Tuesday, 12 December 2017

TUESDAY, 12 DECEMBER 2017

TUESDAY, 12 DECEMBER 2017

Mr Speaker took the Chair at 2 p.m.

Prayers.

Address in Reply

Presentation to Governor-General

Mr SPEAKER: I have to announce that, accompanied by members, I attended upon Her Excellency the Governor-General with the Address in Reply agreed to by the House in reply to the speech at the opening of this Parliament. Her Excellency was pleased to make the following reply:

MR SPEAKER AND MEMBERS OF THE HOUSE OF REPRESENTATIVES:

I receive with much pleasure the Address which has been adopted by the House of Representatives in reply to my speech at the Opening of the First Session of the Fifty-Second Parliament of New Zealand. I thank you for your assurance that the matters referred to in my speech will receive your careful consideration.

Patsy Reddy, Governor-General.

Hon CHRIS HIPKINS (Leader of the House): I move, That Her Excellency’s reply be entered in the Journals of the House.

Motion agreed to.

Points of Order

Speakers and Presiding Officers—“Today in the House” Video

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Mr Speaker. I have again, today, viewed your preamble to the House’s proceedings today. I must say it is quite informative, and there were a couple of bits that were a little bit surprising. One is that you suggested the Order Paper today and for the rest of the week pretty much has business that was started by the previous Government, which you described as “unexciting”. You then went on to suggest that later in the week it was the Half Year Economic and Fiscal Update and the mini-Budget that had everybody excited. Well, I can assure you, sir, everybody is not excited, but also it raises the question: do you know what’s in that mini-Budget?

Mr SPEAKER: I want to thank the Hon Gerry Brownlee for his intervention, which, as I think he is aware, is not a point of order, because it doesn’t relate to a matter of order in the House. The answer to the very real question that he gave me is of course not, but I’m sure, in one way or another, members will show levels of excitement later in the week.

Oral Questions

Questions to Ministers

Job Creation and Unemployment—Policy

1. Rt Hon BILL ENGLISH (Leader of the Opposition) to the Prime Minister: Does she stand by her Government’s policy to “create more jobs”; if so, can she confirm that over 245,000 jobs have been created in the last 2 years?

Rt Hon JACINDA ARDERN (Prime Minister): Yes. It is this Government’s policy to see more people in employment. I can also confirm that in the last two years, there were 235,000 more people in the workforce and an increase of around 245,000 people in some form of employment.

Rt Hon Bill English: Can she confirm that that means there were around 10,000 extra jobs created, on average, each month, and, if so, how many jobs—new jobs—over and above that does her Government plan to create?

Rt Hon JACINDA ARDERN: It is absolutely this Government’s ambition to increase employment, particularly for people in the regions and particularly for young people. Over the same two-year period that that member referenced, there was, for an example, an increase in the unemployment rate in Gisborne, up to 8.8 percent, and the number of “neets”—young people not in employment, education, or training—over that two-year period increased by 4,000. We can do better than that.

Rt Hon Bill English: Can the Prime Minister tell us what kinds of jobs the Government has in mind to create in Gisborne?

Rt Hon JACINDA ARDERN: We’ve spoken a number of times around the kind of regional growth and employment we hope to see. A lot of that we hope to see off the back of our investment through the Regional Development (Provincial Growth) Fund, which is an initiative of New Zealand First. But I see opportunities, particularly in Gisborne, around issues like wood processing, the forestry industry, and others. This is a Government who is ambitious for New Zealanders and our regions.

Rt Hon Bill English: So do the types of jobs she wants to create resemble those referred to by her Minister for Regional Economic Development, who said it would take 1,250 planters to plant a million trees a day, a hundred days’ work a year; and does she mean that planting trees on Tuesdays and Fridays at the minimum wage is the kind of quality job she wants to create?

Rt Hon JACINDA ARDERN: We will see a range of job opportunities off the back of that regional growth fund. It’s sad to see that after such a short time in Opposition, those past Government members have become so unambitious for the potential of those young people.

