Tuesday, 15 September 2015

TUESDAY, 15 SEPTEMBER 2015

TUESDAY, 15 SEPTEMBER 2015

Mr Speaker took the Chair at 2 p.m.

Prayers.

Speaker’s Rulings

Oral Questions—Conduct

Mr SPEAKER: On Thursday last week I undertook to review the recording of proceedings in relation to interjections made during question time. The level of interjection during question time on Thursday was unacceptable. My office and the Clerk’s Office received numerous complaints from members of the public about the level of interjection and the difficulty they had in hearing answers to questions. This particularly applies to those members who sit near me—those to my immediate left and right—because my microphone is live at all times and picks up interjections from those members.

The debating chamber is a place of robust political exchange. Interjections are permitted during question time, as long as they are reasonable and not disorderly in themselves—Speaker’s ruling 187/6. Loud, ongoing interjections make it very difficult for members of this House, let alone the public, to hear proceedings. I intend to take a tougher approach to disorderly interjections, which may mean constant offenders will be asked to leave the Chamber.

With regard to question No. 11 last Thursday, the level of interjection was unacceptable, and I acknowledge that I should have moved to give more assistance to a relatively new member. However, the level of interjection was heightened by attempts to table documents that it seems were readily available to members. It is the responsibility of the member seeking to table a document to ascertain whether it is freely available, and I warn all members that the risk of misleading the House in this way is serious.

There have been complaints from some members about the length of replies to questions. I remind all members of the requirement to ask short, relevant supplementary questions without including excessive opinion. Replies must also be concise—Standing Order 386(2)—which means not only short in terms of the number of words used but also no longer than need be in order to answer the question adequately, as per Speaker’s ruling 196/5. Replies will, generally, be longer than the questions that they are answering. I will be the sole adjudicator of how long a question is to be answered for, and that will be greatly affected by any level of interjection. If there are interjections, then a Minister will certainly be given more latitude in responding to those.

Finally, all members need to take care when they do interject. Unparliamentary reflections on any member of this House are not acceptable and will be dealt with severely.

CHRIS HIPKINS (Senior Whip—Labour): I raise a point of order, Mr Speaker. There are just a few things out of your ruling that I would like to ask for clarification on, and that is, first of all, around the tabling of documents, where you have indicated that the onus is on the member to ascertain whether a document is publicly available before it can be tabled. I just want to get some reassurance from you that a best endeavours approach is the right way to go, because it is not always possible for members to search every available website to see whether something is available. If they have received it under the Official Information Act, for example, it may or may not be publicly available, and a best endeavours approach should, I think, be taken to that.

The second is around interjections. I think that there is a challenge here in the ruling that you have made. One is that often long, lengthy answers or provocative answers will actually elicit disorder amongst members of the House. And if you are indicating that disorder stemming from that therefore gives Ministers licence to go on even further or to be even more provocative in their answers, then I think that that is actually going to lead to more disorder in the House, not less.

Hon GERRY BROWNLEE (Leader of the House): Also on the day in question there was a very audible derogatory comment from a member directed at yourself, Mr Speaker, so I presume that you have considered the tapes—listened to the tapes—and will be aware of that comment. Is it your intention to leave the matter with the warning that you have given the House today or should it be taken somewhat further? I realise that if there was a privilege case to be brought, it should have been brought as soon as possible, but given the severity and the ridiculous nature of the comment—two almost contradictory things—it was decided, certainly on our side, to leave your consideration to the undertaking you had given to the House last week.

Mr SPEAKER: I first address the points raised by Chris Hipkins. With regard to tabling, the point that I am making in that ruling is that I will be asking the member who seeks to table whether they have done some work to ascertain public availability. There will be occasions when an answer is given that, to the best of their knowledge, it is not publicly available. That will be perfectly acceptable.

With regard to the point about ongoing provocative answers, if the member had listened, I said quite clearly that I will be the sole adjudicator as to the length of answers, but I am equally saying to Ministers answering questions that once the question is answered, that is sufficient. To go on and then add provocative words is unhelpful, it leads to disorder, and I will be dealing with that more severely than in the past.

With regard to the point raised by the Hon Gerry Brownlee, I looked at the transcript of Hansard. I then watched the proceedings as available via Parliament TV. I could hear no interjection at all delivered by any member, so if it was, it was not available for me to adjudicate. If there was an unparliamentary remark, on this occasion I think that that member may well get off very, very lightly. If it is an interjection that occurs in the back half of the House, it is often heard by members who sit in the back half of the House. It may not necessarily be picked up by Hansard. It may not be picked up by me in the position that I sit. But if the members study that ruling carefully, the final paragraph said that there had been, on occasions, some very unparliamentary comments hurled across at various members. That will cease, or I suspect that members who persistently do that risk being named in this House.

Oral Questions

Questions to Ministers

Housing New Zealand—Dividend and Performance

1. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: What did he mean by his statement, “we want Housing New Zealand to be doing the best job it can”?

Rt Hon JOHN KEY (Prime Minister): I meant that we want Housing New Zealand to be doing the best job it can. I went on to say that Housing New Zealand “will continue to be by far the biggest provider of social housing in New Zealand. But the experience of countries like Australia and the United Kingdom is that having non-government organisations involved in social housing, alongside the Government, is a better way of doing things.” That is why the Government is trying to get community housing providers involved in running social housing and not leaving it all up to Housing New Zealand.

Andrew Little: Does it help Housing New Zealand to do the best it can when he is already taking $118 million out of Housing New Zealand, and is he planning on taking any more out this financial year?

Rt Hon JOHN KEY: If the member is talking about the dividends that are paid, then under the Crown Entities Act all surpluses have to be returned to the Government. That is the law. We have never requested more than that. That has been in the order of, in recent times, about $100 million off an asset base of $20 billion. Last year alone we spent $398 million on maintenance and upgrades—40 percent more than the highest year under Labour.

Andrew Little: In light of that answer, why does Housing New Zealand’s statement of performance expectations show the Government taking another $336 million out in this financial year than capital contributions to the Crown?

Rt Hon JOHN KEY: The member would need to direct that to the Minister responsible for HNZC.

Andrew Little: Given that Housing New Zealand is reducing its planned maintenance due to budget constraints, why is he taking a total of $454 million out of Housing New Zealand this year?

Rt Hon JOHN KEY: I do not believe that Housing New Zealand has budget constraints.

Andrew Little: Why does he continue to use Housing New Zealand as a cash cow, while refusing to fix homes that are killing New Zealand children?

Rt Hon JOHN KEY: It is a very interesting cash cow—one that you give more cash to than you take off.

Andrew Little: Is not this the truth: his Government is asset stripping Housing New Zealand to the tune of $454 million, while Kiwi children are dying in cold, damp State houses?

Rt Hon JOHN KEY: That is far from being the truth. The reality is that under this Government we have tidied up the abysmal state that we found Housing New Zealand in. I know that members over there are looking down. They are hanging their heads in shame at how little they did. We have spent $30 million on providing heating in about 10,000 properties. We have installed thermal curtains in 18,000 homes since February 2013. We have retrofitted insulation to 53,400 homes. We have spent more on maintenance, 40 percent more, than the absolute highest point ever under Labour.

Andrew Little: If State housing is a priority for him and his Government, why are there over 3,000 families on the waiting list; children dying in cold, damp homes; and a shortage of State houses?

Rt Hon JOHN KEY: That is the very point about why the Government is expanding income-related rents, not just to Housing New Zealand homes. Actually, the social housing sector can provide stock that can be used to help those people in need.

Hon Trevor Mallard: If Housing New Zealand is going so well, why did one of my constituents have to ring Housing New Zealand seven times over a period of 6 months after their contractor left a hole in the ceiling and the roof, so that all the hot air was leaving, her children got sick—

Mr SPEAKER: Order! The member will resume his seat. The question has been asked. It does not need to be that long.

Rt Hon JOHN KEY: The member knows that he needs to direct those specific questions to the Minister. I do not have that information; I am not responsible for that. But what I can say is that any issues that might be there under Housing New Zealand now are far fewer than they were when that member was a Minister in Government.

Economy—Resilience

2. Dr PARMJEET PARMAR (National) to the Minister of Finance: How is the Government’s programme of economic reform supporting the resilience of the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): It is certainly not to declare a crisis and panic when dairy prices fall. The Government’s approach is to support the resilience of the economy through responsible fiscal management, a floating exchange rate, sustained investment in infrastructure and education, and supporting diversification and investment in research and development through the Business Growth Agenda. As a result of this programme, we are seeing higher household savings, more moderate borrowing growth, a smaller current account deficit, and improvement in New Zealand’s net liabilities offshore, all of which improve the resilience of this economy to external shocks.

Dr Parmjeet Parmar: How does our economic resilience compare internationally?

Hon BILL ENGLISH: It compares pretty well, provided we stick to the policy that delivers the following four factors: a broadly balanced Government budget, net debt less than 40 percent of GDP, economic growth greater than 1.5 percent, and interest rates high enough to reduce them. New Zealand meets all of these criteria, and only four other OECD countries do. So by this measure we have a pretty resilient economy compared with most developed countries.

Dr Parmjeet Parmar: What recent report has he received showing growth in the New Zealand economy, despite recent falls in dairy prices?

Hon BILL ENGLISH: Reports show continued expansion of manufacturing and services, which together make up three-quarters of the New Zealand economy. The BNZ-Business New Zealand Performance of Manufacturing Index showed the sector expanded in August, the 35th straight month of expansion since the Labour Party called the manufacturing crisis. The BNZ-Business New Zealand Performance of Services Index showed that services, which make up two-thirds of the economy, are growing at their fastest rate in over a year. So these are positive indications that, outside of the dairy sector, the economy is growing moderately.

Chris Hipkins: I raise a point of order, Mr Speaker. I want to draw your attention to Speaker’s ruling 197/5, which you have also referred to in the past, about Ministers not bringing a political party into an answer where they have not been involved in the questioning. You indicated at the beginning of question time today that you intend to set a higher bar for questions and for answers, and so I want to get some reassurance from you that you are also going to be enforcing that Speaker’s ruling, because repeatedly throughout his answers today the Minister of Finance has been referring to policies of the Labour Party—and, we could argue, misleadingly—and if that is going to be the nature of the debate, then I think your higher standards are going to be difficult to enforce.

Mr SPEAKER: I certainly had not picked up any drawing in—I may have missed it, but I had not realised that the Minister was continually bringing in an Opposition party through those answers. I thought the answers were reasonable, but I will certainly keep a more vigilant watch in the future.

Dr Parmjeet Parmar: What options does the Government have to support the economy, should economic growth end up being lower than expected?

Hon BILL ENGLISH: The Government continually updates its plans, depending on changing circumstances. In the past, we have increased spending and supported New Zealand families through the global financial crisis and the Christchurch earthquakes, and then tightened our belts when times were better to get back into a position where we could deal with further shocks to the economy. At the moment, growth is around 2 to 2.5 percent, and we do not believe the kinds of measures we pursued after the global financial crisis are currently warranted. But, of course, if significant global risks eventuate, then we may have to consider them.

Overseas Investment—Silver Fern Farms

3. FLETCHER TABUTEAU (NZ First) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Fletcher Tabuteau: Why did his Government reject an invitation from Silver Fern Farms within the past year to discuss potential investment?

Rt Hon JOHN KEY: I do not have any details of where that invitation was sent. The member needs to direct the question to the Minister who received it.

Fletcher Tabuteau: Can he not see the irony of taxpayers forking out $145 million to the Chinese-led Asian Infrastructure Investment Bank while a Chinese State-owned enterprise seeks control of our largest beef exporter and our second-largest export industry?

Rt Hon JOHN KEY: New Zealand has made a capital contribution to the Asian Infrastructure Investment Bank, like we do to the World Bank and others—it is on call—and, actually, it can be used for projects around the region that New Zealand companies may well be involved in. [Interruption]

Mr SPEAKER: That is the sort of interjection I was talking about earlier. If the member on my right-hand side wants to be going early, I can assist.

Richard Prosser: What material difference in circumstances supports his statement “it’s not really a matter for the Government” in relation to taxpayer support for Silver Fern Farms, as opposed to his Government’s corporate welfare given to overseas-owned MediaWorks, which received a $49.8 million taxpayer loan, which, the Minister Amy Adams said, “took the financial pressure”—

Mr SPEAKER: Again, that question is too long. The member needs to refine it. The Prime Minister can answer.

Rt Hon JOHN KEY: Firstly, Silver Fern Farms is not asking the Government for money. It is in the process of looking to, obviously, raise more capital, and one of the interested parties clearly has been a Chinese entity. In relation to MediaWorks, I happen to remember that some time ago that was done to a range of entities. It was to allow them during the global financial crisis, for all of those licence holders, to basically pay, over time, their licences at above commercial rates, and the Government actually made money on the deal.

Richard Prosser: What material difference in circumstances supports his statement “it’s not really a matter for the Government” in relation to taxpayers’ support for Silver Fern Farms, as opposed to what some commentators have described as his Government’s treasonous $12 million bribe to a Saudi billionaire to support a farm we do not even own?

Rt Hon JOHN KEY: In the first instance, as I said earlier, when it comes to Silver Fern Farms, it is not asking the Government for money. When it comes to the agribusiness hub in Saudi Arabia, we see that as an opportunity, actually, to potentially strengthen and further opportunities for New Zealand companies in the very big market of the Middle East.

Fletcher Tabuteau: I seek leave to table a written answer received only today confirming that Mr English declined an invitation from Silver Fern—

Mr SPEAKER: Order! Can I just clarify that when the member says he has received it today, is the member saying it has not yet been published?

Fletcher Tabuteau: That is correct.

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

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

Unemployment—Reserve Bank Forecasts

4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he agree with the forecast of the Reserve Bank that unemployment will rise to 6.1 percent by March next year; if so what new action, if any, will he take to avoid this happening?

Hon BILL ENGLISH (Minister of Finance): The Reserve Bank is independent. It is not a matter of whether I agree or disagree with its forecasts; those are its forecasts. By way of example of the Government’s action to improve employment, today we released an update of the export markets work stream of the Business Growth Agenda, the latest step in a programme of reform designed to support businesses to invest another dollar and hire another person and to back that up with confidence in the stability and credibility of the Government’s leadership on the economy. The effects of this have been to see 69,000 more jobs in the last year and the average wage now $10,000 higher than in 2008.

Grant Robertson: Does he still stand by his statement in the Budget that unemployment will fall below 5 percent in 2016?

Hon BILL ENGLISH: That now looks unlikely because the economy is a bit softer since then, mainly because of the substantial drop in the terms of trade, so it would not make sense to stand by forecasts that were made in different circumstances.

Grant Robertson: In light of that answer, then, is it acceptable to him that there are now 13,000 more people unemployed than in September last year, when he was re-elected?

Hon BILL ENGLISH: Of course it is undesirable—there is no doubt about that. The Government, starting 4 years ago on welfare reform and following through to the investment approach we are now applying, has probably a more sophisticated approach to the non-working population and Government support for it than any previous New Zealand Government. The member could do well to study that policy, because it is a worthwhile one for the Labour Party to adopt.

Grant Robertson: Is he comfortable that under the Reserve Bank scenario more than 150,000 people will be unemployed, and is this not a sign that he should adopt some new policies to deal with this?

Hon BILL ENGLISH: Of course we are uncomfortable with people being unemployed. It happens that New Zealand, of all developed countries, has one of the highest proportions of its working-age population available for work and in work. So we have proven to have very good job-producing capacity, but, of course, we do not think that that is enough. That is why, for instance, we are refreshing the Business Growth Agenda, which is an ongoing iterative process with the business community to build its confidence in investing in new jobs.

Grant Robertson: So is the summary of his answers today that he has no new plans to do anything to see unemployment get down to levels that he promised New Zealanders they would have?

Hon BILL ENGLISH: No, and I think the member would agree that that is a fairly lazy summary. In fact, some new plans have been issued today by the Minister for Economic Development, on top of any number of others issued in just the last couple of months.

Business Growth Agenda—Export Markets

5. JAMI-LEE ROSS (National—Botany) to the Minister for Economic Development: How is the Government helping New Zealand businesses to grow their exports?

Hon STEVEN JOYCE (Minister for Economic Development): This morning my colleagues Murray McCully, Tim Groser, and I launched the updated export markets work stream of the Business Growth Agenda. The report lays out an ambitious trade development programme over the next year, to strengthen existing relationships in China and the EU while also making the most of significant opportunities in South-east Asia and Latin America. As part of our trade strategy, we will be working closely with industry to develop a longer-term policy for other key and growing markets. The updated export markets work stream sets out an ambitious programme for further growth, not just in the economy generally but also in investment and, importantly, in jobs.

Jami-Lee Ross: What is the Government doing to strengthen our relationships with South-east Asia, China, the EU, and Latin America?

Hon STEVEN JOYCE: As part of the 40th anniversary of the ASEAN - New Zealand relationship, we are working hard on a new strengthened framework with South-east Asian nations to mark this milestone event and further raise our exports in this growing part of the world. In China we are working on an upgrade to our free-trade agreement. We are pursuing the launch of a free-trade agreement with the European Union, while also continuing negotiations on the multilateral Trans-Pacific Partnership and the ASEAN Regional Comprehensive Economic Partnership agreements. In Latin America we are developing a new partnership with the Pacific alliance countries, a trade bloc that consists of Mexico, Peru, Colombia, and Chile. As part of that commitment, Minister McCully announced that next year we will be opening a new embassy in Bogotá, the capital of Colombia, to grow our presence in South America and serve as a base for New Zealand Trade and Enterprise and Education New Zealand in that region.

Jami-Lee Ross: What other measures are contained in the updated report to help grow New Zealand’s exports?

Hon STEVEN JOYCE: The export markets update contains a total of 23 new projects. Alongside the ambitious trade strategy I have already mentioned, the report sets out the importance of maximising the benefits to exporters of existing trade agreements, like the new Korean free-trade agreement; developing the world’s most efficient and cost-effective border management system to support trade and people flows; to grow New Zealand Trade and Enterprise’s portfolio of companies; to grow international education and tourism further; and to develop and grow our international marketing brand. These are all designed to increase economic activity and job growth in the New Zealand economy.

Prime Minister—Collaboration with Other Parties on Climate Change Policy and Flag Referendums

6. JAMES SHAW (Co-Leader—Green) to the Prime Minister: Does he stand by his statement made yesterday on the flag referendum that “I’ve been very strongly of the view I think it’s in New Zealand’s interests to change, and I, you know, I hope the political parties can see past the petty politics of that”?

Rt Hon JOHN KEY (Prime Minister): Yes, and can I commend the member on such a stylish tie.

James Shaw: Would he also say that it is in New Zealand’s interests to see past the petty politics that are preventing cross-party consensus on climate change?

Rt Hon JOHN KEY: The Government is always happy to have discussions about climate change but—

Andrew Little: Do you like his tie now? How’s the tie looking now?

Rt Hon JOHN KEY: Thank you. My wife bought it for me, and I quite like it too.

Mr SPEAKER: Order!

Rt Hon JOHN KEY: The Government is always happy to have discussions about climate change but we have over the years developed policies that we believe are in the right interests of New Zealand. We are going off to the 21st conference of the parties in Paris with those settings. But, you know, in reality, even if we had a discussion with the Green Party, we would never reach anywhere near its level of ambition because that is at the very outer edge of what I think most people would find acceptable.

James Shaw: What is his response to Treasury advice from October last year that calls for greater policy certainty around climate change and says: “Probably the most significant [step] would be to secure a greater degree of political party consensus about climate targets and ETS settings.”?

Rt Hon JOHN KEY: I do not recall that specific bit of Treasury advice but I would just caution the member about having Treasury as his poster child, because let me assure you that Treasury’s advice to the Government, as I best recall, was to have a far less aggressive target than the one the Government actually set. It pointed out that the per capita cost to New Zealand was significantly greater than other countries, and from memory, at one point I think it was at least suggesting that New Zealand’s target should not be a reduction but should be an increase of the 1990 rate.

Hon Simon Bridges: Treasury poster boy.

James Shaw: I think he does a disservice to Treasury.

Mr SPEAKER: Order! I know that it was a response to an interjection on my right. It would be helpful if the member would now just ask his question.

James Shaw: I seek leave to table an Official Information Act request from Treasury received by my office yesterday with official advice on important decisions on climate change.

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

James Shaw: Would he agree with Waikato University management school’s 2013 business survey which found that “Lack of Government leadership has seen companies stop measuring their carbon footprint or put their carbon strategies on hold.”, and is it not now time for this Parliament to show this climate leadership?

Rt Hon JOHN KEY: No.

James Shaw: Why has the Government chosen to act unilaterally when it comes to setting climate change policy targets, rather than build a cross-party consensus like David Cameron’s Conservative Government in the United Kingdom?

Rt Hon JOHN KEY: I have not looked at the process that David Cameron has gone through in the UK, but in terms of the Government’s position, as the member will accept, there are a wide range of implications as a result of the climate change target that is set. We believe we have set that in broadly the right place. We are going off to Paris, and we will see what happens as a result of those negotiations.

James Shaw: If, as the Treasury advice says, the business community itself has called for political party consensus, why does he insist on playing petty politics with climate change?

Rt Hon JOHN KEY: Firstly, I am not sure that they have, and, secondly, I think the member confuses a consensus in consultation with agreement. I can assure you that if the member wants to see the Treasury advice, I am sure that somewhere along the line it can be dragged out of the files, but the Treasury advice, as I best recall it, was to do significantly less than the proposal that the Government is taking to Paris.

James Shaw: Why does he believe that it is important to get cross-party support for changing the flag but it is unnecessary for climate change? Where is the statesman in you, Mr Key, when it comes to the climate?

Rt Hon JOHN KEY: Well, look, here is an old-fashioned thing: we went to the election with a set of policies and, as the Government, we carry them out. We are just calling out political parties that went to the Government with the same policy and now cannot work out what they want to do other than play petty politics.

Andrew Little: Supplementary question, Mr Speaker. [Interruption]

Mr SPEAKER: Order! Mr Brownlee’s memory might be shorter than mine.

Andrew Little: Will he accept my offer, made publicly, to meet to discuss ways in which he and I and the rest of this Parliament can restore public confidence in the flag referendum process in order to achieve a result that he wants and that many New Zealanders would also like to see?

Rt Hon JOHN KEY: I am more than happy to meet with the member, but the point I would be making publicly is the same point I would make to him now, and that is that I am not going to agree to a yes or no referendum—this Parliament voted that down. But most important, actually, is there are now, I think, a couple of million New Zealand voters who are quite interested in this process and are interested in potentially weighing up the options. But if they want to decide that they want to change the flag, they ultimately need to know, firstly, what they are going to and, secondly, in reality, we accepted the best advice we could get from the officials, which was that unless you have a contender against the current New Zealand flag, you are very unlikely to get 50 percent or more of the people involved. The whole way through, actually, we have gone through a consultative process. If the member wants to do that, we are more than happy to have the discussion.

Prime Minister—Flag Referendums and Military Deployment to Iraq

7. RON MARK (Deputy Leader—NZ First) to the Prime Minister: Does he stand by all his statements?

Rt Hon JOHN KEY (Prime Minister): Yes.

Ron Mark: Does he stand by his statement yesterday: “There was a process and that Red Peak, like all the other flags, went through that process. I’m not the head of the committee.”; if so, why is he now considering a fifth design?

Rt Hon JOHN KEY: In answer to the first part of the question, the answer is yes. In answer to the last part of the question, in an act of conciliation, and the like, I have tried to say to the Labour Party that if it wants to actually honour its election pledge, and actually go out there and back a fair and even process—in other words, man up to the words that it went—

Mr SPEAKER: Order! The question has been answered.

Ron Mark: What has persuaded him to corrupt the process that his Government passed into legislation in this House?

Rt Hon JOHN KEY: Absolutely nothing. But I am known as a person who is reasonable and fair, and if the Labour Party wants to come around and have a nice cup of tea and talk about how there could be a fifth flag on the ballot paper, and then run a fair, reasonable process—because its members privately go out, I am sure, and tell people, that they want a change of flag—then I am happy to do it.

Ron Mark: Does he consider the Red Peak design his saviour for his failed flag change project?

Rt Hon JOHN KEY: I think the process that we are going through of considering whether the New Zealand flag should change is actually a good one. I think it is an issue about national identity and national pride and about whether we as a young, multicultural country at the bottom of the world want to demonstrate to the world that we can have a new, iconic flag that represents who we are. You know, I understand that some political parties take a different view on these matters.

Ron Mark: On a different statement, does he stand by the statement he made in the House when he announced the deployment of troops to Iraq that “The deployment will be reviewed after 9 months and will be for a maximum 2-year period.”; if so, can he tell the House why, after less than 5 months, he is now considering deploying an extra platoon of infantry to Iraq?

Mr SPEAKER: Either of those two supplementary questions, the right honourable Prime Minister.

Rt Hon JOHN KEY: I have no knowledge of that at all. We made a commitment that we would have around about 150 people, or slightly fewer than that, in Iraq, and, as I understand it, that number is going to be consistently maintained.

Regional Economies—South Island

8. Dr DAVID CLARK (Labour—Dunedin North) to the Minister for Economic Development: What concerns, if any, does he have about the state of the South Island economy, given the ANZ Regional Trends report shows that it shrank by 0.8 percent in the June quarter?

Hon STEVEN JOYCE (Minister for Economic Development): The ANZ report does not, in fact, measure economic growth, but ANZ’s own composite mix of confidence measures and a selected range of other indicators. Therefore, the ANZ report cannot determine either positive or negative growth. Secondly, it is important that even in the measure of ANZ that particular quarter was a negative one, but prior to that it has been very strong. Most interestingly, he highlights the South Island economy, when by most measures the South Island economy has been seen to be very strong. For example, unemployment at the end of the June quarter in the South Island economy was just 3.9 percent. So I do not have the sorts of concerns that Mr Clark is suggesting I have, but, of course, we are always continuing to work and improve in all regional economies.

Dr David Clark: Will the South Island enter recession in the September quarter? [Interruption]

Mr SPEAKER: Order! I did not catch that. I will ask the member to start again, and could I ask for less interjection from my right-hand side.

Dr David Clark: Will the South Island enter recession in the September quarter?

Hon STEVEN JOYCE: The measure that the member uses for the June quarter is not an economic growth measure, so, by definition, if he is using that series it cannot help him determine either growth or a recession. But I would note that the South Island economy has been particularly strong. For example, in the BNZ-BusinessNZ Performance of Manufacturing Index, out just last week—

Dr David Clark: Point of order.

Hon STEVEN JOYCE: —the Canterbury region, which includes Nelson, Marlborough, and the West Coast—

Mr SPEAKER: Order! I apologise to the Minister; I have a point of order.

Dr David Clark: I raise a point of order, Mr Speaker. It was an incredibly straight question—I do not think they come much straighter than that—and the Minister has not addressed it and is—

Mr SPEAKER: Order! The member needs to be a bit more familiar with Speakers’ rulings. He is hoping for a yes or no answer to his question—

Dr David Clark: Or an “I don’t know”.

Mr SPEAKER: Or “I do not know”. He has got no right to demand those three options. I think the Minister was making a genuine attempt to give an answer, and if the Minister wishes to continue he can.

Hon STEVEN JOYCE: In the performance of manufacturing index for August, for example, which is in the September quarter, the wider Canterbury region was at 54.6 and the Otago-Southland region was at 64.6. So that and the employment figures and a number of other indicators suggest that no, the South Island is not entering a recession.

Dr David Clark: Is it correct that there has been a 22 percent—[Interruption]

Mr SPEAKER: Order! That interchange between both front benches is exactly what I am talking about. I made a fairly definitive ruling. If it needs to be reinforced I can do so by asking members to leave the Chamber. I hope it does not get to that.

Chris Hipkins: Point of order.

Mr SPEAKER: Point of order, Dr—Chris Hipkins.

Chris Hipkins: I raise a point of order, Mr Speaker. Not quite yet, Mr Speaker—maybe one day. The issue that I wanted to raise with you is where Ministers begin answers basically saying they do not have the information or they perhaps cannot give a full answer to the question, and then say “But what I can say is”—or words to that effect—and go on to address a whole lot of other issues, or pick off a relevant topic but not one that actually addresses the question.

Mr SPEAKER: Order! The point of order?

Chris Hipkins: And so therefore the point of order is, consistent with your earlier ruling today, that I am sure you would rule those to be out of order in the way that you have been much stricter on questions, as well.

Hon Gerry Brownlee: Speaking to the point of order—

Mr SPEAKER: No, I do not need any assistance on this one. If the member had listened, or goes back and reviews Hansard, as I would suggest, the question was: will the South Island enter a recession? It was interrupted by the questioner himself, but if the member would go back and listen, particularly to the latter part of the answer, the Minister said he did not think the South Island would enter a recession. He cannot be more direct than that in answering a question. I think the member should be actually congratulating the Minister on this occasion.

Dr David Clark: Is it correct that there has been a 22 percent increase in South Island unemployment in the past year?

Hon STEVEN JOYCE: I do not have the member’s numbers to hand, but I can tell him that as at the end of June this year unemployment in the South Island was 3.9 percent, which is low unemployment by anybody’s reckoning right across the OECD.

Dr David Clark: Is it correct that employment in Canterbury fell by 5,000 people in the last quarter alone?

