Wednesday, 9 September 2015

WEDNESDAY, 9 SEPTEMBER 2015

WEDNESDAY, 9 SEPTEMBER 2015

Mr Speaker took the Chair at 2 p.m.

Prayers.

Motions

Queen Elizabeth II—Longest-reigning British Monarch

Hon BILL ENGLISH (Acting Prime Minister): I move that this House congratulate Her Majesty the Queen on the occasion of her becoming the—

Mr SPEAKER: Order! The member just needs to seek leave to move the motion.

Hon BILL ENGLISH: I seek leave to move a motion without notice that the House congratulate Her Majesty the Queen on the occasion of her becoming the longest-reigning British monarch.

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

Hon BILL ENGLISH: I move, That this House congratulate Her Majesty the Queen on the occasion of her becoming the longest-reigning British monarch. On 9 September 2015 Queen Elizabeth II became the longest-reigning monarch in British history. Previously, Queen Victoria held that record, reigning for 23,226 days—63 years and 7 months. Queen Elizabeth surpasses that record today. This is a significant moment for the Sovereign personally, and for Britain and the other 15 nations of the realm.

However, I would like to note that Her Majesty has already achieved the status of longest-reigning monarch of New Zealand. Queen Victoria’s reign over New Zealand began in 1840, later than her reign in Britain, which began in 1837. Queen Elizabeth surpassed her record as the longest-reigning monarch of New Zealand in 2012, the year of extended celebrations of the Queen’s diamond jubilee. When the Prince of Wales was here as part of the jubilee, he noted the fact that it was also the occasion of the Queen becoming New Zealand’s longest-reigning monarch.

To reign is also to serve, and the Queen is widely respected by monarchists and republicans alike as embodying a lifetime of service. She was only 25 years old when she ascended to the throne and became Queen of New Zealand. In her speech then, she promised to follow the example of service and devotion provided by her father, King George VI. She has certainly fulfilled that promise. Throughout more than six decades of extreme change, she has steadfastly served the people of her realm. I have had the honour of meeting Her Majesty on a number of occasions, and I know that she has a deep knowledge and interest in the history and affairs of New Zealand and cares sincerely for the welfare of this nation.

The Queen has asked for there to be no particular celebrations of this occasion, and for it to be treated reverently, out of respect for the memory of Queen Victoria and the other monarchs who have gone before. It is a normal working day for the Queen, another day in her lifetime of duty and service. So I will keep these comments brief and merely conclude by offering congratulations to the Queen both as Queen of New Zealand and as the longest-reigning British Monarch.

ANDREW LITTLE (Leader of the Opposition): I rise to register my personal congratulations and the New Zealand Labour Party’s congratulations on Her Majesty’s achievement of this very fine milestone. For the record—and I do not want to embarrass the Acting Prime Minister on his numbers and his calculations—Her Majesty achieves this great milestone at 4.30 tomorrow morning New Zealand time, which raises the obvious question of why we have not had legislation in this House allowing Her Majesty’s loyal subjects in New Zealand to raise a glass of Pimm’s on licensed premises at that time so that we can all celebrate the very special occasion. I regard it as an epic fail on the part of the ardent monarchists in this House.

I do have a personal connection with Her Majesty, going back only a few years when I was at the ripe old age of 11 and she was on one of her 10 visits to New Zealand. She came to the bustling metropolis of New Plymouth. I was at intermediate school. We got the day off school and went down to the main road, Devon Street, as it then was, the main retail precinct—it still is; there are just not as many retailers there. She did one of her walkabouts. Having an eye for youthful talent, she came over and spoke to me. I was accompanied by two friends, one with the coincidentally apt name of Daryl Prince. So we had a conversation about what we were doing that day, and what have you. I did urge her that perhaps she would come back at some later date—very quickly, hopefully, because we all got a day off school that day.

Turning to a slightly more serious reflection, there are historians who say it is very easy to understand the Victorian age, representing Queen Victoria, the last longest-serving monarch. Time during her reign moved very slowly. The achievement of Elizabeth II is that she has reigned during one of the most rapidly changing and dynamic periods of world history. From Churchill to Cameron, from the Turing machine to Samsung 6, 7, or 8—or whatever it is—and from Elvis to Ed Sheeran, she has reigned during a time of great technological change, cultural change, and political change. And yet, after more than 63 years on the throne, the monarchy in Britain has never been more accepted, never been more secure, and never been more respected.

Every country, every people need their standard-bearer at times of mass celebration and mass grief—a person who can lead and reflect back the feelings and thoughts of a nation. Queen Elizabeth II has done just that, and she has done it in a humble and understated way. One of her great achievements is that she has imbued successive generations of the royal family with the same level of humility and public service.

I call in aid the words of our national anthem—or national dirge, as the case may be—and hope that the praises that are heard in this great House on behalf of our great people will be heard well and truly in the chambers and corridors of Buckingham Palace, or Sandringham, or Balmoral, as the case may be. Congratulations to Her Majesty.

DAVID CLENDON (Green): It is my pleasure to speak on behalf of the Greens in recognising this remarkable milestone and to join with other parties in offering our congratulations and our good wishes. For over 63 years the monarchy has remained unchanged. It is one of the very few points of stability in an otherwise very fast-changing world. One could write a very long and learned dissertation on the changes in the world in the last 63 years—

Hon Simon Bridges: Do it.

DAVID CLENDON: —and no doubt somebody will. For the moment I will constrain myself to commenting on just two matters, two indicators of change over that time.

One of those would be that a few hours ago in this House we passed a Treaty bill—one in a series of Treaty bills. With all of the settlement bills the text contains an acknowledgment and a very profound apology from the Crown for wrongs done to Māori in the past and for the ongoing ill effects of those misdeeds of the Crown and the Governments. I think that such an apology would have been inconceivable 63 years ago. I think we now recognise the importance of the Crown apology as a significant part of settling the disputes that do continue to linger in New Zealand and no doubt will for some wee while yet.

The other matter I will reflect on is the identity of our Governors-General over recent decades. Initially, and for many years in fact, they were typically a long line of British soldiers. In 1967 we saw our first New Zealand - born Governor-General, who was a military person, a doctor, and an athlete. In 1985 we had our first Governor-General of Māori descent representing the Queen in New Zealand. In 1990 there was a significant breakthrough. A woman took up that role of Governor-General, the Queen’s representative in New Zealand. In 2006 we had as Governor-General a New Zealand - born man, but of Indo-Fijian descent. And I think of course now of the incumbent Governor-General—again, somebody who proudly proclaims Māori heritage.

I think these differences do indicate that although we have had stability and continuity we have also had change, and I think it is incumbent on all of us to seek to find the right balance between stability and change in our work in this House. So enough from me. Again, I simply reiterate our congratulations and our good wishes. Kia ora.

RON MARK (Deputy Leader—NZ First): It is with great pleasure that New Zealand First rises to congratulate our Sovereign, Her Majesty Queen Elizabeth II, on a significant milestone in this second Elizabethan age. It is particularly satisfying for those of us in the New Zealand First caucus who are holders of a Queen’s commission. Her Majesty is, of course, the longest-ever reigning monarch of New Zealand, let alone the 15 other realms that proudly have her as their head of State. What is more, she is the sixth monarch of New Zealand since 1840, and it is perhaps fitting that she has now overtaken the first, Queen Victoria.

Although there are some in this House with republican ideals, we are proud that New Zealand First is not among them. In our offices we have posters of Her Majesty the Queen of New Zealand, for which we thank Monarchy New Zealand. The monarchy is as much about heart as it is about head. It gives us a sense of something much bigger than ourselves that we have links to—Richard the Lion-heart, Henry V, and, of course, the first Elizabethan Age, which is, in essence, the British component of our New Zealand whakapapa—which gives us a greater sense of history.

Her reign was spectacularly kicked off by the conquering of Everest by Sir Edmund Hillary and Tenzing. Sir Edmund Hillary is a person whom many republicans throughout New Zealand have always identified as being the only other person whom they would imagine being the head of State, should the Queen not be. Our Queen has served her countries with honour and distinction. She pledged so many years ago that, whether her life be long or short, she was committed to the service of her people. Thankfully, it has proved to be a long and full life, which began before the jet age, saw in the space age, and in this second Elizabethan age we have seen the advent of computing, the internet, and the nuclear age. It has been a reign of radical transformation.

Above all, her reign has seen 16 New Zealand Prime Ministers serve, from Sidney Holland to our current Prime Minister, and she will no doubt see the swearing-in of the 17th Prime Minister in 2017. This is perhaps the greatest thing about constitutional monarchy—that politicians and Prime Ministers come and go, but our monarch and monarchy are enduring. She offers us all lessons in commitment, stickability, service, and dignity. We are proud to honour our Queen today, and as a party we proudly say—in defiance of those who would seek to remove the Union Jack from our flag as a first step towards republicanism—God save the Queen.

Hon TE URUROA FLAVELL (Co-Leader—Māori Party): Ā, tēnā koe, Mr Speaker, kia ora tātau katoa. I te tuatahi i roto i tōku ake Reo, me mihi rā ki a Kuini Irihāpeti kua eke ki tēnei taumata, ko ia arā te uri o Wikitōria! He aha te tikanga o Wikitōria ki tēnei rā? Ko ia Te Kuini i te wā i a ia i haina nei i Te Tiriti o Waitangi i te tau 1840 i te 6 o ngā rā o Hui-tanguru, arā, koi nā te here! He aha te here o tērā kaupapa ki tēnei rangi? Ā, i tēnei ata tonu nei i tae mai ngā iwi o Te Motu, o Te Tai Tokerau, o Tāmaki anō hoki ki konei whakarongo ai mō ngā take e pā ana ki Te Tiriti o Waitangi.

Ka whai wāhi anō rā Te Ao Māori ki te kōrero mō te āhuatanga o tēnei mea o te haki e kōrerohia ake nei, kia whai wāhi tātau ki te kōrero mō te haki. Ko te kōrero mō te haki? E kōrero anō hoki mō tō tātau mana motuhake ā-whenua, ka mutu, he kōrero anō tērā mō tēnei mea e kī ana, ko te constitution. Nō reira, he aha te tikanga o te constitution? Te tikanga ia he kaupapa tērā hei here haere i a tātau kaua ki te whakawehewehe i a tātau, nō reira koinei tētahi kōrero hei whakatakoto ki mua i a tātau i tēnei rā!

[Thank you, Mr Speaker, and acknowledgments to us all. Firstly, I pay a tribute in my own language to Queen Elizabeth, who has reached this pinnacle; she is truly the relative of Queen Victoria! What does Victoria mean to this day? She was the ruling monarchy at this time when she signed the Treaty of Waitangi on 6 February 1840. That indeed is the link! And how does that link to this day? Well, tribes of the nation from the North, and Auckland as well, arrived this very morning to listen to matters pertaining to the Treaty of Waitangi.

Māoridom has an opportunity to talk about the situation relating to this flag thing and to discuss it. And what is there to talk about the flag? It is about our sovereignty in regard to land, and, furthermore, about this thing which is referred to as the constitution. So what is its meaning? Well, technically it is a way of binding us together as we go along but not dividing us, and so this is something to put before us today for consideration.]

The Māori Party is pleased to support the motion from the Acting Prime Minister and offers congratulations to Kuini Irihāpeti. I noted in my kōrero that she descends from Queen Victoria, and Queen Victoria is the person whom most Māori think about. When we think about Queen Elizabeth, Queen Victoria also comes to mind. The Treaty of Waitangi comes to mind because Kuini Wikitōria was a part of that Treaty negotiation and, of course, today in the House we had a lot of discussion and debate in respect of the shortcomings of various Governments over time and the Crown in maintaining the dignity and respect of our Treaty of Waitangi.

In talking about that, also we think about the notion of a flag being debated at present, because a flag is symbolic of a nation’s sovereignty and a part of that must be the discussion around a constitution. Therefore, today is pretty significant because Māori in a sense worry about that disconnection with England because of that relationship with the Treaty of Waitangi. Nevertheless, we understand the desire to stand firm and stand on our own two feet. In that regard, the one thing we can say about the rārangi kōrero—about the line of accession, I suppose—is that it brings us to today and, I hope, brings us together, as a constitution does. It is about bringing people together as opposed to our differences. Hopefully, that is what is symbolised today with Elizabeth’s reign and into the future. Kia ora tātou.

Hon PETER DUNNE (Leader—United Future): I want to join with other members in commemorating this unique occasion that sees Queen Elizabeth II become Britain’s longest-serving monarch, attaining some 63 years and 217 days since her accession in February 1952.

The Queen has exemplified the concept of service throughout her time in public life, and her humility and commitment have set standards that others would be well advised to follow. Although she may be an elderly woman now, she still reads her papers every day and, according to all of the speculation, is still up to a weekly encounter with her Prime Minister, the 11th of her reign, where she can test him on the current issues of the day and the way in which her Government is behaving.

She joins a very rare pantheon of rulers. Queen Victoria has been referred to—she is still a little way short of the last Austro-Hungarian Emperor, Franz Josef, who served approximately 68 years, but they all pale into insignificance behind Louis XIV of France, who was King for about 73 years. The Queen may well yet outlive them all.

DAVID SEYMOUR (Leader—ACT): I would like to join with other members in supporting the Acting Prime Minister’s motion to congratulate our Queen. I think we in New Zealand are very lucky to have an extremely stable and extremely efficient system of governance, and the Queen is an integral part of that. The performance of that system over a record of 63 years now is very much down to one individual who very much personifies the moniker “Our Gracious Queen”. Thank you.

Motion agreed to.

Points of Order

Written Questions—Availability of Material Referred to in Answers

CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order, Mr Speaker. I would like to ask you to give a considered ruling with regard to written parliamentary questions, and answers to written parliamentary questions supplied from Ministers, and the growing practice of Ministers to simply refer to either the annual review process or the estimates process when given questions that relate to financial performance or spending decisions by Government departments. The increasing practice of Ministers has been to simply say that this information is supplied to select committee X, or whatever, and to please refer to those answers.

There are two things that I would like you look into with regard to that. The first is that that information is not necessarily available to all members, and any member has a right to question a Minister regarding those matters of financial performance. In some cases, the matter could still be before the select committee, so it is not available to all members. The second, of course, is that it may not have even been asked for in the first place. So although extensive questioning goes on during those processes, what we are finding is that some of the information asked for in written parliamentary questions has not even been asked for through the annual review or estimates processes.

So those are the issues that I would like you to look into and give a considered ruling on, because the written parliamentary questions process is a very important part of the Opposition’s ability to hold the Government, and Government departments and agencies, to account for the use of taxpayer funding.

Hon GERRY BROWNLEE (Leader of the House): I would point out that if information has been provided to a select committee during the annual review and the review is being conducted through the House, then that information is available to all members.

Secondly, I think that if you are going to have a look at the way in which Ministers are answering questions, I would hope that you look at the questions that are being asked. It is an important aspect of our democracy that members representing Opposition parties—or any member of Parliament—can ask written questions of Ministers, but they do have to be reasonable questions. I think when they are in the nature of a fishing exercise then they are probably going to get a broader sweep of answers, or an answer that gives a broader sweep of potential answers, in order to make sure that the greatest amount of information is captured by the intention of the answer—therefore, the referral to an annual review, which, of course, is an extensive document with many, many questions in it.

Mr SPEAKER: I thank both members for their contributions. I will certainly have a very close look at the matters raised by Chris Hipkins. I will certainly come back to Chris Hipkins. If I feel it requires information coming back to the House, then I will do so as well.

Question No. 9 to Minister, 8 September

RON MARK (Deputy Leader—NZ First): I raise a point of order, Mr Speaker.

Mr SPEAKER: A fresh point of order?

RON MARK: Yes. I raised with you yesterday an issue regarding a question that was put by the Rt Hon Winston Peters to the Minister for Māori Development. It was taken on behalf of the Minister by the Hon Chris Finlayson. In giving answers to that, the Hon Chris Finlayson said that the question should have been directed to the Minister for Whānau Ora. I asked you to consider that, firstly, the report was commissioned by the Minister for Māori Development, it was released by the Minister for Māori Development, and, of course, the Minister for Māori Development is also the Minister for Whānau Ora. You were going to deliberate on the Hansard and come back and advise the House whether or not that question could have been answered—

Mr SPEAKER: Order! I have heard enough. No, if the member would only go back again and look at Hansard, he would see that my response was that I would certainly have a look at the questions and the answer. I specifically said I would not necessarily come back to the House. I did have a look at the questions and answer, and I am quite comfortable that the questions were answered according to the Standing Orders. The particular problem in the question that was raised is that it was a supplementary question that arose from a very unspecific primary question: “Does the Minister stand by all his statements?”, or words to that effect. Therefore, the adequacy of the answer, in my opinion, was consistent with the Standing Orders, and if the member wants to have a look at Speakers’ rulings to help him, I suggest he looks at pages 198 and 199.

Oral Questions

Questions to Ministers

Climate Change Policy—Pacific Islands Forum

1. JAMES SHAW (Co-Leader—Green) to the Minister for Climate Change Issues: Are New Zealand officials working to soften the climate change declaration to be adopted at the Pacific Islands Forum?

Hon SIMON BRIDGES (Acting Minister for Climate Change Issues): No. Our officials are working closely with their Pacific colleagues to get a strong declaration on climate change from the forum. A clear statement of ambition that recognises the particular circumstances in the Pacific will be an important contribution to the outcome in Paris in December.

James Shaw: Given that answer, will he support the call of Pacific Island leaders at the forum to hold global temperature increases to a level that would ensure their survival—yes or no?

Hon SIMON BRIDGES: Of course we all think climate change is an incredibly important issue. I think the member, though, is getting ahead of himself. The declaration is going to be discussed, and a consensus, we hope, arrived at tomorrow. I do not believe there is a settled position today. It is a matter of open dialogue by all the parties there to try to achieve consensus.

James Shaw: Will he support the completely reasonable resolution from small Island States to put an immediate moratorium on any new coalmines?

Hon SIMON BRIDGES: I think ultimately that is for different countries in terms of their energy mix, but be very clear: New Zealand is, as indeed the member should be, incredibly proud of the $100 million we are putting into Pacific Island nations to make them more renewable. There are some 20 renewable projects in Tonga, Samoa, Tuvalu, and a number of other Pacific Island countries where New Zealand is taking a leadership position on renewable energy.

James Shaw: I raise a point of order, Mr Speaker. My question was specifically in relation to the resolution from small Island States to put in a moratorium on new coalmines, not about the amount of aid that we are—

Mr SPEAKER: Order! Again, I need to refer the member to Speaker’s ruling 187/4. The member is, effectively, asking for a yes or no answer to the question that he has raised. The Minister is not required to give a yes or no answer.

James Shaw: I raise a point of order, Mr Speaker. That may be true, but it was in relation to the resolution relating to a request for no new coalmines, and I do not believe that the Minister addressed that question. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! As I listened to the question, I think it has been addressed. It is a marginal call, from my point of view. As a way forward I will on this occasion allow the member an additional supplementary question.

James Shaw: So what does he have to say to the President of Kiribati, Anote Tong, who has told us that: “We cannot negotiate this, no matter how much aid. We cannot be bought on this one because it’s about the future.”?

Hon SIMON BRIDGES: Well, of course, the Prime Minister is in Papua New Guinea. He will be respectfully listening to the various positions. As I have already said, I think this is a matter of an open dialogue to try to achieve consensus tomorrow in relation to a declaration on this very important issue—I think we all agree—of climate change.

James Shaw: And what is his response to Pacific Island leaders who are calling for New Zealand to be kicked out of the forum because our approach to climate change represents the single greatest threat to their territorial integrity and security?

Hon SIMON BRIDGES: Well, of course, as I say, I think we take climate change very seriously. We have got an ambitious target heading into Paris. I think that New Zealanders, including the members of this House, should be incredibly proud, actually, of the leadership role that we play in the Pacific when it comes to climate change, whether that is in terms of sharing experience and expertise in a range of areas, or whether it is spending and investing $100 million across Pacific Island countries in renewable energy, which is literally transformative to small communities throughout, as I say, the Pacific.

James Shaw: How many of the 179,000 people living in Kiribati, the Marshall Islands, Nauru, and Tuvalu will New Zealanders take in as refugees when sea level rise renders those countries uninhabitable?

Hon SIMON BRIDGES: I think that the member is referring to climate refugees. That is of course a possible future phenomenon, and hence one of real concern—I think we would all agree again—to Pacific Island nations and those people, each and every one of them whom the member talks about. We think that our response in New Zealand to climate change should continue to focus on mitigation and adaptation measures, so Pacific peoples can continue to live in their own countries. As I say, the leadership role that we have had in the Pacific on climate change is something that I think New Zealanders and the member should be proud of.

James Shaw: Is he happy, therefore, to go to Paris with an emissions reduction target that, if widely adopted by the rest of the international community, would eliminate entire countries in the South Pacific?

Hon SIMON BRIDGES: The member is entirely wrong. We have an ambitious new target to reduce greenhouse gas emissions to 30 percent below the 2005 levels by 2030. This is—and the member may not like it—a significant increase on our current unconditional target. We compare favourably with other countries: the same as Canada, a little better than the United States—27 percent on 2005 levels—a little better than Australia, and a little under the EU. I think that we can hold our heads up going to Paris with a high level of ambition.

James Shaw: Is he aware that climate scientists at the Climate Action Tracker group have placed New Zealand’s response as insufficient and inadequate, and we are in fact in the bottom category of countries in terms of the levels of ambition that we are taking to Paris?

Hon SIMON BRIDGES: Well, of course there will be a spectrum of views on these things, and there is a clear desire for high ambition from many people. But I will repeat what I have already said: we have got an ambitious target that we take to Paris, and we compare favourably with other countries.

Economy—Household Debt

2. ALFRED NGARO (National) to the Minister of Finance: How are household balance sheets supporting resilience in the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): The resilience of the New Zealand economy is based on the resilience of New Zealand households. That can be measured by household debt relative to incomes and relative to assets. The aggregate debt of New Zealand households increased significantly between 2000 and 2008 because of uncontained house price rises and debt-funded consumption. Since then growth in household debt has been moderate, despite continued growth in Auckland house prices. Household savings have increased markedly since 2006 and have been positive since 2010. The combined effect has been a reduction in the ratio of household debt to assets. More savings and moderate growth in debt mean that New Zealand households are well-positioned to manage through the current uncertainty.

Alfred Ngaro: How can higher household debt affect macroeconomic vulnerability?

Hon BILL ENGLISH: It is pleasing to see that since 2008 higher household incomes and moderate growth in household debt have resulted in stabilising the debt to income ratio, after it rose by 50 percent from 2000 to 2008. So although household debt is increasing at moderate levels of around 5 percent per annum, it is far below the debt increases of 16 percent per year in the mid-2000s. High household debt is associated with volatile consumption. High household debt can also produce a more volatile business cycle, but it looks as if New Zealand’s households are running pretty well-balanced debt and asset ratios, and that will help them to get through any softening in the economy.

Mr SPEAKER: Order! Before I call the member, there is a huge level of interjection coming from one particular member who has a primary question later that I am very interested in the answer to. So I am hoping that he is here to ask the question.

Alfred Ngaro: How does the change in household debt to income ratios in New Zealand since 2008 compare with other countries?

Hon BILL ENGLISH: Up to 2008 New Zealand had one of the more rapid increases in household debt to income—that is, debt went up a lot faster than income—and now that has changed. Households in some countries have significantly reduced their debt—for instance, in the UK and in the United States. Another measure of vulnerability is total debt to GDP. Between 2007 and 2014 this increased across all advanced countries, including New Zealand, and New Zealand’s increase was about the second-smallest in the last 7 years among advanced countries. According to Treasury, in 2014 New Zealand had the second-lowest ratio of total debt to GDP among advanced economies—the second-lowest ratio of total debt to GDP.

Hon David Cunliffe: I raise a point of order, Mr Speaker. You have rightly surmised the level of frustration on the Opposition benches. I seek that you clarify your ruling of yesterday that both long questions and unduly long answers are out of order, and clarify whether the Minister is coming close to your definition of an unduly long answer, especially because it is arguable whether the Minister of Finance has any ministerial responsibility for the debt of individual households.

Mr SPEAKER: If the member would only study the question, it is around the resilience of the New Zealand economy, so the Minister of Finance certainly has an interest in that. As I have mentioned on many occasions, I will be the adjudicator as to the length of answers. I am conscious that some of the answers given to two supplementary questions are tending to be on the long side, but I will be the adjudicator, not the honourable member.

Alfred Ngaro: How are lower interest rates and moderate debt growth resulting in more money in the pockets for New Zealand families?

Hon BILL ENGLISH: Interest rates have dropped from a high of 11 percent to, currently, under 5 percent. At the same time, since 2008 the average wage has increased by 22.5 percent, so that means that the debt-servicing ratio in households has reduced. In 2008 households were spending, on average, 14 percent of their disposable income on servicing debt. Today they are spending 10 percent of disposable income on debt servicing. Their incomes have gone up, their debt levels are stable, and interest rates are a lot lower, so they are better off.

Exchange Rate—Forecasts and Impact

3. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with the Prime Minister’s statement that a rising exchange rate “is a sign of confidence in New Zealand”?

Hon BILL ENGLISH (Minister of Finance): Yes. When the economy is doing well relative to other countries, the exchange rate is typically higher. It should not be a surprise that when dairy prices have dropped so sharply, people’s view of prospects for the New Zealand economy in the near term have weakened. That is one of the reasons the exchange rate has fallen. But we are pleased it has, because it acts as an automatic stabiliser. It means that exporters can now be more competitive.

Grant Robertson: In light of that answer, with the dollar having dropped 20c against the United States dollar since that statement was made in April, is the falling dollar a sign of a lowering of confidence in New Zealand?

Hon BILL ENGLISH: I think I answered that question before. It is not at all a surprise. It may be a surprise to the member, but not a surprise to anyone else, that when our national income has dropped, then the view of our near-term economic prospects has moderated. There is no doubt about that, and that is one of the reasons the exchange rate has dropped. But, of course, it would be worse if dairy prices dropped and the exchange rate stayed up. Then we would be in a real mess. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I know the member is responding to interjections, but it is not helpful.

Grant Robertson: Does he agree with John Key in 2015, who said that the high exchange rate of 81c to the United States dollar was “a point of celebration”, or the 2008 John Key, who said an exchange rate of that level could not be sustained in New Zealand?

Hon BILL ENGLISH: What we all agree on is that New Zealand exporters did amazingly well to be competitive at 81c because in 2008, in the outflow of the economic wreckage left by the Labour Government, no one thought it was possible to compete at 81c. But we found out, by backing New Zealand businesses and fixing the damage that Labour did, that we could compete.

Grant Robertson: Does 2015 Bill English, with the NZ$1 at US62c, agree with 2012 Bill English, when the NZ$1 was at US81c, that “A 20 percent devaluation of the New Zealand currency would cut the standard of living of every New Zealand household by 20 percent.”?

Hon BILL ENGLISH: Yes, and I will explain why. In 2012 I shared the view that everyone in the world did that a big drop in the exchange rate would lead to high inflation, eroding the real value of household incomes. It turns out that, like everyone else, I was wrong. We have a remarkably stable low-inflation environment, where New Zealanders are getting real increases in their incomes. We have yet to see how the drop in the exchange rate will flow through, but the indications are that it will be not nearly as strongly as we might have expected just 3 or 4 years ago.

Grant Robertson: Does 2015 Bill English agree with 2013 Bill English, who said, when the NZ$1 was above US80c, that those calling for a lower exchange rate “want to cut the real wages of workers”; if so, with the NZ$1 at 62c, is he now celebrating the real wages of workers being cut?

Mr SPEAKER: The Hon Bill English—either of those two supplementary questions.

Hon BILL ENGLISH: I know that listening to the answer is work compared with asking the question, but I just answered that question before. In 2012 and 2013 everyone expected that a big drop in the exchange rate would lead to a rapid increase in inflation, eroding the purchasing power of New Zealand households. That does not appear to have been the case. We have yet to see whether it might become the case with a big drop in the exchange rate, but the low inflation that seems persistent around the world indicates that it works differently from how we thought.

Grant Robertson: Is it not the case that he is actually just spinning like a top about the exchange rate in a desperate attempt to find something positive to say about an economy that the ANZ bank has described as running at stall speed?

Hon BILL ENGLISH: I think the member has put his finger on an important issue, and that is that although the Labour Party is always trying to find something negative to say about the economy, we are simply explaining how the economy is and which Government policies support the resilience of New Zealand households to deal with it. I know that the member believes that by having an opinion that the economy is going down the tubes he can drive it down, and that would suit him. We do not agree with that approach.

David Seymour: Where would the exchange rate be and what options would the Reserve Bank Governor have today had he been “given more tools” and spent the last year trying to print money to lower the exchange rate, as some would suggest?

Hon BILL ENGLISH: It is difficult to speculate on some of the mad, hypothetical policies we have heard in the past. But I suspect it would probably be about 42c against the US dollar.

Health Care—Free GP Visits for Under-13s

4. SCOTT SIMPSON (National—Coromandel) to the Minister of Health: Can he confirm that 98 percent of general practices across New Zealand are offering free visits for under-13-year-olds, covering 770,000 eligible children or 99 percent of all under-13s?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes, I can. In Budget 2014 the National Government committed $90 million over 3 years for the roll-out of free GP visits and prescriptions for children under the age of 13 to complement the existing under-sixes policy. The policy has been in place for just over 2 months and the sign-up rate of general practices has exceeded expectation. As at 1 September, 966 GP practices out of 985 are offering free daytime GP visits, and we expect that several more will sign up in the coming weeks.

Scott Simpson: What are the positive effects of this increased access to primary health care?