Rt Hon Bill English: Can the Prime Minister address the question, and that’s: do the jobs proposed by the Minister for Regional Economic Development—that is, people working planting trees, two days a week, on the minimum wage—count as the kind of ambitious job she has in mind?

Rt Hon JACINDA ARDERN: There are full-time job opportunities in the forestry industry, and the member well knows that.

Rt Hon Bill English: So will she direct the Minister for Regional Economic Development to create full-time jobs, paying the living wage—as the public have been led to believe will be the case—or is she happy with the current policy to create part-time jobs on the minimum wage?

Rt Hon JACINDA ARDERN: The Minister for Regional Economic Development does not need to be directed. He has a very clear ambition for job creation. He has a particular focus on rangatahi and young people, particularly in Northland, in the Bay of Plenty, and in the East Coast. Those are job opportunities, like forestry, and I have an expectation that of course they will be quality opportunities with long-term prospects.

Rt Hon Bill English: So can the Prime Minister tell us what jobs will be available in addition to those already struggling to be filled in the horticulture industry and the hospitality industry in the regions that she has referred to?

Rt Hon JACINDA ARDERN: Look, as I’ve said, in an area like Gisborne we have an unemployment rate of 8.8 percent. Yes, in some cases that’s about investing in education and training. That’s another reason why this Government has removed any barriers to access around education and training, with its fees-free policy. It’s about investing in young people so that they’re able to take up those jobs—not diminishing their motivation or their ability to do a job.

Rt Hon Bill English: Does the Prime Minister stand by the estimates made for the Government policy that there will be a few thousand extra enrolments across New Zealand as a result of the fees-free tertiary policy; and to what percentage should unemployment drop in Gisborne as a result of that policy?

Rt Hon JACINDA ARDERN: Speaking to the question on the expected enrolment for the education sector, there’s been an expectation that that will lift, as a result of our policy, and stem the tide of declining enrolment and participation that was happening under the last Government.

Reserve Bank—Appointment of Governor, Policy Targets, and Legislative Review

2. WILLOW-JEAN PRIME (Labour) to the Minister of Finance: What recent announcements has he made regarding the Reserve Bank?

Hon GRANT ROBERTSON (Minister of Finance): Thank you, Mr Speaker. I was very pleased to announce yesterday that I’ve appointed Adrian Orr to be the next Reserve Bank Governor. Given his broad range of experience, I have no doubt that he will be an excellent Governor. I can’t put it better than Sharon Zollner, the chief economist at ANZ, who yesterday described Mr Orr as “A very safe pair of hands. … he’s a fantastic communicator and that’s obviously a key part of the role, … He’s extremely well qualified for the role. It’s difficult to think of anyone who is more qualified.” I would like to put on record my thanks to the outgoing Acting Governor, Grant Spencer, who has done an excellent job in the interim period.

Willow-Jean Prime: How will Mr Orr’s appointment affect the policy targets agreement?

Hon GRANT ROBERTSON: It is a requirement of the Reserve Bank of New Zealand Act that I negotiate a policy targets agreement with the new Governor before he takes up that role. I will do this on the basis of the work of the first phase of the review of the Reserve Bank of New Zealand Act, which is currently under way. This will include broadening the bank’s mandate to include maximising employment alongside price stability.

Willow-Jean Prime: What progress has been made on the review of the Reserve Bank of New Zealand Act that the Minister announced in November?

Hon GRANT ROBERTSON: Phase 1 of the review work is under way, with officials looking at the language that can be used to best reflect the Government’s goal of maximising employment alongside the price stability mandate. We’re also investigating international examples of decision making within reserve banks that include external experts and greater transparency about their decisions, as committed to in the Reserve Bank of New Zealand Act review. I’ll also be making announcements of the members of the independent expert advisory panel to support this work, very shortly.

