Tuesday, 1 August 2017

TUESDAY, 1 AUGUST 2017

TUESDAY, 1 AUGUST 2017

Mr Speaker took the Chair at 2 p.m.

Prayers.

Points of Order

Personal Reflections and Unparliamentary Language—Use of “sponsor”

DAVID SEYMOUR (Leader—ACT): I raise a point of order, Mr Speaker. I raise for your attention a matter that I have only now been able to raise, and it relates to question time last Thursday, and Standing Order 120. During that exchange, the Minister of Health said that I was being motivated by my “sponsor” in asking questions. Mr Speaker, I take grave offence at that insinuation and I ask that you require him to withdraw and apologise.

Mr SPEAKER: I had a look at the transcript of question time, and my interpretation of the transcript would be that the words that the member has now quoted were not exactly the words that were used by the Minister in answer to the question. He did use the word “sponsor”. I think that on reflection he could have chosen a better word to use, but I do not believe, considering it was an answer to a supplementary question, that the criticism just raised by the member is valid on this occasion.

DAVID SEYMOUR (Leader—ACT): I raise a point of order, Mr Speaker.

Mr SPEAKER: Is this a fresh point of order that is being taken?

DAVID SEYMOUR: Well, yes it is, Mr Speaker, in that what I am saying is that I take offence at the use of that word.

Mr SPEAKER: It has been a well-known ruling for a long time in this House that if the member takes offence, he has to do it at the time. To do it a number of days later is simply too late for me to deal with it in that way.

Oral Questions

Questions to Ministers

Housing Affordability and Availability—Homelessness and Emergency Housing

1. JACINDA ARDERN (Leader of the Opposition) to the Prime Minister: Does he stand by his statement on the housing crisis that “I wouldn’t call it a crisis. We have strong demand, we have an uplift in prices—these are good problems to have actually.”?

Rt Hon BILL ENGLISH (Prime Minister): First of all, can I congratulate the member on her new role as Leader of the Opposition. I stand by my full statement on emergency housing special-needs grants, which went on to say: “This is trying to deal with the real need that may have been hidden before, … more houses on the ground is what’s going to matter and more emergency housing.” I also stand by my statement that this is the first Government to ever invest directly in emergency housing—around $300 million—creating 8,000 places in transitional housing. [Interruption]

Mr SPEAKER: Order! Before I call the member for a supplementary question—I can appreciate that there may be cause for a little bit of excitement, but there still has to be a process by which questions are asked and answers are heard. I will accept a reasonable amount of interjection, but if it gets to the stage where it is unruly and causing problems, I will not hesitate to be asking some members to leave the Chamber.

Jacinda Ardern: How long has this issue been “hidden” for, as he claims, when we now have the worst homelessness in the OECD?

Rt Hon BILL ENGLISH: I simply disagree with the member’s assertion around international comparisons. What is relevant for New Zealand is that in the face of what was a sharply rising housing market, which has now calmed down a bit, we have provided extensive emergency housing, of which there are today 1,500 places tenanted and available, as well as expanded the Housing First programme, which deals with people who are actually sleeping rough because there is nowhere that they have shelter.

Jacinda Ardern: If it is not a crisis, how did his Government get into a situation where it needs to spend $139,000 a day putting homeless people up in motels?

Rt Hon BILL ENGLISH: The Opposition cannot have it both ways: that the Government is not doing enough but is spending too much. The fact is that a fast-rising housing market, driven mainly by big problems with our planning system, means that low and middle income families are most affected. The Government has responded with extensive investment in transitional housing and housing for those who are actually sleeping rough.

Jacinda Ardern: If the Government has responded as he claims, why for every family he expected to request an emergency housing grant did 20 turn up? Does that mean the homelessness problem is far bigger than he accepts?

Rt Hon BILL ENGLISH: That is all old news; that all happened last winter, when the grants were put in place, and it turned out there was strong demand for the grants. The next step in dealing with rising housing costs was announced in the Budget with the Family Incomes Package, where families with the highest housing costs will, at 1 April next year, be receiving in many cases over $100 a week more accommodation assistance to help them with their housing costs.

Jacinda Ardern: If this issue is so last winter, why are we paying $139,000 a day to pick up a problem that he has still not addressed?

Rt Hon BILL ENGLISH: The problem is being addressed in a wide number of ways, because it needs to be. We need more houses on the ground, faster. That is why we work with counsellors and put up a billion dollars for housing infrastructure, more emergency housing, and more social housing. I want to acknowledge the support of the Greens and New Zealand First for the increases in accommodation supplement, which on 1 April will help thousands of families with their very high housing costs.

Jacinda Ardern: Does part of his plan to address this issue in a “wide number of ways” include selling State houses so that we now have 3,000 fewer social houses today than when he came into office?

Rt Hon BILL ENGLISH: I want to thank the other parties for their support for the reforms of State housing. The pressures in the market have shown that we have too many of the wrong sorts of houses, in poor condition, in the wrong places. This Government has grappled with the complex task of ensuring there is more appropriate social housing and growing numbers of social houses available to those who need them.

Jacinda Ardern: Will he work with me to ensure that everyone has an a affordable, safe, secure place to live, by building starter homes, by banning overseas speculators, and by requiring all rentals to be warm and dry, because that is what all New Zealanders want this Parliament to do?

Rt Hon BILL ENGLISH: Overseas purchasers of houses in New Zealand now have to pay a withholding capital gains tax when they sell them. That may have been part of the dampening effect on the market, as it is now. The other measures that the member has mentioned are under way, including the regulation that all houses by 2019 need to be insulated.

Economy—Confidence

2. MATT DOOCEY (National—Waimakariri) to the Minister of Finance: What reports has he received on confidence in New Zealand’s economy?

Hon STEVEN JOYCE (Minister of Finance): Confidence in New Zealand’s economy continues to be strong. ANZ has released its business outlook yesterday, showing that business confidence rose on a seasonally adjusted basis from 26 to 28 percent. ANZ notes in its commentary the diverse range of sectors driving this higher level of confidence—in fact, confidence ratings at this level point to strong economic momentum and growth of around 3 percent over the next 12 months or so, and that is important for growing more jobs for Kiwis.

Matt Doocey: What effect will this confidence have on exporters and job seekers?

Hon STEVEN JOYCE: Our export sector is particularly confident, with export intentions increasing from plus 27 to plus 33, which is its highest level since April 2014. In addition, employment intentions rose from plus 24 to plus 26, which is the highest level since May 2014, and that is good news for graduates and job seekers. This result reinforces the challenges some forums are having finding the staff they need, confirming this Government’s position that now is not a time for a breather or even to have a reset.

Matt Doocey: What is driving higher levels of confidence in our growth and economy?

Hon STEVEN JOYCE: This Government’s strong and consistent economic plan and political stability are giving companies the confidence they need to make long-term investment decisions, whether it is Fonterra investing $150 million in its new cream cheese factory in Darfield, Air New Zealand adding another 180,000 extra seats over the summer tourist season this year, or a mum and dad business taking on its first employees with a 90-day trial period, the Government’s policy programme is allowing companies to add more jobs for Kiwis and increase their wages, and that is what is important for New Zealand families.

Matt Doocey: What is the Government doing to boost confidence and support companies that are expanding or exporting?

Hon STEVEN JOYCE: It is doing many things, including in the Budget in May, which saw New Zealand’s total infrastructure and capital investment rise to $32.5 billion over the next 4 years, which is a 40 percent increase on that for the last 4 years. This is a massive commitment to supporting New Zealand’s growing economy and society. Over the next 4 years we are adding new hospitals, new schools, new roads, and new rail services at very high levels. One of the benefits of a strong economic plan and strong growth is the capability to build the new infrastructure that New Zealanders expect in a modern, successful society.

Todd Barclay—Southland Electorate Office Allegations, Prime Ministerial Conduct

3. Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements on the Todd Barclay matter; if so, why?

Rt Hon BILL ENGLISH (Prime Minister): Yes; because I said them.

Rt Hon Winston Peters: When he said “I have no responsibility” for the Todd Barclay matter, why did he send over 450 text messages to Glenys Dickson, many early in the morning and late at night, in the 12 months before she resigned on 7 February 2016?

Rt Hon BILL ENGLISH: That is no matter of ministerial responsibility so I cannot comment on it further.

Mr SPEAKER: Order! I am just waiting for some silence on my left.

Rt Hon Winston Peters: If he had no responsibility, as he says, why did he send Glenys Dickson 31 text messages in the days immediately before her resignation?

Rt Hon BILL ENGLISH: Well, just the same answer—I have no ministerial responsibility for that and so I cannot comment on it any further.

Rt Hon Winston Peters: Why does he say he has nothing further to add, because Glenys Dickson received 22 text messages on 6 February, the day before she resigned, and a further 26 text messages in the 6 days after she resigned? Why did he not add that when the media asked him what he knew about it?

Mr SPEAKER: Again, in so far as there may be prime ministerial responsibility, the right honourable Prime Minister.

Rt Hon BILL ENGLISH: Just the same answer—I have no ministerial responsibility for that. The whole matter is being dealt with by a police investigation.

Richard Prosser: I raise a point of order, Mr Speaker.

Mr SPEAKER: Order! [Interruption] Order! It is a point of order, and I wish to hear it in silence.

Richard Prosser: The Prime Minister did answer the primary question, which was a question on notice asked to him in his capacity as Prime Minister. I am a little puzzled and seek your guidance, Mr Speaker, as to how he can now refuse to answer supplementary questions along the same lines by saying that there is no ministerial responsibility.

Mr SPEAKER: I am very happy to give the member my guidance, and this will be the third time that I have given him my guidance on this matter. There have been a number of statements made by the Prime Minister, and I am not now able to judge whether he has made them as Prime Minister, as the former electorate member for that particular electorate, as the leader of the National caucus, or in what other capacity. The only person who knows on what basis he has made any of those comments is the Prime Minister himself. He is the only one who can answer that question, and that is the third time I have risen to my feet to give exactly the same answer to Mr Prosser, so please take note of it on this occasion.

Rt Hon Winston Peters: Could the Prime Minister inform us, when he says “I have nothing further to add,” that this document has hundreds and hundreds of text message records, from himself to Glenys Dickson—someone with whom he has claimed in this House to have had no peripheral interest when it came to her occupation or her employment, or her sacking or removal from office? Why could he not just tell the public the truth on the matter?

Mr SPEAKER: Order! The last part of that question is completely unnecessary. The Prime Minister can answer the first part, in so far as there is—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Whether it is unnecessary is not for you to decide. I am asking him whether he will tell the public exactly what went on with the taxpayers’ money.

Mr SPEAKER: Order! The member will resume his seat. I refer him to Standing Order 380. It is very lucky for the member that I am allowing the first part of his question to stand, and for the Prime Minister to have the opportunity to respond, in so far as there is prime ministerial responsibility.

Rt Hon BILL ENGLISH: That is right. I do not have any ministerial responsibility for that.

Wage Rates—Wage Increases Compared With Living Cost Increases

GRANT ROBERTSON (Labour—Wellington Central): My question is to the Minister of Finance and asks: what was the annual average ordinary-time hourly earnings increase over the last year—

Hon Paula Bennett: You should have stepped up, Grant.

GRANT ROBERTSON: What about you, Paula? It is probably time for you to do that right now, actually.

Mr SPEAKER: Order! Let us call that one-all. We will now get on to the question without interjection. The member can start his question again.

4. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: What was the annual average ordinary-time hourly earnings increase over the last year, and what percentage of workers received pay rises of less than 2 percent last year, according to Statistics New Zealand?

Hon STEVEN JOYCE (Minister of Finance): For the member’s benefit, the questioner is probably a day ahead of himself, as there is some current data coming out tomorrow: the household labour force survey for the June year. But according to the March data, which is the last data we have, average total hourly earnings rose 1.6 percent for the year. However, average weekly earnings rose 2.2 percent over the same period, which shows that in a growing economy people work more hours and take home more pay. A break down of the labour cost index showed 33 percent of New Zealanders received an increase of over 2 percent, while 67 percent received an increase of less than 2 percent in the period.

Grant Robertson: Can he confirm that his Government has delivered, according to the Ministry of Business, Innovation and Employment rental bond data, an increase of 4.9 percent in rents, on average, across New Zealand over the last year compared with that wage increase of 1.6 percent?

Hon STEVEN JOYCE: No, I cannot. I do not have that information to hand. But I would say to the member that, actually, concern for people’s living costs is something that this Government is really focused on, and that is why we put together the Family Incomes Package in Budget 2017, which increases after-tax incomes on 1 April next year by around $26 a week for about 1.34 million working New Zealand families. Our compatriots in the Greens and New Zealand First voted for it, and I note that the member’s party did not.

Grant Robertson: I raise a point of order, Mr Speaker. I know you do not normally allow the tabling of publicly available information, but I am just concerned the Minister is a bit behind on his—

Mr SPEAKER: Order! The member will resume his seat. With that sort of behaviour, he will be very lucky to continue his line of supplementary questions.

Grant Robertson: Can he confirm that his Government has delivered, according to the Statistics New Zealand food price index, an increase in costs of 3 percent on average across New Zealand over the last year compared with wages growing by 1.6 percent?

Hon STEVEN JOYCE: The member seems to be labouring under some sort of delusion that the Government controls all prices in New Zealand, and, of course, unlike what the member would like, everything is not run centrally from the Minister of Finance’s office. But I bring good news to the member: in terms of the period that the Government has been in office, which is a good period to take these things, real after-tax wages have increased 19 percent under this Government, which is much higher than the cost of living and compared with just 5 percent under the previous Government. But I invite him to continue his questions.

Grant Robertson: Can he confirm that his Government has delivered, according to the latest Statistics New Zealand Consumers Price Index data, an increase in the costs of medical and dental services of 2.7 percent and 3.6 percent over the last year compared with wages growing by 1.6 percent?

Hon STEVEN JOYCE: Again, I am sorry but the member is labouring under an illusion about what control the Government has. But the good news for the member is that after-tax wages, under this Government, have been increasing and also faster than the rate of inflation. He can pick apart elements of inflation, and he is welcome to do so, but the other thing we are doing is making sure that people do get a benefit from a growing economy, in addition to their wages, and that is the Family Incomes Package, which delivers 1.34 million families an average of $26 a week.

Grant Robertson: Can he further confirm that the cost of living is going to get worse when, according to page 6 of the “Additional Information” section of his own Budget, the expected annual increase in real wages over the next 4 years is, in order, 0.0 percent, 0.6 percent, 0.7 percent, and then 0.0 percent?

Hon STEVEN JOYCE: Again, for the member’s benefit of my experience, those numbers often do not pan out in terms of the increase in wages, because, actually, our increases in wages have exceeded those predictions in the past. But, again, the member is right to raise the concern. The good news for the member is that we have one of the strongest-performing real-wage increases in the OECD. He had the opportunity a short time ago to encourage his colleagues to vote for the Government’s Family Incomes Package, which delivers more money into people’s hands—$26 a week to 1.34 million families from 1 April next year. So he says he cares, but then they vote against it.

Schools—Risk Index

5. TODD MULLER (National—Bay of Plenty) to the Minister of Education: What recent announcements has she made on funding for children at risk of educational under-achievement due to disadvantage?

Hon NIKKI KAYE (Minister of Education): Yesterday I was pleased to announce that this Government has agreed to replace the decile system with a risk index that allows us to better target funding to schools with children and young people most at risk of not achieving due to disadvantage. We will also be replacing the equity index used to allocate disadvantage funding in early childhood education (ECE) with the risk index. This means that rather than allocating funding on the basis of neighbourhood characteristics, as the current decile system does, the risk index will instead provide fairer funding that better reflects the needs of children in schools and ECE. This will mean extra resources are better targeted to support schools to lift achievement.

Todd Muller: What are the next steps on this announcement?

Hon NIKKI KAYE: This decision is the first decision made in terms of the funding review looking at funding across our education system. As part of the review, the Government has been working with education leaders such as those in the ministerial advisory group for the funding review and the technical reference group, which have advocated for change in further funding for disadvantage. We will be working to engage with these groups on key decisions like the implementation date and the factors in the risk index. We are working on a number of initiatives to make it easier for parents to find and assess information about the quality of schools. This includes a project with the Education Review Office that improves its reports and key information as well as making it more accessible to parents. This will involve some investment in greater online tools.

Conservation, Department—Funding, Mining on Conservation Land, DOC Rangers, and Threatened Species

6. METIRIA TUREI (Co-Leader—Green) to the Prime Minister: Ka tū ia i runga i te mana o āna kaupapa here katoa?

[Does he stand by all his Government’s policies?]

Rt Hon BILL ENGLISH (Prime Minister): Yes. I particularly stand by our family incomes policy, which will benefit 1.3 million New Zealand families by over $26 per week and which will include higher payments per child, lower taxes paid by everyone on a low and middle income, and also significant increases in accommodation assistance for those with the highest housing costs.

Metiria Turei: Does the Prime Minister agree that the Department of Conservation (DOC) plays a critical role as nature’s primary defender on behalf of all New Zealanders?

Rt Hon BILL ENGLISH: Yes, it plays a critical role, but not the only role. Increasingly, communities are involved in, for instance, Predator Free New Zealand, and I certainly regard all those who own land in New Zealand or use it as part of the process of protecting our environment for all New Zealanders. Actually, most of our natural environment is not controlled or owned by DOC; it is controlled or owned by landowners and operators who do care about our environment.

Metiria Turei: Why, then, has he cut hundreds of millions of dollars from DOC’s budget, forcing lay-offs of front-line rangers and closing field bases?

Rt Hon BILL ENGLISH: Certainly, my advice is that the member is not correct about that. What is much more exciting about the work that DOC is doing is that for the first time ever it is taking a long-term view about the management of the DOC estate, the management of functions like threatened species, and the management over all its assets, laying out a 10- to 20-year view so that we can better see what impact our investment in conservation is going to have.

Metiria Turei: Does the Prime Minister agree that DOC’s two-page submission that “neither supported nor opposed” the Te Kaha mining application on entirely precious conservation land is evidence that his Government has, effectively, silenced nature’s primary defender?

Rt Hon BILL ENGLISH: No. I mean, DOC has the obligation to follow its statutory processes. As I have said, it is not the only guardian of the natural environment in New Zealand. Increasingly, the way it works is to cooperate with community groups, which is turning out to be quite successful in the case of Predator Free New Zealand, and also, increasingly, to work with landowners, who do control more of our land mass and more of our environment than DOC does.

Metiria Turei: Why is his Government’s conservation plan to protect only one in five of our most threatened species by 2030, when we can protect them all?

Rt Hon BILL ENGLISH: I would dispute the member’s description of where that work is headed, but, certainly, the preservation and the improvement of our threatened species is a high priority. We are keen to see more innovation, a better organisational structure, and a longer-term view taken to ensure that we can, for instance, turn around the long-term decline in kiwi, and that work is well under way.

Metiria Turei: Does the Prime Minister agree with Jan Wright, Parliamentary Commissioner for the Environment, who recently said the situation for our birds is desperate; if he does agree, why are there around 200 less front-line DOC rangers today—

Hon Members: Fewer.

Metiria Turei: —than there were in 2009? Thank you!

Rt Hon BILL ENGLISH: Of course, the future of our birds matters in the way that the Parliamentary Commissioner for the Environment said. That is why we have the Battle for our Birds, for which, I have to say, it is sometimes a challenge to deal with those who, for instance, oppose the use of 1080, but we are determined to give our bird species the best opportunity. It is the inspiration behind Predator Free 2050, which is going to engage, as it already is, a much wider number of New Zealanders than the possible numbers of DOC rangers in the very constructive process of reducing the burden of predators so that our birds can thrive.

Metiria Turei: If he is so reluctant to increase core funding for conservation, why will he not raise a small $20 tourism levy, which will provide tens of millions of dollars of new funding for pest control to help exactly those native birds to thrive again?

Rt Hon BILL ENGLISH: We are quite happy to budget more for the Department of Conservation where we can see that there are going to be real conservation benefits. However, we do not believe in just slapping a levy or a new tax on everything—all the suggestions the Opposition has made. We would rather focus on what result we are going to get and fund that adequately.

Schools—Risk Index

7. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: What criteria will be used to calculate the Risk Index that will “better target funding to schools with children and young people most at risk of not achieving due to disadvantage”?

Hon NIKKI KAYE (Minister of Education): The criteria that will be used to calculate the risk index are based on research and evidence and involve factors that are linked to students not achieving NCEA level 2. However, as I have already stated yesterday, we will be working with the Chief Science Advisor, the Social Investment Agency, and the sector to test out the draft risk factors and how they may work within the overall system.

Chris Hipkins: Why does the National Government believe that being from a larger family, having a younger or older mother, having a male caregiver who is not a biological father, or having parents who are migrants indicate that a child is disadvantaged?

Hon NIKKI KAYE: That is because we have worked with a range of organisations and the sector to look at what the potential risk is of not achieving. So it is not about just the individual factor; it is about how the factors may work together, to potentially look at what the prediction is in terms of those who are at risk of not achieving.

Chris Hipkins: Which does she think creates a greater stigma for schools: decile rankings based on socio-economics, or the creation of league tables showing the number of children in a school with parents on a benefit; a parent in prison; Child, Youth and Family (CYF) notifications; or male caregivers who are not the biological father of the child?

Hon NIKKI KAYE: Well, firstly, I would like to make a couple of points. The first is that publicly labelling schools via the decile system is widely seen as discriminatory. We have been very clear that this risk index will involve anonymised data—that is the first point. Secondly, we have said we are going to work with the Auditor-General and the Ombudsman to see what we can do to make sure that this does not become a discriminatory system.

Chris Hipkins: How will she prevent the release of that information, given that once it has been compiled and used to inform funding decisions when using public money, the Government will be legally obliged under the Official Information Act to release it to the public?

Hon NIKKI KAYE: Well, the first point that I would make, again, is that this is different to the decile system in that this is, overall, a more sophisticated system in terms of determining what the weighting of funding may be in terms of those students who are at risk of not achieving. The second thing, which answers his question, is that we have said we will be working with both the Auditor-General and the Ombudsman, but separately from that there is the possibility that we are—it is how we present the funding information, and it could be presented with other funding, so you may not be able to determine exactly which funding is for those at risk of disadvantage.

Chris Hipkins: Which does she think is going to create the greatest stigma for schools: decile rankings, as we have now, or the release of information—which would not be able to be withheld under the Official Information Act—on the number of children in a school with a parent on a benefit or a parent in prison, or on whether a child is subject to CYF notifications or has a male caregiver who is not their biological father?

Hon NIKKI KAYE: As I said in answer to the previous question, the decile system is discriminatory, and it is that system that we are getting rid of and it is that system that is more discriminatory. The second point that I would make is the member does not understand how it works. He does not understand how it works in that it is not just about the individual factors; it is about how the factors work together. We are working with the sector in terms of the presentation of that information to make sure that we do not create a discriminatory system.

Chris Hipkins: Which does she think is the biggest influence on a child’s chances of success in education: their natural talents and abilities coupled with their willingness to work hard, or the National Government’s Big Brother algorithm, which is going to miraculously decide their future before they even set foot inside a classroom?

Hon NIKKI KAYE: Well, I completely disagree with the last statement in the question, and I want to make this point. We have received widespread support for this announcement because not only are we scrapping the decile system, which is discriminatory, we are providing more funding for disadvantaged, and it is supported by a lot of parents and the sector.

Immigration—Visa Requirements

8. Rt Hon WINSTON PETERS (Leader—NZ First) to the Minister of Immigration: Does he stand by all his statements; if so, how?

Hon MICHAEL WOODHOUSE (Minister of Immigration): Yes, I do. I particularly stand by my statement that any political party promising to reduce net migration to 10,000 would decimate industries and regions, and that this Government is not prepared to throw those regions under a bus at a time when they are growing so strongly.

Rt Hon Winston Peters: If, as he claimed, he has “toughened [the] English language rules” in October 2016, can he confirm that serious, widespread fraud with regard to the English language requirement was a major reason for him doing so?

Hon MICHAEL WOODHOUSE: Yes, I do confirm that there were concerns about the way in which the English language tests were being conducted, and also about the fact that the resident application for skilled migrants included 12 months of work in a New Zealand workplace. That did not in and of itself constitute competent English, so we changed it.

Rt Hon Winston Peters: Is he concerned that when Nigel Bickle, Deputy Chief Executive of the Ministry of Business, Innovation and Employment (MBIE) and head of Immigration New Zealand, had investigators look into this back in November 2015, they found, for example, 95 out of 98 applicants were not asked for any evidence that they had met minimum English proficiency standards?

Hon MICHAEL WOODHOUSE: I would need more details about the specific example the member is asking about. I presume it is in the international education space. At that point there were certain categories of tertiary education provider that were exempted from requirements. That was changed after November 2015.

Rt Hon Winston Peters: When is he going to take some responsibility, for example, about rules, whatever they are, being openly and routinely flouted, when another MBIE manager, Paul Arram in this case, found out in June 2016 that out of 105 applications, only one applicant was required—that is one—to provide an international English language test certificate; one out of 105, under you?

Hon MICHAEL WOODHOUSE: I am not quite sure what the question is, but what I would say is that when you have more than 3.5 million people crossing the borders, nearly 800,000 visas being approved every year, and a set of rules, some people try to bend them. We fixed that, we improved that, and we have far fewer problems than we have had in the past.

Rt Hon Winston Peters: If he has got two investigations by senior people within his department and they are finding that there are thousands of people who have committed fraud, what has he done about it, when another MBIE investigator, Theodore Ashton, has concluded that thousands did break the law?

Hon MICHAEL WOODHOUSE: We do what the public would expect us to do: we investigate and we prosecute.

ICT Sector—Contribution to Economy

9. BRETT HUDSON (National) to the Minister for Economic Development: What recent reports has he received on the contribution of the IT services sector to the economy?

Hon SIMON BRIDGES (Minister for Economic Development): I have recently seen a 2017 ICT sector report that demonstrates the strength of New Zealand’s technology sector to the economy. The report paints a very positive picture of a strong and growing sector, and finds that it is rapidly maturing. There are more firms in the sector than ever before, both large and in start-up phase, and there are more local and international investors. Through the Government’s continued commitment to the sector, including our nationwide roll-out of ultra-fast broadband, we are seeing New Zealand firms developing and commercialising cutting-edge technologies, competing with the best and brightest globally.

Brett Hudson: What were the key findings of the 2017 ICT sector report?

Hon SIMON BRIDGES: The Government has backed the ICT sector by investing in enabling technology and innovation, and this support is paying dividends. The report finds that the IT services sector makes a significant contribution to our economy. In 2016 more than 11,000 IT firms employed 29,700 people and contributed $3.6 billion to New Zealand’s GDP. In addition, these firms invested $436 million in R & D in the last year alone, more than any other sector in the economy. The report finds that the Government’s strong emphasis on innovation and growth, diversification of the economy, and providing an economic environment in which entrepreneurs and investors feel confident about starting to grow new smart businesses is clearly paying off.

Health, Director-General—Performance

10. Dr DAVID CLARK (Labour—Dunedin North) to the Minister of Health: Does he have confidence in the Director-General of Health?

Hon Dr JONATHAN COLEMAN (Minister of Health): Yes, and that is because he has overseen a lift in performance across hundreds of health services, including delivery of 50,000 more elective surgeries, 150,000 more first specialist assessments per year, free GP visits for under 13s, and nearly 7,000 more doctors and nurses across the system. He is now focused on implementing the historic $2 billion pay settlement for 55,000 of the hardest-working, most deserving people in New Zealand: care and support workers. But, of course, there is always more to do.

Dr David Clark: Now that he has had a copy of Paula Rebstock’s draft performance report in his office for more than a month, as canvassed in questions in this House on 21 June, can he tell the House what he expects its main findings to be?

Hon Dr JONATHAN COLEMAN: As I have told the member before, that report is far from finished—parts of it were blank in the version I was given—but, most importantly, it is the State Services Commissioner’s report, and it is up to the State Services Commissioner to finish the report and then to release it. He controls it; it is not a ministerial report.

Dr David Clark: Has he met with Paula Rebstock since the performance review of his ministry began?

Hon Dr JONATHAN COLEMAN: I would have to go back through my diary, and I can tell you the dates I did meet with her. Put it in writing, and I am happy to answer it.

Dr David Clark: What action has he taken in response to the fact that Chai Chuah contacted district health boards (DHBs) on 31 May and 1 June to tell them that they could keep money where there was no specific legal appropriation from the Parliament?

Hon Dr JONATHAN COLEMAN: Chai Chuah has been doing an excellent job overall. With that particular situation, which involved a fraction of less than 1 percent of the total budget, Mr Chuah felt that he could solve it. In actual fact, he probably overreached a bit, but the bigger picture is that DHBs have received $439 million, Vote Health is at record levels, and, actually, we are focusing on continuing to deliver more of the services that really make a difference to New Zealanders’ health.

Dr David Clark: So does “overreaching a bit” mean that he had no specific legal appropriation?

Hon Dr JONATHAN COLEMAN: Could you say that again?

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

Dr David Clark: Does “overreaching a bit” mean that he had no specific legal appropriation for that action?

Hon Dr JONATHAN COLEMAN: I do not think he did anything illegal.

Dr David Clark: Has he asked Chai Chuah why he appeared to go rogue—given that journalists put that question to him last week—and whether he had been directed to take that course of action; if so, what was his response?

Hon Dr JONATHAN COLEMAN: I do not know whether the member has met Chai Chuah, but he is not a “go rogue” sort of guy.

