Thursday, 3 August 2017

THURSDAY, 3 AUGUST 2017

THURSDAY, 3 AUGUST 2017

Mr Speaker took the Chair at 2 p.m.

Prayers.

Visitors

Bangladesh—Parliamentary Standing Committee on Ministry of Foreign Affairs

Korea—National Assembly, Legislation and Judiciary Committee

Mr SPEAKER: Honourable members, I am sure that members would wish to welcome two delegations present in the gallery: members of the Parliamentary Standing Committee on Ministry of Foreign Affairs from the Parliament of Bangladesh, led by chairperson Dr Dipu Moni MP; and members of the Legislative and Judiciary Committee from the National Assembly of the Republic of Korea, led by Mr Beom Kye Park MP.

Business Statement

Business Statement

Hon SIMON BRIDGES (Leader of the House): When the House resumes on Tuesday, 8 August the Government will look to complete the Appropriation (2017/18 Estimates) Bill, the Commerce (Cartels and Other Matters) Amendment Bill, the first reading of the Employment (Pay Equity and Equal Pay) Bill, and a number of other bills on the Order Paper. Wednesday, 9 August will be a members’ day. On Thursday, in the morning, the House will sit under extended hours for the Committee stage and third reading of the Rangitāne Tū Mai Rā (Wairarapa Tāmaki nui-ā-Rua) Claims Settlement Bill and the Ngāti Pūkenga Claims Settlement Bill.

Oral Questions

Questions to Ministers

Tax System—Multinational Enterprises

1. MELISSA LEE (National) to the Minister of Finance: What decisions has the Government made to ensure multinational companies pay their fair share of tax?

Hon STEVEN JOYCE (Minister of Finance): Today my colleague and the excellent Minister of Revenue, Judith Collins, and I announced the Government’s final decision on proposals to address base erosion and profit shifting, also known as BEPS. New Zealand has been working alongside the OECD on the global response, to ensure multinationals are taxed fairly no matter where they operate. Our new initiatives will significantly strengthen our tax rules and align them with the changes being made in Australia and in other OECD countries. The Government has ensured we will tackle multinational tax without reducing the attractiveness of New Zealand as an investment destination.

Melissa Lee: What specific changes affecting multinational companies is this Government making?

Hon STEVEN JOYCE: Our package of initiatives will stop foreign parent companies charging subsidiaries high interest rates to reduce their taxable profits in New Zealand, stop multinationals using artificial arrangements to avoid having a taxable presence in New Zealand, and make it much easier for the Inland Revenue Department to investigate uncooperative companies. It is very important that every company operating in New Zealand pays its fair share of tax, and that we avoid the situation where companies do not pay tax anywhere in the world.

Melissa Lee: How much extra revenue will result from these changes?

Hon STEVEN JOYCE: The changes announced this morning will result in an estimated additional $200 million a year in tax being paid by multinational companies. This is made up of the $100 million per year already booked through Budget 2017. [Interruption]

Mr SPEAKER: Order! [Interruption] Order! We are not putting up with that level of interjection, and particularly from one person immediately to my left.

Hon STEVEN JOYCE: Mr Speaker, I think it is his relief at keeping his job. The changes are made up of the $100 million per year already booked through Budget 2017, and an additional $100 million resulting from today’s announcements. It also builds on the work we have already done to impose GST on imported services, and the stronger non-resident withholding tax rules that were introduced last year. Taken together, the Government’s actions on multinational companies are estimated to result in revenue of $300 million per year—$100 million more than is already in the Budget track.

Grant Robertson: Why after 9 years of being in Government, and 5 years after he was warned exactly about multinational tax avoidance, does he think he will have any credibility with this announcement—and maybe he should have let Judith Collins make it instead of trying to take credit for it?

Hon STEVEN JOYCE: In answer to the second part of the question, the Minister and I work as a team on many matters, including on this one. Can I tell the member that—and he might want to listen here, because he might learn something—there is a thing known as the OECD, and the countries in the OECD agreed to work together to make sure that multinationals pay tax across all the jurisdictions, otherwise the actions of any individual country would not make any difference at all. So we have signed the multilateral treaty, and, in fact, Minister Collins went to Paris to sign that treaty so that New Zealand actually was able to join with the other countries and collect this revenue.

Melissa Lee: How does today’s announcement on multinational tax fit into the Government’s strategy of making business easier in New Zealand?

Hon STEVEN JOYCE: New Zealand is a great place to do business, and our broad based - low rate tax system continues to perform very well overall; in fact, it is very, very important for encouraging people to create jobs in this country. It is important that we do not become complacent and that we keep taking additional steps to ensure that our tax system remains fair to everybody operating in this country. Our strong economic plan gives businesses the confidence to invest and expand and grow jobs, and, by ensuring that all companies are taxed fairly, those that come to New Zealand and grow operations here know they will get a fair deal.

Special Housing Areas—Outcomes

2. JAMES SHAW (Co-Leader—Green) to the Prime Minister: Does he stand by all his Government’s policies?

Hon STEVEN JOYCE (Minister of Finance) on behalf of the Prime Minister: Yes, particularly Budget 2017’s $2 billion a year Family Incomes Package, which will provide rewards for hard work, help lower-income families with young children meet their living costs, and improve incomes for people with high housing costs. I would like to thank the Greens again for their positive vision of New Zealand in supporting this Government and voting for that package.

James Shaw: Can he confirm that 25 of the special housing areas (SHAs) in Auckland show no signs of building activity?

Hon STEVEN JOYCE: No, I cannot, and I suggest that if he wants to ask that question he put it down to the relevant Minister. But I can confirm to the member that earlier this week the building consents figures came out, New Zealand was again at the highest level in about 12 or 13 years, and Auckland was up to 10,500 houses consented. There are also, of course, many under way that have already been consented.

James Shaw: Can he confirm that over 2,180 homes that were supposed to be built under the SHA legislation have not been built?

Hon STEVEN JOYCE: Again, no, I cannot. I suggest the member puts down a question directly to the portfolio Minister. But I can confirm again for him that the important thing is how many houses are being built in Auckland. I can tell him, for example, that in just one suburb in Albany in Auckland, which I am familiar with, there are over 1,000 apartments being built at the moment amongst the 10,500 houses that are being built annually around Auckland.

James Shaw: When will those 2,184 homes be built?

Hon STEVEN JOYCE: Well, again, I cannot confirm that for the member so it is a slightly redundant question. But I can tell him, which, again, I think he will find helpful given his interest in this matter, that the Government is, through its Housing Infrastructure Fund, bringing the ability to build another 60,000 houses in places like Auckland, Hamilton, and Tauranga—there are about 30,000 in Auckland. Of course, Crown Fibre Holdings is becoming Crown Infrastructure Partners and it has another $600 million, which it is going to invest alongside the private sector, in particular for large housing projects in the south of Auckland and in the north of Auckland but also in other fast-growing councils around the country.

James Shaw: Does he concede that it was a bad idea not to put “use it or lose it” clauses into the SHA legislation?

Hon STEVEN JOYCE: My understanding from the Minister—and, again, it probably would have been easier if he had just asked the Minister the question—is that, actually, they do have those clauses in that particular arrangement. But it is just one of a number that have ensured that we have gone from very low levels of construction in Auckland—in fact, I think it was about two and a bit thousand houses a year being built around 2009—to now, and if you take into account units and apartments, we are up to over 10,500. So it is a great story of progress and it is continuing.

James Shaw: Given that the requirement to build affordable housing lapses when the SHA status expires, does he accept that the Government has set up an incentive to land bank those 25 areas?

Hon STEVEN JOYCE: No, I do not. I would point out to the member that the arrangement come to in each SHA has been in partnership with the local councils in that area. Can I say again that the important thing is how many houses are actually being built and the important thing is housing prices—and housing prices in Auckland, as we have had confirmed in the last 48 hours, are now flat to falling and the number of houses being built is continuing to rise.

James Shaw: Can he confirm that it is a special housing area that is being used to build “New Zealand’s premier luxury retirement resort”?

Hon STEVEN JOYCE: I would need confirmation of that—independent confirmation of that—but I would point out to the member that, actually, building retirement villages is a good way of freeing up other houses for people to live in. He may not be aware, but when somebody moves into a retirement village, they often move out of an existing house, and that house might get sold to somebody else. That is how the housing market works together to achieve the provision of housing for New Zealanders.

Youth Unemployment—Household Labour Force Survey

3. GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Has the number of 15- to 24-year-olds not in education, employment, or training according to the Household Labour Force Survey increased since the same quarter last year; if so, by how many?

Hon STEVEN JOYCE (Minister of Finance): The number of 15- to 24-year-olds who were unemployed and not in education in the June 2017 quarter, according to the household labour force survey released yesterday, is 29,000, and that is the exact same number as recorded in the 2016 June quarter. In the wider “neets” situation, the total number for “neets” for June 2017 is down 12,000 on the last quarter, down 17,000 on the December quarter, and 1,000 down on the September 2016 quarter, but, yes, I can confirm for the member that he has found a quarter that is up 3,000 on that June quarter.

Grant Robertson: So, to confirm for the Minister, compared with the exact same quarter last year, there are 3,000 more 15- to 24-year-olds not in employment, education, or training, and why is that?

Hon STEVEN JOYCE: Well, again, for the member I confirm for him—and I think I have illustrated that in the answer to the primary question—that the numbers do move around a bit from quarter to quarter. The figures in June are 12,000 down on the March quarter, 17,000 down on the December quarter, and 1,000 down on the September 2016 quarter, and I can confirm for him it is up 3,000 on the same time last year.

Grant Robertson: Why are there 3,000 more 15- to 24-year-olds not in employment, education, or training compared with the exact same quarter last year?

Hon STEVEN JOYCE: Well, I cannot give him the exact answer, but I can tell him that it is not because they are unemployed, because the number who are unemployed—as I have pointed out to him in answer to the primary question—and who are not in education is exactly the same number as it was in June last year. So I invite the member to have a look at table 15 in the household labour force survey and, if he is interested, compare the numbers—of which there are about a dozen—from June 2017 back to 2016, and he can make his own call.

Grant Robertson: Why, according to the household labour force survey, in comparison with the exact same quarter last year, are there more young people not in education, employment, or training in Auckland, Waikato, Manawatū-Whanganui, Tasman, Nelson, Marlborough, West Coast, Canterbury, and Otago?

Hon STEVEN JOYCE: Well, there are slightly more in those areas and slightly less in other areas. Can I point out to the member that he is talking about a population of 667,000 people aged 15 to 24, and today, in his wisdom, he is debating the figure of 3,000 in June of last year. Look, I encourage him to continue in his line of questioning, but I can point out to him that compared with June last year, the number of young people unemployed who are not in education is exactly the same.

Grant Robertson: After 9 years of being in Government, why are there more 15- to 24-year-olds not in education, employment, or training? And if he does not know why, why does he not just give up now?

Hon STEVEN JOYCE: I am in this weird universe where Mr Robertson seems to think that he knows exactly what a very, very small proportion of the 667,000 young people aged 15 to 24 are doing. What I can point out to him is that the figures are nearly identical to last year, significantly down on the last quarter, and significantly down on the quarter before that, so only in Mr Robertson’s warped world could it be called an increase.

District Health Boards—Canterbury and South Canterbury Chairs and Funding

4. MATT DOOCEY (National—Waimakariri) to the Minister of Health: What announcement has he made in relation to filling the Chair positions at Canterbury and South Canterbury District Health Boards?

Hon Dr JONATHAN COLEMAN (Minister of Health): Today I announced the appointment of John Wood as chair of the Canterbury District Health Board (DHB), with Sir Mark Solomon continuing in his role as deputy chair. Together they will make a very good leadership team. Dr Wood has significant governance experience, a proven track record of drawing multiple agencies together to deliver key work programmes, as well as a strong personal commitment to Canterbury. I have also appointed Ron Luxton as the chair of the South Canterbury District Health Board, with Paul Annear appointed as deputy chair. All of these appointees bring a great range of skills to their boards, including a wealth of governance experiences, and they are worthy additions to the governance of the health system in the wider Canterbury region.

Matt Doocey: What other actions has the Government taken to improve health outcomes in Canterbury?

Hon Dr JONATHAN COLEMAN: The Government recognises that the DHB has required extra support since the earthquakes, and we have provided an additional $106 million above the DHB’s bulk funding allocation, including a $20 million mental health package. Overall the DHB has received an extra $399 million over the last 9 years, including an extra $73 million this year, taking its budget to $1.5 billion. Work also continues in Canterbury to deliver the largest ever hospital redevelopment project in New Zealand’s history, with close to $1 billion being spent, including the $215 million new hospital facilities at Burwood, a new $72 million outpatients facility, and the new $463 million acute services building.

Dr Megan Woods: Will he be making further announcements concerning the Canterbury DHB, specifically about new facilities for regional mental health services that are still stranded in a hospital that was too awful for Government-appointed reviewers to visit?

Hon Dr JONATHAN COLEMAN: Well, that last bit, I think, is very anecdotal, and there is no evidence to support that. But I also welcome the member’s first contribution in this House on Canterbury, despite being a local MP. I can assure her, if she follows our press releases, that she will be advised in due course.

Mr SPEAKER: Question—[Interruption] Order! [Interruption] Order! I have allowed the member to have a question. She has not ceased interjecting since the start of question time. If she interjects again today, I will be asking her to leave.

Overseas Investment—Policy and Jericho Station Sale

5. RON MARK (Deputy Leader—NZ First) to the Minister of Finance: Is he satisfied with Government policy on overseas investment?

Hon STEVEN JOYCE (Minister of Finance): Generally, yes, but there is always room for improvement. As a general rule, overseas investment brings opportunities for more jobs, particularly around regional New Zealand. I think of companies like Oji Fibre Solutions and its investment in timber processing. I think of companies like King Salmon and its investment in salmon in Nelson and Marlborough. I think of, for example, Premier Beehive bacon in the Wairarapa, which is another big investor internationally that provides jobs for people of Masterton and the Wairarapa region. These companies employ hundreds and hundreds of workers in regional New Zealand, and produce valuable exports that improve our balance of trade.

Ron Mark: Does he no longer support his predecessor and now Prime Minister Bill English’s 2010 ministerial directive letter issued to Land Information New Zealand, which states that the foreign buyers of farmland must show a substantial and identifiable benefit for New Zealand?

Hon STEVEN JOYCE: My understanding is that that policy, overall, has not changed. And, actually, we are always looking for the benefit to New Zealanders of international investment.

Ron Mark: Why then is Landcorp, a State-owned enterprise that he is a shareholding Minister for, selling Jericho Station for $8.7 million to a Chinese buyer when there was an unconditional offer of $8.5 million from a New Zealander, or does $200,000 meet his Government’s definition of a “substantial and identifiable benefit”?

Hon STEVEN JOYCE: Well, I am not aware of the details of that particular purchase, but can I say to the member that, actually, often the approach that Landcorp takes in these places—as I am sure other parties do, given that it is a Government-owned company—would be to offer it as a tender or open sale arrangement, where the best offer would generally be accepted. So, without being aware of all the details and all the requirements around a particular station—I presume the member has been approached by the unsuccessful bidder; I understand they might be disappointed, but there is a process that has to be gone through.

Ron Mark: Given that Landcorp board member Eric Roy, a former National Party MP, has acknowledged that the Kiwi offer of $8.5 million cash went before it, why are taxpayers now losing over $26,000 a month in lost interest from turning down a Kiwi cash buyer in favour of a Chinese conditional buyer?

Hon STEVEN JOYCE: Well, again, if the member would like to put this down in a written question, I would be more than happy to get him the answer. He did not raise it in the primary question—he tried to play gotcha with it—but if he actually wants the information, he should put it down in a question and ask about it.

Ron Mark: How can New Zealanders trust a word he says about not privatising assets when this State-owned farm, one he is a shareholding Minister for, has been sold to a Chinese buyer subject to a Government department’s approval, with the final safeguard meant to be his Cabinet colleagues?

Hon STEVEN JOYCE: Well, I hope the member is not suggesting that Cabinet Ministers should make the decisions on the sale of these properties, because if he is suggesting that, I think he is wrong. I appreciate that he has, obviously, been approached by the gentleman concerned who was the unsuccessful bidder, but it is important that these things are kept at arm’s length from Cabinet and that the decision is made by the company. But again, if the member would like some information, I would invite him to actually ask the question formally, and I will get him the information.

Housing, Auckland—Supply

6. PHIL TWYFORD (Labour—Te Atatū) to the Minister for Building and Construction: Do MBIE officials still advise that the shortfall of housing in Auckland is projected to continue beyond 2030?

Hon Dr NICK SMITH (Minister for Building and Construction): No, and the member misrepresents the Ministry of Business, Innovation and Employment’s (MBIE’s) advice. No one can seriously predict with any certainty housing shortfalls 13 years hence, given the level of variability in both population and house building. The solution to the shortfall is what we are focused on, and that is getting more houses built. The house-building rate has trebled from that which we inherited from the previous Government and has grown by an average of 20 percent for every year for 6 straight years—the longest period of continuous growth on record.

Phil Twyford: I raise a point of order, Mr Speaker. I seek the leave of the House to table advice from Treasury and MBIE officials to the Minister Dr Nick Smith predicting—

Mr SPEAKER: Order! I do not need that; I just need the source of the document.

Phil Twyford: An Official Information Act release.

Mr SPEAKER: On that basis I will assume that it may not be in the public arena. I will put the leave and the House will decide. Leave is sought to table that information. Is there any objection? Yes, there is.

Phil Twyford: How long does he think that it will take to eliminate the 40,000 shortfall of homes that has built up on his watch, in light of numbers from Auckland Council that show that fewer than half of the 14,000 homes Auckland needs per year were actually completed last year?

Hon Dr NICK SMITH: Firstly, the member is wrong: last year there were 10,400 homes consented. The member keeps wanting to use code compliance certificates, but they do not apply to retirement villages—and, actually, they are houses—and, actually, Statistics New Zealand has just produced a report that says that building consents result in 98 percent of homes. In respect of the member’s other question, I simply point out that the scale of building in Auckland now is at all-time record levels.

