Tuesday, 13 October 2015

TUESDAY, 13 OCTOBER 2015

TUESDAY, 13 OCTOBER 2015

Mr Speaker took the Chair at 2 p.m.

Prayers.

Points of Order

Leave for Introduction and First Reading—Environment Canterbury (Democracy Restoration) Amendment Bill

Dr MEGAN WOODS (Labour—Wigram): I raise a point of order, Mr Speaker. I seek leave to introduce the Environment Canterbury (Democracy Restoration) Amendment Bill, a member’s bill in my name, and for that bill to be set down for first reading today before Government order of the day No. 1.

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

Hon GERRY BROWNLEE (Leader of the House): I raise a point of order, Mr Speaker.

Mr SPEAKER: Is this a fresh point of order?

Hon GERRY BROWNLEE: Yes, it is, Mr Speaker. I think it is completely unreasonable when members take the opportunity to seek leave of the House to introduce a bill that has not been seen by other parties in the House. There could be no other option than to decline it. [Interruption]

Mr SPEAKER: Order! [Interruption] No, I do not need any assistance at all. Order! I do not need—[Interruption] Order! I realise it is the first day back and there is a level of enthusiasm amongst members to engage, but I am not going to allow a free-for-all with interjections across the floor. Leave was put, it was denied, and that is the end of the matter.

Oral Questions

Questions to Ministers

Australia—Detention and Deportation of New Zealand Citizens

1. JAMES SHAW (Co-Leader—Green) to the Prime Minister: Will he be formally raising the issue of New Zealanders detained in Australia when he meets with Malcolm Turnbull later on this week?

Rt Hon JOHN KEY (Prime Minister): Yes.

James Shaw: When he meets with Malcolm Turnbull, will he be requesting that Australia bring back to the mainland those New Zealanders being detained in offshore detention centres?

Rt Hon JOHN KEY: Yes, I will be raising the issue of New Zealanders being sent to detention centres—in particular, the offshore processing centre on Christmas Island.

James Shaw: At the meeting, will the Prime Minister be requesting that Australia increase the imprisonment threshold for deportation of New Zealanders?

Rt Hon JOHN KEY: Obviously, we will have a wide-ranging discussion, but what is causing the problems are the changes that were made by the Australian Parliament late last year—effectively, to lower the mandatory cancellation of visas - threshold—and on that basis, yes, we will be discussing that issue.

James Shaw: At this meeting, will the Prime Minister be requesting that Australia do a case by case analysis for New Zealanders on humanitarian grounds prior to deportation?

Rt Hon JOHN KEY: I cannot be sure that that will be one particular issue that will be raised.

James Shaw: Given that he is now criticising the use of offshore detention centres for New Zealanders, why did he negotiate a deal with Australia that would have seen the use of these very centres for refugees seeking asylum in New Zealand?

Rt Hon JOHN KEY: No one really likes to see detention centres, full-stop. But the main purpose was, of course, to try to take those people out of the refugee detention centres. That is why we agreed to take 150.

James Shaw: Is he aware of the information that another 40 to 50 New Zealanders are due to be shipped to Christmas Island in the next fortnight; if so, will he be asking Malcolm Turnbull to stop this?

Rt Hon JOHN KEY: No, I do not have those specifics.

James Shaw: Given that he knew about the plight of New Zealanders being detained in Australia, why did he not raise the issue with Tony Abbott at their last meeting in Papua New Guinea, and why was the memorandum of understanding progressed only following a massive public outcry?

Rt Hon JOHN KEY: That is not true, actually. In fact, I first raised the issue with Tony Abbott during the bilateral talks that I held with him in February of this year, and again when we met in Wellington in April. I raised the issue also with the Australian Foreign Minister in New York. The New Zealand Foreign Minister has raised the issue on numerous occasions, and officials have raised it—so this issue has been raised for some time. In the end, the rules that the Australian Government sets are the rules that the Australian Government sets. I cannot necessarily demand a change any more than Helen Clark could when she agreed back in 2001 to allow a position whereby New Zealanders would, in certain circumstances, have fewer rights than others in Australia. That was the situation that Helen Clark accepted.

Overseas Investment—Overseas Ownership of New Zealand Properties and Trade Agreements

2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that “I don’t want to ban foreigners from buying residential property”?

Rt Hon JOHN KEY (Prime Minister): I stand by my full statement, which went on to say: “I don’t think that’s actually good public policy that works. And … around New Zealand, there would be a whole lot of people who’d say, ‘I don’t want to stop an Australian buying a house in Queenstown or an American buying a place in the Bay of Islands or actually people buying a house in Wellington.’ ”

Andrew Little: Does he accept that it is a loss of New Zealand’s sovereignty if future parliaments cannot pass laws without being sued to stop Trans-Pacific Partnership agreement nationals buying our homes?

Rt Hon JOHN KEY: No, I do not believe that is the case. In fact, the Labour Party not only supported but actually helped with negotiations of free-trade agreements to which it was a party, and it did exactly that.

Andrew Little: Supplementary question. [Interruption]

Mr SPEAKER: Order! The Leader of the Opposition is standing to ask a supplementary question, but the level of interjection coming from his own colleagues is unacceptable.

Andrew Little: Why did his Government fail to protect the sovereign right of New Zealand to limit foreign buying of existing houses when the Australian Government was able to do it?

Rt Hon JOHN KEY: I know the member has had so many positions on the Trans-Pacific Partnership that it is embarrassing—

Mr SPEAKER: Order!

Rt Hon JOHN KEY: —but, actually, he is just continuing to show that he does not even understand how it still works, because the Australian Government had negotiated its position around bans on foreigners buying houses long before the Trans-Pacific Partnership agreement came along.

Tim Macindoe: Has the Prime Minister received advice on whether New Zealanders can freely buy residential property in other developed countries?

Rt Hon JOHN KEY: Yes, I have. I am advised that New Zealanders can buy residential property with few, if any, restrictions in at least the following OECD countries: Australia, Austria, Belgium, Canada, Chile, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Mexico, the Netherlands, Norway, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Turkey, the United Kingdom, and the United States. That tells me that, more than ever, New Zealand’s future lies in being open and connected with the rest of the world—which overwhelmingly should be the case—which is far less xenophobic than the Labour Party is.

Mr SPEAKER: Order!

Andrew Little: What advice has he received from the trade Minister on our efforts to carve out protection for the right of New Zealand to limit foreigners buying existing homes, as Australia has done, as Malaysia has done, and as Singapore has done?

Rt Hon JOHN KEY: Australia had those provisions prior to going into the Trans-Pacific Partnership. What the Government did do as part of the carve-out that it wanted to follow was to allow extra taxes to be applied for foreigners who buy property in New Zealand if the Government of the day deemed that to be possible. Why? Because that will work. What will not work is a ban on foreigners. It did not work in Australia and it would not work in New Zealand.

Andrew Little: When Tim Groser described the deal as having “dead rats”, did he mean the meagre increase in access for dairy exports over an extended period of time, higher costs for medicines, and the loss of sovereignty over who owns our land? Why will you not stand up for New Zealand?

Rt Hon JOHN KEY: What Tim Groser was meaning when he very successfully on behalf of New Zealand—and I personally want to congratulate him—negotiated the Trans-Pacific Partnership was that he was going to give this country access to 40 percent of the global economy, with 93 percent tariff-free. But I look at this quote and I hear these words ringing in my ears: “What always haunts a Prime Minister is ‘will there be a series of trade blocs develop that you are not part of?’ Because that is unthinkable for New Zealand as an export-oriented, small trading [economy].” Once again, I agree with Helen Clark, just like I did—

Mr SPEAKER: Order!

Tim Macindoe: How would a ban on foreigners buying residential property sit within New Zealand’s network of trade agreements?

Rt Hon JOHN KEY: As well as the Trans-Pacific Partnership, such a ban would be inconsistent with CER, the Singapore free-trade agreement, our agreement with Chinese Taipei, our free-trade agreement with Korea, and, as a consequence, our free-trade agreement with China. New Zealand entered those agreements in good faith, with support from both sides of the House. It would be a sad day for New Zealand’s international credibility if a party started picking and choosing with bits of an agreement, to blatantly flout it.

Andrew Little: In light of that answer, why has his Government introduced and, in fact, passed legislation requiring foreign buyers to register with the Inland Revenue Department and have a New Zealand bank account?

Rt Hon JOHN KEY: Because the Government is interested in getting more information on foreigners, and is happy for them to pay taxes, which is exactly the very point that we negotiated in the Trans-Pacific Partnership.

Andrew Little: Why does the Trans-Pacific Partnership agreement compel Pharmac to reveal its negotiating strategy to drug companies, when his own Government itself said that it would be insanity for a party to give away its negotiating strategy to the other side?

Rt Hon JOHN KEY: Because we are quite comfortable with it. Those provisions will not see any material change in the way that Pharmac operates. If one looks at the Trans-Pacific Partnership in its wider context, with all of them, I agree with this: “There are huge advantages from being involved with TPP and even bigger disadvantages of being locked out.” These words were said with force; they were said with meaning—they were said by the leader of the Labour Party; they were said by Phil Goff in 2013.

Economic Outlook—IMF Forecasts

3. ALFRED NGARO (National) to the Minister of Finance: What reports has he received on the outlook for the world economy, and what are the consequences for the New Zealand economy?

Hon BILL ENGLISH (Minister of Finance): The IMF and World Bank meetings in Peru affirm that slowing growth in China and other emerging economies like Brazil is a risk for the world economic outlook. There are also a number of positives, including improving growth in the US and the UK. The IMF projects that in 2015 global economic growth will be 3.1 percent—a bit weaker than it thought just 6 months ago. This weaker world growth highlights the importance of continuing to expand our international connections, particularly through trade agreements such as the Trans-Pacific Partnership. The more markets our exports have access to, the more resilient they will be if any particular market runs into economic headwinds.

Alfred Ngaro: How is the global decline in commodity prices affecting the New Zealand economy?

Hon BILL ENGLISH: Generally, there has been a decline in commodity prices across most global economies, and, of course, in New Zealand the impact was through the dairy price. From a high in February 2014, dairy prices fell 65 percent to their low in early August. Since August, dairy prices have regained about a third of those falls. It is too early to know whether those increases are permanent, but it is pleasing to see some stabilisation. The effect of this has been cushioned by a significant reduction in the exchange rate, which is down more than 25 percent against the US dollar since mid-2014, and similar adjustments are occurring in other commodity-type economies such as Australia.

Alfred Ngaro: What was the IMF’s view about the growth prospects for New Zealand?

Hon BILL ENGLISH: The IMF’s latest set of forecasts was released earlier this month, and they had the New Zealand economy growing at 2 to 2.5 percent. The early half of calendar year 2015 now shows fairly soft growth, and it is possible that growth could drop below 2 percent for calendar year 2015. That is certainly slower than the 3 percent that Treasury was forecasting last year, but in the context of slowing growth around the world, it is moderate, sustained growth that will continue to deliver more jobs and higher wages for New Zealanders.

Australia—Detention and Deportation of New Zealand Citizens

4. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement “in the order of about 1,000” people with New Zealand citizenship could be deported here from Australia due to criminal convictions?

Rt Hon JOHN KEY (Prime Minister): Yes. Advice provided to me by officials suggests there are currently around about 1,000 New Zealanders in the pipeline for deportation from Australia, but this number will move around.

Andrew Little: Given Australia changed its deportation policy last year, and his Government immediately began making preparations for an influx, why has it taken him until now to speak publicly about the implications for New Zealand?

Rt Hon JOHN KEY: I do not think that is correct. The law there was changed in December of last year. That was obviously freely available to everyone in the world to see. I raised the issue at the first possible instance with Tony Abbott at my bilateral talks in February.

Andrew Little: Does he believe that it is right that New Zealand is forced to take in people who left New Zealand as infants, were raised in Australia, educated there, and committed crimes there?

Rt Hon JOHN KEY: As I have been saying, my preference would be for Australia not to lower the threshold in the way that it did. My preference would be for it to make some alteration to reflect that, but if the member is asking whether I believe I should strip those New Zealanders of their New Zealand citizenship as well—and make them Stateless—then I do not think I should do that. I know the Labour Party has some really wacky ideas these days, but that is a dumb one.

Andrew Little: Why is his Government accepting into New Zealand deportees who have lived their entire lives in Australia, including children who do not even have New Zealand citizenship?

Rt Hon JOHN KEY: Because that is their legal right as New Zealand citizens to come back to this country. The fact that they may be being returned to this country against their will does not fail the test that they are New Zealand citizens.

Andrew Little: Why will he not stand up for New Zealand when he meets Malcolm Turnbull this weekend and tell him that what our Australian mates are doing to New Zealanders is just wrong?

Rt Hon JOHN KEY: Firstly, I raised this issue with Tony Abbott in February. Secondly, I raised this issue with him in Wellington in April. Thirdly, I raised this issue with the Australian Foreign Minister in New York. Fourthly, this issue has been raised by the New Zealand Foreign Minister on numerous occasions. Fifthly, I will be more than happy to raise the matter with Malcolm Turnbull. But I do think that it is just, frankly, a little bit rich getting lectured by the Leader of the Opposition when Labour was the Government that signed New Zealanders up to worse rates, and like a lapdog accepted it for 7 years and did nothing about it.

Trans-Pacific Partnership—Outcomes

5. MARK MITCHELL (National—Rodney) to the Minister of Trade: What recent progress has he made in improving access to international markets and supporting New Zealand exporters to grow and create new jobs?

Hon TIM GROSER (Minister of Trade): Last week trade Ministers from 12 Pacific countries, covering almost 40 percent of the global economy and 800 million consumers, successfully concluded negotiations for the Trans-Pacific Partnership—the largest free-trade agreement that New Zealand has been a part of. Under its provisions we will eliminate tariffs on 93 percent of New Zealand’s exports to our new free-trade agreement partners and, using the very conservative measure of tariff savings, that will save New Zealand businesses a little more than a quarter of a billion dollars per year, which is roughly twice the estimate given for the New Zealand - China free-trade agreement.

Mark Mitchell: What reaction has the Minister seen to the outcomes of the Trans-Pacific Partnership negotiations?

Hon TIM GROSER: Many, many reactions. I will quote you a couple of the more interesting political ones—or interesting to me. First of all, the Federation of Māori Authorities has said: “Māori have always traded across Te Moananui A Kiwa so the TPP is a contemporary expression of age-old trading routes”—[Interruption]

Mr SPEAKER: Order! I require the Minister to resume his seat. I will not put up with the level of interjection coming from somewhere on my left. If I can sight where it is coming from, then those people will be leaving the Chamber immediately for at least the balance of question time.

Hon TIM GROSER: I would concede that I am being very provocative with the quotations that I am using here, in terms of their political constituencies. I quote: “The removal of tariffs is an immediate advantage for Māori exporters, and the agreement sets the stage for better gains in the future.” I would like to quote also the chairman and president of World Wildlife Fund in the United States: “No major trade agreement before this one has gone so far to address growing pressures on natural resources, like overexploited fish, wildlife and forests. … the conservation committees in this trade agreement could be game-changers”.

Mark Mitchell: What outcome was achieved for dairy, and is the sector going to be worse off because of the Trans-Pacific Partnership agreement, as some have suggested?

Hon TIM GROSER: First of all, using the metric that we traditionally use, the paradox is this: the dairy sector is the largest single source of gains from the Trans-Pacific Partnership agreement, accounting for roughly 40 percent of the gains. This is only because although we are very regretful that the United States blinked and failed to use this as an opportunity to restructure global dairy trade, what we did achieve represents very significant gains for the dairy industry, and I am certain that we will build on that in the future.

David Seymour: Could the Minister characterise some of the key motivations for opposing free-trade agreements such as the Trans-Pacific Partnership?

Mr SPEAKER: No, I cannot see any ministerial responsibility for that.

Trans-Pacific Partnership—Pharmac

6. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: What is the estimated cost to Vote Health of the Trans-Pacific Partnership Agreement?

Hon Dr JONATHAN COLEMAN (Minister of Health): The best estimate of the cost to Vote Health from the Trans-Pacific Partnership is $4.5 million in one-off costs, and $2.2 million per year in ongoing operating costs to Pharmac. That is a tiny 14/1000ths of 1 percent of the $15.9 billion health budget. The Government does not foresee any additional cost to Pharmac from the provisions relating to biologic drugs. Consumers will not pay more for subsidised medicines as a result of the Trans-Pacific Partnership. Most prescribed medicines are fully subsidised, and New Zealanders will still pay no more than $5 per prescription item—the Trans-Pacific Partnership does not change this in any way. Pharmac’s ability to negotiate with drug companies to keep prices down is unchanged.

Hon Annette King: What has he been informed are the “comparable outcomes” to enable New Zealand to deliver a longer period than the current 5 years’ data exclusivity on biologics under the Trans-Pacific Partnership?

Hon Dr JONATHAN COLEMAN: The point underlying that question is that we do not need to make any change to our policy settings to fulfil the requirements of—

Hon Annette King: I raise a point of order, Mr Speaker. A very specific question: I asked has he been informed what are the “comparable outcomes”—

Mr SPEAKER: I will allow the member to repeat the question.

Hon Annette King: What has he been informed are “comparable outcomes” to enable New Zealand to deliver a longer period than the current 5 years on data exclusivity on biologics under the Trans-Pacific Partnership?

Hon Dr JONATHAN COLEMAN: They are those delivered by the existing policy measures. So you have got 20-year patent protection—that remains intact. That is going to exceed the 5-year data protection. And when you put that together with the Medsafe process, that actually meets the requirements of the Trans-Pacific Partnership.

Hon Annette King: Has he been informed what a comparable outcome would mean in actual years added on to the 5-year data exclusivity protection in New Zealand with changes negotiated under the Trans-Pacific Partnership?

Hon Dr JONATHAN COLEMAN: There will not be any change, because our existing policy framework meets all the requirements of the Trans-Pacific Partnership.

Rt Hon John Key: What does the Minister think will be the impact on the health budget if and when the New Zealand economy is much larger and more successful as a result of having a good free-trade agreement?

Mr SPEAKER: In so far as there is ministerial responsibility, the Hon Jonathan Coleman.

Hon Dr JONATHAN COLEMAN: That is the best question of the day. The reality of it is that because we have signed up to the Trans-Pacific Partnership we are going to have the economy increasing by $2.7 billion per year by 2030. That is going to mean that we are going to have much more money to put into the health budget to provide more medicines and better care for New Zealanders over time. It is a real shame that Labour cannot make up its mind whether to support this or not.

Hon Annette King: What will be the cost to the health of New Zealanders of a 1-year delay in making biologic drugs available, in light of an article in the Medical Journal of Australia that states “pharmaceutical monopoly protections … cost Australian taxpayers hundreds of millions of dollars each year.”?

Hon Dr JONATHAN COLEMAN: Do not forget this is the member who said the Trans-Pacific Partnership—

Mr SPEAKER: Order! It is a very simple question that has been asked of the Minister. If he would rise and answer it, please.

Hon Dr JONATHAN COLEMAN: It is a very complex hypothetical question. What I have said is that there will be no added cost. It will not be the $1 billion that Annette King said would be added. It—

Hon Annette King: I raise a point of order, Mr Speaker.

Mr SPEAKER: I will hear from the Hon Annette King.

Hon Annette King: Once again the Minister has to bring the Labour Party into the answer, when it was a straightforward—

Mr SPEAKER: Order! No, the first attempt—

Hon Annette King: No.

Mr SPEAKER: Order! My patience will probably run out fairly quickly with this member. The question was not attempted to be answered in the first place. I took issue with the Minister and he now has, to my satisfaction, addressed the question. If the member has further supplementary questions, that is the way to proceed.

Hon Dr JONATHAN COLEMAN: I raise a point of order, Mr Speaker. May I finish my answer?

Mr SPEAKER: Yes, the Minister can complete his answer briefly.

Hon Dr JONATHAN COLEMAN: OK. I just want to clarify: it will not cost a billion dollars a year as Annette King said; it will not cost lives as Annette King said; and, most important of all, it will not undermine the Pharmac model as Annette King said. So, quite frankly, she needs to apologise—

Mr SPEAKER: Order! No, we have had the—[Interruption] Order!

Hon Annette King: Does he agree with Tim Groser in relation to Pharmac and the decisions made under the Trans-Pacific Partnership agreement that “there is constructive ambiguity”?

Hon Dr JONATHAN COLEMAN: I have not seen that quote. I mean, you may well be making it up, but I will have to check with Mr Groser now.

Hon Annette King: I raise a point of order, Mr Speaker. I take exception to being told I made things up. I am sure the Minister of Trade will confirm it. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! I am on my feet. It was certainly not a helpful remark from the Minister. I accept that, but it is hardly one that I think the member should take offence at. If she really requires me to ask the member to withdraw, I will do so. Is the member offended by that remark?

Hon Annette King: I raise a point of order, Mr Speaker.

Mr SPEAKER: No, I will allow the member—

Hon Annette King: No, I will not ask him to withdraw. I will not. I would just ask whether it is possible for the Minister of Trade to confirm what I just said.

Mr SPEAKER: No, no. That is not a point of order at all.

Trans-Pacific Partnership—Regional Development

7. SARAH DOWIE (National—Invercargill) to the Minister for Economic Development: How would the Trans-Pacific Partnership help regional New Zealand?

Hon STEVEN JOYCE (Minister for Economic Development): The Trans-Pacific Partnership is exciting news for businesses across New Zealand, but particularly for those in regional New Zealand. The Trans-Pacific Partnership allows New Zealand exporters access to up to 800 million potential customers and covers 40 percent of existing global trade. In the US, the world’s largest economy, in Japan, the world’s third-largest economy, and across the rapidly developing Asia-Pacific region, the Trans-Pacific Partnership will benefit all our exporters by opening up fairer access to more markets, whether they are farmers in Hawke’s Bay or the Manawatū, winegrowers in Central Otago, or manufacturers in the Waikato. As a Government, we back our farmers, our horticulturalists, our wine growers, and our manufacturers. We are confident they are equal to the best in the world. With this agreement, they will get access to the big consumer markets to compete on a more equal footing with local suppliers.

Sarah Dowie: What does the Trans-Pacific Partnership—[Interruption]

Mr SPEAKER: Order! To Mr Prosser, that is the last warning he will be getting during this question time. Would the member Sarah Dowie please repeat that question.

Sarah Dowie: Thank you, Mr Speaker. What does the Trans-Pacific Partnership do for our farmers and other exporters in regional New Zealand?

Hon STEVEN JOYCE: The impact will be significant. In 2014 our trade with Trans-Pacific Partnership countries was worth more than $28 billion, or 45 percent of our total trade, including $2.7 billion in meat, $4 billion in dairy, $1.4 billion in forestry, nearly a billion in wine, and $1.2 billion in food and vegetable exports. Tariffs on beef exports to Trans-Pacific Partnership countries will be eliminated, with the exception only of Japan, where tariffs will reduce from 38.5 percent to 9 percent. Tariffs on all other primary sector exports, except some dairy products, will be eliminated completely, including fruit and vegetables, sheepmeat, forestry products, seafood, and wine. By 2030 the overall benefit of Trans-Pacific Partnership to New Zealand is conservatively estimated to be at least $2.7 billion a year, and it is likely to be much better than that given our track record of exceeding the predictions of the China free-trade agreement.

Fletcher Tabuteau: What will individual Kiwi dairy farmers in the regions expect to receive between 2038 and 2048 from the US when—if—it finally, possibly, axes tariffs on milk powder and a line of cheese?

Hon STEVEN JOYCE: The Government is being quite open that we did not get all we wanted from dairy, but dairy benefits are $102 million in terms of $260 million of tariff reductions, which is the largest single beneficiary. As we have seen, it is not even so much the tariff reductions, even though that is good; what is really the benefit is the increase in trade that occurs as those tariffs drop. That is what we have seen in China, that is what we will see in the Trans-Pacific Partnership, and I invite New Zealand First to continue to argue against the benefits of the Trans-Pacific Partnership for regional New Zealand.

Sarah Dowie: Why are free trade and international linkages important for regional New Zealand?

Hon STEVEN JOYCE: As a small country located at the bottom of the world, to grow our economy it is critical that we trade with larger countries and that we sell more of our products and services on the world stage. For places like the Bay of Plenty, the home of kiwifruit and Zespri, which have grown their sales by 16 percent in the last year, this is important. For places like Marlborough, Hawke’s Bay, and Central Otago, part of a wine industry that has seen 8 percent annual growth in exports, this agreement is important. For dairy provinces like Waikato, Southland, and Taranaki, where tariffs are dropping by $102 million, this deal is important. For all parts of regional New Zealand, where beef export revenues are up by over a third from the previous year, this agreement is important. This is a Government that stands unashamedly in favour of trade access for regional New Zealand as the best way to grow our regional economies for the benefit of New Zealanders.

Fletcher Tabuteau: How much will regional New Zealand actually benefit from a 3.25 percent slice of Canada’s dairy industry, for example, given that that country’s high level of subsidies will continue to undermine our exporters’ efforts?

Hon STEVEN JOYCE: There will be some benefit from that. There will also be benefit in Mexico, benefit in Japan, benefit in the US, and benefit around the Asia-Pacific region. Again, I invite Mr Tabuteau to continue with this line of attack. I invite him to go out to regional New Zealand and run these arguments and see what short shrift he gets.

Fletcher Tabuteau: Can the Minister confirm that Kiwi beef farmers will benefit more from the Trans-Pacific Partnership agreement or actually more from a free-trade agreement with Russia, given the US Department of Agriculture says that Russia could fall 40 percent short of meeting its own beef needs, in complete contrast to the Trans-Pacific Partnership markets?

Hon STEVEN JOYCE: The member is free to argue for a free-trade deal with Russia ahead of one with the Trans-Pacific Partnership, ahead of one with China, ahead of one with, I do not know, the EU—wherever he likes. But, actually, this agreement marks a red-letter day for New Zealand. It will supply access to the beef markets, for example, in Mexico, which we have been shut out of, and in Japan. The member can decry it all he likes and suggest that we should do something else instead, but most New Zealanders, particularly in regional New Zealand, know the benefits that this agreement will bring.

Fletcher Tabuteau: Would Mr Joyce not have more credibility selling coal to Newcastle—

Mr SPEAKER: Order! A question worded in that way is quite out of order. Question No. 8, Fletcher Tabuteau.

Hon David Parker: I raise a point of order, Mr Speaker. Is it beyond the Standing Orders to question the credibility of a Minister at question time now, because that is the effect of your warning?

Mr SPEAKER: The member has been here a long time, and it is certainly out of order to in any way accuse a member of not telling the truth. [Interruption] Order! Iain Lees-Galloway, if he carries on like that, will be leaving the Chamber. That is the way I took that question. [Interruption] Order! I felt that question was out of order. I have ruled it out of order. I will look at it again later on today. If I have made a mistake I apologise, but a question like that is not in line with the Standing Orders. There is absolutely no doubt about that. Question—[Interruption] No. Order! All members will resume their seats—all members resume their seats. I have made a ruling, and that is the end of that matter. If any member wishes to raise a fresh point of order, I am only too happy to hear from them, but—[Interruption] Order! I have not finished. If I interpret their point of order as in any way relitigating what I have just ruled on, then that member who raises the point of order will immediately be leaving the Chamber.

Chris Hipkins: I raise a point of order, Mr Speaker. I simply ask that the same standard that you have just made very clear—about questioning members, telling the truth or whatever in questions—is also applied to the answers as well, because we have had several examples today where Ministers have questioned the truth telling of those asking the questions. It cannot be one way or the other; it has to be for both.

Mr SPEAKER: I will do my best. Further points of order?

Ron Mark: I raise a point of order, Mr Speaker. Do you think you could find it within yourself to allow the member to rephrase his question?

Mr SPEAKER: On this occasion, I will allow the member to rephrase that question, and I will allow it.

Fletcher Tabuteau: Thank you very much. Would it be of more benefit to the country, in terms of credibility for the country, to sell coal to Newcastle rather than claiming the Trans-Pacific Partnership will be of benefit to New Zealand forestry, especially when it comes to the dominant Canadian and US markets?

Hon STEVEN JOYCE: This particular agreement provides benefits to a whole range of industries, and the benefits occur in different countries. What I can tell the member is that this agreement, in terms of tariff reductions, is roughly double the impact of the China free-trade agreement, which has been hugely positive for New Zealand, and will continue to be so, and the Trans-Pacific Partnership agreement will continue to be so—[Interruption] Again, the member is welcome to argue against it, but the benefits to regional New Zealand, whether it is in forestry, wine, kiwifruit, meat, or dairying, are clear to everybody except Mr Tabuteau.

Trans-Pacific Partnership—Release of Information and Non-discrimination Provisions

8. FLETCHER TABUTEAU (NZ First) to the Minister of Trade: Will he release the full details of the Trans-Pacific Partnership Agreement immediately, given that the 12 Asia-Pacific countries have concluded their negotiations?

Hon TIM GROSER (Minister of Trade): The Government will release the texts as soon as it possibly can, but it will not be a unilateral decision of the New Zealand Government. This is a partnership among 12 countries, and everyone has recognised that there is absolutely legitimate and intense interest in some quarters in seeing the whole picture. This is fully understood, and we agree that it is a completely legitimate position, but we are waiting until our experts can reach an agreement that as much of the text as can be available—and on some estimates we are talking thousands of pages—will be released as soon as is humanly possible.

Fletcher Tabuteau: Can the Minister deny that the non-discrimination provision within this agreement will mean that this Government will not be able to protect New Zealand citizens when they are buying New Zealand homes; instead, they will forever have to compete with overseas investors from Trans-Pacific Partnership nations?

Hon TIM GROSER: It is really very unusual to find people trying to assess a trade agreement in terms of Auckland house prices. The reality has already been spelt out by numerous Ministers. You know where we stand. We want to send a message of connectivity to the rest of the world. We realise that New Zealand First is in a totally different space.

Fletcher Tabuteau: Given the most favoured nation provision in the China free-trade agreement, can he protect future generations of New Zealanders from overseas investors from this trade partner speculating in our housing market also?

Hon TIM GROSER: This arrangement is about strategic gains; it has nothing to do with speculation in housing markets. That will continue so long as both New Zealand residents and foreigners can anticipate a future price change. We are trying to fix a strategic problem for New Zealand.

Fletcher Tabuteau: The Prime Minister said: “I’m not saying it’s OK. I’m just saying technically”—

Mr SPEAKER: Order! Can I have the question, please.

