Tuesday, 16 February 2016

TUESDAY, 16 FEBRUARY 2016

TUESDAY, 16 FEBRUARY 2016

Mr Speaker took the Chair at 2 p.m.

Prayers.

Oral Questions

Questions to Ministers

Economic Programme—Budget 2016 and Job Creation

1. Dr JIAN YANG (National) to the Minister of Finance: How will Budget 2016 support further growth in jobs and wages, while maintaining the Government’s fiscal management?

Hon BILL ENGLISH (Minister of Finance): The Budget will be on 26 May. It will continue the Government’s record of fiscal discipline, which focuses on getting better results from spending and managing long-term spending pressures. As a result of that, so far, expenditure has fallen from 34 percent of GDP in 2011, where it peaked, to 30 percent in 2015. We are committed to achieving debt of around 20 percent of GDP by 2020. As we said in the Budget Policy Statement, with the Budget now broadly in balance, the Government will not distinguish between forecasts of small negative balances and small positive balances.

David Seymour: What is the fastest-growing item of expenditure over the next 5 years according to the Budget Policy Statement?

Hon BILL ENGLISH: That is likely to be national superannuation, which is rising at around $700 million to $800 million per year. Alongside that, the Government spends about only another billion dollars per year on everything else.

Dr Jian Yang: What recent steps has the Government taken to support growth, delivering more jobs and higher wages for New Zealand households?

Hon BILL ENGLISH: The most recent and one of the largest steps the Government has taken is to sign the Trans-Pacific Partnership agreement (TPP agreement). This gives equal and fair access for New Zealand exporters to 800 million customers in 11 countries that account for 36 percent of the global economy, including the world’s biggest economy, the United States. It also means that other countries are bound under that agreement by rules that help protect access of New Zealand exporters to overseas markets. So the TPP agreement is important to jobs and incomes in New Zealand; the alternative of not participating would certainly be bad for New Zealand households.

Dr Jian Yang: What is the outlook for economic growth over the next 4 years, and how will this growth deliver more jobs for New Zealand households and families?

Hon BILL ENGLISH: After a relatively soft first half of 2015, recent data suggest the New Zealand economy picked up somewhat in the second half of last year, and the outlook is for continuing, moderate growth. The most recent forecasts expect GDP to grow around 2.7 percent per year each year through to 2020, and what this means in terms of jobs and incomes is that there will be a further 173,000 additional jobs, on top of the 175,000 jobs added in the last 3 years.

Dr Jian Yang: What are some risks to the economic outlook?

Hon BILL ENGLISH: It is fair to say that 2016 has started with, certainly, a perception of greater risk in the global economy. Factors making up that would be weak commodity prices and slower growth in China, driven by lower investment, even though the consumption aspect of China’s economy is growing pretty strongly. There is uncertainty around the impact of US interest rates and there appears to be some growing risks around European banks. We will continue to focus on New Zealand’s resilience to any of these changes.

Grant Robertson: Is ASB chief economist Nick Tuffley correct when he says: “On a per-capita basis, there has essentially been no growth over the past year.”?

Hon BILL ENGLISH: In fact, he may not be correct. It depends how you measure growth over the last year. It is not surprising that in a growing economy where more and more people are turning up to enjoy the benefits of one of the faster-growing developed economies, we may get periods where per capita growth is a bit slower, but, overall, Treasury analysis shows per capita growth has averaged about 1.2 percent per year, if you exclude the Canterbury earthquake.

Rt Hon John Key: What is New Zealand’s unemployment rate, and has he seen any predictions of the unemployment rate going to 7 percent?

Hon BILL ENGLISH: The most recent unemployment number was, I think, 5.3 percent, somewhat below the Labour Party finance spokesman’s forecast, which as usual was based on his wishful thinking that everything will go bad suddenly. He forecast 7 percent.

Grant Robertson: Has the Minister of Finance seen the forecast from Treasury of unemployment being 6.5 percent in 2016 and possibly reaching 7 percent in 2017?

Hon BILL ENGLISH: You have always got to be a bit careful with quarter-to-quarter numbers. It turns out Treasury was wrong, but it is pretty hard to be wronger than the Opposition finance spokesman.

Economy, Diversification—Exclusion of Agriculture from Emissions Trading Scheme

2. JAMES SHAW (Co-Leader—Green) to the Minister of Finance: Has he read recent economic reports from ASB and Westpac and is he planning on doing anything differently as a result?

Hon BILL ENGLISH (Minister of Finance): Yes, and no. Both of the reports make reasonably balanced comments about the economy, although I disagree with some of the negativity in the ASB report.

James Shaw: And in light of his response to Mr Robertson’s question previously, does he agree with ASB’s chief economist, Nick Tuffley, who says that population increases account for much of New Zealand’s economic growth at present; and why, after 7 years of his economic leadership, does New Zealand still lack a strong, diversified export economy?

Hon BILL ENGLISH: In answer to the member’s question, the issue is what the point of the analysis is. A year or two ago, the Opposition parties were saying there is no growth without the dairy industry, then it was saying there is no growth without the Canterbury rebuild, and now it is saying there is no growth without population growth. Well, if you take out all of the things that are growing, you end up with no growth.

James Shaw: In light of that answer, how can he say that the New Zealand economy is strong and it has a diversified export economy when the recent downturn in one sector alone has left a $17 billion hole in the economy?

Hon BILL ENGLISH: It must be a diversified economy if we can have a pretty sharp slump in dairy prices and still have 2 percent growth, a 60,000 net migration inflow, a flourishing tourism sector, and big growth in employment such that the unemployment number has dropped to under 5.5 percent. That tells you we do have a diversified economy that is not totally dependent on dairy prices.

James Shaw: So, then, does he agree with Westpac economists Dominic Stephens, Anne Boniface, and David Morgan, who recently found that his Government’s exclusion of agriculture from the emissions trading scheme “skews the way resources are allocated in the economy and puts farmers at risk by avoiding the difficult choices that they are going to have to make at some point in the future.”?

Hon BILL ENGLISH: No. I agree with the Government’s approach, which is a pretty practical one, which is that there is not much point in taxing one of our most globally competitive industries when, at the moment at least, there is not the technology available to enable them to reduce emissions. But the Government is investing millions, along with 30 or so other countries, in finding solutions for agricultural emissions.

James Shaw: So, then, does he also disagree with Westpac, which found that the lack of a proper price on carbon also skews investment even within the agricultural sector, resulting in long-term land use decisions favouring dairying over cleaner alternatives like forestry and sheep farming.

Hon BILL ENGLISH: If you are following through the theory of putting a price on them, that may be the case. But we have decided not to tax them when they cannot take measures to reduce their carbon emissions. What I would say, though, on the agricultural sector is that constraints such as nitrate loadings are starting to have a considerable impact on land-use decisions in agriculture, to the benefit of the quality of our fresh water. I think we should take the opportunity to congratulate the farming sector on the gritty way it is coming to grips with those pretty challenging issues.

James Shaw: Let me be clear: is he disagreeing with the Westpac report on the nature of emissions trading schemes and the exclusion of agriculture?

Hon BILL ENGLISH: No, what I said was if you were putting a price on agricultural emissions, then the lack of the price follows the logic of that criticism. The Government, however, has decided not to do it for the reason that I said, which is that while there is no technology available to the farming community to change its emissions profile, the Government has decided not to pointlessly tax a globally competitive industry.

James Shaw: Let me just repeat the last question—

Mr SPEAKER: Order! We do not need the lead-in—[Interruption] Order! It is perfectly OK to repeat the last question, if the member wants to use another supplementary question that way, but we do not need the lead-in to the supplementary question.

James Shaw: How can he justify excluding considering agriculture from the current emissions trading system review when it so clearly creates big imbalances in the New Zealand economy?

Hon BILL ENGLISH: We do not believe that it creates large imbalances in the New Zealand economy. The Greens have just got to listen to themselves. They have been complaining that the carbon price is too low—far too low. So even if we had decided to impose carbon pricing on agriculture, it would have had the effect their spokesman pointed out in the select committee this morning—that the price is too low to make much difference. So even if we had followed Green policy, it would not have had an impact.

Rt Hon John Key: Has the Minister of Finance seen any reports on the logic of someone who would argue that they are worried about the economy but want to put a big fat tax on export-orientated parts of the economy but do not want to support the single thing that would make the economy go faster, and that is the Trans-Pacific Partnership and exposure—

Mr SPEAKER: Order! There is no need to answer that. That question was designed—[Interruption] Order!

Rt Hon John Key: It was such a good question.

Mr SPEAKER: Well, it was not such a good question. For a start it was too long.

Prime Minister, Statements—Tertiary Education Fees

3. ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement regarding Labour’s fees-free post-school study policy that “the question will simply be that if it is completely free, will there be any control on the quality”?

Rt Hon JOHN KEY (Prime Minister): Yes.

Andrew Little: Given that answer, is he saying that when he went to university for free there was no quality control?

Rt Hon JOHN KEY: There may well have been better control back then, but I tell you what, when Labour got into office and had the sorts of policies it is advocating now, there was an explosion in low-quality, part-time courses with very poor completion rates, and the member knows that is the case.

Andrew Little: Putting aside courses on homeopathy for pets and iridology, which appeared under his Government, is he saying that it is a good thing that some people cannot afford a qualification even though that gives them a chance for the Kiwi Dream?

Rt Hon JOHN KEY: Far from that, what the Government is saying is that if one looks at the current situation with tertiary education, on balance about 70 percent or maybe as high as 80 percent of the costs are actually met by the taxpayers other than the individual. Yet we know that the person, when they go to university and complete their tertiary qualification, actually earns a lot more money. On balance, I do not think it is unreasonable for someone who is going to earn about 46 percent more than the median wage after 5 years should actually pay that 20 or 30 percent. I think that balance is about right.

Andrew Little: Does he not accept that it is just a little bit hypocritical for him, with his free education and no student debt, to claim that people who do not pay fees will not study hard?

Rt Hon JOHN KEY: No.

Tim Macindoe: In light of the primary question, does the Prime Minister stand by his statement regarding Labour’s policy that “Under Andrew Little Labour has become the TPP—the ‘Two Position Party’.”?

Chris Hipkins: I raise a point of order, Mr Speaker. Although the question does in fact open up questions on Labour’s education policy, it certainly does not open up questions on other aspects of the Labour Party policy, which that supplementary question was getting to.

Mr SPEAKER: I need no further assistance. On this particular occasion I agree with the point raised by Chris Hipkins. That question is designed to do nothing else but to attack the Labour Party. I do acknowledge that the original question did mention the policy in the first place.

David Seymour: How much more rapidly has the median New Zealand house price risen than the average student loan over the past 3 years?

Rt Hon JOHN KEY: I do not know, but I suspect it is a terrible amount.

David Seymour: I seek leave to table a back-of-envelope calculation—

Mr SPEAKER: Order! [Interruption] Order! The member will resume his seat. Raising points of order like that leads to more disorder, and I would hate at this early stage of this parliamentary year to be asking the member to leave the Chamber for that reason.

Andrew Little: In light of the analysis out today from Universities New Zealand that when a person goes into a job like IT, engineering, marketing, or science they are going to pay more than 10 times the fees they paid for their education, is it not better to be investing more in people to get qualifications?

Rt Hon JOHN KEY: The member is in serious risk of blowing both of his feet off. That is exactly the point: at the moment, people do go to university, they are not stopped, they get a free student loan—

Hon Members: A free student loan!

Rt Hon JOHN KEY: They do go out and pay more taxes, and—a zero percent student loan—why the hell should they get somebody on low income’s cross-subsidising? [Interruption] That is exactly the point. The system is working.

Tim Macindoe: In light of the primary question, does the Prime Minister stand by his recent statements about all of Labour’s recent announcements?

Chris Hipkins: I raise a point of order, Mr Speaker. If the supplementary question was specific to the primary question, in relation to the quote that Andrew Little used in his primary question, that question may have been in order. But the Prime Minister has no responsibility for all of the policy announcements that the Labour Party has made.

Mr SPEAKER: I will hear from the Hon Gerry Brownlee.

Hon Gerry Brownlee: The primary question asks whether the Prime Minister stands by his statement regarding Labour policies.

Chris Hipkins: No, a specific Labour policy.

Hon Gerry Brownlee: Well, all right, a specific—

Mr SPEAKER: Order! This is a point of order—[Interruption] Order! Can we just be clear. This is a point of order being raised by Gerry Brownlee, and it will be heard in silence.

Hon Gerry Brownlee: Mr Speaker, to be clear, I am speaking to the point of order raised by Chris Hipkins, which was the result of his shooting himself in the foot by lodging the question in the first place. The question says: “Does he stand by his statements regarding Labour’s free post-school study policy”. If the ruling would be that you cannot ask for a general question based off that about Labour policy, then it would assume that we can ask specific questions about specific Labour policy positions. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! If the Minister is keen to stay for the balance of question time, I suggest he also does not interrupt. I am going to allow this question. It was a very general question about the Prime Minister standing by his statements, as I heard it, but if in the answer I detect that it is being used simply as a means of attacking the Opposition, I will then be inclined to close the answer down very quickly.

Chris Hipkins: I raise a point of order, Mr Speaker. Part-way through the Leader of the House’s point of order, I expected you to either interrupt him or ask him to actually come to the point of order. If it is now legitimate for us to insult other members during points of order, we are happy to participate in that process—

Mr SPEAKER: Order! [Interruption] I do not need any assistance from either member. The member might have noticed that I did interrupt the Minister through his point of order, only because I was dealing with a number of interjections from this side. The point of order has been heard; my ruling has been given. I will not ask for the question to be repeated, but I will be listening very carefully to the Prime Minister’s answer. If I see it leading down a path where it is simply attacking the Opposition, I will then deal with it.

Rt Hon JOHN KEY: Yes, I do stand by all my statements, and I think it is worth recapping those. At the moment the taxpayer pays about 70 to 80 percent of the tertiary education of someone who goes on to earn, on average, a lot more in New Zealand. To me, that balance seems about right. Having no controls on the sorts of courses that would be promoted under the sorts of policies we have seen announced in recent times would actually lead to low-quality courses that would largely be part-time, for which the completion rates would be very low. The reality is that it is a dog of a policy.

David Seymour: Can the Prime Minister confirm that the correct answer to my earlier question was a ratio of 2.8, and does he believe that young people should be far more worried about rises in median house prices than rises in student loans?

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

Rt Hon JOHN KEY: On the basis that the member is a very gifted member, whom I offered a warrant—and he turned it down—and it would therefore have only been offered if he had true ability, I will accept him at his word that it is 2.8 percent.

Andrew Little: Is the Prime Minister so out of touch with the real world that he cannot see that student debt is a barrier to people getting post-school qualifications; why would he not want to do something about that?

Rt Hon JOHN KEY: It is an interesting thought to say that student loans are a barrier to people going to university, because thousands and thousands, tens of thousands, of people are. We have seen a lot more people completing high-quality and tertiary qualifications under this Government; the bulk of people who go actually earn more over time; people actually do complete degrees that are worth it; and if the member is saying those things are not true, he is philosophically saying that a policy that was supported for 9 years through a Labour Government was totally and utterly wrong. All he is doing here is trying to change the line between the taxpayer paying 70 or 80 percent, to higher—and, actually, that will be paid for by lower-income New Zealanders, the logic of which defies me.

Mr SPEAKER: Order! The answer is quite long enough.

Andrew Little: Is this not the truth, that he has been penny-pinching, rather than investing in New Zealanders’ future; he is locking New Zealanders out of the Kiwi Dream; and only the Labour Party has the courage and the ideas to fix the problem?

Rt Hon JOHN KEY: The truth of it is that this is a policy that was announced on the Sunday and sank faster than the Titanic. This is the party that told us that all it cares about is the Trans-Pacific Partnership, but it knows it is getting ripped apart on it and does not like it. It has been a horrible start to the year for the Labour Party, it really has. [Interruption]

Mr SPEAKER: Order! That is enough now.

Corrections, Department—Middlemore Hospital and Auckland Region Women’s Corrections Facility

4. MAHESH BINDRA (NZ First) to the Minister of Corrections: Is she aware that a prisoner escaped from Middlemore Hospital in December 2015; if so, when was she made aware of the incident?

Hon JUDITH COLLINS (Minister of Corrections): I was not the Minister of Corrections at the time of this escape and therefore was not aware then, but I have been made aware of it as of today because I am now the Minister.

Mahesh Bindra: What action was taken to ensure that corrections staff do not fall asleep as a result of fatigue while on duty?

Hon JUDITH COLLINS: The matter is now an employment matter, and I would have to say that that is the correct response. It is an employment matter and corrections is dealing with it.

Mahesh Bindra: How does that action ensure that corrections staff do not fall sleep as a result of fatigue while on duty?

Hon JUDITH COLLINS: I think I have answered that. It is an employment matter. Corrections take it very seriously. I think the threat of losing one’s job would sort of work it out, really.

Mahesh Bindra: Does she still have confidence in the management of Auckland Region Women’s Corrections Facility, or is she planning to hand over management to Serco?

Hon JUDITH COLLINS: I have full confidence in corrections and, in particular, in the management of the women’s prison at Wiri. I am not planning to do anything with it other than to go and visit it again and look at the fabulous Mother and Baby Prison Unit that I set up and the drug units and all those sorts of things that I was privileged enough to be able to be Minister for. Thank you.

Mahesh Bindra: I seek leave to table the Department of Corrections’ incident information report created on 5 December, showing the reasons—

Mr SPEAKER: Order! We do not need a further description of it. I will put the leave. This is a corrections incident report. Leave is sought to table it. Is there any objection? There is none. It can be tabled.

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

Broadband, Ultra-Fast and Rural—Progress

5. JONATHAN YOUNG (National—New Plymouth) to the Minister for Communications: What recent announcements has she made on the progress of Ultra-Fast Broadband and Rural Broadband Initiatives?

Hon AMY ADAMS (Minister for Communications): Yesterday I released the latest quarterly report to December 2015. Halfway through the build period the Ultra-fast Broadband Initiative project is now 60 percent complete and ahead of schedule. Connections have grown by 135 percent over the last year to more than 162,000, meaning uptake has increased from one in nine to almost one in five. Fibre coverage has increased by 54 percent in the last year, with more than 875,000 households and businesses now able to connect. This project is an excellent example of how this Government is delivering greater connectivity for New Zealanders.

Jonathan Young: How is the Government delivering improved connectivity for rural New Zealand?

Hon AMY ADAMS: The Rural Broadband Initiative programme is delivering significant benefits for our rural communities. Over the last year there has been a 32 percent increase in rural New Zealand households and businesses able to connect faster, more reliable broadband, which now reaches around 500,000 New Zealanders. The Rural Broadband Initiative is also extending mobile coverage to rural areas across New Zealand. In the last quarter alone almost 1.8 million devices accessed services on just one network. In addition, more than 200 of the Rural Broadband Initiative towers have now been built or upgraded to 4G services, meaning rural families and businesses now have access to fibre-like speeds, with many experiencing download speeds of 100 megabits a second.

Jonathan Young: How are the Ultra-Fast Broadband Initiative and Rural Broadband Initiative programmes delivering for priority users?

Hon AMY ADAMS: As at 31 December last year, around 96 percent of businesses within the ultra-fast broadband coverage areas can now connect to world-leading fibre broadband—that is, over 200,000 individual firms, stores, and traders who can now compete on the world stage. I have also recently announced that every hospital, every designated family health centre, and every school are now able to access high-speed broadband connectivity under our programmes.

Mental Health Services, Canterbury—Funding

6. Hon ANNETTE KING (Deputy Leader—Labour) to the Minister of Health: Does he stand by his statement last week on Canterbury District Health Board that “I was down there in November announcing the extra $13 million, and that is more than ample to cover the $4 million that Canterbury said was necessary to cover mental health demands”?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes, and I quote the Canterbury District Health Board chief executive officer. He said in his written update to staff yesterday: “You may recall we received additional funding late last year. This has enabled the DHB to sustain its level of investment in mental health services while at the same time delivering on a financial break-even position.”

Hon Annette King: Was the chairman of the Canterbury District Health Board incorrect when he said at the select committee last week that Canterbury District Health Board had “a deficit in our budget of $17 million and the Government gave us another $16 million to balance our books so actually it was already spoken for; it was actually so we would come in with a zero budget rather than a deficit budget.”?

Hon Dr JONATHAN COLEMAN: Well, you know, I cannot really see what the member’s point is, quite frankly. Canterbury District Health Board said to us it had a $16 million deficit. We said yes, we will fund that upfront, and then it will be able to use that money at its discretion to fund whatever services the chief executive officer thinks is appropriate. He said that some of that money should be used for mental health services and that is what he is using it for.

Hon Annette King: Did Canterbury District Health Board receive $222 per head of population for mental health funding for 2015-16 while the national average was $243; if so, why did he say in Parliament last week that he absolutely disputed the district health board’s claim?

Hon Dr JONATHAN COLEMAN: No, what it received was $147 million of ring-fenced funding—that is a $23 million increase on 7 years ago—and it will receive more in this Budget because the Canterbury District Health Board budget has gone up by $254 million over the last 7 years and it is now at $1.36 billion. That is a huge budget and the chief executive officer gets to decide how he spends it.

Hon Annette King: I would like to table the Canterbury District Health Board chief executive officer’s update newsletter quoted by the Minister. It is dated 15 February, in which they say—

Mr SPEAKER: Order!

Hon Annette King: —they got $222 per head—

Mr SPEAKER: Order! The member will resume her seat. I will put the leave; there is no need to further describe it. Leave is sought to table that particular newsletter. Is there any objection? There is none. It can be tabled.

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

Hon Annette King: Has the Canterbury District Health Board been told that for the 2016-17 financial year it can expect another decrease of $10 per head for mental health, even less than the 2015-16 funding; and is he still insisting it can live within its budget?

Hon Dr JONATHAN COLEMAN: No, they have not been told that—the member is making it up. Basically, they are getting $147 million this year ring-fenced for mental health. It will go up next year.

Hon Annette King: I raise a point of order, Mr Speaker. I take exception to the Minister saying I am making it up. I have offered to table the information that he quoted, where it says they get $10 less—

Mr SPEAKER: Order! Order! [Interruption] No. Order! We are now—Order! The Minister’s answer was not helpful, but it is hardly disorderly to stand up and say that he disagrees with the figures and the member is making them up.

Hon Annette King: What will it take for him to listen to the pleas from staff and the people of Canterbury to take their mental health issues seriously, particularly in light of the latest earthquake and the challenges that they face, like the 20-week wait list for child and family mental health services and a 55 percent increase in suicide-related callouts since 2011?

Hon Dr JONATHAN COLEMAN: Look, I am in touch with the district health board all the time. I have been in touch with the chair today. The fact is that we have put in an extra $86 million above the population-based funding formula to support the Canterbury District Health Board through the earthquake period. We have put in a $950 million hospital rebuild programme, $13.5 million in Budget 2014 over 4 years for the psychosocial recovery plan—there is a lot going in there. I will be down there regularly; the Prime Minister is down there regularly. Canterbury is an absolute top health priority for this Government. Sorry, but it is true.

Christchurch, Recovery—14 February 2016 Earthquake and Building Standards

7. NUK KORAKO (National) to the Minister for Building and Housing: What reports has he received on the issues of rock falls, liquefaction, and building performance arising from Sunday’s earthquake in Christchurch, and what implications do these have for the ongoing rebuild work for the city?

Hon Dr NICK SMITH (Minister for Building and Housing): I am advised that Sunday’s earthquake caused five major rockfalls totalling several thousand tonnes of rock. It was lucky, actually, that no one was seriously injured or killed. These were in areas that were red-zoned as vulnerable by the geotechnical assessments made by my ministry of both the Port Hills and Sumner areas. The areas of liquefaction were consistent with the ministry’s technical advice on the areas that were red-zoned. There has been significant innovation and foundation design on technical category 3 land, and we are using Sunday’s quake to review how these designs performed to ensure that we have got those design standards right. Preliminary assessments at six sites where liquefaction occurred show that these new foundation systems are working well. There were some previously damaged buildings that sustained greater damage as a result of Sunday’s quake, and one cordon has been extended. The processes for managing these have been updated and are much improved on 2010.

Nuk Korako: How has the Government translated into building safety the heightened risk in Christchurch of ongoing earthquakes from the original 2010 event, and is he satisfied that the building code adequately manages this risk?

Hon Dr NICK SMITH: There is a heightened risk of quakes following a major event like the 2010 quake, and that results in a higher probability of quakes for several decades. The Government responded to this in 2011 by increasing the seismic hazard risk factor in Christchurch by 36 percent, i.e., from 0.22 to 0.30. The practical effect of this change is that newly constructed buildings, since 2011, have had to be designed to cope with a significantly stronger earthquake. Initial assessments from the ministry are that new buildings performed well in Sunday’s quake, albeit that it was significantly smaller than the maximum that new buildings are designed for. Seismic events are unpredictable, but the Government is using the very best seismic and engineering advice to ensure the rebuild is as safe as is practically possible.

Nuk Korako: What reports has he received on rockfalls, including the Redcliffs School site, and what conclusions does he draw from these reports?

Hon Dr NICK SMITH: Redcliffs School is an area of near-identical geology and risk profile to those that experienced substantive rockfalls on Sunday. Site inspections yesterday by geotechnical engineers—[Interruption] I would have thought members opposite might be concerned about these safety issues. Site inspections yesterday by geotechnical engineers showed additional damage from Sunday’s quake on the Redcliffs site, with new cracks in the upper third of the rock face and a number of individual boulders dislodged from the face. This school site has previously had five substantive rockfalls from the size of 100 tonnes and one of nearly 50,000 tonnes. Sunday’s events reinforced the correctness of the Minister’s interim decision to follow professional geotechnical advice and to not reopen the school. I note Ruth Dyson and the Leader of the Opposition—

Mr SPEAKER: Order! [Interruption] Order! The question has been answered. There is no need for the last part of it.

Police Resourcing—Numbers

8. RON MARK (Deputy Leader—NZ First) to the Minister of Police: Is she satisfied with Police numbers in New Zealand?

Hon JUDITH COLLINS (Minister of Police): Yes, and I am very proud that since 2009 this Government has boosted the annual police budget by $200 million to increase police numbers by 600, to a record 8,907 sworn officers.

Ron Mark: Does the Minister think that the 90,000 residents of Rodney should be satisfied with the current police numbers when the resolution rates for breaking and entering homes currently sits at 14 percent?

Hon JUDITH COLLINS: I have a tremendous amount of empathy for victims of burglaries, and under this Government burglaries have actually reduced from 60,000 in 2010, to 52,000 last year. The police are making resolutions of burglaries a priority and they want to ensure that they continue to reduce the number. I support them in that.

Ron Mark: With the help of the Ombudsman, could I seek leave to table the police’s Official Information Act reply we received, dated 15 December 2015, which details the number of police on duty over April 2015 in towns throughout New Zealand.

Mr SPEAKER: Can the member assure me that this is not publicly available?

Ron Mark: No, this is not publicly available—

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

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

Ron Mark: What contact has the Minister received from members of the Rodney Local Board about the activities of the Hell’s Angels in Kūmeu and Helensville, and does she believe the police have adequate numbers to deal with this situation?

Hon JUDITH COLLINS: I cannot recall actually having heard from the members of the Rodney Local Board in relation to that, but I can tell the member that this Government takes organised crime extremely seriously. The members of the Hell’s Angels and other ridiculous gangs are involved in very serious criminal activities and we have a plan to crack down on them.

Ron Mark: Would it concern the Minister to hear comments from a police officer saying that there are now over 70 high-ranking gang members who have taken up residence in Kūmeu and Helensville as a direct result of police under-resourcing, and that gangs are now looking at the spread of police officers and are moving into areas with low numbers?

Hon JUDITH COLLINS: Yes, that would concern me, and I would also, therefore, like to hear that that member would belatedly support the search and surveillance powers that this Government pushed through with the ACT Party for the New Zealand Police. Unfortunately, that member did not support them.

David Seymour: Is the Minister aware that members of New Zealand First objected to Parliament debating my three-strikes burglary bill just last week?

Mr SPEAKER: I will allow the question in so far as there is ministerial responsibility to be aware of that issue here in this Parliament.

Hon JUDITH COLLINS: Well, having been in Parliament on that day, yes, I am aware of that.

Mt Eden Corrections Facility—Prisoner Safety, Disclosure of Reports

9. KELVIN DAVIS (Labour—Te Tai Tokerau) to the Minister of Corrections: Why was the Law and Order Committee not told at the Corrections Estimates hearing last year about either the 2009 or 2014 investigations into organised prison violence at Mt Eden Corrections Facility?

Hon JUDITH COLLINS (Minister of Corrections): Putting aside the mistake in the member’s question—the Mt Eden Corrections Facility did not open until 2011—I can inform the member that the 2009 investigation at the old Mt Eden Prison found no evidence of organised violence, so was not escalated by officials to a ministerial level, and that the 2014 investigation was brought to the then Minister’s attention following the publication of video footage that occurred after the estimates hearing on 24 June 2015.

Kelvin Davis: Given her failure to disclose the 2009 investigation into organised violence at Mt Eden Prison, is this the only time she has misled the public about prison management on her watch?

Hon JUDITH COLLINS: I raise a point of order, Mr Speaker. That is an offensive question. That member knows full well that I had no knowledge of any 2009 violence. He needs to withdraw and apologise.

Mr SPEAKER: Order! I am going to allow the member to rephrase that question. If you think about the question, it is directly contrary to the information the Minister has just given in the answer to the primary question. I will give the opportunity—[Interruption] Order! I do not want to have to ask the member to leave, particularly with a question on the Order Paper. Would the member please rephrase his question.

Hon David Parker: I raise a point of order, Mr Speaker. A similar point of order was raised by Annette King in respect of the answer by Jonathan Coleman in respect of his suggestion that she was fabricating data that she had in a report before her. I would ask for consistency.

Mr SPEAKER: The difficulty with the question—it is not in my mind a similar situation at all. The question then referred to the opening of a facility in 2009. The Minister had already answered that that was not the case. She has taken exception to the primary question. I will give the member a chance to ask the question.

Kelvin Davis: Given that the Minister has said that there was a new prison opened, were the prisoners in the old prison also in the new prison?

Hon JUDITH COLLINS: The member might ask when in the last 5 years. The Mt Eden Corrections Facility now is primarily a remand prison. The average length of stay is 28 days. That member is talking about something that apparently occurred, or he thinks it occurred, now 7 years ago. They will not be the same prisoners—28 days is the average stay—and there are 30,000 prisoner movements, as in, in and out of that prison, every single year.