Dr David Clark: I raise a point of order, Mr Speaker. In response to journalists last week, the Minister accepted that premise and suggested that the question be put to Chai Chuah himself—

Mr SPEAKER: Order! This is not a point of order. This is now very much a debating matter. Unless the member can raise a point of order quickly, I am moving on.

Dr David Clark: He accepted that proposition previously, and now I am afraid he is misleading the House by saying—

Mr SPEAKER: Order! The member needs to go back and carefully look at the question that was asked and the answer that was given. My job is to adjudicate as to whether that answer addressed the question. There is no doubt in my mind that it did—I agree, not to the member’s satisfaction, but that is not my role.

Schools—Risk Index

11. CATHERINE DELAHUNTY (Green) to the Minister of Education: How will the Government collect risk index data for education funding and how will the ministry ensure that data is up to date, given families needing to move often because of the housing crisis?

Hon NIKKI KAYE (Minister of Education): The Government collects the information for the risk index through the integrated data infrastructure. This is a large research database containing microdata that is collected from a range of Government agencies, Statistics New Zealand, and non-governmental organisations. In terms of up-to-date information, funding for educational underachievement due to disadvantage will be calculated annually. The member may wish to note that while I do not agree with her characterisation of the housing situation, and while the risk index is not finalised, one of the factors being considered is school transience, which could be linked to housing.

Catherine Delahunty: How will schools, which can have a 50 percent school rollover, have any budget certainty, year to year, under this individualised funding model?

Hon NIKKI KAYE: The member is making an assumption, because we have not finalised the risk index.

Catherine Delahunty: Why are disability, mental health, and learning support not included in the risk factors in the risk index?

Hon NIKKI KAYE: As I have already mentioned, this is a draft risk index, and this has been developed—just in terms of the process so far—via research and international literature. It has been worked on with the ministerial advisory group, but we will be testing it out with the chief science advisers and the Social Investment Agency.

Catherine Delahunty: Why is the Minister not just increasing funding to all schools, rather than stigmatising children within schools using an unproven, deficit-based risk index?

Hon NIKKI KAYE: I disagree with a number of things said in that question, but the first point is that under this Government, on average, we have increased Vote Education by half a billion dollars. As I have already stated, in terms of this announcement, there will be additional funding. Thirdly, the largest point that I have been making out there is that this is about a cultural shift for New Zealand in respect of not discriminating against children, and I am confident that we can manage that through, in terms of the way the information is presented.

ANZ Business Micro Scope Survey—Small Business Confidence, Employment, and Investment Expectations

12. SARAH DOWIE (National—Invercargill) to the Minister for Small Business: What recent reports has she received regarding small business confidence in their future?

Hon JACQUI DEAN (Minister for Small Business): I have received the ANZ Business Micro Scope survey for the June quarter, which shows small business activity expectations are at a 2-year high. A net 17 percent of small businesses are more confident about general business conditions for the year ahead. The report also highlights that a net 28 percent of small businesses are eyeing bigger profits on the horizon. This is at a 3-year high, and showcases that the benefits of our growing economy are being felt throughout the country.

Sarah Dowie: What does the report show, in terms of employment and investment expectations?

Hon JACQUI DEAN: Small business employs 29 percent of the work force. The ANZ report highlights that the demand for labour is strong, at a net 17 percent. This shows that small businesses have confidence in their future and are looking to expand and grow. The report also highlights that small businesses are looking to invest, with a net 18 percent looking to invest more in their business in the next year. This is another good sign of the growing economy and the fact that small businesses remain confident about their future.

Estimates Debate

In Committee

Debate resumed from 27 July on the Appropriation (2017/18 Estimates) Bill.

Justice Sector (continued)

The CHAIRPERSON (Hon Trevor Mallard): There are 4 hours and 10 minutes remaining in the debate. When we were last considering the bill, the Committee was dealing with the votes in the justice sector in the Estimates debate. Darroch Ball had the call and while he had 1 minute and 23 seconds, we will give him 2 minutes.

DARROCH BALL (NZ First): In the last 9 minutes that I was using for my last two calls last week, I concentrated on the funding, or lack thereof, really, of the police force, what the Government thought it was promising, and, really, the drivers of crime, because we hear about the drivers of crime from the National Government all time and how it is trying to tackle the drivers of the crime, but the real driver of crime, which I have highlighted on many occasions in this House, is the failing youth justice system.

I have brought it up so many times in this House that I do not think there is anyone who would stand up and really say that the youth justice system is actually working. There is no way that they could say that the youth justice system is working—with an 80 or 90 percent reoffending rate in the Youth Court, higher than that when offenders go to a youth justice residence, and a 60 to 70 percent reoffending rate when the police are dealing with them through diversion, and especially when you look at the major indicators of youth crime, you see that the serious offences are increasing. No one can deny that. In 10 out of 12 police districts within the last couple of measureable calendar years—2015 and 2016—offences have increased by 40 percent.

The reactive approach from this Government is more police. Well, unfortunately, you cannot arrest your way out of a failing justice system. If you do not have a justice system that backs up the increased number of police, it will not work. We need a justice system that is accountable, that ensures there is personal responsibility taken by the young people, and, of course, one where there is consistency of consequences. And all of those things need funding, which there is very little of. You need resources and, basically and fundamentally, the youth justice system needs to be completely overhauled. If this Government really wants to make some inroads into the serious offences being committed by the young people of this country, it needs to put some funding into the youth justice system.

JONO NAYLOR (National): It is great to be able to stand up and speak just after that member, Darroch Ball, who was talking about there being not enough funding for the justice sector, when actually, when we look through these Estimates for the Budget for the 2017/18 year, what we see across the board is, in fact, additional funding.

I do just want to acknowledge the great work that has been done by the Ministers across the justice sector: obviously, Ministers Bennett in Police, Adams in Justice, and Collins in Corrections, because, as I said, we are seeing increased funding and increased emphasis going into the whole sector across the board. In fact, when we look at the extra 1,125 police staff, there are, of course, 880 front-line police. In terms of intervention at that level, it is great that we are going to see extra people out there who have a twofold purpose. By having extra police it makes it easier for us to catch those who are perpetrating crimes, but, of course, when we are seeing extra resources out there patrolling in more communities what that also has is a preventative measure aspect to it as well. So, by having extra police, we have those who are obviously able to work harder, as I said, in catching those people who are committing crimes, but also work in that preventative space as well.

I want to particularly touch on the area of Corrections, where there is, in fact, $255.9 million in funding going in over the next 4 years to help to deliver core services and reduce reoffending. Now it is not very often that it happens that you necessarily have somebody fresh out of prison come into your office, but, actually, yesterday, in my office in Palmerston North, I had somebody come into my office who had been released from prison only last Tuesday. He wanted to come to see me to talk about the fact that he wanted to make a video to actually help to encourage people who are in prison to stop them from reoffending, to stop them from wanting to go back to prison or doing the sorts of things that would lead them back. It was interesting, actually, he thought it was—one of the reasons was that life in prison was too easy, but that was just his take on it, interestingly enough.

But I think by us actually having extra funding to put into those areas, that can help reduce reoffending. We have actually got people who have been in prison a number of times themselves wanting to commit to helping others to do that. I think it is great that he is actually committed to wanting to help in that way.

I also want to touch on the introduction of the new non-emergency numbers for reporting. I think this is a great initiative. I know that on a number of occasions I have used the ⃰555 number. Thankfully, I have hands-free on my car phone so I can utilise that. But, actually, it has been a great tool for people to be able to report non-emergency issues while on the road. And the introduction of a number that will be easy for people to remember, easy for people to access—they are not necessarily having to go to the phone book to look for the local phone number for the police, for those people who still use phone books, that is, of course. It took me a while to find mine at home the other day, actually.

Richard Prosser: And have one in the car. Ha, ha!

JONO NAYLOR: But anyway—I certainly do not have it in the car, that is for sure. It is bad enough driving while using a phone. It would be worse to be reading a phone book, I am sure, particularly when you are getting a bit middle-aged and you need reading glasses or something. But that said, I think this initiative just goes to show that this is a Government that is committed across the board to the Justice Sector and that is actually still full of innovation and still looking for new ways that we can help reduce crime, make it easier for people to report crime, and also reduce the level of reoffending as well.

There has been a great record, I believe, from this Government over the last 3 years, or 9 years, in fact, in addressing issues of domestic violence, by putting things in place that will make it easier for people to report, putting things in place for victims—and these estimations are a carry on from this. Going from strength to strength is what we are doing. It is great to see these initiatives going forward, and I commend the Estimates in this area to the Committee.

KELVIN DAVIS (Deputy Leader—Labour): It is a pleasure to take a call on the Estimates. I would like to focus also on Corrections. We just heard the member who finished speaking, Jono Naylor, say that Corrections is looking for innovation. Well, the trouble with the innovation that we are seeing from Corrections is that it is very stilted and stifled innovation.

There are some really exciting examples of best-practice corrections innovation throughout the world, in Scandinavia in particular, and what do we do with that innovation? We actually totally ignore it. And if we are looking to fulfil the mission statement of Corrections, which is to make New Zealand safer—making New Zealand safer is not just by locking people up. In fact, we have got 10,200 people locked up in prison now. The big thing about that is just about every single one of those 10,200 people is going to come out of prison at some stage, and we cannot be living under the illusion that by locking up people and mistreating them in prison they are going to come out of prison in a better state of mind.

We have just heard that $259.9 million is going to be spent on core services and reducing offending. Well, that sounds really good. The trouble, though, with our programmes in prisons is that—and Corrections acknowledges it in its own annual report—the results of the reoffending programmes produce results that are less than statistically significant.

As a former school principal, if I produced results for the students that were less than statistically significant, I would have got the sack. I would have been moved on. But we still pretend that it is OK to produce results that are less than statistically significant in prisons, and we do not do anything, really, to weed out those programmes that are not effective.

In the Estimates, we were told that 62 percent of people who arrive in prison arrive with a substance abuse or mental health issue. Now we do very, very little to address the underlying causes of their offending. We do have $14 million being invested to address that. Now, that is four social workers and four counsellors in the women’s prison.

The question I asked the Minister at the Law and Order Committee was—because Corrections says the healthcare in prisons is as good as that outside of prisons. And if that is the case, if I had a mental health issue, I would think that best practice for me would be a visit to a counsellor or someone to help me with my mental health issue probably once a week for an hour or so. The question was to the Minister: does that 60 percent of prisoners—that is, some 6,000 prisoners—with a mental health issue or a substance abuse issue get to see the counsellor for about an hour a week? And the answer is, of course, no.

So how can we say that we are really making gains in terms of these people, helping them with their mental health issues and addressing the underlying factors that cause their offending if all we have got is $14 million? The problem is so much bigger, so much broader, and we need to invest a heck of a lot more.

We heard that Corrections is expecting another thousand prisoners to turn up to prison over the next few years. I say that figure is inaccurate and that we are going to have more than a thousand prisoners turning up to prisons over the next few years. The trajectory we are on, if it continues, means we will have 4,000 or 5,000 prisoners over the next couple of years, and that does not make New Zealand a safer place. It just means we lock up more people.

The conditions in prison are such that those with mental health issues actually need support and rehabilitation in a better environment, not concrete and bars. They are not treated well in there in many instances. They are not getting the support they need. They are actually often teased, antagonised, beaten, and broken, and yet we expect them to come out of prison after their sentence and we say: “Despite the fact that you’ve been treated like that, we want you to be good people after this.” It just does not work. It is like kids turning up to school and we mistreat them, abuse them, yell at them, scream at them, and say: “Oh, by the way, now you’ve got to pass an exam.” It just does not happen that way.

In the short remaining time I have got left, I tell members that I have spoken to an expert in the field. He says that 30 percent of people actually get their mental health issue inside prison, and that is not right.

DAVID CLENDON (Green): I am pleased to take a call on the Justice Sector part of this debate. We have heard from two members of the Opposition about some of the stressors, some of the failures, of the justice system currently. I agree with Mr Ball that the youth justice area is under considerable stress and is broken. He and I might disagree about some of the solutions, but we certainly agree that we need to do something a great deal better.

Similarly, Mr Davis highlighted some of the problems with Corrections, Again, Opposition MPs are often told that we identify things as problems and then insist on more money being thrown at them. Actually, I am not convinced that we need to spend more money on the justice sector collectively, but we need to spend it very differently. I would offer one obvious example in Corrections. The annual budget for Corrections this year is something between $1.6 billion and $1.7 billion. Sixty-six percent of that—66c out of every dollar—will be spent simply locking people away. Fourteen cents out of every dollar will be spent on rehabilitation, reintegration, education programmes, and all the positive solutions, and a little bit remaining is given over to supervising community sentences. If we just shifted that ratio, that balance of spend, just a little bit each year for the next 10 years, I think we would get remarkably different outcomes quite quickly.

We are so focused at the moment on spending enormous amounts of money in ways that simply perpetuate the problem that we are missing the opportunities to spend that money in ways that actually offer real solutions. I see considerable opportunity for a cross-party consensus. If we can simply agree that our system is broken, that we are not getting the outcomes that we all collectively want, then I think we can simply start looking at that spend and start shifting it in other ways.

As I have said, I believe the justice system is in bad shape. It is under considerable stress. An example of that is just simply getting access to justice. For many people, that is a step too far—for example, for many people needing to get into the Family Court, using legal aid. That has become so oversubscribed and under-resourced that many people are simply giving up. In recent times I have spoken to a number of family lawyers—people who do work in the Family Courts—who are simply stepping away from legal aid work because they simply cannot afford to continue doing it. That is true particularly of smaller practices, but, equally, some of the larger concerns. They are simply saying that they cannot afford to keep taking the loss because that very critical part of the system is simply under-resourced. We need to do a great deal better there.

The specialist courts, the alcohol and drug treatment court for one, are succeeding in ways that other practices have not. I sat in on one of those courts for a day about 2 weeks ago. We heard from one man who had had 15 drink-driving convictions and numerous prison sentences. Nothing much changed in his life until he went through the alcohol and drug treatment court and its programme. It took him 2 years. He came out the other side a changed man—straight and sober, working, involved with his family, and back in touch with his kids. That programme worked where other programmes simply had not, and yet we are continuing, frankly, to meddle about with the pilot and not really resource it sufficiently despite the proven success of that programme.

I think that is one way we could spend a lot more money much more productively—on other forms of specialist courts, homeless courts, and those sorts of initiatives, which, to be fair, the system is starting to experiment with. We need to actually mainstream a lot of those. We need to make them adapt and adopt best practice that we have seen overseas, and start looking for real solutions, because they do exist and we know what they look like.

The Greens have supported the increase in the Police budget to enable the Police to put more front-line officers out there and to have more support staff around them. We did see an absolute deficit in that. The evidence was compelling for at least 2 years before the Government did eventually agree with everybody else that the Police needed more resource. That is a necessary step, to give the Police more officers so that they can do their job better and to take the load off individual officers and stations. But it is not sufficient. We need more than that. Part of the reason the police are stretched, and have been considerably stretched, is an increase in offending around people who have mental health challenges and are having substance addiction—those sorts of difficulties that are emerging.

We need, as well, to be investing more in giving the police the tools to fulfil, for example, their Prevention First strategy, to build their neighbourhood policing teams, and to enable them to do the preventative work that they want to do. Again, Mr Ball made a comment that you cannot arrest your way out of a crisis or a problem. I think 99.9 percent of police would absolutely agree with that. They do not want to be constantly arresting and re-arresting people. They want to break that cycle. The police cannot do it on their own. They need to have the community-based drug and alcohol support, the mental health system—which, again, is in disarray.

Until we get rid of some of the waiting lists—for example, a person with an addiction problem, a substance abuse problem, is currently likely to wait for a minimum of 3 or 4 weeks. I know for sure that not so long ago in Auckland anybody either self-referring or being referred by the courts for treatment for P addiction or abuse was looking at about a 3-month delay. That is utterly ridiculous. That is a lifetime for a person with an addiction. Three months is ample time for them to offend, reoffend, and you are back putting up the load on the justice system, rather than spending it constructively in health treatment and addiction abuse treatment.

Corrections is something of a pet issue of mine, and I share in that with the new deputy leader of the Labour Party, Kelvin Davis, who is doing a lot of good work there. This Government has committed to spend $1 billion on increasing capacity in our prisons, essentially to build more cells—one new prison around Waikeria. Additionally, it is talking about another $763 million over 4 years, again, simply to build more cells, to keep more people locked up for longer. That is such an incredibly wasteful application of public money that there ought to be an inquiry, and I am sort of almost serious in that.

I see the support services, the programmes that can actually deal with people’s cycle of offending and reoffending, almost going under for want of $20,000 or $30,000. I see the community law sector, which enables people to get access to the Justice Sector in ways that can make their lives better and easier and often, in the long run, can also reduce reoffending, absolutely running on empty. I see it looking for all sorts of creative and innovative ways to generate other income streams, and I see people burning out because they know that no matter how hard they work, how many hours they do, or how thinly they stretch every dollar, they are still not meeting need. That is a classic recipe for burnout, and we are seeing it in community law.

But in the prisons we are spending, as I say, enormous amounts of money on simply keeping people locked away. That is amazingly wasteful. We need to get real, both about community-based programmes and indeed the programmes available within the prisons. We do see that there have been some improvements just in the last 2 or 3 years. There are now programmes existing that do deal with drug and alcohol problems, recognising, as people enter prison for the first time, they do get a psychological assessment—an assessment of their needs. But none of this is being properly resourced.

The mental health assessments being done are being done in good faith by committed people but they are not specialists, and nor do they have sufficient time to really drill into these people, who are often people with quite deep-seated and complex mental problems. It is simply unreasonable to expect a registered nurse, a general nurse—a competent person certainly, but it is unreasonable to expect the level of investigation of a person’s mental state in a 20-minute interview, using basically what is a tick-box tool. It simply is unreasonable to expect any positive outcomes from that.

We need to shift the mind-set. We need to shift the culture of Corrections away from containment and punishment, and move it towards genuine innovation—thinking: why are these people landing up in jail again and again and again? How do we break that cycle? How do we put in place and move the resource away from this wasteful spending and move it into something that will deliver positive outcomes for us?

I believe that that will be a 10-year project. I think it will take us 10 years. There are some legislative changes we need to make. The Parole Act, the Bail Act, the Sentencing Act—we do need to address those. But ultimately we need a culture change. We need to reallocate resources to get good outcomes. Thank you.

STUART NASH (Labour—Napier): Let me talk about Vote Police. But first of all I want to say hearty congratulations to Jacinda Ardern and our new deputy leader, Kelvin Davis. This is a dynamic team that is going to take a new energy and a new drive and a new face into this election campaign. It is actually worth noting that both Jacinda and Kelvin have been past police spokespersons for our party, and this shows the focus and the drive and the energy and the commitment we are going to be making and taking into the police portfolio.

There are a couple of things that are worth noting in this report. The first one is that we noted that, in fact, the Police put one bid in—that is all; just one Budget bid. We also noted that that received less than 75 percent of the original funding asked for by the Police. The whole committee was concerned about the costs to the community of the Police getting less than 75 percent of what it asked the Minister of Finance for.

We are in trouble in our communities. I disagree with Darroch Ball. He said you cannot arrest your way out of the justice system, and having more police will not work. No one is ever suggesting we can arrest our way out of the problem we are in at the moment. But what we are all suggesting—what New Zealand First is suggesting, and certainly what Labour is suggesting—is that we need more police on the beat. That is why Labour has committed 1,000 more police in its first 3 years in Government—1,000 more police—plus the staff associated with that.

But it is not about arresting our way out of the problem. It is about crime prevention. It is about putting more officers into our communities so they understand what is going on, so they know the dynamics of who is doing what in our communities, and so they can prevent the crime. We are locking up too many people these days. Our Corrections budget is $900 million more now than it was 12 years ago—$900 million a year more to keep men and women in jail. That is not a good use of taxpayers’ money.

We talked about the fact that we have a real problem with P, with methamphetamine. We saw the Government come out, I think it was yesterday, or certainly over the weekend, and almost admit it is losing this war on P. I spoke to the Mayor of the Far North a couple of weeks ago, and he told me that P is free on the streets of Kaikohe. It is free, until someone becomes addicted and then they are in the grasp and the tangled web of the gangs. That is absolutely wrong, and we need more resources in our organised crime squads so we can come after the gangs that are peddling this death into our communities.

When the price of P is cheaper and it is more plentiful than it was 8 years ago, after the then Prime Minister John Key declared a war on drugs, we know there is something wrong. We know there needs to be a change in strategy, and that is what we are going to deliver on.

We also noted that the Budget showed that the resolution rates for property crime are going to remain stable at 13 percent, and that the resolution rates for crime against the person are going to remain stable at 43 percent. It has been this way for the last 4 years, and the Budget documents show it is going to be like this for the next year. This does not give the people of New Zealand the confidence that the police are resourced in a way that is going to keep us safe and solve crime and put the bad guys behind bars. We have to do better than this. What this says is that 87 percent of burglaries are going to go unresolved, and that is unacceptable.

What we know is that family violence has gone through the roof. In fact, 41 percent of police call outs are to family violence incidents. We need to change this statistic. What we do know is that the police attended 17,000 more family violence call outs last year than they did the year before. That is a sad indictment of what is going on in our communities. Again, this is why we say we need community police in there to find out, to know what is going on before it happens, and to put interventions in place. The shame of this is that the 100,000 calls that the police attend every year for family violence makes up only 20 percent of the estimated 500,000 incidents of domestic violence in our country. It is terrible. That is all I have to say for now.

RON MARK (Deputy Leader—NZ First): It is really interesting that if you stay around here long enough, you hear the people who were in Government criticising the current people in Government for things that actually happened under their watch as well. I am very mindful of that every time I hear Labour speeches about corrections and police. I have to say that a thousand extra police is not a new novelty.

I have to say that when a Government is appropriating more money to prisons against a backdrop of pathetically low resolution rates, it is conclusive evidence that the Government has failed in corrections, failed in rehabilitation, and that the Government is failing in the youth Justice Sector. I mean, how can you be building more prisons at a time when you are getting less convictions—ridiculous.

The CHAIRPERSON (Hon Trevor Mallard): Fewer.

RON MARK: Fewer convictions. What it does is it says that the youth justice system is failing and it is time for an overhaul, because it is those numbers in the youth justice system that are going on to graduate and become adult criminals. Until this House gets its head around that fact and accepts New Zealand First’s view that raising the age of criminal responsibility is a dumb move, we are just going to continue to see more of these people going into prison and hear more politicians bleating on about how awful that is when they are the very ones creating it.

I have got to take the Government to task on this extra resourcing. How bizarre that we can have a Government member stand up and say that the Government is putting more money into policing, when New Zealand First revealed back in June that Police has been so underfunded it has been going cap in hand to the Justice Sector slush fund. In going to the Justice Sector slush fund, which is a fund made up of all the surpluses—they put all the surpluses from the Justice Sector into this fund of money that has not been spent, and then they bid for it; they bid for it for such things as wages. I have got the report here, obtained under the Official Information Act, dated May—dated May—that shows that on 12 occasions Police was out of money and had to go to the Justice Sector slush fund to make a bid to pay things such as wages. So how can anyone on that Government side stand up and say honestly that the police are resourced sufficiently? If they were resourced sufficiently, they would not run out.

Then we have things popping out of the woodwork that tell us that crimes are not being—I will hold this one for later. Crimes are not being investigated, not being prosecuted, because “the police are unable to instruct the ESR to undertake a scene examination and provide forensic evidence to [the] prosecution.” because of a lack of funds. We have to sit here and endure listening to Ministers standing up day after day, week after week, month after month, saying that the police have got the resources, yet all the paper evidence, obtained under the Official Information Act, says that is not the truth.

So we do not support this Government’s Budget. We find that its appropriations are actually all smoke and mirrors. We do not accept it, and we seriously, seriously, say to the Government and to this House and to all those parties that supported the raising of the age of criminal responsibility: how can anyone accept—particularly, Māori MPs sitting here who are very quick to go on about the number of Māori incarcerated, how can they accept the building of a new prison to take more prisoners against decreasing resolution rates and, apparently, a youth justice system that is world class? Well, I will tell you what it is world class in—it is world class at failing young people. It is world class in ensuring that they go on to become adults and then get imprisoned as quickly as they offend after their 17th birthday. The only thing that is going to happen now is that by the time they become eligible to be held responsible under the adult justice system, they will be a year older, a year smarter, and a year deeper into crime. That is an appalling indictment on every party in this House that supported such a move.

Votes agreed to.

Māori, Other Populations and Cultural Sector

The CHAIRPERSON (Hon Trevor Mallard): Members, we now come to the votes in the Māori, other populations and cultural sector, B.5, volume 8. The question is that Vote Arts, Culture and Heritage, Vote Internal Affairs, Vote Māori Development, Vote Pacific Peoples, Vote Sport and Recreation, Vote Statistics, Vote Treaty Negotiations, and Vote Women stand part of the schedules.

NUK KORAKO (Chairperson of the Māori Affairs Committee): Ā, tēnā koe e Te Kaiwhakahaere, huri noa i Te Whare nei e mihi atu ki a koutou katoa. It is a pleasure for me to take this call in this appropriations debate for Māori, other populations, and cultural sector. It is a privilege indeed to be a Māori MP within the National caucus, and also to be the chair of the Māori Affairs Committee.

This Government is indeed delivering for Māori, particularly when we look at the measures—

The CHAIRPERSON (Hon Trevor Mallard): Order! I am going to interrupt the member early, as I did with other chairs, to remind him that his role is to report in as neutral a manner as he can as the chair of the committee, rather than give a partisan speech. That is why the member has an extra speech, and the member’s team has an extra speech, so he can do that. It is a warning I have given to previous chairs. He can take another call if he wants to be partisan and talk about a particular party’s programme.

NUK KORAKO: Thank you for the guidance. The Māori Affairs Committee heard evidence from the Minister for Māori Development, the Hon Te Ururoa Flavell, Te Puni Kōkiri, and also the Office of the Auditor-General. When we look at the total appropriations for Vote Māori Development, they are, for 2017-18, $312.9 million. The Minister conveyed to the Māori Affairs Committee that within that there were 15 new policies, including additional and actual new funding. That new funding actually covered, particularly, additional funding—first of all, $2.5 million for Whānau Ora; then also for the Māori housing initiatives, which was another $5 million; and then new funding, under that, was for Te Reo Māori, of $6.5 million.

One of the things that the Minister highlighted, along with Te Puni Kōkiri, was that in the 2017-18 appropriations there was, actually, funding of $71 million to achieve the Whānau Ora outcomes. When we look at that, a lot of the funding itself was concentrated around the Whānau Ora Outcomes Framework, which was a principle measurement. We found, in the presentation, that there was actually a lot of commitment, more so to the way that the Whānau Ora initiatives are actually measured and monitored.

One of the things was that it very much highlighted the seven outcomes that Whānau Ora was going to deliver on—or that it is delivering on. One was self-management, others were to live healthy lifestyles, participate fully in society, and confidently participate—that was the big one in Te Ao Māori, in the world of the Māori: “Whānau and families are economically secure and successfully involved in wealth creation”. That particularly came, within that Whānau Ora piece, around Māori entrepreneurship and the development of that particularly, and Māori actually being in charge of their own destinies—particularly in businesses and employing Māori within those businesses as well.

There was another part of it that talked about being cohesive, nurturing, and also very, very resilient within the whānau space or the whānau area. The responsibility was also for stewardship to the living environments, particularly around the upkeep and the kaitiakitanga of Papatūānuku—so the environment was very, very important inside of that.

At the committee, we were told that there was some real, sort of, tangible process that was achieving these outcomes and that the Minister was satisfied with that performance. He was questioned by a number of us on the committee, but there was a very, very clear way in which this was presented around that measurement. For example, we heard that just over 1,014 whānau were prioritised in a housing report, particularly with insulated houses. So that was under that Te Pou Matakana.

JAMI-LEE ROSS (Senior Whip—National): I raise a point of order, Mr Speaker. I did not want to interrupt Mr Korako’s speech, but I raise a point of order to express this side of the House’s concern at your use of the word “neutral” when it comes to speeches from the chairs of committees. I have read the Business Committee’s determination, and whilst chairs are expected to set out the major findings of the committee, the Business Committee’s determination did not say that chairs must be neutral. I do note you have pulled up a number of our chairs around that and suggested that they must be neutral, so I wanted to outline that concern—that I do not believe that is quite the determination of the Business Committee and that any member of the Parliament, unless they are a presiding officer, is likely to have some partisan aspects to their speeches. I wonder whether you could reconsider the way that you have been ruling.

The ASSISTANT SPEAKER (Hon Trevor Mallard): I will reflect on what the member said. I have been involved in discussions around the difference in the role of that speech and the reasons for giving an extra speech to the chairs of committee, and, actually, it is a speech for presiding officers from the committees. My understanding—and I am happy to reflect on it, and I am happy to discuss it with colleagues—is that they are, effectively, extra speeches in order to set out what happened at the committee, in the tone of the reports, rather than the tone of a partisan member.

JAMI-LEE ROSS (Senior Whip—National): Thank you for reflecting.

CATHERINE DELAHUNTY (Green): I take a call on two aspects of these Estimates, and there is so much in this. I find the name a bit problematic: Māori, other populations and cultural sector. “Other” is sort of “othering” people who actually have a very legitimate place in this country and very legitimate things to talk about. But I am just going to talk a little bit about Vote Māori Development and Vote Treaty Negotiations. I am only a part-time, temporary member of the Māori Affairs Committee and do not have the knowledge of my colleagues. I am not there for the Appropriations or Estimates. However, today I do need to speak for the Greens on this, and I am not going to pretend to be neutral. I do not think I ever have in any circumstance, really, so I do not see any reason to start.