Fletcher Tabuteau: Did the Prime Minister not say “I’m not saying it’s OK. I’m just saying technically any Government can flout any free-trade agreement rules … there will be a process … if someone wants to take a case against them.”; are you comfortable that that process will include a secret tribunal process?

Hon TIM GROSER: I do not have the quotation in front of me, so I cannot address whether or not it is an accurate or contextual statement of the Prime Minister. But, broadly speaking, I would say that that was correct. You cannot stop people taking out cases against you under domestic or international law. What you can do is try to frame agreements that are legally tight and make the cases of litigious or badly conceived cases almost impossible to succeed. Our experts have done an outstanding job in this context—as they usually do.

Fletcher Tabuteau: Is the Minister not aware that discriminatory actions against the member nations are a contravention of this trade agreement, and, therefore, the Prime Minister’s preferred solution of a tax on foreign land buyers would also come under the investor-State provisions, meaning that we will still get sued in a secret tribunal?

Hon TIM GROSER: The introduction to the question was completely incomprehensible. I have no idea what he means.

Finance, Minister—Return to Surplus

9. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he stand by his statement that the Government’s top fiscal priority is “returning to surplus this year and maintaining surpluses in the future”?

Hon BILL ENGLISH (Minister of Finance): I stand by my full statement from Budget 2015. The Government has five priorities: returning to surplus and maintaining surpluses in the future—that is, this year, 2014-15; reducing net debt to 20 percent of GDP by 2020, including repaying debt in dollar terms in 2017-18; further reducing ACC levies; beginning to reduce income taxes from 2017, with a focus on low and middle income earners; and using any further fiscal headroom to reduce debt faster.

Grant Robertson: Is it correct that the first line of the Minister’s letter of expectations to the Earthquake Commission is “Returning to surplus is a key priority for 2014-15.”, and is this what led to the $2 billion that was set aside to meet the Earthquake Commission’s shortfall mysteriously shrinking to $500 million in the 2014-15 accounts?

Hon BILL ENGLISH: No, it is simply not possible to politically direct the Earthquake Commission on its assessment of liabilities. The fact is when you have 400,000 claims in Christchurch, including many very complex claims, the commission is continuously re-estimating its liabilities. It turns out that it was fairly conservative to start with, and we took the hit at that time. If the liability is dropping, that is good news, not bad news.

Jami-Lee Ross: What was the state of the Government’s finances when National first came into office in 2008?

Hon BILL ENGLISH: The projected numbers were pretty awful, including never-ending deficits. But what was worse is that the Labour Government’s attitude to spending had permeated the Public Service, which believed it should get money for any purpose it could think of, with no accountability. We have now changed that.

Grant Robertson: Was Judith Collins correct when she said that ACC levies were not lowered “because we need to get to surplus and we’re very honest about that.”?

Hon BILL ENGLISH: The decisions about ACC levies have been made in order to be assured that ACC is in a sound financial situation. Ms Collins was quite right that we were fairly conservative about the reductions in levies, but now that we have achieved over $1 billion in reductions and levies—and the motor vehicle registration levy, for instance, is now consulting on a reduction from $330 per car just a couple of years ago to $130—we think that is progress.

Jami-Lee Ross: What progress is the Government making towards its target of returning to fiscal surplus this year?

Hon BILL ENGLISH: Most of the progress has been based on the Government being active in restraining spending. Four years ago the Government showed an $18 billion deficit, around 9 percent of GDP, following the global financial crisis and the Canterbury earthquakes. That deficit was halved in 2012, halved again to $4.4 billion in 2013, and reduced to just around $3 billion in the year to June 2014. It is clear that the return to surplus was always a stretched target, as evidenced by the fact that Treasury’s last forecast showed a deficit for 2014-15. So regardless of whether the annual accounts tomorrow show a small surplus or a small deficit, the overall trend is in the right direction because the Government is making sure that public money is used effectively—that is, to make sure children learn at school, prisoners who leave prison do not reoffend, fewer children are abused, and we get rid of some scourges in our community such as rheumatic fever.

Grant Robertson: Is it not correct that the small surplus for 2014-15 that he will announce tomorrow was created by accounting fudges, ripping off the people of Canterbury, and making New Zealanders pay more for their ACC than they should have, and that it will actually be the only surplus he will achieve in three terms in Government?

Hon BILL ENGLISH: We have yet to see what the annual accounts will show, but I can confirm for the member that the Government has been able to run small increases in expenditure—around half a billion per year on a $70 billion spending base—and achieve better public services. I know that is what really makes the Labour Party angry, because it thought the National Government would slash and burn and the social sector, in particular, would support the Labour Party. But, in fact, it does not. It is supporting our efforts to do a better job for New Zealanders with the money that we have.

Jami-Lee Ross: What progress has the Government made on its other fiscal priorities?

Hon BILL ENGLISH: Quite good progress. In Budget 2015 we signalled another $500 million reduction in annual ACC levies, on top of the $1.5 billion reduction in annual levies since 2011. The Government’s net debt is projected to fall to around 20 percent of GDP in 2020-21 and, according to the IMF, we now have one of the lowest net debt levels in the developed world. Any further fiscal headroom, including from positive revenue surprises, would be used to get debt down sooner.

Marine Protected Areas—Kermadec Ocean Sanctuary

10. SCOTT SIMPSON (National—Coromandel) to the Minister for the Environment: What specific species and natural features does the Government aim to protect from the Kermadec Ocean Sanctuary announced by the Prime Minister at the United Nations in New York on 28 September?

Hon Dr NICK SMITH (Minister for the Environment): The Kermadecs area is one of the most pristine places on earth and is host to over 6 million seabirds of 39 different species; 35 species of whales and dolphins, including the largest animal on earth, the blue whale; and hundreds of species of fish and other marine life unique to the area. Significant natural features include the longest underwater chain of submerged volcanoes anywhere in the world and the second-deepest ocean trench in the world, which, at over 10,000 metres deep, is deeper than Mount Everest is tall. The Prime Minister’s announcement of this huge sanctuary is akin to a national park of the sea and is as historic as that of Prime Minister Seddon’s in the 1890s in creating our first national park in Tongariro and the announcement of the largest national park in Fiordland by Prime Minister Holland in the 1950s.

Scott Simpson: How does this new ocean sanctuary compare internationally, and what feedback has the Minister received on the Prime Minister’s announcement?

Hon Dr NICK SMITH: The new sanctuary of 620,000 square kilometres is twice the area of New Zealand’s land or about the size of France. It will be the largest contiguous area of completely protected ocean in the world. The new sanctuary ensures that we meet our commitments as a country, under the Convention on Biological Diversity, to have 10 percent of our sea in marine protected areas. To give some sense of scale, this new sanctuary will be 35 times larger than the total of all of our existing 44 marine reserves and sets us at 15 percent of our marine area and above that target. The Prime Minister’s announcement has been widely welcomed internationally, with strong commendations from people including former US President Bill Clinton, the current Secretary of State for the US, John Kerry, and advocates for improved oceans management like Prince Albert of Monaco and Richard Branson.

Scott Simpson: How does this Kermadec announcement fit within the Government’s broader ambition of being a world leader in responsible management of our oceans?

Hon Dr NICK SMITH: Firstly, New Zealand has a world-class fisheries management system with the quota management system. Secondly, the new exclusive economic zone legislation that we passed in 2012 addressed the anomaly of an absence of environmental regulation for activities in that area and matches up with world best practice. Thirdly, we have made good progress with marine protected areas, with 10 new marine reserves in the territorial sea established last year and now with the Kermadec Islands, which we will aim to have in place by 1 October next year. The next steps will be revising our outdated marine reserves legislation and continuing our efforts internationally to establish a marine protected area in the Ross Sea, through the Commission for the Conservation of Antarctic Marine Living Resources process, which meets in Hobart in a fortnight.

Employment—Gender Pay Gap

11. JAN LOGIE (Green) to the Minister for Women: Does she stand by the Prime Minister’s statement on the gender pay gap that “I don’t think it’s discrimination, it’s just the occupations they are more typically involved in”?

Hon LOUISE UPSTON (Minister for Women): Yes, in the context in which it was given.

Jan Logie: Could the Minister tell us how this Government will address the underpayment of women-dominated industries, such as midwifery, rest home work, and social work?

Hon LOUISE UPSTON: The issues associated with the gender pay gap are complex. The member raises issues around pay equity, which, as the House is aware, is a matter that is before the courts at the moment. So although I am watching the issues carefully, I am not able to comment while it is before the courts.

Jan Logie: Does the Minister think it is acceptable that due to Government inaction, the only recourse women have to address such inequality seems to be through our courts?

Hon LOUISE UPSTON: I have said on numerous occasions that the gender pay gap is unacceptable. It is a very complex issue, with a range of contributing factors. Some of the measures that the Government has been undertaking include getting more women into high-demand, high-growth, and highly paid industries such as construction, and we have doubled the number in Canterbury in the last 2 years. We are increasing the number of women in leadership. We have made employment legislation to increase paid parental leave, we have parental tax credits, and, most important, there is the introduction of the right for every worker to request flexible work. In addition, we are directly countering unconscious bias.

Jan Logie: Given that the gap between men and women’s median hourly earnings has risen by almost 20 percent in the past year and not one ministry has reducing the gender pay gap as an action point in its statement of intent, will the Government put a comprehensive plan in place to reduce the gender pay gap?

Hon LOUISE UPSTON: That member will be pleased to know that, actually, the State Services Commission is leading the work on the public sector pay gap. It is currently decreasing. It is 14.1 percent, so it is coming down. But the member will also be pleased to know that the State Services Commission has a particular focus on developing future leaders and has a specific focus around increasing the ability for public sector employees to have increased levels of flexibility, which, as that member will know, is a significant aspect that women require in terms of their being supported in employment.

Trans-Pacific Partnership—Housing Market

12. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Housing: Does he stand by his statement, “I want to do things as Housing Minister that are going to make a material difference to my kids and their generation having access to more affordable homes”; if so, is he still confident he can do that under the terms of the Trans-Pacific Partnership agreement?

Hon Dr NICK SMITH (Minister for Building and Housing): Absolutely. The Trans-Pacific Partnership will help housing affordability in three ways. The measures of housing affordability use three components: incomes, interest rates, and house prices. The Trans-Pacific Partnership will grow the incomes of New Zealanders by giving Kiwi businesses access to markets of 800 million people, representing 36 percent of the world’s economy. As John Key and former Prime Minister Helen Clark said, we are not going to grow incomes by selling stuff to ourselves, with a population of just 4.5 million. Secondly, the Trans-Pacific Partnership helps the competitiveness of the materials and technologies that build homes. I welcome the entry of alternative technologies from countries like those in the Trans-Pacific Partnership that will actually help us build more affordable homes. Thirdly, open markets help keep interest rates and inflation low. Members opposite need to recognise that interest rates are at the lowest level in 40 years. That is a big help to the affordability for young families wanting to own their own home.

Phil Twyford: Do the provisions of the Trans-Pacific Partnership agreement mean New Zealand will not be able to ban non-resident foreigner buyers from buying existing homes?

Hon Dr NICK SMITH: Yes, but we do not believe that will make any difference to the price that New Zealanders pay for homes. That certainly is the experience in Australia. I do find the Opposition party’s position very confusing. Its members say they are quite happy to have Aussies buying New Zealand homes, but if they happen to be Canadians, Americans—

Hon Steven Joyce: Or anybody with a Chinese name.

Hon Dr NICK SMITH: —or maybe those with Chinese-sounding names, they have a different position, although there are so many different positions that the Opposition party has had on the Trans-Pacific Partnership—

Mr SPEAKER: Order! The Minister can resume his seat.

Phil Twyford: Is he aware that last year Australia’s restrictions on existing homes being purchased by non-resident foreigners drove nearly $30 billion of foreign investment into residential property development, more than the total value of residential construction in New Zealand in the same period, and does he really consider that to be ineffective?

Hon Dr NICK SMITH: Absolutely. The Australian policy has not worked because the prices of homes in Australia have gone up by more and are less affordable than what they are in New Zealand. If the Labour Party believes that Australia is the answer to housing affordability, it needs to explain why the housing price in Melbourne and Sydney is significantly greater than what it is in Auckland. It actually just shows what a nonsense Labour’s Chinese-sounding name policy is in respect of housing.

Phil Twyford: Can he confirm that some of the countries that are members in the Trans-Pacific Partnership negotiations successfully protected future lawmaking on issues like housing ownership; if so, why did not his Government?

Hon Dr NICK SMITH: The Trans-Pacific Partnership—on which I think this House should be tremendously proud of the work Tim Groser did—specifically enables the Government, if it wishes, to put on a stamp duty or other measure. That is an option that might be effective if we were concerned about foreign ownership. Our Government’s position, though, is that we are going to make the decision on the basis of facts, not Chinese-sounding names. That is why we have passed legislation that will give us those facts.

Phil Twyford: I raise a point of order, Mr Speaker. It was a very specific question about future lawmaking protection.

Mr SPEAKER: I think the member has got a reasonable point. Can I invite him to repeat the question for the benefit of the Minister.

Phil Twyford: Can he confirm that some of the countries in the Trans-Pacific Partnership negotiated protections for future lawmaking on issues like housing ownership; if so, why did not his Government?

Hon Dr NICK SMITH: Because we did. The Minister responsible, Tim Groser, specifically included provisions that might be used by our Government, such as a stamp duty that could be imposed on overseas owners, because it is our view that the instrument of a ban, which that member has advocated, is inconsistent because it would not apply, even under his policy, to Australia, would be inconsistent with the free-trade agreement that his Government negotiated with China, and would not make any material difference to the core issue of improving housing affordability for Kiwi families.

Urgent Debates Declined

AgResearch—Disestablishment of Jobs

Trans-Pacific Partnership—Conclusion of Negotiations

Mr SPEAKER: I have received a letter from David Clark seeking to debate under Standing Order 389 the announcement about the disestablishment of jobs at the Crown research institute AgResearch. The announcement is a particular case of recent occurrence involving ministerial responsibility. The announcement on 24 September was that AgResearch was consulting on a proposal to disestablish jobs and that the decision on the proposal will be made at the end of October. The announcement of a consultation process on a proposal does not warrant the setting aside of the business of the House. Therefore, the application is declined.

I have also received a letter from the Leader of the Opposition seeking to debate under Standing Order 389 the Government’s announcement that it has concluded negotiation of the Trans-Pacific Partnership agreement. The announcement is a particular case of recent occurrence involving ministerial responsibility. I understand that the text of the agreement is to be released to the public. Before the agreement is ratified it will be subject to the parliamentary treaty examination process set out in Standing Orders 397 to 400. I understand that legislation is also required to give effect to the agreement, which will again give opportunity for parliamentary debate. The Trans-Pacific Partnership agreement is a significant agreement, which should be debated by this House. There will be opportunity for parliamentary consideration of it in the future, with the benefit of the text of the agreement and the national interest analysis. I am not convinced that at this stage the business of the House ought to be set aside to debate the matter.

Bills

Environment Canterbury (Transitional Governance Arrangements) Bill

First Reading

Hon Dr NICK SMITH (Minister for the Environment): I move, That the Environment Canterbury (Transitional Governance Arrangements) Bill be now read a first time. I nominate the Local Government and Environment Committee to consider the bill. At the appropriate time I intend to move that the bill be reported to the House by 15 February 2016. This bill is about the Government sensibly transitioning Environment Canterbury back to a fully elected council. It is deliberately designed to ensure and maintain the momentum of the step change in how water is managed in Canterbury and to ensure it is consistent with the Government’s work of transitioning Canterbury back to normalcy following the trauma to that region from the Canterbury earthquakes. It is designed to ensure a smooth transition from the excellent work of the commissioners to a fully elected council in 2019 by providing for a 7:6 split of elected to appointed councillors for the next local government term.

The bill needs some context and history, because some of the commentary wants to ignore the problems of dysfunctionality that led to the Government reluctantly intervening in Environment Canterbury in 2010. The problems in 2010 at Environment Canterbury were deep-seated, had gone on for years, and could no longer be ignored. Firstly, the council had failed on water management. You cannot talk about New Zealand freshwater issues without reference to issues in Canterbury because it is where 70 percent of irrigation occurs, it is where we have the biggest problems over freshwater quality, and it is where more than half of New Zealand’s hydroelectricity is produced.

The Resource Management Act relies on regional plans to manage water, but Environment Canterbury had proved incapable, in 19 years, of getting plans in place. The previous Government had to pass special legislation to try to get progress on a water plan for the Waitaki River. The 10 local councils had become so frustrated that they promoted the Canterbury Water Management Strategy to try to get progress. People who claim in this Parliament that they want New Zealand to manage freshwater quality and allocation better but who have opposed the Government’s very attempts to do so through interventions in Environment Canterbury are being both disingenuous and dishonest with the electorate about the need for New Zealand to improve water management.

I contrast this historic non-performance with the progress that Environment Canterbury has made over the past 5 years. The council has gone from being a laggard to being a leader. The Canterbury Land and Water Regional Plan is in place and work is progressing at pace, consistent with the water management strategy, with specific limits and rules in each of the 10 zones.

Let me specifically outline the progress that we have made with water that would not have been possible without the Government’s interventions. Firstly, there would be no land and water regional plan without the specific provisions in the law that we have put in place in 2010, and there would not be the collaborative process in each of those 10 zones that are putting the rules in place. There would not be the hundreds of millions of dollars currently being invested right now in the Central Plains Water irrigation scheme without the specific provisions in our law in 2010—opposed by members opposite—that help with water management by using those huge, big Canterbury rivers rather than extracting all the water from the very limited aquifers.

Thirdly, there would not have been the prohibition on takes in those red zones; that is only possible by the Government’s intervention. There would not be the huge investments that are going into the clean-up of Lake Ellesmere and Lake Wainono, and I challenge members opposite: those lakes have not suddenly become polluted; they have been polluted for decades, and Labour did zip during its 9 years. It really takes gall for those members to stand on their feet today and criticise our efforts around water quality, noting the progress that has been made with those significant water bodies. I also point out the progress in even metering water. When we came into Government, less than a third of the water was even metered in Canterbury, and now that is over 80 percent.

The problems in Environment Canterbury went well beyond the issues of just water. Environment Canterbury had the worst record of 78 councils, with 77 percent of consents not being processed on time. I note that rather than 77 percent not being processed on time, that number is now below 2 percent, and Canterbury is one of the very best performers. In fact, it got a public sector award for excellence earlier this year.

The third area of concern was the complete breakdown in relationships between Environment Canterbury and the 10 councils in Canterbury. It was so bad that all 10 mayors of Canterbury wrote to the Government specifically asking for the intervention. This dysfunctionality between Canterbury’s regional and territorial authorities was holding the region back. We did not know, when we intervened in March of 2010, that only a few months later it would be hit by the Canterbury earthquakes. It was fortuitous that we had made that intervention and rebuilt those relationships because the region would have been incapable of being able to respond to those huge challenges without the regional and local authorities working together. It is a telling tribute to Dame Margaret Bazley, her fellow commissioners, and the 10 councils of Canterbury, that far from the dysfunctionality that we inherited from the previous Government, the council has now produced an economic recovery plan for Canterbury, jointly and together, and this House should stand by Canterbury and this bill in supporting it.

This bill will provide for a mix of seven councillors to be elected from four constituencies across the Canterbury communities, and the appointment of up to six councillors by Government. I have had representations from the Māori Party specifically for Ngāi Tahu’s interests to be recognised. We take that on board and we appreciate its support for this bill coming into the House to ensure there is a smooth transition in Canterbury.

Let me point out the four important reasons for this bill. Why would we in Canterbury suddenly change the direction by 100 percent of the governance of Environment Canterbury, given its chequered record? Why would we not provide for a smooth transition, with those commissioners’ skills being able to be transferred forward as we work through both those water challenges and those earthquake challenges? Members opposite are more interested in playing politics than supporting the reconstruction of Canterbury and the challenges that go with the earthquake.

Secondly, the job around water is not done. Yes, the regional plan is in place but we need to retain those special Resource Management Act powers and the continuity of the work of commissioners to get those zone plans in place that are so critical. I think we would all acknowledge—and in fact the former Minister Jim Anderton openly acknowledged—that Environment Canterbury had a real problem of head-butting between rural and urban Canterbury. We on this side of the House believe that, actually, urban Christchurch and rural Canterbury must work together to deliver a blue-green outcome around water that supports the growth of the economy but also improves the management and the quality of the water. This plan, of ensuring that transition, is part of achieving just that.

This bill provides for a smooth transition to 2019, when there will be full elections. We need to provide the continuity back. I am not going to take speeches from members opposite giving us lectures around democracy when previous Labour Governments have stepped in in places like Hawke’s Bay and sacked district health boards, and when members opposite have stepped into other councils and intervened. I say to members opposite, just as it was justifiable to intervene sometimes in authorities, the circumstances in Canterbury absolutely required the intervention. That has been proved by the very satisfactory progress that has been made in the intervening period.

I want to conclude by again reinforcing this Government’s thanks to Dame Margaret Bazley and the full set of commissioners who have done a superb job in rebuilding relationships with councils, in rebuilding a very constructive relationship with Ngāi Tahu, and with the work they have done both around water and earthquakes. I say to members opposite who wish to oppose this bill, they are opposing the reconstruction of Canterbury and the earthquake recovery, and they are opposing the real progress that this country, and particularly Canterbury, wants to make on water, and they should hide their heads in shame.

Dr MEGAN WOODS (Labour—Wigram): Labour is opposing this bill, but I can assure the Minister who has just taken his seat, the Hon Dr Nick Smith, and everybody, that we are not opposing the reconstruction of Christchurch. Actually, it is on this side of the House that we believe that part of the reconstruction and recovery of Canterbury and of Christchurch is about power going back to Cantabrians. It is about Cantabrians having a say in their future, and not central control from Wellington.

Not much of what stood in 2010 in Cathedral Square remains today. There are a few things, and one of those things that remain standing in Cathedral Square is a cairn that was erected by people when democracy was sacked by Nick Smith in Canterbury in 2010. This was a monument that was erected by people from all around the region bringing stones from all our rivers so that it would not be moved until democracy was restored in Canterbury. Well, that cairn is going nowhere because this bill is not the restoration of democracy. This bill is a continuation of central government control of a region.

Nothing that the Minister for the Environment said today, either in fact or in logic, justified why it is that Canterbury will have a regional council governance structure that is different from everywhere else in the country—nothing that Nick Smith said justified that today. He tried to say “Well, Labour did it.”—it seems to be all that National can say in response to everything. Yes, when Labour was in Government, when there were problems we as a Government did step up and we did what was necessary; we certainly did not withhold democracy for 9 years at a time, which is what the legislation that we are debating here today in effect will do. That democracy was always restored, at the latest, at the next triennial election.

And let us not forget that actually the Minister who has just taken his seat promised Cantabrians in 2010 that they would have democracy restored in 2013. He did not do it in 2013 and he most certainly is not doing it in this legislation here today. Let us bear in mind that this is a Minister who has labelled democracy as carrying too many risks. This is a Minister who told The Timaru Herald that he was worried about the outcome—the outcome being the decisions of a democratically elected council. Everybody in New Zealand should be worried today—not just the people of Canterbury whom this legislation impacts on, but everybody. Because this is a Government that is willing to sack elected bodies if it does not like what they are doing and replace them with its own appointees. It simply is not good enough and it is not something that we are willing to put up with.

The other thing that really concerns me, and I have tabled an amendment to this, is the report-back time that the Minister has described on this bill: a report-back time of 15 February 2016. This puts it in the 4 to 6 month category, which means there will be no vote. There will be a vote, but no separate debate on that part of the legislation. Given that this period that the Minister described includes the New Year break, when the House does not sit for 7 or 8 weeks, it leaves, effectively, a select committee consideration of little more than 2 months. This is simply not acceptable. This is about a Parliament stripping away democratic rights, and to put in place with that a truncated select committee process is reprehensible and something that should not be allowed to stand. Either the usual 6-week period for receiving submissions will have to be shortened—and that is not acceptable to Labour members—or there would be only 1 week to hear submissions. Again, that is not acceptable to Labour members.

We know that with predecessors to this legislation, when the Government has previously legislated to take away the right of Cantabrians to control their own destiny, actually Cantabrians have wanted to have their voice heard—and we have a Government that not only is putting in place legislative measures to stop that happening, when it should have been fully democratic elections at the 2016 triennials, but also it wants to truncate the select committee process. So I ask the Government, and any other support parties, to at least consider voting to allow this to have a full and proper select committee process, so that Cantabrians will have the right to be heard and they will not be stifled by this Government, because, as the bill stands at the moment, they will be. This is an absolute travesty.

This is the continuation of central control of Canterbury by this Government. Appointing nearly half the councillors in no way, shape, or form represents a return to democracy. The Minister likes to dress it up, and “mixed model” is what he has come to. It is like being a little bit pregnant—being a little bit democratic, I guess. It simply is not the case. This is not democracy; this is the Government maintaining its sticky fingers in the affairs of Canterbury in a way that it does nowhere else in the country. And it is an insult to the people of Canterbury. We are more than capable of governing ourselves, of electing representatives who will make decisions for the good of our province, like every other place in this country—

Hon Dr Nick Smith: What about Hawke’s Bay health?

Dr MEGAN WOODS: —and Cantabrians are more than capable of doing that. The Minister is heckling across the House: “What about Hawke’s Bay?”. We did not deny democracy there for 9 years. Democratically elected councillors were restored. So the Minister’s continued justifications are weak and they do not stand up, as I said, in either logic or fact. The Minister is on very weak ground here and he knows it.

What we also know is that the Minister has made a big hoopla about how we simply cannot afford to lose the skills base that is currently sitting around the Environment Canterbury table. This is the case with any council in a triennial election. In fact, it is the case with any member when they stand in 3-yearly parliamentary elections. So I want to know from Government members about the fear of losing skilled people. Should we cancel all elections, or is this something that is going to count only in Canterbury? Are there special rules for Canterbury? I want to know whether this is something that the Government is planning to roll out in other places in the country. If the real fear that the Minister has is that we will lose institutional knowledge and skills, there are alternatives other than denying Cantabrians the right to control their region. There are many things that the Government could do rather than rush to this decision. For one, institutional knowledge is carried through by staff, and commissioners could have been employed in some way to sit alongside elected members. So the Minister’s justifications simply do not stack up.

The Minister was quite right when he said that this is legislation about the regulation and management of water use in Canterbury, and he derides the last council and talks about what a bad job it did. I think that so much ink has been spilt showing how this was actually just a justification that the Minister manufactured back in 2010. Actually, the Government had a target of 80 percent of the rivers in Canterbury being swimmable. Back in 2010, 74 percent of them were swimmable, when our council was sacked. Today only 67 percent of Canterbury rivers are swimmable. Is this the blue-green future that the Minister is proposing—that we have a reduction in the swimmability of our rivers? I want more. I want to actually have a commitment to having swimmable rivers, and not to have set in place a process that is going to ensure that we do not have them.

Treasury told the Minister that he was not putting forward a solid case and that he was not putting forward a range of options—

Hon Dr Nick Smith: Rubbish.

Dr MEGAN WOODS: —to be consulted on. It is in the regulatory impact statement, Minister. It is there, in black and white. Treasury told you that you needed to put out a range of options. It is a pity the Minister did not read it at the time, or his discussion document may have actually had more impact. Cantabrians made it clear at that point of the process that they did not want this imposed model from the Minister as the way of governing our future. We have a fantastic future in Canterbury. It is part of our restoration. Let the people of Canterbury—

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

SCOTT SIMPSON (National—Coromandel): As chairman of the Local Government and Environment Committee, it gives me enormous pleasure to actually speak to the first reading of the Environment Canterbury (Transitional Governance Arrangements) Bill in the name of the Minister for the Environment, the Hon Nick Smith.

The answers to many of the questions that the previous member, Dr Megan Woods, has been asking about this bill actually lie in the title of the bill. It is a transitional governance arrangement—a transitional governance arrangement for the people of Canterbury. It is moving the people of Canterbury from what was back in 2008—in fact, prior to 2008, at the tail end of the last Labour Government’s administration—a state of complete dysfunctionality in terms of where the governance of Environment Canterbury was for Canterbury.

That was prior to the earthquakes in Canterbury, which came following that dysfunctionality. It just beggars belief to think that the situation that existed prior to this Government taking the leadership action that was required to sort out the governance issues in Canterbury on this important matter—if that had not occurred, and then we had had the earthquakes, as I say, it just beggars belief to think about what the consequences might have been.

So I would ask this of the member who has just resumed her seat: why is it that the Labour Party does not want to listen to the local mayors? Why is it that the Labour Party does not want to take notice of what the local government leaders in Canterbury are saying? There are 10 mayors in the Canterbury region, and, of that 10, six of them support this legislation. Six of them support this transitional governance arrangement that will take us through to the 2019 elections.

Of those who are not in that group of six local mayors who support this legislation, one of them wanted to keep all the commissioners and wanted to keep the status quo that we have currently, and that is clearly not going to happen. One of them wanted to elect straight away, a new return to democracy—just one wanted to go back to the process that the Labour Party is calling for. Two of them were agnostic or did not actually express a view. So when you analyse the support across the 10 local government bodies in the Canterbury region, six of the 10 support this legislation.

The question I have for the Labour Party is: why is it listening to just one of those local government organisations in Canterbury? Before the central government stepped into this mess that was Environment Canterbury, there was absolute evidence of severe underperformance in the Canterbury region. The previous Government actually, I am told, considered taking steps but deferred the opportunity to do so in the run-up to the 2008 election. That Government actually abrogated its responsibility to take a leadership role and do something about what was painfully, obviously a huge problem in Canterbury.

It was not until after this Government was elected in 2008 that action was taken to appoint the commissioners. I want to express my thanks and praise for the work that the commissioners have done in turning what was an absolute dog’s breakfast and a mess into something that is now well along the way to being best practice and something that I think Canterbury and all New Zealanders can be proud of.

The main provisions of this bill really seek to establish a continued, timely development of a robust, clear, and effective framework for the management of fresh water in the Canterbury region. Nothing could be more important than that allocation of water to Canterbury people or, indeed, to all New Zealanders, because so much of New Zealand’s natural water resource is sourced from the Canterbury region.