Phil Twyford: Why does he prefer to use Statistics New Zealand’s consent data over Auckland Council’s numbers based on code compliance certificates that actually prove the completion of a building, given that Statistics New Zealand described its data as experimental and said it was still refining it?

Hon Dr NICK SMITH: For two good reasons. The first thing is that there is no legal requirement to have a code compliance certificate on a house. I actually happen to be living in a home that was completed 18 months ago; it does not yet have a code compliance certificate. Secondly, when a code compliance certificate is issued for an apartment block, there is only one code compliance certificate issued, but it may be for 50 apartments, so that makes a substantive difference. The third point I make is that the Statistics New Zealand report concluded that the most reliable measure of building activity is on the consent figures, and, on average, it takes 10 months from the time of the consent until the home is complete. [Interruption]

Phil Twyford: Is he concerned—

Mr SPEAKER: Order! I have not yet called the member. I am just waiting for some silence to give him a fair go.

Phil Twyford: Is he concerned that the trend for consents for new dwellings in Auckland has now fallen every month since September last year, and that consents are down on the same month last year?

Hon Dr NICK SMITH: I have those exact figures in front of me, and let us just take it very simply. Add up the number of consents for the first 6 months of this year and compare them with the first 6 months of last year. These 6 months are higher—that is called growth—and no matter how many times the member opposite tries to skew or misrepresent the numbers, the fact is that we have got the largest building boom ever in Auckland’s history.

Phil Twyford: I raise a point of order, Mr Speaker. My question was about the trend, not the absolute figures per month.

Mr SPEAKER: Order! The question was quite a detailed question. Without a doubt, in my opinion, it was addressed.

Hon Dr NICK SMITH: I seek leave of the House to table the latest report I have received from MBIE on the number of building consents in Auckland, which shows that 4,770 were consented—

Mr SPEAKER: Order! [Interruption] Order! I do not need that part of the information to decide whether to put the leave. What I do need is just an assurance that it is not publicly available.

Hon Dr NICK SMITH: It is a specific report that was provided to me from MBIE, and so would not be available—

Mr SPEAKER: That is all I need. Leave is sought to table that particular report. Is there any objection to it being tabled? There is not. It can be tabled.

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

Phil Twyford: When he wrote to—[Interruption]

Mr SPEAKER: Order! The conversation between Mr Joyce and Mr Robertson will cease. If they wish to have a conversation, they are welcome to go to the lobbies and have a convivial time over a cup of coffee, if they like.

Phil Twyford: When he wrote to land bankers in June 2015 begging them to develop the land in their special housing areas, how many replied to his letter and how many built houses as a result of his begging letter?

Hon Dr NICK SMITH: I would need to check that, but what I would point out is this: at mid-2017, the prediction was that there would be 4,400 consents in special housing areas. Actually, there have been 5,500—that is, the number of homes in special housing areas is 1,000 more than what we projected at that time.

Phil Twyford: I seek leave to table Nick Smith’s begging letter to the land bankers, which was released—

Mr SPEAKER: Order! I will put the leave, but I do not need that description of the letter. Leave is sought to table a particular letter written by the Minister. Is there any objection to it being tabled? Yes, there is objection.

Phil Twyford: After 9 years and a housing shortage that continues to get worse by the day, is it not time for a massive Government-backed building programme of affordable houses, the abolition of the urban growth boundary that he has been promising for 10 years but has not done yet, and a move to infrastructure bonds to finance infrastructure for new development?

Hon Dr NICK SMITH: The member is like an old stuck record. The infrastructure bonds that were announced by my colleague Steven Joyce, with the special purpose vehicle, shows that he has resorted to picking up the Government’s policies and pretending that they are new. The member also does not seem to recognise that in the last 12 months the Auckland housing market has been absolutely flat, something that is a consequence of the record building boom.

Offenders—Employment Support

7. MAUREEN PUGH (National) to the Minister of Corrections: What recent announcement has she made regarding a partnership between the Department of Corrections and employers to get offenders into work and reduce their chance of reoffending?

Hon LOUISE UPSTON (Minister of Corrections): Corrections’ Employer Partnerships initiative is making a positive difference by helping 482 offenders into employment in just the last few months. Finding steady employment for offenders when they leave prison is critical to helping them turn their lives around, and to reduce their chance of reoffending. I have hosted three successful employer breakfasts recently in Hamilton, Christchurch, and Wellington. The feedback from the employers has been overwhelming. Corrections has signed memorandums of understanding with 125 employers to help match prisoners with positions relevant to their experience and qualifications. Offenders can obtain qualifications through education and training courses offered while in prison, and this provides them with the first step towards employment once they are released.

Maureen Pugh: What new initiative is Corrections piloting to support offenders with mental health issues to improve their ability to be work-ready?

Hon LOUISE UPSTON: As part of a $14 million investment to help offenders and their families cope with the challenges of mental health, four new services are being piloted by Corrections. The new services include increased mental health support for prisoners and community-based offenders at 16 prisons and in four community corrections sites. We will also be investing in more counsellors and social workers at the country’s three women’s prisons, to support them with current and historical trauma and family issues, to reduce harm and their chance of reoffending. The Supported Living service will work with offenders with highly complex mental illness or cognitive impairment, to access accommodation and support services on their release from prison. The Wrap Around Family/Whānau Support initiative will connect family and children of offenders with mental illness with community services, to improve their social, health, and education outcomes.

Kelvin Davis: Why was North Shore employer Mark Hoddle invited to Auckland prison—a businessman prepared to offer positions to offenders—but given no information about numbers of suitable offenders, no information of their previous offences and their work experience, no CVs to peruse, and no date that they could interview them to ascertain whether they were suitable for his line of work, so that he away annoyed that he had wasted a day away from his business?

Hon LOUISE UPSTON: I am thrilled to hear that there is another employer who is interested in taking on offenders, because that actually gives them the opportunity of a chance of not reoffending. I would encourage that member to give me their details so we can get in contact.

Maureen Pugh: What other initiatives are being rolled out to support offenders to return to employment?

Hon LOUISE UPSTON: Last week the second phase of an alcohol interlock pilot was launched nationally with 694,000 from the Justice Sector fund. Phase 2 will see 240 alcohol interlock devices rolled out to eligible offenders who are serving community sentences for drink-driving offences. That is on top of the 175 rolled out in the first stage of the pilot. Alcohol interlocks immobilise a vehicle until the driver has successfully passed a breath-alcohol test, and can reduce recidivism of alcohol-impaired driving by up to 70 percent. Offenders charged with drink-driving can face lengthy driving disqualification periods, which obviously disrupts their employment. Stable work is critical to reducing reoffending, and this programme means that offenders can continue to work as well as looking after their families and reducing the risk to their communities.

Students with Special Needs—Support

8. CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Is she satisfied that after nine years of a National-led Government all children and young people are receiving all the support that they need to succeed in education?

Hon LOUISE UPSTON (Associate Minister of Education) on behalf of the Minister of Education: I am satisfied that this National-led Government has made a significant improvement in the education of our children and young people. This financial year our investment in education amounts to $11 billion, the highest ever investment in public education. Also under this Government, there are nearly 97 percent of children attending early childhood education, and approximately 85 percent of 18-year-olds now have NCEA level 2. However, we recognise that we could always do more to improve, and that is why we have undertaken a significant work programme to ensure that not only is there more funding provided but that we are also ensuring this funding is going to the right child at the right time, to make the biggest difference.

Chris Hipkins: Why did this year’s Budget reduce the forecast for ongoing resourcing (ORS) funding—the additional support provided to children with the highest needs—by 50 student places, given that over 500 applications for the funding are being declined each year?

Hon LOUISE UPSTON: This Government’s focus on learning support has increased by over 30 percent since 2008. Budget 2017 provided an additional $63.3 million over the next 4 years to support students with additional learning needs. This includes $15 million to extend teacher-aide support to an extra 625 students per year, and this investment fulfils the Government’s commitment to roll out in-class support to over 4,000 students.

Chris Hipkins: I raise a point of order, Mr Speaker. The question that I asked was specifically about ORS funding and why the Government had reduced the forecast for ORS funding.

Mr SPEAKER: I listened very carefully, and the Minister then went on to say that they had actually given additional money toward students with additional needs. I think that addresses the question. If it does not address it to the satisfaction of the member, I suggest he moves forward with further supplementary questions.

Chris Hipkins: Why did the Government reduce the forecast funding for ORS funding by 50 student places, when over 500 applications for that funding are being declined each year?

Hon LOUISE UPSTON: As I have said, we are increasing our support for children who have learning challenges. I said in my primary question that we are committed to ensuring that funding goes to the right children at the right time, to support their learning.

Chris Hipkins: Why is she satisfied that all children are receiving the support that they need after 9 years of National Government, when 115 applications for the intensive wraparound service for students with the most complex needs were declined because the service was at capacity?

Hon LOUISE UPSTON: As I said in my primary answer, we are constantly looking at ways to improve, to make sure that we are reaching the students who do have challenges and do have needs. This Government is investing more than ever before in education, and we are getting results for our children. Does that mean there are greater opportunities to support individual children in need? That is why we have got a significant work programme ahead of us.

Chris Hipkins: Why has the Government reduced the number of education support workers employed by the Ministry of Education—those who work with the youngest and most vulnerable—by more than half between 2008 and 2015, from 275 to just 134?

Hon LOUISE UPSTON: I am not sure that the figures that the member states are correct. On top of schools’ operations grants, we are actually allocating more in teacher-aide support than ever before. Budget 2017 includes $15.5 million to extend teacher-aide support, as I said before, to another 625 more students.

Chris Hipkins: I raise a point of order, Mr Speaker. I think the Minister may have misheard my question. I was not asking about teacher-aides who work in schools. I was asking specifically about education support workers employed by the Minister of Education.

Mr SPEAKER: I agree on this occasion, so the member can re-ask the question.

Chris Hipkins: Why has the Government reduced the number of education support workers employed by the Ministry of Education—those who work with the youngest and most vulnerable—by more than half between 2008 and 2015, from 275 to just 134?

Hon LOUISE UPSTON: That is a very detailed question. Given the broad primary question, I would suggest that member put it down in writing.

Police Resourcing—Access to Institute of Environmental Science and Research Forensic Experts

9. RON MARK (Deputy Leader—NZ First) to the Minister of Police: Does she stand by all her statements?

Hon ANNE TOLLEY (Minister for Children) on behalf of the Minister of Police: Yes, within the context they were given.

Ron Mark: Given her statements on police resourcing, why are some police districts currently struggling with financial constraints that prevent their ability to procure services from the Institute of Environmental Science and Research (ESR), which are the forensic experts used by the Police and the Crown?

Hon ANNE TOLLEY: Those resources, of course, are managed by the commissioner, around the different districts. I would suggest that that member would be far better to put that in writing to the Minister, where she could get a response from the commissioner.

Ron Mark: Given that it is the Government that allocates the resources to the commissioner, does she think it is acceptable for a victim who has been shot in the face and has lost an eye to have to witness the offender walking free from a charge of the careless misuse of a firearm causing injury because the prosecution was unable to assemble the necessary forensic evidence, due to the lack of funding?

Hon ANNE TOLLEY: I am sure that we all feel tremendous sympathy for the victim of any such violent crime. However, police prosecutions are statutorily in the hands of the commissioner, and are the responsibility of the commissioner, not the Minister. But the good news is that Budget 2017 funded half a billion dollars to the Police to support staff and support staffing resources, which will include, of course, prosecutions.

Ron Mark: Does she think it is acceptable for the Crown prosecutor to state that “Due to financial constraints, the Police are unable to instruct the ESR to undertake a scene examination and provide forensic evidence to the prosecution.”; if not, what is she going to do about it?

Hon ANNE TOLLEY: The Police Prosecution Service is always managing its budget, according to priorities. The issues with ESR go back decades. I do not think that the member can put those at the feet of any one particular Minister, but that is always a balancing argument.

Ron Mark: I seek leave to table a letter to the officer in charge of the Palmerston North Police, dated 31 March 2017, from the Crown solicitor.

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

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

Waste Management—Flight Plastics Recycling Facility

Mr SPEAKER: Question No. 10, Chris Bishop.

CHRIS BISHOP (National): Thank you very much, Mr Speaker.

Hon Members: Aw, aw, aw, aw, aw.

CHRIS BISHOP: Very strange reaction.

10. CHRIS BISHOP (National) to the Associate Minister for the Environment: How is the Government supporting the recycling of PET plastics in New Zealand?

Mr SPEAKER: The Hon Scott Simpson.

Hon SCOTT SIMPSON (Associate Minister for the Environment): Aw, thank you, Mr Speaker. Yesterday my colleague the Minister for the Environment, the Hon Dr Nick Smith, and I officially opened the new Flight Plastics processing plant in Lower Hutt with the member Chris Bishop. Thanks to a $4 million grant from the Government’s Waste Minimisation Fund, the new facility has the capacity to turn more than 6,000 tonnes of polyethylene terephthalate (PET) plastic into high-grade, food-safe packaging each year. That means that more than 200 million bottles, like this one, will each year be turned into flake and chip, like this, which in turn produces food-quality packaging, like this, which in turn can be recycled into more flake, like this.

Chris Bishop: How do recent international developments make this more important?

Hon SCOTT SIMPSON: China recently announced a ban on importing waste and recyclables from foreign countries. This move from China will reduce end markets for recyclable materials and makes it even more important that we are able to recycle onshore here in New Zealand. This project at Flight Plastics is significant because for the first time New Zealand now has the capacity to recycle PET plastic here onshore. I encourage all councils to direct their PET plastic collected at kerbside recycling to this new Flight Plastics processing facility, and I also encourage New Zealand consumers to purchase products that use New Zealand recycled PET.

Mental Health Services—Demand and Funding

11. JENNY SALESA (Labour—Manukau East) to the Minister of Health: Does he think it’s acceptable that after nine years of a National-led Government the Ministry of Health’s budget bid shows it does not have “an understanding of the mental health population, workforce, and interventions”, according to Treasury?

Hon Dr JONATHAN COLEMAN (Minister of Health): Sorry, but Treasury is just wrong on this. The member has to understand that Treasury generally opposes any extra spending in health and always comes up with reasons to justify its position. The member will, however, be delighted to learn that the Government is right now working on how it will invest the $100 million extra announced for cross-sector mental health initiatives in this year’s Budget. This will build on the $300 million extra that has been invested in mental health by this Government, the 150 extra psychiatrists, and 600 extra mental health nurses.

Jenny Salesa: If the Minister of Health and his ministry do understand the mental health needs of New Zealanders, why is it taking over 2 months for him to explain what half of his funding announcement on mental health is from Budget 2017?

Hon Dr JONATHAN COLEMAN: What the member needs to understand is that $224 million allocated in the Budget is being supported by the mental health strategy, which Cabinet has been considering, as well as a very detailed plan for new and innovative solutions, which the Government is currently working on. But I can tell the member that this is a difficult area. Governments right across the Western World are looking for new solutions, and she will be very delighted with the plan when it is announced in due course.

Jenny Salesa: Is it acceptable that last year the number of children and young people waiting more than 3 weeks to see mental health services increased from the previous year, with nearly 1,500 across the country last year waiting over 8 weeks to get the help they need?

Hon Dr JONATHAN COLEMAN: Overall in the mental health system, waiting times have decreased, but you have got to understand also that demand has increased. So 8 years ago 96,000 people were seeking specialist mental health services; last year it was 168,000—a big jump, much greater than the growth of the population over that period.

Jenny Salesa: Is it acceptable that 1,824 children and young people were turned away from child and adolescent mental health services across the country, a 153 percent increase in rejected referrals since 2012 under this Government?

Hon Dr JONATHAN COLEMAN: There are a couple of elements there. I mean, as I have outlined, demand has increased, but, look, you would have to do an analysis of those figures that the member is putting. I know she is not the regular person asking the questions but, I must admit, the questions are better. But the point is—

Mr SPEAKER: Order! We will just complete the answer.

Hon Dr JONATHAN COLEMAN: —you would have to actually look at the referral patterns and what those referrals actually detail to really understand what is going on there.

Jenny Salesa: Does he believe that there need to be school-based health services to provide mental health support in all secondary schools, not just deciles 1 to 3; if so, will he support Labour’s policy to extend school-based health services in all public secondary schools?

Hon Dr JONATHAN COLEMAN: Well, as the member has pointed out, that is Labour policy. Look, it is well intentioned, but it is not actually going to deliver the results intended.

Pay Equity—Joint Working Group on Pay Equity Principles Recommendations and Legislation

12. JAN LOGIE (Green) to the Minister for Workplace Relations and Safety: What are the differences between the recommendations of the Joint Working Group on Pay Equity Principles and the pay equity bill that the Government has introduced?

Hon LOUISE UPSTON (Minister of Corrections) on behalf of the Minister for Workplace Relations and Safety: In November 2016 the Government accepted the recommendations of the joint working group and has developed the Employment (Pay Equity and Equal Pay) Bill to give effect to those recommendations. One area that the joint working group could not reach agreement on was the extent to which the principles provide guidance on identifying comparators in terms of industry or sectoral proximity to the employees in the pay equity claim. The Government has chosen to strengthen the principles by making it clear that comparators should come from within the same business, similar businesses, or the same industry or sector when available and appropriate. Closer occupations are likely to be more readily comparable and provide better quality information for making comparisons. This is consistent with the Court of Appeal’s decision in the Terranova case, and with pay equity regimes in other jurisdictions, which generally limit comparators to being within the same workplace or employer.

Jan Logie: I raise a point of order, Mr Speaker. I did ask the Minister what the differences are. She has identified one, but it was a plural question.

Mr SPEAKER: That is not a point of order. The member now needs to make progress with her supplementary questions. I have a little sympathy for her, because I found it very difficult to hear the answer and that was because of interjection from people on my left. Carry on with the supplementary questions.