The CHAIRPERSON (Hon Trevor Mallard): I’m not expecting you to break the habit of a lifetime.

CATHERINE DELAHUNTY: No; nor I. I have got only a few more speeches left; I may as well go hard. Also, I think neutrality is fairly mythical. Everybody brings a clever little bias, especially in this place.

Getting on with the Estimates, there is a lot of interesting appropriation of money here, and it is very hard to assess unless you go into the detail, but one of the things that concerns me is that there is only a total of $71 million for Whānau Ora outcomes, including Whānau Ora navigators from non-Government commissioning agencies.

The reason I raise this is that Whānau Ora as introduced to this House by the Hon Tariana Turia was a programme that we, the Greens, could understand as being a once-in-a-generation transformative, complete overhaul of how the welfare system has failed to work for Māori. It was the vision of Dame Tariana Turia because she was so aware of that failure. It has always been under-invested in, and $71 million is, again, an under-investment. It really is. We actually need to spend a whole lot more money than that if we are serious about the potential of this programme, which has great potential but is still underfunded. So I just want to make that point.

I want to note also that there is some funding for Māori women’s development, which is always good to see, but what is sobering alongside that, I think, is the fact that for Māori women—and I saw the statistics today—the gender pay gap is 24 percent; for Pasifika women it is 28 percent, and for the rest of us it is 12 percent. That just tells you that funds like this, in this Estimate, will not do anything until we address the gender pay gap for low-paid Māori and Pasifika women workers. It is a disgrace that it is double the gender pay gap for Pākehā women in particular, at 12 percent—and that is a disgrace in itself. So we have got a long way to go and therefore Vote Māori Development is not totally satisfactory, because of the fact that it is still underfunded.

The other Estimate I want to address is Vote Treaty Negotiations. There are a number of things in here that are concerning in principle that I wanted to talk about. There is money here, which I want to support, that was a contribution to the Parihaka community engagement with the Crown support package. I was one of the privileged people who went to Parihaka on the day of the apology and I fully support this process. What it tells me is that full and final settlement, which is what a lot of this appropriation is about, is not, and should not be, the goal. We need a peace process, and that is why this particular small part of it, for Parihaka, is being looked at by other tangata whenua groups who have had the trauma of colonisation and the brutality of the loss of their land and culture. Settling is not what is required; it is honouring that is required.

So the funding that was put into the Parihaka process, which is just the beginning of the healing, is very important because it steps outside the narrow definition that this Government has had—and, in fact, several Governments—that all we do with Te Tiriti in this Whare is settle claims. Actually, that is a complete misunderstanding of the breadth and depth of our founding document. So this Estimate talks a lot about the money being set aside for assisting tangata whenua, mana whenua, to establish their takutai moana, and that, again, is a waste of money because that relationship with takutai moana should never have been broken. They do not have to prove a thing.

Hon ALFRED NGARO (Minister for Pacific Peoples): I would like to take a call on this Estimates hearing and make comment, especially because the last two speeches have been talking about Whānau Ora, in particular. Just around the Pasifika component, as the Minister for Pacific Peoples, I believe that there is a lot that we can actually acknowledge and celebrate, as well as also—like with anything—think about what the future may look like in regard to the work of Whānau Ora but also some of the other parts of the Estimates hearings that talk about the development for Pasifika, in particular.

I was honoured to attend the conference just a while ago in the lunchtime break—the Pasifika conference for the Pasifika Futures commissioning agent. The title of the conference was “From Work to Wonder”. It was celebrating the achievements over 3 years, and what I can say to the Committee and those who are listening in is that there are 56,039 individuals who have benefited over those 3 years from the work of Pasifika Futures. That is, roughly, around about 10,400 aiga and families up and down the country that are making a difference. That is 19 percent of our Pasifika population—

Pita Paraone: How much has it cost?

Hon ALFRED NGARO: —in New Zealand, which is just over 300,000. The member has been talking about what the cost is. For that commissioning agent, over those 3 years, roughly around about $27 million has been invested into that. The member may ask whether that is a good investment and whether it has made a difference. As I have said, those are the figures around the reach that it has, in particular, for the Pasifika Futures engagement, as well. There are 38 partners up and down the country, from the top of the country right down to the end. They are making a difference, and I want to be able to highlight that in some of the results that they are achieving—

Pita Paraone: What’s the split between the different Island groups?

Hon ALFRED NGARO: —through it, as well. So when we think about the differences, and while there are many different ethnic groups that are in the Pasifika groups, predominantly—

The CHAIRPERSON (Hon Trevor Mallard): As long as you are looking forward to the Estimates.

Hon ALFRED NGARO: Sorry—in looking forward in the Estimates, in the Estimates the breakdown is quite clearly that 40 percent is Samoan, 31 percent is Tongan, 16 percent is Cook Islands, 16 percent is some of the other smaller groups, and 3 percent is Fijian. I just say for the member’s benefit that these are the differences that it is making as well.

Kris Faafoi: What about us?

Hon ALFRED NGARO: And the Tokelauans are there—sorry, I do apologise. The Tokelauans are very strong in their presence as well. Actually, I have to say that they are clearly making a difference through this, and we celebrate with them, as well.

When we are talking about how we know that this work of Pasifika Futures, through the Whānau Ora work, is truly making a difference, I want to make three little points that have come out of the report from the chairman, Dr Kiki Maoate. He said: “The wonder about Whānau Ora and the work that we are planning is this: we can as Pasifika, first of all, understand our challenges, we can design our solutions, and we can create our future.”

When I was talking to the providers that were there today, they talked about the difference that they are able to make in working with these aiga—with these families—to design what that future would look like. So here are some of the results that are coming out, as well. Out of that, 2,480 families have prioritised health. We know non-communicable diseases are a critical issue of concern. It is the diabetes, it is the cardiovascular disease, and it is the issues around obesity. There is a 20 percent increase in the proportion of those families around immunisation. We know that for Pasifika as a population/ethnic group, it has the highest proportion of uptake in regards to immunisation, which shows that this work is making a difference. Sixty-six percent of engaged families have a family member with a long-term condition. They are now further engaged with health providers, which is making a difference as well.

If we take, for instance, economic development and the work that is happening there, 1,652 families have completed financial plans. We know that financial capability—budgeting and so forth—truly makes a difference to the work that we are doing. That is 1,488 families who have reduced their debt. These are some of the results that are coming through that are making a difference to our Pasifika through Whānau Ora funding that has been allocated in the Budget.

We are succeeding in education with lifelong learning, and—I know that Mrs Martin will appreciate this—62 percent of families who were not previously enrolled are now enrolled in early childhood education. Three hundred—and as tradie, I really appreciate this—now have trade qualifications that have been absolutely completed. John Kotoisuva, with the work that he has been doing in Trades in Schools, is making a difference.

At Ōtāhuhu College the STEM programme has shown that 33 percent of students who have gone through now have university entrance. That is an increase of 65 percent of students who have gone on to NCEA level 3 in the STEM subjects.

I just want to say in my closing remarks that the work of Whānau Ora through Pasifika Futures and with the championing of our Minister for Māori Development is making a difference and is delivering for our Pasifika whānau and communities as well.

PEENI HENARE (Labour—Tāmaki Makaurau): I rise to contribute to the debate on Vote Māori Development. I look at some of the information here, and it is quite clear that there has been a minimal increase in this particular area—in fact, it says there is a 0.6 percent increase. I also read on about the capacity of Te Puni Kōkiri and also the policy advice. Other aspects of the role of Te Puni Kōkiri have come under question many times, and I cannot help but wonder whether or not Te Puni Kōkiri is, shall we say, schizophrenic—schizophrenic—

Pita Paraone: Irrelevant.

PEENI HENARE: Ha, ha! Te Puni Kōkiri is there for economic development, it is there for monitoring Whānau Ora, it is there for monitoring Te Reo Māori, it is there for monitoring the Māori Housing Network, and it is also there with oversight over so many other things. I wonder whether this is actually impacting on its performance.

As we have questioned in the select committee process around the deliverables and the outcomes that have actually been there for our people, questions still remain. Questions have been asked about particular policy directives of this Government, and those answers have not been given about the intention of a particular policy. Sure, it might sound good on paper to throw a few dollars at it, but it does not meet the needs of our people. It does not contribute to a long-term sustainable vision for our people.

I come now to Te Ratonga Whenua Māori—the Māori Land Service. The vote includes an appropriation of $1.796 million to establish and operate the Māori Land Service. Well, in the last month Te Ture Whenua Māori Bill has been taken off the table. What does this mean in particular with regard to the Māori Land Service? It says here, “When enacted, Te Ture Whenua Māori Bill will establish the Māori Land Service”, so we have an appropriation for the Māori Land Service, and I understand that. But we have a bill that has been widely rejected by the people of Aotearoa New Zealand—widely rejected—so much so that the bill has been taken off the table, yet in the appropriations the Government has forged ahead with the Māori Land Service. Something about putting a cart before a horse comes to mind, and that is of serious concern to us.

We also have some questions—me, in particular—in Tāmaki-makau-rau about whakapapa, and the marae ora sustaining the marae, sustaining the pae. I think that is a worthy cause. I think it is important because of the important place that marae as an institution has for our people. But I wonder whether this particular appropriation is actually big enough to rise to the challenge. I think of Tāmaki-makau-rau and of all the urban Māori, the majority of whom are people who, if you ask them, actually whakapapa back to the North, back to Ngāpuhi—most of them do. But if you ask them, we are now into a third and fourth generation of disconnection—of disconnection. While this particular policy is well intended, and I think it has a bit of merit—rebuilding our pae and rebuilding our marae to make sure that whānau want to go home and be connected—I wonder (1) whether it can be achieved, and (2) what is the particular strategy for Tāmaki-makau-rau, given the urban migration and generations of disconnection from marae and whakapapa.

Of course, while some bits of money are appreciated for these particular kaupapa, if you think about the spread of marae and where the concentrations of people are, I have not seen a strategy directed at Tāmaki-makau-rau, where the majority of the Māori population are. In fact, this policy was launched down on the East Coast, where there is already a strong sense of culture and identity amongst the people down on the East Coast—Ngāti Porou and Ngāti Kahungunu. Yet in Tāmaki-makau-rau, where the need is greatest—where the need is greatest—we have not seen that particular impetus placed upon reconnecting whakapapa and whānau.

In conclusion, we have some concerns around the appropriation for Vote Māori Development. While we acknowledge the Minister and his hard work in getting what he can, we still believe that it is not enough for our people. It is not enough, and, hopefully, come September there will be a time for change, when true outcomes can be reached for Māori people.

Hon TE URUROA FLAVELL (Minister for Māori Development): Tēnā koe Mr Chair, kia ora tātau katoa. Ka mihi rā i te tuatahi e Kelvin. Ki te āhuatanga o te aranga ake o tētahi o koutou hei tuarua mō Te Reipa me pērā ka tika, kua eke tētahi Māori ki tēnei o ngā taumata, nō reira, ka waiho tērā kōrero ki reira.

[Thank you, Mr Chair, and acknowledgments to us all. I do acknowledge in the first instance, Kelvin. The situation where one of you being elevated as deputy for Labour, it has to be acknowledged, no doubt about it, a Māori has achieved this one of the levels, and as a consequence leave that comment there.]

I just want to acknowledge the fact that that Mr Kelvin Davis is No. 2 for Labour. That is an important development in terms of Māori aspirations and dreams. Being a leader in this political arena, I just wanted to acknowledge that at the start of my kōrero. In respect of the other issues that were raised by Mr Peeni Henare—unfortunately, I did not hear many of the other speeches in respect of Vote Māori Development—I can say that as Minister for Māori Development I am very pleased with the development that has happened for Te Puni Kōkiri. I do not think that it is schizophrenic, but I do think that it has a lot of work on, and I have certainly made it very clear that I have got high aspirations as the Minister to address many of the issues that have been canvassed in this Committee. I would like to think that I push it hard and I like to think that I role-model hard work, as Te Puni Kōkiri should do, in the best interests of our people.

I think the member was a little bit economical with the truth in respect of the—

The CHAIRPERSON (Hon Trevor Mallard): Oh no, no, no. I am just going to give the member a bit of guidance. I think he is heading into an area where he is likely to get out of order, so I think he had better take care.

Hon TE URUROA FLAVELL: Thank you very much, Mr Chair. I will correct the member, and say that Te Ture Whenua Māori Bill is not off the table. It is still on the table. It will be on the table until the end of this parliamentary term, so to say otherwise is not quite correct. I just wanted to address that to the member. He was also suggesting that Te Ture Whenua Māori Bill has been widely rejected. Actually, the truth, from my perspective at least, is there have been well over 300 hui. Well over 3,000 of our people have listened to the discussion, and we have been able to work through Te Ture Whenua Māori Bill in a methodical manner that has allowed every member to have a say. Despite the fact that I could well have taken it through urgency, I chose not to do that, for the purposes of allowing everybody to have a say.

The issue in respect of wharenui and Tāmaki-makau-rau—one would accept that there are not a lot of wharenui in Tāmaki-makau-rau, but the kaupapa around that particular initiative was to help those marae where, through circumstance, the infrastructure needs some help to reinvigorate the marae in terms of physical presence, as well as the development of that cultural angle for speakers and kaikaranga to keep our marae more active and to bring them to another level. So, while the member did talk about Tāmaki, I would have to say to him that that is part of the worry. But I do agree with one thing that he says, and that is that it is not a lot of money. I understand that. All I have done is recognise that there is a niche there, that we want to address it, and that we will continue to advocate for more money in that space.

The Minister in the chair before me, the Hon Alfred Ngaro, did talk about Whānau Ora. Yesterday I had the privilege of going to a Whānau Ora conference here for the Pasifika peoples. Kia orana tatou katoatoa—it is Cook Islands Language Week. I also want to acknowledge the many whānau navigators throughout the whole of the country who are doing great stuff around our Pasifika communities. I recognise that. In fact, they recognise that themselves by acknowledging those navigators and, indeed, providers throughout the country that are doing great work for whānau. So I was pleased that at the last Budget a further $10 million for Whānau Ora has been invested, there is $9 million over 4 years for whānau-centred family violence intervention approaches, and, indeed, looking across the span of other initiatives in this particular area, there is some more money in terms of rangatahi suicide. It is a sad indictment on our society that we have to face rangatahi who are taking their lives at such young ages. We have been able to build on that fund with a further $8 million over 4 years.

Of course, the big one is around trying to address the issue of “neets”—that particular cohort not in employment, education, or training. We have pumped some $12 million into what we have called Passport to Life, which is about an opportunity that came from the view from providers throughout the country that suggested that so many of our rangatahi are tied because they cannot get a driver licence or they have a pretend driver licence, they get caught out, they cannot pay the bill, they go to court, they get hammered, and they end up going into the prison system. Unfortunately, it is a downward spiral, so what we have tried to do with that package is come up with a package that is about a birth certificate, that is about a passport to allow those aspirations to be sky-high, so our young people believe that they can, in fact, go off Aotearoa and go to the opportunities in the world. It is talking about an IRD number—those sorts of key documents that will allow our young people to pick up opportunities for them in the future.

I know that many members have talked about the kōhanga reo and, in particular, I suppose, the money going to the kōhanga reo. I can say to members that the initiative of helping out kōhanga reo with $5 million is all about trying to get more of our people into kōhanga reo by offering up opportunities to either (1) do up that transport by way of the safety elements of the vans or (2) get more vans to be able to help our kōhanga reo get our tamariki into the kōhanga reo movement and hopefully lock them in. That initiative came from the kōhanga reo themselves, and so therefore our responsibility was to support them in that particular line.

Yes, there is some more money in broadcasting, as well. In Te Māngai Pāho we have got $10 million, and, of course, there is a further $6 million in Te Reo Māori initiatives. I know that members talk constantly about housing, and I have been questioned in this House about housing and the housing network. I think the important point to be raised here is that the path that has been raised by the Māori Housing Network is but a small part of the bigger picture of housing initiatives covered by a number of Ministers. Is there one silver bullet to deal with those who are in homelessness? The answer is no, there is not, because if somebody had found it we would have dealt with it far earlier. Our initiatives like Te Puea Marae and marae taking responsibility for some of our families are important—yes, they are—because they fill a gap, but what they do identify is the ability for our people to work with our own and to make a connect with Government agencies that need to make those connects with many of our people. So I am pleased to say that we have been able to help in that space.

What we have done is to secure, for example, a little bit more money into the housing network—$8 million. In fact, I need to say again to members that the housing network’s job is not to build houses. Its job is to do other things like, actually, educate people about the whole process of getting houses. It is to help those communities—like the Waimanas, like the Ruatāhunas, like, in my particular electorate, the Ruātokis—that have housing issues within those communities such that just some repairs and maintenance on those houses would bring them up to at least being warm and safe, and would get rid of the rain that sometimes trickles down the windowsills. All those sorts of things are things that I have seen in my electorate that you would not believe should be a part of our New Zealand way of life. But they are, and therefore we have tried to target and find our niche amongst all of the offerings that are available from the Government.

We have also looked at the possibility of other avenues to help our people move into housing, because homeownership is still a dream that many of our people aspire to, as they should do. They want to have their own house, establish their papakāinga, and there are great examples around the country. In Meka Whaitiri’s area in Ikaroa-Rāwhiti, at Waiōhiki, there is one there. There is Waimārama. There are some more up in Ngāruawāhia, in Tauranga Moana, in Mangatawa—areas throughout the country that are doing great stuff. The most recent development was probably 2 weeks ago when I was at Ngā Pōtiki in Tauranga, where they have an opportunity to build over 200 houses on an area of land that they secured through settlement. The housing network is giving them a hand, a kick-start in terms of that particular development. So things are happening in that space, and I am really looking forward to the opportunities that come up into the future.

Can I just say that the member Peeni Henare also talked about the reforms and the Māori Land Service. I can say that the Māori Land Service is on track to be delivered 18 months after the actual passing of the Māori land law legislation. Why 18 months? It gives us a good time to make sure that all of the elements of the land service, of which there are four, will be in place and up and running. Part of it is the registry. Of course, we want some services around governance, to give assistance to landowners to sort out some governance arrangements, for far too many land blocks do not have those arrangements in place. Dispute resolution is important, and the last part—the actual key to all of this—is around development opportunities that may come for our people to utilise the land if they so wish. I am pleased that we are in the first phases of that development. In fact, it has been probably about 6 or 8 months now along that road. It is a new service—completely new. Therefore, we know that we have got a lot of work to do, but it is in a good space, and I think that more will come in the next electoral cycle.

PITA PARAONE (NZ First): Tēnā koe. It is a pleasure to take part in this debate looking at the Estimates, particularly the Estimates that affect the portfolio of the Minister for Māori Development. Can I say in the first instance that when the Māori Affairs Committee discussed these Estimates, we had some concern about the level of work that is required of Te Puni Kōkiri in its capacity to carry out those duties that have been assigned to it. One has to question whether, in fact, it has the capacity to do the job well. I, as a member of the Māori Affairs Committee, did have some reservations about the capacity of Te Puni Kōkiri to do the work that it is supposed to do. I think that part of the difficulty is that it has got rid of experienced staff, or that the staff that it has employed do not have what I would call the life skills for the issues that our people out in the regions are having to face.

The question of Whānau Ora, for instance—the ability of Te Puni Kōkiri to monitor the success or otherwise of that particular programme. It has been going for some time now, and we have yet to see some evidence as to how the success, so to speak, of that programme is measured. I just want to put that on record, in terms of the concern that New Zealand First has about that particular programme, in light of the level of funding that it has received since its inception.

The other issue I wanted to talk about is the whānau-centred family violence intervention. While that has been allocated $9 million over 4 years, the nub of the matter for me is getting qualified facilitators to help families and to address the violent behaviour that is quite common in whānau-centred family violence. I also acknowledge the level of funding towards the Rangatahi Suicide Prevention Fund, but I believe that while it may be a major concern amongst the Māori community, it should not be left entirely to Māori funding to address that particular issue. I just wonder whether, in fact, the $9 million that has been made available over 4 years is sufficient.

The Māori Land Service—we have heard from Minister Flavell that they have allowed for 18 months to establish the service after the passing of Te Ture Whenua Māori Bill. Can I suggest that in spite of what the Minister might say, this is a covert way, I believe, of doing away with the Māori Land Court, and I would suggest to this Committee that the level of funding that has been allocated for the establishment of the service itself could be better utilised by restructuring the Māori Land Court. I would hope that the Minister does give that thought some consideration, because there is concern out amongst the Māori community, irrespective of what some of them have said about the Māori Land Court itself. It is better the devil you know than the one that you do not know, and I believe that Māori are correct in having some concern about the role of the Māori Land Service.

AUPITO WILLIAM SIO (Labour—Māngere): In this week, the Cook Islands Language Week, may I say kia orana tatou katoatoa to all members in the Committee. In reference to Vote Pacific Peoples, I note that the report has additional money for this Budget. It is seen as an increase of $750,000 per year. Sadly, if one looks through that report and looks at what the Ministry for Pacific Peoples intends with that increasing funding, it does not have any support for Pasifika languages, and that concerns me.

I want to make it quite clear that I am not necessarily pointing my finger at the honourable Minister Mr Alfred Ngaro, because he became a Minister only last year. But I am saying to this Government: why is it that this Government is so determined to not support Pasifika languages that even in this year’s Budget, not one dollar—zilch money—is allocated to support them? In fact, if you divide the additional money, $750,000 per year, amongst the 350,000 Pasifika people, that works out to only $2.15—$2.15. You cannot even get a bag of chips at $2.15. I want to state that I am not pointing the finger at this Minister alone, but, certainly, he has responsibility to step up and either support Pasifika languages or follow what his colleagues in the National Party are saying.

I want to say that in 2008, when National came into power, it cut all references and strategies supporting Pacific student bilingualism from the Pasifika Education Plan. In 2009 this Government forced the then Ministry of Pacific Island Affairs to abandon its plan to publish, in its statement of intent, for two pilot bilingual schools.

The CHAIRPERSON (Hon Trevor Mallard): Order! I am going to interrupt the member, and that is to remind him that we are currently considering the Estimates, and that is something that is forward-looking. He can make passing reference to things from the past or he can say that things should be in there, but to focus on previous cuts is not appropriate.

AUPITO WILLIAM SIO: I appreciate that, Mr Chairman; it is just that my style has always been to provide some context. None the less, let me just provide for the performance improvement framework review by the ministry in May of 2017. You will find that in this report, the Ministry of Pacific Island Affairs is saying that the new May 2017 strategic direction drops the ministry’s commitment to Pacific languages policy, drops the ministry’s commitment to its Pacific languages framework, and drops the ministry’s commitment to language weeks and language rejuvenation, in favour—this is what the report says—of moving from language to culture so that we can be more aligned with the New Zealand - born demographics and, furthermore, for communities increasingly to take a hands-on role in the delivery of Pacific language weeks.

Pacific language weeks were started by the communities anyway, but this Government—in an effort to try to make it look as if it was doing something—decided to get behind them. Now it is going to drop them—now it is going to drop support. International best evidence shows that three generations is the time that minority languages among local-born populations can survive. If this Government does not get behind Pacific languages—and in this report there is failure to show any support for them—then Pasifika languages will be lost in the years ahead.

Forward-looking again, in the years ahead, it will be the islands of Niue and the Cook Islands that will suffer the most. At least with Samoa and Tonga we continue to bring in cohorts from the Pacific, through the Samoan quota and the Pacific access quota, who speak those languages. But for Niuean and Cook Islands communities, that is not the case. I want to put that on the ground, and say to the Minister, the Hon Alfred Ngaro—a person who speaks Cook Island himself—that in this environment, this could be one of your legacy tasks: to show that you care about the languages and to not simply follow what the National Government has said, because $750,000, with nothing allocated for languages—

Hon MAGGIE BARRY (Minister for Arts, Culture and Heritage): I am going to use my time in this Chamber today to talk a little bit about this Government’s track record and our future plans for the arts, culture, and heritage sector. I begin with the Regional Culture and Heritage Fund, which was a fund that was usually, really, for historic collections of nationwide importance—buildings and places that were absolutely the crème de la crème. While it is important to support those, it has also been important to change the rules, which we did last year. This was the first time that the Regional Culture and Heritage Fund had the kind of brief that has seen the announcements that I have been making over the last couple of months.

I look around this Chamber and I see many areas represented and hard-working local MPs who have advocated for places within their own electorates and within the regions that really need a little bit of extra support. From a $30 million fund over 3 years we have been able to give money to The Meteor Theatre in Hamilton, and to Whanganui—not only to the Whanganui Regional Museum but also to the Sarjeant Gallery. This is a building that is, deservedly, known nationwide, but is a particular attraction, obviously, for “The River City”, and it was in dire need of help. The Regional Culture and Heritage Fund is the fund of last resort and it funds to “a third, a third, a third”.

There is also Whakatāne’s museum and research centre, which combined, for the first time, iwi as well as colonial artefacts and meeting rooms and meeting places and is, I think, a game-changer for Whakatāne. The Nelson School of Music and Eastern Southland Gallery similarly benefited, and the Hawke’s Bay Opera House has been given an additional $4 million for seismic strengthening. This is a building that was originally given seismic strengthening by a community that worked hard to raise those funds—and I commend the local council at the time for allowing that to happen—but it needed more money, so the fund has enabled it to get to the level, now, where people are able to access it safely.

Similarly, with the Whangarei Art Museum, otherwise known as the Hundertwasser—an extra $3 million has gone into that, and I commend Dr Shane Reti, who has been an articulate, hard-working, and, shall we say, unswerving advocate for this extraordinary project, which is going to do a lot to change the visitor numbers, I think, to Whangarei. It also involves iwi, so there is a modern art gallery for Māori art that will be there, in amongst this international attraction.

The Heritage Earthquake Upgrade Incentive Programme, which we have niftily called Heritage EQUIP, came into being in last year’s Budget and we have set up an expert panel that now evaluates properties. This is a particular fund that is designed to assist private building owners to strengthen their earthquake-prone heritage buildings. It is about a $10 million fund, and we have made announcements in Dunedin and Napier. We are about to make them in Nelson and Christchurch. This is where we feel that the character of a town or a community could be lost if it was left up to individual owners of buildings that require extra maintenance. It is at a much more expensive level than just regular maintenance, and it also means that the integrity of the character of that original architecture is kept in place. These are the kind of things that money almost cannot buy—that are priceless—but they need some help from the Crown, and we do not resile from a leadership role, as we did not when it came to the New Zealand film sector.

I have been around long enough to have seen the halcyon days of the 1980s—the movie industry that came and then went. We needed to come in in 2014, which we did, and change the archaic labour laws. They marched in the streets but they were wrong. When we got together with the screen sector we understood that the fund was required to attract people to make big blockbuster movies in New Zealand, and also to reignite the moribund film sector of New Zealand, because it was lacking a professional service. It was lacking people who could guarantee that they would have projects all year round, and so it meant that we lost professional people across what I call the craft side of the movies.

We have put in, over the last 5 years, $100 million to make 26 New Zealand productions, and we have announced in this year’s Budget an additional $220 million for international productions. That is going to be over 4 years. We are evaluating this grant again because it has been so successful, and, when it comes to the New Zealand productions, we have brought forward $25.5 million to enable about $64 million to be made available over a 4-year period to sustain our vibrant screen industry. It makes us all feel good to have our screened stories told in a way that is eloquent.

TRACEY MARTIN (NZ First): I am going to dedicate the majority of my contribution to the “other peoples” who make up the 52 percent of New Zealand, and that is women. I just want to pick up on a comment made by the Hon Maggie Barry just then. It is unfortunate that in the Estimates and in the amounts that she just announced for culture and the arts, the member for Rodney was unable—I am not sure whether he advocated for it—to gain any funding from these Estimates for the Warkworth Town Hall, which is over 100 years old. It sits there and, actually, the men of that area marched away from there for World War I. I also think it is disappointing that, with regard to Pasifika peoples and the contribution from the Hon Alfred Ngaro, who mentioned lifelong learning, these Estimates have nothing to do with lifelong learning if you are over the age of 30. There is nothing for Pasifika peoples, the Computers in Homes budget has been taken away, SeniorNet’s budget has been taken away, and there is no increased budget for night school.

I want to pick up also on the lack of budget around Pasifika languages. It is interesting that it was only in the last Parliament that a National-led Government actually participated in a Pasifika languages inquiry, which had several recommendations for Budgets going forward about the support of the retention of Pasifika languages, not only for those coming to New Zealand but for those born in New Zealand. So it is of interest that inside these current Estimates there are cuts to any support for Pasifika languages, when assurances were given only 3 years ago.

I will talk now about the 52 percent of the New Zealand public that comes under “other peoples” in the Estimates debate. We can acknowledge that there has been an increase of $500,000, and we need to acknowledge that that has happened because the Hon Paula Bennett has taken the portfolio. Not only has there been an increase by the National Government, and $500,000 in the 2017-18 Budget, but now, at least, the Minister for Women actually sits at the table. That only happened because when the Hon Paula Bennett, I believe, got the opportunity to take on a larger leadership role, she also, being the bolshie woman that she is, said: “I’ll have that portfolio, thanks.” That is the only way, it appears, that the National Government would allow the Minister for Women to sit at the Cabinet table. That is the only way, I believe, that there was any increase in the Budget for these Estimates. We do note that this increase disappears, going forward. It appears to be a one-off $500,000 increase in an election year, projecting for 2017-18, with the Minister for Women sitting at the table.