Environment Canterbury has actually made huge progress in developing the comprehensive water plan that is required in supporting the earthquake recovery programme. To go now to this transitional stage, which will take us from 2016 through to the local government elections in 2019—this bill seeks to achieve that, and I think that that will be something that will be met with support from across the Canterbury region and, probably, great support from around the rest of the country.

I am very much looking forward to hearing submissions from Cantabrians at the select committee. I am looking forward to the process. I know that it will be vigorously debated, but it needs to be debated on the basis of fact and knowledge and certainty rather than hyperbole and exaggeration, which is the sort of thing that we see from Opposition members who are determined to dance on the head of a pin in order to oppose for the sake of opposition. This is a bill that I think has merit. I am looking forward to debating and discussing it at the select committee, and I commend its first reading to the House.

Su’a WILLIAM SIO (Labour—Māngere): Earlier the Minister for the Environment instructed the Local Government and Environment Committee to report back on the bill in the House by 15 February 2016. This puts it in the 4 to 6 month category, meaning that there will be a vote but there will not be a separate debate on this issue. Given that this period includes the Christmas and New Year holiday, when the House does not sit, it effectively leaves the select committee consideration little more than 2 months. What we are looking at is that either the usual 6-week period of receiving submissions would have to be shortened, or there would be only 1 week of hearing submissions and only 2 weeks to consider the departmental report.

So the Minister, I would hope—if he really does believe in what he is saying—would want to amend his instruction to ensure that he gives ample time to the residents and citizens of the Canterbury region to come forward and to make submissions on this particular bill. When you take into consideration the Christmas and New Year holiday, I cannot help but wonder whether this was deliberate, because most citizens will be focused on the Christmas holidays and not on this bill, yet this is such a significant piece of legislation that I suspect citizens of the Christchurch region will want to have a say. I would ask the Minister to make the amendment and allow the citizens of Christchurch ample time to make submissions. I would tell the Minister to move the report-back date further out.

I say that because I want to challenge some of what the Minister has said. When I listened to the Minister I was listening intently because I genuinely wanted to hear the arguments, but I have heard that same argument over and over again. In fact, in the last 7 years since this Government came to be, I believe that it has gone out to deliberately undermine the local government sector. It has treated local government with disdain. It has not treated the people elected by the people with respect. It treats them with disdain. It treats them as if they were an extension of his Government ministry.

I say that because in 2010 we heard the Minister and that Government say that it was for only a short period that we were going to abolish and get rid of elected representatives—until 2013. In 2013 the Government tabled a similar piece of legislation, saying: “No, we are not going to elect people. We are now going to look to 2016.” Next year is 2016. Before 2016 the Government is tabling a similar piece of legislation, and what did the Minister say? He said: “We’re going to wait until 2019 before the citizens of the Christchurch region get the opportunity to elect their own representatives.”

Can we trust that word, given the pattern of 2010, 2013, and this year? Can we trust the Minister, and, in the same regard, can we trust the word of that particular Government when it comes to what it is saying today in this House? I would say no—I would say no. We do not know what is going to happen in 2019, but we certainly know that the promises made in 2010 were not kept in 2013 and that the promises he made in 2013 will not be kept this year, or next year, when the elections take place. So I have serious doubt that the promise he makes today in this House will be kept, come 2019.

So what is this all about? This is about this Government wanting to control who decides what happens to water in that region. This is about a Government that does not trust the people of the Canterbury region. It does not trust that they can make their own decisions as to what happens there.

I know my colleague from the Green Party Eugenie Sage was a member of that council, whose seat on that council was rudely abolished by this very Government.

Hon Dr Nick Smith: Because they were incompetent.

Su’a WILLIAM SIO: She will probably give a more intimate, detailed description of what happened—not from the word of that particular Minister. He can say all he wants, but can we trust him? I say no. Based on the pattern that he has established in this House, you cannot trust this man here. You cannot trust this Government when it comes to local democracy.

Democracy is about trusting the people to make their own decisions. Rightly or wrongly, the people will make the decision.

Hon Dr Nick Smith: Why did you sack the district health board in Hawke’s Bay?

Su’a WILLIAM SIO: Listen. I sat here listening to you; you will sit there and listen to me. Here is a man who now does not trust what he said himself and he is trying to defend the indefensible. If those members felt so strongly about maintaining proper decision-making here in Christchurch, why did they not do that up north in the Kaipara District, where there are some serious problems? They did not, because this is about protecting their own self-interests in the irrigation of water in the Christchurch region.

People in Christchurch will want to have a say on this, and I hope they are listening. I hope they are listening when I say that you cannot trust a Government that makes promises time and time again, and each time it makes that promise it then passes legislation to break that same promise that it makes. But democracy is important, and democracy is the foundation of local government. Local communities want to have a say on how their councils determine the direction and the future of where those local communities go. So I would say that if I was a Cantabrian I would feel that it is disgraceful the way this Government has used its powers to usurp the rights of communities to elect their representatives, which those communities have every right to do. They would be their local representatives, who would represent them and make the decisions that are best for that community and the future of the Canterbury region.

I understand that before this Government passed legislation in 2010 it had actually hatched up the agreement at a National Party conference. Why? Because, as I understand it and as it was reported to me by those in the know, this is about protecting personal interests—personal interests. So this is not about elected representatives on the Canterbury Council making bad decisions. This is about those members protecting their mates—protecting their interests over the interests of the wider community.

Tim Macindoe: Oh, here we go again.

Su’a WILLIAM SIO: Well, I can say this. Those members have not been straight with New Zealanders. They have not been straight from the beginning about Canterbury and the rights of Canterbury people to elect their own representatives.

So the mixed model—what is the mixed model? I like what my colleague Dr Megan Woods here said. She said that a woman is either pregnant or not pregnant. That is what Dr Megan Woods said. A person is not half-pregnant—a person is not half-pregnant—so what is this mixed model about? It is about maintaining the façade that we are transitioning into democracy, when the reality is that it is not going to happen. It is not going to happen. The Government has retained its right to be able to appoint six councillors on the regional council. As long as the Government has that ability to be able to appoint people on that regional council, it will also have the ability to control and to determine and to influence the decisions of that council in the years to come.

But the reality, I have also been told, is that even though the Government says today that this is a transitional provision and that in 2019 the region will be able to elect its own full council, it is my understanding that the Government has been advised by the Ministry for Primary Industries to retain the structure—to retain this mixed model of democracy of convenience for the Government. So I do not believe that we can trust any word that this Minister and his Government have laid out before the House.

Look to the pattern. In 2010 the same promise was made and broken again. In 2013 the same promise was made and broken again. This year we are hearing the same promise again—the promise that in 2019 the people of Canterbury will elect their representatives. I do not believe that that is ever going to happen, based on the pattern that the Government has established for itself.

Hon Dr NICK SMITH (Minister for the Environment): I seek leave of the House to table the Cabinet paper in which the Government appointed commissioners to the Kaipara District Council, contrary to the false claims by the previous speaker.

Mr DEPUTY SPEAKER: Publicly available?

Hon Dr NICK SMITH: It is a Cabinet paper.

Mr DEPUTY SPEAKER: Is it available to members of the public?

Hon Dr NICK SMITH: Cabinet papers are not normally publicly available. They are not on a public—[Interruption]

Mr DEPUTY SPEAKER: The question has been answered.

Hon Dr NICK SMITH: Cabinet papers are not normally made publicly available, and given the inaccuracy that the previous speaker made in his speech I would just like to see the record set straight.

Hon Annette King: I raise a point of order, Mr Speaker. A simple question: is it publicly available now? Has it already been released?

Mr DEPUTY SPEAKER: Well, that question has been put to the member who has—

Hon Annette King: He has not answered it yet.

Mr DEPUTY SPEAKER: Well, he has answered it as best as he can, he assures me, so I will put the leave. Leave is put for that purpose. Is there any objection? There appears to be none.

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

JOANNE HAYES (National): I rise to take a short call on the first reading of the Environment Canterbury (Transitional Governance Arrangements) Bill. After sitting and having to endure the load of rubbish that came across from the Opposition just recently—and I am sad to see that the previous Labour speaker has actually left the Chamber. Honestly, when someone gets up in here talking about this bill and says “Why did the Government intervene? Why did you do this? Why did you do that?”, well, I think he forgets that Labour actually had it on its radar to do exactly what this National-led Government did.

I can also tell you the reason why our Government stepped in. The reason was that it was invited to come in by the councils. Of the 10 councils, there were six councils that came to Government to ask for intervention because things were going wrong, and that is why the previous councillors from Environment Canterbury back then actually got removed. It was because they were not performing in the roles that they were put into and that were voted on by the people who actually put them there, and that is why we are here today.

We are here today to put forward this bill. The main component of this bill—and I do want to take a little bit of time just to talk about this—is to establish a mixed-model governance body. People ask: “Oh, who wants a mixed-model governance body?”. Well, local government wants it—local government. Six out of 10 Canterbury councils supported the mixed governance model—that is, Ashburton, Timaru, Hurunui, Mackenzie, Waimakariri, and Waitaki—as did Ngāi Tahu, the iwi of the South Island, and TrustPower, Genesis Energy, and Irrigation New Zealand. They wanted this mixed-model proposal.

Federated Farmers also support the phased approach towards this mixed-model governance arrangement. What William Rolleston, the president of Federated Farmers, said was that “the commissioners had made difficult decisions that balanced the needs of farmers with environmental concerns”—that is, the hard work of the commissioners of today, capably led by the amazing Dame Margaret Bazley. That is where they have got to, and they will carry on until October 2016.

When I heard the member say that the people of the Canterbury region will not have an ability to elect—of course they will have that ability to elect in October 2016. The Government is making sure that with the people it is selecting to go on there, it is keeping up the experience and making sure that everything that has started now will continue over, so it is about keeping that experience there. The regulatory impact statement from the Department of Internal Affairs and the Ministry for the Environment states that they support the mixed-model governance for 2016—a 3-year local government term—because by 2019 that will expire. That is about giving the power back to the people of Canterbury.

In closing, I do want to reiterate the hard work of the current councillors of Environment Canterbury. I think that Dame Margaret Bazley has done a wonderful job—an absolutely wonderful job—of being able to shepherd her way through all of the issues that the previous Environment Canterbury councillors could not do, would not do, or perhaps did not have the experience to do.

So I stand in support of this bill. I support the work that the Hon Nick Smith does for the environment, especially in this bill, and I look forward to it coming to our Local Government and Environment Committee. I look forward to hearing what people have to say and to it coming back and passing through the House. Kia ora.

EUGENIE SAGE (Green): Tēnā koe, Mr Deputy Speaker. I would be pleased to be speaking on the Environment Canterbury (Restoration of Democracy) Bill but we have got the exact opposite here. The Green Party strongly opposes the Environment Canterbury (Transitional Governance Arrangements) Bill. Cantabrians should not be treated as second-class citizens and have to live with second-class local body representation, which is what this bill is about, by continuing to have appointed commissioners that the Minister has handpicked and with not returning to a fully elected regional council.

That is what Nick Smith promised in 2010 when the Government axed elected councillors at Environment Canterbury—that we would get democracy back in 2013. That did not happen and it is not happening in this bill. No other regional or unitary council across the whole of New Zealand—in fact no other council—has this half-pie democratic option of having half the members of council elected.

Hon Dr Nick Smith: Every district health board.

EUGENIE SAGE: The Minister talks about district health boards. The Minister does not seem to realise that most of Environment Canterbury’s funding comes from rates and that there is a constitutional principle of no taxation without representation, whereas district health boards receive a major chunk of all of their funding from central government through taxes rather than rates. So district health boards are not an appropriate model.

But I would just like to talk a bit about history, because the Minister has misled people again. He claims that Environment Canterbury had no water plans in place in 2010. In fact, there was a proposed natural resources regional plan that was reaching the end of its hearing process and which the commissioners picked up, adopted, and made operative a couple of months after they were appointed. The Minister said there was no—

Hon Dr Nick Smith: It’s not true.

EUGENIE SAGE: It is true, Minister. The Minister said there was no collaborative process. Well, that is interesting, because it was elected councillors who developed the Canterbury Water Management Strategy, which provided for a collaborative process and which finalised the strategy before they were rudely got rid of. The Minister claimed there were no prohibitions on water takes in red zones. It was an elected council that recognised that ground water was being overused and that established the red zones and that was moving to actually restrict additional takes from those.

So this whole process is undemocratic. The regulatory impact statement highlights that there is certainly no certainty that we will even get democracy back in 2019 because it contains the statement: “In the long term, if the planning frameworks for freshwater management and earthquake recovery have been effected as planned, this model would provide a mechanism for transition to a fully elected body”. There is a big if in there. The Minister promised democracy back in 2013; that did not happen. We are not getting it back in 2016 when the local body elections occur, and there is no certainty that we will get it back in 2019 either.

There is no justification for Cantabrians being given this half-pie model that the bill sets out. Why is that happening? It is, of course, because 60 percent of the water that is allocated for irrigation in New Zealand is down in Canterbury. So the Government wants to keep Environment Canterbury under its thumb by appointing commissioners. That whole water issue is why the Government got rid of councillors, because it was an elected council that increased the flow regime for the Waimakariri River. The directors of Waimakariri Irrigation and Irrigation New Zealand objected to that—how dare elected councillors move to improve river flows to better protect the health of rivers! So they lobbied the Government along with councils and that resulted in the councillors being removed.

Under this bill, we will have a halving of the level of elected representation we had in 2010. In 2010 we had 14 elected councillors. This bill provides only seven. In 2010 Christchurch citizens elected eight regional councillors. Under this bill they will elect only four.

We are returning to what Peter Dunne has called the days of the squattocracy, where a vote in rural areas is worth more than a vote in the city. Under this bill we will see one councillor in Christchurch representing more than 90,000 citizens, but in South Canterbury a vote is worth more because one councillor there will be representing only 59,770 citizens. So it is gerrymandering, effectively, where you get constituencies established and they have not got the same number of citizens being represented by councillors.

So what do we have under this bill? We will have our second-largest city being able to elect only four regional councillors, and that contrasts with the 20-odd councillors who are elected in Auckland and the 13 over the whole of Greater Wellington. So this Government wants yes-men and yes-women in place at Environment Canterbury so that it can continue to control the direction of that council and it can continue to ensure that we have more irrigation, more intensive agriculture, and, of course, more water pollution.

You only have to look at the performance of these commissioners that the Government has appointed, and we have seen a decline in water quality. At recreational bathing sites on rivers in 2009-10, 74 percent of those sites were suitable for swimming, but in 2013-14 that had decreased to 67 percent. So water quality for recreation has declined under the commissioners. They have not improved water quality. They have certainly made it easier for irrigators by allowing more takes, but they have not improved it for recreation and for swimming.

This whole model—the Minister has said that the commissioners have made good progress. Yet in the regulatory impact statement it says that the implementation of the National Policy Statement for Freshwater Management and the final chapters of the Proposed Canterbury Land and Water Regional Plan are not expected to be completed until at least 2020. So we have got a double standard here. We have had the commissioners in place for 5 years, and yet they are being allowed another 5 years to finish the planning process and to have a second-generation regional plan when that was at the heart of the Minister’s misplaced criticism of Environment Canterbury in 2010.

I think it is worth reminding the House that Environment Canterbury back then was dealing with more applications for water takes than all of the other regional and unitary councils in New Zealand combined and that there was no national guidance and no national policy statement on fresh water to help provide that assistance to the council. We got that only last year. So it was dealing with a situation by itself with a failure by successive Governments to provide the guidance that the Resource Management Act intended.

So we have the commissioners continuing when, if the Government was really concerned—genuinely concerned—about continuity there would have been other options. The Government could have provided through this bill for elected councillors to return in 2016, to have a fully elected council, and for some of the commissioners to be contracted as advisers for a period after those elections, and to continue without having the right to vote.

That would have been an alternative if the Government trusted the citizens of Canterbury, which it does not. But the Green Party does. It believes that Cantabrians are ready to elect a competent council to pursue policies of sustainable management of water, the coast, soils, air quality, and natural hazards and to make much more progress than the commissioners have made in actually improving water quality, not allowing it to further decline, as has happened under the commissioners.

The Green Party would listen to the more than 500 submitters on the Government’s review document who wanted democracy restored. It would listen to the Christchurch City Council, which has said that it wants effective, open, and transparent processes back rather than this hybrid model that this Government is proposing.

We oppose the bill. We oppose the truncated select committee process, and we want the restoration of democracy in Canterbury. That is what Cantabrians deserve, not this half-pie model.

DENIS O’ROURKE (NZ First): As we know, the Environment Canterbury (Transitional Governance Arrangements) Bill provides for a mixed governance model for Environment Canterbury for the local government term 2016 to 2019. But we have already had several years since the commissioners were appointed in 2010 and it is difficult to understand why a further transitional period of another 3 years is now needed. We in New Zealand First think that is far too long before a return to a fully elected council. The year 2019 would mean that we would have had 9 years of appointed commissioners—much, much too long a period. Democracy requires a return to a fully elected Environment Canterbury next year, and not in 2019.

I want to say this at the beginning. I supported the appointment of the commissioners to replace the Environment Canterbury councillors in 2010 because I think it was true that Environment Canterbury was then dysfunctional. It was making irrational, politically motivated decisions about water management that were, in fact, threatening the orderly processes that were then in train for consents for takes and uses of water for irrigation. Those processes were then well developed—for example, for the Central Plains Water scheme. Actions then by Environment Canterbury simply undermined those processes. There were then, and still are, four problems with Environment Canterbury. First, in 2010 there was a lack of a properly developed strategic plan for fresh water. In fact, contrary to what Eugenie Sage said, that process was shambolic and was not really going anywhere. Nobody really had any confidence that it would. That, in fact, is the truth of that matter, whether or not we like it. Furthermore, that process was actually used to undermine the consent process for the Central Plains Water scheme even while it was in train. For me, I think that the way Environment Canterbury behaved at that time was most improper.

Secondly, Environment Canterbury acted far, far too late—at least 10 years too late—in getting that plan off the ground. Organisations such as Central Plains Water, which wanted to get started, had to do it in a vacuum, without any such strategic plan, and that was the fault of Environment Canterbury up until 2010. It is no surprise that that was the case, because the third reason, the third problem with Environment Canterbury then, was that management acted like a law unto itself. It would not listen to people, and neither would the councillors of Environment Canterbury listen to people at that time. I was one of the people who were seeking to be heard, and found it very difficult to even get a hearing with management or councillors that was meaningful and constructive. We had plenty of good things to offer, but they did not want to know. So management was a major problem. And, fourthly, the fourth problem is that there is an inherent problem of an urban versus rural schism in Canterbury, because of the urban dominance. This is something that Eugenie Sage does not seem to appreciate. It is not appropriate for the city of Christchurch to dominate the whole region in the way she suggests would be appropriate.

So, therefore, the appointment of commissioners in 2010 was, in fact, necessary. They have done an excellent job. They did listen. They did have an excellent process for the development of the strategic plan, and they took people with them, which is something that Environment Canterbury, as an elected body, had not done. They did achieve that plan, and it is now effectively in operation. It has brought order and direction, and does properly balance the need for the economic development potential of irrigation with sustainable farming practices. That will lead, over time, to a better environment. I disagree again with Eugenie Sage, who uses statistics that do not recognise the fact that farming in Canterbury has been going on for more than 100 years. There is a lot of nasty stuff still in the post that has got nothing to do with modern and more effective farming practices in terms of the protection of the environment that are now in place.

The truth is that the objective of the 2010 appointments, however, has been achieved. The commissioners have done a good job, but they are no longer needed. What they were put there to do has been done. A return to democracy next year is essential. It is wrong to treat Canterbury as different from other regions, and Canterbury is entitled to fully democratic local governance. The proposal to have seven elected and six appointed people on the board of Environment Canterbury is bizarre. It is likely to create tensions, just in the same way as the old urban and rural schism created tensions. A them-and-us attitude will develop. It will not be positive for Environment Canterbury. I note, for example, that in clause 11 of the bill there are a number of criteria for appointed members of the board. When you look at those—management of freshwater skills, local authority governance skills, tikanga Māori skills, and knowledge of the Canterbury region and its people—they are the same things that elected people are perfectly capable of judging. We do not need appointed commissioners for those reasons or because of the need for those skills. The mixed-governance model is likely to result in the Government being accused of political interference, and that will not be positive for Environment Canterbury either. However, I would have to say this. The provisions to carry forward the limitations upon appeal rights are still needed and are acceptable to New Zealand First. They are needed to ensure that the implementation of decisions made already and the furtherance of the strategic management plan are not compromised, otherwise everything that has been achieved so far could be lost.

What is really needed is not the appointment of commissioners for another 3 years but a genuine review of the structure of regional governance in Canterbury. New Zealand First’s policy is this: it does not support having appointed members for Environment Canterbury and will therefore not support this bill. New Zealand First is committed to effective regional democracy, with which appointed members are not compatible. Secondly, New Zealand First does not support the resurrection of Environment Canterbury as it was prior to the installation of the current commissioners. So just having appointed commissioners for another 3 years and then going back to the old system is not acceptable either. That is simply because of that urban and rural schism that exists inherently in Canterbury, with a large city that tends to dominate everything else. We would not support Environment Canterbury as it is currently, as it would be reconstructed after 2019. Instead, New Zealand First would support a unitary authority for Christchurch City and would give the rural authorities in Hurunui, Waimakariri, Selwyn, Ashburton, and Waitaki the option either to have unitary authority themselves or they could club together and have a rural regional authority. That is something for them to decide.

So New Zealand First acknowledges the historical and inherent problems with Environment Canterbury, based on the urban and rural schism of interests, but does not accept more appointed commissioners. It seeks a longer term review of regional governance aimed at unitary councils in Canterbury. We see that, in the long term, as being the only solution. This bill will do nothing at all to solve any of those problems. New Zealand First will therefore be obliged to vote against it.

NUK KORAKO (National): Kia ora e te Mana Whakawā, huri noa i te Whare, nei te mihi atu ki a koutou katoa.

[Thank you, Mr Assistant Speaker, and to you, throughout the House, I acknowledge you all.]

Kia ora e te Mana Whakawā, huri noa i te Whare, nei te mihi atu ki a koutou katoa. It is my pleasure to stand and speak on the Environment Canterbury (Transitional Governance Arrangements) Bill’s first reading. Before I was elected to this House I was, and still am, a proud Ngāi Tahu Cantabrian and a former businessman, and I was also a member of Ngāi Tahu’s governance board, Te Rūnanga o Ngāi Tahu, as Ngāi Tūahuriri’s representative. Ngāi Tūahuriri actually are mana whenua over most of Christchurch. In those roles it was absolutely clear to me that Environment Canterbury was failing, and a change was needed. Environment Canterbury was failing to provide the leadership our region needed on irrigation issues. It was failing miserably in its duty to maintain water quality, and particularly in its Treaty and statutory obligations to mana whenua.

Environment Canterbury was dysfunctional and either could not or would not take up the hard decisions it needed to. Where our region needed decisions, all we got were delays. When it came to consenting time frames, this council was breaking the law over 70 percent of the time—that is right, over 70 percent of the time. So we were all very pleased when the Government launched an investigation into Environment Canterbury’s performance. We were delighted that the Government took the resulting report seriously, recognised the urgent need for intervention, and took the hard decisions to replace the regional council with commissioners. The response to this was overwhelmingly positive, in particular amongst Environment Canterbury staff.

Ngāi Tahu were rightfully cautious about the removal of elected representatives, but they recognised the need for intervention as a necessary, practical solution. We should be cautious when intervening in a democratically elected body, but the legislation we pass here puts certain responsibilities and obligations on councils. So when a dysfunctional regional council cannot or will not fulfil its responsibilities it is incumbent on the Government, with the support of this House, to act, and that is exactly what happened. In 2010 the National-led Government acted, and the results make it clear it got it right. Under the commissioners, Environment Canterbury and Ngāi Tahu have built a much stronger relationship thanks to Environment Canterbury placing a higher priority on engagement with mana whenua. Just to quote from the iwi, the Ngāi Tahu - Environment Canterbury success under the commissioners “sets the scene as a successful model of partnership”. Ngāi Tahu now has a relationship with its regional council that many iwi in this country would envy.

Environment Canterbury has now become an exemplar as regional councils go, but we still need a transition back to a fully elected body, which is what this bill will do. It is about transition. It is equally important that we maintain the good progress that has been made and continue with the current stable governance that Environment Canterbury has throughout the transition.

Finally, I have heard from the other side of the House, from the Opposition, a lot of rhetoric and a lot of examples about democracy and all of this sort of thing. But if we go to the election of 2014—I think the most important thing there, which is a reflection that we are doing this correctly and we are doing right, is that in the 2014 general election National won the party vote in all Christchurch electorates. That is in Selwyn, Port Hills, Ilam, Christchurch Central, Christchurch East, and Waimakariri. That there, to me, is a reflection of the fact that the people of Canterbury and the people of Christchurch actually support this and they, indeed, support this transition.

I have no hesitation in commending this bill to the House, and I look forward to it coming to the environment and—

Jan Logie: Local government.

NUK KORAKO: —the Local Government and Environment Committee. Kia ora.

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

JAN LOGIE (Green): Tēnā koe, Mr Speaker. It felt wrong helping out my National colleague Nuk Korako after that contribution, but I just could not help myself. I am really pleased to have the opportunity to rise and take a short call in support of the more comprehensive contribution that was made by my colleague Eugenie Sage where she, I think, eviscerated the Government’s arguments for this bill and exposed its true purpose in outlining the history of this bill.

We have heard several times from National members, and also from New Zealand First members, who were saying that the councillors were removed from Environment Canterbury because they were not doing the job that the people put them there to do. Well, I would say, still, it is the right of the people to decide whether they were doing the job they put them there to do, or not. It is not, and should never be, the job of people sitting in Wellington on these Government benches to decide whether a local council or a regional council is doing the job for its people. It is the heart of democracy that the people themselves get to vote and express their will.

If the people of Canterbury had been unhappy with the functioning of Environment Canterbury, they would have removed those councillors and replaced them with people whom they believed would deliver on what they wanted. That is how democracy works, and it seems to be a fundamental failure on behalf of this Government to misunderstand that very basic principle.

The Green Party has a proud history of supporting democracy and, particularly, participatory democracy at a local level. We believe that the more perspectives that are gathered, the better the decision. We believe that the more people who are directly affected by a decision and who are involved, the more likely you are to get a better decision.

Appropriate decision-making is one of our charter principles, and it is so important for us because we know it is really hard to protect the environment and create a fair society without good democracy. The arguments that have been put forward for getting rid of Environment Canterbury council members were that the decisions were taking too long and it was getting in the way of economic progress, i.e., irrigation.

Well, actually, that is the case in point. When Nick Smith from Wellington and from these Government benches decided that the economic priorities of his Government overrode the considerations and the complexities that were happening in that local community, he undermined democracy and put the environment at risk. We are seeing so clearly now that while this commission is in place and people are appointed by this Government to prioritise economic growth and irrigation, we have seen a decline in water quality.

Hon Dr Nick Smith: Rubbish!

JAN LOGIE: We have. That is the reporting, as we have heard from my colleague Eugenie Sage, who outlined the struggles that Environment Canterbury was working within and the constraints around having no national plans and that it was dealing with more irrigation proposals than all the other councils combined, with no support from central government. It was got rid of and commissioners were put in place, and, as a result, we have declining water quality. I suspect there have been more irrigation permits given. The Government’s agenda is being met, but the needs of the environment and the community are not being met.

I would also like to just touch on one of the aspects of this. The Government, through the Minister Nick Smith, has said that he can justify this by saying: “Well, DHBs are mixed models. This is just like a DHB.” Well, this is not, because the point of comparison is not district health boards. This is a regional council, and the point of comparison is other regional councils. What you are doing with this bill is singling out Canterbury. You are turning Cantabrians into second-class citizens, and that is completely unacceptable and unjustifiable.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Poto Williams—5 minutes.

POTO WILLIAMS (Labour—Christchurch East): It has been an interesting first reading debate thus far. There are a couple of points that I want to touch on. In 2010 the Government removed a democratically elected regional council organisation—it removed it. When we talk about democracy, we talk about one person, one vote, and the ability for that person’s voice to be heard in the democratic process. I am concerned that the Government felt its duty was to override the interests of the democratic process in what would appear to be a favouring of the interests of those people who really had an interest in the rural environment over the urban environment. One of our previous speakers talked about the schism between the rural/urban environments, and I feel that the removal of the Environment Canterbury councillors actually shifted the balance in the other direction unfairly and was not a democratic process. If there had been such an issue, then the will of the people should have been sought and another opportunity to vote should have been given.

When you look up the model that the Government is proposing—the mixed model of governance—when you google it, all you get is Environment Canterbury. It is not a model that is widely used. In fact, it is used nowhere else in the regional council environment. It is not a model that is widely used. We are going to go from a Government-imposed model to one that is not tried and true. Here again, Cantabrians are guinea pigs.

When you look at the regulatory impact statement and look at what the commissioners were actually required to do, the whole idea was that we were going to “streamline the planning process. Part 3 of the ECan Act empowered ECan to: make changes to a plan or regional policy statement, or to make a variation to a proposed plan or regional policy statement, through a limited appeals process;”. Yet again, it stripped out the ability to go back to Environment Canterbury and say—as an individual, as a farmer, or as an organisation—we actually want the right of appeal. We have had that process limited.

Let us have a look at the “Problem Definition” in the regulatory impact statement—the reason that we have got this bill before the House. The expiry of the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act at the local body elections is October 2016, assuming the commissioners themselves do not stand. The reason that we are doing this and extending this for a further 3 years is that “their collective skills, expertise and institutional knowledge will be lost at a single point in time at ECan’s leadership level.” It is as if the commissioners have been operating in a vacuum, and that the people of Canterbury do not know how to run their own affairs—that we need for them to hold our hands for a further 3 years.

Further on in the regulatory impact statement is another problem definition: “In addition, the new leadership would not have available to them the resource management powers and processes under Part 3 of the ECan Act.”, which I described before. So that is to make changes to a plan or a regional policy statement, and, again, there is a limited appeals process—[Bell rung] Thank you, Mr Assistant Speaker. That was so soon, Mr Assistant Speaker. There is so much more to talk about on this bill, which is undemocratic to the people of Canterbury.