Kelvin Davis: Can this Parliament expect more openness from her and her officials in the future about prison problems, such as at the annual review hearing for the Department of Corrections tomorrow?

Hon JUDITH COLLINS: Well, really, it is up to that member—for instance, in a select committee inquiry or hearing—to ask questions. Today I have seen a member who has not done his homework, who continues to state as questions things that are of dubious value, and in 2009—

Mr SPEAKER: Order! I have a point of order from Kelvin Davis.

Kelvin Davis: I raise a point of order, Mr Speaker. I asked whether this Parliament could expect more openness from the Minister.

Mr SPEAKER: And the Minister was addressing that question.

Kelvin Davis: Does she believe that Serco’s management of Mt Eden Corrections Facility has lived up to the “high standards of professionalism, safety, rehabilitation, and security expected by the Government” she placed on them in 2010?

Hon JUDITH COLLINS: As that member well knows, the relation of the report into Serco’s management is subject to a judicial review hearing, and it would not be appropriate, I think, for me to comment on a matter that is before the courts.

Kelvin Davis: I raise a point of order, Mr Speaker. I asked her whether she believes they have lived up to the expectations that she expected of them in 2010.

Mr SPEAKER: And the Minister in her answer in addressing that question said she did not want to go further with an answer because it was currently, as I understood it, under a judicial review. That is an answer a Minister can give. It might not satisfy the member, but it still addresses the question.

Kelvin Davis: How many more fight clubs investigations, High Court cases, and bashed prisoners will it take for her to admit that her prison privatisation agenda is a complete mess and a failure?

Hon JUDITH COLLINS: For goodness’ sake! It might shock that member to know that when we get an awful lot of very violent males together in a prison, sometimes they fight each other. None of that is acceptable, which is why when they do—as they do when the Department of Corrections runs the prison or whether Serco runs the prison—strangely enough they are all prosecuted under the prison regulations, and some of them actually get further penalties. So, actually, that happens in every prison. If only that member could actually go to visit someone other than Arthur Taylor, and visit some of the prisoners who are not indulging in that behaviour. [Interruption]

Mr SPEAKER: Order! I want less interjection from my right-hand side.

Mahesh Bindra: Has Serco reimbursed the Crown for any costs incurred as a result of the step-in at Mt Eden Corrections Facility; if so, has the reimbursement covered the cost of the seven managers, 10 principal corrections officers, and 30 officers employed by the Department of Corrections to perform the suspended services?

Hon JUDITH COLLINS: My understanding is that that is a matter that is being dealt with at the moment, and I cannot take that matter further.

Mahesh Bindra: Who, if any, has been covering the normal duties of these seconded staff while they are doing Serco’s job for them, and at what cost, and to whom?

Hon JUDITH COLLINS: As to the cost, that is a matter that is being dealt with, and as to who is doing it, it is other corrections officers.

Trans-Pacific Partnership—US Ratification

10. Dr KENNEDY GRAHAM (Green) to the Prime Minister: Does he stand by all of his Government’s policies?

Rt Hon JOHN KEY (Prime Minister): Yes.

Dr Kennedy Graham: Will the Prime Minister commit not to introduce and pass any Trans-Pacific Partnership (TPP) agreement - related legislation until the US Congress has ratified the agreement?

Rt Hon JOHN KEY: No.

Dr Kennedy Graham: Why is the Government seeking to pass laws to make it easier for foreigners to buy land, and harder for New Zealanders to access medication, when there is no guarantee that the US Congress will even pass the TPP agreement?

Rt Hon JOHN KEY: We are not.

Dr Kennedy Graham: If the US Congress does not pass the TPP agreement, will he guarantee to reverse all the changes that his Government may have made to our legislation?

Rt Hon JOHN KEY: This might come as a shock to the member, but this is a free-trade agreement between, in this particular instance, 12 countries. One of those countries is the United States—the member is clearly very wound up about that—but if the United States does not ratify the legislation then it is null and void with the United States, in which case we do not have anything to worry about.

Trade Agreements—Beef Exports

11. BARBARA KURIGER (National—Taranaki - King Country) to the Minister for Primary Industries: What recent reports has he received on growth in beef exports to Taiwan?

Hon NATHAN GUY (Minister for Primary Industries): Recent reports show that New Zealand’s beef exports to Taiwan increased by 36 percent to $188.6 million last year. Trade with Taiwan has accelerated since our economic cooperation agreement came into force in December 2013. This agreement saw the tariff on New Zealand beef cut to zero from a previous rate of 46c per kilogram.

Barbara Kuriger: What impact is this trade deal having on the competitiveness of our beef exporters?

Hon NATHAN GUY: These latest figures confirm that Taiwan is now our third-largest beef market behind the US and Canada. Taiwan is also taking higher-value meat cuts, with the average value last year at around US$5.68 per kilogram. That compares with US$5.08 for the United States, and US$4.94 per kilogram for China. This has seen our beef exporters move from weaker markets where they face more competition. This shows the importance of trade agreements in both diversifying our export footprint and allowing our exporters to be more profitable and to be competitive in our international markets.

Barbara Kuriger: How will the Trans-Pacific Partnership benefit our beef exporters?

Hon NATHAN GUY: Very good question. The TPP will save our beef exporters an estimated $60 million per year when fully implemented. This includes unrestricted access to the lucrative US market after 5 years, and an almost 30 percent reduction in tariffs to Japan over 15 years. This is the lowest beef tariff level Japan has ever agreed to in any free-trade agreement. It will save our beef exporters $18 million per annum at entry into force, and $48 million annually after 15 years. It is well summarised by the Beef and Lamb New Zealand chairman, James Parsons, who said that our negotiators “have secured the best possible deal for Kiwi sheep and beef farmers. The TPP will have a significant impact on the competitiveness of our exports”.

Question No. 12 to Minister

Hon DAVID PARKER (Labour): I raise a point of order, Mr Speaker. Speakers’ Rulings on page 170 make it clear, and I am quoting from Speaker’s ruling 170/2, that “The primary condition of asking a question of a Minister is that the Minister has ministerial responsibility for the subject matter of the question. If there is no ministerial responsibility, there can be no question.” Then making the same point is Speaker’s ruling 170/6, on the same page: “The Minister of Justice [in that case] has no responsibility for the actions of Ministers outside her own portfolio responsibilities. She cannot be asked to confirm something for which she is not responsible.”

This question is in respect of New Zealand Trade and Enterprise conduct, for which Minister Joyce has responsibility and the Minister of Foreign Affairs has none. When the Clerk’s Office asked, at the request of the Minister, that this be transferred we made that point, but the transfer went ahead anyway. I ask you, Mr Speaker: is there now a new ruling that overrules Speakers’ rulings 170/2 and 170/6, which I have referred to? Because if there is that has very, very significant implications that the Opposition would very much enjoy.

Mr SPEAKER: I looked very carefully at this matter, because I thought the member might well raise it. The first point I would like to make is that within the Standing Orders there are no particular rulings around transfers. I then refer to a number of other pages of rulings that have been given by various Speakers to the House. The member may want to start with page 167, particularly Speakers’ ruling 167/4: “It is not for the Speaker … to determine which Minister has responsibility for a question.”, or, further, Speaker’s ruling 168/1(1): “The Government has the right to transfer a question,” etc.

What I then did is I went back and looked at the number of times this issue has been raised in the House over the last 6 months, approximately. This particular Saudi sheep issue has been the subject of 14 questions to Ministers, seven of which have been answered by the Prime Minister, six of which have been answered by the Minister of Foreign Affairs, and one of which has been answered by the Minister of Trade. In determining whether I would not allow a transfer, I need to consider whether the only reason a Government is seeking to transfer a question is an attempt to dodge giving an answer to the question. I think when you look at where the questions have gone in the past to be answered, and the very fact that the Cabinet paper that was tabled in the House was indeed tabled by the Minister of Foreign Affairs, I cannot conclude that in transferring it to the Minister of Foreign Affairs this Government is attempting in any way to thereby dodge the question that has been asked. The question that has been asked is one that is similar to the other 14 questions that have been asked, so I am quite comfortable with the transfer to the Minister of Foreign Affairs occurring.

I do want to conclude by saying that there is a ruling, Speaker’s ruling 168/1(2), that says that once the question is transferred the Minister to whom the question is transferred must be in a position to answer supplementary questions. So if the question is to continue—if the member wishes to leave the question on the Order Paper and ask it—I will be watching very carefully any supplementary questions that flow.

Hon DAVID PARKER (Labour): If I may just speak to that ruling—

Mr SPEAKER: I will allow the member to do so.

Hon DAVID PARKER: —the difference between this question and earlier questions of the Minister of Foreign Affairs and, indeed, the Minister of Trade is that they were going to the nature of the deal and the earlier payments. This is, actually, the administration of a contract by New Zealand Trade and Enterprise. It was New Zealand Trade and Enterprise that was at the select committee last week, and the Minister responsible is the Minister for New Zealand Trade and Enterprise, Mr Joyce.

Mr SPEAKER: If the question was to then be referencing New Zealand Trade and Enterprise, the member might well have a point, but the question simply asks who now owns the abattoirs, and I think the Minister of Foreign Affairs can give an answer to that. It similarly asks whether spending has ceased since a particular date. I would be surprised if that cannot be answered. So I suggest the member proceed.

Saudi Agri-hub—Ownership and Funding

12. Hon DAVID PARKER (Labour) to the Minister of Foreign Affairs: Who will own the abattoir at the Al Khalaf Agri-hub in the Saudi Arabian desert and how much taxpayer money has been spent on it since further spending was suspended in August 2015?

Hon STEVEN JOYCE (Minister for Economic Development) on behalf of the Minister of Foreign Affairs: Under the funding agreement, when equipment is sent to Saudi Arabia it becomes the property of the Al-Khalaf Group. However, the ultimate ownership arrangements for the abattoir have not yet been finalised. That is a matter between the Al-Khalaf Group and the Saudi Government. Regardless of the outcome of those discussions, the agri-hub and the abattoir will provide a platform for New Zealand businesses to demonstrate their expertise and explore commercial opportunities in Saudi Arabia, where there is a network of 2,000 such abattoirs. In answer to the last part of the question, there was no active suspension of funding by New Zealand Trade and Enterprise in August 2015.

Hon David Parker: I raise a point of order, Mr Speaker. I would suggest that, on the basis that it was the Minister responsible for New Zealand Trade and Enterprise who actually answered the question on behalf of the Government, that question should have been to the Minister responsible—

Mr SPEAKER: Order! I will hear from the Hon Gerry Brownlee.

Hon Gerry Brownlee: I make a contribution simply because the point of the question has been lost, and I may be able to help with that. The point is the Government makes the decision about which Minister can best answer a question. You gave the history of the Minister of Foreign Affairs dealing with this matter, alongside the Prime Minister, over a period of time. You then referred to the fact that should the transferred question go to a Minister who patently could not answer it, that would be an abuse. Quite clearly, the Minister for Economic Development is in a position to answer succinctly and appropriately for the Minister of Foreign Affairs. That is all that has happened here.

Mr SPEAKER: Are there any further supplementary questions? [Interruption] Is this a point of order?

Hon David Parker: Mr Speaker, are you going to rule on my point of order?

Mr SPEAKER: I am going to hear from James Shaw.

James Shaw: I raise a point of order, Mr Speaker. In reference to the Minister’s answer to that question, given that it was a question on notice, he did not actually say how much taxpayer money was spent since August 2015. He said that it was not suspended. And I think that given that it was a substantive question, he would have been able to answer how much taxpayer money has been spent since that date.

Mr SPEAKER: Can I address the first point. If the Minister then answers that it has not been suspended, then the question has been addressed. It may not be satisfactory to the member, and I suggest maybe a supplementary question may be useful. With regard to the issue of transfer, we have covered the fact that the Government has the right to transfer the question; it did so. I am then not privy to whether a Minister is in the country, out of the country, etc., and who ultimately might answer it. I do not think that makes a blind bit of difference to the rulings that you have contested, or to the rulings that I have given.

Hon David Parker: I seek leave to table the 20 August 2015 New Zealand Trade and Enterprise memo that said further funding is currently suspended.

Mr SPEAKER: Leave is sought to table that New Zealand Trade and Enterprise memo. Is there any objection? There is none; it can be tabled.

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

Hon David Parker: Was the Prime Minister correct when he said at the post-Cabinet press conference on 26 January 2016 that the multi-million dollar abattoir being built with New Zealand taxpayer funds will be owned by the Al-Khalaf Group and not the Saudi Arabia Government?

Hon STEVEN JOYCE: The Prime Minister is correct in terms of the equipment becoming the property of the Al-Khalaf Group. However, as I said in the answer to the primary question, the ultimate ownership arrangements of the abattoir have yet to be finalised. That is a matter between the Al-Khalaf Group and the Saudi Government.

David Shearer: This is a joke.

Mr SPEAKER: Order! This is a point of order. I need to hear it in silence.

Hon David Parker: I seek leave to table a briefing that was prepared for the Ministry for Primary Industries, it looks like just prior to 1 March 2014, when it said that the Saudi Government owns all 2,000 slaughterhouses in Saudi and that the abattoir was going to be gifted to the Saudi—

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

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

Hon David Parker: Can he confirm that that briefing, which I just tabled, stated that the abattoir will be gifted to the Saudi Government, which has been condemned internationally for human rights abuses, including recent mass public executions of its political opponents?

Hon STEVEN JOYCE: To the issue at hand, the Al-Khalaf Group will receive the equipment. It is very keen, I understand, to own the abattoir privately. The member points out that most abattoirs, if not all, in Saudi Arabia currently are owned by the Government. That is a matter of ongoing discussion between the two.

Hon David Parker: Which of the four official versions that we have had recently is correct: the one who said in the memo that funding for the abattoir was suspended; the one yesterday who said that funding was suspended pending clarity about who will own the abattoir; the one who yesterday afternoon said that funding was not suspended, because there is no need to release further funding; or the New Zealand Trade and Enterprise chief executive, who said the “suspension” was not helpful, only going on to describe the suspension of funding?

Hon STEVEN JOYCE: The member is deliberately trying to confuse. The New Zealand Trade and Enterprise Chief Executive, Peter Chrisp, said yesterday—this is the comment that may be of interest to the member, given that he is confused—that in hindsight, the use of the word “suspended” in the board paper was not helpful and was open to be misinterpreted: “The board papers should have said that further payments were [simply] delayed until matters in relation to the abattoir development were resolved in Saudi Arabia. There was no active suspension by New Zealand Trade and Enterprise at any stage.” That was publicly reported yesterday.

Hon David Parker: Is not the truth that these officials are just being forced to cover for National’s disreputable deal, that even his own colleagues are now ducking for cover—

Hon STEVEN JOYCE: I raise a point of order, Mr Speaker. I think that where the member was heading in that question was disrespectful to the Minister of Foreign Affairs. [Interruption]

Mr SPEAKER: Order! [Interruption] I will hear the member when I get a bit of silence.

Hon David Parker: I think it is pretty disreputable to pay bribes to overseas—

Mr SPEAKER: Order! That certainly did not help the order of this House, and on that basis I will rule the question out of order.

Hon David Parker: I raise a point of order, Mr Speaker. Why was my question out of order?

Mr SPEAKER: Because of the tone of the question and then—[Interruption] Order! The member will resume his seat. The tone of the question was going to lead to disorder, as was clearly displayed, and then the point of order raised subsequently was definitely going to lead to further disorder. I have made a decision. The member does not have to like it, but he certainly has to accept it.

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

Mr SPEAKER: Is this a fresh point of order?

Hon David Parker: It is.

Mr SPEAKER: I will hear from the Hon David Parker.

Hon David Parker: Are politicians in the Opposition not allowed to allege corrupt or improper practices on the part of the Government? Is that the ruling, because—

Mr SPEAKER: No, that is not my ruling.

Hon David Parker: —it is a very unusual ruling in any Westminster parliament.

Mr SPEAKER: Order! No, that is not my ruling, and I have ruled, and if the member wants to have a look at Speaker’s ruling 23/5—[Interruption] Order! If the member wishes to stay for any longer in the House—

Hon David Parker: There’s not much point.

Mr SPEAKER: OK, then the member can stand, withdraw, and apologise for that comment, or leave the Chamber. The choice is his.

Hon David Parker: I withdraw.

Mr SPEAKER: I said stand, withdraw, and apologise for that remark, or leave the Chamber. The choice is the member’s.

Hon David Parker: I withdraw and apologise.

Chris Hipkins: I raise a point of order, Mr Speaker. During his answers the Minister made a number of disreputable references to the member asking the question. If it is therefore going to be out of order to include disreputable references to a Minister in a question, is it therefore going to be out of order to include disreputable references to those asking them?

Mr SPEAKER: I did not detect any disreputable references to the member. I will look closely at the Hansard. I did not hear any at the time. There may not have been any. The member’s interpretation of some of the comments of the Minister might be slightly different from mine. I will certainly have a look at it.

Debate on Prime Minister’s Statement

Debate on Prime Minister’s Statement

Debate resumed from 11 February.

Hon PAULA BENNETT (Minister for Climate Change Issues): Here we are at the end of another frightening question time from the Opposition members, who, quite frankly, tried their scattergun approach again and got absolutely nowhere. I am going to take some of my time today doing something that I think is rather controversial. I am going to disagree with the Prime Minister.

Hon Simon Bridges: Oh!

Hon PAULA BENNETT: I am going to disagree with the Prime Minister. The Prime Minister says that Labour is the “TPP Party” or the “Two-position Party”. I think he is wrong. I think it is the “Multi-position Party”. I think we could take it well and truly a few steps further and say that Labour really is the “Multi-position Party.” In fact it has got more positions than a yoga master. It may interest members of the House to know—and those who might be unfortunate enough to be listening—that we all know how disunited those members are. There is no real unity, and Andrew Little’s stance last year was to try to get them all to be team players and work together. So what they decided they would do—and, of course, this is all the talk around the Beehive and all the talk around Parliament—is to have team-building exercises. They have been having team-building exercises with yoga classes.

Hon Anne Tolley: Really?

Hon PAULA BENNETT: They have—they really, really have. They all get together and they do team building. Everyone is involved. There is a smorgasbord of arms and legs flying around, and I do not just mean because they are ripping each other apart. It is a bit weird but it is true. So let us go through some of the positions they have been doing in their yoga classes.

First of all, team, there is the triangle pose—I am not going to do any of these, you will be pleased to know—and that is arms pointed above your head, except that you do it Labour style. So the way you do the triangle pose Labour style is, of course, you have at least three positions. So those three positions, for example, might be the flag. Labour’s website says that Labour is for a change of flag. But, publicly, it is against the flag. But, then, privately, it is for the flag. So that is the triangle pose when you are actually trying it Labour style.

Then Andrew Little is leading the—and these are all actually true yoga poses, I am quite proud to say—eight-angle pose.

Hon Anne Tolley: Eight angle?

Hon PAULA BENNETT: The eight-angle pose. I am not going to go into how you angle your arms or legs to get yourself into an eight-angle pose—except on how you do it Labour style. Labour style is, of course, the eight positions on the Trans-Pacific Partnership (TPP). It has at least eight positions on the TPP. So it is for trade but against the TPP. But it might vote for some of the legislation but not for other parts. Labour has got different members with different stances. Some are allowed to say they have got that stance, and some are not allowed to publicly say they do, and, if they do, then they are bullied and told that they have to apologise. So then those members are not united. They do not think they would repeal the legislation if it does get voted through, and if you are confused—and so are they—that is up to eight positions.

Actually, the party is very good at the yoga pose of the standing split.

Hon Members: What?

Hon PAULA BENNETT: The standing split. I am just going to leave that one to your own imaginations. It is painful, particularly if you are David Shearer. It is really painful, because you have got the stance—this thing you actually believe in. You have put it forward, you go out there and say what your stance is, and then, of course, you are a standing split, so you then have got to apologise for it. Let us be fair, David Shearer is spending a lot of time doing the downward-facing dog, which is a popular yoga pose. He is definitely doing the yoga.

Then we have Phil Goff, and this is the shoulder-pressing pose, which is a bit nicer to describe than some of the others I have been trying to describe. That is when you do not have to be united with your team, so you can actually be on the side of the public because you know that is more popular, because you desperately want to be voted in as mayor. So instead of actually taking the stance of your party, you are going to take the stance of the overwhelming view of the public, who are in support of the TPP, and you are allowed to say so because your team is so bloody happy to get rid of you if you get voted in. So you are then allowed to go out and do the shoulder-pressing pose and stand for mayor.

Then, of course, there is a favourite, which is the peacock pose—the peacock pose, of course, being often led in the caucus by Phil Twyford. Phil Twyford leads the peacock pose, which is where, of course, it is all feathers and bluster. You go out there and say you are against community housing providers getting money from the Government to support social housing, but then you say you are for it in a speech. Then you stand up in the House and bluster, and then go out—really, it is all over the place. I see Jacinda Ardern is not happy with my speech, but then that is because she would rather do bikram yoga, because she thinks she is hot, you know. You have got to have that kind of hot, and then the heat comes in, and that kind of helps, as well.

We have got changing positions. That is something that Labour is very good at because when you are in your yoga class you have got to go for your changing positions all the time. It is stop, take hold, and change positions. There are good examples of that. Remember when we had the plan to dock beneficiaries’ payments unless they voted?

Hon Members: Oh, yeah.

Hon PAULA BENNETT: Yes, you might have forgotten that one. This is now called the “high lunge, fire your party secretary if you open your mouth” pose. We have got David Cunliffe—a couple of quick ones. He is the corpse pose, so it is kind of unfortunate there. Kelvin Davis is doing the lotus pose, which is pretty much sort of scatter and spread lots around, and hope that something sticks even though you have not got your facts right and you are actually not getting there.

I am going to end here with a new pose that those members have invented, which is the Chicken Little pose. Grant Robertson is good at this one. Grant Robertson likes the Chicken Little pose. It is the doom and gloom—you actually sit there and do nothing, to be fair. You just sort of sit there with your grumpy look on your face, and just say “Actually, New Zealand’s rubbish. Nothing’s going well. Everything’s going really badly. Everything’s really, really, really bad.”, and hope that someone believes you, because then that will mean they will want a change of Government and you do not actually have to stand for anything yourself. That is the “talk everything down, going nowhere, the sky is falling” pose that we see from the Labour Party.

Let us contrast that with the actual balanced poses of this Government. Yes? Let us challenge that with where we are at at the moment on the ideas of—I do not know—a 5.3 percent unemployment rate. There are more New Zealanders working. The average wage has gone up by $10,000 under this Government. There are 175,000 jobs that have been introduced, and we are on track for another over 170,000 jobs in 2020, with the way that it is going. Let us actually look at—and let us be clear on what we stand for.

We stand for free trade. We stand for New Zealanders getting more money in their businesses so that they can employ more people and so that they can actually pay them more. We can see that happening. The Prime Minister says it often, and it is true: we will not get rich by selling to ourselves. We will become rich by providing smart services and products that the rest of the world needs, which we can then take the tariffs off, which means more money in the pockets of businesses. That means that businesses will develop more technology and research, which means more jobs, which means higher-paid wages. That means a progressive New Zealand, and that is really where we stand, as far as New Zealand standing for what it means.

Let us think about some of the things that we are going to see introduced in this year alone. Increasing paid parental leave—that increase is going to 18 weeks on 1 April. We have already extended those free GP visits. Talking about the welfare changes that are going through this year—the difference that will make in people’s actual pockets when they look at it. Some of the big things that we are seeing tackled by this Government are more targeted services. You are seeing that across welfare, health, education, and across the justice services.

Economic growth—I want to really commend the regional economic growth products that we are seeing. The difference that that is going to make in Northland—it is not just talk. It is actually real actions and real money, which leads to real jobs and makes that big, major difference. Areas throughout New Zealand that have so much potential are tapping into that tourism dollar—which, quite frankly, is reaching well up past 6 percent of GDP and making a real difference. The backing up of those policies that are going through, led by Steven Joyce and his team—that economic development is the stuff that will most certainly make the difference.

Let us just compare the two parties in 2 seconds flat. One is aspirational, believes in this country, is getting out there, and is doing the hard work. The other does not know where it stands, what it stands for, and, quite frankly, cannot even stand united on a position. It is a pleasure to support the Prime Minister in his statement to the House.

DENIS O’ROURKE (NZ First): This Government has got a lot to answer for, with backward policies and investment decisions on transport issues. Anyone who read the Waikato Times today will have seen quite an interesting article in it. It refers to “disturbing lack of an overall transport strategy” instead of “pulling together road, rail, and maritime services into a coordinated effort”. It also refers to roads: “jammed with the national fleet of giant trucks, … up to 50 tons, wearing out the expensive seal and choking main [roads] while the adjacent rail system seems to be in a potentially fatal decline.” Finally, it points out “main roads and the rail lines run side by side for hundreds of kilometres”. The Waikato Times is absolutely correct—none of that makes any sense at all.

The Government has no transport strategy, it has no sensible transport plans, and it has no coordinated transport policies. In the regions, huge trucks inflict massive damage on regional roads, with the costs falling on regional ratepayers to maintain them. Regional roads are, of course, subsidised by central government, but there is a sinking cap on the available finances. That puts intolerable stress not just on the roading systems but on councils in the regions to maintain those roads. Again, the National Government has no strategy to deal with those issues.

Rail itself needs much more investment in New Zealand, and New Zealand First is the party for the regions. It is the party for the regions because it would put that right. There is only $97 million in this year’s Budget for regional roads, and there is only $210 million set aside for improvement in rail. These are drops in the transport bucket, and will make no difference to anything. What it shows is an absolute lack of commitment by this Government to both rail and to regional transport generally.

You can see some of the dumb decisions this Government has made, such as the failure to reopen the Napier to Gisborne rail link at a cost of only $4 million. Now that we have the probable, or at least possible, phasing out of log shipments from the Gisborne port itself, that rail link will become even more important.

KiwiRail and management, with Government compliance, wants to phase out, or de-electrify, rail on the main trunk line from Hamilton to Palmerston North. New Zealand First, on the other hand, would electrify the entire Auckland to Wellington route because that is what needs to be done for a sustainable transport system in this country—

Hon Jo Goodhew: At what cost?

DENIS O’ROURKE: The Minister over there says: “At what cost?”. What about the $12 billion that Government is spending on motorways—what about that? What about the cost of that—let us hear an answer to that. There is also a need for a passenger link from Auckland City to the airport in that city. We are not hearing anything about that sort of urban passenger rail development from this Government. The Cook Strait ferries are another disaster area. We soon will not have a rail ferry at all, and what that means is that wagons and locomotives will have to be double handled on to and off the Cook Strait ferries—freight double-handled on to and off the rubber-tyred trailers, on and off those ferries. The South Island wagons and locomotives will be stranded in the South Island, even though the only heavy transport facility is actually in the North Island. How will that work? We have not heard any solutions from this half-witted Government on that.

New Zealand First has a policy called “RONI”, railways of national importance, instead of National’s “RONS”, roads of national significance. We would ensure much better use of the railway network and services in New Zealand, with improvements and extensions where there is an opportunity to significantly reduce dependence on the road network. That is what people want, especially for heavy freight and for bulk freight services, and also where there is a passenger service demand that would lead to a redevelopment of high-quality passenger rail services in the main centres. That can be achieved in the short term, as I just said, by reallocating some of the roads of national significance’s $12 billion being squandered by this Government at the present time. New Zealand First wants a New Zealand transport system to begin a new phase that is strategic rather than reactionary, that is sustainable, that meets the needs of our people and our communities, and that is affordable and enhances and does not degrade our economy and our environment.

National cannot even do anything sensible in the transport area about tourist drivers. As you may be aware, I have a member’s bill that would require cars that are hired to overseas licence holders to comply with the Australasian five-star safety rating. Last week the Associate Minister of Transport said in answer to one of my questions “… what the member’s bill proposes would result in, actually, only the latest-model BMWs and European cars over $100,000 …”. In fact, you can buy 10 European Australian New Car Assessment Programme, five star - rated Skoda Fabias for the price of one—for the price of Mr Foss’ own BMW ministerial limousine. The Skoda car is a $19,900 car, but has autonomous emergency braking that senses an impending collision so that the brakes are applied automatically. The humble Ford Mondeo is another good example.

In fact, it is a virtual cornucopia of traffic safety devices that include a lane-keeping aid, which vibrates the steering wheel when a driver drifts out of a lane, and that is what is happening too often with tourist drivers in this country. Imagine what that would mean for reducing the risk of head-on collisions, which we are seeing far too many of in this country at the present time. The problem is an absence of leadership by the National Government and by an Associate Minister of Transport who is hopelessly out of his depth.

The bill would also place a duty of care on rental car operators to make them vicariously liable for accidents caused by drivers only if it can be proven that they did not take reasonable and practical steps to ensure driver competence and their familiarity with New Zealand traffic laws and roads. Mr Foss’ response to that situation was: “I am not transferring that liability to some other organisation.”, but the bill does not transfer responsibility away from the driver. It simply makes rental car operators additionally liable, unless they have taken the steps I mentioned.

I want to finish with this. There is currently a review of vehicle dimensions and mass going on—in fact, the submissions close tomorrow—to allow huge, wider, longer, higher, and heavier trucks on New Zealand’s roads. That is a disgrace. The economic case for that has not been made. Safety will be a huge problem as a result. And that, finally, is just another example of how this Government has not got a sensible, practical, forward-looking, and sustainable transport strategy, which this country so dearly needs.

Hon JO GOODHEW (Minister for the Community and Voluntary Sector): It is indeed a pleasure to be here this afternoon and to rise in support of the Prime Minister’s statement and to rise in the knowledge that New Zealanders are looking for steadiness in a Government, a Government that will look after the things that they hold dearest to their hearts. So what are they? What are the things that New Zealanders care about? Well, they care about their health, and they care about law and order. They care about having jobs. In fact, they care about education because they know that is the way to the future for their children, and they care about the fact that New Zealand looks after those who are in need.

So New Zealanders want a Government that actually can deliver on those things and that has a big-picture view on how it will deliver on those things. And I have got to say that it comes back to the economy, because if the economy is in good shape and growing, as ours currently is—to September last year growth was at 2.3 percent, with a predicted 2.7 percent ahead—and is the envy of many other nations, with the lowest unemployment rate at 5.3 percent since 2009, well, people know that the ship is steady and that the Government is delivering on the things that they care about.

