much. The other thing that I did not know before I started—well, I kind of did know it, but it has been reinforced for me—was around Mr Seymour’s contribution. So Mr Seymour’s contribution, apart from being somewhat muddled, was that he believes this Act should be repealed. He believes absolutely that it should never have been passed into law. He absolutely, categorically believes that this Government should not have signed that Act, but he will not vote against it. He will not vote to repeal something that he believes is fundamentally wrong. This Act is totally against his party’s principles, totally against his values, but no, no, he cannot bring himself to actually stand up for those things and vote to repeal it.

I want to thank my colleagues from the Opposition. I think that we have had very intelligent debate from this side of the House. Metiria Turei’s contribution was absolutely invaluable. She is right: this has nothing to do with the convention centre. This piece of legislation repeals an Act that gives corporate welfare. My bill would repeal an Act that provides a private business with something that nobody else gets: a protection until 2048—protection that nobody else in Auckland City has got. I challenge the member Mr Simon O’Connor, who, again, is a lovely man, and I am sure that the voters in Tāmaki find him particularly pleasant. I saw a photo of him with a large chocolate Labrador the other day, and, again, I bet you that got lots of favourites.

What I would challenge him on is that I am not confident that he is correct when he says that Aucklanders want this convention centre. Aucklanders voted, through consultation with their local government, for a sinking lid on pokie machines. Aucklanders were consulted by Auckland City in 2009 and 2010, and, across the board, they voted for a sinking lid on pokie machines in the by-laws of Auckland City. And what has happened is that this Government has decided it knows better than the people of Auckland and that it is not going to listen to the voice of Auckland, which said: “We want a sinking lid. We want these things to actually slowly become less and less and less.” It has decided that it is going to strike a deal for an international convention centre.

And this is not about a convention centre. This bill is merely about legislative change that gave somebody an unfair advantage. That is all it is about—that is all it is about. If you read it, it is not very long. No, it is not very long, and I think that is really interesting. We kept it brief for the benefit of the Government. We know that the Government members, particularly the backbenchers, do not normally read the legislation that they have to speak on. We kept it very, very short so that we could have, possibly, some level of understanding by those members who actually had to stand and speak on it. Whoever has handed out the notes that have been passed back and forth along the backbench: well done, very good, nice bullet points, everybody used them. So it is disappointing. That is actually disappointing.

The bill is very simple. It is about removing a protection—a protection for a deal that has changed. Skycity is not going to deliver the deal that it signed on. It is also a concern that Mr O’Connor, Mr Seymour, and Ms Lee tried to suggest to the New Zealand public that there is a $400 million debt here. Well, there is not yet, but when Skycity gets halfway through building the convention centre and then comes back for money, New Zealand, there very well may be one. The question is: if there is debt involved with actually removing this legislation from this Parliament, who struck that deal? The same people who are asking us to trust them because they are such good negotiators for the Trans-Pacific Partnership Agreement.

The ASSISTANT SPEAKER (Lindsay Tisch): Sorry, the honourable member’s time has expired.

A party vote was called for on the question, That the New Zealand International Convention Centre Act 2013 Repeal Bill be now read a first time.

Ayes 60

New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2.

Noes 61

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

Motion not agreed to.

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

Bills

Overseas Investment (Owning our Own Rural Land) Amendment Bill

First Reading

Hon PHIL GOFF (Labour—Mt Roskill): I move, That the Overseas Investment (Owning our Own Rural Land) Amendment Bill be now read a first time. I nominate the Commerce Committee to consider the bill. As a provincial member, Mr Deputy Speaker, you will know that here in New Zealand we have a deep cultural attachment to owning our own land, both our homes and our farmland. I guess that comes from nearly two centuries of migrants coming to this country to escape from being servants and tenants. People came here to make a better life for their family, and the Kiwi dream was born of owning your own home and working your own farm. Our forebears did not come to this country to be tenants in their own land.

As the ANZ bank pointed out in an analysis that it did a few years ago, land is also important because that is where New Zealand’s competitive advantage lies. What our economy relies on is what we produce on the land. The bank itself noted that we have got a huge degree of interest in maintaining local ownership. I think it is for those reasons that many New Zealanders feel that Kiwi control of our land and the Kiwi dream is under threat. It is under threat from the increased acquisition of property, both residential homes and farmland, by overseas investors.

I guess the first question to answer is: “What is the level of land being sold?”. The curious thing is when I looked up what the manager of the Overseas Investment Office said, she said that she did not know how much of our land was in foreign ownership. Is this not typical of the Government? It does not know how many of our residential houses have been bought up by foreign investors and it does not know how much of our farmland is being bought up by foreign investors. Many people would say that it is not a case of not knowing; it is that the Government does not want to know—or, rather more precisely, it does not want New Zealanders to know. But some figures are available there. On the broadest definition of land approved for overseas sale, the Overseas Investment Office records show that under John Key more than 1 million hectares of land has been approved for sale wholly or partially to overseas interests—1 million hectares since John Key became Prime Minister. On the narrowest definition, which is of net farm sales solely—100 percent to overseas interests—the figure is over 300,000 hectares.

We should not be surprised about this, because John Key and Bill English came to office in 2008 saying that they were going to open up our land for sale to overseas interests. Bill English said that the system was cumbersome and he was going to loosen it up. But then came along an organisation called Crosby/Textor. Crosby/Textor did some polling, and, lo and behold, what did Crosby/Textor find out? It found out that New Zealanders fundamentally do not want to see their birthright, their houses and their farmland, sold to overseas interests that do not have at the forefront of their goals the betterment of New Zealand. So suddenly the rhetoric changed and John Key got up and said: “We do not want to be tenants in our own land.”

Although the rhetoric changed, what did not change was the practice. The political spin altered but not the reality. What happened? Very bravely, the Minister of Finance altered the regulations and said that we should actually have oversight to safeguard New Zealand’s interests—very vague. What did that convert to? Absolutely nothing. Then in December 2010 Bill English sent a ministerial directive to the Overseas Investment Office. On the surface it looked like it was toughening up, until you read the fine print. You know what the fine print said? The fine print said: “I want this office really to concentrate only on sales of farmland that are 10 times the average New Zealand farm.” That is a tiny percentage of the sales. What went under that does not seem to matter, and the proof of the pudding is in the eating. These regulations have had no impact.

In fact, in the last 3 years the consents for sale of our farmland overseas have gone up, not down. Another 140,000 hectares has been alienated from New Zealand ownership—

David Seymour: People with the right genetics.

Hon PHIL GOFF: And wait for it, Mr Seymour, wait for it: Ministers have the discretion to decline sales. Of the 400 approvals in the last 3 years, how many were declined?

Pita Paraone: Zilch.

Hon PHIL GOFF: Zilch. None. Not one. Not one time did New Zealand Ministers see fit to stop the sale of land to overseas interests. What the National Government is doing is simply rubber-stamping the approvals to sell land to every application from overseas to buy it.

Who is buying that land? The biggest buyers are the Americans, followed by the Canadians, the Israelis, the British, the Australians, Switzerland, the Netherlands, and Luxembourg. One thing that is actually quite interesting in this is that the accumulated sales of farmland to Chinese interests are very low, but in 2014 the largest purchaser of farmland was China because of the changes that are happening in that country. But really it does not matter whom the land is being sold to; what matters is that ownership of more and more land is slipping out of New Zealand hands.

I want to say that Labour allowed too much land to be sold—it allowed too much land to be sold. But, to its credit, it changed its policy 4 years ago, and this bill is a product of our commitment to that policy. National pretended to change its policy but in reality nothing at all has changed.

Why do I object to the sale of land overseas? Well, the first thing is—and let us hear the National Party on this—it is not a level playing field. Young New Zealanders wanting to work up from being a sharemilker to owning their own farm are competing with overseas investors whom they cannot possibly compete with. They are competing with people with access to money where they are paying a fraction of the interest rates that the young New Zealand farmer would have to pay for borrowing to buy that land.

The real worry is that with the dramatic fall in the New Zealand dollar over the last 6 months, the cost of buying up New Zealand land from overseas is becoming cheaper, and we will see the American pension funds buying up that land. We will see the farmers who are suffering from a downturn in dairy prices forced into mortgagee sales, having that land go to people who will snap it up as a bargain from overseas. We will see the changes that are happening in China having an impact as well. I know China well. I know the Chinese Government has liberalised the investment rule for its investors. I know that investors in China right at the moment, with a 50 percent drop in the Shanghai stock exchange, are looking abroad for safe places to put their money, and what better place to come to than a country that has no capital gains tax, no stamp duty, and where that land is certain to maintain its value over time?

I am in favour of foreign direct investment, but I am in favour of it in areas where it will benefit New Zealand. What this bill says is that investing in residential property and investing in our farmland is good for those overseas investors, but it provides nothing for us as New Zealanders. In the residential housing area we have seen house prices in Auckland go up by 26 percent in the year to June 2015. Who thinks that overseas investors, wherever they come from, are doing us a favour in pushing those prices up? We will see overseas investors pushing out the young couple that want a life farming their own land and stopping them from having that opportunity. I say to those members, shame on them.

Mr DEPUTY SPEAKER: I am sorry to interrupt the member. His time has expired.

MELISSA LEE (National): Thank you. [Interruption]

Mr DEPUTY SPEAKER: Order, cousin! I have called Melissa Lee, who has the floor.

MELISSA LEE: Thank you very much, Mr Deputy Speaker, but I almost feel like I have to give the opportunity to the front-bencher in front of me, because he does actually have some wonderful lines about the member who just sat down, Phil Goff.

I rise to take a call as the Government benches’ first speaker on this, the Overseas Investment (Owning our Own Rural Land) Amendment Bill. For a little while there, while Mr Phil Goff was speaking, I was thinking: “Maybe he’s actually unlike some of his other colleagues and he isn’t actually going to be having a go at, you know, the Asian migration and the house prices.” I thought this was about land. You know what? I understand the value of land. Korean people are very strong on landownership. They have an attachment to the land and they value the land. But one thing about land is that it stays in this country. It is not like they can package it up, bag it, and take it back to China or any other country that they could take it back to.

I have to say that I am rather disappointed and actually surprised that the honourable member for Mt Roskill is the main proponent of this bill. After all, he is a former Minister of Trade who hopes perhaps to become the mayor of the super-city of Auckland. I thought he was actually gunning for the role of mayor, His Worship, next year. If he does in fact become the Mayor of Auckland, he will have to go overseas and look for investment into the system—if he is in fact the mayor. After all, Auckland is in fact the home to 50 percent—almost 50 percent of people living in Auckland are born overseas. How is he going to explain this bill to the people who will eventually vote for him? I am just a little surprised.

Mr Goff, the honourable member, is a longstanding member of this House whom I actually get along really well with. I do attend a lot of ethnic events with him as he is the spokesperson for ethnic communities for the Labour Party. He also claims he is a champion of the working man, and yet he fails to represent the 39 percent of his electorate who are of Asian descent and the 3 percent who are of Middle Eastern descent, and, indeed, any New Zealanders in his electorate who have family and friends from their homeland looking to invest their hard-earned finances and resources into the better development of this country.

Just in case he is actually wondering whether I got this data from a real estate agent, I will just say that this data comes from the census figures—that 39 percent of his electorate are in fact of Asian descent. When his colleague actually calls me 40 percent Chinese, I have to say that I am 100 percent not Chinese. I am 100 percent Korean-made, but I am 100 percent Kiwi. I have made a conscious decision to become a New Zealander. I have been in this country for three-quarters of my life almost, but I was made overseas in Korea. I just cannot change that. My parents did the deed.

I am surprised and yet not shocked that the former Leader of the Opposition promotes this legislation. I am wondering whether the member feels that I should be less offended, because at least he thinks that this is actually not about a particular ethnic community—that he is not actually having a go at the people who look like me, or the Chinese, or those who may be mistaken for Chinese just because their surname happens to be Young or Lee or Ling, for example.