So after 6 years of a Government-controlled Environment Canterbury, we are still not going to have the ability to control our own affairs. I do not buy the argument that we are unable, after 6 years, to take back the reins of our regional council. I do not buy the argument that changes in leadership will create a vacuum and that we cannot control these affairs ourselves. I do not buy the argument that it will require nearly 10 years of Government interference in order to provide stability to the environment. I do not buy these arguments. I look forward to my future contributions on this bill.

MATT DOOCEY (National—Waimakariri): It is an honour to rise and speak to the Environment Canterbury (Transitional Governance Arrangements) Bill in its first reading. It is a bill that I support and I am looking forward to it being passed in its first reading, and for it to go to the select committee and to receive submissions in the legislative process.

I do want to raise today just four points, and I think they are very key points when considering the context of this bill. One is that what people like about this Government is that this Government makes a decision and then acts. We saw that with the earthquakes in Christchurch. There was talk about a lot of social problems coming out of the earthquakes. People were going to leave Christchurch. House prices were going to crash. Jobs were going to be lost. But the Government came in and provided a lot of certainty, security, and stability. Like with Environment Canterbury, which was very dysfunctional, the Government came in, made a decision, and acted—contrast that with the Opposition, which makes one decision and does the next, whether that be on the flag referendum or the Trans-Pacific Partnership agreement—and that is what the public want. That is what the people of Christchurch want. That is what the people of Canterbury want. Like my colleague Nuk Korako said, it was the National Party that won the party vote, not only in Christchurch or in Canterbury but in the whole of the South Island.

I want to acknowledge the work of the Ministers—the Hon Dr Nick Smith and the Hon Louise Upston—who went out with the document for public consultation. They took it around the councils, and six out of 10 of them were in support. My electorate, Waimakariri, is in support. They consulted with Ngāi Tahu, who are in support. They got public submissions, which have led to the development of this bill.

They say there are two positions in politics. One is “It’s time for a change.” and the other is “Don’t put this at risk.” Well, this legislation, this bill, actually combines both. It gives us a change—we move towards a mixed model of governance—but it does not put the gains at risk. As a new MP, I am out in my electorate of Waimakariri dealing with the very real environmental issues in Waimakariri. One of them is around water management. The other is around working collaboratively in zoned committees. Environment Canterbury has shown leadership in those over the last few years, and it is right that we support it and the people of Canterbury in protecting our environment. So I support this bill and commend it to the House. Thank you.

Hon RUTH DYSON (Labour—Port Hills): What an arrogant speech from a Canterbury member of Parliament. What do people value in a democracy—what do people value in a democracy? I think that they value their vote. This might come as gobsmackingly big news to the member who has just resumed his seat, Matt Doocey, but people overseas long for the right to vote. We in New Zealand sort of take it for granted, but we do not have it in Canterbury. [Interruption] And that Minister interjecting and giggling said that we could not possibly give Cantabrians a full right to vote for their regional council. Why? He said it. The Hon Dr Nick Smith said it in the Press, on Newstalk ZB, and on Radio New Zealand. He said it was too risky. Oh, too risky! It is too risky to give us our right to vote in the same way as every other person in New Zealand. Well, I think that that is wrong; I think it is immoral, and it is certainly not justified on any basis that that member pretends it is being justified on.

The Creech report made it very clear that there was no breach of responsibility, no breach of functionality, no cause for concern in terms of the job that was being done by Environment Canterbury with elected members. It was all about irrigation. It was all about water. It was all about that Government wanting to get more water out of our rivers and on to the Canterbury Plains. That is what the debate was about. It was not about competency. It was not about being functional. It was about water allocation. I think the member should be honest. I know that it is a big call to ask that of him, but I think the people of Canterbury deserve it.

We had the promise in 2010. We will have elected commissioners, totally against the context of the Creech report. Wyatt Creech was a former National Minister who was honest enough to say that what the Government wants to do is not justified.

Hon Dr Nick Smith: They were dysfunctional.

Hon RUTH DYSON: He never said that they were dysfunctional, and I challenge that Minister to table that comment. I know that he will not be able to. He should be very careful about what he accuses Wyatt of having said, because I tell you what, Wyatt Creech, despite being a former National Minister, is a man of integrity. He would highly resent what that Minister has just accused him of saying.

I think it was the Hon Nick Smith who, in 2010, first sacked our democratically elected council, albeit for a very short time. He said: “It will be for a very short time. We will just get it all back on track. We will just get the irrigation flowing.” He said that there was no water plan. The water plan in Canterbury was proposed in 2004—11 years ago, and 6 years before that Minister sacked the democratically elected councillors. It was in 2004—an operational water plan—and that Minister knows it, because he is on top of his job, usually. But in this regard, he has clearly been rolled. He is doing what he is told by other Cabinet Ministers, and, actually, he is not making a very good job of it.

Twice since then, we have had that promise that Minister Smith made to Canterbury people broken: “Oh, we’ll just have a little bit longer and then we promise we’ll give them back. We promise we’ll give you your vote back—ah, more legislation.” And now we get: “Oh, sorry, we can’t have democracy back in Canterbury because it is too risky.” In March of this year, we had a little glimmer of hope that we might get back our right to vote in Canterbury. This document, the Environment Canterbury Review: A discussion document, is full of great ideas—all these functions and powers, what the review was all about, the freshwater management; all very good. It says at the back that you have got a bit of time to put in your submission—better than this bill, which is, again, truncated; but do not worry, everyone knows what they are going to say.

The review says: “Submissions will be summarised by the Review Team and available online … A report on the outcomes … [will be] published… The Government will then make a decision.” Oh, they forgot to say that the Government will then make a decision having totally ignored the overwhelming majority of submissions. There were 534 submissions—534 submissions in total. How many of the 534 were supportive of the option that has ended up in this legislation? How many, Minister Smith? Sixteen—one-six. Which is bigger: the 518 who opposed it or the 16 who supported it? Shall I give you a clue? It is not the number of people who backed this legislation that we are looking at. There were 534 submissions, but only 16 supported the model that is in this legislation. The Government was totally arrogant, totally dismissive, and just rode roughshod over democracy—who cares? It says it is too risky and ignores the submissions that this document asks for. That is arrogance beyond belief, although I have to say that we are getting used to it.

So what was the real agenda? Well, it is always hard to tell with the current Government because it is never straight with people. It does not tell people the full truth; it tells them what it wants them to believe and then keeps repeating it. Well, in this case, it has not been successful. Sometimes it is; I have noticed that. Some Ministers think that if they repeat things that are not true often enough, people will believe them, but in this case, that is not the case. People in Canterbury know why Environment Canterbury was sacked. It was sacked for one reason only: to get more water out of our rivers to irrigate the plains.

We know the environmental damage that is being done as a result of excessive irrigation. We know that there is an urban/rural tension. Does this bill go any way towards resolving it? No, it does not. It does not restore democracy. It gerrymanders the population so that the strength is in the rural communities. Bjelke-Petersen would be very proud of that. It has not happened since his days in Queensland. Never before have we had gerrymandering of electoral boundaries in this way—never before. We have always had an open, democratic, fair process—

Hon Dr Nick Smith: Rubbish!

Hon RUTH DYSON: Well, the Minister might know where he has gerrymandered electorate boundaries before in the past, but I am certainly not aware of any. We have an independent commission with political representation, we have public submissions, we have transparency, we have criteria to be met—none of it is met in this legislation. It is gerrymandered, and then on top of that, the Minister says to Canterbury: “Don’t worry about having a proper process for submissions—don’t worry your little heads about that. We’ll just give you a short period of time—shorter than any for other legislation.” I hope the select committee gets to go to Canterbury. It certainly did last time and the time before.

Again, it is a truncated process—unless the Minister is going to be absolutely disingenuous and say the Christmas holiday break does not mean anything. Is the Minister going to say that? Well, in that case you should take at least 3 weeks off the time that is allowed, because there is not—[Interruption] That member should be very careful about pots calling kettles black. He might have some truth discovered in the House if he continues along that line. So one of the examples that we can use to demonstrate how the Government is thinking is a quote from the Speaker, actually, when he was a Minister. He said in December 2008 that the one thing that the irrigation community needed to know was that they had to take the urban community with them if they were to get what they wanted. He was, basically, giving them his advice. But by April 2010 all bets were off. Let us work together, let us collaborate—that was all thrown out and instead we got: “We can do anything”.

Arrogance had taken over the Ministers. They decided that they were running the show and they were going to do what they wanted. The then Minister David Carter said to the regional councils at the irrigation conference: “We had to act [on Environment Canterbury] because the situation was untenable if we are going to seriously make progress in delivering this irrigation. I would have thought that what happened recently [to Environment Canterbury] would be a signal to all regional councillors to work a bit more constructively with their farmer stakeholders.” Those are on the record—public comments by the Minister, who was the only one to tell the truth, but now he is not even in Cabinet, so that is a bit of a tragedy.

The Creech review of Environment Canterbury did not say the organisation was dysfunctional. It did not say that it needed to be replaced with unelected representation. This legislation carries on the removal of a fundamental right of all New Zealanders: the right to vote. It is unnecessary, it is wrong, it was opposed by Cantabrians, and it is about time the Government got off its arrogant high horse and started listening.

JONATHAN YOUNG (National—New Plymouth): On this matter of the Environment Canterbury (Transitional Governance Arrangements) Bill, I am very happy to support this bill and commend it to the House. Thank you.

A party vote was called for on the question, That the Environment Canterbury (Transitional Governance Arrangements) Bill be now read a first time.

Ayes 62

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

Noes 59

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

Bill read a first time.

Bill referred to the Local Government and Environment Committee.

Hon Dr NICK SMITH (Minister for the Environment): I move, That the Environment Canterbury (Transitional Governance Arrangements) Bill be reported to the House by 15 February 2016.

The ASSISTANT SPEAKER (Lindsay Tisch): Dr Megan Woods has moved an amendment to the motion replacing “15 February 2016” with “18 April 2016”.

A party vote was called for on the question, That “15 February 2016” be replaced with “18 April 2016”.

Ayes 58

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

Noes 63

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

Amendment not agreed to.

Motion agreed to.

Bills

Home and Community Support (Payment for Travel Between Clients) Settlement Bill

First Reading

Hon Dr JONATHAN COLEMAN (Minister of Health): I move, That the Home and Community Support (Payment for Travel Between Clients) Settlement Bill be now read a first time. I nominate the Health Committee to consider the bill. This bill resolves a claim filed in the Employment Relations Authority that the time a home and community support worker spends travelling between clients—in-between travel—is work for the purposes of the Minimum Wage Act 1983. The bill sets in place an enduring, affordable, and sustainable framework to remedy the in-between travel issue between Crown-funded employers and their employees. It represents an important milestone in recognising the valuable work of people who provide care and support to assist elderly and disabled New Zealanders to remain in their homes.

Specifically, the bill will implement the settlement agreement between the service providers, support workers and unions, the 20 district health boards, and the Crown for the payment of time and costs for workers travelling between their clients. The settlement agreement also sets out a process for investigating transitioning this important workforce towards a more regularised employment model. This two-pronged approach resolves a longstanding historical issue and looks forward to ensure the service can attract, recruit, and retain a high-quality workforce to meet expected increased demand and services as the population ages.

It delivers increases to support workers’ take-home pay, reimburses them for using their vehicle to deliver services to multiple clients over the course of a day, and commits to investigating how best to increase their certainty of hours of work and ongoing employment and, therefore, their ongoing income. Increased income, reimbursement for vehicle use, increased certainty of hours of work, ongoing employment, and ongoing income will reduce the current 30 to 40 percent industry turnover rate and reduce recruitment and retention pressures.

This is a responsible approach not only to resolving a longstanding industry issue but also to setting out a road map for ensuring that there continues to be a skilled workforce available to support elderly and disabled New Zealanders to live in their homes and be part of the wider community. People depend on these services; it is not a matter of choice. We owe it to New Zealanders that the service they receive is delivered when they need it and is consistent with service specifications set for their level of need, whilst being flexible enough to meet individuals’ specific needs. We also owe it to the increasing number of New Zealanders, as the population ages, who will benefit from these services, to take the time now to ensure that the service can sustain growth in both client demand and expectations.

The challenge is how best to deliver a service that is also affordable and sustainable over the long term. Investigating transitioning towards a more regularised workforce employment model will drive fundamental changes in every aspect of home and community support services, including funding and contracting models, employment terms and conditions, and service delivery specifications. This work will see support workers given more certainty of their hours of work and ongoing employment, working with safe and fair caseloads, supported to upskill, and rewarded for those skills. It will ensure high-quality support services continue to be available to support New Zealanders to live in their homes as the population ages.

The Crown has negotiated the settlement in good faith, and I would like to acknowledge all the parties involved in the tremendous amount of work and effort that everyone has put in. It is very pleasing to see that the unions and health and disability providers agree on what is a fair settlement—one that balances the interests of employers, employees, and the Government. It is equally pleasing to see the level of cooperation right across the sector and the drive that all parties share to ensure that the client remains at the centre of the service. It is important that these Crown-funded employers are supported to meet their obligations under the bill to pay support workers for their time and costs in travelling between their clients.

In support of this, Budget 2014 delivered the sector additional funding of $96 million over 4 years to support the payment of in-between travel. A further uplift of $14 million per year was later allocated as a forward commitment from Vote Health. It is also important that services are not differentiated by funder. Although this bill implements a settlement agreement negotiated within Vote Health, the benefits will extend to home and community support workers funded through the Accident Compensation Corporation to deliver services to clients requiring support due to injury.

This bill is a priority for the Government. It is an important piece of legislation that will ensure that people continue to receive the quality care that they need in order to remain in their homes, while also securing a better future for those who provide home and community support services. I am pleased to be able to present this bill here today, and I commend this bill to the House.

Hon ANNETTE KING (Deputy Leader—Labour): Labour welcomes this bill, the Home and Community Support (Payment for Travel Between Clients) Settlement Bill. It is the settlement of a long-running case, because several years ago the Human Rights Commission ruled that travel time should be remunerated. So I want to begin at the beginning, and give credit to Tamara Baddeley, who bravely took a test case on behalf of hundreds of fellow home-care workers.

Let me tell you about Tamara Baddeley. She is a member of the former Service and Food Workers Union, now a combined union with the Engineering, Printing and Manufacturing Union called E tū. She was working with the union, which filed a test case with the Employment Relations Authority in 2013. At that time, the union secretary, John Ryall, described the situation as a serious injustice and one that needed to be remedied. Tamara was paid $14.80 an hour for the home visits she did when she was helping the clients whom she had responsibility for. Her work included showering these older people, dressing them, feeding them, and checking to see whether they had taken their medication. In one day, her round covered 12 calls around the city in her old, ageing Hyundai. For that she got an allowance of 33c a kilometre, but she got absolutely no payment for the time she spent travelling from one client to the next client. That was treated as if it was her own time, as if she was somehow having a rest or on holiday, or as if it was her tea break. But, of course, to go from one client to the next client it took time to travel there.

What we know is that there are many people who work in New Zealand who travel from one job to another. There would not be a person in this House who has not had to call out a plumber or an electrician, only to find that also included in the cost you get is the cost of their travelling to come to your job—but not for home-care workers. I thought that maybe it had taken so long because of some of the attitudes that we have towards work that women do. I was really staggered when I heard the Prime Minister recently say that he did not think it was discrimination to pay women less; it is just the occupations they are typically involved in. Can you see the irony in that?

Women are paid less because they are in caring occupations—occupations that require them to go in and look after old, vulnerable people. They do not fix things like your plumbing or your electrical wiring; they care for human beings. Because they are in these industries that women are normally in, somehow or other it has been all right to pay them less, and certainly to pay them less when it comes to the payment of travel.

The former Equal Employment Opportunities Commissioner under the Human Rights Commission, Dr Judy McGregor—an amazing woman, in my view; a courageous woman, a woman with conviction—brought out a report called Caring Counts: Report of the Inquiry into the Aged Care Workforce in about 2013, or was it a little earlier? I cannot quite remember. It was an amazing report, with many recommendations. She did not just believe what she was told; she went in and worked in the community and in rest homes to see what actually happens to those who are the carers in them. Through her conviction and from what she saw, she decided to get a legal opinion, which concluded that there was a good argument that the travel time between clients constituted work under the Minimum Wage Act.

I thought to myself “Imagine any of us, perhaps. What about the member for Whanganui, who travels in his car, or the member for Palmerston North, who travels in his car from his electorate to Wellington—imagine if their pay was docked or they were not paid when they were travelling to come to work.”, because that is the effect of what was happening to these many, many women.

Judy McGregor, as I said, heard the cases, as we did in Labour. They heard cases. Jonathan Young may have even read this case, because it was from his electorate. I would hope that he put some energy into advocating for them. Trudie Featonby of Taranaki—she clocked up 160 kilometres over 2 weeks. She tracked between her clients in their homes in Bell Block, all the way out to Waitara and back again. At that time, there were 12,000 home-care workers affected.

As home care grows, there will be even greater demand by older, vulnerable disabled people wanting to stay in their own homes. They want to stay in their own homes because that is the place that they know and they are close to friends and neighbours. In effect, they save hundreds of millions of dollars by not needing residential care. The cost of residential care and of the subsidies that are provided is hundreds of dollars a week. By staying at home, with good quality carers, these people are saving taxpayers a heap of money. They will be able to do that only if we retain the health workforce that provides this service. Those who provide this service are the lowest paid.

Home-care workers are the lowest paid in New Zealand, doing some of the hardest work that you could ever do. Anybody who has done any of that sort of work—and I know there are people on this side of the House who have—knows that it is hard, grinding work but very, very rewarding. But the turnover of staff is huge—as high as between 30 and 40 percent. It is low-paid work, with little recognition.

This bill is a very important first step. I say it is a first step because there are still things to deal with for home-care and community support workers, and that includes a historical underpayment of them, not just for their travel but for what we pay for the value of the work that they do. But this bill does settle an agreement. It is an agreement between the Crown, the district health boards, providers of home and community-based and support, employers, and certain unions on behalf of the home and community-based and support employees. The bill supports an agreement that was reached for the payment of travel time between the parties. As the bill says, it “seeks to ensure an enduring, affordable, and sustainable solution for paying HCS employees for the time and the cost of travelling between each of their clients.”

It has a phase in—a transition, if you like—over two time periods. Home-care and support services’ employees will receive payment from 1 July 2015—so it has got a retrospective part to it because it is backdated to then—and they will be paid for time spent travelling between that time until 29 February 2016. The payment will be calculated—and I will not go into it because I do not have time, and we will get to that.

But then from March 2016 the payment will be calculated again and this will then be prescribed in regulation. It does extinguish any other claims. You might say “Oh, doesn’t that sound a bit dicey.”, but it was an agreement reached between the parties, and we need to honour that agreement and support it. Maybe some will feel a bit squeamish about extinguishing other claims, but to settle this, because it was incredibly complex and it could have been incredibly expensive trying to work out back-pay going back many, many years—and probably there are a few people here who could have put in a claim—and because it was agreed that it does extinguish other claims, then we need to support it.

So we welcome this bill. We welcome it at the very good Health Committee, where we will no doubt hear submissions from the public on it. It is a good step along the way to recognise some of the hardest-working, most valuable workforce that we have in New Zealand—overwhelmingly a workforce of women.

SIMON O’CONNOR (National—Tāmaki): I am very pleased to take a call on this Home and Community Support (Payment for Travel Between Clients) Settlement Bill. I want to acknowledge the words of the Minister in bringing this bill to the House but also the member who has just sat down, the Hon Annette King, for her words and the support of the Labour Party at this stage. I think that it is indicative, actually, of, I suppose, the conducive discussions that have been had by various parties to bring this bill to the House.

I am very pleased it is coming to the Health Committee.

Scott Simpson: A good committee.

SIMON O’CONNOR: Well, I think it is a very good committee, Mr Simpson. We know it is a busy committee—

Hon Ruth Dyson: Who chairs it?

SIMON O’CONNOR: —but I hope you do find time to get back to the Coromandel to serve those good people down there. It is actually a busy and hard-working committee. We have a couple of bills before us at the moment, so this will be the third one that we will begin considering—so quite a hard-working and busy committee—but I think, as has been noted in two speeches to date, this is a bill that has, I believe, the widespread support of the House. We will be interested to hear what the other parties are saying in further speeches.

This bill is bringing into effect discussions that have been had. I think that it is important for those listening out there to know that this has come out of a court case and a series of concerns, and we heard some of that raised in the previous speech. This bill puts those agreements into effect. I am just making a distinction here. This is not the Minister of Health or the Ministry of Health making a series of arbitrary decisions. Instead, it is listening to what came through the courts in discussions, effectively, between the Crown, the Ministry of Health, unions, and so forth. I think it is really important to note that it is incredibly critical work that these people do.

I do not claim to have huge experience in this area, other than a couple of years of, if you like, providing home help to people in Fiji. There was no need for transport costs, mainly because you had to walk between villages and everywhere. But I think it is just a small hint of appreciation for the enormous good work that these people do in caring, more often than not, for our most vulnerable in society.

I think we have provided ourselves with a very good outcome here that we are acknowledging not only the work but also—as was pointed out through the court case—that transport in between clients is work as well and should be covered. I think, importantly—and it was mentioned several times by the Minister—this has to be something that is sustainable. I think that has been part of the negotiations since April—to come to a way of providing adequate recompense that all parties can agree to but, importantly, recompense that is sustainable into the future. The Minister did note that the Government in Budget 2014 has put, I think, about $96 million into this with a further, I think, $14 million. So the money is there, but it has been important to bring all of those parties together.

Again, this is a bill to bring into effect the discussions that have been had. I think, as chair of the committee, I just want to acknowledge the hard work that has clearly—

Hon Ruth Dyson: Oh! Now we know who’s the chair.

SIMON O’CONNOR: —gone on. Yes, the Hon Ruth Dyson was having a moment when she could not remember who the chair was, so I thought that we had better indulge her. But we are really pleased at the enormous work that has gone in already, so I want to acknowledge those different parties. We obviously have the service providers, those involved with the union, 20 district health boards, and, of course, the Crown and then the ministry and the Minister himself.

It was being noted at the end by the speaker the Hon Annette King, who was speaking formerly—the previous speaker; there goes grammar at this time in the afternoon—that it is a two-staged process that we are looking at. There are going to be two series of payments: one that, effectively, kicked in from 1 July this year, and that recompense will run through until 29 February next year—so a leap year, clearly. Just reading some notes here because I think it is important to be specific, the payment for that period of time is going to be calculated using a figure that represents the minimum wage for the weighted average of time spent travelling. Then from 1 March 2016 an ongoing regime will be in play. I think it is at least a minimum of 50c per kilometre around transport costs, but again it is to try to reflect some of the costs involved with travel to provide that enormous support.

Again, I am very pleased that this bill is here, bringing effect to those negotiations, and very pleased that the Health Committee will have it. Can I end as I started by thanking those people who work in the homes and in the community to support our most vulnerable, and to say thank you for the tremendous work that you do, and we look forward to progressing this bill through the House.

IAIN LEES-GALLOWAY (Labour—Palmerston North): I want to start my contribution today by acknowledging some of the people who have been involved in the campaign to ensure that home support workers do get paid for their travel time. They are people like Tamara Baddeley, who is a member of what was formerly the Service and Food Workers Union, now the E tū union after its amalgamation with the Amalgamated Engineering, Printing and Manufacturing Union.

Hon Member: Is that the Latin?

IAIN LEES-GALLOWAY: Definitely Māori. And I want to recognise Jenny Goodman as well—a member of the Public Service Association (PSA) who also took a case. So I want to acknowledge those individuals and other individuals like them—other care workers like them—who have stood up and, over years, campaigned through a variety of methods to get the Government to finally recognise their situation and to finally do something about it. They were able to do that with the support of their unions—unions like the Service and Food Workers Union, unions like the PSA.

If anybody seriously believes that unions are somehow irrelevant today, then I would point them to this settlement, because this simply would not have happened if these workers had not been part of organisations that were prepared to support them, to take their legal cases, to negotiate with the district health boards, with their employers, and with the Government, and to actually facilitate everything that needed to happen for the settlement to be reached and for this piece of legislation to be brought before the House. If those caregivers did not have the support of the other workers around them who are also part of that union, this simply would not have happened. I think that is important for us to reflect on because unions play a really important role in ensuring that workers are able to negotiate with the Government—they do that by working together—and workers’ voices simply would not be heard here in Wellington if it was not for those organisations that they are part of.

So this legislation essentially enacts a settlement that was reached between the Government and those unions representing those caregivers, the district health boards, and the employers to ensure that the time caregivers have to use travelling from one client to the next is actually recognised as work time. As Annette King said, it is not some sort of break time. It is not their tea break, although it might be the closest that you are allowed to get to a tea break these days under this Government. It is not downtime for them; it is part of their working day. And given that their wages are already abysmally low for the time that they spend actually in the home with their clients, in effect it meant that a lot of these caregivers were working for less than the minimum wage. When their entire working day was put together, they were, essentially, being paid under the minimum wage, and that was part of the thrust of the case that was taken to the Employment Relations Authority, and, as Annette King said, Judy McGregor had already secured a legal opinion indicating that it was more than likely that they had a good case under the Minimum Wage Act that their remuneration was insufficient to meet the minimum standards of that legislation.

So, as a result of that, the Government entered into negotiations, and we have this settlement, which, it is fair to say, is the result of negotiation. It is the result of some compromise. It is not gold standard, which is a term that has been thrown around a bit today. It is not gold standard, but it is certainly a very significant step forward from the situation that those care workers were in. I think that we here in Parliament need to appreciate—the Government certainly needs to appreciate—that those workers came to the table prepared to negotiate and prepared to settle at a rate that was financially sustainable for the Government.

But that is just one aspect of chronic underfunding of the wider caregiving sector. Certainly we know that in aged residential care the people who provide care—whether they be caregivers, whether they be nurses, or whether they be part of the broader health workforce—are desperately underpaid for the work that they do. The most obvious signal of that is the differentiation between what someone in the caring professions can earn in the aged-care sector as opposed to what they can earn if they are working directly for a district health board. There is no good reason for why that gap should exist, and the only reason that gap exists is that the Government refuses to fund that sector to a level that is actually able to support reasonable wages in that sector. As I say, those wages are so poor that when these caregivers were not paid for their travel time, then, effectively, they ended up on less than the minimum wage.

So, although we are addressing that, there is also a range of other matters we need to address. We need to look at aged care. We need to look at what we pay these home support workers for the time that they are in their homes, because it is a policy of, I think, most parties in this Parliament that more people will be supported to stay in their homes for longer, especially into old age. That is a good policy. A lot of people like that policy—people want to age in their own home. They want to be supported to be able to stay in their own home for as long as possible, and there are myriad benefits from supporting that policy, both for the person themselves and for the State. But we cannot do it on the back of slave wages. We cannot expect these care workers to subsidise that policy.

If we are expecting more people to stay in their homes and we are expecting more of these caregivers to do more work—doing the excellent, wonderful, and sensitive work that they do—then we need to actually support them with wage rates that encourage them to take up the job, encourage them to stay in the sector, and encourage them to undertake the training that will make them better able to provide the level of care that we ought to be providing as a State. If we are expecting people to live a dignified life in their homes with home support, then we need to ensure that we have a qualified and well-supported workforce, and we need to make it a career that people actually want to stay in and invest themselves in. It should not be the kind of job that becomes a sort of a job of last resort. Thankfully, we have thousands of people who are prepared to work in this sector because they feel as though they are making a contribution to their society, but we should not rely on that. We should not take advantage of that. We should actually pay rates that are fair for the work that they are doing, and this is one step in that direction.

I want to again congratulate everyone who has been involved in getting to this point. I will be interested to see—not that I will be on the select committee—what the submissions are and whether any of the submitters believe that the deal can be improved in any way, although I acknowledge that this is the direct result of a matter that has already been settled. But it will be interesting to see whether there is any room for improvement or whether there is any way in which we can work with the Government to make this settlement any more generous and more appropriate for these workers.

With those thoughts, I just want to reiterate what Annette King said, which was that we support this legislation and we look forward to hearing the submissions.

SCOTT SIMPSON (National—Coromandel): I do sit on the Health Committee, which is so ably chaired by my friend and colleague the member for Tāmaki, Simon O’Connor. I listened carefully to his contribution earlier in this debate, as I also listened carefully to the words of the Minister of Health in introducing the Home and Community Support (Payment for Travel Between Clients) Settlement Bill for its first reading. I have to say that I was mindful of their comments when listening to Opposition speakers contributing to this debate, because I think that in just listening we can hear across the House that there seems to be broad consensus and appeal for the aims and objectives of this bill. It is a bill that seeks to implement a settlement agreement that has been developed amongst a variety of stakeholders including the Crown, district health boards, and the very providers of home help support and community-based care and support services. That is an interesting range of stakeholders who, collectively and collaboratively, provide a wonderful level of service to a great many New Zealanders who need and have a requirement for care in their own homes.

I have the great privilege of representing the Coromandel electorate, and one of the features of the Coromandel electorate is that it has the second-highest proportion of any electorate in the country of people aged 65-plus. It is a vast, rural electorate with a lot of older, mature citizens, many of whom retire to the Coromandel because they want the lifestyle, they like the communities, they like the environment, and all those sorts of things. But as they age they do often need support and care in their homes, and the mere logistics of getting around the vast geographic area of the Coromandel electorate means that it is these support care workers who are having to, in many cases, clock up a lot of miles, a lot of kilometres, a lot of time, and a lot of energy in providing the services that they do to a far-flung but ageing population. They do enormously good work, sometimes under incredibly difficult and trying circumstances, and I am thrilled that this bill goes, I think, some way, certainly, toward remedying a situation that has been in need of addressing for a long period of time.

All the evidence suggests that if people are to age well and maintain independence and seek a connection with their community and their family and their environment, more often than not they do it better if they are still in their own home. We have seen those statistics feature again and again and again, and, of course, many people who are ageing want to maintain the dignity that comes with being independent and with living in their own home. For that to occur, when they need that help and support, they are going to need the help and support of other people to ensure that they can maintain that independence and that dignity of being in their own home.

I am delighted to support this bill in its first reading. I too will look forward to the submissions that I am sure we will receive from a wide range of stakeholders at the select committee, and I am sure that the committee will work in its normal collegial and thorough way to ensure a good outcome for this piece of legislation. I support the bill and commend it to the House. I will look forward to it progressing through the House in due course. Thank you.

DENISE ROCHE (Green): Tēnā koutou katoa. I rise to take the first call for the Greens on the Home and Community Support (Payment for Travel Between Clients) Settlement Bill. We will be supporting the bill.