Jan Logie: Why, after spending months on a process overseen by Dame Patsy Reddy, which got agreement on pay equity principles from business, Government, and unions, has the Minister now introduced a bill that makes changes to these agreed principles and does not have the support of one of the three parties?

Hon LOUISE UPSTON: As I said, there was one area, and that was the area of identifying comparators, that the joint working group could not reach agreement on. So the bill that has been introduced—and we have put out a draft for circulation—has provided great and valuable feedback from the stakeholders, and we have tabled a bill that we look forward to passing.

Jan Logie: Is the Minister saying that the comparators are the only point of difference from the principles?

Hon LOUISE UPSTON: The joint working group principles were a really critical part and led to the drafting of this bill, as I mentioned earlier. What this Government is committed to is ensuring that we have a pay equity regime, that women are able to take a claim more easily, that it is fair, that it is easy to approach, and that it is workable for both employees and employers. That is what this Government has delivered.

Jan Logie: I raise a point of order, Mr Speaker.

Mr SPEAKER: If the point of order is that the question has not been addressed, I agree. Can I invite the member to ask the question again?

Jan Logie: Is the Minister saying that the comparators are the only thing that is different from the principles as they were agreed?

Hon LOUISE UPSTON: I am saying that is the key area of difference, only because the joint working group was not able to reach agreement on it. We have a bill that is before the House and will be open to public submissions, and we look forward to hearing from New Zealanders, employers, and employees, about their views.

Jan Logie: I seek leave to table a briefing from the New Zealand Council of Trade Unions outlining several points of difference from the agreed principles.

Mr SPEAKER: Leave is sought to table that information. Is there any objection? There is objection. [Interruption]

Mr SPEAKER: Order! Supplementary question, Jan Logie.

Jan Logie: How can the Minister say this bill will be good for women when the campaign for equal value, equal pay, arguably New Zealand’s experts on pay equity, has said that the Government’s bill will “make it harder not easier for women to claim equal pay for work of equal value. We prefer to keep the Act we’ve got, which has just increased wages for 55,000 undervalued care and support workers.”?

Hon LOUISE UPSTON: We welcome submissions as the process of the legislation progresses. That is exactly why we have a submission process. The reality is we have a piece of legislation that enables both equal pay and pay equity, and, as the member has just said, over 55,000 New Zealand women have benefited exactly from our Government’s work on pay equity.

Points of Order

Business of the House—Racing Amendment Bill

CLAYTON MITCHELL (NZ First): I raise a point of order, Mr Speaker. Can I seek clarification from the Leader of the House with regards to the work for next week—the work plan? He did not mention anything about the Racing Amendment Bill, which was tabled. Is that planned for next week as well?

Mr SPEAKER: Order! The Business Statement—[Interruption] Order! The Business Statement is given at the start of Thursday proceedings. That is the opportunity, really, to raise points of order with the Leader of the House. On this occasion, if the Leader of the House wants to respond to the positioning of the racing bill for the benefit of Mr Mitchell, I invite him to do so.

Hon SIMON BRIDGES (Leader of the House): Yes, well, I offered that we could do it in extended sittings this morning, but he did not want to.

Appointments

Electoral Commission

Hon LOUISE UPSTON (Minister of Corrections) on behalf of the Associate Minister of Justice: I move, That, pursuant to section 4D of the Electoral Act 1993 and section 32 of the Crown Entities Act 2004, this House recommend Her Excellency the Governor-General appoint Hon Sir John Hugh Williams QC as the chairperson of the Electoral Commission for a term of 18 months commencing on the date of the warrant.

The Electoral Commission is responsible for the administration of parliamentary elections and referenda—[Interruption]

Mr SPEAKER: Order! I am having extreme difficulty—[Interruption] Order! This is an important motion and at this stage I am having extreme difficulty hearing what the Minister is saying. For those members who wish to leave the House, would they do so without interrupting the proceedings. I apologise to the Minister.

Hon LOUISE UPSTON: The Electoral Commission is responsible for the administration of parliamentary elections and referenda; the allocation of time and money for the broadcast of election programmes; conduct of the Māori electoral option; servicing the work of the Representation Commission; the provision of advice, reports, and public education on electoral matters; and the election enrolment services for both parliamentary and local body elections.

The Electoral Commission has a board of three members, comprising a part-time chairperson, a part-time deputy chairperson, and a full-time Chief Electoral Officer, who is the chief executive. Appointments to the Electoral Commission are made by the Governor-General on the recommendation of the House of Representatives. The position of chairperson of the Electoral Commission is under review as the term of the incumbent, Sir Hugh Williams, expired on 12 March 2017. The Electoral Act 1993 is administered under the justice portfolio and the Minister of Justice, the Hon Amy Adams, is responsible for the process of appointments to the commission. She has delegated this appointment to the Hon Mark Mitchell as the Associate Minister of Justice.

The position of chairperson of the commission is a leadership and governance role. It requires a person with good strategic planning skills, expertise in financial management and risk management, and unquestionable personal integrity and independence. The functions of the chairperson are not defined in statute but in practice. The chairperson’s responsibilities include chairing meetings of the commission and determining the agenda, ensuring that the commission’s governance practices are in line with good practice and are well documented, ensuring that the commission works harmoniously and effectively in carrying out its functions, consulting with Ministers, acting as the spokesperson for the commission where appropriate, undertaking public speaking engagements where appropriate, developing and maintaining good collegial relationships between commissioners, and generally ensuring that the commission meets its statutory responsibilities and lawful Government expectations under the statement of intent, memorandum of understanding, and other expectations placed on independent Crown entities.

Sir Hugh was appointed President of the former Electoral Commission in 2009. At that time the governing legislation required the position to be appointed from a list of three persons nominated for the purpose by the Chief Justice. Even though there is now no statutory requirement for the chairperson to be a judge or former judge, the constitutionally significant nature of the Electoral Commission’s role means that having a chair that can provide strong and independent legal leadership is highly desirable. The practice has been to appoint a retired senior member of the judiciary. Following the recent appointments of a new deputy chair and Chief Electoral Officer, it is highly desirable to retain a level of institutional knowledge leading into the general election. I am confident that Sir Hugh Williams can continue to provide the commission with sound leadership. His expertise and experience will be invaluable.

Sir Hugh was appointed as a judge of the High Court in 1995 and retired from the bench in 2009. He previously served as a Master of the High Court for 6 years and was for as many years the chancellor of Massey University. He has a longstanding involvement in the administration of justice and significant governance experience as a highly engaged university chancellor. Sir Hugh was appointed President of the Electoral Commission in 2009 and then as chair of the present commission in 2011. He was appointed for a second 3-year term in March 2014 and has continued to perform ably in this role.

The Crown Entities Act 2004 provides that appointments to the independent Crown entities may be for a period of up to 5 years. It is proposed that Sir Hugh’s reappointment be for a term of 18 months. This will ensure that Sir Hugh can oversee the reporting processes that will follow the 2017 general election and that the chairperson position is reviewed with 18 months’ lead-in time to the 2020 general election.

The proposed appointment of Sir Hugh was consulted on with all cross-party leaders following the approval of his appointment from the Cabinet appointments and honours committee on 16 February. With great pleasure I commend to the House the reappointment of Sir Hugh Williams for this important role. He is an extremely capable man, as his service in the role to date has shown. I am confident that his expertise and experience will serve the Electoral Commission and the country well.

CHRIS HIPKINS (Labour—Rimutaka): I am happy to speak in favour of the motion before the House making appointments to the Electoral Commission. I do want to acknowledge the important role the Electoral Commission has in ensuring that New Zealand has free and fair elections, where the rules are fair and where they are adhered to by all parties and implemented in a manner that is scrupulously fair.

I do, however, want to express some concern at this point that one of the jobs that the Electoral Commission has is ensuring that the electoral rolls in New Zealand are up to date. I fear that we are going to find at this year’s general election that there are tens of thousands of New Zealanders who are disenfranchised from the process because when they go to cast their votes in the polling booth, they will find that their votes are discounted because they are not on the appropriate electoral roll. That is of huge concern to anybody who cares about democracy.

Those who go to vote should have their votes counted, and the Electoral Commission has a vital role in ensuring that the rolls that provide for people to have their right to vote protected are up to date. They are not up to date. It is abundantly clear from the work that we have been doing out and about in the community that there are thousands of people out there—

Mr DEPUTY SPEAKER: This is about the appointment.

CHRIS HIPKINS: —who are not on the roll and who need to have their details up to date. Therefore, one of the jobs of those who are appointed to the Electoral Commission—

Mr DEPUTY SPEAKER: Not close enough.

CHRIS HIPKINS: —is to ensure that those processes are implemented and that that work does take place and does happen.

The appointments have been consulted on widely across the Parliament. I was not one of those involved in the process, but I have been advised by those on the Labour side of the House who were involved in the process that they have full confidence that the process has been fair and that the appointments being made are appropriate. Therefore, the Labour Party will be supporting the motion.

BARRY COATES (Green): Tēnā koe e Te Māngai. I rise on behalf of the Green Party to support and congratulate Sir Hugh Williams on his reappointment as Chairperson of the Electoral Commission. The Electoral Commission plays a crucial role in our society. Sometimes I think we overlook the importance of the role until we look at societies where elections are corrupt and manipulated, and we should be grateful that we have a commission that operates to a high standard.

We applaud the chair’s role in steering the Electoral Commission over recent years in improving the processes around our elections. In particular, we appreciate the provision of information in many other languages—other than English—including New Zealand Sign Language. We applaud the support for the Māori roll. We support the introduction of the provision to enrol and vote on the same day. We applaud the promotion of enrolment, while also echoing my colleague Chris Hipkins’ concern that the data on enrolment needs to be up to date. He was expressing some concern about the current state of the enrolment data. We applaud also the overseas enrolment being easier and better promoted. Finally, we support the opportunity for voters who have disabilities to be able to vote in our elections.

We urge Sir Hugh Williams to carry on with these processes. In particular, we appreciate the performance objective of pushing enrolment over 93 percent—that, we believe, is a minimum performance measure that the Electoral Commission and his role should be fulfilling—and also the performance measure of increasing voting participation to over 75 percent.

So, in all, we consider Sir Hugh Williams has strong credentials for professional leadership and governance for his role to continue as chair. We note that he is a former judge of the High Court and has in the past been a Palmerston North city councillor and a chancellor of Massey University, and has been chair since 2011. We also would like to extend thanks to the 18,000 staff in 2,300 voting places, supporting 3 million voters.

Just a reminder to anyone who may be watching on Parliament TV: the election will take place on 23 September. Voting starts on 11 September, so please make sure—

Mr DEPUTY SPEAKER: We do not need an advertorial.

BARRY COATES: —that you enrol and vote. With that, the Green Party supports the motion to reappoint Sir Hugh Williams as chair of the Electoral Commission.

DENIS O’ROURKE (NZ First): I want to begin by first acknowledging the good work of the Electoral Commission over many years past and, also, the very able leadership of the current chairman, Sir John Hugh Williams. I also want to particularly applaud the work of the commission in its attempts to increase enrolment and also to increase turnout. New Zealand First will support its thrust to do even more in that area. It is unfortunate that the current Government has not agreed to do more in the ways that the commission itself has advocated, or in the ways that other parties have advocated. However, the commission itself has done a very good job, and I think it deserves the congratulations of the House on doing so, under the able leadership, as I have said, of the current chairman.

It is essential that the commission has the confidence of the public of New Zealand and of this Parliament to conduct its business and to conduct it fairly, to be seen to be conducting it fairly, and, in particular, to conduct it with complete political neutrality, because there are many functions that the commission has that rely heavily on that principle. I think the commission has done a very good job in achieving that under its current leadership.

Continuity is another important issue when we consider the reappointment of Sir Hugh, because continuity is especially desirable in an election year, when the commission is at its busiest and when the retention of institutional knowledge is so vital to make sure that it continues to operate as a commission effectively and fairly in the ways that I have described. So for all of those reasons, New Zealand First is very happy indeed to support the reappointment of Sir Hugh for a further period of 18 months.

Motion agreed to.

Bills

Land Transport Amendment Bill (No 2)

Third Reading

Hon PAUL GOLDSMITH (Minister for Tertiary Education, Skills and Employment) on behalf of the Minister of Transport: I move, That the Land Transport Amendment Bill (No 2) be now read a third time. I am very pleased to speak on the third reading of such an ambitious piece of legislation. The bill will modernise regulation of small passenger services, update rules for heavy vehicles, support the effectiveness of public transport operations, and improve road safety.

The first part of the bill addresses alcohol interlocks, which are a very effective tool for reducing the incidence of repeat drink-driving. They work by requiring a driver to pass a breath test before they can start their vehicle. Evidence shows that interlocks are effective in protecting the safety of the public and that they reduce reoffending rates by an average of 60 percent while the devices are fitted. The bill makes alcohol interlocks mandatory for first-time high-alcohol offenders and repeat offenders, with limited grounds for exceptions proposed. The bill also sets out how the mandatory alcohol interlock sentence applies when other offences with disqualification penalties have been committed. The Government will fund a financial assistance scheme to assist low-income offenders where the cost could be prohibitive. Greater use of alcohol interlocks by high-risk offenders will help improve road safety outcomes and supports the Government’s road safety strategy. The bill creates a sound foundation on which to further develop the interlock programme in the future.

The second part of the bill addresses the Government’s commitment to supporting a well-functioning public transport system. We want to prevent a culture of evasion of fares from becoming established. This is because the evasion of fares is, essentially, theft, and affects the efficiency of public transport services. The bill strengthens the legislative regime for managing evasion of fares. It gives enforcement officers new powers to require passengers to provide evidence that they have paid a fare, provide their contact details when evidence of payment is not produced, and/or order a passenger to disembark a public transport service. It will be an offence for a person to fail to comply with an enforcement officer’s directions. The changes in the bill will enable enforcement officers to deal with most cases of fare evasion. The police could be called in more difficult cases involving non-compliant passengers and would continue to attend more serious cases involving antisocial behaviour.

The third part of the bill implements increases to the penalties for drivers who fail to stop for police. When drivers attempt to flee, they endanger the safety of other road users and the police, as well as their own safety and that of their passengers. All too frequently the actions of fleeing drivers result in crashes involving serious injury or death. Increasing the penalties for fleeing drivers will send a clear message that this behaviour is unacceptable and will not be tolerated. The disqualification penalties for failing to stop will also scale up, based on whether it is the driver’s first, second, third, or subsequent offence of this kind. The bill also proposes strengthening the powers of the courts to permanently confiscate vehicles involved in fleeing driver incidents.

The fourth part of the bill makes key changes to the regulation of heavy vehicles. It enables more efficient enforcement of heavy vehicle weight limits, makes it easier to redirect vehicles for weighing, and increases the maximum penalty for overloading. The changes will lead to productivity and safety gains with fewer heavy vehicle trips being required on the transport system to transport the same volume of passengers and freight.

The fifth part of the bill addresses the fact that new technologies like smartphone apps are changing the way the small passenger services sector can operate. Modernising our regulatory framework ensures we can keep pace with these changes and make sure it is flexible enough to accommodate new business models while managing safety risks. The bill, together with the amendments to regulations and land transport rules, will overhaul small passenger services by removing outdated provisions and bringing the sector into the 21st century to allow all transport providers to operate and compete on a more even footing.

Finally, the bill introduces a range of minor amendments to clarify interpretations or the intent of the legislation, improve its operation, remove inconsistencies, and make minor technical adjustments. Although minor, these changes are a sign of the Government’s commitment to better regulation.

I want to thank the members of the Transport and Industrial Relations Committee for their work on this bill, as well as those who submitted on it or who made contributions in different ways. Taken together, the changes proposed by this bill demonstrate the Government’s determination to ensure the country has an effective, efficient, and safe land transport system. I commend the bill to the House.

SUE MORONEY (Labour): Thank you, Mr Deputy Speaker, for the opportunity to speak on the third reading of the Land Transport Amendment Bill (No 2). With a bill with a name like that, we would really hope that this was the bill that was going to actually do something to reduce congestion, to maybe reduce the road toll, or to make sure that our transport system works much more effectively and efficiently than what it does. Maybe there would be hope that this would be a bill that would actually make better use of our rail system, for example, up and down the country and in the regions.

But, sadly, no—it does not do any of those things. It is a bit of tinkering around the edges from a Government that has spent $9 billion of taxpayer funding on transport, only to make carbon emissions higher, to make congestion worse, and to have the road toll go up for 4 years in a row now. I do not know about you, but I think that takes a high level of ideological incompetency to spend $9 billion and get worse outcomes from our transport system. But that is exactly what this Government has achieved—if you could call that an achievement. But, good news—soon there will be a Labour-led Government that will actually truly bring about amendment to our land transport system that will make a real difference and will get New Zealand moving, and get it moving in the right direction.

This bill does have a lot of features that, yes, we do support. So we are voting for it because it does not do terribly much harm, but it does not do much that is great either. However, we have some real reservations about this bill. We tried to fix it up. We tried to help the Government out at Committee stage by proposing some really sensible amendments that we thought would have made a real difference to this. The area that concerns us most in this bill is the area where it deregulates and lowers the standards in the small passenger vehicle services—always makes me think that it might be a service that jockeys can use, being small passengers. I think we need to find a different phrase to use to talk about this service, but it is basically what people know of as being—

Jonathan Young: Very small passengers.

SUE MORONEY: Ha! That is right: small passengers. It is kind of like the taxi services and Uber, and trying to bring all those things together and get a level playing field. In doing that, the Government is deregulating.

Now, why this needs some particular attention is that when Tory Governments—when National Governments—deregulate, in this country it has led to disastrous outcomes, and in other countries too, actually. What it normally means is that they deregulate and they just kind of throw away the rule book. They lower standards so far that it makes thing dangerous. So, the Pike River mine—there is a local example of an area that was deregulated, and 29 men paid the consequences with their lives. Leaky buildings—that is another area where that Government deregulated, and now thousands of New Zealand families are out of pocket because of that level of deregulation. So it is always really important to look closely when a National Government deregulates.