Hon Steven Joyce: Does he expect, as a result of his Reserve Bank changes and other policy changes, that the Government will exceed the 245,000 jobs created in the last two years in the next two years, and would he consider that a reasonable measure of achievement?

Hon GRANT ROBERTSON: There are a lot of factors involved in whether or not jobs will be created. We want the Reserve Bank of New Zealand Act, and, indeed, monetary policy, to contribute to that. We will be ambitious for New Zealand, unlike the Opposition, who seem to have given up on that in terms of employment.

Roading—Projects

3. Hon PAULA BENNETT (Deputy Leader—National) to the Minister of Transport: Which statement does he agree with: his statement in the House last week that “no existing and funded roading project other than the East-West Link has been altered by the Government”, or the Minister of Finance’s reported comments, in relation to roading priorities, that “there are other priorities around New Zealand as well, in terms of investing in rail and getting coastal shipping going, improving our regional roads”?

Hon PHIL TWYFORD (Minister of Transport): Both of them, in the context in which they were made.

Jami-Lee Ross: Can the Minister confirm that the construction of the Auckland-Manukau Eastern Transport Initiative project in its current form is a priority for the Government?

Hon PHIL TWYFORD: It’s currently under consideration, but I would expect it would be a priority.

Todd Muller: Can the Minister confirm that the construction of the Tauranga Northern Link will commence as expected in 2018?

Hon PHIL TWYFORD: I want to make it clear that it’s not the role of the Minister of Transport to prioritise particular roading projects, because that would encourage pork-barrel politics. My message to the people of New Zealand is: don’t believe scaremongering press releases from National backbenchers aligned with—

Mr SPEAKER: Order! The member will resume his seat.

Lawrence Yule: Does the Minister support the four-laning of the Napier to Hastings expressway, in light of Friday’s briefing, which shows that the port volumes of cargo at Napier Port are going to go up by 49 percent by 2026?

Hon PHIL TWYFORD: Actually, there is an investigation of that stretch of road going on right now. The focus is safety improvements. The business case, including recommendations on a preferred option, is expected mid-2018. I would point out to the member that this—along with a number of other projects that were announced by the former Government in a press release—was never costed and never funded, and no analysis of economic value was done on a single one of those projects.

Tim van de Molen: Does the Minister consider the extension of the Waikato Expressway from Cambridge to the foot of the Kaimai Range more or less of a priority, given its safety improvements, than a rail connection through the Prime Minister’s electorate?

Hon PHIL TWYFORD: That’s a line straight out of Judith Collins’ press release, if I’m not wrong.

Mr SPEAKER: Order! [Interruption] Order! I am going to advise the Minister to be direct in his answers. I’m trying very hard with both the askers and answerers to be straight, and the member is not helping.

Hon PHIL TWYFORD: Thank you, Mr Speaker. The investigation of Cambridge to Tīrau, again, is on safety and journey improvements. The business case will be expected in mid-2018. For the stretch of highway to the Kaimai Range, similarly, there’s an investigation on freight efficiency, resilience, safety, and travel time reliability requirements. This Government takes the view that high-quality, high-value roading projects can be funded alongside investments in modern rapid transit systems in our city. It’s not an either/or.

Marja Lubeck: What is the current state of the Accelerated Regional State Highway Programme, introduced in 2014?

Hon PHIL TWYFORD: Well, in the current three-year cycle the fund has delivered $70 million less investment in regional State highways than was promised. Similarly, investment in local roads under that programme has been $45 million less than promised. Understandably, this has fuelled scepticism of the Opposition’s new-found commitment to regional roads.

Tax System—Rates

4. Hon STEVEN JOYCE (National) to the Minister of Finance: What was the marginal personal income tax rate paid by someone on the full-time median wage on 1 April 2011, and how does this compare to the expected marginal rate paid by someone on the full-time median wage on 1 April 2018 under his tax package?