Hon STEVEN JOYCE: Again, I do not have that figure to hand but I can tell the member that Canterbury unemployment is the lowest in the country, at 3.3 percent in June of this year. If the member is looking for a challenge I suggest he look somewhere else.

Dr David Clark: Apart from being a family member of a senior Earthquake Commission executive, how are young people in the South Island meant to find jobs when unemployment is rising and the economy is slipping into recession?

Hon STEVEN JOYCE: Ignoring the first part of the question, unemployment in the South Island is 3.9 percent. In Canterbury it is 3.3 percent. Those are some of the lowest numbers on record. The member may try to seek a crisis out of those numbers but, actually, he truly needs to go away and think up a new target. Mind you, if he wants to declare a crisis, I am sure the economy will roar away—

Mr SPEAKER: Order! I have heard enough.

Beneficiaries—Support for Higher Education

9. STUART SMITH (National—Kaikōura) to the Minister for Social Development: What is the Government doing to support sole parents off benefits and into study?

Hon ANNE TOLLEY (Minister for Social Development): In July we aligned the accommodation supplement and the accommodation benefit. This means that sole parents who take up full-time study are now eligible to receive the same rate of accommodation support that they would on a main benefit. I am pleased to report that 598 applications have been approved in just the first 2 months and the majority of these students are now receiving between $60 and $225 per week, depending on their circumstances. Previously the maximum they could receive under the student support system was $60 a week.

Stuart Smith: What are the benefits of tertiary education for people on benefits?

Hon ANNE TOLLEY: Each year we see approximately 20,000 clients exit a benefit to take up full-time study. Research shows that those completing level 4 qualifications or above were between 9 and 19 percent more likely to get work within 5 years of starting their study. Beneficiaries who completed levels 1 to 3 qualifications were 5 percent more likely to be employed within that same period. We also know that, on average, beneficiaries with a tertiary qualification spend 6½ years fewer on a benefit. This Government is focused on providing a range of options to improve the employment prospects of young people in New Zealand.

Mt Eden Corrections Facility—Serco’s Performance and Financial Penalties

10. DAVID CLENDON (Green) to the Minister of Corrections: How many Specific Deductions were issued to SERCO, and then withdrawn, since SERCO took over management of Mt Eden Corrections Facility; and what is the amount of each of those withdrawals?

Hon Peseta SAM LOTU-IIGA (Minister of Corrections): Since Serco took over the management of Mt Eden Corrections Facility in 2011, I am advised that Corrections has issued a total of 55 performance notices to Serco. Seven have been withdrawn, and the total amount of the withdrawals is $275,000.

David Clendon: Does the Minister approve of Corrections’ decision to excuse the $100,000 fine that was imposed when Serco failed to take back razors that had been issued to inmates; if so, why?

Hon Peseta SAM LOTU-IIGA: That is not part of the fines that were actually withdrawn as part of the seven that I referred to in the primary answer.

David Clendon: I seek leave to table a reply to an Official Information Act request from Corrections, which shows a specific deduction to the tune of $100,000, withdrawn in the 2014-15 year around the issue of safety razors.

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

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

David Clendon: Given that at least 14 performance notices were issued in the 2014-15 year alone, why have none of these doubled as a final notice so that the contract with Serco can be terminated?

Hon Peseta SAM LOTU-IIGA: Those notices that have been issued are still subject to a reply. It would be imprudent at this point to issue any of those types of final notices while there is due process required in those circumstances.

David Clendon: Does the Minister still have confidence in Serco?

Hon Peseta SAM LOTU-IIGA: My confidence in Serco, as I have already said in this House, is dependent on the review that is currently taking place by the chief inspectorate into the incidents at Mt Eden prison.

Earthquake Commission—Foundation Repairs

11. Dr MEGAN WOODS (Labour—Wigram) to the Minister responsible for the Earthquake Commission: Can he confirm that, based on the MBIE survey findings, EQC expects to remediate one-third of homes with “jack and pack” repairs in Canterbury; if so, what will the costs to EQC be?

Hon GERRY BROWNLEE (Minister responsible for the Earthquake Commission): No. Of the 69,000 homes in the repair programme, 3,600 had repairs completed that required specialist technical input, and 2,100 of these have now been identified as having the “jack and pack” repair method applied to them. Clearly, not all of these will be problematic, but all of them are being checked. Until these checks are made, a definitive number cannot be known, although the Earthquake Commission in some communications has taken, or made, a generous estimate. These repairs fall under Schedule 1 of the Building Act and do not require consents. The cost of further remediation is estimated at between $500 and $1,000 per property, but this will not, in most cases, come at a cost to the Crown.

Dr Megan Woods: Has he met with representatives from the building industry to discuss potential liability issues for those repairs?

Hon GERRY BROWNLEE: The liability for those repairs, as has been stated by the managing director of Fletcher Residential will fall, in the first instance, on the contractors who failed to do those repairs properly. So the $500 it might cost them to fix it or the up to $1,000 it may cost them to do the work properly, as they have already been paid for it, will be on them.

Dr Megan Woods: I raise a point of order, Mr Speaker. My question was has the Minister met—

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

Dr Megan Woods: Thank you. Has he met with representatives from the building industry to discuss potential liability issues for those repairs?

Hon GERRY BROWNLEE: I have most certainly met with Fletchers, which runs the programme. That is the appropriate level of engagement. What I have been assured of by both Fletchers and the Ministry of Business, Innovation and Employment is that these are at the lesser concerning end of any scale, and that where there is a failure of some kind it is expected that the repair would be somewhere between $500 and $1,000, and that will fall on the contractor who has failed to meet the standard in the first instance.

Dr Megan Woods: What deadline, if any, has he set for the completion of the reassessment and repair of those homes?

Hon GERRY BROWNLEE: The process—I think it is worth knowing—for the assessment of those 2,100 properties is that they will have some form of below-floor inspection and then a programme will be put together for the individual repair of those houses. I do not think it particularly useful to put an artificial date out there for when they could be completed. Deadlines, I have found in most things relating to the Canterbury earthquake recovery, have not worked well for the people who do want to ensure that they get a good job.

Dr Megan Woods: In light of foundation specialist Bevan Craig’s statement that this is the very diluted tip of a very big iceberg, is he concerned that a thousand more homeowners may be living in homes with other shoddy repair work?

Hon GERRY BROWNLEE: No, and I think it would be—

Denis O’Rourke: Should be.

Hon GERRY BROWNLEE: No, and I think it would be—well, some people live in two homes, of course, even though they are attached. [Interruption]

Mr SPEAKER: Wind it up.

Hon GERRY BROWNLEE: Well, you should not judge a house by its mailboxes—that is the thing. No, and I think it is inappropriate for the member to conflate two different types of damage that might have occurred to the house. So the issue that we are talking about, and I think she is talking about, is subfloor “jack and pack” as a method. I do not believe that the concerns that some are expressing are around foundation repairs.

Dr Megan Woods: When 30 percent of repairs are defective in one review, Cantabrians are increasingly expressing concern about the wider Earthquake Commission repair programme, and the allegations of nepotism at the Earthquake Commission are rife, what will it take for him to start taking this seriously and launch an independent inquiry?

Hon GERRY BROWNLEE: I have taken the issue of repairing houses in Canterbury seriously since 7 September, when we had the first meeting about those issues. There have been a large number of houses that are damaged. Many of them are over-cap, but 69,000 fall under the $100,000 repair cap set by the Earthquake Commission. I do not believe that the excitement that some want to generate about a small amount of failure to meet a compliance that might cost between $500 and $1,000 to fix if found to be defective is a reason for an inquiry of the nature that the member seeks.

Electricity Market—Smart Grid Forum

12. SIMON O’CONNOR (National—Tāmaki) to the Minister of Energy and Resources: What recent reports has he received on smart electricity grid development in New Zealand?

Hon SIMON BRIDGES (Minister of Energy and Resources): I recently received the first year-end report from the Smart Grid Forum, which was established last year by the Government to help to understand and advance smart meter electricity development in New Zealand. It is a forum that brings together academics, industry, consumers, and officials. It found that the Government’s market-led approach relying on consumers and customers within a competitive market provides the necessary focus as well as the agility to help exploit smart grid technologies. The forum did recommend measures to help consumers understand and compare new technologies, and also a way to monitor and report on the risks of transitioning to a smarter grid. I will be looking at ways to implement those recommendations.

Simon O’Connor: What will be the focus of the Smart Grid Forum’s future work?

Hon SIMON BRIDGES: I have asked the forum to continue its work, and I have sought its views on two issues in particular: first, how New Zealand is progressing relative to other countries, and what might be done to accelerate developments, and, second, how smart grid developments might help to meet our emissions reduction targets. I want to thank the forum for its work to date, and I look forward to continuing working with it. There is no doubt that in the future our electricity system will look very different from how it looks today. New technologies are already giving consumers greater choice. We need to ensure that we capture the benefits of technological advantages in New Zealand.

Bills

International Finance Agreements Amendment Bill

First Reading

Hon BILL ENGLISH (Minister of Finance): I move, That the International Finance Agreements Amendment Bill be now read a first time. I nominate the Foreign Affairs, Defence and Trade Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 22 October 2015 and that the committee have authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday during a week when there has been a sitting of the House, despite Standing Orders 191 and 194(1)(b) and (c).

This is the piece of legislation that enables the Government of New Zealand to become a member of the Asian Infrastructure Investment Bank and to implement our obligations under the articles of the agreement of the Asian Infrastructure Investment Bank. Just as a little bit of history to this legislation, last year the Chinese Government floated the idea of an Asian infrastructure bank. At the time, there was, I have to say, some scepticism about whether there was the room for such a bank, the need for it, and whether it would be structured in a way that meant that there could be multilateral participation in that bank.

The New Zealand Government already has shareholdings in the World Bank and its various manifestations, and the Asian Development Bank. New Zealand took something of a brave step early on, partly with the encouragement and assistance of Singapore, to be the first developed country that put up its hand to engage developing countries and that put up its hand to engage in discussion with the Chinese Government about the possibility of the Asian Infrastructure Investment Bank being a true multilateral institution because, like many others, we anticipated that it would be fairly similar to the other Chinese banking operations that are completely controlled by the Chinese Government. As it happened—principally with New Zealand’s effort, but also with that of others—the discussions with the Chinese Government progressed very positively and much more rapidly than we might have anticipated. It turned out that this initiative, taken personally by President Xi Jinping—it came to be seen that this initiative was intended by the Chinese Government to be a modern, multilateral institution. So that is how it has turned out.

I want to acknowledge the role of the New Zealand officials, particularly the role of the former Secretary to the Treasury, John Whitehead, in negotiating an outcome—unexpected, I think, by the broader community of developed countries and developing countries that took an interest in the structure of the bank. Since New Zealand put up its hand to engage in those discussions, many other developed countries have joined. A number of them commented to me at the signing ceremony in Beijing that the fact that New Zealand had participated early and was happy with the arrangements was a positive signal to them that it was the type of institution that they could support.

The Chinese Government, with its focus on getting things done, has set out a timetable, as have the negotiators of the articles of the bank, more correctly. This bill is part of meeting that timetable. Why have we been interested? Because our future lies in the Asian region. In the context of a lot of discussion about uncertainty over whether the Chinese economy continues to grow at the rates to which we are accustomed, it is important that we broaden our interests across South-east Asia—as this Government has—and build up our relationships and understandings in other well-populated markets where growth rates are significant: Indonesia, the Philippines, and Viet Nam. One has to visit those countries only briefly to see the demand and the need for very significant investment in infrastructure.

This kind of multilateral institution allows a range of countries to participate, but I suspect it will also lead to the setting of both asset standards and financial standards that ensure quality infrastructure investment in those economies. Every bit of that infrastructure will be of benefit, in the long run, to the New Zealand economy. A well-functioning Indonesian economy will, in 10 or 20 years, be a powerhouse of growth. There is no doubt about that. It is the same for the Philippines, the same for Viet Nam, and the same for other countries such as Thailand, Malaysia, and so on.

Those kinds of considerations were reflected in the international treaty examination of both the bank and its articles of agreement, which was handled by the Foreign Affairs, Defence and Trade Committee. I want to thank that committee and the officials, but particularly the committee, for taking quite seriously their opportunity to scrutinise this. There was an opinion that I was looking forward to seeing, and it was a constructive, forward-looking opinion.

The purposes of the bill are to amend the International Finance Agreements Act to enable us to participate. Through our involvement in the negotiations we have seen the founding documents of the Asia Infrastructure Investment Bank that promote and uphold the principles of broad and open membership, strong and efficient governance mechanisms, and a firm commitment to sustainability, to environmental and social safeguards, and to transparency and openness. I am pleased to say that these are the kinds of standards that we take for granted somewhat in New Zealand, and it is important to see them embedded in this institution.

The bill gives certain articles of the agreement the force of law in New Zealand. Clause 7 provides for various privileges and immunities, including from legal proceedings, for the Asia Infrastructure Investment Bank, its assets and archives, and its officials. This is consistent with the immunity afforded to the staff of other international financial institutions, in accordance with the International Finance Agreements Act. Founding members of the Asia Infrastructure Investment Bank have been requested, if possible, to complete ratification by the end of the year. This will allow entry into force of the articles and the start of the bank’s operations by that time.

That is another reason why I think we have got broad agreement to expedite this piece of legislation. Multilateral institutions are often known for the slowness with which they move. We have issues with the Asian Development Bank, whose procurement processes mean that our aid projects across the Pacific are held up because they apply the same standards to small Pacific aid projects as they would apply to a multibillion-dollar investment in a large South-east Asian economy. This particular multilateral institution has been formed quickly. It is moving from concept to operation remarkably quickly, by any international standard.

If this is the way that we can do business with other countries, not just China but the other 49 or 50 members, then it is a great example of not only how we can contribute, but a great example of a higher degree of global cooperation on some of these issues than I have seen in other examples of multilateral institutions.

It is intended that the bill be brought into force when New Zealand becomes a member of the Asian Infrastructure Investment Bank. Two things must happen before that. First, New Zealand must have ratified the Articles of Agreement of the Infrastructure Bank. Second, they must have been entered into force—that is, approved by at least 10 signatories whose initial capital subscriptions comprise no less than 50 percent. We will be a very small proportion of that 50 percent capital, but we can contribute by getting the job done. Again, I want to thank the Foreign Affairs, Defence and Trade Committee and the officials for their work, and I commend this bill to the House.

GRANT ROBERTSON (Labour—Wellington Central): I rise on behalf of the Labour Party to indicate our support for the first reading of this bill. When announcements were made earlier in the year that the Government was, firstly, signing up as a foundation member and then, secondly, to contribute money, we supported that on the grounds that, essentially, this bank is going to happen, it is going to be established, it is going to become a very important player in our region, and it is something that, as New Zealand looks to expand opportunities for our involvement and our development with the wider Asian region, we should be a part of.

It was quite clear in the Minister of Finance’s speech that he has just given that he expressed some of the surprise that others did at the pace at which developments have occurred with the establishment of the Asian Infrastructure Investment Bank. I want to say that that is the small note of caution that I would like to sound. I think when the select committee has some time to go through the bill, one of the things we would want it to do is to look closely at those governance arrangements and the way in which safeguards have been included within the establishment of the bank because of that particular reason—the pace—but also because this is unchartered territory for an initiative led by the Chinese Government.

The Minister himself used the language very early on, when this was being debated, that some commentators had seen this as some kind of expanded Chinese State-owned enterprise. He was reflecting the concerns of countries that that is what we were facing up to. It is quite clear in the development since that time that that concern has significantly reduced, but it is vitally important that the governance arrangements that are built around this bank have the level of transparency and the level of accountability that we would expect from a multilateral institution like this. I have got confidence in the likes of John Whitehead and others to have involved us in an agreement only if they felt that that was possible. But that is the job of the select committee—to ensure that we have those safeguards in place and that we are confident about the governance issues.

What I can say, in terms of what this will mean for the coherence of infrastructure development across the Asia region, is that this can only be positive. I think anyone who has spent time in the Asia-Pacific region and who has seen the more ad hoc style of infrastructure development that can take place can see how that can cause some problems if a large country—and it often is China, but it can be other countries—finds its way into the Asia-Pacific region and supports a particular one-off project. That is not always the most effective or efficient way of ensuring that that infrastructure dollar is well spent.

When we look at what lies behind the Asian Infrastructure Investment Bank, we can see that it is indeed an attempt to create a very coherent form of infrastructure development right through those Asian nations that the Minister mentioned in his speech. So I think that will be an extremely positive development out of the establishment of the bank, if we can get that kind of coherence into what is, clearly, a rapidly growing region, but one where there are significant infrastructure gaps.

The World Bank and the Asian Development Bank have, certainly in the initial stages of this idea being floated, been very critical of the idea that a separate mechanism was required. Anyone who has spent any time in the Asia region will hear from Governments there their criticisms of the World Bank and the IMF and that they do not believe that they are sufficiently focused or have sufficient knowledge of the Asian region to be able to give the leadership in infrastructure development that a bank focused on and based inside the Asian region would be able to do.

The World Bank has said that a further trillion dollars annually is needed to support economic growth in the region. That is a massive sum of money to be able to find. So the arrival of a domestically or a regionally located bank like this will, clearly, be an important element in getting towards reaching some of those growth goals.

New Zealand already benefits from expanding growth across the Asian region; it is vital to our future success, and the development of infrastructure is equally vital in that context as well. We believe New Zealand does need a seat at the table when these kinds of initiatives begin, and we do believe that the bank is likely to become a very influential institution across the Asian continent. By being there now, we are best placed to exert some influence over the direction, work, and governance of the bank.

It is important to note that New Zealand’s contribution over the next 5 years will be a fairly modest $126 million, with a possible further commitment of $504 million of callable capital. This is a large investment in terms of just raw dollar figures, but across the many billions of dollars required in the region it is quite small. We do think that there are significant benefits in terms of increased economic development in the Asian region, in supporting that economic integration, as I mentioned before, and in augmenting New Zealand’s other relationships that it has in the Asian region. We are not as represented as we could be in some of the places where the bank will be doing its work.

This offers a way in for New Zealand being a part of the development of those countries. Particularly, we think it will, if done well, improve the operational standards and the safeguards around infrastructure development by having a more coherent process. Clearly, it builds on our very good and strong relationship with China. Some commentators have likened this to being the fifth first, with New Zealand there. Anyone who has been to China will have been part of a speech talking about the four firsts—Mr Goff has certainly given plenty of those. He was there for most of them. But New Zealand has always been at the forefront of recognising China as a market economy, of supporting its involvement in multilateral institutions like the World Trade Organization, beginning negotiations for a free-trade agreement, and then, eventually, being the first country to settle a free-trade agreement with China. They were the four firsts. Some people see New Zealand’s early involvement with the bank as a fifth first. That can only be positive for developing our relationships in China.

We do support this legislation, but I do want to note the very odd way in which the Government has chosen to finance its contribution into the fund. It has done that through the Future Investment Fund. The Future Investment Fund is a well-used mechanism by the Government when it wants to find some money. It was, as people will recall, the fund that was to be created by the sale of State assets. Around $4 billion ended up in it. I will not go into how the fund did not end up being what it was going to be, but $4 billion ended up in it.

We have sat in this House year after year and seen Government Ministers stand up and tell us that things will be funded out of the Future Investment Fund. It was not surprising, when we came to the Budget this year, to discover that the Future Investment Fund is now oversubscribed. So with all the commitments that the Government has made for the things that it originally said the Future Investment Fund would be used for—education and health specifically, and building that infrastructure here in New Zealand—there is still outstanding hundreds of millions of dollars that have not yet been spent. Yet the Government seems to be able to find the room, in this case, to find $125 million to go and spend on the bank.

By all means be part of this, but that is not what the Future Investment Fund was meant to be for. The Future Investment Fund was quite clearly designed to be spent on things like education, building schools, and building hospitals here in New Zealand. It was always an illusion. It was an accounting trick by the Government, and it has the gall to come to this House and say: “Here we are; we’re going to fund New Zealand’s contribution to this very worthy initiative by raiding the Future Investment Fund, which we’ve already overspent.” It is not without irony for people who are sitting in the regions of New Zealand and wanting an infrastructure boost, and wanting to see some roads developed, perhaps for the forestry sector on the East Coast, or maybe for the Ōpōtiki wharf. They are saying: “Wouldn’t it be good to get some of the Future Investment Fund into our infrastructure.” We can understand that people would see it as somewhat ironic to be using that fund.

It is a track record that the Government should not be proud of. It managed to spend $6 million fixing the roof of the Beehive. That was, apparently, worthy of the Future Investment Fund. It spent $8 million on the census. That also came from the Future Investment Fund. This is not the health and education infrastructure that New Zealanders were promised would come out of the Future Investment Fund. So I think it is pretty disingenuous of the Government to claim that it can keep on raiding that fund, which is already overcommitted, when it has not been able to follow through on the education and health funding that was meant to occur.

So we now see the Government being about $364 million short of the spending on schools it promised under the Future Investment Fund, and about $316 million short on health funding. The Government has failed to find the funding that was needed for that, yet it still tries to pretend that this is where the funding will come from for this particular initiative. So we would be interested in looking into that as we go through this in the select committee process, just to see exactly where this funding is coming from, because, quite frankly, I do not believe it.

Mr Deputy Speaker, I just want to finish—because I know you will sit me down in a moment—on the slightly odd motion that the Minister moved, at the start of his speech, on having a truncated select committee process. I certainly appreciate the need to get this done by the end of the year, but we would be asking why the Government is so disorganised that it has to keep coming to the House with such motions.

Dr SHANE RETI (National—Whangarei): It is a pleasure to rise and speak to the International Finance Agreements Amendment Bill, which in itself speaks to the Asian Infrastructure Investment Bank. The purpose of this bank is to address the gap in infrastructure investment in the Asian region and to promote regional collaborations and partnerships. I would note that the Minister of Foreign Affairs has described Asia as important to New Zealand’s future and that Asia is driving global growth. Indeed, if we look at a 2009 report from the Asian Development Bank, it has estimated that infrastructure financing in Asia may be as much as $8 trillion dollars during the decade 2010 to 2020.

I think it is useful just to talk briefly to the definition of Asia as it is described in this agreement. That definition is the United Nations classification of Asia and Oceania, which in itself encompasses North Asia, South-east Asia, South Asia, Central Asia, parts of the Middle East, Australasia, and the Pacific, and I think it is useful to bear that breadth in mind.

The committee officials noted three particular benefits to New Zealand’s involvement in this bank. The first reason is economic, obviously noting that Asia’s growth is limited by its infrastructure, and if it benefits, then indirectly we benefit. Of course, New Zealand firms may directly compete for proposed infrastructure projects that may well be of direct benefit also.

The second point noted by officials was strategic connectivity, and it was noted that our international relationships benefit from this agreement as well, as it supports Asian networks. It has already been noted that China particularly has appreciated our early relationship with the bank.

The third comment was about our ability to influence and shape as a founder member. We were the 24th country to join negotiators, and, as has been commented on, the first Western developed country. We can look and see what New Zealand’s influence has been, as one of these founding members, across a range of domains. If we look at governance, New Zealand has supported a non-resident board of directors and adopted many of the frameworks and models from the World Bank. Our negotiators supported open, transparent, merit-based appointments. That is a good thing.

Further, we looked at safeguards. We were looking to ensure social and environmental safeguards, and I note that New Zealand had “sustainable” added before the “economic development” phrase in the purpose section, therefore reading, in continuity, “sustainable economic development”. Of course, as part of best practice and other safeguards, it is noted that proposed investments and proposed projects will also be open procurement and best value for money. The fourth influence from New Zealand is in the collaboration of global and regional institutions and promoting best practice.

We have some obligations under this agreement. Our obligations are to provide the agreed paid-in capital and callable capital and accept voting decisions—and voting decisions where membership may be suspended if we do not fulfil our obligations. We are to impose no capital constraints, nominate the Reserve Bank as a depository, and our liability is limited to the shareholding.

I would like to just briefly talk about our equity contribution, which is $125 million paid-up and $500 million on-call capital. We asked about the security of that equity. What we were told was that we have already received a disproportionate benefit for what is effectively a 0.6 percent shareholding. We were also told there is a very small probability of the on-call funds actually being called up. We asked about the security of the $125 million that we have paid, and we were told this was very secure—secure on the basis of preferred creditor status, a favourable risk rating, and the fact that there is a high proportion of paid-up capital to callable capital in this particular arrangement, which at 20 percent actually exceeds the World Bank. The logistics of entry into force—10 States comprising 50 percent of the bought-up capital—have already been commented on as well.

I note that one of our partners alluded to the progress of this agreement and the fact that China is a dominant shareholder. I would note that it is not unusual to have a significant anchor shareholder. The World Bank, the Asian Development Bank, and the European Bank for Reconstruction and Development also have this. I would like to acknowledge the committee members and officials for this fine piece of work. I commend this bill to the House.

Hon DAVID PARKER (Labour): I rise to take a call in respect of the legislation to give effect to New Zealand’s participation in the Asian Infrastructure Investment Bank, which it does by way of amending the International Finance Agreements Act to make provision for this new international development bank to sit alongside some of the other banks that New Zealand participates in, including the likes of the IMF and the World Bank.

I begin by thanking the Chinese Government and the people of China whose resources lie behind this bank. Without their contribution this would not be happening. I know that there was some initial opposition to the formation of this bank from the United States, and from some other countries that perhaps were a little threatened by the rise of China and did not want to see it being given recognition by the creation of this Asian Infrastructure Investment Bank, which is so clearly tied to its fortunes and to its rise in the world. I thank the National Government for its steps to bring this to fruition, because I think that it has made the right call, that we should be involved, and we should be celebrating this as a good thing in the world rather than seeing it as a bad thing.

I think that in addition to the trade benefits, which have been emphasised by other members, I would emphasise some of the non-economic or indirect economic benefits that will flow from this. I want people to be lifted out of poverty. I think that we are a better world if people can have decent standards of living in their own countries and the secure civil settings that that brings about. If we are going to avoid conflagrations where we have civil wars and the movement of millions of people—refugees—caused by war and lack of economic prospect in their home country, then we actually need to lift the people in poorer countries so that their circumstance at home is better. That is a good thing to do for them, and it is actually a good thing for us to do, not just economically. I do not want to emphasise so much the economic benefits for us; I want us to do this because it is the right thing to do for the world, and I think it is. I think of the history of the World Bank and the IMF, both of which have made mistakes over time—but overall these have been institutions that have made the world a better place than it would otherwise be.

I agree with the previous speaker, Dr Reti, that it is good that New Zealand has been influential in this from the start, and that we have tried to imbue some of our standards as to what we think will make the world a better place by, as Dr Reti has said, trying to get environmental impacts of new infrastructure developments to be taken into account. There was a period, I think, when international organisations funded infrastructure improvements without much regard to the environmental consequence—when taking those environmental consequences into account has a better long-term outcome.

The other thing I want to talk about is that I think it is very important that this Asian Infrastructure Investment Bank stands against corruption from the start. I have some hope in that regard from the fact that the Chinese Government itself is pushing against some of the corrupt practices that it has discovered in its own country and that it dislikes. I would hope that the systems that the Asian Infrastructure Investment Bank implements from its first day push against corruption in these developing countries, against the private profiteering by politicians out of large infrastructure projects, against kickbacks, and against improper practice in its contracts. And if they do, then the Asian Infrastructure Investment Bank will not just have the benefit in respect of the individual project; it will actually be lifting the standards of conduct in these developing countries, to their benefit and, again, to our wider benefit, because they will be better countries as a consequence and we will live in a better world.

In terms of the small percentage that we make to the capital, the same thing has to be said here as was said in recent amendments, I think it was last year or the year before, to the IMF rules under the international finance agreements legislation that we have in New Zealand—that is that New Zealand’s contribution to these organisations keeps dropping as a percentage because we are not growing as fast as other parts of the world. That is due, in part, to developing countries catching up, but in part it is because our record of economic development and growth in this country is not as good as it should be. We are funding, through this new bank, infrastructure projects that will lift economic performance in other countries, and that is a good thing, but it has to be noted that in respect of New Zealand’s economic performance our exports are dropping.

Perhaps we should pay some more attention to the recommendations of other international bodies like the OECD and the IMF, which have given instruction to New Zealand as to how we could improve our economy and lift exports. Instead, exports are going backwards as a percentage of our economy. They have dropped from 30 percent to 28 percent of GDP in the last 7 years, and they are still dropping. The Government’s ambition was to lift them from 30 percent to 40 percent of GDP.

I want to turn to an issue that Grant Robertson raised, which was the funding of this out of the Future Investment Fund. Has not this fund turned into being the pot into which you dip in order to fund everything? We had the list that Grant Robertson started—listing the census and the Beehive roof. I went back and looked at some of the other things that they said they are going to do. Bill English initially said that they were going to pay down debt from the fund. Well, how did that go? Well, actually, debt under this Government has gone up by $60 billion, despite having inherited zero net debt from the outgoing Labour Government, which had also reduced gross debt from 40 percent to 18 percent of GDP. This Government has increased both measures by about $60 billion. It was going to fund schools and hospitals—that was what John Key said. That was going to be the main reason for this fund.