We also note that there is absolutely nothing in the Vote Women document that sets any targets for the ministry to measure itself against, with regard to, let us say, pay equity, or to measure itself against, let us say, the number of women on boards. There are actually no practical things going to be done by Vote Women with this $5,208,000, except providing advice. So that is $5,208,000—there are no events being run to actually make sure that young women are more confident in their opportunities, and that they can do as the Minister has done and pull themselves up to the table and take these opportunities. There is no measurement of any of those sorts of projects coming out of the Ministry for Women.

I think that the other thing that needs to be seen, if we are going to be discussing the pay equity bill later today, is there is absolutely nothing inside these Estimates to address the fact that the pay gap has got bigger under this Government, particularly for women with children compared with men with children, which now sits at 17 percent. So it is disappointing. There is $500,000 more in these Estimates but no targets, no real action: a conversation will take place, we will talk to people and try to get them to do something, but we will take no action. Kia ora.

Dr SHANE RETI (National—Whangarei): I rise to support the Estimates for this theme and talk to Vote Māori Development, Vote Treaty Negotiations, and Vote Arts, Culture and Heritage, time allowing. In the Estimates consideration at select committee we heard that Vote Māori Development had received increased Estimates funding of 60 percent over the past 5 years, going up from $195 million to $312 million. This has been spread across the four anchors for Māori development, each of which I would like to touch on.

The first anchor for Māori development is Whānau Ora, which received $71.48 million. We were interested in the Estimates around what the outcomes measures might be for that funding. As my good friend and colleague Nuk Korako has described the seven components to the outcomes framework for Whānau Ora, I will not reiterate them, but we did have quite a detailed discussion as to how the Estimates funding might be spent, and we are satisfied that it was well accounted for.

The second arm to Māori development is whenua Māori, and this received $1.79 million in the Estimates. This is primarily tied to the new Māori Land Service, which will be enacted as part of Te Ture Whenua Māori Bill. The Māori Land Service has several functions. These include land registration, components of governance, capacity building, dispute resolution—which was quite important as this came to committee—and land utilisation. Again, we discussed what the outcome measures are, and we were told that this was for review after 5 years.

The third component to Māori development is whare. This talks to Māori housing initiatives, which received $22 million. We heard, as the Minister has said, that Te Puni Kōkiri (TPK) does not build houses; TPK is responsible for managing Government funds and for collaborating with Government departments. Having said that, in the last financial year the whare component to Māori development has resulted in 22 affordable housing units and 136 whānau homes.

The fourth part to Māori development is whakapapa. We heard that the Marae Ora programme will receive $10 million over 4 years. This is primarily around building relationships between whānau in the community and their marae. So we had quite a detailed discussion over Māori development.

The committee then talked to Treaty negotiations, with an appropriation of $400 million. We heard that 16 percent of these funds are going to claimant funding, roughly the same amount is going to takutai moana, and the balance—roughly two-thirds, or 66 percent—is going to negotiations on, and implementation of, historical Treaty claims.

We asked what the progress was, because we have a target of settling all claims by 2020. We heard that 83 deeds of settlement have been signed and 54 deeds of settlement remain. There was also some interest in the select committee around the Post Settlement Commitments Unit, which actually sits under the Ministry of Justice. We were interested in its role and responsibilities. We heard that this unit is responsible for 6,000 historical commitments that it monitors. We were also made aware that it could indeed revisit previous settlements.

Finally, I would like to touch base on the arts, culture and heritage fund, and both congratulate the Minister for Arts, Culture and Heritage on, and thank her for, the very generous funding that the Hundertwasser Wairau Māori Arts Centre received earlier this year: a further $3 million, added to that previously received, for a total of $7 million, fitting the old formula of a third from local government, a third from central government, and a third from philanthropic sources.

The Regional Culture and Heritage Fund is a fund of last resort, and for the Hundertwasser Wairau Māori Arts Centre it was a last resort. We actually had the funding all ready to go, and then the new seismic regulations as a consequence of Kaikōura added on the extra $3 million, which the Minister and her officials were able to come to. So again, I would like to thank the Minister for that, and complete my contribution today. Thank you.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Chair. E ngā mema o Te Whare nei, tēnā tātou katoa. I am happy to take a call on the 2017 Estimates for Vote Māori Development. Before I start, can I just acknowledge what a historic day today is. We have not had a woman leader of a major political party since 2008. I want to congratulate Jacinda, and I also want to congratulate Kelvin Davis, the first Māori deputy leader of a party.

Women voters and Māori voters up and down this country will acknowledge the great decision that Labour has done. I come into this Chamber as a proud representative of Ikaroa-Rāwhiti. I stand on the shoulders of great men, like Tāreha Te Moananui, Hēnare Tomoana, A T Ngata, and Parekura Horomia. Why I mention those particular rangatira is because whenua was very important to them. It was also very important that they came to this House to talk and advocate for the rights of Māori people.

So to the Estimates. I am glad that I followed on from the member, Shane Reti, who just resumed his seat, who talked about an increase in the Budget. Let us put the facts on the table. In Budget 2017, Vote Māori Development went up not by 1 percent; it went up by 0.6 percent—0.6 percent from $310 million to $312 million in the Estimates. That is an increase of 0.6 percent. This is not a Budget for Māoridom, given that it is facing the severe impact of homelessness in this country. The people who I see when I drive up and down my electorate, particularly around Marine Parade—and you can see them in the cars, in the vans, any time after 10 p.m. in all the car-parks where people normally used to go for other activities along Marine Parade; they are actually living there. That is what has happened under this Government.

The Minister for Māori Development in his contribution quite rightly said: “Well, there is no silver bullet to housing.” He said there is no silver bullet and that it is not his Ministry’s responsibility to find housing. But at the very least he is at the table with this Government. What has happened to the advocacy of the Minister for Māori Development to speak up for those many Māori around the country who cannot get on the waiting list, who are left homeless? What has happened to that? That is the question that I would like to propose to the Minister in his defence of this Budget.

Let us look at some of the facts. The Māori Housing Network, in 2015, despite spending over $37 million, has completed only 11 houses to code compliance—$37 million and 11 homes. But the real story around this country—if many of the National MPs will come to visit any of our offices—is that there are so many people who cannot even get on the waiting list. So our waiting lists in small provincial towns are growing, but what about those who cannot even get on the waiting list?

In the time I have got left I do want to address Te Ture Whenua Māori Bill, which the Minister talked about. He carries on misrepresenting his rounds of consultation. The actual draft was tabled in June 2015. What the Minister fails to acknowledge is the multiple changes he has made to a considerable and significant piece of land legislation, and he has done it outside of the scrutiny of the Māori Affairs Committee. He has made 70 changes that he forgets to tell New Zealanders and landowners about, which he has done without the proper scrutiny.

My colleague Peeni Henare has spoken about the enormous opposition to that piece of legislation, but the Māori Land Service is a cornerstone of those reforms. In its report to the Government, which the Minister had in April, Treasury said that it was not prepared, because there was no business case put up and there were a whole lot of gaps in his planning. This shows that the Minister is so out of touch with something as enormous as Māori land reform, and that his Ministry has not been backing him up, and so Māori land owners out there are absolutely confused as to what is happening next.

This bill is a dog—I am talking about Te Ture Whenua Māori Bill. Māori do not want it. The Māori Land Service is completely a failure, and it should not proceed.

RICHARD PROSSER (NZ First): I raise a point of order, Mr Chairperson. Sorry, I did not want to interrupt the member Meka Whaitiri’s contribution, and my apologies if I misheard her. I do congratulate Kelvin Davis on his elevation to the deputy leadership of the Labour Party. But if I heard the member correctly, she claimed that he was the first Māori deputy leader of a party, and I think the record should have to reflect that Ron Mark actually beat him to it.

The CHAIRPERSON (Hon Trevor Mallard): I think the member knows very well that he is trifling with the Chair. That is not a matter of a point of order. If the member wants to debate it, then he takes a call.

Votes agreed to.

Primary Sector

The CHAIRPERSON (Hon Trevor Mallard): Members, we now come to votes in the primary sector, B.5, volume 9. The question is that Vote Lands and Vote Primary Industries and Food Safety stand part of the schedules.

Before I give Ian McKelvie the call, it is my intention to make a considered ruling following an inquiry by Jami-Lee Ross by way of point of order earlier, when he asked me to make clear the reasoning behind my asking chairs to give their speeches in a non-partisan manner. I have consulted with the determination of the Business Committee for Wednesday, 7 June this year and its agreements around the Estimates debate. At that, it agreed that the committee chairpersons would lead off each sector debate in order to set out the major findings of their committee. Those speeches do not count as part of that party’s allocation. In fact, for chairs who have made inquiries of me in this matter, I have made it very clear that they should be neutral and report the findings of the committee and not make a political speech, because that is something that comes in the Minister’s role, or as far as other members are concerned. So what I am going to do is reinforce my earlier ruling to make it clear that chairs of committees can have a second speech, if they so wish, and they can be as partisan as they want to at that stage, but for the first speech that will not be the case.

IAN MCKELVIE (Chairperson of the Primary Production Committee): Thank you for that very sage advice, Mr Chair. I am, of course, completely impartial in this matter. The Primary Production Committee of this House is a pretty collegial select committee. I want to thank the members of that select committee for their participation during the course of this debate and during the course of the year; their input has been pretty significant.

Of course, we run the sector that is the backbone of the country. There are some 350,000 jobs in that sector. There is export revenue of $38 billion, and it is predicted to grow by 10 percent to $41 billion in the next year or two. I have never seen, in my time—and I suspect that our committee has never seen it in its time—this sector in such good heart, and I will go into that a little further. I also want to thank the Ministers Guy, Bennett, and Upston for their contribution to the select committee in the course of those discussions.

The total appropriation for Vote Primary Industries is $991 million. It is a significant amount of money, and I will detail where some of that goes, in a moment. There are some programmes in the course of that that take quite a significant amount of money on their own, and the Primary Growth Partnership process, which the Government has entered into over the last 8 years, has come up with some great successes. It has come up with some proposals that have not been such great successes, but that is the nature of science. That programme swallows up some $720 million, and the great successes have initially related to forestry and fishing.

Another really challenging issue for this sector is irrigation, and I would contend that there is a quadruple bottom line to irrigation around community recreation, the environmental factor, and the economic factor, and it is an issue that the Government has been grappling with for some time—and clearly the sector is grappling with it as well. It is an issue that I think we will do well in in the future. We have just got to get the settings around it correct.

Biosecurity is our Minister’s most important issue that he deals with, and he has acknowledged that on a number of occasions. The total spend in this area is of some $223 million. One of the big challenges for this area in the next year or so will be reviewing the import health standards, and, of course, those reflect directly on some of the factors that we are dealing with in the country at the moment because we do import seeds and quite a number of other things into the country—palm kernel being a big one, I suspect—and so there is a whole lot of stuff that needs to be done around that, and that will be reviewed in the course of the next year.

For fisheries, there is $30 million to upgrade and modernise the fisheries management system. This includes cameras and monitors on the fishing boats. We have seen a significant improvement in the performance of this sector as well. I think one of the really interesting things in this sector was the passing, some 3 years ago, of the foreign charter fishing vessel legislation, which, effectively, has tidied up a lot of our fishing industry and the vessels they use for that business.

Food safety is a very important factor that this committee deals with and the Minister deals with. It has got a lot of intricacies around it. It is hugely important to New Zealand’s agriculture sector and, in fact, to our export sector. It probably is almost the key, actually, to most of what we do.

Another issue that the committee deals with at length—and this Budget deals with at length—is animal welfare, which is a big challenge for New Zealand. When I say that it is a big challenge for us, it is an area that we have to get right. It is an area that is critical to our primary production exports, and I think we do pretty well with it.

Another topic raised during the course of this discussion was that of careers. We need some 50,000 more people by 2024 in this sector. There is a large number of what we might call foreign workers employed in the agricultural sector, particularly around horticulture and the dairy section, and so, consequently, the immigration settings of the country are very important to those sectors.

Forestry is another very important sector for New Zealand. We have got record levels of forestry exports right now, and the committee dealt with that in the course of the discussions. And there are two, I think, very topical issues—other than the biosecurity one—that the committee is dealing with now that relate to honey.

So that is a brief summary of what the committee has been up to in the course of the last year and what we dealt with during the course of the Estimates discussions. I thank the committee and the Ministers for their participation in that. Thank you.

RICHARD PROSSER (NZ First): I agree with the chair of the Primary Production Committee, Ian McKelvie, that we are a very collegial committee, probably the most so of the House. But I want to address the subject of biosecurity funding. The chair did mention that—as we know, from his many mentions of it—the Minster claims that biosecurity is his No. 1 priority. It is unfortunate that it is not the Government’s No. 1 priority and that funding for the biosecurity is manifestly inadequate in this vote as it has been in other votes.

The visitor levy, when that was brought in, was touted as being a great thing for biosecurity. And after much wrestling with the Government benches, we finally levered out of them the fact that it was actually just a replacement revenue stream for central government funding and not actually an increase. And that is a shame because just only in the last week the biosecurity doomsday clock ticked another minute closer to midnight with the arrival of Mycoplasma bovis in dairy cows in the South Island. We do not know how this disease got in. The suspicion is that it came in with either imported semen or embryos, which begs the question: was that a failure of the import health standard or was it the failure of inspection at the border?

We know that this Government’s approach to biosecurity is pretty much “Look, Mum, no hands!”—relying on intelligence, relying on profiling, relying on computer modelling, and relying on too few boots on the ground, too few inspections, too few actual physical inspections, and too little in the way of actual testing. This is unacceptable in a country where three-quarters of our foreign exchange comes from the primary sector.

Prior to that, we had the incursion of myrtle rust. Myrtle rust poses an enormous danger to our mānuka honey industry, amongst other things, yet the Government sat on its hands for 7 years doing nothing about the warnings it was given that myrtle rust was likely to arrive, the means by which it was likely to arrive, and the damage that it could do when it got here. In 7 years nothing was done in terms of forming a management plan—until last year, when a small amount of money was finally put forward for an initial study into what might be needed for a management plan. Again, with myrtle rust, we have to ask: was this a failure of the processes at the border? It is telling that all of the incursions that have been discovered so far have been discovered in nurseries, which points very strongly to the incursion coming in on infected plant material and being spread from there, from one nursery to the next. Our border is simply too porous and we do not put enough effort or enough resourcing into actually stopping and checking and testing and inspecting the things that come across our border.

The next major problem—well, we will talk about the doomsday itself at the end—that we are going to have to face is the brown marmorated stink bug. Now, the brown marmorated stink bug is a horrible pest. It is, according to the Ministry for Primary Industries report, which I have here, the kiwifruit industry’s second most unwanted biosecurity threat after fruit fly, and the risk of it entering New Zealand is now considered extreme. It would have no problem establishing itself in New Zealand, due to the highly conducive environment—the abundance of food and the abundance of host material. It could cause anything up to 30 percent loss of crop in kiwifruit orchards.

The methods by which it can arrive—will arrive, because of the lax approach that this Government takes to biosecurity and the lack of funding and the lack of resourcing that it applies to it. The advisory statement from the ministry says the stink bug could find its way into loaded containers for import into New Zealand. It is also spread through the transport of personal effects and housewares, and could find its way into luggage and mail, and yet we do not inspect 100 percent of goods, of mail, of passengers, or of luggage crossing the border. We inspect, at most, one out of four shipping containers. At some ports, on some days, it is as few as one in 100. It is totally irresponsible, and it is partly down to the fact that this Government simply does not resource biosecurity sufficiently, and the money that it does spend is not directed in the right way.

Of course, doomsday—this is kind of like Groundhog Day at the moment—when it comes upon us, will be in the form of foot-and-mouth. Because of this Government’s approach to biosecurity—because of its lack of proper resourcing and funding for biosecurity—this means that foot-and-mouth is a matter of when, and not if. When that happens, it will decimate our livestock industries and it will probably cost this country somewhere in the order of $20 billion. To my way of thinking, that warrants a little more genuine spending on biosecurity than what this Government appears to be prepared to do. Thank you.

Hon DAMIEN O’CONNOR (Labour—West Coast—Tasman): It is a pleasure to follow on from the previous speaker, Richard Prosser, there, because I too am going to speak on what is the most important issue facing the primary sector at the moment, and it is one word: biosecurity. The Mycoplasma bovis outbreak that has been identified is a classic case of the Government’s inadequate management of biosecurity—in fact, inadequate management across the whole of the primary sector. In its classic wisdom, or lack of, it thought that it would throw all areas of responsibility into one organisation called the Ministry for Primary Industries (MPI), and that that would be efficient, and that would create cooperation, but what that has in fact has done is dumbed down the area of expertise and knowledge and passion that we need, particularly in the area of biosecurity and food safety.

When the restructure occurred, I had people contacting me saying: “I’ve left. I’ve gone from my chosen career in biosecurity because I feel we aren’t doing our job properly.” And, indeed, we have had a recent example of that massive failure. It is a failure in a number of areas. In fact, this afternoon I was contacted by someone who said a neighbouring farm of where we have the identified infection has not been contacted by the Ministry for Primary Industries. They had been contacted by National Animal Identification and Tracing, the organisation responsible for animal tracing, but they have not been contacted by the Ministry for Primary Industries to give them advice on a whole range of issues. This farmer is bringing stock back from a grazing property back on to their home property, right past the Van Leeuwen Dairy Group’s place, and the farmer does not know whether that is appropriate, whether it gives further risk for his or her operation, and whether it creates, I guess, a complication for the Van Leeuwen Dairy Group, because MPI has not knocked on the door of the neighbouring farmer and given that advice. Such is the level of failure at MPI and, in my view, of their ability to deal with these issues.

A number of years ago, the Auditor-General said that, actually, it was not up to management of foot-and-mouth if it came into New Zealand. So there was a review and an upgrade, we were told, of MPI processes. Now, when we have Mycoplasma bovis in the country, there are a number of questions. Firstly, how did it come in? MPI very quickly said that we may never know, which is an absolute acceptance of failure, and I do not accept that for a moment.

What we hear now is that there were symptoms of this in March. Persistent mastitis, resistance to antibiotics, and some of the classic symptoms of Mycoplasma bovis were present but not identified and pursued. Now, I am not going to make a judgment on whether that was with the farmer or with MPI, or the vets, or whatever, but to now be in the end of July before we finally have an admission that we do have this bacteria in the country—it has serious animal welfare implications from a farmer’s perspective. In fact, they are more serious than any foot-and-mouth. The issue with foot-and-mouth is, I guess, its infectious nature and that it can be blown in the wind. Mycoplasma bovis can spread beyond direct contact, through feed, or within a metre—so we are told from international experience. So MPI have been playing this down.

I do not wish to play it up, but I do wish MPI to be in a position to manage this adequately. In my view, there has not been sufficient funding going into biosecurity to meet the increasing trade across the border, in and out of New Zealand, and the increasing risks from the number of diseases that we know are present around the world. Just at a time that we were—and even the meat industry; God, that has taken them a while—starting to realise the importance of our biosecurity status, our relatively low level of diseases in this country, and the potential that that offers for us to sell very high-value products, free of any contaminants, into the world’s most discerning markets with customers who really want the finest protein in the world. When the meat industry gets it, but the Government does not, then we are in trouble.

The Government has to step up here. It has got to put more money into biosecurity. It has got give more independence to the agency—[Bell rung]—and that is why Labour has said, indeed, that it will put biosecurity and food safety out of MPI, to give them more authority—

The CHAIRPERSON (Hon Chester Borrows): You are supposed to ask for another call or stop there.

Hon DAMIEN O’CONNOR: Oh, sorry. I just have not had enough speaking opportunities lately, but that is all right. Can I just say that on biosecurity, the Government has not funded enough into this area, is not committed to it, and now we are starting to pay the price. I could take another call in this area, but I have to say that the issue of food safety is one area.

We have a classic example of skewed priorities, I guess, within MPI. When we had inspectors rushing to The Duke of Marlborough Hotel in the Bay of Islands to stop the chef serving a medium-rare burger—an absolute outrageous food-safety risk, so we were told, or they were told. Those people would have been better off dealing with real food safety issues and dealing with real biosecurity issues. I think you would agree that we have just got to make sure—because I guess there will be an argument that there is never sufficient funding—with the funding we have, that we get our priorities right. Within MPI, under this Government, I think they have got them all skewed.

I applaud some of the good work that people do on the ground, but when we have got one big policy department forced together to make general policy directives or develop papers, without the level of expertise that we have seen in the past, people get despondent. I think we have lost some of the passion and commitment within the MPI because of the Government’s oversight and blind belief that bigger is better and that by throwing all these people into one big organisation, the Ministry for Primary Industries, that we are going to get a better deal for the farmers, for New Zealand, and indeed for our customers.

We have seen numerous examples in food safety where the ball has been dropped in the past. We hope that we do not have repeats of that for Fonterra or for any other organisation. We have got pressure now from within the meat industry to have self-regulations of meat inspection. I have had discussions with the industry. They want to engage. But I put it to them that, ultimately, the trust that our international customers put in Government oversight should be absolute, and that if we compromise the systems and leave the door open for, I guess, commercial opportunities or human failure, then we are all going to pay the price.

This one outbreak of Mycoplasma bovis may yet cost us hundreds of millions of dollars and it is only small mistakes that can do the same to our reputation in the area of food safety. In fact, our inability to accurately identify whether we had a major food problem meant that our reputation has been tarnished in the international area, particularly in China, and we are indeed trying to play catch-up from a food safety mistake.

I will not go on, other than to say that Labour believes there has been insufficient funding going into MPI, particularly in the area of biosecurity. We believe we need to up our game in food safety, and we have passed a couple of pieces of legislation to help in that process. But the funding has to follow. The Government’s determination to balance the books, to have its first, or indeed, maybe its second surplus Budget has come at a huge cost, not only in the areas of social responsibility across New Zealand but in the areas of biosecurity oversight. Practically every day now I am getting emails from people who are concerned about the process at the border, where there is a casual attitude, or indeed through the systems in industry, where I think we have a very high standard of outward export oversight. But we have an insufficient level of oversight for products coming into the country.

Officials are too quick to be trusting. If a foreign country exporting into New Zealand says that our systems are all OK, then they accept that. I think that is totally naive and puts us at risk. That was in the area of palm kernel expeller, or PKE as it is known. The Government, or its officials, denied that there was any possible contamination, and it was not until farmers actually showed them, with photos, that they took action to improve the import health standards.

We need to ensure there is sufficient funding into MPI to do the proper review of the import health standards. They have indicated that they are starting, and we need to make sure that when they do that, they do it properly.

STEFFAN BROWNING (Green): Speaking to the primary industries and food safety, I will start by saying these Estimates had nothing in there for the organic sector. The food labelled as organic in the US is the fastest-growing label, showing a real need by consumers, a real demand, second only to non-GMO food labelling. Both of those are the fastest-growing food labels in the US, one of our primary markets, and yet there was nothing in the Budget for them. There was nothing around organics.

In terms of food safety, and everybody on the Primary Production Committee has heard very, very well about Biddy, the cheese producer with four cows, paying absolutely thousands per year for testing. I am pleased to hear that the new Minister for Food Safety appears to be hearing that call and there may be some reduction, because her food is absolutely safe. She had paid $26,000 in 6 months for just four cows, the produce from four cows, and that is nuts. But as a select committee, we all agreed we wanted to see some support there. We would like to see a more affordable regime for small producers. We recommended that—in fact, it is to the benefit of large producers if we make it easier on the small producers, who often come through with innovative ideas, and others can benefit from that innovation.

Another thing that came up in our discussions was around raw milk. The new raw milk regulations came in on 1 March 2016, and what did we get? An improvement, and increased access for consumers who want it? No. Because of that unnecessary stringency and over-the-top methods we have had a reduction, from 74 raw milk producers down to 24, although I gather there is a small increase coming up again. That was appalling. That food was not coming through as unsafe and this overprotection for an unsustainable dairy industry, by stopping people getting access to what is overall a healthier style of milk, was over the top. So that was very, very concerning. It was concerning for the Green Party.

I am with the other calls around biosecurity. The latest issue, with Micoplasma bovis that is coming in and the Ministry for Primary Industries (MPI) is saying it thinks it might not be able to trace it, or is almost talking failure from the start. The ministry did that with myrtle rust—talked it down, made it seem like it would be a failure, so if things went wrong it was a predictable situation.

I hope that this is treated like foot-and-mouth. This is a useful opportunity to test the resources of MPI, which says it is foot-and-mouth ready, and nail it—not hold it, not manage it, but nail it. Get rid of it. The ministry could have done that with Theileria, but what did MPI do? It mapped its progress through the country, and this is what we are seeing in case after case. Velvetleaf is another one where we are not seeing rapid enough change. We might get there; we might not. In my region, Chilean needle grass just carries on spreading, no matter there is an element of money going in, but never enough.

Biosecurity needs to be lifted up. I had a constituent get in touch with me, saying, “What’s this mud being imported from Korea?”—another foot-and-mouth country. We have imports that are not even necessary, and we could be doing so, so much better in terms of biosecurity; we must. Myrtle rust—I said to contain it. They only got around to containing it 9 weeks after I put that to them. The oysters—only after I asked questions did we even get an announcement that that disease was there. And then, we finally got some action. It would not have happened if I was not asking questions. The Green Party wants to see much improvement in biosecurity. I suspect that is my time up.

Hon DAVID BENNETT (Minister for Food Safety): Mr Chair, I want to take just a very brief moment of your time, first of all, to thank Ian McKelvie and the team on the Primary Production Committee. It is a very good committee, very well led and chaired. The members of that committee, from all sides of the House, have a distinct interest in agriculture and horticulture. I think it is a very valuable committee in this Parliament.

I note that most of the speakers have talked about biosecurity. As food safety Minister I also want to talk about food safety and how important it is, and how the next generation of the New Zealand brand will be very much dominated by having higher food security and food safety standards that will underpin our products, so that customers will get the kind of quality product that they can trust. That is really important for a growing agricultural industry.

The other thing I just want to mention is the importance of trade. When we look at an industry that is worth about $38 billion this year and going up next year as well—and note the Opposition parties’ opposition to anything to do to grow that base of agricultural and horticultural export, by their opposition to trade policies. I think that is very destructive to a very strong industry that people work hard in. They put their whole lives and their family’s investment on the line, and politicians in this room play politics with that and go around trying to get votes from those communities while at the same time opposing the one thing that would actually assist them to grow their businesses. So with that, thank you.

BARBARA KURIGER (Junior Whip—National): I move, That the Committee report progress presently and move to consider the Land Transport Amendment Bill (No 2).

Progress to be reported presently.

Bills

Land Transport Amendment Bill (No 2)

In Committee

The CHAIRPERSON (Hon Chester Borrows): I have a clarification to make on the title of this bill. The bill on the Table is titled Land Transport Amendment Bill. This is the second land transport amendment bill in the 51st Parliament. It is, therefore, the Land Transport Amendment Bill (No 2), as noted on the Order Paper. I can confirm that the bill that is on the Table is the correct bill for the Committee’s consideration, and the title will be updated next time it is published.

Part 1 Amendments to Land Transport Act 1998

STUART NASH (Labour—Napier): It is a pleasure to stand up and talk about the Land Transport Amendment Bill (No 2) in the Committee stage. Talking about Part 1, something that I would like to talk about is the “Mandatory alcohol interlock sentence for repeat offences and certain first offences”—this is new section 65AB, inserted by clause 19, on page 11. There is no doubt about it that drink-drivers cause death on our roads. People who drive when they are drunk or impaired by alcohol should be—anything to get them off our roads makes a huge difference. In fact, I remember talking to a retiring—I think he was an assistant commissioner of police, of road transport policing. I cannot remember his name, which is terrible, but he is heading off to Geneva, and he said to me that one of the things—this is good for Mr Iain Lees-Galloway—that will actually save lives is Iain Lees-Galloway’s member’s bill, I think it was, that changed drug alcohol limits.

But the bottom line is that we want to stop people from driving drunk. Of that there is absolutely no doubt, and there is also no doubt that there is too much recidivist drink-driving. I think a New Zealand First—no, no, I think it was one of the Greens; David Clendon spoke about the fact that he visited a drug and alcohol court and a chap was there for his ninth offence, or something ridiculous. That is totally unacceptable, someone with nine offences for drink-driving. What we do know is he had been caught nine times. What we do not know, obviously, is how many times he had driven drunk. But he had a real problem; of that there was no doubt.

So there are these things called alcohol interlock devices, and what they do is they are fitted to a vehicle and the person has to breathe into this and pass a test before they are allowed to drive their car. I think this is absolutely fantastic, and what this bill does is it makes them mandatory for repeat offences and for certain first-time offences. Now what is a first-time offence? Well, we all know what a repeat offender is, of course. They have been convicted before for drunk-driving within 5 years of the date on which the offence has been dealt with by a court. So if it is outside that time, then they are not a repeat offender; if it is within the 5-year time, then they are classed as a repeat offender under new section 65AB(1)(a).

We talk about what a first-time offender is. Well, that is if they have a high blood-alcohol reading that exceeds 800 micrograms of alcohol per litre of breath. The proportion of alcohol in a person’s blood, as ascertained from the analysis, exceeds 160 milligrams of alcohol per 100 millilitres of blood. It probably means nothing if you do not know exactly what I am talking about, but what I would say is that it is a lot, OK? This is someone who is drunk, who is impaired, and not only puts their own life at risk but, more importantly, puts the lives of everyone else on the road at risk.