Hon Dr JONATHAN COLEMAN: Because the National Government has removed cost as a barrier for young children accessing primary care, parents will be more likely to take their child for treatment before their condition deteriorates. It will also help reduce the number of children presenting at our busy hospital emergency departments with an illness that a GP could have treated. Only a National Government can both handle the country’s finances and deliver more services.

Hon Annette King: Is funding for two GP visits a year, as calculated in the Budget, going to be sustainable in light of reports that the data used by the Ministry of Health underestimates by two visits per child per year nationally for this age group, leading to an annual loss of around $70 to $120?

Hon Dr JONATHAN COLEMAN: As the member knows, during the negotiations with GPs all matters were covered, including the rate of uptake and the consultation rate. I do not know where that report has come from but I would like her to present it because, frankly, it does not accord with the information we had from the doctors and the information we have had from the Ministry of Health, so I think she is probably making it up yet again.

Mr SPEAKER: Order!

Hon Annette King: I raise a point of order, Mr Speaker. That is a constant refrain—saying that I make things up, and that member—

Mr SPEAKER: Order! The member will resume her seat when I get to my feet. That sort of answer—the final wording—from the honourable Minister is not helpful to the order of the House. [Interruption] Order! No, I do not want any response from the Minister if the Minister wants to stay to answer the next supplementary question. I cut the Minister off as soon as he made that comment. I cannot do it any quicker than that. That sort of answer about members making things up is, effectively, a reflection on a member. It leads to disorder and I will not tolerate it in this House.

Barbara Stewart: Which other political party has advocated for free visits for under-13s? And if it makes so much sense for young people, when can we expect this Government to implement New Zealand First’s policy of free health checks for SuperGold cardholders; if not, why not?

Hon Dr JONATHAN COLEMAN: One could only guess, but I suspect it is one that never has a chance of delivering anything.

Businesses—Financial Support from Government

5. FLETCHER TABUTEAU (NZ First) to the Minister for Economic Development: Does he stand by all his statements?

Hon STEVEN JOYCE (Minister for Economic Development): Yes, in the context in which they were made.

Fletcher Tabuteau: Was the Minister authorised to release commercially sensitive ownership data from Rocket Lab in his reply to New Zealand First’s written question; if so, who at Rocket Lab authorised the release?

Hon STEVEN JOYCE: In relation to that matter I do not realise that I have necessarily disclosed that information, but if the member would like to come to me I am happy to address it for him.

Fletcher Tabuteau: I seek leave to table correspondence from Rocket Lab to New Zealand First stating that the information provided by the Minister that has been previously released was without Rocket Lab’s approval, dated 14 August—

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

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

Fletcher Tabuteau: Does the Minister agree with the reported claims that $25 million of taxpayers’ money given by him to Rocket Lab is a wise use of Kiwi taxpayers’ money, given Rocket Lab is 100 percent American-owned by Rocket Lab USA; if so, why?

Hon STEVEN JOYCE: A couple of things. Firstly, I have not provided that level of funding to Rocket Lab myself in any capacity. Those decisions are made by Callaghan Innovation according to research and development policies. My second point to the member is that I think he is being more than a little tricky about his ownership figures in relation to Rocket Lab, because I understand that the New Zealand subsidiary is owned by the US company, but then the US company is owned by a range of New Zealand and other shareholders.

Fletcher Tabuteau: I seek leave to table a document not available freely to members of Rocket Lab USA’s registration in Delaware—

Mr SPEAKER: Order! I just want to know where the member sourced this information from. Was it off the web?

Fletcher Tabuteau: It was purchased on a registry database, so it is not freely available to members.

Mr SPEAKER: On that basis I will put the leave. Leave is sought to table that particular document. Is there any objection? There is none. It can be tabled.

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

Fletcher Tabuteau: How can the Minister reconcile giving $12 million to Saudi billionaires for a farm in Saudi Arabia; $25 million to build Rocket Lab, a wholly American-owned company; and $145 million for a Chinese-led Asian Infrastructure Investment Bank, yet this Government refuses to help Silver Fern Farms in its New Zealand ownership?

Hon STEVEN JOYCE: In relation to the matters the member raises, the first one is in relation to the Minister of Foreign Affairs. In relation to Rocket Lab, with the greatest respect to the member, that is one of the most innovative New Zealand companies owned and set up by New Zealanders, and if he wants to bag it, that is fine. In relation to research and development programmes, those are provided to companies according to the level of research and development that takes place in New Zealand, and, actually, Silver Fern Farms has been a beneficiary of that.

Richard Prosser: Supplementary question. [Interruption]

Mr SPEAKER: Order! Mr Prosser has a right to ask a question. [Interruption] Order! The fun is over. The question will be asked, unless members are very keen to leave early.

Richard Prosser: What material factor or factors determine the difference between, first, his Government’s willingness to provide foreign-owned MediaWorks with what was effectively bridging finance totalling $54 million to enable it to continue trading and, second, his Government’s unwillingness to offer Silver Fern Farms similar bridging finance to keep it in New Zealand hands ahead of the Meat Industry Excellence group’s NewCo proposal?

Mr SPEAKER: The Hon Steven Joyce, in so far as he has ministerial responsibility.

Hon STEVEN JOYCE: The member is incorrect in his characterisation of what was provided to MediaWorks, which was what was provided to all radio companies at that time, which was the ability to pay later on their frequencies provided they paid a commercial interest rate. I do not believe—I may be wrong, but I do not believe—that such an arrangement would necessarily be helpful to Silver Fern Farms, but the people to make a decision on future investment in Silver Fern Farms are the directors and shareholders of Silver Fern Farms, not Mr Prosser or Mr Tabuteau or Mr Peters, who, frankly, know nothing about the meat industry.

Rt Hon Winston Peters: Point of order—[Interruption]

Mr SPEAKER: Before the member starts, it is a point of order, and can I give a warning to the right-hand side of the House that it will certainly be heard in silence.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The Minister struggled through his answer then descended into personal character assassination, which is not part of the Standing Orders, and I would ask you to ask “Mr Fix-it” to get it right next time.

Mr SPEAKER: Order! The member will resume his seat. This is a robust debating chamber. On occasion members will be slightly offended by an answer, but in this case, in a robust Chamber, I do not think the answer was at all offensive.

Dr David Clark: Does he still agree with the PM’s statement that the people of Northland want more and they want to go faster; if so, does he appreciate the irony in National’s cutting investment in Northland transport by $36 million a year, or 29 percent—the biggest cut of any region in the country?

Hon STEVEN JOYCE: The member is incorrect. The Government has invested hugely and is currently investing hugely in the Northland region. In fact, it is almost like one great long roadworks between the Brynderwyns and the Bay of Islands as the roads are upgraded. The member should actually get out of his office in Wellington, stop sending out press releases, and go and have a look.

Dr David Clark: I seek leave to table figures prepared by the Parliamentary Library that show that between the 2008-09 and 2013-14 Budgets, funding was cut by 29 percent.

Mr SPEAKER: No, that information is available to members if they want to go and search for it.

Housing New Zealand—Dividend and Condition of Properties

6. PHIL TWYFORD (Labour—Te Atatū) to the Minister responsible for HNZC: Why has the Government extracted more than half a billion dollars in dividends from Housing NZ when there are over 3,000 people on the waiting list, children dying in cold, damp homes, and a shortage of houses?

Hon BILL ENGLISH (Minister responsible for HNZC): Because funding decisions around social housing are based on the needs of the most vulnerable, not on the dividend paid by Housing New Zealand in any particular year. For instance, the Government has in every year since 2009-10 spent at least $100 million more per year than the best year that the Labour Government was in charge of Housing New Zealand Corporation, and that is because we have had to spend a lot of money to catch up with the damage done by Labour to the State housing stock. The number of people assisted is now determined by the flow of income-related rents. The Government is forecast to spend $774 million this year—up from $718 million last year—and we are looking to purchase 3,000 new income-related rent places over the next 3 years.

Phil Twyford: Why was 2-year-old Emma-Lita Bourne allowed to die in a cold, damp State house after her mother repeatedly requested improvements to the house, if, as he says, Housing New Zealand has all the money it needs to make the repairs?

Hon BILL ENGLISH: I am not going to discuss the details of that particular case, but I think the member does make a valid point. That is that the way the State housing stock has been managed for a number of decades, but particularly under the last Labour Government, means we have thousands of houses that are not appropriate for the tenants. That is why we have a social housing reform programme—because we have to undo decades of damage that has left our most vulnerable people in houses that are not always suitable for them.

Jami-Lee Ross: What steps is Housing New Zealand taking to help deliver more homes that are warm, dry, and safe?

Hon BILL ENGLISH: Last year Housing New Zealand spent $400 million on maintaining and upgrading State houses—much higher than any previous Government has ever spent, and $100 million more than the Labour Government ever did when it was in charge. We have also insulated—

Hon Member: It’s getting worse.

Hon BILL ENGLISH: Well, we had to insulate 280,000 houses to make up for what the Labour Government did not do. We had to retrofit 48,000 houses with insulation. We had to provide heating in 10,000 homes that Labour left without any heating. We had to install thermal curtains in 17,000 homes that Labour left—

Mr SPEAKER: Order!

Phil Twyford: Does he agree with Guyon Espiner that after 7 years we have all had enough of National Ministers blaming the last Labour Government?

Hon BILL ENGLISH: I do not always agree with Guyon Espiner, but I have to say that even I have been amazed at how negligent the previous Labour Government was. We could have spent hundreds of millions on new homes, but we had to spend it on insulating 280,000 public and private sector homes and providing heating for 10,000 houses. I feel sorry for those tenants, and I wish we had been able to do more, faster, but the Labour Party should—

Mr SPEAKER: Order! The answer has gone on for long enough.

Phil Twyford: When he said that Housing New Zealand has made 126,000 health and safety repairs in the last year, did this include the contractors who dealt with a mould problem by nailing a piece of plywood over the top of it in the home of Te Ao Marama Wensor, whose son Iriah has holes in his lungs and has suffered strokes due to the toxic mould?

Hon BILL ENGLISH: It may have done. That is quite possible, which tells us about how much work needs to be done on the State housing stock and the system that runs it. That is why we believe we need other providers who help to set higher levels. But in the case of the person whom the member has mentioned, of course those kinds of cases are now taken very seriously by a range of agencies. If he is willing to provide details, then we can take action to improve that situation.

Phil Twyford: Why does he choose to pocket the $0.5 billion dividend and sell houses to merchant bankers and property developers instead of building new State houses and fixing up the ones that are killing the children, when on his watch the number of State houses has been cut, 2,000 houses lie empty, and there are 3,000 families on the waiting list? That is your record, Bill.

Hon BILL ENGLISH: Here is the record. In 2006-07 Labour spent $55 million building houses. This year we are spending $180 million building houses. That is the difference in commitment. Labour did not build new State houses; we are.

Hon Craig Foss: I raise a point of order, Mr Speaker. I am sitting almost directly behind the Minister. I can hardly hear him because of the interjections from the other side.

Grant Robertson: Mr Speaker.

Mr SPEAKER: I will hear from Grant Robertson.

Grant Robertson: I appreciate that there was a lot of noise there, but what the Standing Orders talk about is comments in the House that will lead to disorder. Every answer from the Acting Prime Minister referred to the last Labour Government instead of him taking responsibility for his actions. [Interruption]

Mr SPEAKER: Order! I do not need any assistance from the member. The answers were certainly robust, but I consider very carefully what is in the question and the tone of the question. When a question asks about a Government with a policy to sell to merchant bankers and then accuses houses of killing children, etc., that is an inflammatory type of question that inevitably will get a robust answer in this House.

Roading, Waikato—Waikato Expressway

TIM MACINDOE (National—Hamilton West): Thank you, Mr Speaker. My question is to the Minister of Transport: what update can he provide—[Interruption] What update—

Mr SPEAKER: Order! The level of interjecting coming from one particular member again has been absolutely consistent throughout question time. It will cease, or the member will be leaving the Chamber. [Interruption] Order! It could happen quicker than the member might expect.

7. TIM MACINDOE (National—Hamilton West) to the Minister of Transport: What update can he provide on progress with construction on the Government’s Waikato Expressway Road of National Significance?

Hon SIMON BRIDGES (Minister of Transport): The $2.1 billion Waikato Expressway, started under this National Government as one of our seven roads of national significance, is a crucial part of supporting a strong and growing regional economy. It was my pleasure to recently turn the first sod of construction on the $458 million Huntly section of that expressway. The 15-kilometre Huntly section is the fifth section to be built and will connect to the already completed Ōhinewai section in the north and to the Ngāruawāhia section in the south. Construction of the Huntly section is an important step towards completing the entire 102-kilometre Waikato Expressway project by 2020.

David Bennett: What benefits will the Waikato Expressway deliver?

Hon SIMON BRIDGES: I am glad the member for Hamilton East asks. There will be tremendous benefits in terms of reducing congestion, in terms of reliability—

Sue Moroney: No, it doesn’t. It doesn’t do that at all.

Hon SIMON BRIDGES: Oh, so Sue Moroney does not want it. Sue Moroney does not want it.

Mr SPEAKER: Order! Just finish the answer quickly.

Hon SIMON BRIDGES: And there will be benefits in terms of massively much safer roading. The Government is committed to this important project for the people of the Waikato.

Sue Moroney: What update can he provide on the reasons why international airline Jetstar decided not to establish flights to and from Hamilton?

Mr SPEAKER: It has very little to do with the primary question.

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

Mr SPEAKER: The Leader of the House has the right to raise a point of order.

Hon Gerry Brownlee: The question that is set down for answer relates to the Waikato Expressway. I simply wanted to point out to the member asking the question that an expressway is not a runway.

Mr SPEAKER: Order! [Interruption] Order! There will be another front-bench member on my left getting a similar warning very shortly. I have considered the question again. It is so far from the primary question that it is not in order to ask it.

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

Mr SPEAKER: This is a point of order, I might remind the people on my right.

Chris Hipkins: You could interpret the primary question in that way, but the first words of the primary question were “What update can he provide”. The supplementary question asked by my colleague Sue Moroney asked for a similar update on a different matter.

Mr SPEAKER: A good try—a gallant try, indeed. It would have been a perfectly satisfactory question yesterday, but it is out of order on this occasion.

Refugees—Māngere Refugee Resettlement Centre

8. DENISE ROCHE (Green) to the Minister of Immigration: Does he agree with the manager of the Māngere Refugee Resettlement Centre, who said “We’ll make it work” when asked if they can accommodate the extra Syrian arrivals?

Hon CRAIG FOSS (Associate Minister of Immigration) on behalf of the Minister of Immigration: Yes, of course the Minister agrees. We will make it work. That is what successful Governments do every day. That is why we have committed to a staggered intake of 750 Syrian refugees over the next 2½ years. The advice received was that 250 Syrian refugees at this stage in the current financial year would be challenging, and anything more than that would put a strain on the resettlement process. But of course we will make it work. I do note for the member a media report this morning that found the Māngere Refugee Resettlement Centre to be “unexpectedly well-prepared for the influx of new migrants arriving under the government’s emergency refugee package,”.

Denise Roche: If New Zealand has the capacity to take this number of refugees on a short-term basis, why will he not commit to increasing New Zealand’s quota on a permanent basis?

Hon CRAIG FOSS: The Māngere Refugee Resettlement Centre has refugees for 6 weeks. These are lifetime movers to New Zealand, and we need to make sure that they are able to move into our communities and build a better life for themselves in New Zealand. It is a lifetime decision, not just a short-term capacity decision in Māngere.

Denise Roche: I raise a point of order, Mr Speaker. I do not think he answered the question. My question was about permanently raising the quota, and he did not address that.

Mr SPEAKER: I listened to the answer. It may not be satisfactory to the member, and I am not surprised that it is not. But it still addressed the question that was asked. The answer is certainly consistent with the Standing Orders.

Denise Roche: Is the Minister saying that the people who actually do the resettlements, such as the Māngere Refugee Resettlement Centre and the Red Cross, are wrong when they say that New Zealand can handle a refugee quota increase now?

Hon CRAIG FOSS: I acknowledge the fine work that the Red Cross and many volunteers do on behalf of the Red Cross throughout New Zealand. Right now the advice we have is that given the infrastructure and financial resources we have and the ability to resettle refugees, we are doing pretty good—750 additional refugees from Syria in particular, on top of the 750 we take in per annum.

Denise Roche: Given that there is no legal requirement to wait for a review to increase the refugee quota and the Minister has already had official advice on increasing the quota, which the Minister said he needed, why will he not raise the quota now?

Hon CRAIG FOSS: As the Minister noted yesterday, a review process is due in 2016. Right now, we have already announced an extension to our refugee quota particularly targeted for those people from Syria to come into our country. The scheduled review process will be under way, as scheduled, next year.

Denise Roche: I raise a point of order, Mr Speaker. I really did not get an answer to the question I asked.

Mr SPEAKER: If the member simply asked a simple question, it would be helpful. The question is: why can the quota not be raised now? If it was a simple question like that, I could assist in getting an answer. Would the Hon Craig Foss answer that part of the question.

Hon CRAIG FOSS: The advice we have is that given the resources and infrastructure we have and the recent extension and additional refugees that we will allow to come into New Zealand, that is what our system can handle at this point in time.

Tertiary Institutes—Monitoring and Investigations into Funding

9. Hon DAVID CUNLIFFE (Labour—New Lynn) to the Minister for Tertiary Education, Skills and Employment: How much funding have tertiary institutes been forced to repay to the Tertiary Education Commission in the past year as a result of overfunding, and does he still have confidence that the Tertiary Education Commission’s regular monitoring procedures are working?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): In relation to the first part of the question, repaying funding is a standard part of the tertiary system, with the Tertiary Education Commission recovering funding if a tertiary education organisation receives funding greater than its planned enrolment level and does not meet its education performance indicators. In 2014 there were also two cases where providers were required to pay back because they had received more than they were entitled to receive. Total recoveries for 2014, which is the latest year we have, are $57.5 million across all tertiary education organisations. In relation to the second part, broadly yes, but in light of a few well-publicised recent events, the Tertiary Education Commission and the New Zealand Qualifications Authority (NZQA) have commissioned an independent review by Deloitte into its monitoring of tertiary education organisations. That was released in July of this year, and it found that the monitoring has the principal elements expected of a comprehensive framework. It also made some recommendations for improvement, which are being implemented currently.

Hon David Cunliffe: Why in the Deloitte review to which he has just referred did Deloitte say: “The current monitoring approach across both organisations”—that is, the Tertiary Education Commission and NZQA—“is neither designed nor resourced to detect potential fraud.”?

Hon STEVEN JOYCE: There are requirements that tertiary education organisations must meet in return for funding, and the funding organisations are entitled to expect that the governors and operators of those tertiary education organisations meet those requirements and make representations to the Tertiary Education Commission that are correct. Should those situations not be the case, as has occurred in the recent examples that, as I say, have been publicised, then the Tertiary Education Commission can go in and recover that money. That is what it has done on four or five occasions.

Hon David Cunliffe: Why did it take whistleblowers to spark an investigation into 5 years of overpayments and the enrolment of ghost students in courses at Taratahi Agricultural Training Centre, and what does that say about the tertiary education sector and its monitoring agencies under his watch?

Hon STEVEN JOYCE: Well, I think that it says a lot about the management of Taratahi during that period, and I think the situation that occurred is very disappointing. It is the job of that organisation—just the same as it is the job of other tertiary education organisations—to ensure that they meet the terms of their funding agreements. That is their responsibility. So it does not say anything about the Tertiary Education Commission; it says a lot about the behaviour of those organisations. The Tertiary Education Commission has been diligent in recovering money where it is found to have not been paid correctly.

Hon David Cunliffe: Why did it take whistleblowers to spark an investigation into Warriors club members and staff gaining a certificate for an 18-week course after doing just 1 day of study, and what does this say about the tertiary education sector and its monitoring agencies under his watch?

Hon STEVEN JOYCE: Well, the particular matter the member raises is from the middle of last year, I think, and was publicised at the time. If I could be helpful to him and to members of this House, there have been four reasonably well-publicised matters: Te Whare Wānanga o Awanuiārangi, which we had complaints about in March 2014 and was settled last year; Taratahi, which is the recent one; also the Western Institute of Technology at Taranaki; and also one private trust in Rotorua with links to Awanuiārangi. There is one further investigation being undertaken at the moment.

Grant Robertson: Right, so things aren’t great then, are they?

Hon STEVEN JOYCE: Well, there are 600-and-something tertiary organisations. If Mr Robertson would like to cast aspersions on the whole sector, he can feel free to do so.

Hon David Cunliffe: I raise a point of order, Mr Speaker. Although it was helpful of the Minister to recite—

Mr SPEAKER: Order! I can anticipate—

Hon David Cunliffe: —the names of some investigations, he did not address—

Mr SPEAKER: I agree. I am going to invite the member to ask that question again.

Hon David Cunliffe: Why did it take whistleblowers to spark an investigation into Warriors club members and staff gaining certificates for an 18-week course after just 1 day of study, and what does that say about the tertiary education sector monitoring agencies under his watch?

Hon STEVEN JOYCE: Well, again, it does not say anything about them; it says a lot about that particular provider. Also, in relation to two matters that the member has referred to today, they have been referred to the Serious Fraud Office. It cannot be the responsibility of the Tertiary Education Commission to detect potential fraud when people deliberately misrepresent the situation to the monitoring agencies.

Hon David Cunliffe: When the Minister referred, in response to press questions in November 2014, to 12 tertiary institutions for which there were targeted reviews or investigations under way, what are the names of the other eight, in addition to the four that he mentioned in his answer to the previous supplementary question?

Hon STEVEN JOYCE: There are, in fact, six focused reviews that have been undertaken by the Tertiary Education Commission in terms of its own responses after the matters had been raised with it. Five of those have now been completed with no concerns. One of them has been elevated to a full review. That review is ongoing. I would be happy to report to the House once that review is complete.

Hon David Cunliffe: I raise a point of order, Mr Speaker. The Minister has not addressed the names of any of the institutions that were under review. That was a very specific supplementary question asking for the names. Not one name was produced in his answer.

Mr SPEAKER: The difficulty I have is that the Minister answered it by saying that the numbers quoted by the member were wrong. He talked of there being 12 and of four having been mentioned, and asked what the other eight were. The Minister said: “Well, you’re wrong. There are six.”

Hon David Cunliffe: It was not my contention that there were originally 12; I was quoting the Minister’s answers to a press question in November 2014, a matter that—

Mr SPEAKER: Order! The way forward is that I will ask the member to ask the question again, but the Minister will certainly be at liberty to answer that until reviews are over, it is not in the public interest to make any further comment. Let us have the question again.

Hon David Cunliffe: What are the names—what are the names—of the 12 tertiary institutions that he stated to the press in November 2014 were under “targeted reviews or investigations”, and what is the status of those investigations?

Hon STEVEN JOYCE: In fact, six targeted reviews have taken place. Five of those have been concluded completely satisfactorily with no concerns, and I do not propose to list the names of those organisations to the House, because there are no concerns about them. The sixth one is currently under investigation, and that investigation is continuing. As I said to the member previously, at an appropriate time I would be more than happy to publicise the outcome of that and the name of the institution involved.

Broadband, Ultra-fast and Rural—Expansion Proposals

10. BRETT HUDSON (National) to the Minister for Communications: What recent announcements has she made on expanding ultra-fast broadband to New Zealanders?

Hon AMY ADAMS (Minister for Communications): Last week I released the request for proposals to expand the ultra-fast broadband network from covering 75 percent of New Zealanders to reaching at least 80 percent of the population. We have made fantastic progress with the first phase of ultra-fast broadband, but we are doing more still to get faster broadband to as many people as possible. The Government has committed an extra $210 million from the Future Investment Fund to boost the ultra-fast broadband programme, and the request for proposals is a critical step in deciding which communities are next in line to get fibre and who will deliver it.

Brett Hudson: How will the towns to get ultra-fast broadband in the expansion programme be selected?

Hon AMY ADAMS: The request for proposals included a long list of more than 110 towns and communities around New Zealand in places like Huntly, Carterton, Hokitika, and Kaikohe. The long list was developed to cover the next biggest towns beyond the areas covered by the first phase of ultra-fast broadband, and were determined based on Statistics New Zealand’s population projections with reference to council submissions. It is important to note, however, that not all towns included in the long list are guaranteed to get ultra-fast broadband, and there may also be some that are not on the list that may still be included following receipt of the bids from respondents to the request for proposals. Following the receipt of bids from the wholesale fibre providers and councils’ digital enablement plans, the final towns will be selected.

Rt Hon Winston Peters: Will the Minister commit to Kerikeri and Dargaville being at the front of the UFB2 roll-out, in line with statements made by the Prime Minister in Kerikeri during the Northland by-election; if not, why on earth not?

Mr SPEAKER: The Hon Amy Adams, either of those two supplementary questions.

Hon AMY ADAMS: No, for the reasons just set out in my answer. I can tell the member that should he open an office in only one of those places, it may make them more attractive—

Mr SPEAKER: Order!

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. You cannot have, surely, hope of there not becoming a state of disorder when a Minister concludes a question like that, which was a palpable lie, and if she woke up—

Mr SPEAKER: Order! The member will resume his seat. It goes to show the House, again, the trouble we get into when Ministers take the opportunity to put a political chip in at the end of answers. It leads to disorder, as has just been demonstrated by that point of order.

Rt Hon Winston Peters: How does the Minister intend to deliver ultra-fast broadband to the 77 more towns added to the UFB2 when the budget from the Future Investment Fund remains at that projected for 33 towns, or $210 million?

Hon AMY ADAMS: If the member had listened to my answers, he would understand that we have already committed the $210 million to fund the proposal and we have not yet determined what number of towns will be finally selected.

Clare Curran: Why did she rush through legislation under urgency in May extending the telecommunications development levy to fund rural broadband when she has now postponed that roll-out, meaning rural communities will have to continue to put up with crap internet speeds?

Hon AMY ADAMS: Ignoring the fact that that has nothing to do with the substantive question, the member is quite simply, once again, wrong.

Ria Bond: Is the Minister aware of Venture Southland’s report on the true state of broadband and the level of dissatisfaction at the Rural Broadband Initiative?

Hon AMY ADAMS: Yes, I am aware of the report, and actually the issues raised in that part of Southland come from a number of causes. But that member will be pleased to know that, thanks to the Rural Broadband Initiative and the Government’s Rural Broadband Initiative, speeds across New Zealand have already tripled and are predicted to double again. So the residents of Southland should be very grateful that at least this Government is addressing it, which is something that Labour failed to do.

Ria Bond: I seek leave to table Venture Southland’s Registration of Interest report, dated July 2015. This is not readily available on the internet.

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

Hon Gerry Brownlee: What is it? We did not hear what it was.

Mr SPEAKER: Order! Will the member repeat what it was? It is the Southland—

Ria Bond: It is Venture Southland’s Registration of Interest report, dated July 2015. It is not readily available on the internet.

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

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

Ria Bond: I seek leave to table my letter in support of Venture Southland’s Registration of Interest report, dated 8 July 2015.

Mr SPEAKER: Order! If members really want it they can come and see the member and get a copy. [Interruption] Order! That is using the point of order system simply to make a political point. That is not the purpose of it at all.

Child, Youth and Family—Parental Access to Children in Care

11. MARAMA FOX (Co-Leader—Māori Party) to the Minister for Social Development: What is she doing to investigate any concerns raised by families who are being denied access to their children in care because of Child, Youth and Family processes?

Hon ANNE TOLLEY (Minister for Social Development): Access to a child in care is a decision for the Family Court, and Ministers are unable to interfere. Child, Youth and Family’s role in these cases is to implement the rulings of the court. If anyone contacts my office with specific concerns about a child, I immediately ask officials to look into the matter, but, as I say, access to children in care is a matter for the Family Court, and I cannot interfere.

Marama Fox: Will she be establishing an independent authority to investigate claims by parents who feel they have been alienated by Child, Youth and Family through dubious practices?

Hon ANNE TOLLEY: As the member is aware, I have commissioned an expert advisory panel to look at a complete overhaul of the Child, Youth and Family systems. In the terms of reference for that panel there is specific mention of examining the adequacy of the current independent oversight advocacy and complaints mechanisms for Child, Youth and Family. When that final report comes to me at the end of the year with a newly designed system, the panel will have addressed that issue, I am sure.

Marama Fox: In light of that answer, can the Minister give whānau assurances that if they have been poorly dealt with prior to that announcement, they will be heard and have a place to hear their claims?

Hon ANNE TOLLEY: There is at the moment a complaints process that people can use. But I say to the member that my hope is always that Child, Youth and Family keeps focused on what is in the best interests of the child, and all too often it seems to the outsider that custody and access fights are normally more about adult agendas. So, yes, there are review mechanisms at the moment, but I say to that member that I have asked the expert panel to have a good look at how adequate they are and whether they are independent enough, and to bring recommendations into a new system at the end of the year.

Overseas Investment—Silver Fern Farms

12. Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) to the Minister for Primary Industries: Does he think it’s in the best interest of primary industries for a controlling interest to be potentially taken by foreign investors in New Zealand’s largest meat processing company, Silver Fern Farms?

Hon NATHAN GUY (Minister for Primary Industries): As no official details on Silver Fern Farms’ capital-raising process have been released so far, fuelling speculation would be unhelpful. However, I agree with the Leader of the Opposition, who said that the Silver Fern Farms capital structure is a matter for Silver Fern Farms shareholders to decide. Mr Little went on to say: “My position on foreign direct investment is that adding jobs, adding investment and creating new value for New Zealand—that’s a good thing.” Ultimately, Silver Fern Farms is owned by farmer shareholders and there are, indeed, farmers on the board. They are in the best position to influence the outcome of this process.

Hon Damien O’Connor: Why did the Government refuse to assist the Meat Industry Excellence group, which has a proposal to consolidate the meat industry that would benefit New Zealand, and instead is allowing Silver Fern Farms to be controlled by foreign investors?