I must say that the Labour Party has not had too many issues about non-Asian people buying land in the past, and I fear that in fact the Labour Government sold double the amount of land that this National Government has actually sold. I mean, we have sold half what the previous Labour Government actually sold to overseas interests—less than half. I am surprised that Labour members get up now to say: “Oh, selling to overseas interests is wrong.” You know, somebody reminded me that New Zealanders will never get rich selling to ourselves, and that is true. We cannot make milk just for New Zealanders. We are not going to bring foreign currency into New Zealand by selling to just New Zealanders, and so what? I am just wondering whether Mr Phil Goff, when he decides that he wants to sell his farm—or maybe he did try, and maybe a non-Asian did not want to buy. Maybe locals did not want to buy. Maybe it was in fact Asian people who wanted to buy, and he had to turn them down because he is anti - Asians buying land, perhaps. I do not know. I am not going insult him, but I have to say that the honourable member is wrong and I am voting against this bill.

I am just a little bit sad that Labour has to condescend to ethnic communities in this way. It is actually pitiful, and I have to say it does not work. I think people in this country who are of ethnic origin do recognise that these kinds of policies that Labour is proposing are simply racist. It is simply not something that most New Zealanders want. It does not work. The former leader, I am afraid, is showing his advanced years, and I am not talking about his age. He has actually been here for about three decades. It is a shame that he does not grow in understanding and compassion for those New Zealanders who are of ethnic origin and those applicants coming from distant shores to try to make their dreams of becoming a Kiwi a reality.

I am just baffled that he does not actually get this. If he holds the portfolio for ethnic communities, he must understand how ethnic communities work. Most people, when they send their children to New Zealand to study English or do high school or university, are thinking about their future. When their children become New Zealanders or become accustomed to the New Zealand way of life, they often want to buy them homes so that they have a comfortable life while they are living in New Zealand and so they invest in a home or maybe they invest in a farm because they see a little bit further into the future; that when they are looking to retire, maybe they will settle in the country that their children have become accustomed to and maybe they have become New Zealanders. So by virtue of that they would want to invest in this country and they will eventually move to this country, and many have.

I am a New Zealander. I sort of had to follow the other way. I did not come to New Zealand to study and have my parents follow me, but I had to follow my parents, who had decided that New Zealand was the haven that they had been looking for. I had to follow my parents—typical Asian family; you know, families move together. The member must know that most ethnic communities who invest and send their children to school in New Zealand buy houses and land because they hope to become New Zealanders in the future, full stop.

This Government has already put a number of measures in place to prepare for situations where there are concerns about potential investors. These measures can be found in the Overseas Investment Act 2005, and that Act, voted for by the honourable member while his party was in Government, strikes the balance between widening the investment opportunities that New Zealand gives to the global community and protecting those sensitive assets that New Zealand cares about.

I must point out that Mr Goff, the former Leader of the Opposition and a former Cabinet Minister, signed off on the free-trade agreement with China. He was, in the past, a beacon of overseas investment, I am sure, going over to China many times over and actually telling those Chinese people to invest in this country. It baffles me to think why Labour cannot see its own creation is, in fact, working. The 2005 Act is working, like the National Government is working, and like most New Zealanders who work hard and hope to one day retire to our beautiful rural landscapes, so the foreign investors and businessmen wanting to diversify their stock and set up somewhere can retire in peace while maintaining a strong connection.

Some of the big investors in New Zealand—an example is James Cameron, a recent appointment to the Screen Advisory Board and a resident here in the Greater Wellington region. Look at the owner of Matakauri Lodge in Queenstown, Julian Robertson. He has done so much for New Zealand that we appointed him a rare Honorary Knight Companion of the Order of Merit for his philanthropy across our country. But the opposition of Mr Phil Goff is not about these gentlemen; it is actually Asian investment that he is worried about. It is a knee-jerk reaction to the housing crisis, and I am appalled that he buys into that. I know that he does not believe that and, hopefully, he will wake up, because he will need their vote if he is to have a hope of becoming the Mayor of Auckland. I oppose this bill.

Mr DEPUTY SPEAKER: The balance of the calls are for 5 minutes.

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): Firstly, that was an outrageous misrepresentation of a bill that is designed to offer a fair go to every New Zealander regardless of their race or background or ethnicity. Anyone in New Zealand requires some protection, by a bill like this, from what is a flood of potential foreign investment into this country. There could not be a more timely bill in this House—more timely than the one under urgency yesterday. Today we had an announcement of a likely $3 payout in the dairy industry. Tonight we went to a forum talking about the future of food in this country, and it is all dependent on New Zealand’s ability to control its own destiny. I applaud my colleague Phil Goff, who, in his patriotic, committed way, has put into the ballot—and had it pulled out—a bill that “requires foreign investment to deliver benefits that would be over and above what a New Zealand investor would produce.” All it does is guarantee something that the National Government claimed it would put in place and has failed to do.

Can I say that New Zealand is a nation built on farmers and farming families. They have worked, they have innovated, and they have sweated blood to build industries that are the envy of the rest of the world. The ownership of the land has been at the core of their passion and their commitment. We need to ensure that that opportunity still exists for New Zealanders into the future. Otherwise, our economy is at risk.

We had a Prime Minister who, if you are to believe him, made a quote that we do not want to become tenants in our own land—John Key himself. And then he is, effectively—

Hon Phil Goff: Oh, that’s a racist comment.

Hon DAMIEN O’CONNOR: Well, we could perhaps believe that one comment. We too believe that. We too believe that we need to have a fair go for New Zealanders investing. At the moment we have got foreign investors able to access capital at half a percent or less—or hot money—who can come into this country and not face any challenge from the current Government’s Overseas Investment Office. Not one application of the 400 since this Government came into the House—not one of them—has been turned down.

At the time of the Crafar farm debacle, when John Key reiterated his view that we do not want to become tenants in our own land, the Government said it would change the Overseas Investment Office criteria. The Government said that it had to move to protect New Zealand investors, but it also said, but did not tell us of course, that it was going to move to protect applications for large farms only—large farms defined by the National Government as being 10 times that of the average New Zealand farm. The average farm is, say, 300 hectares. That is 3,000 hectares and above that the Government would look carefully at. It is an outrageous promise not kept by the National Government and a promise that needs to be implemented to ensure that we have economic certainty into the future.

Yesterday on the radio an economist, Mr Geoff Simmons—I do not know him—was talking about the dairy industry dilemma at the moment. If I can quote him, he said: “We will see foreign buyers come in and snap up land, keeping the banks solvent and propping up the value of the land.” That is the reality that we are facing: investors throughout the world—

David Bennett: No, it’s not.

Hon DAMIEN O’CONNOR: —with access to cheap capital—and that member knows that the Government is going to leave the doors wide open to the purchase of that land to prop up the values and save the banks. What we say, and what my colleague Mr Goff is saying in this bill, is that we need proof that any of that foreign investment will deliver greater benefits than a Kiwi of any ethnicity would—in spite of the outrageous claims by the previous speaker, Melissa Lee—any Kiwi investor. They do not even have to be a farmer, but at least they have to be a Kiwi. Any foreign investor has to deliver additional benefits.

This bill is very timely because we are facing a tsunami of investment into this country—a country with no capital gains tax, with farmers who will work 26 hours a day, and that is a safe place for any foreign investment. This bill gives New Zealanders a fair go and it represents everything that Labour stands for. We stand for New Zealanders first and foreign speculators second.

BRETT HUDSON (National): I rise to speak in opposition to this bill. Before I move on to the substance—the flaws—of this bill, I would just like to acknowledge the Hon Phil Goff. He has a reputation for being an extremely diligent and hard-working member—

Hon Christopher Finlayson: He had—past tense.

BRETT HUDSON: —had—and for being a very capable senior Minister in the previous Labour Government. Mr Goff, this is not your finest work.

Before I move on to the flaws and the tests that this bill would apply, I shudder. There is quite a chilling effect that has come with news in the recent week or so. There are some provisions in the bill as it stands at the first reading for how those to whom it would be applicable would be determined. Just this past week the House has had very good cause to consider that if this bill were to progress to a select committee and beyond, the true test of applicability would actually be based on the sound of people’s names. That is an absolute disgrace. It is absolutely terrible to stand in the House this week, after such postulation has been made over the past 10 days and after the Labour Party’s spokesperson for ethnic communities has been quite equivocal—quite equivocal—in his not quite condemnation of what his colleagues have done. That we could possibly look to change the applicability on the basis of what a name sounds like has quite a chilling effect.

Let us now actually move on to the provisions of the tests of this bill and to how flawed they are. As the speakers on both sides have pointed out, the test for a foreign investor who is wanting to buy land of 5 hectares or greater—rural land—would, under this bill, be what a hypothetical New Zealander might do in the future. How on earth can you run a robust test—particularly for people who say that they support foreign direct investment—on the basis of what someone who does not exist and is not in the market at that time might possibly do? Anyone could make up what someone might possibly do if in fact that person is not in the market at the time, bidding for that sale. The only test that, logically, can be applied, outside of fundamentally objective criteria such as the Overseas Investment Office uses today—that is, “Will it create more economic benefit? Will it create more jobs?”—is to test against other participants in the marketplace. This bill creates a test against a hypothetical bidder—someone who does not exist—and it is open to purely subjective decision-making at any point in time. The bill is poorly drafted. Simply, it would not really work.

It is quite rich that this change is being suggested by a member of the previous Labour Government. I would like to remind the House that the previous Labour Government sold the equivalent of the whole 16 Crafar farms every month for the whole 9 years—9 long years—of the tenure of its Government, and Mr Goff, the sponsor of this bill, was a senior Cabinet Minister in that Government. What we have, and another reason that this bill is simply unnecessary, is we have a current Overseas Investment Act. We have provisions for testing the value of an overseas bid to buy farmland in this country. It is an economic test. Will it create economic benefit? Will it create jobs or protect jobs? There is a real possibility, particularly when you look at the receivership circumstances of the likes of the Crafar farms, that keeping the work farm going as a working concern is, in fact, every bit as good as any other test, because otherwise jobs would be lost.

Let us look at how we operate this balance and how we are placed across other countries in the OECD that we would compare ourselves with. We have a very restrictive regime. The OECD rates New Zealand as the sixth most restrictive nation in the OECD for investment in land.

David Bennett: What number?

BRETT HUDSON: The sixth.

David Bennett: The sixth?

BRETT HUDSON: The sixth. So it is interesting to see that those members think that we have a problem that needs to be addressed. We are the sixth most restrictive today, under a set of objective criteria.

Hon Members: Say it again.

BRETT HUDSON: The sixth—the sixth most restrictive. Just to remind ourselves that if we were to adopt a bill such as this, investments by Haier or, particularly in land, by Mutt Lange or James Cameron would be rejected. Julian Robertson—they would all be rejected. The bill would not achieve what it would want to achieve in terms of an objective measure. It is a flawed idea. It is flawed bill. I oppose it.

JAMES SHAW (Co-Leader—Green): I rise to take a short call on the Overseas Investment (Owning our Own Rural Land) Amendment Bill. The timing of this bill and the debate on this bill is really unfortunate given the controversy over the last 2 weeks about the purchasing of New Zealand’s housing stock by people from overseas. We have always said since the controversy broke that the issue is not one of ethnicity; it is one of property speculation. So it is unfortunate, given that the controversy over the last couple of weeks has been primarily directed around ethnicity, that that is leaking into this debate as well, because otherwise this seems like a fairly sensible bill, in our view.

I would just like to say that in a previous speech Brett Hudson mentioned the OECD. It is good to hear him quoting the OECD, which is an organisation that National dismisses every time we hear a report from the OECD on climate change. So now that he has imbued it with a sense of some usefulness, actually it would be great to hear him get in and endorse the OECD’s reports on climate change, which rate New Zealand’s performance extremely badly.

In terms of why we are supporting this bill, it is largely for the reasons that previous speakers on the Labour Party side have said. We are in a particularly unusual set of economic circumstances globally at the moment. Other countries around the world have engaged in successive bouts of quantitative easing, which we did not, so there is a great deal of, essentially, extra money floating around in the investment markets. There are historically low interest rates in most of our major trading partners—interest rates that are even lower than our own—making capital even more available and meaning that the global investment markets are awash with capital and looking for a safe haven. We are providing those markets with a safe haven for that capital. Because we have no capital gains tax to speak of, New Zealand is a very easy place for that money to go in and inflate those prices, which is why it is so hard for New Zealanders to buy into farms in New Zealand. We are like a goldfish swimming alongside a whale in terms of the availability of capital in this country to maintain ownership of our own land.

I notice that the National speakers have protested greatly at this, but I would like to point out—as previous speakers have done—that this Government came to power on a promise that New Zealanders would not be tenants in their own land, and yet that is precisely what has happened in the face of zero action by this Government to either collect useful information or place any sensible restrictions on the ownership of foreign land, such as is present in virtually all of our major trading partners. So if it is good enough for them, we believe it is good enough for us.