Well, what has it done since? Nathan Guy said it was going to fund irrigation projects out of it—a terrible thing to do anyway because it is effectively a transfer of wealth from taxpayers to landowners. But, putting that aside, it was going to do it out of the Future Investment Fund. Gerry Brownlee said it was going to rebuild Christchurch. Gerry Brownlee also said it was going to fund Auckland transport projects out of it. Then Mr Joyce wanted to get in the news and so he said they would fund some of the recapitalisation of KiwiRail out of it. Then Bill English wanted to recapitalise Kiwibank. Guess where that came from? The same Future Investment Fund. Then Chris Finlayson wanted to be involved in the Wellington war memorial—that was the part that he propped up. Then Tony Ryall, as the then Minister for State Owned Enterprises, shot some money into Solid Energy, or said he was going to, from that fund.

This really has been a grab bag of things, and the Future Investment Fund has not been used to add to the productivity of New Zealand. As a consequence, of course, of the sell down of those State-owned enterprises, taxpayers have lost control of what, I think, are pretty important assets over time. They have also forgone the dividends and the future profits from those companies in a way that is always going to be to the long-term cost to taxpayers because, of course, the return on those sorts of investments always exceeds the Crown cost of capital and, therefore, it would never have made sense from a point of view of the deficit, and it was not necessary in terms of the Government’s balance sheet.

Returning to the objectives of the Asian Infrastructure Investment Bank, can I thank the Finance and Expenditure Committee for its report on the treaty, which has led to this legislation. Lastly, in terms of process, if there is to be a motion to put this to the Finance and Expenditure Committee for a truncated process, I do not understand why. Just let the committee do it as quickly as it can and report it back, and trust the committee to do its business wisely and quickly. Do not create an artificially short process that will require us to vote against that part of the process.

DAVID BENNETT (National—Hamilton East): When it comes to the International Finance Agreements Amendment Bill I just want to take a short call. This bill is in regard to the establishment of the Asian Infrastructure Investment Bank, which is basically an equivalent of the World Bank and the Asian Development Bank. It is led predominantly from the Chinese economy rather than through the Asian Development Bank, which is led by the Japanese economy, and the World Bank, led by the US.

When we look at this proposal, members have spoken about the hard work that officials undertook in negotiating it. I would like to congratulate those officials as well. I know that earlier in the year at a conference they were especially well-thought-of as being leaders in the negotiation with the Chinese and the Singaporeans to deliver the structure of this bank that has enabled many other countries in North America, Europe, and through Asia to feel comfortable to be involved in it, and I think those officials need to be well thanked.

It is good to see the Labour Party will be supporting this bill as well, so that is good to hear. We know that the New Zealand First Party will not be supporting it. If it is consistent in its arguments, then it should stand up in this House today and withdraw funding from the World Bank and withdraw funding from the Asian Development Bank, which are both banks that essentially do the same thing. In fact, this bank will actually be delivering finance to our region and to the South Pacific, which is actually more important than probably the World Bank for us, and the Asian Development Bank has had issues in doing that. So I would like to see consistency from the New Zealand First Party rather than bigotry against certain countries because of race.

This is a good bill and is something that is needed. [Interruption] Do we hear there is something against that from the other side? Well I would like to hear your reason why you will not withdraw from the other ones. Thank you.

FLETCHER TABUTEAU (NZ First): I raise a point of order, Mr Speaker. I took offence. He called New Zealand First—he implied—I do not want to say the word again, it was so offensive.

Mr DEPUTY SPEAKER: I take the member’s point of order. The member who has just resumed his seat should be a little bit more discreet in respect of that, but making a comment about a party is different from making a comment about a particular person.

JULIE ANNE GENTER (Green): The Green Party will be supporting this bill at its first reading. The bill, of course, puts into effect the Government’s commitment to make a contribution to the Asian Infrastructure Investment Bank, which is an initiative of China, in particular, but it has 57 countries signed up to it to be a multilateral investment vehicle that will enable investment in core infrastructure and also in areas of potentially productive industries across Asia and the Pacific.

There is no question that investment in infrastructure across the world will be necessary to respond to both of the big global challenges that we are facing: that is, climate change and inequality. When it comes to climate change there is the potential for infrastructure to reduce pollution and also to help us to adapt to the climate change that is already locked in, like sea-level rise and increased frequency and severity of storms. It is really critical that we are investing in the right type of infrastructure to address these problems. It remains to be seen whether or not the Asian Infrastructure Investment Bank will be leading on that type of investment.

The Global Commission on the Economy and Climate put out a report earlier this year called The New Climate Economy. It had a specific focus on infrastructure. What the report says is: “2015 is a year of unprecedented opportunity. A goal once seen as distant—to end extreme poverty, achieve broad-based prosperity and secure a safe climate, all together—is increasingly within reach.” And that is exactly what the Green Party is interested in. We must respond to climate change. We must reduce greenhouse pollution—there is no debate about that. To that end, every piece of infrastructure that we are investing in needs to bring us closer to that goal.

What is increasingly being said by economists across the world is that there is no trade-off between reducing our greenhouse pollution and having an economy that works for people. There is not a big financial cost to reducing our emissions—in fact, there will be an enormous financial cost and consequences to not reducing greenhouse pollution—so that is why climate change in particular is a major priority for the Green Party. We have high hopes that the Asian Infrastructure Investment Bank will be investing in infrastructure that not only enables reliable access to electricity, clean water, sanitation facilities, transport, and urban development, but does all of this with an eye to reducing greenhouse pollution and achieving greater equality across the world, because ultimately that is going to be better for the economy.

There is a slight risk, right? This is because investment in all of these areas of infrastructure, whether it is electricity generation, transport, water, sanitation—all of that has the potential to reduce pollution and respond to climate change and reduce inequality, or it has the potential to make it worse. This is one of the points that was made by the Global Commission on the Economy and Climate. It said that “crucial investments will be made over the next 15 years in … land use and energy systems [and transport]. They have the potential to generate multiple benefits for economic growth, human development and the environment; or they could lock countries into high-carbon pathways …”. So it is really critical that this is a major priority for how we prioritise infrastructure investment.

Unfortunately, here in New Zealand the National Government is not using that as a lens for how we prioritise investment. In fact, it is prioritising a lot of investment in transport infrastructure, in particular, that is not only going to do nothing to reduce the cost of moving people and goods around New Zealand, it is actually going to make our greenhouse gas emissions from transport increase, rather than decrease. So that is a real lost opportunity here in New Zealand, but we hope that the development bank—because it will be independent and not constrained by the narrow political ideology of the National Party here in New Zealand—will be looking to seize the global opportunity to actually respond to climate change, reduce inequality, and have an economy that is going to serve people and the environment better.

There is some concern because, of course, there has been criticism of some of the policies of the World Bank and the IMF in the past. I think the basis of the criticism is that if the decisions are being made primarily by people with linkages to financial industries—like finance Ministers and central bank governors; if they are the only ones at the table—they end up pushing certain policies that do not represent the interests of everybody in the economy, especially workers. So that is the basis on which Joseph Stiglitz, for example, has criticised some of the policies of the World Bank, and has said that we need agencies that are dedicated to development. It is possible for those agencies to be making decisions that benefit everyone in the economy, but if we have only a narrow group of people making the decisions, it is very easy for those decisions to not reflect the interests of everyone in the economy but, in fact, to reflect the interests of their connection to people they know who are involved in the financial industries. These interests are often at odds with the real economy, as we have seen over the past 10 years.

But I am relieved to say that if you look at the Asian Infrastructure Investment Bank, it states up front that its modus operandi will be to be lean, clean, and green: lean, as in having small, efficient management—which could be good, but, again, we want to make sure that a broad group of people are involved in decision making; clean, as in having zero tolerance for corruption; and green, being an institution built on respect for the environment. So it is on that basis that the Green Party is very positive about this development and the possibilities for us to invest in infrastructure that is actually going to reduce pollution, make people’s lives better, and start to chip away at the increasing inequality that exists not only in this country but around the globe. There is a real opportunity there.

I note with interest—and I have to agree with—the comments from Grant Robertson and David Parker. We do have concerns about the speed with which the bank has been established—it has been unprecedentedly quick—and I think that is something that needs to be canvassed during the select committee process. Particularly, we have concerns about where the money that New Zealand is contributing is going to come from, because comments have been made that it is coming from the Future Investment Fund, which, of course, was the money set aside from the proceeds from the asset sales that National undertook last term. It is not clear that there actually is enough money in the Future Investment Fund to cover all the different promises that National has made.

We in the Green Party certainly did not agree with the asset sales. We do not believe that that was an intelligent economic policy for New Zealand. We do not believe that it has done anything to reduce our debt, which was one of the bizarre claims made by the Government at the time—that it was going to be reducing debt—and, of course, the promise that was made was that the proceeds would be invested in productive infrastructure for New Zealand, like schools and hospitals and rail. Of course, putting the money in something like the Asian Infrastructure Investment Bank is quite a different proposition from investing in infrastructure here in New Zealand. So it will be interesting to see where, in fact, the money is going to come from.

One final point is that $125 million is going to be going towards this bank over 5 years to capitalise it. Before the last election the Green Party put forward a policy of having a green investment bank for New Zealand, and, in fact, it was a very similar amount of money. It was $120 million over 3 years that we thought was needed to capitalise a green investment bank here in New Zealand that could then be run on commercial grounds and specialise in investment in clean technology and other infrastructure that is going to help us respond to climate change. We think that is a great policy. It makes a lot of sense. It is the sort of thing that one would think National would support. Of course, it has not shown any support for it thus far, but it is interesting that it is a similar amount of money for a similar purpose, albeit this purpose.

The Asian Infrastructure Investment Bank obviously has wider implications for our relationships with other countries, but there is a case for having a green investment bank here in New Zealand to help prioritise the projects that are going to help us have an economy that is going to respond to climate change and allow future generations to prosper well into the future. Thank you.

FLETCHER TABUTEAU (NZ First): I rise on behalf of New Zealand First to speak against the International Finance Agreements Amendment Bill, as it gives rise to the implementation and our membership of the Asian Infrastructure Investment Bank. I would just like to take the first part of my speech as an opportunity to reply to some statements from the Minister of Finance and Mr Bennett, in particular. They used the World Bank and the Asian Development Bank as examples of operations running well. Actually, what we are seeing here today and are debating today arises from the very fact that China has said for decades that the Asian Development Bank and the World Trade Organization do not operate well. They do not operate well, and, therefore, China has decided to not necessarily opt out but to create its own infrastructure bank, and the reasons for that are myriad and complicated. But it just goes to show that what is held up on that side of the House as examples of what is good, from the debate itself, from the issues arising from this very legislation, are actually bad examples.

The Minister spoke of how wonderful this will be and how it will encourage regional growth in our area. He specifically spoke of Indonesia, and then he listed off a few other countries in the region as being powerhouses of growth in about 20 to 25 years. I would put it to this House that that Minister, who is the Minister of Finance and who is in charge of this economy, should be speaking to this House about plans to make New Zealand the powerhouse of growth in the Asia-Pacific region. He should be talking about how the Government is developing plans to grow New Zealand, not relying on other countries, neighbours, reasonably close by. Instead, he goes on and talks about relying on others growing. Yes, Minister of Finance, your plan is working: sell off New Zealand, fund other countries’ growth, and let New Zealanders pick up the crumbs! It just makes no sense, whatsoever.

If New Zealanders were not already suffering, if our regions were not already missing out, if our exports were not actually declining, if real unemployment in New Zealand was not actually on the increase, and if money used to buy into this club was not, in fact, sourced from broken promises given by Prime Minister John Key, New Zealand First would actually welcome a discussion on China’s initiative. For example, one of the questions New Zealand First would ask is, what kind of aid does a—

Hon Member: A brilliant speech!

FLETCHER TABUTEAU: —developing Asia actually need—Mr Ross?

Members of this House will know that developing countries with weak institutions and poor governance are often far bigger obstacles to growth than an actual lack of funds. New Zealand First would point out that a project will often look good on paper; practical implementation, on the other hand, is often a frustrating and sobering experience. Costs provided to investment bank projects historically far exceed initial estimates, and planners bidding for funds often woefully underestimate the skills and funds needed to ensure maintenance and repairs of these big infrastructure projects. But there was no discussion. Actually, instead, the details of the Government’s participation in this investment fund came to the select committee after the fact. All decisions had been made in relation to our participation in the infrastructure bank itself.

New Zealand First stands to oppose this legislation. There are two significant reasons for this. Firstly, and perhaps most important, is the fact—as I mentioned very briefly—that the Prime Minister promised in his 2011 election campaign that the money from State asset sales would be for New Zealand hospitals and schools. Money from the assets sales went into the Future Investment Fund launched in 2011, but the Government is now using it to pay a $140 million contribution to pay an infrastructure investment bank off of New Zealand shores.

Alastair Scott: Oh, “offshore”. That’s a scary word: “offshore”.

FLETCHER TABUTEAU: Mr Key means to look New Zealanders in the eye—along with some of those National backbenchers—to look your constituents in the eye and talk to them about your broken promises and explain how he was unable to answer questions in the House, bizarrely insisting that this was an asset for New Zealand. This is so far from his election promise. [Interruption]

Mr DEPUTY SPEAKER: Order! Take a breath.

FLETCHER TABUTEAU: This is so far from his promise. Many who were opposed to the sales, including New Zealand First, were told that this fund would be spent on hospitals, schools, and infrastructure. We were told it would be spent on paying off this Government’s debt. We were told it would be spent on investing in Christchurch.

There will be hospitals, schools, and roads built, but not in New Zealand, and that is the reality of this investment. This Government has agreed to put $140 million up front into the investment bank. It has agreed to more than half a billion dollars being set aside to be on call. And, actually, as the New Zealand dollar devalues and because these discussions were had in United States dollars, our commitment actually grows and grows day by day. So we are talking perhaps around a $145 million commitment today, and perhaps the $561 million on call is over and beyond $600 million now. This is a vast sum of money that could be used to invest in New Zealand infrastructure—into cell towers, roads, schools, hospitals, or rail. We could set up provincial New Zealand for growth when the recovery kicks in. New Zealand First insists that infrastructure development, just like charity, actually should begin at home.

New Zealand First stands to oppose, as I said, on two main grounds. The second reason for this opposition arises from the actual history of infrastructure banks, as spoken to by both sides of the House. Infrastructure and development banks, as I mentioned to Mr English—for example, the Asian Development Bank and the World Trade Organization—are actual examples of China’s ongoing discontent with those banks. Here we are today—I say it again—debating this legislation because those infrastructure banks do not work for all of their members. I put it to this House that although New Zealand has been quick on the uptake and part of developing the rules and obligations of this bank, which I commend, the reality is that we are a small member with very few shares. Our commitment, although I contend it is huge as far as the New Zealand economy is concerned, is tiny in comparison with other countries’ contributions. So although we are acknowledged as an early starter and an early player in this, the reality is that we will not have the say that the members on the other side of the House have spoken to. We will be just as frustrated as China was in its own relationship with previous development banks as the future unfolds.

There are actually several issues with the legislation itself, but it looks like discussions around the House will have it that this will come to select committee despite New Zealand First’s opposition to this bill, and I will take the opportunity to raise opposition to particular parts—for example, article 56 of schedule 8—in those conversations. Thank you.

JAMI-LEE ROSS (National—Botany): This bill is good and this agreement is good for New Zealand because the future of New Zealand and its economy is in exporting more goods and being an open country: forward facing, looking towards other parts of the world where we can contribute and sell our goods. The Asian markets and the Asian countries are a big part of where New Zealand’s future opportunities lie. New Zealand’s participation in this agreement with this bank is also important, because having good infrastructure in Asian countries where they can grow and where they can develop and demand more of our goods is going to be good for New Zealand as well.

Many of the speeches in this House have already covered those points, and I do not want to dwell on them, but I do want to point out some of the aspects in the Foreign Affairs, Defence and Trade Committee’s report on the international treaty examination. There is some good stuff in that report. It talks about the fact that “We”—the committee—“consider that New Zealand’s early involvement in the bank provided a good opportunity to influence its direction”. It talks about the fact that being a founding member of the bank “also makes sense for geo-strategic, political, and economic reasons.” The report goes on to say that “New Zealand’s economic future is linked to the Asia region, and Asia’s growth is increasingly constrained by limited infrastructure investment capital.” These are very good points.

I do want to point out to the House that when the committee considered this treaty, the committee included one Fletcher Tabuteau. The committee included the New Zealand First Party. In this report there is not a single word of opposition to this treaty. At the committee meeting the New Zealand First Party and the New Zealand First member did not have a whisper, did not have a murmur, did not have a squeak of opposition to this bank. But New Zealand First members come into this House and they beat their chests day after day on issues on which in the select committee they sit there quietly like little lambs, supporting very much of what the Government is doing.

If Mr Tabuteau wants to be honest with the New Zealand public—he said we should go and be honest with—

Fletcher Tabuteau: I raise a point of order, Mr Speaker. I seek your guidance here. Mr Ross is completely misrepresenting the facts. I did speak out against this.

Mr DEPUTY SPEAKER: That is not a point of order. It is a matter for debate.

JAMI-LEE ROSS: The report speaks for itself. There is no minority report; there are no points about some members disagreeing with x, y, or z in the report. New Zealand First members are little lambs in select committees. In select committees they do not oppose what the Government is doing, but they come in here and beat their chests.

This is good for the country. This is good for New Zealand’s future growth and economic opportunity. That is why we are supporting it. I suggest New Zealand First members would be better off continuing with the position they take in select committees when they come into this House and contribute to debate.

Mr DEPUTY SPEAKER: A Green Party 5-minute call—Dr Russel Norman.

Dr RUSSEL NORMAN (Green): I rise on behalf of the Green Party to support this bill. I think what we are recognising with the Asian Infrastructure Investment Bank is that the global economic institutions are having to accommodate the growth of China. Of course, China’s initial gambit was actually to increase voting rights and reform voting rights in the International Monetary Fund, but that attempt to reform the International Monetary Fund and voting rights within the fund has been blocked by the US Congress. People may or may not know that in order to change the voting rights within the International Monetary Fund, you have to get an 85 percent vote from the fund, and, of course, the United States controls 16 percent of the votes on the International Monetary Fund board, so it can block any attempt to reform voting rights on the board. China, of course, has only about 3.8 percent of the vote in the IMF, and yet it currently represents more like 15 percent of global GDP.

So the old economic institutions—the Bretton Woods institutions that were set up after World War II—were an attempt to represent the global economy at the time and to provide global economic governance of a sort. They have done that, at times well and at times extremely poorly. But those economic institutions simply have to change to reflect the rise of China, and they have not. And, really, the US Government—in particular, Congress—has only itself to blame for the invention of the Asian Infrastructure Investment Bank.

What China said eventually—when it got completely frustrated by the lack of reform in the global economic infrastructure—is that, OK, it would set up its own. Of course the United States said that that was totally unacceptable and no one would join it. A number of countries have, of course, joined China, including Britain and New Zealand, and eventually a whole raft of countries signed up to the infrastructure bank, and that is what we are, effectively, doing here today. And I think that is a good thing. The reality is that the world has changed. China is now a huge part of the global economy, and the global economic institutions simply need to reflect that. So that is the first point I would like to make.

The second point is that I just hope that the Asian Infrastructure Investment Bank does a really good job. At various times the IMF and the World Bank have done a good job; at other times they have done a terrible job. During the 1997 Asian crisis, the intervention of the IMF and the World Bank at that point was disastrous, as Joseph Stiglitz went on to write about. He was the chief economist at the World Bank. So there have been times when the global economic institutions have played a positive role, and at times a very negative role.

The third point I would like to make about the Asian Infrastructure Investment Bank is that sustainability needs to be at the heart of the thing. The president-elect of the bank has said “lean, clean, and green”—his rhyming description of what he wants to do. The green stuff is really important now in Asia. I think people from outside do not realise how rapidly this has come to the centre of things. Obviously, a lot of it is about air quality. In those giant Chinese cities air quality has now become a big focus. But also the Chinese Government is getting its head around climate change in a big way, and of course it is the world’s leading producer of solar panels and is the leading installer of a lot of different kinds of renewable energy.

So the green part of it is tremendously important, and we need it in the infrastructure that is built over the next 20 years in East and South Asia, in particular, where there is a massive growth. If that infrastructure uses clean energy rather than coal and dirty energy, that will make a fundamental difference to the future of climate change on this planet. That really is going to be one of the deciding factors. Does India, for example, put in coal-fired power, or does India use sustainable energy? That will be one of the deciding factors in the future of planet Earth for us and our children. That is one of the key questions—and likewise all through South-east Asia and East Asia.

So if the Asian Infrastructure Investment Bank can play a positive role in pushing in a sustainable direction for those giant infrastructure projects that are going to determine the future of life on planet Earth, then that will be a very positive thing. We do not yet know the outcome of that, but the Green Party is very hopeful, given some of the early comments, that it will be sustainable and it will push infrastructure in a sustainable direction, and we very, very much hope that New Zealand uses its influence to push infrastructure in that direction. Of course, unfortunately, the current New Zealand Government obviously goes in the opposite direction, but at some point, hopefully, there will be some representatives on the board from New Zealand who push that bank to embrace sustainability more than it already does. Thank you.

Hon DAVID CUNLIFFE (Labour—New Lynn): I rise to take a short, 5-minute call in support of the Asian Infrastructure Investment Bank. I have got only 5 minutes so I will be very quick and clear about the reasons for that support and what is really going on here. I want to strip through some of the officialese that pervades the documents that we have in front of us. Supporting the comments of my colleague Dr Norman and congratulating him on his recent appointment to head Greenpeace New Zealand, can I agree that there is a major gap in the international financial institutions. The World Bank has been spending too little in the Asian region, the Asian Development Bank is worthy but of a smaller scale, and the International Monetary Fund historically has got itself fairly tangled up in driving what has historically been seen as a pro-austerity set of economic measures rather than bankrolling sustainable development. That is less so, it has to be said, under the current chair, Christine Lagarde, and we welcome the progress in the broadening of the IMF’s agenda, but there is a gap.

Secondly, this is about geopolitics. The US, the architect of the Bretton Woods institutions, which include the World Bank and the IMF, really did not respond to the changing geopolitics and China threatened to go it alone. New Zealand was the first Western country to sign up to join this initiative by the People’s Republic of China to get a new Asian investment vehicle up. We did so, as far as I can tell from the documents, for the very good reason that an integrated China is better than an isolated China and that together, provided that sufficient openness and transparency was included in the governance arrangements, we might make this a constructive contributor to the region rather than a divisive one.

This is interesting because in parallel with this are the Trans-Pacific Partnership negotiations sponsored by the United States. New Zealand was the first Western country to sign up to this Chinese initiative. You can imagine the pressure that will be on New Zealand to sign up to the Trans-Pacific Partnership and the offset arguments, which are the wrong reasons for signing. It may or may not be a deal worth having but that has got to be judged on its merits in terms of New Zealand’s national interests.

It brings me to the third point. I deplore the lack of specificity in the select committee papers produced by the Foreign Affairs, Defence and Trade Committee officials. There is no quantitative analysis as to the economic return to New Zealand for this investment, and it is not the first time that an international treaty has been proposed to this House with a matching capital investment, and qualitative rather than quantitative analysis has been provided. The Ministry of Foreign Affairs and Trade is capable, along with Treasury, of better than that and Parliament should, frankly, demand it. This is not an inconsiderable amount of New Zealand money.

Fourthly, the Future Investment Fund is the source of that capital. This is not only an overspent fantasy but an improper use of Future Investment Fund capital according to the objectives that the Prime Minister and the Minister of Finance set for that fund. In that regard I think that New Zealand First has a point—not actually to say that we should not support the Asian Infrastructure Investment Bank but to say that the Future Investment Fund is an inappropriate source of that capital. It has already been spent a thousand times over for every pet project of every Minister. It was the result of the fire sale of New Zealand assets, and its funds were to be protected for investment in New Zealand. That has been gainsaid.

Finally, let me say this. New Zealand officials have made a positive contribution to the governance arrangements and the agenda of the Asian Infrastructure Investment Bank, being one of the first Western countries to participate in those negotiations. They have upheld New Zealand’s tradition of constructive engagement. They have done so by ensuring the appointment processes are safeguarded in the articles of agreement, and that there are safeguards around effectiveness and procurement transparency, and collaboration with other global and regional institutions—all built into the articles, and for that I think that our diplomats deserve our thanks and congratulations.

Let me conclude by summing up. Firstly, there were and are grievous gaps opening up in the Bretton Woods system of international financial institutions. We ought to work closely with our American friends to ensure that those institutions are modernised and that those gaps are reduced. Secondly, New Zealand was the first Western country to sign up to this Chinese initiative. It is a good initiative but we ought to understand the geopolitics around that. Thirdly, this is being funded from an inappropriate source. It should be funded directly off the Crown balance sheet. Fourthly, we ought to thank our officials for their work.

Dr JIAN YANG (National): I rise to support our involvement in the Asian Infrastructure Investment Bank. When I was listening to the speech by the New Zealand First member I got the strong impression that everything Chinese is bad, everything Asian is bad—that is the impression.

The world has changed. China is the second-largest world economy, and many of the fast-growing economies in the world are in Asia. So this is the reality. Look at our trade with China. China is our second or first trading partner. In the 1970s our trade with Asia accounted for about 10 percent of all our trade but today over 40 percent of our trade is done with Asia, so that is how important Asia is to us.

It is clear that Asia needs that infrastructure. According to a 2009 Asian Development Bank report we need about US$8 trillion for Asian infrastructure, so that is why we need to help Asia. To help Asia is to help New Zealand, simply because Asia is so important to us. Our contribution is very small but symbolically it is very important, so I am very pleased—I am very pleased—that New Zealand is the very first OECD country to sign up to this China-led initiative.

It is good for us because, as many members have mentioned, we have many firsts in our relations with China, and this is another first. It is important for us to strengthen our relations with China and with Asia simply because we are so close to the region economically and also culturally and in terms of people-to-people relations. So I support the International Finance Agreements Amendment Bill wholeheartedly, and I think we are doing a good job for New Zealand. Thank you.

Dr DAVID CLARK (Labour—Dunedin North): We on this side of the House, from the Labour Party, have indicated that we will be supporting this bill. Markets are powerful institutions. They make excellent servants and terrifying masters. Of course, the open flow of capital has beneficial effects where countries benefit from trade, but it can also have detrimental effects when markets are exposed and when some countries struggle to compete where they have not found their comparative advantage and maximised that benefit. We need strong international institutions in order to encourage the kind of trade from which we will all benefit.

We are a global society and, increasingly, all of our futures are intertwined. This region is no different. When China sneezes, the US stock markets catch a cold, and so our future prosperity is dependent on our neighbours doing well and on us doing well also. That prosperity in our region has effects in terms of security, liberty, and peace. Prosperity itself creates the conditions for strengthening and maintaining the rule of law. It is a virtuous cycle that, of course, is then a key plank in prosperity itself.

I think that the path to reducing inequalities is part of creating a more prosperous society. We know that societies with low inequalities have higher social mobility and in those societies there is less suspicion that the rule of law is there to protect the interests of a favoured few, and so there is less likely to be civil unrest in countries with lower inequalities and higher social mobility. We in New Zealand have a part to play in creating a world with strong institutions that support those countries that are struggling in the global economy, both to introduce prosperity and, from that—and, really, the more important thing—to create countries that people would want to live in, which have security, liberty, and peace.

The prosperity of nations is built on the infrastructure that everyone needs but very few people can afford on their own. When I say this, I am thinking of things like hospitals, schools, clean running water, roads, police forces, and courts that are beyond corruption. The principle of fair and equitable access to those institutions and to that infrastructure is critical to social justice and also to the success economically of nations. So here we have the Asian Infrastructure Investment Bank, which is going to contribute a little bit to that picture through investing in infrastructure in developing economies. These institutions that provide the reasonable financial stability that nations need ensure that the opportunities for growth that free capital flows bring are more likely to be grasped and also, I guess, they give the confidence that when economies are open, not just will they have the opportunity for the growth but they will be somewhat protected from the downsides of globalisation and those effects will be mitigated against.

This legislation and this investment bank, the Asian Infrastructure Investment Bank, are not without risks. We read in the report that has been adapted from the negotiators meeting, the report of the Foreign Affairs, Defence and Trade Committee, that there are many risks ahead, and some of them are, of course, risks that any new institution like this might face. There is a learning process with any new institution. People have to find their roles. Countries have to find their roles within this. Those risks, though, should not stop us wanting to support something that is genuinely good for the world, that we hope will reduce inequality, and that will begin to address the problems of climate change and other environmental and social impacts.

Some of these things are listed in the paper and they very clearly outline the risks and the kinds of things that they would want to achieve with the bank: “The environmental and social safeguards draft policy outlines an approach to (i) identifying and managing environmental and social risks, (ii) the formulation and implementation of environment and social management plans for each AIIB operation, and (iii) ongoing monitoring and post-project evaluation.”—these are all things that of course we would wish to support—“The policy covers biodiversity, sustainable land use, climate change and greenhouse gas emissions; gender, working conditions, community health and safety; and child labour and forced labour.”

These are all things that we would like to see progress on, not just in our own country but across the Asia region, and we recognise that with that stability, with the implementation of those ideals, comes prosperity not just for those countries but also for neighbouring countries. We all benefit from having a safer, fairer world where all have access to justice, where all feel they have a stake and can make a contribution, and where people do not feel excluded from participating in the economy and from justice. So Labour supports this legislation that will enable the Government to become a member of the Asian Infrastructure Investment Bank, and we are pleased that the Government is taking these steps.