Hon NATHAN GUY: I think there is some confusion in the Labour caucus, because I do not think that Mr O’Connor has talked to Mr Little—they have different views. Can I go on to say that I have read the Meat Industry Excellence report; I think it has created some discussion. The Government does not feel that we should be stepping in the middle of that process. If the gains are the big as that report says, then it is going to be up to the meat industry to drive those changes.

Hon Damien O’Connor: Why has he not made good on John Key’s 2008 commitment to a $200 million suspensory loan to help with the consolidation of the meat industry, saying: “I think everyone sees the need for change.”?

Hon NATHAN GUY: This Government is investing a lot to assist the red meat sector to grow and flourish. We are investing over $150 million in the Primary Growth Partnership. Of course, we went to the campaign 12 months ago with election promises that our farming and rural communities backed, unlike the Labour Opposition, which went there with a capital gains tax, a tax on irrigation, and also an enlarged emissions trading scheme process, and that is why it had its worst result ever in the history of the Labour Party.

Hon Damien O’Connor: I seek leave to table a 2008 meat industry report where Mr English said: “As long as it’s under $200 million, I don’t mind.”

Mr SPEAKER: What is the source of the report?

Hon Damien O’Connor: It is a media report.

Mr SPEAKER: Does the member have any further supplementary questions? I suggest he use them.

Hon Damien O’Connor: Will he commit right now to ensure any foreign investment in Silver Fern Farms goes through the Overseas Investment Office; if not, why not?

Hon NATHAN GUY: There is an Overseas Investment Office process for foreign investment, if it does indeed meet that threshold. The member is obviously very confused. Yesterday he was on the Farming Show radio programme, saying that the board of Silver Fern Farms should be sacked. I think that is terrible, when at the moment all we have is speculation that the member is indeed fuelling along.

Hon Damien O’Connor: Has he or his officials or his ministerial colleagues had any involvement in the potential sale of the shareholding in Silver Fern Farms to Chinese company Bright Food?

Hon NATHAN GUY: I have had no involvement in this process. This process is being run by the board. It is going to be up to the board and it is going to be up to the farmer shareholders to decide on the direction of Silver Fern Farms.

Hon Damien O’Connor: I raise a point of order, Mr Speaker. That was a very simple question about whether he or his officials or his ministerial colleagues have had any involvement.

Mr SPEAKER: It was a supplementary question and the Minister addressed one part of it, saying that he has had no contact. That has addressed the question.

Hon Damien O’Connor: I raise a point of order, Mr Speaker.

Mr SPEAKER: I hope the member is not attempting to—

Hon Damien O’Connor: No, no, I am just seeking clarification—

Mr SPEAKER: No, the member does not need to do that.

Hon Damien O’Connor: Can I ask the Minister, who is responsible for his officials, whether he can inform the House whether, to his knowledge, they—

Mr SPEAKER: Order! That is not a point of order; that is effectively another supplementary question. If he wants to—[Interruption] Order! The member will resume his seat. I have just ruled, for the benefit of the member, that the question was addressed satisfactorily. If the member then wants to make a more—[Interruption] Order! If the member then wants to ask a further supplementary question that is more specific and he has got supplementary questions left, I suggest he does so.

Hon Damien O’Connor: Have the Minister’s officials had any direct involvement in the sale of Silver Fern Farms to Chinese company Bright Food?

Hon NATHAN GUY: At the moment the member is just speculating on something. As far as the involvement that I have had, I have already indicated that I have had no involvement in this process. As far as I am aware, my officials have had no involvement in this process. This process is being run by the board of Silver Fern Farms. Ultimately, it will be up to the shareholders, who are farmers, to decide.

Hon Damien O’Connor: I raise a point of order, Mr Speaker. It is a repeat, and I tried to keep the question very narrow. It was one relating to just his officials, and I did not hear an answer.

Mr SPEAKER: The member did get an answer. The trouble is that his own colleagues were making so much noise that he may not have heard it, but the Minister effectively said: “To my knowledge my officials have not had any contact.” That was included in the answer. I accept that it was hard to hear, but it was not helped by the level of interjection coming from people who regularly yell out: “Answer the question. Answer the question.” That is not helpful when the Minister is attempting to, Dr David Clark.

Hon Damien O’Connor: Supplementary question, Mr Speaker.

Mr SPEAKER: No, the member has used all his supplementary questions.

General Debate

General Debate

ANDREW LITTLE (Leader of the Opposition): I move, That the House take note of miscellaneous business. What we have seen in the House this afternoon is the shabby entrails of the last vestiges of an underperforming Government. It has lost control. It has lost track. It has got nothing to offer New Zealand in its time of greatest need. It sits there, with nothing to offer New Zealand. It sits on the sidelines doing very little.

The Government claims no responsibility for the things that it can control. It claims the credit for things that are completely out of its control. It blames a Government of 8 years ago for things that go wrong on its watch. That is the New Zealand Government today. That is the New Zealand National Government that we have got presiding over us for the next 2 years. Then, of course, it will change.

On this Government’s watch, this is a Government that has had its back turned on the best interests of New Zealand, and, under our noses, New Zealand has been undergoing profound change. Let us just think about what has been happening.

The Government is doing its level best to sell absolutely everything. It is not pleased enough with selling our employment laws to Warner Bros. It is not pleased with selling our thousands of State houses, when people are queueing up, trying to get into good houses, trying to get into safe, warm houses—the very least expectation we have for our most vulnerable. The Government is not content with selling our State businesses, our power generation businesses. It is not content with trying to sell off our Pharmac purchasing model to overseas interests. It is not content with putting our lawmaking capacity on the block, under the Trans-Pacific Partnership. It is not content with selling off our gambling laws to Skycity and others.

It does not stop. The integrity of the Government has been sold to a Saudi businessman, and that is now under investigation. There is the whole shabby line-up—Minister after Minister, issue after issue. This is the National Government 2008 to 2017, and then it will come to an end. But in the meantime the damage is being done—in the meantime the damage is being done.

This Government is also presiding over an ever-growing sale of our productive base, our productive land assets, and our productive industries—selling them overseas. It is the Government’s inattention, this Government’s inattention, and so many New Zealanders are feeling it now—not just those in Taranaki, not just the rising number of unemployed in Taranaki, not just the rising number of businesses that are struggling to get ahead because of this Government’s inattention.

We have a slowing economy. Seven regions are now reporting shrinkage in their economic growth, and let us just see what happens in the next quarter. We have out-of-control house prices in Auckland and a Government that will just do nothing—just do nothing—about it. Thousands of Aucklanders are shut out of the opportunity to own their own home. The one thing that we promise New Zealanders—those who are newly arrived here and those who will grow up here—is that if they work hard, if they save hard, they will have a chance to own their own home. Well, that is out of touch because of this Government’s inattention and lackadaisical approach.

There is a growing number of jobless people across New Zealand. There is growing poverty in New Zealand. The Government says that $25 a week from 1 April next year to a selected few is going to make the difference. It will not. The Government does not care. It treats a growing number of New Zealanders as if they just do not matter, and we have a growing number of businesses that just want to get ahead but they cannot do so. There is more red tape imposed by this Government. There are more hurdles to leap. It just does not care.

If this Government stands for one thing, it is a failure to stand up for the future—a future that New Zealanders are desperate to hear about and know about and hope for. Well, the Government is not delivering, and it cannot deliver because this is a sideline Government. It stands on the sidelines and hopes for the best—it stands on the sidelines and hopes for the best.

But what is worse is that a new characteristic has emerged from this Government and it is so far adrift of the New Zealand characteristic. This Government no longer represents a sense of compassion, a sense of conscience, a sense of moral responsibility. It has lost its way. It has no values, no moral compass, no nothing to offer hope to New Zealanders.

Well, it has to be better and it can be better. We need a Government, and we will get a Government, that truly represents the New Zealand character; a Government interested in investing in the real future, in infrastructure, in research and development, and in real diversification—stuff that will make a difference. But most of all, we need a sense of hope and conscientiousness and compassion for all New Zealanders, and for our reputation abroad. New Zealanders deserve nothing less.

Hon ANNE TOLLEY (National—East Coast): I read a quote in the Listener the other day that I think applies well to the Opposition parties, especially at the end of that last speech. It says: “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.” If ever you heard that, we have just heard it from the Leader of the Opposition. Actually, the owner of that quote was Groucho Marx—so be it. We hear from “Angry Andrew” again—

Mr SPEAKER: Order!

Hon ANNE TOLLEY: —that regional New Zealand is in deep crisis. Well, thank God the Labour Party has declared another crisis because that means that the regions are about to take off. But out there in the regions—

Ron Mark: I raise a point of order, Mr Speaker. Not too long ago, that very same member pulled me up on a point of order for referring to a member—in fact, the Hon Maggie Barry—

Mr SPEAKER: Order! Can I just get the point of order, please?

Ron Mark: The point of order is that she referred to—well, I am not going to repeat the epithet, but—

Mr SPEAKER: Order! [Interruption] Order! The member will resume his seat. When the comment was made, I called “Order!”. It is not helpful to the order of the House to talk to any member like that. That is complete lack of respect for any member of this House. I would be grateful if all members would refrain from such language in the future.

Hon ANNE TOLLEY: We are out there in the regions—we are out there and we are getting the job done. I do not often get the opportunity to talk about my electorate in the House but I am going to do so today, because, actually, I represent a very large and diverse electorate, which runs from Gisborne right up the East Cape, out across the Eastern Bay of Plenty, right across to the edge of Te Puke, and then right down to the top of the Rotorua lakes. It takes in places like Murupara and Galatea—places that there would not be many people in this House who have actually been and visited. My electorate is a fantastic place and it has got a heap going for it, not the least being fantastic weather. Yes, it does have some tough issues. It is one of the poorest regions in the country, and it has some major difficulties with things like benefit dependency, gang membership, etc., etc. But it has so much going for it, and I want to talk about that today.

This Government is out there in my electorate, and in many others around the country, doing the job that New Zealanders elected it to do. So if we just have a look at education, this Government is investing in education in the Eastern Bay of Plenty in particular. There is a new kura that is going to be built in Whakatāne. The Associate Minister of Education, Nikki Kaye, came into Ōhope last week and announced a $13.5 million rebuild of the Ōhope Beach Primary School. They have been working for 7 years. They have got leaky buildings, they have got asbestos—you name it. It is a $13.5 million rebuild of that school. That is on top of when you go over to Kawerau, where there is a $15.6 million rebuild of Tarawera High School—looking fantastic and about to be opened in the next couple of months. This Government invested in that area, in education, so that those kids get a good chance in life.

There are three communities of schools in the Eastern Bay of Plenty, three groups of schools working together, focused on lifting student achievement, because they know that that is what is going to make the difference in the lives of those children. Economic development—we hear the Opposition talking about a lack of economic development. Well, this Government has worked with all the regional leaders in what is called the wider Bay of Plenty—that is, it goes right down to Taupō, Rotorua, Tauranga, and across to Ōpōtiki—and they have produced the Toi Moana Bay of Plenty Regional Growth Study.

One of the major features of that growth study is Ōpōtiki aquaculture. For those of you in the House who have not heard me talk about this over the last 10 years, this is a huge opportunity for Ōpōtiki to have. It has already established a mussel farm offshore. They are providing spat all over New Zealand. They are growing the biggest, fattest, juiciest mussels. There is so much that I want to talk about; I have touched only on a very small part. This Government has been working with Ōpōtiki now—

Hon Member: Feels like you’ve been talking forever.

Hon ANNE TOLLEY: For johnny-come-latelys, I have to say that Labour members are turning up there now and saying that this is a great project. They did absolutely zip for them when they were in Government. They turned their backs on Ōpōtiki when they were in Government, but this is a Government that is out there in the regions, that is doing it, that is working alongside local government, that is working alongside businesses, that is growing economic development, and that is helping those in regional parts of New Zealand to get a good living and have the opportunities for their children that we all want. I think this Government is really getting on with the job.

EUGENIE SAGE (Green): Tēnā koe, Mr Speaker. Kia ora tātou katoa. Well, in Minister Tolley’s speech talking about getting the job done, I did not hear the environment mentioned once. This Government’s economic policy, which focuses on short-term extractivism, is not building a long-term, sustainable future for New Zealanders or the New Zealand economy.

I would like to talk today about our indigenous plants and wildlife because they are some of our most significant and special features. They are a result of our long and isolated evolution and the diversity of our land and seascapes. New Zealand is a global hotspot for biodiversity because we have so many species that are found here and nowhere else in the world. We have got very high levels of endemism. All of our skinks and geckos are found only in New Zealand, and more than 90 percent of our insects, a quarter of our birds, and 80 percent of our higher plants. Half a dozen islands in the Hauraki Gulf have got higher levels of endemism than all of Great Britain. We also have a biodiversity crisis, with far too many species threatened with extinction, and this Government is doing far too little about it.

We have the Minister of Conservation sitting in the front row, head down, failing to invest adequately in funding the Department of Conservation to protect our special places on conservation land and protect our threatened species. Conservation funding for natural heritage management was cut by $7 million this year. The Government is failing to ensure that the law is enforced properly, whether it is the Forests Act or the Resource Management Act. It is a Government that proposes to change the Resource Management Act to weaken nature and strengthen private property rights.

The Treaty bills that we addressed in this House this morning sought to redress some of the gross injustices of the colonial era and the harm that the Crown allowed to be done to Māori and to their Treaty rights. But we are still harming the first inhabitants of these lands: ruru, kākā, mānuka, kauri. What we need is stronger law and much greater investment in conservation, and a complete change from this Government’s agenda of short-term extractivism.

Under the Resource Management Act the recognition and protection of the natural character of wetlands, the protection of significant indigenous vegetation, and significant habitats of indigenous fauna are identified as matters of national importance. Yet what do we have in Northland? We have the plundering of wetlands for ancient swamp kauri. We have the peat mining operation in Kaimaumau wetland, and we have the Government failing to provide guidance to councils on how these legal responsibilities should be applied.

There was work done on a National Policy Statement on Indigenous Biodiversity—that stopped under this Government in 2011. After public submissions, the Minister at the time stopped it. Why? Because he said there were issues, including the impact on private landowners. Once again, it was the Government putting the interests of private landowners first. Three years later the Government decided to restart that work. But I am not confident that we will get better protection for our special native plants and wildlife under any national guidance from this Government because of what we are seeing in the National Environmental Standard for Plantation Forestry, which has been released recently.

Forestry is a major export earner, but it occurs in areas where there can be significant environmental impacts. This proposed National Environmental Standard on Plantation Forestry is a missed opportunity to encourage a smart, sustainable forest industry in the long term while protecting our natural environment. It promotes afforestation at the expense of our indigenous species. It has got a very permissive regime, which allows areas of tussock grasslands and shrub lands to be overplanted with exotics, except in areas that councils have specifically identified as significant in their plan.

Forest and Bird has called the proposed standard woefully inadequate in the way it deals with the protection of wetlands and high-conservation value areas. It is inadequate too in terms of the way it deals with riparian buffers. They are well recognised as safeguarding waterways, yet it is proposing only 5-metre buffers around smaller streams and around wetlands.

This Government claims that it is providing national guidance, but what it does is provide guidance that strengthens the rights of private landowners and does not adequately recognise our distinctive biodiversity and our important landscapes and protect them so that we ensure that a strong economy is based on strong environmental foundations.

Hon NICKY WAGNER (Associate Minister for Canterbury Earthquake Recovery): It is my pleasure to update the House on what is going on in my region, my region of Canterbury and Christchurch. I would like to thank the Minister Anne Tolley for telling us about all the action in her town, but we can add more than that.

Post-earthquake, Canterbury and Christchurch are really buzzing. We have got a region that is really making things happen. It is almost as if the 15,000 earthquakes have forced us to think about our priorities, to refocus on what is important, and to think creatively about our future.

Last night I celebrated with the Hon Louise Upston, the Minister for Women, a magnificent outcome of the earthquakes in terms of what is happening in the construction industry. There is a significant new trend in the rebuild—it is women in trades. The demand for skilled labour has really opened the door for women and they are pouring in. There are 8,600 women working in trades in Christchurch compared with 3,600 before the earthquakes. What is more, there are 500 wildly enthusiastic women in training at the Christchurch Polytechnic Institute of Technology, all looking forward to getting out into the action. The employers told us last night that women are adding real value to their workplaces. They added value with diversity, they added value with more variety in skills, and more work and better quality work was being done.

But this is just one of the positive changes across the province, as new ways of thinking and new ways of working are creating new and exciting opportunities for Cantabrians. If you drive into Christchurch you can feel the buzz of change. There are the signs of construction, dozens of cranes, thousands of cones, high-vis everywhere, and more and more shiny new homes and buildings.

But I do not really want to focus on the construction of infrastructure beyond noting what has been completed: things like 67,000 housing repairs, 20,000 new homes, 75 percent of the horizontal infrastructure, and many new buildings and facilities. There are completed anchor projects such as the cricket oval, the bus exchange, and full steam ahead activity on the Avon Ōtākaro precinct, the Christchurch Justice and Emergency Services Precinct, and the Metro Sports Facility.

That is all great stuff and a fantastic achievement for our city. But I want to talk about the unseen changes in the province and the city: the attitudinal changes, the collaboration, the hubbing of ideas and services, and the positive focus on the future. It is really exciting to see that young people in particular are responding to this new focus and energy. Ever since the earthquakes they have been more interested in education. They are achieving better results. This year 81.6 percent of 18-year-olds are leaving school with National Certificate of Educational Achievement level 2 or more, and that is a record in Christchurch and across New Zealand.

But beyond school, more young people are in education, in training, and in work than ever before. The unemployment rate for 15 to 24-year-olds is down by an amazing 42 percent and I think it is because these young people are able to see the benefit, the immediate benefit, of education and training and have identified what they can do to be part of the future of our city and our province.

I came across a couple of young guys the other morning. It was very early—far before start time. They were waiting at the gate to their construction site and they were champing at the bit to get in. They told me that it was their first job and they could not wait to get to work. What a great start for their careers. Right across the city we are all engaged in life more in Christchurch. More of us are playing sport, more of us are going to arts events, and more of us are involved in community projects than the rest of the country. It is as if Christchurch has been inspired and energised by all this change.

Yes, of course there are people who still have a long way to go to rebuild their lives and we are waiting for them to get back to normal. But we are really focusing on providing them with the support that they need, and things like the Residential Advisory Service—the RAS—which is a free legal service for earthquake repairs and issues—

Mr SPEAKER: The member’s time has expired.

IAIN LEES-GALLOWAY (Labour—Palmerston North): On this side of the House and in the Labour Party right across the country we are preparing to celebrate 100 years of the Labour movement. The Labour Party was formed in 1916 by people who wanted to get a better deal for workers. They were sick of being exploited, they were sick of not having a chance to get ahead, they were sick of dying of diseases caused by exploitative working conditions, they were sick of their children dying too young, and they were sick of their children not being able to go to school and not being able to get ahead. The Labour Party was formed because we held the values of working people, we knew the value of work, and we wanted people to get ahead.

After the first Labour Government was elected, the National Party was formed to keep Labour out of Government. That was the sole purpose of the National Party: to keep the people who represented the working people—the hard-working, ordinary, salt of the earth - backbone of the country—out of Government and out of power. That is what the National Party is all about, and that is why the National Party has no idea what it stands for. It has no values; all it has are focus groups and Crosby/Textor. That is all the National Party has.

We believe in a country that does far more for New Zealanders than what working people and ordinary New Zealanders are getting from this National Government. We believe in a country where if you work, you can get ahead, and where if you work, you will actually get paid a decent day’s pay for a decent day’s work. That is what we believe in. We believe that if you get a job, you should have some security in that work. You should know from one week to the next how many hours you are going to get and how much you are going to be paid, so that you can put some money aside, so that you can get a mortgage or get a loan, or so that you can save up for your kids to be able to go to school camp—all the variety of things that people ought to be able to take for granted but that have become luxuries under this National Government. Working people get a raw deal under National.

I want to talk about one of my constituents. I am going to call her Jane because she is so scared that her employer might find out that she has come to speak to me that she does not even want her real name to be exposed. Jane came to me and she said: “Is there anything I can do about my employment situation? I do not have an employment agreement. When I go to work my employer decides what is work and what is not—what I get paid for and what I do not get paid for.” So when she is sitting on the phones, staffing the phones, she does not get paid. When she goes into a meeting she does not get paid. Unless it is work as defined by the employer, she does not get paid. That is completely illegal, and my advice to her was: “We have got to go to a labour inspector. We have got to get this investigated.” Her response was: “I can’t do that, because I might lose that little bit of work that I’ve got.”

That is the plight of working people today under this National Government. Working people are too scared even to stand up for the rights that they are given in the law. At the same time, this Government has passed law after law after law stripping away workers’ rights. Well, we believe in something much better than that. We believe that Jane should get not only her minimum standards as allowed for under the current law but also guaranteed hours. She should know how many hours she is going to get from one week to the next. She should get paid a decent wage for the work that she does. She should be respected by her employer for the work that she does. She should have the opportunity to develop her career so that she can get ahead in her chosen profession and so that she can live the life that members opposite, who think that getting a passport every 5 years is the worst thing that could possibly happen to them, take for granted.

That is how out of touch those members are. They talk about how they are getting more people into work when those people are on zero-hour contracts, when they are on the minimum wage—or not even getting the minimum wage, because they are on contracts and they have to work too many hours to get the money that they have been contracted for and they do not even get the minimum wage. We can do much better than that. Labour has a vision that is far more ambitious for working New Zealanders than National could ever be, and it is time for the end of this anti-worker Government and for something that actually provides New Zealanders with the Kiwi dream that New Zealand was originally founded on.

TIM MACINDOE (National—Hamilton West): I love our country, and today I am especially proud to be a New Zealander. I am particularly proud of our constitutional arrangements, which have served us well and are internationally admired, and I want to add to the tributes that were paid in this House earlier to Her Majesty the Queen on this momentous day as she surpasses the record of her great-great-grandmother Queen Victoria in becoming the longest-serving monarch in British history. Of course, as we know, she became the longest-serving Queen of New Zealand about 2½ years ago.

Despite the distance involved and the fact that she is the Queen of the Commonwealth and has many countries to visit over the years, she has paid no fewer than 10 visits to New Zealand. She came here in the year of her coronation and took part in the opening of Parliament. She was here for the James Cook bicentenary celebrations in 1970. She was here in 1977 when, amongst other things, she formally opened the Executive Wing, which we know as the Beehive, and, of course, there is a plaque on the stairs acknowledging that. She was here in 1990 for the Commonwealth Games, which she closed, and, of course, the important thing that year was the sesquicentenary of the Treaty of Waitangi.

In more recent years we have enjoyed regular visits from her children, her grandchildren, and, most recently, her great-grandson, Prince George. They are an outstanding family, and, of course, they reflect the great commitment to service that Her Majesty gave as a young woman when she said that whether her life be long or short she was committing herself to a lifetime of service. I acknowledge that and think that she has been an outstanding example for us all to follow.

I think it is particularly significant that today in the House we have this morning seen two more final readings of Treaty settlement legislation, because, of course, the Treaty settlement process has all been conducted during the reign of Queen Elizabeth. She was here in 1995, and this year is the 20th anniversary of the signing of the first settlement, which was in my own area—the historic Tainui settlement, which she attended in person. She issued the all-important Crown apology in person and in the presence of the late and much-loved Dame Te Atairangikaahu and Prime Minister Jim Bolger. As a National MP, I am incredibly proud of that process, and I believe that it is making a huge difference in bringing our country together and righting the wrongs of the past.

I am very proud that New Zealand is a stable, democratic nation with a firm commitment to human rights and respect for the rule of law. This is something we should never take for granted, because when we look around the world we see how many people are being deprived of that. Of course, at the moment we see the dreadful atrocities being committed against the people of Syria, and I am proud that we have taken more refugees, or announced our commitment this week to take more refugees.

I am also very proud, at a local level, that we are attending to the important things. Other members who have spoken before me have also spoken of our regional investment. In my own region of the Waikato, on 28 August I was very proud to be at the sod-turning ceremony for the new Huntly bypass section of the Waikato Expressway. This is a $2.1 billion project, in total. It is an incredibly significant investment. I was amazed to hear a Waikato MP today denigrating it, because this is the single most important investment that we can possibly make in our region. The 1.5 kilometre Huntly section is the fifth of seven to be built, and when the 10 sections are completed the entire 102 kilometre Waikato Expressway project not only will have been completed on time and within budget but it will make an enormous difference to everybody travelling through our region and to those who need to move freight, do business, and so on, as well as, most important, saving many, many lives because of safer roads.

So, yes, we are getting the job done, and I am very proud of that. I am also very proud that our Government has been tackling and will continue to tackle the serious social issues of child abuse and violence against women. I was delighted to accompany the Hon Anne Tolley in Hamilton about 10 days ago to the launch of Hamilton’s children’s team. I am disappointed our local media did not give more coverage to it, because at its peak that team will be working with up to 650 of our region’s most vulnerable children, and what more important work could there be than that? All power to their arm. I am so proud that that is under way, and I was proud to advocate for that when the children’s teams were first being mooted.

I am also very proud that in New Zealand we have had over half a million patients receiving a first specialist assessment in just the last financial year—a 26 percent increase from when we came into Government. I could go on and on. We are getting the job done. I am very proud of our country.

SUE MORONEY (Labour): I thought there was a theme developing with the National members’ speeches, and it was all about how great the economies were going in their regions. Then Tim Macindoe got up and could not speak about the economy in the Waikato, because it is going down the tubes under this Government. It is shameful that he spent most of his speech talking about the Queen. Do not look at the Waikato economy going down the tubes; look at the Queen.

Phil Twyford: Look over there.

SUE MORONEY: Yes, look over there, look at the flag, go look at the Queen. The truth is that in the Waikato we are facing the perfect storm. We are facing the perfect storm.

Tim Macindoe: Talk the region down all the time. Never have a good thing to say about our region.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

SUE MORONEY: I raise a point of order, Mr Speaker. It is very difficult when the member is getting so angry about his lack of attention to the Waikato—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member will resume her seat. I have just drawn the member into line. I now invite the member to get on with her speech rather than refer to the ruling that I have just made, even if I have made it from my seat.

SUE MORONEY: Well, I am disappointed that the member for Hamilton West did not talk about the Waikato economy, because it is the perfect storm. His Government ought to do something about it because at the moment we have got plummeting dairy milk prices, which is affecting our region and, at the same time, escalating house prices because that Government has failed to fix the housing crisis in Auckland. The crisis is marching on down over the hill, over the Bombays, and straight down to Hamilton, affecting house prices, increasing rents, and meaning that MPs like me and Tim Macindoe have got hordes of people coming into our offices trying to find decent places to live—trying to find places to live. That is what is happening in the Waikato.

But I do want to talk about a hopeful future for this country, because what we do need is a Government with a decent moral compass, one that is in touch with the people who it is there to represent. Who demonstrated that this week? Andrew Little demonstrated that in truckloads—in truckloads. He led the fight to get the refugee quota lifted and the emergency measures in place. Since April he has been calling for the refugee quota to be lifted. He did not have to wait to see the dreadful photos. He did not have to wait for Crosby/Textor to tell him to start moving. He did not have to wait to see public opinion starting to change. He knew since April that that was the right thing to do, because we could see the humanitarian crisis just revving up over in Europe and the Middle East and those parts of the world. What we need is the sort of leadership that Andrew Little demonstrated: the ability to say that that is the sort of thing that New Zealand can help with and should help with, and he was on the front foot on that issue.

I do not know what John Key was doing, but he certainly was not listening to the New Zealand public on this. It took him weeks to catch up, and that is not the sort of—

Hon Member: At sea.

SUE MORONEY: He was completely at sea with it. That is not the sort of leadership that we need, because John Key is taking his instructions from Crosby/Textor, and they got it wrong—they got it wrong. Mr Assistant Speaker—what?

The ASSISTANT SPEAKER (Hon Trevor Mallard): I think the member has been here long enough to know that she cannot say that members are receiving instructions from outside parties. She will not say that. In fact, she will withdraw.

SUE MORONEY: You would like me to withdraw?

The ASSISTANT SPEAKER (Hon Trevor Mallard): I would.

SUE MORONEY: OK, I withdraw. What I will say is that he takes his advice from Crosby/Textor. That is where he takes his advice from. He ought to be taking his advice from the New Zealand people, because the New Zealand people knew what the right thing to do was, and Andrew Little got that right as well.

A hundred years ago the New Zealand Labour Party was formed. It was formed on the back of a dispute by miners, who actually went on strike over crib-time. Crib-time is what they used to call getting a tea break. That is what miners were on strike about 100 years ago, and 100 years later we have that Government taking away ordinary workers’ right to have a tea break. Some things never change. The National Party is back to its old tricks, and the Labour Party is the one with the answers and the positive vision about what working life ought to look like.

Next week we will be talking about 26 weeks’ paid parental leave—another area where the Government is hopelessly out of touch with the New Zealand public because it does not understand and has no interest in knowing about the pressures on New Zealand families. It is the Labour Party that understands the pressures that are on New Zealand families, and we will fight. Yes, we are determined, and we are going to continue to fight to get that right, because while the National Party just takes a laissez-faire approach to it and tries to deal with the politics of it, it will continue to get this wrong. It is not about politics. It is actually about doing the right thing—doing the right thing, like Andrew Little had the instinct about and like the Labour Party has the instinct about—in making sure that every child gets the best start in life. It is clear that the best ideas are coming from this side of the House.