The thing about these devices—I would actually like to see these mandatory in every vehicle. Why are we doing it only for people who have been convicted of a high blood-alcohol level or a high breath-test analysis? Why are we not doing it for everyone? I know there is an expense here, and I do know that—I assume it is the department of Justice that will provide a fund, but correct me if I am wrong; and no doubt one of my colleagues will. If you have been convicted of this and one of these has to be fitted to your car, then you have got to pay for it. What we do not want to do is penalise a person twice by making them pay for something that they just cannot afford and therefore they do not do it. So there will be a fund set up to do this, because the most important thing, of course, is to stop someone from driving drunk. It cannot be prohibitive in the sense that they just simply cannot afford it. But would it not be great to have these in every single vehicle? I mean, what are the rules now, Mr Lees-Galloway? If you are under 18, you cannot have any alcohol on your breath?

Iain Lees-Galloway: That’s right.

STUART NASH: No alcohol whatsoever. What is the risk of having this in every single car and just dialling it down? For example, if the car is owned or it is driven by someone who is 18 or under, then this is automatically installed in the car. In fact, I think that is probably the future, and maybe this is just a trial. We want to stop people driving drunk. In fact, I would pay to have this in any of my children’s cars, no doubt about that, and I think there are many people around the country who should have them installed whether they have got a drink-driving conviction or not. But the bottom line is that it is the right thing to do. It is using technology in a very smart way to save lives. I was not on the Transport and Industrial Relations Committee, but I have absolutely no doubt whatsoever that this was supported by all.

One thing I am unsure about, and I have been trying to find it in the legislation, is actually the cost of this. What the court can do is when it imposes—this is new section 65AH—a fine or a court order or imprisonment or an assessment or anything like that, “the court may take into account the cost of an alcohol interlock sentence [when setting] the amount of any fine.” So, as mentioned, what we do not want to do with these things is make them prohibitive or make them unaffordable, but the bottom line is that if you are convicted of drink-driving, there is a price to pay. What we also know is that when people have been drinking their judgment is impaired—is that not right, Mr Seymour? So what we need to ensure is that these things take that element of risk out of the equation when someone has had a few too many drinks and wants to hop in a car. The other thing it can do, of course, is it means that people who need their vehicle for work—you know, it is a vital component of their life—can possibly have one of these installed and know with confidence that they will not be done for drunk-driving again. But the bottom line is that it is the right thing to do.

There are exceptions. There is an exception for people who are not given an alcohol interlock sentence, and that is set out in new section 65AI. For example, and there are 3 of them, any disqualification as “appropriate under the provision relating to the qualifying offence;”—oh, anyway, you can read them yourself if you are very interested, there is no doubt about that. It would get a little bit boring if I were to go through it. It is quite technical, but it is important. All I would say is that I think these are a fantastic initiative. I actually think they should be in all cars. I would love to hear from someone who was on the select committee to provide a little bit of direction of why, in fact, we did not suggest this for everyone who has been convicted of a drink-driving offence and why they are not mandatory for anyone under the age of 18 who is driving a vehicle. The records show that those are the ones who are going to kill people on our roads. Thank you very much.

MICHAEL WOOD (Labour—Mt Roskill): I am very happy to take a call on the Land Transport Amendment Bill (No 2), and I am particularly pleased as this is my first opportunity to speak in this debate as Labour’s new transport spokesperson. In introducing that point, can I just acknowledge the work that my colleague Sue Moroney has done not only in this role but also on the Transport and Industrial Relations Committee in working constructively on the progress of this bill. I would like to take a few calls on the bill this evening. There are lots of quite important points to cover off here.

The Labour Party’s position on this bill is that we support many of the measures within it, but we do have some real concerns that we want to flag and have some engagement with the Minister in the chair, Scott Simpson, on. The one that I want to touch on in my first contribution relates to the provisions in this bill—and we are talking about clause 58 here—which remove requirements to have identification information in Braille in small passenger vehicles. I want to reflect on some of the things that we heard in the Transport and Industrial Relations Committee about this and really dig into why we have not been able to see some proactive and sensible and pragmatic changes made to the legislation through that select committee process in response to those concerns.

This really goes to, I guess, probably the heart of Labour’s concerns about some of the deregulatory aspects around small passenger vehicles that come through in this bill. We are a party that supports sensible public-good regulation. We always have to be careful when we are regulating that we do not get into the territory of being overburdensome, but we have public-good regulation to protect the public good.

What we had in the select committee in respect of this issue was, I thought, a number of very good submissions, including one from the Association of Blind Citizens of New Zealand—and I could not really put it better myself. It made the point that it sees real potential through the introduction of ride-sharing services like Uber—it is not anti-Uber at all. The association thinks it is a good service that offers opportunities for the people it represents. It goes further—and I quote directly from them here—it says: “we urge caution to ensure that there are no serious and perhaps unforeseen consequences for people who are most dependent on such services for their everyday transport, and who may also be amongst the most vulnerable. We are deeply concerned that the overall thrust of the changes, as explained in the explanatory note to the bill, is to ‘remove regulatory requirements that impose costs on operators but no longer offer any significant benefits’.” What it goes on to say in its submission is that it does believe, as one of the bodies that represents the interests of vision-impaired people, that there are significant benefits in terms of having that Braille identification in small passenger vehicles.

What we really have not heard from the Government through the course of the Committee stage debate, or at any other stage, is why this relatively non-onerous piece of public-good regulation has been removed. In this respect, I want to speak to the Supplementary Order Paper (SOP) that was put forward by Sue Moroney, Supplementary Order Paper 346, which seeks to directly address this issue. It is very simple. It means that in the legislation, in the bill here—and we are looking at page 36 of the bar 2 bill—

The CHAIRPERSON (Hon Chester Borrows): Order! I am sorry to interrupt the member but, just for the purposes of transparency, the Supplementary Order Papers that the member Sue Moroney has put forward are out of order because they are on an intangible or not-a-fixed date. Discussions around Uber and what regulations should be imposed on them—so discussion about what the Supplementary Order Papers are intended to do is fine and totally in scope, but they will be ruled out of order come voting time. Just to let you know.

MICHAEL WOOD: Thank you, Mr Chair. If I can continue on in this vein, it would be really good to hear from the Minister in the chair on the substantive point that we are talking about in respect of clause 58 of the bill here, which is why there has been such reluctance from the Government to listen to this point. While the SOP might be out of order, I do note, from the commentary, we heard in the select committee that, in fact, the provision of this Braille signage is actually very cheap—possibly about $20 per vehicle. So it does seem to be a relatively non-onerous thing that we could do to ensure the safety and comfort of vision-impaired people.

In the short time I have got—actually the frozen time I have got, judging by the timer—in the remainder of this call, I would just like to address a very, very specific point I picked up in terms of one of the changes that was introduced by the select committee—and I would like to come back to some other calls a little bit later—and this is on page 42 of the bill, and we are looking at clause 80 here, and it is the definition of “moped”. I have a particular interest in this because I am the proud owner of a nice little 1998 Honda Giorno. It is more sort of held together by duct tape and things these days—I probably would not want the land transport authorities looking too closely at it. But ensuring that those vehicles are roadworthy and ridden in accordance with the rules of the road is very important. Of course, they are a very useful addition to a vehicle fleet, particularly in our congested cities.

The question that I have got is around clause 80(1). Clause 80(1) introduces, through a select committee change, a new definition of “moped”, and here we have got “has 2 or 3 wheels;”—well, we understand that that is an accurate thing to say—has “an engine cylinder capacity not exceeding 50 cc”, and 50cc has always been the standard definition of what separates a moped from a motorcycle or the baby vehicle from the grown up one; 50cc’s the cut-off point. So we know that that is right; and “a power source other than a piston engine”. Effectively, a moped is a lawnmower that you ride around on the roads.

But it is clause 80(1)(b) that I just want to question and perhaps get the Minister in the chair to respond to: “a maximum speed not exceeding 50 kilometres per hour;”. This is important. This is part of the definition of a moped in this piece of legislation. Every moped that I am familiar with has a maximum speed of more than 50 kilometres per hour. The maximum speed at which a moped is legally, lawfully, allowed to drive on the road is 50 kilometres per hour, but the maximum speed of a moped is generally far more than 50 kilometres an hour. So it would just be helpful to check through the Minister that we are confident that the definition of “moped” is not going to, through a loose use of language, create potential definitional issues when we get to the implementation of this legislation further on down the track. I will wind up my call there, Mr Chair, but I will be very keen to take a few more calls later in this debate.

PEENI HENARE (Labour—Tāmaki Makaurau): Thank you very much, Mr Chair, for this opportunity. I am glad my esteemed colleague here knows the definition of “motorcycle” and “scooter”. It is an important thing. I want to touch on a couple of things, and one of those is around impairment while in charge of a vehicle. While the bill talks about alcohol, it also talks about drugs. I think it is a relevant debate to have, given the issue around synthetic drugs today—not your traditional drugs, which, I am sure, many police who have worked in this particular space are familiar with, but synthetic drugs.

There is a real issue with synthetic drugs and how they impact on people’s functions and abilities, and clearly in this case the ability to drive a vehicle or control a vehicle. The definition of what synthetic cannabis is, I think, still up for debate. Some would argue it is not cannabis and is in fact a whole host of other different poisons—not cannabis per se but clearly something that is bad for you and can impair your ability to be in command of, or drive, a vehicle. I would like to see, perhaps, some clearer definition around that.

I also want to touch on the point made by my colleague Mr Michael Wood on Braille. The reason I want to highlight his particular contribution—which is around clause 58, “Section 30B repealed (Provision of identification information in Braille)”—is that the submitters to the select committee were very, very clear, and gave, I thought, very emotional submissions on fearing for the lives of the most vulnerable in our communities when they are hoping to catch a taxi somewhere. They also spoke about their dependence on taxis to get around places like Auckland. Although the quite regular use of taxis can be booked, they fear that if a particular driver or their regular driver is not available and they get a different driver and they are not able to readily identify them, then there is a serious issue there.

There were recommendations that perhaps technology could help with this, but the point was made to us that technology actually costs a fair amount of money, and those who are vision-impaired and rely on taxi services are unable to afford the technology required to make sure that they get a timely service from the taxi service that is there to pick them up, and that the identity of the driver is readily available and also the cab number. That was a serious concern.

I will say it clearly in this Chamber: the submitters on this actually gave some harrowing stories where they feared for their lives when they were unable to clearly identify who the driver was, felt they had been taken far off track and not to their intended destination, and literally felt they were going to be murdered or hurt in some particular way. That is an important thing, because, like I say, I thought those were very powerful submissions.

I take the point that my colleague Mr Wood made, which is that it is very clear that the cost to make sure that the signage is available on a car is very minimal—very minimal. In fact, it is so small—I think, if I recall correctly, one of the submissions from the taxi company, when asked about whether or not it is that hard to provide Braille signage for vision-impaired consumers, was that it said: “Look, compliance isn’t that hard. Actually, we’re not too fussed. We’re neither here nor there with it.”

So I wonder why we are taking this away when, like I said, for the most vulnerable members of our community who rely on this particular service, we are not helping them. We are not looking after them. We are not making sure that they can continue to get from A to B safely. That is of huge concern to us, primarily because we do not understand why such a small cost is not being considered when repealing this particular part of the legislation. We have got some concerns about that.

DAVID SEYMOUR (Leader—ACT): I would just like to make some short initial remarks with regard to two amendments in the name of Sue Moroney: Supplementary Order Papers 348 and 349. These two amendments are positively Venezuelan in that they name a particular company and target it as though the purpose of the House is not to make laws that apply equally to all New Zealanders and all who operate in the Realm of New Zealand but that we are actually legislating in the House, naming individuals or naming corporations and bullying them through legislation. That is the sort of approach that we find in Venezuela, where Sue Moroney’s fellow travellers have destroyed the country—

Iain Lees-Galloway: How much is this contribution worth?

DAVID SEYMOUR: —and, as F A Hayek predicted, have taken that country down the road to serfdom, where it now finds itself, having collapsed inevitably from central planning to out and out dictator—

Iain Lees-Galloway: Is the cheque in the mail yet, David?

DAVID SEYMOUR: I raise a point of order, Mr Chairperson. Iain Lees-Galloway has asked whether I am receiving a cheque for speaking in the House. As you know, under Standing Order 120, that is unparliamentary and not the kind of behaviour we would expect from a King’s College old boy.

The CHAIRPERSON (Hon Chester Borrows): Well, I can understand the sensitivities. However, he said: “Is the cheque in the mail?”, and he could have been talking about anything. He did not actually refer to whom the cheque could be from, or speculate. I take the point you are making in respect of the context, though, and I would suggest to Mr Lees-Galloway that he refrain from making such glib comments.

DAVID SEYMOUR: I raise a point of order, Mr Chairperson. This is a fresh point of order. Prior to that, he asked: “How much is this speech costing?”. If you are seriously denying that he is in contravention of Standing Order 120, then I think you have misread what he was saying.

The CHAIRPERSON (Hon Chester Borrows): I ask Iain Lees-Galloway whether he confirms that that is what he said.

Iain Lees-Galloway: Yeah, he is close enough.

The CHAIRPERSON (Hon Chester Borrows): Well, I suggest you withdraw and apologise.

Iain Lees-Galloway: I withdraw and apologise.

The CHAIRPERSON (Hon Chester Borrows): Actually, I was not suggesting that; I was instructing it.

DAVID SEYMOUR: Thank you, Mr Chair—

Michael Wood: I raise a point of order, Mr Chairperson. Mr Seymour’s point of order interrupted one that I was about to take myself, which is that the prior comment that had set off that exchange was comparing a Labour Party member to a regime that is murdering its own citizens on the streets. I think we take offence at that and would ask that that is withdrawn.

Sue Moroney: I have taken offence.

The CHAIRPERSON (Hon Chester Borrows): Unfortunately, the member should have objected at the time. But let us just see whether we can deal with this in a relatively respectful way, bearing in mind the latitudes of the House.

DAVID SEYMOUR: Thank you, Mr Chair. However, I have to say that comparing one’s policies is quite different from comparing one’s motives, and it is a fact that throughout history, wherever these types of policies—socialism and central planning—have been adopted, they have inevitably led us down the road to serfdom and have inevitably concentrated power in the thugs and bullies and led to great violence.

The CHAIRPERSON (Hon Chester Borrows): Let us get back to the bill.

DAVID SEYMOUR: If Michael Wood is offended by that, I am very sorry, but those are the facts. To have a member of the Labour Party in 2017 putting an amendment before this House that targets a particular corporation—

Sue Moroney: And ask them to pay their taxes.

DAVID SEYMOUR: —names it, and attempts to shame it is a disgrace. And there is Sue Moroney saying: “Oh well, we’re only asking them to pay their tax.” Well, the fact of the matter is that the assumption in a civilised society, in a democracy, in 2017 is that all corporations are observing the rule of law, and only Sue Moroney could possibly misunderstand that and put forward such ridiculous amendments to this bill. So I hope that these amendments will be voted down, I hope that they will not stand, and, in fact, Mr Chair, I hope that you will rule them out of order because I felt it necessary—

The CHAIRPERSON (Hon Chester Borrows): Order! I can put the member’s mind at rest. I gave an indication to the Committee earlier that the Supplementary Order Papers in respect of the company are out of order because they relate to an indeterminate date. However, debate around the company is within the scope of the bill.

DAVID SEYMOUR: Thank you, Mr Chair. Nevertheless, I think it is important to put it on record that for this House to make legislation targeting specific individuals and targeting specific companies is positively Venezuelan, and the Labour Party should be ashamed for putting such amendments before this Committee. Thank you.

Hon SIMON BRIDGES (Minister of Transport): It is a great pleasure to take a call on this and to just set a few things on the record for starters. Firstly, I must thank the Transport and Industrial Relations Committee for its diligence on this bill. I think it is a very significant bill. As I say, I think the changes to alcohol interlocks are entirely right. I am sure they will have widespread support amongst the Committee. I think the fare evasion provisions, again, are important, particularly in Auckland, where we are starting to see this emerging. It has been happening for some time and certainly is a growing issue. They will be helpful provisions and will empower enforcement officers to require passengers to show evidence they have paid the fare and to provide their contact details if they do not. The fleeing driver provisions—again, I think we will see widespread support, as well as for the heavy vehicle regulations and the like.

I think, for my part, we are focusing on the most significant part of the bill in the sense that it is the newest. It is the most interesting of the provisions, and that is in relation to some small passenger services. I can say personally that I am proud of these provisions. I think this is going to be a very significant reform that will make an incredibly positive difference to, broadly, the small passenger services area—taxis and private carriage and the shuttles, and so on, as well. I say that because, really, what they do is they lower the compliance, they level the playing field, and they bring us into a world that is far different from the one in the 1980s, when what we had, of course, was not even big brick cellphones, really. I mean, they might just have been on the scene, but we certainly did not have these smartphones and all that technology and innovation have put before us today.

Ultimately, what the bill is going to do is provide for much greater service to consumers—to the people of New Zealand—and that has got to be a good thing. There will be more competition, more service, more choice, and that choice, I think, by lowering the compliance, is going to result in an array of different services. I think you will still see traditional taxis that are identical to what we have today. You will walk out of an airport, you will get out on a rank, and you will see exactly what we see now—the branded car with the meter, the camera, and all those things. People will still do that, and that will be a strong way of doing it.

But I think you will also see different models, where people will use their phone and they will see a different range of services. If they want the cheaper option to get somewhere quickly, which might be the mum with her shopping, or if they want to go sharing—perhaps the university student will be getting in with strangers or other university students in a ride-sharing situation—this bill is going to be incredibly enabling for all that. So it will be empowering for consumers, and I think it will also see a reduction in congestion over time. I have talked about electric vehicles, autonomous vehicles, all these things—I think this area of ride sharing is the most significant in the short to medium term.

I just want to address a couple of the concerns that I have heard from members that I think it is valid to raise. Firstly, the one by Michael Wood about mopeds—it is good to hear his personal history when it comes to mopeds. The definition of moped in regard to the maximum speed limit of 50 kilometres is actually in the Act now, so that is the current situation, and the changed definition is designed to better include three-wheeler mopeds.

I also want to address head-on what I think is a valid concern about the disability sector and about Braille that we have heard. I can understand the concerns being raised, but what I heard in the lead-up to the bill and what Craig Foss, the then Minister, heard at quite a number of meetings was that this was a sector, the disability sector, for which the small passenger services sector was really underperforming. They do not see the status quo today—well, they might say it is just passing, but not good enough.

What has happened is that technology has changed everything. We have a situation now where technology, through apps, through different credit cards and payment forms, provides every bit the same—actually much more—assurance for a disabled person in a taxi or in a private hire vehicle as they could have had before. It allows them, of course, through various apps with talking technologies, etc., etc.—there is so much happening in this area—to have much better direct communication with operators and much better direct assurance about the operators and whom they are getting in advance, records of the trips, and all of these things, than they ever could have had with the tatty piece of paper and the compliance cost on regulators that the Braille signage provides at the moment.

So I think this is the right thing to do: to strip away compliance costs while actually ensuring, as we know, that the technology and innovation provide other, different—and, I believe much better, stronger—safety assurances for disabled folk who are using these sorts of services. This is a system, I repeat, that is going to be enabling more service, more consumer choice, more technology, and innovation that is better.

I also give this guarantee to the sector. At the moment, Total Mobility is the service that provides for them in this area, and provides subsidy, effectively, for their services. I believe that this regime is going to show much more service for them, some of it much cheaper, which is something that they have complained about in the past. But if we see any sort of reduction in service, I will, as Minister of Transport in a newly constructed National Government—or the National Government will—up the Total Mobility subsidy. I will up the amount we are putting in if we find that the system is not working as it should. I know that it will, though.

I feel very strongly that what we are doing here is a step forward. I feel that, in fact, technology and innovation and the enabling that we are allowing here for the apps and so on, which at the moment they cannot do properly, legally, under the current regime—which will pass when this bill is passed—will allow for much better assurance, not less, for the disabled sector in New Zealand.

SUE MORONEY (Labour): Thank you for the opportunity to participate in this debate on the Land Transport Amendment Bill (No 2). It does cover a wide range of issues in Part 1 here, but I want to focus particularly on a couple of issues in the first of what I hope will be many calls, because I have quite a number of Supplementary Order Papers on Part 1 of this bill.

Can I first of all say that David Seymour from the ACT Party just jumped the shark. He just jumped the shark. If anyone does not know about jumping the shark, it is a reference to what Fonzie did on Happy Days when they were desperate to try to make the show look a bit more groovy and entertaining—that is what David Seymour just did. He just accused me of being like a regime that murders its own citizens because—oh, wait for it—I put forward Supplementary Order Paper (SOP) 348, which says that this bill should not actually come into force until the day after Uber becomes fully compliant with all the tax requirements obliged of it under New Zealand law.

I have put this forward just to say that all of these companies should be compliant with tax laws, and we know that, in fact, there is an issue with Uber. That is why Uber was named. In the New Zealand Herald in July 2016, it was written that Uber declared gross revenue of just over $1 billion in New Zealand in 2014 but paid just $9,397 in income tax. So how can that be? How can that be right?

We in the Labour Party are all up for having a level playing field here in New Zealand. We want to make sure it is utterly a level playing field. That is why we are supporting this legislation, because it is an attempt to get a level playing field in the small passenger vehicle services. That is part of this bill. But we also want it to be fair across the board, because the taxi companies are not able to use the sorts of loopholes that Uber is using. They are paying tax on every cent, so why is Uber not? So if we want a completely fair and even and level playing field, Minister Bridges, then we need to get real about the rest of the situation, as well.

The other Supplementary Order Paper—Supplementary Order Paper 349—that David Seymour seemed to think equated to murdering one’s own citizens was requiring Uber to become “fully compliant with all Transport Rule requirements regarding log books and driving hours as obliged of them under New Zealand law.” The reason for this is that there have now been a number of well-publicised cases where people driving for Uber—and, you know, the Uber company will be very clever, and say: “You know, actually, we don’t employ drivers. We just have partners.”—

Peeni Henare: Rod Stewart.

SUE MORONEY: —that is right—“It’s an application. Don’t you realise that Uber is an app. It’s not a vehicle that is being driven.” Of course we understand that, but there have been cases where Uber drivers have been driving outside those hours. Every New Zealander should be concerned about that because we all share the roads with those same drivers, and I want to make sure, and the New Zealand Labour Party wants to make sure, that our roads are safe.

One of the ways that we do that is we have transport rules and regulations for these services, and, for some reason, Uber seems to think that those do not apply to it. So the Supplementary Order Papers—which I fully accept have been ruled out of order, but the ACT member objected to them—were simply about saying that the legislation should not proceed and should not come into force until those issues had been addressed by that company. After all, it is, by and large, that company’s performance and introduction into New Zealand that has required the law to be changed in this way. Yes, it is time to update this law, but let us be really clear that when we deregulate—and that is what this is; be very clear that this is piece of deregulation—we need to be very careful that we get it right.

We need to be very careful about that, because when deregulation goes bad, it costs lives. We know that. We know that through the Pike River mine experience, which we have had in our very own country. We know that because much more recently, we have seen the tragic events that unfolded in London, where fire standards had been deregulated. There was that horrific sight of that building going up in flames, when several people—tens of people—lost their lives. That is what happens if we deregulate and we get it wrong.

This is a service that people rely on when they are sometimes impaired. They are sometimes impaired. Sometimes that is because they have been out on the town and they have been drinking, and they are doing the right thing by not driving themselves but by calling up one of these services. We want to make sure that when people do the right thing, they are in safe hands. That is why this is so critically important. Quite frequently, it will be young women who are in that situation, so we want to make sure that they are looked after. People are very vulnerable in these circumstances.

Also—and the Minister made reference to this—people with disabilities rely utterly on this service. It is not a thing that they choose to do every once in a while when they go out on the town. This is how they live their lives because, with particular disabilities, they cannot drive themselves. The entire way that they interact with their community and the way they get themselves around is entirely dependent on this service, so the standards are very important to them.

One of my SOPs that, thankfully, has not been ruled out of order is just requiring all of those services to have some Braille signage on the side of the door, as they currently do. If you get into a taxi, you will see on the passenger side of the door that there is a little bit of plastic and it has got Braille signage on it. We had disability advocacy service after advocacy service after advocacy service come into our select committee and beg us not to remove the requirement for that Braille signage because they rely on it so utterly. We were told that if it is done well and properly, the cost is about $20 per each one of those little plastic stickers. Twenty dollars—for the want of $20, Minister. The cost is not burdensome for the safety that it provides for those very vulnerable people in our community who are sight-impaired.

For people who are blind and who, therefore, cannot drive themselves around and who cannot easily use public transport, this is their lifeblood, and all they are asking for is for it to be safe in a way that they know they can find out information about what vehicle they have just put themselves into. Yes, there is new technology, but all of them said that nothing was going to be as secure for them as having that little plastic sticker on that actual door. If you are sight-impaired and you are using an app to try to identify the driver in the picture of the driver on the app to make sure it is the right person, and you do not want to get into a vehicle you may regret getting into, then that is not going to work for a sight-impaired person.

We kind of kid ourselves quite a bit about what all this new technology means, as if it is going to fix everything—as if it is going to fix every circumstance. Well, it is just not, but the thing that has worked are these Braille stickers. They give certainty and security to the people who most rely on this service and who are most vulnerable when they are using this service. So I urge all parties to seriously consider supporting Supplementary Order Paper 346, because all it does is keep the current regulation in place that requires Braille signage in any of those vehicles that are being used to provide a small commercial passenger service. It is not too much to ask, but it is incredibly important for those people and it is what they rely on in terms of their safety.

I am really looking forward to some further debate on those SOPs. I want to hear from the Government, if it is not going to support SOP 346, why not.

DENIS O’ROURKE (NZ First): New Zealand First will continue to oppose this bill solely because of its provisions in relation to Uber. We do not believe any of the points that Minister Bridges made are true or correct. We think, to the contrary, that the bill will degrade the standards applying to small passenger vehicles, and that will impact on passenger safety. We say that there will be no level playing field provided for Uber in relation to taxis and that that is a bad thing. We do not accept that simply because there is a new technology, it is necessarily good—and it is not good in this case.

In fact, we think that the taxi drivers have a very valid complaint in relation to the lowering of standards, which they have worked so hard, for so long, to maintain, not because of the Transport Agency but because of the taxi drivers and their organisations themselves. We think that that will have a very adverse effect on the safety of passengers and drivers alike. The Government seems to be willing to pay that price, and we think that is deplorable.

We say that the bill will not provide a level playing field between Uber and taxis, and that there is no possible way this legislation could do so. Uber should be required to do what taxis and taxi drivers are required to do. One of those things is that they should be required to pass an English language test and an area knowledge test, and maintain a log book and comply with restrictions on hours of driving, in just the same way as taxi drivers are required to do.

Another issue is the removal of mandatory signs on and in vehicles. We say that they should stay. Uber vehicles should have mandatory signs on the exterior of them, in just the same way as taxis do, and the reason for that is that passengers have a right to know whether the vehicle that they are going to pay for a ride in is being run by authorised providers. You cannot do that without proper signage, and signage assists in identifying the vehicles and the drivers so that that identification can be used for enforcement of regulations. We also oppose the deletion of the requirement for Braille signs in the interior of the vehicles. We think that it is perfectly reasonable that for sight-impaired people, those Braille signs should stay. We say the same about security cameras—we think they are a very important adjunct for the safety of passengers and drivers, as they are in taxis. They should be required for Uber vehicles in exactly the same way. Security cameras record passenger misbehaviour and provide a very good record of events, should that be required for enforcement purposes.

Most of all, however, New Zealand First is very deeply concerned that Uber pays no tax in New Zealand and that most of its drivers will pay little or no tax either, as a matter of fact, while taxi drivers will be required to continue to do so. That is certainly nowhere near a level playing field, and the Government should be aiming for a level playing field.

It is also true that Uber drivers do not pay at airports for drop-off fees or pick-up fees in the same way that taxi drivers do, nor will Uber drivers have to pay for renting taxi stands at airports. Uber drivers just pick up or drop off people as though they are members of the public; they are not in that category. I know of one taxi organisation in Wellington that pays $200,000 a year for taxi stands at Wellington Airport. Nobody in the Uber industry will be doing that, and that is another very important way in which this bill is not providing Uber with a level playing field.

New Zealand is not ready for a free-for-all Uber service in New Zealand in the way that this Government intends. The standards that will apply will be too low. The safety levels will be very significantly reduced. Uber will take profits from New Zealand to benefit overseas owners, with no benefit to New Zealand whatsoever.

There are already 7,000 Uber vehicles in New Zealand, and they include drivers on student visas whose real reason for being here is to find work, not to study. They take jobs away from Kiwis, jobs that should not be taken away from Kiwis. But even those drivers are being ripped off by the Uber organisation itself, which has recently severely reduced Uber drivers’ incomes, to the point where you would have to wonder whether it is viable at all.

The truth is that Uber is an international organisation with no interest whatsoever in the welfare of New Zealand or New Zealanders, especially in the viability of the small passenger services industry in this country. New Zealand First wants Uber out of New Zealand, as has happened recently in Denmark and in Italy for good reasons, and we want a fair deal for taxi operators. This bill is not going to do it, and we will not support it.