We think that in this area it is just the same. It is so important—so important—because the people who are using these small passenger vehicle services are often—not always, but often—impaired at some level: either temporarily because they have been out on the town and have done the sensible thing and ordered up one of these services rather than driving themselves home, or, actually, because they are permanently impaired. People in the disability community are utterly dependent on these services—utterly dependent on them—for having some level of independence, for being able to get around their community, and for being able to participate in society. So getting the safety features of these services right affects some of the most vulnerable people in our community. People are often very vulnerable when they are using these services.

So, here are some of the areas that we think the Government has got wrong in here—where it has deregulated too much, where the idea of cost has actually been put ahead of the issue of safety. There are two key areas. One is taking the requirement for Braille signage away from that service. At the moment people will know when they get into a taxi that on the passenger side there is a little plastic strip for people who are sight-impaired and for people who are blind so that they will be able to work out where they are. Are they in the right vehicle? Who is the driver? They will know details about the car that they have just stepped into.

But that Government says that that is no longer needed. Here is the bizarre truth: submitters came along and told us—actually most of the advocacy organisations for the disability sector came along and begged the Transport and Industrial Relations Committee not to go down that route, not to take away one of those main safety and security features for them. They also told us that those strips can be produced for about $20 each. So for the sake of $20 for people who are sight-impaired to have that certainty and that security—that Government will not even afford them that. It is saying the cost is too high. Well, the cost of not getting the service right, like the cost of deregulating the mining sector, like the cost of deregulating building materials—those costs are simply too high.

The Government will argue: “Hey it’s all right, because they are all going to have smartphones.”—I have not even got mine on me—“They are all going to have smartphones. They are going to have an app and it is going to say: ‘Here’s your driver. Here is what he or she looks like.’ ” You know, if you are sight-impaired, how is that going to go, guys? I am just saying. Those Government members are all nodding over there, saying: “Yep. The app is going to sort it out.” Yes, well, how is that going to sort that out? So when Rod Stewart’s picture pops up—because we know that a person was able to register as an Uber driver using Rod Stewart’s photo and his name and start picking people up when he clearly was not Rod Stewart. And even when fully sighted people could see that the picture and the driver did not match up, they still got in the car. So, this idea that these technological advances will fix every situation and look after people’s safety is just utterly wrong, and the Government members have their heads in the sand about it.

The second thing that the Labour Party proposed was that all of these services should, if they operate in the 18 largest urban areas in New Zealand, retain the requirement to have a security service in that vehicle. This provision came in only a few years ago. It was brought in by that National Government. At the time some of the taxi companies rebelled against it. They said: “Oh, it will be too costly and it is not a good thing, and it is too over-regulating.” That was on the back of two vicious murders of taxi drivers—one in Auckland and one in Christchurch. That is why that regulation came in. And do you know what? Since then, those same taxi companies are now begging for that provision to stay. Those ones that thought it was overreaching at the time, that thought it was going to be too much compliance and too much cost, now say that it is the best thing that they did. They have seen the violent offences completely drop—drop by about 40 percent, actually, in the first couple of years of operation of that new provision. They have also seen that they do not have as many people running off without paying—another unintended but good consequence of having those systems in place.

I am going to put that Government on notice right now. I am going to put it on notice. It voted down those two sensible amendments. The first time that a vulnerable woman gets attacked and raped in one of those services, and the first time that one of those vulnerable drivers picks up someone violent who attacks them—and I hope we are not talking about murder, but a violent attack—I want that Government to stand up and say: “That is our fault. We did that.” That is what it is inviting. That Government—[Interruption] Well, those members are already shaking their heads and washing their hands of that responsibility, but they had the opportunity to vote to have those security systems maintained right across that fleet. They need to understand the seriousness and the consequences of not getting the level of regulation right in this bill.

Finally, I will say that the other two amendments that we wanted to see put in place were that we did not want to see this change at all until we had certainty that Uber was going to pay its fair share of taxes, which it currently does not, and that it lived up to the regulations of having logbooks and driver hours, which it currently does not in some circumstances. Those are just about fairness and getting it right. If we are going to have a level playing field for everyone, then let us do it right across the board and get that right. We support this bill with major reservations.

JONATHAN YOUNG (National—New Plymouth): I would like to just pre-empt my comments with a response to what the previous speaker, Sue Moroney, has said regarding an issue that came up in our select committee hearings. Mr Wayne Branks brought allegations against Uber and, as a process in select committee called natural justice, we give a person or a company who has had allegations brought against them—particularly in public hearings—the opportunity to respond.

The previous speaker is aware of this response, yet continues to bring this situation into this House and into the public arena. I would like to just read out one paragraph from Uber’s submission.

Sue Moroney: Read the whole thing. Do the job properly, Jonathan.

JONATHAN YOUNG: No, just one paragraph is sufficient. [Interruption]

Mr DEPUTY SPEAKER: The member will stop interjecting.

JONATHAN YOUNG: Thank you, Mr Deputy Speaker. “In his submission Mr Branks seems to claim to have provided trips to riders using the Uber app under various different aliases. Uber confirms that Mr Branks does not have, and has never had, an active Uber profile in New Zealand under his name or any other alias connected to his driver’s license or P-endorsement.” He is in fact a taxi driver for another company. It goes on to say: “Mr Branks has registered his interest to drive using the Uber app under various aliases, but none of these Uber profiles has ever been activated.” I am just reading that out as part of the record, thank you. That came to our select committee, and the member was fully aware of that response to that natural justice issue.

In my closing comments regarding this bill, I would like to say that one particular area that I think is going to be very, very important and helpful for the road safety of New Zealand—and the previous speaker raised that as well—is the mandatory alcohol interlocks regime, which is going to be strengthened under this bill. The bill proposes making alcohol interlock sentences mandatory for recidivist drink-drivers and first-time offenders with high alcohol levels. The existing alcohol interlock sentence has not been used much by the courts since it became available in 2012—only 2 percent of eligible offenders have received a sentence. So this bill makes it mandatory, and will not prevent the courts from giving additional sentences such as fines or imprisonment, should the circumstances of a repeat driving offence merit it. The reason why this is so important is that alcohol interlocks have the record of reducing recidivist drink-driving by 60 percent, and that is going to translate into fewer people being injured seriously and killed on our roads in New Zealand. Thank you; I commend this bill to the House.

IAIN LEES-GALLOWAY (Labour—Palmerston North): The Land Transport Amendment Bill (No 2) is a bland but appropriate title for a piece of legislation that actually does a range of things and makes a range of changes to our land transport legislation. The area that has received the most attention is of course the area of small passenger services, which I will come to. But as the chair of the Transport and Industrial Relations Committee, Jonathan Young, mentioned in his very brief contribution, there are other aspects to it: the alcohol interlocks, matters relating to fare evasion on public transport, dealing with fleeing drivers—drivers who attempt to escape from the police and cause police chases—matters relating to heavy vehicles, and other miscellaneous amendments as well. It is as close to an omnibus bill as you can get without actually being an omnibus bill, because all of those matters are dealt with within one piece of legislation.

I also would like to speak about the alcohol interlocks. I think this is progressive. This is an important change to our legislation to try to reduce the incidence of repeat drink-drive offences and to reduce the harm caused by drink-driving. This House has made some changes to our drink-drive rules over recent years—most notably, reducing the blood-alcohol limit for drink-driving, which itself is already proving to be positive and to be having a positive impact on the harm caused by drink-driving. These changes will, essentially, make it mandatory not only for people who are convicted of repeated drink-driving offences but also first-time offenders who are seriously over the limit. It is a mechanism to try to keep them off the roads if they continue to attempt to drink and then get behind the wheel.

What I would also like to see more of from this Government is investment in actually helping people deal with the problems that being a drink-driver actually signify. If you talk to anybody who works in the alcohol and drug field, being a drink-driver is a very good sign of having an underlying alcohol addiction problem—but not for everybody. Sometimes people just make a mistake. It does not excuse it. Frankly, I think it is one of the most appalling things that you can do, to get behind the wheel whilst you are intoxicated by alcohol, or impaired by any other substance, for that matter. Sometimes, people do just make one mistake, but more often than not it is actually a sign of an underlying problem, and I would like to see a lot more investment from the Government in alcohol and drug services, and using a conviction for drink-driving as a sign that we actually ought to be getting that person into treatment and supporting them to not be a recidivist by actually dealing with the underlying causes. This is important, to be able to extend the use of alcohol interlocks and also reduce the opportunities to be exempted from having to use an alcohol interlock. So those are important.

It is very important that we clamp down on the evasion of public transport fares. Public transport absolutely relies on everybody making their contribution, and those are helpful changes that will help councils in particular to be able to enforce the rules.

Fleeing drivers—the bill increases the penalties for fleeing drivers and also gives the police powers to impound vehicles and permits that vehicles can be seized and impounded for up to 28 days after a failure-to-stop incident. Again, this is a behaviour that puts the public at an extraordinary risk, trying to speed away from a police vehicle when the police officer is trying to pull you over. It often ends in an accident. It often ends in serious harm or death to the driver. But it often involves other drivers and damage to property and injury to people who are not even on the road, because high speeds are involved, people lose control, and considerable harm results from that. Everything that we can do to discourage drivers from attempting to evade and flee from the police, especially at speed, should be done, so we absolutely support that.

On the issue of small passenger services—so what we are talking about here is the massive technological change that has occurred all around the world, with the introduction of apps such as Uber. Uber is not the only one, but Uber is the major operator here in New Zealand and has been the operator that has engaged the most on this legislation. It has been pretty fraught, actually, and I think the problem that this House has had with Uber is its flagrant disregard for the law. It is one thing to lobby politicians, to lobby Governments and Parliaments and encourage us to change the law—and there is no doubt that our law as it stands, before we make these changes, is simply not fit to deal with this new technology. So, absolutely, come and lobby us and encourage us to make changes, but do not just go out there and break the law. Do not go out there and, potentially, put other people at risk or undermine other operators that are sticking to the law. That is not on. Then, frankly, the way Uber came and behaved in its dealings with politicians and with the Government and with the regulators and those tasked with enforcing the law was abhorrent, and it did not encourage us to work with it.

My advice to any business, or anyone actually, that wants to work with this Parliament to make positive changes is find out the way Uber did it and do everything in the exact opposite fashion to how Uber went about its business. That is just a little bit of PR and lobbying advice to anybody who wants to work with us in this House. Having said that, technological change is coming—well, it is not coming; it is here, and it has been here for a long time. Parliaments can be a bit slow to keep up with this stuff sometimes, and to try to turn back the tide, to try to deny the fact that changes are happening and that new technology is available, and even to deny that a lot of those changes are positive, that they come with positives, that they often come with reduced costs or more availability or simpler access—those things are all good. A lot of passengers do enjoy the positive benefits that some of this ride-sharing technology brings. So we should not try to deny that. We cannot try to turn back the tide, but we do have to get it right.

We do have to get the safeguards in the right place—

Sue Moroney: We think it’s a good thing. We like ride sharing.

IAIN LEES-GALLOWAY: Absolutely, ride sharing is a great thing. But we have got to get the right balance between opening up that market and making it work properly, making sure that there are good rules in place and making sure that people are safe, the passengers are safe, the drivers are safe, and the other people on the roads are safe. This speaks specifically to the other people on the road. I was distraught when we had an item in the news applauding an Uber driver for having done a full shift and then, at the end of their shift, driving from Auckland to Wellington in an appalling storm when they were fatigued, when they had not taken the appropriate breaks, and when they had driven for a longer period of time than what is actually allowed within the law. Initially, that driver was treated as a hero. Well, I think that driver is an absolute villain because he put himself at risk, he put his passengers at risk, and he put every other driver who was on the road when he was at risk as well.

I am really pleased to see that one of the changes that this piece of legislation requires is that apps like Uber keep records of the distances travelled and the hours travelled. What they also need to do is make sure that they are working more closely with their drivers so that they understand the law and they know when they are in breach of the law. Whether or not that driver knew he was in breach of the law, we do not know. It does not actually matter. Being ignorant of the law is no defence. We need to make sure that people are safe whilst we adopt this new technology and embrace it at the same time.

This bill represents largely good changes. It is not perfect, but it has largely good changes, and we certainly do commend it to the House.

Dr PARMJEET PARMAR (National): Thank you for the opportunity to speak in the third reading of the Land Transport Amendment Bill (No 2). As we heard from the Hon Paul Goldsmith on behalf of the Minister of Transport at the start of this reading, there are several components in this bill, and all of these components show our commitment to improved public safety.

It is good to see support for mandatory alcohol interlock sentences from all sides. Having mandatory alcohol interlock sentences is important to make the alcohol interlock programme viable and also to see some significant results in terms of road safety, by preventing drunk people getting behind the wheel. If we do not make it mandatory then we will not be certain about the uptake and we will not be certain about the outcomes. This step has been taken based on evidence that has been collected here in New Zealand. We know that if even a small number of people take up alcohol interlock devices to stop themselves from driving when they are drunk, we have seen a reduction of thousands of drink-driving attempts. So mandatory alcohol interlock sentences are good, and it is good to see the support for making alcohol interlock sentences mandatory for repeat drink-drivers and also for serious drink-drivers.

At the same time, we have to see that things are practical too. That brings me to several exceptions that are there in the legislation. One of the exceptions is actually based on access to an approved alcohol interlock service centre. It is important that offenders have access to an approved alcohol interlock service centre, and it was important to decide a criterion. The criterion that is picked in this legislation is distance. When the legislation was proposed it was 30 kilometres, but now it has been changed to 70 kilometres because we want to make sure that we bring in as many offenders as possible into this programme.

Along with that there are medical conditions. Yes, if they are medically certified there will be exceptions, but this legislation also allows for resentencing of offenders who receive an exception because of a special circumstance if that circumstance changes. So the aim of this part of this bill is to bring as many offenders as possible into the alcohol interlock programme.

Very quickly, I want to also touch on the small passenger service provider provisions that are in this bill. Yes, we are upgrading the regulatory framework to provide a level playing field to various players in the small passenger service provider industry. As the Government, it is important that we allow good competition. We know that businesses like to adopt unique ways to grow their client base to get a bigger market share, and we have to allow that, keeping in mind passengers and drivers’ safety. Again, this bill actually shows our commitment to public safety and also our commitment to help businesses grow. I support this bill and commend it to the House. Thank you.

JULIE ANNE GENTER (Green): I rise to speak on the third reading of the Land Transport Amendment Bill (No 2). I am going to start with something that has not been mentioned yet that is contained in this bill, and that is the provisions around heavy vehicles, mass dimension, and axle loadings. There is a lot of detail there but, really, to make a long story short, one of the factors that has been overlooked for a while now is that the rules around heavy vehicles and axle loadings that we have had for a number of years have not actually allowed our buses to be fully loaded. We have got all these buses driving around Auckland that are technically breaking the law if they are more than half full, which is basically all the buses in Auckland, now—all the buses any time of the day. I take the bus on Sunday afternoon, on Friday night, and all hours of the day, and they are pretty much all full all the time. It is just a little bit strange that it took the Government this long to get this law changed. It was something that was being told to me by bus companies when I first got into Parliament, nearly 6 years ago.

So, you know, when we look at transport legislation and transport policy that has been coming through under this National Government, I think what we see is that there is this very slight rearranging of deck chairs—these tiny little improvements that, for some reason, take many, many years to come to the House. But we do not see a fundamental shift in paradigm that would actually seize the opportunities that are available to us within transport to create much more vibrant, dynamic cities and towns, to reduce our greenhouse pollution, and to enable better public health and safer roads. For a while there, the road toll was falling, but now it is sky-high again and that is because, fundamentally, this National Government has not taken a smarter approach to transport, which is available to them.

While the Green Party is supporting this bill, it is full of a lot of minor tweaks and changes that are trying to make up for change that is happening despite the Government. I think what New Zealand wants, needs, and can have is a Government that will lead on positive transformational change in a way that is going to improve everyone’s life in New Zealand, is going to ensure a fairer approach, and is going to protect our climate for the long term. There is no area that is more exciting or full of opportunities than transport.

So what do we have—we have the minor changes that are finally going to make legal something that was happening anyway, around buses. Obviously, one of the solutions that we need is not just to allow those vehicles to technically have heavier loads but many more buses and trains in Auckland to deal with the surging numbers of people who are trying to get around the city on wholly inadequate public transport because of this Government’s failure to invest in public transport.

Then we see the changes around small passenger services. Again, the Government is, like, years behind what is actually happening with Uber out there operating. I do not condone the actions taken by Uber, where it decided to go ahead and flout the law and start operating in ways—particularly down in Christchurch—you know, before this law change could be made. Finally we have the Government making some changes, and I do not think they are all good. I supported—the Green Party supported—Sue Moroney’s amendments that were proposed during the Committee stage of this bill, which would have required Uber to comply with some basic aspects of our law before it could start participating in this regulatory regime, like ensuring that it is paying sufficient tax in New Zealand. We also do not want to completely deregulate some of the safeguards that have been built into the taxi industry, which benefit some of our most vulnerable people.

I think this is something the National Government often overlooks—the needs of the most vulnerable—because they just are not rich or powerful enough to get the ear of this particular Government. So requiring Braille signs in passenger services—I think that is a minor cost that makes a huge difference to people who are visually impaired, and we certainly heard that from the people who came to the select committee. With an ageing population, we are going to have increasing numbers of people with visual impairment and I think that we need to constantly be thinking about how our transport systems are enabling people with different types of disabilities or visual impairment to fully access everything that society has to offer, to be able to get around.