So they are a little puzzled to see—as Minister Paula Bennett has stood on her feet and described—the many positions of the Opposition. That, in fact, tells us why we have a very popular Prime Minister who is delivering on what he said he would do: a brighter future for New Zealand. It does not come by accident and it does not come easily, and that is one of the reasons why our Government has set ourselves stretch targets for so many ways we can improve the lives across New Zealand.

So let me talk a wee bit about what is going on at the moment. We know that the stability, the cohesion that is seen on this side of the House is just what the people of New Zealand have been looking for, and it is an absolute privilege to serve in a Government that is working in this way. We have got a good track record and we are busy at the moment delivering on the things that the Prime Minister’s statement outlined to New Zealanders. There was an enormous list of those, and I am going to cover off on some of them. In that agenda are a number of examples that I am going to give to the House this afternoon that are related to my portfolios. In that respect, I want to talk a little bit about forestry, about primary industries, about social development, and also about the community and voluntary sector.

As I said, we are a busy Government, and this year within the social development portfolio the Government will respond to a review of Child, Youth and Family to ensure our most vulnerable children get the care and the protection they deserve. There have been many reports and reviews. It is time to have action that gets things right and that puts children—those very vulnerable children—in the centre of being protected. On that note, I also want to allude to an announcement from Minister Anne Tolley today on the 10,680 children whose caregivers have received what amounts to $5.18 million of benefit—that is, the school and year start-up payments. So that is for caregivers who are receiving either the unsupported child’s benefit or the orphans benefit, and it amounts to a really good hand up at the beginning of the year. It is $400 to $550 for each child. There are 13,5000 eligible for it, and thus far 10,680 have collected that really helpful start to the year for the most vulnerable children.

We are going to be pressing on with our social housing reforms in order to do a better job for tenants as well. What I know is that this is really tough stuff. It is stuff that has not been able to be achieved in the past, but we are tackling it as a Government. We are going to be completing the assessment of the emissions trading scheme, and I know that many people in the forestry sector are well engaged and submitting on that.

In building a stronger economy—and that 2.7 percent predicted growth does not come by accident—that strong economy needs to attract investment. The jobs that will be created out of the economy—not by the Government, because that is not sustainable; out of the economy—will be filled by skilled New Zealanders because of our emphasis on upskilling right the way through the education system, right from early childhood education, where we have record numbers engaged, and right through the primary school system, where we are actually measuring how young people are getting on and making sure that their families understand how they are getting on. That is a really important part of the triangle: the family, the child, and the education system and the teachers within it. So that is a really important thing that we are dedicated to, and we are seeing great strides in there. We are seeing many more young people getting National Certificate of Educational Achievement level 2. It is tough, but it is worth putting our effort, our shoulder, into that.

I want to move on a little bit to talk about primary industries. As we know, primary industries have been very much at the centre of the debate at the moment around the Trans-Pacific Partnership (TPP). I thought I would deal with not the conjecture, not the misinformation, not the “it might happen”, and not the scaremongering—I would stick to the facts. When I have been addressing public audiences in the Rangitata electorate, they have been really interested in the facts and they have said: “Oh, really? Gosh, I wish we knew that when we were watching all the protesters.” So, fact No. 1, it was 2 weeks ago when we hosted the signing of the TPP agreement. Fact No. 2, there are 12 Asia-Pacific countries in it. Fact No. 3, it is our biggest free-trade deal. And fact No. 4 is something that is often forgotten in the rhetoric of the Opposition—successive Governments have worked to get free-trade agreements with countries like the United States and like Japan and Canada for about 25 years. Good Lord! This should be something to celebrate then, should it not? It will create significant new trade and investment opportunities, and it will make it easier because it will reduce barriers for Kiwi companies to work with their overseas business partners. That means more jobs, more income for New Zealanders, and also more flow-through into the social sector spending.

Another fact that seems to have fallen shy of the memories of the Opposition members is that in fact the groundwork was laid by one former Prime Minister, Helen Clark, alongside Phil Goff. So that is a hard one for them to swallow. As the Prime Minister often says—and he is right—we will never get wealthy just selling to ourselves. We are a country of trade. So if we did not trade in fish, what would that mean for Nelson? If we did not trade in kiwifruit, where would the Bay of Plenty be? If we did not trade in wine at record levels, where would Marlborough and the Wairarapa be?

Another fact: there are 800 million customers across Asia and the Pacific. So I just want to briefly touch on a couple of specific examples so that the members can have in their minds a dollar figure. New Zealand exports $839 million in wine into the TPP countries—those 12 nations.

Iain Lees-Galloway: What—already?

Hon JO GOODHEW: Yes, already and with an estimated tariff saving of $10 million per year when the TPP is fully implemented. They are rubbing their hands together because this represents an opportunity for the wine sector.

Grant Robertson: What year?

Hon JO GOODHEW: Actually, I do not have the year in front of me, but I absolutely know, given that the wine industry put out a press release immediately, that it represents a real gain for those people and they are very supportive of it. Why do you not check it out tonight and ask them exactly that?

Forestry—$1.5 billion worth of forestry products in the 2014 year into that TPP region. There are estimated savings of $9 million again when it is fully implemented.

Iain Lees-Galloway: When is that? Do you have that year in front of you, Jo?

Hon JO GOODHEW: Most of those gains for forestry are immediate, Mr Lees-Galloway—immediate for most of those people, as it happens.

I am actually going to carry on, because I have got more good news stories. In this House we have been united on free trade in years gone past. But it would seem that it is falling off the radar of the Opposition, which simply means to me—and it is coming time for me to close my comments today—that, sadly, the Opposition members no longer care about creating jobs for New Zealanders or making incomes for New Zealanders what they could be rather than what they wish they were in the past, so it is a disappointing way forward. As Minister Bennett has already said, they are not united on that particular plank either, but, as I conclude my comments in support of the Prime Minister, I say that those New Zealanders with whom I have shared the facts say: “What’s all the fuss about? Let’s get on with it.” Thank you.

GRANT ROBERTSON (Labour—Wellington Central): When the Prime Minister delivered his opening statement to Parliament this year, two things struck me. The first was the difference between the speech he delivered in the House and the speech that was published on the Beehive website. The speech he delivered in the House began with him taking credit for New Zealand’s recent sporting triumphs—

Iain Lees-Galloway: Including the test match?

GRANT ROBERTSON: —he had not taken credit for that; it had not happened—and then following that up with declaring success for the economy. This will come as a surprise for a lot of people because just a paragraph later in the written speech we learn that the Government is now $17 billion short in terms of what it thought it would get in revenue from the Budget in 2015—$17 billion short.

This goes along with a record for the National Government of great success: tens of thousands more people unemployed than when it got into office; wage rates rising slower than inflation over the next 2 to 3 years; $60 billion more debt than when it got into office; plummeting commodity prices, which it has failed to react to; and, we learnt today, a likely 3 years of below break-even for farmers around New Zealand. But it is all success, apparently. We can debate the numbers, we can argue whether or not the numbers of growth rates are zero in terms of per capita—which they are—or whether or not we can claim credit for things that we have had nothing to do with, if we are the Government, but what is success in our economy? Is success in our economy the chance for every New Zealander to achieve their dreams—to achieve the Kiwi Dream of a decent job, a warm, dry, safe home to live in, time with your family, and a safe community? Has every New Zealander got the right to that Kiwi Dream? Is that what the economy is for, or is the economy just a set of numbers that the Prime Minister can get up and crow about?

Is it success in New Zealand when we learn the fate of Anna from a recent Radio New Zealand Insight documentary? I am going to quote at some length from this. This is what the item said: “Anna is re-packing her car. Between the children’s car seats are small piles of clothes and a few carefully selected toys. She pulls a white rabbit onesie from under a small foam mattress and refolds it before opening a compartment, and explaining how she stores food. ‘I can keep in there things that will keep cool. I’ve got little chilly bags. We try not to have too much fresh food on us, we just buy fresh fruit.’ A few weeks ago, Anna and her three children, aged between six and 13, were evicted from their North Shore home. They now switch between couch surfing at friends’ houses and sleeping in the car. ‘Usually in a public area that’s got a little bit of privacy but also lighting, so the other day, we parked up in the next carpark to McDonalds, so that there was 24-hours toilet, as well as … we were parked under the trees so it had a bit of darkness. [There’s] a lot of light there, so it enables sleep and security.’ She says rents are now phenomenally high, she can’t afford a bond, and has bad credit. The money she makes from owning and running her own business just isn’t enough to cover it. She says she phoned around emergency housing providers, but they were all full.”

And this is what Anna said: “You end up being on the lower end of the scale as far as trying to improve your situation. Yeah, I didn’t realise how bad it was actually in New Zealand until I ended up in the situation myself.” That is happening in New Zealand today. Thousands of people are homeless. There are children sleeping in cars. Is that a successful economy? Is that what National thinks marks us out as a success—that the Prime Minister can stand up in this House and crow about the success of the New Zealand cricket team? There are people living in cars.

The economy is not the end in itself, Ms Goodhew. Standing up here and saying we have got a growth rate of 2 percent, 2.2 percent, 2.4 percent—does that matter if a family is living in a car, and the best we can hope for those children is that there is a 24-hour McDonald’s that they can go to the toilet in? It is a disgrace, and it is time that the National Government got up and started explaining to New Zealanders why it is that success is possible in New Zealand only for some people. It is possible for only the 1 percent under National’s vision for the future. Every New Zealander deserves the right to dream of a better tomorrow. They deserve the right to be able to fulfil their version of the Kiwi Dream. Anna deserves to be able to live in a warm, dry, safe home. Her children deserve to grow up knowing that they have the same opportunities as every other New Zealander, and right now, today, in this country, they do not.

There are 305,000 children in New Zealand growing up in poverty—that is not a successful economy. We have the lowest homeownership rate in New Zealand in 60 years—that is not a successful economy. If the end of the road for the National Government is some figures on a sheet or some numbers that it can manipulate to make itself feel better, then that is not good enough for New Zealanders. The Government says: “We’ve got billions of dollars squirrelled away so that we can offer tax cuts in the 2017 election.” That is not good enough. What we have got to do from today is invest in the future for New Zealanders, and that is why I am quite pleased and very happy to make the debate that we have about the future of this economy, the future of this country, be about what it delivers for all New Zealanders.

We are a prosperous nation; there is no doubt about that. What we need to do is ensure that there is shared prosperity so that everybody gets the chance to live their Kiwi Dream, and right now, under this Government, that is being denied. The economy is not a person—we are not going to hurt its feelings if we do things that the National Government does not like. The point of the economy is to deliver the society that New Zealanders want and to deliver the opportunities to every single New Zealander.

The National Government wants tax cuts. It wants tax cuts, which, on its record, will end up favouring the most wealthy in New Zealand, because that is what happened in 2010. Well, on this side of the House we say, by all means, you go ahead and offer those tax cuts, National. What we are going to offer is a programme about investing in our future, and the first element of that programme that the Labour Party has announced this year is to offer 3 years’ free post - high school training and education.

The world is changing. In the first Labour Government, Peter Fraser and Clarence Beeby came to New Zealanders with the idea that secondary school education should be universal. They said that in order for people to be able to achieve their potential, they needed the right to a free education to the extent of their abilities. It was about saying that everybody needed that, because that would be the route to being a productive member of society, to contributing to the growth of New Zealand. Well, in the 21st century, that now extends beyond high school. We need every New Zealander having a plan at the end of high school to go on and learn and study and train. That is how we will get the economy growing, by recognising that the future of work has changed—and on this side of the House, we get that.

The Prime Minister stood up in his speech and decided to laugh about the fact that I went to a conference in Paris about the future of work. Well, I wonder whether he is laughing at the 30 or 40 Ministers from around the world who were at the same conference. Or is he laughing at his friends in the World Economic Forum, who devoted their whole forum in Davos to how we manage this change in the future of work?

Work matters to New Zealanders. It gives them income but, more than that, it gives dignity. It provides coherence in our communities. We want every New Zealander in the future to have decent work and decent pay and to be able to contribute to New Zealand society. Our vision on this side of the House is for an economy where we build wealth from the ground up—where we offer those opportunities for everybody to get education and training, not just the privileged few that National would have you believe this economy is about. We will be debating over the next 2 years what makes a successful economy. For me, a successful economy is one where everybody gets to share in the benefits and where everyone has the opportunity to achieve their potential. We will do that only if we invest in people and the economy works for people, not the other way round.

This party on this side of the House has a vision for the future of New Zealand that includes everybody and that grows a prosperous economy from which we all benefit. That side of the House wants to take credit for other things and stick its head in the sand. We will see by the 2017 election that those members have no vision. This side of the House has a vision for an inclusive, prosperous New Zealand.

Mr DEPUTY SPEAKER: This is a split call on behalf of the National Party. The first 5 minutes is Matt Doocey.

MATT DOOCEY (National—Waimakariri): Can I say I am very proud to be part of a unified caucus of 59 National MPs who are committed to working hard in 2016 for all New Zealanders. What I will not do is sit here and take a lecture from that party, which has got a litany of failed social policies.

The 2008 state of the nation report reported back that the last time those members were in Government, with all their increased expenditure, they made no social progress—all their increased expenditure, and not one bit of social progress. The way you improve the well-being of the people in your country is that your country becomes competitive. By increasing competitivity, you increase the well-being of your people, so get off the fence and support the Trans-Pacific Partnership agreement. We know that will give us trade in 11 other countries and an increase of 800 million potential customers—40 percent of the world’s trade.

It has been a great start to 2016. We have got GDP growth that is the envy of other OECD countries. We know that unemployment is tracking down—one of the best figures in a long time—the workforce participation rate is increasing, wages are rising faster than inflation, and the country has returned to surplus. What a great start to the year—what a great start to 2016. But we in this National Government know that we can do better, and we are committed to doing better and working harder for all New Zealanders.

Can I take this opportunity to also welcome our new MP, Maureen Pugh. She is a list MP and a very hard-working local MP, who is going to give the region of West Coast - Tasman great representation. Maureen and I are part of the 15 new National MPs from the intake of 2014. We are new and we are fresh, energetic, and committed to working hard for all New Zealanders in 2016. We are looking forward to a great year coming ahead.

Can I just pause for a moment and reflect on a meeting I had yesterday in my electorate of Waimakariri. I had organised a senior citizens meeting. I turned up there and we had some great discussions, and it is great to hear feedback from people on the ground and hear their concerns and about what we are doing well and what we need to improve on. It was great for them to see and recognise that we are a small cog in a global system and we need to get out there and engage in international markets. They, like me and like this Government, know that there is a lot of instability out there—a lot of economic instability, political instability, and security concerns—and we know that by having strong leadership and strong economic management, as outlined in the Prime Minister’s speech, we will engage those markets and we will have a strong, energetic, viable economy.

You see, we on this side of the House know that New Zealand will not get rich by selling to itself. We need to get out there with free-trade agreements like the Trans-Pacific Partnership: 11 other countries, 800 million potential customers, and 40 percent of the world’s trade. We need to get out there and be competitive. Being competitive in a globalised world is a choice. Some countries choose to be competitive, and they improve the well-being of their people. Some countries are not competitive. It is a choice, and it is as stark as that. On this side of the House we back New Zealand being competitive and we back hard-working New Zealanders to do better, and we want to support them doing better in 2016.

The Prime Minister also spoke about this Government’s unwavering commitment to the Christchurch rebuild, one of our top four priorities. Like many, I experienced the earthquake on Sunday—quite a big shake; I was at my house in Rangiora—and it is at the forefront of Cantabrians’ minds as we commemorate the fifth anniversary this Monday of the fatal February 2011 earthquakes. This Government is committed to rebuilding Christchurch—committed to rebuilding the best new small city in the world. We have had some great openings over the Christmas break. We opened the Margaret Mahy Family Playground. I know my daughter loved being there. There were over 100,000 visitors to that anchor project in the first few weeks of its opening. This Government is committed to a competitive economy and committed to supporting Cantabrians rebuild. Thank you.

Mr DEPUTY SPEAKER: A 5-minute call—Stuart Smith.

STUART SMITH (National—Kaikōura): I want to carry on with the same theme of trade, which has been covered in the last few speeches, and I want to do it with an example of free trade. Back in 1983 the Closer Economic Relations, or CER, agreement with Australia and New Zealand came into force, but prior to 1983 the wine industry was a totally domestic market - focused industry, protected in just about every way. New Zealanders had no choice but to buy the wine that was produced in New Zealand. It was of quite inferior quality, but, actually, because it was protected, it really did not matter that much—they could sell it anyway.

So after 1983 the market was opened up. Australian wine was able to be purchased in New Zealand without the tariffs, at a similar or even a cheaper price than New Zealand wine, and, lo and behold, it actually tasted better. It was what consumers wanted. That left the wine industry high and dry. It led to a scheme—a vine-pull scheme—in which the Government paid industry to remove grapevines because it was simply economically unviable. But that opportunity led to the wine industry becoming very customer-focused and what is now a $1.5 billion export industry—from nothing to $1.5 billion. That is a significant shift in an industry’s focus, and that is because the industry was opened up to competition and it embraced innovation. It planted grapevines that consumers wanted to buy. That has enhanced our other trade opportunities around the world because people in the world now recognise that New Zealand can make high-quality consumer goods that are grown in New Zealand and branded to the very highest of levels.

So I put it to the people who oppose free-trade agreements to have a good look at CER and at the difference that it made to the wine industry and to other industries, but I know the wine industry quite well. It did make a significant difference, and we have to embrace change. If we rail against it, it is natural for people to fear change. But change offers opportunity, and the opportunity for the wine industry is that it is now going forward towards $2 billion in exports by 2020. I think that even Frank Yukich, who planted the first commercial vineyard in Marlborough, could not have imagined how it transformed the regions around New Zealand, like Central Otago with its Pinot noir and Marlborough with its sauvignon blanc.

I want to move on now to the flag. I have been in favour of the flag change right from the beginning. In fact, I have been wearing this badge since before the votes were counted. It has been quite interesting to note that in the time up to Christmas, people did talk about it a bit, but after Christmas it has been phenomenal—the change in people’s attitude—and you can see that they have come along and they are actually embracing it. I want to go back to the trade thing and draw a parallel with that, because in 1973, 10 years before Frank Yukich planted his grapevines in Marlborough, New Zealand’s trade with the UK was 26 percent of our exported goods. Today it is 3 percent. The UK, as we know, entered the EU and it was very difficult for us to trade with it, or it was much less easy than it was before. Like many New Zealanders, I have enjoyed my OE in the UK, as many of our colleagues across all sides of the House have done, but it is getting much harder for other Kiwis to do that now. The UK is doing what it needs to do, but it is also charging fees.

We as New Zealanders have a multicultural society now. I think we want a symbol that represents us and where we are today, and I believe that the current flag does not do that. The Union Jack does not really represent where we are. People fought and died for a choice, and I am going to be putting my choice forward. It is quite interesting to note, in my view, that when people see the flag flying, they realise it is actually quite a stunning flag and it represents us.

It is a great pleasure to have been able to speak in favour of the Prime Minister’s statement. I really look forward to hearing other contributions, and let us hope they are thoughtful. Thank you.

Mr DEPUTY SPEAKER: A split call on behalf of the Green Party. The first 5 minutes is Eugenie Sage.

EUGENIE SAGE (Green): E Te Māngai o Te Whare, tēnā koe. In the Green Party we would rather the $26 million that is being spent on this flag referendum was spent on doing something about protecting our climate. I had the privilege yesterday of listening to a world leader, the President of Kiribati, Anote Tong, talking about climate change. He called it the greatest moral challenge facing humanity. He said: “We simply want the ability to live on our island.” That is a basic human right, to have a home and to be able to live in your homeland. Yet, from the Prime Minister’s statement, National seems totally intent on ignoring what is happening with our oceans, the impacts of rising sea levels on our Pacific neighbours, and the urgent need to tackle climate change. Instead, it is distracted with the flag referendum, as we heard from the previous speaker.

Our oceans, as well as producing half the oxygen we breathe and absorbing around 30 percent of the carbon dioxide we produce, also absorb 93 percent of the heat we are producing from global warming. With these warming oceans we get sea level rise, up to a metre or more by 2100. Warming oceans, of course, contribute to more intense weather events—cyclones where they did not occur previously, more extensive and severe droughts—and in the Pacific we are seeing that combination of sea level rise and more extreme weather events costing those islands the ability to have a homeland.

Rising sea levels will inundate some of our Pacific neighbours. Here in New Zealand we can move uphill and we can move inland. On coral atolls like Kiribati there is no uphill or inland to move to. Yet in the Prime Minister’s statement we saw a total failure to recognise that we need to reduce our emissions and that we need to adapt to the realities of an unstable climate. That was missing from the Government’s top four priorities.

New Zealand cannot have the competitive and productive economy that the Prime Minister claims to want without making a shift to a low-carbon economy, without shifting our policies—changing the structure of our economy to one that protects our climate. We need to make those shifts if we are going to protect the right of our Pacific neighbours to live in their homelands. What the Government is doing, what the Prime Minister’s statement has set out, is business as usual. It is high carbon pollution, encouraging more fossil fuel extraction, and more subsidies to oil drillers and miners, when we know that burning even two-thirds of global fossil fuel reserves will be catastrophic for the climate.

Business as usual for National means ruling out agriculture even being discussed in the current review of the emissions trading scheme. Business as usual means more handouts for irrigation and intensive agriculture, despite nearly half of our emissions coming from agriculture. We heard it again today, with the finance Minister’s comments. National seems to believe that there is going to be some technological silver bullet that can reduce our agricultural emissions. It is sending completely the wrong message to farmers. It is signalling that climate change does not matter by failing to set a date when agriculture will be in the emissions trading scheme.

It is sending the wrong message about our economy. It means that we continue with business as usual, with the old carbon-intensive economy, rather than shifting investment to clean low-carbon sectors like IT, like renewables. It is an utterly irresponsible choice for our Pacific neighbours and for New Zealand. It is putting the risks on to Kiwis in the future and now. It is not dealing with current challenges. The target in the Paris agreement was very ambitious: keeping global temperatures to within 1.5 degrees Celsius. Prime Minister, you signed up to that target, and yet this Government totally lacks the policies to deliver on that. Yesterday a leading climate scientist, Tim Naish, said that the window to stay within a 2-degree Celsius rise in global temperatures is the next 10 years.

In the Green Party we believe that action is urgent. We want to stay within that limit. That means major structural change in the economy. It means investing in public transport, not spending billions of dollars on new motorways that will make our emissions worse. Last December we had the second biennial report on our emissions. That showed that New Zealand’s emissions were set to increase by 96 percent above 1990 levels by 2030. That is this Government’s plan. It is not about being responsible. It is not about delivering a safer or a brighter future to New Zealand. It is about burdening us with catastrophic climate change.

Dr KENNEDY GRAHAM (Green): In his statement opening the parliamentary year the Prime Minister allowed the nation one sentence on climate change. He said: “Following the Paris Agreement [on climate change], the Government will [this year] complete its review of the Emissions Trading Scheme, which will assess the Scheme’s [operation and] effectiveness to 2020 and beyond.” So let us explore the relationship between the Paris agreement and the emissions trading scheme review here in New Zealand.

The Paris outcome is going to require higher standards of behaviour from all 196 parties to the framework convention. It aims to strengthen the global response to the threat of climate change. Article 4 provides that developed countries should continue to take a lead. The accompanying decision says that much greater emission reductions will be required than those associated with the intended 1.5-degree Celsius threshold. New Zealand’s intended nationally determined contribution for 2030, of 11 percent, is regarded by independent observers as inadequate and poor. So to meet our legal obligations coming out of Paris, New Zealand will be obliged to increase its intended nationally determined contribution before ratification of the agreement. The onus is therefore on New Zealand to review its target not at its leisure, but now. A greater mitigation reduction effort will require fundamentally different reasoning, and so it is best to recognise now what, with respect, we think has been incorrect in this current Government’s thinking.

The Cabinet paper of last year shows how the Government’s thinking has trended in making what is perhaps the most critical decision in New Zealand’s history. Let us consider what it does not do. It does not explore the global mitigation required between 2015 and 2030 for the temperature goal, even though the paper states that the goal is in New Zealand’s interests. It cites, without concern, the Prime Minister’s scientific adviser’s statement that sustained reduction in global emissions of the order of 40 to 70 percent by 2050, compared with 2010, is required. It touches, only in passing, on ways of comparing targets. It identifies four methods: equal cost, equal per capita emissions, historical responsibility, and equal reductions from business as usual. It does not explore any of these in detail, and it does not assess them. It fails to acknowledge the sophisticated models for determining fair shares around the world.

What is required is a Cabinet paper no later than mid-2016 that will do five things. First, it will acknowledge the required reduction in global emissions in 2030, from the intended nationally determined contribution projected 55 gigatonnes to 42 for 2 degrees Celsius, and 39 gigatonnes for 1.5 degrees Celsius. Second, it will acknowledge the integrity and applicability of the principle of equity in the framework convention and the results that the research institutes have reached regarding each country’s responsibility level in 2030. It will note the two main studies done in this respect—contraction and convergence, and equity reference—indicating that New Zealand’s responsibility will be as low as 23 megatonnes, or even 5 megatonnes, in 2030. This compares with our current megatonne level of 67. Third, it will explore the maximum domestic abatement potential for New Zealand by 2030 in meeting that responsibility and acknowledge a responsibility to make up any shortfall through climate financing. Fourth, it will develop a national climate action plan, with the most effective set of climate policies and regulatory measures, designed to reach the maximum domestic abatement potential. Fifth, it will ensure that the national climate action plan reflects optimal equity among all relevant intersectoral and societal interests, to the extent possible.

There is a need for a genuine, cross-party dialogue on climate policy in this Parliament, one that finds sufficient common ground for a predictable and far-reaching national plan of action, for the sake of future generations.

Hon Dr JONATHAN COLEMAN (Minister of Health): I move, That this debate be now adjourned.

Motion agreed to.

Debate interrupted.

Bills

Social Housing Reform (Transaction Mandate) Bill

Second Reading

Debate resumed from 11 February.

The ASSISTANT SPEAKER (Hon Trevor Mallard): The question is that the—

Tim Macindoe: Sorry, I beg your pardon, Mr Assistant Speaker. Is Carmel Sepuloni not taking her call?

The ASSISTANT SPEAKER (Hon Trevor Mallard): Well, I think that if the member casts his eyes around he could probably work that out.

Iain Lees-Galloway: Just speaking to that point—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Well, there is no point of order—

Iain Lees-Galloway: I raise a point of order, Mr Speaker.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I have already ruled that the question that has been raised by the senior Government whip is not a point of order.

IAIN LEES-GALLOWAY (Labour—Palmerston North): I raise a point of order, Mr Speaker. Just to assist with the order of the House, usually the Speaker does ask whether the member who was on their feet wishes to complete their call, and that would be a signal to other members who are intending to take a call that it might be time for them to rise to their feet and take theirs.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Well, I thank the member for his assistance to the House in that particular area, but I also think it was unnecessary in that if members had been alert they would have already taken the call.

DENIS O’ROURKE (NZ First): This Government is trying to get the State out of social housing in this country. It wants to fob it off to often ill-equipped non-profit organisations, and it is selling houses at the very time when more houses need to be built and when the State needs to be involved in that. The Government should be building more houses; it should be upgrading and improving existing State houses. Its concentration is simply, for ideological purposes, on the sale of State houses, and that is wrong.

This particular bill empowers Ministers to direct the sale of houses that are in the ownership of Housing New Zealand Corporation. The reason for that is, of course, the Government actually does not trust the corporation and wants to do the job itself. The Government wants to do it, ostensibly, for what it calls housing reform objectives, but, in fact, the objective is just ideological—the privatisation of social housing—and the real objective of this particular bill is simply to fast track that process by giving the two Ministers excessive executive powers.

The Government in its own disclosure statement was correct when it said: “The transaction mandate is an unusual legal mechanism. It provides Ministers with the ability to effect the transfer of HNZC assets in HNZC’s name, without a decision-making role for the HNZC board.” So, as I said, clearly the Government does not trust the board to do its job, and the Government wants to do it for it. In that respect, the Government wants to both pay the piper and call the tune. It is yet another example of this Government’s habit of extending executive powers.

I have complained many times in this House that this Government is taking on more and more powers to the executive in many of the bills that it brings before the House, thus sidelining Parliament, and in this case effectively sidelining one of the Government’s most important agencies, Housing New Zealand. That is wrong, and that sort of thing really does need to stop.

Another issue is this: the bill allows the land acquired by Housing New Zealand under the Public Works Act to be transferred without complying with the usual offer-back process. I think I know why that is particularly the case. It is because when Nick Smith was embarrassed a year or so ago over the Government land that was not, in fact, available in Auckland for housing as he claimed it was available, he then made reckless statements about how much land the Government had available and whether, in fact, it was suitable for housing or not. He got into deep trouble about all of that because he simply did not check first whether the land was actually available for housing or not, and, if so, how much was available.

So, this bill is really a face-saving device for Nick Smith. It allows the Public Works Act to be bypassed. What the Government is effectively doing is saying: “To hell with people who had rights under the offer-back provisions of that Act, because we want to get on with this quickly, and we want to save Nick Smith’s neck.” There are at least 2,000 houses up for sale by this process, so I ask this simple question: who gets the proceeds of them, and what are they going to be used for? I have not yet heard any Government member answer that question. I asked it in my first reading speech; I ask it again now.

I see that new section 2A(7), inserted by clause 4, says that the proceeds “must be paid to a Crown Bank Account.” That is all it says, and that is not answering my question. So what is the mandate for that money? Will it go to new social housing? How many new houses will be built? How many houses will be upgraded or replaced?

As I have said, fundamentally the Government wants to get the State out of the provision of social housing, and the result will be to deepen the housing crisis. As a result no new houses will be built. It does not matter whose ownership they are in. What does matter is how many of them there are. This bill does nothing to assist that problem. Ostensibly, the rationale of the bill is the objectives set out in new section 50D in new Part 5A, inserted by clause 8, which actually gives no cause for hope whatsoever in terms of more and better State housing.

Amongst the objectives is one listed in new section 50D(1) that says: “(c) social housing tenants are helped to independence, as appropriate:”. What does that mean? To me, it is pretty obvious. It means pushing people out of State houses. People who have been assessed for some reason as being capable of renting in the private market—they will be pushed out of State houses. That is what that means. Another objective says: “(d) there is more diverse ownership or provision of social housing:”. What does that mean? What that means, simply, is the privatisation of State houses for ideological purposes.