For the Green Party, our policy is actually to not have sales of New Zealand land to non-resident non-citizens because, as Mark Twain once said: “Buy land. They’re not making any more of it.” It is the one thing that we have that is special—

David Seymour: It’s not true. There’s volcanoes near Hawaii.

JAMES SHAW: —ha, ha—to our own country, and we should attempt to retain ownership of it in this country. Thank you.

KANWALJIT SINGH BAKSHI (National): Thank you for the opportunity to speak on the first reading of the Overseas Investment (Owning our Own Rural Land) Amendment Bill, under the name of the Hon Phil Goff, which we are opposing. We want our economy to grow, to be productive, and to be internationally competitive. All this bill does is suppress all our plans.

As my colleague Melissa Lee mentioned, the Hon Phil Goff is well recognised in the ethnic community. We see him on a number of occasions and we attend a number of events together every weekend. I do not understand how Mr Phil Goff is going to face the ethnic community tomorrow, if I have to believe the rumours that he is going to stand for the mayor-ship. What this bill is doing is that—

Hon Member: His worship.

KANWALJIT SINGH BAKSHI: His worship, yes. How is he going to convince the ethnic community that he is not stopping them bringing in overseas investment? It is very important for us to have overseas investment—direct investment—so that we can have greater economic benefits for this country, which will help with the growth of jobs, will increase wages, and will increase our GDP.

This bill is unfair to the foreign investors. According to this bill, they will be required to show that they would bring more benefits than the New Zealand buyer. We have already ensured that New Zealand’s sensitive assets are adequately protected and, in fact, we are already restrictive when it comes to foreign investment in land.

Each year the amount of rural land approved for sale to foreign investors is less than half of what it was under the previous Labour Government. Let me highlight some of the important benefits that foreign direct investment brings to our country. First, it drives the growth in wages, employment, and output. Profits generated by foreign direct investment contribute to corporate tax revenues in the host country. It allows the transfer of technology and it helps to promote competition in the domestic input market. Foreign direct investment is a source of capital to supplement New Zealand’s domestic savings. We are looking at ways to embrace foreign investors and this bill is going to drive our valuable investors away, which we do not want.

Labour itself was responsible for the sale of some of the main big chunks of land during its regime. Just now when my colleague was speaking, the Hon David Parker was trying to say that Labour rejected many such proposals during its regime, but he could not number them. In fact, it was zero.

National knows the importance of balancing the benefits of international investment with protecting the New Zealanders’ estate for the current as well as future generations. We already some have of the strictest criteria when it comes to approving the applicant, and we do not believe in rejecting the potential investor on the basis of the country he or she belongs to.

One more thing needs to be clarified, which is that any investment done in any land in New Zealand does not mean that they will pack up the land and take it with them to their own home country. Overseas investors need to apply to the Overseas Investment Office for consent to purchase sensitive New Zealand assets. According to this bill, if there is no New Zealand buyer who wants to buy the particular asset, the foreign investor still needs to show how much benefit they are going to bring to the country. How is our economy going to grow if we are going to put such restrictions on foreign investors?

This bill risks preventing the sale of some of the rural land to foreigners that would create jobs and would benefit New Zealand. We have been able to strike a balance between ensuring New Zealand remains open to business with the rest of the world, in order to support jobs and higher incomes, and tightening the rules for overseas investment in sensitive land. I oppose this bill.

FLETCHER TABUTEAU (NZ First): I stand in support of this bill firstly because it is a form of flattery for New Zealand First policy. It represents policy we have stood for for 22 years. It represents policy that is common sense, but unfortunately it goes only part-way. The frustration, standing here tonight listening to the debate from the other side of the House, is just beyond measure. It is so frustrating to hear those MPs describe this debate as having anything to do with race or ethnicity. There is no mention of race or ethnicity in this bill.

David Bennett: Yes, there is.

FLETCHER TABUTEAU: No, there is not. So the conversation is about foreigners buying land. Let us be clear about what we mean when we say “a foreigner”, as well. Because if a New Zealander, whether they be born overseas or whether, like the speaker before, they have been here for 70 years from Korea and are proud of it—that is a New Zealander buying a home or buying a piece of farmland in this country. That is a New Zealander and that is a Kiwi, and it is not the conversation here tonight. We are talking about foreigners coming in and buying New Zealand land.

Mr Bakshi spoke about foreign direct investment contributing to the New Zealand economy. The return on foreign direct investment payments going overseas totals billions upon billions of dollars. That is money leaving our shores—leaving our shores—because foreigners are coming in and investing in New Zealand. That is my next point. The National members do not know what investment is. They do not understand. I challenge them to give me a definition that is meaningful, because a foreigner coming in and buying a New Zealand farm, processing that material in New Zealand—usually with foreign labour—selling the proceeds of that labour and those resources overseas, back home, and then taking the profits back home is not an investment for New Zealanders. That adds nothing to this economy.

David Bennett: Aw!

FLETCHER TABUTEAU: Mr Bennett, when the rest of the Waikato has been bought up by Americans, Canadians, Chinese—it does not matter where they are from. [Interruption] You probably will not have yours, because you would have sold—[Interruption].

Mr DEPUTY SPEAKER: Order! The member has the floor; he should be allowed to speak.

FLETCHER TABUTEAU: Thank you, Mr Deputy Speaker. The reality is that that type of investment would contribute nothing to the Waikato economy, and for Mr Bennett to yell abuse at the sponsor of this bill is an insult to his constituents, who know full well as farmers—whom I spoke to when I was there in Hamilton; I spoke to your constituents, and they did not want to sell their farms to overseas owners or investors.

What the problem was for them was that they are about to see—and it has been spoken about already—their property values decline. Nothing that this Government will do will counter that. Property values will drop, and unlike in the past, when New Zealanders were buying from New Zealanders, whether the market was good or bad, the reality is that now foreigners can come in and take advantage of these bad economic conditions, particularly in our dairy industry, for example. They can come in and take advantage of these terrible, terrible circumstances that our farmers are experiencing, and they can do it, as has been said, with the cost of the money being next to zero percent, or maybe even 1 percent. We cannot compete with that, and we actually should not have to compete with that.

New Zealand First is flattered that this bill has been put in front of the House. It reflects a policy that we have held for years. What I wanted to say, though, just to add to the conversation at the end, is that the Overseas Investment Office has not declined a single application. The criteria were supposed to be set at a high standard, but the office is just not doing its job, it would seem. We are here to limit the sale of rural land to foreigners—not to new New Zealanders, wherever they may have come from; to foreigners. This bill is worthy of debate. It is worthy of moving forward and being taken to a select committee, so New Zealand First will support this bill tonight. Thank you.

Mr DEPUTY SPEAKER: Are you going to be long? I call David Seymour.

DAVID SEYMOUR (Leader—ACT): I will just grab my notes. [Interruption] Ha—ha! I rise on behalf of the ACT Party in opposition to the Overseas Investment (Owning our Own Rural Land) Amendment Bill. I have to say that it is interesting to look across at the Labour benches and see a veritable line of popguns sitting in the front row when they have a howitzer sitting in the back row. And then I look across to the New Zealand First Party and I was going to say to those members that it may be too late for any kind of cerebral advancement, but let us at least have some integrity. And did Clayton Mitchell not let us down in that regard tonight?

But here is Phil Goff, who has the brains—who has the brains—but I cannot believe for a moment that he really believes what he has just said. It comes down to the pronouns in the title of his bill: “Owning our Own Rural Land”. And the question is: whose land exactly is it? Because to listen to Mr Goff, it would seem that we have, actually, a system of collective ownership. No matter that the vendor of the land, who legally has the property title, has considered their options, has accepted a price, and has decided to enter into a voluntary contract to make a sale. The problem is that this mystical “we” has decided they do not agree. Who exactly is that “we”?

Well, let us get down to the dirty little secret of the Labour Party in the last 2 weeks and this bill in particular. It is attempting to do something that is legally impossible, and that is to identify the culture and the genetics of the person who has the beneficial interest in the ownership of a piece of land. That is what it is really about. And he did not mean it to come out, but it came out. Sometimes if you have to say you are a lady—as Mr Tabuteau knows—you are not. When he said “I would like to list the Australians, the Americans, the Canadians, the British, and all of the white people who invest in land.”, what he was really doing, in a rather Freudian sort of way, was explaining to the House that he was not really interested in the culture and the genetics of those who hold the beneficial interest in the piece of land—oh no, no, because he is not like that; he is a howitzer, a cut above the popguns in the front row of his party these days. But, unfortunately, in a rather Freudian way he did not want the truth to come out but he let it out.

That is what this bill is fundamentally about, in contrast to the history of our country—a country whose history is a history of foreign investment. It is a country that has relied upon injections of foreign capital, as you would expect it to, being at the far edge of the world. It is a country that has paid a 2 percent premium on foreign capital throughout its history, which explains much of the New Zealand productivity paradox. It is a country that, as mentioned by the very fine member Brett Hudson—who is generally a socialist but who joins the ranks of the free marketeers tonight—is 49th out of 54 when it comes to permissiveness for foreign investment, much of which is due to restrictions that are already around land. The countries that ranked worse than us in permissiveness for foreign investment are countries such as Indonesia, Saudi Arabia, and the always nationalistic Japan. Those are the countries that are more restrictive than us. To go worse than that would be inimical to the interests of New Zealanders and particularly the vendors of New Zealand land, who have every right to sell it to whomever they please, no matter what their cultural and ethnic origins may be. What a shame that—

Mr DEPUTY SPEAKER: I am sorry, the member’s time has expired. [Interruption] The member will resume his seat.

SIMON O’CONNOR (National—Tāmaki): I look a bit surprised because we were actually expecting the Labour Party members to take a call, or the Green Party members perhaps, but it seems that they have become a little bit embarrassed about this. Actually, James Shaw referred earlier to one correct thing and one not so correct thing, which I think provides some context. The first was that he said the Overseas Investment (Owning our Own Rural Land) Amendment Bill was coming in with unfortunate timing, because of announcements by Phil Twyford and Andrew Little last week about foreign buyers, based supposedly on Bayesian mathematics but, really, based just on—

David Seymour: Bayesian?

SIMON O’CONNOR: Bayesian, is it?

David Seymour: Is that a German name?

SIMON O’CONNOR: Well, you never know. It is shocking that they may have used a foreign name to explain what they were doing. He says that it was unfortunate. I do not think that it was unfortunate. Actually, I think that the bill that is being discussed tonight, and Labour’s use of foreign names to try to set that policy and to discriminate, exposes the heart of what they truly think. I think that will provide a challenge for Mr Goff when he has to stand up in front of the people of Auckland, including those of my constituency, and explain why discrimination can be had based on words and letters alone and the way that they are structured.

The second thing that Mr Shaw talked about was that no more land is being created. David Seymour pointed out, correctly, the Hawaiian volcanoes, but I also should note to the House that we have, of course, the islands in the South China Sea, which are doubling each week as they are being built upon.

David Seymour: Always take geography seriously.

SIMON O’CONNOR: Always take geography seriously. That is why I am very pleased to have a degree, or one of my majors, in geography—human geography it must be said. Look, it is no surprise to the House that I—[Interruption] No, I did study Latin, Minister, but I did not get a major in it; Greek, French, Māori, and Fijian as well but, again, no majors.

I oppose this bill. Actually, I think the first point—and I will re-highlight what the leader of the ACT Party said—is that the title betrays one of its great faults. This is not our land—OK? It is not our land; it is a person’s land. It might be a natural person; it might be a family trust. But it is not our land. It is not as if Phil Goff, the Labour Party, the Green Party, or anyone else somehow has rights over it. At day’s end—and I have said this at times to my own constituents, who get a bit upset about foreigners buying land—it is New Zealanders who actually make the free choice to sell it to someone else. No one has put a gun to their head and said: “You must sell to an overseas buyer.” The land that we are talking about was private land—farms like the Crafar farms are a perfect example. The Crafar farms were private land. It is not Government land; it is private land. And for a variety of reasons, they chose to sell it. But, again, it is a bit like the unfortunate nature of the comments around race: the Labour Party members do not believe in private property rights. They believe that they know best, and they want to tell you how to run your life, your land, your showerhead pressures, and everything else. It is a disgrace.