I really regret that that amendment was not adopted during the Committee stage, because I think it is something that will not affect me right now, but it might affect many of us at some point in our lives. We just do not know, and with skyrocketing rates of diabetes, we are having increasing rates of visual impairment. Of course, type 2 diabetes is something that could be addressed by this Government—partially in transport and partially in the health policy, through something like a tax on sugary drinks, changing the environment in which people are making decisions about what they are consuming. But of course the National Government, ever blind to the things that do not affect its particular constituency—

Mr DEPUTY SPEAKER: Come back to the bill.

JULIE ANNE GENTER: —has failed to include those sorts of protections, just like it has failed to include the protection for people with visual impairment by maintaining the requirement for Braille identification signs.

The other aspects of the bill—they all fit a particular pattern. We have got the alcohol interlocks, enforcing fares, and the changes around fleeing drivers. You know, on balance you can make sense of these changes within the existing structures, but really, ultimately, what we are seeing is changes that are there to help punish people for doing something wrong, rather than making it easy for them to do something right. I think that is the fundamental difference, probably, in the world view between the National Government and the rest of us: we understand that if you make it easier for people to live good lives, to do things the right way, they will do it. You do not have to just make it easier for the richest people to make more profits and then go out and punish those who are suffering from inequality.

A perfect example is enforcing fares. We are going to make people criminals rather than making transport accessible and affordable for everyone. That is the reality. I know that Todd Barclay will not know about this, because he hangs out down in Queenstown, and I am sure Alastair Scott does not know, because he is off on his vineyard. Most of the people on that side of that House do not know what life is like for the poorest people living in Auckland right now who cannot afford to get around.

You know, people have to make all their Work and Income appointments, and somehow they need to get around and do that. There is horrific traffic congestion, they cannot afford to have cars, they cannot afford the rising rents, and they cannot afford the outrageously expensive public transport, which is infrequent and unreliable because the National Government has failed to sufficiently invest in it. What is the Government going to do? It is going to make it easier to go and penalise people who are trying to get around town, to make it to their Work and Income appointments, to make it to their job interviews. They are just trying to get around on outrageously expensive public transport, and we are going to slap fares on them.

Well, that is going to make it easier for them to get ahead, is it not? No, it is not—it is not. But that is not what you want, is it? No, you want to preserve the privilege that you already have. An equal society—

Mr DEPUTY SPEAKER: Sorry, do not bring me into this rant. Try to construct a speech that is a little more in accordance with the Standing Orders.

JULIE ANNE GENTER: Excuse me, Mr Deputy Speaker. I really question whether or not an equal society is one that the National Government wants to achieve—one where people have every opportunity. If it did do that, it would not be proposing this sort of land transport legislation. The Government would be proposing a fundamentally different approach to transport investment—one that makes our towns and cities easier to get around, one that ensures that no matter how poor the family someone is born into, they still have the opportunity to access education and to access opportunities, and one that ensures that they are able to get around their city and participate in their community. That would require a fundamentally different approach from the one that has been taken by this Government. But it is one that a new Government will pursue.

DENIS O’ROURKE (NZ First): There are many parts of this bill that New Zealand First supports: effective deterrents for fleeing drivers, increases in penalties for drivers who fail to stop for the police, mandatory alcohol interlocks, measures to assist enforcement officers in dealing with cases of fare evasion on public transport, and the updates to heavy vehicle regulation, to name a few.

New Zealand First does not oppose any of those changes. But New Zealand First will vote against this bill solely because of the provisions relating to Uber. I have the Uber app on my phone and I have used it in the United States, especially in places where the taxi service is very substandard. So New Zealand First and I are not against new technologies where they comply with proper standards, and that is not the case with this bill or with Uber.

The bill will degrade the standards applying to small passenger vehicles, and that will impact significantly on passenger safety. We also say that there will be no level playing field, as claimed by the Government members, provided for Uber in relation to taxis, as a result of this legislation. That is a very, very bad thing, which will have many adverse effects.

We do not accept that simply because there is a new technology that it is necessarily good, and its applications in this case are going to be bad. In fact, we think that the taxi drivers have a very valid complaint in relation to the lowering of standards that they have worked so hard, for so long, to maintain. We should be proud of what the taxi industry in New Zealand has achieved. When you compare it with what you see in other countries, we should be proud of it. It is a very good industry and very well operated.

I think that this bill will have a very adverse effect on the safety of passengers and drivers alike. It is a shame that this Government is willing to pay that price, that reduction in safety, that reduction in standards, simply to accommodate one new technology that is being operated by people and a company that do not give a damn about standards or safety in New Zealand.

We also say that the bill will not provide a level playing field between Uber and taxis, and that Uber should be required to do what taxis and taxi drivers are required to do in this country. Drivers should be required to pass an English language test and an area knowledge test, maintain a logbook and comply with restrictions on hours of driving, just in the same way as taxi drivers are required to do. The fact that some Uber drivers are driving many hours, after doing a normal week’s work, and working, I have heard, hours in total like 70 or 80 hours a week—incredibly long hours—shows just how important these restrictions are and why Uber drivers should be required to comply with them.

Another issue is the removal of mandatory signs in and on 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 are required to do. The reason for that is that passengers have a right to know whether the vehicle they are going to pay for a ride in is a properly authorised vehicle and that the driver is a properly authorised and competent driver. That is the whole point of signage. It is not just advertising. You cannot achieve the standards that are necessary without proper signage, and exterior signage assists in identifying the vehicles and drivers for the better enforcement of regulations. If you do not have a sign on your car, you feel pretty free to do things that you might otherwise not feel free to do.

So we oppose that, and we oppose the deletion of the requirement for Braille signs on the interior of the vehicles. It is perfectly reasonable that for sight-impaired people those Braille signs should stay, because for sight-impaired people those simple little things are very important. It may not seem important to the rest of us, but it is certainly important for them.

We say the same about security cameras. We think they are a very important adjunct to the safety of drivers but also the safety of passengers. Sue Moroney pointed out the two murders that have occurred as a result of inadequate security in taxis, and I think those security cameras were a very important way to reduce violence by unruly drunk or drug-affected passengers. Those are very serious issues, and security cameras are important in stopping the worst happening. They should be in Uber vehicles as well as in taxis. They record passenger misbehaviour and provide a very good record of events that might be required in prosecutions and for other purposes later.

Most of all, though, New Zealand First is very deeply concerned that Uber pays no tax in New Zealand, whereas taxi drivers and taxi companies are, of course, required to do so. That is certainly nowhere near the level playing field that the Government says it is providing in this legislation. The result of that is that Uber drivers can charge less because they are simply ripping off the taxpayer. That should not be encouraged; that should be prohibited.

Uber drivers also do not pay at airports for drop-off or pick-up fees in the same way taxi drivers do, nor will Uber drivers have to pay for renting taxi stands at airports. I know of one taxi company in Wellington that pays $200,000 a year for its taxi stands at Wellington Airport. Uber drivers would not contemplate that. They do not have to pay that, and that is another reason why they can charge less, because they just pick up or drop off people as though they are members of the public. They are not members of the public. They are not in that category, and, quite frankly, their behaviour in this respect is patently dishonest. They know what their obligations are and they do not even attempt to meet them, yet this is being expressly condoned by this Government and this legislation. It is already tacitly condoned by the Transport Agency, which has been extremely incompetent in enforcing the rules in this respect. It should be upholding its own rules rigorously and the laws of New Zealand rigorously, and the Transport Agency has no credibility or integrity for its performance, as far as Uber drivers in New Zealand are concerned. It stands, in my view, utterly, utterly condemned by its lack of adequate action. It is letting Uber get away with blue murder, and that is not good enough.

New Zealand is not ready for a free-for-all Uber service in New Zealand in the way that the Government intends. Whether it intends that or not, that is going to be the actual effect of this legislation. The standards that will, effectively, apply will be far too low, and we will end up with small passenger services that are as bad as some of the worst countries in the world. The safety levels will be very significantly reduced. Uber will take tax-free profits from New Zealand to benefit its overseas owners, with no benefit to New Zealand whatsoever. There are already 7,000 Uber vehicles in New Zealand, and that is growing. They include drivers on student visas—many drivers on student visas—whose real reason for being here is to find work and not to study at all. They work long hours, they do not comply with the rules, and they take jobs away from Kiwis. That is another adverse effect of this legislation and the encouragement of Uber in New Zealand.

But even those imported Uber drivers are actually themselves being ripped off by the Uber organisation itself. It has recently severely reduced drivers’ incomes, to the point where you have to wonder whether it would be worth them doing it at all. The truth is that Uber is an international organisation with no interest in the welfare of New Zealand’s small passenger vehicle service. It has been kicked out of Denmark and Italy for those reasons, and we should do the same right here in New Zealand. This bill is utterly disgraceful in its deliberately adverse effects, and New Zealand First will be voting against it.

ALASTAIR SCOTT (National—Wairarapa): I will try to address the points that Mr O’Rourke made, in the short time I have. For a start, Mr O’Rourke, area knowledge is no longer required because we have an app. There is Google Maps; there are lots of apps that will tell the holder of the smartphone exactly where they are in any country that is able to manage Google. I too have used Uber all around the world, and I know exactly where I am at any time.

The second point is signage. Why do we need to have the name of the driver on the side of the car when we have the information in our app, when we know the name of the car is identified by its registration plate? I know exactly which car I am going into before the car even approaches me, because the registration number is available to me on this app. So that provides me with a lot of security and a sense of understanding of the driver whom I am going to be driving with.

Denis O’Rourke: What if you can’t see?

ALASTAIR SCOTT: I will get to that. I even know what other people think of this driver. Other people who have used this same driver have been able to rate and rank that driver, so I can see if he is a 4.8, a 4.9, or a miserable 3.2. If he or she was a 3.2, I can decline that driver. So I have a choice as to which driver I am able to ride with.

So just on that safety aspect, I feel, for one, much safer in an Uber car than I do in a taxi, and I have ordered Uber cars for my 18-year-old and 15-year-old daughters, because I feel safe that they will be home. I can track her. I know exactly where she is, when she gets in the car, and when she gets home, or whether she is going to some other destination—very secure in understanding where the person is and whom the person is with.

The Braille aspect—again, the application will tell the blind person what car is approaching and who the driver—

Denis O’Rourke: How will they see that?

ALASTAIR SCOTT: In the same way that the only information in Braille is the car and the car’s ID—in the same way that the application can provide the same information. In fact, a lot more information is available through the application, through the app, than just a number of letters that are available by Braille in its current form. So the information available in the application is far more than is currently available and so should give security and assurance to the passenger or to Mr O’Rourke when he enters into the car, whether he is blind or not.

As far as paying tax, there has been talk about a billion dollar turnover, but we get taxed on the profit of the business, not on the turnover. And rest assured, those drivers in the Uber cars in Wellington and Auckland are receiving income. They are receiving income; they would not do it for free and, no doubt, they would also be paying their fair share of tax as taxpayers in this country. When I pop out of the Uber, I know I can get a GST receipt so, again, I know the GST is being paid to the Government, and the income tax is being paid by the driver.

To highlight again, the Uber business, or the business, is only taxable on its taxable income—its profit, in other words.

Denis O’Rourke: Overseas?

ALASTAIR SCOTT: It may even be a loss situation that a start-up company faces, Mr O’Rourke, and overseas owners, just like New Zealand owners, receive income from overseas. So too do offshore investors receive income from New Zealand.

So I think I have covered all the points that—oh, the airport point. The airport point is that Uber drivers are not able to pick up passengers from airports. The airports do not allow them, and they fine them when they do come across them. The taxi drivers pay the fee because they have easy and quick access—and privileged access, in fact—which is what they are paying for, from the passengers who rock out from the airport immediately on to the passenger waiting queue. With that, I commend this bill to the House.

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

DAVID CLENDON (Green): In the short time that I have I would just like to reiterate, firstly, that the Greens are supporting this very modest bill—should I say? We would like to see a great deal more done in the transport space, but we see enough in this bill to support it. It does some good and useful things.

I would just like to comment on two aspects of the bill, one of those being the alcohol interlock devices, the other being the issue of fleeing drivers—drivers failing to stop. The bill, in part, seeks to increase the pick-up, the take-up, of these devices. They have been available for some time for sentencing and for conditions for people who have been convicted, particularly recidivist drunk-drivers, or for people who have been caught for the first time with extraordinarily high levels of alcohol. And that is a good thing. They are useful devices. They are a technology that does ensure that people will drive at least responsibly, in that sense. The privilege of driving is retained for people who are using these devices, to enable them to get to work, to function in a normal way in society, and use their vehicles accordingly.

They are, however, a short-term technical fix, and Mr Lees-Galloway, in his very useful contribution, sort of started down the track that I would just like to comment briefly on. That is that while we can celebrate and commend the use of these devices, they are often not a long-term solution for recidivist drunk-driving. They know that people can use these devices on their vehicle, which will prevent them from driving, but they will still have a very deep-seated problem with alcohol addiction and abuse, and that is something that we can address.

This Government, I have to say, has been remarkably unwilling to recognise success when they see it, and I speak of the success of the alcohol and other drug treatment courts, very ably led by Judge Lisa Trewmewan and Judge Ema Aitken, in Waitakere and Auckland respectively. For 5 years they have been demonstrating how successful those courts and those processes can be in actually changing people’s behaviour at a very significant level, a very deep and meaningful level. They have had considerable success in turning people away from alcohol abuse and addiction. Those people, for the most part, will no longer drive. We are told there is a 60 percent reduction in drunk-driving with the alcohol interlocks while they are fitted, but there is very little assurance that they will continue with those behaviours after the devices are removed. In a way, the alcohol and other drug treatment court process does seem to be much more robust, much more reliable, in actually changing people’s behaviour and attitude. So while we commend the use of these devices, I think this Government needs to get real and acknowledge that the alcohol and other drug treatment courts are a wonderful success and to stop, frankly, fiddling about with this extended 3-year pilot.

To return to the issue of the fleeing drivers, that is, undoubtedly, a lose-lose proposition for police. Sadly, in instances where police have pursued vehicles, this has led to those vehicles crashing, causing serious injury or death. The police are then told they got it wrong. Equally, if the police decide not to pursue, they are told they are getting it wrong, they are letting people get away. It is an extraordinarily difficult decision to make—literally, in a matter of seconds—and I think it is a very difficult area for them to pursue. So I do not have, I am afraid, any substantial suggestions for how police make those spur of the moment decisions. What I am sure of is that increasing penalties is often quite a weak deterrent, actually. Most of these people who are inclined to flee are actually not thinking rationally, as in “What is the penalty if I do this?”, so I have serious doubts that merely increasing the penalties will have much effect.

I think one small way we could influence the likelihood of particularly young people fleeing is investing more in helping young people get their driver licences. We know that driving offences are called a gateway to the justice system, for good reason. Many people enter prison for the first time on the back of multiple driving offences. If a young person, in particular, does not have a licence, then they literally have nothing to lose. I think it is a very expensive proposition in this day and age. In my long distant youth it cost a matter of a few dollars to secure a licence. A lot of young people cannot afford the process now, and that is more likely to have them driving illegally—therefore they are more likely to flee if a police officer tries to stop them. I think investing through community groups, through schools, and through local government to enable these young people to get licences is money well spent. Thank you.

The ASSISTANT SPEAKER (Lindsay Tisch): I call Stuart Nash—5 minutes.

STUART NASH (Labour—Napier): It is my pleasure to take a 5-minute call on this very briefly, but there is one point I would like to make to the member Alastair Scott, who said: “No, of course Uber pays all its tax. Why wouldn’t they?”. Well, if that is the case, let us have a look at these sums on this. I will just say, it was very interesting that the Minister of Finance and the Minister of Revenue today outlined measures they were taking on this base erosion and profit shifting scam—i.e., multinationals to pay their fair share—and then we had the member stand up and defend Uber. There is a little bit of irony there, is there not?

In 2014 Uber declared revenue of $1,061,018. It paid tax of $9,397—that is less than 1 percent tax on its gross revenues. But I accept that you do not pay tax on revenue; you pay tax on profit. So if it is paying tax on its profit, if it is paying 28 percent company tax, then it must have meant that it made around about $35,000 profit, because that is what $9,397 is—about 28 percent. It is about a $35,000 profit or about 3 percent, so the margin is about 3 percent. You know, you would have to be a little bit naive to believe that these guys were making 3 percent. They can stick it in the bank and get better money than that. Of course these guys are evading tax, goodness me, Mr Scott! And it is wrong, it is absolutely wrong. We do not have to defend them. We can go after them for a whole lot of reasons, but let us not defend for tax avoidance. It is not evasion—I am not saying they are doing anything illegal—but it is avoidance, of that there is no doubt.

There are a number of points in this bill that we agree with. We are supporting the bill, but there is one thing that I shake my head at. You know, according to the Local Government Commission—I do not know why it submitted on this—the 12,000 members of the Blind Foundation, about 53 percent of them take taxis. And there are around about 75,000 New Zealanders whose sight is such that they rely on someone else to ferry them around. Yet we are being so mean-spirited that we are taking the Braille requirement out of taxis—

Peeni Henare: A $20 sticker.

STUART NASH: $20—that is mean. That is mean-spirited. Surely we have got much more important things to concentrate on, and for a lot of these people life is a challenge anyway, let us not make it harder. Mr Scott says: “Oh well, you can use the app.” Well, maybe you can use the app, but leave what is in place. Leave what these people know in place.

The alcohol interlocks—we all acknowledge that drunken drivers are a menace on the road, a danger on the road not only to themselves but to everyone else. We want to keep these people off the roads. I would have actually liked to see these alcohol interlocks in place for everyone who has been convicted for drink-driving. In fact, they should be in place for every person 18 years old and under who is driving a car, considering they are not allowed any alcohol on their breath. In fact, I would recommend putting them in any car just so people can know whether they are over the limit or not. If they are over the limit, then the car just does not start. It is not a bad deterrent, I would have thought. It should be mandatory in every single car. But, anyway, that is the way it is.