Another objective, at paragraph (f), states that “the supply of affordable housing is increased, especially in Auckland.” Well, how on earth is that going to happen, because all this bill is going to do is transfer ownership from the State to other providers. So how is that going to increase the number of houses, how is that going to improve the quality of houses, and how is that going to really help to solve the housing crisis—a crisis that this Government, by its gross inaction, has actually caused? This Government is doing nothing to solve that problem and, in the end, this bill is just another nail in the coffin of State housing in New Zealand.

The bill will, if anything, reduce and not increase the supply of more State housing in this country. The sale money will not go to the improvement of social housing, nor will it go into more social housing for those New Zealanders who need it.

Concerning the reporting requirements of this bill under the Housing Act, the committee’s main recommendation appears to be to insert a new section 2A(8), in clause 4. It says that it would not be appropriate for Housing New Zealand to provide such reports because it would no longer have control of the land, but instead it should be reported under the responsible ministry’s annual report. Well, how does that really help to inform the public about what is going on here—buried in some departmental report that next to nobody ever reads? Effectively, the public of this country are having this hidden from their view, and this is not really reporting at all. It is just the opposite. In fact, the majority of the Social Services Committee was just doing nothing more than toeing the Government line.

Finally, the Opposition parties, I see, are united in their opposition to the bill, and there are two main reasons for that. The first is that the bill enables the sale of a large proportion of the country’s State housing stock. Although the housing crisis demands a substantial increase in the number of houses for people on low incomes and demands the improvement of those houses, simply changing the ownership of those houses addresses that problem not at all.

The second objection to the bill is very simple. It confers on the Ministers, as I have said, extraordinary powers that they should not have. So for all of those reasons New Zealand First will definitely not be supporting this bill. It has not done so, and will not do so in the future. The Government needs to rethink it and not pass it as it is.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I am going to call Matt Doocey in a minute, but I just want to make it clear that although this is the sixth call, it will be regarded as the fifth call, to be followed by a full Green call, and then we will get ourselves back on to track again. The reason for this is, pretty obviously, that at the point at which I called Mr O’Rourke, he was the only person who actually called for the call. That got us slightly out of order.

MATT DOOCEY (National—Waimakariri): It is a pleasure and honour to rise in support of the second reading of the Social Housing Reform (Transaction Mandate) Bill. I would just like to comment on that last contributor, Denis O’Rourke, who spoke constantly about ideology, which I thought was slightly ironic from a member of a party that has no ideology other than what its party leader tells it.

This bill is not about ideology. It is about pragmatism, it is about listening to the sector involved, and it is about listening to vulnerable New Zealanders. That is what this Government does so well. We are only a few days into the sitting calendar and here we are supporting the increased provision of social housing. Just like the increased provision of GP care to under-13s, the raising of parental leave from 16 to 18 weeks, and the increasing of benefits by $25 a week on 1 April, it is because this Government cares about vulnerable New Zealanders. Opposition members will tell you they care, but they are the ones stuck in ideology. They are the ones who have a litany of failed social policies. We do not mind thinking, and thinking, and thinking, and then thinking: “What works?”. What we know is that the Government does not need to be the sole provider of State housing, and that is what this bill does. It allows the Minister of Finance and the housing Minister to have the mandate to transfer the assets to the social housing sector, and it was very clear from the number of submissions we got—

Richard Prosser: Who else? Who but the State can provide State housing?

MATT DOOCEY: Mr O’Rourke can speak as much as he wants, and so can Mr Prosser. They were not at the Social Services Committee; we were. We had only 11 submissions. The sky did not fall in, and, actually, I agreed with all those submissions because they fundamentally said that we need more social housing. Where we disagree is that I believe we can develop a mixed economy of social housing: the Government—which will always be the primary provider—social housing, community housing, and it just goes on and on.

Richard Prosser: Sounds like ideology.

MATT DOOCEY: You see, when you look at the statistics—and you might want to listen to this, Mr Prosser—that currently in Housing New Zealand the demand for one-bedroom units is 25 percent, whereas the supply is 9 percent. For Housing New Zealand three-bedroom units the demand is 24 percent, whereas the supply is 43 percent. It is very clear. What we need is the right house, of the right size, at the right time, and in the right location going to the right people. That is what this social housing reform will provide. We know that many in social housing have complex needs, and by bringing in community housing providers we are providing wraparound services to people to support them in becoming more productive and gaining the lives that we want. So I say well done to this Government for stepping up and supporting vulnerable New Zealanders.

This bill is not only about supporting vulnerable people. What we want to ensure is that anyone who wants to access social housing is able to. We know that there are thousands on the list waiting, and ones who want to transfer, as well, and that is why I support this bill and commend it to the House. Thank you.

MARAMA DAVIDSON (Green): E Te Māngai o Te Whare, tēnā koe, huri rauna i Te Whare tēna koutou katoa.

[Greetings to you, Mr Assistant Speaker, and to you all throughout it.]

It is with some frustration that I rise to speak on behalf of the Green Party. We oppose this second reading of the Social Housing Reform (Transaction Mandate) Bill. This bill is purely to enable a flog off of public housing assets, and at a time when we need more. Over the time of this Government the State housing stock has shrunk indeed. In New Zealand in 2016 we have a severe housing crisis, and this bill is not driving to fix it. It is not. It is important to call this Government out in not wanting to address the severe housing crisis. Although we often hear of the crisis of housing affordability in Auckland with prices blowing out every day, that is not the extent of our problems. There is also a crisis in the quality of housing, and, certainly, the Government has not been a responsible landlord.

As spokesperson for social housing I can say that my office receives far too many messages from whānau, and I literally mean whānau—my whānau—across the country, living in both Housing New Zealand and private rental housing, who are desperately trying to get action on warming up and fixing their homes so that their whānau can live safely.

We also know that there is a crisis in the levels of severe housing deprivation, also known as homelessness, and I do want to take the time to enforce that this bill is not driving to fix homelessness. I think now of women with children, particularly Māori women, who in just the past year or maybe 6 months are having to crowd into friends’ garages—also Māori women with children—because they are unable to find a home, most definitely in the rental market, both public or State provided, and private. I am thinking of them right now, as I am in this House, as a Māori woman, and understanding very clearly that this bill is not even wanting to pretend to want to help those very people.

I have learnt about homelessness that it is very difficult to get any information, any solid information, or any information at all, in fact, about what the Government is doing, and the Government refuses to measure and get data on it. However, we know from those working on this issue in the community that it is getting worse by the day. There is no national policy framework to address homelessness, no Government agency or ministry responsible and accountable for homelessness, no welfare response, and no housing response, let alone the whole-of-Government approach that is required. The mind boggles as to how the Government can simply ignore the disgraceful reality that increasing numbers of New Zealanders, including in my home community of South Auckland, are living in streets, in cars, in garages, and in charity shelters. It is a moral disgrace and a governance disgrace, and this bill certainly is not aiming to help that.

So when we know that there is a crisis in housing affordability, a crisis in the quality of rental homes, and a crisis in the levels of severe housing deprivation and homelessness, then we know that the scale of our housing issues is massive. They require the urgent attention and commitment of this House—and this bill is not it—but, instead, we have this bill. The lack of ambition and concrete solutions in it is striking, because it is not even trying to do that. More than that, this bill has the potential to substantially undermine the provision of public housing in this country. What this bill is about is the Government extending its pervasive privatisation agenda into the area of social housing and abdicating its responsibility to ensure New Zealanders have secure and healthy housing.

The bill also puts extraordinary powers in the hands of Ministers, cutting across the due process and accountabilities of the Housing New Zealand Corporation board. Extraordinarily, the Government sees its own Ministers, rather than Housing New Zealand, as being the most qualified to manage the ownership of our $18 billion State housing assets. There are no constraints on whom or what these assets are transferred to. They can, and probably will, be sold to overseas interests.

The Government claims it wants to transfer these homes to New Zealand community housing organisations, but we know that the Salvation Army and other organisations have made it clear that they are not in a position to buy these rundown homes, which have been badly, badly managed by Housing New Zealand, and renovating them is too big a cost for those community organisations. So we want to see more support for community housing organisations, yes, but not at the expense of State housing. The driver for community housing should not be that the Government simply wants to shirk off a core Government responsibility. So, yes, the Green Party understands that good community housing where organisations are able to step up is vital and that this must sit alongside State housing as a core and vital infrastructure.

I myself have longstanding experience in the real impacts of this privatisation agenda on our community. I have tried to stay connected to the residents’ campaign in the Glen Innes community, which resisted the sell-off of its State homes to the Tāmaki Redevelopment Company. Property developers are the group that will benefit from this bill. The residents of Glen Inness have indeed been vindicated in their fight and their arguments. Newly developed housing in Glen Innes is being sold for between $600,000 and $800,000. That is not affordable. Since this sell-off began, land values in Glen Innes have increased from $400,000 to over $800,000—$800,000. This is gentrification, pure and simple. I am proud that the Green Party opposes this bill. Kia ora.

TODD MULLER (National—Bay of Plenty): I rise to take a short call to speak in favour of the Social Housing Reform (Transaction Mandate) Bill. Perhaps we may actually have a contribution from somebody who was there and participated in the Social Services Committee, as opposed to reading pre-prepared statements of opposition that bear very little reality to what we are debating.

In respect of this bill, when it came through the select committee—as my colleague Matt Doocey, in a very considered contribution, has already noted—there were only 11 submitters. The core of some of their concerns, in my view, related to a fundamental misunderstanding around the policy objectives that we are seeking to promote here. This view that houses should not be sold because only Housing New Zealand has the capacity to provide social housing in this country—for a start, other organisations already do provide it and, secondly, it is looking at the debate through the wrong lens.

The issue is not who owns the house. The issue is that we have 62,000 income-related rents. Is that sufficient? This Government believes not. We are going to lift it to 65,000. That is 3,000 more people who are going to be supported to be able to be in a warm, dry home because of a demonstrated need for more than what is the case today. That is social housing provision and delivery. The debate around who owns the bricks and mortar and who should own the roof is completely the wrong one. Of those 3,000 extra over the next 3 years, I am very pleased to see that 70 are going to be in Tauranga because it is a community, because of its high growth, that a lot of people are moving into, and we do need to ensure that those social housing provisions, those income-related rents—which, actually, are the core of social housing provision—grow in my community.

The only other point I would like to make in my short call this afternoon is, again, this view that only community housing organisations and only community organisations are fit to participate in the provision. A strong sentiment came from a few submitters that if you have a profit motive—if you have shareholders in the provision of your service—then somehow you need to be disqualified because you do not have the capacity to care and you do not have the capacity to deliver outcomes. Well, that logic is flawed—it is a nonsense. What counts here is the delivery and the outcome of provision, not the nature of your commercial structure. It is the wrong debate and is typified by the response that we have had, particularly from the Opposition members through the select committee process.

I am very pleased to support this bill. It is good thinking, it is good policy, and it is going to deliver for Tauranga and New Zealand.

JAN LOGIE (Green): I rise to take a short call on this bill, which the Green Party—as has been previously stated by my colleague Marama Davidson—is proud to be opposing. I would just like to pick up on some of the points raised by the previous National speaker, Todd Muller, who was saying that there is no issue about who owns the stock—that that is not important, it is about making sure there are roofs over peoples’ heads, and too bad if there is a profit motive involved because people can still care. Well, actually, these are significant issues that are at the heart of this bill because on this side of the House there is an understanding that if there is a profit motive, then there is lost delivery that is going back to that company in terms of profit that could otherwise be put into resource and support for the people in those houses, that could otherwise be put into building more houses, and that could go towards our collective good as a country, which is being taken and channelled into the hands of a few. That is at the heart of what this debate is about.

We are all for business in its place, but when this country has an absolute crisis over housing affordability and enough housing, then, actually, we know there is a role for a larger State provision because the State does not need a profit motive. Obviously, Housing New Zealand has kind of been given a profit motive, but that should not be the case. Housing New Zealand is our collective property. It has been built up by taxpayers over generations in this country to ensure that every New Zealander has a warm, dry, stable home, not just some piece of shelter over their head that they could be kicked out of at any moment when policies change or profit motives dictate. It is about us as a country saying that we believe everyone deserves this.

The Green Party knows that our communities are stronger when people are around long enough to put down some roots and when they are not made sick by cold, damp houses. We have read the research that shows our economy is more productive when people have warm, dry, stable homes, and we know we could take pressure off our health budget if we ensured all New Zealanders the right to warm, dry housing. We also know that children are more likely to succeed at school and in life when they live in warm, dry houses long enough to be able to become part of a school community. We know we have a housing shortage and too many people are homeless in this country or are living in unstable housing for a number of reasons. This bill will not solve any of those things. Transferring the ownership to businesses or even, in some cases, when the community housing providers, as this Government has made them, are required to apply limited tenure into their housing—even transferring ownership to them is not going to provide that tenure that is so critically important.

So our view is that the housing crisis, more than anything, demands a substantial increase in the number of houses affordable for people on low incomes. We know that the Government has access to low-interest loans and has previously had experience in mass house-building enterprises—experience that no one else has. Property developers have told us they cannot deliver what is needed in terms of the number of houses. Community housing associations have also told us they do not have the capacity to meet the needs, and many of them are not entering into this process because they do not have the capacity to get the houses up to standard. The one player in this country that does have the experience, the access to the money, and the capacity is the State.

So here we are, bringing to the House a bill that limits and reduces the State’s role in addressing our housing crisis. It is absolute madness. It gives the Minister an unprecedented amount of power to override Housing New Zealand to, with very little scrutiny, negotiate these deals. It will leave whichever Minister is in charge of this open to accusations of corruption because the checks and balances are not in place in the legislation. That should be worrying everyone in this country. This is an appalling piece of legislation.

Hon DAVID CUNLIFFE (Labour—New Lynn): Only somebody who actually owns their own home could say what the previous National speaker said, which was that ownership does not matter. It sure as heck does if you are renting or, even worse, if you cannot get a place to rent.

I used to own a house. Now I rent a house. I dug the garden. I planted vegetables. I got it looking great. And then the owner said “Hey, it’s looking so good I think I’ll auction it.”, and I was packing up and down the road before I could say Jack Robinson. I have not got kids in the local school who were disrupted by that, but plenty of families have.

There is nothing more important to the Kiwi Dream than homeownership. There is nothing more important than the stability of families and the learning of children and having a safe, secure roof over your head. In all of New Zealand’s history, since Michael Joseph Savage in 1935, the State has had a role to provide public housing, until this ideologically wayward Government started dismantling, brick by brick, frame by frame, one of New Zealand’s most precious assets—its State housing stock.

Here we are today, to confer Draconian, sweeping powers on Ministers to do lightning deals with Gold Coast developers to flog off New Zealand’s State housing stock. What are Government members so scared of? Why do they not want the normal processes of accountability and transparency? Why do they not want to go through the full rigour of parliamentary scrutiny? What dirty little deals have that crooked lot got cooked up with those developers?

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I think the tone of the member’s comments is now a breach of the convention of the House, and I would ask him to take more care.

Hon DAVID CUNLIFFE: I will take more care, and I apologise. I am a little bit het up about this because I am the MP for an area that this summer has witnessed homelessness in public parks. Only yesterday I was walking around an area that the so-called rough sleepers of New Lynn have recently vacated. It has recently been cleared. The community brought down blankets and food, and local community agencies and State services have belatedly got together and placed those vulnerable people in—temporary, at least—accommodation. There is no place in this beautiful country for homelessness. Bad luck, bad stuff, can happen to anybody, whether they are a distinguished member of Parliament or somebody who comes from a well-to-do business background. Bad luck, ill health, family breakdown—anything can happen, and members opposite would do well to remember that when bad luck strikes, the helping hand of the State to get people back on their feet and back into productive employment and secure living is absolutely crucial.

I abhor this bill. I abhor this bill, which destroys the Kiwi Dream of homeownership, working hard, playing by the rules, getting ahead, and providing for your family. It is impossible to do that if you do not have a secure, predictable roof over your head. We have some $20 billion of housing stock owned by the State in this country—or we did have before that lot started running it down. This bill confers on Ministers the power to sell off hundreds of millions, indeed billions, of dollars of assets that previous generations of Kiwi taxpayers paid for, and to do so with sleight of hand, beyond the normal parliamentary accountability. This bill is a travesty. It is a dog. It is a crock. It is just plain wrong.

I say to members opposite that the public of New Zealand will have their say in 2017. They have had just about enough of Government by spin and being told that everything is rosy, when patently the gaps are getting wider and wider, and it seems suddenly to be acceptable to have rough sleepers fending for themselves in the rain in the bush of a major urban centre. It is not OK and we need our emergency housing stock. We need our social housing stock preserved and built up to give the next generation of New Zealanders a safety net to bounce back off.

The Government says it has $2 million to spend on emergency housing, Auckland-wide. What is it planning to do—buy one bedsit in Ponsonby, or two garages? Or is it going to buy tents and distribute them around Auckland? That is how crazy this Government is, how bankrupt of ideas, how questionable of motive, and how ridiculous this bill.

Dr PARMJEET PARMAR (National): I am taking a short call to support the Social Housing Reform (Transaction Mandate) Bill on its second reading. The previous speaker, David Cunliffe, demonstrated how narrowly focused he is.

I want to acknowledge the Social Services Committee, which did the work on this bill, and I want to acknowledge and thank all submitters for their contribution. As we heard, the select committee received 11 submissions, of which eight were heard. Through those submissions there were two main points that came through. One was around the overall housing issue, especially social housing supply. That is a valid concern, and that is why we need a social housing reform programme. The second concern that came through was around transparency, and, again, that is a very valid concern. Accountability and transparency of all processes that will be put through by this bill is important to everyone.

This bill, in the long run, will mean that we are able to provide the right type of houses and that our housing stock is utilised effectively. So in the long run this bill will make the actual difference by ensuring that those who are in need are housed in the right type of house and are housed in a timely manner. Listening to previous contributions, I have to say, regretfully, that this issue of social housing has become a political football. Yes, I do understand that this bill will enable the transfer of properties from Housing New Zealand to community housing providers, but that is to support the development of community housing providers. The social housing reform programme is designed to see that we are able to house people in quality houses, and that could be through Housing New Zealand or through community housing providers.

As we also heard, this bill is based on evidence. One-third of Housing New Zealand’s portfolio is of the wrong type or is in the wrong place. Moreover, there are thousands of people on the waiting register. There are thousands who have applied for a transfer. The fact is that currently there are 62,000 households receiving an income-related rental subsidy. We have committed to increase that by 3,000 households by 2017-18. The aim of this bill is that through Housing New Zealand and community housing providers collectively we are able to provide more housing places.

It is a great bill. I support this bill and commend it to the House.

JENNY SALESA (Labour—Manukau East): Thank you for the opportunity to speak on the Social Housing Reform (Transaction Mandate) Bill. Labour opposes this bill. In one of the addresses from the other side of the House earlier, the statement was made that it does not matter whether you own your own house. Can I say that it matters a lot to people in South Auckland whether or not you own your own house. It matters because in terms of rental property it matters a lot whether you can actually afford to pay the rent on a house.

Every day in our office we see people come in, and the main issue they come seeking our help with is housing. Many of these people work, but even though they work full-time, and sometimes with the addition of a part-time job, they still cannot afford to pay the rent. For so many people in South Auckland it is a case of two families, or sometimes three, sharing the one house. Why? Because they cannot afford the rent. Many of the people who come to see us do not have even a State house. They qualify for a State house but they cannot yet get into a State house.

This bill is an indictment on this National Government and its attitude towards the duties it has for the people of Aotearoa New Zealand. On the general principles proposed in this bill alone, it should not be allowed to stand. What the Government is proposing here is that we should give Minister Bennett and Minister English unprecedented extraordinary powers to sell off New Zealand’s State houses. This legislation, once it gets enacted, will allow them to personally negotiate contracts on any terms whatsoever and on any conditions they like, and to take any actions necessary to ease the sale’s process. If this bill is passed, it will allow Ministers English and Bennett to sell off billions of dollars’ worth of our State houses without reference to even the chief executive officer or the board of Housing New Zealand. That would not allow transparency. We are currently debating and considering the wisdom of giving these two Government Ministers the right to sell off our State assets—in this case, our State houses—holus-bolus, without any regard whatsoever to the realities of thousands and thousands of New Zealanders today, those who qualify for a State house and those who are homeless.

Thousands—too many, actually; over 2,500 in Auckland, our largest city, alone—are on the waiting list for a Housing New Zealand State house. In addition to this, the Citizens Advice Bureau late last year released a report where it said there are over 3,000 families who go to it seeking advice. These families are homeless, and 50 percent of them have children. So we are talking about thousands and thousands of families with their kids who are currently homeless. Under this National Government the Kiwi Dream is slipping away for so many people, with a housing market that has become the plaything of speculators and a housing market where there are so many people who are locked out of the dream of homeownership.

Labour backs an economy that works well for everyone—for all of us, regardless of where we live—not an economy that works for just the privileged few. We back an economy and a country where our children—all of our children—can hope to one day own their own homes; a country where homes are affordable, either to buy or to rent; a country where we do not have thousands who are homeless; and a Government that can address the issue of homelessness. Instead of building more homes for people and instead of fixing the State houses so that they are warm, dry, and healthy, we are today in the House debating whether or not to give two Ministers the power to sell off our State assets, collectively owned by all of us as taxpayers.

What is really astonishing to me is the fact that this Social Housing Reform (Transaction Mandate) Bill would exempt Ministers Bennett and English from the normal legal requirements we would expect, putting them above the law and allowing them to sell billions of dollars’ worth of our assets on any terms they like, in a sale process ripe for backroom deals. The Government wants the power to do secret deals, the power to flog off billions of dollars’ worth of land and housing to its Cabinet mates, and it does not want to be bothered with pesky public servants or, indeed, with the rule of law. This proposed bill will exempt Bennett and English from all relevant enactments, including the objectives and function of Housing New Zealand, which includes social responsibility, environmental responsibility, and good financial oversight. The Ministers are not constrained by any rule of law relating to the capacity or validity of their acts.

There are very, very good reasons why our Government Ministers are supposed to be at arm’s length and why we have protective checks and balances built into our system. In fact, the proposed powers in this bill are so out of line with proper practice that the bill’s departmental disclosure statement attached to the bill states “there are no direct precedents for this approach in other statutes”—there are no direct precedents for this approach in other statutes. This is not the way our system of Government works, for very good reason. There are checks and balances throughout our system that, among other things, protect the people of this country from unfettered or unwise exercise of power by Ministers. They also protect Ministers from any perception of corruption.

Compounding these risks is this Government’s poor track record of deal making. It has come off very badly trying to negotiate deals with Rio Tinto, with Warner Bros, with Skycity, and, let us not forget, with Saudi businessman Al Khalaf for sheep, worth millions. Selling off State houses is not the choice a forward-thinking Government should be making. Giving Ministers the right to take over what is essentially an operational matter without the usual checks and balances is very unwise.

Going back to Auckland, we have a shortage of housing right now of about 40,000 houses, and the prediction is that we should be building somewhere along the lines of 13,000 houses per year just to keep up with the demand. Instead of doing that, instead of actually building houses and making sure that the State houses are fit, dry, and healthy for our families, what is this Government proposing with this bill? “Oh, no, give us the power to be able to flog off and sell off our State assets.” Two-thirds of my Ōtara constituents and one-third of our people in Ōtāhuhu rely on State housing to provide a base for their family. They live in areas of the highest levels of deprivation. They come from low-income families, and many are struggling just to provide the basics, let alone prepare their kids for school. Many of them are just not in a position to get into the private rental market, given the state that that rental market is in right now in Auckland.

We, as a society, pay in very many different ways. Just to give you an example, over the last few weeks our office has been dealing with one family in particular, a family who is homeless. They have a child—a baby, in fact. This baby has been in and out of hospital many, many times. She has respiratory issues, and for one of those hospital stays this baby stayed for nearly 2 months—nearly 2 months—and the hospital was basically very, very hesitant to discharge this baby out into the community. Why? Because (a) the house that they were living in was not a healthy house and it was not a warm, dry home, and (b) because some people in that house—remember, this is not their house—were smoking. Because this family was living in the lounge of this house, they did not feel they were in a position to tell other family members not to smoke. The reason why I made that point is that when families are homeless—and this child is one example of so many people who are homeless in this country—we pay, as taxpayers, in various different ways.

As a country, New Zealand is so much better than this. We are a country where we should look after each other, where we should take care of each other. Having a roof—shelter over your head—is a basic human right. We should be taking care of our own people in this country. Thank you so much.

JONO NAYLOR (National): It is a great pleasure to be the last speaker on the second reading of this bill, and to put the record straight a little bit, if I can. I think that what we have lost sight of in this debate—certainly, the members opposite have—is that this bill is about delivering better, more flexible, more responsive social housing for New Zealand, particularly for vulnerable New Zealanders. This is not about flogging off State assets. This is about developing better systems. It is about enabling other players to play a part in social housing within New Zealand.

I know that back in the 1930s Michael Joseph Savage came up with a very good idea, which was State housing in New Zealand. It served a very good purpose. But the members opposite, who seem to be bereft of any new ideas, want us to keep doing things the way they have always been done. They want to stick to the same ideas that were done back in the 1930s—that is all that could ever be done in New Zealand. But New Zealand is an innovative country. New Zealand has a kind of a culture here where we say we want to find better ways to do things.

We do not want to settle for what has always been; we want to do things better. We are going to do things better. We are going to be more responsive, and we are going to deliver a better outcome for people in New Zealand. That is the guts behind this bill. That is exactly what we are trying to do. We are going to ensure that we do not just stick to the same old ideas. This is a very good bill, and I commend it to the House.

The question was put that the amendments recommended by the Social Services Committee by majority be agreed to.

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

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.

Question agreed to.

A party vote was called for on the question, That the Social Housing Reform (Transaction Mandate) Bill be now read a second time.

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.

Bill read a second time.

Bills

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

In Committee

JOANNE HAYES (Third Whip—National): I seek leave for all provisions be taken as one question for the purposes of the debate, with a vote on each question.

The CHAIRPERSON (Lindsay Tisch): It has been sought that all the provisions be taken as one question. Leave is sought for that purpose. Is there any objection? There is none.

Preamble, Parts 1 to 3, schedules 1AA to 3, and clauses 1 and 2

Hon ANNETTE KING (Deputy Leader—Labour): I am very pleased to take a call in the Committee stage of this very important bill, the Home and Community Support (Payment for Travel Between Clients) Settlement Bill. This is a bill that has been in gestation for quite some time. It arises from work that the Human Rights Commission did in a ruling it gave some years ago, saying that the time spent travelling between clients by home and community support workers should be remunerated. This happened, as I said, several years ago. But it all really started when a member of the New Zealand Public Service Association (PSA) Jenny Goodman and the PSA took a test case to claim on behalf of hundreds of fellow home-care workers.

So the genesis of the settlement came from a brave woman standing up and being prepared to say: “I will take this case with the backing of my union.” I commend the PSA for backing Jenny and taking this case. So when you hear criticisms of unions you have to say that they are misinformed, because this really shows the power of a union backing its workers to get justice, and to get the right outcome for very vulnerable workers. You cannot get much more vulnerable workers than those who work in this area.

So what has happened in this settlement is that the unions and the employers sat down and they worked together. It is an agreement between the Crown, the district health boards, the providers of the home and community-based care and support services, and certain unions. They came up with the settlement. They worked through this settlement to address what is now a historic underpayment of home and community support workers. It was not an easy process for them because they had to come to an agreement and come forward with what they believed would be a satisfactory resolution to this issue. What they have arrived at in this bill has been supported by the employers, and in my second reading speech I read out a number of the submissions provided by those employers, who said that they totally support this bill. It has been arrived at by the unions who were involved, by the district health boards, and by the Crown, and I give credit to all of them for the work that they have done in coming to this settlement.

The objective of this legislation is to ensure that these employees will be compensated in accordance with this bill, at the minimum wage, for qualifying travel time from 1 March 2016; that they will compensated, at no less than 50c per kilometre, for qualifying travel costs, as prescribed by regulation; that the employees will abandon any claim under the Minimum Wage Act 1983 for payment for travel between clients undertaken by them before the enactment of this bill, and after its commencement are prevented from bringing a claim that travel between clients is work under the Minimum Wage Act; and that following the commencement of the bill, any prior agreement between the employees and the employer relating to travel by the employee would be unenforceable.

So, really, this is a settlement to deal with this particular issue, these particular workers, and these particular companies. What it does is ensure that when these workers—and they are overwhelmingly women—go out and perform their role in the home and the community, they are paid when they travel between one client and the next, and I have already set out the arrangement for paying them. But when you think about it, why should these women—nearly all of them on the minimum wage—then pay for their travel to go and provide that service, that vital service, to vulnerable New Zealanders, mainly older New Zealanders, wanting to stay and live in their homes?

What we heard about at the select committee, and debated here in the House with the first and the second readings, is that we have other workers who go out and provide services to clients—they could be the local electrician, or the local plumber—and they include in their costs the cost of travel between clients. But not for these employees, and it just seems shameful to me that in their old cars, using their petrol, they were expected to pay to go and provide this service on the minimum wage. I do not believe that there are many New Zealanders out there who have been the beneficiaries—or their parents, or their grandparents have been the beneficiaries—of home care and community support who would not have supported such an approach to ensure that those workers are funded and that they are provided with the appropriate travel for this very important role.

But I have to say that it is not the end of the work that needs to be done. This is a settlement that deals with this particular issue, but it does not deal—and it has been said in the second reading, and I have said it myself—with the historic underpayment of these workers in terms of what wages they are paid. I do not believe that the minimum wage—and this is based on payment of the minimum wage—is good enough for this work. We are going to need literally tens of thousands of home and community workers to provide our health services within the community over the next few years.

As our population ages, as more old people want to stay in their homes and have their health care provided very close to where they live—if not where they have lived for many years—then we are going to need more of these workers. They are a very valuable workforce for us and we are going to need thousands of them. This settlement deals with part of what we want to do, but it does not address the need for us to have a better agreement in terms of what happens to these people in the future in terms of their wages. In fact, this bill does not deal with what is called Part B of the settlement. That has not been dealt with at all.

Part B of the settlement agreement is about the establishment of a regularised workforce and a review of the home and community health sector. That is not included in it, but it is raised and I notice that we have officials who came to the Health Committee and we questioned them on this issue and the need to have a well-trained workforce. That work, I know, is now under way and is going to be very important in the future.