They also forget that we live in a global environment. The honourable member who has proposed this bill understands this because he has been the champion, particularly through the Labour Party, of free-trade agreements. The thing about free-trade agreements is that you trade freely. You engage freely with your foreign neighbours. Just as we will seek New Zealand to invest, we are open, from our side, to having people purchasing here in New Zealand. We have heard very good examples from colleagues on this side of the House of foreign people buying businesses and land here. We know about the Crafar farms and we know about Haier, which has become quite involved with Fisher and Paykel Appliances. I do not have the exact numbers here, but they are just a couple of examples where foreign purchasers—foreign capital coming into New Zealand—is helping not only those businesses but also New Zealand. It makes sense. Again, we live in a global environment. Our strength comes from dealing with other people trading capital.

I do not want to get into economics; I leave that to others. But we do not want to return to a state of autarky—not Ōtaki but autarky—where we close our borders and we all wear the same uniforms, drive the same cars, and go down to some Labour Party welfare office to collect our bottle of vodka and one potato a day. I oppose this bill.

STUART NASH (Labour—Napier): It is pretty obvious that members on that side of the House have not even read the bill. They got to the title and went “OK, let’s look at the notes that the research unit sent.” The vast majority of the nonsense that that party and those last speakers have spoken does not even relate to the bill at all.

In fact, I think it is quite easy to mount an argument that the sponsor of this bill, Mr Phil Goff, has done more for international trade than anyone in this House—than anyone over the history of this Parliament. Mr Goff was the man responsible for the New Zealand - China free-trade agreement. How can anyone accuse Mr Goff of racism, of xenophobia, or of anything except putting New Zealand’s interests first—and this is exactly what this bill does. This bill puts New Zealand’s interests first—nothing more, nothing less—and we in the Labour Party believe that we have an absolute right as representatives of this nation to look after the rights of New Zealanders.

To say that we are racist and to say that we are xenophobic simply means that you have not read the bill, you have not understood the bill at all, you have not understood the purpose of the bill, and you have also not understood the purpose of the Overseas Investment Act. All Mr Goff’s bill does is ensure that those who buy our farmland—and it is our land; as New Zealanders, this is our country—add value, that they add value to our land, that they do not come over here and rape and pillage.

There is already an Overseas Investment Act, which does this, but we do not think it goes far enough. It is simply because the Minister himself, who has provided a letter to the chief executive officer of the Overseas Investment Office to give that chief executive officer direction on policy initiatives, has said: “Don’t worry about the small farms. Don’t worry about the average farms. The only thing I want you to put any effort into is the really, really large farms.” We do not think this is right.

We absolutely believe that New Zealand’s global competitive advantage relies on the fact that we are excellent farmers, that we add significant value, and that we provide a product to the world that is first class. We are not saying “Close the borders.” We are not saying no to overseas investment. We are not saying that overseas investors cannot buy our farmland. That is the last thing we are saying. What Mr Goff’s bill does say, however, is that it is a privilege to own land in New Zealand, which of course is the purpose. If you read the purpose statement of the Overseas Investment Act it says it is a privilege to own or to be able to invest in New Zealand, and to be able to take advantage of that privilege, to be part of that privilege, to earn that privilege, an investor has got to be able to add value over and above that which can be added by New Zealanders.

That test is already in place. That test is in place. All Mr Goff’s bill does is tighten it even further to ensure—to ensure—that those who are not born here but want to invest here and want the privilege of owning sensitive New Zealand land live up to that privilege and that they add value so all New Zealanders know that people who want to call New Zealand home and want to have a balanced portfolio that includes New Zealand farmland understand absolutely what that privilege means. And that privilege means that that overseas investor has got to be able to add value over and above that of a Kiwi.

The thing that Mr Goff’s bill does is that it emphasises jobs—is there anything wrong with that? Is there anything wrong with emphasising jobs? And it emphasises the economic imperative—i.e., you cannot come in here and run down our farms and take our land, or our people, or our economy for granted. In fact, you cannot do that. You have got to come in here and you have got to make sure that New Zealand jobs are protected, that you create New Zealand jobs, and that the economic benefit that is going to be created is real. Is there something wrong with that? I do not think so. In fact, I think the vast majority of New Zealanders actually get the fact that Mr Goff’s bill protects the interests of New Zealanders. That is all—nothing more, nothing less. We think that is fundamentally important and that is why we support this bill.

Hon PHIL GOFF (Labour—Mt Roskill): Clearly the research unit of the National Party faced a dilemma when it was drafting the identical notes for the National Party backbench. The dilemma is this: fundamentally the National Party understands that New Zealanders support the approach that I am proposing in the Overseas Investment (Owning our Own Rural Land) Amendment Bill. I say that not as a rash claim; the New Zealand Herald has run a Herald-DigiPoll on this bill and it shows that 55 percent of New Zealanders support it and 33 percent of New Zealanders oppose it. That means that there is cross-party support for this bill.

I reckon if I went to David Bennett’s electorate in Hamilton East and talked to his farmers, they would have something to say about this and they would be positive about it. In fact, I saw the president of Federated Farmers—known elsewhere as the “National Party in Gumboots”, but the president is a very fine guy—William Rolleston, warning New Zealanders about the risks of wholesale loss of land to overseas investors. He was telling New Zealanders about vertical integration, where foreign individuals or companies owned everything from the farm right down to the supermarket shelves, and the risk that that posed to New Zealand’s interests. That was from Federated Farmers. I heard the mogul of the free enterprise world. He had a very spirited dinner, I think. I was going to ask for an interpretation of his speech. I looked to the National Party benches and they could not help.

The two freest market economies in the world are probably Hong Kong and Singapore—both Chinese, by the way, which is apropos of nothing. They place restrictions on foreign ownership of lands and residential properties. This is not unusual. Any Government that is worth its salt puts the interests of its residents before the interests of foreign investors. We will have foreign investment in this country, where it is good for New Zealand. But where it simply forces up residential property prices, or forces young New Zealanders to remain the sharemilkers and the employees instead of the farmers, we will unashamedly stand up for New Zealanders. We give no apology for that whatsoever. The National research unit had a choice. It thought it could either say this bill is no different from what National is doing, and National tried to run that line, or say this bill is fundamentally racist, and it tried to run that line as well. But, unfortunately, those two arguments are mutually contradictory.

I want to say that New Zealanders have had a gutsful of people who play the race card in reverse. Let me give you an example. There is a well-known property developer in Auckland who this week was rack-renting trailer homes, where 14 people were forced to share one toilet, to new migrants.

Hon Members: Oh!

Hon PHIL GOFF: That was wrong. That is wrong in anybody’s language. But because that property developer happened to be Donghua Liu, when he was criticised we were told that that criticism was racist. That criticism was not racist. That criticism was criticism of an individual regardless of his ethnicity, who was behaving in an inappropriate and unethical way—

Mr DEPUTY SPEAKER: Come to your bill.

Hon PHIL GOFF: —and I will not accept any criticism from any member on that party, which ran the “Kiwi not iwi” ads and stood behind Don Brash and that man. I will not take any criticism from those people at all. There is nothing in my bill that discriminates against any New Zealander. What it does is it acts on behalf of every New Zealander. I have talked to my Chinese constituents and my Indian constituents, and they think that it is a good idea that New Zealand should own its own future, because those Chinese and those Indian constituents are proud to be New Zealanders, and this bill stands up for New Zealanders. So do not come at me with a cheap and shabby criticism that is not worthy of many of those people on that bench who should know better.

What this bill does very clearly is what the National Party promised to do but failed to deliver. It says, and the Overseas Investment Act says, that owning land if you are a foreigner is a privilege and you have to earn that privilege. The way you earn that privilege is by showing that you produce substantially more jobs or substantially more exports. If you cannot come up to that standard, do not come here—

Mr DEPUTY SPEAKER: I am sorry to interrupt the member but his time has expired. [Interruption] The vote will be heard in silence. It is not that long since a certain member was ejected for not doing that. He has just done it again. He is on notice, as are others who are interjecting in the course of the vote. Please complete the party vote.

A party vote was called for on the question, That the Overseas Investment (Owning our Own Rural Land) Amendment Bill be now read a first time.

Ayes 60

New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2.

Noes 61

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

Motion not agreed to.

Bills

Fighting Foreign Corporate Control Bill

First Reading

FLETCHER TABUTEAU (NZ First): I move, That the Fighting Foreign Corporate Control Bill be now read a first time. I nominate the Foreign Affairs, Defence and Trade Committee to consider the bill. New Zealand First is deeply concerned about the investor-State dispute provisions currently included in the Trans-Pacific Partnership negotiations. Nobel laureate economists, senior medical experts, international law experts, trade experts, international human rights experts, and more and more everyday New Zealanders are growing increasingly concerned as they learn more about the non-trade elements of this treaty.

The reality is that this Government has kept secret from the people of New Zealand just what it is that it is negotiating, and even why. For years now New Zealand First has asked this Government to make the policies in this treaty negotiation public to the people of New Zealand. It has not done that, despite international precedent from the EU, for example. That is why I stand here proudly in support in presenting the Fighting Foreign Corporate Control Bill.

Tim Groser recently labelled any concerns or counterarguments as politically irrelevant. He said that the views of those New Zealanders were driven by ideology and not based on evidence. It is clearly the manifestation of “third-term-itis”. Government members ask us to trust them, but they have not earned it.

The ambition of the Trans-Pacific Partnership is huge. Nearly 40 percent of the trading world will be included in this agreement, and I for one can actually understand why we would like to be a part of that. Our exporters compete against US firms, for example, which have huge protections. We would like the playing field to be levelled so that our businesses can enjoy the same access to our competitors’ markets that we allow others here already.

But the Trans-Pacific Partnership is also about renegotiating global investment rules. It includes legal rules covering issues such as investor protections and intellectual property rights. These rules allow foreign corporations to sue Governments if they introduce policies that interfere with corporate profits. Even the perceived loss of potential profits is ground for suit. This is the investor-State dispute settlement provision that this Government is allowing into our trade negotiations. Even the most optimistic supporters of the Trans-Pacific Partnership, for example, have to concede that this rule may not only prove to be very costly but it will, without a shadow of a doubt, also reshape our democracy.

We believe that those who have voiced their concerns are not only politically relevant, Mr Groser, but, further, New Zealand First believes that as New Zealand is one of the oldest continuous democracies on this earth, to have a select few Ministers and the Prime Minister sign this supposed free-trade agreement on behalf of all New Zealand, before it has been seen by all parliamentarians, before it has been seen by the Foreign Affairs, Defence and Trade Committee, and before it has been seen by even your National backbenchers or your support parties, is a travesty that is being undertaken in the name of democracy.

It is a failure—a failure—to understand where the people of this country stand.

David Bennett: Where’s the conspiracy?

FLETCHER TABUTEAU: It is arrogance, Mr Bennett, pure and simple. Why? Because the details of these negotiations are completely concealed from the New Zealand public, yet they are available to over 600 United States corporations, which have made in-depth contributions to the negotiation process, dictating the terms and conditions that Mr Groser seems ready to accept at any cost.

Further, the negotiating documents will remain confidential for a further 4 years after negotiations have been concluded or abandoned. New Zealanders may, therefore, be subject to, and bound by, essentially a secret agreement that will be virtually impossible to reverse. Other countries have started to try to remove the investor-State dispute settlement provision from their trade agreements, only to find it will take 25 years to do so.

International trade is complicated stuff, which is why I am going to go slowly for the National backbenchers. In the early years of trade the focus was on trans-boundary tariffs, with a goal of actually levelling the playing field so that goods and services could more easily flow between nations. Today’s trade agreements are a wholly different beast. Instead of tariffs, they increasingly seek to reduce so-called non-tariff trade barriers. These non-tariff trade barriers can be any law, any rule, or any Government support that may have the effect of limiting trade or reducing corporate profits. They include such basic safeguards as, for example, those around drinking water, environmental protection, and even fair labour laws.

The investor-State dispute settlement provisions were originally designed to stop Third World nations repatriating assets from foreign companies. But investor-State dispute settlement provisions now allow foreign corporations that believe their profits have been hampered by a country’s laws or rules to challenge the host Government. This is the problem with investor-State dispute settlements. Foreign corporates do not have to use New Zealand law to settle those disputes between themselves and our Government. Luckily, the foreign corporates that have had grievances with New Zealand in the past have actually used the New Zealand legal process. I am proud to say that my understanding is that New Zealand has successfully defended all of those claims in New Zealand courts. This is a wonderful precedent, but it does not justify the head-in-the-sand approach from this Government, moving forward.

