Wednesday, 10 February 2016

WEDNESDAY, 10 FEBRUARY 2016

WEDNESDAY, 10 FEBRUARY 2016

Mr Speaker took the Chair at 2 p.m.

Prayers.

Oral Questions

Questions to Ministers

Economy—Employment and Wages

1. JONATHAN YOUNG (National—New Plymouth) to the Minister of Finance: What recent reports has he received on employment in New Zealand?

Hon STEVEN JOYCE (Minister for Economic Development) on behalf of the Minister of Finance: Last week Statistics New Zealand released the labour market data for the December quarter of 2015. It showed that New Zealand’s unemployment rate had fallen to 5.3 percent, with 175,000 additional jobs created over the last 3 years. That means New Zealand has the tenth-lowest unemployment rate in the OECD, but that does not tell the full story. Our employment rate is the third highest in the OECD, New Zealand’s labour market participation rate is also the third highest in the OECD, and it was also pleasing to see that the proportion of 15 to 19-year-olds not in education, employment, or training is at the lowest level since records began.

Jonathan Young: How do changes in the average wage compare with costs of living increases?

Hon STEVEN JOYCE: Statistics New Zealand figures show that the average weekly wage is up 3.1 percent over the last year, to over $56,000, with real wages growing considerably faster than inflation, which is at just 0.1 percent. Treasury expects the average wage to reach $62,500 by 2020, with another 173,000 jobs forecast by then. These results highlight the importance of continuing the Government’s programme of microeconomic reform. It helps businesses have the confidence to invest and employ more people. This is particularly true given the signs of further international economic turbulence that we have seen recently.

Jonathan Young: What recent steps has the Government taken to support more jobs and higher wages through international trade?

Hon STEVEN JOYCE: Last week New Zealand hosted the signing of the Trans-Pacific Partnership agreement. This agreement means better access to 800 million consumers, in 11 other countries, which account for around 36 percent of the global economy. This will be New Zealand’s first free-trade agreement with five of those countries: Japan, Canada, Mexico, Peru, and the US, which is, of course, the world’s largest economy. The agreement means New Zealand firms have increased opportunities to diversify. That will translate into more jobs and higher wages for New Zealand families.

Grant Robertson: Is it correct that the household labour force survey shows that the labour force participation rate is lower by nearly 1 percent over the last year. That is 61,000 more people who have opted out of the labour market—six times larger than the fall in unemployment during the same period?

Hon STEVEN JOYCE: I appreciate the member’s new-found interest in the participation rate, because normally he rubbishes the participation rate. But for the member’s benefit, yes, the participation rate has dropped. I talked to Statistics New Zealand about that, so listen and you might learn something. Fifty percent of that is people retiring—50 percent of it is people retiring. The member may like to take the view that people should not be allowed to retire, and, of course, that is, possibly, Labour Party policy, but on this side of the House we think that once they have got to a certain age and they want to retire, they should be allowed to do so, with their superannuation.

Jonathan Young: What alternative prescriptions for New Zealand’s growth has he seen?

Mr SPEAKER: In so far as there is ministerial responsibility. I will be listening for that.

Hon STEVEN JOYCE: I have seen one or two commentators lamenting New Zealand’s reliance on dairy and the need to diversify. New Zealand, says one commentator in particular, is too reliant on dairy and needs to move up the export value chain. Unfortunately, this very same commentator has been a leading participant in opposing one of the single most important measures this Government has taken to achieve increased diversification and move up the value chain—

Mr SPEAKER: Order! I can sense exactly where the question is going to go, and it is not going to help the order of this House.

Tertiary Education—Student Debt and Fees

2. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he have confidence in the Minister for Tertiary Education, Skills and Employment in light of student loan debt being set to pass $15 billion this year?

Rt Hon JOHN KEY (Prime Minister): Yes, I do have confidence in the Minister, who is doing an excellent job of improving results in the tertiary sector. I note that since 2008 the Government has increased its investment in tertiary providers by 14.5 percent, to over $2.2 billion a year, and nearly 20,000 more New Zealanders achieved a tertiary qualification in 2014 than they did in 2008.

Andrew Little: Why have tertiary fees risen by roughly 37 percent on his watch, while Government tuition funding has risen by just 3 percent, and can he see that that has made tertiary education less affordable?

Rt Hon JOHN KEY: The first thing I think we reject as a Government is the Opposition’s numbers. But I think it is worth looking at what the situation is for a tertiary student in New Zealand. At the moment, taxpayers subsidise tuition for all students, and around 70 percent of the costs overall are borne by the taxpayer. In some cases it is over 80 percent. We know that 5 years after they have completed their Bachelor’s degree, the median earnings of those young people who stay in New Zealand are 46 percent more. I think that those students are getting a pretty good deal under the current settings.

Andrew Little: In light of that answer and his rejection of the fee rise of 37 percent under his watch, is he now saying that Statistics New Zealand’s tertiary and other post-school education price index that records the tertiary fee rise at 36.76 percent is unreliable and cannot be referred to?

Rt Hon JOHN KEY: No, what I am saying is that the member is generally unreliable when it comes to that.

David Seymour: Has the Prime Minister seen any reports that Universities New Zealand is concerned that 100 percent taxpayer funding of tertiary education could lead to cost constraints and declining quality?

Rt Hon JOHN KEY: The member makes absolutely the right point. Nobody has stopped going to university at the moment. They are free to get a student loan, obviously, and, as we have just commented on, the vast bulk of those were actually paid by the taxpayers. So all that would happen here is that the universities would get no more money; just slightly more would come from the taxpayer. Almost certainly the quality of those courses would fall. There would have to be control over the costs of those courses, and it would be yet another failed policy by the Labour Party.

Andrew Little: Does he agree with Steven Joyce’s statement about advanced education that “if you don’t have to pay anything for it, its value is nothing.”?

Rt Hon JOHN KEY: Well, I do agree with the Minister in the context of everything he would have said around this particular area, which were the only sensible comments being made. But I think if you go and ask most New Zealanders and say if someone can get a Bachelor’s qualification and after 5 years earn 46 percent more than the median wage, they pay off their loan within 6 years, and they have between about 70 and 80 percent of their costs paid for by other taxpayers, I would say that they would say that is pretty fair.

Andrew Little: Where does he get off laughing at New Zealanders who want better access to education, when his Bachelor of Commerce degree, which today would cost $18,000, was free; Bill English’s Bachelor of Commerce and Bachelor of Arts in English literature, worth $24,000 today, was free; and Steven Joyce’s 21-year epic zoology degree, worth $19,000 today, was also free?

Rt Hon JOHN KEY: The only thing that I am laughing at is the Labour Party—

Mr SPEAKER: Order! The level of interjections means I now cannot hear the answer. Just settle down on my left-hand side.

Rt Hon JOHN KEY: The only thing I am laughing at is the Labour Party, which last week was telling us that the biggest single issue facing New Zealand was the Trans-Pacific Partnership. We have not seen a single question in this House on that topic. [Interruption]

Mr SPEAKER: Order! If I continue to get interjections from the left-hand side, I am going to have to ask somebody to leave.

Andrew Little: Given his argument that people do not value free things, is he admitting that his degree, Bill English’s degree, and Steven Joyce’s degree have no value?

Rt Hon JOHN KEY: Far from that being the argument, the question will simply be that if it is completely free, will there be any control on the quality? If you take anybody who went to university at my time and who lived away from home, and you put them in the same positions today, even if those fees were free they would still have to borrow for their living or costs. There was still a charge back even when I went to university, so in the end it does not eliminate the student loans.

Andrew Little: Given his comments about the value of education, and his claim that his Government has cut low-value courses, what value does he see in courses that he funds on homeopathy for pets and iridology?

Rt Hon JOHN KEY: I am delighted that one of the first things the Government did was cut most of those, but I can be very confident, if Labour’s policy is introduced, that many of them would return. The only thing is, for Labour’s policy to return, Labour would have to win four elections, which on my calculations would take about 12 leaders.

Mr SPEAKER: Order! I have called for order from my left-hand side. It now also applies particularly to Mr Joyce.

Andrew Little: Is it not the truth that National opposed Labour’s interest-free student loans, National has ramped up fees by 37 percent, making access to higher education harder, and only Labour stands for affordable higher education and investment in everyone’s future so that everybody gets a chance to live the Kiwi Dream?

Rt Hon JOHN KEY: No, that is not correct. But what is correct is that in 2005, when the zero percent loan scheme was announced on the campaign trail by Helen Clark, (a) the Labour Party refused to, in fact, allow those costings by Treasury into the public domain; (b) the Ombudsman had to overrule that; (c) Trevor Mallard did not even want to front up because his knees were knocking on Close Up; and (d) it ended up costing a whole lot more than even Treasury thought. What we know about this scheme is it would be even worse. The truth is—

Mr SPEAKER: Order! No, I have heard quite enough.

Transport Infrastructure, Auckland—City Rail Link and Roading

3. JAMI-LEE ROSS (National—Botany) to the Minister of Transport: What announcements has the Government made recently setting out its commitment to the City Rail Link project in Auckland?

Hon SIMON BRIDGES (Minister of Transport): The Prime Minister recently announced the Government will work with Auckland Council to bring forward the business plan and formalise our funding commitment from 2020 for the $2.5 billion City Rail Link project. The council has indicated this would allow construction of the main works to start in 2018, at least 2 years sooner than currently envisaged.

Sue Moroney: Is that a definite?

Hon SIMON BRIDGES: A number of important and complex issues still need to be worked through with the council. But I am confident we will be in a position to finalise the business case later this year. Sue Moroney, I look forward to your first question.

Jami-Lee Ross: Why has the Government decided to bring forward the business plan for the City Rail Link and formalise its funding commitment from 2020?

Hon SIMON BRIDGES: The Government has been very clear that we would consider an earlier start if Auckland’s rail patronage and central business district employment hit certain thresholds committed to by the Auckland Council. Strong growth in rail patronage since 2013 means the 20 million annual trip threshold will probably be met before 2020. We also want to provide certainty for other planned central business district developments affected by the City Rail Link. All of this means we see real merit in working to formalise our funding commitment from 2020, allowing the main construction works to start as soon as 2018.

Jami-Lee Ross: How will the City Rail Link project benefit Aucklanders?

Mr SPEAKER: Order! If I have to start specifically mentioning people who will be ejected from the House if they continue this barrage, I can do so.

Hon SIMON BRIDGES: The City Rail Link will be one of New Zealand’s largest ever transport projects, with an estimated cost of around $2.5 billion. When completed, it will double the capacity of Auckland’s rail network, provide two new stations in the central city, and benefit commuters, whose travel times will be reduced significantly. For example, Auckland Transport estimates that a commuter travelling between Henderson and the planned Aotea station will save, on average, 17 minutes per trip. The Government’s recent announcement also provides more certainty for large-scale projects like the $350 million NDG Auckland Centre and the $680 million Commercial Bay tower. Both of these projects will pump renewed investment into the central business district, as well as creating new jobs. I am proud to be part of the “infrastructure Government” that is really bringing projects forward.

David Seymour: What percentage of total trips made by Aucklanders each year is 20 million?

Hon SIMON BRIDGES: I could not give the member a percentage. But, of course, at about 14 million in the last year, that is a very significant—indeed, exponential—rise in patronage by rail in Auckland. And I think most would agree that is a very good thing.

Rt Hon Winston Peters: Tell us, Minister, at the end of this plan how long will it take for a commuter by rail from Whangarei to get to the central business district of Auckland, when the rail is down to under 5 kilometres an hour in numerous places right now?

Hon SIMON BRIDGES: They will travel by an incredibly impressive road that we are procuring at the moment.

Sue Moroney: In response to that answer, has he seen reports this morning of a 17-kilometre gridlock on that road he just talked about, the Auckland motorway, and has he also seen the Radio Live poll conducted yesterday, where 90 percent of those participating want commuter train services between Tauranga, Hamilton, and Auckland? Does this not show that his “maybe, might be” reheated announcement on the City Rail Link is out of touch with what Auckland needs: a firm commitment on now? [Interruption]

Mr SPEAKER: Order! Any of those three supplementary questions.

Hon SIMON BRIDGES: I did see obsequiousness practised by the member with Duncan Garner yesterday on Radio Live, but what I can say is that accidents do happen. That does lead to congestion on some occasions, but that is true across all modes, whether it is road or rail.

Reserve Bank—Policy Targets Agreement and Inflation

4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he have confidence in the Governor of the Reserve Bank; if so, is he confident that the Policy Targets Agreement he signed with the Governor in 2012 is being fulfilled?

Hon STEVEN JOYCE (Associate Minister of Finance) on behalf of the Minister of Finance: Yes, and yes.

Grant Robertson: If he thinks that the agreement is being fulfilled, why did he introduce the 2 percent mid-point target for average inflation to that agreement, given that it has not been met for 4 years and is not forecast to be met for another 4 years?

Hon STEVEN JOYCE: Meeting the policy targets agreement is, ultimately, the governor’s responsibility. So over the medium term, we would expect to see inflation move back towards the middle of that band. The bank’s forecast shows that happening. The trick will be seeing that occur in practice, and that is the bank’s responsibility.

Grant Robertson: Why will he now not revisit the overall monetary policy framework, in light of his own statement: “The whole framework was devised to bring inflation down. No one ever thought it would be used to lift inflation, and central banks that have tried to lift inflation have found that pretty difficult.”?

Hon STEVEN JOYCE: I draw the member’s attention to the last part of the quote that he just gave. I would also draw his attention to the other quote that has been given in the last couple of days, which has indicated a bipartisan understanding of the Reserve Bank Governor’s role and challenges. I quote his own leader, who said yesterday that the Reserve Bank Governor has “been around in his job a lot longer than I’ve been in mine … He brings a lot of wisdom to his job. … I accept that yes” he is doing a good job in taking a medium-term horizon. I think that is something that is agreed with by both myself, on behalf of the Minister of Finance, and Mr Little. Mr Robertson is a little out of step.

Grant Robertson: Has he considered that what he is currently calling “unusual circumstances” in respect of low inflation might actually be the future norm and that he should take some action to review monetary policy instead of just sitting around waiting for something to happen?

Hon STEVEN JOYCE: The member should note that inflation has been outside the target of the agreement at times in the past. For example, back in 2008 inflation was at 5.1 percent, which was well outside the target range, and in that year real wages increased just 0.1 percent. I am confident that New Zealanders would prefer what we have now, which is the other way around: real wages up 3 percent, inflation at 0.1 percent.

Trans-Pacific Partnership—Outcomes

5. MARK MITCHELL (National—Rodney) to the Minister of Trade: What progress has been made to advance New Zealand’s trade links with the rest of the world?

Hon CHRISTOPHER FINLAYSON (Acting Minister of Trade): On 4 February representatives of 12 Asia-Pacific countries met in Auckland to sign the Trans-Pacific Partnership. This is a very positive development for our country. Successive Governments have worked very hard to achieve free-trade deals with large economies like the United States, Japan, and Canada for more than 25 years. The Trans-Pacific Partnership is estimated to boost our economy by at least $2.7 billion a year by 2030. It will provide much better access for our goods and services to more than 800 million people across 11 countries. These countries account for 36 percent of the global economy.

Mark Mitchell: How will the Trans-Pacific Partnership create significant new trade opportunities for New Zealand companies?

Hon CHRISTOPHER FINLAYSON: Tariffs will be eliminated on 95 percent of New Zealand’s trade with its new free-trade agreement partners once the Trans-Pacific Partnership is fully phased in. This will ultimately represent $274 million of tariff savings a year, around twice the savings initially forecast for the New Zealand - China Free Trade Agreement. As an example of this, tariffs on beef exports to Japan will reduce from 38.5 percent to 9 percent; tariffs on beef exports to other Trans-Pacific Partnership countries, including our largest beef market, the United States, will be eliminated.

Mark Mitchell: What misinformation has he seen on the Trans-Pacific Partnership?

Hon CHRISTOPHER FINLAYSON: Quite a lot. In fact, it is hard to know where to begin. For example, I have seen reports that because of the Trans-Pacific Partnership the Government will be sued by overseas corporations. In fact, investor-State dispute settlement provisions have existed in New Zealand free-trade agreements for the past 25 years, including the China and ASEAN free-trade agreements. These provisions have never yet been invoked against the New Zealand Government. The hurdle for breach is very high indeed. At the same time these provisions help protect New Zealand businesses investing offshore.

Dr David Clark: Why has his Government not undertaken any analysis of the labour market impact from the Trans-Pacific Partnership, when a study out of a US university has found the deal will see a smaller portion of our national wealth going to working people and a loss of 6,000 New Zealand jobs?

Hon CHRISTOPHER FINLAYSON: There is a very careful national interest analysis, which I would exhort the honourable member to read, that will be of much more value than a couple of left-leaning marshmallows in an American university.

Dr David Clark: I seek leave to table a document.

Mr SPEAKER: Order! The member is seeking leave to table—

Dr David Clark: To table a document.

Mr SPEAKER: What is the document—a brief description?

Dr David Clark: It is economic modelling commissioned by the Ministry of Foreign Affairs and Trade that shows that that market analysis—

Mr SPEAKER: Order! What is the source of the document?

Dr David Clark: It is the document to which he is referring.

Mr SPEAKER: Then, if he is referring to it, he already has it. Is it freely available?

Dr David Clark: Yes.

Mr SPEAKER: Yes, it is. Then we are not tabling it.

Economic Programme—Fiscal Strategy

6. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Does he stand by his statement to Parliament yesterday that he’s in government to make this country a better place for New Zealanders and their families?

Rt Hon JOHN KEY (Prime Minister): Yes.

Metiria Turei: Why is his Government’s fiscal priority spending on tax cuts in an election year, when it would cost only about $10 million a year to feed lunch to the thousands of kids who go to school hungry every day?

Rt Hon JOHN KEY: Firstly, the member is making assumptions about what the Government may or may not do in Budget 2017, but I would make the point that this is the Government that has actually ensured that all young New Zealanders who want to have a breakfast in their school may get that, and I think about 5 million of those have, literally, now been provided. This is the first Government in 43 years to raise benefits, and, obviously, that will be beginning on 1 April. This is a Government that is currently spending $4.3 billion per year on benefits, $2.4 billion on Working for Families, and $1.9 billion on subsidising housing for low-income families. We certainly want a competitive tax rate and a competitive tax system. It might come as a shock to the member that some people out there are very, very hard working and just deserve to keep a little bit more of what they earn.

Metiria Turei: Why has the Prime Minister prioritised spending on tax cuts in an election year, when he could, instead, properly insulate another 200,000 cold, damp homes?

Rt Hon JOHN KEY: The member is making some assumptions about what may or may not be in Budget 2017, but I would point out that this is a Government that has insulated over 300,000 New Zealand homes and is very proud of that record.

Metiria Turei: When the cost to our rivers and lakes of pollution from dairy farming is expected to cost around $15 billion to clean up, should he not prioritise the passing of tough new laws to stop this destruction rather than prioritise tax cuts for the very rich?

Rt Hon JOHN KEY: This Government has done a tremendous amount, actually, to improve water quality in New Zealand, including national standards and other measures that have been taken. In fact, if the member wants to stay tuned, she will be able to read the new discussion document on freshwater that will be coming out and see many of the policies and ideas that have been canvassed in that. She will probably enjoy reading that, and we will personally make sure that a copy gets delivered to her office so that she can read it.

Metiria Turei: Much appreciated, Prime Minister. Does the Prime Minister agree with the IMF that taking steps to “reduce the tax advantage of housing over other forms of investment” would help to fix the Auckland housing market and also help young families buy into their first home?

Rt Hon JOHN KEY: Firstly, in relation to tax, the Government took steps last year that were aimed primarily at the Auckland housing market but in relation to the brightline test. Secondly, the Government has indicated that there will be, almost certainly, a withholding tax applied to foreigners, which we are currently working on. Thirdly, it is my personal view that if you really wish to fix the issues in relation to house prices in Auckland, then that remains very much a supply issue, and that is why the Government’s focus of attention has been there. I think we are starting to see signs of that working, with record levels of consenting and building activity over the last 12 months, compared with, say, the last 7 or 8 years. That is more likely to be the most effective form.

Metiria Turei: Is it not time that the Prime Minister considered a proper capital gains tax to help level the playing field between those who are lucky enough to own their own home and those families who are still desperate for one, given that the IMF recommended reducing the tax advantage to housing?

Rt Hon JOHN KEY: I do not support the Greens’ policy, which has obviously just been announced by the member, of putting a capital gains tax on the family home.

David Seymour: How effective have capital gains taxes been at suppressing house prices in Vancouver, Sydney, and London?

Rt Hon JOHN KEY: Highly ineffective. One of the things that you see, though, in relation to places like Vancouver, Sydney, Melbourne, and the like, is that house prices have risen, but they have actually risen, in part, for the same reason as in Auckland: because this is now a place in a country that people want to come to. I remember when utopia was, for a lot of people, racing to the Auckland International Airport to get away from Helen Clark’s Government, but now—

Mr SPEAKER: Order! The question has been answered.

Metiria Turei: Why is his Government’s priority tax cuts rather than saving for our future, and will he announce the resumption of contributions to the Superannuation Fund before spending on tax cuts for the wealthy?

Rt Hon JOHN KEY: The member makes one correct point, which is that this Government has been more focused on savings than probably any other Government. Because of its tight fiscal management—and careful fiscal management—debt is likely to be around about $100 billion less than it would have been. What the Green Party does is come to Parliament every single day and tell people that they are going to be able to tax them more and spend more and believe that will have no impact on the indebtedness of New Zealand. Secondly, if the member really believes that the answer to all of these issues is to put money into the Superannuation Fund and get some remarkable return, then what the member should do is go and borrow $500 billion, whack it into the stock market, and see how she goes. She might do a little bit better than George Soros, but I suspect she probably will not.

Metiria Turei: Given that the IMF recommended yesterday new incentives for KiwiSaver, to address our “chronically low national savings”, does he still stand by his statement that “the removal of the $1,000 kick-start contribution will not make a blind bit of difference to the number of people who join KiwiSaver”?

Rt Hon JOHN KEY: In my opinion, yes, and it would not make any difference to national savings, because the Government would actually be borrowing that $1,000 to give to someone to put into their savings account.

Metiria Turei: What was the KiwiSaver enrolment rate this time last year, before he cut the $1,000 kickstart, and what is it now?

Rt Hon JOHN KEY: I do not have those numbers with me. The member would need to put that question down in writing or direct it to the Minister of Finance.

Metiria Turei: Does the Prime Minister genuinely think that spending on tax cuts is more important than hungry kids, polluted rivers, and saving for our future?

Rt Hon JOHN KEY: The Government spends in the order of $72 billion to $73 billion a year, the bulk of which is actually spent on a range of different areas such as, obviously, health and education, and a great deal actually on low-income people and people who are in need. What is absolutely true is that when a country has a competitive tax rate, which actually encourages people to work, gives them the incentive to save and take on extra employment, and actually ensures that inflation does not eat away at their income because of the bands that we have in our tax system, that is a fair model and system. Actually, our whole system relies on people getting out of bed in the morning, working hard, and paying taxes. In my experience, there are literally millions of New Zealanders who get up every morning, who do not want the Government to give them a handout, and certainly just want to have a fair system in which to operate.

David Seymour: Can the Prime Minister please confirm that cutting taxes is a priority for this Government; if not, can he explain to the House the difference between, on the one hand, not taxing money in the first place and, on the other, spending it?

Rt Hon JOHN KEY: The Government has indicated that within the right fiscal parameters, it would like to cut taxes for the reason that I think the member has pointed out in his question, which is that otherwise the burden of tax on individuals actually goes up over time because of fiscal drag, if for no other reasons, and, actually, we want to make sure that we have a competitive tax system. As we know, when we have a broad-based, low rate that is fairly applied, actually what you see is that New Zealanders get on and they pay their tax bills. They do not spend time trying to avoid taxes. What we know, actually, with the Green Party and, to be frank, with the Labour Party, is that all they know how to do is spend other people’s money, when the rest of the country is actually focused on how to make money.

Tertiary Education, Minister—Oversight

7. CHRIS HIPKINS (Labour—Rimutaka) to the Minister for Tertiary Education, Skills and Employment: Is he satisfied with his oversight of the tertiary education sector?

Hon STEVEN JOYCE (Minister for Tertiary Education, Skills and Employment): Overall, yes. I am confident in the system’s ability to monitor over $2 billion of funding to over 730 tertiary education providers who are lifting their performance every year and last year delivered 163,000 qualifications, up 31,500 on 2008, including some 29,000 Bachelor’s degrees, up nearly 5,000 on 2008. I am also confident that the Tertiary Education Commission will robustly investigate any funding concerns, and it is more efficient and effective than at any time in that organisation’s history.

Chris Hipkins: How can he be satisfied with his oversight when enrolments have dropped 20 percent, apprenticeship numbers have declined 22 percent, over $25 million in funding has been misappropriated, and there are at least three ongoing Serious Fraud Office investigations?

Hon STEVEN JOYCE: Weirdly, I think the member is wrong in three or four of those four statements.

Chris Hipkins: Why should the public have confidence in his Government’s management of education when it regards declining participation in post-school education as a good thing, regards closing a charter school fewer than 2 years after it opened as a success, and, in his own words, claims that participation in higher education “achieves absolutely nothing”?

Hon STEVEN JOYCE: I am sorry—I am rather stunned by the member’s questions. The third leg of that question is strictly incorrect and is a manufacturing and a twisting of a quote that is completely different. The second one should be directed to the Minister of Education, and the first one is also wrong, because the participation in post-school education, particularly at a full-time and higher level, such as universities, with degrees and post-graduate degrees, is higher than it has been at any time since 2008. So I think Mr Hipkins needs to go back to school himself.

Chris Hipkins: Does he stand by his statement “If you don’t have to pay anything for it, its value is nothing.”; if so, will he now pay back the $19,000 the taxpayer forked out for his zoology degree, which he clearly thinks is worthless?

Hon STEVEN JOYCE: Well, back in 1981 we were all in a different system, which had—

Hon Members: Oh!

Hon STEVEN JOYCE: Let me take you through it, because you are quite young, Christopher. It had a highly restricted access to university education. For example, I was the first in my family to ever attend university. These days most people get the opportunity to attend university if it suits them because we have a student loan system and a student support system that allow them to do so, and we have close to the highest numbers of full-time students at universities that we have ever had.

Chris Hipkins: What does it say about his oversight that less than a year after he chastised the Ministry of Business, Innovation and Employment for spending $15 million on a lavish headquarters upgrade, another agency he also has oversight for spent $20 million on a lavish upgrade including a $2.5 million “Stairway to Heaven”; or is it simply that when it comes to Steven Joyce all that glitters is gold?

Hon STEVEN JOYCE: Dear oh dear! We have drunk a little bit of V at lunchtime, have we not? The member needs to understand a couple of things. Although not at all resiling from the investment by the ministry in the upgrade of its building—which unlike when the Labour Party was around was always a new building, whereas these days they actually re-inhabit old buildings and with smaller floor spaces—I do not recall us signing off on the big buildings around town that were built under the Labour Government—like the Supreme Court—but I should point out to the member that the Minister responsible is the Minister of Education, and he might like to direct his questions to her, but I support the approach taken by the ministry.

Housing—Building Consents

8. ALFRED NGARO (National) to the Minister for Building and Housing: How does the number of homes consented in the last quarter of 2008 compare with the last quarter of 2015?

Hon Dr NICK SMITH (Minister for Building and Housing): The pace of new home construction has more than doubled nationally and more than trebled in Auckland. The exact numbers nationally—

Andrew Little: From a very low base.

Hon Dr NICK SMITH: Yes, it was a very low base under Labour, I accept that. The exact numbers were that in the last quarter of the previous Government 3,468 homes were built; in the last quarter of 2015, it was 7,718. The comparisons in Auckland were that 763 homes were consented in the last quarter of 2008 as compared with 2,718 in the last quarter of 2015. The pace of new home builds is at the highest for more than a decade.

Alfred Ngaro: What are the latest annual reports on home building numbers and values in Auckland; and how have they changed since the Government entered into the Auckland Housing Accord?

Hon Dr NICK SMITH: The number of new house builds in Auckland has gone from 3,700 in 2012 up to 4,600, then up to 6,300, and last year 9,250. This is an annual growth rate of between 20 and 30 percent in every year since the Auckland accord was signed. The level of investment has grown from $1.6 billion per year in the period around 2008 to now over $3.8 billion a year in Auckland. If we look at the number of people employed in the building and construction sector in Auckland, last year it grew by 31 percent in a single year, or an additional 20,000 tradespeople building homes in Auckland.

Alfred Ngaro: What reports has the Minister received on future home build rates in Auckland, and what measures is the Government taking this year to maintain this momentum?

Hon Dr NICK SMITH: The National Construction Pipeline report, which is produced independently, is projecting an additional 80,000 new homes being built in Auckland over the next 6 years. That compares with only 30,000 over the preceding 6 years, and it gives me optimism that we are successfully addressing the issues of supply. The next steps in our reform programme are the changes to the Resource Management Act, completing the unitary plan for Auckland, developing a national policy on urban development, and developing into housing blocks those quite large numbers of surplus Crown lands that have sat around for decades.

Dr David Clark: Does the Minister accept that the housing situation has worsened, according to the statistics, since the period of the global financial crisis 8 years ago that he quotes from in his initial question; if so, does he further accept that 8 years on people still cannot live in consents?

Hon Dr NICK SMITH: No, no—quite the opposite. If you look at all of the core statistics around housing, the number of houses that are being built in Auckland is three times the number from when Labour left Government. The number nationally has doubled. If we look at the number of homes that have been insulated, that number is over 300,000. In fact, in the years of this John Key Government, we will make more progress on insulating older homes than any Government in the history of New Zealand. I would also draw to the member’s attention the housing affordability data from Massey University, which shows that even in Auckland it is more affordable for housing today because interest rates are, of course, at a 40-year low, and nothing makes a bigger difference for Kiwi families wanting to buy their own home than the level of interest rates they are paying.

Regional Economic Development—Northland

9. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he have confidence in the Hon Steven Joyce; if so, why?