The other thing I wanted to mention is something that was actually added by the select committee. This was a select committee that worked very, very hard on this bill and worked across all parties. We wanted to do it as quickly as possible. We have brought this bill back to the House in very quick time so that we can get this settlement in place, knowing how important it is. So working very closely together we agreed on all the amendments, and one of them was to include the Accident Compensation Corporation in the bill.

ACC is included in the bill because the home and community support workforce provides services under contract to ACC. So it is mentioned in this bill, and as part of the settlement a similar arrangement between the home-care support employees and the ACC will be negotiated. I think that was a very good inclusion in the bill by the select committee. Otherwise we would have continued with what we often do in New Zealand—have a two-tier system. Those who are covered by ACC often get a much better deal than those who are covered by Vote Health. This is helpful in sorting that out because they are now included in it.

The Labour Party fully supports this bill. I am glad it is being taken as one question. The main part of this bill is in the second part, and by including it all together we are able to have this wide-ranging debate. We fully support it and look forward to its implementation as soon as possible.

CLAYTON MITCHELL (NZ First): It gives me great pleasure to stand on behalf of New Zealand First to talk in the Committee of the whole House with regard to the Home and Community Support (Payment for Travel Between Clients) Settlement Bill. We absolutely concur with what has been said by the Labour Party members with regard to this bill: it is well and truly overdue. It should have happened years ago and it is great to see that the Committee stage is finally taking place here today under—almost—urgency.

There will be a lot of people at home who will be sitting back watching this conversation take place. It will be giving them a great amount of pleasure, as it does me, particularly when I think about my own grandmother, who, sadly, has passed away. She relied heavily on those people—who were paid very poor wages—coming into her home to give her care and help. These workers give support and help to the most vulnerable people of our society—people who have worked hard their entire life and paid their taxes—who then see those workers unfairly treated and being paid very, very small amounts of money to do probably the most important work that anybody could do, which is to give care and support to those people who have created New Zealand the great country we live in.

The travel time and the costs incurred to get to clients when you are doing this sort of work are horrendous. In some of the larger electorates and provinces around the country the travel time can be hours. When you go to people’s homes and give support and help, you incur costs in terms of fuel and maintenance for your vehicle, and for this bill to address that issue is absolutely fundamental. But it is not just about recognising the cost involved in travelling that distance. It is also about recognising the time, and allowing the minimum wage as a bare minimum to be paid is, I think, a very good step in the right direction. But it is not good enough, fundamentally, going forward.

We would like to see some more work done in this area to make sure that the wages are fair and adequate. This is an area that is not being looked after as far as funding goes. We are talking about workers who are paid largely a very low wage. If you go to those retirement villages, to those homes, to those people who ask for and need this care, you will see that the questions and the concerns that are raised by not only the workers but also the people who are being looked after show that the pay is just substandard. We need to put a priority on looking after the workers who are in this sector. One of the lowest paid professions in New Zealand needs to be looked at as one of the most highly regarded positions that anybody could take on.

Barbara Stewart: Treating the most vulnerable.

CLAYTON MITCHELL: That is right. Treating the most vulnerable workers should be an absolute priority for this Government. We do have to say that this is a good bill. It does not go right to the end where we would like to see it, and more work will need to be done in alignment with the cross-party accord to see those wages raised considerably. But, certainly, being able to be remunerated for the time it takes to travel to a workplace is absolutely fundamental for this bill. We will certainly be supporting this bill through, and we look forward to seeing it come through by 1 March. Thank you.

DENISE ROCHE (Green): It is a pleasure to take a call for the Green Party on the Home and Community Support (Payment for Travel Between Clients) Settlement Bill in this part of the proceedings, the Committee of the whole House.

I would like to start my speech by acknowledging the genesis of this bill. The genesis of this bill really does rest with Jenny Goodman, the home-care worker and New Zealand Public Service Association Inc. (PSA) member who, with her union, lodged a claim with the Employment Relations Authority way back in August 2013. The union and Jenny were basically acting on some of the recommendations that were coming through from the Human Rights Commission report Caring Counts, put together by Dr Judy McGregor, who was one of the commissioners at the time. She actually went undercover as a home-care worker in order to have a look at how the aged-care sector worked and what the conditions were that the women—mostly women—in that industry faced, as well as, of course, the clients themselves.

What Dr McGregor recommended was a series of things but the first five were that the Government show leadership to deliver better services to older people, because we are not paying home support workers or even rest home workers as well as they should be paid. We have to acknowledge that they are underpaid and that is what the equal pay case is about, which is currently being negotiated. But when we do not pay them well enough, then essentially it is a disservice to the clients they look after. She also recommended that the woefully low wages be addressed and that as a minimum the Government-funded service provided in the aged-care sector, including home support, should actually reach some sort of parity with those who are employed directly by district health boards.

Dr McGregor also suggested that there be a consistent and fair travel policy covering actual time and costs, and this is what we are discussing today, but also that there be a commitment to qualifications for staff and that employers commit to this, and that there be voluntary safety standards including a home and community support sector standard, and that that become compulsory. This would set out minimum standards for care, which would protect older people as well as the workforce. This bill is actually the result of the Ministry of Health and the employers and the unions agreeing that they will address the issue, at least around travel time.

As a result of the agreement to withdraw legal proceedings and to forgo back-pay claims for the workers in the home support sector, there is also an agreement that the working group that was set up to address this issue carry on and look at the qualifications for home support workers, but also look at regularising their hours of work. Essentially, the home-care support sector is based on zero-hour contracts. That is exactly how it works, and it is a scourge for workers across the country, because, essentially, from week to week many workers cannot actually determine how much they will get paid or plan how they will spend that pay, as a result.

As a result of the negotiations, this was the deal—that qualifications would be discussed and there would be an attempt to regularise the workforce so that it could have secure hours in that area. It is a real tribute to the negotiating powers and goodwill, I would say, from Jenny Goodman and from all those members of the PSA who have ratified this, that workers are looking forward to the future, to a time where they can have regularised hours and a career path, with training, that would be offered to them and acknowledged within their pay scales.

The settlement is also constructed so that, although it is going to cost $38 million, I think, in order to bring the travel time into play so that all those workers in that sector do get paid the travel time—despite that—we need to make sure that the money that goes into the home support employers is actually passed on to the home support workers themselves. This is an undertaking that the employers themselves have signed up to, and they are the ones that are listed in the schedules to this legislation.

The legislation does also make mention of ACC home support workers who are working with ACC clients. That area needs to be addressed as well, because—and I have done it myself when I was a home-care worker with the Nurse Maude Association many years ago—if you are working as a home support worker, some of your clients are ACC clients but some are covered by the district health board, and you get different pay rates because there is no consistency across there. This needs to be addressed for ACC home support workers as well—that they get paid their travel time.

This is going to have a major effect on the industry itself, but I am really pleased to see that the employers have signed up to it. They recognise that in order to provide really good service to those clients in our community—most of whom are our most vulnerable, and the workers themselves have been vulnerable too—these issues of underpayment, of travel time not being paid, need to be addressed now.

In context, there is still a lot of work to be done in the whole sector. As we know, the aged-care sector is a female-dominated occupation, and as a consequence—and as Judy McGregor outlined—the wages have been incredibly low. The Kristine Bartlett case for rest home workers, from the E tū union, has also resulted in more negotiations with the sector and with the Crown about how to apply equal pay across this female-dominated workforce. That is something that we look forward to in the future.

It struck me as I was again reading the bill that the only comparison I can make is that it is similar to a Treaty settlement bill, in that there have been major negotiations with several parties, some of whom may or may not be accepting of the deal. But there has been a deal struck, and that deal, that negotiation, is now brought before Parliament to be enacted. So it is with pleasure that we will be supporting this bill, and we look forward to the day when pay equity comes before this House as well.

POTO WILLIAMS (Labour—Christchurch East): Tēnā koe, Mr Chairman. As I look across the Chamber I can see many of my colleagues who have had an association with the home and community sector in their previous lives, so what I am about to say will come as no surprise to them, I am sure.

This bill is really about equity on a whole lot of levels. It is about equity for pay, to recognise that home and community care is as important, if not more important, than many other roles out there. It is about equity for gender, because 91 percent of the people who perform the work in the community are women. It is about equity for training, and for the recognition of the training that many of these home-care workers undertake when they are undertaking some very advanced personal care. They may be involved in percutaneous endoscopic gastrostomy feeding or they may even be involved in supporting medically fragile children, with skills and training that are second to none but are not recognised currently in their pay rate. It is also about the equity of recognition of the status of the care that is delivered in the community, that it can be as good as, if not better than, care that is provided in institutions. Let us face it, many of our older people really value the opportunities to stay well in their own homes and in the communities of their choice.

This bill we support wholeheartedly, because it recognises all of those inequities and it does go some way towards addressing them. This bill also recognises the work that has been done by unions, by the district health boards, by the Ministry of Health, and by those home-care service providers themselves to come to an arrangement that sees us going some way towards having fairer wages for workers in the support service.

If I can talk a little bit about what I understand of the background that has got us to this place: over the last several years we have engaged in a process of reassessing the levels of care that the recipients of this care require. As our health care dollar is stretched even further, assessments have been made that the amount of time to deliver specific pieces of care—whether that be around looking after someone’s home, preparing someone’s meal, doing personal care such as showering or helping people with their shopping, or around issues of social isolation—the time required to complete those functions has been diminished somewhat.

That is really around our ability to deliver more services for the time that that home-care worker has. As a consequence of that, that home-care worker may be delivering services to more people in the course of their 8 or 9-hour day—or however many hours they may work across the day—than they would have done in the past. What this has required is more travel, because, as a consequence of having more clients to work for in your normal hours of work, the amount of travel you are doing has increased. So it is right that we should recognise that travel between our clients is actually part of our work. We should get paid for that, and this bill addresses that.

It does not address, necessarily, the issue of what we should be paying. Given the sensitive nature of the care that is delivered, in my view we should be paying these very caring people a lot more than we are. Part 1, clause 4, really relates to that settlement, that agreement that was made by those four parties. Also, Part 2, clause 10, speaks to a very important principle that has been used in this bill, which is that no home-care service employee be financially disadvantaged. That has underpinned much of the discussion and debate—that they should not be financially disadvantaged—which has led us to the point where we are now in a position to pay for travel between clients. With reference to Part 2, clause 6, this bill will also extinguish some of the current claims that home-care service employees may have. That will settle that.

Part 3, clause 28, also looks at amending the Minimum Wage Act to provide an exemption to the requirement to pay wages at the minimum rate. Also, just on that note, Part 3 looks at amending three Acts, including the Minimum Wage Act, which will then require home-care services to pay for travel at no less than the minimum wage. Clause 29 contains the amendments to the Employment Relations Act. Because that travel time will now actually be counted as employment time, it will have significance to employment agreements. Also, it relates only to workers who attract a wage—it does not apply to salaried staff. Also, clause 30 contains the amendment to the Holidays Act, which, of course, has reference to the fact that the travel time is now included as work time. So it has a reference to the Holidays Act.

You cannot look at the work of a home-care support worker in isolation, just around the funding stream that may come from the Ministry of Health or the district health boards. One thing that the Health Committee did manage to get included in this legislation is the work that is conducted for the Accident Compensation Corporation. Because many of the workers will be working across a range of clients who will have their care managed by district health boards, the Ministry of Health, or the Accident Compensation Corporation, to leave ACC out of this legislation would have been unfair. It would have meant that you would have two strata of payments, which is not right and is not appropriate.

I just want to finish by commending the bill, and commending all of those home-care workers who have spent so many hours really fighting for this to come to the House and to actually be enacted. I pay homage to them for the work that they do. Many of us know—we have older parents who are well cared for in their homes. Without that, they would have to be in institutions, and we know the value of having our loved ones in their own residences in the community. It has far better outcomes for them, their well-being, and their quality of life, and it certainly has far better impacts for us on our health spend. So, in conclusion, I support this bill and I commend it to the Committee.

RIA BOND (NZ First): I am pleased to take a call on behalf of New Zealand First to support the Home and Community Support (Payment for Travel Between Clients) Settlement Bill. I understand from listening to previous members this afternoon that this bill has arisen from there having been an unfair disadvantage financially impacting on the home and community workers and that this has been going on over a very, very long period of time. I also want to add, as previous speakers have said, that I am actually quite pleased that multiple areas such as the Ministry of Health, the district health boards, the unions, and the employers have all agreed that this issue is not something that they wish to see continue for longer.

Adding to what the previous members have said, I also want to say that this has been an appalling position for workers to be put in—to not be recognised for their travel in between their clients’ homes. In today’s world it is absolutely appalling to know that that was occurring. I also want to add to what the member Poto Williams said, which is that when we are going into our communities and into the homes of our loved ones, often it is to take care of our elderly people.

In my previous career I had quite a few clients who found the situation they were in quite frustrating, and for them it was all about the love of the job that they were going to, between each client’s house, and it was the long-term commitment they made to these clients to ensure that they could still see them and could provide personal services such as showering and making sure that these clients were actually looked after.

So I am rather pleased that this bill, and the way that it is going through, is addressing that problem, but I am also concerned to hear that it does not address the underpayment or the undervaluing of this sector itself. Coming from a previous career where we were a female-dominated workforce, we often struggled to actually get recognised and be able to feel quite proud and to ask for a higher wage, as females in the workforce. So I am rather heartened to hear previous members discussing this as an area that they are going to be watching quite closely. To ensure that there are the qualifications needed to deliver the level of care and knowledge to our at-home clients is actually quite crucial.

I want to mention a saying that we have in the hairdressing industry, which is that if you pay a person peanuts, then you are going to get monkeys. I am rather happy to say that the people in this sector particularly are in no way at all monkeys. They are very proud people, they are very hard-working people, and I think it is fantastic that this bill is actually addressing their ability to be paid while going to and from a client’s house. So New Zealand First supports this bill. Thank you.

Preamble agreed to.

Part 1 agreed to.

Part 2 agreed to.

Part 3 agreed to.

Schedule 1AA agreed to.

Schedule 1 agreed to.

Schedule 2 agreed to.

Schedule 3 agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Bill to be reported without amendment presently.

Bills

Radiation Safety Bill

In Committee

JOANNE HAYES (Third Whip—National): I seek leave for all provisions to be taken as one question for the purposes of this debate.

The CHAIRPERSON (Lindsay Tisch): Leave is sought for that purpose. Is there any objection? There is no objection.

Parts 1 and 2, schedules 1 to 5, and clauses 1 and 2

Hon ANNETTE KING (Deputy Leader—Labour): Again I am pleased to rise in support of the second health bill before this House today. This is another bill that went to the excellent Health Committee, where some very good work was done on trying to understand this bill.

Hon Member: Who’s on it?

Hon ANNETTE KING: Who is on this committee? Of course there is myself, and some others. There is Scott Simpson, there is Barbara Kuriger, and there is the excellent Poto Williams, and Louisa Wall was on it at this time.

Hon Member: Excellent members.

Hon ANNETTE KING: It is a very, very good committee. But this was quite a difficult bill, because we had to understand some issues that were quite foreign to many of us, when you got into the detail of it. I want to commend our officials who serviced this committee. They were excellent. They understood the bill. They could explain to us in layperson’s language what it meant, how it would work, and what we were changing.

This bill replaces the old Radiation Protection Act of 1965. So you can see that it was a pretty old Act and it was in need of some change. One of the purposes of the bill is to enable New Zealand to meet its international obligations relating to radiation protection, radiation safety and security, and nuclear non-proliferation, under a range of international treaties. We acknowledge the necessity to do this, to update the legislation, and to keep pace with technological changes, because an awful lot has changed since 1965. In fact, I can recall seeing my first programme on television in about 1962. You can have a look at how things have changed in that time. We have changed in terms of microwaves, cell towers, etc. There are lots of modern technology.

I have to tell you that this bill is not about that, which is why I commend my Supplementary Order Paper 140 to the Committee for consideration. This bill is called the Radiation Safety Bill and it is about ionising radiation. I am suggesting that we have a Supplementary Order Paper and a change of name to the Ionising Radiation Safety Bill. I will tell the Minister in the chair why we are doing that. There is, and was, some confusion as to what ionising radiation is and where it is regulated, and what non-ionising radiation is. Can I just quickly tell the people who are listening what the difference is. But before I do that I just want to say that the suggestion for changing the name came from Louisa Wall, and I want to acknowledge that she made the suggestion although the Supplementary Order Paper is in my name.

Ionising radiation is high-energy radiation and includes X-rays, alpha particles, beta particles, and gamma rays that have ionising capability and hence cause chemical or molecular changes to interacting bodies. Non-ionising radiation is electromagnetic energy. That includes laser lights, electromagnetic fields, and radio waves. So non-ionising radiation is from cell towers, Wi-Fi, microwave ovens, ultraviolet tanning machines, and power lines. It is not addressed in this bill. So when people thought that we were passing a bill on radiation safety, the confusion was that we were including everything. We are not including everything. This is about ionising radiation. So I say to the Minister that it is not a big loss to the Government to actually name it as it is.

Non-ionising radiation is not regulated under this legislation. It is controlled through standards. So that is the difference. Non-ionising radiation is done by standards; ionising radiation is done by the amendments that are being made to this bill. I will commend this Supplementary Order Paper to the Committee, when we get to debating it.

There was, as I said, some confusion around ionising and non-ionising radiation and I think it is important to point out to the Committee that the World Health Organization, the pre-eminent body in terms of looking at health issues, said with regard to public health risks posed by electromagnetic fields that the evidence is weakened by the methodological problems, such as potential selection bias. In addition, there are no accepted reasons to say that this could cause cancer. This is the non-ionising radiation. I say that because there was some confusion perhaps that if we do not include this, maybe there is evidence saying that it would cause cancer. The World Health Organization says there is no such evidence.

What the bill does is it introduces a number of things. As I said, it does ensure that we meet our international obligations. But it also brings in a new regime for authorisations for individuals and organisations using radiation material. It puts in place quite a hefty fine regime for those who contravene their authorisation. In the case of an individual there is a fine not exceeding $100,000, and in the case of a person or organisation other than an individual there is a fine not exceeding half a million dollars. There are enforcement officers who have the power to inspect places, for reasons that are specified in the bill. The Director-General of Health, as the chief executive officer of the Ministry of Health, is responsible for administering this bill. The director-general must maintain a register of controlled radiation sources. The old council that is in place is replaced by a new council, a Radiation Safety Advisory Council, as opposed to a Radiation Protection Advisory Council. But all the existing members are reinstated, and I think that is probably important because they are the people who know what they are doing.

There is quite a lot in this bill. It has a number of parts and schedules. We support the bill. We think a lot of work has been done on it. I now see we are joined by another member of our officials who supported us at the select committee. Can I repeat our thanks for the excellent way our committee was serviced, and the very broad knowledge that is held by the officials in this area of great expertise. None of us claimed that we had that expertise, and we have been very well guided by our officials. The bill also covers the use, transportation, and disposal of ionising radiation—both man-made, which is cobalt-60, and naturally occurring uranium—in quantities above a stated level.

I do think that the changes that have been made—and the Minister has got a number on his Supplementary Order Paper, which we support—bring our legislation right up to date. It brings us in line with our international conventions and requirements in treaties, but it also brings us up to date in terms of New Zealand’s domestic approach. I have to say it has taken longer than an elephant having a baby to bring this bill to the House. We are talking years to get it to this stage, so I think people will be pleased to see it passed, and passed as soon as possible.

The Labour Party supports this bill, but I do say to the members opposite, in the spirit of cooperation that we have had on this bill—I would urge members of the Government to vote for my Supplementary Order Paper. There is a very small change—changing the name from the Radiation Safety Bill to the Ionising Radiation Safety Bill. There is no confusion then for the public as to what is covered by legislation and what is covered by standards. Thank you.

POTO WILLIAMS (Labour—Christchurch East): I am going to take a short call on the Radiation Safety Bill. Despite being named by Mrs King as being the excellent Poto Williams, I was not actually sitting on the Health Committee at the time that the submissions were being heard. However, I do want to make a couple of points, just to add to the excellent contribution that the Hon Annette King has made.

Having read through some of the submissions, and there were a few—not a great deal, but definitely from people who understand the industry well, such as the Canterbury District Health Board and Radiation Protection Services Ltd, which is called RadPro. They had a couple of suggestions to make, which confirm the issues that Annette King has raised. In the first one, Radiation Protection Services says that it supports the general intent of the bill, but that the problem really was with the title. It supports the change to the Ionising Radiation Safety Bill, which actually clarifies that we are talking about ionising radiation, as opposed to non-ionising radiation. It would clarify that for them, professionally.

In relation to the Canterbury District Health Board, it talked specifically about clause 10(1), and the associated definitions to be amended to make it clear that repairs may be carried out on source equipment. As the legislation went to the committee, it read: “No person may deal with a radiation source unless it is fit for intended purpose.” The Canterbury District Health Board recommended clarifying that point. Also, it talked about the definition of a calibration service, by adding at the end of the definition: “or other organisations, or similar.”

This bill brings us up to date with other international standards and obligations around radiation protection, and it is well overdue that we align ourselves to other legislation. It has taken a long time to get the bill to this point, so I am not going to speak for too long, because it is important that we do pass this legislation. I support and endorse and encourage other parties to support Hon Annette King’s Supplementary Order Paper 140, which actually just clarifies the name of the bill. It really does also bring us in line with compliance for the best practice for international standards and helps us to meet those international treaties. I think that is about the sum of my contribution. I thank you, and commend the bill to the House.

The question was put that the amendments set out on Supplementary Order Paper 131 in the name of the Hon Dr Jonathan Coleman to Parts 1 and 2 be agreed to.

Amendments agreed to.

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

Amendments not agreed to.

The question was put that Parts 1 and 2 as amended, schedules 1 to 5, and clauses 1 and 2 be agreed to.

Parts 1 and 2 as amended, schedules 1 to 5, and clauses 1 and 2 agreed to.

Bill to be reported with amendment presently.

Bills

Weathertight Homes Resolution Services Amendment Bill

In Committee

Debate resumed from 10 February.

Clauses 1 to 3 (continued)

Hon DAVID CUNLIFFE (Labour—New Lynn): Thank you, Mr Chairperson, and I appreciate in the previous section of this debate, on a bill that Labour does support, your willingness to take those three clauses together and to have a reasonably broad-ranging debate.

It is in that spirit that I would observe that Labour is supporting this bill, which tidies up a number of the provisions of the Weathertight Homes Resolution Services Act, and in particular seeks to remove doubt around the validity of the criteria in clauses 1B and 1C of the 2011 Gazette notice by inserting them in the Act. It also deems certain claims eligible that were not previously clear in sections 14 to 18 of the Act, as a result of the 2014 Osbourne v Auckland Council Supreme Court case. Thirdly, it widens the definition of “qualifying claimant” to allow claims that are in progress up until the end of the current eligible period to continue to be heard. All of those are small but worthy amendments that broaden the scope and improve the potential range of eligible families in respect of their homes.

None of that, as we previously observed, can take away from the fact that the weathertightness service is really a very poor ambulance at the bottom of a very high cliff, and it is a cliff that has cost New Zealand and New Zealanders several billions of dollars and has caused untold distress to families up and down the country. As we know, it has been very difficult for New Zealanders to get a resolution on leaky buildings because of the pyramid structure of fly-by-night developers, and because, in some cases, the liability of the regulatory authorities—the councils—has not been clear. This bill is a small afterthought that allows a number of claims, which otherwise might have been inadvertently caught in the cessation of the current window, to have a continuation of their hearing process. That is a good, but limited, thing.

It will not be lost on New Zealanders that the House is discussing this bill—a remedy after the fact for the terrible leaky building syndrome—on the same day that it has discussed another bill around housing: that debated earlier this afternoon in the Chamber about social housing. Taking these bill together, I think New Zealanders have a very stark picture of what this Government has been about. This is a Government that in earlier days deregulated the building industry—some would say under pressure from the manufacturers of kiln-dried timber—by removing the requirement for treatment, like tanalisation of that timber, and relaxed some of the building code requirements to allow mono-cladding and lower-quality flashings. This was all in the name of haste, speed, and efficiency—actually, greed—and was an ingredient in an industry structure that resulted in the collapse of lots of companies as risks were passed down to subcontractors, and the defrauding of thousands and thousands of New Zealand families who got left with lemons, white elephants of buildings that leaked, and, in many cases, resulting in family breakdown and suicide.

So it is with no joy that we support this bill. We know that these small steps are useful in increasing by, we were advised, some 70 cases the number of families eligible to have their hearings taken through to a conclusion—but that is 70, as against thousands of people who have been affected by the leaky building syndrome.

At the other end of the scale—and debated today, as I said earlier—we have the Social Housing Reform (Transaction Mandate) Bill. It is one not designed for those in the early stages of the building process of the property ladder. It is for those who have not even got secure rentals; those who are without secure housing. The social end—the emergency end—is also an area where this Government has a woeful record. It is an area where it is now saying it is going to invest—wait for it—$2 million in emergency housing across Auckland. Two million dollars, which will buy very, very little in the way of—

The CHAIRPERSON (Lindsay Tisch): Order! That is not part of the debate.

Hon DAVID CUNLIFFE: You are right to bring me back. I certainly would not wish to divert from the substance of this bill, the Weathertight Homes Resolution Services Amendment Bill, but it is tidying up after a major deregulation wave, and people will not fail to see the irony that we are debating this on the same day that the Government sought ministerial approval to sell off what is left of the State housing—

The CHAIRPERSON (Lindsay Tisch): Order! Come back.

Hon DAVID CUNLIFFE: There is material contained in these three clauses.

Sitting suspended from 6 p.m. to 7 p.m.

Clause 1 agreed to.

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

Amendments agreed to.

Clause 2 as amended agreed to.

Clause 3 agreed to.

Bill to be reported with amendment presently.

Bills

Radio New Zealand Amendment Bill

In Committee

Debate resumed from 1 July 2015.

Clauses 1 to 6 (continued)

The CHAIRPERSON (Hon Chester Borrows): Members, we turn now to the Radio New Zealand Amendment Bill. When we were last debating this bill, leave had been granted for all provisions to be taken as one question for the purpose of debate. Kris Faafoi had the call and he has 4 minutes and 12 seconds remaining should he wish to avail himself of that opportunity.

KRIS FAAFOI (Labour—Mana): I will avail myself of the opportunity to complete the speech that I began on 1 July 2015. I guess that shows you the priority that the current Government has given public broadcasting. I will come back to the background to the bill, which will outline a pretty sorry tale of neglect and delay from the Government. Because we are taking all parts as one question, I did want to take the opportunity to point out that broadcasting, Radio New Zealand, and how we get news out to people has changed considerably.

A sign of that happened in the very suburb I live in, Tītahi Bay, this morning, where the mast that once carried the radio signal of Radio New Zealand out to New Zealand and further afield was felled. It has been up there for decades and is part of the landscape in my neck of the woods. Now it is no longer because at 9 o’clock this morning someone pushed the button, some explosives went off, and the radio mast that once stood there proudly as a beacon for all the locals to know exactly where they were at a particular time of night is no longer there. I guess that is a real signal that happened today that broadcasting as we know it has changed, is changing, and will continue to change. I think that is why there has been some disappointment on this side of Chamber as to the delay of the passage of this piece of legislation through the House.

A part of this legislation ensures that there is a 5-yearly review of Radio New Zealand, its functions, and its operations. One of those reviews was to happen in 2010, but that review has not happened because this piece of legislation has languished on the Order Paper. If you do the maths, you will see that another review of Radio New Zealand, its operations, and its functions should have happened by rights about this time or late last year, but that also has not happened.

So that is the sorry tale of public broadcasting under this current Government. I think it shows just another example of its delay and neglect of public broadcasting when you put it into the context of what used to be and what is now no longer. I am pointing towards TVNZ 6 and TVNZ 7, which were the two digital channels that were started up by our other supposed State broadcaster, Television New Zealand (TVNZ), back in my days at TVNZ actually. I think it was 2008 that those channels were started.

TVNZ 6 was a real loss because of the content it had for our children. It was free to air. It had mostly New Zealand content, of a New Zealand feel. It was educational, it gave our children a sense of what it was to be a New Zealander at a young age, and it had good content. But, unfortunately, because of the overall attitude of the Government, that has gone and we are debating the Radio New Zealand Amendment Bill, which has been delayed.

I look to the quite substantive Supplementary Order Paper in name of the Minister Amy Adams—Supplementary Order Paper 94. The first substantive note in its explanatory note mentions the change in the commencement date: “Clause 2 is amended to substitute a new commencement as the date in the clause has passed.” So there you have it. The first lines of the explanatory note within Supplementary Order Paper 94, which the Minister has put forward, admit that the commencement date has passed. It has not just passed, though; it has passed by a good 5½ years, which, I think, is a reflection of the Government’s priority around public broadcasting.

I did want to point to what I think is a substantive provision within Supplementary Order Paper 94, and that is the inserting of new section 8AB, in clause 5. That is around commercial-free broadcasting. I will take the liberty of reading this just so that those at home, either listening or watching, or watching this on the internet later, can be fully aware of what I am talking about. New section 8AB says that “(1) The public radio company”—and that is Radio New Zealand or RNZ, as we know it now—“must, in fulfilling its Charter, provide its services in a commercial-free manner.” But it can offer some commercial services “(3) … if the provision of the service or services—(a) is consistent with its role as a public broadcaster; and (b) does not impact adversely on the provision of its services under its Charter;”.

It also allows Radio New Zealand, or RNZ as we know it now, to provide: “(4)(a) … media services to countries outside New Zealand, other than Radio New Zealand International or any radio services that might replace, in whole or in part, Radio New Zealand International:”. That is essentially saying that RNZ, as we know it now, can provide content to overseas broadcasters and it does not matter whether or not there are commercials on that broadcaster. It is very similar to the set-up that they have got with the BBC, which I also have some knowledge of working for. BBC World News, which we watch to get our international news, is a commercial arm of the BBC. It is allowed to sell advertising, but you will not see that content within the UK, because the BBC in its purest form in the UK is non-commercial. But there is a revenue stream allowed to be had with BBC World News, which I used to work for.

There is a good side and a bad side to this. It is good in that it opens up another revenue stream for Radio New Zealand to get funds to be able to do more of the things that we would like to see. But there is a tension on this side of the Chamber over the fact that for the last 8 years we have seen a funding freeze at Radio New Zealand, and that has affected its ability to do its core services. At the select committee, when asked about that by our broadcasting spokesperson Clare Curran, the board chair and the chief executive have been quite frank about the fact that they have been under extreme pressure to deliver their services under the frozen budget.