Hon SIMON BRIDGES (Minister of Transport): I have some regard for Denis O’Rourke. On some of the more legal bills I think he gives a good perspective on things, and that is excellent. But that was a ridiculous speech. It was a ridiculous speech because it wants to take us back to the 1960s or 1970s, and to sort of blindfold ourselves to the technology and innovation that is happening. He said in his contribution that New Zealand is not ready for Uber drivers. Well, I have got a little secret. It is a dirty little secret for the member: they are here in their thousands. Tens of thousands, if not hundreds of thousands of New Zealanders use them, Mr O’Rourke, and that is the way it goes.

Be very clear though: this bill is not for Uber. It is not the Uber bill. This bill is for a lower-compliance, level playing field that brings competition to the likes of Uber, actually. I will tell you what, a company that excites me much more than Uber is a company called Lyft, which we see in the US. Actually, over half of its trips these days involve more than one stranger passenger. It is effectively doing sharing better than anyone I have heard of. It is particularly strong in American university towns.

Think about that, and about the congestion benefits it would have, if in our bigger centres we saw that sort of technology and innovation—people getting into cars with others, rather than the 1.2 people per average, or something, that we seem to have at the moment in our vehicles, on our highways, and on our arterial roads. It would make a really big difference indeed, and that is what excites me about this bill. It is the competition and it is the choice that New Zealanders will have.

It will not be just Uber; I think it will be players like Lyft, and I think there will also be significant indigenous players. We are already seeing them. Here in Wellington there is Chariot. I know there are others—actually, if I had gone and got a list, I could have reeled a few of them off for you—who are wanting to play in this space and are waiting for this law.

Sue Moroney: If they are paying their taxes.

Hon SIMON BRIDGES: It will not happen overnight, but over time you will see more of this. Sue Moroney mentions taxis. Actually, I am with her, inasmuch as I know that the Blue Bubble cabs and the others will, in very much a “horses for courses” way—

Iain Lees-Galloway: Taxes, not taxis.

Hon SIMON BRIDGES: Well, she is obsessed. She is obsessed with that. That actually has absolutely nothing to do with this bill, but that is the way that Sue rolls. Taxis will also, I think, offer their traditional services, and they will also offer the app-based kind of services. They may do a bit of both from the same car, and I welcome all of that innovation.

Sue Moroney said this bill deregulates. Well, it does, and I am proud of that. Actually, if you look at the deregulation it removes a number of unnecessary current regulatory requirements that impose costs on operators. That is what National is about. We believe in that, and we think it is good for New Zealanders to do that. We are reducing the mandatory signage—I have talked about that. I have addressed the Braille concerns, from the Government’s perspective.

It removes requirements, such as an area knowledge certificate—I mean, why you would have that today, when every taxi driver I ever get in with now does not have the knowledge and actually goes off the GPS, is beyond me; the full licence test every 5 years, because that is unnecessary and they get the test when they start; the P endorsement course, of course, which we are doing away with but keeping the P endorsement, which is important and I will come back to it; belonging to an approved taxi organisation; providing a small passenger service 24 hours per day, 7 days per week; holding a certificate of knowledge of law and practice; and monitoring of driver panic alarms in taxis from a fixed location 24 hours per day, 7 days per week. We are doing away with a lot of compliance.

Sue Moroney also said something else that I think is interesting and is important. That is that we need to make sure when we deregulate that we do not make mistakes and that we do ensure that safety is paramount. This bill does that. That is because, contrary to submissions that I know the Transport and Industrial Relations Committee heard, we have kept the P endorsement. We want to make sure, and we will continue to ensure, that people who drive others in a commercial service have the police checks, have the good-character checks, have the medical assessments, and so on. It will be at a dramatically reduced cost because we want to democratise what we are doing in this area, but that P endorsement will still be there, and that is very important.

I think it is also very important to place on the record what is happening with the in-vehicle camera because there is a lot of misunderstanding in that area. Let me briefly detail that. There is still a requirement for in-vehicle cameras in all of the 18 largest centres in New Zealand, just as there was. What is also true is that there is an exemption process there where the small passenger service can, and indeed must, to meet the exemption requirement, provide services only to registered passengers.

So where the provider can make quite clear and satisfy the New Zealand Transport Agency that in advance of—let us take the case that we have heard from Sue Moroney—that impaired person getting in the vehicle, he or she knows in advance who the driver is and they know everything about them and their company. They have probably used the company before, because they have it all there. Equally, from the driver’s safety perspective, they know that it is Sarah Jones whom they are picking up. They have her details—actually, they will have her bank details, and so on. I would argue that that is actually a much more effective safety deterrent and way of doing things than the in-vehicle camera, in terms of the assurances that it provides before the trip and during the trip.

Also, they will need to have recording devices because they will need to be able to make available and retain specified information for at least 168 hours after a trip. They will be able to detail where the trip has been—effectively, GPS information; there is the power of technology now to do these things. They will need to be able to say when it was at X point and when it then reached Y point. These are requirements that, in fact, drivers do not need to provide today, so they are additional and different safety assurances from the in-vehicle camera, but I think the international experience is showing that they are every bit as strong as the in-vehicle camera.

So it will be a situation where, in the 18 biggest centres, drivers will either have to provide the in-vehicle cameras and services or there will need to be the registration and the information that is kept for a period of time.

MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): I would like to take a short call on the Land Transport Amendment Bill (No 2). I acknowledge that I am not a member of the Transport and Industrial Relations Committee, but, just to remind us, the bill attempts to improve the regulation and support the efficiency and safety of land transport. There are six parts: reducing repeat drink-driving offences by strengthening the legislation; giving enforcement officers other than the police new powers; reducing the incidence of drivers who fail to stop for the police; updating the heavy vehicle regulations to align with recent changes to the land transport rule; updating the regulatory system for smaller passenger services to ensure that it is responding to emerging technology; and, the sixth one, making minor amendments to the Land Transport Act to clarify interpretations of the legislation and improve its operation.

In terms of Part 1, I just want to draw the attention of the Minister in the chair, Simon Bridges, to Subpart 2, “Fare evasion”, and to make some observations. We have got clause 29, where it talks about “Penalties for failure to pay passenger service fares”, replacing section 79M, “Penalties for failure to pay service fares, etc”. I am assuming that when we talk about “etc.” under this particular provision, we are talking about buses, taxis, airplanes, ferries, trains, and whatever comes under “pay service fares”.

When I read this particular clause—and the Minister, perhaps, can answer this, probably, when we come back—I have three questions. One is that when I read this particular clause, I immediately say: “How this is to be implemented?”. How are we going to have enforcement officers across all those public transports? It is an interesting point, but I would like to be really clear as to how this is going to be implemented and who is actually going to pay the cost. Who is actually going to pay the enforcement officers to be on the planes, be on the trains, or be on the taxis? I just think it is a legitimate question to ask—how this is going to be applied across those particular pay service fares—because—

The CHAIRPERSON (Hon Chester Borrows): I am sorry to interrupt the member, but the time has come for us to adjourn for the dinner break. She will have 2 minutes and 44 seconds remaining when she comes back.

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

MEKA WHAITIRI: When we broke for dinner, I was addressing Part 1, Subpart 2, “Fare evasion”, and talking about clause 29, “Penalties for failure to pay passenger service fares”, which replaces section 79M, “Penalties for failure to pay service fares, etc”. The question I was seeking clarification about from the Minister in the chair was assuming that “pay service fares, etc” included transportation like buses, taxis, airplanes, ferries, trains, and any other passenger-paying service, and the question I was proposing before we broke was one around implementation, about the practicality. This is because in clause 29 of Subpart 2 on fare evasion, it talks about the appointment of powers to an enforcement officer to ensure people who are riding on these particular public services pay their fare.

So the question to the Minister in the chair is around just the practicality of how this is actually going to be enforced and who is going to pay these enforcement officers—really just trying to get some clarification from the Minister. Did we consider the kind of cost that maybe the businesses, the transportation entities, would have to face by giving these extended powers of enforcement?

But I would also like to get some clarification, if we look at Subparts 2 and 3, because they talk about the penalties in subsections 5 and 6 of new section 79M as inserted by clause 29. I just seek clarification from the Minister because when you read new section 75M(2)(b) it talks about “fails to provide (in response to an enforcement officer’s direction given in accordance with section 128F(1)) evidence of having paid the fare.”, and then when you go down to subsection (3)(a) it repeats that: “fails to provide (in response to an enforcement officer’s direction given in accordance with section 128F(2)(a)) …”. The reason why there could potentially be confusion there is that the penalty related to subsection (2)(a), if you break this, is a fine of $200, and the penalty targeted to subsection (3)(a) is $1,000.

JONATHAN YOUNG (National—New Plymouth): Thank you very much for the opportunity to speak in this Committee stage of the Land Transport Amendment Bill (No 2). As we look at Part 1, Subpart 1 this evening, looking at mandatory alcohol interlocks, this is an incredibly important part—perhaps one of the most important parts—of this bill, because this has the power to reduce recidivist drink-driving by at least 60 percent of those who have been convicted in the past of this offence. But in the past, only 2 percent of those who could have received the sentence had received the sentence, so making this mandatory is very, very important if we want to see the road toll come down and see a greater change of behaviour from those people who have been involved in this continual issue and problem around drink-driving and also the high intoxication of some drivers.

This is going to contribute significantly to the reduction in vehicle crashes in New Zealand. Drink-driving causes on average 77 road deaths a year—that is a very significant number of people—436 serious injuries, and 1,252 minor injuries. We are talking substantial figures and numbers, so this part of the bill brings forward some very significant changes to the regime that are important for New Zealanders’ road safety.

Once an offender has received the mandatory alcohol interlock sentence they need to apply to the New Zealand Transport Agency for an alcohol interlock licence. In fact, one speaker earlier on in the debate this evening said he would like to have this as mandatory across all young drivers. Well, we know that the cost is quite significant: around $2,400 to $2,800 for the installation of these devices. Indeed, they are very effective. You have to blow into them before you can start your vehicle. Then there are periodic intervals when you are driving your vehicle—because I wondered this question myself: could it be that somebody who continues to have the habit of driving under the influence of alcohol just gets a friend to blow into the interlock to enable that car to get started? But the technology is that at periodic intervals during the journey you will have to blow into the interlock and so the current driver, i.e., the person who has that device, who has that licence, will be required to do this if their journey is going to continue.

I think that is marvellous technology and it is expensive technology: $2,400 to $2,800. We understand that this may cause numbers of people not to be able to afford to do this, and so the Government is putting in place a fund of $4 million to enable this mandatory sentencing to take place so that we do see these alcohol interlock devices installed and see the change of behaviour that is intended to happen. The big winners are those people who have those sentences because it will require that they comply with the law. That is a good thing, so we do not see that recidivist breaking of the law. Secondly, it is a great thing for the road users of New Zealand to see these situations where you do not see recidivist driving as much, because, as I said earlier in my remarks, it brings a 60 percent reduction in recidivist behaviour in terms of driving under the influence of alcohol.

So as we just look at Subpart 1 of this first part of the bill, there is a tremendous emphasis on this aspect of the amendment bill. I think this is a great step forward. It is really important to see these sorts of provisions that will save lives, save serious injuries, and save the number of minor injuries happening to New Zealanders on our roads and in our places of driving activity. I am very pleased to see this portion, and happy to make a contribution later on as we come to other parts of this bill. Thank you.

SUE MORONEY (Labour): I want to speak on the issue that is raised in my Supplementary Order Paper 347, which is about ensuring that every vehicle involved in this type of service would need to be fitted with an in-vehicle security camera system. I know that Minister Bridges spoke about this issue before, and I have just two words to say to the Minister about his assertion that an app that tells you who the driver is and who the supposed passenger is fixes this issue, and, therefore, if they have that application in place that they should be exempted from having these in-vehicle security cameras. Well, the two words that I want to say to the Minister are “Rod Stewart”. That has piqued his interest—

Clare Curran: That got him captured.

SUE MORONEY: That did catch his attention—

Hon Ruth Dyson: I wonder what song he’s thinking of?

SUE MORONEY: Ha, ha! This is because we had Rod Stewart come to the Law and Order Committee—and, of course, it was not actually Rod Stewart but this man had been able to register as an Uber driver using the Uber app and using the name Rod Stewart and using the photo of the singer Rod Stewart. He, clearly, when he came into the committee looked nothing like Rod Stewart; his hair was somewhat tidier. He did not look like Rod Stewart at all, but he had been able to operate as an Uber driver under an application that he—

Alastair Scott: No, he didn’t.

SUE MORONEY: Well, yes, he did. I know that Uber contests this, but he actually did. He actually picked people up. They knew he was not Rod Stewart, but they were in the vehicle anyway. So I think that was a demonstration of just how—that was an exaggerated example of how these systems are not foolproof. Not only was there that instance, where someone can register and even use the photo of someone quite famous when they are obviously not, and still register and do that, but, secondly, what a lot of the submitters raised with us was that if you are a passenger and you are an Uber user—and so you are registered and you make an arrangement for an Uber to come and pick you up—what is to say that you are actually that person? But, more so, what is going to happen is that the other couple of people who come with you in that vehicle may not be registered at all. So who is to know what their identity is if something goes wrong? So that is why it is not the same, Minister, as having every vehicle in those 18 metropolitan areas, those 18 largest areas, fitted with an in-vehicle security camera system.

I have a really sad but recent incident to discuss that absolutely raises the reason why we need these in-vehicle security camera systems. They were brought in not that long ago, actually. I think they were brought in in 2014—have I got that right, 2014? It was pretty recent. They were brought in for a reason. There were two shocking murders of taxi drivers, two brutal murders of taxi drivers that happened—one in Auckland and one in Christchurch. So that is the reason why the current Government brought those in. And do you know what? Instantly, the taxi drivers knew that they worked, and a lot of the taxi companies that had argued against that level of regulation at the time are now arguing in favour of it. But they want a level playing field, and they want it for all of these services.

What they found was that not only did the violent offences drop immediately, and have continued to stay low—and, in fact, there has not been a reported murder of a taxi driver since this regulation came into being—but what they also found was that they did not have as many runners. So knowing that there was a system operating in that vehicle meant that people were much less likely to try to take off without paying. So there was not only an immediate health and safety benefit to these companies and, obviously, the safety of their staff, but there was also an immediate economic benefit. Some of the companies that were opposed to them when they were introduced are now big fans of this because they have seen how well they operate.

But the recent incident that I want to refer to—Mr Chair, if I could have another call [Bell rung]—is the incident that happened in Hamilton just on the weekend, on Friday night: the shocking and unnecessary murder of a man in Norton who was stabbed to death. The arrests that have been made are for three young women. I caught a taxi back from the airport last evening, and the taxi driver who basically caught those young women was my taxi driver. Here is the story that he told me—he is a hero. Before I tell the story, I just want to say to Norman Kingi’s family that I want to express my sincere sympathies to them and say may Norm rest in peace, because he was a deeply valued member of our community. This is a sad situation that he found himself in.

Those young women allegedly murdered him around about 10.30, 11 o’clock on Friday night. At around about 2 o’clock the next morning, this taxi driver was called to an address nearby and picked up three young women. He said that he had not long had them in the vehicle when he realised that he was in trouble, because, even though these were quite young women, they were instantly aggressive with him. He just knew that they were bad news and he needed them out of his vehicle as soon as possible. He had an in-vehicle security camera system operating in his vehicle and even though he had that, he knew that he needed them out of his vehicle. He saw a cop car. He pulled up behind the cop car, got out, and said to the police officer: “Get these women out of my car. They are bad news.” The policeman went and got them out of the car, realised whom he had, and that is why the police were able to arrest these young women so quickly after that murder.

The reason I tell the story is that—you know the app that the Minister talked about that you can get an exemption from having this in-vehicle security system for? If one of those young women was registered—sure, she may not have caused a problem ever before—go to that address, get picked up. But guess what? The other two get in with her, and the other two are the bad eggs.

What this driver told me was that he thought two of them were pretty whacked out on drugs and one of them was completely sober, in his assessment. That could have been the one who used the app to call up the driver, and then the other two climb in as well. Now, if that driver was in that situation without an in-vehicle security camera—and without just driving down the road and having the good sense to do what this driver did, which was to pull up immediately behind a cop car and get them out of there, and the good luck that that police car happened to be there—what might have happened? What might have happened next? I can tell the Committee that this taxi driver was thanking his lucky stars that he did what he did, because who knows—did they still have the knife on them? What could have happened next? There could have been an even deeper tragedy for our community.

I do want to come back to that issue about deregulation, Minister. Yes, you may be proud that it is deregulation, and, certainly, if it is a level playing field and it is sensible deregulation, we have no problem with that. But time and time again this House gets it wrong with going too far. And time and time again, when there is a National Government in place, deregulation does go too far, because the National Government always argues that it is too expensive. It is too expensive. Well, how expensive are taxi drivers’ and Uber drivers’ lives? What cost do we put on the safety of people who are impaired, either temporarily through having a night out or permanently impaired through their disability? What price, Minister, do we put on that? The Labour Party says at least the cost of getting an in-vehicle security camera system in those 18 locations across the board; not penalising the taxi industry by making it have them but not the other group. Let us get serious about having security and safety first.

CLARE CURRAN (Labour—Dunedin South): I want to address my remarks to the Supplementary Order Paper that has the deletion of clause 58, which is around the Braille—

The CHAIRPERSON (Hon Trevor Mallard): 346.

CLARE CURRAN: —provision. Supplementary Order Paper 346—thank you, Mr Chair. I am actually appalled. I did not sit on the Transport and Industrial Relations Committee for this. I have been reading some of the submissions. I have heard Minister Bridges speak generally about these issues, but I do not know if he has quite specifically dealt with—

Alastair Scott: Very specifically.

CLARE CURRAN: Well, you know, give me the chance to ask the question and some of the questions around this. With reference to the fact that there were 14 submissions on this piece of legislation, including from individuals, blind citizens—and I know that there have been references made to submissions from the New Zealand Taxi Federation, the Office of the Ombudsman, The Braille Authority of New Zealand Aotearoa Trust, Otago Regional Council, other very auspicious organisations, and Local Government New Zealand. All of those submissions make reference to this particular clause in the bill.

When I actually read the officials’ report on this I failed to understand what the logic is, actually, other than cost, for the removal of this clause. This clause required a simple Braille identification mechanism for people who are sight-impaired to know that when they got into a small passenger vehicle it had a safety measure that they could verify then and there. One of my questions to the Minister in the chair is: is it the cost of that that is the reason for the new technology and the reason for the removal of this clause?

The precise number of sight-impaired people in New Zealand is around about a quarter of a million, at least, to maybe half a million people—it would be good if somebody could give me the precise figures on that. That is actually quite a lot of people, and it is a significant enough number of people, surely, for the Government to be paying attention to them as a group in society and their ability to have accessible means of transport.

When I read the officials’ report, I read with some horror, around the commentary on the United Nations Convention on the Rights of Persons with Disabilities, that there was a reference to the fact that the convention does not specifically require the provision of information in Braille and that the convention requires New Zealand to take appropriate measures but it does not identify specific initiatives that must be implemented. So that felt like a kind of “get out” clause, which I think, in terms of health and safety and the accessibility that this Government says it is providing to people—why would the Government say that the provision of an app where there is a tracking mechanism, and if there is a problem then the Uber driver or whoever can actually be tracked in retrospect, is a solution? How is that a solution, where you can track somebody retrospectively but where, if there is an issue when they get into the vehicle and an issue occurs and they do not have a mechanism to identify that it is a viable vehicle—

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

The CHAIRPERSON (Hon Trevor Mallard): We have had at least a dozen Opposition speeches on this part, and I think there has been an opportunity to cover everything.

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

Ayes 73

New Zealand National 58; Green Party 11; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 43

New Zealand Labour 31; New Zealand First 12.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Papers 328 and 351 in the name of the Hon Simon Bridges to Part 1 be agreed to.

Amendments agreed to.

The question was put that the amendment set out on Supplementary Order Paper 345 in the name of Michael Wood to insert new Subpart 5A in Part 1 be agreed to.

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

Ayes 56

New Zealand Labour 31; Green Party 11; New Zealand First 12; Māori Party 2.

Noes 60

New Zealand National 58; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 347 in the name of Sue Moroney to clause 57 be agreed to.

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

Ayes 56

New Zealand Labour 31; Green Party 11; New Zealand First 12; Māori Party 2.

Noes 60

New Zealand National 58; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 346 in the name of Sue Moroney to clause 58 be agreed to.

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

Ayes 56

New Zealand Labour 31; Green Party 11; New Zealand First 12; Māori Party 2.

Noes 60

New Zealand National 58; ACT New Zealand 1; United Future 1.

Amendment not agreed to.

Part 1 as amended agreed to.

Part 2 Related and consequential amendments

The question was put that the amendments set out on Supplementary Order Paper 351 in the name of the Hon Simon Bridges to Part 2 be agreed to.

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

Ayes 104

New Zealand National 58; New Zealand Labour 31; Green Party 11; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 12

New Zealand First 12.

Amendments agreed to.

The question was put that the amendments set out on Supplementary Order Paper 350 in the name of Jami-Lee Ross to Part 2 be agreed to.

Amendments agreed to.

Part 2 as amended agreed to.

Schedules 1 to 3 agreed to.

Clauses 1 and 2

The CHAIRPERSON (Hon Trevor Mallard): Before the member speaks, I will indicate that there are two amendments in Sue Moroney’s name that are debatable but are not in order for the purpose of voting because they have commencement dates dependent on an indeterminate event, which is inconsistent with the Standing Orders.

PEENI HENARE (Labour—Tāmaki Makaurau): I rise to speak to the title of this particular bill. Much of the debate from this side of the House has been around those vulnerable members of our community. We have mentioned those who rely on Braille postings and Braille signage for their safety, comfort, and convenience. I wonder whether, perhaps, some of the titles that could be offered up in this particular part might be something like “Land Transport (Exclusion) Amendment Bill”, with reference to the exclusion of a significant part of our community. The point was made earlier by speakers on this particular bill that many of the submitters came in to speak to their safety. Many of them came in to speak particularly to the issue with regard to Braille in the taxis, to make sure that those communities that rely on those services were safe and were looked after.

Sadly what this Land Transport Amendment Bill (No 2) ends up doing is actually excluding a large part of our community. There were varying numbers I read through the submissions on those who will be affected, but they range from 22 percent of our community. In particular, one submitter spoke about their disabled community in Papatoetoe, South Auckland—

The CHAIRPERSON (Hon Trevor Mallard): I am going to interrupt the member and ask him to draw my attention to the specific clauses or subclauses between clause 93 and clause 97, in Part 2 of the bill, to which he is referring.

PEENI HENARE: Part 2 of the bill?

The CHAIRPERSON (Hon Trevor Mallard): Sorry; I apologise. Clauses 1 and 2.

PEENI HENARE: I was speaking directly to the title of this particular bill. I mentioned earlier that in an attempt to amend the Land Transport Act, in fact it was excluding a significant part of our community, and I offered up the “Land Transport (Exclusion of Disabled Communities) Amendment Bill” as a potential title. While some members in this Chamber might cringe, the facts were quite clearly laid out to the select committee and, as I mentioned earlier, some very sensitive topics were raised by those submitters.

While there are parts in this bill that of course we agree with, and it does seek to amend significant parts in the Land Transport Act, there are still other aspects of this particular bill that we—I spoke about the exclusion of those communities. We also spoke about the issues with regard to Uber and the availability of passenger services and how that will impact on traffic in my electorate of Tāmaki Makaurau.

I just want to offer a little something for us to think about when we pass this particular bill. Actually, it does exclude people. It excludes a large part of our economy and those services in Tāmaki-makau-rau. I heard the Minister speak about how it will ease congestion. Well, that is not the vision or evidence to assure this member, whose electorate spans right across Tāmaki-makau-rau, that those congestion issues in Tāmaki-makau-rau will be settled or will be eased, if you like, through the passing of this particular bill. I will finish there with the offer of my particular changes to the title, in the hope that members across this Chamber will actually remember those submissions by those people affected—that their voices can be heard.

SUE MORONEY (Labour): Thank you for the opportunity to rise and speak to clause 2, which is about the time when this bill, when it becomes an Act, commences—when it comes into being. I have two Supplementary Order Papers, which I want to acknowledge have been ruled out of order by the Chair. I think, actually, the very legitimate reason why they have been ruled out of order is an interesting point, in itself, to debate when we are looking at this part of the bill.

The two issues that my Supplementary Order Papers were wanting to address were about getting that actual level playing field that this bill purports to deliver, and does not quite do. It does not quite do, because of some of the issues that we have raised about safety in the previous parts, which have already been debated. I want to place on record how sorry and sad I am that three parties in this Chamber would not support the blind community in their requirement for Braille signage. I think that is really sad.

But what this part is about is—two things. First of all, we in Labour did not want this bill to pass until Uber had become fully compliant with all tax requirements obliged of it under New Zealand law. Not a big ask. Actually, Mr Seymour, that is what it is required to do. So I am not sure why this is a problem. But the ruling has been that what we are asking for here is an indeterminate date. In other words, this Committee cannot even determine a date on which Uber would become compliant with all its tax requirements obliged of it under New Zealand law. How bizarre! How bizarre is that?

What we know, what has been reported in New Zealand, is that Uber in 2014 declared gross revenues of just over a billion dollars in New Zealand. But in that same year it paid only $9,397 in income tax. How can that be fair?

Alastair Scott: That’s turnover, not profit.

SUE MORONEY: Now the National Government is coming to the defence of this unfair taxation system. A person on the average wage of $45,000 is taxed about $7,800. So how can that be fair? A person on the average wage of $45,000 pays just under $8,000 of tax each year, but Uber, with its over $1 billion, pays just over $9,000. The National Government thinks that is all right. It is defending that situation. Well, we do not believe it is right and it is not a level playing field. That is not the same situation for the taxi companies that are operating under this same piece of legislation that we are about to pass, and that is why we have raised it.

We have also raised again something that should just be pretty straightforward. We do not want this Act coming into force until the day after Uber becomes fully compliant with all transport rule requirements regarding logbooks and driving hours, as obliged of it under New Zealand law. Again, it has been ruled that we cannot actually even vote on that because it is an indeterminate date. We do not know when Uber is going to follow the law. That is basically what this Committee is determining.

Well, that is a crazy situation. It is an unsafe situation. As we know, there was the highly publicised situation that happened not very long ago, where an American couple arrived in New Zealand. They thought they were doing the right thing by publicly declaring their Uber driver to be a hero because in a dreadful storm this was the only way that they could get from Auckland Airport to Wellington in one driving feat. Well, one problem. That exercise flouted these laws that we are talking about. It actually flouted the laws that are in place to keep everyone on the road safe, to stop people from driving when they are fatigued, and to stop people in this industry from having pressure put on them to drive in an unsafe situation—in one of the worst storms that we have had in New Zealand this year, and that is saying something because we have had some pretty bad ones.

So I hope that parties will be able to support—

DAVID SEYMOUR (Leader—ACT): I wish to speak to the title clause. I think it is absolutely appropriate that the Land Transport Act is being amended, and amended for the second time in this Parliament—hence its title Land Transport Amendment Bill (No 2). The reason is that land transport does frequently change, and some of the changes are addressed well in this bill. For example, in central Auckland and in the Epsom electorate, where we have eight train stations, the use of public transport has gone through dramatic growth and change, but with that comes serious challenges and problems. One of those has been fare evasion.

People in my electorate have asked how it can be possible that it is not an offence and it cannot be enforced when people evade fares. It seems common sense that if you take something that is not yours, even if it is a service, you should be able to be forced to pay, under the law. That is one example of how this bill will improve land transport and why the title, which implies we are amending the Land Transport Act for the second time in this Parliament, is so appropriate.

In this stage, we have introduced Jami-Lee Ross’ Supplementary Order Paper 350, which will introduce fines and penalties for people who are doing windscreen washing. Again, this is something that has come about as a result of changes in land transport and the way that people use it. It is actually related to the fare evasion issue, because the police in Epsom tell us that we have a problem with people who use what they call the “free train”, having evaded fares, and then go about windscreen washing and committing other crime as related activities. So it is reasonable that an infringement notice regime, as introduced by Jami-Lee Ross’ amendment to the bill, is introduced in this amendment bill too. There are two major intersections in Auckland that are close to train stations and that do not have proper gating, and in both those instances we have had an epidemic of crime related to fare evasion and windscreen washing, children getting pushed off their bikes and having their cellphones nicked by people who have been breaking those two laws, which have not been easy for the authorities to enforce under the current law.

Another area where it is very appropriate to entitle this the Land Transport Amendment Bill (No 2) for this parliamentary term is around the kinds of companies that do business in New Zealand. Again, I commend the Minister of Transport for his Supplementary Order Paper 351, which ACT has advocated for and strongly supported. That allows an entity that is otherwise based offshore to participate in the New Zealand land transport market by having a presence here in New Zealand. So long as it identifies somebody who can be identified as responsible for the company’s operations in this country, then that organisation is able to operate here. From the point of view of New Zealanders using land transport, that is hugely important, because, again, in central Auckland and particularly in the Epsom electorate, people are using land transport in new and different ways.

Literally hundreds of thousands of New Zealanders have signed up for Uber. But I would remind my friends on the other side of the Chamber who are in the business of making legislation in order to account for what they view as poor enforcement and picking on particular identities in a form of Venezuelan legislation: it is not just Uber; it is also, for instance, Chariot. It is also Lyft. We need an ecosystem of transport providers and ride-sharing companies in this country. This is amending the Land Transport Act to keep up with the changes that are coming about in the way New Zealanders use land transport, and so, again, that introduction is highly appropriate.