There is, of course, a somewhat comical aspect to this in that various members of the House—not comical; I use that word kind of reluctantly because it would be comical were it not so serious. The Future Investment Fund, we are told, is where this money is coming from, but that is money that has already been spent on a variety of other projects by this Government. We know this fund is a mythical pot of money that the Government has created. First, it was going to pay down huge amounts of debt from it, but we find that this Government has borrowed more money than the Government of Muldoon. It is now $100 billion in debt, and that debt has been growing year by year. This is a Government that has continued to borrow, and yet it said initially that this Future Investment Fund would be used to pay down debt.

Well, I return to the point, which is that we are told that this contribution that we are making—this $92 million to the bank—will be paid for out of the Future Investment Fund, and I am questioning whether that is indeed possible, given that this fund has been spent on so many different things, including the roof of the Beehive building. The roof of the Beehive building has come out of that. We were told it was going to be used for schools and hospitals and other infrastructure that would help our prosperity in the future, but it has also paid for compliance for tax legislation and for repairs to Te Papa and to fund the census and to fund—I mean, for goodness’ sake! These are the things coming out of this Future Investment Fund. It has been spent many times over, and my colleagues have drawn attention to this.

Dr Megan Woods: Magic money.

Dr DAVID CLARK: It is magic money that can be spent again. David Parker listed the likes of Kiwibank receiving funding from it, Chris Finlayson buying memorials out of it, and Auckland transport and the Canterbury rebuild—you name it, the Future Investment Fund has been labelled as the source of this magic money.

So here we have a $92 million contribution. We in the Labour Party think that this is a useful thing to be investing in. We need stronger financial institutions in the world. If we are all going to capture the benefits of flows of capital, we need to have the kinds of strong institutions that give countries confidence to participate in global markets—that give them the confidence that there is some level of security that should their economies stumble, there will be investment in the kind of infrastructure that builds economies over time. We will be supporting this bill and we want to see stronger international institutions to support economies in the interests of prosperity and the interests of fairness and in the interests of creating a better world.

TIM MACINDOE (National—Hamilton West): The Asian Infrastructure Investment Bank is, clearly, a very significant initiative that has enormous potential to be of great benefit to New Zealand’s future economic growth, and therefore I have great pleasure in supporting the measure. I thank most members in the Opposition parties for their support of the measure.

A party vote was called for on the question, That the International Finance Agreements Amendment Bill be now read a first time.

Ayes 109

New Zealand National 59; New Zealand Labour 32; Green Party 14; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 12

New Zealand First 12.

Bill read a first time.

Bill referred to the Foreign Affairs, Defence and Trade Committee.

Hon BILL ENGLISH (Minister of Finance): I move, That the International Finance Agreements Amendment Bill be reported to the House by 22 October 2015 and that the committee have authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 191 and 194(1)(b) and (c).

There are a couple of reasons for moving this motion. The first is that the proposition has already had extensive and thorough scrutiny from the Foreign Affairs, Defence and Trade Committee as part of the parliamentary treaty examination process, and that committee reported to the House last month. I would have to say that that inquiry was held in a constructive and positive atmosphere, and I think that members of the committee noted the efforts of officials representing New Zealand and their efforts to achieve a truly modern, multilateral institutional framework for the Asian Infrastructure Investment Bank—not a bad effort for a small country that will hold only a fraction of the capital.

I may say that, in that respect, our fleeting moments of influence are probably now over in respect of the bank. That means that a foreshortened select committee hearing will not foreshorten the opportunity for Parliament or the public to understand the nature of the bill. In a technical sense, the earlier date will allow New Zealand to join the Asian Infrastructure Investment Bank as the articles of the agreement enter into force, and that will enable us to continue to play a constructive and effective role as the bank begins its operations at the end of the year.

I think that is consistent with what has been an effort across almost 50 countries to expedite this bill. It is a small part that we can play to get it through the select committee by 22 October.

GRANT ROBERTSON (Labour—Wellington Central): I do thank the Minister of Finance for that explanation of the thinking behind this motion; however, I want to say at the outset that the practice of the Government of coming to this House with truncated select committee processes is one that Labour regards with—I guess the best word is “suspicion”. Frankly, it happens too often, and it goes against what is good practice in this Parliament. Of course there will be reasons from time to time why a piece of legislation needs a short select committee turn-round. It may be a matter of particular urgency that has arisen; it may simply be because the issues involved are ones that are completely non-controversial and there are no issues that need to be considered. But actually that situation will be extremely rare, and once again I think that we have got a piece of legislation here that is getting a truncated select committee process because the Government cannot manage its own business.

If we look at some of the dates involved in this situation, the original finalisation of the text was adopted at the fifth chief negotiators meeting on 22 May. New Zealand then finalised its signatory to the agreement on 29 June. What was happening after that? Why did it then take until August for the Foreign Affairs, Defence and Trade Committee to be able to give its report to Parliament? The committee met on 28 July and then on 20 August. There is just this constant slippage in the process. So you have an agreement that is actually signed off in May, that New Zealand signs up to in June, that eventually finds its way to the committee towards the end of July, that emerges out of the committee in August, and that gets to Parliament here in September. At some point did someone on the Government benches go: “You know what, we actually need to get a wriggle on here if we are going to get this passed by the end of the year.”?

Dr Megan Woods: Gerry should’ve.

GRANT ROBERTSON: The Leader of the House—the last time that we did this was only on the last sitting day of Parliament—the Leader of the House’s management of the legislative programme is hopeless. What happens is that members of Parliament and members of the public are the ones who suffer as a result of that. I take the point that the Minister has made that the matters covered in this bill have had a reasonable amount of examination by the Foreign Affairs, Defence and Trade Committee, but that does not reduce the importance of the public seeing this legislation and having the chance to comment on it or MPs having a chance to consider the full range of issues that will arise. I actually believe that if the Foreign Affairs, Defence and Trade Committee were simply given the information that this bill needs to be enacted before the end of the year, it is quite within its power and wit to say: “Yup, we understand that.” It is a pretty good committee; it operates fairly collegially. It would get the bill reported back with plenty of time, but without this arbitrary restriction around it being reported back by 22 October.

So it is with regret that we are not going to be able to support this. It places pressure on all parties in Parliament. The Foreign Affairs, Defence and Trade Committee has representatives of smaller parties in this House. Those members find it very hard to be able to attend select committee meetings when the House is sitting, because they do not have the resources. It is even a stretch for other, larger parties to have that. It interferes with the business of MPs who perhaps are not available on Fridays or on other days on which this motion would allow the select committee to meet. So it is extremely disappointing from this side of the House.

These are serious issues within this bill. We support the New Zealand signatory to the establishment of the bank through this piece of legislation, but nobody, including the Minister of Finance, has stood up here today and said that this is without risk or that this is without issues around governance, which need to be clearly sorted through. We need to give the public the opportunity to be a part of that debate. New Zealand is contributing over $100 million. This is a new venture in terms of how to fund infrastructure in the Asian region. It goes against what some of our traditional allies would want, so that is a serious matter as well. All of these are matters that deserve full and proper public attention, and I simply do not think that it is good enough for the Government’s disorganisation to be the cause of limited involvement by the public. If there is another good reason, by all means, but that is not how it appears to us on this side of the House. We know that this legislation could have been in front of the House any time from the end of June onwards, and the failure of the Government to get a piece of legislation together in time so that we do not need a truncated select committee process is ridiculous.

I do also just want to finish my comments by saying that I think we need to treat individual committees with some respect. The Foreign Affairs, Defence and Trade Committee would have been capable of making a decision about getting this bill back so that we can sign it up, so that it is all sealed and delivered before the end of the year, so that we will be there when the bank first kicks off its operations. I am very disappointed that this motion has found its way to the House. It is, unfortunately, becoming a pattern from this Government to have truncated select committee processes. We do not think that that is good enough, and we will oppose measures unless there is a very good reason to support them.

FLETCHER TABUTEAU (NZ First): New Zealand First would like to stand up to oppose this proposal from the Minister of Finance. I would like to acknowledge a lot of what was spoken to by the previous member, Grant Robertson. This is a truncated process and essentially undermines democracy. It undermines democracy and a longstanding process that has been accepted by the members of this House over decades of practice and participation.

It should be noted, especially coming from New Zealand First, that smaller parties with only one member on such select committees are compromised entirely by this truncated process, as we are unable to fully engage in this process in a meaningful way. We must make the very tough decisions of either contributing to the conversation and forgoing other work that we are obligated to do for this House in representing the people of New Zealand, or we choose to represent the people of New Zealand in other business and we forgo our representation on this select committee, for example. That is not acceptable. It is not a decision that should be forced on smaller parties.

I would just like to end our opposition by voicing the fact that yet again this is another example of the Government taking an unwarranted opportunity to truncate a democratic process and take away, essentially, the voice of New Zealanders in terms of a contribution to a good, fair, and meaningful select committee process. We certainly cannot support this.

Hon DAVID CUNLIFFE (Labour—New Lynn): I rise to take a call to join with my colleagues in opposing the truncated report-back time for the International Finance Agreements Amendment Bill. The proposal has been made by the Government that the Foreign Affairs, Defence and Trade Committee should have only 5 weeks, until 22 October, to report this bill back. This is a bill that the Government negotiated back in May, and it has taken months to get to this House. The Government is now proposing that the difference be made up by denying the New Zealand public the opportunity to make considered submissions on the bill and to have those submissions considered in the normal way. I wish to refer, firstly, to the type of work that confronts the select committee and why it is important to have adequate consultation and deliberation, and, secondly, to the broader picture of the threats to democratic process and good governance, which this move is yet another small part of.

The job in front of the select committee is to complement the work that the Foreign Affairs, Defence and Trade Committee has done. We have a 3-page report from that committee. That is about $40 million worth of capital investment per page—assuming that the 500 and something million dollars of call facility is never called. But, as Bill English would say—I see Bill over there, doing urgent negotiations with the Māori Party—$500 million here, $500 million there, and pretty soon you are talking real money. Well, for New Zealanders that is already real money, and that is why we deserve more than 5 weeks to consider how it is being spent—more so because the Government is pinching from Peter to pay Paul. It is pinching from the Future Investment Fund—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! That is not part of this.

Hon DAVID CUNLIFFE: —to provide this capital. We covered that in the earlier debate.

The Foreign Affairs, Defence and Trade Committee has looked, at a very broad and general level, at the work the New Zealand officials did—which we have earlier acknowledged was good work—on progressing this treaty. What it has not done is a comprehensive national interest analysis. In Appendix B it has done what I think would be called a qualitative national interest analysis. It goes through the provisions of the bank. It goes through the purposes of the bank. It notes, in the Treasury documents, some of the safeguards, the protocols, the purposes—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! When we are doing an instruction to the select committee on a truncated report-back period, you cannot refer to the contents of the bill, as you are doing. I refer the member to Standing Order 290(3): “Any debate on the question for a motion under this Standing Order is restricted to the special powers or instruction set out in the motion. It may not extend to the principles, objects, or provisions of the bill to which the motion relates.” I will ask the member to come back to talk about why this process is being truncated and the reasons that the member wishes to express.

Hon DAVID CUNLIFFE: Thank you for your clarification and guidance on that. The agreement was negotiated on 22 May. New Zealand signed the agreement on 29 June. It was considered by the Foreign Affairs, Defence and Trade Committee on 28 July and 2 August—only two meetings to produce a pretty thin report. The bill has come to the House now to be debated at first reading on 15 September, and we are being asked to require the Finance and Expenditure Committee to report it back to the House in fewer than 5 weeks. That is an inadequate time. It denies the public the proper opportunity to consider what is a large and complex set of documents for a large and significant amount of capital. We think the New Zealand public deserves better than that. I do not think it is out of scope to say that as part of that compressed time frame there are risks that the proper financial, economic, and legislative analysis that would normally be done for such a complex instrument could well be compromised. It is that which is our immediate concern.

Moving on, can I also say in respect of this truncated time frame proposal from the Government, that there has been a habit of coming to this House with requests for compressed select committee timetables. For members of the public who may be watching or listening, a normal select committee process, as you well know, Mr Assistant Speaker Tisch, would expect to take about 6 months. That would give a committee adequate time to advertise, to wait for the public to prepare their submissions, to receive an analysis of those submissions, to consider that analysis, to prepare a report, and to get it back to the House. Under our Standing Orders, which you are of course the master of, Mr Assistant Speaker, the House would then consider the bill at second reading, clause by clause in the Committee of the whole House, and at third reading. It is just not possible to do that in 5 weeks, and something will be compromised by that time frame.

Finally, I do think it is worth noting that this habit the Government has of compressing select committee considerations does appear to be part of a tendency towards the slow erosion of some of the guarantors of our Westminster tradition. Around Wellington you hear public servants saying how little the current Government cares for the convention of free and frank advice, how much Ministers are expecting officials to tell them what they want to hear, and how the Government is railroading through proposals—sometimes involving close associates. The tradition of free and frank advice is there for good reason. For any Government, whatever its stripes, it is much better to find out the bugs and problems in legislation before decisions are made, rather than afterwards, and find out the hard way. In protecting the select committee timetable for this bill we also wish to make a nod to the broader conventions that underlie good governance in our Westminster system.

Finally, of course, that other guarantor of good governance is the free and independent press. I guess many watchers of the media are watching with some concern the impact of new technologies on traditional broadcasting models and the importance that that places on a strong public broadcasting system with a reputation for independence and integrity, which can ensure proper public debate of issues like this—complex issues, international issues, issues that are not the product of reality TV or flag consideration panels, or other matters that seem to clog up the news websites. Five weeks is not enough time to consider a matter that has a contingent liability for the New Zealand taxpayer of over $600 million. The bill has been months in the production, in which New Zealand officials have played a proud role, and in principle we are happy to support it. But this timetable is not appropriate. It does not do justice to the best traditions of this House. We are opposed to the motion that the select committee process be truncated to a mere 5 weeks.

Hon DAVID PARKER (Labour): There is an old saying that is that you cannot know what you do not know—you cannot know what you do not know. As I stand here, I do not know whether there are hidden mistakes in this bill and whether they are significant. As a member of select committees, including, at times, the Finance and Expenditure Committee, I know that it is through the select committee process that we run in this Parliament that you tease out mistakes in legislation—sometimes errors as to words or grammar, which have effect as to meaning, and sometimes errors as to policy. These things are brought to the attention of select committees through the select committee processes, which take time. More often than not, the mistakes that are found in legislation are identified by submitters to the legislation who are interested in the areas and go over it with a fine-tooth comb. In a Parliament that has only got one House of Parliament—we have not got an Upper Chamber to correct mistakes and shoot things back to the main House of Representatives when mistakes are identified in the Upper House—we are more reliant on select committee processes.

The other thing I would say is the Finance and Expenditure Committee is dominated by Government members. They hold a majority on that committee, and they are in control of their own process. Another piece of legislation, which was actually more controversial than this, where the Government wanted to speed up progress recently, was on the reduction in tariffs consequent on the New Zealand - Korea free-trade agreement. Minister Groser approached us and, indeed, me on our behalf, to see whether we would agree to a truncated select committee process. I said no, for two reasons. One was that it would just feed suspicion within the population that their rights were being run roughshod over, and, two, I thought it was wrong in principle. We all knew on the select committee—and, actually, I did not sit for the hearings on that bill, but everyone who was on that select committee knew—that there was an interest in actually doing it properly, and so the select committee, quite properly, did not take the full amount of time that Parliament allowed it because we had heard the request from the Government that it was in New Zealand’s interest to pass the legislation promptly.

So the select committee did not muck about. It called for submissions through a tight period and it reported the legislation back to Parliament very promptly, well within the normal select committee period that was allowed. The process was done properly, the bill was properly scrutinised, and the Government still achieved its objective. In respect of the Finance and Expenditure Committee, it is the most senior committee in Parliament in some ways.

Hon Christopher Finlayson: It is not—Privileges is.

Hon DAVID PARKER: Sorry, excluding the Privileges Committee—quite right, Mr Attorney-General. Excluding the Privileges Committee, it is known as the senior committee. It has senior representatives from all parties, including the Government, and it is in control of its own processes. Why can the Government not trust its own select committee, which it has got the numbers on, to actually give this the urgency that it needs, if urgency is needed, and have a period where it calls for a shortened period of submissions, perhaps, so that it can proceed promptly with consideration of the bill?

The date of 22 October is a bit more than a month away—what, about a month and a week away? It is hard for submitters in that time, if they are volunteer organisations, which most of the submitters are—from the New Zealand Institute of Chartered Accountants or, I do not know, there will be some international foreign affairs organisations or the Law Society. These committees are generally populated by people who are doing this in their own time. They have reporting structures that are periodic. They cannot make these decisions as to what the submission should be off their own bat, generally; they have to take it to a committee to whom they are accountable and get its approval. That all takes time. You cannot do it in a period that then enables the committee to give consideration to the submissions that are made.

The terms of the treaty itself really are not up for grabs. They have been considered by the prior select committee, so I do not think that the detailed consideration of the articles will be too hard and, indeed, the terms of the bill are reasonably clear. It is not a complex bill. It is an important bill, because it involves a lot of money, but it is not a complex bill. So I would have confidence that the Finance and Expenditure Committee, if there was a pressing national interest—as in a New Zealand interest, as opposed to a National Party interest—in reporting this back promptly, would responsibly go about its business and do just that.

I want to reinforce some of the criticisms that have been made in terms of what is our representative democracy. All the members of this select committee, including members of minor parties, ought to be able to appear. I know that one of the members of the Finance and Expenditure Committee is the Rt Hon Winston Peters. He is a busy man. He is the leader of the New Zealand First Party, he is the representative up north, and he is on this Finance and Expenditure—

The ASSISTANT SPEAKER (Lindsay Tisch): Sorry, it is not for me to interfere with the member’s speech, but this bill is not going to the Finance and Expenditure Committee; it is going to the Foreign Affairs, Defence and Trade Committee.

Hon DAVID PARKER: Oh, I am sorry. Thank you, Mr Assistant Speaker. I thought this was—

The ASSISTANT SPEAKER (Lindsay Tisch): One moment. For those who may be listening, previous speakers have talked about the Foreign Affairs, Defence and Trade Committee, which this bill is being referred to. You are referring to a different committee. I am just trying to help you so that people are not confused about which committee it is going to.

Hon DAVID PARKER: Thank you, Mr Assistant Speaker. I was not here when the Hon Bill English put the motion, so I am sorry I picked that incorrectly. It is going to the Foreign Affairs, Defence and Trade Committee, but it is, itself, a senior committee. It is actually one of the committees that run on a more consensual basis than some of the other committees. I have sat on it at times, and it is a more collegial committee, a less adversarial committee, and it is trying to achieve things in the New Zealand interest. I am sure that that committee, too, would be able to report this bill back promptly.

That brings you back to the why. Why? Why is it that the Government is putting Parliament in the position that it has to agree on an inappropriately short select committee period? That comes back to competence of Government. If this agreement was agreed in May and signed in June, why is that we, at this late stage and at this late juncture, are only now considering the legislation? Why could not the legislation have been produced earlier and have been put to the select committee at the same time as the treaty? Nothing in the Standing Orders would have prevented that. Indeed, it would have been more efficient for submitters. Submitters could have been considering the treaty at the same time as they were considering the bill that accompanied it. These things could have been done in parallel by the Government, they should have been, and if they had done that, we would not be contemplating this poor process, which leads to less robust outcomes. For those reasons, the Labour Party will be opposing this motion.

A party vote was called for on the question, That the International Finance Agreements Amendment Bill be reported to the House by 22 October 2015 and that the committee have authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 191 and 194(1)(b) and (c).

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.

Bills

Māori Purposes Bill

First Reading

Hon TE URUROA FLAVELL (Minister for Māori Development): Tēnā koe, Mr Assistant Speaker, kia ora tātou katoa e noho nei i roto i tō tātou Whare. Ka nui te mihi ki a tātou.

[Thank you, Mr Assistant Speaker, and greetings to us all seated here in our House. I appreciate us all greatly.]

I move, That the Māori Purposes Bill be now read a first time. I nominate the Māori Affairs Committee to consider the bill. This Māori Purposes Bill amends the Maori Purposes Act 1991 to improve the governance arrangements for the Wī Pere Trust. This includes enhancing the trust’s operational capability and removing unnecessary Crown involvement in the administration of the trust. It is a huge privilege and honour to present this bill to the House.

By way of some background, the Wī Pere Trust was established in 1899 to administer the estate of Wīremu Pere, a prominent East Coast politician who graced the halls of this Parliament in his day. In 1906 the trust became a statutory trust, and the trust deed has been incorporated in legislation since the early 20th century. The Wī Pere Trust is now governed by the Maori Purposes Act 1991 and has grown to be a successful enterprise. The trust has approximately 460 beneficiaries with land and other net assets valued at nearly $66 million, as at June 2014.

The Maori Purposes Act 1991 requires the Minister of Māori Affairs—currently the Minister for Māori Development—to be responsible for certain aspects of the trust’s administration. The internal management of the trust is also detailed in the provisions of the Maori Purposes Act 1991. This means that any changes to the way the trust operates must be effected through statutory amendment. The Māori Purposes Bill removes the need for further ministerial involvement in the administration of the trust. It empowers the trust to adopt rules relating to internal management, and that can only be good. The bill also replaces the current trustees of the Wī Pere Trust with an incorporated trust board.

These amendments will provide more commercial flexibility for the trust in the future. They will strengthen the direct relationship of accountability between the Wī Pere Trust Board and the beneficiaries of that trust. The trust board will be accountable to beneficiaries under the constitution and will continue to be accountable under the Trustee Act 1956 and the amended Maori Purposes Act. The trust’s register of beneficial interests is currently maintained by the Māori Land Court. In line with recognising the Wī Pere Trust’s autonomy over its own affairs, the bill allows the trust to control and maintain its own register of beneficial interests. This will help the trust to administer its unique succession rules.

The Māori Purposes Bill continues and clarifies the Wī Peri Trust’s longstanding succession provisions as set out in the Maori Purposes Act 1991. Succession to beneficial interest in the Wī Peri Trust is limited to direct lineal descendants of Wī Peri himself. However, the beneficiary spouses and children and remoter issue who are not lineal descendants can succeed to life interests. It is important for beneficiaries of the Wī Pere Trust that these unique succession provisions are maintained: firstly, to preserve the whakapapa of Wī Pere; secondly, to honour his wishes to provide for his whanau; and, finally, to pass on the legacy of Wī Pere to his descendants.

The Maori Purposes Act 1991 provides that all land forming part of the trust property is deemed to be Māori freehold land. Under Te Ture Whenua Maori Act 1993, Māori freehold land is subject to alienation restrictions and requirements that general land is not. These restrictions are designed to promote retention of Māori freehold land by Māori but also to considerably limit the Wī Pere Trust’s use of this land. The Māori Purposes Bill removes the current provision deeming all land held by the trust to be Māori freehold land and enables the trust to hold general land for investment purposes. It reverts land owned by the Wī Pere Trust, which was general land at the time it was acquired, to its original general land status. These changes will allow the trust to exercise far greater economic autonomy in the management of its landholdings.

The Māori Purposes Bill clarifies the relationship between Te Ture Whenua Maori Act 1993 and the legislation governing the Wī Pere Trust. It also clarifies the respective jurisdictions of the Māori Land Court and the High Court in respect of the trust. The High Court will have jurisdiction over matters relating to governance and general land held by the Wī Pere Trust. The Māori Land Court will have jurisdiction in relation to Māori freehold land held by the Wī Pere Trust. A new Te Ture Whenua Māori bill has been drafted. These feature future changes that may impact on the amended Maori Purposes Act 1991, though the Act will likely require only consequential amendments to update references to the new Te Ture Whenua Māori bill. The bill provides a framework tailored to the needs of the Wī Pere Trust to govern itself while maintaining key protections for Māori land set out in Te Ture Whenua Maori Act 1993.

The amendments to the Maori Purposes Act 1991, can I say, were initiated at the request of the representatives of the Wī Pere Trust. Representatives of the trust have been closely involved in the development of this Māori Purposes bill. The trustees consulted formally with beneficiaries in 2009 and again in 2013. I hope that information will be helpful to those considering the bill tonight. Of the beneficiaries who voted on the amendments, 91 percent supported the changes to the trust—91 percent—as given effect to by the bill.

Finally, the bill corrects a minor technical error in the Maori Trust Boards (Transitional Provisions) Order 2012. This order specifies the transition dates for those Māori trust boards transferring to revised financial accountability requirements under the updated Maori Trust Boards Act 1955. The order mistakenly refers to the Tauranga Moana Māori Trust Board as the Tauranga Māori Trust Board. The Māori Purposes Bill corrects this error.

In conclusion, I want to thank all of those who participated in the consultation on these amendments. I am confident that these amendments will contribute to the autonomy of the Wī Pere Trust to manage its own affairs, something that it wants and something that it should be given. It will enable a successful Māori enterprise to operate more effectively in a commercial environment. With those words I commend this bill to the House.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Assistant Speaker. E ngā mema o te Whare nei, tēnā tātou katoa. Can I preface my contribution to today’s bill with a couple of acknowledgements. Firstly, some 40 years ago an 80-year-old woman, whom we all know, Dame Whina Cooper, left Te Hāpua to lead the historic land march under the banner of “Not another acre more”. Her legacy around protecting Māori land is, for me, a preface to my contribution to this debate.

Her commitment 40 years ago is something all Māori members of this House need to uphold, and her commitment to “Not another acre more” was not just about those non-Māori who may be threatening to take whenua, but actually amongst our own, I am sure. In my second contribution, I want to acknowledge another Māori member who is going to join us very shortly, Marama Davidson. I look forward to her expertise when she joins us here in the ranks.

Can I turn to the purpose of this bill and thank the Minister for Māori Development for outlining its purpose. Labour, can I put on record, will support this bill to the select committee but with reservations—reservations that I, hopefully, will outline in my contribution. As the Minister has outlined, the main aim of the bill, which is an omnibus bill, is to amend the Maori Purposes Act 1991 in so far as it governs the Wī Pere Trust, and it also amends the Maori Trust Boards (Transitional Provisions) Order 2012.

Can I add, as the member for Ikaroa-Rāwhiti, which the Wī Pere Trust descends from, that it is a very successful whānau whenua trust. I too whakapapa to that, being a descendant of Thomas Halbert, who is actually the father of Wī Pere. So I acknowledge my whakapapa to this particular bill and what its intention is.

However, when we look at what it is trying to create—and I am going to go through the amendments one by one and offer some comments around what this bill is trying to achieve. Let me first turn to the amendments that I support, which were outlined by the Minister. Point one: “allow the trust board to adopt rules relating to internal management and governance, and set out the new trust board’s initial constitution …”. Clearly, as a progressive future-focused organisation, you want the ability to run your own affairs, and to me that makes absolute sense. You cannot do that without a constitution, so I have no issues with that particular provision.

We move to the next one, and that is to “remove unnecessary ministerial involvements in the governance of the trust;”. I think we should remove all ministerial involvements in the trust, but we have certain ministerial involvements, meaning there must be some good ministerial involvements we want to retain, but we also say that that too does not send any alarm bells.

Moving to “enable the trust to acquire and hold general land for investment purposes;”—again, if you are a successful business, you want the opportunity to invest, be it in land or be it in other resource areas. So, again, there is no particular issue there. Then we move on to “allow the trust to maintain its own register of beneficial interests;”. Again, it is important that those in the Wī Pere Trust at the present time must have lineage to Wī Pere. It is important that they maintain and update the register of beneficial interests, and I do note that if you are a spouse or a whāngai, then you currently have life interest in the trust.

I have pretty much endorsed four of the amendments. Can I now turn to the ones that cause me some concerns. Let us start with the easier one: “replace the trustees with an incorporated trust board with body corporate status and limited liability;”. Why does that give me some concerns? We are talking about the management and the protection of Māori whenua—Māori whenua. So how does turning an entity into a corporate body uphold, protect, and maintain whenua?

When I read that particular provision—which is why we are supporting it going to the select committee, so that we can have submissions on that—that was definitely a concern that came out of Te Ture Whenua Maori Act reviews, of which I attended all four. There was a concern for Māori landowners around turning their trust into corporate bodies. As we are seeing under this particular regime of this Government, profit is often always put before people. So I want to put it on record that I have a concern with that particular amendment.

I turn to the second amendment that I have a concern with, and that is: “clarify the interface between the principal Act and the 1993 Act, and the jurisdiction of the Māori Land Court.” It is no secret that Te Ture Whenua Maori Act, which has been deferred—again, from my experience of attending the four reviews throughout Ikaroa-Rāwhiti, there are real concerns around what is actually wrong with the Māori Land Court. Why is this legislation removing the protection that the Māori Land Court offers?

I will refer to the preamble to the current Te Ture Whenua Maori Act 1993. In that preamble it talks about land, or whenua, as taonga tuku iho, which means that it is to be protected and enhanced for the purpose and that we, the current descendants, are only in terms of custodianship or kaitiakitanga over it. In practice, the preamble, as used by the Māori Land Court judges, references that particular section when making decisions on land. By this particular amendment, which says it is clarifying “between the principal Act and the 1993 Act, and the jurisdiction of the Māori Land Court.”—I, again, share my reservations about who is going to protect the Māori landowners, which is currently done by the Māori Land Court in the preamble to Te Ture Whenua Maori Act 1993.