TODD BARCLAY (National—Clutha-Southland): I would just like to make a contribution with regard to the comments made by the previous speaker, Sue Moroney, around the celebrations of the 100-year existence of the Labour Party. Who would have thought? I suspect that the forefathers of the Labour Party looking today at those benches would be disappointed at the scant affair that is being represented there today. Also, another point I would like to just acknowledge in the last member’s speech is that we heard so many times about how she has a vision and she has a contribution for New Zealand’s regions, yet we did not hear one initiative—not one sausage—about something that she would do in her home seat of Hamilton. She also thinks that the new expressway announced by the Minister of Transport today would be suitable for the landing of a Jetstar plane, also not quite appropriate and a bit out of touch, I would think.

I would like to join my colleagues and the colleagues across the floor in acknowledging Queen Elizabeth II, our longest-serving monarch in New Zealand. I would like to acknowledge Paul Foster-Bell, who has taken the opportunity to host a function in recognition of that tonight, on level 2, Parliament House.

I would just like to take up a couple of themes in my presentation, and they are around education and around tourism, specifically relating to the Clutha-Southland electorate. But first I would like to acknowledge my senior colleagues who, since I was elected almost a year ago, have gone out of their way to come down in droves to the Clutha-Southland electorate and meet with my constituents and familiarise themselves with the issues facing our region, and who are taking real action to address some of those challenges. We have had 51 town visits by Ministers and MPs from 18 of my colleagues over the last 12 months. The Opposition says we are not focused on the regions, but I have had half of caucus down to my electorate over the last 12 months. I have not seen many Labour MPs down there.

I have seen Annette King down there, observing the mess she created when she was health Minister. It has taken a National Government to put in a commissioner and finally sort out the issue that successive Governments have been facing with the Southern District Health Board. It has taken Jonathan Coleman to make the call and put in a commissioner, and she is doing a fantastic job. A future plan for the Southern District Health Board is what the commissioner is working on now, and I look forward to seeing her communicate that to the district in the coming days.

Just regarding the Southern District Health Board and health in the area, I want to acknowledge a project that I am personally involved with, which was initially driven by the previous member of Parliament for Clutha-Southland, Bill English. It is looking at alternative forms of governance for Wakatipu health. There is a feasibility study going on at the moment to see whether or not health in the Wakatipu district can be managed or governed in a separate way. A former Minister of Health, Bill English introduced community governance in Gore, Balclutha, Ōāmaru, and a number of other areas, and that is having a significant impact in that area. Only 60 percent of the funding for Gore Health Ltd comes from district health board contracts. The remaining 40 percent comes from dentists, GP services, and the mole-mapping clinic, and services all the way up to Ashburton. That is innovative thinking from provincial New Zealand. It is something that Queenstown can be a part of as well.

It is great to see new initiatives being taken up by this Government. It is exploring new ways of doing things. With regard to education, I have been proud to be able to promote and drive the Government’s Communities of Schools initiative, which so far has seen 12 of our 72 schools sign up. We have a further 15 schools that either are in negotiations with the ministry or have put forward an expression of interest to be part of a community of schools. This provides an innovative way for schools who are already working together to further strengthen their relationships and combine resources in order to get great outcomes for specific learning difficulties in particular geographical areas.

We have Mataura School, which has an art demonstration at Parliament at the moment. It is the largest-ever art display that has been in the Parliament Buildings, so I encourage all members to go and check that out. It is a piece of Southland that is being displayed in Bowen House at the moment. We have got a number of initiatives going around in education. The Minister of Education came down and she has met with almost all of our principals and board of trustees representatives over the last couple of months, in a series of meetings to find out what differences they need in order to continue doing a great job in education.

In terms of tourism we have a number of great initiatives going on. Tourism is a part of the economy that is booming at the moment. Tourism in Queenstown is going exceptionally well. We had about 1.9 million visitors last year. It is 4 percent of GDP nationally, just behind dairy. We have a number of projects going on to help sustain tourism growth in the area. One that I want to mention before sitting down is the Milford futures project that I am driving at the moment, which is to find a new way to sustainably manage tourism into Milford. Thank you.

FLETCHER TABUTEAU (NZ First): What a great example from the previous speaker to make my next point. This National Government has become a Monty Python skit, straight off “Planet Key”. It is just wonderful to watch. They make noises about how wonderful things are. They make noises about being a hands-off Government and about being a laissez-faire management system—in that this Government should not do anything for private enterprise. This Government has no role to play, they say, in private business. They tell that to the New Zealand public with pride. But here is a bit of a brief reality check for members on the opposite side. Does MediaWorks ring a bell? Does Rio Tinto sound familiar? Does Warner Bros sound familiar? A hundred million times, a hundred million dollars, this Government has interfered and intervened in private business—even South Canterbury Finance, the company that abused the vagaries of the time. It was given over a billion dollars of taxpayers’ money.

New Zealand First can actually understand and support Government intervention in certain cases.

Chris Bishop: Oh, of course you can.

FLETCHER TABUTEAU: It is the inconsistency, Mr Bishop. It is the inconsistency of this Government in the message that it tells New Zealand. It tells us that the Government should not intervene. It tells us that it should not pick and choose—

Chris Bishop: Trust you guys! You’d pick better, right?

FLETCHER TABUTEAU: But Mr Bishop, you do pick and choose. You do intervene. As with just about every message from the Government, it says one thing but then its actions belie the lyrics from that wonderful song sheet that has been written for them: say a nice thing, do another.

New Zealanders do not need to be reminded of the $12 million payout to billionaire Saudi farmers for a model farm that New Zealand has no ownership of—not even a small part. It makes no sense whatsoever. Yesterday in the House the Rt Hon Winston Peters brought to the House’s attention the arbitrary decision-making of this Government to use a foreign-owned waste management company instead of a purportedly highly effective New Zealand company. There was no tender process—completely undemocratic.

Then there is Rocket Lab. We found out in the House today that this Government has been holding Rocket Lab up as a wonderful, successful example of Government helping out New Zealand business. But what we found out today is that this is a 100 percent American-owned company, and at this stage, the Government has handed over about $25 million so far. Stories are told by this Government about supporting Kiwi business, but Rocket Lab is an American company with shareholders such as Lockheed Martin, a billion-dollar foreign corporate. This Government is giving it money.

This Government is selling out. It is selling out New Zealand to large foreign corporates. They do not believe in small New Zealand business. We have been told that Mr Key and Mr Foss cannot even be bothered to turn up to the of small New Zealand business annual conference, and apparently this has been going on for 3 years. They just cannot be bothered. What this Government needs to appreciate is that it has agreed to new Government procurement rules, and that means they give no preference to New Zealand companies. But they give no cognisance to the fact that a million dollars spent in New Zealand results in an average of 10.5 new or sustained jobs, $105,000 taken back in tax, and $130,000 saved out of welfare payments. It is not racist—as New Zealand First is often accused of being—to be proud and to stand up for New Zealand and New Zealand first. It is, in fact, absolutely common sense.

This Government continues to be short-sighted in its decision making to sell off Kiwi land, Kiwi homes, and Kiwi businesses. The strategic partial sale of energy assets makes no economic sense whatsoever. In fact, it is theft from those Kiwis from the past who put the toil in to create those Kiwi-owned assets, and it is theft from future generations. New Zealanders, whether they be brand new or born here, must be proud to be New Zealanders. As so many examples from around the world show us quite starkly—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member’s time has expired.

JAN LOGIE (Green): This afternoon I would like to speak about an issue that has been in our courts a lot recently and in our media but has had very little response from this Government, and that, of course, is the issue of pay equity and the mass exploitation of women’s traditional work in this country. I want to frame it initially around recognising that if we addressed pay equity we could increase productivity in our country, we could improve the quality of our services, we could reduce child poverty, and we could increase consumer spending and the money that is going around businesses at a local level, which could then promote growth in our businesses and create more jobs.

Pay equity is not something to run away from. It is something to embrace as an absolute economic opportunity for this country and an opportunity to deliver some justice to women all around this country. In the words of a rather authoritative source, Audrey Young: “You’d have to have been raised on Mars not to know that ‘women’s work’ is worth less in the marketplace because it is women’s work.” Well, sadly, it seems “Planet Key” must be quite close to Mars. When the Prime Minister was asked about the issue of pay equity in response to the midwives’ case and whether he thought it was structural sexism, Mr Key said there were some industries that were dominated more by women than by men, but “whether that causes issues or not—one of the arguments people put up is: is it because they are women that the pay is slightly less, or is it because that’s what the job pays?”.

Our Prime Minister does not seem to have any understanding whatsoever of our law, which recognises equal pay, or of the issue of discrimination in terms of work of equal value within our law—what we have been telling the UN for decades now that we are committed to addressing. He seems to have no consciousness of our international obligations or even some basic established economic theories. He has no idea. He is just kind of responding, but not making much sense. What we know is that rest home workers are one example of a group that it is pretty obvious are being discriminated against. They are doing intimate work with significant and increasing technical skill being required of them, and heavy lifting, with people’s lives in their hands. Most of these workers are women and they are paid just over the minimum wage or at the minimum wage. If you think about the skills required in that job and whether the minimum wage is fair remuneration, it is blindingly obvious that it is not.

We also heard from the midwives last week that they are paid around $53,000 per annum, despite it being a job that requires a lot of training. They are required to be on call 24/7—which they are not paid for—and, again, they hold people’s lives in their hands. They are up for public notification if they get something wrong. It is an entirely skilled job. They are paid $53,000 a year because of the Government’s decisions.

All of these groups of people, including educational support workers, are in front of our courts at the moment. I am incredibly grateful for our unions and all of the low-paid workers within those unions who are funding those cases to try to get some justice for our communities and the women in our communities. But it did not have to rely on a court case. We do not have to litigate this through the court because it actually is blindingly obvious that there is exploitation going on and it is well established.

I want to call the Government out on being missing in action and actually working against the interests of our community in this area. When National came to Government in 2009 it closed down the pay and employment equity unit. It scrapped the plans that were in place to identify and redress this exploitation. The Government has been siding with the employers in the court. We cannot get a straight answer from the Minister for Workplace Relations and Safety on whether the Government going to review the Act in order to be able to shut down these cases in the court. It is in our economic best interests to embrace pay equity and justice for women.

JENNY SALESA (Labour—Manukau East): As New Zealanders we are fast becoming tenants in our own land. In Auckland, where a third of our population lives, 57 percent rent. They are tenants. For Māori people, only 28 percent own their own homes, which means 72 percent of tangata whenua in Aotearoa rent. They are becoming tenants in their own land. For Pacific people the number is even worse: 18 percent of Pacific Islanders own their own homes, so that means 82 percent of all Pacific people in New Zealand are tenants—82 percent—because homeownership is just so unaffordable for the majority of Pacific people in this country. Five years ago in 2010 our Prime Minister John Key stated: “I’d hate to see New Zealanders as tenants in their own country …”. He probably wishes that he had not made that statement, because that is, unfortunately, the future that so many New Zealanders are faced with now: being tenants in our own land because people just cannot afford to buy their own houses. This is not surprising, of course, particularly in Auckland where the average price of a house is $855,000 and climbing each week. South Auckland has suffered one of the worst fall-outs from this Government’s lack of control, with house prices having risen by 79 percent since 2008, and rising by 19 percent since last year alone.

The Government promised that there would be no more asset sales. That is yet another broken promise because that is exactly what this Government is currently doing, particularly with the selling-off of our second-largest asset, our State houses. That is exactly what this Government is doing—selling them off to their mates, to their private developer friends, and to overseas companies. Instead of keeping its promise of no more asset sales, this Government is going ahead with selling off our farmlands, selling off our school lands, selling off our school houses, and selling off other State-owned enterprises and State assets in addition to selling off our State houses.

Is this a Government that listens to the public though? Well, sometimes it does. Just recently in the last week or so it listened to the public when the public actually said that we should become good international citizens and take on more refugees—that New Zealand as a country should be more compassionate and should be more caring to those refugees overseas. But instead of waiting for polls and instead of waiting for the focus groups to tell the Prime Minister and this Cabinet and this Government to do the right thing with the refugees, this is something that the Prime Minister should have taken leadership on without having to wait for those polls and those focus groups to tell him to do so.

On the issue of selling off our State assets, this Government has arrogantly ignored two-thirds of New Zealanders who last term voted against the selling-off of our State assets. They voted against selling off Mighty River Power, Meridian Energy, and Air New Zealand. Instead of developing and implementing a comprehensive economic vision, members of this Government are just putting their head in the sand and hoping in respect of the economic realities—in terms of what they say when they try to make the economic realities appear as good and as positive as possible according to the National Government—that somehow the people of New Zealand are going to agree that everything is fine and that homes, particularly in Auckland, are not going through the roof.

This Government would throw away one of our most precious assets—our homes; the homes that could house our most vulnerable, the homes that actually already house our elderly, the homes that house a lot of our disabled. These are our State-owned homes. The family of Emma-Lita Bourne is one of those tenants from my electorate in Ōtara. Emma-Lita unfortunately died because her family’s house was mouldy, leaking, damp, and freezing—and she lived in a State house. This morning I heard the Hon Bill English saying on Radio New Zealand National that it is the responsibility of tenants—that it is up to tenants to let the Government agencies know that they have maintenance issues. Well, in the case of the Bourne family, that family let the Government agencies know—not once, not twice, but 48 different times—

Hon Ruth Dyson: What?

JENNY SALESA: —48 different times—that there were maintenance issues in their house before the unfortunate event of this little girl passing away. It would be great if this current Government, instead of pointing the finger at the previous Government of 7 to 8 years ago, took responsibility for things that happen on its watch. Thank you.

SARAH DOWIE (National—Invercargill): It is a pleasure to round off this debate, for a couple of reasons. The first is that I congratulate the Queen on being the longest-reigning monarch over New Zealand, which is exciting. The second reason is that the 1-year anniversary is soon coming up for the class of 2014, and my own 1-year anniversary of being elected to the position of MP. This is very exciting. I think that has given us enough leverage to at least assess how the House behaves and perhaps assess the performance of the various teams that make up the benches in this House.

What do we have directly opposite? Well, we have a writhing cesspit of negativity, clinging to the hope that one day people will agree with their warped sense of world view. You know, sometimes we will introduce bills into this House that members opposite may agree with in part, but they still cannot bring themselves to be gracious, when this is a moderate Government that is appealing to New Zealanders who have issues and are looking to solve them with pragmatic solutions.

I want to address the member opposite who said that Labour is the party for workers. Well, I would dispute that. I want to celebrate the announcement last month that New Zealand Aluminium Smelters got a deal across the line with Meridian Energy for the supply of power. If it were up to the members opposite, they would have left New Zealand Aluminium Smelters to rot. That is 800 direct jobs at the smelter and 3,000 indirect jobs. They would have left it to rot. Instead, what did this Government do? We supported our people, we believed in them, and we believed that their jobs were worth it and the economy was worth it. We supported the regions.

The Invercargill electorate is an export-driven economy, and how we are supporting that is through the Business Growth Agenda. Without us selling our primary goods and services to the rest of the world, there would be no jobs, there would be no incomes for our people, and we certainly would not have a labour participation rate of 74.3 percent, compared with the rest of New Zealand at 69.3 percent.

We need more people to help our production. One of the other initiatives that we have is that we have changed our immigration rules. Immigration initiatives are so vital for the provinces, despite members opposite always rounding up on foreigners and people who want to come to New Zealand to make a better life for themselves and contribute positively to our economy. So changing the points system so that skilled migrants can come to the regions, making it easier for them to come to the regions and commit for 12 months, which is a long time frame, means they can come and be integrated into our society and produce and contribute. They can not only help to produce our 14 percent of total export receipts, but also contribute to our society in an intangible way by having their children in our schools, thereby adding to the diversity and tolerance in our area. It is absolutely wonderful.

There are jobs for the vulnerable too. We are supporting the vulnerable. Obviously we have made increases to benefits—a net $25 for our most vulnerable people. But also there are jobs in Invercargill for our beneficiaries. We have had a decrease in beneficiary numbers by 4 percent, which means nearly 200 people are going back into the workforce in Invercargill.

So, again, through our Business Growth Agenda we want to see more connectivity. We want to connect even our southernmost businesses with the rest of the world. I note that that was something New Zealand First did not support, yet they have the audacity to ask the Minister about connectivity. Connectivity is so important to our regions, especially when you are in remote areas. We are continuing to move that initiative forward so that our businesses can export.

I just want to say that we are not one-trick ponies down in Southland. It is not just all about agriculture, which often resonates from the other side of this House. We have other opportunities too. We have tourism—fledgling tourism sites that are growing at an exponential rate because of the magical scenery that is down south. We are attracting both domestic and international visitors to the Catlins.

The debate having concluded, the motion lapsed.

Bills

Taxation (Land Information and Offshore Persons Information) Bill

In Committee

Part 1 Amendments to Land Transfer Act 1952

GRANT ROBERTSON (Labour—Wellington Central): It is a pleasure to take a call on Part 1 of the Taxation (Land Information and Offshore Persons Information) Bill. I mainly want to focus, in this first call on this part, on the definition of “main home”.

But before I do come to that, it is important to note that the purpose of this bill, the huge Government initiative that lay behind this bill, was to respond to public concern about the lack of information about who was buying and selling homes in our country. I have to say that ultimately when we look at Part 1 of this bill, which amends the Land Transfer Act, it is a seriously underwhelming piece of legislation in terms of achieving the goals that the Government has set for itself in trying to address this issue of the lack of information. The shorthand for this bill for people has been the “Foreign Buyers Register Bill”. That is the thing people say when you talk about this legislation in the communities and cafes and halls of New Zealand, as they no doubt will be discussing this bill. It fails utterly to live up to that anecdotal name. There are so many loopholes. There is such a lack of clarity about the definitions within the bill.

Ultimately I believe we will be back before very long, possibly under a new Government, changing this because we have failed to do the rhetorical thing that the Government said it would do, which is create that register, give New Zealanders the confidence and the information to know who it is who is purchasing homes, get past the anecdotal issues about who it is, and actually get down to the nitty-gritty of making policy based on evidence about how we can ensure New Zealanders can live the Kiwi dream of being able to buy their own home. For New Zealanders of long standing or New Zealanders who have recently arrived, whoever they are, that ideal of being able to buy their own home is being compromised at the moment, in our view. This piece of legislation could have been the vehicle by which we gave New Zealanders that confidence and that information but, unfortunately, it fails on many counts.

The first of those counts that I want to come to is the definition of “main home” that is contained in clause 4 of the bill—the redrafted section 156A of the Land Transfer Act. The Finance and Expenditure Committee has made some changes to the definition of “main home”. It did this, in part, in response to submissions raised by a number of people. I think particularly the New Zealand Law Society submission was influential on members of the committee in terms of where the definition should go. It would be fair to say that we are in uncharted territory here. This is not a definition that we will find, apart from the Act that we passed yesterday, anywhere else in New Zealand law, and that was of concern to the select committee. I think it is worth noting—

Dr David Clark: So many changes.

GRANT ROBERTSON: I know. I think it is worth noting that the changes that have been made in the definition of “main home” drew the attention of the select committee. There is a minority view from the Labour Party, and from the Green Party as well, but even the Government’s own members in their responses in the report back noted just how difficult and interesting this definition would be.

I just want to quote briefly from the committee’s report, just the final sentence. So this is National members on the committee: “We recognise that there could be some confusion about the rules, and have been assured that guidance material would be provided for buyers, sellers, and conveyancers, in addition to more detailed explanatory material provided in IRD’s tax information bulletins.” That is as good as it gets from the Government in trying to create a register of foreign buyers. It puts in place an exemption for the main home—and I will come back to why I am concerned about that exemption—and its own members, in the select committee report, say: “We recognise that there could be some confusion about the rules,”.

Why on earth is the Government bringing to this Parliament law that it is confused about? That is not what we are here to do. We are here to create clear lines for people to follow. This is an area where we want accurate information. The problem here is that the definition of “main home” is the creation of an exemption within this law that, effectively, can turn into a loophole. The confusion, as it has been stated for us by Government members of the select committee, comes in this part of the bill.

The definition of “main home” within the bill has been changed. One of the key elements that was removed after the Law Society’s intervention was a reference within the definition to members of a person’s family. The original definition of main home was “for a person, the 1 home—(a) that is mainly used as a residence by the person and any member of the person’s family living with the person;”. So the Law Society, among others, came to the select committee and said: “Well, that’s going to cause some trouble, isn’t it?”.

Members of Parliament will be very family with this scenario. Potentially, if somebody spends a lot of time away from their home but their family stays in the home, that is the main family home. If an MP, as an example, were to own a home in Wellington and a home in Dunedin, as Dr Clark does, which would be the main home depending how much time they spent there? If an MP comes—as many MPs in this House do—from far away from Wellington and moves their family to Wellington in order for children, for instance, to go to school but they keep the home in their home electorate, which most wise MPs would do if they want to be re-elected, which is the main home? That is just an example from MPs, but you could take that to a lot of other jobs that require people to be in two cities or in more than one city at a time.

So the select committee looked at that and, quite rightly, decided to deal with that issue by removing the reference to a person’s family living with them. So the new definition of main home is “main home means, for a person, the 1 dwelling”—dwelling rather than home; we will return to that issue in a moment—“(a) that is mainly used as a residence by the person (a ‘home’); and (b) with which the person has the greatest connection, if they have more than 1 home”. This is the nub of the problem with this clause. The phrase “greatest connection” is an invention. It is an invention of this piece of legislation. It has got no case law that lies behind it. It has not been tested, and I venture to suggest it will be interpreted wildly differently by different people as they go through this process.

Again, what we are trying to establish here is a register that can let New Zealanders know who is buying and selling houses in our country. By creating an exemption for the main home in that register, the Government opens a loophole. Then, in the definition of “main home”, it creates a further loophole by putting in place a definition that says “the 1 dwelling … with which the person has the greatest connection,” I would venture to suggest that this is going to be a significant problem, and I would ask perhaps the Minister in the chair, the Hon Louise Upston—and I feel a bit reluctant to ask the Minister to take a call or get to her feet, but I would ask Government members or the Minister to actually help explain to Parliament and to New Zealanders why they need to exempt the main home at all.

My colleague Julie Anne Genter has Supplementary Order Paper 121 to, in fact, delete the definition of “main home” because this is not a question of whom a tax applies to or anything like that. That is a different piece of legislation we have dealt with. This is simply about creating a register. There is no great encumbrance upon people having to register the fact that they have a main home. I would say 99 percent of the people who have a main home in New Zealand will already have an IRD number and already have a bank account, which are the two tests that come in Part 2 of the bill in terms of being on the register. So there is no great compliance issue. In fact, all we are doing is creating a gap in the information that we are trying to create—the information database we are trying to create. So from our point of view, and we say this in our minority view, there is no reason to create a main home exemption, and, in fact, by creating such a loose definition within “main home” we have a significant problem.

When we look at the question of greatest connection, this does offer an element of subjectivity, which is the reason why Government members on the committee have described the potential for confusion in what happens. I do need to say this. The officials who came to the committee did say to us that it will not be subjective; it will be an objective test. I simply do not believe that.

Hon LOUISE UPSTON (Minister for Land Information): I do want to put on record, firstly, my thanks for the work that the Finance and Expenditure Committee has done. I appreciate that a truncated period of time makes that challenging, so I do want to just first of all put that on record, and also I appreciate the officials who have worked very closely with the select committee.

I do want to make sure that those who are listening to this debate are clear about the intention of this legislation. It is one of a number of measures and pieces of legislation that we announced in Budget 2015 that are predominantly about making sure that we collect tax from property speculators, and there is a view from some that that is a component of housing affordability. So I do want to correct the member Grant Robertson, who spoke before me. The intent of this bill is not to have a register; the intent of this bill is to make sure that those who have houses, those who invest in housing, particularly those who are speculating, pay their tax fairly and squarely where it lies.

As I said, this is a suite of a number of pieces of legislation. Another bill was introduced yesterday around the brightline test. Actually, there are a number of pieces in this puzzle to make sure that hard-working New Zealanders are comfortable and confident that somebody who speculates in property in New Zealand, whether they live in New Zealand or are from overseas, pays the tax that is due. So that is why in terms of the exemption, for the majority of New Zealanders who own their own home or live in their own home, this does not apply to them. That would have been incredibly bureaucratic. What we are trying to do in this Government is make sure we do not create additional rules and regulations for no reason.

This bill exempts the majority of homeowners who buy their own home and who may sell it, change it, in 5 years’ or 10 years’ time, so that there is not a requirement on them to provide this information. The bill is very clear about those whom we want to collect tax from, to make sure that we have the right information so that the Inland Revenue Department can enforce actions on those property speculators. Also, I think an important point that has not been raised today is that it also makes sure we have information to ensure that New Zealand and housing in New Zealand is not used as a place to launder money. Thank you.

Dr DAVID CLARK (Labour—Dunedin North): I find the suggestion from the Minister for Land Information this bill increases compliance somehow and that it makes things simpler rather extraordinary when the evidence presented by the speaker prior, my colleague Grant Robertson, pointed clearly to the strange legal concoction that sits in this bill: the notion of feeling the greatest connection to a property. It is something that appears in no other legislation and is something that makes the definition of a “main home” very vague indeed.

I want to just reflect for a minute on the kinds of greatest connection people may feel—to explore this loophole. I suspect for many speculators the properties with which they will feel the greatest connection are the ones they make the most money from, because that is why they are connecting to the New Zealand property market. It will have very little to do with where their family is living. It will have very little to do with those things that we may regard—those of us who live in one home and own one home—as the reasons for connecting to a home.

This legislation is designed, it seems, to have big loopholes in it. It is designed in a way that will not collect the kind of information that the public is very interested in: the register of buyers, which has been sought for some time. This is legislation that will encourage offshore parties to obtain New Zealand bank accounts for no practical reason and to make no use of the accounts other than to obtain an IRD number, and it is legislation that is unlikely to achieve its goal.

Those who wish to exploit the loopholes are given every encouragement through this legislation. It is not, as the Minister suggested, legislation that will increase compliance or make life easier and simpler; it is bad legislation. We on this side of the Chamber are opposed to the putting through of bad legislation. The only reason that we will be issuing any support for this bill is that it is a gentle step along the way. It is highly likely that a future Government will be back here correcting the mistakes in this legislation and a future Government will be making it legislation that increases compliance and that actually achieves the principles that were laid out in the arguments for having such legislation in the first place. I hope that that Government will be a Labour Government, because I doubt very much that this Government will have the audacity to come back again in such a short time to correct legislation with so many loopholes and impracticalities about it.

I wonder what other reasons for “greatest connection” there may be. Why else would people have reasons for having a great connection with properties? What legal issues will be fought? What tests will be put in place to understand what the most legitimate reason for the greatest connection to a property is? It seems an entirely subjective test on the surface and it is going to require a great deal of legal debate and, probably, litigation to sort out what that may mean in different contexts. It is very strange that the main home has been exempted. People who have a main home here are highly likely to already have a bank account and an IRD number. Simply to complete the purchase of the original home for most people, I would suggest, involves having a bank account in New Zealand—or for most New Zealand citizens, in any case.

So this legislation is vague, open to misunderstanding and confusion, and although it does improve on the current lack of information regarding overseas house purchasers, it is needlessly weak and a half measure—the kind of half measure we are coming to expect from this Government. It is disappointing that we will find ourselves revisiting it before too long when we could be doing it properly in the first place at more limited expense to Parliament, rather than spending a million or more dollars of costs to put through a new piece of legislation to tidy up after this Minister. I would ask the Minister, again, what she understands by “the greatest connection” to the property, how that will be legally defined, and what kinds of debates she expects will happen before that definition is tied down. These are questions that this Parliament needs answers to if we are to understand how this legislation will work.

ALASTAIR SCOTT (National—Wairarapa): The previous speaker, Dr David Clark, obviously has some sort of selective hearing. The exemption of a family home does not increase compliance. The increase in compliance is relevant to offshore purchasers of property; it is not aimed at the 99 percent of Kiwis who own their own home and will only ever have one home. So there is no issue. That is why there is an exemption—it is just common sense, and it is a very simple concept to understand. The house with the “greatest connection” is quite clearly where the person spends most of the time, has their family, and there is a case for it being where their heart is. That is the home where the person has the greatest connection, and it is very sensible and very much common sense, and one only needs to think in a practical and reasonable manner to understand what a home is and which home would be of the greatest connection.

This legislation is not aimed at the average Kiwi person. It is aimed, as the Minister for Land Information has said, at the speculator, and it is aimed to gather information so that we can understand who is buying the houses and how long they are holding them for. It is part of a suite of legislation, and we have already talked about the brightline test legislation in its first reading. This is the bill that gathers that information, which enables more work to be done around assessing what is only fair and reasonable—that is, to tax people who are gaining, speculating, and making profit through trading of property. Although that is already in the tax legislation , this bill makes the intention to tax those who purchase a property with the intention of making a profit much more clear.

So this is all that this legislation is doing: it is clarifying and making very clear that the aim is to tax those who buy a property with the intention of making a profit, whether they are New Zealand residents or reside offshore. This legislation is a way of forcing people to reveal information about themselves and reveal information around their tax status in their offshore country. It forces them to identify themselves by making it compulsory to get a bank account and an IRD number, as the Minister has said, to go some way—or a long way—to nail potential money-laundering.

It is not as complicated as the Opposition would make out. It does not create the loopholes that are suggested. It is very simple. The house with the greatest connection is the main home, and that is the house that will be exempt from these information-gathering regulations. I commend the bill to the Committee.

JULIE ANNE GENTER (Green): As speakers in this debate have already indicated, this bill is one part of a suite of bills, and the Green Party would like to congratulate the Government on taking this very tiny, probably ultimately ineffective, step towards cracking down on property speculation in the Auckland housing market. That is what this suite of bills, as the Minister for Land Information said, is intended to do.