Rt Hon JOHN KEY (Prime Minister): Yes, I do have confidence in Minister Joyce, who is both hard-working and effective. I would say, after he released the Northland report last week and went up to Northland to do that—not only did it have 58 initiatives in it, but I dare say that Minister Joyce now knows more about Northland than the member does. In actually having been there once this year, he has probably been there more than the member has—[Interruption]

Mr SPEAKER: Order! This is the very last warning to Dr Megan Woods. If I hear her interject again, I will be asking her to leave.

Rt Hon Winston Peters: Seeing as the Prime Minister put it at issue, is it not a fact that I have spent more time in my electorate in the space of just 9 months than he has for the whole time he has been an MP in his electorate?

Rt Hon JOHN KEY: Not if you count time in your electorate being on a boat, fishing.

Rt Hon Winston Peters: How—

Hon Member: Well, that didn’t go anywhere.

Rt Hon Winston Peters: Of course it did not go anywhere, because it is not true.

Mr SPEAKER: Order! Less interjection from my right-hand side, and when the member—I call him for a supplementary question. Could we have the supplementary question?

Rt Hon Winston Peters: How can he have confidence in a Minister who launched the Northland economic plan and is so proud of it, when it catalogues National’s record: the unemployment rate there is 3 percent above the national average, nominal GDP—all in this book—per capita is 32 percent below the national average, and 20 percent of the population is living in deprived areas. Why is that a cause for pride?

Rt Hon JOHN KEY: Just to give a flavour of the facts that the member has quoted, which are not factually correct: the unemployment rate in Northland fell, actually, in the December quarter from 8.2 percent to 6.2 percent. It is certainly not new that Northland is a deprived part of New Zealand, but this is a Government that has actually been looking to do a number of things to change that position, and if the member wants to support them, including potentially more mining in Northland, reform of the Resource Management Act in Northland, more tourism activity, a whole bunch of other initiatives that were included in the document—58 in total—we look forward to his support. But as per normal, he will—

Mr SPEAKER: Order! The answer is long enough.

Rt Hon Winston Peters: How can this 58-point plan even touch the surface of Northland’s needs, when Mr Joyce confirmed that there are no monetary or fiscal changes to give it effect, or any plans for seven of the 10 two-laned bridges that he talked about or the enhanced taxpayer-funded cellphone tower coverage or the ultra-fast broadband or, for that matter, the Wellsford to Pūhoi motorway? Where is that in his—

Mr SPEAKER: Order! The question has been asked.

Rt Hon JOHN KEY: It is good to see the member is now supporting the Wellsford to Pūhoi part of the motorway. We look forward to that. The member should know, actually, that the Minister is not responsible for monetary policy in New Zealand, but when it comes to so many other initiatives like ultra-fast broadband and rural broadband and the likes, the Government is involved in that, and in terms of upgrading the infrastructure of roading and bridges. But I would just make this simple point: if we just want to have a point-for-point comparison, it is 58 to zip, because this Minister has come up with 58 initiatives for Northland and the “member for fishing” has come up with zero.

Rt Hon Winston Peters: When he and his colleague Mr Joyce were in Northland, albeit briefly, and promised 10 two-laned bridges, taxpayer-funded ultra-fast broadband, and extra cellphone coverage paid for by the taxpayer, and the Pūhoi to Wellsford highway, did they not plan to give it any funding to make it happen? Because if it was the plan, where is it in his master 58-point plan?

Rt Hon JOHN KEY: We are good as a Government—I am prepared to accept that—but even we do not think we can build roads, bridges, and ultra-fast broadband without putting in money. So, yes, there will be money following those initiatives, as there already has been. And, actually, that report indicates that we decided to put $4 million into the Hundertwasser project in Whangarei. There are 58 very bold and good initiatives in this plan, and the member should either come up with his own 58 or get on the bus and support it.

Trans-Pacific Partnership—Small Businesses

10. MELISSA LEE (National) to the Minister for Small Business: How will New Zealand small businesses benefit from the Trans-Pacific Partnership Agreement?

Hon CRAIG FOSS (Minister for Small Business): New Zealand’s small businesses will benefit from the opportunities of having an open market to 36 percent of the global economy and over 800 million potential customers. Our small businesses will have the opportunity to increase their margins and cash flows as tariffs are reduced. Improved cash flow will mean stronger, more confident businesses creating more jobs and higher incomes for Kiwis. Across the agreement the Trans-Pacific Partnership will reduce the kinds of barriers that disproportionately affect smaller businesses. In addition, small businesses will also benefit from the provisions outlined in chapter 24 of the agreement. The Trans-Pacific Partnership will make it easier for businesses to gain access to the regulations and requirements in the Trans-Pacific Partnership markets, and will mean less time waiting for goods to clear customs, lower compliance costs, and more predictability around other countries’ processes. This is consistent with article 176 of the China free-trade agreement agreed to by the previous Labour Government.

Melissa Lee: Why is it important to create more opportunities for small and medium sized businesses to export?

Dr David Clark: Because their numbers have dropped under this Government.

Hon CRAIG FOSS: Oh, listen carefully. More of our small and medium sized businesses are engaging in export sales. That is why it is important that we continue to create the export opportunities for those businesses. The most recent Statistics New Zealand Business Operations Survey shows that the number of small businesses engaged in export sales has increased from 14 percent to 21 percent since 2007, and for medium businesses engaged in export sales, it rose from 21 percent to 28 percent since 2007. In areas such as Southland, Tasman, Marlborough, and Hawke’s Bay 40 percent of jobs in those regions are in the export sector. Free-trade agreements such as the Trans-Pacific Partnership will ensure opportunities for regional New Zealand in particular. I agree with Helen Clark, who said it would be unthinkable for New Zealand, as a small, export-oriented trading nation, not to be part of the Trans-Pacific Partnership.

Melissa Lee: How will the Trans-Pacific Partnership benefit New Zealand small businesses not directly engaged in exporting?

Hon CRAIG FOSS: The Trans-Pacific Partnership will also benefit thousands of small businesses, and their employees, that are not directly engaged in exporting—from lawyers, to trucking businesses transporting goods to ports, to a plumbing or cleaning business doing maintenance at a food-processing plant; the list goes on. Those businesses will all benefit from the improved export growth confidence and the improvement to the positive outlook of those export businesses they are working with. Even those small businesses currently not facing tariffs will have growth opportunities as non-trade barriers between Trans-Pacific Partnership countries are addressed. I repeat, and agree with, the words of Helen Clark who said that it would be unthinkable for New Zealand—

Mr SPEAKER: Order! We have heard that before.

Border Control—Illegal Drug Interception

11. RINO TIRIKATENE (Labour—Te Tai Tonga) to the Minister of Customs: Does she agree with the Prime Minister’s statement that “We will confront the P problem, using the full force of the Government’s arsenal”; if so, why does an experienced Customs officer say that only one in 10 illicit drug imports is being seized at the border?

Hon NICKY WAGNER (Minister of Customs): Yes, I absolutely support the Prime Minister, and we have the objective data to prove it. Fact one, increased tools and intelligence by Customs has allowed it to seize a record number of drugs at the border for the last 3 years, and 2015 was the highest. Fact two, the number of meth users has decreased significantly, from 2.2 percent to less than 1 percent. The best news is that they are getting older, rather than younger. Fact three, the price of meth has remained high and stable. In fact, in Australia the price is one of the highest in the world. An increased supply would have seen it plummet.

Grant Robertson: I raise a point of order, Mr Speaker. That was a question on notice, there being two parts to it and the second part has not been answered.

Mr SPEAKER: I agree. Could the Minister address the second part of the question.

Hon NICKY WAGNER: There is simply no evidence to support that anonymous claim. As I have said, data in terms of the number of interceptions, in terms of the number of users, and the price of meth refute his rather fanciful ideas.

Rino Tirikatene: What proportion of drugs is Customs intercepting at the border?

Hon NICKY WAGNER: We are intercepting a larger and increased amount at the border. As I have said, we have got increased intelligence and an increase in the tools to do that. Over the last year, in terms of—

Mr SPEAKER: Order! Would the Minister please resume her seat when I get to my feet. There is a point of order?

Rino Tirikatene: I raise a point of order, Mr Speaker. I asked a very specific question of the Minister and she has not addressed my specific question regarding what proportion of drugs Customs is intercepting at the border.

Mr SPEAKER: Order! I invite the member to think carefully about his question. How would any Minister of Customs possibly answer that question accurately? I will allow the Minister to address the question, as she was.

Rino Tirikatene: Point of order, Mr Speaker.

Mr SPEAKER: Order! I have spoken. The member will resume his seat and allow the Minister to complete her answer.

Hon NICKY WAGNER: That question is impossible to answer, but all the evidence that we have points to increased numbers of interceptions and less use in society, and the stable price. If we were not—

Rino Tirikatene: I raise a point of order, Mr Speaker.

Mr SPEAKER: I hope this is a fresh point of order and is not in any way questioning a ruling I have already given. I will hear from Mr Tirikatene.

Rino Tirikatene: The Minister alluded in her answer to the primary question that the numbers in the primary question were wrong.

Mr SPEAKER: Order! The member will resume his seat. He is now starting to try my patience. The answer was given very clearly by the Minister. If the member had not been jumping to his feet to raise a point of order he may have heard it more clearly. Does the member have a further supplementary question?

Rino Tirikatene: How can the Minister be satisfied that the Customs Service is minimising the smuggling of drugs and precursors into New Zealand when there are only 800 front-line officers engaged in border protection, despite having a budget for 1,000 officers?

Hon NICKY WAGNER: I have absolute confidence in what Customs is doing at our border. What we are finding is that we are putting increased resources into new tools and into new intelligence, and, actually, the use of SmartGate, which allows the auto-processing of routine customers and allows our officers to deal with at-risk passengers. We have increased vigilance at the border. Let me reassure you that nothing is left to go past, and anything we have found is recorded for future intelligence.

Rino Tirikatene: Can she rule out any link between the performance of the Customs Service in intercepting drug precursors at the border and there being no decrease since 2008 in the availability of P?

Hon NICKY WAGNER: Yes, there is a link. It means that the Customs Service is doing a good job. As I have already said, interception numbers have increased. The year 2015 was a record year. The number of P users has dropped and the price has remained stable and high. Those are the best indicators that Customs is doing a good job.

Fisheries, Waikato—Release of Silver Carp

12. RICHARD PROSSER (NZ First) to the Minister of Conservation: What was her reasoning behind approving the transfer and release of silver carp near Lake Taupō?

Hon MAGGIE BARRY (Minister of Conservation): Let me make it very clear that I have not signed an approval to transfer, and that I have only signalled to the company an approval if the applicant and the Department of Conservation reach an agreement on risk mitigation and on potential penalties.

Richard Prosser: Is she completely confident that silver carp pose no risk to our trout fishery; if so, why?

Hon MAGGIE BARRY: In terms of the applicant and this particular farm, and I will keep it specific to this, the Department of Conservation’s technical and science advisory team has advised that this company has gone a long way down the track to mitigating silver carp staying within the ponds. Silver carp and grass carp, as the member may know, are breeds of fish that will not breed in New Zealand waters unless they have hormonal injections. So there are very many reasons through nature and through this applicant that would cause our Department of Conservation staff to say that this is one of the safer applications, but it has not yet been approved.

Richard Prosser: I seek leave to table a National Institute of Water and Atmospheric Research document from 2013 highlighting the risk of silver carp breeding in the Waikato River.

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

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

Richard Prosser: What evaluations have been done on the potential impacts of silver carp on New Zealand’s freshwater aquatic environment, including their potential impact on our trout fisheries?

Hon MAGGIE BARRY: I am confining my comments to the application that has come before me as the Minister of Conservation. As I said earlier, these fish do not readily breed in the waterways around the Waikato, let alone into Lake Taupō, without injections. So in terms of mitigation of risks around our fisheries, the wording that our team has used is that the risk to our fisheries and our waterways is highly unlikely, and that there is a low probability of fish escaping. As I said, I am confining my comments to the application that is before me as the Minister.

Richard Prosser: Is she aware that silver carp compete for the same diet as trout smelt, and they can grow to 40 kilograms in size?

Hon MAGGIE BARRY: That may well be the case. That is not what you were asking in the primary question in terms of the notification question that you gave me, and in terms of this particular application.

Richard Prosser: I seek leave to table a paper published by the Department of Conservation in 1999, which, among other things, says that proposals for the use of silver carp should be approved for experimental—

Mr SPEAKER: Order! It is a document published by the Department of Conservation in 1999. If members want it, I am sure they can find it.

Questions to Members

Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill—Purpose

1. Rt Hon WINSTON PETERS (Leader—NZ First) to the Member in charge of the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill: Why did he draft the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill?

Dr JIAN YANG (Member in charge of the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill): I believe it is necessary to better protect our children from child sex offenders. However, I did not originally draft the bill.

Rt Hon Winston Peters: What was behind his decision to introduce a limited bill to protect children from paedophiles, and will he support amendments at the select committee to capture paedophiles hiding behind name suppression; if not, why not?

Dr JIAN YANG: Yes, I am open to any suggestions at the select committee.

Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill—Impact

2. Rt Hon WINSTON PETERS (Leader—NZ First) to the Member in charge of the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill: What problem does the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill seek to address?

Dr JIAN YANG (Member in charge of the Births, Deaths, Marriages, and Relationships Registration) Preventing Name Change by Child Sex Offenders) Amendment Bill): At this stage, sex offenders can change their names legally, so my bill will address that problem.

Rt Hon Winston Peters: Does he believe this could be beneficial for the people of my electorate who are concerned that they might have a paedophile hiding amongst them?

Dr JIAN YANG: I believe—

Mr SPEAKER: Order! In so far as—the member can answer the question but certainly not refer to any specific case he may be aware of.

Dr JIAN YANG: The bill is trying to protect the environment for all children, so it applies to all of New Zealand.

Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill—Objectives

3. Rt Hon WINSTON PETERS (Leader—NZ First) to the Member in charge of the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill: What are the main objectives of the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill?

Dr JIAN YANG (Member in charge of the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill): The main objective of my bill is to protect children from sex offenders by preventing people convicted of a child sex offence from changing their names legally.

Rt Hon Winston Peters: Would he agree that a paedophile hiding in a community behind a new name is just as bad as a paedophile hiding behind name suppression?

Mr SPEAKER: This is an opinion question. In so far as there is responsibility, I will allow Dr Jian Yang to answer the question.

Dr JIAN YANG: It is our responsibility to protect our children under any circumstances, and to make sure that children have a safer environment.

Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill—Support

4. Rt Hon WINSTON PETERS (Leader—NZ First) to the Member in charge of the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill: What indications of support has he received for the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill?

Dr JIAN YANG (Member in charge of the Births, Deaths, Marriages, and Relationships Registration (Preventing Name Change by Child Sex Offenders) Amendment Bill): At this stage, on the first reading of the bill on 2 December 2015, the bill had the support of National, the Māori Party, ACT, United Future, and New Zealand First. So I will actually take this opportunity to thank the member and his party for their support.

Rt Hon Winston Peters: On the basis that National MPs have offered support, are there former National MPs in contact with him offering—

Mr SPEAKER: Order! There is no responsibility for that question.

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

Mr SPEAKER: Order! I want to hear from the member.

Rt Hon Winston Peters: He has a bill before Parliament, and I am asking a strict question that it could have gone to a submission or it could have gone to a written document or it could have gone to a phone record. I am asking him a plain question about support, and you are ruling it out before we even get to the end of it.

Mr SPEAKER: That is right. I am ruling it out of order because I am aware of a case that is completely suppressed, and if the member wishes to raise that, he knows he can do so via the Standing Orders and make contact with me. He has not done so. We are moving on.

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

Mr SPEAKER: It is a fresh point of order, I hope.

Rt Hon Winston Peters: Yes, it is a fresh point of order.

Mr SPEAKER: I will hear it.

Rt Hon Winston Peters: It is one of clarification, as well. What—

Mr SPEAKER: No. Points of orders are not for clarification. I have had—[Interruption]. Order! I just want to explain to the member that if he wants to raise a fresh point of order I am happy to hear it. But you do not then say that it is a fresh point of order and seek a point of clarification on a previous point of order that I have ruled on.

Rt Hon Winston Peters: I am talking about a misjudgment, in a legal sense, by you.

Mr SPEAKER: Order! [Interruption] The member will resume his seat. [Interruption] Order! I ask members to look very carefully at Speaker’s ruling 23/5. What that, in essence, says is that members have a right to raise a point of order, but once the decision is made, that is the decision that is made. Members do not have to agree with that decision, but they certainly have to accept that decision. To continue to raise points of order, and attempting to say that they are fresh, in order to relitigate a decision, will lead to disorder, and I will not tolerate it from the member. That concludes oral questions—

Rt Hon Winston Peters: You can run but you can’t hide.

Mr SPEAKER: Order! I call on Government order of the—

Rt Hon Winston Peters: You can run but you can’t hide.

Mr SPEAKER: Order! If the member the Rt Hon Winston Peters continues in that vein, I will be asking him to leave the Chamber for the rest of the day.

Debate on Prime Minister’s Statement

Debate on Prime Minister’s Statement

Debate resumed from 9 February.

Hon NICKY WAGNER (Minister of Customs): It is my pleasure to speak on the Prime Minister’s statement to Parliament for 2016. The National members are delighted to be back. We are full of energy and bright ideas and are ready to roll up our sleeves and get on with the work. We are absolutely focused on our ongoing plan—our plan to grow the economy so that we create jobs, raise incomes, and support New Zealand families.

Our agendas are full this year. We are committed to policies to make New Zealand a better place to live in, a better place to work in, and a better place to enjoy. I think all New Zealanders understand the benefits of living in a confident and prosperous nation, because that is where New Zealanders can get the best opportunities—opportunities for people to get ahead. I think we are making real progress. The figure that came out for the unemployment rate just last week, at 5.3 percent, is a great result. That is better than Australia, it is better than the OECD average at 6.6 percent, and it is significant because getting a good job is the best opportunity for anyone to get ahead.

It is also why the Government’s four priorities are so important. The first, responsibly managing the economy, and the second, building a more competitive and productive economy, go hand in hand. And it is not about growing the economy just for growing the economy’s sake; it is for what it can do for Kiwis. It is what it can do in creating new jobs, building more businesses, increasing incomes; and, most of all, increasing our tax take, which underpins the third priority of this Government, which is better public services—better public services. That is about quality health care; better education and training, particularly for our young people; investing in social development; investing to support families and giving them a hand up; and building the infrastructure—the roads, the trains, the bridges, the sewers, and the pipes—that all New Zealanders use.

And that brings us to our fourth priority, which is supporting the rebuild of Christchurch, which, of course, is very close to my heart as the member for Christchurch Central. That rebuild has probably been the Government’s biggest challenge since 2010 and 2011. International research tells us that it takes about a decade—about 10 years—for any community to recover from a major disaster like our earthquakes. And I think almost 5 years later, with the enormous amount of effort that has been put in locally and, actually, right across New Zealand, and with $17 billion of commitment from this Government, we have broken the back of it. I think we have broken the back of it because just last week the Earthquake Commission told me that it has repaired 68,000 homes and it has got only a couple of thousand more to go. Sixty-eight thousand homes—that is the number of houses in Nelson and Invercargill combined. So it just gives you an idea of the scale of that work.

Eighty five percent of the infrastructure in the city has been repaired, and we are on the positive side now. Most of our demolition has been completed, and we are beginning to build. In fact, our building expansion is going gangbusters. In the middle of last year we completed the Christchurch Bus Interchange. The interchange is a particularly important facility for Christchurch because it is going to enable us to revolutionise how we use public transport in our city.

Over the last year or so we have cleaned up the Avon/Ōtākaro River and we are developing attractions along the side of that river and public spaces. The most exciting public space that opened just before Christmas is the Margaret Mahy Family Playground, and I just want to take a moment to celebrate that playground. I take my hat off to the people of the Share an Idea process, who came up with the idea of a playground. The idea was that it would bring children and, therefore, their families back into the city, and it has worked a treat. Christchurch people—Canterbury people, actually—have taken it to the heart. It helps that it is the biggest and the best and the most glamourous playground, probably, in the southern hemisphere, and the fact that it was designed by kids, for kids. But do you know that over 100,000 people have used that playground since Christmas? They are using it day and night. One of the loveliest stories is that it is not enough to have the kids during the day, but the big kids and those who are young at heart are using it at night. And I think that is a really good sign, because it has so much light and it is so secure with its closed-circuit television cameras that people feel they can use it in the evenings. And the best thing about that is they are using it without alcohol, without drugs, and without violence.

It is an absolutely wonderful family facility. It has actually catalysed families coming back into our city. In fact, several families have told me they had a staycation this year. They stayed at home so they could enjoy the attractions of the central city: the new art gallery that has opened, the museum has had record numbers, the Re:Start mall, and everything that our city has to offer.

Let us just have a look at some of the more serious buildings, like the Christchurch Justice and Emergency Services Precinct, which will be completed this year. And that is important, not only because it is a fabulous building but because it is a new way to deliver services in our city. The police, the Department of Corrections, and courts are all working together in the justice precinct, and that will make it much easier to coordinate their approaches and to manage crime. In terms of emergencies, the police, the Fire Service, the ambulance, and civil defence are all working together as well. I think this hubbing of services will provide a far better service in a cost-effective way, and I think it will be a new model for other cities around the country.

Coming up following that are the Metro Sports Facility, the East Frame residential development, and the conference centre, and they are all progressing. When I look at all the development and design work that is going into these buildings I am sure that they are going to be absolutely world class and that they will be beloved by the people of Christchurch, just as they liked the facilities that they had pre-earthquake.

So I think I can, in all objective ways, say that we have broken the back of the tough stuff, but let me explain that there are still some people who are managing the issues of the earthquake. It is still difficult for them, and so it is really important that we put in support for those people, things like the All Right? campaign, which is to do with well-being and supporting people through this process and through mental health issues; the In the Know Hub, which provides information for people and connects them up to the services; and also the Residential Advisory Service, which gives people who are still struggling with rebuilds and repairs some help.

But I think it is also time that we look to the future, and I think the part of our future that is coming along is the Greater Christchurch Regeneration Bill. That is sitting in the House at the moment, and it ushers in a whole new wave of redevelopment and commitment to local involvement and local leadership as the Canterbury Earthquake Recovery Authority is wound up. The Regenerate Christchurch board will be jointly appointed by the Christchurch City Council and the Government, and it will bring local leaders with the skills, the expertise, and the passion to carry on that regeneration. They will focus on regenerating the central city and the residential red zone, which will be a wonderful swathe of green through the centre of our city, four times the size of Hagley Park, and they will focus on the rebuild and renewal of New Brighton.

It is a whole new phase for Christchurch as it looks to a vibrant future. This will drive new thinking and new ways of doing things, and really regenerate so that our city can grow and flourish. I think it is really important that Regenerate Christchurch helps us make the most of every opportunity that is coming along for us, to make sure that our city really fulfils its place for future generations.

So to recap, the National Government is energised. We are leaping into 2016. There is much for us to do but we are up for it, and we are looking forward to making a real difference to New Zealand and New Zealanders. Thank you.

MARAMA FOX (Co-Leader—Māori Party): Ā, tēnā koe, Mr Speaker, tēnā koutou ki Te Whare, koutou i haere ā-tinana mai ki tēnei Whare ki te whakatutuki i ngā mahi o te tau, kai te mihi atu ki a koutou ōku hoa mahi. Anō na te pai te tuku whakaaro ki a rātau kua mene atu ki Te Pō, i ngā rā, i ngā wiki, i ngā marama kua hipa atu nei. Tēnei te mihi atu ki a rātau kai roto i ngā ringa o Te Atua i tēnei wā, tēnā koutou.

[Greetings to you, Mr Speaker, and to you as a collective, the House. To you who came here physically to this House to complete the year’s tasks, I salute you, my fellow work colleagues. How nice it is once again to give a thought to those assembled in the void of recent days, weeks, and months. Those in the arms of God at this time, my tributes to you collectively.]

We are here to speak about the PM’s statement—the PM’s statement about the future of this country. I want to say clearly and loudly to the people of this nation that the Māori Party is here to add value not only to this Parliament but to our nation. We add value to this Parliament when we work with the Government of the day to ensure that the rights guaranteed under the Treaty to Māori are upheld, and that is not just for Māori; that is for the benefit of this entire nation.

Those people who stand up and say that to do so is divisive need to think about that, because in 1835 a collection of Māori chiefs declared this nation a sovereign nation. Under He Whakaputanga we declared this nation a sovereign entity on its own, and 5 years later we gathered at Waitangi, the birthplace of this nation, to enjoy a duality of nationhood, where two partners come together to celebrate living together in a pristine country.

When we talk about pristine, let us have a conversation about the Resource Management Act. Let us have a conversation that starts with Māori rights under the Resource Management Act, guaranteed to them in that Treaty and upheld by this Government, not put down as divisive and not put down, as some members and some parties would have us believe, as excluding others. This is not about exclusiveness; this is about inclusiveness, and under the Resource Management Act, if we can guarantee the rights and the protection of kaitiakitanga in section 6 and section 7, then that is not just for the benefit of Māori. That is for the benefit of this entire nation, and it needs to be celebrated.

That brings us to the argument over fresh water. Much we have heard in the last couple of days from a particular party in question that says that this is a divisive element, that we are “brownmailing” the Government, and that the Māori Party is not serving the interests of this country. I tell you that that is not us being divisive; that is that party being divisive. To go back to Ōrewa and to make those speeches in front of a crowd of sympathisers and to come out not 2 days after being at Rātana and to say that is divisive.

If those members want to make those claims over the Treaty having to be pulled out of the Resource Management Act, then why did they not say those things at Rātana in front of the Māori people? They need to stand up and own that, because, actually, do they vote on Treaty settlements? No, they do not. Do they support the Treaty? No, they do not. They use it as a tool to drive a wedge in this country and to split our nation. It is not exclusive; it is inclusive.

When we recognise the rights of Māori people and fresh water, we recognise the rights of all of us, because, actually, the Government will say that no one owns fresh water. Well, I tell you, if the regional councils in this country allocate fresh water, then they act like owners. When they allocate fresh water for the corporate needs of our farmers, of our industry, of our horticulture, and of those who want to bottle it and sell it for profit, that is corporate welfare. When we stand by as the observers of the degradation of our rivers, that is corporate, that is welfare, that is benefit fraud. That is exactly what that is. If we have to spend more of the public purse to clean up the rivers in this country so we can go back to the places where we spent our childhood, swimming in the rivers of this nation, and enjoy our time with our family, then that is corporate and benefit fraud, and that is what they are committing.

The Māori Party is not advocating for the rights and interests of Māori so that we can be exclusive; it is so that we can be inclusive. This country needs to stand up and recognise that recognising Māori rights, as guaranteed to them under the Treaty, ensures that our people can live in the duality of nationhood in this country. That is value added to our nation, not the deficit theorising that is going on over in that quarter of the House. It is not deficit theorising. When we realise that to include Māori is inclusive, we sit together in this country in the true understanding of what partnership means, and that is what we advocate for every single day when we come into this House.

I say to all who are listening that you have no need to fear because of Māori having rights and interests recognised. There is no fear in that. That was the irrational fear that the Labour Government tried to perpetuate over the foreshore and seabed. What? That we could not go to the beaches if you dared give some rights to the Māori? Well, lock up the doors, shut them now, keep your daughters locked away, because the Māori are coming. And we should fear that? That is the fearmongering that goes on in this place when we do what is popular and not what is right. What is right is to recognise those values, those things, those privileges guaranteed under the Treaty that we came together to sign at Waitangi—a partnership agreement.

So let me tell you about that, because 60 years ago Māori lived in this country next to its riverways as their source of life, as their mana o te wai. We lived there in a pristine environment, and since the allocation of water we have been merely observers to the degradation of our rivers, and we have sat on the sidelines while it has been allocated to the corporate benefit of those who produce our food. That is not a bad thing—people need to produce food, we need to eat, and we understand that—but it needs to be done in fairness. So if anybody thinks that that is exclusivity, it is not. It is inclusivity, and it allows all of us to live here together.

Actually, I think we should hold back 40 percent of water allocation for the good of our community so that we can never over-allocate our waters, so that our waters will be pristine and we can live in a country where we value our green, clean New Zealand.

Hon Te Ururoa Flavell: That is just the start.

MARAMA FOX: That is just the start. The Māori Party is not here just for the benefit of Māori, as people think. Yes, we advocate for Māori, but that is a good thing because we want Māori to be independent, not co-dependent on the Government. The Resource Management Act is one area where we can do that. The fresh water is another area where we can do that. And we can work on the Marine Reserves Act because, yes, we need to have places that are held in posterity for all of us, but not if it then further takes away the rights and privileges of Māori that are guaranteed under the Treaty.

Yes, we go on about the Treaty all the time, and people say “Oh, you’re only about Māori.”, but it is about value-add to this country. What is wrong with a kaupapa Māori model of practice that upholds everyone’s rights? When we guarantee the rights of Māori, we guarantee the rights of all in this country. That is not exclusive; it is inclusive, and we need to get that right.

This brings us to the Trans-Pacific Partnership (TPP) agreement. We have been vocal over the TPP agreement for a long time. Actually, in Pita and Tariana’s day they sat and put out a press release with the Greens objecting to the TPP agreement because we did not know what was in it. Now we know—6,000 pages of it. Now we know.

Well, I tell you we are not against free trade; we are just against unfair trade, because if there is not a greater distribution of wealth to all peoples in this country, then what good is it? What good is it to have a free-trade agreement if we have poverty in this nation? What good is it to have a free-trade agreement if we have homelessness in this nation? We have to have structural intervention in our system so that all people can realise the benefits of free trade—so that it becomes fair trade. Our people should not be struggling to buy a loaf of bread, a block of cheese, and a bottle of milk so that they can feed their children. That is the real struggle that people feel today.

The TPP agreement has a clause in it called the Treaty clause, as everybody has come to call it, and it guarantees the rights of our people. But, actually, it is up to the interpretation of the Government, and we only need to look back at the 175 years gone by to see that that is not always conducive to the thoughts of Māori. So if we have to rely on the Government to interpret it, well, we have seen what the Labour Government does—it just changes the law. We want to say to the National Government, be careful. This may be the same clause that has been in every free-trade agreement, but all those free-trade agreements did not extend to intellectual property, to biodiversity, to environmental issues, and to the Wai 262 claim still remains unrecognised today.