The third amendment, which I ring-fence because it gives me the greatest concern—I want to share with you that I have spoken to a couple of beneficiaries of Wī Pere before I came to the House—is the amendment to “remove the provision deeming all land held by the trust to be Māori freehold land;”. I have been trying to paint a picture around the protection of Māori whenua. Taonga tuku iho, which, perhaps, many in this House do not understand, is our legacy as Māori MPs and as representatives of constituencies that have been losing many, many acres of land and that have got—and I am sure that the Minister for Treaty of Waitangi Negotiations will agree—a small pittance of what was taken. Yet here we are, potentially alienating further Māori whenua.

For me, that particular amendment around removing the provision deeming land to be Māori whenua is a red flag. It is an absolute red flag. On this side, Labour supports the bill, like I said, going to the Māori Affairs Committee, but I, like many, many in my electorate and, I am sure, around the country will, have some keen reservations around who is going to pick up that responsibility.

I can hear people saying “Well, that’s being a nanny State.”, but trust me, when you get to a certain point when it comes to Māori whenua, you cannot turn back—and you cannot turn back. So I will say again that Labour, with these reservations, supports this bill going to the select committee. Beyond that, who knows? Kia ora tātou.

Hon CHRISTOPHER FINLAYSON (Attorney-General): I just want to take a brief call to discuss the possible application of the New Zealand Bill of Rights Act 1990 to this legislation, so I am doing it as Attorney-General. Normally the obligation of the Attorney-General is to produce a section 7 report if an issue arises, but I have thought long and hard about the matter I want to discuss, and have concluded that the Bill of Rights Act does not apply. But, because it is an important issue, I thought I would take a brief call to highlight it for members of the select committee who in due course will be looking at the bill, if it goes there.

As has been stated by the Minister for Māori Development and the previous speaker, Meka Whaitiri, the bill is going to amend certain provisions of the Maori Purposes Act 1991 relating to the Wī Pere Trust. One aspect—and the aspect of the bill that caused me to think long and hard—was the issue of possible discrimination on the grounds of family status. As things stand under the Maori Purposes Act 1991, beneficiaries of the trust are treated differently according to whether they are lineal descendants of Wī Pere or descendants as a result of adoption. Those related by blood may inherit a parent’s beneficial interest in the trust and in turn pass that interest to their own children. Those related as a spouse or by adoption inherit only a life interest, which by definition cannot be passed on to their children. So the relevant part of the bill, which is Part 3, is introduced by clause 9 of the bill—and I refer honourable members to the proposed new sections 23, 24, and 25.

Clause 9 inserts a new section 21, which prohibits the disposal of any beneficial interests in the trust property other than in accordance with the new sections to which I have referred: the new section 23, the disposal by will; the new section 24, which deals with intestate; and the new section 25, which deals with the issue of gifts. The effect of the bill will be that a beneficiary may dispose of his or her beneficial interest—whether by will, intestate, or gift—only to a lineal descendant of Wī Pere. The phrase “lineal descendant” is defined in the bill as “a person who is a direct descendant … by blood”, and so the beneficiary’s spouse, child, or descendant, if not the lineal descendant, is eligible to succeed only to the life interest. So I needed to give some thought as to whether the bill discriminated on a prohibited ground, and I must say that I spent quite some time thinking about the issue, because, as a general principle, treating adopted children differently from non-adoptees gives rise to a prima facie family status discrimination issue.

However, in the particular context of the bill I consider that the different treatment was justified and not inconsistent with section 19 of the Bill of Rights Act. In forming that conclusion, I had regard to the essentially private character of the trust. The trust’s succession arrangements are very long standing, as the previous speaker said, and are the means by which the trust seeks to preserve its tikanga. Were the trust to be created by deed today it would probably contain exactly the same provisions and be consistent with the Human Rights Act and the Bill of Rights. The fact that the terms of the trust are set out in legislation necessarily engages the Bill of Rights Act because legislation is an act of the legislative branch, but having thought long and hard about it, in my view, this does not on balance obscure the fact that in substance the trust was, and remains, essentially a private one.

So I thought I would bring that issue to the attention of the House. It is a very important issue. In a sense I am giving what could be called not a section 7 report, but it is a very important issue, and I want the House to know that as Attorney-General I gave the matter a lot of thought. In my opinion, the bill exemplifies the difficulties in reckoning with matters of indigeneity and ethnic identity in legislation. Generally it is preferable that iwi, hapū, and whānau determine their own membership in accordance with tikanga Māori, and that the State not impose a non-Māori world view. Where legislation is used to define rights as between or within various iwi, hapū, or whānau, such as through Treaty settlements, any apparent inconsistencies with fundamental human rights have to be shown to be reasonable and justified. I believe they are in this instance for the reasons that I have endeavoured to explain to the House. If people are interested, I can advise them that there is a comprehensive coverage of this point by me that is on the Ministry of Justice website in an opinion dated 27 July 2015.

With those brief comments on only one aspect of the bill, I commend the bill to the House.

Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): I take a call to reiterate the comments of my colleague Meka Whaitiri, the member for Ikaroa-Rāwhiti, who has stated that Labour will support this bill in its first reading and referral to select committee. We have some questions and some reservations, which may or may not be answered at that point.

Wī Pere was a member of Parliament, as members before me have highlighted. He served in this House in 1884-87 and then from 1893-1905. We have some questions of the Minister that we think deserve clarification once it gets to the select committee like, for example: much of the intent of this bill could have been dealt with within the changes that are anticipated with Te Ture Whenua Maori Act—why is he preceding that decision or that ability to take up that pathway by having this bill go through the House? The other question is one of a substantive nature around the change in classification of land. I took some time to look into the history of the establishment of the trust, and what comes forth to me is that this was a very innovative way of looking at collective Māori land ownership under the laws of the time. Wī Pere and his whānau—well, he encouraged all his whānau to transfer all their estates and form a trust under the Native Land Laws Amendment Act 1897.

At the time I believe that would have been quite a radical concept—to get everybody to collectivise with the specific purpose of collectivising the utilisation of the land and, therefore, the way in which they were going to look at improving the productivity of that land. There was a trustee—only one trustee was appointed at the time—and they were to be free from any interference from the beneficiaries of that particular land. Again, it was a very innovative and interesting establishment.

Reading through some of the history, it is chequered with regard to how that land was managed in a freehold title. I think Walter George Foster of Wellington was the first trustee. It is interesting to track the way in which that estate was utilised—I suspect much for the benefit of the Wī Pere descendants, but with a very chequered history. The reason why I draw the attention of the House to that is that in the inception of the trust there was some sense of collectivising interests under an individualised native land tenure system. The point that my colleague Meka Whaitiri makes with regard to the inherent collective aspects of having land held under Te Ture Whenua Maori Act I think still applies, and it is a valid question.

The other point that I wanted to draw to the attention of the House is more in the present day. Looking at the website, the estate is being managed well. It was valued at approximately $35.7 million in 2003, and it has a number of commercial interests that are within its operations. That said, it is really important that the beneficiaries of the Wī Pere Trust are able to influence the governance decision-making of that particular entity. Again, as far as the collective aspiration and the opportunities generated from the Wī Pere Trust are concerned, I would think that the select committee would pursue this with some vigour to ensure that there was widespread consultation with beneficiaries around what has tried to be achieved under this particular bill. If it has indeed been the case that beneficiaries have not been well consulted or that the new terms and conditions of the trustees have not been widely publicised amongst the beneficiary group, I think that would raise some concern for the select committee, but we have ample time through the submissions process to pursue questions.

The changes in the bill that propose to renew the governance structure—there is some merit in that. In fact, it is happening in other trusts as we speak, and there are opportunities to ensure that, I think, greater leveraging from the estate can occur.

Can I just identify, with regard to the matter that the Minister raised around who has a beneficial interest, that it is certainly my view that the way in which the Wī Pere Trust has been specific about who holds a beneficial interest is useful when we are looking at changes that impact on trusts of this kind. It is useful that we reaffirm that this was always the intent from its inception through to the various refinements—and the ability of the trust to operate within its contemporary context.

The reason why I make mention of that is that a number of Māori members will have experienced in one way or another a range of emotional types of situations where spouses and adopted children have had such a close connection with the whenua that they have been living on and raised on, but it belongs to their spouse by whakapapa, and when their spouse dies they have literally no ability to continue that relationship because it is only for their lifetime interest. I have had one case that comes to mind which was particularly emotive. It pulled at my conscience to ask whether something should be done here. I land on, I guess, the whakapapa connections that people in this House have to their lands and, actually, it is probably landing in the right place—blood, kin relationships to whenua tōpū must be retained at all costs, and any weakening of those connections can fundamentally break down your kin connection to the area and your ability to be able to continue to, I think, invest back in your whenua tōpū.

The Minister makes some good points. I am looking forward to this particular bill coming to the select committee and to the ability to ask submitters questions. I have highlighted a number: were beneficiaries consulted widely on the change in this trust deed and the provisions of this particular bill; why is it that the Minister introduced this bill in advance to pending changes to Te Ture Whenua Maori Act; and what ways does the Wī Pere Trust envisage that this will help to advance its economic opportunities and well as its social opportunities? I note that it funds—along with the distributions, the shareholding beneficiaries—education grants and tangi grants, and it is engaged in a number of social activities as well.

I do not want to spend too much time on this first reading of the bill, as I know that the select committee is an important part of the process. I am hoping that the Minister at some point—or a member of the Māori Party—might get up and let us know when the amendments to Te Ture Whenua Maori Act will be introduced in the House. That will be a robust debate. It is an important debate to be held, but for the time being I support this bill going to the Māori Affairs Committee.

NUK KORAKO (National): E mihi atu ki a koe e te Māngai o te Whare, huri noa i te Whare tēnā koutou katoa.

[I acknowledge you, Mr Assistant Speaker of the House, and greet you all throughout the House.]

I am pleased to take a call in support of the Māori Purposes Bill. This bill is an omnibus bill that amends the Maori Purposes Act 1991 and the Maori Trust Boards (Transitional Provisions) Order 2012. These amendments are important, particularly in regard to the changes of the Wī Pere Trust.

To understand what this bill is about, we need to go back to 1899 and the establishment of the Wī Pere Trust. Wīremu Pere, or Wī Pere, was the MP for Eastern Maori for five terms in the late 1800s and early 1900s. He was widely acclaimed as being one of the great Māori MPs and was a leading figure amongst the people of the Poverty Bay area. Pere had a reputation as a great orator in Te Reo Māori, both before the Native Land Court and, later, in the House of Representatives. Although he lost three elections, it would be hard for history to judge him too harshly as his election losses were only to the great Māori MPs in Sir Apirana Ngata and Sir James Carroll.

Part-way through his time in Parliament, Wī Pere was forced to set up the Wī Pere Trust to ensure a legacy was left to his descendants. The trust has long been incorporated in legislation, becoming a statutory trust under the Maori Purposes Act 1938. Although the trust has these legislative protections, it does operate as a private business in a commercial environment, and, in fact, it operates quite successfully. The trust has business activities in the agribusiness sector—the citrus fruit sector, vineyards—and I understand it is looking at possible mining activities in the future. I am not sure of the latest figures—well, I am now, actually, because I heard the Minister quote one—but it is interesting that in 2003 the trust assets were in excess of $35 million, and now, with a new figure in 2013, it is $66 million. So, obviously, it is a trust that is doing very, very well in this economic climate.

The payments to beneficiaries include a per share beneficial interest, age grants for those over 60, tangi grants, and limited education scholarships. The trust also contributes to the maintenance of Rongopai Marae at Waituhi, which was established by Wī Pere’s son Moanaroa. These changes to the governing legislation will put the trust in a better position to operate more effectively in the commercial environment of today and without the Crown’s involvement.

The Minister has already talked about the various changes, so I do not intend to go into the proposed changes in detail. However, I do look forward to the bill coming through the various stages of the Māori Affairs Committee process. I would just like to acknowledge my colleagues on our committee because you have raised some very, very interesting points, particularly when we talk about whāngai and also about he tikanga tuku iho nā ngā matua tīpuna kua wehe atu ki Te Pō—and it is the tikanga that has been laid down by those of our tīpuna who have passed into the long night. So it will be a very interesting discussion, I am sure, but we will find our way through, as we usually do.

But one thing for me is that Wī Pere was a visionary right back in 1899, and so what he actually left and what he put together was a structure in which he believed that only the best people should be trustees, and the beneficiaries need to be separated and apart. It is interesting when we talk about incorporations and when we talk about trusts in today’s world, I think of the Mawhera Inc. on Te Tai Poutini and I think about the Rakaia Inc. as well, where they still have those very strict laws about whāngai and about bloodlines actually inheriting those shareholdings. So we are looking forward to that.

But I think the key message of this bill is that we want to see the Wī Pere Trust operating in an autonomous way, free of some of the constraints that it currently has. We do not see any need for ongoing ministerial involvement in the trust’s affairs, I believe, and this bill will maintain the key protections—because that is what is important, as well—for Māori land that currently exist. But it will give the trust the flexibility and autonomy that it should have to operate as a successful commercial entity. I have no hesitation in commending this bill to the House. Kia ora.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Before I invite the next member to speak, I have been looking at Speakers’ rulings with regard to visual aids. I understand the question of the display of the New Zealand flag in the Chamber has been the subject of some discussion at the Business Committee, but what is also clear is that other visual aids should be displayed only by members who are making speeches or asking questions. There are some other visual aids currently being displayed in the House, and before I call Metiria Turei, can I ask that they may be removed. It may be that staff have to remove the one from Mr Seymour’s bench. Could I ask some of the floor staff, or the Serjeant-at-Arms, possibly, to or—Marama Fox, thank you.

METIRIA TUREI (Co-Leader—Green): I do not intend to speak for long on this bill. It is not particularly complicated or particularly controversial, so far at least, but when we get to the select committee—[Interruption]

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Sorry, I did not make myself clear. I think there had been previous discussion about the New Zealand flag at the Business Committee and, although not all of us would agree with the conclusion the committee came to, I think that those flags have been displayed for some time and I have not made a ruling as to the New Zealand flags. Thank you. Metiria Turei—time starting again.

METIRIA TUREI: Thank you, Mr Assistant Speaker. But there will be issues that will come to the Māori Affairs Committee, and I look forward to hearing the submissions from those who are involved, particularly the beneficiaries, and I will be particularly looking at two of the questions that have been raised by other members on that committee.

One is the corporatisation of the trust and the extent to which the purpose of the trust moves from managing the assets in the best interests of the beneficiaries to a much more corporatised model, where the changes will allow for a whole different approach to the management of that asset. I do not think that is a small change; I think that is quite a significant one. It may well be supported by the trustees and possibly by most of the beneficiaries—we are yet to find out. But that will be one of the questions that I will be looking for advice on from submitters—about whether that new kind of structure will be in the best interests of everyone.

This is an old whānau trust. It has been running for a long, long time, and anybody who has been involved with Māori land will know how difficult it is to manage the assets that a trust like this might have—and there are hundreds of them around the country—to be able to maximise the opportunities that those assets have while retaining the land in Māori ownership and protecting it from sale, because, of course, that is always the risk. It is why these kinds of structures are set up. So the corporatisation of the trust is a concern, and we will be looking for more information about that.

Related to that is the change in the status of land under the trust. As I understand it, Māori freehold land will become general land as a result of this legislation. On the one hand, you could argue that that makes that land more usable in a commercial sense, but it also makes it much more vulnerable to being lost to that whānau in the short and long term. And it is not necessarily even because of the decisions of the trust and the beneficiaries and the trustees, but potentially, for example, through compulsory acquisition. We have seen examples in New Zealand in very recent times, and very close to here, of Māori land that has been taken or attempted to be taken through the Public Works Act compulsory acquisition process and the fight that iwi have had to try to retain some of that land. And that is land that is in their ownership; we are not talking about other examples like we see in Auckland where whānau land is being rezoned for housing against their will. That land is technically owned by an agency but actually Māori land, owned by Māori, which is subject to the Public Works Act and can be taken.

I would just note that Green MP Catherine Delahunty does have a bill in the ballot, the Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill, and it is designed to protect Māori land from being taken under the Public Works Act without consent. Just as an example, should this bill pass with the current provisions that transfer Māori freehold land into general land, that land is then available to be taken without the consent of the owners under the Public Works Act. If perchance Catherine Delahunty’s bill was pulled from the ballot and was passed, that legislation would protect the Māori freehold land but it would not protect the general land. So there are real consequences and there are real issues around the protection of Māori land, and we see continued threats to Māori land, for example through the Public Works Act compulsory acquisition process. The Green Party has proposed a solution to that so it is just not possible to take Māori land in that way.

But if Māori land becomes general land, it becomes much more vulnerable. I am looking to hear from the beneficiaries and the trustees about their intentions, how they expect to protect that land, what the beneficiaries are hoping to see from that change in status, and what protections they think are necessary to make sure that there is always whānau land being held by this trust, that it will not be wasted, that there will not be too many mistakes being made about its management—and this happens; it is just the nature of business—and that the effects of the corporate model on this trust will not, in time, disenfranchise this whānau from the land that they have been caring for for so long. I will say that I am always pleased to see legislation that removes Crown control over Māori resources, and this bill does that to at least some degree. That is a good thing, so I am looking forward to talking about that more too with the trustees.

We are happy to support this bill to select committee, and I expect that if we hear good support from the trustees and, particularly, the beneficiaries about these provisions—it might be that there is a little bit of negotiation or change to the bill—

Meka Whaitiri: Bet you you won’t. Bet you there won’t.

METIRIA TUREI: Well, yes, my colleague says: “Bet you there won’t.” That is probably true, too. Often these things are faits accomplis by the time they come to us. But assuming that the beneficiaries, in particular, are comfortable with the provisions and with the protections in the bill, I cannot see why we would not support it through to the second and third readings. At the moment the Green Party certainly commits itself to supporting it to the select committee so that we can have the conversation about whether this is the right approach. Thank you.

PITA PARAONE (NZ First): Tēnā koe, Mr Assistant Speaker, ā, tēnā hoki tātou e noho nei i roto i te Whare i te wā nei. He tū wāhi poto tēnei ki te mihi atu ki a koutou o te hau kāinga e mātakitaki mai, e ‘hakarongo hoki mai ana ki ēnei kōrero i puta atu nei i te Whare i te ahiahi nei. Tua atu i tēnā, hiahia ana au kia mihi atu ki tetahi o waku whaea, a Phoebe Matiu, mōhio ana au ki tana kaha ki te mātakitaki i ngā mahi o te Whare nei, nā reira, ka nui taku mihi ki a ia mō tērā.

[Thank you, Mr Assistant Speaker, and greetings to us seated here in the House at this time. This is a short call to accord a tribute to those of you back home watching and listening as well, to these contributions emerging from within the House this afternoon. Further to that, I want to shout out to one of my aunties, Phoebe Matiu. I know how staunch she is at watching the proceedings of this House, and so I really appreciate her greatly for that.]

I stand on behalf of New Zealand First to say that although we support much of the intention of this bill we do have some concerns, and some of those concerns have already been articulated by members who have spoken before me.

I want to just touch on a bit of history. Although I acknowledge the standing and the mana of Wīremu Pere, himself a former member of this House, I think that we would be remiss in not articulating the original reason for the trust. Due to his benevolence, he found himself in some financial difficulty, so that gave rise to the establishment of the trust, because some money was owed to the Bank of New Zealand. It was the bank at the time that determined who should be the trustee and what its requirements were in accepting the trust, so I just wanted to have that included in the discussion this afternoon.

We have heard how, in 2003, this trust had assets totalling $36 million, and there has been the suggestion that it now has assets around $60 million. I ask the question: why are we changing the legislation for an entity that, quite clearly, is very successful?

Meka Whaitiri: What’s broken?

PITA PARAONE: That is the question: what is broken? I have some thoughts, but I will keep those for the select committee process, because we will certainly be supporting this legislation to the select committee. The Minister of Justice, Minister Finlayson, made reference to adoption—

Hon Ruth Dyson: Attorney-General.

PITA PARAONE: Oh, the Attorney-General. He made reference to adoption and the intent of this legislation to recognise as beneficiaries only those who whakapapa to their tupuna. I want to ask a question. In terms of the Māori view—whāngai is very much of the Māori world view. My question is: what of those particular whāngai, who have since passed on, who at the time became beneficiaries? Their issue would be entitled, and I would suggest that for some of those whāngai who fall into that category—who have since passed on—their issue will now be beneficiaries of the trust. In terms of the intent of the bill and the intent of the trust itself, I am asking: what of those beneficiaries? Perhaps we will get some clarification during the select committee process.

The notion of replacing the trustees with an incorporated trust board quite clearly is an indication that the trust wants to adopt a more corporate approach to its dealings, and, in spite of its concern about the overview that the Minister and the Māori Land Court have over their land assets, it has still managed to do very well. I want to ask the question, during the select committee process, whether the Minister has ever been asked to intervene in the running of this trust.

The other issue for me is grants. The previous speaker articulated the many grants that the trust presently makes available. I have some concerns as to whether or not those grants and the level of those grants will continue, because when you move into the corporate world you need financial resources, and one of the major sources is to just turn off the grants tap and make that available to whatever corporate decision you want to make. So I will certainly be asking that question in the select committee process.

One concern that I have is, who then takes responsibility if things should go belly up as a consequence of this bill being passed? I suppose we have to go to the High Court. Talking about the court and, in particular, the Māori Land Court, part of the intent of the bill is to allow the trust to administer its own beneficiary registration. At the moment, that work is done by the Māori Land Court. I would suggest that the trust would probably not know the whereabouts of a number of its beneficiaries, or its beneficiaries have not been succeeded to because people have not made the succession, whereas with the Māori Land Court there is a drive to encourage beneficiaries to make succession and therefore keep the ownership list up to date.

We heard about the current trustees consulting with the beneficiaries in 2009, and having a subsequent meeting in 2013 where a draft constitution and an overview of proposed amendments to the Maori Purposes Act were circulated. In November 2013, 143 beneficiaries took part in making the decision as to whether or not this proposal should be adopted, and although we talk about 91 percent of those 143 giving approval, if we look at it in the context of having around 460 beneficiaries in total, then the overall approval rate is not that high. However, this seems to be the process that this Government is adopting, particularly around Treaty settlements, and so we should not be surprised that that return has been accepted and therefore forms the basis of this bill.

Overall, the bill is well intended but I fear for the beneficiaries—in particular, the question of who might be appointed as trustees—because all you need is one or two rogue trustees and the whole asset base of the trust could be lost. Having said that, I, on behalf of New Zealand First, will certainly be supporting the bill going to the Māori Affairs Committee. Kia ora.

MARAMA FOX (Co-Leader—Māori Party): There is such a lack of faith in our people to be able to govern themselves—is that not what we are fighting for? Is that not why we come to this place? And, in fact, is that not why Wīremu Pere came to this place? You know, Wīremu Pere from Te Aitanga-a-Māhaki and Rongowhakaata was described as being a mediator, as a person who was called upon to share his knowledge to settle disputes. He was schooled—yes, in an Anglican mission—but he was also schooled in the whare wānanga. He was schooled in the traditions of his ancestors and he was called on to settle disputes not just between his own people but between Māori and Pākehā as well. You know, he used his position to criticise the Government, he used his position to oppose land sales, and he used his position to set up a trust—a trust that started with 18,000 sheep. We have heard already that this is a very successful trust—a trust that has considerable assets and a trust that has managed to exert its rangatiratanga over its land for a long period of time.

So why are we questioning its ability to continue to do that, and why are we questioning its desire to make these changes? These changes have been put through because it has asked for them—91 percent of the beneficiaries who are mentioned here have agreed to this. The Minister would not be doing something in complete opposition to the will of the people. The people have asked for this to happen and therefore the Māori Purposes Bill has been prepared. We can debate back and forward the intricacies of it but, essentially, we are doing this to support their aspirations, their tino rangatiratanga, and their desire to advance their asset holdings and to do more with the land that they still have—and they have that land because Wīremu Pere was visionary.

Wīremu Pere did put aside that land, and while he was a parliamentarian he actually wanted to ensure that there was money given from the Parliament to help Māori people develop their lands and their holdings and their assets, and to become strong entrepreneurs. He put bills forward. He supported Hone Heke’s bill to boycott the Native Land Court—it had too much power. He was bold and he was courageous and he did this on behalf of his people, and now they are the beneficiaries of his vision. Now, after all these years—more than 100 years of having run their assets as a trust—they have asked for this to happen. They have learnt over that time; they are capable people.

I find it a little bit disrespectful that actually we are questioning their ability to do this by saying that it takes only one rogue trustee—one rogue trustee. Well, these people have been operating well for a good long time and have proven their worth in developing the assets to a considerable base, as we have already talked about. There are some things in the bill that make people nervous because we do, as they have said, want to continue to keep the land in perpetuity—for all time—for the beneficiaries of not just these ones now but for their descendants, just as Wīremu Pere wanted to do when he first established this trust.

I think the bill has been considered with the people. The changes have been put forward by them. The Minister has upheld their right to do so and has brought that bill to the House. I stand to support that bill. I do not have to keep going on about the things that are in here; everybody has talked about it. The Minister has completely articulated the changes that the Government wants to make, and, yes, we can debate the intricacies of it at the select committee. But, essentially, we stand not just to support this bill but to support the people and their ability to be self-determining about the way in which they want to operate their lands and their holdings, and so I commend this bill to the House.

LOUISA WALL (Labour—Manurewa): Kia ora, Mr Assistant Speaker, e te Māngai o te Whare. Tēnā koutou katoa. Actually, it is a privilege to join my colleagues to contribute to the debate that seeks through the Māori Purposes Bill to create a new piece of legislation called the Māori Purposes (Wi Pere Trust) Act 1991.

I think it begs the question who Wī Pere was. Many have spoken about Wīremu Pere this afternoon, who was Te Aitangi-a-Māhaki, Te Whānau a Kai, and Rongowhakaata, and born in 1837 in Tūranga. He was the MP for Eastern Māori between 1893 and 1905, and Sir Apirana Ngata said of him: “No man had ever done more for his people.” So he was obviously a person who was visionary, and, as my colleague Meka Whaitiri has just pointed out to me, he was also incredibly entrepreneurial. In fact, he would have probably been a large property developer in today’s times because he accumulated land.

Actually, this bill is about land and it is incredibly ironic for me that this bill is talking about the alienation of Māori land, within the context of Dame Whina Cooper leading a hīkoi from Te Hāpua to us here in Wellington 40 years ago—1,100 kilometres. This would have been day 2 of the hīkoi, and the whole kaupapa of Dame Whina’s hīkoi was “not one more acre of Māori land”.

So the point I want to make, primarily, is that changing the classification of Māori freehold land to general freehold land actually has huge implications. Māori freehold land, by virtue of it being Māori freehold, is within Te Ture Whenua Maori Act 1993. And what was that designed to do? It was designed to protect Māori land. The preamble of Te Ture Whenua Maori Act says that it recognises that land is taonga tuku iho and it has a special significance to Māori people, and it also highlights that the retention of lands in the hands of owners’ whānau and hapū is of utmost importance and significance. So I think the implication of this piece of legislation is huge. What it does is that it transfers the status of that land to a commodity that is easily bought and sold. There are not a lot of protections around it, and, actually, if the trust got into trouble because it expanded, then the banks could take the land.

That is the other irony of this piece of legislation, because the fact that it is in trust in the first place can actually be traced back to 1899, because Wī Pere got into a bit of trouble. The Bank of New Zealand actually had a mortgage over the land and the fact that it was put into a trust was in lieu of the land being taken. He and the other beneficiaries were given time to repay the mortgage. It took them 6 years. So in 1905 Wī Pere had paid £47,000—which in today’s money is $4,510,000—to reclaim his land. That is what Wī Pere did at that time. They kept that land in a trust, so in 1906 we had the establishment of the Wī Pere Estates Act and he was the sole trustee. Progressively, over time, we have had different trustees who have been whānau of Wī Pere. Then there was an amendment in 1991 and that amendment Act empowered five trustees, who had a 3-year tenure. To be a beneficiary you had to be related by blood to Wī Pere.

So we come to the discussions today about the amendment to this piece of legislation that I think contains something within it that we must be incredibly wary of—more than wary, actually. We have to be vigilant and we have to continue the legacy, I believe, of Dame Whina Cooper and the 50 people, including people like Deirdre Nehua, whom I saw on Sunday. I was privileged; I was one of a few people who were invited by Hinerangi Puru and Joe Cooper—the children of Dame Whina Cooper—to attend the 40th anniversary of the Land March at Te Ūnga Waka Marae. So for me to attend that particular hui and to be part of that commemoration was incredibly special.

I think what bills like this highlight is actually ka whawhai tonu mātou—struggle without end—which is just what Tā Ranginui Walker said. Our struggles will never be over. Our struggles to retain—and I am talking about ours in terms of our mana whenua, our tangata whenua, our whānau, our hapū, our iwi. Actually, we have to be ever watchful of pieces of legislation such as this that actually have the potential to take more than one more acre of land.