Fleeing drivers—this talks about fleeing drivers. What it says here is that if you have been a driver who has “flee-ed” from the police, run from the police, driven away from the police three or more times, you can go to jail. Why three times or more? It also says that if you have “flee-ed” the police—it is the wrong word, is it not—if you have taken off from the police, they can confiscate your car for 28 days or more. This is a really contentious issue and the reason I say that is that every now and again someone who flees dies. The reason they die is they are an idiot and they crash into something and they kill themselves. Usually, thank goodness, it is not another person; it is a lamp post or it is a stationary car, or it is a tree. We have got to get tough on this. I know—and Mr Assistant Speaker, you know as well—that the police complaints authority has had a good hard look at this. We cannot stop this from happening. I do not think we can say to the police “Do not pursue anyone who flees.”, because that would be wrong. Every young driver would know that as soon they put their foot down then the police would not chase them, and that sends the wrong signal.

In my last 30 seconds I would just like to make a comment. I would say there is a saying that a week in politics is a long time—try 24 hours. We started this week on a downer; we have finished this week on top of the world. We have got Jacinda Ardern and Kelvin Davis leading the Labour Party to victory. The energy and the enthusiasm for the party out in the electorates have gone through the roof. The money is coming in, the volunteers are coming in, the energy is rising, and you can see it over there—you can see it over there. It is now “Game on!”. Bring it on, I say! Thank you very much.

Dr JIAN YANG (National): This bill aims to improve the land transport system, and we all know that road crashes have both economic and social costs. In New Zealand there are about 300 fatal crashes each year, killing over 300 people, and also we have thousands of injury crashes, so it is in our strong interests to manage our transport and make it safer for people to travel on the road.

This bill contains a number of changes. One critical change is, of course, to strengthen the legislation relating to alcohol interlocks, and previous speakers have mentioned this frequently. Basically, strengthening the legislation relating to alcohol interlocks will make our land transport system more efficient, more effective, and safer. Alcohol interlocks, of course, are highly effective, but they have not been used very frequently. Some people have a habit—quite a bad habit—of drink-driving, so they need a strong regulatory mechanism to manage their drinking behaviour. So this bill will result in the greater use of alcohol interlocks, particularly by those high-risk drink-driving offenders, and also repeat drink-driving offenders. For that reason, this bill is a good bill.

Of course, alcohol interlocks are not cheap. They can be prohibitively expensive for low-income offenders. For that reason, this Government will set up—will fund—a financial assistance scheme to support the new mandatory alcohol interlock sentence. So this is another change in the bill.

Another change in the bill is, of course, the new regulatory framework for small passenger services. Previous speakers mentioned Uber. I know that Uber has been a bit controversial, but at the end of the day, the services provided by Uber have made it easier and cheaper for the public to travel. They also have the potential to reduce congestion and to enhance productivity. For that reason, what we can do is to simply face reality and regulate such services to make our small passenger services sector more effective, and this bill is aimed at enhancing the effectiveness of small passenger services and at regulating in a better way.

So I would like to commend the bill to the House. Thank you.

PEENI HENARE (Labour—Tāmaki Makaurau): Tēnā koe, Mr Assistant Speaker. Thank you for the opportunity to speak in the third and final reading of the Land Transport Amendment Bill (No 2). There have been some meaningful contributions across the House on this particular bill, and there are some very good mechanisms in this bill, as mentioned by Dr Jian Yang, the member who has just taken his seat.

But I want to speak to several other points that have been raised, and one of those in particular is of course Uber. My colleague Stuart Nash has talked about some of the tax question marks that still sit on multinationals, but I want to make it clear, because the Government members of this House are suggesting that we on this side of the House are anti-technology and we are anti the evolution process in small passenger services. Can I say this: the taxi companies—the well-established taxi companies in this country—were all for Uber coming in. They were. That is what they said in their presentation to the Transport and Industrial Relations Committee and in their submission. All they asked for was a level playing field—a level playing field. They welcomed the competition. Competition is a good thing for the market—we know that. All they asked for was that drivers who drive for Uber had to operate just like they do, on a fair, level playing field. I think that is fair to ask for.

Sadly, what this bill does, though, however, is it actually creates a disadvantage for many of those taxi companies. What it does too is—we know this. We see this everywhere we go. Taxi drivers will drive all day, stick to the books, do what they are supposed to do by the law, and then, at the end of the day, they will take their magnet off and then go and drive for Uber. They go and drive for Uber. They are a danger on the road. They are a danger to themselves, to the driving public, and to the public at large. Why? Because they go beyond acceptable hours, and driver fatigue is a serious issue in this country. Let us be real about that. You can spot an Uber car a mile away, because they generally look like one of the taxi cars that you probably just got out of on the way to the airport, or from the airport to Parliament here. Simply remove the sticker and, all of a sudden, it is an Uber car. That is not fair.

I also want to speak about the fairness to a sector of our community, one of the most vulnerable sectors of our community, and that is the disabled and, in particular, the vision-impaired. The members on that side of the House raved on about how technology will solve this issue for them and how technology, or a particular app, will be able to tell them who the driver is, what taxi company it is, what cab and rank—all the rest of it. But here is something for that side of the House. People in the disabled community earn 37 percent less—37 percent less—than the average wage here in New Zealand. They earn 37 percent less. With rising house costs and with the rising cost of living, how are they expected to have the kind of technology that that side of the House says will solve this particular issue—will solve this particular issue?

My grandfather’s eyesight was failing him towards the sunset of his life, and we tried as hard as we could to say: “Papa, you need an iPhone. This is going to change your world. You can connect to all of your mokopuna across the world.” He said: “No, son. This old Nokia here is what I need.” Why? Because the buttons were big enough for him to see. How are you going to download an app on an old phone like that? How are you going to do that? On that side of the House, they simply brush off the submission from an important part of our community. They brush it off by saying technology will solve their problem. I reiterate the point—37 percent less. Actually, that number—the 37 percent less than your average income in New Zealand—was a 2015 statistic. I dare say that has actually increased. I dare say that has increased. Why? Because we refuse to make taxi companies put a Braille sticker on the car at a cost of approximately $20—the cost of approximately $20. We have marginalised a part of our community. It shows just how out of touch this Government really is—how out of touch this Government really is.

So I am disappointed in that particular part of this bill. We say to those communities: kia kaha. Kia kaha. When we take over that side of the House—the Government benches—we will be fixing this. We will be fixing this, because the heartfelt submissions made to the select committee actually opened even my eyes to the issue—my eyes to the issue.

I come to fleeing drivers. I totally agree with the sentiments by my colleague Mr Stuart Nash, the fantastic MP for Napier, around making sure that there is an element in this particular legislation—keep passing me the notes, Mr Nash—to deter drivers from fleeing. That is absolutely important. We see it far too often—far too often. In places like South Auckland we have noticed an increase of drivers fleeing. Recently, a motorcyclist took off from the cops and, sadly, ran into trouble at a traffic intersection in Tāmaki-makau-rau and, sadly, passed away. So there do need to be stronger mechanisms in legislation to ensure that this does not continue to happen, and it also must have the effect of deterring people from fleeing from the police.

One of the things that always concerns me when we push through bills in the House—and we know that this particular bill has some aspects to it that will require significant resource. One of those is for fare evasion. This particular bill has a clause that will look to clamp down on those who evade paying a fare on a public transport system, and a growing public transport consumer base in Tāmaki-makau-rau suggests that, actually, the numbers are quite large. I recall the submission to the select committee, and I was actually quite surprised by just how much money is being lost from those who are failing to pay their fare on public transport. But I always ask the question: how do we expect to police this? How do we expect to police this? I know the provision in the bill gives authority to some officers of council, and those who police public transport sites around Auckland, in particular, but I know Wellington as well, as its council gave a very good submission. Just exactly how can we expect this to have the capacity to make sure that those who do catch the public transport system actually pay their way?

I just want to also touch on another part of capacity. I know the Supplementary Order Paper (SOP) included in this bill by Mr Jami-Lee Ross, SOP 350, is a good one. I understand why he has done that. During summer, of course, all of us in this House, I am sure, noticed an increase in those washing windows at intersections. I think about how in Tāmaki-makau-rau you cannot manoeuvre yourself around many places without seeing these particular people out trying to wash windows to make a buck. What was sad to see was some of the threatening behaviour that came with gangs and with groups of young people—men, usually; young boys—who were out trying to make a buck washing windows. Intimidation tactics—drivers actually felt really unsafe.

Here is another question, and it is just like the fare evasion. We all know that Great South Road is a very long road, with intersections right across Tāmaki-makau-rau. I wonder whether this is just another burden on a police force that is already inundated with work—inundated with work. Of course we want to stamp out intimidation tactics. Of course we want to stamp out bad behaviour and criminal behaviour. But I wonder, in terms of it being a priority for a police force that is struggling under the weight of work that they have to cope with at this point in time—I cannot help but think: “Exactly how is this going to work?”. How are we going to make sure that we support the officers and those who are clamping down on window washers at intersections?

Just finally, to close my contribution, I want to talk about Te Roopu Waiora Trust, a great group in Manukau city—a Māori disabilities rōpū. It made it very clear to me just how hard the struggles are for people with disabilities getting around Tāmaki-makau-rau. I want to apologise to them for the failure of this Government to make sure that those vision-impaired people actually can.

JAMI-LEE ROSS (National—Botany): I am pleased to support the third reading of this bill. Much of this bill is around safety, and it is around public safety and ensuring that the land transport legislation works better for New Zealanders.

We have already seen debated in the House the changes that are within this bill around alcohol interlocks, which will ensure that there are greater penalties and greater use of alcohol interlocks for those who are repeat drink-drivers. There are also the clauses in here around fleeing drivers. I think the House needs to give Stuart Smith, the MP for Kaikōura, some credit for that idea coming through and ending up in the legislation.

I want to reply to Peeni Henare a little bit, just briefly, and talk to the change that went through on Tuesday night. I am talking about Supplementary Order Paper (SOP) 350, which I put forward. That was around the washing of vehicles—typically known as window washers. I did not speak to the SOP during the Committee stage, but I do want to say thanks to the Committee for allowing that to go through. It went through without dissent on Tuesday night.

The reason why I put forward that SOP was to go along with the theme of this bill, which is around ensuring greater safety for the public with the land transport legislation. Peeni Henare raises some very good points. There is a lot of activity, particularly during summer months, with window washers who are threatening, harassing, and intimidating to members of the public. Police in my local area have spoken to me and other local MPs about their concerns that they did not have sufficient tools to be able to tackle the issue of window washers.

The council has attempted to deal with them by way of a by-law. However, for a council to deal with them using a by-law, it had to take prosecutions through the court. That took a lot of time—many months—and it cost the ratepayer a lot of money as well. A solution was suggested, which was to see that land transport legislation include it as an offence around window washing. So the SOP inserted into the bill new rule 11.6A: “Washing of vehicles. A pedestrian must not wash or offer to wash a vehicle, or part of a vehicle, on a road unless the vehicle is legally parked.” Once this bill goes through the third reading, this change will effectively make window washing an unlawful activity. It will give police a tool that they can use in their tool box to enforce an issue on the roads.

I take Peeni Henare’s view around resourcing and capacity. The issue is that police know there is a lot of activity on intersections with window washers that turns into other crimes where people have been attacked, where people have been subjected to robberies around their businesses, and where young children have seen themselves attacked and have had their bikes or bags stolen. If we can give police a tool so that they can move those window washers on from problem intersections, a tool whereby they can ensure that their prevention-first approach to policing can be applied in this case, then we can actually keep the public safer.

In fact, a window washer himself was bowled over a couple of months ago on Great South Road in Tāmaki-makau-rau. That window washer ended up in hospital because he was running in and out of traffic and he got injured. From a public safety perspective I was pleased to put forward that SOP and I am pleased to see it now inserted into this bill, and I look forward to the bill’s third reading very soon.

A party vote was called for on the question, That the Land Transport Amendment Bill (No 2) be now read a third time.

Ayes 104

New Zealand National 58; New Zealand Labour 29; Green Party 13; Māori Party 2; ACT New Zealand 1; United Future 1.

Noes 12

New Zealand First 12.

Bill read a third time.

The result corrected after originally being announced as Ayes 106, Noes 12.

Bills

Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

Third Reading

Hon DAVID BENNETT (Minister of Veterans’ Affairs) on behalf of the Minister of Justice: I move, That the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill be now read a third time. This bill implements a number of measures to strengthen New Zealand’s ability to combat money-laundering and the financing of terrorism. I would like to take this opportunity to thank the Law and Order Committee for its valuable work on the bill and acknowledge the broad support from all parties in the House for the reforms in this bill.

Money-laundering is an insidious crime. It fuels criminal activity, it undermines the integrity and stability of financial systems, it distorts international capital flows, and it allows criminals to profit from their crimes. People who finance terrorism use similar methods to funnel money to violent causes. New Zealand has a strong legislative framework that enables us to detect and disrupt money-laundering and terrorism financing. This bill will strengthen our ability to protect our businesses and our country’s reputation as being one of the least corrupt countries in the world.

The existing Anti-Money Laundering and Countering Financing of Terrorism Act applies to banks, casinos, and a range of financial service providers. When the regime was put in place, these sectors were considered the most at risk of being abused by criminals. However, we know that criminals are always looking for new ways to launder their ill-gotten gains. This means that establishing money-laundering controls in one sector can increase the risk that other sectors are not covered.

This 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 sports and racing betting, and to businesses that deal in particular high-value goods. As traditional methods of laundering money become more difficult, these sectors are at risk of being exploited by criminals to launder money. Extending the regime to these sectors will reduce the avenues available to criminals to launder money without being detected. These sectors and professions often have visibility over certain transactions that banks, casinos, and other financial institutions do not. Therefore, they may be better able to spot red flags for money-laundering than current sectors are able to. This will make it more difficult for criminals to hide their money.

The bill will not only include more businesses and professions within the regime’s scope but also expand reporting requirements to include suspicious activities rather than suspicious transactions. This is the legislative response to the recommendation in the Government Inquiry into Foreign Trust Disclosure Rules in 2016. It will provide the New Zealand Police with additional financial intelligence that will assist it to follow the money and to stop the crime.

The amendments in this bill will have significant benefits. Not only will it be more difficult for criminals to launder money, it will seriously disrupt their ability to re-invest in criminal activities and enjoy their criminal gains. The Ministry of Justice estimates that these reforms will disrupt between $1.4 billion and $1.7 billion of criminal activity over 10 years, and reduce the social harm from illegal drugs and criminal activity by up to $800 million over the same period. Disrupting criminal activity and reducing their ability to re-invest in crime will strike a significant blow to gangs and to organised crime groups in New Zealand. It will reduce criminal activity and result in fewer victims, helping to protect legitimate businesses from being exploited by criminals.

I have great confidence in New Zealand’s law enforcement agencies, which have a history of successful prosecutions against gangs and organised crime groups. However, the measures in this bill will bolster the ability of law enforcement to detect and prosecute criminal activity, including illegal drug offending. This bill will help to protect and prevent more New Zealand businesses and professionals from being unwittingly used by criminals to launder criminal funds.

The benefits of extending the regime are not only domestic. Money-laundering and terrorism financing are global issues. They have blighted societies around the world and have caused untold harm. While New Zealand has a strong anti - money-laundering regime, we are not immune to the threat of international crime. New Zealand businesses trade internationally on our hard-earned reputation as one of the least corrupt countries in the world. We are consistently ranked in the top of Transparency International’s Corruption Perceptions Index, and New Zealand is seen internationally as a great country to do business.

However, we must not become complacent and take our good reputation for granted. Having a strong anti - money-laundering regime is essential to maintaining New Zealand’s international reputation. The amendments in the bill will bolster our regime. They will prevent New Zealand from being seen as a soft target for international criminals to launder their money. We need to ensure New Zealand is not seen as a weak link in international efforts to counter money-laundering and the financing of terrorism. The bill demonstrates New Zealand’s commitment to actively doing its part to prevent international money-laundering and terrorism financing.

New Zealand’s anti - money-laundering and countering financing of terrorism regime is scheduled to be evaluated by the Financial Action Task Force on Money Laundering (FATF) in 2020. FATF is the global standard setter for anti - money-laundering and countering financing of terrorism policy. Extending the new regime to the new sectors will assist in New Zealand’s preparation for the review. The results of the evaluation are likely to have an impact on our international reputation.

This Government recognises that this bill will impact on everyday businesses and people throughout New Zealand. That is why we have worked hard to ensure that the bill strikes the right balance between addressing the risks of money-laundering and terrorism financing and enabling New Zealand to meet its international obligations whilst minimising compliance costs for our businesses.

In conclusion, this bill demonstrates the Government’s commitment to combatting money-laundering and terrorism financing. It will ensure that New Zealand has a robust anti - money-laundering regime that is hostile to money-launderers, criminals, and those who finance terrorism. Ultimately, the bill will reduce crime, help protect our businesses, and enhance our international reputation and standing. I commend this bill to the House.

Debate interrupted.

Voting

Correction—Land Transport Amendment Bill (No 2)

Hon RUTH DYSON (Labour—Port Hills): Apologies to the House, but I seek leave to correct the voting numbers that I presented at the end of the Land Transport Amendment Bill (No 2) on behalf of Labour.

The ASSISTANT SPEAKER (Lindsay Tisch): And what are those numbers?

Hon RUTH DYSON: Twenty-nine in favour.

The ASSISTANT SPEAKER (Lindsay Tisch): Twenty-nine in favour. Leave is sought for that purpose. Is there any objection? There is no objection. The record will be amended accordingly. Thank you.

Bills

Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

Third Reading

Debate resumed.

STUART NASH (Labour—Napier): I stand in support of this bill. Labour will support this bill for a number of reasons, mainly because this is about our international reputation. It is about the integrity of our financial system and making sure that the bad guys cannot do business here—that is the bottom line—but I will elaborate a little bit on that.

The concerns we do have—and I will express these concerns—are not about the substance of the bill; they are about the process that we have gone through to get to this stage. The thing about this is that in July 2015—it is a couple of years ago now, more than 2 years ago—officials actually advised the Minister of Justice, Amy Adams, to begin work on policy to implement these reforms. The thing is that the Minister went against that advice. I have absolutely no idea why. When officials say “Hey, this is really important. This is something we need to get up on the legislative agenda.”, you would think the Minister would take that seriously. But, no, she went against that advice.