So we say to the Government that we do not support anything that breaches the rights of the Treaty, not just for Māori, but for all New Zealanders. That is what realising the duality of nationhood is. Thank you.

Hon ANNETTE KING (Deputy Leader—Labour): Can I, first of all, wish members who are in the House a happy New Year, and also a happy Chinese New Year, which we are celebrating in this Parliament this very evening.

Fletcher Tabuteau: Ni hao.

Hon ANNETTE KING: Ni hao. Most of us enjoyed our Christmas break with our family. We had fun, we had food, and some of us look like the emphasis has been on food. With the weather that we have had, with our victories in sport—and I have to say to the Prime Minister, none of them was he responsible for. It was all our great teams’ work. With the weather, the sport, the beaches, the activities, the grandchildren, and the holidays some of us have come back with recharged batteries. We have come back energised and excited about the year ahead.

What I found is that when you spend time with your family it often brings out some wonderful memories of days gone by. And it certainly did that for me over this Christmas period when I was around my family. It brought back memories of my own upbringing. I have to say, I was lucky enough—as I believe you were, Mr Assistant Speaker—to actually live what we call the Kiwi Dream. We actually got to live the New Zealand Kiwi Dream.

You see, my parents built their first home with a State Advances Corporation loan, and they were able to capitalise their family benefit to put a deposit down on that house. My old dad said to me: “You need to have a freehold home when you retire, then you will be safe.” I have had the chance to do that. I do own my own home. I have to say, not all our children do. I got that chance because my income related better to the cost of the house I was going to buy, which is not the case today. And my old dad, he was in the same job for 40 years, then he retired. He never had to change his job. His wages supported a wife and three daughters.

I got paid to train for my first job at the dental school. I got my first job from that training. I never paid for it; they paid me. I got a free tertiary education from Waikato University. I got the chance to get the jobs that I wanted.

I had the freedom of the outdoors—of family holidays, of clean rivers, of close family, and good food. I had my grandparents, who lived next door to us for most of my young life, and we had neighbours who looked out for us. The Kiwi Dream for many of us was a reality. That was our life. It was what made New Zealand unique—unique in the world.

The Kiwi Dream was central to who we were as New Zealanders. In this country we had the highest rate of homeownership in the world. That is what we aspired to. Around 80 percent of New Zealanders owned their own home by the time they retired. We had job security. We had jobs to go to. You could go from one job to another. You could train and retrain for a job. We had free education, and we had affordable health. We led the world in living the Kiwi Dream.

What saddens me is to see that dream slipping away for thousands of New Zealanders. It is like the Government is saying: “It’s not possible to have that dream any more. It’s not important. It’s a bygone era. It’s not needed.” Well, I have to say, I do not accept that. I will not accept that. I will not roll over and give up on New Zealand being the best place in the world to live, to love, and to work in.

What worries me is that I believe we have become a meaner country. We have become a more selfish country. We are a country that is more about me, me, me than about us. And our Kiwi values, I believe, are being changed at this very moment. It seems to me that what we celebrate now, and what we worship as success, is money. We see spoilt rich kids who have no concept of how thousands of their peers live just down the road. More and more people are being shut out of the Kiwi Dream, and this Government is closing that door. It is creating a new reality for New Zealanders.

You see, our economy is increasingly weighted in favour of those who already are doing well. I believe it started in 2009, at the height of the global financial crisis. It was tough for the world. New Zealand was a little luckier because the previous Labour Government had left this Government with no Government debt. It had paid down debt. It had the lowest unemployment rate in the OECD—and that is on record if the members want to go and look at it. But what did the National Government do in 2009? It gave tax cuts to the wealthiest percentage of the population in New Zealand. In the middle of a global financial crisis, its response was to give a tax cut.

Billions and billions of dollars have been given to those who did not need it, and those who had the least were told to suck it up because they needed to tighten their belts and they needed to ensure that we got out of the global financial crisis. The burden was placed on those who had the least. Now we are told that there are going to be tax cuts again, for the very same people. Surprise, surprise! The tax cuts are a promise for next year. Some of us know that next year is election year. So in election year, when there might be some money that could be spent on far better things, a few at the top are going to receive a tax cut. Not for our kids, not for those older New Zealanders who are looking to have the health services they need, not for free education after New Zealanders leave school—no, not for that. We are told by the Government that that cannot be afforded.

Well, it is all about priorities, is it not? Houses are now unaffordable for thousands of Kiwis. If you have got one and you live in Auckland, you probably feel you are a millionaire because your house is now worth a million dollars. But it is a house for a house, so if you change your house you are not going to be much better off unless you shift to Reefton, or somewhere like that. If you live in Auckland, you are living in the fifth-dearest city in the world for housing. Imagine that—in New Zealand. We now know that houses are the playthings of speculators, those who often live offshore, who come to buy up houses here to be able to sell them again and put the cash in their pockets and take it away.

We have a Government that turns a blind eye to poverty amongst children in New Zealand—and “poverty” is a word that must not be spoken. You may call it “hardship”, or “hard times”, but never say “poverty”. We have got health care that is stretched to the breaking point, and anyone who was at the Health Committee today would have heard how tough it is on an area like Auckland, with a bulging population, or on an area like Christchurch, where they are still suffering from the impact of an earthquake, particularly in mental health.

The Labour Party does not believe in that future. We have a different future for New Zealand, based on the inherent beliefs of Kiwis. They are beliefs that need to be rekindled by leadership and by a Government that is in touch with New Zealanders and believes in a chance for a decent, secure job, for a warm, affordable home, and for education for the future. We will make that happen.

The first part of our announcements came when we announced that we want to ensure our children and our grandchildren have the opportunity to have post - secondary school education, and the first 3 years of that education free—the same as I had and the same as Mr Joyce had, as Mr Key had, and as Dr Coleman had. We took it, but that Government does not want to give it back to our children. If we want a future for them, education has to be the future. As our job market changes, as we know that around 47 percent—is it 47 percent? No, I will not go there—I cannot find it in a hurry. We know that we have got a changing job market and that we are going to have many people out of jobs in the next 20 years. They need to be retrained into the new jobs that are coming. This is not our future. Our future is to rebuild that Kiwi Dream, and we intend to do it in Government.

Hon Peseta SAM LOTU-IIGA (Minister of Local Government): Thank you, Mr Assistant Speaker, and happy New Year to you and to all our colleagues across the Chamber. It is the first week back in Parliament in 2016. Xin nian kuai le. Hou nian da ji. It is Chinese New Year—the last couple of days have turned over the Chinese New Year—and tonight we celebrate that in Parliament with a function here, which I will be hosting.

It is a new year, and it is another year in which this Government—this John Key - led National Government—continues to focus on the issues and the matters that are important to all New Zealanders. It was interesting to hear the speaker who just sat down, Ms King, talk about the Kiwi Dream and talk about what is important to New Zealanders around education. What is important is education and jobs, and she referred to jobs. That is why this trade agreement, the Trans-Pacific Partnership agreement, is such an important agreement to get signed and get implemented, because we know that free trade with our partners across the globe helps to eliminate poverty. It helps to raise living standards, it helps to employ people, it helps to put clothes on children’s backs and food on the table, and it helps to look after our families, our communities, and, ultimately, this country.

What does it mean? Well, let us talk about the figures. In 2030 it will be approximately $2.7 billion per year. It involves 12 countries—12 countries where there are over 800 million potential customers whom we will be able to sell our goods and services to. I find it rich that a party that used to support free trade, a party that used to support enterprise and endeavour, is now railing against jobs, railing against economic development, and railing against the types of benefits and jobs that it used to promote.

Dr David Clark: Job losses.

Hon Peseta SAM LOTU-IIGA: I think—David Clark—that shows a lack of leadership and a lack of vision, and, certainly, it shows division amongst our opponents.

How do I know this? Visiting local businesses—and I visited a business with the Prime Minister. It is a dried meat products company. There, they were talking about how increased trade with China had led to more jobs within that company. They were talking about overtime for the workers, not just after hours but on weekends. They were talking about production runs that were looking to expand over time. They were talking about how this company, which is based in Māngere, could provide further opportunities for family members, friends, and others who were prepared to apply for jobs within that company. That came about only because of the free-trade agreement with China.

We have heard members opposite talk about the loss of sovereignty. Well, they know and we know, and the New Zealand public know, that the shared nature of free-trade agreements provides for some loss in sovereignty. You give up something in order to gain something else. These agreements, by their nature—even the one that was signed under the Labour Government, the Chinese free-trade agreement—have a loss in sovereignty. I do not get the argument that now, 8 years later, this has suddenly changed.

The second point that was raised by members opposite was around the lack of consultation. Well, these things, we know, are not done in the public gaze. There is an opportunity, through the select committee process, for the public to have a say in these matters—

Dr David Clark: After it’s been signed.

Hon Peseta SAM LOTU-IIGA: —well, after it has been signed, but they have a say in these matters—and you do not do negotiation in the public sphere. We all know that if we did that, we would not have a negotiation, we would not have an agreement, and we would have bickering amongst those members to that agreement. All I would say is that the proof is in the pudding on this trade agreement.

All I will say is that in 2008 our two-way trade with China was less than $9 billion. Today it is over $20 billion. China is our largest trading partner. We have over 30,000—

Dr David Clark: “Thank you, Labour.”

Hon Peseta SAM LOTU-IIGA: Yes, thank you, Labour. I will acknowledge it—thank you, Labour. But I would not thank Labour for depriving this country of a similar trade deal with 11 other countries, with over 800 million customers. I would not thank Labour for that, Mr Clark. We are talking about 30,000 students who come here every year to get their education. We are talking about 355,000 tourists—and growing—who come here and spend money in the New Zealand economy, expanding our tourism industry, and most important, expanding the job base in this country.

I just have one more example to add to what trade agreements give us. In my own electorate, Maungakiekie, locally in Mount Wellington, there is a company called Waste Management. It took a $900 million investment from Beijing Capital that led to over 400 additional jobs—400 additional jobs—for local people, for New Zealanders, where 400 families could be provided for. I challenge members opposite to argue against that and to say to those 400 extra workers that they cannot be provided for. Silence—that is all I hear from David Clark. Silence.

Jobs are important, and last week we heard the jobs figures—5.3 percent unemployment, which we are all proud of. Even the Labour Party is proud of our record on unemployment. But what I was particularly proud of were the figures around Pacific employment. Over 130,700 Pacific people are now fully employed in this country—130,700 Pacific people employed in this country. Why is that important? That is the most Pacific people to be employed in this country in our history.

Carmel Sepuloni: What’s our unemployment rate, Sam? It’s about 13 percent, isn’t it? Thirteen percent of Pacific unemployed.

Hon Peseta SAM LOTU-IIGA: Even Carmel Sepuloni likes it. Well, thank you, Carmel Sepuloni. We appreciate your support for those figures. What that shows is that in the last year, 14,500 extra Pacific people are now employed. She likes that. She has an angry face, but she still likes the fact that all those people are employed.

It goes alongside our education figures for Pacific people. Early childhood education rates are well over 90 percent, and it starts in the home. It starts at early childhood and goes right through the education system. Annette King asked why it is important, and these are the facts—these are the figures that show this National Government is good for all New Zealanders. But I am particularly interested, as the Minister for Pacific Peoples, to show that the record has actually improved the well-being and the welfare of Pacific people in this country. That is a record that we stand proud of every day. What does it mean? The National Certification of Educational Achievement (NCEA) level 2 rates—not just early childhood education but the NCEA level 2 rates—have gone up 46 percent since National took power. That is over 5,000 Pacific people who now get NCEA level 2 or above every year.

This year my focus is not just on ethnic communities and Pacific peoples. As the Minister of Local Government, I am looking to improve local services and improve the provision of local services by local government. I will work alongside local government, the mayors and the councils, with some reforms that will allow them and enable them to better utilise local government assets in order to provide better infrastructure, especially around water, around transport, and around the provision of utilities. I will be working alongside them to better monitor their performance to see what works in various local government bodies and what does not work. We know that there is some really good work being done in local government, but we also know that with a little bit of tinkering and a little bit of tweaking of local government, we can get it working better.

I think we are all in agreement that ratepayers demand services that are effective and efficient but also quality services that they can use and they can utilise. I will be working alongside those councils and Local Government New Zealand to improve those services. What does it mean? It terms of infrastructure it is over $110 billion over the next 10 years, between central government and local government, for the provision of infrastructure that will support jobs. So what does that mean? It means broadband outlay. It means bridges, roads, and various other infrastructure projects. I am particularly proud that the Prime Minister announced 2 weeks ago the $1.25 billion project in the East-West Link, which is in my electorate, in Maungakiekie.

So this is a Government that is moving forward. This is a Government that—

The ASSISTANT SPEAKER (Hon Trevor Mallard): The member’s time has expired. I will call Julie Anne Genter, but just before the member speaks, I say to members that I have indicated a couple of times to members in the last day or so to wind up their speeches. Basically, I do that when they run out of time, and I do not appreciate it when people—I think we have had three—keep on going until I stand up. If members persist in doing that, I just will not give them any time to wind up. Julie Anne Genter—a 5-minute speech with a bell at 1 minute.

JULIE ANNE GENTER (Green): Tēnā koe, Mr Assistant Speaker. Tēnā koutou e Te Whare. The Prime Minister’s speech really highlighted for me the wasted opportunity of the last 8 years. It was rich in the usual rhetoric about responsible financial management, paying down debt, delivering benefits to New Zealand, and growing the economy. We always hear a lot about that from the Government, but the reality does not quite match up with the rhetoric.

Credit where it is due—things are ticking along. This National Government is very good at focusing on the short-term and protecting the status quo. That much can be said for it, and it is true what the Prime Minister said, for example, about wages rising. They are rising just faster than inflation. So real median incomes, since National took power, has increased by about 2.8 percent. But for many New Zealanders they are not actually better off, particularly many who are living in Auckland, where house prices have increased by 80 percent during that time. So, obviously, some property investors are much better off than they were 8 years ago, but many people, particularly young people and low-income people, are going to find it that much harder to find a decent place to live that is close to jobs and education.

After 8 years, it is pretty clear that National is not going to do anything to reduce our shocking levels of inequality, which go back to the 1980s and the 1990s. There has been no plan to increase the supply of social housing. There has been a very half-hearted attempt to close the tax loopholes on property, which is unlikely to have much impact given how full of loopholes that particular legislation is. There is not even a plan to feed lunch to hungry kids in schools, even though we could easily afford it.

National has also shown that it is not going to do anything to rapidly increase the diversification and innovation in our economy. Our exports are a smaller percentage of GDP than they were when National came to power. Back in 2008, exports were 31 percent of GDP. Now they are back down to 28 percent. Over the last 8 years the export of low-value, unprocessed primary products, like milk powder and raw logs, not only have not declined as a share of our exports but they are actually growing faster than any other value-added category. So we have more of the same and no diversification, no innovation—and this is from Statistics New Zealand’s Global New Zealand - International trade, investment, and travel profile.

If we look at the breakdown of our exports we can see that total primary products have increased. Unprocessed primary products have increased, and in the processed primary products, the only thing that has increased is milk powder. Out of our total manufactures, the elaborately transformed manufactures and simply transformed manufactures have not increased at all. In fact, they have declined slightly since National has come into power, and, of course, the answer to that is to incentivise more research and development. Of course, we hear from the Government that that is what it is doing, but New Zealand’s overall investment in research and development has started to decline as a proportion of the overall economy. We invest less than half the OECD average.

National has also shown it is not going to do anything to substantially clean up our rivers or to reduce dangerous carbon pollution. So after 8 years of governing, not much has changed, except that Auckland house prices have gone up, we have more children in poverty, net debt has increased by $60 billion, and, of course, our carbon pollution has gone up considerably and is on track to blow out. But there is an alternative.

The Green Party knows that we can have a New Zealand where every child—every single child—grows up in a warm, dry, safe, secure home; a New Zealand where they can swim in our rivers without fear of getting sick, where they can walk and cycle safely to school, and where they can learn and succeed because they have access to healthy food in school. This is not a pipedream. It does not end there. We know we can have a New Zealand where those kids will grow up and be able to find meaningful work that makes the world a healthier and happier place and that does not simply rely on extracting more commodities from our land and water, and where they can get paid a living wage for that work, and if they fall on hard times or get sick or decide to start a family the Government will be there to back them. We know that looking after our people is the most fundamental key to having a healthy, happy, successful society.

National will say we cannot afford this; the truth is we cannot afford not to do it. The Green Party has the practical, costed policies that will deliver this, and we know that they work because they have worked overseas. This is the vision that we have and will deliver for New Zealand when we are in Government.

KEVIN HAGUE (Green): New Zealanders value in their Prime Minister someone who has a sense of humour and who has a self-deprecating wit, but they also value someone who applies gravitas and sensitivity when those are appropriate and who has the wisdom and the judgment to know which to use in which situation. The Prime Minister’s personal poll ratings have been increasingly lagging behind the Government’s level of support from New Zealanders, so it is evident that an increasing number of New Zealanders now believe that the Prime Minister we have now does not have the wisdom and judgment to make an appropriate call about which mode he should be in. No doubt their opinion would have been bolstered by his speech in the debate on the Prime Minister’s statement yesterday. It was unfortunate. It was a series of try-hard sporting references, dad jokes, and then a gallop through platitudes about the economy, when New Zealanders are crying out for courage, wisdom, and leadership.

I was reminded of a Fairfax piece that I read recently about words used in this Prime Minister’s state of the nation speeches. He has given eight of them so far, and in those state of the nation speeches he has used the word “economy” 94 times, he has used the word “growth” 63 times, and he has used the word “businesses” 54 times. In those eight speeches he has never used the word “poverty”; he has never used the phrase “climate change”. The evidence is that this is a Government that does not care about poverty and does not care about climate change.

In this House, repeatedly, day after day, we have seen Government Ministers bat away challenges that they adopt a measure for child poverty. On our side, we have said “We do not care which one it is you choose. Just choose one and monitor that.”, and they consistently refuse to do it. When it comes to climate change, just days after the ink was put on to the Paris Declaration, our Prime Minister, John Key, was out there saying to New Zealanders: “It’s OK guys, it’s still business as usual as far as we’re concerned.” They do not care.

So it is tempting to think that this could be a traditional National Government—one that just muddles along and actually does not do very much—because it interprets action as being political risk. That is certainly the pattern that National Governments of the past have had. But, actually, this is not a Government that is bereft of ideas. It is just a Government that is smart enough to know that it needs to hide its ideas, because if it exposes them it will not be popular with New Zealanders. It is a Government that fetishises economic growth. We do not know whether that is because of ideology and that Government members simply believe the old trickle-down theory that everyone will benefit—you know, a rising tide lifts all boats, and the rest of it—or instead whether it is because they genuinely believe that their job as Government is to advantage the wealthiest few. But, actually, it amounts to the same thing. The effect is the same.

The effect is that they put economic growth as the entire goal of their Government, and people and the environment are forced to serve that goal. What that means is extracting as much value as they can out of labour and extracting as much value as they can out of the environment, which they think of as raw materials and waste disposal. New Zealanders deserve more than that. New Zealanders deserve long-term thinking from their Government. New Zealanders deserve a Government that delivers a fair society and a sustainable relationship with the natural world and understands that it is the economy’s job to serve those goals. And, above all, New Zealanders deserve a Government that will deliver leadership and a long-term vision. They do not have that now.

Hon LOUISE UPSTON (Minister for Land Information): It is somewhat surprising to follow a Green member—well, actually, no, it is not—when, actually, they think the worst thing a Government could do is focus on growing the economy. Well, guess what? A growing economy is good for families, it is good for communities, and it is good for our country.

It is always fascinating to follow the Greens when they focus on lifting children out of hardship, which is absolutely what this side of the House is committed to and focused on, and that is absolutely why we focus on growing the economy. Until we are focused on growing our incomes, improving the quality of life for New Zealanders, well guess what? We will still have children in hardship.

It is why on this side of the House we have fed more than 6 million children breakfast in schools. But, as the Prime Minister said today, every single child in New Zealand has that opportunity. This is a Government that is absolutely clearly focused on growing the economy because of the benefits it delivers to hard-working New Zealanders. It is just staggering that the Opposition forget that actually you cannot have a growing income and you cannot have families who have more in their pockets every week and each week without having a growing economy.

So we are focused on—yes—creating more jobs, creating higher incomes, providing greater opportunities for each and every New Zealander. So it is interesting—[Interruption] I do not know where those members have been over the Christmas break, but I want to talk about some of the comments that have come from constituents in the Taupō electorate, because the real kind of attitude out there is a really positive, confident attitude. Whether you are a business owner, whether you are a mum, or whether you are an exporter, that is the common thread. Whether it is Cambridge or whether it is Tūrangi, the atmosphere is one of just quiet confidence.

They like the stability. They like the fact that this Government has a clear plan and that we are delivering on it each and every day. And when the Prime Minister stood in the House yesterday, gosh, that list was long. Yes, he had to rush through some of it because he would not have been able to get through all of it in the 20 minutes allocated, so I want to cover a few of those that are particularly pertinent to my electorate and the people I represent and also to touch on some of the plans of work for the constituency.

Of course, I would start, given that in my electorate the majority of the jobs are in farming, forestry, and tourism—well, guess what? The Trans-Pacific Partnership (TPP) agreement is a very good deal for the constituents in my electorate. It means they get to export more, they get to create more jobs, they get to employ more locals, and they get to take on more apprentices from our community. And, actually, I think that is fantastic news for families in my electorate, because that is what they want. They want to have a clear plan from the Government, which is exactly what we have, and they want to be able to have a plan for their young people in terms of education and training. They want to go into a career that has fantastic prospects, and absolutely we do have a plan.

But I am staggered that members on that side of the House have quite happily crowed about the benefits of the New Zealand - China free-trade agreement—and even in this very debate they have done that—and yet they are sitting there saying: “Oh, we won’t support the TPP agreement.” Well, if I look at businesses and families in my electorate, what do they want? They know that we grow the economy by selling more to the world. So whether it is a tourism operator who is running a jetboat in Cambridge, or whether it is a new geothermal forestry plant that is doing value-add for our wood processing in Taupō, that is what counts, because until we are growing our markets overseas, we are not going to grow our jobs and our incomes at home.

I want to touch on a couple of specific things in the electorate that I think are worthy, because we have heard it here—this is the infrastructure Government. It was really interesting last year when I surveyed all of my constituents. The top issue that they talked about was infrastructure. So, of course, on 15 December it was fantastic to open the Cambridge section of the Waikato Expressway, because that is about jobs for locals, but, more important than that, it is about safe transport and it is about getting our goods to market faster, and that is just one of the sections of the Waikato Expressway, which is one of our roads of national significance. But you would not get that road if the Labour Party was in Government. I do not know about you, but if you have not driven on it yet, I would encourage you to. It is a beautiful stretch of road.

In terms of infrastructure, broadband is also incredibly important. If you look at the Waikato, over 250 schools—whether it is new entrants, intermediate, or high school—are now connected. So, as a mother of three teenagers, I know how connected they are both from a social perspective and from a learning perspective. There is absolutely no way that we can have schools in our country that are not connected and providing that learning opportunity for our children. So it is fantastic to see the ongoing investment that is coming but also the anticipated 4,000 jobs that come from that level of investment.

I think one of the other things I want to touch on, given the Waikato, is also the unemployment rate. The national figures have just come out at 5.3 percent; Waikato is at 5.1 percent. But the particular aspect of it is that we have seen in the last year that women have the highest levels of participation ever. I think that is really fantastic, because if you are talking about what makes a difference to families, it is the income that comes in the door to support each individual family. So I think that is a fantastic result that we have had in the last year.

We have talked about export. Another key part of growing our economy comes from attracting investment. So one of the pieces of work that I will be progressing this year as the Minister for Land Information is the Overseas Investment Office fees review. As I have said in the House before, we have got to make sure that we are maintaining that balance of New Zealand being open for business but also protecting the rights for New Zealanders and making sure that those investors who are looking at the opportunity understand that it is a privilege to own land and assets in New Zealand.

So an extension of that is the tax compliance work that we put into place last year to make sure that everyone—whether they are a foreigner or a New Zealander—who is investing in residential housing is paying their fair share of tax. I object to the comment from the Greens member before me, Kevin Hague, that suggested that this side of the House is not tightening up on property taxation. I would struggle to list fewer than 10 things that we have done to tighten up tax compliance for a whole range of areas, but very definitely at the top of that list is property compliance. We think that if you are due to pay tax, you should pay it. That is fair and square. So whether you are earning a lot or a little, we want to make sure that you are paying your fair share of taxation.

The other thing I want to touch on, which is not something that gets aired a lot in this House, is the Open Government Information and Data Work Programme. As the Minister for Land Information, I am proud to lead this piece of work. And it is really important because, as the Prime Minister said in his statement yesterday, our focus is on social investment for public services, which is getting better results through evidence-based data. So whether it is the Data Futures Partnership or whether it is the Statistics New Zealand Integrated Data Infrastructure programme, it is about making more of the Government data available to others—public sector, private sector, and civil society—because it is actually the use of that data that we will use to grow our economy.

The final point I want to touch on is the 1 April changes, which I think are incredibly beneficial for New Zealand families. Yes, we focus on a growing economy. Why do we do that? Because at the end of the day, we want to provide more for those hard-working families. On 1 April we are increasing paid parental leave, but, more important than that, we are actually making it far more flexible so that it will work for more New Zealand families and there will be more families who are entitled to get support in those first critical weeks and months of a baby’s life.

National is focused on supporting families, whether it is increasing paid parental leave, whether it is extending free GP visits, or whether it is helping more Kiwis to get into their first home. We are focused on increasing our exports and growing our economy, but we do that so we can better support Kiwi families. We are still focused on what matters to New Zealanders.

Dr DAVID CLARK (Labour—Dunedin North): New Zealanders have simple aspirations. We want to lead a good life with the people closest to us, and we want the chance to own our own home. We want an income that means we can look out for the people we love. We want time to spend in the outdoors, enjoying the best that our clean, green country has to offer. That is the New Zealand that I grew up in. It is the stuff of the Kiwi Dream, a dream that is central to our country’s identity. Unfortunately, the current Government’s obsession with the interests of an in-crowd is crowding out those very aspirations for an increasing number of New Zealanders.

Inequality is growing in New Zealand. We know this because we are told we have a rock star economy, yet real household incomes in some parts of New Zealand are still lower—and that is over half a decade since the global financial crisis ended—than they were when this Government came into office. We know this because homeownership is now at its lowest level in 60 years. Our economy needs to work for Kiwis, not just for a handful of National Party in-club cronies.

As I said, things used to be different. We have had an economy that worked for us before, and on this side of the House we know that under an Andrew Little - led Labour Government we can have that again.

I grew up in the land of milk and honey, knowing that New Zealanders could foot it with the best in the world. Our living standards were better then; we measured better on the scales than those countries we like to measure ourselves against. Back then, success was not guaranteed. My father built his own small business. He had to learn new skills to make that happen. Around the same time, my mother went back to high school, and then eventually she went on to study to become a doctor. Both of my parents made sacrifices for their successes, and things were tight at home when I was younger. But in our country of opportunity, when the Kiwi Dream was real, talent and persistence paid off. Plenty of kids I know had far more difficult childhoods than I had, and plenty of them have succeeded beyond their wildest dreams. Back then, it seemed like anything was possible. The Kiwi Dream involved the possibility of the poorest kid in the neighbourhood succeeding and becoming one of the wealthiest people in the country.

Now we see an economy that is increasingly weighted in favour of those who already have privilege, those who are already doing well, and we see an economy that puts up barriers to stop other people getting ahead. Of course there are Kiwis who continue to succeed today, but we all know that conditions are tougher, particularly under this Government. Fewer small businesses are being created. The income tax changes have ensured that the wealthiest portion of New Zealanders have a higher income than they used to while middle New Zealand is going backwards. We need a Government that backs the Kiwi Dream. We need to make it possible for more Kiwis to succeed. The truth is that our economy does not work for us like it used to. Those of us who are doing OK are uncomfortable with the fact that in the sandpits our children play in there are other kids who do not have food, necessarily, for school, who do not have shoes, and who do not have raincoats.

This is not the New Zealand that we aspire to. This is not the New Zealand that we all dream of. It is not the Kiwi Dream. It should not be like this, and it does not need to be like this. Nobody I know thinks that the growing inequalities under this Government are a good thing. Nobody I know thinks that this harsher reality is OK. It is not what New Zealand is about. When I grew up, most Kiwis dreamt of owning their own home, but for many today this is just a pipedream. A lot of households have two parents working just to meet the rent. It did not use to be this way. Things have become unbalanced, and we need to face up to that fact and say what needs to be done to put it right. If today’s New Zealanders are to enjoy homeownership again, we need decent incomes. If people are to spend time with their loved ones like previous generations did, we need a credible plan for our economy.

Unfortunately, this Government’s silver bullet at the moment is the Trans-Pacific Partnership (TPP) agreement. It would have us believe that prosperity will flow and all the economic crises and difficulties that the country is facing, the challenges we are facing, will diminish—will be gone. But that deal was a long time coming and it has delivered a lot less than would be expected ordinarily. The deal was, in fact, for dairy. It was rubbish.

Chris Bishop: Oh, rubbish.

Dr DAVID CLARK: Yes, that is right—rubbish. The member is correct. An independent study shows that the portion of our country’s wealth going to working people will decrease and 6,000 job losses will eventuate in the first 10 years of this agreement. That is the only independent study that has been done on the labour market. This Government has not even researched what the TPP agreement will do to the labour market. It does not care that the wealth will not go to working people any more. It does not care that jobs will be lost.

New Zealand failed to even ask for the homeownership sovereignty protections that Australia, Malaysia, and others achieved in the agreement. Why was it good enough for Australia to have protection from foreign speculators not resident in its country and not good enough for New Zealand to even ask for it in the deal—why on earth? So we have Tufts University, the Peterson Institute, and the World Bank estimating that New Zealand’s economy will benefit very little from a ratified TPP agreement—less than a rounding error in Government forecasts.

This Government could have—and should have—done so much better for Kiwis. This Government has already broken plenty of promises. It promised to grow exports as a proportion of our economy to 40 percent. Well, the figure has dropped below 30 percent, and it is dropping further every year. This Government is failing to set goals for itself that it can achieve. The reason that it is failing to achieve those goals, though, is that it is not taking the steps to deliver on them. Seven years on from the global financial crisis exports as a proportion of our economy are below 30 percent and trending down, and overhyping the benefits of one trade deal has done nothing to halt this decline.