I want to commend Nuk Korako for actually acknowledging that there are challenges about this piece of legislation that the Māori Affairs Committee is going to have to deliberate on. I want to acknowledge the members of the Māori Affairs Committee because I think one of the things that can be amended, for example, is that the lands that are currently within the holdings of the trust should remain Māori freehold land, but if they want to get into commercial development and purchase other lands, then that land can be general freehold land. But the reserve of land that they currently have, there should not be any ability to change it from Māori freehold to general freehold, which would protect the legacy of Wīremu Pere that we have all talked about today. The fact that he established the trust was to keep the land for ever—for ever—for his tamariki, the mokopuna, the uri of Wī Pere. So I think what we could say, though, is that there will be a distinction between land that the trust has an ability to purchase once this legislation goes through the House—and that can be general freehold land and they can do whatever they like with that, but they need to safeguard the land that they have for future generations.

I want to say to my colleagues “kia kaha”. I think that this piece of legislation is going to challenge you in many ways, but what I am hoping is that through the process of the select committee we can actually hear from all the whānau and make sure that the mandate of 91 percent is actually real, and we will know, once submissions are open, whether or not this bill has the widespread support of the whānau. Inherent in this is maintaining the legacy of Wī Pere, his vision for the future, the fact that he must have been committed to passing the land on to his direct descendants because of the blood requirement. So we need to help protect and safeguard this piece of whenua, the whenua within the Wī Pere Trust, forevermore. Nō reira, tēnā koutou katoa. Kia ora.

JOANNE HAYES (National): Tēnā koe, Mr Assistant Speaker. I am pleased to stand to take a very short call to support the Māori Purposes Bill, which is in the name of the Hon Te Ururoa Flavell, the Minister for Māori Development, in its first reading today. It is always difficult when you are the third-to-last speaker in the House on a bill. Much of what has been said about the Wī Pere Trust has been articulated right throughout this House on this day. There are many views about it. As a member of the Māori Affairs Committee I look forward to the bill coming to the select committee.

Wī Pere was a very good leader. He was a very staunch supporter, as we have heard, of Māori land, and especially that land around the East Coast. Yes, he did have some trouble with the mortgage and that, and the Bank of New Zealand did take a mortgage out over the lands, but he did pay it back, and I think that was the test of the man. He was a leader who walked the talk, back in those days. He talked it and he walked it, and I think that he leaves a very good legacy behind him.

I am going to end my contribution there because, as I said, I look forward to the select committee process. I look forward to hearing the kōrero from the whānau of the Wī Pere Trust. I totally support the bill and commend it to the House. Thank you.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Ā, tēna koe, Mr Assistant Speaker, otirā, tēnā tātou katoa i tēnei rā whakahirahira.

[Thank you, Mr Assistant Speaker, but at the same time acknowledgments to us all on this wonderful day.]

I stand with my colleagues in support of this bill. This is not about us making it difficult or about us not trusting our people; we do trust our people. Our position on this bill is to make it the best legislation it can possibly be. In saying that, I too want to talk about the status of land. We are talking, in this instance, about it being general freehold land at the time that the principal Act, the Maori Purposes Act, was passed into law, which was then transferred and made Māori freehold land. This particular bill changes that and gives the opportunity for those particular lands that were once general freehold land but were transferred under the principal Act to become Māori freehold land to now, under this bill, become general freehold land again. What I would ask the House and the select committee to consider is what the original intent of the principal Act was in making that determination of changing the status from general freehold land to Māori freehold land. I would suggest that the intent was to protect the land from alienation. We see a number of settlement bills come through this House that address that very issue—the issue of alienation of Māori freehold land. I encourage the select committee to take a very close look at that particular issue.

I also want to talk about the governance aspects of this bill. The changes, to me, look like they will give a lot more scope for the governance of these lands—

The ASSISTANT SPEAKER (Hon Trevor Mallard): I apologise for interrupting the member but it is kai time. I will resume the Chair at 7.30 p.m.

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

ADRIAN RURAWHE: Tēnā koe, Mr Deputy Speaker. Before the dinner break I was speaking about the governance arrangements for the Wī Pere Trust. The thing that I really like about these kinds of bills is that it does give the trustees and the beneficial owners greater autonomy in their governance arrangements. Can I quote from the departmental disclosure statement where it says “These changes include reducing the role of the Crown,”, which is, I think, always a good thing. It gives a lot more responsibility to the trustees themselves. That is something that I agree with. It also increases direct accountability to beneficiaries, which I also agree with. I think it is really important that the beneficiaries know what the trustees are doing, so having a new constitution for the trust is a very good idea.

I did hear the Minister for Māori Development in his contribution refer to the consultation that had taken place between the Crown and the beneficial owners. There was a vote for the change to support the changes that are included in this bill. Of those who participated, 91 percent supported the changes. I just want to highlight that only 31 percent of the beneficiaries representing 57 percent of the beneficial interests actually participated in this process. Out of those 143 beneficiaries, by my calculations, 99 did not participate in this. I think it is important that that fact is highlighted and that there is an opportunity through the select committee process for these beneficial owners to make a contribution to this bill, and a contribution that, hopefully, addresses some of the issues that have been raised through this first reading.

I think another good thing about this bill is the register of beneficial interests. I think it is important also that the trust runs its own register. It is part of what we would call rangatiratanga. So from a Māori world view it is about taking care of our own interests. I think that having this in there as well is a very good thing.

I go back to the status of the lands. I mentioned earlier about changing the status of lands that were once general freehold land under the principal Act to Māori freehold land, and then under this change they will return to general land. I want to talk further about that, having thought about it a little bit more over the dinner break. There are both positives and negatives to this. I highlighted the negative side of it being that this land could now potentially—turning it back to general freehold land—be alienated. On the other hand, it does give the trust the opportunity to invest and to purchase other lands, whether it be farmland or any other properties, and for the specific purpose of being an investment property. As we all know, the true benefits of an investment property are realised when it is sold. In selling that it would give the trust more opportunities to invest further, whether it be in property, other properties, or other kinds of investment. I thought that in fairness to my first comments about the concern I have about alienation of land I would balance that with the acknowledgement that there are situations in the future for this trust where they may be able to purchase land specifically for the purpose of economic development.

I think that is all I have to contribute to this debate on the first reading. I look forward to the bill going to the Māori Affairs Committee. I do not sit on that committee but I am certain that it will do a really good job. I look forward to the report back when it comes back to the House. Thank you.

Bill read a first time.

Bill referred to the Māori Affairs Committee.

Bills

Child Protection (Child Sex Offender Register) Bill

First Reading

Hon ANNE TOLLEY (Minister for Social Development): I move, That the Child Protection (Child Sex Offender Register) Bill be now read a first time. I nominate the Social Services Committee to consider the bill. This bill will enable the establishment of a child sex offender register through the Child Protection (Child Sex Offender Register) Act. Child sexual abuse is a serious problem in New Zealand. It causes significant and long-lasting harm to children in our community and to their families. In 2014 alone, 451 offenders were convicted of a child sex offence, and of those, 307 were sentenced to imprisonment. Also in 2014, 294 child sex offenders were released from prison back into the community. The majority of these offenders will have no ongoing contact with justice-sector agencies after they complete their sentence or orders even though their risk of reoffending may be high.

This Government has gone a long way already towards addressing the risks presented by high-risk sexual and violent offenders with the introduction of public protection orders and the enhancement of extended supervision orders in 2014. The Government is currently working on addressing the risks around overseas offenders who are deported back to New Zealand, of which child sex offenders are a subset. The establishment of a child sex offender register will further enhance the safety of our children by ensuring that the appropriate agencies have the information that they need about registered child sex offenders who are living in the community, particularly when they are no longer subject to oversight by the Department of Corrections.

The bill will enable Police and Corrections to establish a child sex offender register for offenders aged 18 years or older who are convicted of a qualifying offence against a child under the age of 16 years and who are sentenced to a term of imprisonment or a non-custodial sentence and are directed to be registered at the discretion of the sentencing judge, or who are convicted of an offence overseas that is equivalent to a qualifying offence in New Zealand. The bill applies to persons convicted after the Act comes into force. It also applies retrospectively to those serving a sentence of imprisonment, including when they are on parole or release conditions or are subject to an extended supervision order for a qualifying offence on the date the Act comes into force.

The bill imposes reporting requirements on registered offenders. They must report to police and provide a range of personal information within 72 hours of their release from prison, their being made subject to a registration order at the direction of a judge, or on their arrival in New Zealand. This information includes any aliases, all the addresses at which they may reside, their workplaces, club memberships, car registrations, any distinguishing marks, email addresses, details of computer internet service providers used, and passport details. They must report annually to confirm their information and to provide a photograph and fingerprints if required. Finally, they must report within 72 hours of any changes to their personal information, and at least 48 hours prior to any travel, either within New Zealand or overseas.

Duration on the register for offenders is based on the class of the qualifying offence contained in the schedule to the bill and the sentence received. If a registered offender is sentenced to imprisonment, they will remain on the register for life for a class 1 offence, 15 years for a class 2 offence, and 8 years for a class 3 offence. If a registered offender is sentenced to a non-custodial sentence, they will be registered for a period of 8 years, regardless of the class of qualifying offence committed. This reflects the lesser non-custodial penalty imposed by the judge. The bill establishes offences for failing to report or provide the required information, with a penalty of imprisonment for up to 1 year and a fine of $2,000, and a penalty of imprisonment for up to 2 years and a fine of up to $4,000 for providing false or misleading information.

The bill has provisions for information sharing between specified agencies—Police, Corrections, the Ministry of Social Development, and Housing New Zealand Corporation—and between Police, Corrections, and a third party when it is deemed necessary in order to protect a child or children at risk; for example, to a parent of a child or children who has a new partner who is a registered child sex offender, that will be the Commissioner of Police and agencies administering corresponding registers overseas, such as Australia and the UK. Information in the register will not be publicly available. This is to ensure that we have one complete register of all offenders, including those who have name suppression. Outside of information sharing among specified agencies, there is limited provision for information to be disclosed to third parties. In situations where there is reasonable grounds to believe that a registered offender poses a threat to the safety of any children, information in the register may be provided to a parent, guardian, teacher, or caregiver of the child, but it will be an offence for anyone to make any unauthorised disclosure of information in the register, with a penalty of 6 months’ imprisonment and a fine of up to $25,000.

I note that the Attorney-General has tabled a report on this bill pursuant to section 7 of the New Zealand Bill of Rights Act 1990. The Attorney-General’s report has concluded that the bill is inconsistent with section 9 of the Act and section 26(2), and that this cannot be justified under section 5. Respectfully, I have slightly different views on those. The inconsistency with section 9 is based principally on there being no possibility for a review, at least of the lifetime reporting obligations of those who have been sentenced to imprisonment for a class 1 offence. This was an issue that was considered at length during the policy development stage, and the difficulty is how any reviewing authority can conclude that a fit and healthy person on the register who has committed a class 1 offence has ceased to be a risk to children. A reasonably long period of apparent non-offending will not necessarily mean that the risk of reoffending is sufficiently reduced to justify removing the person from the register.

There are no restrictions placed on where an individual can live or work, whom they can live or associate with, or when and where they can travel, including overseas. They are obliged only to report any changes in these circumstances. The bill is based on the premise that the rights of the child justify the imposition of obligations on these registered offenders and that there is a rational and proportionate connection between the objectives of the legislation and the means used to achieve them. The inconsistency with section 26(2), “double jeopardy”, is based on the retrospective application of the bill to those serving a sentence of imprisonment or who are subject to an extended supervision order for a qualifying offence when the bill comes into force. The limited retrospective nature is considered necessary in order to remove the not inconsiderable immediate risk presented by already sentenced child sex offenders moving into the community after the Act comes into force and not being subject to the bill’s reporting requirements. There are likely to be about 470 offenders to whom these provisions will initially apply. The section 7 report acknowledges that the retrospective provisions would help with addressing the risk, but it considers them to be more than is reasonably necessary. As stated above, I do not consider these reporting obligations to be excessive when balanced against the rights of children.

In summary, we know that child sex offending is a significant problem in New Zealand and that the harm caused to our children is substantial and long term. We also know that the monitoring of child sex offenders in the community is limited by the current legislation, which does not allow for the collection and sharing of information about child sex offenders in the community by relevant agencies. The Child Protection (Child Sex Offender Register) Bill provides a strong statutory basis for addressing these issues and for enhancing the sexual safety of the most vulnerable members of the community: our children. I commend this bill to the House.

JACINDA ARDERN (Labour): It is my pleasure to rise on behalf of Labour and to make a contribution to this first reading debate. First, I just want to query with the Minister for Social Development her decision to refer the bill to the Social Services Committee. I would have thought that the rationale behind sending it to either the Law and Order Committee or the Justice and Electoral Committee would probably be a much more useful decision, particularly given that the likes of those two committees have dealt with things like extended supervision orders and other issues that can be quite confronting to Bill of Rights issues and that need to be properly weighed up, and given that those are the select committees that have had to deal with those issues. I am sure that the Social Services Committee will do a fine job, but it just seems wrongly placed, because, at the end of the day, these are criminal justice decisions that are being made.

Of course there will be absolute consensus across this House around the need to protect the most vulnerable citizens in New Zealand, and children are amongst those citizens. We always welcome and are willing to support initiatives that are well placed to do that. For instance, even when the Vulnerable Children Bill came up, we took the opportunity to highlight those areas where we thought that there were useful mechanisms in place for children. Of course, that does not remove our ability to critique when we think that there is an absence of those ideas, but I want to raise the point that in arguing and debating for bills like this, we are actually already missing some very simple opportunities to put in place those protections. For instance, it is all well and good for us to be debating this child sex offenders register, but what about the fact that in the Vulnerable Children Act we have a requirement now on NGOs and on anyone who is working with children on the front line for them to take up the role of making sure that they check their workforce and that they ensure that they are properly able to work with children. So carrying out police checks will be a part of that. Of course, it does not matter that the Government is now putting in requirements, via a bill that it has before the House at the moment, that they will have to pay for that.

Secondly, the Government has also removed the ability of those NGOs to ask Child, Youth and Family Services to do a check on individuals whom they are employing in order to check that they are the right people to be working with children. So, on the one hand, we are saying that we want to create greater checks and balances, but on the other hand, we are removing the ability of NGOs to do that job properly. This seems counterintuitive. So our argument is: let us get the basics right. Carmel Sepuloni’s bill on the registering of social workers is another prime example. If we want to make sure that we are protecting young people, a very simple thing we can do is make sure that we have registration of social workers in New Zealand, and we do not even have that. So, again, let us get back to basics. That does not preclude us being able to do things like this, but let us get the basics right. I look forward to debating that bill tomorrow, hopefully.

To come to the detail of some of this bill, Labour is supporting it going to the select committee, so that we can look at some of the issues that we have a few concerns about and also some of the issues that, obviously, we would support. In the explanatory note, in the general policy statement for this bill, it says upfront that “The commission of sexual offences against children is a serious problem … it causes significant and long-lasting harm …”—no question there—“Information sharing between relevant agencies is recognised as an effective way to minimise the risk of harm from reoffending by known child sex offenders,”. We must also add, however, that the research and evidence definitely suggests that the ability to rehabilitate these individuals is undermined if ever these registries become public.

That is a really important point for us to keep in mind, because as much as there is public pressure for opening up information like this, it actually undermines our ability to keep young people safe. That seems counterintuitive. The easy political thing to do is to say: “Let’s just put all that detail out there.” That actually makes it harder to safely reintegrate someone and to ensure that we rehabilitate them properly so they never offend again. There is research and evidence around that fact, and we cannot and should not play politics around that if that is, in fact, the right thing to do in terms of trying to keep people safe in the long run. So, yes, keeping a register absolutely has benefits, but that register must be kept within the Government departments, which can make sure that they use that information appropriately and in the best interests of children and their communities.

The explanatory note then goes on to say that the Child Protection (Child Sex Offender Register) Bill requires all child sex offenders to register if they were aged over 18 years when the offence was committed and were convicted of a qualifying offence. I think it is up to the select committee to make sure that that list of qualifying offences is the appropriate list. I have had a quick look through it; a lot of it seems to make sense. The one issue that I am genuinely unsure of, but that I would like to test at the select committee, is that we do have to be careful with some of the historical offences on our statutes—for example, people who currently hold convictions from pre - homosexual law reform—which are not actually the kinds of convictions that we want to be captured in a bill like this. I think that is just one of those tricky legislative questions that we need to ask at the select committee so that we know we are including only the right people in this particular bill.

The bill also goes on to say that we want to ensure that we can register any offender who is found guilty of a corresponding offence in a foreign jurisdiction. Look—that makes sense. A lot of individuals are being deported back to New Zealand prior to finishing their custodial sentences. Again, I think that what we have to be mindful of here is just the practical implications, actually. It sounds good on paper, but we actually do not even have an information-sharing agreement that has been practically implemented between us and Australia, for instance. I think we are all in agreement that it is a good idea, but as a select committee, if there are blockages to that, we should be talking about it, because it is holding up our ability not just to do this work but also to implement some elements of our extended supervision order legislation. Already we have seen some horrific cases where it was not the intention of the Parliament to have those individuals let off the hook when they came back into New Zealand.

One of the other points that is made is that “All registered offenders, when residing in the community, will be required to provide a range of personal information to a central register administered by the New Zealand Police. The registered offender must update the information annually, within 72 hours of any change of details, and at least 48 hours prior to travel.” Just one issue there that I would like to see discussed at the select committee is: who, then, is making sure that that residential address is appropriate? We have already seen cases in New Zealand where someone has been released to an address that is actually within very close proximity to victims. In this bill, we have a reporting mechanism, but it does not seem that there is any check in that reporting mechanism to ensure that it is an appropriate residence for that individual. So we need to make sure that we have got that mechanism in place, otherwise it becomes quite redundant.

If, indeed, the people are checking that appropriateness—which you would assume would be probation officers—we have already seen some areas where that process has fallen down. So, again, are we resourcing those individuals to do this job properly? Who will be monitoring, for instance, that people are staying within the residence that they are listing? Will we be privately contracting out that role? We have seen the issues that that can present. How can we make sure that the current poor management that we have seen around monitoring of offenders in the community is done properly? These are all things that make a scheme like this utterly redundant unless we have proper checks and balances in place. So these are all questions that we would ask.

Also, I want to add in, because it seems appropriate, that, actually, there is an assumption in this bill that when a sex offender is released into the community, they have got accommodation, they simply need to go and register it, and everything is, therefore, tickety-boo. Part of our problem with reintegration and rehabilitation is the lack of availability of appropriate accommodation in the first place. I have seen scenarios where it has been decided by the Parole Board that an offender is ready for release and is ready to be monitored back in the community, but they have been unable to be released because of a lack of appropriate accommodation. This has to be a part of a proper, well-functioning corrections system to ensure that we have the appropriate kind of accommodation available in the first place. So we are kind of skipping a bit of a step in making that assumption in the first place.

The other thing that we would like to see discussed is what the mechanisms to be removed from the register are when, for instance, after a period of 10 years, a person has not reoffended, there have been no issues, and everyone is satisfied with the way the individual has reintegrated. We heard the Minister for Social Development make some vague comment about—

Mr DEPUTY SPEAKER: I am sorry to have to interrupt the member, but her time has well expired.

MATT DOOCEY (National—Waimakariri): It is important for me to speak in support of the Child Protection (Child Sex Offender Register) Bill at its first reading. I would just like to commend the Minister for Social Development, the Hon Anne Tolley, for all the work she does in the space of protecting children and vulnerable children. I would not say, necessarily, that it is a pleasure to rise to speak to a bill around child sex offenders, but I think, as the father of a young daughter—and many people in this room are parents, grandparents, uncles, and aunties—and for people throughout the country, that it is something that we will join together in support of in making this country safer. It is a bill that is focused on offenders who are over 18 who have committed crimes on children who are under 16.

Child sexual abuse is a crime, and this Government is tough on crime. It is tough on the causes of crime. When we look at crime in New Zealand at the moment, we do have one of our lowest crime rates since the 1970s. I think our Better Public Services target around crime of around 20 percent has already been surpassed, but, as this bill demonstrates, there is always more to do. That is what this Government is committed to and what this Government is focused on doing. Look at the work we are doing around children and vulnerable young children. Look at the release of the State of Care 2015: What we learnt from monitoring Child, Youth and Family report from the Children’s Commissioner and the response of the Minister and the Government in looking at the modernisation and the overhaul of Child, Youth and Family Services, as well as Children’s Teams to work with some of the most vulnerable young children before they go into care, and even things like raising the age of free GP care up to the age of 13.

This bill is about establishing and creating a register that will collect information—things like names and addresses of child sex offenders. It is also about building a risk-based, multi-agency management framework. I think that if we look at that sentence around the risk base and unpack it for a minute, obviously child sex offenders pose a risk to people in the community, and it is about understanding that risk and thinking through how that might play out in a community. The phrase “multi-agency” is about ensuring that all the agencies are working together and are joined up, and that might be the police, the Department of Corrections, and, you could imagine, the Ministry of Social Development and Housing New Zealand, understanding that a child sex offender could be living in a house, under their oversight, with a new partner and children.

When we look at the regulatory impact statement, it is interesting that when we benchmark ourselves internationally and look at the research and evidence, it is very much a growing field. It is a field that is still developing evidence around the use of a risk register as well as long-term monitoring of child sex offenders. We can look at a piece of research from the UK in 2011. It was around the Multi-Agency Public Protection Arrangements, or MAPPA, which was introduced by the British Government in 2001. What it identified from its research was that there was a reduction in reconviction rates amongst sex offenders between 2001 and 2014. That is when they compared that with a cohort of 1998 to 2000, albeit that the Multi-Agency Public Protection Arrangements was introduced in 2001.

So what Multi-Agency Public Protection Arrangements evidenced was that through risk-profiling as well as risk management of the offenders, it was able to understand how it could cause a reduction in reoffending. Let us be clear: any reduction in reoffending is beneficial. If you look at some of the regulatory impact statement and the departmental disclosure statement, you see that there are some references around child sex offenders, those who are serving or future ones, having less privacy of personal information through this bill. Depending on the severity of the crime, of course, some people will go on the risk register for 8 years, some child sex offenders for 15 years, and some for life. By being placed on this register there will be less privacy of their personal information, but I think that is tough. At the end of the day, we are putting children first, and that is what we need to do. I think this bill puts children first. I take the comments of the previous speaker, Jacinda Ardern, about public disclosure and how that probably does not do the children any good itself, but I think that collecting this information and having a multi-agency response and monitoring are the right things to do in looking at recidivism and in looking at reoffending to ensure that we are managing right some very high-risk criminals and putting young people safely in our communities.

So when we look at the three types of information sharing that this bill is talking about for child sex offenders when they go on the register, it is about facilitating more personal information, which police and the Department of Corrections can collect and discuss within themselves. It is also about ensuring that additional personal information can be shared with Government agencies, such as the Ministry of Social Development and Housing New Zealand. But it is also about allowing the police and the Department of Corrections, if they feel it is right, to disclose personal and private information to people outside of those Government departments if they feel that a child sex offender is at risk of reoffending.

This bill creates a decision-making power for the courts, and that was clearly stated in the departmental disclosure statement. It has about four categories. If a child sex offender is found guilty of a qualifying offence but is given a non-custodial sentence, a court may make an order for a child sex offender who poses a risk to the lives or sexual safety of a child or children, or other offenders who have received a custodial sentence, and they will automatically be put on this register. But there is also another category, which the previous speaker alluded to, and that is New Zealand nationals who commit these offences overseas and then are deported at the end of their sentence. I know that in my electorate this has occurred recently, and there was fear and concern in the community that there was no oversight of this person who was coming back from another country and reintegrating in a community in New Zealand. So I think this will allay some of that fear for the local community and they will understand that police and the Department of Corrections will have oversight of this child sex offender.

I commend this bill to the House. Thank you.

CARMEL SEPULONI (Labour—Kelston): I am standing to speak to the Child Protection (Child Sex Offender Register) Bill. As my colleague Jacinda Ardern pointed out, we will be supporting the bill’s referral to the select committee. We are concerned about the fact that it is coming to the Social Services Committee. I do not mind considering this bill, being on the Social Services Committee, but we do wonder whether or not, because this is a criminal justice issue, the bill should actually be sent to the Justice and Electoral Committee or the Law and Order Committee.

I just want to acknowledge that across the House every single one of us would recognise that this is a major issue. I think it is important to look at a few of the facts that we see in the regulatory impact statement—facts that we should all be concerned about. Child sexual abuse is a serious problem in New Zealand. In 2012-13, 505 offenders were convicted of 1,819 sex offences against children, up by over 20 percent from a decade earlier. We heard earlier from the other side that crime is down, but when we hear those statistics and see that sexual offences against children are up by 20 percent from a decade earlier, then we should be concerned. In 2012-13 the Accident Compensation Corporation had 779 sensitive claims lodged for sexual abuse against children under the age of 16 years. These are just the cases that actually led to a conviction. We know, because of the research, that there are thousands of cases of child sexual abuse out there every year that do not get reported, let alone lead to a conviction. Child victims of sexual abuse are amongst the most vulnerable victims of crime, and the resultant harm is often very serious and long-lasting. These are things that we can agree on in the House.

My concern—and I will be asking questions about this when the bill comes before the select committee—is actually around the rehabilitation side in respect of sexual offenders. I am really interested to know—and I will be really interested to know and will be digging down on this—how successful the rehabilitation programmes that we have in place are, particularly the ones that are run in our jails, what the results are, and what the research there is. What do we need to know as parliamentarians about this and what do the public need to know? Where do we need to be investing more funding and more resource in if the rehabilitation programmes that we have in place are not successful?

I was recently quite disturbed by a case in west Auckland where a person was caught by the police in the library sexually offending against a child. Not only was that disturbing but what was particularly disturbing was that that particular person was working in the capacity of a social worker for a social service in west Auckland and had committed a similar crime 25 years earlier. And, yet, that person was still able to work in that position of social worker and was able to reoffend. I am going to go down the track of talking about the need to have a qualified and registered workforce working with our children, as my colleague Jacinda Ardern alluded to before, and I am going to take this opportunity to bring up the fact that a report that recently came out highlighted the need to have a more qualified workforce working with vulnerable children.

Tomorrow in the House we have a members’ day, and my bill, the Social Workers Registration (Mandatory Registration) Amendment Bill, will be coming up. It is about moving towards the mandatory registration of social workers. I bring this up because I am reflecting on that particular social worker in west Auckland who sexually offended against a young child in the library and who was working for a social service at the time, in the capacity of a social worker. Unfortunately, all too often the people who are committing these offences are either family members or people in trusted positions. So I think we have a moral obligation as a Parliament to make sure that we are holding to account the people who are in those trusted positions or working with vulnerable children. I am hoping that tomorrow the National Government will consider supporting my member’s bill to make social worker registration mandatory.

We are not opposed to certain types of information sharing between departments—in this case, it would be corrections and police—but there are concerns, though, about how information will be shared. Anne Tolley has said that in some cases where there is a significant threat to the safety of children, information from the register may be released to a third party such as the parent or guardian of a child, or a teacher or caregiver responsible for a child. My concern with that is that the National Government’s speakers on the bill have said that, on the one hand, this will not be a public register. The register will not, apparently, be public but will be available to authorised police, corrections staff, and authorised staff from relevant agencies such the Ministry of Social Development and Housing New Zealand.

Then, though, we have Anne Tolley, the Minister for Social Development, saying that where there is a significant threat to the safety of children, information from the register may be released to a third party such as the parent or guardian of a child, or a teacher or caregiver. I guess that we are just seeking clarification on that, because, actually, if that information is going to the third party, such as the examples that have been given here, then it actually is going public. So, on the one hand, to say that this register will not be public and will be going to only these agencies, and then, on the other, to say that in some circumstances it can go to a third party—including the guardian of a child, or a teacher or caregiver—it then becomes really blurred. Is this a public register or is this not a public register? If it is a public register, then the Government really needs to name it that and be very transparent about that. At the moment I am a little bit concerned that it is a little murky.

I just want to point out the fact that there should be a mechanism for review to be removed from the register if offenders have not offended in a very long time. This has been brought up, but this is something that we will need to discuss at the select committee. There are so many issues digging down on this that we are going to have to have discussions about at the select committee, which does take me back to my concern as to whether this is well-suited with the Social Services Committee or, as my colleague Jacinda Ardern pointed out earlier, whether it would have a better fit with the Justice and Electoral Committee or the Law and Order Committee, given that this really is a criminal justice issue.

It is important to manage any risks to children and the community posed by convicted child sex offenders who have come to the end of their sentences or are serving non-custodial sentences. We do accept that this bill will allow for the tracking of convicted child sex offenders in the community, to be used as a tool to try to prevent reoffending. If it does assist with preventing reoffending, then of course we will support this. But we do need to acknowledge that this is not a silver bullet, with regard to the very serious issue that we face as a country with child sex offenders and sex offences committed against children. There is much more that needs to be looked at. This is one possible way in which we can try to mitigate the risk, but it definitely is not the silver bullet to resolving the issues that we have in this country with sexual offences against children.

TODD MULLER (National—Bay of Plenty): I rise to take a call this evening to support the first reading of the Child Protection (Child Sex Offender Register) Bill. Like my colleague Matt Doocey, I would like to acknowledge Minister Tolley for her work in this area and for bringing this bill to the floor of the House, and also the Hon Judith Collins for her previous ministerial roles. I know that she had a particular advocacy for such a register.