What this bill does is it basically implements the settlement between the Crown, the district health boards, the providers of home and community-based care and support services, and the unions of home support staff—the Public Service Association (PSA) and the Service and Food Workers Union—over the payment for the time spent by home support workers travelling between clients. It follows on from a claim that was filed with the Employment Relations Authority by the unions that time spent travelling between clients by home support workers should be paid for at at least the minimum wage of $14.75 an hour. Essentially, this is legislation to replace litigation.

According to the regulatory impact statement, this settlement will affect around 28,000 carers, the majority of whom are women, who work as home support and work in people’s homes. They ensure that people who are frail or elderly or who have disabilities can be looked after in their own homes, and apparently there are around 40,000 of those clients being cared for every year.

Home support carers provide really good value for money. It is cheaper for our health system for people to stay in their own homes rather than in hospital, and it is better for the client to maintain as much autonomy as possibility and just have some help while they are in their own home. So it is depressing, to say the least, that that value-for-money option—that cheaper option than hospital—has been achieved in part by reducing the cost of the labour provided by carers to the extent that our minimum employment standards around wages have been breached.

Carers and their unions have known for decades that the work they perform has been underpaid. We knew it in 2002, when I was a caregiver with the Waiheke Health Trust, and even way back in the 1980s, when I was a carer with the Nurse Maude District Nursing Association in Christchurch.

In May 2012 Dr Judy McGregor, Equal Employment Opportunities Commissioner with the Human Rights Commission, reported on, basically, the exploitation of women who are carers, in her report called Caring Counts: Report of the Inquiry into the Aged Care Workforce. As part of that research for her report she worked undercover in an aged-care facility, and she graphically outlined how physically and emotionally exhausting the work is. The reason—and she has said it too—that there is a very low pay rate for carers is that it is seen as women’s work and, consequently, it is undervalued.

She made 10 recommendations. The first five are that the Government show leadership to deliver better services for older people; that the woefully low pay rates be addressed and, as a minimum, there should be pay parity in Government-funded service providers in the aged-care sector—including home support—between people working in home support and residential facilities and people working for district health boards; that there is a fair and consistent travel policy covering actual costs for the time spent travelling between clients; that there be a commitment to qualifications for staff in the sector, and a commitment by employers to this as well; and that the voluntary safety standards, including the Home and community support sector Standard, become compulsory. There are another five recommendations as well.

It is a credit to the unions of the people who work as home support carers that in negotiating this settlement they have attempted to address the recommendations outlined all those years ago by Dr Judy McGregor. They have also had to take groundbreaking court cases to try to address those recommendations. The Service and Food Workers Union—or, now, E tū union—and the New Zealand Nurses Organisation are taking the case for carer Kristine Bartlett under the Equal Pay Act, and, of course, the PSA and the Service and Food Workers Union have taken the case for payment for travel time for home carers on behalf of Tamara Baddeley and Jenny Goodman. This legislation underscores how important the union movement is for protecting and enforcing people’s wages and conditions on the job, not just for their members but for whole sectors. It is sad that it had to take legal action for the barest of equality to start to be negotiated and to be addressed in this House.

The legal case for payment for travel time triggered real discussion and negotiation with the Crown for a fair outcome for home support carers that takes into account the chronic underfunding of the sector, the need for quality care for those receiving home support, and also the need for stability in the workforce. I note that as part of this deal carers will not be able to claim back payment, as would be expected in a legal case. According to the regulatory impact statement, that back payment for 6 years could be as much as $261 million. Carers have foregone that because they want an agreement that will benefit themselves, their clients, the service providers—which are the employers—the district health boards, and the Government. They have sacrificed past claims to create a better future for all of them.

The deal the union negotiated includes, as well as the payment for travel time, payment to cover the cost of mileage at 50c a kilometre from March next year and 60c a kilometre from July next year. That is up from an average of 33c a kilometre. It also includes a transition to guaranteed hours of work. It also calls for clients to be allocated safe staffing levels, training for carers to a level 3 qualification within the first 2 years on the job, and, of course, pay rates that are better than the minimum wage, and where qualifications are recognised on the pay scale.

These are all incredibly important aspects of the deal. The transition to guaranteed hours of work means an end to zero-hour contracts for home carers, and it means there will be stability around their earnings. They will be able to plan their lives. Hopefully, this will also start to address the horrendously high staff turnover in the sector, which I read is as much as 40 percent. It makes sense to invest in rewarding carers who have achieved their qualifications so that there is an incentive to upskill.

The Government cannot continue to underfund home support work at the level of the minimum wage, and it is time to recognise the current and growing level of skill needed, because carers are dealing with increasingly complex needs. It is going to cost about $38 million a year, and it is good to see that the Crown has allocated this to district health boards, which will send it out to the service providers, which will pass it on to the carers themselves.

We support this bill. We also acknowledge that this will pave the way for ACC-funded carers to start to see some equity in their payments. This deal is starting to make an impact right now. The PSA journal last month had interviews with two carers who talked about the increase in their take-home pay as a result of finally—finally—being paid their travel time. Thank you.

DARROCH BALL (NZ First): It is a pleasure to rise on behalf of New Zealand First—and, actually, on behalf of Barbara Stewart, our spokesperson for this bill—to speak on the Home and Community Support (Payment for Travel Between Clients) Settlement Bill. I would like to begin by stating first and foremost that this bill formalises in legislation an already agreed settlement negotiated between the estimated 24,000 home and community support service workers’ unions, providers, and district health boards to ensure home and community-based care and support workers receive compensation for the time and cost of travel between clients. For this reason, New Zealand First will be supporting this bill through to select committee.

Having said that, we in New Zealand First hold firm reservations about the process by which this bill came into the House and its glaring flaws in what it is trying to achieve. The bill is an example of the Government acting on the worst of motivations. Rather than delivering what is right and what is fair for New Zealand workers, the Government has chosen to take an underhanded approach and legislate one of the most deserving, most undervalued workforces out of what is rightfully theirs. The truth is that the only reason this bill is in this House is that the Government wants to stop legal action from the home and community support workforce and remove any liability for the $261 million of back payments for travel expenses to which the sector is entitled.

What is worse is that the only reason the Government wants to stop that legal action is that it does not want to set a precedent within the wider labour market regarding what can be considered work under the Minimum Wage Act. The cost of future action due to this precedent is unknown, but officials have already warned that it is significant.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Can I just ask the member to resume his seat. I have reflected on what he said at the beginning and also on a note that I have been sent from the spokesperson, but I do want to warn the member that he is not allowed to just read out a speech, even if it has been prepared by or for another member. If the member really wants someone else’s speech on the record of the House, the member can table it, but he actually has to give a speech, not read it out.

DARROCH BALL: The decision to bring this legislation to the House is not motivated by a wish to help New Zealand workers earn what they deserve. Instead, it is providing a bare minimum of compromises in terms of actual expenditure in order to prevent care workers receiving what they actually deserve. In the end, it is actually stopping New Zealand workers in the future from trying to justifiably seek compensation for work they are currently doing. In fact, workers should not actually have to go to the courts and take this sort of action in order for them to get what rightfully is theirs.

At this point I would like to touch on what the home and community support workforce is actually to receive. By the interim solution, between 1 July 2015 and 29 February 2016 the workforce will be paid a figure that represents the minimum wage for the average time spent travelling between clients, and from 1 March 2016 this will change to employees being compensated at the minimum wage for qualifying travel time and receiving no less than 50c per kilometre for the qualifying time. Yet the Inland Revenue Department actually estimates the per kilometre reasonable expenditure to be around 74c per kilometre incurred by an employer—and that includes the petrol prices, as well. So if that is the case, then legislating for up to just 50c per kilometre will fail to achieve the bill’s actual designed intent and aim in the first place, and obviously that does not fairly compensate the home and community support workforce for the travel times and the cost that it incurs. Therefore, it actually shows that it represents a further example of Government legislation that claims to be having a meaningful change where, in fact, it is asking the organisations to do more with less.

If we look at Part B of the terms of the settlement—although that part is not actually included within the provisions of the bill itself, it does remain important and relevant—what it does is it focuses on the commitment from all the parties towards having a regularised workforce within 24 months following the settlement taking effect. Quoting directly from the health report to the Minister of Health related to this commitment, it sums up exactly why regulation is needed in the first place. “The regularised model is expected to be beneficial for all parties … and will ensure continued viability of HCSS as a cost effective alternative to residential care.” However, “such progress is subject to affordability and implementation occurring within available funding”. So the funding that is available at the moment, being $38 million that was put forward for the additional costs of the travel expenses in the workforce, is again asking home and community support to deliver more but without giving them any more investment necessary to make it work.

In other words, the settlement agreement and the bill, in particular, is not the Government riding in to save the day for home and community support, as it would have us believe, but rather a demonstration of how badly mismanaged home and community support is and the lack of future planning that has gone into home and community support services from this Government in the first place. Even having withheld the $261 million in the first place, the Government still cannot deliver sufficient funding to implement necessary changes.

So, yes, New Zealand First will be supporting this piece of legislation through to the select committee because it is a step in the right direction, but it is the least that can be done. There needs to be, in fact, a dramatic overhaul of the entire funding of the sector with a focus on workforce planning to futureproof New Zealand from the coming crisis in our care workforce. This needs to be only the start of a continued effort by the Government to get the funding and the organisation for this sector right and to give the home and community support service workforce the support it actually deserves. Thank you.

STUART SMITH (National—Kaikōura): It is a pleasure to speak on this Home and Community Support (Payment for Travel Between Clients) Settlement Bill. I want to bring a personal aspect to this in a minute or two, but I think it is quite important to say that the purpose of this bill is actually a result of an agreement between the parties, being the district health boards, the home support and community-based care services, and their community-based care employees. There are some 24,000 employees, as we have heard before, which is a significant number of people who are involved in this very necessary area.

My wife’s grandmother—our children’s great-grandmother—was in care in her own home, and it was very important to her to remain in her home as long as possible. I really did not have much understanding of what was involved in home care at all until I witnessed that, and it was actually during the election campaign last year. When I was doorknocking in Blenheim, I went to Julie’s grandmother every day for lunch. This lady grew up in a household with a photo of Michael Joseph Savage on the wall, so you can imagine it was quite a leap for her to have a National candidate having lunch with her every day. It was phenomenal.

To come back to the bill, though. To witness on a daily basis the home carers coming in and to see how they bring great pleasure to those people remaining in their home and give them the necessary care that they need—what really struck me about the whole thing was not just the skills involved in what they did but the enjoyment they got out of providing that care to those people. I think that is something that I certainly had not really appreciated until I witnessed it, as I said, on a daily basis. Unfortunately, she is no longer with us, but those people are out there doing this on a daily basis for other people.

We have an ageing population. We are going to have more people who will require these kinds of services, and it is incumbent upon us to actually have a workforce that can keep people in their homes, should they desire to stay there, for as long as possible. We need to provide a career pathway, and that means remunerating those people to the level they deserve for the services they are providing, and this bill goes a long way towards that. There is a transitional phase, then it moves into an ongoing and permanent phase, and I think that is really to be lauded. So it is with great pleasure that I commend this bill to the House. Thank you.

KEVIN HAGUE (Green): It does sound as if all parties will be supporting this bill, so I thought I may make some reflections on the problem that we are trying to solve here. My reflection is that the straitened financial circumstances that the health sector so often finds itself in sometimes leads to very poor strategic decision-making.

When we look at mental health, we have moved from an era when the approach to people with mental illness was to institutionalise. We all recognise that, actually, that is not the correct approach for most people, so we closed down the big psychiatric hospitals, but then we did not invest properly in creating the community-based support services that were required to replace them, with the consequence that now we have both community-based services and acute units that are struggling to cope and chaos for people with mental illness.

We know that the need for secondary care and the cost of secondary care could be saved by a much better investment in public health services and in primary care services, yet do we make that investment? We do not. In fact, in the last several years under this Government, it is those precise services that have borne the brunt of funding cuts. So, rather than taking us closer to a situation where we make the smart, strategic choice to invest in keeping people well in the community, and thereby saving costs in secondary care, in actual fact we exacerbate the need for secondary care. We exacerbate the problem because our thinking is constrained by short-term considerations. That is how this problem has arisen.

We have had a strategy now for at least the past 15 years, I would say, called Ageing in Place, where we say: “We actually do not want to consign all of our older people to require rest home and hospital-level care as soon as they start to struggle to cope in their own homes, so let’s instead bring services to them because that is the best thing for them, and it is also the best thing in the long run for our services.” But what has happened is that we have made that our strategy and yet have failed to put in place the appropriate level of community-based services that older people need to be able to remain in their own homes. This bill addresses one of the facets of that issue.

Several speakers have mentioned Judy McGregor’s report. Judy McGregor’s report Caring Counts addressed this as one of the most significant issues because she said that it was an injustice. She said that it added to the precarious nature of the work by community-based support workers.

I put the case to the House—and I have heard other speakers in this debate do so—that we have got away with failing to appropriately reimburse for travel costs principally because this work has been carried out mainly by women. That is, I think, a pretty sad reflection on decision makers in the health sector over a significant period of time.

I want to reflect too on the fact—and Judy McGregor makes this point in her report—that this has had a differential geographic impact. For community-based support workers in an urban environment, the failure to be adequately reimbursed for travel costs may be a relatively small consideration, but for those workers in an area like the one I live in, the travel time and distance between clients may be vast and it may actually mean that it is completely non-viable to do that as a job. That certainly has been the case with costs both to the workers and also to the clients.

I am a member of the Health Committee. I look forward to those submissions, and I just want to conclude by saying thanks—thanks to those workers for the work they do, for the perseverance and courage they showed in taking the cases that led to this situation, and for their generosity in the settlement that this bill legislates for. Thank you.

CARMEL SEPULONI (Labour—Kelston): I am standing on behalf of Labour to express our support for the Home and Community Support (Payment for Travel Between Clients) Settlement Bill. I think I will start by just taking us through a little bit of a time line in respect of how we got to this point. In May 2012 the Caring Counts report came out. In November 2012 Tamara Baddeley bravely took a test case claim on behalf of hundreds of fellow home-care workers. She won that case, and then in September 2014 Cabinet approved this change, but it has taken quite some time for us to get to this point. Just reflecting on what the member Stuart Smith said earlier about the fact that we need to recognise the importance of the work that is done here, that we do have an ageing population, and that it is going to become increasingly important moving forward, I have to question then why the Government has dragged its feet to a large extent. It has reluctantly bowed to pressure from the unions and adopted Labour’s fair and sensible policy to pay home support workers for the time they spend travelling between clients. It is only fair, because these people are paid so poorly that at the very least they deserve to be paid for their entire time, which is also that travel time in between clients.

Before I got into Parliament in 2008 I had the privilege of managing a research project around the non-regulated Pacific health workforce. Many of the people whom we worked with and whom we interviewed were actually providing home and community support. As has been pointed out by a number of people here this afternoon, that workforce is highly feminised. It is also very ethnically diverse. In places like Auckland we have a large number of women working in that sector who are from minority ethnic groups, who are Pacific, and the research also showed us that not only were those people working in those positions just to get a wage but their primary reason for being in that workface was that they genuinely cared about the people they were being given an opportunity to work with, and yet they did recognise that they were poorly paid. So the workforce is highly feminised, ethnically diverse, and very underpaid.

This bill does not go to the full extent in terms of recognising the work that these people do. It is just a minor change that in some way will help them in terms of remuneration, but it goes only a very small part of the way. At some stage the Government, or whoever is in Government, is going to have to better recognise the value of the work that these people, who are largely women, undertake. I think one of the major factors here is the amount that they get paid, and the fact that they need to be recognised through remuneration. But there are other things too, such as the investment in workforce development for the people working in this sector. It is about the type of support to be put in place so that they are able to do their job as well as possible.

We support this bill, but we are disappointed that the Government has dragged its feet on this one. Moving forward, as a whole Parliament I think we are going to have to think how we can better recognise this workforce, and how we can afford as a country to recognise them through remuneration. I look forward to the day when we can debate some legislation that allows us to have that fuller conversation, rather than—even though it is really important—just recognising the travel time in between clients, which these people will now be paid for, thank goodness.

CHRIS BISHOP (National): It is a pleasure to take a brief call on the Home and Community Support (Payment for Travel Between Clients) Settlement Bill. I am not a member of the Health Committee, much to my chagrin, but I know that my colleagues on the committee will do a good job of considering this important piece of legislation.

I want to commend the comments made by my colleague and friend Stuart Smith about the important work that home and community support service workers do in our community. I have been reading the regulatory impact statement, which notes that every day 40,000 people in this sector provide support in our community, and they do a sterling job.

The background to this piece of legislation is an interesting one, and it is neatly contained in the preamble to the bill that is before the House. Of course, the background to the bill is that proceedings were filed by the Public Service Association in the Employment Relations Authority. The question, in a legal sense, turns on whether or not travelling between appointments is work for the purposes of the Minimum Wage Act.

It is interesting to read the regulatory impact statement prepared by the Ministry of Health, because it notes that that is actually a reasonable point. There is actually a reasonable chance of success. The regulatory impact statement notes that “Independent legal advice indicated that there is a good argument that in-between travel time constitutes ‘work’ under the Act and a test case has a reasonable prospect of success.” Of course, if that was the case, “then providers would be liable to pay their home-care workers at, at least, the minimum wage rate for their in-between travel time and potentially six years of backpay”, which of course, as the regulatory impact statement notes, “was the case in the IDEA Services Limited v Dickson”, which is the sleepovers case that people will be aware of. “However, providers have expressed concern that they cannot sustain such an outcome as it would be difficult to remain viable if they had to fund or part-fund in-between travel time. That could have a negative impact on the delivery of health-funded HCSS.”

We find this legislation before the House as the result of negotiations begun in April 2014 and a settlement reached between certain unions, the district health boards, and the Crown in August 2015. The legislation is required to give effect to that settlement. The aim of the legislation is to provide for an enduring, affordable, and sustainable solution.

I know that my colleagues on the Health Committee will be looking forward to the submissions as to whether or not this legislation will, in fact, give effect to the aims that I think all parties around the Parliament are looking for. With those brief remarks, I commend this bill to the House.

LOUISA WALL (Labour—Manurewa): Kia ora, Mr Assistant Speaker. It is my pleasure as a member of the Health Committee to speak on this first reading of the Home and Community Support (Payment for Travel Between Clients) Settlement Bill. To begin, can I say: ka pai, E tū. E tū, as part of its membership, includes the Service and Food Workers Union. It was the Service and Food Workers Union member Tamara Baddeley, who, with the support of her union—and I want to acknowledge John Ryall—filed a case against Healthcare New Zealand. To support the Service and Food Workers Union we also had the Public Service Association. (PSA). So I want to acknowledge our unions, which actually fight for the rights of our workers and highlight the inequalities in legislation.

In fact, this bill is the result of an inequality in the legislation, which was the Minimum Wage Act of 1983. That is, in fact, the legal opinion that the then human rights commissioner, the Equal Employment Opportunities Commissioner, Judy McGregor, obtained. So she supported the Service and Food Workers Union. She supported the PSA. In addition to her support, she got Russell McVeagh to write a legal opinion that basically said that there was a legal argument that travel between clients constituted work under the Minimum Wage Act of 1983.

That is incredibly symbolic because what it does is it highlights that the people who work in the home and community-based care and support sector—and that is 28,000 New Zealand workers who work in the sector, who service over 40,000 New Zealanders, and we have heard today about whom this particular care and support service sector provides services to. We are talking about older New Zealanders. We are talking about New Zealanders who have disabilities. We are talking about New Zealanders who choose to be careful in their homes. We are talking about a vulnerable population that, in fact, is supported by vulnerable workers.

A lot of people have talked about the context of this legislation and the fact that the people involved in this piece of legislation are not paid sufficiently. Hopefully, as other colleagues have alluded to in the debate this afternoon, this provides the impetus for the Government to not only address this settlement that was reached between the Government and the PSA and the Service and Food Workers Union in August last year, which was then ratified by those union members, but also recognise and acknowledge that the 28,000 people, in particular women, who work in the sector deserve a living wage. So we will put that on the table today. They deserve a living wage.

They deserve a living wage because—actually, we should not rely on the fact that they qualify because they are paid the minimum wage to care for the people whom we have talked about in the House today, who deserve to be serviced with best-quality support. Well, part of being serviced with best-quality support is making sure the workers who are undertaking those tasks are remunerated appropriately.

If we look at the progression of this piece of legislation, it was started in November 2012, when the Service and Food Workers Union, the PSA, and Tamara Baddeley went to the Employment Relations Authority and asked it to refer the matter to the Employment Court. The progression from this issue being referred to the Employment Relations Authority then gave rise to a period of negotiation. From November 2012 we come to April 2014, when the Government decided in earnest that it wanted to negotiate with the Service and Food Workers Union and with the PSA.

What I want to note is that prior to that decision being made, the Government’s position was pretty clear. I will quote from the Minister of Health at the time, Tony Ryall. He said that this matter between home-care employers and home-care employees was for them to resolve, it had nothing to do with the Government, and it was not the Government’s responsibility. So it is good that we are in the House today and the Government is taking responsibility for ensuring that our home and community-based care and support workers are compensated appropriately for travelling between jobs. That is the context of their work. Actually, their car is their office. So I am glad that the Government has changed its position and that it is actually now supporting the unions and what the unions are trying to achieve.

From the negotiations, which started in April 2014, they reached a resolution by August 2014. I want to commend the leadership of the unions. Also I commend Judy McGregor at this time for standing up for the workers and then for transparently presenting that settlement to the workers. The ratification of that settlement has enabled the bill that is before the House tonight.

One of the interesting things that I have found in looking at this particular piece of legislation this afternoon is that, actually, they are having the same arguments over in Europe at the moment. The headline is “British trade unions welcome ruling against Spanish company, saying home care workers could see benefits”. This particular article was published on 10 September 2015. In the European Court of Justice, a Spanish trade union took a case against Tyco, which was a multinational fire and security company that closed its network of regional offices in Spain in 2011. The interesting thing about that is that the staff were not paid to travel from their homes to install these security systems. Sometimes they had to travel for up to 3 hours away from their homes. So the finding of the European Court of Justice—and I want to read the judgment—is: “During the necessary travelling time—which generally cannot be shortened—the workers are therefore not able to use their time freely and pursue their own interests. The fact that the workers begin and finish the journeys at their homes stems directly from the decision of their employer to abolish the regional offices and not from the desire of workers themselves.” So it is kind of a different rationale but, actually, it is the same logic.

Of interest to me is that Dave Prentis, who is the general secretary of the UNISON union in Britain, said that he thought the biggest impact of this ruling is going to be on home-care workers—“Tens of thousands of home-care workers [who] are not even getting the minimum wage because their employers fail to pay them for the time they spend travelling between the homes of all the people they care for.” So what I am hoping for from the legislation that we are enacting here today is that actually workers around the world who are working in the care and support sector are going to be recognised for the contribution that they make to all of our societies to care for those most vulnerable, particularly.

We have all been very clear about how supportive we are of the care workers because of the people whom they are serving—older New Zealanders. We know through the demographics of our country that New Zealand is ageing, but what I am hoping is that the Government does the next step and actually progressively increases the wages of this sector so that they do not continue to be the minimally paid workers in New Zealand. The value that we place on those workers is actually the value that we place on older New Zealanders. I think that is the challenge not only for this Government but, actually, for Parliament in the future.

So I see this as the beginning of having appropriate compensation for our workers. What I am hoping is that this is not the end of the story and the Government has not done this just as a settlement because it was taken to court but that, actually, it takes this sector seriously and it remunerates this sector appropriately and that we value its contribution to New Zealand. The way that we value it is by ensuring these workers are paid sufficiently. Kia ora.

BRETT HUDSON (National): It is a pleasure to rise in support of the Home and Community Support (Payment for Travel Between Clients) Settlement Bill in its first reading. I think it has been canvassed or traversed quite well this afternoon as to how this bill has come about. It does, or will, enact a negotiated settlement between service providers, support workers, unions, the 20 district health boards, and the Crown around the issue of payment for time and costs for those workers when they are travelling between clients.

I acknowledge, as my colleague Mr Bishop pointed out, that in the regulatory impact statement officials noted that they had cited at least one legal opinion that suggested that the authority may find that travel between clients was indeed part of the classification of work under the Minimum Wage Act. So I would suggest that rather than having long and protracted court proceedings, the parties did come together and negotiated an acceptable outcome—an outcome acceptable to all parties—around the middle of the last year. This legislation will give full effect to that.

Importantly, around this particular issue—and I am not looking to canvass elements outside the specifics that this bill is addressing—it will give an enduring solution, one that is affordable and, therefore, sustainable to address this issue of travel between clients and the recompense for the time and cost of travel.

So what we will see is from 1 July 2015 employees will be paid for the time they spend travelling. From 1 March next year they will be recompensed towards the cost of that travel. That gives certainty around that future, and that is balanced in the negotiated settlement with an agreement, therefore, that those employees will not and cannot pursue wages payable under the Minimum Wage Act 1983 from before the commencement of this bill. I think this is an effective and clearly agreeable outcome for all parties involved, and I commend the bill to the House.

Bill read a first time.

Bill referred to the Health Committee.

Bills

Taxation (Transformation: First Phase Simplification and Other Measures) Bill

First Reading

Hon MICHAEL WOODHOUSE (Minister of Immigration) on behalf of the Minister of Revenue: I move, That the Taxation (Transformation: First Phase Simplification and Other Measures) Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. This bill is part of a staged roll-out of the Inland Revenue Department’s Business Transformation programme, an ambitious programme that, over time, will reform the department’s business practices and modernise our tax system. The proposed approach of stages to delivering the reforms were clearly outlined in the Government’s consultation paper Making tax simple: A Government green paper on tax administration, which was introduced for public feedback earlier this year. That paper sets out a number of steps that would be necessary to realise the fullest potential of the proposed reforms and the importance of public consultation along the way. The first of these consultation papers Better Digital Services was released in March and more will follow later this year. This bill is part of that process.

As the name suggests, this first-phase bill deals with some of the more immediate legislative obstacles to making the tax administration system simpler and more certain for taxpayers. It begins our simplification of tax legislation by proposing to remove references to outdated means of communication and allows for future developments in communication technology without the need to revisit individual provisions in the principal tax legislation. That means, for example, removing outdated requirements for certain communications with taxpayers to be in writing or delivered by post. The purpose of the proposed change is to begin the process of providing modern and relevant rules that will ensure modern electronic technologies can be used in the same way as current paper communications and make it easier for people to manage their tax affairs.

With that in mind, the bill also contains proposals that will allow for documents such as tax returns to be filed under electronic signature. This will allow tax agents and, ultimately, taxpayers to submit electronically signed documents to the Inland Revenue Department under circumstances prescribed by the Commissioner of Inland Revenue. Other measures in the bill are part of the process of simplifying current tax rules and making taxpayers’ lives easier. Measures aimed at simplifying the current tax rules for employee share schemes, for example, follow feedback received earlier this year on proposals to make the rules less onerous for employees participating in these schemes.

Employee share schemes are arrangements where employers offer shares in the company to employees and are often used to encourage staff retention and motivation. The value of shares from these schemes is treated as an income substitute under the current tax rules but, unlike most employment income, is not subject to PAYE. Instead, employees who receive share scheme benefits must file a tax return and account for the tax on the value of the shares themselves.

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

Hon MICHAEL WOODHOUSE: Prior to the dinner adjournment I was espousing the virtues of the excellent changes that this bill will make to employee share schemes. Just to recap, these arrangements are subject to taxation but not subject to PAYE, so those employees who receive these benefits need to file tax returns and account for the tax on the value of the shares themselves. That can be a deterrent to participation in the scheme. So to simplify these rules, the proposal that this bill makes will allow employers to choose to withhold tax on the employees’ behalf as part of their PAYE return.

Other provisions are intended to refine certain interactions between taxpayers and the Inland Revenue Department and to make them more efficient. One such proposal will halve the time that taxpayers with personal tax summaries that meet the automatic refund threshold will have to wait for their refund. A further amendment proposes to increase the current threshold for automatic refunds from $200 to $600, which will benefit approximately 400,000 more taxpayers.

Other proposals in the bill will allow the Inland Revenue Department to share certain information in the interests of efficiency and to provide better services to taxpayers. They include allowing the Inland Revenue Department to supply a KiwiSaver scheme provider with the names and details of members who have transferred out of their schemes and the names of the members’ new providers, and providing special tax codes directly to the Ministry of Social Development to help people who receive a New Zealand superannuation or a veterans pension to meet their income tax obligations.

These and other measures proposed in this bill have been developed to open the way for a modern tax administration system that will make it easier for people to get their tax right and to receive the social policy payments that they are entitled to. For that reason, I commend this bill to the House.

Hon CLAYTON COSGROVE (Labour): Firstly, can I thank the Minister of Immigration for his clear description of the facets and the technical nature of this piece of legislation. The Labour Party will be supporting the legislation to the select committee. Obviously, we want to have a look and see whether the Minister’s eloquence is borne out by fact in submission.

I know the Minister is an enthusiast when it comes to the tax system, he was telling us that before the dinner break. There are a number—and I will not reiterate what the Minister said—of practical measures that will simplify the tax system and make it more efficient for New Zealanders who have to meet their tax obligations, especially those who are in business.

I suppose I want to also just widen the discussion slightly and say that though this is a worthy piece of legislation, I do hope, and I have some confidence having listened to the acting Minister, that this piece of legislation is in far better shape—and not only in far better shape but that it actually does what it says it will do—than the rather bizarre piece of legislation we dealt with, which was the land registry legislation through the Inland Revenue Department, and what comes post that, which is the brightline test. Having worked through the submissions again, where every submitter on the brightline test opposed it and almost every submitter agreed that it, basically, would not achieve the policy objectives, then I do hope that this is a quality piece of legislation.

I do not mean any detriment to the officials, but I hope that this is a quality piece of legislation, and at its basis and on the surface it seems to have some very positive and practical effects for taxpayers. They are not earth-shattering by the way—electronic signatures, sharing information, and the share technicalities in KiwiSaver. These are, on the face of it, pretty practical and efficient measures, but they are not earth-shattering.