You do not need a textbook to know that having a wealthy elite prospering at the expense of a dwindling middle class is a recipe for economic stagnation. The signs are all around us. Drifting is not working. The current Government seems content to roll from one dairy price cycle to the next, under-investing in regional infrastructure and content to blame the farmers when things slide. Well, it will not do.

We need a diversified economy with deep skills if we are to realise the Kiwi Dream again. We need a Government that creates the conditions for high-value jobs and plenty of them. The number of people out of work, which went up before, is up 15,000 in the past year alone. We need to better support the small businesses that create the jobs that will make the change that we need. There is much to be done to make our economy work for New Zealanders. If only there was the will to do it—the will to make our economy benefit all, not just a few in-club National Party cronies. The solutions are obvious. The research and development tax credits, tax simplification, red tape removal—the possibilities are endless. We have heard them in this House before, but they are not the recipe this Government is offering.

This Government is offering more of the same—more of the same—and no new ideas. But solutions are not coming. The OECD estimates that New Zealand’s economy is about 15 percent smaller as a result of inequalities growing in recent decades. Inequalities have been a 15 percent handbrake on our prosperity, yet this Government seems desperate to continue down the same track, ignoring the warning lights on the dashboard and the increasingly sickening smell of burning rubber. It is locking more and more middle New Zealanders out of the Kiwi Dream, and it shows no compunction whatsoever.

To conclude, the story of my parents’ success shows what was once possible. It shows that plenty of people once did it. The Labour Party is determined to see the Kiwi Dream become a possibility for more people again. Labour’s Working Futures Plan of 3 years’ free post-school education is in stark contrast to National’s tired approach to leading the country. We need the Kiwi Dream, and we need a Labour Government to deliver it.

FLETCHER TABUTEAU (NZ First): Greetings to you, Mr Assistant Speaker Mallard, in this Chinese New Year, and greetings to my fellow members in the House today. I have said publicly that there are a few—a very few—good people sitting in those ranks of the Government’s seats over there. It is just a shame—it is a real shame—that none of them is in a position to contribute to the Government’s policy settings. If those few people had been in a position to contribute, maybe we would not have this farce that we are calling a flag referendum. Perhaps we might have seen some forward thinking and actual direction applied to our economy. Perhaps if they had been allowed to speak on the Trans-Pacific Partnership (TPP), we may have had an actual exchange of ideas—an actual debate—about trade. But, no, instead there was a complete and utter blackout.

Just so that people stop—please—comparing the Trojan Horse that is the Trans-Pacific Partnership to the China free-trade agreement, I point out that that document, at 121 pages in its main agreement, including annexes 1 to 15, totalled about 1,000 pages. The Trans-Pacific Partnership agreement, totalling about 6,000 pages, speaks to me about being a document of control, a document of manipulation and corporate protectionism, rather than actual free trade. National’s plan—which is working; that has been mentioned so many times today—is really working only for those members, because many poor souls saw that spin and said “Oh, they’ve got a plan. Oh, it’s working. Fantastic!”. The last general election result suggests that that party has fooled just enough of the people. It just got itself just over the line. But the last by-election result suggests that people have woken up to the spin and the manipulation. This National Government literally has no plan other than to clutch to the old-school thinking, repeated already so many times this afternoon, that if giant corporates are making profits, then everyone else must be doing just fine.

I say to the Prime Minister that poverty keeps growing by the day, and the statistics are an indictment against this Government, which keeps talking about a plan. Try to get some detail as to what that plan might be and silence is those members’ reply. More and more households in New Zealand are no longer living from pay day to pay day, which we saw as being a terrible indictment back in the day. No, that is not bad enough. They are now taking out loans to survive from week to week.

I am talking about working families—good, hard-working families; good people who want to do well by themselves and their children—who must borrow money and manage greater and greater debt just to get by. They are not servicing debt to invest and multiply their wealth, Prime Minister. Rather, they are servicing greater debt simply to put food on their tables and pay the rent, the doctor’s bill, and their children’s education bill, which gets bigger by the day. Right now those people are blaming themselves. Soon enough they will realise it is the National Government’s lack of economic foresight, dominated by old-school thinking, that allows this travesty to exist in the first place and, in fact, to grow day by day.

I spoke last year about the Prime Minister driving the metaphorical bus that is the TPP over a cliff and taking the country with it. Today I say that he has added turbo-chargers to that bus. He races to take us all to the bottom of the international heap—to a low-wage economy where big businesses make ever bigger profits, shared out amongst only the top 1 percent. That is this Government’s definition of success. As this Government scrambles to allow for more rules of trade and a disputes process that is available only to international corporates, the rest of the country watches as this country’s income inequality gets larger and larger. The only plan I can see from National is to keep the people in the dark about the facts—the fact that this Government is borrowing so, so fast just to keep the New Zealand economy standing still.

Debt has grown in excess of $100 billion since National became the Government. That is a sinfully scary number. These puppeteers who call themselves prudent money managers literally have no clue, as our country’s debt to foreign investors gets bigger and bigger by the second. I say to those members opposite who have spoken today that it is time to actually get a plan, a modern plan, and it is time to modernise our trade deals. The fact that the Government’s only plan for the economy is to call its ad hoc, fairy tale approach to the economy a plan that is working is not enough for more and more New Zealanders, especially in our regions.

This National Government talks about being aspirational, and yet the only solution Minister Joyce presents to this country is more and more foreign direct investment and more and more sales of New Zealand assets. Never mind, as that number grows, that the profits those companies generate literally keep pouring out of this country. They are not for reinvestment into our country, not for the sharing of wealth with New Zealanders, not for investment in our schools or investment in our health system, but as returns to shareholders in foreign lands—those who care not one whit about New Zealand and its people. I will concede that GDP is going up, but that is not the debate any more. It is time to get a clue.

Despite its spin, this National Government has a problem on its hands and it is a big one. Wealth and income inequality just keep growing in New Zealand. I say to those across this room that the TPP agreement will exacerbate and increase this inequality problem. It will not do as claimed and repeated again and again as part of the spin by those members. It will not help this economy. Many international mainstream economists, trade specialists, have come out and agreed that this trade deal, for New Zealand, will lead to between 6,000 and 7,000 job losses and an increase in income inequality.

Minister Woodhouse and Minister Lotu-Iiga mentioned that the tariff removals would see huge gains for New Zealand exporters. They seem to imply that all the forecast gains will come about because of the tariff reduction schedule. Are they aware that the tariff removals represent only 23 percent of the Government’s fairy tale numbers? It assumes that all of the tariff reduction gains, as tiny as they are, will accrue to New Zealand exporters. I am not sure whether they are aware of how markets work, but what is more likely is that the processors and the wholesalers will reap those benefits whilst the supplier of those primary ingredients, which is New Zealand, will gain little to no reward.

I conclude by saying again that New Zealand First supports free trade, but the TPP is anything but.

Chris Bishop: Oh, rubbish!

FLETCHER TABUTEAU: I am proud, Mr Bishop, to be a staunch advocate for New Zealand business. I respect and admire those who create and those who take risks—those who would take New Zealand goods beyond our borders. In so doing they do create jobs, and, hopefully, those profits of New Zealand firms circulate amongst our economy and we share in those gains. This trade deal will not enable any of the lines sold by this Government to the business community. Without doubt, I look forward to a robust debate in the House on the TPP. The ability to provide actual, real detail to those who have just assumed it will be good for them because this Government has simply said so will, I hope, enable better decision-making and more questioning engagement from the New Zealand business sector. Perhaps the truth will set us free.

JOANNE HAYES (National): Ā, tēnā koe e Te Mana Whakawā, tēnā koutou e ngā mema o Te Whare Pāremata, ngā mihi o te Tau Hou ki a koutou katoa.

[And so, greetings and acknowledgments of the New Year to you, Mr Assistant Speaker, members of Parliament House, and to you all.]

I am proud to stand and take a call to support the Prime Minister’s statement for 2016. This is a split call, so I have only a few minutes to make my contribution. I want to concentrate on the Government’s investment in Christchurch, and particularly in Christchurch East, where I am the National list MP. As we all know—some may know; some may not— Christchurch East was badly affected in the 2010 and 2011 earthquakes. We lost a large number of our suburbs. We lost all of Brooklands and we lost all of Bexley. One whole side of Avondale was wiped out. A lot of the North New Brighton area has been turned into residential red zone. It is part of the green areas that the Hon Nicky Wagner talked about in her contribution this afternoon on Christchurch, to do with the rebuild and the regeneration.

All of those people who suffered left Christchurch East. The east suffered a big reduction in its population. We saw school rolls reduced in number. I am sure the people there thought at the time that it was going to take quite a lot to bring Christchurch East back. But I am pleased to say that the work of this Government and its investment into the Christchurch East electorate has been amazing. The area is developing northwards, so a lot of the Southshore residents who lost their homes—and some of them are still under negotiation—have left. We have new people coming into the northern area of the electorate. When I say the northern area I am talking about Marshland and the Parklands area. We are finding whole new residential areas just popping up overnight. That is good for the electorate.

We have seen the hard work of the Minister of Education on consolidating education in the east, and the hard work on the Aranui community learning campus. That proposal went through. It merges three primary schools into the high school at Aranui. Just last year they employed their new principal. His name is Andy Kai Fong. Just recently, over the Christmas break, we were catching up with my husband’s cousins. One of them is a very good friend of Andy Kai Fong. He said that Andy will make an amazing contribution to the east. Andy was interviewed by the newspaper. One of the things that he said, after his appointment—he saw the advertisement, he applied for the position and got it—is that it is a chance for Christchurch East to be at the forefront of educational developments locally, nationally, and globally. The Aranui community education campus is going to be just that, because it is going to start from preschool and go right through to secondary school. It is like an area school within a city. For that whole area of New Brighton and Aranui, it is going to be a godsend for many of the parents who have young people getting ready to go to either preschool or high school. That is a plus and one of the major investments that this Government has made into the eastern frame.

The other areas have been the merging of primary schools. We have seen three new primary schools emerge out of about six other primary schools. That has been an amazing project as well. I was pleased to attend the Waitākiri Primary School opening just recently. There has been $17 billion of Government investment into Christchurch, and the east has reaped its rewards there. Regenerate Christchurch is going to be an amazing project for New Brighton, and I look forward to being part of that. Thank you very much. I support the Prime Minister’s statement.

BARBARA KURIGER (National—Taranaki - King Country): A previous New Zealand First speaker referred to the Government as not having a plan. The Government does have a plan. It is called the Business Growth Agenda. It is the Government’s programme of work that will build a more productive, confident, and competitive economy. The bits that make up that growth agenda are around skills, around export, around infrastructure, around innovation, and around natural resources and investment. Today I want to focus on the infrastructure part of that.

The New Zealand First member talked about old-school thinking. It is not actually old-school thinking; it is new-infrastructure thinking, because there was a massive announcement in the Prime Minister’s first speech of the year around infrastructure for State Highway 3, bypassing Mt Messenger and Awakino, which run through my electorate. It was great to hear the Prime Minister refer to that yesterday in the House when he spoke, as well.

I was driving along the other day and I just said to the person in the car with me: “I love roadworks.” You know, we have a massive new roundabout at Waitomo. It is keeping tourists and residents safe. It was a horrible piece of road before, and now we have this fantastic, safe roundabout.

We now have one in the beginning phases that is on the way to Hamilton Airport, which is also in my electorate. It is the main road in and out to the national fieldays at Mystery Creek, which, as the southern hemisphere’s biggest agricultural function, Minister Guy will be well aware of.

Hon Nathan Guy: Yes. Huge.

BARBARA KURIGER: And so it is really fantastic that by June, Minister, the roundabout will be ready for all the visitors who are coming into the Taranaki - King Country electorate.

Hon Nathan Guy: Good local member.

BARBARA KURIGER: Absolutely. So the State Highway 3 thing—I do want to mention, as a new MP, that there are a lot of people who have done a lot of advocacy and preparation for that in the past. A couple of people whom I do want to mention are former Taranaki MP Roger Maxwell, who has been a key driving force on that piece of road, and the Road Transport Association member Tom Cloke.

Secondly, I want to touch on the significant investments going into our urban and rural cycleways. Over the holidays, my husband Louis and I actually biked the Timber Trail, which goes between Benneydale and Ōngārue, which is almost in Taumarunui, and it is just amazing. It is environmental, it is historical, and there is a whole lot of information there. It is actually very steep—up and down—but it is jolly good exercise, and it is a fantastic venture for all of those local people who are providing farmhouses and meals. The tourism in that space is actually booming, and I am pleased to say that, actually, 85 percent of the people who are coming down to bike that trail are coming from Auckland. So, as we get a better road, we will be able to attract more people into the electorate. I am very excited about both of those things.

I am also very excited that the Government this year is going to progress legislation to reform the Resource Management Act. It will reduce costs and delays not only for homeowners but also for businesses. It does not matter if they are small or medium sized, because in our electorates, particularly the provincial ones, they are made up of huge numbers of small to medium-sized businesses. What I am finding at the moment is that people get very frustrated with red tape. It costs a lot, it takes a lot of time and effort, and we need to find a way to simplify that so that people can get on with starting new businesses, employing skilled people, and creating employment, without the hassle of having to go through the whole rigmarole of trying to get their consents through. So I am very, very happy about that one.

The other thing that is also going to really improve my constituents’ lives is the gains that will come from the Trans-Pacific Partnership. It is a fantastic agreement. It is going to cut a whole lot of tariffs off for our primary producers, and it will give our provinces a real boost.

So I am really excited about 2016. It has got off to a really good start in my electorate with the roading announcement, and I have been very proud over the last 18 months to be part of a Government that is really focused on making a difference for the people of New Zealand. Thank you.

CARMEL SEPULONI (Labour—Kelston): The previous speaker, Barbara Kuriger, might be proud of the Government’s accomplishments, but there are a lot of people in this House who are far from proud of the Government’s accomplishments—if you can call them accomplishments at all.

On Saturday night I was in Auckland City—I am seldom in Auckland City—walking down Victoria Street, from the TVNZ side down to Queen Street. I have not been in the city for a long time, but I was saddened by the number of homeless people who were out on that street. The last time I was in the city, walking down that same street, I cannot recall seeing a number close to what I saw on Saturday night. I think, perhaps, that I might have seen one or two homeless people on the street, but not one after another along the side of the road. Walking along that road, I just thought: “Where have we come to as a country?”.

It is not just Auckland City that has this problem; it is so many other areas, including even my own electorate. Often we show up to our electorate office in Glen Eden, and there is a homeless person sleeping outside of the office.

Peeni Henare: In the provinces.

CARMEL SEPULONI: Even in the provinces, my colleague Peeni Henare is saying, that same thing is evident.

Even 5 years ago when I was a member of Parliament and I had an office across the other side of the road from where my current office is, we did not have the level of homelessness that we are seeing every day. Even 5 years ago when I was a member of Parliament, we did not have the number of constituents walking through our electorate office every day with the housing issues that we are seeing New Zealanders faced with now. So for the National Government to say that it is proud of what it has accomplished over the last 7 years—I find that shocking and I think that, in fact, it should be ashamed.

New Zealanders are not used to this level of homelessness. We did not grow up seeing homeless people begging on the street every day. This is not the Kiwi Dream that we were all raised to believe in. In fact, this is a nightmare. It was a nightmare walking up Victoria Street and seeing homeless person after homeless person lining that street. And all I could think of was: “Actually, National Government, you can take responsibility for this.” We have moved so far away from the Kiwi Dream that it concerns me as a politician and it concerns me as a New Zealander. I am sure there are many New Zealanders out there who are thinking: “How are we ever going to be able to find our way back to that Kiwi Dream that we all had envisaged?”.

My father was a migrant to this country, and his dream as a new migrant was not that different from the stereotypical Kiwi Dream that many of us share. All it was was a family, a home, a job, and a better life, actually, for his children as well, so that his children would not have to work the factory floors like he did, and like many of his generation who came over did.

I have to point out that it has been very interesting in the House today watching the reaction of John Key, Steven Joyce, and Bill English to Labour’s announcement about 3 years’ free tertiary education. The fact that they are outraged by it; the fact that they have said it is unaffordable despite the fact that they are considering offering tax cuts; the fact that they say that it is unfair to the waitress who would have to pay for that tertiary education, despite the fact that that waitress quite possibly could be studying herself; and the fact that they say that they are aspirational for New Zealand, and yet Steven Joyce talks about the need to curb the demand for tertiary education—I find it really interesting that they would make statements like that. Actually, they got their tertiary education free, off the backs of people like my working-class, freezing worker father, who paid, with his taxpayer dollars, for them to get their tertiary educations for free.

The thing that really is unfair is that those taxpaying, working class New Zealanders paid for people like Steven Joyce, Bill English, John Key, and others over there to get their tertiary educations, but when their children got to that age when they were able to realise their parents’ aspirations for them to get tertiary educations—like I was able to for my own father—actually, we were not afforded the same opportunity, and we had to fork out thousands of dollars to pay for our tertiary education after our parents had paid for their tertiary educations. So I think it is a little bit unfair of people like Steven Joyce, John Key, and Bill English to say that this is completely unaffordable, that this is unnecessary, and that this is unfair to New Zealanders—like John Key pointed out in regard to the waitress.

I think back to the 2008 election, when we had to constantly listen to the key lines being run by the National Government—and it continues to run them now—about wanting a brighter future for New Zealand, being aspirational for New Zealanders. I look at those two phrases and I think: “Well, how much brighter is our future, when all we see are homeless people lining the street up Victoria Street in the city, and how much brighter is our future when we see constituents coming into our office every day because of the fact that they are homeless, and homeless in the nastiest of ways?”. There are pregnant women living in cars, who are not sure where they are going to be when they go into labour with their children, whole families living in garages, and whole families having to couch surf from home to home. That is not the Kiwi Dream; that is the Kiwi nightmare that we have been introduced to by that National Government over there.

I have had the privilege for the last year and a bit of holding the social development portfolio for the Labour Opposition, and when I look at people here who are in the position where they need to seek assistance from our welfare system, all I can see is the fact that National is actually anti-aspirational for these people. So many things have been cut. You would think—or we would think—that during times of unemployment that is an opportunity for any Government to make an investment in people, so that not only can these people go on to more secure employment but they can increase their earning capacities so that they can better take care of themselves and their families.

But that has not been the case. Instead, what we have seen is a National Government that sets a Better Public Services target that is all about benefit reductions but not about employment outcomes, and we see it doing anything it can to cut people off from the benefit system, with no care whatsoever about whether or not they are going on to something else.

I think some of the things that the National Government has done in this area are dangerous, and the treatment of people who have had to access welfare has been disgusting. I want to talk about some of those, and then I want to look at the National members over there and see how proud they are of their track record. Let us start with cancer patients on the benefit. No longer do we have an invalids or sickness benefit; the Government has decided that, actually, people with cancer or potentially terminal illnesses can go on jobseeker support. And regardless of whether or not they are well enough to, there is an expectation that they go and regularly check in, and that, for some of them—despite the fact they are getting radiation and chemotherapy—they have to constantly go in and prove that they are still unwell and also show that they are actively seeking work.

I want to talk about grandparents raising grandchildren and how they have been treated by that Government. We have had a number of cases reported to us by the Grandparents Raising Grandchildren Trust where they have been told by Work and Income New Zealand, under that Government, that they are not entitled to anything to support their grandchildren. And what we have been left with are grandparents who, actually, have ended up being owed in the thousands of dollars by that Government because they were not given what they were entitled to.

Labour is about giving back the Kiwi Dream. That is what we are here to do. I am disappointed every day by the things that I see out and about, and by the way in which that Government has turned everyday reality for so many New Zealanders into a nightmare. If I have to listen to another National MP say that they are proud of the National Government’s track record, then I think I am going to have to exit this House today, because I have simply heard enough of that rubbish. Thank you very much.

KANWALJIT SINGH BAKSHI (National): Thank you for the opportunity to participate in this debate on the Prime Minister’s statement for 2016. First of all, I would like to touch upon the issue that is very close to my heart, which is law and order. Today we had Commissioner Mike Bush in front of the Law and Order Committee, and he mentioned that the crime rate is lower. He joined the Police Force in 1978, when the crime rate was at the same as today, which means that we are doing very well on law and order. I would like to congratulate the New Zealand Police, which is well respected not only in New Zealand for doing a good job but, I think, it is well respected overseas also.

Recently we saw that more than a hundred police officers were called to Australia to support the G20 summit over there to protect the VIPs and the dignitaries who came to participate in G20. The New Zealand Police were there to support them.

I would like to touch on some of the points that the previous speaker, Carmel Sepuloni, has raised on the National Government’s achievements. She mentioned cancer patients. We were sending our cancer patients to Australia for chemotherapy, but under this Government we are making sure that our patients do not go anywhere, and they get the health facilities in New Zealand. She also mentioned that we do not care about the people who are on benefits. We have raised the benefits, which has not happened in the last 43 years. These are the things that are happening under the John Key - led Government, and I am proud of it.

Some more things that I would like to say have happened under this Government include the highest number of houses being built in Auckland. There is a real shortage, but we are trying to fix it. Billions of dollars are being invested in roading projects in Auckland to reduce congestion on the roads. We are also putting in billions of dollars to make that rail loop that has been talked about for a long time. These are the things that are happening under the John Key - led Government.

The interest rate, which is at its lowest level in the past many decades, is benefiting households who have more money in their pockets and more ability to service their loans. These are the things that are happening, and we should not be deluded: the Government went through a very hard time during the world recession.

I would like to touch upon the Trans-Pacific Partnership (TPP), which has been talked about a lot, and which is not only going to benefit the exporters but is also going to benefit all the small to medium sized enterprises who are participating and helping the exporters to manufacture products or produce products that we export. With the TPP agreement, ultimately we will benefit by more than $2 billion a year, having invested it in this economy. These things will not only benefit us by creating jobs but they will improve our lifestyle, which we look forward to.

As the previous speaker, Carmel Sepuloni, mentioned, when her parents migrated to New Zealand, they had the dream. I also came to New Zealand with the same dream: that future generations would feel that the economy is growing, that they are in a safer place, and that they have opportunities to grow themselves. We have to take steps from time to time to ensure the economy grows.

Opposition members keep on complaining that the Government is not doing enough to create jobs. When we try to do something, then they also criticise us that we are doing something that is not right. So they have to take a side—whether they want the Government to create jobs and grow the economy, or whether they do not want it. That is what the Prime Minister said yesterday when he talked about the “TPP”, or the “Two-position Party”. They have to be fair in saying what they want and what they do not want.

With the Trans-Pacific Partnership, we know that 40 percent of the world’s gross domestic product is among those 12 countries, and we have signed an agreement to have access for our exporters to that market so that we can benefit in the long term. Thank you for giving me this opportunity to participate in this debate.

ALASTAIR SCOTT (National—Wairarapa): Thank you for this opportunity to rise in support of the Prime Minister’s statement. And what a fabulous vision he outlined for us just a couple of days ago. Sometimes I wonder, listening to the Opposition, whether the Opposition members are in the same country.

This dream—the New Zealand Dream—is alive and well. This place is better off than it has ever been before. The standard of living continues to rise. Incomes continue to rise. There are more schools—in fact, every school in my electorate is now connected to the world through ultra-fast broadband. Whether it is Martinborough or Pongaroa, those schools and those kids are now connected to the world. We have more children in early childhood education than ever before. More children are being immunised, and more children are reaching National Certificate of Educational Achievement level 2 than ever before.

This place is in good shape. The New Zealand Dream, the Kiwi Dream, is alive and well. Those members say that we do not care. Well, I have outlined a couple of things that have supported the Kiwi kids of today, and, of course, my colleague Mr Bakshi has already mentioned the $25 a week that demonstrates that we do care for those who are less well off. The superannuation level has outpaced inflation; real incomes have outpaced inflation. People of all walks of life are better off than they were in 2008.

Alternative party policies have been, and continue to be, confusing and conflicting. Flip-flopping is what you can best describe it as. Those members say they support small businesses, they say they support a stronger economy, and they say they care about jobs for the ordinary New Zealanders, but their actions speak louder than words. They choose not to vote for the free-trade agreement known as the Trans-Pacific Partnership agreement, but, funnily enough, they were the architects of the Chinese free-trade agreement, which, of course, we support on this side of the House.

Much has already been spoken about the flip-flopping nature and the indecisiveness of the Labour Party. I would like to spend the next couple of minutes discussing the Green Party’s conflicts, as well, which are not quite as often publicly displayed, if you like. There are two factions that I see in the Green Party, and they conflict with each other, which is why they will never be part—in my view, at least—of a coalition of any Government, whether it be with Labour or National. On the one hand, we have those members who claim they support and protect the environment. These are the people who actually want to rip apart the economy. These are the guys who want to take away the dairy farms. They want to close the dairy farms, they want to take the cattle off the land, and they want to take the sheep off the hills. That would be fair enough if that was a policy and they were consistent through their party, but, of course, they are not.

On the other hand, the Green Party has a faction that wants only to redistribute the wealth created in New Zealand. These are the people who want to pay a minimum wage of $19 or $20 an hour, but they forget that it has to be paid for. So you can see the irony: the second group is in direct conflict with the first. The first wants to rip down the economy—it does not want to support irrigation projects, it does not want to support free-trade agreements, and it does not want us to trade with the rest of the world—but then, of course, the other side of that party needs a growing economy if is to achieve what is its aspirational goal of increasing the minimum wage to, say, $19 or $20.

We are on the right track. There is a Kiwi Dream. It is alive and well. It is being supported by a strong National Government, led by Prime Minister John Key. Thank you.

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

DAVID CLENDON (Green): I must begin by thanking the previous speaker, Alastair Scott, for devoting such a lot of his time to talking about the Green Party. That rather jumbled, misguided analysis of what the party is and does will do nothing but good for our standing with our supporters, so thank you for that.

It was interesting that the Prime Minister ad libbed a great deal in his speech, as other people have noticed, and I think it is because, had he read the statement as it is written, the fact that this Government is completely devoid of passion or imagination or, indeed, vision would have become very obvious, and I think his ad libbing was, in part, to disguise that fact.

I think there are one or two aspects of this statement that I would like to speak to that he did not mention, dropping out of the Government’s much talked about Business Growth Agenda, which has an admirable intention: to build New Zealand business, and particularly to build regional growth—to build business capacity and capability and to restore the regional economies back to where they should be. That is an important programme to pursue, because most of our wealth, indeed, is derived from the regions. Our food exports, our fibre, our timber—a lot of our manufactured goods come from the regions. This Government has talked a lot about the regions—there are any number of documents, including one I will refer to at some length that was released just a few days ago—but we do not see much in the way of actual action or outcome. We do not see the real commitment or the investment that would actually allow the regions to fulfil their potential.

A year ago the Government put out a Northland growth strategy, because Northland is one of the five regions this Government apparently is focusing on. The growth strategy, about a year ago, was a useful snapshot of what Northland looks like today, socially, economically, and in other ways. A year later, almost to the day, this wonderful document, Tai Tokerau Northland Economic Action Plan, was launched by Minister Joyce. He chose the Marsden Estate as the venue for the launch, out in Kerikeri, and I can honestly say that is my local. I recommend it. An unsolicited plug for Marsden Estate: an excellent place to have a 3-hour lunch at the weekend.

For the first time I left Marsden Estate feeling unsatisfied, after having heard Mr Joyce. Normally I would leave there very replete; on this occasion I was left wanting more. Mr Joyce’s action plan—58 points, as we have heard earlier today, but actually not much in the way of any commitment, and not much in the way of any indication that this Government is going to do anything. One of the points made in the plan is that “Northland as a region has potential that is not yet … realised.” That is a song that has been sung for decades, and it is time, actually, a Government got real about seeing that potential fulfilled.

We are told that one of the key matters, one of the key keys to unlocking the potential, is around transport, particularly better connectivity with Auckland, and that is a fair comment. There is an odd sort of a statement in this document that Northland is a “place-based economy”. I have no idea what that means, and I suspect the authors of the document do not know either, but, whatever it means, it leads them on to say that “Roading in particular is critical for Northland”. That is not wrong; our roads are in an appalling state. It is costing us economically, to say nothing of the environmental and health effects of some pretty shabby roading.

One of the “work stream: enablers”—I do love the language in this document; it is the sort of language I used to discourage my students from using, because often jargon disguises lack of substance. We are told that we need to address issues around shipping, around roading, and around air transport. Rail does not get a look-in. In this entire document, the word “rail” does not appear. It talks about infrastructure as though it is something that appears when one expresses good intentions to make it appear. We are told that in 20-odd years’ time there will be a four-lane highway from Auckland to Whangarei. What we actually need is a reliable, resilient roading network. We need the Mangamukas to be accessible 365 days a year, so the far north can connect to the rest of the world. We need the south side of the Brynderwyns to be improved. We need Mangakāhia Road to actually be brought up to State highway standard, which it patently is not at present. Despite the Government’s commitment almost a year ago to do something about that, it is continuing to shuffle and to make promises and to pretend to be doing work that, in fact, is not being done. This is an unfortunate lapse of the—

The ASSISTANT SPEAKER (Lindsay Tisch): Sorry, the member’s time has expired. I call Steffan Browning—5 minutes.

STEFFAN BROWNING (Green): Kia ora, Mr Assistant Speaker. The Prime Minister failed us yesterday. There was no organic target. There was no target for a bright economic and clean, green future. Instead, the Trans-Pacific Partnership (TPP) agreement was his mantra.

It was just at the end of last year that we did the first reading of one of the bills that is one of the ones listed as needing to be changed to suit the TPP, and I said then that it was a TPP bill. That is the Agricultural Compounds and Veterinary Medicines Amendment Bill. That was when I pointed out that this Government has allowed in so many new pesticides in its term compared with the Government ahead of it. Under the previous Government, 687 chemicals actually went out, and 906 new ones came in. Under this Government, 239 were out, but there are 1,100 new ones.

But what the Government is doing under the TPP is moving down to make more pesticides available into New Zealand, and with less transparency—more pesticides and less transparency, and we are awash with pesticides in this country already. What for? Why are we doing this? We are extending the patent time—that is the intention that is in front of the Primary Production Committee from tomorrow on. The intention is to increase the patent time from 5 to 8 years. It rings a bell, like some of the other TPP bills, with the patents rights and intellectual property rights. It is for the USA and other countries’ big pesticide industry giants and those that are stuck in unsustainable production methods.