The investor-State dispute settlement provisions allow foreign corporates, not New Zealand firms, to go to a tribunal. This is not an actual court of law, here or overseas. What the National backbenchers might not understand is that these tribunals consist of only three players—a corporate lawyer for the country, a corporate lawyer for the foreign corporate firm, and a foreign corporate presiding over the proceedings. They play interchangeable roles, and clearly over time have conflicts of interest. Only the foreign corporate can sue. A Government itself cannot use the same tribunal to hold those corporates to account. I ask the Government and its MPs here today why they would happily sit there and watch while our freedom to govern ourselves is handed over to unaccountable secret tribunals that give foreign corporates an unfair advantage in circumventing laws, with the privilege of suing us added into the bargain.

David Bennett: Well, your boss likes to sue people.

FLETCHER TABUTEAU: Remember, Kiwi firms, Mr Bennett, will not have access to the same process here at home. Investor-State dispute settlements are becoming a big business opportunity for big business. Corporations are now selling their actions against nations to investors at discounted rates and the investment companies are taking the gamble of a win, with the possibility of billion-dollar payouts. The number of claims grows every year. We are told that the investor-State dispute settlement provisions within our treaties are world class. Given that we have yet to be sued, they probably are. But do not forget or ignore the fact that many countries have been sued and have lost. The tribunal process is usually always secret, and at the request of foreign corporates, so where countries have thought themselves protected by similar exemptions and protections, this has not always been the case.

I anxiously now sit and wait in anticipation to hear from backbench National MPs who have not been briefed on the investor-State dispute settlement provisions in our next trade agreement, and who do not know what is in it. I say that this will be interesting. Thank you.

MARK MITCHELL (National—Rodney): I would just like to acknowledge the previous speaker. Fletcher is a very good member of the Foreign Affairs, Defence and Trade Committee, and I have to acknowledge him.

How did he sneak this bill past Winston Peters? I do not believe that the Rt Hon Winston Peters has actually seen this bill. I think that in the turmoil of the deputy leadership battle he somehow managed to sneak this bill through. The Fighting Foreign Corporate Control Bill—if Winston saw this I am sure he would say something—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

MARK MITCHELL: This is demonstrably outrageous. Thank you, Mr Assistant Speaker. You are right. Let me get back to the bill. I have to say that I am surprised that the deputy leader—congratulations to the deputy leader—with the international background that he has, would be supporting a bill like this.

This is a bill that, if it were to be implemented, would make it very difficult for New Zealand to continue to enter into free-trade agreements. In fact, this bill would stop 3,000 free-trade agreements from even existing. When you think about that, if you remove 3,000 free-trade agreements from around the world, things would grind to a halt pretty quickly. The bill is poorly drafted—there is no doubt about that—which is a real achievement when it has only two pages. It is a real achievement when it has two pages and it is poorly drafted.

The bill would prohibit New Zealand entering into international agreements that include provisions for investor-State dispute settlements. This includes the Korean free-trade agreement. I want to very quickly go over the Korean free-trade agreement because the member sat on the committee when the agreement recently came before it.

I want to quickly run through some of the numbers and the implications of what they mean for New Zealand, for our businesses, and for our economy as a whole. There is $65 million worth of duty saved for New Zealand exporters in the first year alone. So we will hit that first tariff reduction this year, and I have to acknowledge the whole committee for making sure that we could get the bill through the committee and meet that threshold. I want to acknowledge all the other committee members who have worked hard together on that.

Currently, $229 million a year is paid in duty by our exporters. There are 50 million people in Korea who want to buy quality New Zealand products, and $78.3 million worth of New Zealand cheese was exported to Korea in the year ended June 2014. We are currently facing a 36 percent tariff, and that is about to start reducing. The current tariff on whole milk powder and skim milk powder is 176 percent, and 89 percent is the current tariff that exporters face on butter, which is to be progressively phased out.

These are just a few of the numbers that highlight how important these free-trade agreements are for New Zealand. The reality of it is that we are a small country down the bottom of the world, and unfortunately we are exposed to the risks associated with trading globally. There are some things that we cannot control. That has become obvious—there are some things that we cannot control.

But what we can control is our own ability to be able to generate very good free-trade agreements. New Zealand has a history of doing that. We have got some outstanding free-trade agreements, which already have the investor-State dispute settlement provisions in them. It would be interesting to know, actually, why this bill is not retrospective. The reason for it is that we would lose deals like the Korean free-trade agreement or the Chinese free-trade agreement. We have seen how significant and how important they are to New Zealand.

The Agreement between New Zealand and the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu on Economic Cooperation is another example of a trade agreement that would not be allowed under New Zealand First’s bill.

Fletcher Tabuteau: What is he talking about?

MARK MITCHELL: What do you mean, what am I talking about? You just spent 10 minutes highlighting why New Zealand cannot enter into a free-trade agreement that has an investor-State dispute settlement provision.

The other thing that I want to address is the lack of consultation. There has been a concerted effort by the Opposition benches to put misinformation out there about the lack of consultation. I can tell you now—and I see that Mr Parker is in the debating chamber, and I have to acknowledge him as being someone who has a lot of knowledge around these free-trade agreements and a big history of having worked on them when he was in Government—that the fact of the matter is that there has been significant consultation around the Trans-Pacific Partnership.

We had the Council of Trade Unions appear in front of the Foreign Affairs, Defence and Trade Committee—and there are other committee members here who are quite welcome to stand up and try to rebut what I am saying—to make a submission. At the beginning of its submission we were led to believe that there had been very little consultation. By the end of it we were able to draw enough information out to find out that there had actually been three individual meetings and consultations with the negotiators working on the agreement. And that is not the only one. There has been wide consultation through the sectors, service groups, and people who are concerned and want to know the implications of the Trans-Pacific Partnership.

Tracey Martin: Have you seen it?

MARK MITCHELL: Seen what?

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

MARK MITCHELL: Thank you, Mr Assistant Speaker. The New Zealand Government is aware of the potential risks that investor-State dispute settlement provisions can pose if not negotiated carefully. It is possible to design mechanisms that carefully balance the objectives of protecting New Zealand investors abroad while safeguarding the Government’s right to regulate for legitimate public policy purposes. This balanced and cautious approach was taken in concluding the Korean free-trade agreement, and it has been taken to conclude the Trans-Pacific Partnership.

I would like to say that I would like to support Mr Fletcher Tabuteau, because, like I said, he is a very good member of the committee, but I cannot support this bill, and it is highly unlikely that we will receive it on the committee.

Hon DAVID PARKER (Labour): I want to explain why the Labour Party thinks that this bill should go to select committee, even though we think that the provisions in it are too broad in absolutely outlawing all investor-State dispute settlement clauses.

The National Party should consider why it is that 6 years into its Government, in respect of proposed trade agreements—including the last one that we have just negotiated with South Korea, which is of substantial benefit to New Zealand—there are thousands of people marching in the streets against free-trade agreements. One of the reasons why there is marching in the street against free-trade agreements is that there is public suspicion around investor-State dispute settlement resolution clauses. There are some well-founded concerns about some investor-State dispute settlement clauses, and there are also some incorrect concerns about investor-State dispute settlement clauses, but we are not going to resolve this as a country by refusing to have the debate about the rights and wrongs of them.

Investor-State dispute settlement clauses allow corporations to sue Governments for breaches of those corporations’ rights as set out in free-trade agreements. That is very important, particularly when you are dealing with countries that have got corrupt judiciaries, or judiciaries that might be too close to the Government or not independent of Government, which might, effectively, confiscate the assets of a New Zealand investor investing into a third-party country. So that is why you have investor-State dispute settlement clauses.

The negative side of them is that if they are not properly drafted, corporations can be allowed to sue Governments for doing what Governments ought to be able to do without suit, and that is to properly regulate for the benefit of their own country, whether it be for public health reasons like plain packaging of cigarettes, or alcohol control, or if you want to introduce controls on how much sugar is in food, for example. Those sorts of things are appropriate things for Governments to be able to do, and they ought not to be able to be successfully sued by overseas corporations for doing so. You need to be able to properly regulate the environment, including, for example, having a proper price on carbon or having improved standards of water quality, which might somehow impinge on the cost of production in a way that the corporate may not like. Governments should be able to do that without being sued.

When you get the New Zealand Medical Association turning up to make submissions to the select committee and saying that it is concerned about these things, the Government should not just say “We’re right; we know what we’re doing.” and close down debate. That is why we are supporting this bill to select committee.

I want to give another example, arising out of the South Korean free-trade agreement, of why this is important. The South Korean free-trade agreement allows the screening, pre-investment, of existing categories of investment—we do that for farmland at the moment—but it does not allow new categories of screening of foreign investment—i.e., into existing New Zealand homes. That is a mistake. Theoretically, if a future Government was to introduce a ban on the sale of homes to overseas people, South Korea could object, and a corporation from South Korea that could not make an investment could say that it had suffered a loss and sue the Government. The cost of those processes is so high, and the inability to prove loss—because the corporation could make an investment somewhere else and make a buck somewhere else—means that in all likelihood you will not get an investor-State dispute settlement claim on an inability to make a residential property purchase. But none the less the theoretical risk exists under the investor-State dispute settlement clauses in the South Korean agreement because of how the Government has negotiated.

It is making the same mistake in the Trans-Pacific Partnership—the same mistake in the Trans-Pacific Partnership—and all of those mistakes flow through to the Chinese free-trade agreement because the most favoured nation provisions in that mean that later more permissive agreements flow to the benefit of China. That shows why you have to be careful with investor-State dispute settlement clauses and the clauses that relate to them, and that is why we should have a debate about this in Parliament.

The Labour Party is not saying that investor-State dispute settlement clauses are always bad, particularly with Third World countries. We are saying, in respect of First World countries, that we would be willing to rely upon State-to-State resolution and to forgo investor-State dispute settlement clauses. We think this is a proper debate to have in New Zealand, and that is why we are supporting this bill to select committee.

Dr SHANE RETI (National—Whangarei): It is a pleasure to rise to talk to this bill. Clearly our discussion is around investor-State dispute settlement provisions. Investor-State dispute settlement provisions set ground rules that allow countries to do trade with each other. It is a procedural mechanism provided for international agreements on investments. Investor-State dispute settlement provisions are really about making sure Governments give fair, equitable, and non-discriminatory treatment to investors. We include investor-State dispute settlement provisions in free-trade agreements as fair and good citizens of the trading world, in the knowledge that New Zealand exporters also have the same courtesies and protections in foreign countries. We often forget that our offshore investments have the same protection. It is a balance.

What is unbalanced is to take all of the economic benefits of a free-trade agreement, such as those we are going to get with Korea—and that has been the topic of discussion tonight, by way of example; the Korean free-trade agreement—and then not take the responsibilities of being a fair and reasonable trader. That is what this bill would do, and that is the message that it would send.

By way of example, with the Korean free-trade agreement New Zealand First would rather that we turn away $60 million of duties relief in the first year. New Zealand First would have us turn away benefits to kiwifruit growers, beef, lamb, and dairy producers. Our kiwifruit is competing against Chile, which at the moment has zero tariffs. Mr Tabuteau talked about wanting a level playing field. Well, there is a level playing field right there: give us equality with Chile on its zero tariffs, and we have exactly that level playing field that you are looking for. What is broken is that this bill would not apply to any currently ratified agreements already in place, and that would create an inconsistency across our trading partners and this Government. Good Government is about stability, not instability.

Let us look a little bit further at some of the myths that Mr Tabuteau raised around investor-State dispute settlements, which actually have many procedural safeguards in place. The allegation was made that maybe Government sovereignty and policy making—and Mr Tabuteau raised the question of health, and others have as well—could be compromised under investor-State dispute settlement agreements. Again, let us look at the Korean free-trade agreement with its investor-State dispute settlement provisions, and how health might be protected. For example, public health in the Korean free-trade agreement is held out in the first instance, as it comes under the category of “services supplied in the exercise of governmental authority”. There is our sovereignty right there. We have already cut it out and said that it does not apply. Furthermore, further policy space is preserved as reservations in the schedule of non-conforming measures. That is where health is protected as a social service for a public purpose.