I think there needs to be a philosophy change within the Inland Revenue Department. The Inland Revenue Department, at its core function, is to preserve the integrity of New Zealand’s fiscal position and ensure that we as taxpayers pay our fair share. That is critical. It is critical to our economy. It is critical to the running of a Government and of a country, and that goes without saying. However, the Inland Revenue Department, I think, in recent years has had a philosophy. Its philosophy is that we are going after the cash. We are going to go after the cash, and we are going to go after as much cash as we can. As I have just said, it has an obligation to do that but I think there needs to be a shift in focus also—and you do not have to have one without the other—to flexibility. If you are a small-business person, basically, the tax system is not designed for you. It is not flexible for you. The tax system runs you. You do not have a lot of options within the tax system.

Andrew Little put out a discussion document—a very detailed discussion document, vetted by one Robin Oliver. For those who do not know who Robin Oliver is, he was a longstanding former deputy commissioner of the Inland Revenue Department—an eminent person. I would say that even if I had had no involvement with him in respect of the discussion document, but I would say that, regardless, he is an eminent person. He is a person who has, probably, the best mind in New Zealand, I would argue, in respect of the mechanics and technicalities of our tax system. I suspect that members on both sides of the House who have dealt with Robin—those of us who have dealt with him over the years—would agree on that.

We put together a provisional tax policy and we asked Robin—he is now a professional financial accounting adviser to businesses around the country—whether he would look at our ideas, would vet them, and would he go through and tell us whether they work, because we do not have access to officials. Essentially, our proposal, in terms of provisional tax, gives businesses of any shape or form and of any volume the ability to align their tax payments with their cash flow, setting their own rates and still having to meet the tax obligations, of course. They do not pay any less tax, but they can align their cash-flow arrangements and their tax payments with their cash-flow arrangements. I will not bore the House with that. But that is out there in the ether and has received very positive comments.

My only question is why it is that the Inland Revenue Department—under the stewardship of Peter Dunne originally, the longest-standing revenue Minister, I think, in the history of the Commonwealth Parliaments; I have checked the record, and that portfolio was inherited by Todd McClay—has not been mandated to get stuck into some of those gritty issues and things that would really help small business.

If you were a motelier, come summer the rooms are full and the money is coming in, but you are taxed the same way. Come winter, the rooms are empty, the cash flow is down, and you are still taxed in the same way, and you are subject to that evil that is provisional tax, which has often been the death knell of many businesses—not big businesses—not because the business person is incompetent, not because they are a crook, just because of the total inflexibility of the provisional tax system.

I remember when I had a business—I was lucky enough that I had made enough money so that I could hire an accountant—handing over a suitcase full of the documentation and the receipts and saying: “Sort it out for me, please.” For most of our small businesses, the partner—the husband, the wife, the kids, or whoever—under dark light in the evening, is doing the books, or the proprietor themselves is doing the books and trying to wade through and make ends meet and make the system work for them to meet their Inland Revenue Department tax obligations.

We would argue that this is, on the surface, a pretty practical piece of legislation, but we hope it is better than the land registry, which is a farce. We hope it is better than the brightline test, which is an equal farce—that is what every submitter who opposed it said. Even the National Party’s mates opposed it. We would hope and we pray that this piece of legislation will be far more practical and will have a positive effect and will actually meet the policy obligations, unlike those other two farcical pieces of legislation, one of which, I think, we deal with this week.

As I say, I think the Inland Revenue Department needs to broaden its focus. We are not saying the Inland Revenue Department should slack off in going after taxpayers and ensuring it meets its obligations, but it should be also looking very, very clearly at the spend—what, $130 million and counting—on a business transformation project where I do not think we have struck a keystroke on a computer yet. We have got a few reports, but it ought to be looking at how it can be more flexible and how the functionality of that tax system can work for businesses.

I am sure colleagues over there—I know one in the corner is a vintner who runs a very successful business. That gentleman—whose name, forgive me, I cannot recall—will have a large amount of experience, I suspect, in dealing with the Inland Revenue Department, and will be able to explain to us tonight, I am sure, the strictures and the mind-bending problems that you have unless you are a large business with an accounting department or access to top-class accountants and, if you are a small entity, the real challenges and difficulties you have with a rigid and inflexible tax system.

So my plea to the Government is to put up these pieces of legislation. We will support it to the select committee and we will have a good look at it. Hopefully there will be one or two submitters who will support it and not the 100 percent who opposed the last piece of legislation that Mr Bennett put through the Finance and Expenditure Committee. But my plea is that the Inland Revenue Department needs to really look at hard-core, practical measures that will assist and allow flexibility for businesses so businesses can have control of their own financial situation and so the department can, in a practical and operational way, acknowledge that businesses just do not make the same money every week or every year or every season—they have fluctuations, they have seasonality, and they have different cash-flow difficulties.

Maybe the National Government may want to take up the challenge, grab our discussion document—as vetted by Robin Oliver, an eminent tax expert in New Zealand—and have a look at it in a bipartisan way, and may want to adopt it, although I am told by the rumour mill that since we released that document the Inland Revenue Department has gone into hyperdrive. It has grabbed it, got the xerox out, flicked it around the department, and said: “Hey, how did the Opposition, with no resources, come up with this?”. The Minister said: “Maybe we’ve got to pip them at the post and come out with our own proposal that will mirror theirs before the next election.”

But we live in hope. I am going to enjoy Mr Bennett’s speech because he will be able to give us a dissertation on the practicalities of this legislation and how it is going to benefit those tens of thousands of small businesses. I pray that somebody out there, when the submitters submit to the select committee, actually does support it.

Mr DEPUTY SPEAKER: I call David Bennett—no pressure.

DAVID BENNETT (National—Hamilton East): No pressure—no pressure, Mr Deputy Speaker.

Hon Clayton Cosgrove: Good call.

DAVID BENNETT: Yes. It is great to take a call on this. As that last speaker, Clayton Cosgrove, said, there are a lot of advantages in this legislation for New Zealand taxpayers. It certainly paves the way for a simpler tax system and really sets us up nicely for the use of more technology in our tax system to make sure that taxpayers have the easiest mechanisms to be able to converse with the Inland Revenue Department and to fulfil their requirements as taxpayers.

There are a number of changes in the bill that have been gone through and Minister Woodhouse has spoken about. As we go through the process of the select committee hearings and further readings, I am sure they will become more evident, but the general thrust of it is around the simplification of the tax administration system, and that paves the way for the changes that are going through the Business Transformation system. [Interruption] What is the member from New Zealand First saying?

Fletcher Tabuteau: Would you like me to say something so you can attack me?

DAVID BENNETT: No, the New Zealand First member—no, we do not need Mr Tabuteau trying to interrupt other speakers. I have decided to go back to Mr Cosgrove’s speech on provisional tax. Are we not lucky we have got a master like Mr Cosgrove, who can tell us about provisional tax? He has probably never paid it in his life, but, you know, I am sure he has heard from somebody how it actually works.

Hon Clayton Cosgrove: I raise a point of order, Mr Speaker. I always meet my tax obligations, unlike many of the donors to that member’s party.

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

DAVID BENNETT: Well, he did not answer the question, so he has obviously never paid it. So what we actually see, though, is that the true part of the Labour Party tax policy that those members did not talk about that all New Zealanders need to know—and New Zealand First and the Greens will be spoiling at the election when that comes up in 2017—is it wants to raise taxes on New Zealanders. Labour wants to increase taxes on New Zealanders. Talk about provisional tax—those members will talk about that until the cows come home, but they will not talk about those tax rates. Fifty percent is what those members will be aiming for in the Labour Party. That is what the Labour Party wants. Those members know it; they just do not want to say it. New Zealand First can laugh, but you will jump into bed with them and you will do the same thing—going out and asking for higher taxes on New Zealanders.

So when we look at the tax system in New Zealand for New Zealand taxpayers, this is good legislation, because it simplifies the system. But look out for the other side. Do not get rushed into anything about provisional tax. Look at the tax rates that those members want to apply to New Zealanders. That is the real policy, which they have not come out about to this Parliament or to the public and actually given out to the public. Thank you.

GRANT ROBERTSON (Labour—Wellington Central): I really do want to acknowledge the member who sat down, David Bennett, for doing his level best to actually talk about a tax bill. We know in the Finance and Expenditure Committee that he is the guru of taxation in the National Party. He sits there like some sort of maharishi figure at the front of the Finance and Expenditure Committee, guiding us—silently—towards our understanding of the tax system. That speech really typified the depth of knowledge. The level of analysis that he brings to the committee is sharp—razor-sharp analysis. His fellow committee members sit in awe—either that or shock, we cannot tell—when he is chairing the committee on a weekly basis. Chris Bishop has not even been at the committee for the last two bills. He cannot cope with it. He cannot cope with the aura that is around the chair of the Finance and Expenditure Committee, a man of remarkable expertise in these matters. Really, there is little else to say after hearing David Bennett’s speech, because he covered it all, but perhaps I can fill in one or two minor gaps—for instance, all of the clauses of the bill—and then we will see whether Mr Bennett has any further contribution after that.

This is a bill that the Labour Party will be supporting. It has got a good title—the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. First phase simplification is definitely something that the chair of the committee is able to help us on. We understand that the bill has, in particular, three goals: easier communication in terms of the whole tax system, simplifying the tax rules, and the sharing of information. It is quite remarkable when we look at the bill and the explanatory notes that have been provided for us that one of the main things this bill attempts to do in terms of improving communication is to remove references from the Income Tax Act, the Goods and Services Tax Act, and the Tax Administration Act that restrict interaction with the tax system to paper-based transactions. So just reflect on that for a moment: there are multiple clauses in these three Acts that currently mean that you can communicate with the Inland Revenue Department only via paper-based transactions—not even electronically, not even winding up the party line on the telephone and asking whether you can be put through to the department, but paper-based transactions. That is what we are left with in these Acts. So we congratulate the Minister of Revenue and the Inland Revenue Department on bringing this particular part of the legislation through to us. We think that the goal of removing any legislative barriers to receiving and sending electronic communications is an important step towards bringing the Inland Revenue Department and the tax system into the 21st century, if not the 20th century.

There are a number of changes within this section. One that we will be looking out for is around clause 74, which establishes this communications framework and actually facilitates flows between the Commissioner of Inland Revenue and an individual taxpayer. It does transfer some obligations that are currently with the Minister to the commissioner. It is always important, I think, when we are moving something from the Minister, where we have accountability mechanisms through the House here and so on, to a commissioner that we are careful about what those particular provisions will entail. The other interesting bit is that electronic signatures can now be accepted. For Mr Bennett’s benefit, electronic signatures are like writing a signature but are sent through the computer on the interweb. So, Mr Bennett, we will practise in the committee writing our electronic signatures so we can all see that. So the Inland Revenue Department will be able to accept electronic signatures after this. That is important. It is all very well to facilitate electronic communications and digital communications between taxpayers and the department, but if, at the end of the day, you still had to print them off and sign them by hand, that would be ridiculous. This is another important provision that we have in the bill.

There is a large set of simplification measures around tax rules, including around the employee share schemes, which I know the Minister spoke about in his contribution. Simplifying tax rules is something that I think we would all want to facilitate and encourage. I would join with my colleague Clayton Cosgrove in noting that the last two bills that have been before the select committee have not really met that standard, if we are honest with ourselves, particularly the brightline test bill, which was, as my colleague has said, opposed by virtually all of the submitters, all of the large tax accountancy firms, all of the large law firms, and the New Zealand Law Society. They all said that one of its main flaws was its failure to adhere to the idea that a tax system should be clear and simple. In fact, it reached the point where the senior partner of Ernst and Young, one of the largest tax firms in Wellington, said that he was “professionally confused” by the Government. He was “professionally confused” by the legislation that the Government was putting forward. He thought it was contradictory, but, fundamentally, he thought that it failed that test of simplifying tax rules. We like the rhetoric here, we like the goal, but we will be watchful and mindful, given what has happened in those two pieces of legislation, to make sure that it actually is simplifying the rules as called for.

The third matter is around the question of the sharing of information. I do want to just spend a little bit of time on this, because—a lot of MPs would have had this—members of the public are hugely frustrated when they deal with one Government agency, fill out a big series of forms, do that, go and visit another Government agency the next week, and have to fill out all the same forms all over again. It becomes an absolute waste of time, whether it is done electronically or whether it is done in person. So getting past that, getting ourselves to the point where people can simply have data that is entered and used in a number of different settings, would be very useful. However, with all approaches to sharing information like that, there are risks. I note that there are changes in this legislation to the sharing of biometric information. A lot of the material that is kept by the Inland Revenue Department is around voice recognition. How do we make sure that that is stored securely? There are clear and obvious risks. We have had information sharing from Government departments that has been unintentional in recent times. Information has been shared with random passers-by on Lambton Quay by some public agencies in recent times.

So if we are going to enhance and increase the amount of information that is being shared, then we on this side of the House do want to be absolutely sure that we have got the right rules and regulations built around that and that there are safeguards in the sharing of that information, because although we have many constituents who are concerned about having to fill out multiple forms, we equally have people who come to us very concerned that information that is personal to them is being shared when it is not necessary. I do see, in the drafting of the bill, that an attempt has been made to define “necessary information” for the tax system to operate. Again, the responsibilities for that now fall to the commissioner. The current commissioner is somebody who, we know, will be able to withstand any pressure around the release of information, but we need to make sure that the rules are there to facilitate that.

There are a number of other miscellaneous matters in the bill, in particular around KiwiSaver, with a number of amendments there. Again, there is the question of sharing information about KiwiSaver members for account maintenance purposes between the Inland Revenue Department and the scheme providers. Obviously, this would be useful, but, equally, we are then seeing information moved from, effectively, the public sector to the private sector. We need to make sure that there are the appropriate rules built around that. There are a couple of curious changes related to KiwiSaver. One of them is around a provision that would allow minors who have been incorrectly enrolled into KiwiSaver to opt out before their 19th birthday. I will certainly be asking the officials at the committee just how many people have found themselves unwittingly enrolled in KiwiSaver as a minor. It seems somewhat unusual, if that is the case, and I am wondering whether perhaps there are many people who have found themselves in this situation. Then there is a question of people being enrolled as children by their parents—perhaps they were upset about being enrolled in KiwiSaver. I kind of find that hard to believe, but we have actually—[Interruption] Well, that is right but we have legislation here that will deal with that.

Overall, we look forward to the debate on this bill. We look forward to the astute stewardship of David Bennett, who will be able to answer all of the questions that I have raised today on the question of the details in tax legislation. If he cannot, he will do what he always does and ask Chris Bishop.

CHRIS BISHOP (National): I want, at the start of my speech, to mount a staunch defence of my friend and colleague David Bennett. David Bennett is a superb chair of the Finance and Expenditure Committee, a man who has defeated Labour’s best talent over the years: Cliff Allen; Sehai Orgad; Sue Moroney; Dianne Yates, a sitting member. No man would rise to the heights that David Bennett has risen in this House if it was not for the talent of defeating such luminaries of the Labour Party as Sue Moroney and Dianne Yates. He does a superb job as chair of the committee, as Mr Robertson well knows, and I take his remarks as tongue-in-cheek remarks, as they were no doubt intended.

I am looking forward to examining this bill in the Finance and Expenditure Committee because, quite seriously, it is an important measure that the Government is advancing: to make our tax system simpler and easier to navigate. We have a very good tax system in New Zealand. It is broad-based. It is of a relatively low rate—probably too high, but a relatively low rate. It is a broad-based system that has rightly won plaudits around the world for its navigability, its simplicity, and the way in which it can be easily used by people.

We have an excellent tax system, but that does not mean we should stand still and congratulate ourselves all the time on what a wonderful system it is. We need to keep up to date, and, particularly, we need to modernise the tax system. That is exactly what the Business Transformation programme that the Inland Revenue Department is undertaking is all about. On the Finance and Expenditure Committee we are keeping a watchful eye on that programme, which is being overseen by Todd McClay. We are going to make sure, on that committee, that the very large programme of change that the Inland Revenue Department will be undertaking over the next 5 to 7 years is implemented well, because New Zealanders deserve a well-functioning tax system.

Just in my brief remarks, I want to point to a couple of things that I am particularly interested in in this bill. It is a very wide-ranging bill; it is an omnibus bill that affects a number of Acts, most notably the Income Tax Act 2007. But I am particularly interested—and I know people watching out there at home will be interested—in the amendments that the bill makes around tax refunds, because people will know that at the moment there is a reasonably cumbersome process that exists around getting automatic tax refunds. What this bill does is it proposes an amendment to allow earlier tax refunds, based on personal tax summaries that meet the automatic refund threshold; reducing the waiting time from 30 to 15 days, halving the waiting time; and increasing the threshold for automatic refunds from $200 to $600. The advice that is before the House is that this will help approximately 400,000 people per year to benefit from these changes.

It is a minor and small amendment to a variety of legislation to make that happen, but, actually, it will have a real effect on the day-to-day lives of New Zealanders, people who pay secondary tax, people who for whatever reason pay at a higher rate of tax than they otherwise should do throughout the course of the year. I remember as a student often getting a tax refund for a variety of different reasons, and it does make a difference, receiving a bit of money back at the end of the financial tax year every year. Adjusting this legislation is the right thing to do if it means that we can halve the amount of time that people have to wait to receive tax refunds.

Other things the bill does have already been referred to by my colleague Grant Robertson. There are very useful changes around electronic signatures, which allow for documents such as tax returns to be filed with electronic signatures. Again, it is a sensible, pragmatic, and prudent change, and something that I would hope would have the unanimous support of the House.

There are also some very interesting provisions in the legislation around biometric validation. I note that the Inland Revenue Department is going to be running a trial with other departments to see whether or not voice recognition software can be trialled for the use of approval of documents. I think that is going to be an interesting thing to ponder.

This is a good bill. I think it will have the widespread support of the House. The Finance and Expenditure Committee, ably chaired by David Bennett, is going to do a good job of examining it in further detail. I commend this bill to the House.

JULIE ANNE GENTER (Green): I rise to speak on the first reading of the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. If only this bill was really as transformational as the title implies. The Green Party will be supporting this bill to the select committee, but before I get into the details of our support on this legislation, I feel I must respond to comments made earlier by David Bennett about the Green Party and other Opposition parties simply wanting to raise taxes on New Zealanders. The Green Party is here working for a fair and cleaner economy that is going to benefit all New Zealanders, not just those at the top.

To that end, we have two major priorities. Our two priorities are the two biggest challenges facing New Zealand and, indeed, our world: climate change and inequality. Both of those challenges are also an opportunity. They are an opportunity to create a better New Zealand—a New Zealand where every child has a warm, safe, secure place to call home, where every child can walk or cycle safely to school, where they are not only educated but nourished and not going hungry as so many kids currently are in New Zealand, where families have time to spend together and are not working 60 or more hours a week simply to make ends meet, and where we protect our native forests and our beaches and rivers so that our kids can swim in them as they once were able to.

The tax system is a potential tool that Government has to make this a reality, to make this a New Zealand where we are not contributing pollution to, you know, potentially civilisation-ending climate change, and where we are actually reducing inequality and ensuring that every child has everything that they need to survive and thrive and make a great future for themselves. So Government has this potential tool—the tax system—and I am particularly interested in it. I think that the Green Party has a whole heap of policies that are going to create a fairer tax system that puts a price on pollution—so it is polluters who pay more—and also to create a fairer tax system in that those who have the most contribute the most back, and where capital is taxed the same as income from any other source of work. I think that is perfectly reasonable. It does not mean that people pay more taxes necessarily. It does mean that we all get a better future, and I think that most New Zealanders would agree that that is something worth working towards.

This particular bill is not transformational. I do have to agree with my colleague Chris Bishop’s comments that New Zealand has a very simple and easy-to-follow tax system. Comparatively, being originally from the United States, I can tell you guys what a nightmare it is to file tax returns in the United States. Comparatively, New Zealand is doing really, really well.

Of course, things can be improved, and this bill does make several mostly uncontroversial changes to tax law here in New Zealand. We absolutely want to support the updates to tax law to account for electronic communications, in putting them on the same footing as paper communications. New Zealand is already pretty strong in that, but, clearly, a number of pieces of legislation still rely on paper transactions. I think that is just bringing us up to speed with the 21st century, so it is great that we are getting on to that.

Another change this bill is going to make is to allow employers to manage the tax implications of employees’ shares, making it a bit more simple for those employees who currently might have to file extra paper work to deal with the tax that they owe on shares. This will allow employers to withhold that, just as it is done with PAYE. So that is pretty uncontroversial.

I echo the concerns raised by my colleague Grant Robertson in his speech about the information sharing. There is definitely potential to increase efficiency and to ensure that there is better transparency and better compliance by allowing information sharing across Government departments, but it is incredibly important that that information sharing is protected and that we respect privacy rights. I note that the Privacy Commissioner is comfortable with the proposals and seems positive about this, but I am looking forward to the select committee process where we will look at this in greater depth and ensure that the proposals are not going to be resulting in unintentional sharing of private information of citizens, which has occurred on a number of occasions under this Government—Government departments have shared information a little bit too widely. I think that is something that we all need to be very concerned about, so it is something that we will be looking at closely during the select committee process.

As I said, the Green Party will support the bill to the select committee. Thanks.

FLETCHER TABUTEAU (NZ First): It is my pleasure to stand up and actually support this taxation legislation, but it does seem to be my instinct to dig in and critique some of the detail, so those on the other side of the House will forgive me—I do support it, but there are a few things that you should be cognisant of and perhaps be mindful of as we move into the select committee process.

I just want to start off with a reality check. This Government, the supposed advocates of business in New Zealand, only just now thought that this would be a good idea. It has been 7 years—we are getting into the eighth year—and despite its simplicity, the analysis actually shows us that the US tax system has fewer pieces of tax rules than the New Zealand one. We in New Zealand are overburdened with rules on taxation. So the reality and the intent of this legislation are right: there is a need for simplification, and transformation in that sense is a very good thing.

The bill describes itself as legislation that will simplify and improve the settings for the administration of the tax system. It asserts that there will be decreased compliance costs. One of the reasons it suggests that is because businesses will be so happy with the Inland Revenue Department that they will just naturally be more compliant, and self-regulate on their tax compliance issues. But this first phase does not look like it is actually aimed at big business. The reality is that this seems to be more about the individual, and, unfortunately, it does not seem to be much about simplification either. It is really about the end-user, and the reality is that the rules themselves are changing under this legislation.

In the picture that is painted, a future Inland Revenue Department will interact with New Zealanders more openly, but the reality is—and let us be very clear about it—you do not need legislation changes to interact with your clients in a more open and communicative manner. Sometimes it is not the legislation so much as it is the standards that are set from the top down—perhaps the standard set by this Government and how it pervades the practices of all Government organisations.

I had a couple come to visit me recently about a visit to the Inland Revenue Department. They went on to tell me just how initially helpful the Inland Revenue Department was. In the conversation they had an issue, and the lady from the Inland Revenue Department disappeared out the back. She then came back out with a combative attitude and was really dismissive and argumentative. She almost immediately told them that they had not laid their claim properly and that it was all their fault.

This is the conversation that this bill is purportedly having about simplification and making it easier for the end-user. But the reality is that you do not need a bill to make that happen. You need leadership and you need an organisation like this to be shown what it is to be a good leader in this kind of environment. It is one small example but it is an important one. Sometimes we do not actually need a law change. The couple did make a good point to me. There was a certain double standard there. That is not what this Government, or certainly the Inland Revenue Department, needs when it comes to dealing with New Zealanders.

New Zealand First has continually had, and still does have, quite a large concern about omnibus pieces of legislation brought to this House by the National Party. The reality is that there always seem to be a lot of these unintended consequences, and that is a very generous way of describing the situation. There have been examples brought to this House around tax, actually, where the purported intent of it had nothing to do with the outcome. In fact, New Zealand First ended up defending our veterans on their tax compliance and supposed changes there. All I am saying to the other side of the House is to just be careful. This is a big piece of legislation. It is an omnibus bill; it is a three-part piece of legislation, and it can get complicated, and we need to be mindful of that. That is why New Zealand First is actually supporting it to the select committee.

When I first made notes on this bill, the health and safety legislation had not passed, but one of the significant parts of this legislation is around health and safety. So there was a huge presumption that part of this legislation—that the Health and Safety Reform bill was actually going to pass and that the legislation there would already be in place for the legislation in this bill to take effect. It is a huge presumption, and it is not necessarily a democratic way of looking at our legislation.

One of the technical points: in looking to make deductions from employees without successfully informing them that this will be happening—or, more formally, to dispense with requirements to issue notice to the defaulter—the Inland Revenue Department decided, because of time constraints, that consulting with employees was unnecessary. None of the options was discussed with businesses, which would have to be a party to the deductions from their staff members’ salaries. The question was not asked—I do not believe it was asked—but the reality is this Government needs to be mindful in this particular situation that this could possibly undermine the common law principle of natural justice. So this is just another unintended consequence that this Government needs to look at in this bill.

New Zealand First does support the principle of the elective opt-in system for the collection of tax on employee share schemes. Here we were advised that employers and tax specialists agree with one another. This is fair to both the employer and the employee. Unfortunately, in this part we have, again, an example of oversight and unintended consequences. The current KiwiSaver Act 2006 has no remedy for minors who are signed up to KiwiSaver unintentionally. This bill actually seeks to fix up this oversight in the other piece of legislation, but it does not address the fact that minors can still be signed up accidentally, and there is nothing to be done about it until the problem arises.

The process known as co-location—and this has been spoken about a little bit tonight from this side of the House—and the management of private information, and the secrecy necessary, does raise more questions. The Inland Revenue Department sharing office space with other Government departments, often in literally shared office spaces, will likely lead to the unintended consequence of private information being shared with those unauthorised recipients, that has been so frequently spoken of this evening. New Zealand First is highly concerned that the proposed solution to this is the watering down of current privacy laws, so that breaches of New Zealand privacy will occur without consequence or risk of sanction.

With regard to the strengthening of enforcement and employment standards, New Zealand First has always said that more and more Kiwis are being exploited in the workplace, especially new Kiwi citizens, and this Government has just stood by and literally watched. There is, without doubt, a high level of non-compliance with employment standards. What is being discussed in this legislation is—in the support work for this legislation—sound. New Zealand First is worried that if this is the only approach to this problem—the only solution—then it is too little, too late.

I would like to just conclude by saying the Minister himself said that the department is regularly granted additional investigation funds, and my point here is that we agree with him in this instance. A dollar given to the Inland Revenue Department has resulted in $7 collected for large corporate tax avoiders, and we commend that and we need to focus more on that. What we are seeing here is an attack on individuals. The analysis suggests we might get $700,000 of tax savings from this legislation. The priority, to me, seems to be slightly backwards, and the focus is definitely wrong. Let us go out big, and make sure tax compliance is fairly applied to big business as well as to individual citizens of New Zealand. Thank you.

JAMI-LEE ROSS (National—Botany): This bill, the Taxation (Transformation: First Phase Simplification and Other Measures) Bill, contains a range of measures and options in which we can simplify and make the inland revenue system easier for people and easier for businesses to interact with Government, and, basically, try to reduce some of the burden that people feel in their lives from the Government and the tax system. Far from the characterisation of Mr Tabuteau, where he said it was an attack on individuals, this, in fact, is all about making the lives of individuals a lot easier.

Many of the measures outlined in the bill have been covered by some of the earlier speeches on this bill. I just want to respond to a few of the things I have heard in the past few speeches from Mr Tabuteau and Julie Anne Genter.

Firstly, I want to tackle this comment from Mr Tabuteau that, supposedly, the New Zealand tax system is overburdened and is very difficult for New Zealanders. When he compared it with the US tax system in the way that he did, and tried to say that we are overburdened compared with the United States, I think he made a mockery of himself. As Julie Anne Genter herself pointed out, the New Zealand tax system is far simpler than the US tax system, and New Zealanders are far better off because of that. We are not the only ones saying that, though. Let me just point out that the Tax Foundation in Washington, D.C. found that New Zealand has the second-most competitive tax system in the OECD, and most respondents to the Deloitte’s 2014 Asia Pacific Tax Complexity Survey rated New Zealand’s tax policies as straightforward, consistent, and predictable compared with other countries in the region. We do not have an overburdened tax system.

I also want to respond to some of the comments from Julie Anne Genter. When she started off her speech it sounded like a bit of a stump speech that did not have much relationship to the bill itself, but she was talking about children and how we have missed an opportunity, supposedly, to make the lives of children easier through this tax bill. Can I just point out that this Government is the Government that is putting more money in the pockets of those at the bottom who need help, through the benefits system. We are the Government that is lifting achievement levels in the education system for children. We are the Government that is creating more jobs in the economy, which ultimately benefits children. So when we hear comments from the Green Party that we are not doing enough to help children through this tax bill, we have to point out those measures.

This bill is all about reducing some of the complexity in the tax system. My colleagues have talked about measures like electronic signatures and about reducing the time frames that people have to wait to get their tax return. We have talked about the fact that there is greater information-sharing amongst Government departments. All of those things make it easier for New Zealanders to interact with the Inland Revenue Department and make it easier for them to comply with their tax obligations. This is all about making the tax system simpler for them, and it will be better for New Zealanders in the long run.

Mr DEPUTY SPEAKER: I call Denise Roche in a 5-minute call from the Green Party.

DENISE ROCHE (Green): Tēnā koe, Mr Deputy Speaker. As my colleague Julie Anne Genter has already said, the Greens intend to support this bill’s referral to a select committee. She has already talked about how this bill fits with our vision on tax and monetary policy, so I will just talk in general about the bill, as well as about how it could be helping working people in New Zealand.

One of the key effects of this bill is to update the tax law to place electronic communication on the same footing as paper communication, and other speakers have said that it is a bit of modernisation. We support this. This is a good change that will spare lots of Kiwis from the tedious, time-consuming, and environmentally wasteful processes of sending in paper copies. I have to say, as the only waste spokesperson in any party in Parliament, I would be remiss if I did not say that in New Zealand we have the second-highest waste emissions per capita in the developed world, so any little bit of effort around reducing that would certainly be appreciated, and it is certainly appreciated in this bill.

We support the provision that allows for easier management of the tax implications for employee share purchase agreements. We know that this applies to only a small section of working people, but we support the idea of worker-led, worker-owned companies in genuine economic industrial democracy. We support working people being able to save and invest so that they can create opportunities for themselves and their families. However, as I mentioned, these provisions in this bill apply to only a very small section of people in the workforce. What would really help most New Zealanders is secure jobs with living wages, with decent working conditions, so that they and their families can reap the rewards of the Kiwi dream—that is, if you work hard, you will get ahead in this country.