But there is an alternative, and it is around organics. The world is clamouring for it. Yesterday, the Minister for Primary Industries, Nathan Guy, was extolling the US, his No. 1 TPP market. He did not mention organics. Organics has been growing there at double-digit figures for more than 10 years, and in dairy there is something more like a 20 percent demand. What is this Government doing around promotion of organics and moving to a sustainable economic future by going down towards something that people actually want, something that the markets actually want?

Fonterra is not keeping up with it either. For the third time in less than a year, it is adjusting prices for an organic premium because it has been bleeding some of the organic farmers because it did not look after them. There are not enough organic farmers in this country for the demand. Those conventional ones, who are right up against the wall at the moment, need the Minister, Nathan Guy, to get in there and support them in transitioning to organics.

Fonterra is said to be lifting its price on a floating scheme, balancing up against the market, up to something like $8 a kilo of milk solids by hang; $4.15 for its other farmers. Its price for organic whole milk powder out there at the moment, if it can supply it, is $14,000 per tonne. It is 4.5 times—450 percent—more than conventional rubbish with pesticide residues and all.

There is a way to go. There is a way to actually improve in this country, and it is about taking a stance around organics, moving towards organics, and progressing that very fast. Fonterra is even using a plant in Australia to make some organic baby milk powder, and it is not even their producers over there. They do not have any organic ones; they have got to get it off others. We have opportunity here. We must take it.

Just a last point: another thing that stood out for me with the TPP was the International Union for New Plant Varieties 91, which is a plant-patenting type-thing. Who is that for? It is for Agria, the Chinese-owned PGG Wrightson Seeds, and their unsustainable products like herbicide-tolerant swedes, which kill cows. We will be working on this bill—

The ASSISTANT SPEAKER (Lindsay Tisch): Sorry, the member’s time has expired. I call Kris Faafoi—5 minutes.

KRIS FAAFOI (Labour—Mana): Thank you, Mr Assistant Speaker. It is a privilege to take a call in this debate on the Prime Minister’s statement, and I think it is the first time I have spoken with you in the chair, so happy New Year to you.

The ASSISTANT SPEAKER (Lindsay Tisch): Happy New Year.

KRIS FAAFOI: It is always dangerous to quote oneself, but recent events have led me to look at some of the first words I uttered during my maiden speech in this House. Quote No. 1 is potentially a no-brainer cliché, but none the less it carries weight. I said that “I know that education is the game-changer.” Quote No. 2 was much more forward-looking. I said: “We want our children to have the education and opportunities to succeed in jobs we haven’t even dreamt of yet.” So that is why I am excited about 2016 and 2017. I know that side of the House has said it is excited, but on this side of the House we have actually got something to be excited about.

A Labour Government that takes over the Government benches next year will put a stake in the ground, to make sure our young people are ready for work in the 21st century, with the right skills and training, and without the fear of being saddled with debt. Our Working Futures plan, announced a fortnight ago by Andrew Little, will ensure that all Kiwis will have a chance of living the Kiwi Dream, to support their families to live in their own home, in a safe community, and I think that is something that most Kiwis want.

Education is that game-changer, and I think that every New Zealander, and our country, needs to ensure that we tackle the challenges that the rest of the world also faces with us, with the changing nature of work. And, from our end, it is pretty simple. Our policy is 3 years’ free post-school education, whether it be university, polytech, industry training, or an apprenticeship, because, unfortunately, in the future those without skills will be left behind. The nature of work is changing rapidly, and our education system must keep up with it if we want to seize opportunities for the future.

I believe it is also exciting in my electorate of Mana, where I want to see people from the colleges of Porirua and Kāpiti move on to Whitireia Community Polytech to do that industry training, to do the apprenticeship modules, the Bachelor’s courses—all doing that locally, supporting our local polytech, and supporting our local economy. Free tertiary education will allow families who have seen tertiary study as too expensive, or who did not want to be burdened with debt, to change the course of their lives for the better. It will give them higher skills, they will have higher incomes, and will seek out loftier opportunities, and I think that is something that most families want for themselves.

I am biased, so, please, do not just take my word for it. I put this policy on Facebook, and I would like to quote from one local, Kylie Welch, who said the following on my Facebook site: “My daughter is about to start 3 years’ study at Massey University in Palmy and I hope to help her pay for a lot of it. I don’t like the idea of her starting her adult life in debt, but wouldn’t it be a wonderful world to have her education paid for during those first 3 years?”. Kylie finished off with a pretty simple statement: “I’m keen”. Imagine if we could do that for Kylie and her daughter. Her daughter would study for 3 years for free, and that money that Kylie was going to invest in her daughter’s education would go into the local economy, it would go into paying off her mortgage, and I do not see a downside to that, at all.

But what about this changing nature of work that we have been speaking about? It is a reality that we have to address. I think it is the New Zealand Institute of Economic Research that says that in the future 46 percent of the jobs that exist now will be gone, because of automation. It is not just those manual jobs; it is the likes of accountants, who are also worried about the future of their work. It is a challenge that we know we have to face, and it is a challenge that that side of the House, the Government, completely ignores. It laughs about it, and it makes gibes and jokes about this side of the House, but we know it is something that has to be addressed.

If it was such a joke, why did the World Economic Forum in Davos have as one of its key points on its agenda the fourth industrial revolution? Is it such a joke now that we have got the foresight to look forward 10 to 15 years and say that half of the jobs that exist now may not exist, and that if you want to retrain, our Government will help you do that so you can continue to live that Kiwi Dream, and so you can support your families?

It is not a joke to us; it is real. But every time that side of the House discusses this issue, they think it is a big joke. It is not a joke. It is reality, and it is going to hit us hard soon, if we do not start doing something about it. That is why our Working Futures policy is built for the future, and that is why this side of the House has something to be excited about, as we head into the next election.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Meka Whaitiri—5 minutes.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Assistant Speaker. E ngā mema o Te Whare nei, tēnā koutou katoa. Greetings, salutations, and best wishes for 2016, Mr Assistant Speaker and members of this House.

Can I briefly acknowledge those who may have lost a loved one over the Christmas break. I particularly want to acknowledge the sudden passing of my dad on 13 November 2015—Sergeant Wīrangi Wīremu Whaitiri, who fought for this country, in Korea, for its sovereignty and for its lands that we enjoy. That is a contribution I would like to make today in the short time that I have.

Te Ture Whenua Maori Act 1993 is a statute of Parliament that aimed to reform the laws relating to Māori land in accordance with the principles set out in the preamble. These principles reaffirm the Treaty of Waitangi relationship between the Māori people and the Crown and the recognition that land is taonga tuku iho of special significance to Māori people. To that end, the principles promote the retention of land in the hands of its owners, their whānau, and their hapū, and the protection of wāhi tapu.

It is interesting to note that it took some 17 years to work on that piece of legislation. That shows the complexity and the consideration required if you are going to do any major changes to Māori whenua. Yesterday the Minister for Māori Development spoke about ture whenua legislation as “coming around the corner”. “I am looking forward”—he said—“to having an introduction early this year—3 years on, more than 100 hui, an exposure draft, and 20 hui currently in action as we speak.”

The Crown and the Minister for Māori Development assert that the bill will result in better law, better support, and better outcomes for Māori landowners, with greater opportunities for the exercise of tikanga in land management. I strongly oppose that assertion. The bill will weaken judicial protections and see people lose meaningful interests in fractionally owned Māori land through corporatisation and the changing of Māori freehold land title. The current Ture Whenua Maori Act, which I just read out, is about land or whenua as taonga tuku iho, to be protected and enhanced. The bill will do nothing to uphold, protect, and maintain whenua.

There are some members in this House who have spoken in the press around scaremongering. I put it to this House, and to the public who may be watching today’s debate—is it scaremongering and alarming that the process has been rushed, that consultation has been negligible, and that the proposed reforms will not solve the complex issues around fractionally owned Māori land, particularly where a large number of people hold small interests contained within the current Act? Is it scaremongering and alarming that in the four consultation hui that I attended in my electorate of Ikaroa-Rāwhiti, with over 400 people present, there was no value seen in rewriting Te Ture Whenua Maori Act 1993? Is it scaremongering and alarming that a consistent concern of Māori landowners was the potential for Māori freehold title land to be turned into general title, with it then being either mortgaged against or, worse still, sold?

Is it scaremongering and alarming if the Waitangi Tribunal’s draft report criticised the review process and supported the claimants’ view that there has not been enough consultation and consensus to alter the existing law? Is it scaremongering and alarming that the Māori Women’s Welfare League president and lawyer, Prue Kapua, has backed the tribunal, or that the Tairāwhiti District Māori Council chair, Owen Lloyd, has said Government officials have not visited marae in his rohe? Or that the New Zealand Māori Council co-chair Maanu Paul supported the tribunal’s recommendation, and disagreed with Mr Finlayson that the report had got some of its facts wrong?

Lack of consultation, lack of support, lack of independent legal advice, and lack of respect for the Waitangi Tribunal tells me that this bill is heading down the wrong track. It is unnecessary. It is poorly written, and the Minister for Māori Development needs to take heed of the people who will say—and come to Parliament to say—that the bill is not properly written, it has not been consulted on, and it lacks support. I say to the House and to the Minister that we need to take cognisance of the views of the Māori landowners. Kia ora tātou.

JACQUI DEAN (National—Waitaki): Thank you, Mr Assistant Speaker, and happy New Year to you and to the House. I just want to acknowledge Meka Whaitiri’s loss in November last year. Thank you for sharing that with the House; we do send you our sincere condolences. I know it is a particularly hard time for you and your family.

I also want to acknowledge the earlier speaker from the Labour benches, Kris Faafoi, who stood up for his electorate. I have to say that that is quite a refreshing position to hear from Labour members of Parliament—that they acknowledge the places where they live, their electorates, and that they stand up for them in this House. Well, I am going to do exactly the same thing today in my speech, at the commencement of this year. But, first of all, I want to say what an exciting, energised start to the year it has been for this National Government. We came together last week for our 1-day caucus event, where we talked about the year to come, what each and every one of us hoped and wanted to achieve, and what we are excited about achieving for us in this coming year and the years ahead—not just for our own electorates and our own communities, but for people throughout New Zealand. I believe we all came away from that 1-day caucus excited, we came away united, and we came away very excited about the year ahead.

I can tell you something that I am particularly excited about this year, and that is going to the Wānaka A and P show. That is the showcase, in March, for rural New Zealand, rural Otago, and the rural South Island. Everybody who is anybody will make a beeline to Wānaka for the Wānaka show. I will tell you what is so exciting about that. It is that the farmers, the rural folk, and the small-business people will be talking about what matters to them. They will take the opportunity to talk to me, to the other visiting members of Parliament—of which there will be many—and they will take that opportunity to talk about what is exciting to them. And we already know what that is. That is the opportunities that are presented to New Zealand—for rural sector New Zealand, small business New Zealand, and as a whole—as the result of the Trans-Pacific Partnership. I am so excited on behalf of primary producers, because they are going to benefit from the opportunities of open markets to around 40 percent of the global economy—increased access to over 800 million consumers. That is increased access, when the Trans-Pacific Partnership agreement is fully implemented.

We are an outward-looking country—well, we certainly are in the primary production sector. We already enjoy the benefits of the New Zealand - China free-trade agreement. Thank you, Phil Goff, for initiating and signing that. More laterally, we are the beneficiaries of the New Zealand - Korea free-trade agreement. The cherry growers down in Central Otago are enjoying an increased and stellar season in the cherry product, but also are enjoying the huge exposure that they now have to Korean markets. That is significant not just for the local economy around Cromwell and Central Otago—the benefits do not just fall to the growers themselves; they also fall to the transport companies, and they fall to the whole economy, which is growing more robust because of the opportunities that these free-trade agreements are providing to us.

As the Hon Craig Foss noted during question time in the House today, the most recent statistics in the New Zealand Business Operations Survey show that the number of small businesses and the rural sector engaged in export sales has increased from 14 to 21 percent since 2007. So for the whole time that this Government has been in power, more and more small businesses have engaged in export sales. We are truly an outward-looking country, and so we should be.

In areas such as Southland and Marlborough, in places like Hawke’s Bay—and, indeed, in South Canterbury, Central Otago, and North Otago, which is the area that I proudly call the Waitaki electorate—up to 40 percent of jobs in those regions are in the export sector. You do not need to wonder why there will be so much conversation around the benefits of the Trans-Pacific Partnership agreement. The Trans-Pacific Partnership agreement will provide huge opportunities for businesses in my electorate. You know what? I agree with Helen Clark. I agree with Helen Clark that it would be unthinkable for New Zealand as an export-orientated, outward-looking country, and as a small trading nation—let us face it, we are a small trading nation, floating around in the South Pacific. It is “unthinkable”, in Helen Clark’s words, for us not to be part of the Trans-Pacific Partnership agreement. I absolutely agree with her, and I am sure that our Labour colleagues do, too.

I want to turn specifically to some of the sectors that will be benefiting from the Trans-Pacific Partnership agreement. I am turning to a document from New Zealand’s Ministry of Foreign Affairs and Trade, and I am sure this is freely available. I just want to pick out some of the highlights, and I want to look at some of the outcomes by sector that we will be enjoying as a result of the Trans-Pacific Partnership agreement. This document really highlights only tariff savings and benefits for current trade. It does not take account of the exponential growth in the volume of trade that will come about as a result of the agreement. And how do I know that is going to happen? Because we saw it with the New Zealand - China free-trade agreement and we saw it with the New Zealand - Korea free-trade agreement, and other free-trade agreements with places like Taiwan and so forth.

So in terms of beef, there are big beef producers in the Waitaki electorate. So what is going to happen? The United States, which is New Zealand’s largest beef export market, will eliminate all tariffs and quotas on New Zealand beef, and this is over a period of 5 years, which will allow unrestricted duty-free access into that extremely large market. I can imagine that Alliance Pukeuri, which has one or two beef chains probably running at the moment; Silver Fern Farms, doing exactly the same; and smaller companies such as Lean Meats, based in Ōamaru—my home town—will already be seeing the opportunities and the benefits of just that one example of tariff-free access into the United States. That is huge for those sectors in my electorate.

I turn now to sheep meat. Again, it is exactly the same story. If I think about the sheep farmers in Central Otago: those merino flocks, that beautiful merino meat and wool—but we are talking about sheep meat at the moment—and the Corriedale sheep from North Otago and other South Canterbury producers. Those producers will be benefiting hugely from the introduction of tariff-free access into Trans-Pacific Partnership countries’ dairy—right from Clearwaters Organics Dairy. A member from the Green Party asked what this Government is doing about organics. Well, I can tell them that we are providing exactly the same conditions of entry into these markets under the Trans-Pacific Partnership—and if you have not tried their yoghurt, you really should; it is delicious. Oceania Dairy, based out at Glenavy, which has made a huge investment into our region, will already have an eye on how they can utilise the benefits that are coming about under this new regime.

With regard to fruit and vegetables—cherry growers and apple growers, for example—all tariffs for apples will be eliminated within 10 years. Growers based in Roxburgh, in Millers Flat, in Alexandra, and indeed all around New Zealand are hugely excited about the opportunities presented by that. Cromwell, with its well-known iconic large fruit—there is an apple sculpture up there—and all of those growers will be excited by this opportunity.

I go on to wine, and it is exactly the same story, from the Pasquale and Ostler wineries up in the Waitaki Valley, down to Roaring Meg wine, Bannockburn, Mt Difficulty Wines, Felton Road, Wooing Tree Vineyard—fabulous producers of very high quality wine. Again, there will be tariff reductions. It is the same with forestry. The Waimate firm Laurie Forestry Ltd will already be seeing the opportunities. Wool, leather, textiles—again, those very same companies will be enjoying many, many opportunities. I will just finally, in my roundabout of my electorate, talk about Barker’s of Geraldine. They are a wonderful high-end producer of cooking sauces, and they will benefit. The greater Otago region, under the leadership of John Key, and this country is in very good hands. Thank you.

TRACEY MARTIN (NZ First): Kia ora, Mr Assistant Speaker. Can I welcome you and everybody else back to the House. I wish you all a happy New Year, as for many of us this has been the first opportunity to gather together again. Many of us are not just returning to work; we are returning to Parliament. It has been an interesting start to the year. For myself, I came back to work on 6 January, to my office at Warkworth, where case after case after case walked into my office, because there seems to be some difficulty with members of the public actually gaining some action from many of the Government MPs. It seems to be that if your problem does not quite fit the policy direction of the National Government, then your local representative is not necessarily going to stand up for you. I think that is a problem we have got happening.

Paul Foster-Bell: That’s not true.

TRACEY MARTIN: That is a problem we have got happening in our democracy, Mr Foster-Bell.

Paul Foster-Bell: It’s not true here in Wellington.

TRACEY MARTIN: It is true where I am, Mr Foster-Bell, and many of the other electorate offices of New Zealand First are finding the same thing. Members of the public in our areas are going to see their sitting MPs and are being declined assistance. It shocks and horrifies us. I am assuming that it is not the case with all MPs who sit on the Government benches, but I am telling you that it is becoming more and more common—people coming into my office tell me—and it is something that we need to address in this country. We are all paid, no matter what party we are with, to help the people of New Zealand when they have an issue with a Government department, and I would hope that, no matter what the politics are of any person who walks into any MP’s office, they will not be declined assistance merely because the assistance they need may not fit a certain box that is the policy of the current Government.

One of the other reasons why I am looking forward to 2016 is that, as deputy leader Ron Mark outlined in his contribution, New Zealand First has a particularly strong caucus currently—a particularly strong and cohesive caucus. Unlike the members of the National Party backbench, the New Zealand First caucus members have several portfolios each, and every single portfolio they have, they work hard to make sure that they are up to date, upskilled, and ready to take every opportunity to make sure that they hold this Government to account. In every portfolio area, the New Zealand First caucus members hold this Government to account.

I do not know where the quote came from, but there is a quote, and I am sure it is by some very famous politician, and it says that when the opposition in a debate starts shouting personal insults, it is because they have lost all political argument. I think that what we can see in contribution after contribution—and you will probably see it in the National members’ contributions after I sit down—is that it becomes a personal attack. That is because they know that this Government is losing its grip.

We saw it at Waitangi. We saw it in a Prime Minister who decided to celebrate our national day by going to a sports game instead of attending a service anywhere—anywhere—in this country. He could have gone to a commemorative service on 6 February but he chose not to. He chose to go nowhere but to a football match. This is the gentleman who leads our country and supposedly represents the whole of the nation. Although I totally accept that mixed messages and confusion were given to him up at Waitangi and he chose not to go on 5 February, why on earth on the 6th did he choose not to take part in any service anywhere to acknowledge the Treaty in the history of this country? It exists. It was signed. It is his place to acknowledge it, but he chose to go nowhere.

I think that is an indication, New Zealand, that this Government is losing its grip. Northland was a beautiful indication last year that this Government is losing its grip. This Government misread Northland so much that it thought it could dazzle Northlanders. After 70 years of National Party MPs being their representatives and getting absolutely jack—nothing—they drove up there in Crown car after Crown car after Crown car, thinking they could bedazzle Northland. Northland was not bedazzled—and it is spreading. I think that is really interesting—it is spreading. In region after region, starting in the north and moving down, this Government is losing its grip.

We had Mr Joyce go up there, after 70 years, as I said, of a National Party MP representing the north, and within months of the Rt Hon Winston Peters becoming the representative for Northland, Mr Joyce is up there with a 58-point plan. There is no funding behind it, but there is a 58-point plan to deliver for Northland. Is it not odd that none of the other National Party MPs who represented them for so long, for decades, was able to get that? But the Rt Hon Winston Peters, within months, managed to make sure that this Government got the message that Northland has been so neglected that it needs to be looked at.

The Rt Hon John Key likes to make jokes. I think it is a sort of urban type of a joke really, an inner - city slicker joke, that the Rt Hon Winston Peters does not spend much time in his electorate. Mr Key opens himself up to criticism because, of course, he never goes anywhere near Helensville. He does one public meeting closed to people during an election year and the rest of the time they never see him. However, Mr Peters and New Zealand First has offices in Warkworth, in Dargaville, in Kerikeri, in Kaitāia, and in Whangarei—[Interruption] and Government members hate it. They hate it. Here we go, New Zealand. The move is coming down. Northland is the flagship for the country and next will be Whangarei. [Interruption] Next will be Whangarei, Mr Reti, and then down into Rodney. Then down into Rodney, Mr Mitchell, and on we go, down the country—on we go down the country.

There have been some other things that have been very interesting, and I am going to look forward to them. Whangaruru school—I am looking forward to seeing how this Minister, the Minister of Education, creates commercial negotiations to get back a farm that cost millions upon millions of dollars of New Zealand taxpayers’ money after she signed a contract that had no clause in it stating that if it failed, taxpayers would get their assets back. Commercial negotiations are now being entered into by lawyers and the Ministry of Education to try to recoup what anybody reading a contract that they were paying for with other people’s money might have made sure there was a clause about. This smacks of Novopay—it smacks of Novopay and the same Minister signed off on Novopay.

What is it about this Minister and contracts? What is it about this Government and contracts that it does not seem to realise that if the contract fails it should have an out clause? Figure out how to get out just as well as figuring out how to jump in. It is not the Government’s money. It is the New Zealand public’s money. There must be a way back.

I was pleased at the select committee this morning that the Ministry of Education was able to outline quite clearly that the statements that the Minister has made that the Whangaruru school assets would go through the disposal process just as those of State schools would is a farcical, erroneous statement—absolutely erroneous and it is misleading. It misleads all parties. So I am pleased that the Ministry of Education was able to clarify that today. I will be looking forward to the Budget, the 2016-17 Budget—

Rt Hon John Key: It’s going to be a cracker. It’s going to be an absolute cracker.

TRACEY MARTIN: —because, Mr Key, there was a member’s bill supported by the National Government that promised a budget to come in, in 2017-18, for grandparents raising grandchildren. Mr Key looks a bit confused; perhaps we will talk to Paula about it later. But it is about clothing allowances for orphans and unsupported children. This Budget 2016-17 should show the 4-year projections going on—going on—and that will show whether this Government will keep its word for those grandchildren.

Rt Hon John Key: We will.

TRACEY MARTIN: I hope so, Mr Key, because it is worthy, and I hope so, but I will be watching for that in this Budget.

There are so many other things that are very interesting. I am looking forward to the flag referendum because I am looking forward to Mr Key realising that the country never asked for it, the country does not want it, it will lose, and $26 million of taxpayers’ money will be gone on a flag referendum. I am looking forward to that and I am looking forward to seeing how affordable education will become in New Zealand if this Minister finally gets something right around education.

Hon SIMON BRIDGES (Deputy Leader of the House): I move that this debate be now adjourned.

Motion agreed to.

Debate interrupted.

Maiden Statements

Maiden Statements

MAUREEN PUGH (National): Mr Speaker, my thanks for this once-in-a-lifetime opportunity to address you for the first time and to address this House, my colleagues, and, through this House, the wonderful people of New Zealand. I acknowledge John, Haley, Taye, and Lisa, and other family and friends who have travelled from all over the country to be here today to support me and who are in the public gallery—thank you. Thank you all so much for being here. I have a special greeting to my friend Russell Wilson, who could not be here today.

The significance of this occasion is not lost on me, nor is the privilege of now being a part of the 51st Parliament of New Zealand. As you and my colleagues are all aware, the journey that brings us all to this point is the result of the efforts of a successful team, and I take this opportunity to thank my hard-working electorate and campaign teams in West Coast - Tasman, my regional chair, Roger Bridge, and the hard-working Young Nats, who are such a joy to work with. We are all motivated and guided by a strong Cabinet, but it is the leadership of our Prime Minister, John Key, whose principles, high standards, and unfailing belief in New Zealand and her people, and the goals he and his Government are setting, that inspired me to be part of this National Party.

The philosophy of the National Party means more to me than simple politics. It is personal. My humble beginnings and life lessons resonate so well with the philosophy of the party. As we know, even those of humble beginnings can, and do, change the world. My ancestors include amazing pioneers who helped shape New Zealand into what it is today. I can trace them back to include Thomas Bracken, journalist, poet, and politician. He was the first person to publish the words “God’s own country” when referring to New Zealand, and the man who wrote the words to our enduring national anthem. I am a fifth-generation Coaster, brought up in Cobden. The lesson of my upbringing was how focus and drive are keys to capitalising on the opportunities available to all New Zealanders. Having a plan, taking calculated risk, and never being afraid of hard work delivers dreams.

This Government represents each individual New Zealander. It has a real investment in supporting our fellow citizens, sometimes with a simple helping hand up, so that they too can realise their dreams, while never ignoring the reality that some of our more vulnerable Kiwis need extra support to improve their individual situations. Access to high-speed internet, filling in the cellphone reception gaps, safe roads, always aiming higher for educational achievement and delivery, quality health care and housing, and effective policing are all areas that this Government continues to have in its sights. These are the basics that build strong communities. They are made possible by ensuring we have thriving businesses and jobs for all. The regional growth strategies are an exciting new opportunity to assist regions to identify opportunities, and I am very keen to assist with the West Coast one launched last year.

I have been involved throughout my adult life in improving the health of communities. It started more than 35 years ago by taking an interest in my own town of Kūmara, very proudly the home of Richard John Seddon. Through the years the interest in building community resilience has become a mission for me. My involvement in community health has taken many forms, and I am more committed now than ever before to ensuring that community leaders are empowered and supported to develop and realise their collective’s vision for their place. I know that with the policies of this Government, supported by another strong voice around the table, we will support communities and continue to make this country greater and more successful—one person, one business, one community at a time.

As a list MP coming into Government 16 months after my colleagues, I understand the enormous task of catching up. I also know, based on the recent past, that I will have the assistance of my colleagues from the intake of 2014, along with the rest of my National colleagues and our support staff. Between all of us, I will soon be up to speed. I am starting off the bench and relish the opportunity of playing on this team. I look forward to never dropping the ball, never scoring an own goal, nor ever giving away a penalty.

Naturally, I have aspirations, so for the record I wish to note just a few. In 2014 the West Coast - Tasman electorate was hit by Cyclone Ita. The storm left thousands of hectares of forest broken and lying on the ground. I championed this issue, and thanks to the Hon Nick Smith and a very pragmatic Government we saw urgent legislation passed through this House, enabling the harvesting of some of those trees off the conservation estate. With good stewardship by Department of Conservation ecologists and management, we have seen a world-class harvesting programme create jobs and provide high-value timber to the market. No devastating haul roads built, no destruction of waterways; just consideration for our native forest within the conservation estate. By working together, we made the most of a disastrous event. A review is due within the next few weeks, and I believe it will support the recent operations and provide an extremely effective template that can be used to expand the programme. This is one of the many positive topics I look forward to discussing with my colleagues.

Further to the Department of Conservation estate, there is an opportunity to pick up the work on stewardship land. Assessing stewardship land and making appropriate areas available for land swaps or sale so that it can reach its productive best makes good sense, as does ensuring stewardship land with high conservation value is afforded the level of protection it deserves.

For 12 years I served as a trustee on the West Coast Primary Health Organisation. It complemented my interest in optimising the physical and mental health of Kiwis, along with encouraging all to make better lifestyle choices. I have witnessed people improve their health without always relying on heavy medications. I see people increasingly incorporating holistic and integrated health disciplines that are more in harmony with their heritage or cultural values. Greymouth is looking forward to a $65 million investment into a new hospital and integrated family health centre. This is one of the bigger investments this Government is making into rural New Zealand, and I totally support that investment. I will also support further investment in educating families to take a more responsible path with health care by including other degree-qualified health practitioners, lifestyle choices, and healthier food options as part of regular health care. To me, that makes good economic, social, and health sense, and fits well with the current legislative programme supporting the health practitioners bill. For the past 25 years I have personally enjoyed chiropractic as my sole form of health care.

From health care to tourism—there is no question of the role tourism plays in New Zealand’s economy. It is now contributing $10.6 billion, or 4.9 percent, to New Zealand’s total GDP. We are enjoying one of the best summer tourism seasons in history. We have quality operators in this country and are blessed with a natural environment that visitors come to enjoy. The protection of that environment is paramount in protecting our tourism future. At the same time, new products and experiences will continue to keep us at the top of the world’s most desirable places to visit.

I have a vision of a sustainable West Coast - Tasman region, neither disrupted by nor vulnerable to commodity downturns—a unique and beautiful region that substantially adds not only to the visitor’s experience but also to the local and national economies. A key to making that vision a reality is bettering the road network around the South Island. Not only would improving this route provide new tourism experiences; it would expand opportunities into the small communities of West Coast - Tasman. I am referring to the development of a road through South Westland across the Cascade River, and from Buller through to Tasman via the Wangapeka—something that, as an MP based in West Coast - Tasman, I will go into bat for. Improving this route would be a game-changer for some small towns. Tourist numbers would multiply exponentially in Haast, glacier country, Hokitika, Greymouth, Karamea, Mōkihinui, Hector, Ngākawau, Waimangaroa, Westport, Tapawera, and Motueka. With the right support, these roads would provide an entirely new, core, and economic alternative, creating jobs, businesses, and the amazing experiences tourists seek. These are reasons why I will advocate for more work in this area. Many of these towns would shift from being a siding to being on the main route for visitors.

I talk about visitors, but it is not just international tourism that is important. We must also focus on how regions can benefit from domestic visitors who are drawn to areas by events. Many regions are natural playgrounds, and events like the Wildfoods Festival, the Buller Gorge Marathon, the Buller Festival in Murchison, the Woodstock motorcycle rally, the Coast to Coast, our cycle trails, and many more are examples of how communities and leaders can capture opportunities. Events are an area where we can work together to get even better visitor support. I look forward to assisting communities to develop new opportunities in this tourism space.

Last year I visited the United States with my family and we were fascinated by the unprecedented economic growth happening in the state of New Mexico. This growth is openly credited to the partnerships and working relationships forged between the Republicans and Democrats. We have the same opportunity to facilitate progress across this country. A great example is free trade and the Trans-Pacific Partnership. I look forward to a return to the bipartisan position on free trade, particularly when it will have such tangible benefits for New Zealand exporters, businesses, and the country as a whole. This will in turn flow on to support our regions to flourish. The apple industry is a significant player in the Tasman area. When fully implemented, the national savings on tariffs for apples will be $1.2 million. That is more money staying with our growers and helping to grow that industry.