This particular bill is about collecting IRD numbers in respect of property sales and purchases. We support that. It is going to be incredibly useful to understand exactly what is going on in the property market, because up until now we have not known how many of the buyers are using foreign capital to purchase homes in Auckland. We do know that almost half of the sales in Auckland at the moment are to investors, so that is part of the reason that it is more difficult for first-time home buyers to afford houses. We have a huge number of investors in the market, and, of course, you would, because the tax treatment for property investment is favourable to property investors and not favourable to first-time home buyers. So this bill is just about getting the information—getting the IRD number.

We heard from submitters who are professionals involved in this field that it is not going to be an overly burdensome task to get the IRD number because they are already collecting a whole bunch of other information at the same time. I am sure everyone knows that the IRD number is a pretty short number that does not add a huge administrative burden when the conveyancers already have to collect information, and Land Information New Zealand is already collecting information on the property sales and the purchases, so all that it is doing is attaching the IRD number. We heard in the Finance and Expenditure Committee this morning from officials that it has been problematic not having the IRD number because people use different names or different spellings of the names—they use all different sorts of things, and it makes it more difficult for officials to understand whether or not it is the same person buying and selling homes.

So that is why the exemption that is put into this legislation is so problematic—the “main home” exemption that most of the speakers here have referred to. It means that we are not going to be collecting information for a whole heap of property sales and purchases. We continue to have this difficulty for officials in knowing who it is who is buying and selling houses because—

Hon Louise Upston: I raise a point of order, Mr Chairperson. I would be concerned if that member was referring to matters before the select committee that were not related to this bill. There may be implications for that member if she is.

The CHAIRPERSON (Lindsay Tisch): So I just remind the member if you are quoting information from a select committee and the select committee has not reported back, that is privileged information, and the member would be in trouble if you were divulging information in this debate that has not been released and has not been tabled by way of a report back. So from now on be very careful about anything one might say.

JULIE ANNE GENTER: Thank you, Mr Chair. What officials said during the select committee in respect of this bill was that it was going to be helpful to have IRD numbers because when we do not have the IRD number, we do not know, simply, whether it is the same person, because all they can refer to is the name and there can be quite a lot of variance around that. So it makes it more difficult.

The Minister here in the Chamber today, Louise Upston, and other speakers from the Government have claimed that requiring people to give their IRD number when it is their main home is an added, unnecessary burden that makes it more bureaucratic. I am just going to read directly from the submission from the Chartered Accountants Australia and New Zealand, which said: “The exemption for a transferee’s or transferor’s main home should be reconsidered.” That was its recommendation. “The main home exemption makes the rules more complex and limits the volume of information on property sales that is gathered and therefore the value of that information.” It said it in the select committee’s own report from the members, not the minority view. It said: “We acknowledge that making an exception for a person’s main home adds complexity to the rules, and would limit the information available about property transactions,”.

So nobody is arguing that we should not have the “main home” exemption in the other bill before us, which is the brightline test bill, but we are saying that it does not make sense to have the “main home” exemption for collecting the IRD numbers. In particular, it is going to make the tax rules more difficult to enforce because there is this added exception that says that you are required to give the IRD number if your main home is the third property that you have sold within 2 years. So if one has bought and sold the property that they consider to be their main home three times in 2 years, when it is the third time they are required to give their IRD number and they will be subject to the brightline test.

The problem is how is anyone going to know if it is their third time buying and selling a property if we have not had their IRD number for the first two sales? Part of the problem that the Government is trying to address here is the fact that our current tax rules around speculation require this intention test and, of course, no one is going to declare their intention to buy and sell a property simply for the capital gain if they know they are then subjected to the capital gains tax. I would argue that here there is a bit of a loophole because, obviously, why would somebody declare and put down their IRD number the third time if that means that they are suddenly going to be subject to the brightline test? It makes more sense to collect the same information on all property sales and purchasers. Then we have all the information that we need. There is no additional, unnecessary bureaucratic burden coming from putting down an IRD number with the information. There is already a lot of information being collected and assimilated by Land Information New Zealand. Having the IRD number simply makes it easier for us to enforce the tax rules.

So I would ask members in the Committee today to rethink their position and to consider what was proposed by Chartered Accountants Australia and New Zealand and what was brought up by a number of other submitters, including Ernst and Young. This is not a dramatic change to the legislation. We are not proposing that people should not be exempt from the brightline test for their main home, but we are saying that in this piece of legislation, which is simply about collecting the information and making sure an IRD number is supplied at point of sale or purchase, the IRD number is collected and we have the information on who is buying and selling homes. It will make the tax laws easier to enforce, it will give us more information, and it does not cost anyone money to put their IRD number down on a form that is already being filled out.

I have Supplementary Order Paper 121 and I would ask the Minister to consider it. I know it is late in the piece to consider changes to the bill, but this whole bill has gone through under a very truncated process and it would be really unfortunate to introduce this unnecessary complexity to the rules. The way that Supplementary Order Paper 121 works is it deletes the definition of “main home” in clause 4 in new section 156A(1). It will, of course, need to be teased out in other legislation if we are going to have the exemption for the main home in the brightline legislation. But, most important, in clause 4 it deletes the new section 156A(2)(a). It just deletes all the exemptions. It means we collect the same information on every property transaction. It will actually make it easier to enforce and it will give us more information.

So I would really ask all members in the Chamber here today to consider making this simple change. It will make this legislation better. It will make it easier to enforce tax rules on speculators, and I think that would be something that all parties in this House could agree on.

FLETCHER TABUTEAU (NZ First): Thank you for the opportunity to speak about the Taxation (Land Information and Offshore Persons Information) Bill. I just want to address some of the responses from the Minister for Land Information earlier in the Committee stage. I would suggest that the National Government is kind of deliberately missing the point there. This was supposed to be about a full and comprehensive register, so that we could understand what was actually happening in the New Zealand home market.

This draft bill is absolutely redundant as it currently stands. The Minister pointed out that this is a set piece. It is designed to be used in conjunction with other legislation before the House at the moment. New Zealand First strongly attests that even those two pieces of legislation combined will have absolutely no effect on the actual issue at hand, which is a burgeoning and out-of-control Auckland housing market.

The Minister talked about a multi-pronged approach, and then she spoke about this being a tax-gathering exercise. She said: “We need this data so that we can gather the tax.” But the Inland Revenue Department itself has actually said that this bill, combined with the other piece of legislation, will serve no point whatsoever and next to no additional taxes will be collected. There will be little or no difference made whatsoever. The Minister spoke about it being necessary to simplify the current confusion around legislation, but, again, we were told by experts in this area that this will add another level of complexity.

We already have legislation that seeks to address this issue, and it speaks about intent. Now we are collecting data so that we can use it to apply it to another piece of legislation, which, although not contrary, simply confuses the issue even further. The Inland Revenue Department, again, has told this Government that this legislation will have no effect whatsoever.

I would like to come to the point raised by many of the speakers on this side of the Chamber, and that is the exclusion of the main home. We have heard from the other side of the Chamber that the reasoning for this is that it somehow adds high levels of complexity and it confuses homeowners. They might not know what is going on and they might be concerned that they are going to be taxed, even though 99 percent of them, it was said, own their own home and they are not investors or speculators and it does not apply to them.

But it was eloquently put by the previous speaker that the lack of that collection of information actually does create a big hole in the whole process, because there are exemptions to the main home exemption, and they are those people who are in the process of buying their second or third property. This was well pointed out—how do we know that they are up to that stage in purchasing property if we are not keeping a full and comprehensive database of all people buying residential property in New Zealand? It does not add complexity. It has been stated by experts and it has been stated by the Inland Revenue Department that it is a simple process. Most New Zealanders already have an IRD number—certainly those buying these properties do—and it will add no level of compliance cost to the whole process.

I would like to add the point that our own Institute of Chartered Accountants of New Zealand has said that the use of IRD numbers in all transactions is sensible. It does not add to the level of complexity. Mr Bayly will appreciate that that is coming from a group of experts who are telling us that it is sensible and well meaning and will serve a purpose.

I will just finish off by talking about this use of the definition “the greatest connection” in section 156A(1), inserted by clause 4. I would add that this Committee, by talking about the greatest connection, is adding another level of complexity to what should be simple legislation. We were told about where the heart is, and there was immediate rebuttal from this side of the Chamber about how you measure that. They talked about—

STUART NASH (Labour—Napier): I would just like to pick up on what the last speaker, Fletcher Tabuteau, was talking about, and also what Mr Scott alluded to. He said that the main connection in new section 156A(1) in clause 4 is very easy, because it is where the heart is. But when we were in the Finance and Expenditure Committee this is where the problems really arose. Obviously “where the heart is” is not a definition at all, but the concern that Labour members had was that often it is not where the heart is but, perhaps, where the wallet resides. So what we actually did is we asked the Inland Revenue Department, as well as our expert adviser, to go back and provide us with a number of examples of how this might work in certain circumstances. The Inland Revenue Department, to its credit, obviously, came back with a whole lot of examples that laid out “main dwelling”, but I suppose my point for relaying this story is that it is not an easy test. Mr Robertson pointed out that members in this House are often very much in the same position. We spend 3 or 4 days a week in Wellington and 3 or 4 days a week in our home electorates. We could claim, theoretically, that our main dwelling is in Wellington because the one that is owned in Eketāhuna is not worth nearly as much as the one in Wellington. So I am just saying there that there is the possibility for a little bit of moral hazard.

I would like to also talk about what Julie Anne Genter was discussing in her Supplementary Order Paper 121. The point she made was actually quite an interesting point. She said: “If you have to give your IRD number on only the third time you do this, then why would you do it?”. Well, the simple answer I have got is that that is the law, and under the law you have to do it. But what it does introduce is a level of moral hazard in that if everyone says “Well, you know, it might be the law but, you know, I travel at 55 kilometres in a 50 kilometre zone. It doesn’t really matter. It might be breaking the law, technically, but it doesn’t matter.”, then what you actually end up with is a piece of legislation that does not meet the intended purpose.

We just think that it is quite easy to remove that moral hazard. There is something called the sale of purchase agreement. It is a standard agreement. It is actually put together by the Auckland District Law Society, which is in the middle of a review process at the moment, as we speak. We discussed this with the Inland Revenue Department. We discussed it at the select committee. We thought it would be very easy just to add in a field “IRD number”. There are about 10 or 12 different clauses in this agreement. You just tick the box for the IRD number and you enter it in. It just removes any sort of moral hazard and it removes any complexity.

The reason I say that, also, is that the Minister for Land Information herself stood up and said: “Well, we want to remove complexity from legislation. We want to remove complexity from the whole process of buying and selling property.” I found that slightly interesting, because there is something called Landonline and it is acknowledged, actually, as one of the top pieces of land transfer software in the world. New Zealand is rated, usually, first or second in the world in electronic transactions. As it is at the moment, every land transaction that occurs in this country has to be registered online with the Minister’s own department. So what we are not doing here is asking for added complexity; in fact, I would argue the opposite. What we are actually doing is removing the level of complexity of asking people to make a choice or a decision around whether they have to provide an IRD number or not. We just say, let it be compulsory. Let us make sure that everyone has to provide an IRD number. Then there are no questions, there is no instance of moral hazard, and there is no complexity.

When we talk about complexity, I would like to come down to section 156D in clause 4. This talks about omissions and errors. I have a couple of concerns here, because what it seems is that we are getting into the intention test yet again, which I think has bedevilled a little bit of the whole question of whether we do or do not have a capital gains test in this country. Obviously, we have to have a clause in the legislation that governs omissions or errors of information.

David Bennett: Is this in the bill?

STUART NASH: Yes, it is. It is new section 156D, “Omissions and errors”. What it says here is: “An omission or error … must be corrected …”. That is true, but section 156D(2) says—and this is where I am slightly perturbed—“An omission or error in any tax information provided in accordance with section 156B(2) or (3), or any other failure to comply with sections 156B and 156C, does not—(a) affect the validity of any registration of an instrument to transfer a specified estate in land;”. So what this is actually saying is that if there is an omission or an error, then the contract is still binding—the contract is not void.

I have come across this before in other land information legislation, where what is happening with overseas investors, for example, is that they are just doing things retrospectively, but where it gets a little confusing for me is when you go down to section 156E, where it talks about false or misleading tax information. It defines what is actually false or misleading. It says “to that person’s knowledge or with intent to deceive,”. I wonder whether that “or” should be “and” because I do not know whether you could actually have an intent to deceive without having that person’s knowledge, if you know what I mean. So what I am saying here is that if you have an intent to deceive, then you are doing that with knowledge.

This is where I come back to—I am jumping around a little bit, but it is still in the “Omissions and errors” section. Where it talks about omissions and errors, to me there is a difference between an omission and an error. For me, an error is something that is done—how do I say this—without malice and without intent, whereas an omission, I would argue, is actually done with intent. So an error denotes a mistake; an omission perhaps implies something more sinister. So actually I would have liked to see new section 156D(2) talk just about an error, and then section 156E talk about an offence of providing false or misleading information with an omission included under there, because I actually think an omission is a proactive action as opposed to just a general mistake.

But the interesting thing is that it talks about the fine for committing misleading information—keeping in mind that it does not affect the validity of registration. So the fine for committing an error does not exceed $25,000. I know on the face of it $25,000 sounds like a lot of money, but, in essence, when we are talking about large-scale property deals, even if we are talking about buying a house in Herne Bay or a single dwelling in Auckland, a $25,000 hit, if you give false or misleading information, is not a lot. The deal still goes through, and I assume this is governed by the—what is that piece, the contracts administration—

Grant Robertson: Credit contracts.

STUART NASH: Credit—no. Anyway, what you could actually do—and, again, it comes to that moral hazard—is you could say: “You know what? I’m going to provide that misleading information or false information. I’m going to take the hit for $25,000. It’ll go through, I’ll pay the fine, and then what I have to do, under this legislation, is go ahead and correct that information. So I’ll do that, but the $25,000 hit is actually worth it.”

What happens is if an investor provides false or misleading information a second, third, or fourth time, that fine increases to $50,000—well, I should say that it does not increase; it does not exceed $50,000. So, again, we may find that $50,000 for jaywalking would be hugely excessive, but $50,000 for providing false or misleading information when we are talking about a high-end property deal in a place like Auckland or even Tawa—this is not just defined to residential property—is actually a price that people are prepared to pay to get that deal to go through. I actually would have, in this case—and I am pretty liberal on this—liked to see those penalties be a lot harsher. The one thing I really would have liked to see, in fact, for false and misleading information is that the deal is automatically void, so that what it really does is it deters people from entering into that sort of moral hazard of providing false or misleading information but taking that hit, which I think is actually quite important.

We have had a number of speakers talk about main homes, and, again, I just want to come back to this, because it is important and it did take up an inordinate amount of the select committee’s time. I think Julie Anne Genter’s Supplementary Order Paper 121 is, in essence, talking about a main home register. But where the confusion arose, and I think where the—

GRANT ROBERTSON (Labour—Wellington Central): I want to pick up where my colleague Stuart Nash left off. I want to do that by responding the intervention Mr Scott made earlier, when he told us that we have nothing to worry about in terms of the definition of an exemption for a main home being based on the idea of “greatest connection”. He said it is fine because “home is where the heart is”. So now we are going to base law in this House on some kind of Hallmark greetings card basis. That is how we will do it. We are trying to provide certainty to the people of New Zealand, and we have to go on Mr Scott’s feelings—what is in his waters. That is what we have to base the law on—Mr Scott’s feelings.

I am actually not surprised that Mr Scott is struggling a bit with this law, because he could easily get up in this Chamber and be the embodiment of the problem here. Is home—and home is where the heart is—in the lovely suburb of Kelburn in Wellington Central? Or is it in Martinborough, where you might want to represent some people? Where is that—where is the heart there? Is it where you live? Actually, we will, if I get some time, Mr Scott, use you as an example as we work our way through the definition of “greatest connection” because I think you are living proof of the problem that we have got here.

It is completely ridiculous to have a member of the Government stand up and tell us that it is fine because “greatest connection” is “home is where the heart is”. That cuts to the internal inconsistency of this part of the bill, because, on the one hand, we were told by Minister Upston, when she took her call, that this is fine and it is an objective test, and then Mr Scott got up and said that it is based on a feeling about where one’s home and heart are.

Sue Moroney: It’s the vibe.

GRANT ROBERTSON: Exactly—the vibe. That is the problem here: an untested definition is brought into this House and it creates a loophole. This is not an objective test, no matter how much the Government might want to tell us that it will be an objective test.

To make that point, in the commentary on the bill provided by Government MPs, they say, in the same paragraph where they say that there will be confusion, that they expect the factors to define “greatest connection” to include a series of things. They do not say “These are the things” that will be defining what the greatest connection is, but “We expect”. That is as certain as this law gets—an expectation of Government members about how the term “greatest connection” will be defined. That is poor lawmaking. It is rushed lawmaking. It is not going to help New Zealanders understand as much as we need to about who is buying and selling properties in this market. It is emblematic of the confusion that lies in this law.

To make that point even further, in one part of the commentary on the bill, the Government members have removed the original reference that was in the bill as to whether any member of a person’s family is living with that person. That has now been deleted out of the bill because, according to the Government, that is not relevant in terms of the definition. I am reading here that “It is irrelevant to the definition of ‘main home’ whether or not a person’s family lives with them,”. If you go two paragraphs down you will see that one of the expected factors for deciding whether somebody has a “greatest connection”, which will be the thing that defines where their main home is, is where their immediate family lives. So they take it out of one section of the bill and then include it in the list of expected factors for deciding whether or not someone has a “greatest connection”.

This is confused lawmaking. It is not clear, in an area where we need to be clear. But, fundamentally, what no Government member has been able to do is say why the main home should be exempted from this process. Louise Upston, when she stood up to speak before, said that it is because this is not actually a register. She said it is about making sure that people pay their tax fairly. Well, actually, that is in another bill. That is in the Taxation (Bright-line Test for Residential Land) Bill. This bill is actually about collecting data and collecting information.

The Government’s reasoning for why it would be so complex for people to provide an IRD number on the purchase of their main home is laughable. I want to read again from the commentary on the bill: “… the majority of us accept that not making such an exception [for the main home] would greatly increase the volume of information to be managed by Land Information New Zealand and the Inland Revenue Department, and could lead people to worry needlessly that the transaction would be taxable, even though in most cases it would not be.”

Let us unpick that justification for exempting the family home—that “it would greatly increase the volume of information to be managed by Land Information New Zealand and the Inland Revenue Department,. It is absolute nonsense. Most people purchasing what would be their family home already have an IRD number. There is no increase in compliance for what I would venture to suggest is probably 95 percent of the people involved in those transactions. As Julie Anne Genter and Stuart Nash have already said, it is a regular part of conveyancing to simply fill out a form and include one box on it that has your IRD number in it. I know my IRD number off by heart. I am not going to say it now lest someone tries to steal my identity, but I do know it off by heart. Most people would.

David Bennett: Phil Twyford might put it on a list for you.

GRANT ROBERTSON: David Bennett’s number is 3, or 4, as he is so old—is it not? But their IRD number is easily remembered by most people. It is not a difficult thing. In terms of the Inland Revenue Department, there is no compliance increase at all, and for Land Information New Zealand the increase is a very, very minor one. Again, there is a confusion here—and we will come to it in Part 2 of the bill—as there is an unnecessary compliance burden being put in place by the Government. But this is not it. In this part of the bill, it is absolutely one of the easiest things we could do: make a small change to the sale and purchase agreement. Conveyancing lawyers do this work anyway. Most people buying their main home will already have an IRD number. That is not a decent justification for exempting the main home.

The second part of the Government’s justification for exempting the main home is that it could lead to people worrying needlessly that the transaction would be taxable even though in most cases it would not be. How does that work? You are not given an obligation to pay tax just because you supply an IRD number. People who have IRD numbers know that they have IRD numbers. You supply IRD numbers at all sorts of times of your life and you do not have an expectation that you will necessarily be paying tax. These are empty reasons for exempting the main home, and in the end they compromise the quality of the data.

This is a confused piece of legislation. Part 1 is a particularly confused piece of legislation. I do urge members of the Committee to consider supporting Julie Anne Genter’s Supplementary Order Paper. We will have a much better set of data if we do not have silly exemptions in the law as proposed by National.

In the time I have remaining I want to move to a couple of points that have not been raised. One of those is the changes in new sections 156A(2), 156B, and 156C in clause 4 around the meaning of exempt transfer. This really is a classic example of how complicated it can get once you start making exemptions. This is about the idea that you would not be able to exempt transactions that were not undertaken by individuals—that were perhaps undertaken by trusts or companies. The original drafting of the law apparently did not make this clear, and so the Finance and Expenditure Committee had to find a process through this to clarify the situations in which a piece of land might have multiple uses.

Again, here we get ourselves into a confusing situation. So now we end up with an amendment to section 156A(2) to specify that the main home exemption would be available “when most of the land was used for a home by the owner, and when it was so used for most of the time the person owned it.”, as the commentary on the bill states. Well, we are opening a can of worms about what “most of the land” and “most of the time” means. The obvious examples here are perhaps farms where people will live on different parts of the land at different times. They might have a home that they have on the land plus a property further away within the farm. Which of those is their main home? Creating exemptions around that, creating exemptions around that kind of land, is simply creating loopholes and is unnecessary.

This may well make for a tidier definition—I accept that; I accept that the officials have proposed things that will make a tidier definition—but by creating these loopholes and exemptions we simply make for complex law.

Very briefly, the last clause that I want to mention is one that we actually support, which is around the question of the changes to the information to be supplied in tax statements.

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

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

Ayes 63

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

Noes 57

New Zealand Labour 31; Green Party 14; New Zealand First 12.

Motion agreed to.

A party vote was called for on the question, That the amendments set out on Supplementary Order Paper 121 in the name of Julie Anne Genter to clause 4 be agreed to.

Ayes 59

New Zealand Labour 31; Green Party 14; New Zealand First 12; Māori Party 2.

Noes 61

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

Amendments not agreed to.

Part 1 agreed to.

Part 2 Amendments to Tax Administration Act 1994

STUART NASH (Labour—Napier): The purpose of this is, I suppose, to ensure that we comply with a number of international anti - money-laundering pieces of legislation—the work that is going on around the world. We agree with that. However, again, what we see with this is just the adding of a whole lot of complexity that does not necessarily have to be there.

The main concerns that were brought up around this sort of thing is how long it actually takes for the Commissioner of Inland Revenue and the Inland Revenue Department to allocate certain numbers—bank accounts, and transfers, and all that sort of carry-on. It is actually quite a complex process if you are an overseas investor. Well, no, the definition is not “overseas investor”; actually, the definition is “offshore person”. This is where a little bit of confusion arises, and I think that what you will find is that there will be some Kiwis who are a little perturbed to find that under legislation they are treated differently from New Zealanders who actually live in New Zealand. If we have a look at the definition—this is in clause 9(3)—“offshore person” actually means: “(a) … (i) a New Zealand citizen who is outside New Zealand and has not been in New Zealand within the last 3 years:”. This would apply, I would suggest, to nearly every single young Kiwi who has finished university, has gone over to London or wherever, and has done their OE. Who knows?

Of course they have got bank account numbers here; most of them have got horrendous student loans and that sort of carry-on. But what they may find is that they have earned some money, they have come back, and they want to buy a house in New Zealand, and this is not a hypothetical situation in any way, shape, or form. I would suggest that there are many people—probably all of us in this Chamber—who would know people in this situation; that is, if we have not been in this situation ourselves. In fact, I wonder whether when Mr Scott came back to New Zealand, he was defined as an offshore person when he was going to buy his vineyard in Martinborough. Mr Scott, had you been back within 3 years when you bought your vineyard? You might well have been described as “an offshore person”, and a number of Kiwis actually are. We know this.

What happens is that they go overseas, they have got student loans, they have not got much money, they work incredibly hard—well, maybe not for the first year, but in the second, third, and fourth years, they work incredibly hard—and they are on the internet the whole time looking to put roots down in this country. Actually, about 3 weeks ago in my electorate office, I was talking to a guy who came in because he wanted to get involved. He had just come back to New Zealand from overseas to settle down. So this is not a situation that is hypothetical. I think he, or any Kiwi, would find it a little perturbing to find that they are actually subject to different rules from New Zealand citizens, especially when the only passport they hold is a New Zealand one. They are New Zealand citizens, but according to this legislation, they are also classed as “offshore persons”.

So what the offshore person has to do is they have to give a tax number and a bank account number to the Commissioner of Inland Revenue—when we say “Commissioner”, that stands for the Inland Revenue Department itself. But what it says here in new section 24BA, “Offshore persons’ bank accounts and tax file numbers”, is that “(1) The Commissioner must not allocate a tax file number”—so an IRD number—“in response to an offshore person’s request unless the Commissioner first receives a current bank account number for the offshore person.”

The discussion around this that opened up in the Finance and Expenditure Committee was about timing and requirements. For example, if a person wants to open a New Zealand bank account, then they have got to have various forms of ID—and we have tightened this up quite significantly in this country, which is good, because we needed to. I think the world has done this, as mentioned, due to anti - tax avoidance measures around the world. But what a person has to do is provide a whole level of authorisations and identifications in order to get a bank account number, but they cannot get a tax file number until they have got a bank account number.

Often when you are looking at property, there is the imperative of time, and so if, first of all, an investor has to get a bank account number and then a tax number, we do not know how long this will take. We have quizzed the Inland Revenue Department about this, and it gave us assurances that it would not be onerous. It would get it done within a reasonable amount of time, but it could not pinpoint down a certain number of days. So what we were really pushing the Inland Revenue Department for was to give us a number that the lawyers—

GRANT ROBERTSON (Labour—Wellington Central): I want to pick up this question of the way in which this particular part deals with the bank account.

Jami-Lee Ross: Nashie—another 5 minutes?

GRANT ROBERTSON: There will be plenty more opportunities for Mr Nash. We share and share alike over here, Jami-Lee Ross. Actually, what I would really like is for Jami-Lee Ross to get up and take a call and tell the House why it is that every single person who is purchasing a home in New Zealand now has to provide a bank account number when the Inland Revenue Department, the people we rely on for the advice on this, told us it was not necessary. That is what it said. In its regulatory impact statement, this is what the Inland Revenue Department had to say. It said that the requirement to have a New Zealand bank account to obtain a New Zealand IRD number is unnecessary for individuals and of limited benefit, as the Inland Revenue Department already has the power to require relevant identity verification upon application for an IRD number. That was the advice of the Inland Revenue Department.

We heard before, in Part 1 of this bill, the deep concern of Government members about unnecessary, complicating bureaucratic processes being put in place—it is a terrible thing to have to provide an IRD number that you have already got, that you already use for a whole lot of other purposes. Government members are very worried about adding layers of bureaucracy and adding complexity, but then they get advice from the Inland Revenue Department to tell them that it is completely unnecessary for people to have a bank account number, and they ignore it. They are utterly confused.

I actually honestly believe that members opposite do not really understand what has happened here. This was a rushed piece of legislation, just as the Taxation (Bright-line Test for Residential Land) Bill was a rushed piece of legislation, and I just do not think they have got their heads around it. We had some pretty odd and interesting situations as amendments were proposed at various points in the process, and the officials went away to see whether they could deal with them. It was a shambles, and this Part 2 of the bill really is where the rubber hits the road in that regard.

So let us be absolutely clear here. The Inland Revenue Department has said the provision of a bank account is completely unnecessary. In fact, when people go to get an IRD number there does need to be identity verification, but I would suggest that it is actually somewhat more rigorous than just opening a bank account. It is pretty clear that if someone offshore is going to purchase a property in New Zealand they will get a bank account. It will be the only thing it is used for—in order to get the IRD number. It will not actually be used for anything else. Perhaps unsurprisingly, banks may not be too worried about that. There will be a little fee involved that will be of some use to them, so they are not too worried about it. But actually it is completely unnecessary and completely bureaucratic.

Again, I want to refer, as colleagues have already done, to the submission of Chartered Accountants Australia and New Zealand. It made the same point that the Inland Revenue Department made in its submission—that there is no assumption that there will be any greater assurance achieved in this process by our looking to have to have a bank account number. It really does very, very little in regard to that.

The second point made by the Inland Revenue Department and, indeed, made by Chartered Accountants Australia and New Zealand—and I will just quote the Inland Revenue Department here—is: “It is not apparent that, for individuals, the general anti-money laundering (AML) checks that a New Zealand financial institution would carry out would yield significantly more information than Inland Revenue collects as part of the current IRD number application process;”.

So that is the process here. There is not actually any benefit, but there is a significant additional burden of cost, burden of complexity, and burden of bureaucracy. We are not achieving anything by having the requirement for a bank account number.

I simply ask members on the other side to consider what it is that they are doing here. On the one hand we have been told that this is not about a register and it is not about providing that information; it is about making sure that people are paying the right amount of tax, as Louise Upston said. That is actually another bill; it is not this bill. In this bill, it is about getting data. So on the one hand we are now not getting the comprehensive data that we should get, because we are exempting the main home, but on the other hand we are, in fact, through this legislation, placing an unnecessary burden on people in terms of providing a bank account number.

I want to hear from members of the Government as to why it is that they are imposing this when the Inland Revenue Department told them not to and when the chartered accountants told them not to. What do they know that those people do not? Because it is not clear to me.

Dr DAVID CLARK (Labour—Dunedin North): I join my colleague Mr Robertson in requesting that advice, because members opposite do seem to know a lot better than others, or they think they do, if we are to take this bill at face value. As I have suggested in my previous contributions on different parts of the bill, I think that this is actually about providing convenient loopholes. I really do. I find that the most plausible explanation for the higgledy-piggledy mess that we have here.