And I guess what would really help most working people in this country to save and invest is a KiwiSaver kick-start payment system—but this Government has already cut that—or even maybe payments for kids. But, apparently, the Government’s response to KiwiSaver has actually reduced the number of KiwiSaver enrolments by more than half, according to the ANZ bank.

However, the Greens support the provisions in this bill that will help the minority of working people to save and invest by making it easier to participate in employee share schemes. But I encourage the Government to work with us on making bigger steps to make sure that we have a balanced New Zealand economy that benefits everyone.

Finally, the bill’s provisions on information sharing make it easier to check for worker exploitation, and we support that. Clause 117 means that the Inland Revenue Department, the Ministry of Business, Innovation and Employment, and WorkSafe can communicate and share information, which will make monitoring and enforcing health and safety legislation, for example, so much easier.

I recognise that there are some restraints that we should place around the sharing of information, but it will be easier to detect whether people are being unlawfully underpaid or having their wages deducted. This is a problem, and I will refer to the regulatory impact statement on the Employment Standards Legislation Bill, which says: “There is a high level of non-compliance with employment standards, such as employees being paid less than the minimum wage, not receiving annual holiday entitlements and not having employment agreements. Seventeen per cent of respondents to Statistics New Zealand’s Survey of Working Life [in 2012] reported that they were not receiving at least one of these minimum employment standards.” That is shameful.

It is a shameful indictment that nearly one in five Kiwis in paid jobs are not getting the bare minimum, and it is a damning indictment on the climate of fear that this Government has created through its industrial relations policies. We have seen that climate of fear supported and promoted by this Government time and time again: with its changes to the health and safety legislation, with its changes to the Employment Relations Act, with the changes it made for the Hobbit movie, with the 90-day trials, and with youth rates.

It does not have to be this way. This bill proves that the Government is capable of making positive small steps forward for working people, and we would certainly encourage it to work with us to make more of them.

Mr DEPUTY SPEAKER: I call Meka Whaitiri—a 5 minute call.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Kia ora, Mr Deputy Speaker. Tēnā tātou e te Whare nei. I am happy to take a short call on the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. As a small-business operator in the late 1990s and early 2000s, part of the obligation in my decision to go into small business, or to be a small-business operator, was the relationship I entered into with the Inland Revenue Department. In my time, in reflecting on that period, everything was done on paper. Providing monthly GST returns and provisional tax was just part and parcel of the obligations of being a small-business operator, but I know things have advanced significantly over the last 15-odd years. There are many more expectations from Kiwis to be better served by the services and the relationship they establish with the Inland Revenue Department. I digress, but Labour does support simplifying and improving the settings for the administration of the tax system.

There have been plenty of contributions in this House on the particular provisions in this bill. If I may take the time, there are two particular parts in the explanatory note that I just want to make mention of as a small contribution, and one is titled “Secrecy in a co-location environment”. This bill looks at increasing efficiency and improving services, and “Inland Revenue is co-locating with other Government agencies in some offices and call centres in New Zealand.” We all know that having a one-stop shop is always an efficient way to do business, but the point in the particular sentence that I read out is the last part, which is “call centres in New Zealand.” I do hope that the intention in the bill is for the call centres to be actually based in New Zealand. Perhaps many members have had experience dealing with call centres that are not based in New Zealand, and in our tax system we need to make sure that people who are there to assist us—how do I put it—not only know the geographical challenges of our country but can deal with the way that Kiwis, New Zealanders, expect to be serviced through call centres. So I look at that and I hope that the proposals of the bill and those who put in submissions also support the fact that call centres for the Inland Revenue Department must be based—in my view—in New Zealand. So I hope that point is taken on board.

The relevant part in the explanatory note about the secrecy in a co-location was raised by a colleague from the Green Party. It is around information sharing. We need to ensure that we have some very strong protections, particularly around privacy, around what is gathered and what is released. I just want to endorse the sentiments of that member, who said we needed to ensure that the information sharing between the Inland Revenue Department, the Ministry of Business, Innovation and Employment, and WorkSafe has some strong protocols and regulations around it to ensure that we do not share information that we should not be sharing. I guess with the recent mishaps that we have had, particularly through ACC, I hope that those lessons, particularly, are taken on board under this bill.

When we examine the bill—and part of why Labour is supporting its referral to a select committee is to ensure that we are able to scrutinise all the provisions that this bill is intended to address, which are intended to simplify the tax system, through the select committee. We will want to ensure that small businesses throughout the country are encouraged to enter—not only those wanting to enter it but those that are already in it—a very productive relationship with the Inland Revenue Department. As all members who have contributed on this bill have said, simplifying that relationship with the department will definitely go a long way to ensuring that not only do small businesses operate successfully in New Zealand but they also thrive. I commend this bill to the House.

ANDREW BAYLY (National—Hunua): I rise to give a short call in the first reading of this great piece of legislation—the Taxation (Transformation: First Phase Simplification and Other Measures) Bill. I think we have actually reached nirvana—utopia—because everyone in this Chamber tonight seems to be agreeing with this wonderful piece of legislation. I cannot actually believe it. Not only do we have our Labour members but also we have our Green members, and even New Zealand First—actually, I think this is one of the few times that those members have ever supported one of our bills.

I think that we have to look at this bill in the context of what a great tax system New Zealand has. It is the envy of the world. We have very simple personal tax rates, with only four levels; very simple company and trust rules; and a GST system that, really, everyone around the world looks at and marvels at. This bill is part of an ongoing refinement process and it needs to be considered in relation to the changes that the Inland Revenue Department is making to its IT system and the general business transformation programme that it has under way.

As my colleagues have noted, and I think all of us have noted tonight, there are four key areas where this bill is seeking to bring about change, which I do not actually think is that difficult, but my colleague Mr Tabuteau obviously thinks it is. There are only four key changes. The first is that the bill removes references to outdated communications systems and allows voice and digital communication systems, which is, obviously, what is happening and has been occurring with legal documents around the world and in New Zealand; so it is just bringing us into the 21st century.

Also, it allows for earlier tax refunds, and I would think there is a vast proportion of New Zealanders who are going to welcome the change, which means that if they file their form using their personal summary, not only will they get their refund quicker, decreasing it from 30 days to 15 days, but also the threshold for the automatic refund is going to increase from $200 to $600. I think there will be many people rejoicing once they learn about this.

The third thing is that the Inland Revenue Department is going to be able to share information with other agencies, and that is a good thing to do. Just to give a logical case, where a provider has left a superannuation scheme, the Inland Revenue Department has the ability to share that information with a provider. It just makes it much easier for the taxpayer.

Fourthly, it will allow taxpayers to treat differently how they put in place employee share schemes. These are now quite common in many companies, and, of course, in the case of share purchase schemes, as an example, employers are bound to withhold tax legitimately. So it is great to see this bill coming in. I know that it is an omnibus bill, but I think it is bringing about a number of good changes, which are an ongoing refinement of this bill. I am glad that I have got through this speech with my voice still intact. Thank you.

CARMEL SEPULONI (Labour—Kelston): I am standing to support this bill, the Taxation (Transformation: First Phase Simplification and Other Measures) Bill, to select committee. We support simplifying and improving the settings for the administration of the tax system. The areas that this bill looks at focusing on simplifying are useful ones: communication and process, electronic signatures, employee share schemes, releasing information, and KiwiSaver membership. We will be examining the bill closely at select committee to see whether it genuinely simplifies these provisions rather than adding additional complication, and I guess that where the real analysis needs to take place is at select committee, because the rhetoric is great, but we need to make sure that it actually does simplify.

However, we think that there are larger issues that the Government should be focusing on around making tax more flexible and dealing with provisional tax. Business people know their businesses better than the Inland Revenue Department, so Labour wants to let business owners tailor their tax payments to fix their cash flows. Under Labour’s proposal, businesses will have the option of choosing to pay their tax through regular instalments at a rate they can adjust. This means that businesses can align their payments to suit their circumstances. To further help our businesses get ahead, our proposal scraps harsh late penalties for provisional tax and raises the level at which provisional tax kicks in from $2,500 to $5,000.

Flexible tax for business is about giving our businesses more control over how they pay tax. That is how we will help them do well, grow, and create jobs. That is our objective. We will be going to the select committee looking at this bill to see that it does simplify things for these business owners, and we will make our assessment at that stage. Thank you very much.

ALASTAIR SCOTT (National—Wairarapa): This is another piece of legislation—another piece of good legislation—that supports small businesses. We know on this side of the House that supporting small businesses is the key to the success of the economy. It is the key to increasing incomes. It is why we have high worker participation rates. It is partly why we have created 190,000 new jobs in the economy. This bill supports small businesses by making it easier for them to be compliant. It brings us into the 21st century. It uses technology to communicate. It talks about sharing information to make customers’ lives easier and it helps superannuitants comply with their obligations by providing some special tax codes for them.

We are the party of small business. We are the party that supports small business, unlike the Opposition. Although those members suggest and think they are the proof is in the pudding. They still do not know whether they support the 90-day trial period, for example. They still do not know. Some of them do support it and others do not. Another example of the proof being in the pudding is the Trans-Pacific Partnership. We are unequivocally supporting the Trans-Pacific Partnership.

Iain Lees-Galloway: Talk about the bill.

ALASTAIR SCOTT: I am talking about small businesses and the legislation that we put through to support small businesses. The Trans-Pacific Partnership agreement is key to supporting the economy. It is key to supporting small businesses. Thank you. [Interruption]

Mr DEPUTY SPEAKER: It is not that funny, I do not think.

Bill read a first time.

Bill referred to the Finance and Expenditure Committee.

Bills

Agricultural Compounds and Veterinary Medicines Amendment Bill

First Reading

Debate resumed from 15 September.

STUART SMITH (National—Kaikōura): It is a pleasure to speak on the Agricultural Compounds and Veterinary Medicines Amendment Bill. This bill amends the Act of the same name, which currently protects confidential information made in support of an application for an innovative trade name registration for 5 years after the application is decided. The bill extends the period by 1 year for new uses or reformulations subsequently added to the registration, for up to a maximum of 8 years. The bill strikes a balance between incentivising the registration of products that meet the primary sector’s needs and encouraging competition.

I am going to give a couple of examples in a minute but I think that one of the underlying things we have to understand in New Zealand is that we have a very small market and we often have unique needs and uses required here for agricultural compounds and veterinary medicines. If we do not have an ability to incentivise that investment to get products registered for new uses or reformulations, then they simply will not happen. An example is Pinus contorta, or wandering pine, or wilding pine—depending on what school you went to.

This is a serious environmental weed and it affects 1.7 million hectares in New Zealand, which is estimated to cost $1.2 billion to the economy. Currently, the way that that weed is dealt with is by cutting and poisoning with glyphosate, which is a very labour-intensive exercise, whereas it is well known that 2,4-D is very effective on this weed, but it does not have a registration so it cannot be used.

The cost of getting that formulation registered for that particular use is quite high and no chemical company has been prepared to step up and do that because it will spend the money and other companies can use that particular formulation and benefit from its investment.

That is a very good example of one of the formulations that would be of great benefit or a beneficiary from this particular bill. There are others, in medicines and so on, but I believe that I have made my point. I think that the bill is an excellent bill, I am very happy to commend it to the House, and I am looking forward to hearing other people get in behind this bill. Thank you.

STEFFAN BROWNING (Green): We were getting our numbers mixed up there. We thought that speech was No. four. It was all of about 4 seconds long. I am pleased to be getting up to speak to the Agricultural Compounds and Veterinary Medicines Amendment Bill, particularly because I want to expose the issue that this bill and these amendments are not needed.

This bill is, effectively, one of the Trans-Pacific Partnership bills. [Interruption] Howl you may. This is another one, just like the biologics one, that has been leaked. The text has been leaked. That covers patents through to 8 years and so does this and there is no getting away from it, that it is all tied up. This is about hiding the truth about the parts, the compounds, inside agricultural compounds and veterinary medicines.

This is about putting more chemicals, more carcinogens, more endocrine disruptors, more neurotoxins into the environment and into the public’s food chain without their being able to look to see what is in there. It is already a problem. And I reflect on something I have talked about in this House before—the herbicide-tolerant swedes. If I want to find out, or try to find out, what that seed is treated with—it has got two fungicides and an insecticide—I cannot find out. I am pretty sure that the insecticide will be a neonicotinoid—they do not deny that, but they will not tell us either. Why should the public not be able to know that?

I will pull out some statistics—the Agricultural Compounds and Veterinary Medicines Act came into force a good few years ago now. It basically started in 2001, and here we are in 2015. So we slice it down the middle and we can see when the Government came in. Before National came in there were 906 new products granted approval, through that time. Since National has come in there have been 1,100—there have been another couple of hundred over the 7 years. We will look at how many chemicals have been withdrawn. So in that first period, 687 chemicals were withdrawn as 906 came in. Of course, there were quite a few in there to start with—that were put into the Agricultural Compounds and Veterinary Medicines Register. Since 2008, once National got in, only 239 have been withdrawn—1,100 new ones, only 239 out.

Out of the total number of chemicals withdrawn since this Act came in 14 years ago, only a quarter of them have come out under National, and you are saying that you need more—

Mr DEPUTY SPEAKER: I am not saying anything.

STEFFAN BROWNING: Sorry, not the Deputy Speaker. The Government is saying, and I am looking over here at the Government members, that these companies—these traders of carcinogens, neurotoxins, endocrine disruptors, and others—need to have more protection, that we need more of them in this country. Too many of my friends are dying from cancer. Which one of you Government members over there has not had a relative or a friend come down with cancer in the last 12 months? It did not used to be like that—it did not used to be like that. It is time we got rid of a lot of these chemicals and went to genuinely sustainable methods of production.

This morning a number of us were at the global goals for sustainable development panel and goal No. 12 is responsible consumption and production. There is nothing responsible about bringing in more and more unsustainable pesticides—nothing. Yes, I will speak about glyphosate. Glyphosate probably causes cancer. It is a carcinogen. The World Health Organization (WHO) has come out saying that it is a probable carcinogen, but it is a carcinogen and Monsanto knew that from the start. Glyphosate is genotoxic at sublethal concentrations. It is a hormone-damaging endocrine disruptor at very low levels—causing infertility, birth defects: negative impacts on the reproductive system.

Be embarrassed, in the wine industry. If I fly over Marlborough at the moment, it will be a bit like 2007 when I measured, accurately, that 70 percent of the vineyard area including headlands was herbicided. Oh, and they call it “sustainable” winegrowing. I will carry on. What that herbicide does is it contributes to digestive illness, gut disruption, and nutrient deficiencies. It can exert worrying effects on antibiotics. It is neurotoxic at sublethal concentrations. Organ concerns—it damages kidneys; beneficial insect populations including honey bees get knocked around. The formulation, which of course is secret and is intended to be even more secret with this Act, is even more toxic than the principal ingredient glyphosate. The inerts are not inert.

And groundwater? When have we been testing the groundwater for glyphosate? When have we been testing the milk in a way that can actually measure glyphosate? It does not happen. Is there a need for more herbicides? Well, in that time, in the first 7 years of this Act until National got in, there were 194 new formulations granted—194. Since National has come in, 269, effectively 270, different formulations of herbicides have been granted. There is no need to be ramping this up or making this more secret. Insecticides—84 previously granted. There have been 125 since National has come in.

Oh, National needs to help its big mates in corporate agribusiness in the chemical industry. And then National will help its mates and it will cover up—you watch—when the bills comes through around the medicines and it will hide that information too. So on the one hand, the Government turns around and is helping to make people sick, and then it is going to protect the interests of a similar industry—quite often related—and make it a monopoly and difficult for consumers, for those needing health remedies, by covering up the information and giving them patents rights in terms of medicines.

It is time that this country that is so soaking in pesticides, one of the highest users per capita in the world, actually set some pesticide reduction targets; not carried on pouring in more and more formulations. Another one that we are looking at closely, of course, are the neo-nicotinoid pesticides—those insecticides that are so insidious, that are throughout the environment, which we know affect bees. We need these things re-assessed and we need them withdrawn and moved to really sustainable production methods.

We will be opposing this bill. There is a lot of concerning stuff. I am looking forward to dealing with it at the select committee and we will be bringing up some of these issues and I will be looking to the Government to actually back off on some of the things it is asking for. Thank you.

RICHARD PROSSER (NZ First): I am pleased to rise on behalf of New Zealand First to take a call in this first reading of the Agricultural Compounds and Veterinary Medicines Amendment Bill. New Zealand First supports this bill, certainly to the select committee and probably beyond, and I say “probably” because our position is likely to change only if on closer examination we discover that there are any fish-hooks in it.

I would like to make reference to my erstwhile colleague Mr Bayly there, who in his previous speech, in that wonderful gravelly baritone that he is blessed with, said that he was surprised that New Zealand First was supporting a Government bill. Well, Mr Bayly, when some more time has passed, you will be aware that New Zealand First actually does support probably about half-and-half of Government bills—about half we support and about half we oppose. It is probably the only real objective measure that the Government has for assessing whether or not its own bills are good bills or not, because if New Zealand First supports them they are good bills. So take that as a rule of thumb, Mr Bayly.

I am looking forward to examining this bill in the select committee and I am sure that in the committee, under the most able and, it has to be said, affable chairmanship of Mr McKelvie, we will discover any such faults or pitfalls as might be lurking within it. The bill itself is largely technical in nature, which is perhaps unsurprising, given that it is an amendment bill that changes some technical aspects of the principal Act and does not appear to do a great deal else other than perhaps bringing it up to date.

At face value, it seems that extending the period of protection of confidential information given in support of applications to register innovative trade name products—from 5 years to 8 years—is eminently sensible. In this day and age, where communication is instantaneous, where manufacturing is global, where competition is cutthroat, and where the vultures are circling, if you like, with regard to firms looking to profit from the advances made possible by the efforts and the research of others, it makes sense to extend the protections that are currently afforded to the owners and developers of intellectual property—for them to be allowed to benefit the most from the products and ingredients that they have developed and invented. Extending protection is also important in terms of further applications and uses that might not have been thought of, that might not have been technologically possible for other reasons at the time a particular product was developed, or in fact because the person or the firm that developed the unique or innovative compound might not have been in a financial position to further develop its uses. It makes sense for people in those cases to be allowed some further protection in terms of the confidentiality of the intellectual property that they bring in support of their applications.

It may be that submitters to the select committee might suggest that in fact a 3-year extension is insufficient. In fact, submitters might suggest all manner of things, and that alone would be reason enough for any party to support this bill to the select committee, through its first reading. I do note, however, from the regulatory impact statement, that the Ministry for Primary Industries does not appear to necessarily share that particular sentiment. In fact, it states: “There is no compelling reason to increase the basic length of the data protection term for innovative compounds, principally due to the interface with the patent system.” It does go on to say: “However, the ability to extend the length of the data protection period for the original product if extra uses are added may provide an incentive to add ‘minor’ uses to labels, which is a particular issue for New Zealand.”

It might be, but I might venture to suggest that perhaps the inability to find a compelling reason for extending the protection of someone’s hard-earned intellectual property is perhaps the hallmark of a department that has never created such intellectual property. I wonder whether, perhaps, we have the Minister to thank for the fact that this provision has made it this far at all. It would certainly do the Minister credit if that were the case. If that is indeed the case, then I do hold great hope for the success of the select committee process, because it would appear to indicate that the Government certainly desires to be on the side of the angels with regard to this particular matter. If it is, then New Zealand First will be only too pleased to be there, alongside it.

This is the first reading of a bill that does not appear to show signs of being particularly controversial, notwithstanding the comments from my erstwhile colleague from the Greens. As I have indicated, New Zealand First will support the bill to the select committee and, in all probability, beyond. I will sit on the committee—that fine, august body of men and women—as we examine the bill. For those reasons I do not intend to take too much of the House’s time at this stage.

If we have any questions at this stage, it is probably these. They come from the departmental disclosure statement. The first is in Part 3, “Testing of Legislative Content”. At subsection 3.2 the department asks itself “What steps have been taken to determine whether the policy to be given effect by this Bill is consistent with the principles of the Treaty of Waitangi?”, to which the department answered with the following “MPI has assessed the proposals against the principles of the Te Tiriti o Waitangi and consulted Te Puni Kōkiri. MPI’s assessment is that the policy does not appear to be inconsistent with the principles of Te Tiriti o Waitangi.”, which is all well and good, and very probably is as it should be. But I do have to ask—and maybe this is not the best forum to ask it in, but opportunities for doing so are few and far between and the department obviously considers it pertinent to the bill—so I have to ask: if the department has come to the conclusion that this bill does not appear to be inconsistent with the principles of the Treaty, then one could be forgiven, I believe, for presuming that the department has some understanding as to what those principles actually are, and, if it does, perhaps you could share those with the House because nobody else seems to know.

The second is in Part 4, under the heading “Significant Legislative Features”. At subsection 4.4(a) the question as to whether the bill creates or amends a strict liability offence is answered with a resounding “No”. I have to ask “Why not?”. Surely if we are enacting a piece of legislation that is intended to protect someone’s rights or property, then we must, I would have thought, also be intending that a breach of those rights would constitute an offence of some sort. Maybe the Minister would care to comment on that.

The only other question I have at this stage is a query that was raised by a colleague earlier in the process, and it relates to whether or not the provisions in this bill are to extend to products or substances coming into New Zealand as well as those that are developed here. The reason behind the question is a concern as to whether this bill might, in fact, mean that innovative products developed by overseas companies or persons may remain unnecessarily expensive to New Zealand companies or consumers, relative to their cost in other jurisdictions. Perhaps the Minister might like to make some comment on that.

But in closing, I say again that New Zealand First will support this bill at least to the select committee and very probably beyond. The stated intention appears to be eminently sensible and well-intentioned, and I look forward to examining the bill in further detail through the select committee process. Thank you.

TODD BARCLAY (National—Clutha-Southland): It is an honour to speak in support of the Agricultural Compounds and Veterinary Medicines Amendment Bill at its first reading. I would just like to acknowledge the Associate Minister for Primary Industries, the Hon Jo Goodhew, for putting this bill before the House and, hopefully, shepherding it the full way through the process. I would like to acknowledge those parties that have already offered their support.

It is unfortunate and disappointing that the Greens are not going to support this; however, it is not unsurprising. I would just like to point out that this is not one of the many conspiracies that the Greens seem to think exist within this Government. We are a Government that is trying to make tangible legislative benefits for regional New Zealand, and here is a perfect example of that.

With regard to the innovative chemicals that are being produced, we have heard, through extensive consultation on both sides of the industry, that both the suppliers and the users of these products are concerned that the current data protection levels are insufficient and that that is inhibiting the registration of the latest technologies. We feel as a Government that our industries in provincial New Zealand and our farmers and all those who benefit from the agricultural sector would be heavily disadvantaged if we did not take a move to act in support of these issues that are concerning to the members of the industry.

The Government review found that evidence of current protection levels in the fact that they may not be incentivising registration of these products here in New Zealand. We feel that puts our producers and our farmers at a disadvantage. That is why we wanted to put this bill before the House.

So in the interests of ensuring that this piece of legislation gets shepherded through as quickly as possible, I will end my contribution there. I would just like to reiterate one more time my support for this bill on behalf of the producers in Southland, South Otago, and North Otago, who will benefit greatly from this. Thank you.

The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call—Eugenie Sage, 5 minutes.

EUGENIE SAGE (Green): Tēnā koe, Mr Assistant Speaker. I am pleased to take a short call on the Agricultural Compounds and Veterinary Medicines Amendment Bill. The Green Party will be opposing this bill.

As others have noted, the substances used in pesticides, herbicides, and veterinary medicines have to be registered before they can be manufactured, used, or sold, and new uses for the compounds also have to be registered. As part of that whole regulatory approval process, applicants have to supply information about the product’s safety, its efficacy, and the likelihood of residues after use. Often, quite considerable information and research are needed to provide that information. Information that is provided to the regulator by one manufacturer obviously has value to competitors because they can use it to formulate a similar generic knock-off product, without the upfront costs of having to do the same research for the regulator.

The Green Party certainly wants the primary sector to have access to the latest technology, both for animal health and for plant protection. But we also want to reduce our use of pesticides and herbicides, and we want to move much more towards integrated pest management. We want to see more chemicals with reduced impacts in use, and certainly new products can help here. But we are opposing the bill because the balance in the legislation is far too heavily weighted to meeting industry wants, rather than public needs for good information on the chemicals that we broadcast so freely across our landscape to control plant and animal pests in our farming systems.

I would like to note that around a third of the 3,000 different products that are currently registered for sale in New Zealand under the principal Act are agricultural chemicals. The public has an absolute right to know what is in these pesticides and herbicides, what the toxic compounds are, what their effects are, and what the residues are. Although industry wants to see new uses and new formulations have data protection, we do not, because it means that the information remains secret and it is not in the public domain. Extending the data protection or the secrecy provisions in this bill around those active chemical ingredients in herbicides, pesticides, and veterinary medicines will certainly benefit the companies that manufacture and sell them, because it does reduce the ability of competitors to piggyback on their research. But it does not meet the public’s need for information.

We are not convinced that there is in fact a real need for this bill. This demand for law changes to extend the data protection period has come primarily from industry players. It certainly has not come from regulators like the Environmental Protection Authority or the Ministry for Primary Industries. The bill, in effect, actually ignores the advice from the Ministry for Primary Industries—

Hon Jo Goodhew: What?

EUGENIE SAGE: —and appears very much to be based on the demands of the chemical industry. The Associate Minister for Primary Industries is saying “What?”, but if she reads the regulatory impact statement, the Ministry for Primary Industries says “there is no compelling reason to increase the … data protection term for innovative compounds”, because, as the regulatory impact statement notes, manufacturers can patent those compounds for a 20-year term. So they do not have to worry about competitors developing copycat, knock-off products. So why is it needed to increase the data protection period from 5 to 8 years, when the Minister for Primary Industries is saying there is no compelling reason to do this?

We have got the Government here interfering in the market to benefit the big multinationals like Monsanto, instead of providing more transparency about what active ingredients are being used and their impacts and residues. As another speaker had noted, the Ministry for Primary Industries had also said that the extended “length of data protection may”—note, “may”—“provide an incentive to add ‘minor’ ”—note, “minor”—“uses to labels,”. In that regulatory impact statement the Ministry for Primary Industries is making it very clear that there is not a strong case for this bill.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Poto Williams—5 minutes.

POTO WILLIAMS (Labour—Christchurch East): It has been an interesting exercise in discovering what the Agricultural Compounds and Veterinary Medicines Amendment Bill is about. It is not an area that I am generally familiar with, so I have valued the opportunity to broaden my understanding and experience. From what I understand, in the Agreement on Trade-Related Aspects of Intellectual Property Rights of 1995 the regime for data protection was first set up—so the implementation of the 5-year protection around the registration of innovative agricultural compounds. As I understand, innovative ones are the ones with active ingredients that are new to the market, as opposed to non-innovative ones where you may use those compounds in formulations that may be for a species for which they were not originally intended. I note that a lot of the information that came out at the time noted that the industry was saying there was a potential for inhibiting the supply of products to the market around this protection issue. I think it is kind of central to where this bill is wanting to head.

The Agricultural Compounds and Veterinary Medicines Act currently provides for innovative compounds and medicines, but there is a balance, I guess, that it is trying to achieve between encouraging competition but weighting that against what may be discouraging the registration of those compounds. I think, in terms of intellectual property and what is noted here as “data protection”, it is a useful correlation to think about protecting the rights of owners of this data or this innovation or this information if you look at the wider context of intellectual property and extending the period of, in effect, having a monopoly in the market. So the arguments may be that it is possible that that may cause higher costs. Also, effectively, you could, potentially, be taking away competition, which may naturally force costs down and it could, potentially, even remove the incentive for innovation. Those are the arguments that I think need to be further explored, and this is why we are supporting the bill to the select committee, because there are some questions that need to be asked of it.

I think one of the criticisms about intellectual property and about the length of protection and the extension of that protection period is one of the arguments that has come up in the Trans-Pacific Partnership discussions. It is one of the things that people critical of the Trans-Pacific Partnership discussion, particularly around the pharmaceuticals, are concerned about. It is that lengthening the time for patents, for example, to be in place potentially drives out people who are wanting to innovate, it drives out competition, and it potentially could add cost to the end consumer. Just around the uses for non-innovative compounds, as I have said, where we are looking at increasing protection, there is a possibility to use those non-innovative compounds in new ways for new species.

Finally, I just want to make some comments about what I read that the Federated Farmers and those manufacturers of generic products were saying around seeking shorter production periods. I think that is a really interesting thing to look at, and I am hoping at the select committee that submissions will be made on behalf of those groups to really tease out what would be the appropriate length of time to have a data protection period in place. Just in conclusion, I just want to say we are supporting this to the select committee and there are one or two issues that we believe do need to be thrashed out. Thank you very much.

BRETT HUDSON (National): It is a pleasure to rise in support of the Agricultural Compounds and Veterinary Medicines Amendment Bill in its first reading. This is a Government that understands and appreciates the value of innovation to help to make us more successful, particularly on the world stage. We are a food-producing nation. Our primary sector needs access to the latest innovations and the latest chemical herbicides and other innovations to help manage pests, to increase productivity, and to improve the health of our farm animals if we wish to retain our place on the world stage and even grow our share of feeding the world.

I am sure it has not escaped the attention of members of this House that only just very recently we concluded negotiations on the Trans-Pacific Partnership agreement. It is an agreement that, once fully implemented, will unlock 800 million customers—800 million customers across 11 nations—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

BRETT HUDSON: —to our food producers. What Government would want to open up world markets of that scale to our producers only to hobble them by not giving them the extent of access to the latest innovations, particularly in the areas we are looking at here, in things such as herbicides, to make sure that we can maximise our productivity and be the best food producers we can be?

This is a debate that, before it reached the House, has been had between both sides of the industry—suppliers and users. They both agree that something needs to be done to ensure that our farms can gain access to the latest innovation. They support our doing this. It is a very, very sensible measure. I am pleased that it has got broad support across the House, and I commend this bill to the House.

Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): It is interesting timing that this bill comes to the House when, as Brett Hudson, the previous speaker, said, the Trans-Pacific Partnership agreement—well, we do not know what is quite in the agreement, but it currently lies before the corporations in the US and all of those people over there, but not before the members of Parliament in this House. But we are told that there will be issues in there related to intellectual property protection.