I recognise that provincial New Zealand is the powerhouse of this country. The West Coast - Tasman regions have a long history of exporting and welcoming investors and tourists from other countries. It is important that we continue to build on that history for the benefit of jobs and higher incomes in our region. We can achieve so much when we focus less on who gets the credit and more on who gets the benefits. As we heard recently at Rātana, the stars are able to align; we can too. As a former member of the board of Local Government New Zealand, I have witnessed where the partnership between central government and local government could be improved. Between the 78 local councils, they own and maintain assets valued at $134 billion. The councils are a valuable partner in ensuring the continued growth of this country, while being the guardian of the assets for our residents. This is an area I am happy to contribute to.

The area in which my family and I live is a remote part of the West Coast surrounded by mountains, a river, and native bush. I have learnt that one must have ultimate respect for the power of nature. Our environment is so precious, and activities on that resource must be managed with care—I get that. However, the pendulum has swung too far, so I support changes to the Resource Management Act. It has become the new Bible, and some practitioners are its new disciples.

In conclusion, while I am late to the 51st Parliament, I am excited to take on the challenges. I fully understand and respect the responsibility our country’s leaders have to our communities. I am honoured with having the opportunity to serve them well. As my Ailish Roughan, bee-inspired jewellery signifies, “bee” the change you wish to see. For me, that means being constructive, positive, loyal, and hard-working. I thank you, Mr Speaker.

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

Bills

Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill

In Committee

Debate resumed from 1 December 2015.

Part 4 Amendments to other enactments (continued)

The CHAIRPERSON (Lindsay Tisch): This is just debate on Part 4, and this is clauses 221 to 267.

STUART NASH (Labour—Napier): Yes, it is, Mr Chair. You are dead right there. This is one of those bills where I think it is worth spending just a couple of minutes going over the crux of this because—

Hon Ruth Dyson: A couple of minutes just saying the name of the bill.

STUART NASH: Exactly. It is one of those bills, Ruth Dyson, where it is very, very technical in some parts but very, very important in other parts. By and large, Labour had agreed with the majority of the bill. We spoke in favour of a lot of the bill. We had a number of concerns, but there was one part of the bill that we did not agree with—I would just like to go over this, if you will indulge me—and that was the setting of the annual rates.

What this bill does is it actually sets the tax rates for the following fiscal year. It is actually retrospective, of course, because the Budget has been passed, but we believed that those rates were inequitable, and that is the reason why we had great difficulty supporting this bill in its entirety. If I remember rightly, David Clark—

The CHAIRPERSON (Lindsay Tisch): We are actually on Part 4. What you are mentioning is in Part 2. We have already handled Part 2. We are on Part 4.

Hon Ruth Dyson: Gosh, it was a long time ago.

STUART NASH: Miss Ruth Dyson is dead right. It was a long time ago. I just wanted to bring those who are watching this on television up to speed. This is the first week back and a lot of people have been looking forward to the resumption of the debate on this tax bill. They are probably sitting there with bated breath. Like myself, they have picked up the bill for the first time in nearly 2 months and they have said: “Now, goodness me. Now what was that bill about again?”. That is exactly what I did.

I remember when we left this House, when the debate ended, we were in full flight. We were going hell for leather. Part 4 was—we were like a horse galloping and then we were stopped in mid-stride. We have had to get back on that metaphorical horse and just really get things going.

So here we are. We are looking at Part 4. This is amendments to other enactments, and this effects, by and large, the amendments to the Tax Administration Act 1994—a very important piece of tax legislation that basically sets the scene for a number of pieces of tax legislation, as I was saying.

But there is one thing I would like to talk about, and this is clause 230. This is statements in relation to research and development loss tax credits, and it says something that I think we should be slightly concerned about. The reason I say that is we were debating this in the Finance and Expenditure Committee just today. What it says in proposed new section 70C(1) is that “A person must file by electronic means, in the form and electronic format prescribed by the Commissioner, a statement in relation to—”.

What that does is it sets out a number of statements that, obviously, you have to file this in relation to, but the interesting thing about this is that it is very prescriptive. It says that “A person must file by electronic means,”. The reason why I think that this is quite important, and we need to tease this out a little bit, is that at the Finance and Expenditure Committee today, actually, when discussing another tax bill and looking at the ramifications of not the coming digital age but the digital age that we are in at this point in time, the Inland Revenue Department (IRD) made a very good point when it said that it is not going to require people, under this tax legislation, to just submit by electronic means.

What the IRD said is that it understands that not everyone is on email and not everyone has access to electronic means, so we are still going to allow the option of submitting in writing. So if a taxpayer wants to, they can go to an IRD office—there actually are not many of those left, because you closed them all down. But what they can do, I suspect, is they can probably go to a citizens advice bureau or somewhere, where someone will download the IRD forms, they will print them out, and they will give them to this taxpayer. He or she can then go back to wherever they came from and fill out the form, put it in the thing called an envelope, put this thing called a stamp on it, and post it to the IRD.

The IRD was quite clear that this was an important process. A number of members in the Government will remember this debate. We all agreed that at this point in time we could not be so prescriptive as to discount the ability of taxpayers to submit a written form, whereas this provision says that it must be done in an electronic format. I am sort of wondering why this legislation is a little bit out of step.

GRANT ROBERTSON (Labour—Wellington Central): I am sure my colleague Stuart Nash will take another call on Part 4 of this bill, but I was so anxious to get to my feet to work my way painstakingly through each clause in Part 4 of the bill. Actually, I am not going to do that. What I am going to do is pick out a couple of clauses that I think will be of interest to members and those watching at home and actually seek some assistance from the Minister in the chair.

The first matter is one that I think he may be able to help us with in light of some of his recent policy forays, and that is clause 224. What clause 224 does is repeal section 24O of the Tax Administration Act. Section 24O of the Tax Administration Act, as I am sure most members of the House know, obligates employers in the agricultural, horticultural, or viticultural industries to provide the Inland Revenue Department with information about employees who are covered by an exemption certificate or a special rate certificate. These requirements, according to the officials when they came to advise us in the Finance and Expenditure Committee on this, would have imposed unreasonable costs on employers and the Inland Revenue Department while not being effective at identifying non-compliant employees, and, accordingly, the provision is to be struck out.

What makes this clause interesting is that this clause was actually brought in in an amendment bill in 2008-09 and was never actually implemented. So the clause was actually brought in in order, presumably, to right a wrong of some description. Presumably, there was a concern that in the agricultural, horticultural, or viticultural industries there were employees who were not complying with their tax obligations.

What this clause does—it is actually retrospective and commences in 2008-09, even though the clause was never actually implemented. It is a strange one. I do wonder whether the Minister in the chair, Michael Woodhouse, with his vast knowledge and experience of the dangers inherent in various forms of farming, agricultural, and horticultural work, working with animals and dangerous critters like worms, may be able to give us some advice on the question of why that clause came in in the first place and how it was that it came not to be implemented.

Although we on this side of the Chamber have no desire to maintain within the law provisions that are irrelevant or are not being used or do not serve any particular purpose, I can see in these industries that there is the potential for certain types of employees to be on contracts that are less than normal and to not perhaps be paying tax in the right way. Any members of the House who follows closely some of the activity online around the appalling conditions that are being offered to workers in the agricultural industry will know of jobs being put on websites that are calling for somebody to be working 55-hour and 60-hour weeks, with very poor pay rates and very poor support and conditions. It would not surprise me at all to find out that the kinds of employees who were to be covered by section 24O of the Tax Administration Act, which is being repealed by clause 224 of this bill, are actually exactly those kinds of workers. They are not being employed in a proper way and are not, in fact, paying tax in a proper way.

The original intent of the clause that is being repealed here might well have had a great deal of validity. I do not think, from my memory of our discussion of this bill in the select committee, that we had a great deal of focus on this. But now that I look at this clause in the bill, I see that we are repealing a very, very specific section. This is not all employees who work under an exemption certificate or a special tax rate certificate; it is just employees in the agricultural, horticultural, and viticulture industries. This has been done with intent and we are now removing it, but I do not think with sufficient explanation from the Government as to why that is.

This is a serious matter—the idea that people will not be meeting their obligations to the Inland Revenue Department because they are working under a special tax rate or an exemption certificate—and yet today we take away, under this bill, the ability of the Inland Revenue Department to obligate employers in those industries to provide information about that. So I would ask the Minister in the chair perhaps to give a little bit of advice about how it is that this clause came to find its way into the Tax Administration Act and then magically, a few years later, to be taken out. Bear in mind that this is a clause—and we will come back to this in the title and commencement debate—that has, in fact, been implemented retrospectively from as far back, in this case, as 2008-09.

I just want to refer to a couple of other clauses, and perhaps give one example to contrast with the one that I have just made, and that is in clause 237 of the bill, which repeals section 92AAA of the Tax Administration Act. It requires the commissioner to issue a determination on the cost of timber incurred. This provision, I am sure you will be aware, was introduced when the cost of timber was recorded in a separate account and carried forward to be offset against future forestry income. The cost of timber now is deductible in the year it is incurred, without the need for the commissioner to make such a determination.

That is a good example of a clause that is clearly redundant. There is now another way of achieving the same aim of section 92AAA of the Tax Administration Act. It is now possible to deduct the cost of that timber in the year that it was incurred, so we can see there why the section is being repealed under clause 237. I cannot say with the same confidence why it is that those specified industries of horticulture, agriculture, and viticulture, where there was clearly some doubt about the compliance of employees in that area—why that section is being repealed. However, clause 237 does certainly make sense to me in that regard.

In the remaining time that I have in this call, I want to focus on clauses 234, 235, 236, and 241, all of which relate to the dispute resolution process. I want to say at the outset of talking about these that the Labour Party supports the changes in these clauses. What they are designed to do is to make the most efficient possible dispute resolution process, managed by the Inland Revenue Department. The two issues that are being dealt with here both fall to the question of when a dispute resolution process is seen to have been initiated.

In clauses 234 and 235, in particular, what they do is clarify that the Commissioner of Inland Revenue’s response period when a taxpayer is late in issuing a disputes document starts from the time when it is decided that exceptional circumstances exist and the taxpayer’s late dispute document is to be allowed. This is to deal with an issue that has arisen around particular people who are involved in dispute resolution processes believing that the process itself has not begun until the Commissioner of Inland Revenue has made contact with them. These clauses clarify that. They clarify that the commissioner does have discretion around the exceptional circumstances clause, and they do clarify for those people involved in dispute resolution as to when the process begins.

Clauses 236 and 241 ensure that truncation is allowed in a taxpayer-initiated dispute after the taxpayer has issued a statement of position without requiring the commissioner to first issue a statement of position. This is very important for the average taxpayer. They have got a dispute. They are the one initiating it. It is not the Inland Revenue Department. They are the people who can state the position and then the disputes process can be initiated. Under the current law, there has been an understanding that there would need to be a statement of position issued by the Commissioner of Inland Revenue. That is not required now.

This is actually an exceptionally good move for those people who find themselves in error. There are constituent MPs in the House who will know of constituents who have found themselves locked in disputes with the Inland Revenue Department. This will mean, at least at the very beginning of the process, that if a taxpayer has initiated that disputes procedure, they can get on with it right away.

There are good elements to Part 4, where we are tidying up other Acts that are affected by the changes in here, but I really just want to return to my very first point, which is that there was a very, very specific change made in 2008-09 around those people who were working under special tax certificates or exemptions in those three industries. We have not seen a reason from the Government as to why that has been changed. I think it is probably timely for the Minister, with his extensive knowledge of these industries, to get up on his hind legs and tell us why that has happened.

STUART NASH (Labour—Napier): There are a couple of points that I just want to reiterate, but not in any great way, shape, or form. As mentioned, clause 230, which inserts new section 70C, requires someone who is filing for a research and development tax loss to do so by electronic means. I suppose the point I was just about to make is that I suspect you can make an assumption that those who are applying for research and development tax losses are involved in the sort of industry or have the means of communication that allows them to do it electronically. I suppose the point I just want to make is that we do run a very slight risk of diminishing the integrity of the tax system a little bit if we are so prescriptive that we say it must be done by electronic means and do not allow a taxpayer to do it by paper means, if required. For example, in clause 232, which inserts new section 80KV—this is a replacement in the Tax Administration Act; it is about calculating family support—there is no requirement there, either way, to do it electronically or by paper. Therefore, the assumption is that it can be done in any way, shape, or form. So, like I said, we had to be careful about making it too prescriptive.

I would also like to talk about clause 232B, which is making an insertion after section 81(4)(u) of the Tax Administration Act. We debated this quite a bit at the Finance and Expenditure Committee because what this is talking about is how research and development proprietary information is communicated in such a way that the Inland Revenue Department (IRD) is certain that it is available for a tax credit. The thing that we raised and we discussed quite a lot here—the Government members will remember this, and they may have their own views. The concern that we raised—and I do remember the member Mr Bayly, in particular, was quite vocal about this—is that what we are dealing with in this country is sometimes very innovative and proprietary technology. We want to get the research and development tax credit. But the thing that really concerned the committee was—the “lack of trust” is the wrong term, but we were concerned that what would happen is that innovative companies would not apply for this research and development tax credit because they were unsure that the integrity of the process was total.

For instance, if you were telling someone at Callaghan Innovation and—let me quote this from new section 81(4)(v)—“communicating to an officer, employee, or agent of Callaghan Innovation, information for the purpose of administrating [this Act]”, and Callaghan Innovation was the organisation put forward by the IRD that would determine whether the organisation was able to draw down a research and development tax credit, we were concerned that there is the possibility that the integrity of the process might be compromised. So I just wanted to note that. In the end we obviously left it in the bill—there was a consensus in the end—but we just need to be a little bit careful.

The other thing also is that new section 81(4)(w) says: “communicating to an officer, employee, or agent of the department that is, with the authority of the Prime Minister, for the time being responsible for the administration of the Research, Science, and Technology Act …”. It is a little bit clumsy—I mean, all it says is that we are going to do this for a little bit and then we are going to change it. It is not an ideal way to do tax legislation, considering that one of the fundamental tenets of tax legislation is that it is easy to administer, it is easy to understand, and there are no fish-hooks. That just signifies that even though we are encoding this in new legislation, in fact it is probably not going to be there for a long time if it says “in the time being”.

There are a couple of other sections that I would like to talk about. One is amendments to the Income Tax Act 2004. If you look at clause 260 there is going to be an insertion of new section CC 5, “Person deriving pension from foreign superannuation scheme and returning as income before 1 April 2014”. I am assuming that the vast majority of electorate MPs, and probably a number of list MPs, have received delegations of constituents from countries that have superannuation schemes that are, in fact, a lot more generous than ours. The New Zealand Government grabs them as part of the process and the constituents—often they are Dutch, actually. Dutch and Irish—that is what I have found. Anyway, they seem to be disadvantaged because the Government gets a hell of a lot of money from their superannuation scheme and then gives them the amount of money from our pension scheme, and the Government seems to be winning.

It is a point of contention. I remember speaking to the Hon Michael Cullen about this—

Grant Robertson: Name-dropper.

STUART NASH: Sorry—well, he lived in Napier. Not many people know that when Michael Cullen was the Deputy Prime Minister and the Minister of Finance, he lived in Napier the whole time. It is why Napier has absolutely flourished and come back to Labour. But anyway, I asked Michael: “Is this”—

Dr DAVID CLARK (Labour—Dunedin North): I am sorry to cut my colleague short, because I do realise that the contributions of the Hon Michael Cullen are incredibly important in the tax debate. A few people would actually dispute that, but I hazard to guess that even on that side of the Chamber there would be plenty of members who would honour the contributions made by the Hon Michael Cullen.

Hon Simon Bridges: He did a good job on the books until Helen and Grant got hold of him.

Dr DAVID CLARK: Well, I did not quite catch what that member said, but I do not credit it as something worth responding at length to, in any case. But Dr Cullen, of course, would have put through a tax bill—I imagine—that had different kinds of tax changes suggested that would have really made New Zealand a fairer place to live in. Here in this bill, of course, and with the subsequent amendments that we are looking at in Part 4 of the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill, we know that what we are affirming is a set of tax changes that were made in 2010—the tax regime we have currently—and the changes made around research and development, and other remedial matters that confirm the status quo and that, essentially, continue us along the road we are going along now.

As I noted in my earlier contribution in the House today, that is a path we are going down where we are not achieving the kind of export growth and so on that the Government so often accords to the changes that it wants to make in tax packages. So when we are debating the kinds of changes—the research and development expenditures, and so on, and their flow through to other legislation—this Government claims that it is making a step change in its rhetoric for the New Zealand economy, but the evidence that we have seen tells us otherwise: the fact that the export target of 40 percent has not been achieved for exports as a proportion of GDP. It has come nowhere close under this Government. In fact, the figure has now dropped below 30 percent, and every year it is getting worse. So we find here in this bill, and in the changes that are being made—the proposed amendments that will begin in the 2016-17 tax year—that we are really no further ahead.

We on this side of the House will be supporting the bill, as has been noted earlier, and that is off the strength of the fact that remedial changes to tax legislation are imperative to ensure that we maintain our low-rate, broad-based tax system, which we know is so important in terms of supplying the revenue necessary for the health and education systems that we all depend upon for our children and for the future prosperity of the country, and, of course, the health system in our retirement and throughout our working lives. So we do support the bill and we are glad to do that for those reasons, but we are uncomfortable, of course, with the fact that it is not the kind of bill that the Hon Michael Cullen would have put through, which would have had a fairer deal across the whole landscape.

It would also have ensured that every New Zealander had their fair share of rewards out of the tax system, and ensured that our future prosperity would have been greater because we know that the growing inequalities that are being driven by these kinds of changes—by the rates that we are affirming, and so on—are actually holding New Zealand back. In a report from the OECD, which I think I have got it here in front of me somewhere, about a year ago it gave its view that the New Zealand economy is going 15 percent slower—that is, it is 15 percent smaller than it otherwise would be—because of growing inequalities in New Zealand in recent decades. So we on this side of the House would prefer to have seen more progressive changes throughout the legislation and have these flowing right through into Part 4, because we believe that that would have made the society that we have fairer and more prosperous.

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

The CHAIRPERSON (Lindsay Tisch): Yes. We have a number of calls here—18 calls, over an hour and a quarter.

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

Ayes 63

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

Noes 58

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

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 129 in the name of the Hon Todd McClay, and the following tabled amendment in his name, to Part 4 be agreed to:

in clause 260B(2) replace “After section HH 4(7), insert:” with “Replace section HH 4(7B) and (7C) with:”.

Amendments agreed to.

The question was put that the following amendment in the name of the Hon Clayton Cosgrove to Part 4 be agreed to:

insert the following new clause:

254B New Section 60C inserted (Unit title bodies corporate)

After section 60B, insert:

60C Unit title bodies corporate

To the extent to which a supply of goods or services made to a unit title body corporate is used in the course of making a supply under a power or duty of the unit title body corporate as set out in section 84 of the Unit Titles Act 2010, the supply is treated as made—

to the persons who are owners of the units and common property administered by the body corporate; and

in proportion to each unit owner’s ownership interest in the unit title body corporate.

For the purposes of this section, common property, owner, ownership interest, and unit have the meanings given in section 5 of the Unit Titles Act 2010.

Subsection (1) applies for supplies made on or after 1 October 2011 and before April 2016.

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

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.

Part 4 as amended agreed to.

Schedule 1

The question was put that the amendment set out on Supplementary Order Paper 129 in the name of the Hon Michael Woodhouse to schedule 1 be agreed to.

Amendment agreed to.

Schedule 1 as amended agreed to.

New schedule 1B

The question was put that the amendment set out on Supplementary Order Paper 129 in the name of the Hon Michael Woodhouse to insert new schedule 1B be agreed to.

Amendment agreed to.

Schedule 2

The question was put that the amendment set out on Supplementary Order Paper 129 in the name of the Hon Michael Woodhouse to schedule 2 be agreed to.

Amendment agreed to.

Schedule 2 as amended agreed to.

Schedule 3 agreed to.

Clauses 1 and 2

STUART NASH (Labour—Napier): If you will indulge me, I would just like to point out one thing, if I may, please. If you go—the Minister of Revenue may like to do this, actually—to clause 261B, “Section OB 1 amended (Definitions)”, subclause (1) and subclause (2) are, actually, exactly the same. So you may want to remove one or two of those. It is just something that needs to be done. We will not complain if you do it without bringing the bill back to the Finance and Expenditure Committee, but it just, you know, tidies up the legislation.

Hon Michael Woodhouse: Section what?

STUART NASH: It is in clause 261B. This is called the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill. This is one of those bills where it covers everything, but what the Government does is it sneaks things in there. So it sounds really good. It sneaks them in there. I mean, we are all into research and development. We all want to see the research and development spend increase—there is no doubt about that. We have one of the lowest levels of research and development in the OECD, and we understand that it is imperative that our research and development spend increases if we are going to lift this economy and have a knowledge-based way forward. It is important. This is what our economy is built on.

However—and there is always a “however”—this is very, very piecemeal. David Clark is probably going to talk about this a little bit later in his 5-minute contribution, but we would have gone—

Dr David Clark: 10 minutes.

STUART NASH: —10 minute contribution—a lot further than this bill does. This is really tinkering around the edges, and even in the select committee it was admitted that this is a little bit of: “Suck it and see. Let’s see how this thing goes.” There are a couple of definitions that are not that clear. Are we allowed to claim back employees’ salaries or contractors’ wages, etc., etc.? But it just tinkers around the edges.

This is not the sort of bill that is going to drive the research and development spend and that is going to allow these little innovative companies to really grow into listed organisations or go global or to be the sort of organisation that we need to drive economic growth in this country. This is tinkering around the edges. And to say “remedial matters”—the dictionary definition of remedial matters is “to remedy or to cure”. We do not agree that this bill does much of that.

We certainly do not agree with Part 2, which is about the annual rates for 2015-16. We think they are inequitable. I remember Dr Clark speaking very eloquently about this last year when we talked about the fact that tax needs to be equitable to be able to deliver the sorts of outcomes that society demands right across all our communities. These rates do not do that.

There is nothing remedial about the rates that are in Part 2 of this bill. In fact, there are a number of tax bills that are coming before the Finance and Expenditure Committee at the moment, and Labour is lukewarm on a lot of them. But none of them are really delivering the sort of tax reform that is needed in this country. We have had a whole number of bills—a series of three—that even the submitters became confused about. They started submitting on bills that were not before the committee. We had to gently remind them, you know: “If you put your submission in and come back in 3 weeks’ time, we’d love to hear what you have to say.” Even the submitters were confused on this, let alone the general public. As for this bill, it could have been and it should have been so much better.

The research and development tax credit is something that is really needed in this country in order to drive the growth that Andrew Bayly has been involved with for a long time. Mr Bayly must read this sort of stuff, sort of mop his brow, and say “We can do better.”, but he is too scared to stand up and let Mr English, or whoever is in charge of this sort of stuff, know that.

It should be better, could be better—must do better. This is the difference between the National Government and the next Labour Government. We will do better. We will put out research and development tax policy that will make a difference. And, yes, there will be another research and development remedial matters tax bill back in this Parliament before 3 years have passed. It will be a Labour bill, and it will make a serious difference to the small to medium enterprises. It is not going to be the sort of bill that gives $50 million to Sanford. Well, why would you? Well, I suppose he is the president of the National Party, so it helps.

This is going to be the sort of bill that gives meaningful support to those businesses that we want to grow, that have a mandate to grow. We are going to give them a mandate to grow. It is not about cheap money; it is not about a handout. It is about a hand up and a help. We understand that this business sector is the backbone of the economy. We understand that research and development must happen. We understand on this side that research and development deserves a hell of a lot better attention than this bill gives it.

Hon MICHAEL WOODHOUSE (Minister of Revenue): I want to take just a short intervention on the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill, which is my first as Minister of Revenue, a portfolio that I picked up from my predecessor, the Hon Todd McClay. I want to wish him all the best. He has had, I think, a cracking good start as Minister of Trade, in being able to sign that fantastic agreement, the Trans-Pacific Partnership agreement.

I want to address just a couple of things that Mr Nash has raised in respect of the title and commencement clauses. In his broad overview, he pointed out, firstly, a potential duplication in a clause. I have checked with my officials, and I am very happy to report that there is no duplication; there are minor changes to it, and they affect different parts of various pieces of legislation. But I do applaud him. I was not sure whether he was even awake at one stage prior to his intervention, but he is clearly trying very hard to make that contribution.

What we heard from Mr Nash’s intervention is classic Labour Party. It wants to raise income tax. It wants to get back into Government and be the tax and spend Government that it always was. Mr Nash made it clear that as soon as Labour gets back into Government, it will raise tax. It will take money from every hard-working New Zealander in this country because it knows how to spend it better than the New Zealand taxpayer. So there it is. Campaign 2017 has already started with a $1.5 billion bribe to the citizens of New Zealand, which Labour knows it cannot pay unless it takes more money out of the pockets of the New Zealand taxpayer.

I can reassure this Committee and the people of New Zealand that the National Party and the National-led Government are very clear that the path to prosperity is not tax and spend. So when confirming the annual rates for 2015-16, which need to be in place and commenced by 1 April 2016, I can confirm with confidence not only that the tax rates will remain the same as they are now but also that if the New Zealand taxpayer wants to see the burden on their pockets maintained or reduced, then only a National-led Government will give them that. I think we heard it directly from the horse’s mouth. Mr Nash has confirmed unequivocally that a Labour-led Government will want to take more money out of the pockets of New Zealanders, and we will not.

Dr DAVID CLARK (Labour—Dunedin North): I appreciate the member Michael Woodhouse’s wide-ranging and interesting contribution. I intend to focus on the title and commencement clauses myself, but I understand now that the debate has been broadened, so I would not wish to limit any other colleagues who want to expand their portfolio of complaints against the Government beyond those that you might expect to find in a tax bill.

This bill does confirm the existing tax structure—in that, the Minister of Revenue is correct. It affirms the tax structure that we have currently, which sees this Government borrowing more money than any other Government in New Zealand history. This is the Government that has borrowed more than any other Government in New Zealand history, and so it is a bit rich for that Minister to come to the Committee and talk about a tax and spend Labour Party. His Government has borrowed more than Muldoon’s Government did. That is how shameless it has been. It has returned one surplus. Despite years and years and years and years of promises it has delivered but one surplus to this country, and it was manufactured. This is the borrow and borrow and borrow and borrow and borrow and hope Government—this Government right here in the House that is pushing through a bill that it is borrowing to pay for.

We are being asked to support it. Let me make it clear. We will support it on the basis that we need a robust tax system, on the basis that the remedial changes in this bill help to make our tax system more robust, but we do not support the rates of tax in there that that Government pushed through to ensure that the wealthiest 10 percent got 40 percent of the value of the 2010 tax cuts. The wealthiest 10 percent got 40 percent of the value, while the bottom 20 percent earning the least got just 2 percent—just 2 percent—of the value of those tax cuts. Of course, we know that at the same time John Key broke his promise—broke his promise; that was the start of many broken promises—not to put up GST. That meant that the small, the very modest, pay increase that people thought they were getting with that initial tax cut—that those at the bottom of the tax structure and in the middle of the tax structure thought they were getting—was swallowed up immediately in that GST increase.

Of course, this change that that Government made in 2010, which we are affirming again today, is part of what has driven that growth in inequality under this Government that sees middle New Zealand getting left further and further behind—robbed of opportunities, robbed of the Kiwi Dream. So I want to suggest a title for this bill, an alternative title, which is to replace the material in brackets with the words (Suffocating the Kiwi Dream), because that is what this bill does. That is one of the things this bill does. It does the remedial matters; I am happy to leave that part in the title because we support the remedial matters. What we do not support is this constant drip, drip, drip of making sure that the 1 percent have that little bit more in their pockets. Those who are in the Cabinet in-club get that little bit of extra handout, while those in small business put their own shirts on the line day after day. Small-business people put their shirts on the line and face excess regulation under this Government. Tax changes and child support changes and constant changes and more red tape from this Government, which cripples middle New Zealanders as they try to do their bit to get ahead—all so that the top 1 percent can have their interests looked after and so that the very, very close friends, the in-club of the National Party, can enjoy their lifestyle in Hawaii.

I want to suggest a second alternative title for this bill, and that is the “Can They Deliver Bill”, because one of the issues that I do not feel has been covered enough in the debate so far is the history that goes with the child support reforms that we are dealing with here today. In here are child support reforms that are “intended to reduce the implementation costs”. Why would the Government be trying to reduce the implementation costs of our new child support changes? Well, the answer is that originally the changes were estimated to cost $30 million—$30 million. Then what happened? That was in 2011. In 2014 the cost estimate for changes to the child support system blew out to $210 million. That is a sevenfold increase—a sevenfold increase.

Is anyone on that side of the Chamber prepared to defend a sevenfold increase in the cost of implementing the child support changes? I hear silence opposite.

It had blown out to $210 million in 2014, and on top of that the implementation of the child support changes was delayed by a year—by a year. So families that had made arrangements based on the existing child support legislation—including things like putting money into a mortgage, or investing in new clothes for their kids and so on, because they thought they had a bit more money in their pockets—were forced to go back to the old system and could not necessarily cover the debts for all the changes they had made.

That was a treacherous mistake by this Government, but it was also a costly one because the taxpayer picks up the extra hundreds of millions of dollars to implement this legislation. Now we are told this bill aims to reduce the implementation costs to $163 million for that legislation. Remember, the original estimate in 2011 was $30 million. Now the Government is hoping, through these changes—which make it a less effective system, I might add—to reduce the costs to $163 million.

This is a Government that is not across the basic details. It was told years ago, in its first briefing to the incoming Minister—in fact, Peter Dunne knew about it in the previous regime—that the tax system needed to be upgraded. The Government has dillied and dallied and it has taken for ever and it has pushed out the capital spend, and we have a tax system that is creaking. We now find ourselves in this Parliament putting through legislation that a few months later we will have to reverse out, and there are all the costs of running legislation through Parliament—and they are not insignificant, I might add. This is a Government that is not across the basics, and so we ask ourselves, and we could rightfully put in the title, “Child Support Changes (Can They Deliver?) Bill”, because I am sceptical—I am sceptical. We have twice brought changes in child support legislation back to this Committee, and we have seen the costs mount further and further.