I want to draw attention to some of the information supplied in the commentary on the bill that goes through the information exemptions under the regulations. For those watching eagerly at home or listening to their wirelesses, those listening to wirelesses will hear the rustle of paper as I flick through. Those watching on the big screen will see there are pages of exemptions and amendments and definitions and so on required by this legislation, which, I contend, would not be required—would not be required—if it was the case that this was just a simple register of offshore buyers, plain and simple. We would not need complex descriptions of when a person meets the test and when they do not, and I refer here to Part 2 clause 9, which amends section 3 of the Tax Administration Act—page 11, for those with the tracked changes copy of the bill, and on to page 12. It defines what an “offshore person” means.

It means—and I will read it out for those who have not been following the debate—“(i) a New Zealand citizen who is outside New Zealand and has not been in New Zealand within the last 3 years: (ii) a person who holds a residence class visa granted under the Immigration Act 2009, and who is outside New Zealand and has not been in New Zealand within the last 12 months: (iii) a person who is not a New Zealand citizen and who does not hold a residence class visa granted under the Immigration Act 2009:”. Then a series of regulations that will be created lies under the description of “a body corporate or an unincorporated body of persons” and trusts, unit trusts, and so forth.

We have this complex system for describing it in the legislation and then a requirement for regulation that sits under it precisely because the Government has exempted the main home and is trying to exempt various categories of person from having to fulfil this requirement, because it is not actually interested in collecting a full database of who is buying and who is not buying. It wants to appear to be doing something, but the only logical explanation for where we have got to as a Parliament with this kind of weak legislation, these half measures, is that the Government is doing this quite deliberately.

I want to look specifically at the types of person who would qualify under a trust, if I can find the right page—as I search madly through the many, many pages of description of who is in and who is out—to find the definition of that “offshore person”. A person will be described as offshore—generally speaking, a non-individual when we talk about trusts and others—if it is a body corporate incorporated outside New Zealand or 25 percent or more of its shares are owned by a body corporate incorporated outside New Zealand. You can see that these little tests that we have got along the way are going to require advice from accountants and others, who will be advising people who are trying to get through loopholes in any case. You have got here a whole support structure for an industry of persons who are dedicated to foreign speculation and supporting foreign speculators in New Zealand. That is precisely what we were told this Government wanted to counter.

Here we go: under clause 9(3)(b), referencing section 7(2)(b) to (f) of the Overseas Investment Act, offshore person means a partnership or other unincorporated body other than a trust if 25 percent or more of its partners or members are offshore persons according to those sub-definitions. Then we have got various subcategories of 25 percent and whether their voting power is exercised, in which way, and where they live. A trust is an offshore person if an overseas person or persons constitute 25 percent or more of its governing body or have a beneficial interest in or an entitlement to 25 percent or more of the trust property, or are 25 percent or more of those who have the right to amend or control the amendment of the trustee, or are 25 percent or more of those having the right to control the composition of the trust’s governing body. There are layers upon layers of definition of a trust, of who would be in that 25 percent. An overseas person means a unit trust if the manager or trustee, or both, are overseas persons or if they have a beneficial interest in or an entitlement to 25 percent or more of the trust property, and so on and so forth.

In clause 10 there are rules around the nature of the bank accounts that can be set up. Whether they are non-bank deposit takers or what people would consider regular banks has to be specified in the law. There is a whole bit of the legislation in Part 2, I think, dedicated to the penalty regime that must be set up to try to catch those people who do not wish to comply and want to find their way through the loopholes in the legislation, and exactly what kinds of ways through the legislation they can construct and not construct. So, overall, what we have got is legislation that does not achieve and is designed, it seems, not to achieve the kind of register of interest that an ordinary person at home would have expected from this kind of legislation.

The whole Parliament sits here and spends a considerable amount of time putting this through, officials report to committees, we have advice from members of the public, from the chartered accountants as volunteers or as society members, and the Law Society puts in submissions pointing out the much more logical way things could be done—then over on the other side of the House we have a Government that is either too arrogant to take that advice or too out of touch, or somehow thinks it will get away with this and people will not notice that it is making law that simply obfuscates and does not achieve what it is designed to achieve.

It is part of a suite of similar half measures. Treasury estimated, I think, that $5 million in tax might be collected—and that was in the other accompanying measure—but if a much more simple system was set up, $30 million to $40 million in tax would be collected. It saw that there are holes in this suite of legislation that you could drive a bus through. Then, in the commentary on the bill, we have got advice around becoming an offshore person—for anyone who wants to become an offshore person, there is advice in the commentary. The penalties, of course, are specified, as I have already said.

I want to draw my contribution to a conclusion by saying that this is the kind of legislation that we might expect from a Government that is trying to make it look like it is doing something when in fact it is trying very hard to do nothing at all.

STUART NASH (Labour—Napier): There is one thing that we have not discussed that was brought up at the Finance and Expenditure Committee. It did take a little bit of time to work through it and understand the consequences. This is actually going back to section 24BA, in clause 10, which is headed “Offshore persons’ bank accounts and tax file numbers”. A little bit has been said about this, and I will quote section 24BA(1): “The Commissioner must not allocate a tax file number in response to an offshore person’s request unless the Commissioner first receives a current bank account number for the offshore person.”

Where the Labour members had some concerns about this is that, as we know, we are a destination for a lot of young travellers. People who come over here work in the orchards. They work during the tourist season, and then they disappear. Back in the day when people were paid wages, obviously everyone had a bank account. That is how transactions were done. But what we saw as an unintended consequence of this—and this was also, I must admit, brought up in a submission from Chartered Accountants Australia and New Zealand—was that if a traveller, or a young person, was passing through and wanted, say, an orchard job or a grape job, they would need an IRD number to get paid. In Hawke’s Bay there are a lot of travelling seasonal workers. But what they will require in order to get an IRD number is a bank account.

The unintended consequence that was raised by Chartered Accountants Australia and New Zealand, and the Labour members, was that this provides upon a certain group a level of compliance that perhaps should not be there or is unnecessary—so, for example, if I want to go and work in an orchard, or a Chilean person, for example, does. We have a number of these agreements with different countries. Let us say they want to go and work in an orchard in Hawke’s Bay. They need an IRD number in order to get paid. Well, gone are the days when you got paid under the table in Hawke’s Bay orchards. I do not know what it is like in the Wairarapa, but it certainly does not happen in Hawke’s Bay.

So they need an IRD number, but they also need a bank account. To have a bank account you need various forms of ID. I am assuming that your passport would do, but normally when you open a bank account you need two forms of ID, and it is usually two forms of picture ID. What has happened in recent times is we have tightened up the law due to, as I mentioned earlier, tax-avoidance provisions and concerns. In fact, it is in the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. It is quite a large piece of legislation. But what it has done is tighten up the means to achieve a bank account.

So what the Chartered Accountants Australia and New Zealand said, and what we said, is that we do not think that actually having a bank account in the first place should be a prerequisite for getting an IRD number, because it may provide a level of compliance that is unnecessary for a certain group of people who are coming in here. In fact, one group that was actually used as an example was oil rig workers. They come in here, and they earn a substantial amount of money. This is not my example, but it was certainly brought forward—it might have even been by the Inland Revenue Department but it was certainly by someone with much greater understanding of this than I have.

They come in here, and they are paid in New Zealand dollars because they are in the New Zealand tax jurisdiction. They sort of fly in and fly out. But their money is paid into an offshore bank account because that is the nominated bank account and that is the way it apparently works in the industry. But they will now need a New Zealand bank account. Again, it just provides a level of compliance that we think is unnecessary, and I say that especially because the Minister has stood up and said that they want to limit compliance and get rid of complexity. But we think that this is just opening up a level of compliance and complexity that does not necessarily need to be there.

But, as the Chair knows incredibly well, how the select committee process works, and the reason I think it is fantastic, is that we get a whole lot of experts in and they put forward their views on how to better draft legislation that is workable in the real world. In terms of Part 2, we heard from Ernst and Young and the Chartered Accountants Australia and New Zealand. PricewaterhouseCoopers put in a couple of submissions—three or four actually. We heard from the New Zealand Bankers’ Association, ANZ, and Chapman Tripp. They were all querying the need to actually get a bank account number before you get an IRD number. The concerns ranged from the time it actually took—

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

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

Ayes 63

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

Noes 58

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

Motion agreed to.

Part 2 agreed to.

Schedule

The question was put that the amendment set out on Supplementary Order Paper 117 in the name of the Hon Louise Upston to the schedule be agreed to.

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

Ayes 107

New Zealand National 59; New Zealand Labour 32; Green Party 14; ACT New Zealand 1; United Future 1.

Noes 14

New Zealand First 12; Māori Party 2.

Amendment agreed to.

Schedule as amended agreed to.

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

Clauses 1 and 2

GRANT ROBERTSON (Labour—Wellington Central): Thank you very much Mr Chair. There was a lot of competition for that call. I want to focus particularly on clause 2, the commencement clause, and towards the end of my contribution I am going to table a document released to us by Land Information New Zealand under the Official Information Act.

We need to go back in time a little—in this case, to 11 May 2015, in fact—to when Land Information New Zealand was advising the Minister in charge of this bill, Louise Upston, about when this bill could actually come into force and to when Cabinet was considering it. Interestingly, the context around this is, of course, that both this measure—the creation of a “not register” for the purchasing of property because the Government does not want to call it a register, and it has successfully established it in such a way that it will not be an effective register—and the brightline test were both initiatives that were announced in the Budget. It is quite clear that they were rushed through because the Government did not have anything that it wanted to do in the housing space.

Land Information New Zealand found itself advising its Minister about prospective commencement dates for this legislation. In a note dated 11 May 2015, which I will put in front of the Committee shortly, Land Information New Zealand advised the Minister that it did not see any reason why it could not implement the legislation either by 1 July or, indeed, from Budget night, which seems quite ambitious. It put some pros and cons in the note. It said that if it got the legislation in place by 1 July, it would mean earlier compliance with the Government’s policy and it would “be seen to be moving quickly”, which is clearly the main purpose of this legislation: being seen to be doing things.

The cons of the legislation coming into effect on 1 July were that there would be a very short amount of time to consult on the changes with conveyancers and to develop guidelines. This is where things get interesting. The other con was that conveyancers would need to manually record information via a form until Landonline was in a position to be able to manage this. Now, that is a bit of a worry. A significant change to the process of registering land purchases and to the website, Landonline, is not ready. That is the information that Land Information New Zealand provided. It said that by 1 September it was pretty confident that it would be able to get the legislation into position but that it was a bit worried about that.

Land Information New Zealand also noted in the same note that if it were to try to get this legislation to commence on 1 September, it “may lead to a rush of transactions by persons wanting to avoid the IRD number requirements and avoid tax.” I would be interested to know from the Government side of the Chamber whether or not this has actually occurred, but I am not aware that it has. But, obviously, that was one of the risks. To get the legislation in place by 1 October, which is obviously what we are now faced with in the commencement clause of this bill, there was the suggestion that the Government was going to need to use urgency to get the regulations in place by 14 September. Of course, the way that the Government got around all of this was by truncating the select committee’s consideration of the bill. So they come to us today with a clause 2 that has 1 October as the date by which this bill will commence.

The consultation with stakeholders and the process that was gone through has been rushed, and we have already seen in this House—in fact, in the debate earlier today—that, actually, it is confused. We have got the commentary on the bill from Government members of the select committee saying that they know that it is confusing, that they do not know exactly how it is going to be implemented, and that that is the effect of rushing legislation through and of not having a proper process. But the kicker in the advice from Land Information New Zealand is this: they will have to use manual or paper-based systems to record transactions from 1 October until the computer system is ready in December. So when this comes into force from 1 October, commencing as it does under clause 2, it will involve paper-based transactions.

Hon Ruth Dyson: Carbon paper?

GRANT ROBERTSON: Well, possibly—in triplicate. The Gestetner will be working overtime down at Land Information New Zealand because, unbelievably, the Government has put itself in a position where a fundamental change that it is making—Government members stood up here today and told us that this was going to give clearer information, objective tests, etc., and Land Information New Zealand has been telling its Minister that a manual, paper-based system will be in place. Is this the 1960s? What is going on here? What is the risk here that lots of information will actually get lost in the system—that, actually, we will not be able to start creating the database that the Government tells us it will create, because for 3 months, it will all be done with pen and paper. Maybe it will be done on slate? I do not know how far back Land Information New Zealand is going to have to go to find a technology that is actually ready to do this.

I have to note that the information that I am working off, which I have said I am going to table at the end of my call, could be out of date. It is possible. This was a memo from May, released to us under the Official Information Act. But to me this is an absolute debacle. This bill is being held together by string and sticky tape. It is absolutely poorly thought-out. It does not do the things that it was meant to do. On the one hand, it makes things more complicated when they do not need to be—in terms of forcing people to have a bank account and an IRD number when they really only need an IRD number—and on the other hand, it fails because the Government exempts under this legislation the main home from having to be part of the register, which creates an enormous loophole when there is no additional compliance cost. This is an utterly confused piece of legislation.

Most parties—in fact, I think all parties in this Chamber—support the principle of the bill and support the idea that there be a register. We are voting for it because it is a tentative, incremental, little, tiny footstep in the right direction towards giving New Zealanders information.

Hon Christopher Finlayson: But it’s good?

GRANT ROBERTSON: It is OK, Mr Finlayson. I think “good” would be pushing it a little far; “great” would be completely out of the question in hyperbole. But it is OK. What we are facing, looking at clauses 1 and 2, is a bill commencing on 1 October, which was the grand date put in place by the Government, and the agency charged with collecting the data—Land Information New Zealand—is advising its Minister, through its system, Landonline, that a manual, paper-based system will be required until December of this year in order to make this work. Goodness only knows why the Government thinks that this is a good way to make law. It is not. It is a shambles, it is a debacle, it is half hearted, and it is full of holes. How ridiculous it is when you have support for the principles of legislation like this right around the Chamber to then put up such a flawed piece of legislation. If only we had had longer at the select committee, if only there had been more time to consult, and if only the Government had actually wanted to do this and get a meaningful outcome, as opposed to the window dressing that this clearly is.

We go back to the Budget, when this document was put out, and we see that it was rushed. When the Budget papers were released in July, we discovered that none of the housing initiatives that the Government was putting up, which are buttressed by this legislation and the brightline test, had had any work at all done on them last year in the normal course of the Budget process. They were stuck in early in 2015 when the Government was on the back foot on housing. It is still on the back foot on housing. When the Government was on the back foot on housing, it had nothing in the Budget to show, so it thought that it would come up with something to deal with the concern that New Zealanders have that they do not have the information they need to be able to understand who is buying and selling houses in the New Zealand housing market. And, equally, for people who are speculating, the intention test is completely not working, so the brightline test has been brought in. When we come to debate the brightline test in this House, we will similarly discover the perils and dangers of rushing legislation through with inadequate consultation.

I believe that clause 1 and clause 2 of this bill highlight, perhaps more than almost any other clause, just how poorly thought-out this process has been. The fact that Land Information New Zealand told the Government that it could get the system up and running but that it would have to be paper-based from 1 October until December is a complete farce. I seek the leave of the Committee to table an aide-mémoire from Land Information New Zealand to Hon Louise Upston, Minister for Land Information, dated 11 May 2015.

The CHAIRPERSON (Hon Chester Borrows): Leave is put for that purpose. Is there any objection? There appears to be none.

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

STUART NASH (Labour—Napier): I must admit I am a little bit more cynical than my colleague Grant Robertson. They have these things called rap wars. They are quite comical—politicians go against each other. I think what happened here is that it was Louise Upston versus Todd McClay. Todd McClay said that the Inland Revenue Department wants this to go ahead, and Louise Upston said that Land Information New Zealand cannot deliver at the point in time when you want it, and there was a little bit of a war that went on around who was the Minister who was going to win out here. Let us take it a little bit further. This actually has Steven Joyce’s fingerprints on it, if we are honest. This really is a little bit of a mess.

As my colleague pointed out, Land Information’s Landonline system is actually acknowledged as one of the best in the world. It is an incredibly good system. It is held up by many in developed jurisdictions as the way to handle your land transfer process. As my colleague pointed out, to go to a point where lawyers—it will be lawyers, by and large—have to register everything by hand, on paper, is an absolute nonsense. I do not believe that Land Information said to the Government that it is happy with this situation.

Hon David Cunliffe: Back to the 19th century.

STUART NASH: Absolutely! I cannot believe Land Information said to its Minister: “This is acceptable to us, let us go ahead with this—it is OK—paper for 6 months, but we will cope.” I do not believe it did that, because I know that a lot of people working for that department are highly competent.

I think what happened was that this was a dictate from way above, probably due to polling. Let us face facts. New Zealanders are concerned about who is owning our land—there is no doubt about that. They are concerned about the bogeyman of foreign speculators coming in and taking away our houses so that first-home buyers cannot get in. The Government said: “What shall we do about this? We’ve got an idea.” They went to Mr Joyce, because he tends to be the ideas man although he does not think things through particularly clearly, and said: “How about first of all we start collecting information?”. But the problem is they did not collect the information in a way that made any sense. The title of this bill is actually the Taxation (Land Information and Offshore Persons Information) Bill, but it does not collect the level of information that is going to make any sense. This is the thing that we simply cannot understand, right across this side of the Chamber.

I know that Tim Macindoe, when he thinks about this—and it is going through his head at the moment—thinks this is a little bit of a nonsense, but unfortunately he cannot do anything about it. I know Mr Dunne, who is a former Minister of Revenue, must be looking at this and going “Oh, goodness me. Thank God I’m not in charge of this.”, because if he were it would be a hell of a lot more robust than it is at the moment. I know the Hon Peter Dunne would not have allowed this sort of legislation to come before the House, like this, at the moment.

It would have been so easy to collect the level of information that is required to provide meaningful data to the people of New Zealand, to the tax department, to everyone. This is what is so astounding. It would have been easy to do. We were quite happy to reach across, in a non-political way, with a solution that allowed that to happen. In fact, we suggested this at the Finance and Expenditure Committee. This was held behind closed doors, so no one would have come out and gone: “Oh, Labour has made this better legislation.” This was a classic case of a select committee that could have worked together to create a piece of legislation that provided a level of information that actually made sense.

But the thing about it is that it is confusing. This is one of a number of pieces of legislation that is going to come through that is going to give effect to the Government’s policy. But the thing about it is that it is confusing. In fact, it is so confusing that even the Minister herself stood up and started talking about a brightline test when she was answering questions. This is not about a brightline test. This is simply about collecting information.

But the other problem I have with this legislation—and this is why the title is so wrong, because it does not reflect the bill in any way, shape, or form—is that it creates what we call a moral hazard. This was brought up by the Green MP. By that I mean that the buyers and sellers of houses only have to give their IRD number after the third transaction. One of the earlier speakers stood up and said: “Well, why do we think New Zealanders are actually going to do that?”. The reason that I put forward is that it is the law, and we like to think that people will obey the law. But, unfortunately, when people think the law is a bit of an ass, or they can get away with it, or it does not really apply to them, then they will not do it. That creates a moral hazard, and it really concerns me. It is the sort of moral hazard that we all face. We drive down the road at 56 kilometres an hour in a 50 kilometre zone, but it is OK. It is only a little bit over the law. This is the sort of bill that creates that sort of law: “It is not really applicable to me.”

There are also a number of tests in here that come back to intent, and this is the whole problem we have with this area of tax in this country. The other thing that is slightly offensive—offensive is the wrong word, but I can see how it could create a little bit of offence—is that it classes New Zealanders who have been offshore for more than 3 years, and have not returned, as offshore persons. It puts New Zealand passport holders in a completely separate category from foreign investors. I do not think that is right. In fact, it was queried in the select committee process, so again we are talking about land information. That is why the bill is called the Taxation (Land Information and Offshore Persons Information) Bill. When you think of offshore persons, you tend to think of foreign speculators, but, no, this is about Kiwis as well.

The other one that was quite astounding—quite amusing, actually—was that before the select committee process we called for submissions. There were not that many submissions. I cannot remember how many—maybe 10 or 12 submitters appeared in front of the committee. But two of the submitters talked about a piece of legislation that is coming after this one. That is the one that is going to be debated in the House—I do not know when—next week. I think the first reading was this week, actually. Even the submitters who had taken the time, effort, energy, and, no doubt, quite considerable resources and money, got it wrong when they were submitting to the select committee. We went up to Auckland to listen to them, and we had to say that the points they were making were very interesting, but unfortunately they do not relate to this piece of legislation.

As my colleague Grant Robertson said, we agree in principle that something needs to be done, and we are backing this legislation. But the thing is it could have been so much better if we had worked together, thought a little bit harder about it, and come up with something that is much more robust. But, as Grant said, why is the Government so fixated with 1 October? Is there something we should know about that salubrious date? Is that the final of the Rugby World Cup, or is it the middle of the Rugby World Cup? I am not too sure. But the fact that Land Information cannot even process the information online when this bill comes through just says that that date is wrong. It would have been so much easier just to change the 15 to a 16 or, I do not know, just work with Land Information.

The chair of the committee understands this. The chair of the committee was exasperated with the level of complexity, where complexity did not need to exist. There was a lack of efficiency, when efficiency could have reigned supreme, if only this had been thought through. But, as I said, what I think this came down to was an edict from upon high that said this is what must be done; now go ahead and do it. The relevant departments could not meet the compliance in time, when this legislation came to the fore, but that is just the way it is going to be. It is not the way to craft legislation, and it could have been so much better.

So who won? Did Louise Upston, with Land Information, win? Did Todd McClay, with the Inland Revenue Department, win? Do you know what? I do not think there are any winners. I do not think there are any winners. I do not think even Mr Joyce is a winner in this, because Dr Clark knows—he has had dealings with Mr Joyce’s stuff-ups for a long time. This just has his fingerprints on it—it really does, does it not? It really does. There are no winners. In the rap wars, I think it is zip. Thank you very much.

Dr DAVID CLARK (Labour—Dunedin North): It is with some amusement and distress at the same time that I rise to take a call, having only recently learnt of this manual capture of Inland Revenue Department information that is now required as a consequence of this legislation. I want to suggest an alternative title for the Taxation (Land Information and Offshore Persons Information) Bill. I understand my colleagues have suggested alternative commencement dates, perhaps at a time when it will not all have to be recorded with a quill pen on paper but we can adopt some kind of modern system like—I do not know—maybe a computer to record the information. I just want to suggest that maybe we should label this bill for what it is. It is a farce when we have a bill here that talks about doing something, but finds ways of creating loopholes to ensure that that very thing does not happen. Then on top of that we learn that the whole thing was so rushed.

Let us cast our minds back before the election when the Government was under fire for not doing anything about the housing stuff. It ran right through into the new year. This Government has been under fire for its lack of response to the housing crisis in Auckland and the effects that that is having on our economy. And then this year, ahead of the Budget, the Government must have been doing its polling. It must have realised that this issue was really coming to a head in public opinion, and all of a sudden—all of a sudden—it announced a new tax on housing speculation to try to somehow make it look like it was doing something useful. Of course we have seen the advice from Treasury that says that the way it was designed, it will collect only about $5 million in revenue when, if it did not have all the loopholes that have been thrown in, it would have collected $30 million to $40 million and had a bigger deterrent effect. We know that is not effective legislation.

Then we have got this complementary legislation here, which is going through right now, that is about collecting the register of persons, of foreign speculators, and we know that it is designed to exclude most people. It is designed in a way that makes it full of loopholes, so it will not be useful information that is collected. We have rehearsed the debates in the previous stages of this bill, and in the Part 1 and Part 2 debates, about how we will probably find ourselves as a Parliament in the next Government having to repair the work done on this legislation tonight, to fix those loopholes that we find in the legislation. And we know that passing a bill through this Parliament costs more than a million dollars, with all the officials’ time and all of the salaries of the MPs and so on, and we know that we will be back here correcting this Government’s mistakes.

This bill should be called a farce because that is what it is—that is what it is. We have seen this time and time again from this Government, particularly when it comes to IT systems. The Inland Revenue Department computer system, of course, is the grand champion of the scheme. In 2012, on St Valentine’s Day, the Prime Minister made a promise that he would sort out the Inland Revenue Department’s computer system. Well, we are still waiting—we are still waiting—for real action on that. The Prime Minister said in the speech where he talked about needing to address this issue: “Governments should not have to find themselves in a position where they are held hostage to a lack of technology.” And that is where we find ourselves here tonight, 3 years on, with a different computer system, not up to date, and officials being required to handwrite the records from when this bill is enacted in October through to December. And we learn from the Official Information Act material that has been supplied that December is an optimistic date. They might be handwriting next year the records that are recorded in this register! And it might be the case indeed that the Government comes back to correct the bill, to make amendments to actually try to sort this out so that it can push it further out.

Hon David Cunliffe: The corrections issue.

Dr DAVID CLARK: It has done it before—a corrections issue. It has pushed it out before.

This is what happened with the Inland Revenue Department when the Government changed the child support legislation. It discovered that the computer systems were not up to scratch and it had to come back and change the legislation, use more parliamentary resource to go back and backtrack so that it could find and make legislation that actually worked. This is what we may well find with this legislation. We may find that Parliament spends a million or whatever dollars all over again to put through new legislation that repairs this faulty legislation that does not actually collect a register of foreign buyers properly and uses a manual, paper-based system for the initial months, on an optimistic scenario, for collecting the details for a foreign buyers register. I think the case is fairly clear for adding the word “farce” into this title. I wish the Government would have a sense of humour or irony or something and actually consider this serious suggestion from the Opposition benches. I look forward to the Minister in the chair, the Hon Nicky Wagner, taking a call and saying why on earth this should not be called a farce, because I think the case is pretty clear.

The CHAIRPERSON (Hon Chester Borrows): I call Simon O’Connor. [Interruption]

Dr DAVID CLARK (Labour—Dunedin North): I am sorry to interrupt, but I wish to seek leave to table this document, which is from the Official Information Act material. It is a Land Information New Zealand diagram dated 15 May 2015, and it demonstrates the period of time—

The CHAIRPERSON (Hon Chester Borrows): Do not tell me about that. Tell me what it is, and where it has come from, and when you have done that—

Dr DAVID CLARK: It has come from Land Information New Zealand and an Official Information Act—

The CHAIRPERSON (Hon Chester Borrows): Leave is sought for that purpose. Is there any objection?

Tim Macindoe: Is it on the website?

Dr DAVID CLARK: No. It is from Official Information Act material, and it shows the paper-based collection—

The CHAIRPERSON (Hon Chester Borrows): The document has been described. Leave is sought. Is there any objection? There appears not to be.

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

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

Hon DAVID CUNLIFFE (Labour—New Lynn): I rise to take a first call in this Committee stage of the Taxation (Land Information and Offshore Persons Information) Bill, and I trust it will be the first of a number that will assist the Committee in finding a way through this. There are two areas that I wish to address. The first is the rationale for the bill. The second is the implementation issues that the bill throws up. To bring the public into the rationale issue, can I pose a rhetorical question: what do the housing shortage, the refugee issue, capital gains tax, and the overseas buyers register all have in common? The answer is that they are all examples of a particular mojo or operating method by this Government. In the face of overwhelming public pressure and an overwhelming policy case for change, the Government concedes a very small, usually ineffective amount so that it has got something that it can say to the public. Never mind whether it will work or not, never mind whether it will solve the problem at issue, never mind whether it is actually practically able to be implemented; it is good enough for the press release and the public relations campaign. That is why we have special housing areas with no houses. That is why we have got a temporary and very reluctant increase to the refugee quota. That is why we do not have a capital gains tax that will work, but we may have a partial brightline test to accompany this. That is why we do not have a valid, operable offshore buyer register but why this bill brings in a partial system for registering offshore persons.

To explain the difference, let me drop down to the implementation issues. My colleague David Clark and my colleague Stuart Nash have both, quite rightly, lampooned the idea that in the 21st century we are having a paper-based set of records of anything, let alone anything as important, sophisticated, and high value as overseas property transactions. If that were known in the international press, I daresay New Zealand would be an utter laughing stock. The second implementation issue is that, as the Hon Peter Dunne well knows—and he did not have silver-grey hair before this—the Inland Revenue Department computer system is not easy. He was there. I used to do the job that he was doing as the Minister of Revenue, and it is a worry. You cannot make a change to one part of the Inland Revenue Department computer system without the rest of it threatening to fall over, and time is agin it. The answer seems to be a billion-dollar computer upgrade—let me say that again: a billion-dollar computer upgrade—with a contingency margin of $500 million. It is hard to believe that anybody could put through Cabinet a project with a contingency margin—that is an overrun—of $500 million. Good luck, Peter Dunne. I hope it works. If it does not, well, we will be sending you flowers in whichever retirement place you elect, because it probably will not be in the House.

Look, this bill makes it worse. We are asking for bespoke changes to the Inland Revenue Department’s operating system eventually, because at the moment it is just pencil and paper, for a system that will not and cannot work. Why can it not work, even if we could get the Inland Revenue Department system to change? Well, that is because it does not actually separate out what the register should be doing, which is identifying offshore speculative pressure and separating that out from the legitimate purchases of New Zealand citizens and permanent residents. If Joe Bloggs in my electorate or yours, Mr Chairperson, moves overseas and decides to sell or buy a property in New Zealand, good luck to him. He is as much a New Zealander as you or I who live in New Zealand. And, actually, one out of five Kiwis does not live in New Zealand. We have the second highest diaspora in the OECD after Ireland. One in five of us lives overseas; we should be able to trade property in our home country—not an issue. Likewise, we should treat permanent residents equally. So that leaves us with non-residents, and the whole issue here is that most other countries, including Australia, have a very simple rule: if you do not live in New Zealand and you do not plan to, you should not be able to speculate on property unless you actually build a house. New Zealand houses should be for Kiwis to live in. This register ought to be an opportunity to make a small but incremental gain on that issue. If we were validly identifying speculators who have no intention of living here and separating them out from Kiwis who may well come back and, in any case, have a right to trade property, then we would have a so-what that was worth the paper-based angst. Not only is this probably not implementable, according to the Inland Revenue Department and Land Information New Zealand but even if you could implement it there is very little point, because in its current construction it will not actually do anything useful. So why, why, why are we here?