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

Hon DAMIEN O’CONNOR: There have been—and that is becoming very narrow, Mr Assistant Speaker. That intellectual property protection is at the core of this piece of legislation, and it works both ways. I guess if the members over the other side were to admit that, actually, the market does not always work, you actually have to intervene to offer protection to people from both sides of the debate, whether it be the suppliers or the users of, in this case, intellectual property related to chemical use. We are—or we have been in the past, and we will struggle to remain there—some of the most efficient producers of safe food in the world, and we are going to have to work really hard to maintain that reputation.

I do acknowledge some of the issues that the Greens raise here, because I do not think it is smart for any country or any producer of food to use more chemicals than are absolutely necessary to produce the amount of food that we need. But it is not smart to produce more food and sell it at less value, which is also the mandate that the Government seems to have taken on board. So the objective of this country must always be to produce the best-quality food, using the least inputs and the least amount of chemicals, to go to the highest-value customers. We should never forget that clear objective.

What this bill does is provide a little bit of protection for companies that, in the true Kiwi way, innovate with products or chemicals that are currently in use. This is not at the heart of new chemicals; it is what you do with those chemicals. We have in this country a number of chemicals that have been approved for use in certain crops or on certain weeds. What Kiwis do, as is our inclination, is we say: “Oh, maybe we could use that on something else.” because if it bowls over Californian thistles, it might do Scotch thistles, or it might knock out black-seed grass or something else that this Government seems to have let into the country because of its poor biosecurity systems. Kiwis tend to innovate. But there are, and there should always be, strict criteria over how chemicals are used. So when companies bring chemicals into this country, they have to go through an extensive process—through the Agcarm legislation and process—and then, of course, the hazardous substances and new organisms legislation, which says that we are not going to allow the use of any chemical that might in any way endanger the health of anyone who consumes the products from the things that may be sprayed or affected by this. We must uphold those standards.

When it comes to, as I say, new weeds that we might be trying to eliminate because of poor biosecurity standards—and there is an alarming number of new weeds and pests that come into this country every year because the National Government has not got a strict and robust biosecurity system. When farmers or horticulturalists want to address this, they will want to do so in a way that maintains the safety and integrity of the core product they are growing, be it apricots or apples or any kind of barley crop or whatever—you name it. So if a company that has a chemical that it uses on barley and someone or—no, let me go to actually a case in point that has been raised here, and it is with regard to fodder beet.

We have seen a rapid expansion in the use of fodder beet in the dairy industry, and we have got many chemicals that are registered for fodder brassicas but that are not, strictly speaking, registered for fodder beet. So when the farmers who are growing this rapidly expanding crop to feed their dairy cows want to control some of the weeds, they say: “Well, maybe we can just go and grab the chemical that we used on fodder brassica.” It might be all right on fodder beet, but it has been approved for fodder brassica, so you have got it a bit mixed up here. What companies could do is spend the money to get certification and approval to use it on the fodder beet. But what happened was that, having gained approval, the information was then available through the process. Someone who just came along with a new chemical with the key active ingredient could say: “Well, we want to register our chemical as well.”, and the company that has done the research and done the certification process then receives no protection.

I think it is reasonable that we offer some protection for the investment that those companies make in ensuring that we have the wise and safe use of those chemicals on a similar crop. So that is the reason that Labour will be supporting this bill’s referral to the select committee. But we are not going to give carte blanche approval to companies that are just going to come in and prevent innovation or other generic utilisation of chemicals in this country. We need to ensure there is a balance between innovation and protection of intellectual property.

Federated Farmers of New Zealand came along, as they often do. I think it is a rather naive approach to say: “We just want open competition. We want to drive down our costs and it is all going to be good.” I think that is a very naive approach. I think they must accept that the companies that bring in these chemicals—and as a part-time boysenberry grower, or probably a fairly poor boysenberry grower, myself, I am very aware of application rates of the different active ingredients in many fungicides, in particular, that there can be. In fact, boysenberries is a classic case where, for a small crop, companies have had to get approval to use fungicides used on apples or other things to be then used on boysenberries. There is a process they must go through to ensure that the consumers of boysenberries and boysenberry products are consuming safe products.

So I can understand, as both a producer and as a legislator, I suppose, the need to have a sound balance in this approach. I am not sure that the Government has got the balance right. It very rarely gets the balance right in legislation, I have to say. But we do trust the Primary Production Committee to actually investigate all these things and to make sure that we do get it right.

Labour will support this piece of legislation going to the select committee, to ensure that we get the balance right. But the objective, as spoken about by the Greens, of having safe food products from this country is absolute, and we will not allow the contamination in any way of those food products by chemicals that are not designed to be used at the rates recommended and under strict conditions on the crops that they are registered for. That is a core objective of this piece of legislation, I hope.

We say that leaving this open to the market forces, as the National Government does in most of its thinking in legislation, would not be appropriate here, and I acknowledge that National, for once, is accepting the need for proper legislation for a balance between the property rights of the chemical companies and the farmers and the protection of the safety of the consumers at the end. That is what we must ensure. We in Labour here understand full well the need to get that balance right. The select committee will investigate that balance. Therefore, Labour supports this legislation.

Hon JO GOODHEW (Associate Minister for Primary Industries): Well, I am delighted to stand at the end of this first reading of the Agricultural Compounds and Veterinary Medicines Amendment Bill having been unable to introduce the bill with the first speech. I do so having had the benefit of listening to the members present. I want to thank my colleagues for the examples that they have given of why this bill is important to the businesses in our agricultural sector.

I want to acknowledge some of the concerns that have been raised and to say that some of them have just been plain ridiculous—I will deal with that in a minute—some of them have clearly, perhaps, needed more reassurance and so I will give some of that reassurance. In terms of consultation on this bill, it has been with the Ministry of Business, Innovation and Employment, the Ministry of Foreign Affairs and Trade, the Ministry of Health, the Ministry of Justice, the Office of the Privacy Commissioner, the Environmental Protection Authority—it has been consulted—Treasury, Te Puni Kōkiri, and the Department of the Prime Minister and Cabinet, and this also has the support of the Ministry for the Environment, including those proposed in the Hazardous Substances and New Organisms Act administered by that ministry. So there has been considerable consultation.

This is not a fly-by-night bill. This has been awaited eagerly by those in this sector. By that I do not mean the hateful big businesses that the Green Party keep telling us about nor those dreadful farmers who would seek to put compounds on their plants. They are not all herbicides. Let me also say that this is about the welfare of animals—something I thought the Green Party cared about, but clearly not. The assurance that I want to give is that both sides of the industry, the suppliers and the users, want this. They have been waiting for it for a long time.

I want to thank our colleague Hon Damien O’Connor for his contribution because he comes with some experience in this field and he used that experience tonight to give a good example. The Government review found evidence that current protection levels may not be incentivising registration of these products here in New Zealand. It is important that we remember to use the word “registration”. We are not giving them carte blanche. Following that consultation the Government decided the best move was to make modest extensions to the data protections provisions.

So we need the agricultural industry to remain competitive. Why do we need that to happen? Why do we need the businesses in New Zealand to remain competitive? So they earn more revenue and so they pay more tax so there are more hip replacements, and better provisions for health, education, law and order, and the rest. The primary sector needs these chemicals to manage pests, to increase productivity, and ensure the health of farm animals. We need the right level of data protection, but it is a very small market so we need to encourage the overseas suppliers to invest in registering the new products and uses in New Zealand.

So this is about striking a balance between incentivising the registration of those products that the primary sector needs and encouraging competition in the agricultural market place as well.

This has not been dreamt up overnight. I am glad that the select committee will have a really good look at it and any of the issues that have been raised in this debate will be attended to. I look forward to hearing back from the Primary Production Committee as it makes its way through. I encourage all New Zealanders who have a view about these sorts of things—and, in particular, those who have been eagerly awaiting it—to get involved in the select committee process. I commend the bill to the House.

A party vote was called for on the question, That the Agricultural Compounds and Veterinary Medicines Amendment Bill be now read a first time.

Ayes 107

New Zealand National 59; New Zealand Labour 32; New Zealand First 12; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 13

Green Party 13.

Bill read a first time.

The ASSISTANT SPEAKER (Lindsay Tisch): The question is that the Agricultural Compounds and Veterinary Medicines Amendment Bill be considered by the Primary Production Committee. Those of that opinion will say Aye, to the contrary, No. The Ayes have it.

Steffan Browning: Party vote called for.

The ASSISTANT SPEAKER (Lindsay Tisch): Are you calling for a party vote?

Steffan Browning: Yes, Mr Assistant Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): Did you vote against it? You need to call out that you are voting against it, because I did not hear that. A party vote has been called for. I will ask the Clerk to conduct a party vote.

STEFFAN BROWNING (Green): Sorry, there was a mistake on my part. We are in favour of it going to the select committee.

Bill referred to the Primary Production Committee.

Bills

Standards and Accreditation Bill

Third Reading

Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): I move, That the Standards and Accreditation Bill be now read a third time. The Standards and Accreditation Bill will put in place new arrangements for New Zealand’s standards and conformance system. This will ensure that the system is viable, well functioning, and responsive to the needs of business, consumers, and regulators into the foreseeable future.

Since becoming the Minister of Commerce and Consumer Affairs I have had the pleasure of progressing a number of bills and regulations to improve the regulation of New Zealand’s commercial systems, including the legislation arising from the Accounting Infrastructure Reform Bill, financial markets conduct regulations, the release of the Responsible Lending Code, the regulations implementing the Credit Contracts and Consumer Finance Amendment Act 2014, and now the Standards and Accreditation Bill.

This bill establishes new arrangements for standards development and approval and updates the institutional arrangements for the Testing Laboratory Registration Council to better reflect the nature of its functions. This speech gives me a final opportunity to emphasise some of the key aspects of the new arrangements before the House. I want to emphasise the independence built into the new standards arrangements. Standards will be approved by an independent statutory board, the New Zealand Standards Approval Board. Collectively, the board must have knowledge of standards and the sectors that use standards. The board will be guided by decision-making criteria in the legislation when considering proposed standards and members of standards development committees.

Standards development will be the responsibility of the New Zealand Standards Executive, an independent statutory officer within the Minister of Business, Innovation and Employment. Both the board and the Standards Executive will have statutory independence. Neither is subject to the direction of Ministers. I am confident there is sufficient independence built into the new arrangements to preserve the robust reputation of New Zealand standards.

Further, the New Zealand Standards Executive is required to continue using independent committees of technical experts to develop standards. The bill requires standards development committees to have balanced representation from interests of stakeholders such as industry, consumers, and worker representatives and regulators. This remains consistent with current practice and reflects international and domestic expectations. I have heard stakeholder concerns, and I am confident stakeholder representation in committees will be appropriately broad.

The need to place the standards system on a sustainable financial footing was one of the key drivers for change. The bill does this by strengthening the current cost recovery model. The New Zealand Standards Executive will be able to negotiate arrangements that cover the full life cycle of standards, balancing initial development and approval costs with ongoing costs for maintenance and access. Locating the standards development function within the Ministry of Business, Innovation and Employment will also provide efficiencies and scalability that are simply not possible in a small, stand-alone entity.

The other drivers of change were to ensure standards are responsive to user needs and to ensure closer alignment and contribution of standards to health and safety, productivity, innovation, and international trade for the benefit of New Zealand. I am assured that the provisions in this bill are sensible and will be implemented effectively by officials.

New Zealand’s engagement with the International Organization for Standardization remains important. This bill will build on the robust international reputation of New Zealand standards and the involvement of New Zealand in the international standards arena. New Zealand is, and will continue to be, an active member of the International Organization for Standardization and the International Electrotechnical Commission. Standards will continue to be developed in accordance with international directives and expectations.

Worldwide a number of models for standards development are used. Many countries locate the standards development function within a Government agency. The institutional arrangements for standards in New Zealand need to be fit for purpose for New Zealand’s own circumstances. The bill expressly provides for New Zealand to continue the important function of contributing to standards development by international bodies and other national standards bodies. The bill provides for New Zealand to nominate members to other standards development committees, to attend international meetings of standards organisations, and to contribute to the work of other standards bodies.

In relation to accreditation, the bill updates the provisions of the Testing Laboratory Registration Act 1972 to reflect the contemporary nature of the functions of the Testing Laboratory Registration Council that relate to accreditation of testing and inspection services. The bill will also rename the council as the Accreditation Council.

I once again thank those who submitted to the Commerce Committee and the committee itself for producing useful commentary in only 4 months. As I said in my second reading speech, my view is that the bill is stronger for having been through the select committee process. I am confident that the bill can provide a sustainable and responsive standards and conformance system that meets the needs of business, consumers, and regulators and contributes to the health and safety and prosperity of New Zealanders, both now and into the future. I commend this bill to the House.

KRIS FAAFOI (Labour—Mana): It is a pleasure to speak to the third reading of the Standards and Accreditation Bill. I want to acknowledge the Minister of Commerce and Consumer Affairs and his remarks. There are some issues that he raised that we would agree with on this side of the House, but, in essence, since the select committee process we have had major concerns with how this piece of legislation has progressed.

There was an issue fixed here, and it was, as the Minister pointed out, around the financial viability of our standards process. I think there is no doubt that we agreed and that the Government has taken action to try to address that. But in this piece of legislation we believe the Government has tried to address that and has not addressed that, but has created a completely new issue around the independence of our standards-setting process. Concerns were raised, not just from the Opposition but—more important in this case, I believe—from a number of submitters to the select committee who have had decades of experience in this field. I will go into that a little bit later in my contribution.

I think that this is an example, though—because of the Government’s inability to listen to some of those concerns—where the Government has looked a little bit out of touch with what the industry, certainly, and those experts in this field have been calling for. We supported this piece of legislation at its first reading because we wanted it to go to a select committee to have those concerns heard, and we expressed concerns about the independence of the standards-setting body then.

We thought and hoped that after concerns were raised by us and by submitters, and being able to get some more scrutiny from officials through the select committee process, the Government might see that it was worth listening to some of those concerns. But unfortunately, in this case, the Government ploughed on, and the concerns of the Opposition and the stakeholders were not listened to. We believe that although the select committee did change this piece of legislation—for some it is better—it still has some fundamental issues that we do not believe have been addressed.

We do not believe, as I have said earlier, that the issues around the financial viability of the process have been addressed, and certainly we do not believe that the Government has made a positive move by putting the standards body, which used to be independent and stand-alone, within the Ministry of Business, Innovation and Employment. So we do continue to have concerns about that.

A lot of concern was raised about the independence issue, around our international reputation. I believe Minister Goldsmith raised that towards the end of his speech and said he was confident that New Zealand’s international reputation—a very good reputation; an excellent one, as we have heard through the select committee process—would stay intact. Unfortunately, that is not what many of the submitters who have been in this sector for decades said.

I do want to take the House to some verbatim quotes from the select committee submitters. One, from a member of the joint New Zealand - Australia committee on standards since 1995—a couple of decades of experience that should not be scoffed at—by the name of Diane Baguley, said that she opposed the disestablishment. If I can read this from the submission, she said she opposed “the disestablishment of the Standards Council and Standards New Zealand.” She “did not consider that the provisions set out for the establishment of the standards function within MBIE can adequately control the risks associated with the new structure, whether to the management of standards development or the reputation of New Zealand in the international standards community.”, so she was speaking directly to that international reputation. She went on to say: “The model proposed in the Bill, if realised,”—and this is what this third reading will do—“might even be used as an example by countries without robust government systems, with undesirable results.” She went on to say, with the example being that New Zealand is a well-respected country in the international standards community, that the argument from less-reputable nations was that “If New Zealand does it this way, then we should do it this way too.”

Also, another experienced person in the sector, by the name of Patricia Cunniffe—I think, if I remember—from memory, she made her submission on New Year’s Day. So she is someone who could have been out there having a summer holiday, but felt so passionately about this issue that she decided on New Year’s Day to send a submission on the Standards and Accreditation Bill to the Commerce Committee, which I think is an absolute commitment to the cause. She went on to say, also as a submitter to the Commerce Committee, “I remain unconvinced that placing New Zealand’s national standards body within MBIE will indeed ensure that the Standards system is viable and well-functioning”.

A matter of 5 minutes ago our Minister of Commerce and Consumer Affairs, Paul Goldsmith, said that he was relatively confident of those two things, yet we have got people who are dealing with this on a day-to-day basis—one of whom I mentioned made a submission on New Year’s Day—completely and utterly disagreeing with the Minister. That submission was made during the select committee process. Those kinds of sentiments, I think to the detriment of this piece of legislation, have not been listened to. I think she went on to say that the bill as it stands now is predicated on consumers being the recipients of standardisation, and not participants. She wanted to make sure that consumers were at the centre of that process.

There are other issues that we have with this piece of legislation that we have continued to voice during the select committee process, the second reading, and also at the Committee stage, some of them being concerns that were raised by the Council of Trade Unions—some of our brethren who are with us tonight, up in our caucus room. Those concerns were talking about not only the long-term financial sustainability of this piece of legislation and whether or not the standards process will be able to be continued as we know it but also were making sure that—they made a submission to try to make sure that there were protections within this piece of legislation for workers, which is one of the fundamental things that we do. It is one of the fundamental things that the Council of Trade Unions does and that this side of the House does. But, obviously, that was not heeded to in this piece of legislation, which goes to another piece of legislation that was passed earlier this year in this House around the protection of workers in the workplace—not just in the workplace, but also consumers and the general public.

I think that it is another sad and sorry state of affairs, where we can have this piece of legislation come through this House and concerns again raised by people representing workers and the Labour Party, and again ignored in this piece of legislation, through the many stages when it could have been taken on board by the Government. That was a concern, again, of our brothers and sisters at the Council of Trade Unions.

The bell has rung, so I believe I have got limited time left, but this was and is a missed opportunity for us to continue to keep our longstanding and excellent international reputation within the standards and accreditation community. But, again, it was overlooked and ignored by this Government. I think it is the very early stages of third-term arrogance where, despite the people who know better or who have more experience in this field on a day-to-day basis, the Government says: “No, thank you very much. We know what’s best. We are going to ignore what you, the practitioners, believe is best, and we are going to do what we think is best.” It does not solve the issue of financial viability around the standards process; in fact, it might make things worse. It also creates another, bigger problem around the independence of our standards-setting process, which Patricia Cunniffe and Diane Baguley I think spoke about more eloquently than any of us could.

It does matter that our international reputation stays intact, and therefore, for those involved, it does matter that our standards process is independent of any Government influence. Although the Minister can sit or stand and speak on that side of the House and talk to the confidence that he has in independence and our international reputation, well, I am sorry, Minister, but those at the coalface disagree. I think this Government and that Minister ignores them at their peril.

MELISSA LEE (National): It is a great pleasure to rise to speak on the third reading of the Standards and Accreditation Bill. I commend the Minister for the hard work that he has actually given on this bill.

I would like to begin by thanking everyone who has actually been involved with the select committee process. As the chair of the very vibrant Commerce Committee I say we have a very good committee process, and I would like to thank the Opposition members, as well as our Government members, and the clerks and the secretariat who have actually given a lot of hard work in getting this bill to its third reading.

When this bill was brought before the Commerce Committee I think we had around 130 submissions, and we heard about 21 of them. We have as a committee recommended a more flexible and proportionate approach to managing actual and perceived conflicts of interest for members of standards development committees, which was actually raised as a big concern at the committee when we were debating this bill. In addition, we have also made it clear that New Zealand will continue to be involved in the development of international standards. As I said earlier, the Commerce Committee undertook the role well, and I commend my colleagues for their contribution and time and effort to bring this bill back to the House.

I would also like to make it very clear that standards are very, very important to New Zealand’s economy and safety as a growing OECD economy. Standards are put in place to ensure that our homes, public buildings, playgrounds, electrical appliances—I even talked about light bulbs in previous speeches about this, I think—and health services are in fact safe for all New Zealanders.

Standards can be used, obviously, to protect people in our environment but they also have the capacity to increase productivity and drive innovation. In addition, they are generally voluntary. Firms can choose to use them, and support a standard, support competitiveness, productivity, and trade. Especially with the advent of the New Zealand - Korea free-trade agreement that was signed earlier in the year, in March, and with the Trans-Pacific Partnership agreement, we are actually dealing with numerous countries that we are working together with as trade partners, and I think standards actually become prominent and more important as a result. If, for example, when we are talking about standards, an electrical product is marked as meeting a standard, it means it has satisfied the minimum safety requirements—that is what we are talking about. Therefore, it is easy to see why standards are in fact crucial for our safety.

There is a huge impact on our economy as well. Standards actually underpin billions of dollars’ worth of exports, as I was alluding to prior, when talking about the Trans-Pacific Partnership agreement and the free-trade agreements with other nations. When we are talking about exports, New Zealand firms are dealing in a competitive environment with international partners, and standards actually become crucial. Standards provide access to markets and give quality assurance for the products and technologies that New Zealanders use on a daily basis. Standards improve the effectiveness, safety, and reliability of many goods and services used by consumers and businesses. It is clear that standards and accreditation make an important contribution to a more productive and competitive economy.

The new bill is designed to ensure that New Zealand’s standards, conformance, and accreditation system functions well and meets the needs of businesses, regulators, and consumers. The Standards and Accreditation Bill is part of the Business Growth Agenda and is aimed at strengthening the development and delivery of New Zealand standards, just as fresh legislation is being looked at to tackle obsolete laws, loopy rules, and out-of-date Acts of Parliament that are no longer needed in our modern and innovative society.

The new Standards and Accreditation Bill follows a comprehensive review to ensure our standards systems remain independent and sustainable. We sought stakeholder views on the effectiveness of current arrangements for standards, on options for changes to organisational arrangements, and on how standards could be developed and approved. With this new bill we will implement those voices that were actually heard as a result of the stakeholder consultation.

In short, the new bill will better align standards development with important Government priorities that are vital for our economy, such as innovation and trade facilitation. The focus of the Standards and Accreditation Bill is on preserving and strengthening what works with our current arrangements, and improving and reforming what is lacking from that. We are aiming to improve standards development that has been slow to reform standards that are out of date, as well. We are aiming here, in this House, to give real outcomes to business and industry. It is vital that New Zealand continues to be involved in the development of international standards and maintains its linkages with the international standards community, including the International Organization for Standardization and the International Electrotechnical Commission.

Through the Standards and Accreditation Bill we aim to provide an assurance that products and services are, in fact, fit for purpose—that standards play a crucial role in contributing to trade, innovation, health, and safety. As chair of the Commerce Committee, and as a National MP, I say that it is part of the amazing work that the Ministers in the House have put together, and I am very satisfied with the outcome. I commend this bill to the House.

CLARE CURRAN (Labour—Dunedin South): Well, from this side of the House you will hear a completely different perspective on this bill. Labour tried very, very hard during the progress of this bill, through the select committee process, listening to submitters—we tried very hard to support this bill because, on the face of it, it did not seem hugely controversial. It seemed as if there was a problem that had been defined.

There were some differences around the process that had been undertaken. The previous Labour Government had undertaken a process that had come up with a way of dealing with the problem. When the National Government got elected, it ditched that process and undertook its own. But we were open, our ears were open, and our eyes were open when this bill went through its first reading, which we supported, and it felt like it was not going to be hugely controversial.

How disappointed we are—how disappointed we are with the outcome. And listening to the member Melissa Lee just speaking on this bill as if somehow it was all terribly straightforward, and we are entering some bright new world, is a completely different perspective on what we have ended up with. What we have ended up with is a downgraded standards system in this country. I think that is really disappointing for a nation that is trying to pitch itself to the world as a modern trading nation that has high standards and that takes its role seriously in the world as a small, innovative country.

Unfortunately, the standards system that we have ended up with is open to concerns about conflicts of interest, regulated capture, and a lack of independence. The bill does not address the problem that it was set up to attempt to address, which was to establish a financially sustainable model, going into the future, for the development of independent standards that are fit for a nation of our calibre. Unfortunately, it does not reach that calibre. Instead, it actually opens up questions of New Zealand’s international reputation.

It is our belief that the approach that the Government has taken to this has been an approach that is based on the wrong premise, which was a premise of cost saving—how do we save some money? Therefore, we will absorb the standards function, the standards body, into a great big, monolithic department called the Ministry of Business, Innovation and Employment and we will make a few token gestures towards providing some statutory independence around that.

This is not just the Labour Party making it up, because we had numerous submitters. As I said, we went into this process with our eyes open. We did not have preconceived ideas about it. We sat at the select committee and looked at each other and said “Hang on a minute. There’s a problem here.”, and the problem became bigger. Unfortunately, the Government never addressed the problem—never substantially addressed it. It threw, as I said, a few token measures around it. So I think the people listening at home tonight should be a bit worried about this.

When listening to the Minister’s third reading speech, one of the telling phrases was “establishing an independent officer within the department”—within the department. An officer within the department is somehow going to provide independence for the standards function. The other critical phrase that was used by the Minister was that this was around “achieving efficiencies and scalability”. Well, that is ultimately the guts of this bill, and what it is intended to do is achieve efficiencies.

The Minister also referenced the alignment of standards—and I am paraphrasing here—with the determination of Government priorities. This is the crux of the problem with the bill: aligning standards with Government priorities takes away its intrinsic independence and the importance of that independent function. Unfortunately, this will not build our reputation. We believe that it will undermine it, and I would like to actually draw a little bit of a contrast between the New Zealand approach in this bill and Standards Australia, which is the organisation in Australia. It is “the nation’s peak non-government”—non-government—“Standards organisation. It is charged by the Commonwealth Government to meet Australia’s need for contemporary, internationally aligned Standards and related services.” That is about enhancing “the nation’s economic efficiency, international competitiveness and [contributing] to community demand for a safe and sustainable environment.”

Within this bill we have the establishment of a New Zealand Standards Approval Board, which consists of five to seven members appointed by the Minister, and we have a Standards Executive, which is where “The chief executive must appoint a suitable employee of the Ministry to be the NZ Standards Executive.” If that is not a downgrading of the functions of the independent standards body—and that is not discounting that there was a problem that needed to be solved around the financial sustainability—then I do not know what is.

We had submitters of high calibre who came before the Commerce Committee and spoke with eloquence and power to their deep concerns about the lack of independence, about the possibility of regulatory capture, and about the downgrading of the international reputation. Those are the things that moved the Labour members sitting on the committee to dig deeper, to ask more questions of the officials, and to not feel as if those issues were truly addressed in the final bill that came before the House.

Instead, what came back to the select committee and the changes that were made through the select committee process were in the nature of tinkering around the edges. It got to the point where we could not support the way forward because we feel that the lack of independence and the lack of representation, as my colleague Kris Faafoi said, of stakeholders—particularly stakeholders representing workers—on the overall committee was not dealt with and not listened to. The important concerns of submitters who talked about the lack of independence, the conflicts of interest, and the impact on our international reputation were of a magnitude to make us feel that this issue has not been properly dealt with, that it will have to be dealt with in the future, and that it will have to be relooked at in the future. That is a great shame, because there has been a lot of time and energy wasted in this process. Labour cannot support this bill.

BRETT HUDSON (National): I rise in support of the Standards and Accreditation Bill in this, its third reading. This bill is aimed at supporting our Business Growth Agenda to raise the prospects of Kiwis and their families. It provides structures, processes, and supports to help our businesses grow and compete both at home and abroad. Standards will improve the effectiveness, safety, and reliability of many goods and services used by consumers and businesses every day and throughout the economy. The proposed changes are aimed at ensuring that our standards system is well functioning and, importantly, meets the needs of businesses, regulators, and consumers. A well-managed standards system builds innovation by facilitating the creation and diffusion of technology by codifying technical excellence. What this bill will do is create a statutorily independent Standards Approval Board and, similarly, a statutorily independent Standards Executive, one that, among other things, will be responsible for appointing independent standards development committees.

It is somewhat unfortunate hearing again tonight the Opposition try to claim that this bill somehow weakens the independence of standards in New Zealand when it does exactly the opposite. If members had actually read or comprehended the bill, they would understand that in clauses 8 and 12 the bill is very clear that both the Standards Executive and the Standards Approval Board must act independently.

Simon O’Connor: Which clauses?

BRETT HUDSON: Clauses 8 and 12. Somewhat more regrettably, at the Committee stage a member of the Labour Opposition, Stuart Nash, seized upon one subclause that he said he believed showed that actually the Standards Executive would be at the behest of the Ministry of Business, Innovation and Employment’s chief executive officer. Never mind the fact that that subclause related only to elements that were not about the core functions of the executive’s role, such as ensuring that we meet our international obligations, that development committees are properly put together, and that they actually discharge the work of the standards appropriately and relate it to consequential impacts or conditions from other enactments. Never mind that—he simply meant that because it was there in some form, that would weaken independence. As I say, it was a shame those members either did not read or comprehend the bill.

But then, of course, there is also the real world that they have also missed out on. So again tonight we heard Ms Curran talking about how the Standards Executive being resident in the Ministry of Business, Innovation and Employment would somehow weaken its independence. Well, neither she nor any of the submitters raised the Registrar of Companies, the Commissioner of Patents, or the Official Assignee—each of which is a statutorily independent officer resident actually within Ministry of Business, Innovation and Employment. In the real world these officers are able to discharge their duties and act independently. It was Daniel Patrick Moynihan who pointed out that although people are entitled to their own opinions, they are not entitled to their own facts. Labour members clearly seem to think differently.

The reality is that this bill is a great measure to help support our businesses grow and compete in New Zealand and abroad. I commend it to the House.

James Shaw: Mr Assistant Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): Does the member want a call?

James Shaw: Yes, please, Mr Assistant Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): I call James Shaw, if you want the call.

JAMES SHAW (Co-Leader—Green): I do, Mr Assistant Speaker. I was not actually anticipating rising so early. I mean, my friend over there Brett Hudson was in such full flight—such poetry about this most poetic of subjects—that I was actually anticipating his going on for quite some time and I was not really prepared to rise to join with the other Opposition parties to oppose the bill.

We also supported the bill’s referral to the Commerce Committee, and that was because we acknowledge that the current system is not fit for purpose. The Standards Act dates back to 1988 and the Testing Laboratory Registration Act to 1972. We completely recognise that funding is a real problem and that the current system is not able to deal with the volume of demand for new standards and revisions of standards, or, as Melissa Lee said, to deal with the growing integration with our international trading partners and the need for international standards as well.

Debate interrupted.

The House adjourned at 10 p.m.