The third thing is that some of these reservations, however, cannot be put aside under the terms of what is called “fair and equitable treatment”. We should not be afraid of fair and equitable treatment. We are good international traders, and when we look at some of the definitions of fair and equitable treatment—because people raised this as a barrier to us, that that is what is taken to court, the claims around fair and equitable treatment.

Well, let us look at a couple of international case studies. Cargill v Mexico: what is not fair and equitable, and would bring a claim, was “grossly unfair, unjust or idiosyncratic treatment; arbitrary beyond a merely inconsistent or questionable application … to grossly subvert a domestic law or policy for an ulterior motive.” Bilcon v Canada: “conduct … that is arbitrary, grossly unfair, unjust or idiosyncratic, is discriminatory and exposes the claimant to sectional or racial prejudice, or involves a lack of due process”.

New Zealand’s approach to fair and equitable treatment is as such: “The treatment … should amount to an outrage, to bad faith, to wilful neglect of duty, or to an insufficiency of governmental action so far short of international standards that every reasonable and impartial man would readily recognise its insufficiency.” We should have some surety in that.

Mr Tabuteau presented one configuration of what an investor-State dispute settlement tribunal might look like. Can I just add some clarity to that? There are three appointed adjudicators: you get to choose one and they get to choose one, and then you agree on the third. It is not quite the configuration that Mr Tabuteau would have you believe, where he confabulated some concept out of his mind as to who might sit on that tribunal. Go back and have a look at what the Korean free-trade agreement has. Look at its tribunal. I have it right here. There are a number of safeguards. It is not in secret. It actually comes out, has to be reported, and has to have consultation beforehand. It is a robust framework, not at all how Mr Tabuteau presented it. I think we should oppose this bill. Thank you.

Dr RUSSEL NORMAN (Green): I rise to speak in support of this bill about, essentially, outlawing investor-State disputes clauses in future trade agreements. I thought that perhaps the simplest way to come into this would be to quote at length from The Economist about exactly this issue, which has attracted a lot of attention. The Economist wrote on 11 October 2014 and it said: “If you wanted to convince the public that international trade agreements are a way to let multinational companies get rich at the expense of ordinary people, this is what you would do: give foreign firms a special right to apply to a secretive tribunal of highly paid corporate lawyers for compensation whenever a government passes a law to, say, discourage smoking, protect the environment or prevent a nuclear catastrophe. Yet that is precisely what thousands of trade and investment treaties … have done, through a process known as ‘investor-state dispute settlement’, or ISDS.” That is from The Economist magazine, talking about investor-State dispute settlements.

It goes on to say: “ISDS first appeared in a bilateral trade agreement between Germany and Pakistan in 1959. The intention was to encourage foreign investment by protecting investors from discrimination or expropriation. But the implementation of this laudable idea has been disastrous. … Multinationals”—this is The Economist magazine speaking—“have exploited woolly definitions of expropriation to claim compensation for changes in government policy that happen to have harmed their business. Following the Fukushima disaster in Japan in 2011, for instance, the German government decided to shut down its nuclear power industry. Soon after, Vattenfall, a Swedish utility that operates two nuclear plants in Germany, demanded compensation of [over NZ$5 billion], under the ISDS clause of a treaty … This claim is still in arbitration.” But, as The Economist says, “it is just one of a growing number of such cases … In 2012 a record 59 [of these cases] were started; last year [there were] 56 … The highest award so far is [for US$2.3 billion] to Occidental, an oil company, against the government of Ecuador”, because the Government of Ecuador apparently lawfully terminated an oil-concession contract.

That is from The Economist magazine, hardly renowned for its radical anti-business perspective on trade agreements. And what The Economist magazine and establishment figures all around the world are now doing is stopping progress on these kinds of clauses because they are so fundamentally dangerous to democracy and to regulation-making by Governments. That is why The Economist went to some length to explain the problems and the dangers with investor-State dispute settlement clauses, which allow multinational corporations to sue Governments if Governments regulate in a way that costs those companies money.

Think about the German nuclear industry. Germany is not renowned for having a Wild West legal structure, yet Germany decided, after the Fukushima disaster, that it no longer wanted to pursue nuclear power, and it would slowly phase out nuclear power. It is now facing an investor-State dispute settlement case of around $5 billion that it may have to pay in order to proceed with that perfectly sensible policy. Australia is facing a case because it wants plain packaging on tobacco, and Philip Morris rightfully says “That will cause us harm or damage our business.” Well, that is true, it will, but it will save thousands and thousands of lives. South Africa faced similar cases when it tried to tackle apartheid.

What the lawyer for—and I think this is really interesting—the nuclear power company Vattenfall, Kai Hobar, said when he was asked about the case he was taking against the German Government on behalf of the nuclear power utility company was: “States are complaining about this, but they’ve signed up to these treaties themselves. If they don’t want them, don’t sign them.” Those are the words from the lawyer who is suing the German Government because the German Government is phasing out nuclear power, a case that could cost it $5 billion. That lawyer is right: if we do not want these, do not sign them, and that is what this legislation does.

DAVID BENNETT (National—Hamilton East): This piece of legislation, brought in by the New Zealand First Party, is really just an attack to frustrate an agreement that is in the best interests of New Zealanders. It is something that shows the real, true intent of that party, which is a party that is against an open and free New Zealand. It is a party that does not want free trade. It is a party that wants to take us back to the 1950s. It is a party that does not want immigration. It is a party that does not want change in New Zealand communities and society. It is a party that believes that a select group of a few people can decide and tell everybody else what to do. It is a party that is stuck in the past. Those party members are the dinosaurs of the past, and they have brought in legislation that tries to stop New Zealand from progressing and being in the open, free world that we can be part of and that has made our country so strong in the past. This bill is an attack on New Zealand’s future by the people who represent New Zealand’s past—that was ages and ages ago. We should be looking forward as a country and not back, as those dinosaurs next door are.

The Labour Party is pretty rich coming into this Parliament here today, because the Labour Party in its greatest day of free-trade agreements—every time you talk of the Labour Party and free trade, one person and one agreement are mentioned. Labour members say that Phil Goff got the New Zealand - China free-trade agreement. That is what they said. We heard that in this House only an hour ago. The Chinese free-trade agreement allows these kinds of clauses. It does allow these kinds of clauses. To have the Labour Party members come into this House now and say: “We think that this should still go through to the next stage for discussion.”, really is just them trying to bet on both sides of the coin. They do not actually believe in it. They know that New Zealand needs to be a free and open trading country. They know that an integral part of free and open trade is to have these kinds of clauses in the agreements going forward.

It is very rich of the Labour Party to come in here and try to open up the debate and say “Oh, we believe that there should be a debate on this issue.”, when in reality the biggest agreement that Labour signed had one of these clauses in it. It was an agreement that Labour is very proud of. Labour members cannot come into this Parliament and then be against these types of clauses, and then have them in that very one agreement, which they wanted.

Clayton Mitchell: Tell us what you think of the TPPA with the ISDS clauses instead of what everybody else thinks.

DAVID BENNETT: OK. So we have got New Zealand First piping up again. New Zealand First—the party that does not want free trade in New Zealand. This is what this debate is about. Do you want New Zealand to be a free-trading country? Do you want the Chinese free-trade agreement? Do you want the New Zealand - Korea free-trade agreement?

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

DAVID BENNETT: Do you want to have a free-trade agreement with the Pacific rim?

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

Ron Mark: I raise a point of order, Mr Speaker. I notice you, Mr Assistant Speaker, were a little distracted, but the speaker continues to try to bring yourself and your Chair into the debate—quite pathetic.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I was attempting to call him to order. I think if he occasionally addressed the Chair, he might notice that that was happening.

DAVID BENNETT: There is no involvement of the Chair in this. This is about the New Zealand First Party, which is against free trade and the free-trade agreements.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Can I remind the member that when a ruling has been made on a point of order, it is not to be referred to by members. The member has been here for a while and he does know that.

Ron Mark: But he never listens—never listens.

DAVID BENNETT: Oh, never listens. This is the New Zealand First Party, which does not want New Zealanders to trade—the trade that we have heard about from Mr Mark Mitchell, and what the Korean free-trade agreement would mean for New Zealanders. But, no, New Zealand First does not want that. New Zealand First does not want us to be in that trading bloc, which will be the future of this part of the world. That shows the small mindedness, the arrogance, the old-fashioned approach that is the New Zealand First Party. It is a shame that we have to even debate these bills in this House. It is an attack on the values of New Zealanders and this House that these bills should even be debated here, because they represent an attack on the fundamental values that New Zealanders want. New Zealanders want a progressive, open, and free country. They want a country that does not say no to people because of race, a country that is open to people to come here and make their future, a country that wants to have free trade and that wants to engage in the new world. That is the difference between this side of the House and the opposite side of the House.

Ron Mark: This speech won’t get that member into Cabinet.

DAVID BENNETT: Mr Ron Mark is sitting there. Mr Ron Mark said that they wanted transparency around the negotiation of a free-trade agreement. They want to see the agreement. We did not see transparency around the New Zealand First deputy leadership contest, did we? When was that transparent? That was not around. When were the votes that were cast in that vote last week shown to the public? No. New Zealand First—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The debate has been quite wide, but I think the member has got well beyond it now. I am going to invite him in the last half minute of his speech to address the bill.

Ron Mark: He’s desperate.

DAVID BENNETT: Desperation comes from New Zealand First when their leader will not even come and support their flagship policy.

It is bad for New Zealanders that we even debate this bill. It is a shame on Fletcher Tabuteau to come to this House with legislation like this. New Zealand does not want the attitude that New Zealand First brings to this House, and Labour Party members should stand up and say the right thing. They have had the chance over the last week and they have not done that either.

Hon CLAYTON COSGROVE (Labour): I want to firstly thank Mark Mitchell for his contribution. It was a measured contribution in the spirit of the non-partisan nature with which trade agreements between our two great parties, and latterly other parties, over many, many years—decades—have been dealt with.

As for the last contribution by David Bennett, it was a waste of time. David Parker in his address did what I think the Government should have done. I am a rabid free trader. I believe in free trade. I am part of a party that has been pro - free trade and has initiated, as Mr Bennett pointed out in his snide way, many free-trade agreements, including the China agreement. Mr Bennett is right that there are investor-State dispute settlement provisions within the China free-trade agreement, and that is a well-known fact. Maybe he has just come out from under the mushroom in the last couple of days and worked that out.

But here, I say to Mr Bennett, is the difference: when we negotiated the China free-trade agreement—specifically, Phil Goff and Helen Clark—one, you did not see the outcry. You did not see the angst within the communities because as a Government, and through those two individuals, we brought communities with us. We kept them well informed. I accept that you cannot—and it is naive of those who say that we can—somehow negotiate an agreement in public. You cannot. You do not negotiate wages in public. You do not negotiate trade or commercial deals in public. It is a nonsense to put that forward.

But what you can—and I am certainly critical of the National Party on this one, and slightly critical of our commercial sector—talk about is what has been; i.e., the China agreement and other agreements that have been. You can talk about, as Mr Bennett in his own weird sort of way tried to articulate, the notion of investor-State dispute settlements within the China agreement. You can actually talk about what have been the benefits or the downsides of, say, the China free-trade agreement—but what I would argue are the benefits—and you can make a case that if we got even a slice of 40 percent of world trade for our commercial sector and our people in New Zealand in respect of jobs, growth, and wealth to exploit, that would be a good thing. You can generate those sorts of discussions.

I note, and I believe I was attacked at the time by the Green Party, which is sort of a badge of honour for me, that I was the one, when I was shadow trade spokesperson, who asked Tim Groser whether he would fight for and ensure that similar provisions and safeguards that exist within the China free-trade agreement that protect New Zealand’s right—despite investor-State dispute settlement—to regulate and legislate in the public good are in the Trans-Pacific Partnership, and the answer was yes. The Green Party attacked me and said I was sucking up to the Government for actually eliciting a commitment from them. But we will work that one out in some other stratosphere.

I say, as Mr Parker did, that the reason, and the only reason, we are supporting this bill—which I have to say, with respect, is a very simple bill, but it is very broad, far too broad, in what it seeks to achieve. I do agree with the National Party that if this was adopted it could well negate free-trade agreements, and that is not a good thing for our country. But what Mr Parker has articulated is the ability to have a select committee that examines this very issue and, effectively, do what the Government should have done years ago. For Mr Bennett to get up and say that we have come late to the debate on this is piffle. We have been asking publicly that the Government articulate and discuss with stakeholders, within the bounds of confidentiality, and raise these issues and actually put the debate out there—actually put the debate out there—so people can indeed be reassured.