I am very proud to be supporting this bill. I think it could have done a lot more to facilitate ride sharing, but what it has done is take another step, in this parliamentary term, to making it easier for New Zealanders to safely get around our country. Thank you.

MICHAEL WOOD (Labour—Mt Roskill): I am happy to speak on the title and commencement sections of the Land Transport Amendment Bill (No 2), and, in line with the previous speaker, David Seymour, I do think that the title of the bill is an apt one. When you look back in the statute book there have been numerous amendments to this Act, and that is because land transport is a dynamic area in which technology is constantly changing, practices are constantly changing, and new policy issues are arising.

When I look at this, there are three key areas of land transport that it seems to me this bill addresses. One relates to the safety of the land transport system, and that part of the bill that specifically relates to vehicle interlocks was actually one in which there was a good deal of accord from around the Chamber in terms of the changes that are being introduced there. Land transport safety is incredibly important. We have had approximately 320 New Zealanders who lost their lives in the previous calendar year, and we know that a significant number of those people lost their lives because of people who were under the influence of alcohol. So we on the side of the House think that any measures that improve the safety of the land transport system in respect of people who are alcohol-impaired are to be applauded, and the changes in this bill in respect of the alcohol interlocks, we think, are a practical measure. It is addressing an improved piece of technology that we have, and we think it is a really smart set of changes, and so we are fully in support of those changes to make our land transport system safer.

There are changes in respect of the efficiency of the land transport system. They have not been particularly commented on in the debate here, and, again, I think this was a relatively uncontroversial part of the bill in respect of some of the technical bits of the legislation that relate to heavy vehicles. Basically, the legislation smooths off some of the rough edges that we currently have in that area.

The other part of the land transport system that this bill addresses, or does not address, is consumer protections. My colleague Sue Moroney has spoken, I think, really clearly and effectively about some of the concerns that we have on the side of the House about the lack of consumer protections that are built into this bill in respect of small passenger vehicles. What we have said, and in fact what submitters said throughout the select committee process, is that there is a huge amount of openness to consumers being offered more choices through the use of ride-sharing technologies. Pretty much everyone is open to that, but what we on this side of the House wanted to see in respect of land transport consumer protection were some basic bits of public-good regulation put into this legislation that would provide those protections—simple things like Braille signage and in-car cameras, things that people can expect when they take our small passenger vehicles at the moment, for the most part. I think some of the responses that we received in this debate simply did not satisfy our concerns in that area.

I was also disappointed that we did not get progress in another area of consumer protection in respect of the land transport system, and that is in the area of vehicle clamping in my Supplementary Order Paper (SOP) 345, which was narrowly voted down. This is an area that has been of real concern around Auckland. It is totally unregulated. It is just a voluntary code, which gives a minimal level of protection to consumers and is, basically, ignored by some of the sharks operating around Auckland. We have had terrible stories coming through the media of consumers who have been completely predated on and ripped off by these people, many of them in Mr Seymour’s electorate, in fact, and he voted against giving those constituents a level of protection through my SOP, which would have simply picked up the Government’s current voluntary code and actually given it some teeth. That is all it would have done, but, sadly, that was voted down tonight. So we missed an opportunity for consumer protection there.

I would not be doing my job on behalf the Regulations Review Committee if I did not note the level of concern about the commencement section where, once again, we are seeing a level of looseness in respect of commencement. Once again, we are seeing a lack of clarity about the dates upon which certain parts of quite a consequential Act will come into force. So in clause 2(1) the “Commencement of amendments relating to alcohol interlock sentences … on 1 April 2018”—fine—“or on an earlier date appointed by the Governor-General by Order in Council,”. We simply do not see the need for that level of legislative looseness, and we would prefer to see it kept at 1 April 2018. The same goes in respect of small passenger vehicles. We have expressed our concern there, but at the very least we think that given the huge numbers of people who are potentially affected, both consumers and current operators, by this law, we should give them the certainty of when these changes might take effect and not leave it to the whim of the Minister. Thank you.

Clause 1 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 328 in the name of the Hon Simon Bridges to clause 2 be agreed to.

Amendments agreed to.

Clause 2 as amended agreed to.

Bill to be reported with amendment presently.

House resumed.

The Chairperson reported progress on the Appropriation (2017/18 Estimates) Bill and reported the Land Transport Amendment Bill (No 2) with amendment.

Report adopted.

Bills

Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

Second Reading

Hon AMY ADAMS (Minister of Justice): I move, That the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill be now read a second time. This bill reflects the Government’s ongoing commitment to combatting money-laundering and the financing of terrorism both in New Zealand and globally. Can I take this opportunity to thank the Law and Order Committee for its work on the bill. Thirty-one submissions were received and considered. The committee recommended that the bill proceed with a number of amendments, many of which are minor and technical in nature, and I am pleased to support most of the committee’s recommendations.

Enacting this amendment bill in a timely manner is important for an effective response to money-laundering and the financing of terrorism in this country. This bill addresses a serious issue that has blighted societies around the globe. Money-laundering feeds many other types of crime. By exploiting unsuspecting businesses and channelling money through different layers of the financial system, money-laundering allows criminals to fund their lifestyles and fuel their criminal ventures. People who finance terrorism use similar methods to channel money to violent causes.

New Zealand’s existing anti - money-laundering legislation applies to banks, casinos, and a range of financial service providers. These institutions were the focus of the first phase of reforms because of the higher risk they faced in being used for money-laundering for crime or terrorism purposes. However, there are still sectors at risk of being exploited by criminals.

The bill before this House is an important step in protecting our businesses and our country’s reputation as being one of the least corrupt countries in the world. The bill extends the Act to additional businesses, including lawyers, conveyancers, accountants, and real estate agents when they carry out certain activities. It also extends the Act to racing and sports betting and businesses that deal in certain high-value goods. Criminals are always seeking new ways to launder the proceeds of their crimes, and these phase two sectors are at increasing risk of being targeted by criminals.

The bill also broadens the reporting requirements to require any suspicious activity to be reported, rather than just suspicious transactions. This is the legislative response to a recommendation made in the Shewan report, from the Government Inquiry into Foreign Trust Disclosure Rules in 2016. The Law and Order Committee recommends a number of amendments to the Anti-Money Laundering and Countering Finance of Terrorism Amendment Bill as introduced, and I would like to briefly touch on some of those key recommendations.

The amendments will apply to phase two sectors in a staggered way, with lawyers and conveyancers coming within the ambit of the legislation first, followed by accountants, then real estate agents, then high-value dealers and the New Zealand Racing Board. As introduced, the bill would have applied the Act to phase two sectors at a date to be set by Order in Council but not later than the date specified. The committee recommends that this be changed so that the sectors become bound automatically on the specified dates if an Order in Council has not been made before that time. This will provide increased certainty to the sectors about when they should be ready to comply.

The committee also recommends that the bill contain definitions that the sectors are familiar with. This means using, for example, the definition of “transaction” as defined in the Real Estate Agents Act. This way sectors can more easily understand their obligations in order to detect and deter financially motivated crime in this country.

The committee considered that the legal professional privilege provisions needed minor improvements to protect privileged information while still enabling the disclosure of non-privileged information. For example, the bill clarifies that a lawyer has a defence to the offence of failing to file a suspicious activity report. This would apply when a lawyer has a reasonable belief that the information was privileged. Similarly, the committee recommends that a lawyer who does provide a suspicious activity report when the information is privileged has a defence to civil, criminal, or disciplinary action. This would apply if the lawyer had reasonable grounds to believe that the information was not privileged. The committee also recommends clarifying in the bill that non-legal staff working for a lawyer are also not obliged to disclose legally privileged material.

The bill proposes to expand the scope of what must be reported to the financial intelligence unit. Instead of reporting suspicious transactions, businesses will now have to report suspicious activity, as I mentioned previously. The committee recommends amending the bill to clarify that these reporting requirements come into effect 12 months from enactment, except for the updates to the legal professional privilege section, which will come into force immediately.

The committee considered that the information-sharing provisions in the bill as introduced were unduly broad. It recommends removing the definition of “regulatory purposes” and the provision allowing inter-agency access to data holdings. This would, in effect, largely retain the existing information-sharing regime as contained in the 2009 Act. However, the definition of “law enforcement purposes”, which is central to the information-sharing regime, is recommended to be updated to include the prevention and disruption of relevant offences in addition to detection, investigation, and prosecution, which are already in the definition. Other statutory references in this definition are also updated by the bill.

The committee also recommends including a regulation-making power to allow information sharing to occur in situations that are not otherwise permitted under the Act, with certain safeguards. The committee recommended clarifying that one of the functions of the Commissioner of Police is to receive and analyse financial intelligence from international financial intelligence units, and that the commissioner is able to order information from a reporting entity that is relevant to analysing information the commissioner receives under the Act. I want to thank the Privacy Commissioner for his valuable comments on the bill, and I thank his office for working with the committee and the officials constructively during the process.

The Act included a process to provide ministerial and regulatory exemptions for entities, specific transactions, classes of transactions, and qualifying circumstances. The bill as introduced would have allowed the Secretary for Justice to approve exemptions from all or any aspects of the Act. However, the committee considered that this was not an appropriate role for the secretary and that the power to grant exemptions should remain with the Minister of Justice.

I am also wanting to indicate tonight that in the Committee of the whole House I will be proposing a Supplementary Order Paper to the bill. This corrects technical drafting oversights in the bill, clears up an ambiguity in the transitional provisions relating to exemptions, and ensures that a partnership of lawyers or accountants can comply with the Act as a single reporting entity, rather than each individual partner having to be a reporting entity in their own right.

The Government is committed to helping everyday people combat criminals seeking to launder money or finance terrorism through the legitimate businesses. We want to ensure that the anti - money-laundering and countering financing of terrorism (AML/CFT) regime is as effective as possible while minimising the impact on lawful businesses and their customers. We need to address the real risks money-laundering and terrorist financing presents while also ensuring compliance costs are as low as possible.

One of New Zealand’s biggest assets internationally is our reputation. New Zealand is viewed as one of the least corrupt countries in the world and as a good place to do business. A strong AML/CFT system is vital to maintain New Zealand’s reputation as a reliable trading partner and enhance our reputation in international fora. While we consistently rank near the top of the Transparency International Corruption Perception Index, and in the top five of the Basel AML Index report, we can never become complacent. We must never take our good reputation for granted.

This bill and the amendments recommended by the committee will, in my view, strengthen New Zealand’s legislative framework. It will better prepare us for our next review by the Financial Action Task Force, an international forum of technical experts on anti - money-laundering and countering the financing of terrorism, when it evaluates our AML/CFT regime in 2020. It will also improve the ability of businesses to help stamp out financially motivated criminal activity, and will enable regulators to investigate those who do not meet the legal requirements. Ultimately, New Zealanders can have confidence that we are doing all we can to protect the reputation of our businesses and the reputation of our country from those who would seek to do it harm. I commend this bill to the House.

STUART NASH (Labour—Napier): There are very good reasons for doing this, apart from the fact that we have got to come up to global standards. First and foremost, as Minister Amy Adams mentioned, is our global reputation. We have a fantastic reputation but we also were seen as a bit of a weak link, as the Panama Papers showed. I think what happened, whether it was real or just perception, was it was reported globally that New Zealand did not have appropriate anti - money-laundering legislation in place. In fact, a paper written by the Ministry of Justice in February 2017 said: “New Zealand can be targeted by international criminal networks as a global weak link to inject the proceeds of crime into the international financial system. New Zealand has an anti-money laundering and countering financing of terrorism regime—but the regime is not appropriate to the level of risk.”

As the Minister outlined, phase one came in in 2013, and that included banks, insurance companies, financial services, money remitters, and casinos. Those are all areas that really were at high risk—well, are at high risk—of money-laundering, but there are a number of other areas through which criminals are laundering money, and they are real estate agents, lawyers, accountants, conveyancers, the New Zealand Racing Board, and some high-value dealers. We found that it is actually reasonably easy to launder money if you have the will, and we just do not have the processes in place to counter this.

New Zealand is a member of what is called the Financial Action Task Force on Money Laundering. This sets standards and undertakes reviews of member countries. The operational effectiveness of New Zealand’s anti - money-laundering regime will be assessed in 2020, and one thing we do know is that if it is found to be wanting, then that could impact upon New Zealand’s global reputation. So this is one of these things that cannot be done unilaterally; it is done on an international basis with a whole lot of cooperation. The Ministry of Justice also undertook a cost-benefit analysis, and it estimated that over a 10-year period, this legislation will stop between $4 billion to $5 billion—that is a lot of money; $4 billion to $5 billion—in reduced criminal activity over 10 years, as mentioned. So we are talking about a substantial sum of money.

But let me just go through the process of how we find ourselves here at the moment, and it is not as rosy as perhaps the Minister made it out to be. My personal view is that we have not done the sort of role that we could have done, and we have not addressed this with the level of urgency that I think it deserved. So, as mentioned, what happened was the Panama Papers came out, and New Zealand was mentioned an awful lot. In fact, as mentioned, it was discussed in the Financial Times article in the UK and in Australia, and we were noted as a soft touch for people who wanted to launder money. That is not a good look for New Zealand’s global reputation, and I do not think anyone would contest that.

What is worrying is not the content of this bill—we are absolutely supporting this bill, and of that there is no doubt. The Law and Order Committee worked very constructively to come up with an improved version of the bill, which was presented to us from the House during the first reading, and it is a good bill. But the process it took to get here—the legislation effectively makes up the implementation of phase two of the anti - money-laundering legislation. As mentioned, phase one has already been implemented. It came into force over 3 years ago, so why it has taken 3 years to get here is a little bit beyond me, considering how important this is to New Zealand’s global reputation, and the Minister did outline this. You know, we do rank No. 1 in the world, I think, at the moment in the global transparency index and in a number of other anti-corruption indices—we are certainly in the top three—so we have an enviable position.

But what happened was in July 2015, officials advised the Minister to begin work on implementing these reforms, and I am informed that Minister Amy Adams actually went against that advice. In his review on foreign trusts early last year, John Shewan, whom the Government appointed to a working group to actually have a look at the impact of the Panama Papers, urged the Government to pass this legislation by the end of 2016. Obviously, that did not happen, because here we are, 8 months later, trying to do this. The reason why John Shewan urged the Government to do this and the reason why the Ministry of Justice urged the Government to do this was that, first of all, they understood the impact on global reputation and, secondly, it was plainly obvious that money was being laundered through New Zealand, but we just did not quite understand the extent of it. But we did not work in an urgent way that I think this sort of problem necessitated.

So what happened? Promises of getting the legislation into Parliament last year—promises were made by both the Minister and the former Prime Minister John Key, and they were made mainly when this was the news. Those who were following this debate would know that this came up in the House—well, this was top of mind for around about a month. It was a long process, and it did achieve a lot of airplay, and of that there was no doubt. But when the heat went off the Panama Papers, and when it moved on to the next scandal the Government was involved in, then it sort of disappeared from the PM’s radar, and the urgent action that had been promised became non-urgent and the Government put on the brakes.

We need to ensure that we do eliminate New Zealand as a place for corruption, and the evidence we were having was that people would come in with wads of cash and buy items—buy houses—and that did not have to be reported. In fact, we discussed this long and hard in the select committee because we sort of wondered—certainly for high-value dealers—what the incentive would be if someone came in with $20,000 worth of cash and actually went to purchase something, only for that dealer to say: “No, no, I have to report this under the law.”

There are a whole lot of reasons why people come in with a whole lot of cash. Maybe it is legitimate—of that there is no doubt. It could be legitimate, so we are not suggesting that everyone who buys something worth $20,000, $50,000, or $100,000 with cash is a criminal, but what we are suggesting is that it is most unusual behaviour. In fact, the threshold, at $10,000, is most unusual behaviour—and anything above that, I think we would all agree—because in this day and age, who carries cash? My daughter wishes I would carry more, and there is no doubt about that. But we operate through the banking system, and the vast majority—not all, but the vast majority—of legitimate business is conducted through the banking system. We have a very robust banking system, actually, partly—well, I was going to say “partly” because of the first phase of this legislation, but also because it is just a very well-run banking system, and of that there is no doubt. The legislation codified what banks did anyway.

But what we need to do is—and I will go back to this global reputation thing, because I have gone on about this for the last 3 years, actually. It does concern me because, in the end, as a small country all we have got is our reputation. That is what we go overseas on—our reputation, whether it is our global brand as “clean, green”, whether it is our reputation as hard workers overseas or honest brokers overseas, or whether it is our reputation for fairness overseas. What we do not want to ever end up with is a state of play where people think they can come over here and do business in a way that they do business in other, more corrupt countries. We never ever want to be in that situation, and we never ever want to have that reputation. That is why we absolutely support this bill, but it is why I am also slightly disappointed that it has taken so long to get here, because it should not have.

One of the things that we did discuss in the select committee—and we debated this long and hard amongst ourselves, actually, in a constructive way, I must admit, but also with officials—is when the regimes actually came into place. How this legislation is going to work is that the Act is passed, it gains Royal assent, and then, once that happens, regulations are written for each sector that is covered—and, as mentioned, we are talking about real estate agents, lawyers, accountants, conveyancers—but what we do understand is that there is a cost to these businesses. What the businesses said to us was that their concern was that they were unsure what they were going to actually have to implement, because until this legislation is passed and the regulations are written, these businesses are not 100 percent sure what they are going to have to put into place.

So we discussed the cost and the impost on this but also how that would be passed on. We came to an agreement on this, but what we also did believe was that we could not have a situation where the cost was so high or the impost was so great that, in fact, it was done in a way that meant that these organisations could not comply with the law. So the bottom line is that we support this 100 percent, but we did have a little bit of a reservation about the process.

KANWALJIT SINGH BAKSHI (National): Thank you for the opportunity to speak during the second reading of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. The previous speaker, Stuart Nash, was just mentioning that it has taken a bit long, but I would like to acknowledge his contribution during the Law and Order Committee process. He knows that a lot of things were discussed, and it took a while before we came to the conclusion of the report, and I think that was the reason why it has taken a bit long. I would also like to acknowledge the Minister of Justice as well as the officials, who have really supported the select committee process in coming out with the report. The Minister has already acknowledged the report, and so has Stuart Nash.

This bill is the second phase of the anti - money-laundering and countering financing of terrorism legislation, which is very important. It has been mentioned by both the Minister and Stuart Nash that it is important because our reputation on the international platform is very important. It is also part of our being signatories to our international commitments that we will be working to reduce these kinds of activities in New Zealand.

We have to understand how these things operate, and it is very important that we have to stop these money-laundering things. What happens is that when some money is sourced illegally, the people try to source it from A to B and pretend that there is a legal transaction—that there has been a sale or purchase of goods, or brokerage, or any kind of legal transaction—so that that money looks like legal money. But, in fact, dirty money is being turned into legal money. So we have to be very careful. And we can see that this is happening everywhere in the world—dirty money is attempted to be cleaned up and brought into the system. That is why this bill is a balance between stopping those types of transactions—it is not only the dirty money—but also money that is used for terrorist acts. We want to make sure that money is not used for terrorist purposes. The bill strikes a balance between combatting crime, minimising the cost of compliance, and meeting international obligations. International obligation is one of the most important things, because we are signatories to some of those commitments.

In the select committee we received 31 submissions, most of which were supportive of what the bill intends to do. But still there were some concerns. We in the select committee recommended some changes, which the Minister has mostly agreed to, and we hope that this bill, when it goes through the parliamentary system, will be one of the bills that will help to stop these money-laundering things.

There were some changes. We have recommended a date when the legislation will automatically come into effect. It will not go through the Executive Council to be enacted. That was very important. Officials as well as some of the submitters were very keen on it. The lawyers, the accountants, the high-value dealers, and the Racing Board all submitted in the select committee process. We heard their concerns and we tried to address some of those during our process.

This whole industry is worth billions of dollars, and we want to ensure that that money does not come into New Zealand. The Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill aims to detect and deter money-laundering and the financing of terrorism so that the criminals cannot enjoy the profits of these activities or reinvest them into further criminal activities. With these words, I commend this bill to the House.

AUPITO WILLIAM SIO (Labour—Māngere): I am happy to join my colleague Stuart Nash in making some comments at the second reading of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. The bill was referred to the Law and Order Committee on 23 March of this year. Following 31 written submissions, of which 29 supported the objectives of the bill in general, the report of the Law and Order Committee recommended that it be passed with a number of amendments.

The committee members I think generally took part in the discussions to try to allay the concerns of those who made submissions. Things that were raised as issues by submitters included the time frame for implementation, the scope of activities, obligations for high-value dealers, information sharing, legal professional privilege exemptions, and changes to some definitions, such as recommending a change to the definition of “law firm”. The committee took note of concerns by the submitters that proposed time frames for implementation were too short. It was the time frame that took up a bit of time within the committee. We had debates—I think there were some concerns from the Government members about our desire to bring it forward and bring it quickly, but none the less, I think I am happy that the Government has decided to do this.

In saying this, I think it is important that this is the second part of two-part legislation that aims to combat money laundering and financing of terrorism. I think it is important, also, that the first part was introduced sometime before the release of the Panama Papers. When it was introduced this Government deliberately wanted to exempt these institutions—lawyers and real estate agents—and yet we now know that there was a strong suggestion by the Police. It made a strong recommendation to the Minister saying that the exemption of real estate, the exemption for accounting firms, and the exemption of lawyers actually put the reputation of this country at risk. According to the Police and according to officials who have undertaken research into the matter after the first stage of the legislation, it amounted to about $1.6 million of illegal activities that the Police say took place under what was going on. Here it is. “Police research concludes a loophole is seeing lawyers, accountants, and real estate agents being increasingly used to launder $1.6 billion”—so it was my mistake; it was not $1.6 million—“in dirty money annually—including into New Zealand’s booming property markets.”

I suppose what I am trying to highlight is that the Minister of Justice and the Government had ample time and warning that this was going on to be able to stand up and put a stake in the ground to say: “We’re going to move fast and act quickly in order to protect the reputation of New Zealand.” But they did not, and I think the Minister needs to respond and answer as to why, because Police investigation “ ‘exposed the fact that professional services and the real estate sector are closely linked to organised crime and drug offending.’ … That research, sampling freezing orders obtained to seize the proceeds of crime, found 26 percent of cases involved unpicking the work of accountants and lawyers, and more than half”—or 56 percent—“involved property deals where ‘offenders were ultimately successful in integrating criminal proceeds by purchasing real estate.’ ”

The advice was given to the Minister and the Government way back in 2013, when the first tranche of legislation came into effect. But the Minister did not take action, and reports released under the Official Information Act, which were provided to the Weekend Herald following a complaint to the Ombudsman, show that justice Minister Amy Adams was briefed in June about Police concerns, but substantive policy work to close the loophole was begun only a year later. That is why we find ourselves here now. There has been considerable red flagging, if you like, but for some reason or other they did not do it.

That is one of the reasons why the Opposition members in our discussions with the Government select committee members insisted that it was important that we bring forward the implementation of the bill and not leave it out too far. It is about protecting the integrity and the reputation of our country. As I said, I think evidence that the country was worried about that is the fact that of the 31 written submissions, 29 supported the objective of the bill in general. In fact, I cannot remember whether any of the submitters objected, because of the fact that this was a serious matter regarding the protection of our reputation.

I want to go on further and say that, in terms of the first bill: “The regime was first applied to banks and casinos in 2013—with professional services firms being brought in at a later date—and broadly requires organisations to ensure they know who their clients are and to actively monitor and report suspicious transactions to Police. In a briefing to Minister Adams in March which included Police concerns, officials said that the mismatch in coverage meant the professional services sector was now more attractive to criminals and ‘potentially provides a ‘road map’ for would-be money launderers’.” So there was ample red flagging to the Minister, and I think the Minister needs to answer for why she dragged her feet.

In fact, the Real Estate Institute of New Zealand said it was accepting appropriate vigilance by the department and supports the establishment of suitable compliance provisions. The Law Society said it always recognised the case for lawyers being reporting entities under the anti - money-laundering legislation and was not opposed to it. Chartered Accountants Australia and New Zealand said that it had not lobbied to delay the policy, and while it supported the regime being extended, this support was contingent on the regime being practical, cost-effective, and not imposing excessive compliance costs.

So, you see, even the three core professional organisations—real estate, lawyers, accountants—are raising their hands and saying: “We too are concerned about the protecting of our reputation, so don’t blame us.” It has been the Minister and the Government dragging their feet on this.

“Officials pushing for faster action closing loopholes … have expressed concern that our international reputation may be at risk if changes aren’t implemented quickly enough. Members of the Paris-based Financial Action Task Force—a multinational group formed to fight financial crime—face regular inspections and officials warned New Zealand could get a ticking off. Briefings last year to Minister of Justice Amy Adams noted delaying work on the policy until 2016—as was eventually decided”—by her—“made it ‘less likely to meet FATF’s timing for a positive report…’ ”.

I think, reading through some of these submissions by the public and reading through what the Police have indicated and what officials have said, it has to be said, with the greatest respect to the Minister, that she is at fault and allowed for this to continue. As a result of her dragging her feet and not moving quickly, we ended up tarnishing our international reputation because we were then seen as an easy target for criminals and organised crime to launder our money.

MAUREEN PUGH (National): It is my pleasure to stand tonight and speak to the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill in its second reading. This bill was considered by the Law and Order Committee under the careful chairmanship of Kanwaljit Singh Bakshi—

Andrew Bayly: Very good chair.

MAUREEN PUGH: Very good chair. The current Act is phase one of the changes brought in and applies to the sectors that were at the highest risk of being exploited by criminals. They were the banks, the casinos, and a range of financial service providers. That was the first step in closing the gaps that had the potential to provide opportunities for criminals to launder their money.

This bill is a further step in helping to protect our businesses, and also in ensuring that New Zealand’s reputation remains of the highest standard and that we maintain our position as one of the safest places in the world to do business. This bill is phase two, and it extends the regime to lawyers, conveyancers, accountants, real estate agents, racing and sports betting, and some businesses that deal in high-value goods such as art, jewellery, high-performance cars, boats, etc.

The committee heard from a range of submitters and from those in the affected sectors who were generally in support of this bill. However, some submitters were concerned about the time frames that are proposed in this bill for them to develop the systems that are required and to have them in place in time to meet these required time frames. We did discuss this at some length, and we felt that because the time frames are being phased in over the various sectors, it does give those sectors different implementation dates by which time they have to meet their obligations. It provides sufficient time for them to implement these controls and to train appropriate staff.

For example, the New Zealand Racing Board—its implementation is phased in to be the last of the organisations, which is 1 August 2019. Given the number of small racing clubs around New Zealand, the committee felt that this sector required more time to implement its systems. Lawyers and conveyancers—their implementation date is 1 July 2018, accountants by 1 October 2018, and real estate agents by 1 January 2019. This phased approach also allows for teams within the ministry to work with the various sectors to help them, as they are staggered, to set themselves up and to meet their obligations.

It was also important to the Law and Order Committee, when we were looking at the time frames, that New Zealand is not disadvantaged when we are evaluated by the Financial Action Task Force in 2019, because this could have a direct effect on our international trade reputation. This bill means we are able to meet our international obligations, and it is important that we remain a good and honest place to do business.

The act of laundering money is the way in which criminals clean illegally earned money—dirty money gained through illegal activities like the sale of drugs, the sale of stolen property. The estimated amount of these illegally sourced funds is in the vicinity of about $1.3 billion, such is the scale of this dirty money being laundered through legitimate businesses in our country. So it means that these criminals are then free to reinvest their clean money back into their illegal activities or terrorism activities. The Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill will make it much more difficult for criminals, including international criminals who may have looked to New Zealand as a place to launder their money.

The businesses and organisations that this bill applies to will be obliged to report suspicious activity or cash transactions over a level set by regulation—for example, cash transactions of $10,000 or, for the New Zealand Racing Board, bets of $6,000 cash. Lotto is even restructuring its business, to meet a $6,000 threshold. There is also a requirement for relevant entities to conduct due diligence, and the degree of due diligence is determined by the level of risk. There are three levels of due diligence: simplified, standard, and enhanced. So, for example, a State-owned enterprise, Crown entity, bank, licensed insurer, local government, or any other low-risk entities would require simplified due diligence.

This bill is a big step in protecting our businesses here in New Zealand. It certainly helps to prevent criminal activity and to prosecute those criminals. It tightens the systems used by criminals in the cleaning of their illegally sourced money. This bill protects New Zealand’s integrity, and I commend it to the House.

EUGENIE SAGE (Green): Tēnā koe, Mr Deputy Speaker—thank you. I am pleased to speak for the Green Party in support of the Anti-Money Laundering and Countering Finance of Terrorism Amendment Bill. I think the problems with laundering money and the—

Hon Ruth Dyson: That’s your time nearly up.

EUGENIE SAGE: Pardon?

Hon Ruth Dyson: Time’s nearly up, after you say the name.

EUGENIE SAGE: Ha, ha! The problems with money-laundering and with the financing of terrorism are well recognised by the public, and we are very pleased to support the bill. Like others, we are concerned that it did take some time to actually get it into the House, and we are still only in the second reading, because there have been major problems identified by the Financial Action Task Force. As others have commented, it is an inter-Government forum that deals with money-laundering. It has got a number of international experts on it, it has got the strong backing of Governments, and it also looks at the issue of terrorism financing. It was their very damning report back in 2009 that highlighted the potential for fraud here, the fact that it was happening, and the fact that there was drugs-related fraud, theft, blackmail, and burglaries that were related to the proceeds of criminal action. So that highlighted the need for a major law change in New Zealand.