I will take this opportunity to directly quote them, because I do not want to quote them wrong. This was at the annual review of Radio New Zealand with the Commerce Committee. The board chair, I believe, said: “I’d say our financials are as healthy as they possibly could be under the circumstances of a budget that hasn’t been increased, in terms of Government financing,”. I think they were being a little bit polite there. They went on to say to Clare Curran: “the impact of inflation has eroded the purchasing power … But we are getting to the point where those limited rations are getting more difficult to handle, and I’m quite happy to go on the record about that.” That was someone in a management position talking about delivering those core functions, which are in this Supplementary Order Paper—delivering good news services and good content to New Zealanders. That person is worried that his ability to do that is constrained by the fact that the Government has frozen Radio New Zealand’s budget for the last 8 years.

I would ask that the Minister in the chair, Nathan Guy, at some stage elaborate about how the Government is going to help Radio New Zealand achieve some of the objectives within this amended legislation when that budget has been frozen. I think that is a serious challenge that the Government has put itself under. Although it has aspirations to have a strong public broadcaster, it certainly has not backed up those aspirations with the taxpayers’ ability to fund Radio New Zealand.

I do praise Radio New Zealand for opening up another revenue stream by using commercial means to do that. Most public broadcasters around the world do that. But I think it would also show a decent amount of commitment from the Government itself if it backed up its aspirations for RNZ, or Radio New Zealand, or however you want to describe it, with actual funding that helped meet—

The CHAIRPERSON (Hon Chester Borrows): I would just ask the member—because he has travelled widely on this particular aspect, which is not part of the bill in front of him. Can he now bring himself—now he has been given some latitude—to come back to what is in front of him.

KRIS FAAFOI: Thank you very much, Mr Chair. I am not going to question that ruling, but I think, because this is a wide-ranging debate on all sections, I was allowed some latitude on this issue.

There has been a lack of reviews over the last 8 years. If there has not been a review in 2010 and there has not been a review in 2015 and this piece of legislation implements a review every 5 years, I would ask that the Government commit in this process to making sure that there is more than just a standard review at its next opportunity—and I hope the Government will take the next available opportunity to have a broad review of Radio New Zealand. I would ask that the Government take a really good look at the functions and the operations and, if I may say, the funding of New Zealand. We are now two reviews out. The public and Radio New Zealand have deserved two reviews of its functions, in 2010 and 2015, but because of this Government’s inability to get this piece of legislation through, we have not got there.

TRACEY MARTIN (NZ First): Kia ora. I just want to take a quick call on behalf of New Zealand First. I want to correct the member Kris Faafoi with regard to the starting date of this bill. It was introduced on 2 June 2009, it had its first reading on 24 June 2009, and it was reported back by the Commerce Committee on 16 December 2009. So the first stage went through very quickly. Submissions were gained by the Commerce Committee, which did its job well. So it was on 16 December 2009 that the select committee reported back this bill. The second reading was on 19 May 2015, and we are in the Committee of the whole House now, which started on 1 July 2015—2015.

So one has to ask oneself what on earth is inside this bill that makes the Government drag its heels in this way so this bill, which looks innocuous—it sets a review and a charter for Radio New Zealand about how it delivers public broadcasting to New Zealanders. From a New Zealand First perspective, we would welcome a review. We would welcome the charter being finally put down by this Government so a review can take place, so that Radio New Zealand can answer the question of why New Zealand First does not get as much air time as, say, the Greens or the National Party.

But that is not the point here tonight. The point here tonight is, why is it that this Government is taking so long with this piece of legislation? It sets in place a charter, a direction, a statement for Radio New Zealand and, quite rightly, Mr Faafoi pointed out that the Minister’s Supplementary Order Papers put in a very logical, a very reasonable, a very smart opportunity, one may say—the Hon Amy Adams is the Minister and we know she is a smart woman; we know she is a woman who has her head screwed on. She has put in a smart opportunity there for this public broadcaster not to make money from the citizens who pay for it with their taxes, not to make money from the Pacific Islands, to which we actually provide a service, but to make money on the standards of programmes that New Zealand makes that are unique and that can be sold into America or the United Kingdom—smart, smart, smart, because she is a smart woman.

Why do we not pass it? Why do we not push this through tonight, all the way through—pass the third reading? The Government has the ability to do it. It has put this bill on the Order Paper, again and again and again, at the end of the Order Paper, just to drag it that little bit more. One suspects it is because, should a review be done, they will have absolute proof that Radio New Zealand is being starved for funds.

What it has, should this bill go through and an actual review be done, should a charter be in place—this Government will have to fund public broadcasting as it should be funded, and that is what this Government is afraid of. That is why this bill has dragged on and dragged on and dragged on, and I guarantee you this Government will not push it through in the next couple of weeks, either.

That is my contribution. New Zealand First would like to see this piece of legislation pushed through this House. Give Radio New Zealand a charter. Give Radio New Zealand the funding to do the job it wants to do. Stop hacking away at public broadcasting. Let us review what Radio New Zealand does. Let us make sure that it realises it is in an MMP environment, and give all political parties the appropriate percentage of representation. Let us get on with it.

CLARE CURRAN (Labour—Dunedin South): Well, hear, hear to that from the Labour Party.

The CHAIRPERSON (Hon Chester Borrows): It was not the Labour Party, either. It was New Zealand First.

CLARE CURRAN: Well, golly, golly, is all I can say. Golly, which is not a swear word in Parliament. But, ultimately, the passage of the Radio New Zealand Amendment Bill through the Chamber is a bit of a travesty and a serious embarrassment to this Government. It has been said so on numerous occasions by members on this side of the Chamber. The Government seems impervious to that, and, I suppose, the conclusion that one can draw is that the National Government of New Zealand is not committed to Radio New Zealand and certainly not to public broadcasting in this country.

What is public broadcasting? It is the ability of New Zealanders to have their voices reflected back to them and to have good analysis and debate in a way that is impartial and is not coloured by commercial interests. Unfortunately, in this country that is almost out the door. Radio New Zealand is the last bastion of that, and it is clearly not valued by this Government.

I want to address my comments specifically to Supplementary Order Paper 94 by the Minister of Broadcasting, which is a relatively comprehensive Supplementary Order Paper, which was tabled in the House without the ability for a select committee to have a discussion, for there to be any debate, for there to be any submissions. Labour supports the Supplementary Order Paper, but it is quite comprehensive, and it disturbs me that such a comprehensive amendment to a piece of legislation that has sat on the Order Paper, essentially since 2009, can go through this House with comprehensive amendment without the ability to have a debate, have some discussion about it, and even for the Minister to comment. I have got some specific questions tonight for the Minister, which I expect to be answered during the course of this Committee stage. If they are not answered, then this Parliament is a joke. And the way that our system operates, there is no ability to have questions answered and for matters to be properly canvassed, especially matters that go to the core of how our democracy operates, and broadcasting is an essential plank of our democracy, even though the members on the other side of the Chamber may not agree with that.

The Supplementary Order Paper introduced by Amy Adams is, as I said, supported by Labour. We do not believe that this amendment will fundamentally weaken the existing charter, which is at the guts of this bill. What it does—and it does something that is new, and when the Minister spoke in the second reading she talked about modernising Radio New Zealand—is make provision for multi-platform provisions and for the generation of new content-related revenue streams overseas. A lot of New Zealanders now are watching content on their devices, or through their televisions using smart TVs or Chromecast or whatever apparatus they are buying from their providers. Ultra-fast broadband is actually improving people’s access, improving the speed and the ability to download and access content.

Radio New Zealand is doing its best, and I would like to give it that credit tonight—absolutely. It is doing its best to keep up and to provide those platforms. The big issue is that it is trying to do it within the existing funding envelope, which has been frozen since 2009, and that has ultimately taken it backwards in its budget by 25 percent. It is probably more than that, and it is time I did another calculation. What the Supplementary Order Paper does is update. It updates dealing with new platforms. What it does not do—[Bell rung]

The CHAIRPERSON (Hon Chester Borrows): This is the fourth and final call.

CLARE CURRAN: Thank you. What it does not do is empower Radio New Zealand to extend its operations on to new platforms and find opportunities to commercialise its content overseas, and that is because of that frozen budget. That is a really important point tonight for everybody listening to this. They may be listening through Radio New Zealand. They may be watching on Parliament TV, which is another small expression of public broadcasting in this country. There is no new money, so what Radio New Zealand is trying to do with its new platforms is do it within its existing envelope.

I have three amendments—if anybody on other side of the Chamber has bothered to pay attention to this—that try to clarify what the Minister’s intention actually was. We have serious questions about a couple of things, and I just want to touch on them. Paragraphs (a), (b), and (c) of new section 8AB(3) inserted by clause 5 create boundaries around the services that the public radio company may provide but do not state who is to determine whether any proposed service is consistent with its role as a public broadcaster. That is absolutely critical. Is it the Minister? Who is the determiner? Is it the Minister? The Supplementary Order Paper is absent on this matter, and because there has been no select committee process and no chance to question officials, we want the Minister to tell us who makes that decision. If it is to be the Minister of Broadcasting, there need to be safeguards, and they are in my first amendment, which determines basically that if it is the Minister of Broadcasting, there have to be safeguards around that. This is absolutely critical as conflict of interest issues are at stake here for New Zealand. If it is not to be the Minister and it is to be the board, then there also have to be safeguards around that. We have another amendment, which goes to the heart of that. I request that the Minister of Broadcasting during the Committee stage on this bill actually answer those questions, otherwise we are passing a piece of legislation that is neglecting to answer some fundamental questions. We need those answers.

The other issue that people listening at home need to know about is that Radio New Zealand’s budget is frozen. Its ability to enact what is in this legislation, this Supplementary Order Paper that the Minister has put forward, is severely compromised by its frozen funding. It is doing a laudable job of creating new platforms through the internet and using all the mediums that it possibly can to deliver news, but it is being deliberately starved. Its news budget is compromised. In order to build these new platforms in order to provide these new services it is compromising the existing budget. New Zealanders who love Radio New Zealand, who have thought of it as a treasure, a taonga, for our country in every survey that has ever been done, ought to be asking and need to have answered the questions as to why Radio New Zealand is in this situation and just what is going to be done about it.

Although Labour supports the Supplementary Order Paper the Minister has put before the Committee, we have our own three amendments, which I am asking the Committee tonight to support. Labour’s amendments provide some clarity around the powers of either the board or the Minister in determining how those decisions get made. We need those answers. In the meantime Radio New Zealand is continuing. It is one of those organisations that we should really give a great big tick to in terms of how it does manage the limited budget it has. It has attempted to do that for more than 7 years. The Minister needs to answer those questions tonight.

The CHAIRPERSON (Hon Chester Borrows): I call Kris—sorry; I call Gareth Hughes.

Kris Faafoi: I think you were nearly there.

The CHAIRPERSON (Hon Chester Borrows): I was nearly there until I noticed Mr Hughes had not had a call.

GARETH HUGHES (Green): I do not think you can call for a third umpire, Mr Faafoi, though it probably would be useful to have a third umpire sometimes in this Chamber. Mr Chair, kia ora, ngā mihi nui ki a koutou, kia ora. I rise to support this bill, the Radio New Zealand Amendment Bill.

I have been reflecting since the original review this legislation comes from, all the way back in 2006, on what changes we have seen at Radio New Zealand. The first one, of course, is that it is not called Radio New Zealand. It is now “RNZ”. We have seen some innovative new online content platforms, such as The Wireless. Of course, we have lost old Geoff and Sean on Morning Report but we have gained a Guyon and a Susie. We have seen a new Checkpoint streaming live to the internet and interviews being now conducted by Skype, not just in the Auckland or Wellington or Dunedin studios. Despite all those changes since the Radio New Zealand review way back in 2006, one thing is the same and that is the bird, every morning on Morning Report, which is fantastic to see.

This is entirely a non-controversial bill. The subject matter, at its heart, is incredibly important, and that is public broadcasting. It is something that the Green Party on this side of the Chamber—judging by the speeches I have heard in the Chamber tonight previously from Kris Faafoi, Clare Curran, and Tracey Martin—takes incredibly seriously. It is important to our culture, to our citizenship, and to our democracy, so the Green Party supports public broadcasting.

The changes to the charter are not bringing great change; you could say they are modernising. But I would like to touch on a point, which is the speed and the urgency with which the Government has moved this legislation through the House. As I have referred to, the review was in 2006 and legislation was not introduced until 2009, and here we are, 10 years after the 5-yearly review, and we are finally getting around to the Committee stage. We are not even at the third reading.

My question to the Government and to the Minister of Broadcasting is: is the speed and haste with which the Government is addressing this legislation symptomatic of the Government’s view towards public broadcasting? If you are taking it seriously, why have you acted so slowly? If you take it seriously, why has there been a funding freeze for 6 years? If you are taking it so seriously, why do you not listen to the KPMG report that said we had seen a funding cut requiring an additional $6.7 million just for Radio New Zealand to stay where it is, and what we have seen is a funding cut in real terms of more than 9 percent?

You have to ask whether the Government takes public broadcasting seriously when we see channels like TVNZ 7 being cut. This side of Chamber takes public broadcasting seriously, and my challenge to the Government is that if it takes it seriously, let us move with some haste. Let us put some adequate funding in so the excellent work that happens at Radio New Zealand, including Radio New Zealand Concert, etc., can continue and thrive in 2016.

I would like to make a couple of quick points on the amendments. I would like to acknowledge and thank the member Clare Curran for her constructive clarification amendments. The Green Party will be supporting the Government’s amendments. They in fact relate to my substantive point, which is regarding the slow lethargy in which the Government has approached passing this legislation.

One of the main amendments in the Government’s Supplementary Order Paper 94 inserts new section 8AB, which deals with providing media services outside New Zealand on, for example, paid content services, stating that as long as the services are still in a commercial-free manner they can be then subsequently replayed, broadcast, or onsold to what are, essentially, commercial stations. We support that.

Why I say it is symptomatic of the lethargy—the point is that the Government has had to play catch up. The world is changing. We are seeing it with the content review currently being undertaken by Minister Adams. The Government is trying to play catch up with the new technologies, the new types of services, and the new role that Radio New Zealand is expected to play in 2016. The Green Party will be supporting the amendment, because it is pretty common-sense. The amendment to clause 2, of course, has to change the commencement date. The Government has taken so long to get this bill in front of the Committee that it has had to go amend the commencement date, because, of course, it has expired. The Green Party supports this common-sense law.

The Green Party supports the common-sense Supplementary Order Papers, but the important point for the Green Party is that we will prioritise public broadcasting. We believe it is the bedrock, the foundation of our democracy, of New Zealanders’ right to access information, to hear our stories, to see our culture, in all the various forms, on air and online.

As a last quick point, I would also like to acknowledge—I will be very brief, because my last point is around acknowledging the recent Māori radio networks’ call and analysis of Māori content on Radio New Zealand. When you look at the data—this is only over a small time period—it is incredibly small, so I believe that is a challenge to Radio New Zealand to make sure that all New Zealanders and all cultures’ voices are reflected, in particular the first people of New Zealand, tangata whenua. I hope Radio New Zealand can take those lessons and that analysis on board. Kia ora.

GRANT ROBERTSON (Labour—Wellington Central): I am pleased to take a call in the Committee stage of the Radio New Zealand Amendment Bill. As my colleague Gareth Hughes has just said, it has had a glacial run through the House, as the Government has thought carefully and considered whether or not it still wants Radio New Zealand. It had that conversation inside the caucus. I am sure there would have been a few National Party caucus members probably arguing to say we should hock off Radio New Zealand, but they managed to get themselves through that and finally get themselves back to—Chris Bishop is laughing, in that way that people laugh when they go: “Uh-oh! He knows. He’s worked it out.” I am sure that once upon a time Chris Bishop would have been in the group of National Party MPs and supporters who used to call Radio New Zealand “Radio Labour” or “Radio Moscow”—we heard that, too, coming out from National Party members.

Chris Bishop: I love RNZ.

GRANT ROBERTSON: Oh, he loves it. He is even calling it by the right name. Well done—RNZ.

I want to say at the outset that I probably represent the electorate most closely affiliated with Radio New Zealand, Wellington Central. We have, actually, over the course of this bill’s life—I have run two separate public meetings on the future of Radio New Zealand. They have been well-attended, and there has been a very strong spirit of support for Radio New Zealand. At one of those meetings the chief executive, Paul Thompson, attended, and I do want to give him credit for having got out there and talked to New Zealanders about the future of Radio New Zealand and about how it is going to continue to adapt to the changing media environment. I want to echo the comments that other speakers have made that, in the circumstances, Radio New Zealand has done incredibly well at diversifying its delivery platforms, at taking on new technology, and at keeping up an incredibly good service for New Zealanders as a public broadcaster. It deserves huge congratulations for that. It has been innovative and it has stuck to its mandate to be a public broadcaster.

But we cannot look at this bill, at the principles of operation of the bill, at Radio New Zealand, and at the charter of Radio New Zealand without reflecting on the financial circumstances it finds itself in today. I became a member of Parliament in 2008—

Chris Bishop: Fine year, very fine year.

GRANT ROBERTSON: A very good year it was to become a member of Parliament. Between then and now, my salary has gone up by around about 20 percent.

The CHAIRPERSON (Hon Chester Borrows): Phew!

GRANT ROBERTSON: Give or take—I know, it is a tough thing to say, Mr Chairman, but it has. We have been very well served here. In that period of time, Radio New Zealand’s funding has frozen. It has not had a single extra cent in that time. It has not had the recognition that costs have increased. All sorts of costs have increased for Radio New Zealand, ranging from salaries through to the technical specifications of its equipment through to the programmes that it buys in from overseas. There has been not a single extra dime from this Government to support the public broadcaster for New Zealand.

So if we look at clause 8A, we have got the “Principles of operation—(1) The public radio company must, in fulfilling its Charter, exhibit a sense of social responsibility by—(a) having regard to the interests of the community in which it operates; and (b) endeavouring to accommodate or encourage those interests when able to do so.” How can Radio New Zealand fulfil that mandate when this Government has frozen the funding? It cannot.

If you look at the first of those points—clause 8A(1)(a), “having regard to the interests of the community in which it operates;”—when I grew up in the city of Dunedin and I was an annoying student politician, there were three Radio New Zealand reporters who covered what happened in Dunedin. Today there is one person covering Otago and Southland. If there is what is called a “major” in the news business, which is usually a crime, and it happens to be in Invercargill or Tuatāpere or somewhere, that is it for the rest of the region, for that person, for the rest of that week. There is nobody else there.

This piece of legislation uses an important word about Radio New Zealand. It says it “must” do those things I just read out in fulfilling its charter. It is not an option. This Parliament is not saying to Radio New Zealand: “Kind of do it if you can.” It is saying: “You must fulfil these things if you’re to be a public broadcaster.” How do members opposite expect Radio New Zealand to do that? Well, we want them to have a choice, members opposite, to be able to do that. My colleague Clare Curran has a member’s bill—[Bell rung]

The CHAIRPERSON (Hon Chester Borrows): Grant Robertson.

GRANT ROBERTSON: No other options; you have to pick me, Mr Chair. Clare Curran has a member’s bill in the ballot right now, to say to the Government: let us make sure we actually recognise that between 2008 and now there have been some increased cost pressures. Let us lift the funding of Radio New Zealand by the rate of inflation—not anything like the extra funding that we managed to get as MPs, but just enough to acknowledge that costs have increased. The Government could pick that bill up tomorrow, and I am sure Clare Curran would be more than happy if the Minister of Broadcasting said “You know what? I’d like to do that.”, because a public broadcaster, properly funded, is actually part of a functioning democracy.

I think my colleague David Cunliffe interjected before to say that Radio New Zealand had been deliberately starved. I think that is the only conclusion that we can draw; that this Government does not want a fully functioning public broadcaster that will hold it to account, because despite the “Radio Moscow” and “Radio Labour” taunts from over there, we all know that whoever the Government of the day is, it is Radio New Zealand, more often than not, that is holding it to account. It is Radio New Zealand that still has a functioning news and current affairs business. It gets out there and picks up stories and makes sure that Ministers have to come on air and answer questions—and other politicians, as well. None of us has got away easily. Mary Wilson is no longer on the radio, which makes life slightly easier for all of us, but, actually, there is still a role that the broadcaster that is Radio New Zealand plays in holding all politicians, all public officials, and all of those in the public arena to account. It cannot do its job if its funding continues to be frozen.

We have a laudable piece of legislation in front of us tonight, a charter that everybody in this Committee supports, that has the words in it that we all want to see about diversity, about freedom of thought, about entertaining New Zealanders: challenging, innovating, engaging, fostering critical thought. No one in this Committee is going to disagree with any of that, but it is not real if the organisation is not funded properly to deliver it. This is not just about politics or current affairs. It is about the wider good that Radio New Zealand does by being in the communities that it is part of, by being able to express the stories of New Zealanders. We support this piece of legislation, but we call on the Government to do the right thing and actually fund our public broadcaster, Radio New Zealand, to play the role that it should play in our community.

KRIS FAAFOI (Labour—Mana): Thank you very much, Mr Chair, for allowing me another opportunity to speak to the Radio New Zealand Amendment Bill. I would like to pick up where my colleague Grant Robertson left off, and that is around the democratic function of good journalism. And I will come to the charter—

The CHAIRPERSON (Hon Chester Borrows): We are not going to get repetitive, are we?

KRIS FAAFOI—which is within the bill, to be able to extrapolate those points a little bit later on in my speech.

I would also like to point out that although technology is changing the way that information is being disseminated—we talk about different platforms, we talk about convergence, online streaming; all these different ways of getting the information that we used to get through radios—something has to remain constant in order for us to keep listening, and that is some pretty important principles that are at the very heart of public broadcasting. That is around quality, independence, integrity, and reach, and other qualities like that which—regardless of the medium by which we are receiving the information—have to stay true. That is what we are worried about on this side of the House, when we are talking about freezing of funding.

I would like to put those in the context of journalism, and also what is within this bill, around the charter. Clause 8 goes into some detail on what is expected of Radio New Zealand around the charter. Clause 8(1) says that Radio New Zealand must be an independent public service broadcaster, and the purpose is to serve the public interest. Clause 8(4) says: “The public radio company provides reliable, independent, and freely accessible news and information.” Subclauses (5)(a) and (b) say that the services must be predominantly and distinctly of New Zealand nature, and they must inform and enlighten the people of New Zealand. Paragraphs (h) and (i) of subclause (5) say that this content should “provide awareness of the world and of New Zealand’s place in it:”, and “provide comprehensive, independent, accurate, impartial, and balanced regional, national, and international news and current affairs:”. So Radio New Zealand, because it is legislated to do this, plays a very important function in the fourth estate.

I think that over the last year there have been some worrying signs about the nature of journalism and the fourth estate. We have seen the demise of the current affairs programme 3D Investigates at TV3, we have seen the demise of Campbell Live at TV3, and we have also seen the demise on both major channels around that 7 p.m. slot—what used to be Close Up and Holmes back in the day has now become Seven Sharp. I will let people make up their own minds on that.

But there is an important function within this legislation that says that Radio New Zealand has to hold some pretty important principles of journalism up higher than other broadcasters or news media companies have to. I would actually like to praise Radio New Zealand for its efforts to be able to do that under the current freeze in budget that it has had. It has had challenges around having to deliver on different kinds of platforms, but I think it has done a pretty good job of keeping the integrity, keeping balance, and keeping impartiality—all those qualities that the charter within this bill requires of Radio New Zealand—under extremely difficult circumstances. I think it also means there is a greater importance placed on Radio New Zealand around journalism, and also—another debate that might need to start in New Zealand—that there should be funding for other news media organisations, to make sure that these kinds of principles around journalism are upheld in other areas too. That is another debate around NZ On Air.

But I would like to make sure that these principles around the integrity of journalism are upheld as best as they can be by Radio New Zealand, and that can only be done if a Government takes that entity seriously. I think—with this bill languishing on the Order Paper for well over 7 or 8 years—that the funding freeze that numerous speakers have spoken to on this side of the Chamber and the fact that in other areas of public broadcasting this Government has shown no taste at all for wanting to continue anything that holds people like us to account is not good for our democracy. I want to, as a former journalist, make sure that everyone in this House is held to account properly, and I think as a bastion of all those principles as laid out in this legislation, Radio New Zealand is legislated to do that properly.

But if we are going to put this in legislation, let us back up these words in this legislation with some commitment from the Government that it is going to help Radio New Zealand achieve that. If we do not, then all the words that are in this legislation are merely words. The ability of Radio New Zealand—a very important broadcasting entity—will not be that it can deliver on what we ask it to do. I praise it, because I think it is doing a good job within its constraints. We are again asking it to have a very important function in our democracy: to hold people like us, in this House, to account. If we do not give it the means to do that then I think that is not a good sign for democracy in this country.

Clause 1 agreed to.

The question was put that the amendment set out on Supplementary Order Paper 94 in the name of the Hon Amy Adams to clause 2 be agreed to.

Amendment agreed to.

Clause 2 as amended agreed to.

Clause 3 agreed to.

The CHAIRPERSON (Hon Chester Borrows): The amendment to clause 4 set out on Supplementary Order Paper 94 in the name of the Hon Amy Adams is ruled out of order as being a direct negation of the question.

Clause 4 not agreed to.

The question was put that the following amendment in the name of Clare Curran to the proposed amendment set out on Supplementary Order Paper 94 in the name of the Hon Amy Adams to clause 5 be agreed to:

In new section 8AB(4)(c)(ii), after “free to access”, insert “or the delivery platform includes commercial content or sponsorship references”.

A party vote was called for on the question, That the amendment to 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 to the amendment not agreed to.

The question was put that the following amendment in the name of Clare Curran to the proposed amendment set out on Supplementary Order Paper 94 in the name of the Hon Amy Adams to clause 5 be agreed to:

In new section 8AB, after subsection (4), insert:

(4A) The Minister of Broadcasting—

(a) is to determine if a proposed service meets the requirements of subsection (3); and

(b) having so determined, must—

(i) issue a written notice of that determination to the public radio company; and

(ii) present that determination to the House of Representatives within two working days of issue and at least 1 calendar month before the determination takes effect.

A party vote was called for on the question, That the amendment to 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 to the amendment not agreed to.

The question was put that the following amendment in the name of Clare Curran to the proposed amendment set out on Supplementary Order Paper 94 in the name of the Hon Amy Adams to clause 5 be agreed to:

In new section 8AB, after subsection (4), insert:

(4A) The board of the public radio company is to determine if a proposed service meets the requirements of subsection (3).

(4B) Any determination made under subsection (4A) must not be subject to direction by the Minister of Broadcasting, or any other Minister.

A party vote was called for on the question, That the amendment to 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 to the amendment not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 94 in the name of the Hon Amy Adams to clause 5 be agreed to.

Amendments agreed to.

Clause 5 as amended agreed to.

The question was put that the amendments set out on Supplementary Order Paper 94 in the name of the Hon Amy Adams to clause 6 be agreed to.

Amendments agreed to.

Clause 6 as amended agreed to.

Bill to be reported with amendment presently.

House resumed.

The Chairperson reported the Home and Community Support (Payment for Travel Between Clients) Settlement Bill without amendment, the Radiation Safety Bill with amendment, the Weathertight Homes Resolution Services Amendment Bill with amendment, and the Radio New Zealand Amendment Bill with amendment.

Report adopted.

Bills

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

Third Reading

Hon MICHAEL WOODHOUSE (Minister of Revenue): I move, That the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill be now read a third time. This large and wide-ranging tax bill brings together a suite of proposals to support the Government’s work in creating a more productive and competitive economy for New Zealand. The main proposals in the bill are designed to encourage business innovation by dealing with certain obstacles in the current tax rules that can prevent smaller start-up businesses from undertaking research and development.

To recap briefly, the first proposal deals with a timing problem in the tax rules that prevents innovative start-up companies from being able to use tax losses incurred during their start-up research and development phase. The second research and development proposal relieves the problem of so-called black hole expenditure, where some development expenditure is never able to be deducted for income tax purposes. In offering straightforward, targeted, and pragmatic solutions to these problems the proposals in this bill will support the Government’s wider agenda for business growth, and will be welcome news for New Zealand’s innovative start-up firms.

The remaining proposals in the bill continue the Government’s focus on fine-tuning and maintaining the tax system. They include new rules to clarify the GST rules for New Zealand’s 13,800 bodies corporate to give them assurance on their GST position, as well as targeted business-friendly changes to the tax rules such as giving greater flexibility to users of tax-pooling funds.

This bill also confirms the annual rates of tax for the 2015-16 tax year. This is a small but important part of the bill that provides certainty for all taxpayers. Other measures are aimed at fine-tuning our social policy settings. These include proposals to reduce long-term child support debt; changes to Working for Families tax credits to clarify certain provisions, and reduce compliance costs for recipients of the scheme; and measures to allow greater flexibility to more quickly align the tax exemption criteria for community housing entities with the Government’s HomeStart grant thresholds. Together, the proposals in this tax bill make for a much more workable system for tax and social policy payments.

Many of the measures I have described are the direct result of public consultation and cooperation with the private sector. This is a crucial part of the way we develop our tax rules. It helps to ensure that the new rules reflect current social and economic practicalities as well as the Government’s broader economic vision for New Zealanders. In bringing this large tax bill to its third reading I thank the policy officials, the drafters who worked on the detail of the bill, the organisations and individuals who made submissions on the proposed legislation, and the Finance and Expenditure Committee for its consideration and recommendations to improve the workability and fairness of the provisions. I commend this bill to the House.

STUART NASH (Labour—Napier): What you have just heard there is a very short speech that was filled with political-speak. Let me just translate that for those who were listening and are wondering what they had just heard. Minister Woodhouse talked about fine-tuning. What that really means is tinkering around the edges. Minister Woodhouse said that the bill “provides certainty for all taxpayers.” What this actually means is that it entrenches inequality and inequity. Minister Woodhouse said that it is a “much more workable system”. What that means is: “We can’t be bothered dealing with the really big issues.” And, finally, Mr Woodhouse says “wide consultation”. What that really means is that we spoke to the big-business end of town to ensure we got their support.

Hon Member: So cynical.

STUART NASH: Cynical? A realist; a pragmatist. I am going to be very interested in that member’s contribution because he sat on the select committee and he has been a part of a whole suite of tax bills that have come through the Finance and Expenditure Committee that are no more than tinkering around the edges, when we have a number of really big issues that we face as a country and an economy.