I wish the new Minister of Revenue well in this responsibility, because he does have a challenge ahead of him. It is not his doing in this case, I would say, although there is an element of collective Cabinet responsibility. The problems go back beyond this Minister. He has his work cut out for him, and I do wish him well in achieving a fair tax system that does the duty, which we all want it to do, of collecting taxes so that we can afford as a community to supply things like roads and hospitals and schools—those things we all need but cannot afford from our own pockets. We need an effective tax system. We need a tax system that collects the revenue to afford those things that we need as a community if we want to live in a modern way and in a way that ensures our future prosperity: hospitals, schools, roads, and, at its most basic, a justice system, and so on. So I wish the Minister well with that, but I do question whether this Government will be able to deliver on the things that are promised in this bill.

I am also concerned, as I said at the outset of my speech, about the chilling effect of this legislation, which is slowly suffocating the Kiwi Dream through reinforcing the kinds of tax changes that have driven a 15 percent anchor on our economy over recent decades, according to the OECD. There is growing inequality. We have the lowest homeownership rate in 60 years in this country. The gap has been growing every year, under this Government, between the very well-off and the rest of New Zealand. Those people in middle New Zealand who aspired to own their own home, who might have aspired to own their own business, and so on are struggling more and more and more as this Government looks after the interests of a very select in-crowd, those who are its closest mates.

We challenge the Government to try to shift to being a fairer Government, but we ask in this bill that consideration be given to the name change of “Suffocating the Kiwi Dream Bill” or “Can They Deliver on the Child Support Promises Bill”. We will support the bill for the fact that it makes our tax system, through the remedial changes, more robust to do the basic things a tax system has to do, but we do it with reservations, and we put forward those suggestions for consideration. I am interested to hear whether the Minister will consider them in a thoughtful way and respond, because these changes in here are political. They do have an important bearing, also, on the future shape of our society. Tax bills often are considered not very exciting, but the stuff that goes through in this bill affects every single New Zealander.

GRANT ROBERTSON (Labour—Wellington Central): I think my colleague Dr David Clark has covered very well the broad outline of our concerns on this bill, but I want to make reference to the contribution that the Minister of Revenue made a few moments ago. Two things struck me about it. It was his first contribution as the Minister of Revenue, and in it he managed to do two things. The first of those was to contradict the Prime Minister, which is not a good thing, I would suggest, to do in his very first speech as the Minister of Revenue, and I will explain that in a moment. But the other thing he did was the classic National approach. The Labour Party comes forward with a policy proposal to offer 3 years’ free post - high school training and education—

Chris Bishop: A terrible policy.

GRANT ROBERTSON: —which is a contribution, an investment in the future of New Zealand. “Donald Trump Junior” over there does not like it, but actually it is an investment in the future of New Zealanders. It is an investment in making sure we have people who are work-ready—

Alastair Scott: An expensive bribe.

GRANT ROBERTSON: —who are able to deal with the changes that are coming in the workforce, and who will be the highly skilled workers whom employers implore us for day after day, saying: “The thing we can’t find in New Zealand are the skilled workers who will drive productivity and innovation.” Our policy is an investment in that. It is an investment. Mr Scott called it a bribe. Well, there is the great irony, because the “bribe” is being funded from the same funding that the Prime Minister says is going to be used for tax cuts—and that is the bribe. That is the bribe, because that is not an investment in the future of New Zealand and the long-term contribution that the next generation of New Zealanders can make if they get that chance at education and training. Once again from National, it will be tax cuts that benefit the wealthy. It will be tax cuts that go to its mates, rather than an investment that all New Zealanders can be a part of.

My challenge to the members opposite is that they get up and defend tax cuts versus an investment in our future. We are more than happy on this side of the Chamber to have the debate with you and with New Zealand about which is the best approach. Should we invest in the future of New Zealanders, or should we fritter it away in tax cuts for the National Party’s mates? I welcome that debate. The Chair is urging me to come back to the bill.

The CHAIRPERSON (Lindsay Tisch): It would be good.

GRANT ROBERTSON: Well, I was only responding to the Minister—

The CHAIRPERSON (Lindsay Tisch): I know.

GRANT ROBERTSON: —and his contribution. Clause 1 of this bill asks us to talk about the title and, as my colleague David Clark has said, there are many alternative titles. I want to make reference to a couple of points here. The first of those is that two words do not appear in the title—and, actually, in all honesty—they should, and those words are to do with child support changes. That is a big part of what this bill is actually about. And as my colleague David Clark mentioned, this is not Michael Woodhouse’s fault, so he gets off the hook on this. The process of making changes to the child support system has been a bit of a shambles under a couple of Ministers. The most recent of them, Todd McClay, did his best, I suspect, to try to undo some of the damage.

To recap, the situation that we came into when this bill was introduced to the House was that we discovered that the cost of implementing the IT system for child support changes had blown out from an initial $30 million—a fairly substantial sum—to $163 million. What we actually discovered when we got into the select committee process and the Commissioner of Inland Revenue came in was that, actually, it was more than that. The full roll-out of the child support IT system was going to be worth $225 million, and they just decided not to do phase 2 of it at the moment.

There were strong recommendations from Treasury, from the State Services Commission, and from the Government Chief Information Officer to wait until the vast project changing the IT system at the Inland Revenue Department (IRD) overall could be done and these child support system changes could be incorporated into it. The Government rejected that advice. The Government decided to press on, and as a result we now see a potential bill of up around $163 million for the system. That is the equivalent of a quarter of the annual child support payments that the IRD collects. That is a huge amount of money, and not a cent of it is going to be going into those kids themselves and their well-being. The words “child support” should be in the title. The Government should be prepared to acknowledge the fact that it actually got this wrong and is having to undo a stuff-up. It should acknowledge that in the bill.

The annual rates element of the bill is here in the title, and that is as it should be. Our support for this legislation does not indicate our support for those particular rates. I do challenge the Government members to stand up and say whether they believe the tax system at the moment in New Zealand is balanced and whether it is fair. Are people paying their fair share to ensure that all New Zealanders get a fair go? The answer to that question is no. This bill should have in its title the idea that there are missed opportunities.

Time after time this Government brings tax legislation to this House that, yes, deals with some of the minor changes, the remedial changes, and the inefficiencies. Fantastic, great, but where is the vision? Where is the vision for a tax system that actually sets New Zealand up for the future, gives everybody a fair go, and recognises that those who have the most can pay a little more to ensure that all New Zealanders get the chances and the opportunities that they deserve? That is what is missing from this legislation and, unfortunately, it is missing time and time again from other tax legislation.

The other matter mentioned in the title is research and development, and my colleague Stuart Nash covered this pretty well in his contribution. But I want to make one point, and it arises from a visit I made with Mr Nash to the Lowe Corporation in Hawke’s Bay. Andy Lowe was a very busy man, he was with us that day, and just as he stood up and he walked out the door—this was last year—he swung around back to us, and he said: “R and D tax credits—you’ve got to do them.” That was what he said. What Andy Lowe was saying by that was that the grant-based system that is now operated under Steven Joyce, also known as the picking winners system operating under Steven Joyce, is not enough when it comes to research and development in New Zealand. What businesses are telling us when they say to the Labour Party “We support your R and D tax credit policy.” is that it provides certainty, a surety—

Chris Bishop: Stuart said that you wouldn’t give money to Sanford. Stuart said Sanford got nothing.

GRANT ROBERTSON: —for them that they can invest in research and development. They do not have to be at the whim of Steven Joyce, and when Chris Bishop was there I am sure he had his list of winners—when he was Steven Joyce’s adviser—that he picked out and said: “These are the ones we’ll pick this time. These are the people who will get the R and D support.” We do not think that is good enough, on this side of the Chamber. What we think is necessary is that there is a broad base to research and development, that all companies in New Zealand know that that is where they can invest, and that they know they have got the support of the Government. The changes in the bill are tinkering. They are not dealing with the fundamental issue of how we lift research and development to drive a productive economy. Again, it is a missed opportunity in this bill.

In the brief time I have remaining I want to refer to the other matters, and they are the commencement dates in clause 2. One could make a very—I know many of my colleagues want to pick this up—lengthy contribution looking at the commencement dates, plural, that appear in clause 2 because they range all over the place. I mentioned in an earlier call that one of them goes back to 2008-09, but in clause 2(5) we discover that section 250(3) comes into force on 10 October 2000—16 years ago. I wonder whether members opposite would like to help explain to us quite how that has occurred.

Various other commencement dates appear, and we do understand on this side of the House that when you are amending different Acts of Parliament that will happen. But to have a clause that goes all the way back to 2000—I think that Chris Bishop was probably running around in short pants in the Hutt Valley in 2000, listening to Blindspott or something like that, and probably even then would have lost to Trevor Mallard in a bike race.

Chris Bishop: He was a very good MP back then.

GRANT ROBERTSON: Oh, there we go. So Chris Bishop would have been there in 2000, and perhaps he could explain to us quite how we have a clause that gives a provision a commencement date of 2000.

The Labour Party will be supporting this bill, but we are extremely disappointed that once again a taxation bill has come here that fails to reflect what New Zealanders want—a fair tax system, where people pay their fair share so everybody gets a fair go. Unsurprisingly, the National Government does not believe in that.

Hon DAVID CUNLIFFE (Labour—New Lynn): This is a fairly—what would you say—innocuous sounding bill, the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill. You would think it was just a technical little series of remedial amendments, but actually it is much more than that for the reasons that my good colleagues have just said.

Let us touch base on what the rates are saying. Let us touch base on where the Inland Revenue Department and child support are at, and then let us talk about the choice that New Zealand faces between two different economic futures—a dumb one and a high-value, high-knowledge, high-tech one—and how this bill misses the boat in helping us turn that corner. Let us turn first to the rates.

This bill just perpetuates—there is no other word for it—the lie that National told to New Zealanders. The lie was that it would not raise GST and New Zealanders would have a fair tax system. What it did was raise GST, and it made the tax system less fair by disproportionately giving tax cuts to the top end. So 40 percent of the money, New Zealanders’ money, went to the top 10 percent of income earners, the ones who already had more—people like us in this Chamber. We did not need it. We did not want it. But National’s rich mates were greedy, so that is why National got elected. It was the only significant economic measure it took in its first term.

The Government screwed the scrum from the average joe to the rich, and this bill entrenches that inequity for a further year. Government members can dress it up in John Key’s social media. They can go and stand in a cage on morning radio. They can do whatever modern public relations thinks it can buy, but it does not change the fact that National has made New Zealand less fair and less prosperous—less fair and less prosperous.

Let us turn to one other aspect of the “fairness”: child support. We all know that when families go pear-shaped, they can go really pear-shaped. Kids depend upon fair payments between parents who have separated, so that they can be looked after. Child support is a mess. Child support debt is going through the roof, the new formula is not working properly, and New Zealand children are missing out. They are the meat in the grindstone, and it is just not working. This is the bill that is supposed to fix child support. What does it do? Oh, it votes another $160 million to fix the computer system. What a wasted opportunity.

We should be talking about real, systemic changes to child support that mean separated parents can work together better for the interests of their children. That includes, for separated, non-custodial parents—usually the father—the penalty rates being set at a level, and there being a process so that when they get behind and get outside the system they can get back in again, so that they can be real parents to their children. The amount of suffering that is going on in our country because of the anguish of those parents does not bear thinking about. Here is a bill that could have made real, substantive change in dealing with that problem, and it has not. It is a missed opportunity.

Let us turn to what I think is emblematic of the choice we face between two economic futures. One is that we consign ourselves to being producers of raw commodities. Milk powder—that is worth less and less on world markets, sadly. I am not knocking the primary sector—it is our backbone. There are a lot of wonderful, hard-working people out there, doing their very best to make New Zealand better and to raise their families, and good on them. We should always be world’s best in primary agriculture. Do you know what? That is not going to be enough.

Raising New Zealand’s income standards, providing for all our families, building a great future for our children so that our grandkids do not live overseas—that requires more than milking cows more efficiently. That requires us to have a research and development system that generates world-class innovation. We have got two problems: No. 1, we do not have enough research and development, and, No. 2, it does not work well.

Let us deconstruct that. We do not have enough of it. We invest 1.2 percent of GDP in research and development. The OECD average—the rich country average—is more than double that, at 2.5 percent. And the small, smart country average—the countries that we want to compare ourselves with; Singapore, Sweden, Switzerland, Israel, Denmark—those countries invest an average of 3.3 percent. New Zealand invests 1.2 percent. We do not do enough. We do not do enough, and this bill again misses the opportunity to fix the system.

Why are the incentives wrong? We all know that when someone invests in risky research and development, they are doing it for themselves, but they cannot capture all of the benefits of that investment because, if it works, the whole market benefits. They cannot take all of that. That is why, around the world, Governments sweeten the tax system or provide grants—or, usually, both—so that innovative young companies can get a leg-up, can create jobs, can expand, and often are born global. So it is really crucial that we do that.

What has guided best practice? It is two things. It is a baseline sweetener of the tax system, usually delivered through a near-universal or universal tax credit, which is what was in Labour’s manifesto last time around, and I hope will be again. Then, on top of that, it is specific interventions in high-value or high-potential industries or regions to encourage growth where it matters most. It is not picking winners at the company level, but strategically aligning the incentives and de-risking business enterprise so that people know what the game plan is.

What have we got in the current system, which this bill tinkers with—with black hole expenditure—but does not demur from? We have got a grant system through Callaghan Innovation, which is spectacularly the worst of both worlds.

Chris Bishop: Rubbish.

Hon DAVID CUNLIFFE: It is not—no, no, it is not rubbish. It is not a universal tax credit system that is easy to implement and fair to all businesses and actually allows market prices to work, nor is it a judicious strategic intervention. What it is is an “automatic”, criteria-based grant system with a huge bureaucratic overhead that as often as not ends up with investments that go spectacularly pear-shaped. For example, Callaghan Innovation gave a research and development grant to—wait for it—a subsidiary company of Larry Ellison’s Oracle America’s Cup bid when it was racing against New Zealand. The taxpayer paid one of the world’s greatest billionaires—the guy with the huge superyacht—to race against our team through the system.

Meka Whaitiri: Treason!

Hon DAVID CUNLIFFE: You would not believe it, would you? It is unbelievably stupid. It is unbelievably brain-dead.

Chris Bishop: Tell us about Sovereign Yachts.

Hon DAVID CUNLIFFE: Chris Bishop, I think, is probably smart enough to know the truth of that. How about dishing out grants to the subsidiaries of German multinationals? As soon as the company got the grant, it unbolted and took it back to Germany. That was Bayer. Or a publishing company that was so dodgy that no sooner had it pocketed the money than it was off to the Serious Fraud Office? That one has not even been ironed out yet. Those are the kinds of examples we get of an “automatic” grant system, which is still bureaucratic but to which no one is applying a common-sense test. I want to ask the Minister in the chair, the Hon Michael Woodhouse—with the black hole expenditure provisions in this bill, is he going to look at changing that? Is he going to look at making that smarter? Is he going to look at having the horse in front of the cart rather than behind, and having the fence at the top of that cliff, not at the bottom?

What is wrong with the detail of that black hole expenditure? Well, for example, the clawback on derecognised non-depreciable assets is a tiny token of what was in Labour’s policy, which was an increase in the depreciation rate on high-tech plant and equipment. So alongside a baseline research and development tax credit, we increased the depreciation rate to match the actual life of high-tech gear—typically 2 to 3 years. But this rate is based on at least a 5-year life. Who in this country is using a computer today that they bought 5 years ago? Well, they are probably not in the leading businesses. If the Minister was the Minister of Foreign Affairs, the Ministry of Foreign Affairs and Trade would still be using a quill pen. It is uneven, is it not? But this measure does not fix it.

Here we have a bill—I am summing up, Mr Chair—with a boring little name that completely misses the boat. It perpetuates inequitable tax rates. It fails to deal with the inequities of child support, but just basically votes more money for an overblown computer system. And it completely gets it wrong in terms of a decent and sensible tax structure to do what I think both sides of the House want, which is to encourage innovative businesses and to give enterprising Kiwis—the job creators, the wealth creators—an equal hand up so that they can compete in international markets to win. That is what we believe in—backing Kiwi businesses to go global with a good tax structure, with baseline research and development tax credits, and an intelligent system of interventions.

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

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

Ayes 63

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

Noes 58

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

Motion agreed to.

Clause 1 agreed to.

The question was put that the amendments in the name of the Hon Michael Woodhouse set out on Supplementary Order Paper 129, and the following amendment in the name of Michael Woodhouse, to clause 2 be agreed to:

in clause 2(30) replace “, 263,” with “and”; and

delete “, and 265”.

Amendments agreed to.

Clause 2 as amended agreed to.

Bill to be reported with amendment presently.

Bills

Weathertight Homes Resolution Services Amendment Bill

In Committee

Debate resumed from 21 October 2015.

Part 2 Consequential amendments, validations, and transitional amendments (continued)

PHIL TWYFORD (Labour—Te Atatū): It is good to recommence this debate on the Weathertight Homes Resolution Services Amendment Bill. The people at home who have been following the progress of this bill very closely through the House will be much relieved that the debate has recommenced. They will remember that Labour is supporting this bill because we want to see this final bit of fine-tuning of the Weathertight Homes Resolution Services funding assistance package. We want to see the benefits of the fine-tuning contained in this bill actually realised in the few months that remain before this bill expires.

Before we were so rudely interrupted by the passage of time we were debating Part 2 of this bill, and I want to direct the Committee’s attention to an element in Part 2 that deals with the widening of the definition of “qualifying claimant” in section 125B(1) of the principal Act. This provision is one of three important elements in the bill, and this one particularly updates the Act in accordance with the Supreme Court ruling in Osborne v Auckland Council.

People who have been following this issue will know that John and Helen Osborne had been denied access to the funding assistance package on a technicality, and they took their case through the system all the way to the Supreme Court, arguing that the 10-year limitation on leaky building claims should start from when the building is issued with a code compliance certificate by the council, not when the building itself is physically completed. Because the terminology in the Act refers to the 10-year period kicking in from when the house is built, that is a vagueness that subsequently tripped up a lot of people.

The courts initially ruled that the Osbornes were not eligible for the funding assistance under the Act. Good for the Osbornes—they took that fight on. They won in the Supreme Court. The Supreme Court agreed with them that the 10-year limitation period—that the clock should start ticking from the moment that the code compliance certificate was issued. As a result of that, the Government estimates that perhaps 300 families could benefit.

I want to talk through one particular element. It is not a major issue but concern was raised by some submitters that the bill would have the unintended consequence of making it very difficult for some applicants who have gone ahead and made the repairs on their home after having been turned down for eligibility for the funding assistance package, in that they would not then be eligible. Once the bill was passed, allowing for the Osborne principle to be enacted, these people, having gone ahead and acted and done the repairs, would no longer be eligible.

So let me just talk through some of that detail. The bill deemed the owners who were regarded as ineligible, based on the case law prior to the Osborne case, to be eligible. It basically just deemed them eligible, based on the Osborne principle. That is basically about correcting an injustice arising from an incorrect application of the law.

The problem is that if owners had gone ahead and made their repairs to their house they still would not be able to obtain financial assistance under these provisions because they still would be unable to meet the contribution criteria, which is one of the two key elements they have to meet. What section 125C of the principal Act does is it allows owners who are qualifying claimants to apply to obtain financial assistance. They have got to have an eligible claim. They have got to meet certain contribution criteria set out in the Gazette notice.

Section 166(5), in clause 7, still requires those owners who have made the repairs—they have gone ahead, having been deemed ineligible—to meet the status of qualifying claimant in all other respects. But that is not possible in the case of people who have gone ahead and repaired their homes. That was raised by submitters, including the New Zealand Law Society, who feared that this was an unintended consequence when there was no good reason to deny these people access to the assistance scheme. The Government has estimated that there would be about an extra 70 families in that position. As Paul Grimshaw of Grimshaw and Co. said at the Local Government and Environment Committee, this would essentially require a number of these people to undertake lengthy and possibly expensive adjudication to get their result.

What I would ask is for the Minister in the chair, the Hon Nick Smith, who is the Minister responsible for this bill—which is good for this debate—to get up and explain to us whether in fact the change that the select committee made to the bill in section 166(4), in clause 7, was designed to remedy that unintended consequence. I was not on the select committee. It is not clear to me from the reading that it is, but I would invite the Minister to get up and explain whether or not those concerns have been met in this case.

Su’a WILLIAM SIO (Labour—Māngere): I think it is fair to say that there is genuine interest on our part to ensure that this bill passes but to also ensure that we support the Government in making sure that we correct the injustice that arose from an incorrect application of case law prior to the court case. So in terms of Part 2 of the bill—most of the significant content was in Part 1—clause 7 attempts to clear up the confusion caused by the 2001 Gazette notice and the response to the Supreme Court decision.

I did not have the privilege that the Government members had of sitting in on the select committee process. I note, though, that there were significant submitters who all raised similar concerns, which I think my colleague Phil Twyford has attempted to articulate, and at the outset I say that we want to make sure that this is right. It has taken us a long time to get it here, so let us make sure that we do get it right. Grimshaw and Co. is a specialist litigation and dispute resolution firm that represents over 5,000 clients in leaky building disputes. It raised that the Government has estimated that there will be about an extra 70 families with homes that will be deemed eligible as a consequence of the Osborne court case and the passing of this bill. Given that as of 31 January 2005 there were 1,147 claims representing 3,528 homes that had been assessed as qualifying for the Government contribution of 25 percent, it suggested “it will not be a large cost for the Government to also assist some of these 70 families who were wrongly deemed ineligible and then fixed their homes.” But with this legislation those people would now be eligible.

I know that the Minister in the chair, Dr Nick Smith, has a Supplementary Order Paper in place, but I am not sure whether that covers what this organisation has raised in its submission. You see, it again says that if the bill passes as it is, it would allow certain owners who were deemed ineligible based on the case law prior to Osborne to now be deemed eligible. However, if the bill is passed in its current form, some of those owners will not be able to obtain financial assistance under the financial assistance package specified under this bill. So, specifically, owners who repaired their houses after their claim was deemed ineligible cannot now obtain financial assistance, and the draft law does not appear to allow owners in that position to apply for the financial assistance package even if they would have met the contribution criteria at the time that their claim was deemed ineligible.

I also want to draw to the Minister’s attention that, similarly, the submission made by the office of the Mayor of Auckland also raises the issue that the 2001 Gazette notice clearly distinguishes between the Crown contribution criteria and the participating territorial authority contribution criteria, and that distinction is not reflected in part of this bill. So in the bill as currently drafted there is potential for confusion as to the extent to which the distinction applies. The submission said: “The Bill as currently drafted also does not clearly reflect one of the integral reasons why territorial authorities agree to become [participating territorial authorities], being that a claimant who has commenced proceedings naming a [participating territorial authority] cannot receive a financial contribution unless that territorial authority agrees.”

The Auckland Council also said in its submission that “The proposed definition of ‘qualifying claimant’ also introduces some uncertainty as to whether a claimant who does not meet the relevant contribution criteria might nonetheless be a ‘qualifying claimant’ if the chief executive determines that the claimant is taking all reasonable steps to meet those criteria.” It said: “The effect of the proposed new subpart 9 is that any dwellinghouse which had a code compliance certificate … issued within the 10 years prior to the application for an Assessor’s report will have a claim which is deemed eligible. Conversely, a claimant for a dwellinghouse for which no [code compliance certificate] was issued, but building work continued within the ten years, will not have an eligible claim despite the fact that the [court] decision … would include such a claimant (albeit that those circumstances would be rare).”

So again I think, for our part, we want to get this right, we want to pass it, and we want to support it, but, given the time it has taken to get us to where we are today, I think it is important that you are able to just assure the Committee about the concerns raised by submitters. There is one here by the New Zealand Law Society. Again, it says “The Bill aims to widen the definition of ‘qualifying claimant’ … to include claimants who are actively progressing claims so that these persons are not prevented from having recourse to the … provisions in the Act. However, if the Bill is passed without amendment, there is a subset of owners who had previously been ineligible and will become eligible, but will still not qualify for assistance under the [finance assistance programme] scheme.” Again, that issue is emphasised in the Law Society’s submission.

The other point I want to say is that in the last debate with reference to this bill a Cabinet member—and I am not quite sure now whether it was you, Minister, or somebody else—was reported to have said that you would be keen to free up the building industry, and I would ask the Minister whether he was prepared to just clarify that decision to the Committee. The Minister may recall that we are in this leaky house situation as a result of a previous Government—and I understand that the Hon Maurice Williamson claimed ownership to being part of that Government—that freed up the industry and really set it aside at arm’s length from the territorial authority.

My concern is that here we are attempting to fix the problem that arose from the freeing up of the building industry and, instead of us looking at ways of strengthening compliance, I am hearing that there is a possibility that this Government has set itself on another course where we could end up in the House attempting to find the money to support another leaky home syndrome. So, again, I would ask the Minister whether he would not mind just clarifying to the Committee whether it was him who was responsible for the media reports claiming that that is the direction we could be heading for. I appreciate any comments the Minister might be able to make.

Hon Dr NICK SMITH (Minister for Building and Housing): I am delighted to be able to take a short call on the Weathertight Homes Resolution Services Amendment Bill to respond to the couple of questions that have been raised by members, and I acknowledge the Opposition’s support for a bill that actually makes just common sense.

Firstly, I think it is important to put this bill in some context, and I actually hope it is the last time that this Parliament debates the sad debacle that occurred around the whole issue of leaky homes. The very first point I would want to make, though, to Labour members is that this Part 2 is about making changes to the financial assistance programme introduced by a National Government for those homeowners who are affected by leaky homes. The leaky homes issue arose in 2002. Labour in Government steadfastly argued for 6 years that it would not spend a bean of public money to help the thousands of Kiwi homeowners who were affected by these measures, and it was actually a National Government under a lot more financial pressure than it was that actually came to the party and provided some support.

There are three changes in Part 2. The first of those is very straightforward, and that is where the Government has by Order in Council and Gazette notice made decisions about eligibility for the financial assistance programme and is simply putting them in legislation to remove any uncertainty. The third point that is provided for in this bill is this highly technical question of when the 10-year liability period applies for someone making a claim on a leaky home. The original court decisions were that that should be based on the last date on which someone did work on the home, whereas the Supreme Court took the view that it should be the date of the code compliance certificate.

I actually welcome the decision of the Supreme Court around the code compliance certificate. An underlying issue we have with the building industry is that actually too many homes are completed and nobody bothers to issue a code compliance certificate. The reason I am attracted to the Supreme Court view around when a building project is completed is that if we take the interpretation that it is the date that the code compliance certificate is issued, there is actually an incentive for the builder and those who are involved in a building project to properly complete it to get the inspections done and to get the code compliance certificate issued, and I think our building system as a whole will work better for that. The Supreme Court gave that decision in a particular individual case, but what it did lead to was a number of homeowners who were not eligible for the financial assistance scheme being in the equivalent position.

We are a pragmatic Government. We said other New Zealand families that are in the same situation should be treated equivalent to the Osborne case and be included in the entitlement, and that is what this Part 2 does. Two specific questions have been raised. The first question that has been raised by Mr Twyford, quite appropriately, is what happens if someone in the intervening period has done what a sensible person would get on and do, which is get the house fixed? The answer, with the amendments that have been provided, Mr Twyford, is that they remain eligible. The bit that we want to make plain, though, is that the financial assistance programme has always been about supporting the owner-occupier of a home. I think we all take a charitable view across the House that a man or woman’s home is their castle, and that we take sort of a protective view of that.

But where someone is a property investor and is renting the house out—I am sorry, but that is a business transaction, and we take a less charitable view of risk in that situation. The amendments and Supplementary Order Paper 125 and what the Local Government and Environment Committee has reported is that if you are an investor in a property, or the property is sold, you would not be eligible for the financial assistance programme, and I think that is a pretty fair call for the Government to make when we are, effectively, disbursing public money to assist people who, through some fault in the systems, have been caught up.

The very last point I would make in respect of the questions that have been raised is around the issue of dates, given that it has been some passage of time since the bill was introduced to the House. Supplementary Order Paper 125, which is tabled in my name, makes plain the introductory dates for that so that there is a smooth transition. The very final point I would make is—again, I emphasise—it was a decision of this National Government to provide that pragmatic financial assistance, and at the heart of that financial assistance programme is dealing with the uncomfortable reality of the leaky home dispute. The sensible thing for Government to do, rather than spending huge sums of money on lawyers and disputes, was to provide a subsidy—effectively, 50 percent in the case where a council was involved; some practical 50 percent subsidy—get on and get the houses fixed.

I want to make one last point to respond to the Opposition, and that is more broadly around the issue of building regulation. To be honest, let us get the parliamentary record correct—because I have been around for a while. It was a Labour Government that introduced the Building Act changes back in 1989. The bill was in the name of Margaret Austin. The number of speeches that I have heard in this Parliament from members of the Labour Party who say: “That’s nothing to do with us.” Actually, it was a bill introduced by a Labour member and a bill that was passed all the way through the process with the support of the Labour Party.

In respect of moving forward, it is the Government’s view that there are issues of regulation that are not efficient in the building sector. We are going to be announcing some proposals this year where we actually think that in that balance of trying to get a regulatory environment that ensures that we do not get the sort of debacle that occurred around leaky homes, while, on the other hand, we do not have excessive compliance costs that contribute to the very issues around the affordability of homes, you are going to see reforms from this Government this year. The key component of those reforms is this issue: if there is an injustice around the issue of leaky homes, it is the degree to which the liability for the building flaws rested with ratepayers rather than the building companies that were responsible for those buildings. If we are actually to get more disciplined and better commercial arrangements in the building industry, we as a Parliament need to strengthen the commercial accountability for those who provide building products and get the bulk of the revenue in the building sector.

I welcome having a discussion around issues of first-home warranties and how we can improve those disciplines because, in my view, an underlying issue is that it is unfair that when councils get less than 2 percent of the revenue of a building project, they, actually, over the leaky home debacle, end up with more than half the bill. I think there is an underlying issue that this Parliament needs to have a debate on as we move on from the issue of leaky homes to the future of the building industry and how we can structure it in such a way that there are the very best incentives of ensuring that homes are built once and built right.