Because of that damning report we did suffer the consequences when we were struck off the white list of the European Union list of countries that had financial integrity, and that, of course, has had consequences for businesses exporting and operating in Europe and has added to their costs of doing business.

Phase one was some progress. Phase two, I guess, because it is focusing on people like lawyers—the people who are the gatekeepers to our financial system and the people who are often perceived as having a great deal of financial legitimacy and therefore can be quite critical in disguising money-laundering and make it much harder to detect these offences. As the regulatory impact statement made clear, undetected money-laundering has major consequences for our economy. The police estimated that there is about $1.3 billion worth of disruption costs at the moment, and that is probably only the tip of the iceberg. It does reduce the opportunities for legitimate businesses and activities, and it has the potential to significantly distort the market by skewing prices and increasing the cost of borrowing. Of course, if it is not detected criminals get to enjoy the proceeds of their crime, which they may end up reinvesting in further criminal activities. So there are lots of reasons why we need to clamp down on it—not just in terms of protecting our international reputation, but because of the activities themselves.

This phase 2 has been a long time coming. I think the Law and Order Committee—not being on that committee, but looking at the bill as reported back and the number of changes that the committee has recommended—has done a very thorough job. I would note that the Minister of Justice’s Supplementary Order Paper picks up some of those recommendations, and there were quite a lot of concerns expressed by the Privacy Commissioner and others about some of the definitions in the bill and the breadth of some of the provisions, including the ability of agencies to share information, and that that would undermine privacy provisions in other legislation.

So the committee’s recommendation was that phrases like “intelligence gathering and analysis” and “national security and defence purposes”, where those could be used as the basis for sharing information, were far too broad. The recommendations that are being suggested have a much more explicit definition, to ensure that the power of the State to undermine individuals’ privacy, while engaged in the good purpose of trying to prevent money-laundering, does not go too far.

There were other issues, in terms of when the different real estate agents, lawyers, and others would be subject to the legislation, and the concern that this would be done by Order in Council, and that that was not in line with normal legislative practice. The understanding, I think, that I have from reading the bill, is that there is a commitment that there will be quite a lot of detailed guidance that is provided at least 6 months before the law applies to those different sectors, like lawyers. It is another example, I think, of where you get, out of select committee consideration and the whole submission process, significant changes that improve legislation.

But we want for the Government to speed up the pace here, because not only is there a reputational risk, but of course if New Zealand is the weak link, in terms of global efforts around countering money-laundering and the financing of terrorism, then we are potentially targeted by some of those international criminals. There has been a suggestion that money is being invested in New Zealand in property purchases, and the like, because of the current weak regime.

This bill does need to be progressed, to strengthen not only our reputation but also the controls on money-laundering, to make the system a lot more transparent, and to provide for the ability for this to be detected. This is a bill that the Greens are pleased to support. We commend the select committee for the work that it has done on taking submissions into account and making a number of sensible changes to the bill.

FLETCHER TABUTEAU (NZ First): If I could just start where the previous speaker, Eugenie Sage, left off and commend the Law and Order Committee that picked up this legislation. I would argue that it should have come to the Finance and Expenditure Committee, and we would have had a full and robust debate and analysis of this bill. But, actually, I stand up, not being a member of the Law and Order Committee, and commend the chairman and the members for the work that they have done.

Jonathan Young: Thank you very much.

FLETCHER TABUTEAU: You read this legislation, and it is tidy and it does what it sets out to do—and I am glad my compliments have made the evening of Mr Nathan Guy across the way there. It brings me joy.

The point I do want to make though—and the Minister of Justice made a great contribution in her speech this evening. She spoke eloquently about the legislation, but then she spoke of enhancing our international profile and that we cannot be complacent. The Minister of Revenue has spoken to this legislation in this House. I would like to quote from her first reading contribution. She spoke about money-laundering being the lifeblood of organised crime. She spoke about money-laundering enabling lifestyles and funding illegal practices and, in so doing, in the Minister’s own words, she said that we enable and ensure that legitimate businesses suffer. This was in the first reading contribution from the Minister of Revenue, and I could not agree more strongly with words spoken in this House.

Unfortunately, for the Government, the time line on this issue of money-laundering in New Zealand is a lengthy one. I speak specifically to 2003 when this particular problem was brought to New Zealand’s attention and, in fact, subsequently, we were struck off the UN’s white list for financial integrity—although, admittedly, we were put back on, as Mr Woodhouse is very wont to say. He did raise that with me when I brought it up in a debate some time ago, and I acknowledge we were put back on to it. But then we had the Panama Papers and, in the end, we actually had the Shewan report that outlined comprehensively and in detail what the issues were with New Zealand’s financial situation and what this Government—this National Government—has allowed, in terms of money-laundering in New Zealand.

Clayton Mitchell: Disgraceful.

FLETCHER TABUTEAU: It is disgraceful, and it has been a sad indictment on a Government that has been willing to say that this has been a problem for legitimate businesses in New Zealand—it has. The Government members have said it themselves. In fact, if I go to the words of Minister McClay, who was Minister of Revenue in 2009 when the Government came into power, he spoke about the need for this legislation to be enacted and brought into the House, and he spoke about the need to act. He said: “This bill will ensure that New Zealand’s laws against money-laundering and its laws to counter the financing of terrorism are up to international standards.” He then said: “Well, there is money-laundering in New Zealand.” and it “comes from the illegal drug trade” and, yes, it is “too much, and we must do much more about this.”

That was the Minister of Revenue in 2009 when National took power. This has been a problem since 2003. The Government has known about it since it took office and it has done nothing about it until now. So not only has that compromised New Zealand’s business operation but what that has meant is that terrorism activities and the operations of illegal drug cartels, for example, have been enabled and—dare I say it—empowered by the lack of action from National and its unwillingness to act on an industry that its former Prime Minister described as a great cottage industry that was making a lot of money for the lawyers and the trust managers.

So it is an indictment on the Government. It is a sad state of affairs that we are here only now. I get the impression that we are going to try to get it through this week. So at least we are here now, and I do stand in support of it—in case that was not clear from the start. New Zealand First of course supports this because we have been speaking to this Government and to the public of New Zealand and we have been making it very clear that these lawyers, these real estate agents, accountants—not all of them of course but many of them—have been used to cover up illegal money exchanges and money activities, and that has enabled illegal activity here and across the world. It is frustrating that we have got to this point only now. It has been a decade.

By way of explanation, a police report that was kind of forced to become public, they did not want to release it, outlined that accountants and real estate agents and lawyers have, in their estimation, enabled the laundering of as much as $1.6 billion per year—$1.6 billion per year of illegal funds through New Zealand. That is an absolute indictment on the non-activity, the non-action, and the non-performance from the members and the Ministers opposite. This is because it was not just the police report that suddenly made this issue clear; we and that Government have known about it from 2009. Then we had the Reserve Bank sector risk assessment outline a similar analysis to the thinking of New Zealand First. It outlined very much our thinking for over a decade now—that money launderers and terrorists and terrorist financiers having been using New Zealand lawyers, accountants, and real estate agents or shell companies and their trusts to circumvent our banking sector controls and thereby effectively use New Zealand to hide their money for subsequent illegal use.

There have been good outcomes. This legislation is good. My analysis and the subsequent discussions with caucus have very much highlighted a positive piece of legislation that we do support. It will strengthen the anti - money-laundering, countering financing of terrorism framework. It will ensure that New Zealand steps up in terms of its international obligations. There has been some discussion in the House—and there was discussion in the select committee—around the implementation time frame. At this stage it would be interesting to see what the Committee of the whole House brings—and the Minister mentioned a Supplementary Order Paper. But it will be interesting to see whether we settle on those implementation time frames, because I have some sympathy with some of the industry players around their obligations for compliance.

New Zealand First would support a discussion, but at this stage the 12 months, 18 months, 2 years implementation for lawyers, real estate agents, and the Racing Board seems to be a fair mechanism for asking for compliance. New Zealand First does understand that there will be costs involved with that, but we are talking about $1.6 billion worth of illegal money movement within this country, and no one in this House tonight will—or will they ever—debate the fact that something strong needs to be done about that.

With very limited time to go, I do look forward to the Committee stage. There are some small, minor changes that New Zealand First will recommend to the Committee. I do look forward to that debate. But absolutely we support this bill as written and support the Government despite the length of time it has taken to get to this point. New Zealand First will be supporting this bill to the House. Thank you.

JONATHAN YOUNG (National—New Plymouth): I am very, very happy to hear the comments—or some of those comments, if not all—of the previous member, Fletcher Tabuteau, regarding the quality legislation that is now before the House.

In fact, I can tell you a story of my boyhood. When my family would go to the Bay of Plenty for our holidays from South Taranaki, we would go out—wade out—into the Athenree Estuary with the flounder net and catch breakfast. Every night we would put it out and every morning bring it in, and there were three, four, or five flounder. It used to be a wonderful breakfast when we were on holiday. Then one day we stopped catching fish. One day we would go out there in the morning and they were gone; they were not there. Day after day we wondered what on earth had happened, until we brought in the net and at the end of it found a very large hole.

So this bill is about making sure the net does not have any holes, so that the fish do not escape—those slimy individuals who are slipping through the system, who are taking their ill-gotten gains and laundering them to try to cleanse those funds. And what do I mean by “cleanse”? That means to conceal its criminal origins.

This is what this House does. It is necessary for this House to make sure that we have a system that protects the integrity of our financial systems but also protects our hard-working, tax-paying businesses who comply with the law, who make sure that they do their bit to make sure that New Zealand carries on and that we do not have individuals who take advantage of New Zealand businesses to try to make their quick buck look like a clean buck, because it is not.

We know that the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill—the former iteration of it—focuses mainly on banks and financial institutions, but this one here extends the reach of that net into these phase 2 entities. It is talking about professions that have a high risk of being targeted: real estate agents and conveyancers, people who take their illegally sourced funds and buy products and assets and therefore can then go on and resell them and give the form of legitimacy to those funds. Also lawyers and accountants, betting on sports and racing—these are also these phase 2 areas and industries that can attract these sorts of people. So this bill is to reduce the risk of money-laundering and what it does is to tighten that net.

We understand at this point in time that around about $1.3 billion to $1.5 billion gets through the net in New Zealand, and we have got to stop that. It is from fraud and illegal drugs being bought and sold right through this country. We need to maintain this war on drugs. Not only do they destroy, particularly, our young people and make them unable to succeed in life but it is a black market that destroys our financial integrity and business base. This Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill regime is so important for us to meet our international obligations, to close the gaps that international money launderers can exploit, and to protect our reputation.

We have got a great reputation in the world. We are first for prosperity. We are second for anti-corruption. We are second-best in the world for Government—let us keep it that way. We do have international obligations. We want to close the gaps that international money launderers are trying to exploit and we want to help protect our reputation as a good place to do business. Did I say that we are the best place in the world to do business? That is up there with all of those other great accolades that have come New Zealand’s way under this National-led Government. So it is important to have this bill go through.

Phil Twyford: Did the research unit not provide decent notes tonight?

JONATHAN YOUNG: Phil Twyford has finally woken up. Perhaps it is a depressing day for him. Terrorism financing is where money-laundering methods are used to fund terrorism activities, and here we live at the bottom of the world and we say that we are safe, yet we are in the world where all sorts of activities take place. By and large, across the Tasman Sea we see some of these activities; it has even been reported this past week. So we need to ensure that that cannot happen through our country and through our financial institutions. It cannot happen through our businesses and professions that have been targeted; through real estate agents, conveyancers, lawyers, accountants, and betting on sports and racing.

I would say that it is important that we do not allow people to disguise the source of where their funds come from, but that it is clear and transparent. And where there are suspicious activities, we have in this bill the obligation for those to be reported. I believe there are compliance costs, but the officials have worked with the sector and have been able to halve those compliance costs. We know that this is a responsibility; to have a good, clean, fair, and integral system in this country, and it is a good thing.

The bill extends our obligations to these wider sector businesses and professions that will be better placed to detect red flags. In many regards, these second-phase institutions are the first point of entry into the money-laundering process. They are the places where these people seek to take their funds, take their money, and take their cash in order to get them through into the system. But what we are enabling through this legislation is for those red flags to be lifted sooner and faster so that we can expand the scope of the Act and make it easier for police to access the relevant information, the information they need when investigating money-laundering or organised crime.

I want to say in my closing comments that by working with these affected sectors, refining options to help them meet their obligations, we have significantly reduced the predicted compliance costs. The initial estimate of up to $1.6 billion over 10 years has been lowered to between $800 million and $1.1 billion over a 10-year period. This is a good thing, and I am very happy to commend this bill to the House.

Mr DEPUTY SPEAKER: Jan Logie—5-minute call on behalf of the Green Party.

JAN LOGIE (Green): It is with great pleasure that I rise on behalf of the Green Party to offer our support for the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill at this, the second reading. The Green Party really supports these initiatives. We want to see this law happen. We want to see it happen quickly. We want it to be comprehensive legislation.

I do, though, feel compelled, at the beginning of my speech, to point out a bit of a double standard that seems to exist in relation to crime in this country. It seems that our Government has been very slow to respond to crime at the big end of town, compared with the endless harsh treatment of beneficiaries who may or may not, indeed, have committed welfare fraud. I really think that it is a significant injustice in this country.

This legislation that is in front of us is really long overdue. The extensions to the Anti-Money Laundering and Countering Financing of Terrorism Act were signalled early on, and then the Government delayed it for 2 years, between 2014 and 2016, before the Panama Papers publicity basically forced it to put the reforms back on track. This is a very common picture that I am seeing in this country. There are things that we know we need to do—say, build more houses—and yet nothing gets done because that seems to involve active governance, and this Government that we have here to my left does not seem to be very interested in active governance. It seems to be more interested in waiting until we have a crisis before it responds.

In this case, the delay was after 2010 when the Financial Action Task Force on Money Laundering—which is an inter-Governmental forum on money-laundering that comprises international experts and has the strong backing of Governments from around the world and includes, as well as, in its consideration, money-laundering and anti-terrorism financing concerns—issued a damning report on New Zealand, revealing cases of fraud, drugs, theft, blackmail, and burglary that had resulted in criminal funds subject to money-laundering in this country.

Even that report, which ended up for at least a period of time with New Zealand being struck off the prestigious European Union white list of countries that have financial integrity, was not enough to get this Government to fast track these protections. It delayed after that and was really forced, and waited until the public furore after the Panama Papers forced it to take action. It really does blow my mind a bit, and I wonder how it has managed to stay in its place as long as it has.

It is, I think, really important that we have this legislation to build this trust back in. What this legislation does is it amends the Anti-Money Laundering and Countering Financing of Terrorism Act of 2009 to extend its core obligations to include real estate agents, lawyers, accountants, conveyancers, the New Zealand Racing Board, and some high-value dealers in certain objects like jewellery, precious metals, arts, cars, boats, and antiquities, to give the Department of Internal Affairs oversight supervision of these new sectors, to protect against these areas being used to cover money that is actually the proceeds of crime, so that we can as a country be more on top of reducing crime by removing its cover, protecting the integrity, and creating an even playing field for our businesses, as well as bringing back some of the real costs of things, like housing, taking out the money from the proceeds of crimes that are affecting those markets.

MICHAEL WOOD (Labour—Mt Roskill): Sometimes when speaking in this House, your faith in human nature is restored, and in the case of this bill it has been restored, because we have seen the capacity of people to look at the evidence and change their minds from the fixed positions they held several years ago. I want to commend colleagues on the other side of the House who, just a short number of years ago, were saying things like New Zealand had a full disclosure regime that was “world class”. These words, in fact, were uttered by none other than former National Government Prime Minister John Key, at the time that the Panama Papers first landed in the New Zealand media in early 2016.

That was the first response of this Government when revelations surfaced of huge volumes of dirty money pouring into our country and being laundered for criminal purposes: to write it off, to say that we had a “world-class regime”. Those were his words. And extraordinarily we had Minister Amy Adams here, talking to us about this very good piece of legislation.

Before I go on, I will reaffirm Labour’s support for this piece of legislation. It is a good piece of legislation that closes up holes that we should have closed up a long time ago. But that is the point—we could have closed them up a long time ago. Let me quote here from a very excellent piece by the journalist Matt Nippert, who has done a lot of work in exposing the criminal activity in this area: “In a briefing to Amy Adams in March”, which was last year, “which included police concerns,”—about $1.6 billion of dirty money sloshing around and not being captured by reporting requirements—“officials said the mismatch in coverage”, which means the fact that we left big holes in place when we did not advance phase two of the anti-money laundering legislation, as proposed by John Shewan, as quickly as we should, “meant the professional service sector was now more attractive to criminals and potentially provides a ‘road map’ for would-be money launderers. This noted officials had long-wished to progress work to close this gap, but these preferences had been overruled. ‘Work was due to commence in 2014, but was deferred to competing priorities,’.”

Amy Adams was at least honest about this; she said that the juggling of priorities was not her responsibility—“I wasn’t the Minister at that time, so I can’t speak to that.” So here we have on the record the fact that the National Government has been aware of these problems since at least going back to 2014, when officials warned it, and here we are in the closing days of this Parliament in 2017, finally getting around to it. John Shewan, in his report, said that we should have had this legislation on the books by last year at the latest. This does go to reputation. Members on both sides of the House have spoken passionately and convincingly about this. This goes to our international reputation. We are talking about crooks and drug dealers and arms traders—people who have ripped off their Governments, who are evading taxes, and who are then pouring their “hot” money into our jurisdiction.

One of the ways they have done that—and Matt Nippert’s report is very good in this respect—is they reveal that huge amounts of this, in particular, have gone into the red-hot property sector. Of course, if you have this illicit money pouring into the property sector in New Zealand, it is a double bonanza. Not only are you laundering your money and making it clean but you are making huge capital gains off the back of it as well. So it is absolutely beyond time that we close down on these rorts.

Over the course of this Parliament we have slowly but surely closed down the rort of foreign trusts. What happened when we had disclosure, when the new regime came in a couple of months ago—again, very delayed by the Government? They crashed, from 12,000 down to about 3,000, because these guys do not want the sunlight of the public gaze and public scrutiny on their dodgy activities. That is why this bill is so important, and that is why we should have put it in place several years ago when we had the opportunity. But we are finally getting around to it here.

This bill does some very simple things. It helps us to detect these sorts of transactions and it helps us to deter them. It requires the reporting of suspicious activities above certain thresholds—basic stuff that we should have already had in place—and of course, importantly, it provides protections for those who might be making disclosures as well, because there can be significant pressure put on those people.

When John Shewan issued his report—when he finally issued it—he said that New Zealand’s system was “not fit for purpose” and that it was “open to money-laundering and aggressive tax practices.” Well, finally we are getting around to closing those loopholes. We on this side of the House are happy about that, but it should have been done much, much earlier. Thank you.

IAN McKELVIE (National—Rangitīkei): It is a pleasure to take a call on the Anti Money-Laundering and Countering Financing of Terrorism Amendment Bill at its second reading. The select committee stage of this bill was very interesting in that we all, I guess, concurred on the eventual outcome of it; it was how we got there that was very interesting. The thing that interested me most was the different questions that were asked by different members of the Law and Order Committee. One who was particularly active in the course of that select committee process was Barry Coates. He spent a lot of time raising issues that were quite pertinent, as it turned out, to the course of the select committee process. So the select committee process for me was an interesting one. It was quite a long one, actually, and our chairman, Kanwaljit Singh Bakshi, did a great job of chairing that committee and taking those submissions through their process.

But I want to talk about a couple of submissions specifically, and one of them is the submission from the racing industry. If you think about money-laundering, it is one of the oldest crimes known to man—or woman, for that matter—and the racing industry throughout its history has been one of the places that was a very easy place to launder money, in that it was one of the earliest forms of gambling that we had in this country and one of the earliest forms of bookmaking that we had in this country. So there were two forms of gambling that took place in the racing industry: the legitimate one and the illegitimate one. The legitimate one is easy to track; the illegitimate one is almost impossible to track.

But, none the less, the thing that interests me most about the racing industry is that you or I—sorry, Mr Deputy Speaker—anyone in this House could go along and put a small bet on a racehorse, and could come away with a return in excess of $10,000. If you did that—and you could actually do it if you were fortunate enough, if you think about it, for $5; you could put a $5 bet on a racehorse and come out with a $10,000 dividend. In the event of that, you would end up being subject to this Act. You would then be part of the disclosure scheme and you would for ever be part of the records or the history of this country. I guess that that is one of the things that concerned me the most—that, from a racing industry perspective, the Act picked up people when they were paid out as well as when they paid in. If you put $10,000 on a horse, for example, you would expect to be picked up in the course of this legislation; if you put $5 on it and took $10,000 out, you would not necessarily expect to be. I think that was an interesting issue for me.

The other thing that was raised in the course of this submission was the amount of time that is allowed in order to comply with this bill. That is very challenging for the industry because if you think about its technology, the only way you can monitor those bets—and there is a large number of them—is through its technology system. It needs time to bring that technology up to date and to be able to get it to comply, so it was concerned about that.

The fortunate thing about the industry’s situation, and I think a number of other situations, is that the Minister of Justice does have the ability to grant exemptions around the time-scale of this thing. He or she also has the ability to grant exemptions around other bits of this bill too. I do not think, for a minute, we should be giving exemptions out too freely, but I do think it will be necessary in the course of the implementation of this bill for some exemptions to be made to enable organisations and businesses to comply, because it is a very complicated thing.

I want to get on to another submission that I thought was equally as interesting, actually, from Farmlands Co-operative Society Ltd, which is a large farmer cooperative and which made quite a compelling submission, although a little bit of that submission was outside the context of the bill. Its submission was based around customer due diligence and the fact that its shareholders, because they are the owners of the company, became part of the compliance of this bill. It was very concerned about that. If you think about the conservative old person who might be a member of Farmlands, they are not that keen on having themselves exposed to some kind of Act that may well eventually involve them in some kind of perceived criminal activity. That was an interesting submission. The select committee got through that, and, in fact, it again is not altogether relevant to the bill. But it was an interesting submission that Farmlands made, and it also has, I think, the potential to be part of any exemption that might be granted in the future.

There were a number of other submissions that were very interesting, including one from an accountant in South Auckland who explained at length a whole lot of alternatives to the bill—

Andrew Bayly: Pukekohe.

IAN McKELVIE: He was from Pukekohe. Exactly. One of yours, I think. He must have been one of Bayly’s—he was very complicated. He made a number of submissions around the fact that he thought there were alternatives to this that could very easily short-circuit the system and save the country a lot of money—or save the accountant a lot of money, I think. But that was also ruled out.

A lot of the submissions we heard reminded me very much of a film called The Sting. For those of you who have seen The Sting, I thought it was an amazing film. It was one of the most exciting ones I have ever seen, really. But it is a little bit like what this is all about. Whilst I realise the serious side of this—and, as the two previous speakers pointed out, there are a lot of challenges around how we are perceived internationally and the fact that if we enable people to effectively launder money in any way through this country, it is not in our best interests or in the country’s best interests. But, none the less, it sort of brings connotations of these kinds of those things like The Sting, for me, and whilst I realise the seriousness of it, it is a bit interesting.

The bill really is designed to halt criminal activity in every way. We had a lot of discussion around the alternative forms of criminal activity. Amazingly, for me, it involves everything from buying artwork for half the price of what it is worth and moving it on—you can get involved in anything like that. I was quite surprised, actually, at some of the lengths people go to launder money.

The other thing that was apparent through the course of this bill was the fact that the Police have a financial intelligence branch. I guess its role is to investigate all of this sort of stuff and pick up the issues that create the most difficult challenges for it. It was interesting to think of some of the ways it might look at this, and it was a very challenging situation for the Police. Obviously, this money-laundering allows criminals to fund their lifestyles. It is very difficult for them, I think, to get away with a lot of these things, but none the less this bill will bring it into line.

I think the bill strikes a balance between combatting crime, minimising the cost of compliance, and meeting international obligations. While I do think there are initially some onerous obligations put on things like the racing industry and, you could argue, even on our accountants and lawyers, on the whole it enables us as a country to meet international obligations and to get on top of—[Bell rung] that is fortunate—the potential for crime and the potential for our international reputation to be damaged. I think we have done a pretty good job at the select committee. I think the chairman has done an outstanding job of chairing the select committee and getting the bill to this point. I look forward to the discussion as it moves on through the House in the next two stages. Thank you.

PEENI HENARE (Labour—Tāmaki Makaurau): Tēnā koe, Mr Deputy Speaker. First of all, can I confirm our support for this bill. I will not read out its title. But I would like to pick up on some of the points made from the other side of the House. One of them was by Mr Young, who talked about red flags going up, and having the ability to make sure that you have got the powers and the legislation on your side to make sure that you are able to stop corrupt activities.

I recall living in a small town in the Far North where the town was known for peddling a little bit of drugs—some heavy, some not so heavy, but illegal drugs regardless. One of the members of that community used to drive around in a quarter of a million dollar Rolls-Royce Phantom. We told the police: “Do you think there’s something a little odd here, that in the township of Moerewa, with a median income of some $11,000 or $12,000, you’ve got a gentleman driving around in a Rolls-Royce Phantom?”. I can tell you that that gentleman still has a Rolls-Royce Phantom, but he has upgraded. He has upgraded to the new Rolls-Royce Phantom.

The point of my story is this. I think this is a good piece of legislation, and members across the House have spoken out about how it will close the holes in the net and it will tighten up security and increase our reputation to get us back to the standard where we once were with regard to anti-corruption. But if we cannot do it at the ground level in reality, I cannot help but sit here and question why we think and consider, when we read this bill, that it is going to solve all the problems and close all the holes in the net.

One of the points I want to raise is the staggered approach to enacting this particular bill, and putting compliance times upon different sectors that this bill is widening the scope to capture. I cannot help but wonder why the lawyers and conveyancers would be bound by the provisions by 1 July 2018 and accountants would be bound by the provisions by 1 October 2018. That is a long way off. I do not think that those particular professions are suffering from any shortage of money to allow them to build their capacity to make sure that they are able to be compliant under this legislation.

Sure, I can understand some of these small places—and it was mentioned about the Racing Board in some small little place. Let us just take the Ruakākā raceway, for example. I would be surprised if they had the internet—I am not too sure. But, sure, I can see that they would want to be able to build their capacity, and network together to make sure that they are able to become compliant. But I wonder why it would take so long for the lawyers and conveyancers to be up and running by 1 July 2018. That is over a year away—over a year away—and we are allowing them this time? Sure, there must be some sort of a reason, but I have not heard that from the House tonight. I did not hear from the Minister with any great detail. All I heard was that there is this staggered approach to make sure that when we widen the scope of this particular bill, these occupations will be able to have time to become compliant.

Look, I am no expert when it comes to laundering money. If I was, I probably would not be working here. [Interruption] Mind you, I could have a Rolls-Royce Phantom, living in Moerewa—quarter of a million dollars. It would be bloody fantastic. But, look, the point is, we support the notion that we will once again be put back up on a pedestal as the country that makes sure that we do things fairly and we do things right. You cannot come to this country and hide your money, launder your money through our different institutions here in this country. I think it is important that we (1) fix the legislation, and (2), just as importantly, make sure that we have the forensic and technical abilities to find where these people are hiding their money through what I would consider—and I am sure most of New Zealand would consider—reputable occupations. You do not go to a lawyer and think straight away that they are going to be laundering money. You might suspect it, but that is not the general thinking by the New Zealand public. So I wonder about the forensic abilities for us to police whether or not we are actually closing the net, or whether or not there are still a few sprats, as Mr Young spoke about, slipping away through the net.

But I will not go on much longer, other than to say we do support this bill. Just for the purposes of this House, I will read the title of the bill, and that bill is the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. We support it. Thank you.

BRETT HUDSON (National): I rise in support of this Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. You know, some years ago a politician in New Zealand made an absolute blunder by claiming that we live in a benign strategic environment. It is true that the State-initiated conflicts of previous centuries, including in the first half of the 20th century, have reduced a great deal. However, terrorism is a real and present threat to many parts of the world and, unfortunately, we see all too much of that on the newsfeeds. As responsible global citizens, we have a duty to make sure that we do our best to prevent such terrorist organisations from using our financial systems, people, businesses, and economy, in fact, to launder their money to finance their nefarious objectives.

Beyond terrorism, we need to take care that organised crime is also not able to use New Zealand as a way to channel, funnel, and launder its ill-begotten proceeds, and also other individuals and groups with nefarious intent, particularly those people or groups that might look to exploit people, particularly youth—promising them great rewards and futures, but instead delivering them the nightmare of exploitation and almost slave-like conditions, particularly when they also seek to hide the funding of such operations through very opaque means. These labour camps are as dangerous as other forms of organised crime, so it is important that as good global citizens, we make sure that such operations find it very difficult to move their money around and launder it through our economy and financial systems. I commend this bill to the House.

Bill read a second time.

Sittings of the House

Sittings of the House

BARBARA KURIGER (Junior Whip—National): I seek leave to adjourn the House until the next sitting day.

Mr DEPUTY SPEAKER: Leave is put for that purpose. Is there any objection? There appears to be none. Members—[Interruption] That is enough; I am on my feet. [Interruption] That is enough; I am on my feet. That is enough, for goodness’ sake!

The House adjourned at 9.51 p.m.