Labour does support the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill, for a number of reasons. First and foremost, as the Minister of Revenue said, what it does is it amends a whole lot of other bills where there are errors and omissions, and that is important to maintain the integrity of the tax system. We also support this bill because anything that can be done to improve research and development spend or get firms thinking about research and development we would like to encourage.

But I must say that this bill has really missed a trick. The Government has really missed a trick with this. There is something called the Kiwi Dream. We all know about it, we have all heard about it, we all grew up dreaming about it ourselves. What that Kiwi Dream consists of is being able to afford a house, to get a good job, and to bring up a family in a society that is fair and equitable. It is what is in our DNA. It is what we like to think of as what makes us Kiwis. It is what we like to think the international community thinks of us as Kiwis.

But that Kiwi Dream is fast disappearing, and I think the tax system is one of the major drags on our economy that is fast eroding this Kiwi Dream. Let me tell you why. First and foremost, the Minister talked about the fact that the tax rates are going to remain the same. When I spoke at the select committee the Minister said: “Mr Nash wants to increase taxes.” Well, I can tell you that as the revenue spokesperson I would love to see taxes drop; I really would. But one thing I would like to see more than that is a really equitable tax system: a tax system that is fair, that treats every taxpayer fairly—one that, if you make money, you pay what you can. That is all—no more, no less. If it is income coming in, then you pay tax.

What we really need to do is take a really good, hard look at our tax system—take it from a 20th century model, which I do not think is working particularly well, and drag it into the 21st century. That does not mean that what you do is you whack up income taxes and say: “That’s that, all settled, it works.” When Mr Woodhouse says Labour wants to increase taxes, let me say here, for sure: we would love to decrease taxes, but what we need to do is we need to get it right and we need to treat income the same, no matter where it comes from, in my view—no matter how you earn that income. We need to get that sorted, but we have not done that.

The second thing is research and development. If we want to compete on the global market, then what we need to do is harness the intellectual capital that we have as Kiwis. This is how we are going to realise the Kiwi Dream. This is how we are going to get smart Kiwis who were educated, hopefully under Labour without coming out with a massive student debt, and they have got to go overseas in order to pay it, and then not come back if they cannot afford to. This is what we have got to do—we have got to get our companies up and running and creating an environment where research and development is at the forefront of everything they do.

The problem we have got at the moment—and Mr Bishop knows this—is our research and development spend is one of the lowest in the OECD, and that is wrong. We really need to address that. So although this bill is called the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill, there is actually not much in here for research and development.

There was a real opportunity here to be big, to be bold, and to take something to the market that says: “You know what? We understand where our competitive advantage lies. We understand what Brand New Zealand is, and we know what we need to do to compete on the global stage.” We have to be smarter, we have to be faster, and we have got to do it in a way that Kiwis earn decent wages on a sustainable basis, and that values the sort of education that we know we have the ability to provide in this country. The way to do that is to provide an environment—a legislative environment, but also a business environment—that encourages research and development. I just do not see this bill doing that.

I thought that the National Party always held itself up as the party for business, but the reality is—if you look at the reality over the last couple of generations, the party for business, the party under which businesses have really grown, is actually Labour. Labour is the party that is aspirational for businesses and under which businesses do well. When businesses do well, Kiwis are employed, and when Kiwis are employed, that Kiwi Dream does not become just an aspiration; it becomes a reality.

That is who we are as New Zealanders. That is what I want for my four children, and I suspect it is what we want for all New Zealanders growing up. And unless we create the sort of business environment that encourages New Zealanders to be entrepreneurial, it will not happen. What will happen is our best and our brightest will head overseas. There are many countries—including one across the Ditch—that actually value research and development in a much greater way than we do in New Zealand.

Alastair Scott: They’re all coming here. The Aussies are coming here.

STUART NASH: And imagine how many Aussies would be coming here if we had an environment that created and fostered entrepreneurship. They would not even have left in the first place. But imagine how many would be coming back from London if we were talking about a bill now that provides the sorts of incentives that they get in Australia for research and development.

I think what we would see is a flood of educated, experienced Kiwis coming back and setting up businesses here, because they would finally be saying: “You know what? I’ve wanted to come back to New Zealand for so long; now I’ve got a reason to.” But this bill does not give Kiwis a reason to come back, and that is a real shame. It is a real shame, and it is a missed opportunity.

The other thing I would say is, Mr Woodhouse—he thought that he had a problem when he left a portfolio where there was a $10 million blowout in the current HR bill and—what was it, Mr Robertson, about an $80 million blowout in the child support system?

Grant Robertson: About $130 million.

STUART NASH: About a $130 million blowout in child support—well, sorry, a $10 million blowout in the police. He has come across to a portfolio where they are in trouble in a lot of their IT projects. A $130 million blowout is a significant amount of taxpayers’ money. Imagine what we could do with $130 million in terms of research and development. Imagine what we could do if we put $130 million into incubators, into fostering business growth, into saying to our young people: “Come back, because we’re going to support you.” But $130 million is not that much when you consider the Business Transformation project, which is looking at a budget of a billion dollars—a billion dollars. We have got to get this right.

But let me wrap up by just making three points—reiterating my three points. First and foremost, the Government really missed a trick with this bill. We would have loved to see something brought to the Finance and Expenditure Committee that really drove innovation and research and development in a way that made a significant difference and was a reason to bring Kiwis back. Research and development is vital to the growth of an economy like ours.

Secondly, the Government cannot continue to tinker around the edges with the tax system in the way it is doing at the moment, because it solves nothing whatsoever. It just ends up annoying people, and it just perpetuates that inequality and inequity that exist in our tax system. Again, the Minister missed a trick, but having said that, he did not bring this bill to Parliament, so I will be interested to see whether Michael Woodhouse’s legacy is as someone who takes the bull by the horns and drives that innovation forward in the way that most of us know it should be.

The third point I would like to make is that Mr Woodhouse does have his work cut out. The Inland Revenue Department is spending a significant amount of money on various IT projects. We are keeping a very close eye on them, because we cannot have another blowout to the tune of $130 million on a system that now has a budget of a billion dollars. We are supporting this bill—give me 30 seconds, Mr Bishop; your time is coming—we are supporting this bill—

Mr DEPUTY SPEAKER: You have got 24.

STUART NASH: Twenty-four seconds? We are supporting this bill, but we just thought it could have been so much more aspirational. We thought it could have grabbed that Kiwi Dream, made it aspirational, reached for the stars, and made a real difference to those whom we know the tax system could. This does not. Thank you very much.

CHRIS BISHOP (National): I am almost—

Grant Robertson: Deputy chair’s up, the chair’s just arrived—it’s a shambles!

CHRIS BISHOP: —reluctant to stand up, because, as Mr Robertson is pointing out, my learned superior David Bennett, the chair of the Finance and Expenditure Committee, has entered the House, but I am going to take a call first. Last time I stood up, I managed to spill water all over the Hon Nathan Guy, so, sorry about that, Minister—not a particularly auspicious start for me in the House tonight.

We have just heard some words from Labour MPs that, I think it is fair to say, you do not hear very often. Stuart Nash said to the House: “I would love to lower taxes.” It is quite extraordinary. In the short time I have been in this Parliament—and I am pretty sure I am safe in saying that in the 7 years the National Government has been in charge—I think it would be highly unlikely that you would have had a Labour MP say that he would like to lower taxes. Well, what I would say to that is: good luck, because the Labour Party’s spending promises at the last election, and they are continuing to increase by the day—just 2 weeks ago, $1.2 billion extra spent per year on its much vaunted but, actually, sadly inequitable and regressive tertiary policy—well, good luck.

This is a reasonably dry but very important bill, and you would be forgiven for not knowing that from Mr Nash’s speech, because Stuart used it as an opportunity to bewail the Government’s tinkering and how we are not focusing on equity and how we had a missed opportunity to redesign the tax system. Well, how would the Labour Party redesign the tax system? Will it introduce a capital gains tax? No, because that is not Labour Party policy. Will it introduce a land tax, which I know Mr Nash has blogged about in a favourable way? No, that is not Labour Party policy, either. In fact, the only thing the Labour Party can focus on is the answer to all of New Zealand’s economic problems—research and development tax credits. And it is that point I want to focus on, because you will not find a bigger proponent of growing high-tech firms in our economy, of innovation being at the forefront of the new economy in the 21st century, than me.

This bill does a couple of very useful things to grow research and development in the New Zealand economy, and to grow them in “Technology Valley”, which is what I call the Hutt Valley, where we have a real opportunity to grow high-tech jobs. Very few people would know that hundreds of millions of dollars of gross domestic product out in “Technology Valley” is based upon maths, and science, and engineering, and technology—great firms out in the Hutt like Pertronic, like Tekron International, and like Fraser Engineering, which makes high-tech fire trucks for almost every state in Australia. So we have got a great opportunity there, and that is why this bill is going to be important.

So it does a couple of things. Firstly, it allows companies to cash out their tax losses within specified limits; and then, secondly, we have the relief for what is called in the tax trade black hole expenditure. So it allows expenditure to be either deducted over time or taken as a one-off tax deduction upon the write-off for tax accounting purposes. Is this a wholesale, massive research and development tax credit like the Labour Party would like? No, it is not. Are these useful measures that will help create a pipeline of jobs and growth in our economy through innovation? Yes, they are, and they come as part of a suite of measures that this Government has implemented in order to grow the innovative and productive capacity of this economy. I could talk at length about the numerous things that we are doing in this regard to grow jobs and grow the high-tech jobs. I could talk at length about the technology—the amazing technology—going on out in “Technology Valley”, but I think it is time for me to cede the floor to Grant Robertson. With that, I commend this important bill to the House.

GRANT ROBERTSON (Labour—Wellington Central): I have heard Hutt Valley High School referred to as “Sweet Valley High”, but I am not sure about “Technology Valley”—is it, Mr Bishop?

Chris Bishop: That’s right.

GRANT ROBERTSON: No, you will need to go back to the marketing people on that one. I will give the Government this about this tax bill: at least when the Finance and Expenditure Committee looked into this bill and took submissions on this bill, we did not have every large accounting firm in the country come to the committee and say that the bill does not make sense, that they were professionally confused by the Government’s approach, and that they did not understand how it fits together. This bill came through to the committee at the same time as the Government’s legislation around property measures came through, which was a fiasco. That was when it brought in its brightline test, we had the whole thing about providing an IRD number and an address, and submitter after submitter came and said: “This does not make any sense.”

I will let the House and those watching in on a secret. There is a reason why this bill stands out from those other ones: this one has got nothing to do with the National Government. This bill comes from the officials at the Inland Revenue Department (IRD), who do a pretty good job, to be honest, in keeping the tax system running efficiently—picking up the loopholes, picking up the contradictions in the tax law—and they brought in a pretty good bill in that context. But it is because it does not have the real paw prints of the National Government on it that it has actually come to us in a form where we can vote for it and pass it, without those who work every day in the tax system being worried that they simply cannot understand what the Government is up to. And that is the tragedy of this from the Government. When it puts its own bright ideas into the tax system, it turns into a shambles, and that means that all we are left with are the mechanics of the system. As I say, good on the IRD officials. I want to thank them for their role in supporting the select committee, and Therese Turner, the specialist expert adviser whom we have for the committee. They all did a great job in helping the committee work through the issues that are here.

But it is just making the machine tick over—that is all the Government has managed here. It has got absolutely no vision for what role the tax system might play in helping New Zealanders build the Kiwi Dream and helping New Zealanders to get ahead and take the opportunities that are out there. Where is the vision from this Government when it comes to how the tax system can do that? All it has got for us is a mechanistic piece of legislation, because it does not have the ideas that will help drive innovation and that will help New Zealanders get ahead, take the opportunities, and build the dreams that they have. So what we have got here in this bill is a piece of legislation that does four or five major things, and all of them are a disappointment in one way or another.

Firstly, there is the setting of the annual rates for 2015-16, which, as Mr Woodhouse and others have noted, are the same annual rates that we have had. As my colleague Stuart Nash said, all that does is entrench the inequalities that are in our system already. All that does is say to New Zealanders that the Government is bereft of ideas for how the tax system might contribute to perhaps reducing inequality. You know, I think we would all respect the idea that the Government needs to pass legislation like this, which makes the tax system tick over, if at the same time it was out there having the discussion with New Zealanders about how the tax system could be made fairer and how we could actually look at the role of the tax system, and not only income equality—which is, obviously, what the rates are about—but also asset and wealth inequality.

You know, time after time in the select committee we have had the Governor of the Reserve Bank come to us and talk to us about how worried he is about what is happening with asset prices in New Zealand. When we turn that into real life, that is actually people, lots of New Zealanders—lots of young New Zealanders—being shut out of that core element of what we thought it means to be a New Zealander, which is the idea that you could own your own home. That is what we mean by asset inequality over here. When you have got homeownership rates at the lowest that they have been in 60 years, that is snatching that dream away from a whole generation of New Zealanders. Where is the bill that says we are going to do something about that in this House? We do not see that from this Government; we see the tinkering. So we see the annual rates staying the same, and lots of New Zealanders will be sitting around tonight following this bill closely and wondering whether or not this is the bill that will make sure that everyone pays their fair share in the tax system.

Well, I can tell them that I have waded through it and I have done the work there for New Zealanders—it is not. This is not the piece of legislation that is going to say that every New Zealander should pay their fair share. Where is the bit in here where the Government decides to crack down on tax evasion? I know that Simon Bridges is worried about this. He has got hard-working New Zealand companies in his electorate, in Tauranga, that pay their tax and do the right thing. Well, stand up for them, Mr Bridges. Stand up for them and say that those multinationals that hide their income, that shelter away from their tax obligations—stand up for those New Zealand companies and come up with a plan that does that. Do not sit around on your chuff waiting for some international organisation to sort it out for you. Get up and support those companies that do pay their fair share.

So we look at the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill, but there is no sign of that—no sign of any action to actually make sure that the tax system is a fair system, where we actually collect the tax that is owed and we have a system that New Zealanders could say, once and for all, was fair. So the annual rates are set. They are not set the way that we would do them. My colleague Stuart Nash has made the point that there would not be anyone in this House who would not want to see taxes lowered for, particularly, those on low incomes in New Zealand, but we cannot do that at the moment. We cannot do that at the moment because we do not have a system that treats New Zealanders fairly, and too many people get away without paying their fair share.

As others have said, the other core element of this bill is around research and development. Chris Bishop has made the point that there are a couple of measures in here that will be helpful, particularly for start-up tech companies and those right at the beginning—there is no doubt that that is true—and, again, I congratulate the officials on having come up with that. But it is hardly the comprehensive measure that we need to get research and development going. Every single member on the other side of the House knows that if they have been to Australia or if they have gone to countries in Europe, a simple, straightforward tax credit system for research and development operates there. We could have an intellectual debate about the best kind of system to make that happen, but the truth for companies that are operating in New Zealand today is that they can look across the Tasman and they can see a research and development tax credit system that is easy and operable, and they ask “Why not go and work in that system?” because New Zealand is failing to do that.

I mentioned in my Committee stage speech going to the Lowe Corporation in the Hawke’s Bay with Stuart Nash, and Andy Lowe saying to us “Whatever you do, get that through.”, because it gives the certainty to those companies that they can claim, in our case—the policy the Labour Party has put forward—which is 15 percent for research and development tax expenditure. That means they know they can do it. Under this system we entrench the grant-based system—Steven Joyce picking winners and Chris Bishop going through his Rolodex, deciding who is going to get that research and development grant. We can do so much better than that if we have a research and development tax credit system that is simple, that is easier to use, and that everybody can access.

I just want to end on the question around child support and the simplification of the administration of the child support scheme that is lauded and claimed in this bill. The truth is, what this bill does is it puts in place some of the mechanisms that are required to implement a $130 million blowout. That is actually what it does. In fact, it is more than $130 million. It is more like about $160 million more than what was originally forecast. This was incredibly poor planning by the Government. It went against the advice of Treasury, the State Services Commission, and the Government Chief Information Officer, who all said “taihoa; wait until the overall IT transformation package has been put in place”. But instead the Government has thrown bad money after bad money and created a situation in which the child support IT system has now had all this money chucked at it. I have no doubt that at some point the Government will come back and say it does not quite match with the new IT system. More money will need to go in.

The child support system changes themselves have had difficulty bedding in. I will not be the only MP in this House who has had people come to me with concerns about how that has happened. It is a difficult area. We want to ensure that people meet their obligations, but we have to make sure that people are treated fairly, and ongoing cases indicate that the system the Government has put in place is very, very creepy.

It is a missed opportunity. The Government could have put forward a tax bill that actually made the tax system fair, made it part of supporting innovation, and made it part of supporting a financial system that New Zealanders could be proud of. It has missed that opportunity, as it has so often before.

DAVID BENNETT (National—Hamilton East): This is a solid bill, unlike the last speaker’s comments—and I will come to those in a minute. But, basically, this bill has a number of issues that it deals with—such as research and development in start-up companies, by allowing tax losses from research and development expenditure to be cashed out through a new tax credit, within certain limits. It provides relief for black hole expenditure on research and development. It provides certainty for bodies corporate in relation to GST on services to their members, and it sets the annual rate of taxation for the year. There are some administrative changes, as well, to the child support regime, which the last speaker, Grant Robertson, spoke about. There is the repealing and the simplifying of filing requirements for individuals. Basically, this bill covers a number of issues within the tax system.

Contrary to that last speaker, it is not a bill that does not take into account the needs of our tax system to be continually updated and the need to look at what we can do to make sure that we have the best tax system possible. The last speaker talked about property measures and there being no vision for the role of the tax system. Well, that is, basically, code for the Labour Party telling you that it wants to have increased taxes. That was the message from that speech. That speaker talked about a mechanistic legislation that does not bring about structural change. Well, that tells you that the Labour Party wants to make large-scale tax changes to our system, and it wants to deal with those people who it perceives are not paying their fair share of tax.

The Labour Party talks about income inequality and asset inequality. The last speaker was worried about our asset prices in housing. That all relates to a capital gains tax, and that is something that the leader of the Labour Party has dismissed. He has said that it is not a policy. We know that Grant Robertson and Stuart Nash want to bring that policy back. They are working within the Labour Party to bring that policy back, as we speak. They have said that in their speeches tonight. That is the true Labour Party policy going into the next election. There will be a capital gains tax hidden in Labour Party tax policy. There will be higher tax rates for individuals hidden in Labour Party tax policy. That is what the last speaker said in regard to this tax bill.

The last speaker spoke about the annual rates staying the same. Labour wants to increase the annual rate of taxation on New Zealanders. No, New Zealanders should not be under any illusion, when we go into an election next year, when the Labour Party does not put out its tax policy and when it does not give any information on how it intends to raise money for grandiose promises—they now know that the Labour Party definitely intends to increase taxes and to bring in a capital gains tax. That is the message from the last speaker from the Opposition.

This is a good bill that does work well in our tax system. It is a bill that adds on to the tax system in regard to research and development. It helps new companies that are looking to get ahead. It gives them a specified ability to get tax losses cashed out, through the new programme. It deals with that black hole expenditure, which is something that is a continual process within the tax system. These things are not set in one moment. They take time to refine, to develop, and to provide the right answers for New Zealand taxpayers. The bill provides certainty for other taxpayers through the legislative changes made. This is a good bill for our tax system. It reflects a strong tax system, where we work to make sure that we make it even stronger each time, rather than having what the Labour Party wanted, which was higher taxes and a capital gains tax. Thank you.

JULIE ANNE GENTER (Green): The Green Party will be supporting this bill because there is actually quite a small but important win for the Green Party and the Labour Party in this in that National has finally realised, after 8 years in Government, that it was wrong to cancel the research and development tax credits. So it has started to bring them back a little bit in this bill, and we can support the bill for that reason.

It is a large and wide-ranging bill. We do not agree with everything in it. But before I get to the substance of this bill I need to clarify and correct some of the statements made by previous speakers from the National Party. We hear from the National Party all the time a number of misleading comments about Green Party policy and about Labour Party policy.

I hear over and over again from David Bennett, and I think Chris Bishop said this as well, that the Opposition is going to raise taxes. I think it is really important to point out that every time National says that the Green Party, and probably the Labour Party as well, is going to increase spending and increase taxes, it is actually making that up. Any of you who are watching this at home can go and look at the Green Party website and see our fully costed programme. Before the last election we showed how we were going to pay for every policy we proposed. We also showed how we were going to give a tax cut to 97 percent of income earners.

The reality is that National members find it easier to go around being misleading about Opposition party policies than debating the actual merits and issues. The reality is their party is not delivering the results for New Zealand that they claim it is. I also heard in speeches tonight that National is very serious about innovation and a high-tech economy. If that is the case, and if it is implementing policy that is going to deliver that high-tech, innovation-based economy, why is it that our exports have declined as a percentage of GDP since National has come to power? They have actually declined. National set a target of increasing them, and they have declined—right back down to 28 percent of GDP.

If it is the case that National is serious about innovation, why is it that our exports have become even more focused on simple commodities, unrefined commodities like milk powder and raw logs? That is the reality. If you go and look at Statistics New Zealand, our imports have been increasing, our exports have not been diversifying at all, and the proportion of research and development spending—the proportion of the economy that has been put into research and development—has started to decline as a proportion of the overall economy.

Everything that we need to do to create a competitive, sustainable economy that is going to thrive in the 21st century is not currently happening. The National Party is so blinded by ideology and a focus on delivering for a few big vested interests and protecting the status quo that it cannot see that its policy is not working. It is unwilling to look at the evidence and actually deliver policy that would be better for all New Zealanders.

There was recently an IMF country report—very, very recently the International Monetary Fund, or the IMF, did a country report on New Zealand. It made a number of recommendations. It said that we need to address our low savings rate by increasing incentives for KiwiSaver. What has the National Government done? It has actually been decreasing the incentive for KiwiSaver. The report said that we need to reform the current tax incentives around housing and property.

Credit where it is due, despite David Bennett’s previous scaremongering about a capital gains tax, the National Government has implemented a very baby version of a capital gains tax with the brightline test. The sad thing about it is that it is so full of loopholes that it will not actually be effective. It applies only to residential land—god knows how we are going to define that, because any land in New Zealand can be used for residential property—and it only counts for 2 years, so it is not going to disincentivise property speculation in the Auckland housing market, which is already rampant. The IMF country report actually does recommend extending the brightline test to at least 5 years, which is something the Green Party proposed when we put forward an amendment to that effect.

Also, in the IMF country report recommendations was a boost in the research and development spend. So, it is great that this bill finally, finally brings back some tax breaks for research and development, because that is the most efficient way to incentivise research and development. But we need to do more than that. We actually need public investment in research and development if we want to be as competitive as other small countries like Denmark, Finland, Israel, and Singapore. They are all countries that are similar in size to us but they are doing much better—they are much richer. Part of the reason is they have much more diversified economies. That is because of Government policy that is actually evidence-based and effective, and all of them are investing three to four times more in innovation.

Before the last election the Green Party proposed a big public investment in research and development, in addition to bringing research and development tax cuts, because that is the best way to get the private sector to step up and invest in innovation. We know this from research. You can look at the book Get Off the Grass by Shaun Hendy and Sir Paul Callaghan, which recommends a whole range of policies that demonstrate that what New Zealand needs to become more successful in the world is not to cut taxes; it is not to liberalise regulations to make it easier to do business—we are already one of the easiest places in the world to do business. What we actually need is more public investment in our people, and better protection of our competitive advantage, which is our pristine natural environment.

That is why the Green Party actually has the most realistic, sensible economic policy of just about any party in this Parliament. I will say that we hear a lot of sensible policy coming from the other parties on this side of the House, but not so much from the party that is in Government. What is really, really important to us in the Green Party is that we protect our natural heritage, not only because it is going to be good for the economy, which it will be, but because we love it, and we know that New Zealanders love it. We cannot get richer by selling off our land or our seas to overseas mining companies and allowing them to potentially spoil our pristine natural environment.

Hon Simon Bridges: If only I could!

JULIE ANNE GENTER: It would not make much money anyway, Mr Bridges, so you do not need to worry.

The way to be successful in the 21st century is to address the challenges that are facing New Zealand and the world, and we know how to do that. We have the evidence for how we are going to do that. The two biggest challenges facing New Zealand and the world are inequality and climate change. Those two challenges are actually interconnected, and we could address both of those through our tax system by developing a high-value, clean, green economy that works for everyone in New Zealand, not just for those at the top.

We do not need to increase taxes for 97 percent of New Zealanders, but, yes, those who are on the highest incomes—over $140,000—can afford to give a little bit more back. It does make sense to tax income from property the same as income from work is taxed. Any economist in the world will tell you that.

In fact, I was at a meeting at the OECD in Paris where they were pretty shocked that New Zealand was not doing that. I think that this particular bill, although it is a tiny, tiny step in the right direction, demonstrates the limit of the vision of this National Government. It is, ultimately, here to govern for those who already have the most, to protect the status quo, and to avoid dealing with the great challenges that we are facing. We on this side of the House have practical, costed policies that will address the real issues facing New Zealanders, and ensure that our children have every opportunity to grow up in warm, safe, healthy homes; to go to school where they can learn because they have access to healthy food; and to grow up and have an opportunity to find meaningful work that pays them a living wage that does not rely on destroying our pristine natural environment, but actually makes the world a better place. That is the New Zealand we stand for.

FLETCHER TABUTEAU (NZ First): Thank you for the opportunity—and I would like to take the opportunity—to welcome the Minister of Revenue, Michael Woodhouse, to his new role. His speech left something to the imagination though. It left a lot to be desired, really and truly. It has kind of said to us on this side of the House: “What happened, Minister? Did the legislation come up too quick, and all your staff had gone home?”. It was a 2½ minute contribution where he talked in inanities and lovely political rhetoric. It was lovely to listen to. But what he did say was that in the consultation process in the Finance and Expenditure Committee the National Party members very much listened to the submissions from industry. I have made much of that in my contribution for this evening, which I will get to very shortly, but I do again welcome the Minister to the role and I look forward to supporting efforts such as this one where there are fixes made, as dismal and, arguably, ineffective as they can possibly be.

I would point out to the Minister that the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill is a large piece of unwieldy legislation, evidenced by the fact that since the select committee we have had alterations—I am not going to grab the piece of paper—almost as large as the original bill itself. The Supplementary Order Papers have been huge, they have been vast, they have been highly technical, and they have not necessarily been in response to all of the submissions from those who took time out to provide clarity around what could work and what is not going to work with this legislation. There has been a big amount of change and it has not really gone back to industry for consultation, and so it sits heavily on this side of the House to work through those changes, to work through the permutations, and try to reconcile them with the stated objectives of making it easier for business around tax, and encouraging research and development through those credits.

We get there. New Zealand First acknowledges that we get there with this legislation, but it certainly does not go anywhere near far enough. What we have also been saying is that from the very beginning of the process we have in the main supported what the Government is trying to achieve, but the reality is that what we have been seeing from these post select committee submissions is so much alternation. In support and in conjunction with that, at the same time we saw industry say to the select committee: “Actually, what you need to do is get this draft legislation out a lot quicker to industry. Actually get it out before it is even going into the first reading process, and before it even comes to the House. Put out drafts of what you are thinking.”

This piece of legislation, which the submitter was specifically speaking to at the time, is a great example of how the legislation process could benefit from that kind of submission, because what we would see then is the experts go through, like I said, the permutations of this incredibly complicated legislation. They are working with it every day and they are willing to come back to the Government and say: “You have not thought this part through. This may work. This will work only so far.” You know, they were willing to come back with real contributions in terms of making legislation meaningful, and doing what it intended to do from the outset. So, we have these stated objectives in terms of what the legislation is trying to achieve. We get there in some part with this, but the reality is that all too frequently the fix-ups in these remedial bills will require fix-ups in the not too distant future. What we have seen, and I know it will happen, is that this particular piece of legislation has gone through the House quite quickly and the process has been there but, as I have said twice already, there have been substantive changes to the legislation post select committee. There has been no public review of those changes and so we are here now, and I still ask the question “Is it possible now to go back and say ‘Well, you have had all these changes. They need the public to submit on them. Where do we go to from here?’.”

What we suggest—and I think it is fair and reasonable; examples from tax experts are being borne out all too often—is more of a comprehensive analysis from the Government in terms of the unintended consequences. There were some submissions on this. Although they were positive in the main, some of the submissions pointed out that, actually, what we will find if these fixes are not doing what they are supposed to do will actually be counter-productive, add to the level of complexity, and actually create the complete opposite of the intended consequence of the objectives stated. That was submitted on this piece of legislation. What I would further suggest is that it is really not unreasonable to ask for the Inland Revenue Department to go back and reflect post implementation and to review what has been undertaken in, say, 5 years’ time—for the Inland Revenue Department itself to go back and do a review so that we can actually measure the effectiveness of this legislation. Submitters highlighted this in their submissions and made sensible calls highlighting the level of complexity, as I have said, and I agree with them. This possibility would help flatten out and minimise those complications. Tax should not be complex. New Zealand First says—and would insist, in fact—that it needs to be as simple as it can possibly be. The reason for that is basically for compliance.

Clayton Mitchell: And so David Bennett can understand it.

FLETCHER TABUTEAU: And so the chairman of the Finance and Expenditure Committee can understand it. But if it is simple, compliance is high and businesses will struggle to either avoid or evade their tax obligations. We know for a fact that some big businesses out there are running rings around our legislation and are avoiding their tax obligations. This bill does not even begin to address some of those bigger issues.

I do want to point out that in some parts this is not even a remedial bill. New Zealand First is highly concerned that this Government and this Minister have taken the opportunity to make substantive changes to the child support reform. For those in our community looking for cues as to how they can talk to legislation the title of this bill certainly gives nothing away as to suggest that this Government is making not just fixes but quite substantive changes. I want to point out for Kiwi businesses—it has been said on this side of the House quite emphatically so I will add New Zealand First’s voice to that—that the research and development tax losses section fails. It does actually fail to achieve its objective. It does not go far enough for Kiwi businesses. They are looking at high upfront costs in terms of trying to comply in order to gain those credits. In terms of timeliness and making the claims so that they benefit from the credits, there is a big lag there. It is incredibly complex, it is costly, and there is a huge disincentive to not even bother.

New Zealand First supports the stated intent of this bill, and, as I said at the start, actually, we agree that it does go some way to achieving what it says it intends to do. We do not think it goes far enough. It sounds like the entire side of the House does not think it goes far enough, but it does go some way. New Zealand First does support this legislation but we hope that the Minister will take on our earnest suggestions in terms of reflection and working through complex tax legislation. Thank you.