This bill is seeking to strike the right balance between protecting some of our most vulnerable children—who are aged from a few months old through to 15 years old—on the one side, and on the other the rights of those who have committed these crimes and been found guilty for them but are returning back into the community and are, no doubt, wanting a fair life as they do that. In my view, this bill traverses that age-old tension between public safety, on the one hand, and individual rights, on the other. But the bill that we are discussing this evening reflects a clear bias towards keeping our most vulnerable safe. It is anchored in a view that information tightly held that is used to inform risk and associated response is an appropriate framework to protect those who need our protection, but it does, of course, at the margins erode the rights of individuals.

That is a balance I am comfortable with, and, no doubt, during the select committee process we will hear a spectrum of views from those who are across New Zealand on this issue. I am going to listen with interest, and I am sure that most of our select committee members will, to assure myself that we have landed in the right place. I believe, at the moment, that we have. I also think it is right that we as the Social Services Committee reflect on it. This is a whole-of-Government approach, which this Government has brought in to protect and look after our most vulnerable, particularly children. So I am very confident that under the leadership of Alfred Ngaro and the deputy chairmanship of Matt Doocey and others we will have the appropriate discussion and traverse the areas that we need to.

Sexual offending against children is a serious problem that causes significant and long-lasting harm. Reported child sexual abuse is increasing. In 2012-13, 505 offenders were convicted of 1,819 sex offences against children, up 20 percent from the previous decade. That, to be honest, is likely to be a lower-than-reality number, because children, of all of our community, are less likely to have come forward in all cases if they have been offended against. What we do know is that victims of child sex offenders are some of our most vulnerable in New Zealand. Their lack of emotional, physical, and intellectual maturity puts them at serious disadvantage to those who are leveraging their often adult status. These adverse effects are significant. They can include chronic depression, low self-esteem, sexual dysfunction, and personality disorders, amongst others—and, I guess more tragically, they often have an increased risk of being an offender themselves, in time.

The key problem that we are seeking to solve with this bill is to close the gaps in Government information collection and information sharing systems that have become evident in reviewing recent incidents relating to reoffending. I think this is a key point that we should bring out in this discussion—that this has occurred. We have seen situations where reoffending has occurred in society, and as we have looked deeply at the causes of that and what the conditions were in the place when that happened, it was the lack of information and the lack of sharing between relevant Government ministries that were contributing factors to that.

This bill seeks to establish the child protection offender register, as we have heard this evening. It includes all offenders aged 18 years or older at the time of the offence who have been convicted of a qualifying child sex offence and, of course, were then sentenced to imprisonment. It also enables a judge, if it is a non-custodial sentence, to assess the risk profile of that individual and then also direct them to register on the register as well. It also includes a condition to capture, if you like, on the register those who have committed these crimes in offshore jurisdictions but who intend to live in New Zealand for more than 6 months. Again, as long as the offending was of a similar threshold to what the equivalent would have been in New Zealand, they too will need to be registered on this proposed register.

I will spend a moment on the register itself. I think it is worth here in this first reading to just step through some of the components of that. It is going to have a range of personal information of these individuals: their names and other identifying particulars—address and the like, as you would expect—details of each qualifying offence, or corresponding offence if it was in an offshore jurisdiction; the date they were sentenced; the date the registrable offender ceased to be in custody; and, of course, an obligation that if any of that information changes, they have to update the Department of Corrections within 72 hours of any change or 48 hours if they are seeking to travel. Just as important, every 12 months there is an obligation to make sure that that has been reconfirmed as accurate. As has already been discussed this evening, the time frames in which they need to be on the register are 15 years or 8 years from the date they have been released from prison, or potentially for life depending, of course, on the seriousness of the qualifying offence for which they were convicted. As a point of detail, those who are on this register because of their non-custodial sentence and the judge’s direction, are required to be on this register for 8 years.

In terms of the ongoing management of the register, obviously in this bill it is clear that the Department of Corrections and the Police will share responsibility for managing that. I think, again, that that is a very sensible and efficient conclusion. The Department of Corrections, whilst those offenders are in prison and once those on the register move out into the community, then swaps it over to the Police to be the lead manager of that interface. Agencies such as the Ministry of Social Development and Housing New Zealand will, of course, continue to have limited access to the information—limited, but they do have the capacity to have access to it if it is clear that it is in the interests of public safety.

Obviously, this information needs to be updated to establish a complete picture of emerging risk of reoffending. I think that that is a key component of this register—that it is not a static piece of data. Those with the greatest skills of being able to assess the risk profile of individuals can assess the data, can look at the trend line of recovery of the individual, and can build a particular support plan around them. It is that interface, if you like, between the data and a management plan over time that reduces the risk on our vulnerable children in New Zealand.

That is why I think this is a good bill, and I welcome the conversation that we are going to have, as the Social Services Committee, over the next few months. Thank you.

DAVID CLENDON (Green): I would like to just begin my comments by saying—not wishing to labour a point already well made by our Labour colleagues; and there is a terrible pun in there that was unintended—that the matter of the Minister’s choice of select committee does seem peculiar. I do not wish to impugn the Social Services Committee in any way—I am sure that it is a splendid committee.

According to the advice on our very own parliamentary website, however, “The Social Services Committee considers matters relating to housing, senior citizens, social development, veterans’ affairs, and work and income support.”, and I struggle to see how the content of this bill fits under that umbrella of issues to be considered by that committee. It is not a matter of academic interest; it is a genuine concern that committees build up a level of expertise and experience in their area around specific matters of interest. The Law and Order Committee and the Justice and Electoral Committee are accustomed to working on legislation around offending, around courts, around corrections, and with police, and I really am puzzled as to why you would not send it to one of those committees. So be it.

The Greens are supporting this bill going to the select committee at least, essentially based on the reality that we are willing to engage with any proposition that is aimed at protecting children. It is fair to say, I think, that most forms of offending against the law will find a level of tolerance in some parts of society. With traffic offences, some drug offences, and breaking the rules around tax you will find a cohort of people who are willing to tolerate and even participate in some of those things. Sex offending against children is abhorrent, I would argue, to all New Zealanders. It is something that none of us can tolerate, nor should we, and so any mechanism that might reduce the risk to our children is something that we are willing to engage in.

We will engage in this process in good faith and we will endeavour to keep open minds, but the first most important question is: will the establishment of a child sex offender register make our children safer? That is the evidence and the information that we will be looking for in the select committee. We will be wanting to hear the evidence of experts and we will be wanting to engage with the research, to be persuaded that actually that is the case, because such evidence as there is seems at best ambivalent about whether these registers actually do any good in the real world or whether they are simply a means of appearing to do some good. As I say, we will engage with that in good faith, and we will be interested to see what the outcome is.

Having said that, even if that primary question about whether a register could potentially protect children is answered to our satisfaction, we would still have some fairly significant concerns about this bill as drafted. Not least of all are concerns around the matters described in the section 7 report from the Attorney-General that indicates that the bill as drafted is inconsistent with sections 9 and 26 of the New Zealand Bill of Rights Act, around disproportionately severe treatment.

Hon Christopher Finlayson: Doesn’t listen to anything I say. No one listens.

DAVID CLENDON: Ha ha! I may quote back to the Minister on that comment, but for the moment it is double jeopardy, and the finding of the Attorney-General is that this bill is inconsistent in a way that cannot be justified. That is a very serious matter. It is not a nuanced commentary; it is quite clear-cut and it is quite black and white, and that is something that will have to be attended to and remedied.

The main thing about this matter is that once a person is on the register for some offences then there is no going back—it is for life. There is no possibility or no acknowledgment of reform. A person may, over time, step away from offending and their risk profile could drop to zero, and yet that person would for ever be on the register. I think it is important to recognise that the register—OK, a name on a piece of paper—is actually a great deal more than that.

The Minister did indicate some of the implications of being on this register. It includes name, date of birth, address, names of any children living at an address or where a registered person may be living, details of any club or organisation with which they are affiliated that might also have child participation—and if you think that one through, that would include organisations like Forest and Bird. In fact, it is hard to think of any social club or group where children might not be involved. Also included are details of motor vehicles, all and any phone numbers, details of service providers for phones, details of internet service providers, and details of login names, usernames, and passwords. This is an incredibly intrusive list of requirements. This is an extraordinarily comprehensive array of information about a human being. It is almost zero privacy, and the significance of that I will come to when I mention the security or otherwise of such a register and our ability to keep such a register private.

The fact is that if a person chooses to travel from their place of residence they must give 48 hours’ notice, and they must indicate where they are going to be staying and the names of any children who might be at that address. And somebody might be obliged to do this for 8 years, 15 years, or for life—long past the point at which they may represent a risk to society or, particularly, a risk to our children.

The cost of this legislation or, rather, of maintaining such a register has been commented on. It is in the many hundreds of millions of dollars. Some of that burden, we understand, would fall on the policing budget, which is already inadequate. The police are already underfunded to the point where they are struggling to provide an acceptable level of service, despite their very best efforts and despite their very successful attempts to find efficiencies, to find ways to do more with less. Nevertheless, the cost of this legislation in terms of its implementation would run into the hundreds of millions of dollars, and that is OK—if that is going to actually protect our children, then, yes. The price ticket is not irrelevant, but it certainly becomes a matter of less importance.

But the worst-case scenario is that if we put this thing in place and it does not work, we have spent a great deal of money that could have otherwise been spent on provisions and on mechanisms that would help protect our children—everything from education through to treatment, through to social mechanisms that might be a much better use of that money than spending it on something that may or may not work.

I mentioned the matter of privacy, and Carmel Sepuloni, I think, outlined some of the dilemmas there. It is very difficult to have any confidence in the fact that a register of this nature would remain confidential—private—given the number of agencies that might potentially have access to it. We have rather a poor history in New Zealand. I will not sheet responsibility home to any particular Government or any particular time, but we do not have a particularly good history of keeping secrets. Once databases and their information are in the domain of the public sector, it is very difficult to guarantee their long-term security. That would be an extraordinary invasion, given, as I said, that people’s log-in details, their passwords to get into their internet accounts, and their emails would be part of the information that could be accessible and, indeed, could be accessed by people who ought not to do that.

Clause 39 of the bill as it is drafted would be something of a deal-breaker for the Greens. It says that the guidelines, which will be prepared by the commissioner, etc., “may authorise the use of information contained in the register for a purpose other than the purpose for which the information was obtained”, with the criterion being “if an authorised person reasonably believes such use is necessary to … prevent or reduce a threat to public safety …”—end of story. It goes on to talk about particular concerns around protecting children, but the bottom line is that this information could—at the whim of an authorised person—be used for any purpose on the grounds that it might prevent or reduce a threat to public safety. I would be less concerned if “public safety” was defined anywhere in this bill. It is not. One could draw some exceedingly long bows and provide this information on the flimsiest of excuses based on the wording of the current clause 39. I do not think that is acceptable. I do not think we could be part of supporting that, and I hope the select committee attends to that particular provision.

The point has been made that the bill is intended to be retrospective—that it will apply to people who have been convicted before the passing of this legislation. We would have some serious reservations about that, and Jacinda Ardern in her contribution highlighted a couple of potential pitfalls where people may be captured under this legislation when, in fact, it was never the intention of the legislation to include those people within it.

So, as I say—going back to where I began—we will certainly engage with this in good faith. We will look at the evidence, we will listen to the research, and we will seek out good information and make a decision as to whether or not we think a register would actually protect our children from this most heinous of crimes—sexual offending against them—and our actions from that point will be dependent on the information that we receive. Kia ora.

DARROCH BALL (NZ First): I rise on behalf of New Zealand First to speak on the Child Protection (Child Sex Offender Register) Bill. New Zealand First will be supporting this bill’s referral to a select committee. We do, however, have some concerns, questions, and queries that, hopefully, will be addressed at the select committee. A few of them have already been mentioned. What I did was I went through the departmental disclosure statement and regulatory impact statement, and a lot of those questions fell out of there. So I will take this opportunity to go through those questions and queries from those documents there.

I will start with the disclosure statement and the general policy statement, and the main reason why New Zealand First is supporting this bill is actually quite aptly noted here. It says: “Information sharing between relevant agencies is recognised as an effective way to minimise the harm from re-offending by known child sex offenders, when complemented by a structured risk management framework. Child sex offender registers help government agencies identify and manage the risk of sex offending in the community, and provide offenders with incentives and support to maintain a low-risk lifestyle.” So that is a good paragraph about the basis of why New Zealand First supports this bill, but what is this legislation trying to effect?

What I saw in the regulatory impact statement was of quite some concern, and I know that the Minister actually mentioned it in her first reading speech but kind of brushed over it. It states that “The potential for child sexual re-offending arises when convicted sex offenders are living in the community. … each year around 210 of these offenders are released back into the community [and] approximately 115 child sex offenders per year commence a community-based sentence. The majority of these offenders have no on-going contact with justice sector agencies after their sentence, even though they may present a significant risk of future harm.” So when I read that I said, what is going on here? This cannot be a new problem that is occurring. We have got the information out there that we have got over a hundred child sex offenders in the community who pose a significant risk of future harm and there is no contact with our agencies at that stage.

That is obviously why we need to have something like a child sex offender register, but obviously there is a significant problem, apparently, and there has been for a long time. Given that information, it is no wonder there has been a 20 percent increase over the last couple of years. In the executive summary, it states that 1,819 sex offences against children occurred, which is up by over 20 percent from a decade earlier, but I do not see anywhere in any of these documents where they actually address the recidivist rate, or the reoffending rate, so this, obviously, is the target for the register.

I went and did a little bit of research, and found that the sexual reoffending rate after the 12-month follow-up is in and around 10 percent, and after 24 months it actually jumps up to about 17 percent. So there is a really big problem, and this goes some way to addressing that problem. Obviously, child victims of sexual abuse are amongst the most vulnerable victims. The general public know that this is a different type of criminal and it is a different type of crime, which is why we need a different method to be able to deal with that, and that is what the register is.

What also needs to occur is wraparound services and the other services that would support and integrate with the register. I noticed that in the Bills Digest it suggests that there is a framework of risk minimisation that would support the register, but it does not go on to detail what that framework is. Again, it will be interesting to find out what exactly that framework is that will support the register. I think it is a key thing to note that this is not in itself going to stop child abuse. This targets the child abuse reoffenders, so we need other methods to help prevent child abuse. Carmel Sepuloni actually mentioned one of them, which is the bill that is going to come up tomorrow dealing with the mandatory registration of social workers. That is one of the prime examples of why we cannot look at the register as a silver bullet.

There were a few options that were considered going through and coming up with the child protection offenders register, and it highlights the importance of what the considerations were in ending up at this stage. The options were to maintain the status quo, to extend the scope of the existing child sex offender harm reduction measures, and also to increase funding for NGOs in order to increase the provision of specialist assessments. All of those have limitations in themselves, from some being voluntary, to the status quo not working so we need to find a different mechanism. That is why New Zealand First is supporting this bill.

It actually took until the sixth speech today, from the Green Party, to start mentioning the funding and where the resources will be coming from. When I was reading that I was quite surprised at where this funding was actually going to come from. It says here that the 10-year cost for this proposal is around $150 million, and it states that “Some capital components and all field operating costs for the Register and risk management framework amounting to $85.1 million (Corrections $70.6 million, Police $14.1 million, Courts $0.38 million) over ten years will be met from within existing baselines.” Therefore, $85 million of the $150 million - odd is going to be met from existing baselines.

It goes on to say: “The additional $9.1 million”—in regard to corrections—“will be absorbed by Corrections through efficiency gains.” What that means, in other words, is—tough luck; suck it up and do the job. Corrections will not get any more funding to do more work. In regard to the police, it says “Police will absorb the cost of its new activity … through achieving more effective utilisation of existing staff …”. More effective utilisation of existing staff. That means wearing more hats, doing more jobs, and no extra help, no extra staffing, and no extra funding to make this happen. What that says to me, actually, is that this could end up being yet another public service that is being stretched, and stretching to breaking point.

Actually, I was looking at a study that was done by the Australian and New Zealand Journal of Criminology. One of the study’s headings was “The impact of community notification on criminal justice agencies”. I just want to quote this. It says: “A small but growing body of research demonstrates that community notification has a significant impact on the agencies responsible for its administration … One of the most frequently cited concerns of administrators is that it places a strain on limited agency resources … Community notification schemes are undeniably expensive to implement and maintain, irrespective of whether they are active or passive … The time and money invested in activities associated with notification inevitably must be redirected from other areas, which could plausibly lead to an increase in other types of crime …”.

So there is a lot of detail that has been somewhat brushed over in the presentation of this bill, and I think one that was kind of swept under the carpet a little bit and not mentioned by anyone in the National Party yet, not even the Minister for Social Development, was where the funds are coming from. In the end it is, unfortunately, going to be placed on the police, corrections, and the courts to find a way to make it happen. What we do not want to see is the potential for this register to do a good job being squandered by lack of resources once again from the Government.

Like I said, New Zealand First is going to support this bill. I went through a few—very few—questions, queries, problems, and concerns that we had. I had a heap more to go through, but that will be coming through in the select committee. New Zealand First supports this bill going through to the select committee.

JONO NAYLOR (National): Can I just say that it has been wonderful to hear such widespread support for this bill across the House this evening. I guess the reason why people have been so supportive of it is that keeping vulnerable children safe is at the heart of what this bill is trying to achieve. I think we can all agree on that. I think we would all agree that that is a very good thing for us to be doing, so that reason alone is, I guess, the main reason why the Minister for Social Development has chosen to put this legislation through the Social Services Committee. I have heard a bit of disquiet around people being concerned that perhaps this bill should have gone to the Justice and Electoral Committee or the Law and Order Committee. I can see the rationale behind what has drawn people to that way of thinking, but actually, when you consider that at the heart of this bill is the protection of vulnerable children, that is exactly what we are about in the Social Services Committee. I am sure that that committee will do an outstanding job of looking at the benefits of such a bill coming into law and that it will be able to weigh up those justice issues. There is a little bit of crossover between those committees anyway, and so I am sure that people will bring their expertise from the Justice and Electoral Committee and the Law and Order Committee into the Social Services Committee to be able to assess this bill as it takes its passage through Parliament.

As I have said, I think the great thing about this legislation is that it is about looking after potential victims—people who are yet to suffer abuse, perhaps—but it also looks to protect past victims from being abused again by people who may have offended against them. A bill like this, and putting together legislation like this, is, in fact, a balancing act—a balancing act between the personal freedoms of the offenders and the safety of victims and potential victims. I have always been one who has believed in the fact that people should be given the opportunity to be rehabilitated and to come to a place where they can perhaps be reformed and where they would perhaps no longer offend and no longer be tempted to offend. I think this is something that can happen. But at the same time, we should not just presume that because somebody has shown some level of contrition, they are therefore not at risk of offending again. So, as I say, for the sake of those victims and potential victims, we need to put some protections in place.

This is, of course, a private register, and the reason for this is that it is not always beneficial for information like this to be sitting out there in the public domain. I am sure that we will get submissions coming into the select committee from people asking: “Why don’t you just publish a public register so that we can all know who these people are?”. I think that is not the answer, because it can lead to vigilante-type behaviour. It can even lead to the victimisation of offenders who have perhaps been rehabilitated and who are trying to make the best of living a good life again after having made some bad choices. So making this a public register is not the right thing to do. Therefore, it is important that we remember this and ensure that we keep the parameters of the privacy of this intact.

Also, this is not a new concept. I remember sitting in the staffroom at Child, Youth and Family close to 20 years ago with people talking about whether or not a register like this would actually be helpful. I think that when you are looking at placing vulnerable children with families, this type of information would be good for Child, Youth and Family to know, particularly if it is looking to make a placement with a kin caregiver or with someone within the whānau. Having access to this information via the police might be particularly useful, because the last thing that we would want to do is place a young person who has come into the custody of Child, Youth and Family into the care of somebody who is a known sex offender. Perhaps they are not in any particular ongoing contact with the justice system now. It might be historical, but still you would not want to take the risk of placing a child with them. So it is appropriate that people within Child, Youth and Family have access to this information.

I think it is really important to understand that it is the police and the Department of Corrections that are going to have direct access to this information, and they will have the ability to share it with authorised people within the Ministry of Social Development and Housing New Zealand Corporation. There has been a little bit of a suggestion that there is some concern about whether that information gets shared any further, and I think it is important to understand that the police or the Department of Corrections may then disclose this information to a third party when it is deemed necessary to protect a child or when a child is at risk. So it is not just that the police or the Department of Corrections have the ability to share this with absolutely anybody. For example, if a parent of a child or children was moving in with a new partner and that person was on this register, it might be appropriate for that parent to know about that because it might not be something that they knew about that person. So there will be some parameters around how and when this information can be shared, but it does not mean that it is then becoming a de facto public register. It will still be a private register limited to those people who are authorised to view it and who will have some discretion if they deem it is appropriate to disclose that to a third party in order to keep a child safe from harm.

At the moment, offenders can disappear back into communities when they finish a sentence. If they have got to the end of any protection orders or any ongoing parole, it is appropriate that we want the authorities to be able to continue to keep track of them. What it means is that those people who know the offenders, who know their patterns of behaviour, and who know the things that are most likely to be triggers that might lead to them reoffending will then be able to assess the living arrangement that somebody is moving into. They will be able to look and say “Actually, that’s not a good idea.” and perhaps, at that point, provide some level of intervention. It also means that we will be able to ensure that when those offenders are perhaps tempted to reoffend, the knowledge that there is somebody who is keeping track of them will also act as a deterrent for them.

So even though they are not actually being punished, they are not having to still perform some sort of sentence, and they are not listed under ongoing monitoring, there is at least something in place that says: “Actually, someone is keeping an eye on us. Someone is keeping an eye on me to make sure that I am behaving and to make sure that I am not reoffending.” And do you know what? If they really are fully reformed, if they really have been fully rehabilitated, then those people will not have anything to be afraid of because that information will not be shared with anybody else. They will be able to continue living a normal life, but our communities can continue to operate in a way that makes them, at least in some way, better protected than they are now. It is not onerous for those people who are in this situation to have to report in once a year the information that is required to be on the register.

So it is a good piece of legislation. It achieves, hopefully, good outcomes. I am looking forward to the select committee process, when we can perhaps iron out any of the kinks in the bill that might need to be ironed out and when we can fully debate that trade-off between people’s right to go about their business and personal freedoms, and the needs of vulnerable children in our society. Thank you.

The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Jan Logie—5 minutes.

JAN LOGIE (Green): I rise to take a short call on this, the Child Protection (Child Sex Offender Register) Bill. The Green Party is supporting this bill going to a select committee so that we can hear evidence from a range of experts on this issue.

We do, of course, have child welfare at the heart of our concern generally, and we specifically have a long history in this House of trying to improve our system response to sexual violence and to keep our children safe. So we do have an interest in the identified intent of this bill. However, as it stands, as it is written at the moment, we do have significant concerns.

I would also like to just raise my sense of bemusement that this is being referred to the Social Services Committee. Of course, as a committee last term we had the inquiry into social services for sexual violence and considered some of those issues and certainly heard from providers which are providing treatment for harmful sexual behaviours and sexual offending. So we have some history of looking at sexual violence issues but not at all of the justice response to those issues, and this bill gives powers primarily to police and the Department of Corrections, which will have direct access to this register, and we have not considered those issues.

I would like to note that actually the evidence we heard from those providing services to people engaging in harmful sexual behaviours was that they were very sceptical of the value of registers and warned us against them, in fact. They did note that they still have concerns that people referring themselves for treatment for these behaviours or thought patterns that may lead them to worry that they may offend actually are still finding it very difficult to get into courses to be able to address those behaviours or attitudes in themselves.

So the thought that the Government is prioritising a register when we are yet to be sure there is evidence that it will make a difference, over the provision of those services that we know have a very high success rate, seems to me to be less than constructive, particularly when we know that the conviction rate for sexual violence in this country is 1 percent. So this is dealing with a tiny, tiny percentage of people who are offending against children in this country and it is focusing $150 million of precious resource towards a scheme for which, actually, we do not have international evidence that can assure us that it is going to be effective. The register is targeted towards this tiny, tiny percentage of people out of a much larger group when we could actually be putting that money into establishing a really solid system of prevention and early intervention in our communities. My instinct—and from listening to people working in this sector—is that our resources would be better focused on prevention and early intervention rather than this register, which does raise quite a few concerns around the New Zealand Bill of Rights Act.

I do also just want to point out one of the strange, possibly unintended consequences that might arise from this and that we do want to hear evidence on. This is that it may send a message that sex offending is one of those crimes that you cannot rehabilitate, that we need to just keep an eye on these people, and that is simply not true. There is absolutely a really, really high rate of behaviour change. There are under 5 percent, I think, of people who have offended who after treatment are still a risk. We actually have parole amendment legislation that allows for extended supervision orders to be renewed for that group of people. We do not want to create the impression that may make it harder for people to disclose if they think somebody is never going to change.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Adrian Rurawhe—5 minutes.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): Tēnā koe, Mr Assistant Speaker. We have heard many good contributions to this debate. Keeping our children safe is one of the most important things that our society can do, and one of the things that is not addressed by this bill but that is important to be mentioned is parents being able to keep their children safe. I acknowledge the previous speaker, Jan Logie, because I totally agree with what she has said.

I congratulate the Minister for Social Development on bringing this bill to the House. The Social Services Committee will be able to deal with this efficiently and in a way that it needs to so that our children can be protected. But that is only a small part of the equation, I think. My understanding, and the way I read things, is that the bill deals with those who potentially will reoffend. It is the offenders who have already offended who go on to the register, and that deals with just a small percentage of the overall potential offenders out there. But it is an important step that can potentially prevent further harm to children within our society. So for that I acknowledge that the bill is important.

The register and the sharing of that information is important to recognise as well—and to also identify the potential risk there and the rights of those people who will be registered on that register. The bill does break new ground in that sense. I think the select committee will have some important work to do around it. There is certainly, I think, a test that will need to be met for this register and the processes involved in it to be effective. I stand here to acknowledge that and to highlight that issue. The rights of those people need to be recognised, as well. What the long-term impact is going to be I do not know, but I certainly think that that is a question the select committee needs to answer.

The increase in offending against children—and over 50 percent of all sexual offending has been against children—is such a terrible statistic. That is something that needs to be dealt with not only through this bill but also in the way that all agencies deal with our families. The Government has a policy on Whānau Ora. I think Whānau Ora, from my understanding, is one of those policies that needs to be interwoven in every single piece of legislation that affects our families. I want to put it to the select committee that it should also take notice of that policy—the Government’s own policy on that issue—and apply it to this bill. And it should make sure that it considers every other measure that it can in empowering families to take responsibility for themselves, and that it also looks at providing additional resources for families to be able to keep their children safe. I think that is the main message that I want to give to the House and to the select committee on this issue.

We support this bill’s referral to the select committee, but with reservations, to ensure that the select committee does all that it can to make this bill the best it can be. Thank you.

Dr PARMJEET PARMAR (National): Thank you for the opportunity to speak on the first reading of the Child Protection (Child Sex Offender Register) Bill. I would like to acknowledge the Minister in charge of the bill, the Hon Anne Tolley, for bringing this bill to the House.

This bill will enable the establishment of New Zealand’s first child sex offender register from July next year—that is, July 2016. This register will enable information sharing among entities dealing with the issue. This register will be established by the police and the Department of Corrections. Once it is set up, authorised staff members will have access to this register to identify and manage risk posed by convicted child sex offenders when they come to the end of their sentences or by those who are serving non-custodial sentences.

As we have heard from the Minister and other speakers, this information will not be publicly available, but it will be made available to third parties only if there is a significant risk to a child’s safety posed by a convicted registered child sex offender. This information will then be released to third parties like parents, guardians, or school principals. Convicted child sex offenders over the age of 18 will go on this register—those who are convicted for committing such crimes against children under the age of 16. So if they have been sentenced, or if they are serving non-custodial sentences, or if they have been convicted overseas for a qualifying offence and they come back to live here in New Zealand for more than 6 months, they will be required to go on that register.

This register will contain quite a bit of information about the offender—not just the name and the address but it will have some identifying particulars about the offender. It will also have information about the offence and the date of sentencing for the qualifying offence. So, as this register contains extensive information about the offender and also the offence committed, this register is not going to be publicly available. As I said before, this information will be made available to third parties as specified agencies only if there is a significant risk to a child’s safety, overall welfare, or sexual safety.

This bill also covers the suppression order aspect. It is quite common that in these kinds of cases people apply for suppression orders. In respect of convicted child sex offenders who are subject to suppression orders, their information on this register may also be disclosed to third parties. These convicted child sex offenders on the register do not have any restrictions on their usual activities. If they wish to travel they will be able to travel, but there will be some reporting requirements. For example, if a convicted child sex offender on the register wants to go away from their usual residential address for more than 48 hours, they will be required to report to the commissioner. They will be required to provide information about their plan at least 48 hours before they commence their travel.

This bill is part of National’s big programme to keep young people safe from harm. It is important that we look after people. They should feel safe in their homes and communities. It is important that everyone, including young people, is treated with respect and dignity. It is not just about tackling crime; this register is about preventing crime as well. Our focus is to make sure that we are preventing crime from happening in the first place. We know that the crime rate is the lowest in 35 years in New Zealand and that New Zealanders are benefiting from this low crime rate. This has happened because this National Government is hard on criminals. We have toughened prison sentences for gang members. We have stopped the release of violent criminals on parole, and also the street racing offences have halved since the new legislation passed. This bill is an example of how we are continuing our work to protect our young ones—children—in the community. It is important that we protect them from any violent or sexual crime. Our goal is to protect the public and to hold offenders accountable.