Then what happened is we had the Panama Papers, and we all know the story behind that. We were exposed—well, we were not so much exposed, but in the global financial market place, whether it is reality or perception, we can argue about whether we were corrupt or whether we were not, but the bottom line is that it was reported in the global press that we were an easy target.

Hon David Parker: And we were.

STUART NASH: “And we were.”, says Mr Parker, and he knows. He is one of the lawyers who has been dealing with this—not in setting them up, but in exposing this. [Interruption] Ha, ha! I just need to get that on the record. But the thing is, what was happening is that lawyers involved in setting up these trusts were actually going overseas and saying: “We can hide this for you. We can do this. We can make it happen.” Whether that was the reality or not, it was reported globally that we were an easy touch, and that is a really bad thing. That is a really bad thing. This was significant, and it should have been absolute high priority.

We all know—and those who have followed this debate will know—that this was subject to serious questions of the then Prime Minister, John Key, for about 2 months. We went hard because this was wrong—not only Labour but the Greens and New Zealand First as well—and because of the exposure it got in the media, he came out and made promises about this. He said he would do it. Then there was another scandal involving one of the other Ministers, and it sort of slipped off the agenda. It sort of slipped out of the public consciousness, and, like most things John Key did, it sort of slipped away under the radar and something else came up. But that is wrong.

Then what happened is that the Government, or the Prime Minister, or the Minister of Finance appointed John Shewan to have a look at this, and he came up with—

The ASSISTANT SPEAKER (Lindsay Tisch): Tie it back into the bill.

STUART NASH: Well, I actually—OK, I will. Thank you very much, Mr Assistant Speaker.

The ASSISTANT SPEAKER (Lindsay Tisch): I have not heard about the bill yet. I have heard about other things, but it would be really good to hear—

STUART NASH: I am just—I am nearly there. But John Shewan, who has a formidable reputation, suggested that this legislation must be passed by 2016. He said that this was important to New Zealand’s global reputation—that we get it out there. But when I say “global reputation”, it is important to the integrity of our financial and non-financial system. Well, 2016 came and went. And where we are is we are within 2 weeks of rising in 2017, and now we are doing it. In fact, it is rushed through. We did the Committee stage last night. We did the second reading on Tuesday. This should have been here earlier. One thing that I would like to say is that this is—you know, I am not doubting it—complex legislation; of that there is no doubt. It is complex and it does take time, but that does not mean that it slips off the agenda in the way that it seems to have done. It needed to be in the House earlier—but anyway, here we are and we are doing this.

So whom does the legislation apply to? It applies to lawyers, accountants, real estate agents, the Racing Board, and other high-value dealers. Why are we doing this? Well, as mentioned, it is to preserve the integrity of our financial and non-financial system. What is the issue? How broad is this issue? Well, I can say that in 2016 police research showed that loopholes were responsible for about $1.6 billion in laundered money per annum—$1.6 billion. That is a lot of money coming into New Zealand and being laundered. Twenty-six percent of the cases that the police identified involved accountants, and more than 50 percent of the cases involved property deals. So, in essence, what was happening was the bad guys were coming in here with their dirty money, and they were buying houses, commercial properties, and laundering money. It was very easy to do, and we have got to stop it. We have got to stop it, and this is what this legislation does.

So how are we going to stop it? There is a set of regulations that are being drafted at the moment. The Ministry of Justice, the New Zealand Police, the Department of Internal Affairs, the Reserve Bank, and the Financial Markets Authority are working on a set of regulations that will—well, technically they will begin to be drafted, even though they are working on them, once this bill receives the Royal assent, which is after the third reading today. So today it will receive the Royal assent. Regulations will begin to come into place; they are being drafted now.

The concern we have, and the thing that came up a lot in the Law and Order Committee, is the time frame that these organisations—you know, lawyers, real estate agents, high-value dealers, and accountants—had between when the regulations came into force and when they had to comply. A lot of the submitters said that they just did not have the time. We thought long and hard about this. We thought that the Racing Board was probably hard done by, and the reason I say that is that it was informed. The Racing Board was informed in 2014 that this was coming up, so it knew about it. When it approached the Ministry of Justice and said “What’s this going to look like?”, the Ministry of Justice said: “Hold tight, tai ho—we’ll let you know sooner. We’ll let you know what it’s going to look like, but don’t worry about it.” The thing is that it waited, because it knew this was coming. I mean, this has been signalled; do not get me wrong. This coming in is no surprise, but the Racing Board did not know what the regulations were going to look like.

I was actually in favour of a Supplementary Order Paper to extend this for the Racing Board. It has been hit with health and safety and it has been hit with earthquake-strengthening costs. So this will impose quite a strong cost on the Racing Board, and my personal view is, in fact, that we should have extended this for it.

But for lawyers and accountants and real estate agents—it is a different game for them. My understanding is the Law Commission has gone around the country and advised its members what to look out for and what to expect. But what we are requiring is these non-financial professionals—you know, lawyers and accountants—to put in suspicious activity reports. In essence, what that is is to inform officials when they see suspicious activity. There is a definition of suspicious activity in here. We talked long and hard about—

Jono Naylor: Go on. Read it to us.

STUART NASH: —client privilege and all this sort of carry-on. Mr Naylor, if you are keen to know what they are, I am more than happy to give you about 150 pages worth of submissions to read—and go hard; go hard.

But the thing is, we are putting the onus on these organisations, and individuals, to be diligent when deals come across their desks that look dodgy. And even though we have preserved the right of client professional privilege, we have outlined when privilege exists and when it does not exist, and when it can be used and when it cannot be used, but also when that can be objected to, and that is by going to court.

There is also something that we looked long and hard at, and we debated about it in the Law and Order Committee, and submitters were very eloquent in their objection to it. This was the sharing of information. In the way the bill was initially drafted, we gave officials the right to share information across jurisdictions and across agencies. In the end, we withdrew officials’ right to share information, and elevated that right to ministerial level. The reason we did that is we felt that if we were going to allow the sharing of information across agencies, it needed to be done at the ministerial level; it needed to go to the Privacy Commissioner, just to make sure that it was done correctly; and it also needed to go to other agencies that may be affected—we did not say “shall be affected”; we said “may be affected”—to make sure we had got this right. The bottom line is we need to stop the bad guys from doing dirty deals in here, but we also need to preserve the right of people who are not doing dirty deals to have their information protected. This is fundamental to the financial system in this country—of that there is no doubt

In my last 20 seconds what I would say is what a 24 hours—what a 24 hours. What a week in politics. What a game-changer. We came here, the Government was bubbly, it was ready to go, and what happened? It ends the week—it is flat. It is flat because Labour has got a new leader, the game has changed, and we are in the game again, and we are going to take it back, and the Government knows it. Bring it on! Bring on the election, I say.

Debate interrupted.

Voting

Correction—Land Transport Amendment Bill (No 2)

The ASSISTANT SPEAKER (Lindsay Tisch): Just before I call the next speaker, there is an amendment to the Labour Party vote on the Land Transport Amendment Bill (No 2) in the third reading. The final result is Ayes 104, Noes 12.

Hon Members: Close. Closer.

The ASSISTANT SPEAKER (Lindsay Tisch): Yes, very close.

Bills

Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill

Third Reading

Debate resumed.

MAUREEN PUGH (National): It is my pleasure today to stand in support of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill in its third and final reading this afternoon. As we have heard, this bill has been considered by a very cooperative select committee, the Law and Order Committee. The current Act that is under operation is phase one of the tranche of changes that is being made, and it was brought in for those organisations that were probably of a higher risk of being used by criminals to launder their money—they were the banks, casinos, and a range of other financial service providers. It was the first step in closing the gaps that had the potential to provide ways for criminals to launder their money.

This bill is a further step, and it is helping us protect our businesses as well as ensuring that New Zealand’s reputation remains of a very high standard and is respected, and that we are continuing to be known as safe country in which to do business. This bill, phase two, extends the regime to lawyers, conveyancers, accountants, real estate agents, racing and sports betting, and businesses that deal in high-value goods, such as jewellery, precious stones, cars, artworks, etc. These are the organisations that still have potential, in terms of being used by criminals to launder their dirty money. The committee wanted to give these organisations time to implement their systems, to train their staff, and to have their systems in place in time to meet time frames. Those time frames have been staggered and that gives these organisations a range of time, but also gives the staff within the Ministry of Justice time to work with these organisations to implement their systems.

The lawyers and conveyancers’ implementation date is 1 July 2018, the accountants is by 1 October 2018, and the real estate agents is by 1 January 2019. As we have heard from my colleagues across the House, the New Zealand Racing Board is the last of those organisations to be required to meet its implementation date, and that has been set at 1 August 2019. The rationale behind that was that the racing clubs across the country are quite small and do have some challenges in setting up these systems, so their time was extended out to help them to comply. The timing was important to the select committee, because in 2019 the Financial Action Task Force on Money Laundering will be doing its review of New Zealand, and we know that this will have a direct effect on our international trade reputation. So it was important to the committee that we were able to meet those international obligations, and that is why this bill is being staggered and the implementation dates fit with that review.

The act of laundering money is the way that criminals do clean their illegally gotten gains, and that is usually through illegal activities like selling drugs or stolen property. This bill will make it so much more difficult for those criminals to clean their dirty money. That also includes people internationally who may have been looking to New Zealand as a place to launder their money. So it protects our honest business owners and operators, and it does tighten up the systems that criminals may have seen as an easy ride for them, in laundering their dirty money here in New Zealand. It is much more challenging for them now. This bill protects New Zealand’s integrity, and I commend it to the House.

AUPITO WILLIAM SIO (Labour—Māngere): Let me comment on the regulatory impact statement (RIS) and say to the House that from the RIS we know that in 2008 the officials provided to this Government information—and I would say quality information—that there was a real need for us to strengthen our anti - money-laundering regime. It was important for us to take note of that information—2008, this is—in terms of the changes in the global setting of the way money was being moved around by those who are into the promotion of terrorism. In 2008 that information was given to this Government. In 2008, also, our officials gave this Government information that it was important to stop our domestic criminals taking advantage of our regime at times through organised crime and through laundering money that was gathered through drug offending. That information was made available to this Government.

The Government then decided that it would do something about it, but it would do it in two phases—phase one and phase two. I do not know why it, sort of, did not act quickly on that information. In 2010 the police intelligence unit that gathers intelligence in the financial sector from all over the globe again highlighted to this Government, with a sense of urgency, that we must increase our anti - money-laundering regime because of what was happening in the criminal arena in a global setting. But the Government did not act on it, and then when it did act on it in 2013, when our first phase came into force, the Government had given the non-financial sector an exemption. So the first phase, in 2013, would only include the banks, the money transfer units, and the casinos. I would say that with the money transfer units there was quite a bit of rumbling, because these are small units that send money mainly to the Pacific region from New Zealand, and suddenly they were caught up in this. But, none the less, they adhered to the Government law at the time.

In 2013 this came into force. In 2016 we then found out that the Panama Papers had been leaked to the media, and we learnt that New Zealand was being used by international trusts almost to launder money. We know that those reports highlighted that there was a need for our Government to act quickly and to act early. That information was provided by officials as early as 2008. The police financial intelligence unit provided further information in 2010. We did not act on it until 2013, and when we did act on it, we exempted a very important sector. That sector, the non-financial sector, was considered by the police to be a gatekeeper to the financial system. In other words, the police said that that sector provided an impression of respectability, an impression of legitimacy, and an impression of normalcy, particularly where large transactions or large sums of money were involved.

To this day, I do not know whether we will ever be clearer as to why that information—despite being provided to the Government and provided to the Minister as early as 2008, and reiterated in 2010—was not taken into consideration until the first phase in 2013. And then we allowed it to drag on until this point here.

I will tell you why Labour is supporting this bill. I know that the other Opposition parties that are on the Law and Order Committee also had a sense of urgency that we needed to act on it, and act quickly on it. There was a bit of debate about whether to push out when the implementation of this regime should take place. I think it was generally the Opposition parties that urged that we needed to act quickly for a number of reasons. (1), we have international obligations to the international organisations that are charged with protecting our economies, protecting the integrity of financial systems. (2), it was also about, for New Zealand—we needed to put a stake strongly in the ground and dispel what the Panama Papers revealed. We are strongly in favour of supporting the strength of our reputation, particularly in the international arena of trade. That is really fundamental to why this regime is so important—it is about us protecting our reputation in the international arena.

But I also want to say that New Zealand also plays a leading role in the Asia-Pacific region. We provide technical advice to a lot of the countries in the Pacific. I know that more recently New Zealand has offered advice to Samoa in terms of upgrading its anti - money-laundering regime. This is important because if we are not seen to be following international best standards, if we are not seen to be plugging the gaps, then our integrity, in terms of us trying to give advice to other countries in the region, just will not shine. Any weaknesses in our own system risk us losing not only our credibility but also our influence in the regions.

This legislation is about us protecting our reputation as a corruption-free society. I remember vividly Transparency International holding up a report, in one of the submissions, and saying that New Zealand has so much to lose if we do not act quickly on this. For many, many years our economy, the way that we do our business, was generally seen as corruption-free. For many, many years we held the No. 1 spot in the Transparency International reporting.

I want to come back to the New Zealand Racing Board and its request to push out the implementation of this regime. I sympathise with the board because not too long ago we passed new laws for the need to earthquake strengthen many of the buildings. The board has a lot of structures, and it has been a very costly exercise for it. I am sympathetic to its need, that it is having to pay for significant compliance costs, not only for the earthquake strengthening of buildings but also in this. So I support the fact that we are pushing the Racing Board to be last, in terms of implementing this regime.

Can I say that when the Minister began this debate he looked deflated. He looked down. I just want to say to the Minister: “Cheer up. Change is the air.” I know that one week in politics is a long, long time and as my colleague Stuart Nash said, change is in the air. In 7 weeks we will be able to relieve you of your responsibilities. So, without further ado, this party does support this regime. It should have been passed some time ago, but we are at this stage because of the way that this Government, instead of acting quickly on the information, dragged its feet. That is why we have been slow in passing this legislation.

JONATHAN YOUNG (National—New Plymouth): I think there is a part of this bill that we tend to gloss over, but I think it is very, very important, particularly for the businesses that are going to be the ones on the front line to empower this legislation. It was estimated that the cost of compliance over 10 years was going to be $1.6 billion. By working with the different companies and people in the private sector in particular, refining the options to help them meet their obligations, we have significantly reduced the predicted compliance costs from that estimated initial $1.6 billion over 10 years, and have now lowered it to $800 million to $1.1 billion. But that is an outstandingly high figure.

I bring this to the fore, to perhaps say to New Zealanders who might be listening in to this debate—although at 10 past 5 on a Thursday afternoon there may not be many.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! The member will address the House.

Hon Ruth Dyson: I am getting a lot of calls saying people are listening.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! Do not encourage him.

JONATHAN YOUNG: Ha! Thank you very much, Mr Assistant Speaker, for your guidance. But, by and large, New Zealanders will not notice the effect of this legislation in their everyday lives, but behind the scenes there will be a tremendous level of surveillance taking place regarding transactions that come from suspicious activities. The point I am making is about the incredible cost and expense to ensure that New Zealand is a safe and credible society. I do not think we should just ignore that, because we know that the cost of safety and certainty and security in our country is a very important thing. What we will see is that there will be businesses that will absorb those costs.

Going back to what the previous speaker, Aupito William Sio, said, why has this taken this length of time to bring through and institute? It is because we want to do it in an efficient and a practical and an effective way, but we do not want to load down our businesses with huge compliance costs. We want to find efficient ways in which they can continue to make our society safe from money-laundering. If we do not make it safe from money-laundering, it is not just reputation that we have to worry about; it is actually criminal activity that we have to worry about. Making this place safe, making this New Zealand society and economy safe, is very expensive. We need to do it effectively and efficiently, but we need to do in a cost-effective way. Sometimes that takes just a little bit longer than slapping down a $1.6 billion bill over 10 years. Working with the sector is incredibly important, and also working with it so that it can bring these provisions in in an appropriate and timely way as the sector absorbs, I guess, the demand and the burden of this, and doing it in such a way that the sector can do it effectively: to develop risk assessment programmes, to put in place procedures and controls, and to train staff—all of these things.

So I think it is important for us to just realise that behind all of this legislation, all of this good thinking, all the thinking behind this that parties across this House agree with and support, we also have banks and financial institutions. Now we reach back even further to businesses, real estate agencies, accountants, lawyers, and betting agencies for sports, racing, and all of those activities, and we ask them to be part of this safety net to keep New Zealand safe. Let us just acknowledge that. Thank you.

BARRY COATES (Green): Tēnā koe e Te Māngai. I rise to speak in the final reading of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. I want to first start by saying why this bill is important. I think this is actually one of the most important bills that we have had through Parliament in the time that I have been here, since last October. I think this bill has been far too long in coming. We have to remind ourselves that money-laundering is about how criminals hide their money. It is about ways in which illicit money can be washed clean. The police in 2013 estimated that the annual amount of money-laundering going on is $1.6 billion, but, actually, they did not really know, and they themselves had put the estimates at orders of magnitude higher.

We need to remind ourselves that the money comes from profits from crime. That means there are real people at the end of this crime. There are people who have been hooked into P and other addictive drugs. There are victims of extortion and organised crime—women and children have been forced into the sex trade. There have been arms dealers and corrupt officials. These are some of the people who are hurt by crimes whose profits end up being laundered in our country. We need to remind ourselves of the human cost of money-laundering.

We have also heard from the police that more than half of the money-laundering goes into real estate. What does that mean? Well, there are examples of foreign buyers coming into New Zealand, viewing 50 houses, and buying 40. The amount of money-laundering that has gone into real estate has fuelled our housing bubble and has meant that younger New Zealanders cannot afford to get on to the property ownership ladder. It has distorted our property market because we have not had adequate controls, and the lack of proper legislation has created a financial subsector that feeds off dirty money.