Simon O’Connor: Existential.

Hon DAVID CUNLIFFE: The answer is, I am afraid, buried in the first part of—we are not going that deep tonight, but I know how it feels being a Government backbencher. When you ask “Why are we here?”, you are saying “Why am I here?”, because you do not get to do anything. At least in Opposition we get to get stuck into issues. This bill is here—

Tim Macindoe: You’re welcome to stay in Opposition for a very long time.

Hon DAVID CUNLIFFE: You know, I say this to the whip opposite—he is a decent guy, and I will be honest with him—that we are getting good at this, but we do not want to stay here for ever, so we will be happy to trade you in 2 years’ time, and we are pretty sure that is what is going to happen.

To round off, the reason this bill is here is that it is part of a public relations gimmick by the Government. Faced with overwhelming public pressure to do something about the insane Auckland property market and the increasing influence of foreign speculation, it has bowed to pressure and it has finally started to build some kind of register. Albeit partial, albeit ill-defined, and albeit difficult to implement, it is, in fact, contradicting the earlier words of leaders of the Government. Nick Smith, the Minister for Building and Housing, said a register would be a distraction that would cost mega-millions without doing a thing to tackle house-price inflation. I hope that he was wrong, not for the sake of the Government—it would hurry them to Opposition—but for the sake of New Zealand. I hope that he was wrong.

BRETT HUDSON (National): I move, That the question be now put.

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

Ayes 77

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

Noes 43

New Zealand Labour 31; New Zealand First 12.

Motion agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Hon CRAIG FOSS (Minister for Small Business) on behalf of the Minister for Land Information: I move, That the Committee divide the bill into the Land Transfer Amendment Bill and the Tax Administration Amendment Bill, pursuant to Supplementary Order Paper 116.

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

Ayes 108

New Zealand National 59; New Zealand Labour 31; Green Party 14; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 12

New Zealand First 12.

Motion agreed to.

Bill to be reported with amendment and so divided presently.

Bills

Gambling Amendment Bill (No 3)

In Committee

Part 1 Class 4 Gambling

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): I would like to start off by going straight to clause 6 of the Gambling Amendment Bill (No 3) and speaking about commission-based payments. I want to reflect also on the original Act, the Gambling Act 2003. The real purpose of the venue payments, as I understand it from the original Act, was based on cost recovery for those venues that hosted class 4 gambling machines, or pokies. I understand and believe that in doing so, the intent was for commission-based payments to be prohibited at that stage, because this was seen as a community service, and as for the real payment back to the community, the funds would be distributed to the community that those funds came from. Clause 6(b)(ii) reads: “the only commission that is paid to or received by a person for conducting the gambling is a commission payment to a venue operator that complies with regulations made under section 371(1)(dd);”.

So that is a fundamental change to the original intent of the Gambling Act 2003. We pointed this out in the Labour Party minority report and provided information on exactly why we are against commission-based payments, and it is for that very reason. The original intent was for communities to benefit from gambling machines and from the profits being distributed back to that community. Ever since that time, venues have created ways that they can maximise the return that they get from cost recovery, and I think that has been well documented. So this is a fundamental change, which we believe will incentivise gambling so that venues have an interest in seeing more money going through the machines that they host, and we are fundamentally opposed to that. There are—and I will get to that in later calls, perhaps—the issues around the areas that we do agree with, but this is a key area.

Another issue that we have, as I said, refers to another section. We are concerned about that because we do not actually know what the model is. We do not know what the commission-based model will be for making those commission-based payments. That is a problem. It is a problem because it could be anything. There is a Supplementary Order Paper that suggests that it should be set at a certain level. I think that it is not a good idea to leave the model to be created by regulations. It should have been part of this bill.

Every single provider organisation that made a submission to the select committee opposed commission-based payments to venues. They all cited that they believe it would incentivise gambling. It would also, in their opinion and certainly in my opinion, provide another reason for the venues not to fulfil their host responsibilities, and as we saw in the mystery shopper project that the Department of Internal Affairs ran in December last year, only one out of the 102 venues was compliant. I believe that it is not unreasonable to think that commission-based payments organised and run by those venues are going to provide us with a better outcome. I have not seen the evidence. I refer to the submission made by the Problem Gambling Foundation, which is adamant that this kind of process and this kind of payment system to venues will indeed make its job a lot harder, and every other provider also had that same opinion about commission-based payments.

Also in Part 1, I want to talk about the “key person” issue. There were a number of submitters who made some very good submissions about the “key person” issue because of the difficulty it would provide and the way that it was originally stated within the bill as it appeared in the first reading. So the work that the Government Administration Committee did on this particular issue, I think, resolves it to a better outcome than was originally stated, which we see in the bill today. For example, the Racing Board told us that because of the way the bill was written, it would not be able to pay its employees. Of course, that is not a good outcome for this part of the bill, so I wanted to highlight that.

I also wanted to address the submitters who were in support of these payments, and acknowledge some of the things that they actually said about their reasons for commission-based payments. I do not agree with the outcome, but I acknowledge that the current system is not being implemented in the way that it should be, and I think that the Department of Internal Affairs could be doing a lot better. That is all I have to say on Part 1. Kia ora.

CLAYTON MITCHELL (NZ First): I am very pleased to be standing here tonight, after our scheduled meal break, to talk about the Gambling Amendment Bill (No 3). You are looking at me a little bit confused as to a scheduled meal break, Mr Macindoe. It is what we do, but, unfortunately, this Government has taken that away—I am just letting the world know. Anyway, I digress and I am really wanting to get back to the bill.

The Gambling Amendment Bill (No 3), I think, is actually heading very much in the right direction, and I would really like to put it out there to the Minister to give me some feedback on his thoughts in relation to Supplementary Order Paper 95, which we have got in for an amendment. It is to do with section 30, in clause 6, amending the meaning of class 4 gambling. Unlike the Labour Party, New Zealand First strongly believes that the current situation with “actual, reasonable, and necessary costs” is a very clunky way to work out how site venue operators are going to be remunerated for the cost of having those machines in their venues.

There is a real cost associated with having licensed machines in a licensed premises, and it is very difficult to work out what you are actually entitled to receive as far as payment goes. I think the fairest and most equitable way of working that out, despite what Labour says, is through a commission-based payment. You only have to look at other parts of gambling throughout New Zealand that operate under a similar method. When you look at the TAB, which of course does exactly the same thing, it works on a commission-based payment for its venue operators on the turnover of their site. It is 1.5 percent commission—I believe it is 1.5 percent commission for their venue operators. If you have got a busier operation you are obviously going to get a higher return, but at 1.5 percent of your gross turnover it is hardly a significant incentive to have a racing organisation like the TAB, for example, in your establishment.

What we are proposing here—what New Zealand First is putting forward on the table—is exactly that. A fair, reasonable, and actual cost to be calculated is very clunky. It is very antiquated. It is very difficult to actually determine what you are entitled to. With rents going up all the time and as wage costs alter, you are virtually going through uncertainty from month to month and from quarter to quarter as to what you are actually going to receive as a payment to have those machines on your premises.

What this amendment will do is amend this bill by bringing in a 1.5 percent commission-based payment on the gross turnover of class 4 venue operators’ licences. We looked at the different scenarios that may work in a commission-based system. We looked at 16 percent of net turnover, but the fluctuations that you get from net turnover as opposed to gross turnover are, of course, how often those machines pay out. You have some weeks where, of course, you have a negative banking situation, where you have actually given more money to your gamblers—your punters, who are in your venue—than you actually took in, in kind. So some weeks you find yourself under a net turnover adjustment of actually getting a negative fee. On gross turnover, you look at the overall turnover of the venue and you are putting a 1.5 percent loading on that.

We think that that is a very fair, very reasonable, and respectable amount. It is hardly going to justify venue operators going out there to promote gambling, and, of course, there are laws that already prevent that from happening in your licensed premises. It is very, very heavily monitored. You cannot even have a display on your monitor to show what your jackpots are to the outside world. When you enter a gaming room you know you are doing so for the purposes of having a punt on the gaming machines, and you do not know what the jackpot is until you enter that gaming machine, so you can hardly go out there handing out flyers or go out with a megaphone promoting that your gambling room is going off like a bucket of pipis in the sun—“Get in there and have a quick punt in my pokie-machine room because it is going to be fantastic.” That is not how the system operates.

I think, to be honest, the Labour Party is creating ghosts where there are not any—ghosts, goblins, and ghouls in its brain—to come up with an idea that, somehow, getting a commission-based payment for licensed venue operators is a bad thing. We do support that. We hope that the Supplementary Order Paper gets the support in the Committee. I clearly see that it is not going to get support from the Labour Party. We certainly do hope, Mr Dunne, that we get your support and the support of the National Government.

We would be a strong supporter if we could get that through in this piece of legislation. We do believe that the amendments that have been put forward are heading in the right direction. When the first and the second readings were put through, we were a little bit concerned about some of those clauses, particularly around key operators. I do believe that that has been ironed out.

We certainly had some issues in regard to what constitutes a conflict of interest, particularly in the light of New Zealand being so small that only one degree of separation is going to basically negate you from getting any sort of financial support, if you are in a club organisation, from those societies that are handing them out. I think that you have tidied that up very nicely, too, Mr Dunne, so thank you for that.

This very important piece of legislation has five areas that we largely support. It creates further transparency. It makes it a lot clearer about who is getting what and why. It identifies a much better way of who are going to be the key people who are now going to be held responsible. That is what this legislation is about, too; it is about personal responsibility to make sure that you are operating within the confines of the law. And what it really is about, which I like the most, is cutting through a little bit of the red tape. It is about cutting through the bureaucracy to ensure that we can actually get more money returned to those communities, which is what class 4 operating licences in venues are there to achieve.

Unlike the counterparts that we have got—Skycity Casino—which operate under a completely different model from what we are operating under here, this is sensible. This is for the community. This is about returning as much as we can back to those communities. We will support this if we get the support for our Supplementary Order Paper 95 put forward by New Zealand First, which amends the 1.5 percent of gross turnover for those venue operators. We hope that it does get through for the final reading. Thank you.

Hon RUTH DYSON (Labour—Port Hills): I am really pleased to be speaking in the Committee stage of the Gambling Amendment Bill (No 3), but I have to say that I am also disappointed that this is not a bill that we can wholeheartedly support. We are going to put our vote in favour of it in the end, but we have got a major reservation about a key part that is in Part 1. I think that that is disappointing. With regard to public health issues such as gambling, and there are many others that this Parliament debates, I always think that it is good to have as broad support as possible, and I think the Minister of Internal Affairs has himself been inclined to that view on occasions. So I would like him to take the opportunity of the Committee stage—because it is the only chance that he will have—to tell us why he had such reluctance to move to an agreed, different approach rather than take the commission-based approach, which is what Labour is opposed to in this part.

This part is really the guts of the bill, if you like. It covers clauses 4 to 16. We have got four Supplementary Order Papers on the Table, I understand. One is from Clayton Mitchell from New Zealand First—in amongst some rather disparaging comments that I am sure he will regret making in the Chamber by the end of the evening—and, not on the basis of his contribution tonight, but on the basis of the content of the Supplementary Order Paper, we will be voting against it. There are two Supplementary Order Papers in the Minister’s name, both of which seem sensible amendments, and we will be supporting them. And there is one that Denise Roche has recently tabled, which we will also be supporting.

I would like the Minister to take a call and just give us a straightforward explanation. Every single one of those submitters who did refer to commission-based payment agreed that we should look at a different model that was less onerous, less time-consuming, and more efficient and effective and that either retained or enhanced the level of transparency that the current system has. If everyone agreed with the problems and said we would work together on the solutions but that we opposed the proposed solution in the bill, which is the withdrawal of the commission-based exemption—you know, currently you cannot have a commission-based payment. This bill takes away that prohibition. It does not say that we are going to have one, but, of course, it leaves the door wide open to having that happen.

So I want the Minister to just explain why he was right and the rest of the world that was involved in this discussion was wrong. Everyone put their hands up and said “We will work together to find an alternative that meets the concerns that have been identified.”, because everybody agreed with the concerns. We want something that is transparent, that is not time-consuming, that is not onerous, and that makes sense for everyone who is involved in the industry, but people do not want to move to this commission-based payment. So I want to understand what drove the Minister, in the face of that opposition, to continue to leave it in the bill. Or, perhaps, you know, ever-hopeful that I am that the Minister will use the common sense that he is renowned for, I am ever-hopeful that he might say “Well, I didn’t even know that.”, and now the Minister might table a late Supplementary Order Paper just to say: “Let’s, in regulation, make this a payment system that meets the concerns of the submitters.”

As I said at the beginning, Labour would have really liked to support this bill 100 percent, because on issues that address public health concerns such as those that gambling causes, it is best to have a consistent approach and an approach that is supported by the majority of Parliament. But in this case I am not sure where the Greens are going on their final vote. I know that New Zealand First has got some different concerns from what we have in that regard, but this issue is one that was certainly, I think, quite fundamental.

Commission-based payment has been acknowledged as not being the best method of payment since gambling legislation was introduced in New Zealand in 2003, and that is because it can drive the incentive to increase gambling. It does not do it deliberately; it does not necessarily do it in every case, but, unlike all other types of payment, a commission-based payment system does have the opportunity and the incentive to incentivise increased gambling, and that seems to me to be the last thing that anyone in this Parliament would want. We will have the debate about how much we regulate and how much we introduce harm reductions—you know, they are all legitimate debates—but I do not know of a single member of Parliament who would say that incentivising increased gambling because of the payment system dictated in legislation is a good idea. That is why I cannot understand why we have still got it in this legislation, and I really want the Minister to explain it.

I want to talk about one other concern that Labour has with this bill, and that is not what is in it; it is what is not in it. We have a lot of gambling legislation, so it is certainly not the last opportunity. I hope the Minister has got another bill coming to Parliament soon.

Hon Peter Dunne: At least.

Hon RUTH DYSON: At least one. We might have a few in this term of Parliament. It is something that needs to be worked on on an ongoing basis, not because anything is faulty in the legislation that is before us now, although it is, but that is not the reason that we need to continually revise gambling legislation. The reason is that technology changes. People’s habits change. We now have a situation in regard to online betting that none of us would have envisaged when the original legislation was introduced in 2003. The world is a different place, and if we want to maintain the contribution going to community organisations and the harm reduction protection of problem gamblers, then we need to continually revise the legislative framework. That is the other area on which this bill misses out.

This was an opportunity for some serious measures to be introduced in terms of gambling harm minimisation, and, again, this was a very strong point of contribution from a large number of submitters. The submitters we talked to and heard from were very moving. A number of them were people who told their life stories to the committee about the harm that they had caused to themselves and to their families because of their addiction to gambling, and that takes a lot of courage. It takes a lot of incentive to want to do good, actually—to tell their stories in that way. People came to the committee and said “This bill should have more about harm minimisation in it. Here is what happened to me because I wasn’t protected against myself.”, basically. So this is a missed opportunity. I think we do those courageous people who fronted up to the committee a disservice by not having a serious contribution to harm minimisation in this bill.

I know that the Committee stage is not generally the time to be talking about a lot of what happened in the select committee, but because the bill was introduced and considered so long ago, I had almost forgotten how much alteration the committee made. I just want to commend all the members of the Government Administration Committee. If you flick through the track-changed bill that we have before us now, you will see page after page after page of unanimously agreed alterations, and I think that was a result of the serious work done by all the committee members. We listened not just to the officials but also to the submitters, and I think the officials worked really hard to answer our questions and to make sure that, despite our reservations about some parts of the bill, we were truly satisfied with the level of advice we got. You know, that is pretty well always the case, I guess, but not 100 percent.

I think, in this quite complex bill, short though it is, we should commend the officials for the work they have done. I am sure they are looking forward to staying here until 10 o’clock as we debate this bill tonight. It is one of the few joys and opportunities that public servants have when they have worked on a bill—that they get to sit in Parliament until 10 o’clock alongside us.

I have not yet seen the Minister in the chair, Peter Dunne, move in a way that indicates that he is going to take a call, but I certainly would strenuously encourage him to do that. I think that this Committee deserves an explanation from the man holding the pen, and he is the Minister in the chair at the moment. Why did we leave that door open to commission-based payments when so many people said that this could incentivise harm and we had an opportunity to get an agreed better system?

DENISE ROCHE (Green): It is my pleasure to take this first call for the Greens on the Gambling Amendment Bill (No 3). Like the previous speaker, Ruth Dyson, I also did have to go back and review what had happened at the Government Administration Committee and in the second reading because it has been quite a long period of time since we were here in the Chamber debating these issues, and a long period of time, actually, since we heard the submissions during the select committee deliberations.

I am not usually a member of the Government Administration Committee, but I stepped in because I am the gambling spokesperson for the Greens. I want to acknowledge the chair and the other members of the Government Administration Committee for the excellent way that we examined all the evidence before us and made our report. Unfortunately, I do not agree with a lot of things that are still in the bill, and it is for this reason that I have put forward Supplementary Order Paper 120, which actually covers several issues.

We spend an enormous amount of money on gambling in this country. There are 1,300 class 4 gambling venues across the country, and it is acknowledged that these need to be regulated. I am pleased to see that the Minister in charge of that regulation, Peter Dunne, is in the chair, because I do have some questions for him. The area where gambling venues need to be regulated is around where there is the potential for the funds that are generated from gambling—around how those funds are gathered, where those funds come from, and where those funds go to.

There are parts of this bill, particularly in the first part, that we agree with. Things like transparency and dealing with conflicts of interest are very sensible and reasonable adjustments to the legislation. But where we do not agree is around the issue of the controls and mechanisms that should be in place in the regulation to control problem gambling and to control the ease of access to the gambling machines if there is a problem in the community. It is also about the fact that we have to acknowledge that class 4 gambling—electronic gambling machines—does create problem gamblers.

There is international evidence that actually supports the fact that the machines themselves are designed to ensure that there is a percentage of gamblers who gamble regularly, and that they will become problem gamblers. It is here that I believe our regulation should be focused. It should be focused on minimising harm, and I think it is the duty of a responsible Government to ensure that our laws are in place to protect our citizens. That is surely what we all want, across the Committee, and I am sure that I would get cross-party support on that statement. It is how we go about it—fundamentally, we disagree with some of the provisions in this bill, in Part 1, that will liberalise access to gambling and, subsequently, will incentivise venue owners, particularly, to not control problem gambling or monitor it in the way that they are required to under the Gambling Act.

Since 2003, I think it is, when the first Gambling Act was modernised, there has been a strong opposition to having commission-based payments for venue operators. This, I am sure, will be outlined time and time again tonight. The reason—and it is the reason that we have heard put forward time and again by submitters—to not have commission-based payments to venue owners is simply that it does incentivise the venue operator to not do the correct host responsibility and to promote problem gambling.

We have a situation where 40 percent of the funds that are generated for community purposes from class 4 gambling—40 percent of those funds—come from people who have gambling problems. They have limited control over their gambling behaviour. We also know that where those 1,300 venues are placed, they target poorer communities. Essentially, they sell hopes and dreams, in a very cynical way that lures people in, in the mistaken belief that they will be able to get rich, get out of their financial problems, and, basically, make a life. They are false dreams. They are definitely false dreams, because it is a cynical ploy by the industry to ensure that they entrap people with limited control over their gambling. It creates that sort of gambling behaviour.

So we have got a few Supplementary Order Papers to Part 1—well, they cover a few things. One is around removing the ability for venues to be paid on a commission basis. The other area is around removing what I think the officials have described as an incentive to venue holders with licences, to extend those licences for 3 years. The reason we oppose that is that we have seen that there is very limited good behaviour in the pokie sector—not much at all. The sting, which other people have referred to, by the Department of Labour, where its compliance team in December last year visited pokie gambling venues across the country and only one complied with good host responsibility behaviour—that seems to imply that there are very few venues that are currently operating in a way that actually says they should be rewarded for good behaviour. What I would like to see is more compliance and evidence of compliance well before we regulate to offer a 3-year licence with few controls or regulations or even oversight.

The other area is around harm minimisation, which is completely missing, and this was one of the issues that came up time and time again in the submissions that were put forward. Some of them were really heart-breaking. What we would like to do, in order for us to support the bill, would be to amend the bill to ensure that there are effective harm minimisation practices in the regulations, which would then have to happen in class 4 venues across the country.

The sorts of harm minimisation suggestions that I have in my Supplementary Order Paper are around things like player tracking—real-time player tracking—and pre-commitment cards. This hands control over to the gambler. With a pre-commitment card they can determine, before they start gambling, how much they are going to spend, how much time they are going to spend, and then once their card has expired they are finished. This, in effect, limits—it is a very effective limit—the amount of gambling. Someone who wants to have a flutter can basically just go ahead and have a flutter, and it will not be a problem. But for those who are starting to emerge with problem gambling behaviours, it is a way for them to regulate or self-monitor their own gambling behaviour.

We have also suggested that there be player tracking, and this is something that we could be doing as the technology improves. I think there was some discussion—and there has been in previous bills as well—around facial technology. If you use facial technology you can actually ban people from playing on the machines and losing money. I guess we could be going down that track, but actually we need to be looking at prevention before the problem happens rather than at restrictions on gamblers who already have the problem gambling behaviours in place.

I was pleased to be part of the select committee to hear the submissions that we heard on that. There was some very, very good and compelling evidence from places like the Auckland Council, for example, which, although it supported the bill in many aspects—certainly around distribution of funds and increasing that to 40 percent from where it has been at 37 point something percent, the issues around conflict of interests, and the issues around greater transparency—

TRACEY MARTIN (NZ First): Kia ora, Mr Chair. I would like to take just a short call to support the contribution by my colleague Clayton Mitchell, and it is an appeal to the Minister in charge of the bill, the Hon Peter Dunne, with regard to Mr Mitchell’s Supplementary Order Paper 95.

What I hope the Committee heard was a gentleman who is actually following the values of New Zealand First, which we articulated when we first came into this House. Those are that we will not oppose legislation just for the hell of it; we will oppose legislation that is in our view badly written. What Mr Mitchell has articulated is as a person who knows this industry and who understands the practicalities of it. He complimented the Minister several times during his contribution, because the Minister had written a bill that in his view and in his knowledge of this industry—down on the street where this bill is going to land, where the New Zealand businesses are going to have to work with it—he understands what those businesses are going to have to do. He complimented the Minister on changes that he had made and he asked the Minister to recognise that New Zealand First would like to support this bill.

But there is one change that we feel needs to be made, and that is around the payment structure. I have heard the Labour Party contribution and the Green Party contribution with regard to not having commission payable for class 4 gambling because it incentivises it. Mr Mitchell in his contribution argued from the real perspective, from the perspective of the business owner, how that does not make sense. It may very well be that for politicians sitting in this Chamber it might make perfect sense in theory and on paper. But when you are in business, and Mr Mitchell told you all the other criteria that are there by which you cannot promote gambling—and I thought the pipis going off in the sun was a particularly good metaphor and one I had not heard before. It was the voice of reason about a small change that is required to gain another party’s support for this piece of legislation.

I want to also comment on the fact that the contribution from the Green Party talked about problem gambling and harm minimisation. We have heard this conversation before, and all due credit to them—they stay on track; they stay on message. What we know to be true is that small bars and RSAs and so on who have a few gambling machines report more problem gamblers than any casino in New Zealand, and they get levied for it. They get charged because they report more problem gamblers to organisations to actually assist them to work with their problem. You could argue that that is because they create more. Or you could argue that the casinos do not report them because the casinos do not know them, and that bars and RSAs are actually doing these people a service by having them come and gamble with them.

I heard Miss Roche also say that Auckland Council supported many parts of this bill. Auckland Council has a sinking lid on gambling machines, on pokie machines inside the Auckland city boundaries, and yet the Government supports Skycity. So from that perspective, to suggest that there should be more harm minimisation inside this bill is the wrong place to be directing that criticism in our view. Small bars, RSAs, and local community organisations that have pokie class 4 gambling machines are reporting more often. They know their clients more regularly. They care about those individuals. They do not wait until an individual is incredibly in debt before they put in face recognition. They do not wait until a person is beyond the pale, as casinos have been doing, and so we see that as a non-argument inside this piece of legislation.

So again we appeal to the Minister. This is a small Supplementary Order Paper. It is a small change that we believe would improve the bill. We hope that the Minister has an open mind. I hope that the Minister listened and believed that Mr Mitchell came from a place of knowledge and a place of good intent around actually improving this bill. It was not from a place of politics; it was from a place of intent. So with that contribution I say that, unfortunately, unless this Supplementary Order Paper is able to be supported by the Minister and the National Party members and the majority of the Committee, New Zealand First is unable to support the rest of the bill. Kia ora.

IAIN LEES-GALLOWAY (Labour—Palmerston North): This is my first opportunity to speak on Part 1 of the Gambling Amendment Bill (No 3). Part 1 deals with class 4 gambling, which if you read the website of the Department of Internal Affairs, you will see that class 4 gambling not only is defined as gambling that occurs in pubs and clubs, which members will be aware of, but it also represents high-risk and high-turnover gambling.

I was not on the Government Administration Committee, and I have not heard all the deliberations. I have a number of questions both for the Minister in charge of the bill, the Hon Peter Dunne, and for members about the Supplementary Order Paper that has been offered up in Clayton Mitchell’s name and this question of commission payments, which has been the subject of some discussion this evening.

I have been trying to get my head around why it is that we need to change the system to allow for commission payments. I appreciate that venues do need to cover some administration costs, and we have systems already that allow venues to cover for their administration costs. What I do not fully understand and what I have not actually heard anybody talk about this evening is why the change is necessary. I have certainly heard a lot of convincing arguments against using commission payments, but what I have not actually heard from the Minister or from anybody else contributing this evening is why this change is necessary. We already have systems in place for covering the administration costs of venues, and I am unconvinced. To be fair, I read the explanatory note on Clayton Mitchell’s Supplementary Order Paper, and that was the closest thing to an explanation that I got.

What I do not understand is why a venue, with x number of machines, that has a high turnover ought to receive more in payment for administration costs than a venue with the same number of machines with a lower turnover. I do not understand where the additional costs come from. If you have got a certain number of machines you need a certain number of staff to keep an eye on those machines. You have got certain maintenance that goes along with them. With higher turnover I cannot see where the additional costs come from.

That is a genuine question. If Mr Mitchell wants to respond to it I would welcome that. If the Minister wants to respond to it I would certainly welcome that as well. I do not understand how the mechanism lines up with the need. What is the problem that this change is actually trying to solve? I would appreciate some support. Or, indeed, is there a better way of doing it? Were submissions heard at the select committee that described a better way? If there are improvements that can be made, are there other ways of doing it? That is a genuine question and I would really appreciate an answer to it.

Another concern that I found in Clayton Mitchell’s explanatory note is that his Supplementary Order Paper 95 appears to align the commission rate with what the TAB and Lotto retailers receive. There is a fundamental difference between those. The TAB and people who sell Lotto tickets—that is their business. That is their primary source of revenue. They are doing that as a commercial practice. That is very different to class 4 gambling, where, actually, the primary purpose for those venues is, usually, that they are a drinking establishment. There is some other activity going on and the gambling is sort of tacked on as an addition. Gambling, under a class 4 licence, is not meant to be for commercial purposes. It is not actually meant to generate any revenue for the venue. The funds generated are to be distributed by a charity and to be used for public good works—for all manner of different reasons—but not to make a profit for the venue where they are actually located.

I am concerned that we are starting to blur the lines a little bit here between the way gambling for commercial purposes operates and the way gambling for the non-profit raising of charitable funds operates. So, again, I am very, very happy to hear an explanation of that. [Bell rung] Mr Chair?

The CHAIRPERSON (Hon Trevor Mallard): Oh, Iain Lees-Galloway.

IAIN LEES-GALLOWAY: A good choice, Mr Chairman.

The CHAIRPERSON (Hon Trevor Mallard): Well, only just.

IAIN LEES-GALLOWAY: I am very keen to hear what explanation members have for those issues, as well.

I am also interested in why the requests made at the Government Administration Committee for more active and proactive harm reduction activities were not taken up and not included in the legislation. I am not a prohibitionist. I am not a fan of prohibition; I do not think it works well. But I am a big fan of harm reduction, and having a legalised but tightly regulated market can be a far safer way of dealing with harmful activities than prohibition can.

Obviously, harm reduction is vitally important to any system governing and regulating gambling, and there were recommendations made to members on the select committee for identification and tracking of gamblers, particularly people who demonstrate tendencies towards problem gambling, and also for prepayment cards, so that before people start gambling they could set the amount that they actually want to pay and that could be monitored by the venue owner. These were all rejected, it would appear, by the select committee, but, again, I have not seen an explanation either in the commentary on the bill or from any of the members who have spoken this evening as to why that was.

Again, I have heard strong arguments from Denise Roche in favour of including such aspects in the legislation. What I have not heard is the arguments either why it is not the time, or that the technology is not there, or that the research does not support those approaches. Why is it that that was not included in the original bill? Why was it not included at the select committee as well?

I got the feeling when I was called that the Minister might be enthusiastic about responding to some of these questions. If that is the case I would be very happy to hear some responses to the questions I have asked, and look forward to asking more if the Minister’s contribution requires it.

Hon PETER DUNNE (Minister of Internal Affairs): Let me respond to some of the points that have been raised during the course of the debate so far. Can I begin by acknowledging the support for the general principle of the bill that most members of the Committee have espoused. This is a constructive piece of legislation, and I acknowledge the general support that it has received.

The issue that has attracted the most interest is around clause 6, and I will talk about that in a moment. I also want to address the point about harm reduction issues. I need to say to the Committee that I am in a somewhat unusual position. As Minister of Internal Affairs, I am the regulator; as Associate Minister of Health, I am the Minister responsible for problem gambling issues, which puts me in a unique position that I have to talk to myself constantly. That is quite relevant in this particular discussion.