We are using technology. National introduced 24/7 GPS monitoring of high-risk offenders but this register is going to be useful because it will allow information sharing among different entities. This is also about breaking the cycle of reoffending and imprisonment. The register will help different agencies to keep track of these convicted child sex offenders and to also monitor their circumstances. Our interest is to keep victims safe. Our interest is to make sure that victims are not revictimised and offenders are not reoffending. Victims should not be always living in the fear that offenders are around them. Parents of children should not be worried about offenders hanging around their houses, playgrounds, or schools. We need to make sure that the system provides an assurance to them that we are keeping track of convicted child sex offenders. We should be able to protect children from known offenders so that children get the best possible opportunities to get ahead in life.

Children, if they are abused sexually or physically, can take a long time to recover. They may not get back on track for their whole lives. They may suffer mentally and physically because of the abuse that they might have faced at a young age. So we want to make sure that victims get the right kind of support, firstly, to deal with the aftermath of the crime, also long-term support should be available to help bring them back on track.

The Government is ensuring that our focus is on victims. We want to prevent sexual abuse happening against children and this can be done with the help of communities, parents, schools, and legislation like this. It is very sad to see when offenders go out and commit the same crime repeatedly and victims are revictimised. That is where this bill is going to provide protection for children. At a recent public meeting in Mount Roskill I spoke to inform them about this bill coming before the House. It was quite well-received and there were a lot of positive responses to this bill. We want the public to have trust in the system, and that trust will come only if we have the right kind of mechanisms in place. The setting up of this sex offender register is a significant step forward to protect children.

Another important thing about this bill is that it also establishes an offence for people who do not provide information for this register. So if convicted child sex offenders fail to provide information to go on this register, they can be fined up to $2,000 and can be sent to jail for up to 1 year. If they provide misleading or wrong information, that is taken even more seriously, and they can be fined up to $4,000 and sent to jail for up to 2 years. Convicted child sex offenders serving a sentence at the time the new legislation comes into force will also go on to this register.

So the aim of this bill is to keep track of convicted child sex offenders, monitor their circumstances, and see whether there is any need for any action to be taken. The information on these convicted child sex offenders will be continually updated so that the information will be the most recent. Because of the type of information on the register, the register is not publicly available but, as I said earlier, that information will be made available only if there is a significant risk posed by a convicted child sex offender to a child in the community. I believe this step will reduce child abuse, so I support this bill and commend the bill to the House. Thank you.

POTO WILLIAMS (Labour—Christchurch East): There is no more important job for this House than to keep our children safe. I, for one, am hopeful that the work on this piece of legislation will do just that. As a parent there is nothing that makes you more fearful than the harm that may befall your child. I know that parents whom I have spoken to whose children have been offended against in the manner that is described in this bill are incredibly emotional about what happens to their children. We have an opportunity to look at the impacts of sexual violence on our children and do something really useful about it.

There have been many speakers who have talked about what the potential for this bill is. In a previous life having worked in family violence, not necessarily in sexual violence but in family violence, I have spoken about having run a refuge where we used to say that six women and a piece of paper was all we had to keep our women and our tamariki safe. In this regard we may be falling into the same kind of trap that a register that for all intents and purposes is designed to keep our children safe may not achieve that, because we know that a register will register those who have already offended and will do nothing about protecting our children from the harm that may befall them from those predators in the community whom we know nothing about.

Only 1 percent of sexual offences are actually reported to the police. We are talking about recording a small number of known offenders and doing nothing about protecting our children from the prevalence of sexual violence in our community. We know that it is prevalent. We know that from the statistics around mental health. We know from the statistics around suicide that sexual violence is prevalent in our community, and I do not believe that without proper mechanisms, support, and therapy in place a register of known sex offenders will achieve what we want to achieve to keep our children safe.

This bill talks about an arbitrary period of time that offenders will be on the register—8 years, 15 years, or for life. There has been no discussion about the validity of those dates. Is 8 years better than 7 years, or would it be better to have 10 years? We need to actually have some real, valuable information to ensure that whatever period we have people on the register for is useful.

The other thing that we should be considering, which does not appear anywhere in the bill that I can see, is the requirement for offenders to actually get treatment. There is no point in saying that after a period of time a sex offender is no longer a risk. There needs to be a prescription of treatment and monitoring that that work has been completed by that offender. That does not appear anywhere in the bill. The bill talks about the actual criteria by which you would appear on the register—you must be over 18 at the time of the offence and convicted of a qualifying offence, and it can be custodial or non-custodial. Also, a sentencing judge can put you on the register at their discretion. There is nothing about the nature, necessarily, of the offending, the nature of the treatment that that offender will take on board, and then again there is nothing about his or her level of risk to children, going forward, that appears in this bill except for an arbitrary date.

I have real concerns about who will have access to the information about people who appear on the register. We are talking about staff from the Ministry of Social Development and from Housing New Zealand. I can kind of understand what that is about—about the placement of sex offenders into the community—but I do not feel comfortable about the level of protection of that data once it is opened to scrutiny by various members of those organisations. There is also some talk that caregivers, teachers, and others will also have access to the names. That is one very small step away from being a public register. I do not believe that the level of scrutiny that is required to be applied has been given to that very core detail around the privacy of your information.

There is very little that holds this piece of legislation to ensuring the privacy of offenders if it is opened up to many other people getting access to that information. I, for one, am not suggesting that we do not have a register of some sort, but I would really want to ensure that there is a high level of protection around that information and that it is used only in the manner in which it should be. We know this is a hugely emotional subject matter, particularly for parents and for other members of the community who want to keep their children safe. Getting access to that information could result in a terrible unintended consequence. I, for one, want to make sure that I would be comfortable about the storage and the access of this data.

We say right in the very beginning in the explanatory note that the register will reduce reoffending against child victims. I am not sure that this bill actually will achieve that.

There is quite a prescription about the reporting mechanism, the terms of reporting, and the restrictions around travel, and they proceed for a significant period of time. I do want to refer to the concerns of the Attorney-General that these provisions are inconsistent with section 9 of the New Zealand Bill of Rights Act. Even after someone has potentially paid for the crime that they have conducted, they are still required by this bill to continue to be monitored, to continue to report and to continue to have their access to freedom restricted.

Because it has not really been touched on anywhere, I want to refer to the opportunity to get treatment or therapy to ensure that you are no longer a risk as a sex offender. I want to refer to a report that came out of the Department of Corrections. It is quite an old report—from 2002-03. It talks about the overall recidivism rate as being 8.1 percent across the three programmes that the Department of Corrections conducted, but the recidivism rate for people who completed their treatment programme was 5.2 percent—a reduction of almost half. If we do not have a mechanism in our legislation to ensure we get good therapeutic interventions, we miss out on actually providing safety from at least half of the offenders who will offend again. I believe that when this bill goes to the select committee there are many questions to be asked around those types of provisions.

We are supporting this bill’s referral to the select committee. I am honoured to be able to sit on the select committee and to be able to ask those questions, and I commend the bill to the House. Thank you.

STUART SMITH (National—Kaikōura): The Child Protection (Child Sex Offender Register) Bill—it is really all in the name, and particularly in the first two words. It is about child protection. I have heard a few of the speakers throughout the night lament that it is not a silver bullet, but, unfortunately, there is no silver bullet with offending of any kind, and particularly not with complex offending like child sex offending. There are many reasons why people offend and it is a very difficult issue to deal with.

Over several years the Government agencies have been increasingly aware of a lack of coordinated information about known child sex offenders in the community. It is interesting, today, that the Productivity Commission has just published a report on social services, and one of the major findings in that report is that it identified that siloing of information amongst Government departments and agencies is a major problem. I think that this bill seeks, in some way, to go towards fixing that particular problem in this area.

Ever since the Privacy Act came in we seem to have got ourselves so fearful. We are so tangled up in red tape around privacy that good sense has gone out the window. When one Government department holds information that is really the key to unlocking some potential actions that can save issues in other areas, we are sitting on that information and not sharing it. This bill is absolutely about unlocking that and cutting through the red tape to allow the sensible management of people in this area.

In recent years, Government agencies’ attempts to institute new initiatives to combat the risks posed by known child sex offenders have highlighted the lack of a source of coordinated information—the lack of an agreed risk-assessment process and an agreed management framework for a coordinated preventative action. Those are a lot of words, but basically what that is saying is that we have some information and we are not able to do anything about it; those offenders are sitting out there in the public domain, and we really should take a sensible approach to deal with that. If you have a register with private information about those offenders, then you have to balance risk and manage it.

Of course, the offenders have a right to privacy, but there is also the right of people to live their lives without fear of being offended against in such a way. People in families, as we know, can get really fearful, and sometimes overly so, about these sorts of people coming out into the community. Having the measures that are taken in this bill, which I will talk about in a moment, will go a long way towards managing this in a sensible manner and balancing those risks, as I mentioned earlier. So the bill is about managing risk.

But the issue is that in 2012-13 there were 505 offenders convicted of just over 1,800 sex offences against young children, and that was up 20 percent on the previous decade. In 2014 it was 451 offences—a number of ACC sensitive claims, particularly for young people subject to sexual abuse. Each year around 200 sex offenders are released back into the community. Last year it was 294, and on top of that around 115 sex offenders start a community-based sentence each year. Most of those have no ongoing contact with the justice sector or agencies after they are released. That is where this bill steps in, and we will be able to have confidence that those people are in contact with the relevant authorities.

All of those statistics that I just rattled off represent only the tip of the iceberg. People have come out tonight with statistics about how many other people might be out there as offenders who have never come before the justice sector. Well, we simply do not know how many people there are or what percentage there is, but we do know that it is a very small percentage who are convicted and who come to the attention of the authorities. But, at least, we can manage only what we can manage. We have to start somewhere and I believe that this is a very good place to start.

One of the things that I touched on earlier is that some of those people who have been subject to abuse go on to become abusers themselves. So breaking the cycle where possible is very important, in my view. We need an overarching framework to coordinate preventative action to support offenders, and that will be a part of this. That has probably not been touched on that well, but offenders themselves, when they get out into society, often slip back into their bad ways because they are not supported. If they are not supported, they can slip back out of their low-risk lifestyles that they are able to live in, and back into their old ways. We need to support them to ensure that that does not occur.

The bill will help Government agencies to carry out their duties to protect children and society effectively. At the moment, they are really trying to fight with both hands tied behind their backs, and we are actually untying those knots and letting them get on with what they do well. It will increase support, as I said, for the offenders, but it will also discourage reoffending by giving those offenders confidence that they are living in a society that they are being supported in.

The offenders will be required to update their information annually, and within 72 hours of any change to their personal information that is held on a register. That information includes their aliases, fingerprints, a photo of the offender that has to be updated every year, current address, workplace, employer, car registration, IP address—and, of course, that is very important because often these people are very active on the internet, if they end up in that area; so we need to ensure we know that—and passport details. As I said, they will have to update their fingerprints and their photos with the police every year, and this ensures that the police are actually working with relevant information. There is little point in having a register if the register is out of date, and it would simply serve no purpose at all to have this register if we did not know where the people were living at any given point in time.

I think, to cut to the chase, this register is necessary. The bill will limit accessibility to the register, and I think we have heard a few people talk tonight about ensuring that. It is only one small step from setting up the register to making it fully public. We do not want vigilante activity; we want this information to be protected. There are, indeed, sanctions in the bill for anyone who releases information to unauthorised people—that is, to be subject to a prison term of up to 6 months for an individual, or a fine of $25,000 for a body corporate. So I think those things are managed and are covered as best they can be. As I said, it is about managing risk, and I think the bill treads that good balance and deals with it as well as we can expect. It is a great pleasure to commend the bill to the House. Thank you.

Bill read a first time.

Bill referred to the Social Services Committee.

Bills

Agricultural Compounds and Veterinary Medicines Amendment Bill

First Reading

Hon NATHAN GUY (Minister for Primary Industries) on behalf of the Associate Minister for Primary Industries: I move, That the Agricultural Compounds and Veterinary Medicines Amendment Bill be now read a first time. I nominate the Primary Production Committee to consider this bill. Before explaining this bill in more depth, I want firstly to acknowledge the stakeholders who have been involved in developing this very important bill and thank them for their patience. Getting this bill into Parliament has taken some time, due to the complex nature of the legislation and the subject matter. To remain internationally competitive, the New Zealand agricultural industry requires access to the latest agricultural products to manage the pests of plants and animals, to increase productivity, and to ensure the health of our farm animals.

The Agricultural Compounds and Veterinary Medicines Amendment Bill aims to remove barriers to agricultural compounds being registered in New Zealand by extending data protection for innovative trade name products and conferring data protection on non-innovative trade name products.

All agricultural compounds used in New Zealand must be registered under the Agricultural Compounds and Veterinary Medicines Act 1997. When suppliers of agricultural products apply to register a product in New Zealand, their application must be supported with data on the product’s safety and efficacy. For example, an application to register a pesticide for use on food-producing crops would need to be accompanied by information on how the product complies with New Zealand’s maximum residue limits.

Data protection is important because developing data is expensive, and the New Zealand market, particularly for our small horticultural sectors, is relatively small. This makes the business case for investing and developing data marginal in many instances. Data protection is valued by business because it confers an advantage on an applicant by forcing later applicants to develop their own data or wait until the protection expires. In this way, it prevents subsequent applicants from piggybacking on the costly research of the original applicant.

We need the right level of data protection to encourage overseas suppliers to invest in registering new products and uses in New Zealand. The Agricultural Compounds and Veterinary Medicines Act currently offers much narrower protection than other countries like Australia, the US, the EU, and Canada have. For many years, industry representatives in some of our key horticultural sectors like pipfruit and citrus have advocated for longer and broader data protection. Without these products, their productivity will suffer, they may fall behind their international competitors, and, in the worst case, their viability may be threatened.

A Government review found examples of products available in other jurisdictions, but not in New Zealand. After considering these positions, the Government decided that modest extensions to data protection provisions are warranted. We do not want to inhibit competition and prevent businesses from accessing reasonably priced agricultural compounds.

For innovative products, the bill extends data protection from the current 5 years to a maximum of 8 years. In addition, the bill introduces a new category of data protection for non-innovative products. Three years of data protection will be provided for information provided in support of applications to register non-innovative products, including reformulations and new uses of existing products. The bill also makes minor consequential amendments to the Hazardous Substances and New Organisms Act 1996 and a definition in the Medicines Act 1981 to keep data protection provisions across these statutes properly aligned.

In conclusion, the Agricultural Compounds and Veterinary Medicines Amendment Bill is important for the suppliers of crop protection and animal health products, and the industries that rely on these products for their livelihoods. I believe the bill strikes the right balance between incentivising the registration of products that our sectors need and encouraging competition in the agricultural product market place, but I remain interested in stakeholder views on whether we have got the balance right. I encourage those with an interest in this area to contribute to the select committee process that will now follow. I commend this bill to the House.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Assistant Speaker. E ngā mema o te Whare nei, tēnā tātou katoa. I am honoured to lead Labour’s contribution to this bill we are debating tonight, in place of the very experienced and very knowledgable Hon Damien O’Connor, who, no doubt, will be undertaking his own agricultural compounds and veterinary medicines of sorts as co-captain of the New Zealand Parliamentary Rugby Team representing us on the other side of the world. So I wish them and the All Blacks the very, very best.

What does this bill do? This bill extends the period of protection for confidential information given in support of an application to register an innovative trade name product from 5 to 8 years, by allowing 1 year of additional protection for each new use added to the registration. It also expands the scope of data protection coverage to include confidential information provided in support of applications to register non-innovative trade name products and uses for 3 years. This means that suppliers of agricultural and veterinary medicines would have their products protected for longer in addition to their 20-year patents.

There is argument in the international literature about whether longer patent times incentivise more innovation or not. It will create a strong incentive to produce a new product, but it also reduces the pool of ideas to design new products. As it extends the effective monopoly on these products for a further 3 years, it can mean higher costs for farmers.

In standing here and offering Labour’s position on this bill, I think it is important that I share with the House the consideration that we had in terms of getting to the point of supporting this bill. We consider that 300 companies have approximately 3,000 products registered for sale under the Act. These companies are likely to be in support of the changes. But, on the flip side, there were very low interest levels in consultations, with only 29 submissions. Although those who use the system were in favour, generic product manufacturers and Federated Farmers were not so supportive. On the pro side, supporting this bill, this could increase the access to new innovative products.

The regulatory impact statement indicates that the lack of new-use data protection may be putting off several pest control applications, like contorta pine, white fly in glasshouse tomatoes, and western flower thrip. On the flip side, this gives a monopoly to producers that will raise costs on farmers at a time when they are under significant strain. In submissions, Federated Farmers sought to narrow data protection and shorten protection periods to support competition and low costs. On the pro side, again, Labour generally opposes bills at first reading only in principle, and we feel it is important that we send this bill to the select committee because it will help shape and strengthen it and address some of those concerns we have outlined.

Labour has taken a position on the Trans-Pacific Partnership agreement. We oppose the undermining of Pharmac. This includes opposing data protection extension for medicinal products. It could be considered inconsistent with our position to then support this agricultural data protection extension.

Finally, our last consideration was that the issue was first raised and consultation undertaken by the fifth Labour Government in 2006. Therefore, Labour will support this bill’s referral to the select committee, but we want to see a better analysis of the costs and benefits from officials and reassurance from the sector that this is going to be for its benefit. As I said, the bill will extend data protection for new uses of innovative products and for non-innovative products by up to 3 years. This is in addition to the 5 years of data protection innovative products have access to and their 20-year patents.

There is the potential for these measures to increase access to innovative new products, as I outlined earlier, for several pest control applications: contorta pine, white fly in glasshouse tomatoes, and western flower thrip. However, extending data protection means a longer period of effective monopoly for some products. That could lead to higher prices for farmers at a time when many are struggling due to falling dairy prices. In the consultation that was run on these measures, although those who used the Act were broadly in favour of extending data protection, generic product manufacturers and Federated Farmers sought narrow data protection and shortened protection periods to support competition and low costs. At a time when dairy prices are crashing, several regions’ economies are shrinking, and half of Silver Fern Farms is being sold to a subsidiary of China’s Bright Food, we want to see more comprehensive action from the Government to support economic development in the regions.

I want to turn to the background. It is important to acknowledge where this is all derived from. I want to acknowledge the Government working group that was established in 2008 to review the data protection regime. The Government of the day commissioned Covec Ltd, an independent economic research organisation, to examine the effects of New Zealand’s current data protection rules on the market. I have got the report here. I am not going to read all of it, but I just want to highlight a couple of the points to impress on members the point as to where this particular bill comes from.

In terms of what the issue was, the report: “seeks to evaluate whether the present rules regarding data protection are consistent with maximising the net benefits to the agricultural compound and veterinary medicines industry in particular, and the agricultural sector and New Zealand more generally. To this extent, this report seeks to inform policy makers on whether there is a need for change to the regulatory environment relating to data protection so as to maximise these net benefits.” Further on, the report talks about negative impacts, and I do want to take the time to just highlight them briefly: “Although the current rules facilitate vigorous competition and can lower prices for end-users, the absence of data protection can also deter suppliers from: developing and registering new products using existing chemistry; registering existing products for new uses; or providing data for reassessments.”

Overall, the report, the evidence, and the analysis outlined suggests that any increase in net benefits to New Zealand from increasing data protection are likely to be greatest in relation to new-use registrations. There may also be benefits from providing data protection for reformulations, although this is less clear. Whether the net impact of an extension of data protection for reassessment will be positive is perhaps even more uncertain, although there may be policy approaches—for example, cost-sharing—that could address any anti-competitive impact that may arise from such a change. There do not appear to be any significant issues arising from the 5-year data protection period provided for the registration of new innovative agricultural compounds and veterinary medicines. Therefore, Labour stands to support this bill in its first reading and its referral to the select committee. Kia ora tātou.

IAN McKELVIE (National—Rangitīkei): The Agricultural Compounds and Veterinary Medicines Amendment Bill is kind of music to the ears of the Primary Production Committee. It is the first bill we have had in this term of Parliament, and I have to say that it is a bit of a relief because there is certainly some truth in the old adage that idle hands do the devil’s work.

Richard Prosser: Oh, Mr Chair!

IAN McKELVIE: And so to have Richard Prosser’s hands busy will be a very good thing for us, and Steffan Browning’s even more so.

One of the challenges we face in an isolated, small country with a comparatively small market is attracting the very best of international products. It has been apparent for a long time in New Zealand, and particularly apparent in the agricultural sector. One of the challenges we have because of the small market is that we have a very limited ability to attract the very best products from around the world to New Zealand to establish themselves in the market place unless we give them the opportunity to get some advantage from being here. Very good examples in the past have been the ivermectin products that came into the country and Roundup. Those are two examples of products that have come into the country under the current regime and that have established themselves and gone on and been, obviously, reproduced and copied in many forms as a result of it.

The bill will help encourage the entry of more of these products into our market place, and, as the world-leading, food-producing nation we are, we need access to the very best products we can attract at the most competitive prices we can get them. Of course, if we cannot attract the very best products, we have got a significant challenge, and that is what this bill sets out to address. It gives us the opportunity, right across the agriculture and horticulture sector, particularly—and other areas as well, but particularly those two areas—to attract products to New Zealand and get them tested, registered, and utilised in our primary production sector, which will make a massive difference to our ability to produce.

I was a bit taken by the use of the term “innovative chemicals”. I find, and as you will read in the definition in the bill, that innovative chemicals are, in fact, new ones that are being introduced to the country. They have a bit of an advantage in this process, in that they get a longer protection term than chemicals—I do not like the word “chemicals”, but I guess that is the word I am using—that come into the country and have already been used in other products. They are the non-innovative chemicals. They have been used elsewhere in the world and proven, as well. So that is an interesting definition that we are using there.

Both sides of the industries are concerned that the current data protection level is not sufficient and is inhibiting registration of the latest technologies, as I have said. I think the Government review found evidence of that, and, consequently, we have got this bill following on from it. We do not want—as the last speaker, Meka Whaitiri, talked about—to stifle competition because, I think, there is a balance between stifling competition and giving us the ability to use the very best of products in this country. So the bill is designed to encourage businesses to register new products and to register more uses for products that already exist. This is quite common where products come into the country, are utilised for the specific reason they are designed for, trialled in other areas, and found to work much better than was expected, so it is pretty important that we are able to extend those product uses, and, consequently, the companies that extend those product uses get extra protection around that for another year or two.

So I think this is a very good bill. I think it will make a difference, and it is ironic that a small piece of legislation like this can have such an impact, or potentially such an impact, on the New Zealand agricultural sector—so it is really important for us. One would hope that all parties will support this bill in its first reading as we will be encouraging all stakeholders to share their views with us. I found that having preconceived ideas is perhaps not always the most productive way to make change. There will be controls on residues set out in parts of this bill, and there will be other items of interests, I think, to all sorts of sectors in the New Zealand economy. I think that the process we will go through with the select committee and the submissions that come to it will cover many and varied areas of the use of agricultural chemicals and the like. I look forward to having this bill before the Primary Production Committee and I would encourage all interested parties to submit on it when the time comes. Thank you.

Dr MEGAN WOODS (Labour—Wigram): It is a pleasure to take a call on this bill. I would like to congratulate the chair of the Primary Production Committee, Ian McKelvie, who has just taken his seat, for finally getting some work to do. I think it is an indictment on this Government, actually, that this is the first piece of legislation that we have seen in this space in this term of Parliament. This is, of course, from a party in Government that purports to be the party of farmers, and it is finally taking its first piece of legislation to the Primary Production Committee. So I would like to congratulate that chair on finally getting some work through to his committee and on seeing some legislation. Maybe you could speak to the Leader of the House about upping the work rate of the legislative programme in your area—not your area, Mr Assistant Speaker; that member’s area.

As my colleague Meka Whaitiri outlined very clearly, Labour’s position is that we are supporting this bill going to the select committee, firstly, because we would like to see the select committee do some work and, secondly, because we actually think that there is a really important function that has to occur here in terms of the submission process. There are clearly some very important questions that need to be addressed in the process of the select committee’s examination of this legislation. We have had a good outline from speakers who have spoken about the function of this bill—about innovative and non-innovative products, about extending time periods, and about the balance that needs to be drawn between providing protection and the incentive to innovate for agrichemical companies and between the need to maintain competitiveness and not price some of these products out of the market for farmers.

What we are talking about here is the kind of evidence that is required when protection is sought—the kind of evidence that needs to be filed. This is always a balance for any company that is innovating, whether it is for a patent or for a plant variety right. There is a level of detail that needs to be filed, and the person who is doing the filing has to have confidence that they can still protect their advantage and their investment through the fact that there is a strong business case for them to do this. So this is always vitally important. We know that in New Zealand’s agribusiness industry, having the ability to protect the intellectual property that we invest in is vitally important—again, whether that is through plant variety rights or through bringing in new uses or new products that can be used in our agricultural sector.

I think that there has been some very good commentary on the bill. One of the issues is around new uses, and I think that the previous speaker, Ian McKelvie, has talked about this and about how sometimes it can be that for a particular product, when an innovative use for that product has come up because it crosses over—whether that is in the human consumption chain or the animal consumption chain—the kinds of regulations around how you use it and its use differ. There are different regulatory standards that have to be met. I think the kind of testing and evidence that needs to be submitted around new use is a very important question, and one that the select committee will need to spend some time on.

A very good example of this was provided by Mark Ross, the chief executive of Agcarm, who used the example of fodder beet planting, which grew from virtually nothing to around 50,000 hectares last year. This fodder beet was classified as a different crop from fodder brassica, which had been the traditional use of this. Companies needed to do more efficacy and residue trials to register products for fodder beet. This cost more than $100,000 a product because this was for a new use—it was a fodder beet, rather than a fodder brassica.

Fodder beet growers need chemicals to be registered for fodder beet—that just makes sense—otherwise they face having to use products that are registered for forage brassicas off label. This raises real risks around crop residues and residues in meat or milk, and real questions that do need to be addresses and examined. As for the cost of this—if you have a look at a recalled formulation, it might cost $300,000 to reformulate a product for a new use, but it may cost $500,000 for the efficacy trials around getting the evidence required for filing. So these are all important questions that are going to have to be considered by the select committee when it comes to the bill.

In her contribution, my colleague Meka Whaitiri spoke about the very low number of submissions that had been included to date in the preliminary work that has led up to this legislation coming to the floor of this House, and I would like to see a greater number of submitters. I would like to hear from a greater number of research organisations in our agribusiness sector to find out where the balance lies for them, as researchers who are looking for the development of innovative products. Does the advantage lie in allowing farmers access to off-protection, moderately priced farm products, or does it lie in our having the ability to protect that for longer? What is best in terms of our ability to innovate in the agribusiness sector? I think that this is a very important consideration, which the committee will need to have when it comes to consider this bill.

One of the other questions that I would like the committee to explore is, of course, the interface with the Hazardous Substances and New Organisms Act, as to why it is that whenever we are looking at consequential amendments to that Act, we need to proceed with caution, and we need to ensure that the protections that we need are, indeed, in place and that we are not, either inadvertently or by design, opening the door for consequential amendments to things that really might not be desirable to New Zealand. So I think these are real questions at any time, and I note that in this legislation there are going to be consequential amendments to that Act.

I think one of the key questions that was raised in some of the submissions that have already been heard to date was about when Federated Farmers brought up this very much increasing monopoly time period and the offset with the access to these chemicals, and they asked why it is that we cannot just say that consulting with the agribusiness sector is about consulting with the agri-chemicals sector. It needs to be across the supply chain, it needs to be across the sector, and it needs to understand the different parts of it because, of course, there are going to be people who will benefit from these changes. There are people who will do very well because they will get extra periods of monopoly granted under this legislation, but what is the cost of that? Those are all considerations that need to be considered.

I think that there are important considerations and questions that we need to ask. I, for one, am very interested in the question about new use and the innovation that we can do as a country, both to combat some of our greatest environmental problems and to improve the way in which we can potentially use existing products for new uses. For example, what products are already on the market that could be used to reduce nitrate runoff so that we could actually see an improvement in our waterways? In a similar vein, if you are doing stuff to mitigate the nitrate runoff, what products are already there that might actually have the added benefit of decreasing nitrous oxide and, therefore, decreasing our contribution to greenhouse gases? So I think, given the amount of emphasis that, by design, New Zealand has to put into considering how it is that research and development is going to help find our way out of producing 50 percent of our greenhouse gas emissions as a nation, we need to make sure that we have got a regulatory regime that makes it possible for us to innovate.

We need to be able to innovate right across our agribusiness sector, but we also have to be working always to ensure that we have the right protections in place—that we have the right protections in place for our environment; that we have the right protections in place for the rest of the sector—and that this is not about the unnecessary gifting of a monopoly to only the part of the supply chain that will benefit. We have to ensure that we have those right across the way. So I think the select committee has a hard job ahead of it and a lot of work to do in terms of making sure that we do have these questions answered adequately. It is a job, I am sure, that it is looking forward to and relishing, with its first piece of legislation in this term of Parliament. Thank you.

Debate interrupted.

The House adjourned at 10 p.m.