I am not a conspiracy theorist. I do not believe in the trade bogeyman. If you look at trade agreements, despite our Green friends, throughout history where you have open markets, where you have opened closed economies, it does lead to better environment, labour, and human rights standards and greater wealth for those people. Where you have developed countries that can actually access wealthy markets for their products and services, it does actually lift economic growth and standards of living. That, unless you live in a flat-earth society, is undisputed. So the rationale for us supporting this simply to the select committee process is to allow a public debate.

I thank Mr Mitchell again for his contribution. It was measured. It was non-partisan. I conclude with this—slightly off target—to place on record my thanks to Minister McCully, the Prime Minister, and the Government for their support of our ambassador to the US, Mike Moore, who we know is recovering from some health difficulties. I take this opportunity to briefly simply congratulate him. He has done a job well. His task was to get trade promotion authority and to ensure that trade promotion authority got through, fast-tracked, because you cannot have a Trans-Pacific Partnership without trade promotion authority, and he has done that job. He is a person who is a passionate free trader. I would put his knowledge of this agreement and stack it up against that of anybody in this House, even Mr Groser—he may be insulted by that—as a person who would know the credibility and integrity of this deal. Mr Moore is a patriot. He is a citizen of this country and he is a believer in free trade.

But let us not try to have all the colourful weasel words. Let us take Mr Mitchell’s example. We will support this for one reason and one reason only: to do what the Government has failed to do, and that is to engender a public debate so that people can actually examine this proposal for what it is.

Dr JIAN YANG (National): First of all, I do have respect for my Foreign Affairs, Defence and Trade Committee colleague Fletcher Tabuteau. I understand we both were academics before coming into politics. You were teaching international economy, and I was teaching international relations. However, this particular bill is very disappointing. This is a poorly drafted bill. It is an anti-trade bill and a political stunt.

This bill would prohibit New Zealand entering into international agreements that include provisions for investor-State dispute settlements, or ISDS. The bill’s purpose is to “protect New Zealand laws” and “to protect the public interest”. What a misleading statement. New Zealand’s laws and public interest are protected in all New Zealand’s trade and investment agreements, including those that provide for compulsory investor-State dispute settlements. We are aware of the potential risks that investor-State dispute settlement provisions could pose if we do not negotiate very carefully.

When the Foreign Affairs, Defence and Trade Committee was examining our trade with the Republic of Korea, we discussed this investor-State dispute settlement issue at length. Clearly it is possible to design mechanisms that carefully balance the protection of New Zealand investors abroad with the need to safeguard the Government’s right to regulate for legitimate public policy purposes.

Investor-State dispute settlements are not new. They have been there for quite a few years. New Zealand has extended investor-State dispute settlements to a number of countries or trading partners, including our trading partner of China in 2008 when we negotiated or reached a free-trade agreement with China and then to the Association of South-east Asian Nations, or ASEAN, in 2009 and in the same year to Malaysia. No investor-State dispute settlement claim has ever been brought against the New Zealand Government.

So this is an anti-trade bill, but we all know that trade is particularly important to our economy. It plays an independent and positive role in raising incomes. Of course, New Zealand First does not care too much about our economy and has no genuine interest in raising accounts for New Zealanders. They have been running this scaremongering campaign of foreigners taking over New Zealand.

When National took office in 2008 the world economy was suffering from a global financial crisis and the New Zealand economy was in recession, right? The future for our economy in those years was absolutely gloomy. It was forecast that our unemployment rate would hit 11 percent and then our debt could reach over 60 percent of our GDP. In those years that was forecast, but we all can see that we have worked out of this financial crisis and economic difficulty. One important factor was our free-trade agreements with various countries, particularly our free-trade agreement with China. So in 2008 New Zealand became the first and only OECD country to conclude a free-trade agreement with China. Labour can take credit for that.

Since the signing of the free-trade agreement New Zealand’s exports to China have grown significantly from $2.3 billion in 2008 to $6.7 billion in 2012 and then $9.96 billion in 2013. Our trade relations with China were a key factor for New Zealand to come out of the global financial crisis earlier than many other OECD countries. Had this bill become an Act before 2008 then our trade with China would have suffered and our economy would have been in a very bad situation. So this is how damaging this bill could be.

This bill would prevent proceeding the Korean free-trade agreement, which is currently before Parliament. The fact is our exporters to South Korea have been paying $229 million a year. Thank you.

CLARE CURRAN (Labour—Dunedin South): I want to thank Fletcher Tabuteau for bringing this bill to the House. I too am deeply worried about the contents of the Trans-Pacific Partnership and the inability for New Zealanders to have sufficient public debate on the contents and on the process of this agreement before it actually becomes a done deal.

I do not think anyone listening to this debate tonight should be in any doubt that Labour is a party that supports free trade. Within our party we have varying views. You have heard my colleague Clayton Cosgrove describe himself as a passionate free-trader. Well, I would not describe myself in that way, but what I would say is that I am a passionate supporter of the right for sovereign Governments to legislate in the public interest and to also support our own industries and our own innovation industries. That is what I am here to support tonight. This is why Labour is supporting this bill to the select committee. It is because there is a void that exists at the moment in our country on the ability to have a sensible discussion about some of the provisions that people are most concerned about in the Trans-Pacific Partnership. That is why Labour is supporting this bill to the select committee: so that there can be a sensible debate and informed debate.

I am really disappointed tonight to hear the National Party back-benchers displaying their blind ignorance and their rote-like message delivery when they should actually be looking more seriously at the issues and listening to their constituents. The National Party really has nothing to fear about having this discussion. In fact, those members should be welcoming this discussion. In many of the Trans-Pacific Partnership countries there is a stronger debate going on, and they should actually be saying “We have nothing to fear. We want to have this discussion. We’re up for having this discussion.” That is why National should be supporting this bill tonight to a select committee.

Why is this bill before the House? It is before the House because there has been no ability to have the debate that needs to happen because everything that we are debating is around what might be the case—what might be the case—and it is around the substance of leaks that have come out. It is not about the actual knowledge of what we know, and so the investor-State dispute settlement provisions is the thing that has been latched on to as the symbol that is emblematic of how a Government and how a country can lose control of its own sovereignty and its own ability to legislate in the public good. That is why this debate is so important and why this bill should go toa select committee.

Everybody should be very clear about this: if this agreement does get to the point of being signed, when it gets to Parliament it will have already been signed. The public debate may be allowed to be had, but it will have already been signed and we will not have had the opportunity to have that debate before then. The ability for democracy to have occurred and the ability for a proper democratic process will not have happened, and we will not have been able to have that discussion. I think that is pretty critical, which is a very good reason for all of the parties to support a proper debate in a select committee process around the investor-State dispute settlement provisions.

So what is it we are actually debating? Why are we worried? It is a mechanism by which the multinational corporations can go to some international arbitration tribunal and sue the Governments of countries in which they invest. I think one of the speakers mentioned that there are around 3,000 of those. We know that they are not all bad. We know that there are provisions that actually do protect countries, but we also know that there have been many, many issues raised about some of them—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! [Interruption] Can I just remind members that they should—and I did make the point to David Bennett—address the Chair and occasionally glance in the direction of the Chair to ascertain whether the Chair is on his feet trying to quietly ask the member to finish. The member’s time has expired.

DAVID SEYMOUR (Leader—ACT): It gives me great pleasure to rise on behalf of the ACT Party in opposition to this bill. I notice a slight contradiction in the two New Zealand First bills that have been presented and are soon to be voted down tonight. The first one was about Parliament introducing a statute to undermine an agreement or a contract entered into by the Crown. The second is based on the claim that the Crown is about to sign away all democratic rights and that somehow we will no longer be a democracy. I just ask members to ponder: if the first bill was going to be effective, then why is the second one needed?

Clayton Mitchell: It doesn’t make sense.

DAVID SEYMOUR: I will give him a moment. Actually, I do not have enough time for them to get that. But, fundamentally, the supporters of this bill and opponents of free trade, I have to say, tend to be of a certain type: those who wear tinfoil hats, are worried about chemtrails from trains, think that 9/11 was an inside job, and, more specifically, tend not to understand the concept of limits to democracy and limits to democratic decision-making.

The fact is that in the normal course of things, the majority does not rule unencumbered without due process, without property rights, or without any type of regulatory restraint. In fact, one would hope that when a Government or a Parliament makes laws, it would do it with respect to all of those things. In fact, one would hope that when a Government regulated, it would do correct problem definitions, it would identify impacts on free trade and property rights, it would identify winners and losers, and it would do cost-benefit analysis on a variety of different options for regulating. That is what we would all hope were the limits on legislation passed by a majority. That is something that people who are in favour of this bill tonight and opposed to the Trans-Pacific Partnership agreement and investor-State dispute settlements tend to have a real problem with.

But they have an even bigger problem when those constraints on the tyranny of the majority may in fact be put in place or pursued by people who are not part of New Zealand, because they are already opposed to limits on the tyranny of the majority, they are already sceptical about property rights and due process, and they are even more sceptical about foreigners. Well, the fact is that New Zealand is a trading nation. We have heard it so many times before, but what we need to realise is that New Zealand, as a jurisdiction of around 5 million people, is comparable with, say, British Columbia, or Colorado, or Denmark. If one was to go to any of those jurisdictions and say “Why don’t you pull out of your effective free-trade agreement and your integration of laws and regulations with Canada, in the case of British Columbia; or the United States, in the case of Colorado; or the EU, in the case of Denmark, because if you don’t, if you continue to be integrated into this wider market, then you have no democracy and your grandchildren have been sold out?”, they would say “You’re nuts”, to quote them—not to address the Chair. I say precisely the same thing to those members tonight.

In actual fact, throughout our history we, as New Zealanders, have gained from being able to enforce free-trade agreements, even to the chagrin of foreign Governments. I need only mention the long-running apple case to say that we are a trading nation that believes in limits to Government, and we realise that when we integrate with the rest of the world—

Hon David Parker: That wasn’t ISDS; that was State to State.

DAVID SEYMOUR: —some of those limits will be pursued by other Governments, and the State will not be acting on behalf of corporations. They are going to have to do it themselves, which seems to be a step backwards, from their point of view, Mr Parker. But, none the less, for all of those reasons I am very proud to stand and oppose this rather sad and all too short and poorly thought-out wee bill. Thank you.

FLETCHER TABUTEAU (NZ First): We have never been sued through the tribunal process; this is true. But what this Government has not acknowledged is something called the chilling effect. This Government has itself been stymied by the chilling effect, refusing to implement plain packaging legislation because of the fear of investor-State dispute settlement retaliation by large foreign corporates. Governments around the world are being stymied through fear of billion-dollar claims, afraid to act in the best interests of their citizens and afraid to introduce meaningful and good laws. This is called the chilling effect, and it is already immeasurably changing sovereign nations’ approaches to supposed self-rule. Let us be a proud nation and make a stand. Let us punch above our weight and make it clear to our international friends that we insist that democratically elected representatives of the people should be the ones who determine our future and our laws. We do not care to act in fear of financial retaliation from foreign corporates dictating our futures.

Real solutions are actually available. This is not a unique problem to New Zealand. Firstly, and most obviously, corporates worried about dodgy Governments can already purchase political risk insurance. New Zealand firms do it now when they venture into those overseas markets. Australia refused to have an investor-State dispute settlement in its treaty with the US. And what do you know? The US signed it. Canada is considering not signing the Trans-Pacific Partnership as its Parliament debates many issues, including the investor-State dispute settlement. South Africa has said it will be withdrawing investor-State dispute settlement provisions from its treaties going forward. France and Germany have been particularly strong in voicing their concerns about investor-State dispute settlement provisions.

The European Union is now divided against its equivalent trade agreements with the US because of the investor-State dispute settlement provisions and is now considering a new system for resolving disputes between investors and States. That echoes a Franco-German proposal for a permanent European court to settle disputes in international trade agreements. The European Commission, which handles trade issues for 28 European Union States, has suggested a multilateral court. Investor-State dispute settlements are dead. They must be replaced by a new public and transparent system of investment protection in which private interests cannot undermine public policy that is subject to public law. The German economic Minister has called for establishing an international court and has rejected the old investor-State dispute settlement provisions.