ALASTAIR SCOTT (National—Wairarapa): I rise in support of this, the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill. I am going to touch on a couple of points in the bill. The bill relates to, and supports, small businesses. It treats research and development expenditure as if the business had positive cash flows. It gives them the same cash-flow benefit as if it was a business with positive revenues, by way of a rebate. It also deals with expenditure that was not deductible until now, which should be—and that is known as the black hole expenditure. This is now deductible.

The third and most important part of this bill, clause 65, relates to the annual rates. As someone said on the other side, these rates are the same as last year. Also, we know that this party believes that people are better off with lower taxes. The Minister of Finance has already talked about potentially lower tax rates. Let us look at next year’s probability. If it was the other party we would know that it would be the higher rate, the tax and spend party that it is. An example of that is Labour’s recent policy announcement on free education: a handout that is only going to cost the taxpayer more. It is going to give the taxpayer a view that the rates under a Labour Government would only be higher, with no possibility of tax rates being lower, because the Labour Party does not believe that people know how to spend their own money.

This Government believes in lower taxes. It believes in people having the understanding and the wherewithal to spend their own money. The free education policy is a problem in that it does not allow the student to have skin in the game. When someone is given a handout it is taken for granted. The result of the new “bums on seats” policy that is being proposed by the Labour Party is that it will achieve nothing more than higher tax rates and higher Government expenditure. It will increase the number of buildings that are required to educate these students; it will take more lecturers, more staff, and more people to educate them—and for what? For bums on seats.

It has not worked in the past and it will not work in the future. It is important that these students have skin in the game so that they can appreciate the money that they are spending on their own education. There is plenty of evidence to say that graduates are paid more. They do earn more over their lifetimes, over their careers. It is only fair and reasonable that these people who do earn more as a result of their education should pay for a portion of their education. As we know, it is only around 25 to 30 percent of the total cost that they pay—the taxpayer is generous enough to pay for the other three-quarters. That, as the Prime Minister said today, is about the right balance, and that is what the people of New Zealand think to be fair and reasonable. They have no interest in paying for bums on seats for no real benefit.

Turning to other taxes, for example: by way of not voting for the supporting of the Trans-Pacific Partnership (TPP) one can only assume that the Opposition is in support of tariffs, because all that the TPP does is it allows us—

Hon David Cunliffe: Irrelevant and wrong.

ALASTAIR SCOTT: Well, it is an example of a tax. A tariff is a tax. By not supporting a reduction in tariffs you are supporting an increase in the tariffs and taxes.

The Green Party is quite confused. I am not even sure why it is called the Green Party; it should be more the “Multicoloured Party” or the “Technicoloured Party” because it has absolutely no understanding of taxes. Its members talk about the methane tax. They want to close down farming. They want to reintroduce their fart tax. But of course we know that if we take out the farmers of this country, if we take away the sheep and beef farmers, who on earth is going to pay for the—what was the quote—“warmer houses, the welfare kids, and the high living wage”? Apparently, those things just grow on trees. I am very pleased to support this bill to the House.

GARETH HUGHES (Green): Ngā mihi nui ki a koutou. Kia ora. I just want to touch on one of the last comments the last speaker, Alastair Scott, made, which was “Who’s going to pay for the warm homes?”. Well, I am proud that my party has worked with that party and that party to deliver hundreds of thousands of warmer homes. Who is going to pay for it? We agreed it was beneficial—in fact, it had a 2:1 cost ratio. So we would like to insulate more of those cold, damp, and unhealthy homes. And if the Government is just going to stand there and say “Oh well, what can we do about it? We can’t do anything about it. Who’s going to pay for it?”, people are going to continue to struggle, people are going to continue to get sick, they are going to go to hospital—and, sadly, we do see a terribly high number of Kiwis dying as a result of our housing. That is something we want to work on.

I rise to support the Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill. I do not think any party in this House is likely to put that on an election billboard—the title of this bill—but I do hope that innovation and research and development become an election issue, because it is a key, defining separation down the corridor of this Chamber.

This bill contains a whole bunch of tweaks to GST and bodies corporate, Working for Families, minor remedial matters, and we also see some changes around tax credits and black-hole deductible expenditure. What we see, and what the IRD estimates, is that the total tax impact of this bill is around $17 million a year. And this is what I mean by the dividing line separating the policies in this Parliament. On this side, we see the big change—$17 million in tax. Last election the Greens took a policy of an additional billion dollars—billion with a “b”—in research and development. We want to see a more diversified economy. We want to see a richer economy. We want to see a New Zealand that does not just export those bland brown paper bags of milk powder overseas, because there is a limit—and we are seeing it in our waterways.

There is no limit to the intellectual property, the services, the software, the products, the ideas that we could be coming up with. But if we are going to be just tinkering around the edges with an additional $17 million per annum, we are not going to get there. And I think it was quite telling, the last member’s contribution. The wheels are well and truly falling off the Government when it cannot talk about its own legislation, it cannot talk about its own track record, and it would rather talk about Opposition policies. That shows it is rattled. That shows it has run out ideas and it would rather talk about the other side’s ideas. All we are seeing are tweaks.

In fact, this legislation is a bit of a U-turn, because the Government opposed, and got rid of, tax credits for research and development. What do we see in the Government’s legislation? Tax credits for research and development. Although the Green Party supports it, because it is a step in the right direction, the Green Party has a vision and a fully costed-out plan to achieve a richer, smarter, more innovative economy. We would invest an additional billion dollars in research and development over the course of 3 years. We would get us moving in the right direction, away from the bottom half of the OECD as a percentage of GDP research and development spend. We would see more Kiwis getting patents. What we see under the current Government is research and development in the bottom half of the OECD—we patent four times less than the developed world average. We have an innovation problem. In fact, under the current Government, the New Zealand economy, according to the metrics, has become more simplified. That means we are more susceptible to shocks, as we are seeing in the dairy industry. We heard last week of a $17 billion hole in the Government’s accounts. A richer, smarter economy is the Green’s plan.

We would also not just throw additional amounts of money and pretend as if it matters, because that is short-term politics. That is cynical politics. We want to see a transformational shift in the way the New Zealand economy operates, because we want to see it operate for everyone. We want to make sure those kids are growing up in warm, dry, safe homes. We want to make sure they have a job in the future economy, not just the past one. That is why we are opposed to Minister Bridges’ gamble for oil drilling, which plainly is not working. No one is doing any drilling. Royalties are down $500 million, jobs in Taranaki in the sector are down 20 to 30 percent. This Government is doing everything it can under the sun to support one particular industry. We want to support the future. That is innovation.

Hon DAVID CUNLIFFE (Labour—New Lynn): It is a real privilege to have an opportunity to speak in this third reading of the lauded Taxation (Annual Rates for 2015-16, Research and Development, and Remedial Matters) Bill. Speaking of remedial matters, I cannot resist the urge to refer back to the contribution of the well-known member and celebrated winemaker Allan Scott, who said as follows in relation to tertiary studies—

Hon Amy Adams: Alastair! Allan is the other winemaker. Come on!

Hon DAVID CUNLIFFE: Oh, really? I thought he was famous! I thought he was famous! Maybe not. OK. So the National intake was not quite what it seemed. My apologies to the member over in the back row of the National caucus. His contribution was complete and utter tautology. It was, on the one hand, that the Government is giving outrageous handouts to tertiary students and they do not deserve a penny more, and then he went on to say: “But, those very same students go on to earn a massive fortune through the course of their lives.” Doh! The penny did not drop that, therefore, they pay more tax. Universities New Zealand this week has proved conclusively, by surveying literally millions of graduates, that pretty much every single graduate educated at the taxpayers’ expense returns far, far more in additional tax dollars to the Crown than it costs to educate them. If that is the quality of the Government’s analysis, you can see why this bill is as limited as it is.

This bill does three things: it perpetuates the myth that the National Government has an economic policy—it just rolls over for 1 more year the annual rates that it got wrong when it came in in the first place; it put up GST after it said it would put it down; and then it raised tax on the poor to pay the rich, and the result was the economy got worse. And now, as we look overseas and we see world stock markets in turmoil and the European banking system teetering on the brink of another global financial crisis, what great ideas does the National Government bring to New Zealand? Bills like this, which do nothing.

So the Government does not change tax policy to get the incentives right. It does not help the economy move forward. How does it treat research and development? Well, it got that wrong too. It got it wrong because this minor fix, this piece of window dressing for the black hole expenditure that the member opposite could not explain, is a pale version of what Labour and the Greens have been advocating for the last two elections—a comprehensive research and development tax credit that shares the risk between the entrepreneur and the inventor and the taxpayer, because the entrepreneur never captures the full benefit of the invention—it flows to the economy as a whole. Therefore, it is reasonable that we all help offset the risk.

That is bog-standard economic orthodoxy, pretty much throughout the OECD—except not here in good old “Planet Key”, because Mr Key thinks he is smarter than the rest. “No. New Zealand business is much tougher. It doesn’t need a comprehensive tax credit. We’ve got a better idea—bureaucratic hoop jumping. We will force good Kiwi businesses to jump through hoops, prove their wares to a bunch of bureaucrats in Wellington. And if they are very, very good and say ‘Pretty please, with sugar on top.’, then they will get a grant in addition to this minuscule offset.”—which is only a loan, because they have to pay it back later.

The Callaghan Innovation system is so flawed that its crowning achievement was to give a grant to the competitor of Team New Zealand, Larry Ellison’s Oracle America’s Cup bid. Was not that fantastic? And there are publishing companies whose next stop was the SFO—the Serious Fraud Office, or German subsidiaries whose next act after taking the cash was to relocate back to Germany. It is a joke, and any small business that is trying to innovate will tell you that it is clumsy. So what fascinates the Labour Opposition is that Government members may talk the talk of the market, but they cannot even walk the walk of the market very well, which is why the business community is starting to lose confidence and chafe at the bit, and boring, pedestrian, mean-nothing, do-nothing bills like this do not help.

JAMI-LEE ROSS (National—Botany): I do not think we need to ask this Parliament about the tax policies that this Government has. In fact, the New Zealand public passed judgment on that member and his research and development tax credit policies and his policy proposals in 2014, and how did that go for him? Not very well. In fact, it went so poorly that even Tim Groser beat him in the party vote in New Lynn, and he was out of the country most of the time. So David Cunliffe is not one to stand up and lecture on research and development policy. His policies were soundly rejected by the public.

I am pleased to be supporting this bill, as other members on this side of the House are. It is a bill that implements the tax rates and tax policy that fund the New Zealand Government—a New Zealand Government that is delivering better public services for New Zealanders. This Government has a policy programme that is delivering higher wages for New Zealanders. It is delivering lower unemployment rates in this country. It is a policy programme, funded by these income tax rates, that is leading to more social housing being provided for New Zealanders; it is leading to better health policy for New Zealanders; and it is leading to better education outcomes for New Zealand children—and I am proud of that, as other members of this House are.

I have sat on select committees for a couple of weeks now with Mr Fletcher Tabuteau. I see that he was speaking earlier in the debate. I sat on a few select committees with him where he has talked a lot about the Ministry of Foreign Affairs and Trade. He seems to seriously dislike it.

The ASSISTANT SPEAKER (Lindsay Tisch): No, no.

JAMI-LEE ROSS: I am raising this, Mr Assistant Speaker, because under clause 65 the income tax rates are set, and those taxes go on to fund policy advice to the Government. The Ministry of Foreign Affairs and Trade does a phenomenal job in providing good quality advice to the Government. It has provided advice to the Government around the Trans-Pacific Partnership—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

JAMI-LEE ROSS: —which shows huge growth for New Zealand.

The ASSISTANT SPEAKER (Lindsay Tisch): No, no, we are not into that. Good try.

JAMI-LEE ROSS: Mr Assistant Speaker, that member, Mr Tabuteau, has deliberately attacked a number of times the policy advice that is funded by this bill. I actually want to outline for the House that the tax rates that go on to fund that advice should not be attacked by that member. As we have seen when the Ministry of Foreign Affairs and Trade has provided advice before around trade policy—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

JAMI-LEE ROSS: —and around free-trade agreements, its advice has actually been exceeded considerably by the outcomes. Mr Assistant Speaker, I just wanted to touch briefly on that point. I am pleased that you have allowed me to do that very briefly.

I just simply say to the House, so we can move on, that this is a good bill that allows the New Zealand Government to carry on with the policy proposals it is putting forward, which are leading to greater growth, better outcomes for New Zealanders, and better public services, and we support that.

The ASSISTANT SPEAKER (Lindsay Tisch): Dr David Clark—on the subject.

Dr DAVID CLARK (Labour—Dunedin North): This bill is one we have indicated we will support, on the basis that it makes our tax system more robust. That is its most basic and important function as a bill, in my view. So that becomes the overriding reason that we support the bill. In this bill we are, of course, confirming the annual rates of taxation, which are the same taxation rates that were confirmed in the Government’s 2010 tax package, where 40 percent of the value of those tax changes went to the top 10 percent of earners, and the bottom 20 percent got just 2 percent of the value of those tax cuts, as they were called—and, of course, it got swallowed up in GST at the time, as John Key broke his promise not to increase GST.

So this is what we do in this bill. We confirm that 2010 tax package. Let us not forget that in doing that we seem to be, under this Government’s stewardship, committing this country to further borrowing. This Government, sitting opposite us, is a Government that has borrowed more money than the Muldoon Government borrowed.

Hon Ruth Dyson: What?

Dr DAVID CLARK: This is the Government that has created more debt for New Zealand than any other Government in New Zealand’s history. Part of the borrowing has been to fund these tax cuts.

Chris Bishop: We blame you.

Dr DAVID CLARK: And they do blame us—the member is quite right. Although there is absolutely no evidence to support the claim, they blame us for the fact that they have borrowed and borrowed and borrowed to fund the tax cuts they put through in the 2010 tax package, where all of value went to the very top earners and the middle class missed out again. They are working with this tax package to ensure that their mates in the in-club—a very small club, I might add—are looked after into the future and to make sure that middle New Zealand sees none of the benefits of their economic gains.

Of course, today we also heard more evidence coming out in recent days that shows that New Zealand’s GDP is not growing per person. The only thing that has grown our GDP in the last year, basically, is immigration. So individuals are not better off. In fact, in many regions of New Zealand real household incomes are still lower than when National took office all those years ago. New Zealanders know this to be true. They experience it in their everyday lives. They know that the Kiwi Dream is leaching away from them. They know that these tax changes that we are again confirming this year, in this bill before us, are responsible for them being worse off over time, as the borrowing and these tax changes go to fund the very wealthiest 1 percent of New Zealanders to live the lifestyle that many people could only imagine in their wildest dreams.

Most of New Zealand is missing out under this Government. It has a terrible record. It actually has the worst economic record of any Government in the last 50 years. We know for certain that no one has borrowed more. We know that no one has driven inequalities in quite the way they are being driven now, as we have the lowest homeownership rate in 60 years.

The OECD put out a report about a year ago saying the inequalities in New Zealand had acted as a major handbrake—a major handbrake—on our economy. It is about 15 percent smaller as a result of inequalities than it would have been otherwise. The tax rates in this bill, which we are affirming this evening, are a part of that picture. This is a Government that just does not seem to care for the middle class. It is concerned only with that very tight in-club, that very tight Cabinet club, and their well-being, and that is coming at the expense of ordinary New Zealanders, who once used to dream of owning their own home. It was not such an unreasonable thing to dream of.

When I was a kid, growing up, I think most people imagined that they would own their own home. Now I see a large number of my peers—people in my age group—saying it will never happen for them because housing has got so out of control, particularly in Auckland. The average house price there is now around $930,000, and it will soon hit a million dollars—for the average house. It is one of the most expensive housing markets in the world. Something is out of whack.

James Shaw: The most.

Dr DAVID CLARK: It is the most, my colleague in the Green Party says—the most expensive. This is where we are heading to as a country. This is not the New Zealand that we should have. This is not the New Zealand that we should have, and yet in this bill we are once again affirming those tax rates.

We know why inequality is bad for us. We know that when kids go to school hungry they do not learn as well. It is not rocket science. We know that if they go to school without shoes on, without raincoats, they get illnesses that are preventable. They probably feel the world is against them, and it probably is, actually. They are more likely to end up in the prison system. They are more likely to be unable to make the contribution they otherwise could make, as a result of inequalities.

We know that inequalities are bad for us when people are so desperate to earn money, because they have grown up in poverty, that they throw every other care aside—other societal cares. Think of the person who goes out to become a wealthy stockbroker, exploiting loopholes in financial systems in order to make sure that they can provide for the next generation, because they grew up in poverty. That person might well have been better as a neurosurgeon. They are choosing to use their talents out of desperation when they live in an unequal society.

We know that less equal societies do not invest in infrastructure in the same way that more equal societies do. We see that in the United States. The state of many major highways is woeful, compared with the major investment in places that are committed to public infrastructure, like China. We see China, in recent decades, is on the way up as it has invested in public infrastructure, and the United States is struggling.

These are meta-trends. We know we all need hospitals and schools, and we need a taxation system that supports them, but the more our taxation system drives inequality, the greater the burden on those particular systems and the greater the cost of running them effectively. We need a more equal society, and this Government just does not care. It seems determined to focus on making sure that the 1 percent, the very wealthiest of the wealthy, are looked after at the expense of those in the middle—at the expense of those in the middle.

We know that when we have a fairer society, everyone feels like they are included. Everyone feels like they have a role to play. Everyone feels like they can give of their best, and that it will be valued. That makes for a wealthier, more prosperous, and happy society.

But this Government opposite seems determined to focus only on making sure the 1 percent are better off. It is focused only on some superficial targets around surplus. We have seen the Minister of Finance deliver his first surplus after 7 years of Government. He had been promising it for two elections, has finally delivered one, and now he is saying he cannot do it again. The last Labour Government delivered nine surpluses in a row. There was zero net debt at the end of the day. The last Labour Government had a very responsible fiscal position. This one has borrowed more than any other Government in New Zealand’s history.

Chris Bishop: Absolute rubbish—left us with a structural deficit.

Dr DAVID CLARK: It has borrowed more than any other Government in New Zealand’s history, and that member knows it. He is embarrassed, and well he might be, because this Government has a shameful economic record—a shameful economic record. It has failed to recover after the financial crisis. It was gifted zero net debt. Bill English said: “That’s the day, the rainy day we’ve been saving for.”, that the Labour Party had saved for. They have spent that money through the global financial crisis.

Nobody would say that was wrong, initially, but since then they could have got New Zealand back on track. They could have had a plan. Instead of going from one dairy price bubble to the next—blaming the farmers when things went wrong, like that Government does—they could have set about diversifying the economy, creating a plan, and creating a tax structure that incentivised research and development properly, rather than tinkering around the edges to protect entrenched interests, which is their way of doing things. They could have created an economy that was humming, that was really in New Zealand’s interests.

We could have been debating a tax bill that had much more proactive measures in it—to create a better society, to create a better country, and a wealthier, more prosperous New Zealand where people actually could afford to own their own homes, where they were not worried about non-resident foreign buyers bidding up the market so that the whole market was unaffordable in Auckland for the average Kiwi to buy a home in.

This is not the New Zealand we all dream of. This is not the Kiwi Dream. This Government has lost touch with the aspirations of New Zealand. They were there, they spoke to those aspirations when they came in, but now they look jaded. Now they look tired. They have given up on ordinary middle New Zealand, and they are now only looking to the aspirations of the 1 percent, in the hope that they can fund another campaign, cling to power for another term, and ram through more bills that preserve the status quo and protect the interests that they have, and not the interests of ordinary middle New Zealand.

ANDREW BAYLY (National—Hunua): Have we not heard some weird and wonderful things tonight? I heard, earlier on, that the Australian research and development tax system is much more simple than the New Zealand system. Well, that is garbage, I have got to say. I have just listened to the previous speaker, David Clark, talk about debt levels and tax rates for New Zealand.

I want to take the opportunity to deal with the debt issue that the previous speaker has just been talking about. He is claiming that this country has got a massive level of debt. I just wish that this person would have a historical context in which to make a statement like that, and actually look at some of the facts. If we look at the facts today, our current debt is 26 percent of GDP. By 2020, in approximately 5 years’ time, it will be about 20 percent.

If you look at the Lucky Country, Australia, its debt levels are currently just about ours, but by 2020—the same period; in 5 years’ time—they will be just under 40 percent, i.e., twice New Zealand’s rate of debt. If we look at Europe and the UK, debt is currently just over about 80 percent to GDP, and in 5 years’ time it will be at that same level, which, again, will be four times our debt level. We would be having a totally different conversation.

If we look at America, that place that a lot of people like to talk about, current debt levels—Mr Clark, you should stay and learn a little bit about debt if you are going to talk about it. Current debt levels in the US at the moment are 107 percent of GDP, and are expected in 5 years’ time to be about 100 percent, five times New Zealand’s current debt. It is five times! And you were saying that New Zealand is out of control, Mr Clark.

Anywhere in the rest of the world we would be talking about how we are going to put up tax, how we are going to be reducing all our social expenditure. Well, we are lucky to be in a situation, through prudent management, where we can even be talking about introducing research and development tax credits, dealing with black hole expenditure, and all that good stuff, to try to make this economy much more successful than where it is at, at the moment, and grow it even faster.

This bill actually has four key elements, and unfortunately we have, really, only focused today on research and development, but I would like to say that it also deals with Child Support Act changes. It also deals with GST on bodies corporate—again, something that people wanted; 13,000 body corporate owners have come to us. Finally, it deals with controlled foreign companies and foreign investment firms. Again, these are good tax measures, they are comprehensive, and they are all part of driving this economy forward. Thank you very much.

Bill read a third time.

Bills

New Zealand Business Number Bill

Second Reading

Debate resumed from 9 February.

JACINDA ARDERN (Labour): It has been an absolute education to sit in on the tail end of that last debate and learn what causes, on that side of the House, a mild cardiac infarction from its various members. It is one of two things—either mention of Labour’s positive economic record, or mention of the dire state of the Crown books by virtue of that Government being in power. The fact that we have $78 billion worth of debt—as my colleague rightly pointed out, debt that would make Muldoon blush—is obviously the cause of great embarrassment for members like Chris Bishop, who seemed to be very animated at any mention of the fact that Labour has a proud record of getting net Crown debt down to almost zero when we were in Government.

I might add on that, given that we are now talking about the positive record of working alongside small businesses, that Labour has an excellent record of starting progress towards making sure that Government was more aligned to the needs of small businesses in New Zealand. But one thing that we, as a Government at that time, would acknowledge was that there was always more that could be done—there was always more that could be done. In this case, if the best job of the Government on that bench in identifying what more could be done for small businesses is the small business number, then we are in a pretty poor space.

As I talked about in an earlier speech, getting the right people, having access to capital, and making sure that businesses have time to build business plans and work on their own business are some of the three biggest challenges that small businesses face. Yet this business number, which we are supporting with heavy concerns, does very little to address some of those key concerns. As I want to point out—it has been pointed out by some of my members already—the New Zealand Business Number Bill itself has a number of exclusions in it. One of those important exclusions, one of those areas of Government that will not be covered by the number, is local government. If you ask any small business which department or interface with government they struggle with the most, local government will be raised, and yet there is an exclusion for local government here.

There are also concerns around the level of uptake. If we do not get a good level of uptake among small businesses to this number early on, then there is the chance that we will just have an extra identifier that is not properly integrated into existing Government systems. And, finally, the view from the Chartered Accountants Australia and New Zealand that the benefits for business may be overstated is not something that is lost on this side of the House. The Better Public Services target that the Government has set for itself around small business is what? It is reducing the cost of compliance, and by compliance it simply means form-filling when it comes to small businesses’ interface with Government. If you look, for instance, at the cost of a business registering in New Zealand, that is a pretty nominal cost—it is pretty small. The Government has not set itself an ambitious target when it comes to genuinely helping small business. It could start by improving provisional tax, it could follow the New Zealand Institute of Chartered Accountants’ policy—there is so much more that it could have done.

SIMON O’CONNOR (National—Tāmaki): I think we have to begin simply by reminding the member who has just sat down, Jacinda Ardern, that this is actually the New Zealand Business Number Bill; this is not actually the “Small Business Number Bill”. This is something that actually those on the select committee who processed this would understand from the outset. I have to say though that it is particularly good. It is particularly good, and unfortunately I do not have the exact number of questions that have been asked in the House around small business but it is actually really good to—I believe Jacinda Ardern may be the member from the Opposition who speaks on small business. We are not sure. She has not stood up and answered or responded to any questions, but I just remind her, as a member of the Labour Party, that this is the New Zealand Business Number Bill. It does obviously apply to small businesses. It also applies to the larger ones, and I think, having sat on the Commerce Committee throughout the discussions on this, it has been welcomed and well received. Naturally, in any process there are points of feedback, and I think if you read the select committee report it is clear that there are some elements that we discussed and as a committee came to a conclusion around.

This bill has been welcomed. I was out just tonight, talking with people from within the airline industry—so obviously not small businesses, but significant. They can see the benefits of this. I am also very conscious within my own electorate that small businesses are welcoming this. In fact, when I think of the fine electorate of Tāmaki, the likes of a new superette within the Stonefields community has been set up. There are some local businesses around—well, actually there are far too many to name so I had better be careful here of making sure I do not miss anyone out. The long and the short is that small businesses within my own electorate—and it goes across the country I am sure—welcome any initiative that enables them and us as a community to engage more easily and readily with Government. It makes perfect sense.

We hear remonstrations from the other side that it is just noise—a little bit, in fact, like the points earlier around taxation and so forth from the other side, that it is just noise. This is one of the Business Growth Agenda initiatives. It is one of the targets that Minister Joyce and others have set out. Like so many things this Government has done, we have achieved that. I think the committee has worked incredibly hard to bring it to this position.

I am not going to go through all the detail. I think those who are interested and who are following this know that the initiative itself is positive, it is good. How can there be any complaints about making business engagement easier, right across the sector, between businesses themselves—small or large—or between Government and its agencies? So I commend this bill to the House. I look forward to it progressing swiftly. What more can be said?

JAMES SHAW (Co-Leader—Green): It is a pleasure to rise and take a call on behalf of the Green Party in relation to the New Zealand Business Number Bill. It is quite a pleasure to come back to this bill, after some time; when I was on the Commerce Committee, about a year ago, is when this first got introduced to the House. We have supported this bill the whole way through its process. I think it is really important.

There are a number of concerns about the implementation of how business numbers will be rolled out. There are a number of concerns: for example, the previous speaker from the Labour Party, Jacinda Ardern, raised concerns about the exemptions. There are some concerns about the costs that will be imposed in the short term, and whether we have created a structure so that we can soak up those costs to make sure that they are not onerous. There are, obviously, some outstanding privacy concerns, which you have to balance against the ability to hunt down fraud and so on. But none of those concerns would deter us from supporting this as an initiative. I think it is really important to support the intention of the bill, which is to make things simpler for businesses and trading enterprises.

The last few speakers have spoken, in particular, about small businesses and the advantages that they may gain from having, essentially, lower transaction costs with Government through use of a business number. But I want to also pick up on some of the other forms of trading enterprise. This kind of system already exists for limited liability companies in New Zealand—a particular type of company—and, of course, what we are doing here is essentially extending out an existing programme, or a similar programme, to other forms of trading enterprise. Of course, in New Zealand there are tens of thousands, if not hundreds of thousands, of trading enterprises that you would not normally think of as businesses, as trading enterprises: non-profit organisations, some of which trade; a lot of charity shops; people with online presences; social enterprises; organisations that are subsidising non-profit work using commercial models; and so on. All of those will now have access to business numbers through this kind of system. We think that that is really good, to start treating different types of trading enterprise in the same way that we have been already treating your standard, meat-and-potatoes limited liability company.

We do note that there are some concerns about privacy, and we have been seeking reassurances during the course of the bill that those go through. I want to acknowledge that there is still some discomfort that having this kind of system in place may enable Government agencies to, essentially, go into places and get information that they should not normally be getting. Again, we do not feel that the level of risk there is so high that it would deter us from supporting this bill, but I think it is important that as this gets implemented we keep an eye on that, that we make sure any complaints or concerns are addressed, and that, if there are those sorts of complaints, we do take notice of them. And, of course, if there are mistakes, we then learn from those mistakes and we improve the implementation as we go forward.

One of the concerns that we want to keep an eye on, of course, is whom this is for. Sometimes Government will launch an initiative and say that this is to make things easier for business, or for the public sector, or for the community sector, or whomever, and then what happens in actuality is it ends up being for the convenience of Government rather than the group that is actually using it. Again, I think that in its early days, as we start implementation here, it is really important for us to be very highly tuned to not just the rate of pick-up but the quality of pick-up amongst the organisations that are supposed to be using this, and to get a sense of whether this is actually delivering the value to small business and to other trading enterprises that we say it is—or is the value actually being delivered primarily to Government, in the form of making it easier for Government?

One of the specific concerns that I am really interested in is that in New Zealand there has been a rise in recent years of ghost companies—particularly, small traders who set up shop, run up accounts and bills with clients and with suppliers, and then declare bankruptcy. They then close up shop, open up again a few weeks later using a sort of vague nom de plume, and, essentially, go back into the same type of activity without honouring their bills. One of the things that the New Zealand Business Number Bill may enable—and, I think, one of the opportunities that we have got—is an ability to start to keep track of what is, essentially, low-level business fraud.

It has a huge economic cost. We know that there are hundreds of thousands of sole traders and tiny, tiny little organisations in this country. The cost to them of trading with someone who is, essentially, fraudulent, and who does not have an intention to honour their bills, is huge. I get complaints about it all the time. As I am travelling the country and talking to businesses about what their concerns are, one of the chief things that keeps coming up, over and over again, is the sense that people are being ripped off by dishonest traders who, because they are able to get away with it, are, essentially, just closing up shop when they want to. One of the things that this does is it gives us an opportunity to just start tracking dishonest traders a bit more. That is one of the reasons why I personally am quite keen on supporting this bill.

This has not been set up here, but one of the opportunities here is that—what this does is it gives Government a one-to-one relationship with pretty much every single trading organisation in the country. While it is not in the same way that you should have an Inland Revenue Department number and you should have a one-to-one relationship with the Government via inland revenue, what this may enable is an opportunity for businesses to start offering aggregate services to huge swathes of tiny organisations. One of the bizarre outcomes of the economy that we have created, of course, is that if you work for a large corporate, you probably have health insurance, you probably have a company car, you are able to access discounts—

The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair.

Debate interrupted.

The House adjourned at 10 p.m.