With regard to clause 6, which is the issue that has exercised the Committee—what clause 6, in effect, does is open the possibility for commission payments. It does not per se introduce commission payments. What we are doing is changing the venue payment system, which is inefficient and clunky and outmoded and very complicated, to a more facilitative arrangement that will be devised through consultation with the sector, with the Problem Gambling Foundation, and with anyone else who has a particular view to express. We have not finalised decisions on that model, but we want to leave open a range of possibilities.

I also want to acknowledge in my health role that there are serious issues relating to problem gambling, and I am not in favour of using a commission-based system to incentivise further gambling opportunities. But when we have, as a result of the 2003 Act, a national sinking lid, and when we have work that is required as part of that legislation every 3 years to set a problem gambling levy and to set in place a programme of work that has to be done regarding harm minimisation and related issues, you have got to look at the total package.

The issues that Mr Lees-Galloway and others have referred to are more appropriately dealt with through the work around the problem gambling levy. We are currently in the process of striking that levy for the next 3 years. The consultations are going on literally as we speak; the recommendations will come back via the Gambling Commission later in the year, and I expect that levy, from memory, will be promulgated in the first quarter of next year, for the next 3 years, and a series of activities will be identified as part of that process. That is where a lot of the issues regarding harm minimisation are likely to be addressed.

On the commission one, as I indicated, this is a facilitative clause. At this point we will be consulting further about the detail and nature of that before a new payments regime is implemented, but the important point is to get something that is more efficient, more effective, and less administratively complex.

That brings me to a final point that I want to make, which really underpins this legislation and, I think, goes to the point that the Hon Ruth Dyson was driving at. The speed of change in this environment is intensifying, and what we need to have in our legislative structure is sufficient flexibility to be able to meet new challenges as they emerge. The preceding bill to this one, as members joked at the time, with a degree of accuracy, took 7 years to pass. This bill is actually far quicker than that, but it is still a long process to change the law every time we meet new situations. So what we are trying to do here is move to a more streamlined approach where we do have a greater degree of flexibility to meet some of the new challenges that will emerge in the future. I have indicated previously, and I repeat it tonight, that there is further work under way, beyond the scope of this legislation, that I expect to come to fruition over the next little while.

But if I can just sum up for the Committee, we have a situation at the moment where we need to make the gambling industry fair and responsible. We need to deal with the issues around harm minimisation and problem gambling. We have constructive and comprehensive strategies on both. This is the legislative, regulatory framework. The other matters are dealt with through other mechanisms. Overall I believe this bill, as it is before the Committee at the moment, is a step forward and ought to be supported.

Hon DAVID CUNLIFFE (Labour—New Lynn): It is a pleasure to take a brief call in this Committee stage debate on the Gambling Amendment Bill (No 3), a bill that the Labour Opposition supports with reservation. The reason that we support it is that we commend the objective of increasing the transparency around the proceeds, the conditions, and the regulated persons who are and who are not able to undertake the management and regulation of a class 4 gaming establishment, which includes pubs and clubs. The background to that is, of course, that clubs such as RSAs, cosmopolitan clubs, and many others are integral parts of our community and we do not seek to totally ban legitimate gaming from those venues where it is the wish of the community to retain them.

Having said that, we have some significant reservations about the bill’s failure to prohibit—in fact, its willingness to provide for—commission payments to venue operators. I turn the attention of the Committee to clause 6, which amends section 30, on page 6 of Part 1 of the bill. It states: “the only commission that is paid to or received by a person conducting the gambling is a commission payment to a venue operator that complies with regulations made under section 371(1)(dd);”, which sets out a bunch of regulations.

What is interesting is that it is a weakness in the current law that although there are no commission payments allowable, there are cost payments available for venue costs in gaming premises. There is some history, which I am sure the Department of Internal Affairs officials would attest to, about operators bulking up those venue costs as a way of, shall we say, maximising the operator margins and minimising the payout. It is a matter that officials have worked hard to police across the sector, as one issue.

Embedded in that is the potential issue of conflict of interest in the way in which recommendations for disbursements are made, particularly by some of the large gaming trusts, which rely quite heavily on the recommendations of individual proprietors of pubs and clubs. The story goes something like: “We’ll get a grant for your rugby league club”—or other club; fill in the blank—“to have some new uniforms or sport equipment if you, wink, wink, nudge, nudge, continue to get your wholesale supplies from my outlet for the next 3 years.” That is why there must be an arm’s length relationship between the proprietor and the decision-making body of the community grant disbursement as part of the increased transparency provided for in Part 1 of this bill.

The ability to make commission payments, rather than increasing the transparency of that system, actually decreases it. Clause 6 is a clause that we remain concerned about and will track in the implementation of the bill, because it allows more discretion for the venue operator to build into those commission payments what might otherwise be considered to be margin, and that, in turn, conflagrates with the conflict of interest issue that I referred to earlier.

Some of the more useful parts of Part 1 include some more transparency about prohibited relationships between operators, immediate family, and family members, and other transparency measures, which we support. We try to take a balanced approach to this legislation, and, again, I would note that we would not seek to prohibit well-managed gaming from community venues.

In making a short contribution on Part 1, I do wish to draw attention to the—perhaps we would call it—irony of this bill, which is seeking to improve transparency, and the lack of transparency in the process around the largest single provider of gaming venues, the Skycity convention centre; and to the importance of ensuring that there is good process around the way in which any future consents for gaming machines, gaming licenses, the term of such licences, and the conditions under which such licences are operating, are consistent with Part 1 of this bill.

CLAYTON MITCHELL (NZ First): I rise to take another call on Part 1 of this bill, the Gambling Amendment Bill (No 3). In speaking to this bill I appreciate the Hon Peter Dunne taking a call and clarifying just a couple of things. That probably leaves a little bit of an untold story there, and I just really want to refer again back to New Zealand First’s Supplementary Order Paper 95 around clause 6, and new clause 6AA which is about commission-based payments.

Mr Iain Lees-Galloway along with the Greens and Labour have been sort of talking more about the Gambling Amendment Bill (No 2) and harm minimisation. This bill is not strictly about harm minimisation. This is about transparency and a clearer, easier way to fundamentally work out what, and how, we are going to be paying those venue operators. The question was asked by Mr Iain Lees-Galloway—he cannot get his head around or fathom why a higher turnover venue would justify a higher payment.

Under the current scheme it comes down to fair, reasonable, and necessary costs to operate a licensed premises. The difficulty you have got when you try to work out what your premises is entitled to comes down to the floor area of your gaming room compared with the floor area of your entire establishment, whether you have got carpet, what the wall coverings are, what sort of fittings you have got in your room, how many staff it takes, what the turnover is on your bar, what your hours of operation are, and what your power costs are. You can imagine the sort of conundrum you have got, to work out where you sit for a payment under the current scheme. What we are simply saying, under a simple scheme—and let me give you some numbers so you can rattle those around in your brain. An average to high turnover—

The CHAIRPERSON (Hon Trevor Mallard): Order!

CLAYTON MITCHELL: Mr Chair?

The CHAIRPERSON (Hon Trevor Mallard): Nothing is going to rattle in my brain.

CLAYTON MITCHELL: Mr Chair, I do apologise. It is a bad habit—I will get out of it. I mean Mr Iain Lees-Galloway’s brain. To get that clear inside Mr Iain Lees-Galloway’s brain—if you took an averagely high turnover of $9,000 a week of banking in a gaming site, which is over the average but we are working on that, and if you look at a current site payment of around about $150 per machine, it would work out somewhere around about $1,350. Of course, they fluctuate. The rents in Auckland can be astronomical and they could be paying twice or three times what they are paying, or even five times what they are paying, in Invercargill. So a site rental in Auckland might be getting $200 for a site machine and therefore generating more turnover because of the location, and so forth.

With each increase in turnover comes an increase in foot traffic and that becomes costs in staff. Staff costs are the largest unfixed variable business cost in hospitality. Rent is fixed, power is generally fixed, and a lot of those other associated costs are fixed. But the moment you have to increase your staff to cover a higher turnover venue, you have got more wear and tear on the fixtures and fittings in your premises, then you could surely understand economically that you could not sit within the current regime.

What we are suggesting—putting it under a commission-based system—allows for higher turnover. At a turnover of $9,000 a week, and earning $150 a machine, that is around $1,300 a week—you are hardly saying that you are making a lot of money out of that. It is not even covering a portion of your rent let alone all the other running costs that go with it. What we are saying is that establishing a fee that is based on the gross turnover of gaming machines ties in with the actual running costs attributed to that site, and the ongoing costs of that. That is why we think that commission-based payments are better than not.

We have gone through the Gambling Amendment Bill (No 2), which talked about harm minimisation, and the Minister has talked about other areas where that is going to be picked up on. We too are concerned about issues of problem gamblers. They do make up 0.03 percent of the population. That as a percentage seems pretty small—I think it is about 20,000 problem gamblers—but that is not broken down into the types of problems we are having. There are problem gamblers that have TAB problems, there are casino problems, and there are pokie machine problems, and none of that is really captured in an overall breakdown of what class 4 gambling is actually directly proportionally responsible for.

The biggest problem that we have got, as this very fast world of gambling changes, is the new onslaught of online gambling. That is the elephant in the room. That is something that needs to be addressed that we have not even started to consider. Yet we are throwing a lot of stones and a lot of weight, and a lot of anti - commission-based payments talk, when it is just a simple and easy way to work out payment for the venue operators, and for the Government to assist in those payments.

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

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

Ayes 63

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

Noes 57

New Zealand Labour 31; Green Party 14; New Zealand First 12.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Papers 98 and 111 in the name of the Hon Peter Dunne to Part 1 be agreed to.

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

Ayes 104

New Zealand National 59; New Zealand Labour 31; New Zealand First 12; ACT New Zealand 1; United Future 1.

Noes 16

Green Party 14; Māori Party 2.

Amendments agreed to.

The question was put that the amendments set out on Supplementary Order Paper 95 in the name of Clayton Mitchell to Part 1 be agreed to.

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

Ayes 12

New Zealand First 12.

Noes 108

New Zealand National 59; New Zealand Labour 31; Green Party 14; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 120 in the name of Denise Roche to Part 1 be agreed to.

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

Ayes 45

New Zealand Labour 31; Green Party 14.

Noes 75

New Zealand National 59; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendments not agreed to.

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

Ayes 92

New Zealand National 59; New Zealand Labour 31; ACT New Zealand 1; United Future 1.

Noes 28

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

Part 1 as amended agreed to.

Part 2 Miscellaneous matters

The CHAIRPERSON (Hon Trevor Mallard): We now move to debate on Part 2, which is debate on clauses 17 to 20 and the schedule.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Can I also thank the Minister for his previous contribution. I think it was important for us to hear it. I know that the most substantive issues are in Part 1. There was not as much discussion at the select committee on Part 2, or submissions on this particular part, but there was some concern, especially from societies who did not like clause 17 in particular, which inserts new section 235A into the Gambling Act 2003. They had some concerns around the appeal process to the Gambling Commission and they expressed that quite clearly to the select committee. I think that the select committee has done a very good job, though, on that particular part in new section 235A(1)(a), where it says: “that person exercises that right of appeal;”. I think when we heard from those submitters we heard very clearly what their concerns were.

I think I also have to reflect on the whole issue around running venues, as a business model, as opposed to the original intent of the 2003 Act of it being a community service. I would explain it like this: over time since 2003 the way that things have been operated by the organisations and societies that own the class 4 machines has changed. I think that in the overall bill, and coming to Part 2 in particular, the process for making appeals to the commission highlights the very fact that things have changed and they need to reflect what is actually happening. We did hear from those operators, and the societies in particular, who expressed their concerns. I think the bill is much better for the changes that have been made.

I would further note that our particular opposition to the two parts within this bill are, in fact, as I said before, about the whole nature of the changes that the societies have had to make to the way that they operate. There is not a lot to say in this particular part except that overall we support this bill but the changes to that process are important mainly to the societies. But one thing I would also add is that it has been a missed opportunity to address those real issues around harm minimisation. Thank you.

DENISE ROCHE (Green): I rise to take a call on this part of the bill—Part 2, “Miscellaneous matters”. But what I want to address my comments to is clause 18, which amends section 371. I have a Supplementary Order Paper that, essentially, deletes this clause. As the previous speaker explained, this is the clause that deals with and allows for commission-based payments for venues. I would be interested in hearing a response from the Minister about why this clause is here, given that there has been such strong opposition to it for so many years. It was explicitly prohibited in previous legislation. I am really keen to know why there has been a change and why allowing commission-based payments is going to be a part of this legislation, when, really, it did not come out of anywhere or from any evidence.

The arguments that we heard from the Minister at the time that this bill was introduced were around the fact that the payment for venues was complicated. Without a doubt, the payment for venues is very complicated—there is a very strict equation—but it is for venue operators receiving payments for having pokie machines on their premises that they be paid actual, reasonable, and necessary costs. That is the exact wording: “actual, reasonable, and necessary costs”. Yes, even though it is complicated, there has been an enormous amount of work done by the Department of Internal Affairs over several years, working with venue operators to try to ensure that they are able to claim what they are meant to claim for. In the past, there had been other rorts perpetrated by venue operators for things like claiming for wages and for premises upgrades, which were above and beyond reasonable. This is where we come to “reasonable”. There had been court cases about that.

So the complexity of the regulations has been the subject of much discussion and much education, actually, with the Department of Internal Affairs and with the venue operators. In fact, in 2009 the department began working with gambling societies to standardise venue cost schedules, and it encouraged gambling societies and hosts—the venue operators—to participate in what it called the Venue Costs Resubmission Project. That was to get venues to put in their submissions, so that they could work with them to make sure that they were getting it right. The Department of Internal Affairs did a report on this in September 2013. That was after 4 years of work. The department reported on the project. It was called the Venue Costs Resubmission Project. It included a series of recommendations about the calculations for venue payments, including for a full review, and to initially adjust some of the limits to cover where there had been increases in inflation and, for example, wages.

This is not unreasonable. This is good practice. This is the regulator operating with the industry in a very responsible manner and the industry responding in a very responsible manner. But nowhere in the report with these recommendations did it recommend introducing a commission-based payment system for venues. So my question to the Minister is: where did this come from? Who put this forward? It did not come from the Department of Internal Affairs. The only submissions that supported this part of the bill were from the industry, from venue operators themselves and from gambling societies. In fact, the opposition to this part of the bill came from everyone else—the people who have been harmed by problem gambling, the people who have been problem gamblers themselves, and their families. They went into great detail when describing how problem gambling had impacted on their lives.

If you think about who benefits from commission-based payments, it is the venue operators. Who does not benefit from that? That is what is not clear to me. I do not believe that there has been a relevant cost-benefit analysis of commission-based payments to venues, because surely they have not—

The CHAIRPERSON (Hon Trevor Mallard): Order! I am now going to ask the member to resume her seat. I remind her that we are now on Part 2 of the bill, which is a very, very narrow area. The member—and she has not been the only one speaking on this part—has strayed well past it.

DENISE ROCHE: I raise a point of order, Mr Chairperson. I would like an explanation. Clause 18 refers specifically to commission-based payments. If you look over the page, to subparagraph (iii), that is where commission-based payments are. I am referring to the submissions that we have received on this aspect of the bill.

The CHAIRPERSON (Hon Trevor Mallard): I just want to remind the member that we had a substantive discussion on that area in an earlier part. The main new part—the new thing in this—is around the review of the secretary’s decision. That is really the substantive part of it, and the schedule. There is quite a lot of room in the schedule, but both in the second reading and in Part 1, the principle that the member is now discussing very widely was already accepted by the Committee.

DENISE ROCHE: Thank you, Mr Chair. I will confine my comments basically to clause 18 and to Supplementary Order Paper 120 that I have in my name, which states: “In clause 18, delete new section 371(1)(dd) and (de) (page 15 line 32 to page 16 line 7).” I will probably discuss this more in the next part, in the schedules, because I also have a Supplementary Order Paper pretty much along the same lines to that one. I do want to know from the Minister, though, the justification for this clause for venues to receive commission-based payments.

The CHAIRPERSON (Hon Trevor Mallard): I am sorry, and I do not know whether or not I should be coaching you from the Chair, but we are actually discussing the schedule now. If the member waits until after the vote on this bit, then she will be too late.

DENISE ROCHE: Thank you, Mr Chair. I think I have probably said enough. I actually want to thank you for your assistance in this matter. I appreciate the coaching.

Hon RUTH DYSON (Labour—Port Hills): I raise a point of order, Mr Chairperson. Could I just seek your clarification? It was not until the member spoke just now that I realised that her Supplementary Order Paper 120, which we have already voted on, over the page has amendments to clause 18 and the schedule. I do not recall you saying that we were voting on just clauses 6 to 13. Have we voted on that inadvertently, in which case we need to go back, or did I just miss the fact that you said “part of Supplementary Order Paper 120” when we voted earlier?

The CHAIRPERSON (Hon Trevor Mallard): Just to make it clear, Denise Roche’s amendments set out on Supplementary Order Paper 120, which relate to anything in clauses 17 to 20 and to the schedule, are currently the subject of this debate. We have voted already on that part of Supplementary Order Paper 120 that relates to Part 1. I think it is fair to say that at that point we dealt with the principle and the substantive part of it. We are now talking about the method of regulation, and, frankly, it is a close call whether the Supplementary Order Paper should be ruled out or not, having already made the decision in a previous part. The Committee has made the decision on a previous part that it does not want the approach suggested in Supplementary Order Paper 120. We are more or less dealing with the same question again, but I have been quite liberal in letting it run so far.

CLAYTON MITCHELL (NZ First): I am going to take a very short call, probably much to your pleasure, on Part 2, clause 13 amending section 115, which is actually an amendment that New Zealand First has got there in Supplementary Order Paper 95. Quite simply, what we are asking to do is to delete, in clause 13, “Section 115 amended (Payment of commission prohibited)”, because, clearly, despite not getting the support in the Committee for our first part, Part 1, we will see this through to the end—

The CHAIRPERSON (Hon Trevor Mallard): I am sorry if I have confused the member. We are currently dealing with clauses 17 to 20. The member has had his chance on clause 13. He spoke to it earlier, actually, and the amendment has been rejected by the Committee. Does the member want to have another crack?

CLAYTON MITCHELL: No, that is fine. I have got a Supplementary Order Paper. You are into schedules here.

Hon RUTH DYSON (Labour—Port Hills): You will be delighted to know, Mr Chair, that I want to speak to Part 2, which starts at clause 17—

The CHAIRPERSON (Hon Trevor Mallard): Well, it will be a novel approach.

Hon RUTH DYSON: It goes through to clause 20 and includes the schedule in this particular debate, and it includes Supplementary Order Paper 120, which deals with clause 18 and the schedule. As you quite correctly pointed out, the main content of this part is in relation to the review of the secretary’s decisions and what that involves. These were changes that the Government Administration Committee took some time to consider because it is not something that we normally deal with, in terms of policy issues, unlike the other matters that have been the subject of the majority of the vote.

What I found really interesting when we discussed whether an organisation had an appeal right after the secretary had made the decision—and this is in relation to class 3 or class 4 gambling—was whether they could appeal then to the Gambling Commission, how long they had to appeal, and what the grounds were. What the debate indicated to me was that the nature of the organisations that we are dealing with has changed substantially since the first major gambling legislation in 2003. I think that is something that the House, not during this debate, should at some time give quite a lot of consideration to. I do not think that our Parliament has done that in the consideration of gambling legislation.

There is the highly competitive nature between the organisations seeking to get more pokie machines, basically, and then, after that, when they are granted a licence, or, if they are refused a licence, there is the issue of how they are able to appeal and how long that is going to take. The reason that it was so important for the organisations, and why they made such a song and dance about it, was that their businesses depended on it. I do not think that is how these organisations were originally established. It was certainly never the intention of the gambling legislation originally, but what we have got now is an entirely different sector. We have vending operators that are dependent on their pokie machines in order to run their business. It is cart before the horse. That is why the secretary’s decision, the appeals to the Gambling Commission—how long that takes, how many licences they are allowed, what the terms for withdrawing a licence are; all those issues—were drawn into far greater tension, I guess.

The other issue that became very obvious in relation to this was the groups that now get pokie money. All the electorate MPs in the Committee would be very familiar with their organisations that every year apply for pokie money and are dependent on it. The nature of their reliance, I think, is another problem that at some stage this Parliament needs to grapple with. They had exactly the same concerns about the issues that are outlined in clause 17, which inserts new section 235A, about the review of the decision, the grounds for the decision, the appeal to the Gambling Commission, and the opportunity to apply for a judicial review. Some of them talked about how they would have to basically get pokie money to apply for a judicial review to then be able to maintain the pokie operations of the organisation that they had a relationship with. So it is not a healthy situation, actually.

Clause 17 deals with the nuts and bolts of the operation. It does not deal with the fundamental policy questions about whether we think that having gambling that does public health damage should drive dependency of very good, worthy community and voluntary organisations to the point that in this clause they were so anxious about the rigidity or the rigour of the licence issuing and appeal process—not because of wanting to have integrity in the gambling system but because of the potential harm that that it would do to them either as a vendor running their business, dependent on gambling money, or one of our really great community and voluntary sector organisations that is dependent on the pokie money for their survival. So although we looked at these provisions in clause 17, originally it was just a “Well, this is just a standard process, how you would go through this.” Of course, you need a proper process to have a licence issued. You need a proper appeal process if there is some concern about their behaviour, and all those rules in both class 3 operators’ licences and class 4 operators’ licences or class 4 venue licences are clear in here.

What we learnt during our debate on this clause was entirely different. It was about the changing nature of the organisations that run pokies, the huge competition that there is now, and, of course, with more and more local authorities taking the opportunity to have sinking-lid policies on their pokie machines, that heightens the tension, and the inability of organisations to move their operation from one part of a city or town to another—all those issues came up during this process.

I think that we did good work in considering that. I think that the small changes that we have made in these provisions—you will notice that we made small provisions right at the start of clause 17 and in 17(a) and then a deletion in clause 19, which affects new section 378, and very minor changes in the schedule. I think the changes were good, but what it has left open, and I would, again, urge Parliament in future—the Minister of Internal Affairs himself has always been interested in big policy issues. He may want to instigate a cross-party forum discussion for the issues that are not dealt with specifically in the legislation but that were debated because they were generated by the provisions in Part 2, and that is how different the organisations are now that run these machines and how the competitive nature and the licensing regime that we are discussing in this provision, plus the sinking-lid policy of the territorial local authorities, have combined to make it a pretty hostile environment, actually. It is certainly very finance driven.

The other concern that I have is the total dependence of groups on pokie money. I do not think that is a good environment, whether it is a surf life-saving club or the local kids’ rugby or netball club or whatever it is. There are hundreds of examples where organisations are dependent on pokie money. I think those bigger issues need to be debated as we go forward. They were generated, absolutely, as a result of the specificity of the issuing of the licences, of the appeal procedure, and, as I said, of the provisions that are in clause 17(3) for the judicial review. The bigger issues, I think, need to be debated, and I offer the Minister a gentle challenge. I think that this Parliament is up to that debate, I think the members of the select committee would be happy to assist with it, and I think that, if we are going to make good progress on gambling legislation in the future, those are hard issues that need to be tackled.

Just in conclusion, I want to briefly refer back to the provisions that are in Supplementary Order Paper 120, in the name of Denise Roche, dealing with clause 18. I listened very carefully to the Minister’s explanation of why the prohibition on commission-based payments had been made. This is another attempt—your consideration earlier on is exactly right—but I think the Minister is, unusually for him, dancing on the head of a pin. He is certainly saying that this is not the way it is necessarily going to go because the regulations have not been promulgated. Sometimes when a politician says “Trust me.”, you would laugh. I do actually trust that what the Minister says when he makes a contribution in the Chamber is what he believes and what is true, but I do not think that this is a small issue. I want to have more confidence. Even though I do have that trust in him that it has not been made yet, it does not mean that it is not going to be made. And the fact that that is now an available option remains the biggest consideration of the Government Administration Committee, which heard it, and, I think, of Parliament as a whole, and certainly of the overwhelming number of submitters.

I think that Part 2, minor though it may seem in terms of the policy issues that it contains, leads us to the need for much bigger policy debate.

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

Su’a WILLIAM SIO (Labour—Māngere): I am happy to take a call on Part 2, “Miscellaneous matters”. It is very brief, and, therefore, I will try to keep my comments brief as well. I do want to refer immediately to clause 17. As I understand it, the Gambling Commission follows the judicial line when it comes to the appeals process. What I am noting is that before any person can apply for a judicial review, they have actually got to exercise their right to appeal.

The question I would ask the Minister of Internal Affairs is to do with the fact that I thought the purpose of this particular section was to ensure that the appeals process was done efficiently. Therefore, there is an expectation that the appeals be conducted quite quickly. The way I read it, a person could not seek a judicial review in the immediate sense unless they conducted the appeal and it reached an end. Therefore, it seems like in this particular process we have actually prolonged the whole appeals process, and if a decision has been made about cancelling or suspending or revoking a licence, how long will this process take before a final decision is made?

The reason why I ask that question, Minister, is that, as many in the Chamber will be aware, there are many sports organisations that may be dependent on the funding that comes from that particular pokie machine. To not be specific about the length of time that it will take in order for appeals to take place, particularly where a licence has been suspended, actually leaves those sports organisations in a bit of limbo. That is the first question.

The second thing I would say about the appeals process is that what is not there, which I think the Minister ought to be concerned about, is the fact that the community and local government have, over successive years, taken a keen interest in this particular industry, particularly where gambling-licensed pokie machines are concerned. What is not there is where local government can play a role or communities can play a role in the instance where a licence has been granted. What happens if local government or the local board has a policy where it is saying that it has a sinking-lid policy? Does it then have a right under this political process to appeal a decision by the Gambling Commission in order to maintain that sinking-lid policy, despite the fact that a person might be applying for an extension of that particular licence?

I know that the Minister would be very well aware that many communities, and particularly impoverished communities, have become reliant on pokie-machine gambling, in fact, as a natural part of them attempting to just make ends meet. There are organised communities, including church organisations, that would want to have the right to have a say in decisions that have been made by the Gambling Commission, and, in particular, with the granting of particular licences in certain aspects of our community. Again, that seems to be missing from clause 17. If the Minister has any intention of including the rights of local government and local boards—the rights of communities to be part of the appeals process—then it should also be in clause 20 in terms of the new schedule there. Again, because it is missing in clause 17, it appears to be missing in clause 20.

But, ultimately, if this bill is about being open and being transparent, then there is nothing in here about how the Gambling Commission intends to minimise the harm that pokie machines bring to the local communities. Some years back when I was on local government, on that famous Manukau City Council before it was rudely destroyed by this Government, the council undertook to do a review of the impact of pokie machines on that particular city. After the council had conducted the review in 2004, it found that after taking all the money that came in and disbursing the money to the sports organisations, what it ended up with was a deficit of $100 million in that community.

So I would have thought that ultimately the fundamental legislation was about reducing harm. Ultimately, this bill here is about being open and being transparent, and yet it fails to highlight how these procedures would enable the community to have a say, would enable local government to have a say, and would also enable the community to see how these processes are going to ensure the reduction of harm to the local community.

But I want to emphasise that I think if the Government is quite serious about being open and transparent in how it conducts this particular industry, then what is missing in Part 2, clause 17, is where community organisations and local board organisations can intervene and have a say on the Gambling Commission’s decisions where licences have been granted, and yet the communities may have wanted that particular licence to be no longer established, or where the community has a policy, or the local board may have had a policy, a sinking-lid policy, pertaining to that community. I am genuinely asking the Minister whether he would entertain making an amendment that can ensure that local boards and communities can have an input in terms of the appeals process in clause 17 and also in clause 20.

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

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

Ayes 75

New Zealand National 59; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 45

New Zealand Labour 31; Green Party 14.

Motion agreed to.

The question was put that the amendment set out on Supplementary Order Paper 98 in the name of the Hon Peter Dunne to clause 18 be agreed to.

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

Ayes 104

New Zealand National 59; New Zealand Labour 31; New Zealand First 12; ACT New Zealand 1; United Future 1.

Noes 16

Green Party 14; Māori Party 2.

Amendment agreed to.

The question was put that the amendment set out on Supplementary Order Paper 95 in the name of Clayton Mitchell to clause 18 be agreed to.

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

Ayes 12

New Zealand First 12.

Noes 108

New Zealand National 59; New Zealand Labour 31; Green Party 14; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 120 in the name of Denise Roche to clause 18 be agreed to.

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

Ayes 45

New Zealand Labour 31; Green Party 14.

Noes 75

New Zealand National 59; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

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

Ayes 92

New Zealand National 59; New Zealand Labour 31; ACT New Zealand 1; United Future 1.

Noes 28

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

Part 2 as amended agreed to.

Schedule

The question was put that the amendment set out on Supplementary Order Paper 120 in the name of Denise Roche to the schedule be agreed to.

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

Ayes 47

New Zealand Labour 31; Green Party 14; Māori Party 2.

Noes 73

New Zealand National 59; New Zealand First 12; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

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

Ayes 92

New Zealand National 59; New Zealand Labour 31; ACT New Zealand 1; United Future 1.

Noes 28

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

Schedule agreed to.

Progress to be reported presently.

House resumed.

The Chairperson reported the Taxation (Land Information and Offshore Persons Information) Bill with amendment, and that the Committee had divided it into two bills, progress on the Gambling Amendment Bill (No 3), and no progress on the Radio New Zealand Amendment Bill and the Organised Crime and Anti-corruption Legislation Bill.

Report adopted.

The House adjourned at 9.57 p.m.