For New Zealand First, a new system means publicly appointed judges, not private arbitrators; saying yes to full transparency during the court cases and yes to an appellate mechanism; and changes in law by New Zealand’s sovereign Government so that affecting a company’s profits would not be a sufficient reason to take legal action against a State. If these conditions are not met, it is not good enough for us and it should not be good enough for this Government, which presumes to represent all of New Zealand. It was sent a message in a by-election not so long ago. It does not have the mandate it claims. Listen to all New Zealanders and look past just the numbers, Mr Seymour, and look to understand how this is actually affecting the people of New Zealand—our sick, our needy, our Kiwi-owned small businesses, the regions, and, I say it again, the people of this country.

We have not given New Zealanders the opportunity to be heard on investor-State dispute settlements, and especially on the Trans-Pacific Partnership, for example. Do not stifle democratic principles for the profits of foreign corporates, or even simply for the profits of our own companies. The profits of New Zealand firms should be our first priority, yes, but you were elected to represent all the interests of all New Zealanders. I challenge you to go forth, Minister Groser, and actually secure a free-trade agreement in this Trans-Pacific Partnership. Do that without giving away our sovereignty and without compromising individual New Zealanders, and then we will all profit from these negotiations. Thank you.

A party vote was called for on the question, That the Fighting Foreign Corporate Control Bill be now read a first time.

Ayes 60

New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2.

Noes 61

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

Motion not agreed to.

FLETCHER TABUTEAU (NZ First): I raise a point of order, Mr Speaker. I ask for a personal vote on the grounds that this party vote is so close that a personal vote may make a material difference to the result. This is a significant piece of legislation that should be put to a select committee. We are voting on the fundamental nature of our democracy—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! No—sorry, if the member has reasonable grounds I want to hear them.

Paul Foster-Bell: Speaking to the point—

The ASSISTANT SPEAKER (Hon Trevor Mallard): No, no. I am sorry. I interrupted the member prematurely. I want to hear the grounds that the member has.

Hon Dr Jonathan Coleman: Better ring the Green Parrot.

FLETCHER TABUTEAU: Yes, exactly. I have been led to believe that not all members of this Parliament are on site, and so their votes should be held into question.

PAUL FOSTER-BELL (National): I raise a point of order, Mr Speaker. I have absolute confidence that all of the National Party members, except for those who have duly been granted leave within the allowance given to the National Party, are here, and any suggestion otherwise I take personal exception to.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I want to thank the member for his point of order, but I rule, as previous Speakers have done on questions of this type, that without particular evidence, then the word of whips or other people casting votes must be taken.

Bills

Minimum Wage (Contractor Remuneration) Amendment Bill

First Reading

Hon DAVID PARKER (Labour): I move, That the Minimum Wage (Contractor Remuneration) Amendment Bill be now read a first time. Excuse me, Mr Assistant Speaker; there is a frog in my throat.

This bill tries to remedy a loophole in the New Zealand law whereby people can be paid less than the minimum wage under our current law. I think most of us in this House understand that the world seems to be getting to be a more ruthless place year by year, and the employment practices that used to never be seen in New Zealand are starting to creep in. As a consequence we have, in New Zealand and around the world, more and more people working in very precarious situations, so much so that we have books being written about what is called the precariat. These are people who are living in circumstances where their terms of engagement—and they are not always terms of employment, a point I am going to be coming back to—are so insecure that they do not know what they are going to be paid from week to week. They can be, effectively, abused by the more powerful person in the employment relationship, the employer, if the employer is unscrupulous.

The examples that we have in New Zealand where people do not get the minimum that most people are entitled to are growing. If people are not employed as employees but are taken on as contractors, they are not entitled to the minimum wage, they do not get holiday pay, they do not get sick pay, and they do not get their ACC levies paid for them. This bill cannot fix all of those problems. Neither can it fix the problems that we have where, increasingly, people are being expected to work for free during trial periods. These people are being taken on as interns and are not being paid for quite lengthy periods now during a trial period. That did not used to happen previously. These insecure work practices are worrying people in all sectors of society. Older people who are trying to re-enter the workforce are sometimes in a vulnerable position and do not have many choices. Parents are worried for their children, who seem to be, despite a good education, taken on in workplaces that are quite insecure.

The history of this bill is, I think, worthy of mention. This is the first bill I have had drawn from the ballot in over 13 years since I have been here. [Interruption] Well, it is actually not a very good record. A precursor to this bill was drafted by me while I was a Minister in the last Labour Government. As a Minister I could not introduce a member’s bill. Darien Fenton picked up the bill. It was eventually drawn. It went to the Transport and Industrial Relations Committee because the House, broadly, supported it, and the select committee improved the bill so that the bill that came out of select committee is now the form of the bill that I am presenting to the House. It was narrowly defeated in the subsequent readings in the House.

I think that since that time Parliament has increasing concerns, as the world does, in terms of these precarious work practices. Even the Government is moving to a certain extent in terms of zero-hour contracts, acknowledging some of the improper employment practices that have become more prevalent in the years since. We say it is not going far enough, but even the Government is moving to a certain extent on zero-hour contracts. I believe that New Zealanders agree that all people who work deserve to be treated decently, and that includes minimum protections. If we do not protect those minimum protections for everyone, we also undermine the employers who are meeting those minimum protections but competing against people who are not. It is wrong that New Zealand’s minimum wage laws apply to only employment relationships. In a number of overseas jurisdictions the minimum applies to the rate of remuneration; therefore, you cannot avoid the minimum wage by taking someone on as a contractor rather than as an employee. And that is all this bill does.

For the categories of employee who are listed in schedule 2 of the bill, which is a discrete list that was worked out, including with the involvement of Business New Zealand, through the select committee that Darien Fenton was involved in at the time—they decided that most of these problems were in a discrete list of occupations, and therefore they decided that rather than having an open-ended piece of legislation applying to all contractual relationships, they would list those in schedule 2. It may be that that list is wrong and needs to be amended at select committee, but it is a good place to start.

Those who are affected by this gap in our law at the moment are the least powerful people in society. Sometimes they are recent immigrants. Sometimes they are people for whom English is a second language. Sometimes they will be students visiting New Zealand. Sometimes they will be people of not very high intelligence. Sometimes they will be disabled people. Always, they are not in a union. They are never in a union because they are not an employee, and unions represent only employees. These are amongst the most disadvantaged people in society, and I believe that we have a duty to protect them.

I think that most people in New Zealand think you should not be able to avoid paying the minimum wage by taking someone on as a contractor rather than an employee, and so I am hopeful that I will get sufficient support from within this Parliament because I think we are all here for basically the same reasons. We might have a disagreement as to whether the minimum wage should go up or not—that is a fair disagreement to have—but that is a different issue from saying that everyone should be covered by it. I think that at the moment this lacuna in the legislation should be closed, this gap in our law should be fixed, so that we can protect some of these most vulnerable people.

I honestly do not know how many people are in this situation. I do know, from my inquiries through the community law centres throughout the country and through some of the unions that actually skirt around the edges of these things, because they represent service sectors where the lowest income people work, they say there is a problem to be fixed, and I have been given instances of where this is a real problem. I do not know how prevalent it is, but I do know that in this increasingly ruthless world it is more of a problem this year than it was last year, and is more of a problem this year than it was a decade ago. That is not a criticism of the current Government; it is just that the world is becoming a more ruthless and competitive place, and people who did not used to exploit these loopholes in the law do on occasions in a way that did not happen in yesteryear.

This bill will, if passed, help people who are currently falling through the cracks. We have got some bad practices developing. We have people now who are sold franchises to do cleaning contracts and who, effectively, through a contractual rate, I think, get less than the minimum wage. You know, I do not think that is right. This bill might not actually protect those people. It will protect some of them if they are employed as a direct contractor, but not as a—

Alastair Scott: It won’t. It’s not going to help them.

Hon DAVID PARKER: No, it will not protect all of these people. I am not pretending that this is the perfect cure for all of the ills in the employment relationships that we have around the country, but there is a growth in these non-traditional employment relationships where people are not being taken on as employees but are being taken on as contractors. I think that this is a bill that ought to go to select committee, so that we in this Parliament can help some of the most vulnerable people in society not be abused, and protect the employers who pay the minimum wage and should not face competition from people who employ contractors for less.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Before I call a member, the member who just spoke had a frog in his throat at the beginning, and for the record I will indicate that although he had a frog in his throat he did move the bill and nominate the Transport and Industrial Relations Committee.

JONATHAN YOUNG (National—New Plymouth): Perhaps I could just address some of the introductory comments from the mover of this bill, David Parker, when he talked about how the bill, previously under the name of Darien Fenton, went to the Transport and Industrial Relations Committee and its members improved it, as he said. I am sure there were some elements that they did work on, but the report from that committee on the bill at that point in time said that the committee was unable to reach agreement that the bill should be passed. So I believe that the committee at that particular point in time identified some real complexities on why this bill would not work.

In fact, as we think about it, as the honourable member mentioned, he drafted the bill and passed it on to the honourable member Darien Fenton to bring it to the House as a member’s bill. At that particular point in time, of course, the Labour Party was the governing party. So we have a governing party that proposed a bill. The bill went to a committee, which we assume it would have had the majority on, and it could not get it through the committee. Certainly—[Interruption] All right. Certainly, I would say that at that point in time if the member who drafted the bill thought it was such a great bill, why did he not make it a Government bill? Why did he not take it to this House as a Government bill, instead of passing it on to his colleague?

I believe that the Labour Government would have received advice, as we have received advice, that this is another one of the Hon David Parker’s very complex but unworkable bills, just as NZ Power was, just as he tried to persuade New Zealanders last year on a phantom promise of a $300 reduction in their power supply costs. When the industry asked for the means by which that could be demonstrated, it could not. We have a bill here that is proposing an answer to people who are in difficult situations, who are some of our lowest-wage earners. I believe it is another phantom promise. It is a promise that will not be able to be workable.

As Mr Parker has said it, I understand the intent of this bill. The intent of this bill is to make them look good and us look bad. That is what it is. That is all it is. All it is is political propaganda. Here is a party that, in its time of office of 9 years of surplus after surplus after surplus, increased the average minimum wage by 56c a year. And as soon as we came into office and that party was in Opposition, guess what it pushed for? A $3 jump. Why did it not do that in 2007 or 2008? It is because all it is intent on doing in these sorts of pieces of legislation is pushing out political propaganda. We are the Government that for the first time in 42 years increased the benefit. We are the Government that did that; yet that is the party that claims to be the caring and sharing party. We know that Dr Cullen on Q+A on Sunday said “We should have done more.”—we should have done more. It is because that party really did not want to.

What this country needs and has is a plan that is working. This Government’s economic plan over the last 7 years has laid strong foundations.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am just going to invite the member to address this bill. We did have a general debate this afternoon, but we have a specific piece of legislation before the House now and it would be good if we got to it.

JONATHAN YOUNG: Yes, thank you, but often—if I could speak to your point—

The ASSISTANT SPEAKER (Hon Trevor Mallard): No, you cannot, Mr Young.

JONATHAN YOUNG: If I could say that often in terms of addressing the value of a piece of legislation, you have to look at the alternatives, and the alternatives in terms of what we are doing for the lowest-income people are significant, and what that party is proposing to do is unworkable. There is a great proverb that I think Mr Parker needs to understand, and that is that the cleanliness of theory is no match for the mess of reality.

This particular piece of legislation is very difficult. The intent I understand, and I think we appreciate the intent. The committee was unable to reach agreement that the bill should be passed. The difficulty is in “applying minimum wage calculations to contracting situations.” These are just some of the comments that the previous committee reported back to the House of Parliament: “The bill blurs the distinction between a contract for services (independent contract) and a contract of services (employment contract).”

For example, let us say that I was going to build a house. In your schedule, Mr Parker, you put the building industry in there as one of the, I guess, most vulnerable workforces in the country. That is what you have said. So I would say to a contractor “I want you to build this house and I want you to give me a price.”, and he gives me a price, but then he gets rained off. But then he decides that what he is going to do is to go on to the site and wait for that rain to break, and then he is going to be there on site, ready to work. Let us say that somebody is going to paint a wall or paint a fence, all right? And then he gets rained off. You have already agreed a price for a certain job to be done, all right?

Debate interrupted.

The House adjourned at 10 p.m.