So legislation has obviously been required. The question is why it has taken so long. The UK has had similar legislation since 2007. The Financial Action Task Force on Money Laundering did an evaluation of New Zealand in 2009. It found 197 cases of money-laundering for fraud, drugs, theft, blackmail, and burglary. As a result of its report, New Zealand was struck off the EU’s white list of countries that could be trusted on money-laundering, and that added to the cost of doing business for New Zealand companies. The Financial Times called us a soft touch for money-laundering.

This Government, when it came into office, promised action. Officials, however, subsequently said that work was deferred due to other priorities. It was only after pressure from the Greens, Labour, researchers, and across the business sector that we started to get some recognition that this legislation needed to be brought forward, and then this Shewan report recommended that the legislation be introduced by the end of 2016. Finally, we have legislation before us in this House, produced at breakneck speed in the last sessions of Parliament before the end of the session.

The Green Party supports this legislation. We have been deeply involved in its formulation. We have engaged closely in the select committee process, and have welcomed the constructive process of the chair, Kanwaljit Singh Bakshi, and his Law and Order Committee colleagues. I think it has been a constructive process, and I think that through processes such as this we have seen the committee acting to reduce compliance costs and make more effective legislation.

We have some concerns still about the bill, however. Submitters called for three key elements to be included in this bill. They, in our view, were not fully included. The first was that submitters called for the information to be supported by a public register of beneficial owners. Now, this means that the people who had put their money into foreign trusts in New Zealand—the 11,000 foreign trusts that were registered at the time that the Panama Papers broke open this story—would have had to have gone on to a public register showing beneficial ownership. In the end, the Government stopped short of that register. It provided a far less onerous requirement, that instead only names and addresses would be required without beneficial owners.

As a result of even these weak rules, most of the trusts then did not reregister—3,000 of the 11,000 trusts were prepared to give this basic information. That says to us that any assurances that the Government gave that the foreign trust business was entirely legitimate were not correct—that, actually, it turns out that most of those trusts were in New Zealand because of the secrecy provisions on foreign trusts. We want to see a public register of beneficial ownership applied to businesses and trusts in New Zealand. This is a policy that the UK and many other countries internationally have adopted. We regard it as good practice, in terms of countering money-laundering.

A second recommendation was to ensure that there was proper reporting on enforcement. One of the key areas of enforcement is the link between money-laundering and gambling. We have seen the case of William Yan—a generous political donor, by the way. This year the High Court ordered William Yan to return $42 million from alleged illegal activity that had been laundered in New Zealand. His network and other networks of criminals had been based at Skycity. William Yan gambled $293 million in Skycity. Skycity made $23 million profit from that. However, that money was not returned to the public. What we see is the incentives for some money-launderers to keep using the institutions that allow them to undertake their money-laundering, and those very institutions themselves have a financial incentive to allow that activity to continue. Breaking that cycle is absolutely crucial, and we do not believe this legislation goes far enough in breaking that cycle.

I think the third area that we need is we need additional resources in order to be able to implement this legislation properly, and that was a point made by several submitters. The submitters said that it is not enough to just have the legislation—[Interruption]

The ASSISTANT SPEAKER (Hon Trevor Mallard): Sorry, I forgot to give the member the call—I was so enthralled. The member has only a minute.

BARRY COATES: Thank you. It is not enough to have the legislation; you need to have the proper enforcement. What we have seen in New Zealand is that there has been far more emphasis on the $40 million of welfare fraud than the $4 billion of white-collar crime—that 1 in 20 welfare beneficiaries is investigated, whereas 1 in 10,000 taxpayers is investigated for fraud. What we see is that 67 percent of the welfare fraudsters go to prison while 18 percent of white-collar criminals do.

We have a punitive welfare system and a permissive white-collar crime system. We need to change this. We need to get much more serious about the dirty money in our economy. The Greens would change this. We would supplement this bill with proper action to clean up money in our country and have productive investment and a productive economy for the benefit of all.

The ASSISTANT SPEAKER (Hon Trevor Mallard): The member’s time has expired. Before I call Fletcher Tabuteau—I was involved in a slight interchange with Jonathan Young and the Hon Ruth Dyson earlier, with regards to forms of address in the Chamber. I will refer them to page 224 of McGee, and in particular, a paragraph headed “Debate in the House is a discussion among the members of the House present in the Chamber.” It goes on to say, “Members should address the Chair, not the ‘listener’.” I would assume that that now means the listener and the viewer. So I think I am probably the only member of the House who addresses the listener, and certainly not from within the House.

FLETCHER TABUTEAU (NZ First): Thank you for this opportunity to speak on behalf of New Zealand First on this, the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. I would just like to acknowledge the contribution from the previous speaker, Barry Coates, because it is not often that I agree with the Green Party but he did speak quite eloquently about the resourcing in regard to the implementation of this legislation, and I do think that he is right in saying that. This is an insidious crime, and, in fact, those were the exact words of the Minister of Veterans’ Affairs, who gave the first contribution in this, the third reading of the bill. He described it as an insidious crime.

I would like to congratulate the Minister, actually, on his initial contribution. It was a robust and worthy contribution on such a serious matter. I would also like to acknowledge the Law and Order Committee’s work, which I have done previously. It is not a committee I have sat on, but I do commend it because the detail in this, and the movement from where we were in terms of draft legislation—and the contributions from the public and industry experts were robust and quite large. So to get to this point, now that we are finally here, I do commend the work of our bureaucrats and the committee members.

The Minister said that this crime of money-laundering is insidious. He said that it undermines the financial system, and with that I completely agree. What he said, though, was that we already have good laws. I would disagree with the Minister’s contribution. We do not have good laws currently. This is kind of perhaps best described, this particular amendment bill, as a good step in the right direction, but it is only the second step in the right direction. He seemed to imply in his contribution that criminals would now move into these areas to launder their money, implying that they had not been doing so already. But we have heard in this House this evening some particularly pointed statistics from other members on the level of crime being committed by way of money-laundering and fraud within our trust sector in particular, with our lawyers, real estate, and an example from Skycity—an unfortunate individual case.

So, to the Minister: this has been an issue, and in relation to this particular amendment bill, these areas have been a known issue of concern for decades. I put it to the Minister that the Reserve Bank, Treasury, the Police, and indeed New Zealand First—particularly with regard to Winston Peters—have been telling this Government ever since it came into power that this is a huge problem, and we have needed action ever since National did in fact become the Government. So it was a problem 9 years ago, but the way that the industry itself has been treated—this cottage trust industry has been treated—in New Zealand over the last 9 years, the problem has grown, I think one could fairly say, exponentially.

So I view this bill as an excellent example of what should be called an indictment on the Government and especially the beacon of National Government politics—and I speak of and refer to the former Prime Minister of New Zealand, because he in particular drew up an impassioned defence for these lawyers and the ongoing activities of these trusts in New Zealand. He spoke of a cottage industry returning millions to the New Zealand economy. Yet we have to put this into scope and see what the balance was of this supposed good cottage industry in New Zealand. I think, as previous members have noted, the police investigation team into fraud did give us some particularly useful numbers. Just last year it tried to summarise the problem for us, and it came up with a figure of $1.6 billion.

I say to the members opposite: that is $1.6 billion of money being currently laundered in New Zealand for illegal gain, whether that be through drug cartels, for example—a common example, and it is not an unfair example to give. We are talking about international drug cartels using New Zealand to launder money to the tune of $1.6 billion per annum. We are talking about the facilitation of financial support of terrorism. That was used as an example, and a link was made within the Panama Papers to terrorism and the laundering of money in New Zealand. It is an indictment on this Government that it has taken 9 years to get to this point.

The Hon Todd McClay said to the House in 2009 that there is money-laundering in New Zealand and it comes from the illegal drug trade and it is too much and we must do much more about this. He finished his contribution to the House by saying that the sooner those who use New Zealand as a place where they may be able to launder their illegally gained funds realise that we are taking this issue seriously, the sooner they will stop. Those are the words of a National MP at the time in 2009. It is not unfair, it is not unreasonable, to say that for nearly 9 years this Government has sat back and done nothing. It is an appropriate example of a Government that says one thing and through its inaction does the complete opposite.

The words from Minister Bennett that I described as being eloquent words—they were true. But I say to him that they were hollow words because of the time that it has taken to get here. This Government has done nothing until the pressure came on, and, boy, was there a lot of pressure from the Panama Papers. The pressure was truly put on. Now we have a Government that has acted, and I have spoken in argument of the Government’s actions, but to be fair we are here, and this is good legislation, actually. It is a good second step in the combating of money-laundering and the financing of terrorism.

I think I might end my contribution there, because it would please Mr Naylor to no end, but also because it is important that the public of New Zealand know and that this House record that New Zealand First does support the legislation. It will achieve what it has to do. Actually, I do have to acknowledge Mr Young, perhaps, in ending my contribution because he did speak well about the cost burdens to New Zealand business, and we do have to give cognisance to the obligations that this legislation puts on New Zealand business and its operations. I do agree—which, again, is unusual—with the member. The select committee did do a lot of work, there was a lot of consultation, and we have finally got here. It will cost businesses more to comply, but it is fair that the New Zealand public expects that New Zealand will not allow the facilitation of money-laundering and the financing of terrorism through the New Zealand economy and these industries. We have arrived at the right place. My point is it has taken way too long, and I hope the members accept that, but we absolutely support this legislation. Thank you.

IAN McKELVIE (National—Rangitīkei): That was quite long, that speech. It gives me a great deal of pleasure—

Fletcher Tabuteau: This will be longer.

IAN McKELVIE: Ha, ha! Yes, it will be much shorter—longer but shorter. It gives me a great deal of pleasure to take a short call on the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. This bill brings a range of new entities into play in terms of the ability to monitor what we term the laundering of money. Those new entities include lawyers, accountants, casinos, the Racing Industry board, and a number of other entities.

As I said the other day in my second reading speech, the select committee stage that we went through was very interesting, because, as the previous speaker said, it was quite an interesting bill to have to deal with and to understand how it was going to work. It is introducing some extra cost to business—a considerable amount of extra cost to business, actually—but the Law and Order Committee had to balance the amount of extra cost that was being introduced for business and the benefit to the New Zealand economy and the New Zealand reputation, because this bill is pretty much about our international reputation. It is about our financial system and it is about ensuring that we have got as much integrity in that financial system as we can get.

As has been alluded to in a number of the speeches already, this money-laundering occurs in all sorts of forms, from the purchase of art to gambling to the acquisition of property. There are all sorts of areas it applies to, so it is a very broad challenge for the law to cover all those areas and to then be able to account for it. So the reporting mechanisms and how firms have to account for this stuff was the subject of a large amount of discussion.

There are some pretty broad claims of benefit to the New Zealand economy, and I will just very quickly quote from this. The proposed reforms “could disrupt up to $1.7 billion in fraud over the next 10 years.”—that is fraud and drug crime, basically, over the next 10 years. They may “prevent up to $5 billion in broader criminal activity and reduce about $800 million in social harm”. I think those are a pretty broad range of claims, and how you would really calculate it I am not quite sure, but it does show the significant challenge that we have in this area, and if it is international money that is coming into New Zealand and being, effectively, laundered through our financial system, it is certainly not in our best interests.

As I said, the select committee stage was really interesting. It is a complicated bill, and it is going to be complicated for some of the organisations concerned to report on this. The Minister has the ability to provide exemptions to reporting times and things like that if, in fact, it is found that some of these organisations struggle to get themselves up to speed quickly enough. I imagine it will happen. On the whole, whilst the submitters were asking for more time, almost unanimously they supported this bill, and they also supported the fact that it was necessary for New Zealand’s good.

So I have got a great deal of pleasure in commending this bill to the House, and I look forward to it being put into law. Thank you.

PEENI HENARE (Labour—Tāmaki Makaurau): Tēnā koe, Mr Assistant Speaker. Thank you for this opportunity. Many of the speeches this evening have gone a long way to explain both the content of the bill and, of course, the pathway the bill has followed to this point in time. I want to support many of the sentiments and also reiterate some of the points made by speakers from across the House about the importance of this particular bill in terms of our international reputation. We need to restore that because, let us be very clear, we took a fall. We took a hit. We took a slide, and it is important to make sure that our reputation internationally gets placed back where it belongs, and that is right up towards the top, where New Zealand is considered a reputable country to do business, to invest in, and to work with. I think that is an important thing to do. We want to be at the top of those kinds of lists and not the OECD homelessness list, and I think that is an important point to make.

This particular bill obviously closes some loopholes. A member on the other side of the House referred to fish slipping out of a net. I think this is a good opportunity to certainly close those loopholes, to close those holes, and to also do it in a reasonable fashion, to allow lawyers, accountants, the Racing Board, and others who fall within the scope of this bill to come up to compliance.

I did ask questions about whether or not we have given too much time, and whether or not they will have the resources to become compliant, but it was clear through the submissions and many of the speeches in the House over the course of this bill that the submitters were—it was an agreeable date to be able to become compliant with this particular bill. So the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill—I commend it to the House.

Dr PARMJEET PARMAR (National): Thank you for the opportunity to speak on the third reading of the Anti-Money Laundering and Countering Financing of Terrorism Amendment Bill. It is good to see the support for this bill, so I am taking a short call to support this bill.

It is important for us to keep our country safe. Our current legislation has obligations with regard to anti - money-laundering and countering financing of terrorism for certain businesses, especially businesses that deal in cash for cash, or money for money—for example, banks, casinos, etc. So it is important to extend these obligations to other businesses that are at risk of being exploited by money-launderers.

As soon as we hear the term “money-laundering”, it just gives us the idea of some kind of illegal activity happening somewhere. Yes, when money-laundering happens, that money is normally generated through some illegal activity. It is normally laundered to convert that to legitimate money or sometimes for tax avoidance, but at other times it can be used for supporting some very serious criminal activities like terrorism or drug trafficking. Terrorism and drug trafficking, we know, are criminal activities that are eating away our communities, and we have to ensure that we are protecting ourselves from such activities. These activities need money, and money has to come from somewhere, so we have to protect ourselves from money-laundering.

We know that New Zealand is seen to be a very safe country, but we cannot be complacent. So we have to make sure that we have systems in place where we can detect such activities, we can prevent such activities, and, also, we can prosecute people who are involved in such criminal activities.

We also have this very good reputation of doing business with ease in New Zealand, but that does not mean that any kinds of businesses or money can come to New Zealand. We have to protect our country, and this is the legislation that will do that, so I support this bill and commend this bill to the House. Thank you.

The ASSISTANT SPEAKER (Hon Trevor Mallard): The question is that the motion be agreed to.

Hon David Parker: Mr Assistant Speaker?

The ASSISTANT SPEAKER (Hon Trevor Mallard): Oh, the Hon David Parker. I apologise. I thought that we had finished.

Hon DAVID PARKER (Labour): Mr Assistant Speaker, I have heard people talk against national standards in this House and they cannot even count to 12. I rise in support of this bill—

The ASSISTANT SPEAKER (Hon Trevor Mallard): The member should take his shoes off.

Hon DAVID PARKER: I want to respond, just briefly, to a couple of comments that were made by National Government members. They lauded the fact that New Zealand has low levels of corruption and was ranked highly by the Transparency International measures of freedom from corruption. They did not say that each time, in the last 2 years, that report, in respect of New Zealand, has dropped us a ranking, which I think is a terrible thing, and is a consequence of things not being completely good in New Zealand in respect of these matters. I will not say anything more, other than “Saudi sheep scandal” to actually link some of that to the Government.

In respect of other areas where this Government has been woefully short in responding to the needs of our country and the world to deal with these issues, the Panama Papers have been referred to by members on both sides. It was terrible that the National Government pretended that there was nothing wrong there and that we had transparency when we did not. The beneficial owners of those trusts were not transparently disclosed, and, therefore, people used New Zealand to invest overseas in order to invest—I would think—some illegal money, some drug money, some laundered money, perhaps money from slavery, and corrupt money stolen from Governments. That was happening through New Zealand.

How can I say that with confidence? Because when the report from John Shewan came and there was a change to the law requiring disclosure of beneficial owners so that that could be reported to tax authorities overseas, how many of those trusts reregistered? A very small proportion of them. The vast majority of those trusts did not register under the new regime.

Tax avoidance by multinationals has not been clamped down on. We heard two announcements today that the Government was lauding. Those were the use of interest rates that are falsely high from a parent to a New Zealand subsidiary and the pretence that there was not New Zealand business for the likes of Apple or Google, which have transferred their profits to overseas jurisdictions. The Government lauds that. We have been claiming that and asking for those loopholes to be closed for 5 years in this Parliament, and the Government is only doing it now. It is pretending it needed authority from the OECD to do its sovereign duty to New Zealand and to New Zealand business competitors, including the media, which has been cleaned out by the likes of Google and Facebook, while the media interests—sometimes, not always—pay tax in New Zealand, and those entities did not.

In respect of this, this is another important part to getting fairness back in society and to oppose those who launder money to finance terrorism or for other criminal activity. With those brief comments, I support this on behalf of the Labour Party.

JONO NAYLOR (National): I will be very brief, actually. I have to say, coming into this debate, I had not been a member of the Law and Order Committee and was not too au fait with the major details of the bill. But I have to say that the minute I heard the member Stuart Nash get up and say that this was going to help the good guys catch the bad guys—and I am pretty those were his words—he had me hooked. So with that, I commend the bill to the House.

Bill read a third time.

Sittings of the House

Sittings of the House

MATT DOOCEY (Third Whip—National): I seek leave of the House to rise early.

The ASSISTANT SPEAKER (Hon Trevor Mallard): Is there anyone who is going to object to that? There appears to be none. The House stands adjourned until 2 p.m. on Tuesday, 8 August 2017.

The House adjourned at 5.49 p.m.