Dr MEGAN WOODS (Labour—Wigram): Thank you to the Minister in the chair, Nick Smith, for answering some of the questions that have been put to him. It was useful to get some clarification on those points, Minister, so thank you.

I think that colleagues on both sides of the Chamber who have spoken on this legislation have traversed very well why we are here and how we got here. I want to address some of the issues in Part 2 of the Weathertight Homes Resolution Services Amendment Bill that the Minister just raised and pick up, really, where he finished off, about what it is that we can learn from this legislation going forward, in terms of what it means for the future. The Minister talked about two of the issues around eligibility—who is eligible—being covered off in this Part 2, and the need to validate the Gazette notice. The other point that he raised, which I think is worth discussing and is of interest, is the time frame around liability, which Part 2 deals with and we have had to deal with in this legislation, because as a Canterbury member of Parliament sitting through the hearings on this weathertight homes legislation, it did from time to time send a chill down my spine around a number of issues.

First of all, there is the time period for liability, which is covered in this, and the precedent that this legislation puts in place, which is around dealing with when it is that the certificate of compliance is issued in terms of when we start calculating liability—because, of course, in terms of Earthquake Commission claims, we are dealing with a 6-year window in terms of liability in which people have a right to take the Earthquake Commission to court. But one of the issues that we have in Canterbury with the Home Repair Programme—and the Minister talked about the need to build it once and build it right—is that many of the repairs have not had a code of compliance, because there has been the ability for the building industry to self-certify. We have laid aside in the name of speed the need for people to get building consents for quite significant repairs to homes. So in terms of the precedent that this legislation sets, in terms of when we start calculating liability in the absence of certification as we would normally recognise it within the building industry in New Zealand, I have great fears.

My great fear is that we are going to be back here in a decade’s time, having to put into place legislation that is going to clean up a mess that we could have foreseen—foreseen—around how it is that people have redress around their homes. The very ideas that we are talking about in this Committee tonight—the fact that for most New Zealanders their house is going to be the largest asset that they will ever own, and the need to have security in that and to have some certainty around what is happening—are paramount. For so many Cantabrians, the lessons of what we have learnt in terms of the leaky homes saga are not something that have been picked up. So I would encourage the sentiments that the Minister in the chair is expressing tonight around the need to get the regulation right, to build once and to build it right, or to repair once and repair it right.

I would encourage that Minister to go and talk to some of his Cabinet colleagues and to warn them about the consequences that we could be facing, because many of the themes that we have going through in this legislation about determining eligibility and setting up funds also apply when we are—and rightly so—spending so much time fixing Cantabrians’ homes. Not once, in some instances, but twice the Earthquake Commission is having to go in to do a patch-up on repairs that have been botched in the first place. In a decade’s time, are we going to be in this House talking about setting up a fund so that that work can be rectified yet again? That is something that is truly disturbing to me that we have the potential to deal with now.

None of us, as legislators, like being in this House doing fix-up legislation. It is not something we enjoy. It certainly is not something that we enjoy on this side of the House. We have got ideas for the future. We want to be talking about how it is that we can make New Zealand a better place, and not fixing the mistakes of decades past—and we run the risk of doing that. We have ideas on this side of the House on how we can not only get people into houses but also get people into the Kiwi Dream, so that we can set them up for a future, and so that we will not spend our legislative timetable fixing mistakes that could have been foreseen in the past.

So I think there are some lessons that we need to learn from this piece of legislation, which Labour is supporting. We are supporting it for the reasons that the Minister outlined: it is sensible, and it needs to be done for the people who have found themselves in this horrific situation of having their home, their piece of security, become something that is not as secure as they thought it was going to be. We are in that situation, but for goodness’ sake let us learn the lessons of this unfortunate phase in our history and think about what we are doing in this very House at the moment in regard to the potential leaky homes issue that is going to face this country in a decade’s time. We know that it is coming, we know what the risks are, and we are talking about them tonight. I urge you, Minister, to talk to some of your Cabinet colleagues. Thank you.

Hon DAVID CUNLIFFE (Labour—New Lynn): It is salutary to be back in the Chamber talking about weathertight homes. I thank Minister Smith for his contribution. Of course, we are supporting the bill. In doing so, however, I think it behoves us to recall the folly that led to the situation, how this bill then impacts the legal situation, and how we might go forward. I want to concur with what my colleagues Dr Megan Woods and Phil Twyford have offered, and to remind the Committee that “leaky building syndrome” was a phenomenon that occurred from around 1994 to 2004. Weathertightness was primarily an issue that derived from two things: the approved use of non-treated framing timber; and various changes to building techniques that compromised weathertightness through the combined use of things like mono-cladding and the lack of cavities, and various technical changes that cut corners around window flashings and roof flashings, and practical things like that.

But what all those things have in common is that the building industry was deregulated during that period under pressure from for-profit enterprises with massive lobbying power. We all know who the largest companies were—I do not need to name names—but I do not think that there is a single member in this Committee who is not well aware, with the painful lessons of history that we must never forget, that it is the right and proper role of Government, in order to have a healthy and mixed economy with a thriving market system, to put boundaries around enterprise in the name of public safety and the sustainability of enterprise. In this case—and we are not blaming individuals or naming names—the reverse happened. With some recurrent naivety, a kind of market malaria, we thought we could trust the building industry to regulate itself. Self-regulation—have we heard that phrase before? The tragic thing about this particular tiptoe through the self-regulatory tulips was that the results have been manifest in broken homes and broken lives.

I think every constituent MP in the Committee will have had the most tragic, heart-rending cases come to their door. Families have been ripped asunder by the stress of not being able to deal with a leaky home, but then not being able to afford to either sell it or fix it. Parliament—again, accepting, probably, shared responsibility for this; I am an old dog and I can do that now—did not bankroll the solution. What it did do was sponsor a legal process that was as fair as we could reasonably get it, but it was imperfect. Iteration by iteration by iteration, we are back in the House on various occasions to fine-tune that process, and I commend the Minister for the changes that are in this bill. They are limited, but they are good. They make it fairer because they allow more claims to proceed. That saves 70-odd cases having to go to court—claims which this bill deems to qualify. It means that cases that are currently in progress rather than having reached a particular stage—and the Minister is taking the broad view, and good on him—can continue through the legal process even though the expiry date of the legislation has been received, and that is the right thing to do.

We have no argument here about the content of the bill, and we are supporting it all the way, but it is a bit like Anzac Day—lest we forget. It would be a deviation to say that there are a number of other industries in the past where a halcyon view of self-regulation came a multibillion-dollar cropper. Telecommunications was one that I had direct experience with. Remember Telecom New Zealand Chief Executive Officer Theresa Gattung saying that confusion was a weapon that it used to keep prices up? It kept customers confused. Remember that? Do you remember the massive lobbying effort that that company put in place to prevent the public interest, which was the removal of monopoly rents and the investment in faster and cheaper broadband, from occurring? I want to commend Maurice Williamson and successive Ministers on both sides of the House, including Amy Adams, who have continued a drive towards the pro-competitive regulation of that industry.

Sometimes in this House we get lost in a right/left dynamic where we think that either all intervention is good or no intervention is good. Usually, as in most parts of life, the truth is somewhere in the middle, and regulation that sets clear boundaries for private enterprise can help everybody. It is like the rules of a sport. You know what the rules are and, if you have got a good ref, everyone can get on and play the game and have a good time. If either the rules are unclear or the ref does not know what he is doing, or the Government stays on the sideline—or, God forbid, as in the leaky building crisis, it removes the rules and says “Oh, you guys just sort it out yourselves.”—then billions and billions of dollars later, suicides and divorces later, we are back in the House fine-tuning the solution.

Have we learnt the lessons of history? Well, I do not know, but here are a couple of theories, and I want to now acknowledge my former colleague Shane Jones. Have we learnt in the supermarket industry? My goodness me, food prices are expensive in this country, and yet we have really, really high levels of production and a small population. We have got only two players in the industry. I wonder how competitive that really is, and I wonder whether the Commerce Commission is going to take a close look at it.

Closer to home on this one is building products. There are really only two companies that matter in that industry, and we have per unit prices for building products in this country that are so much higher than in Australia. I would really like to see the regulators strip that down. That is the 21st century manifestation of the same market malaria that caused this mess—the blithe ignorance of commercial strategy and the abdication of the Crown’s role to be a good and prudent referee. I am not naming names. I am not casting aspersions. I am not pointing the bone. But I am saying that we have a shared public interest in fair rules of the game and good, value-creating market behaviour, hard work, and enterprise.

Labour stands for work. We are focused on the future of work so that we can all get on and build a better country. You know, the divisions across the House are not that wide. Most of us would agree with that. Most of us agree that pure capitalism like in The Wolf of Wall Street ends in tears, and most of us do not want to live in the Soviet Union either. We want a system that works for ordinary Kiwis. As the year unfolds, we are going to be exchanging ideas, in what is usually a robust but pretty decent sort of a process, about how we do that.

This is a great bill, small but perfectly formed—nothing like the Minister.

Hon Members: Aw!

Hon DAVID CUNLIFFE: He is big and perfectly formed.

RON MARK (Deputy Leader—NZ First): Thank you, Mr Chairman, and welcome back to you too, sir. It is my first opportunity to say that to you, the Hon Chester Borrows. I want to say that in this moment—and it is quite an interesting little moment that we are enjoying here in the Committee—we are seeing admissions from the right and from the left that everything that is done in this House in the name of good government policy is not always right. I think we need to just hold on to that thought for a minute. I appreciate that this debate has gone a little bit wide ranging, so I am going to take the opportunity to add a little bit to that, from New Zealand First’s perspective. I appreciate Minister Smith’s—

The CHAIRPERSON (Hon Chester Borrows): We are going to keep it narrow.

RON MARK: Well, we talked about supermarket prices over here. That is pretty broad—

The CHAIRPERSON (Hon Chester Borrows): And the member was pulled back into line, so we are going to keep it narrow.

RON MARK: I appreciate the Hon Nick Smith’s contribution, but I have to say, from New Zealand First’s perspective, we have got a saying “Red or blue, there’s nothing new—you’re both the same, Labour and National, in so many, so many, so many ways”. This matter probably reflects that. What I would say, in contrast, is that in the 13-odd years I have spent in this House, the times when we think that Parliament works best is when the Government has taken time out to listen to opposing views and has accepted openly that it does not have a franchise on the font of all knowledge, that it does not own the formula for the elixir of youth, and that, actually, there are times when it needs to work across parties. We would like to think that that moment would have been here, with the Trans-Pacific Partnership (TPP) agreement, but clearly not. Despite the Prime Minister’s speech the other day, it is going to be rammed through the select committee, so why have a select committee process? It is pointless, we would say.

This piece of legislation smacks of the same things. It is a very—[Interruption] Mr Macindoe, it is a very pertinent time right now to reflect on this. We are talking about the history of a piece of legislation started in Labour’s time, when we had Roger Douglas running the country and the ideology, which was Labour’s right-wing moment, of “the market knows best” became the fashion. It bequeathed this—the deregulation era. Taxis were deregulated. There was a whole mass of sectors that were deregulated, and up until that time I actually think National was opposing some of those steps. This is the consequence.

Subsequent to that, as the Hon David Cunliffe has just said, this country saw an era of tragedy. People were committing suicide, families were broken up, and people were driven to bankruptcy. Small businesses, small builders, and small building companies were liquidated and folded and running away from the problem. Who bore the brunt at the end of the day? Well, it was the taxpayer and the ratepayer. It was probably rightly so that Parliament should have been held to account, because it was Parliament—the Labour Government of the time—that pushed through that move to deregulation.

What were we talking about? Funnily enough, at the time that this was all happening, there was a whole bunch of people who were probably considered a bit old and a bit fuddy-duddy—small builders. There were a lot in provincial New Zealand. I can name a couple in Rangiora and I can certainly name a few in the Wairarapa who said: “Oh, no, no, this is nonsense.” They took one look at this monolithic cladding, the Mediterranean-style houses, and the way in which cowboy builders—and it was mainly in urban metropolitan New Zealand that it happened. Apartment blocks—that is where it happened. The funny thing is that when you go to rural, provincial New Zealand—go to Whanganui, go to the Wairarapa, and have a look at how many leaky homes there were. The Wairarapa—Alistair Scott knows, do you not, Alistair Scott? No, he does not, actually. He does not live there. Two—there were two in Carterton and, I think, probably half a dozen in Masterton. Why? Because the building practices of those tradespeople over there did not buy into this nonsense of small eaves, monolithic cladding, and Mediterranean-style houses. They did not buy into the cowboy style. They carried on building houses the way they had always built them. I guess you could argue that deregulation in the Wairarapa and in rural, provincial New Zealand did not affect them because they stuck to tried and true practices.

One of the other things that also changed—I am just reading back on a bit of history here—was the methodology behind the training of apprentices. Who did that? Oops—share the blame. Those things combined to give us a problem that was a multibillion-dollar problem, which, as we have just discussed here, various Governments—firstly, Labour, and then National—have attempted to address in this piece of legislation, we would all hope. New Zealand First is supporting it. Hopefully, it will be another step, and I hope it is the final step, in the right direction to delivering justice to those people who own homes that were caught up in this. Many were driven to bankruptcy. Many have died and been buried over the years. There are many who never recovered their financial position. I can name, right now, people living in Auckland who are still to have their apartments repaired. These are bodies corporate that are still locked into the bureaucracy of trying to negotiate and fund the repair of those apartment blocks in Auckland, right now. I know so because we have a family member stuck in one of them. And that is tragic.

I would just ask at this point in time, when we are all going back over the history and accepting that things were not done right, that going forward we apply the same sort of thought, the same degree of openness to ideas from across the House when looking at legislation, and just for one moment consider that maybe we as the Government or you as the Government do not have all the answers and that maybe, just sometimes, there are people on the other side of the House who have something valuable to contribute and who do have some experience that is worth noting and listening to. I would like to think it would happen.

There is one question that popped up when I listened to the Minister speaking. He quite rightly said that these changes specifically do not include landlords who are running commercial operations. This is specifically about homeowners—and rightly so, we believe. But it does beg the question, under the Warm Up New Zealand: Healthy Homes initiative, where the Government is giving out funding to people to assist them to have their homes insulated, why are we funding landlords to do that? Why do we have a system that allows a landlord to take the community services card of their tenant and book up and get the subsidy in the name of the tenant for the home that they are renting out? Why are we doing that—especially when it debars that tenant, if they move on and rent another house or if they move on and buy a house, from accessing that subsidy for themselves later on?

I know of landlords in the Wairarapa who are real estate agents who have their own portfolio off to one side, who regularly buy properties and access the healthy homes funding for home insulation from the Government to insulate their property portfolio. They pick up the capital gain on that. We have people in Carterton who have questioned that, and they have just simply been told that that is the way it is.

I just ask the Government to reflect on that. If the leaky homes legislation we are passing right now is not to be to the advantage of property investors, why are we assisting property investors with subsidies for insulating their property portfolios?

Hon Dr Nick Smith: Because the benefit is to the tenant.

RON MARK: It would be good to hear that on the record, Minister. We know, and we accept, that if a landlord insulates a home, it helps a family in a low socio-economic bracket that needs that home insulated. But if it then stops that family from accessing that subsidy later on down the line when they have saved enough money to buy their own house, the question is: is that fair? Is that the way it was intended? I do not think it would be, and, actually, I do not think the Government would realise that that was probably the implication.

New Zealand First will be supporting the legislation. We are happy to have worked on the Local Government and Environment Committee towards its conclusion. Thank you very much.

ADRIAN RURAWHE (Labour—Te Tai Hauāuru): I am happy to take a call in the Committee stage of this amendment bill. I have just a few comments. When I spoke in the first reading, I mentioned the families that are sitting at home, listening and wanting resolutions. So it is good that we have a bill before the House that will, hopefully, resolve these real issues. I would like to thank the Osborne family for having the tenacity to take it to a place to force the Government to provide this amendment bill. I think that removing the doubt around the validity of claims in new section 164 under clause 7 of this amendment bill can be almost directly attributed to the Osborne family.

One of the other things that I spoke about was the number of bills, including this one, that have come before the House to tidy something up. I have been a member of this Parliament for only 15 months, and I think this might be about the sixth or seventh piece of legislation that I have spoken on that has needed to be tidied up. I certainly do hope that in the future there is legislation that comes to the House that does not need to be fixed up, and that we get it right first up.

I cannot talk about being inundated with constituent inquiries in my electorate of Te Tai Hauāuru. I am sure there are some within the general electorates, but considering the low homeownership rates of my constituents, I am hardly likely to get any inquiries about it. But I do feel for those people who are affected by leaky homes. I think they can draw some comfort from the clauses in Part 2, and now that these clauses in Part 2 have been put in place, they can get some comfort that they have applied for adjudication and they can go through that process.

Also, for those who have made claims, these claims are now eligible through this legislation. I think the Minister should be commended. I thank him for his earlier clarification of the questions that we put to him on this side of the Chamber. Widening the definition of a “qualifying claimant” is important as well, as we have heard from other members from this side of the Chamber. It did strike me as to why we do not hear of the same kinds of stories that must be going to the members opposite. Although it is important for the Opposition to be putting forward its views on these clauses, I think we should also ask the Government to put its position forward as well—from members of the National Government, who, surely, must be getting inquiries from their constituents.

As I say, I feel for those families who are waiting patiently for this legislation to pass, and I will not take up any more of the Committee’s time, except to say that we will support this bill.

The question was put that the amendments set out on Supplementary Order Paper 125 in the name of the Hon Dr Nick Smith to Part 2 be agreed to.

Amendments agreed to.

Part 2 as amended agreed to.

Clauses 1 to 3

PHIL TWYFORD (Labour—Te Atatū): I guess the first thing to say about the first clauses of the bill is that the most notable thing is that the commencement clause is retrospective and that the Act is deemed to have come into force on the day it was introduced—that is, 23 February 2015. The observation that you have to make at this point is that this bill is a fix of a fix, and it is a desperate kind of last-minute scramble to fix a couple of problems with this bill in the 4 months before the Act is set to expire. We have said we are supporting it. We have said that we agree with the intent of the bill—the original Act and this bill—but retrospective commencement is never a good thing. It always raises questions, I think, about the quality of the process. I think, also, that the fact it is happening so late in the piece, before the expiry of the Weathertight Homes Resolution Services Act, begs the question of why the Government has taken so long to progress this and why it is really being tidied up at the last minute.

Over the last hour or so, we have had some reflections on both sides of the Chamber on this issue, which has been, really, one of the dominating issues of political life in this country over the last 20 years. The Hon Clayton Cosgrove, who has taken part in this debate as the bill has gone through the House, has reminded the House on a number of occasions that the Hon Dr Nick Smith sat on these Opposition benches day after day and screamed at the Government of the day: “Why don’t you just write a cheque?”. But he learnt, as his colleagues did in Government as well, that the issue is not quite as simple as that. Although the Hon Maurice Williamson, as the then building and construction Minister, proudly trumpeted on the front pages of the newspapers that this billion-dollar package was going to solve the leaky homes problem—great largesse—what have we seen? Actually, it has been a veritable trickle of homeowners who have come forward to avail themselves of the benefits of the funding assistance package for weathertight homes.

I do not mean to trivialise that. It has provided those homeowners with a useful alternative to litigation, adjudication, and the expense and the uncertainty of going down that track. It has provided them with an alternative.

As of a year ago the official figures were that only 87 leaky homes had been fixed. The ministry said at the time that it had approved repair plans for another 364 homes, and I think there were 3,000 in the pipeline that had been approved as having qualified for assistance. But it is a far cry from Maurice Williamson’s billion-dollar package. I am not aware of the dollar figure that has been spent under the funding assistance package. Perhaps the Minister for Building and Housing could just say, because I am sure he has got that number at his fingertips, but I do not think it is very much. The lion’s share of the appropriation for this funding assistance package has long since been siphoned off for other activities.

In this debate I think there has been some reflection on the follies of deregulation, and there has been something of a cross-party consensus in recent years that we need to continue to fine-tune and develop the Building Act and try to find the right balance between protecting consumers and trying to raise the quality standards in the building and construction industry without imposing undue and unnecessary compliance burdens on the industry. That is an ongoing process, but it was disturbing to hear the Hon Paula Bennett—then Minister of Local Government—come to this House last year and declare that New Zealand had moved on and was over the leaky homes. Apparently, according to Paula Bennett, we have moved on and we are over the leaky homes crisis. Nothing could be further from the truth. And, as Ron Mark was saying, the whole problem of leaky homes is actually a much bigger problem of shoddy building, poor building, and systemic breakdown, and deregulation is part of that.

I trust the Minister is aware of what Auckland Council has described as an epidemic of shoddy building in Auckland at the moment and an industry that is very poorly equipped and that lacks the capability to scale up and meet the demand pressures in Auckland—as that Minister well knows because he wakes up in the middle of the night in a cold sweat worrying about the lack of actual houses. I do not mean consents, I do not mean subdivisions, and I do not mean consented sections; I mean actual houses that people can live in. That Minister knows more painfully than probably anybody in this Committee how ill-equipped the industry is in order to meet the furious demand pressures that we see in Auckland at the moment.

One of the consequences of the inability of the industry to scale up is the shoddy building that Auckland Council says is responsible for something like 30 to 40 percent of building consents being failed at the moment. It is because the industry lacks skilled personnel, and there is so much work on that you have got people who are under-qualified and who are not properly supervised to do the work that they are doing.

We are also seeing, as I think Ron Mark was alluding to, a lot of multi-title buildings that were built in the 1990s—blocks of apartments and flats—that are now coming horribly unstuck and a Unit Titles Act that is simply not fit for purpose, that simply cannot do the job, and that is exposing residents in those blocks of apartments to financial catastrophe because they are being hit with huge repair bills. Particularly, what we are seeing is older New Zealanders who sold up and invested whatever asset they had into a flat or an apartment being hit with massive repair bills. They are part of bodies corporate that have not had adequate long-term repair plans, or the repair plans have not been funded properly. They have got poor Government standards and people are being driven to bankruptcy, and it is a hideous situation.

I would hope, in the spirit of the funding assistance package, that the Minister and his Government would consider providing on a case by case basis appropriate assistance to people who find themselves through no fault of their own in situations that are an exact parallel to the leaky homes problem that this legislation is seeking to correct—the injustice that it is seeking to fix I would hope that the Minister would exercise a kind of case by case and compassionate approach to assisting people who find themselves in those situations. It is not just leaky homes; we have seen large numbers of apartment buildings that have been built in breach of fire standards, and, frankly, I am amazed, given the data that is coming out on this issue at the moment, that there has not been a catastrophe and loss of human life because some of these buildings were built with such appalling breaches of the fire standards.

So Paula Bennett is wrong—we have not moved on from the leaky homes catastrophe. Any move to self-certification of building work or, in fact, contracting out and privatising the consenting process, as has been raised by the Minister in the past, would be absolutely mad and would demonstrate that this Minister has not learnt the lessons of history. It is not just the Earthquake Commission repairs that have thrown up so many cases of shoddy building, but it is happening in Auckland right now, and the lesson that we have to draw from this is that we have to be ever-vigilant and we have got to ensure that there are decent regulations and protections. If the Minister hints that he is considering an insurance-backed proposal—and I think this is what he was suggesting—then we would welcome that.

Dr MEGAN WOODS (Labour—Wigram): I too would like to take a call on clauses 1 to 3, and, in particular, start my contribution this evening by considering the title of this bill, the Weathertight Homes Resolution Services Amendment Bill. I would like to acknowledge that we are putting in place a scheme that offers an alternative to litigation, and allows homeowners who have been caught in this leaky homes nightmare a way in which they can get just and fair resolution for repairing their homes without needing the redress of the courts. I think that that is something that is positive. I think that we have traversed throughout this evening the long history of how we got here. My colleague Phil Twyford, in the contribution that he has just concluded, has also talked about how the Government members and the Minister who was previously in the chair, Nick Smith, had in Opposition quite a different approach to how it is that this may be fixed.

I think that we have a very apt title for this legislation, but I think, quite clearly, there are other names that we could have given this bill. One of them would have been the “Why Regulation Matters Bill”. What we have is a Government that often derides regulation. It talks instead about the need to be pragmatic, to just get on and do things. But regulation does matter, and nowhere can we see that more than in the leaky homes saga and what happened when we did deregulate an industry and let it go on and do things. Phil Twyford has talked about the deficit of standards that is occurring in the Auckland housing market. I, in earlier contributions, have talked about the fact that this Government has put in place at this very moment a system in Christchurch where we allow builders to certify their own work. We do not have an independent certification of some of the repairs that are going on in the Canterbury Home Repair Programme. We need to learn those lessons.

And it is not just in the case of housing; it is in the case of so many things. This is a Government that is hell-bent on deregulating everything from employment to education and thinks that it is the answer. It dresses it up in all kinds of fancy words and says that it is making things easier, but actually what it is doing is cutting the very kinds of protections in a way that has led to this leaky homes saga. So I think the “Why Regulation Matters Bill” name is a very, very good alternative.

I would also like to talk about the commencement of this bill and when this comes into force, and to acknowledge that we are, yet again, doing validating legislation. We are needing to put into legislation things to fix up what has already happened, and that is not the purpose of this House. I do not think it is why any of us came in here. We came into this House to make a difference. We may differ on how it is we think we can make a difference to the future, but spending inordinate amounts of time validating what has already happened seems a bit like being shut in a bad episode of a bad sitcom—we are always having to deal with the past. We are better than that. Our legislation should be future-focused. It should be about what we can do to make New Zealand better, not about fixing up disasters of deregulation gone bad in the past—and that is what we are here spending the time of this Committee doing tonight.

Labour supports this legislation, but we do not want to be in this situation. And we urge members and Ministers opposite to learn the lessons of how we got here, why it is we are here, and what happens when we do not put in place adequate protections for people and do not use the law to actually protect people and, in this case, their property. It is not just a nuisance; it is there for a reason.

Su’a WILLIAM SIO (Labour—Māngere): I asked the Minister in the chair, Nick Smith, earlier whether he would clarify to this Committee whether it was him or Minister Paula Bennett who was reported in the media as advocating for a freeing up of the industry again. I think the terminology in one of the reports was that the industry would self-regulate—that the industry would certify its own work. I said to the Minister then, and I say it again, is that not the reason why we are in this problem? The Minister answered and said that it was Labour that put a bill through here in 1989, but I want to refer the Minister to the words of the Hon Maurice Williamson, who in this House claimed responsibility and said that it was him and his Government that passed legislation deregulating the industry, which has subsequently led to the situation that we now have.

I want to say that I take on board what the Hon David Cunliffe said. Look, this is not about blaming. Let us just take responsibility for where we are. But I did ask the question earlier whether it was his intent or the intent of Minister Paula Bennett to again lead this industry to a situation of more deregulation. I would caution the Minister and say, look, is not that why we are in this situation? We have got this Weathertight Homes Resolution Services Amendment Bill, which is a mouthful, and most people will not know what this is about. It should have been the “Leaky Homes Solution Bill” because that is what we are trying to identify here: a solution to help those people whose homes were leaky as a result of shoddy building and of the use of untreated timber during the period of the 1990s. If my memory serves me right, that was, again, during the Jim Bolger period. I want to say that I do not understand why it has taken so long—why it has taken this long from when the bill was first introduced to this House. I am not sure whether the starting date is going to serve the interests of those people whose issues we are trying to deal with here tonight.

The greater issue here is that most people, as a result of the leaky homes syndrome, do not feel confident about the building industry. In fact, I think most people are asking their neighbours whether they know a builder whom they can trust and have confidence in before they embark on building work. This is what has happened as a result of a Government that was so set on a freer industry, or deregulating the industry, that it did not care what took place. And when it did not care what took place, it actually was saying it did not care what happened to ordinary Kiwis, and now we are having to foot the bill for the result of that. This is another example of how this Government attempts to pride itself as the master of our economy and promote the fact that deregulation is good.

Once upon a time this country was hailed worldwide for having a mixed economy, where business could operate within the regulations set by Government. Time and time again, we have had politicians, or members of Government, step forward and say that freeing up industry was good. But here you have an example where greater freedom for an industry actually meant that it was looking at cutting costs without any concern about the subsequent consequences of shoddy work and the use of untreated timber. That is why we are here.

We are told that there is a small number of people who are going to have their claims resolved through this particular bill—about 70 homes, I understand. But Grimshaw and Co. identified that there were 42,000 homes affected as a result of the leaky home syndrome, and it also said that that is about 80,000 New Zealanders. I do not know whether this bill addresses these 42,000 homes affected, but I am hopeful that if we are genuinely concerned and want to make sure that we resolve the issues raised by these people, we will then have this Government consider seriously the consequences of its actions before it embarks on another deregulation exercise that it believes is good for the economy, when all we have seen and all that these 80,000 New Zealanders have experienced is that deregulation has not, in fact, helped them out. Thank you for that opportunity.

Hon DAVID CUNLIFFE (Labour—New Lynn): The clock allows us a couple of minutes. May I make a concluding call in this title and commencement part of the debate. I think this has been a good summary of the issues. I think there is a consensus around the provisions in the bill that broaden the category of cases and elongate the process by which they can still qualify for assistance.

There has been extensive discussion about the lessons of history around this, and they are valid, and the responsibility is shared by all in this House, even though different things have occurred at different times. But I do want to pick up on a comment that my colleague Phil Twyford made—that some of those lessons we have to highlight. As my colleague Megan Woods has said, Minister Bennett commented that we had moved on, and we certainly want to demur from that. As Phil Twyford said, the current Minister for Building and Housing declared when he was in Opposition “Just write a cheque and give them the money.”, and we know that that does not work.

Hon Dr Nick Smith: Never said that.

Hon DAVID CUNLIFFE: Well, words to that effect. That does not work. This is a much knottier problem. So we want to make sure that justice is done. Sadly, the number of homeowners who have been helped through this process is low relative to the total number of—

The CHAIRPERSON (Hon Chester Borrows): I am sorry to interrupt the honourable member, but it is time for me to report progress.

Progress to be reported presently.

House resumed.

The Chairperson reported the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill with amendment, progress on the Weathertight Homes Resolution Services Amendment Bill, and no progress on the Radiation Safety Bill.

Report adopted.

The House adjourned at 9.56 p.m.