Hon GRANT ROBERTSON (Minister of Finance): On 1 April 2011, someone on the full-time median wage paid a marginal personal income tax rate of 17.5 percent—that’s if we use annual figures. I’ve been advised by Treasury and IRD that they do not make forward projections of the full-time median wage, so I am unable to fully answer the second part of the member’s question. However, I can tell the member that the Government is not proposing to alter the marginal tax rates on what people are currently earning.

Hon Steven Joyce: I raise a point of order, Mr Speaker. Given that the median wage is currently around $50,000 a year, it surely would not be beyond the wit of the finance Minister to make an estimate as to what the tax rate would be on 1 April 2018 under his tax package, because I can work it out—it is likely to be 30c in the dollar.

Mr SPEAKER: Well, the member can ask his next supplementary if he wants to.

Hon Steven Joyce: Well, if he’s unable to work out the answer to the first question, can I ask him another one. Given his concern for Kiwi workers, should someone earning $23 per hour face a marginal tax rate of 30c in the dollar if they are working a full-time wage?

Hon GRANT ROBERTSON: I’ll repeat the second part of my first answer, which is that we’re not proposing any changes in terms of what people will pay in terms of their effective marginal tax rate. What I can say is that somebody in the position that the member indicates would actually be paying an average tax rate of around 16 percent on all of the income that they earn.

Hon Steven Joyce: Does he stand by his statement to interest.co.nz journalist Alex Tarrant on 14 September that “I think”—and I quote—“all New Zealanders understand, when they go to work every day, pay tax on every cent of income that they earn, that they want fairness to be seen across the system”, and how does increasing the tax rate for median wage earners increase people’s perception of fairness in the tax system, and when I say increase, I mean changing the law from 1 April next year?

Hon GRANT ROBERTSON: I’m sure Mr Tarrant would have quoted me very accurately in that story. What we are saying is that no New Zealander will pay more tax—

Hon Steven Joyce: That’s not the point.

Hon GRANT ROBERTSON: No, it is. No New Zealander will pay more tax than they do now. Mr Joyce’s package may well have seen changes in tax rates, but no New Zealanders will pay more tax, because that package has not been implemented.

Hon Steven Joyce: Is it the Minister’s view that fiscal drag should actually never be addressed so that any full-time worker eventually pays a marginal tax rate of 30c in the dollar?

Hon GRANT ROBERTSON: All Governments would like to address fiscal drag. This Government has inherited a massive social and infrastructure deficit from the previous Government, and our priority has to be to make sure that our schools and our hospitals work. We’ll do that first, because that’s what a responsible Government does.

Tamati Coffey: How does the tax on wages in New Zealand compare internationally?

Hon GRANT ROBERTSON: OECD analysis shows that the average worker in New Zealand has the sixth-lowest net average tax rate among the 35 OECD members. Under this Government’s policy, no one will be paying more tax in the future than they do today, but by rejecting National’s tax cuts we can actually rebuild the social services New Zealanders rely on.

Hon Steven Joyce: In light of his previous answer, does he realise that the net $2.4 billion that he saves through this tax package has already been exceeded by the $2.8 billion in the tertiary package he’s so fond of, and does he think that builders on the median wage will be happy paying $1,060 a year more throughout their working lives as a fair exchange for one year’s free education for a law student?

Hon GRANT ROBERTSON: I think builders on the minimum wage will be welcoming the fact—

Hon Members: Median wage.

Hon GRANT ROBERTSON: —the median wage, will be welcoming the fact that there will be apprentices arriving fully subsidised and paid for by this Government. They’ll be welcoming the fact that their hospitals will actually be working. They’ll be welcoming the fact that more houses will be being built under the excellent KiwiBuild programme. They will be very happy indeed.

Hon Steven Joyce: How does the finance Minister expect us to believe he cares about average Kiwi workers when his very first act as finance Minister for workers is to lift the marginal tax rate from that that is in law now and actually charge them $1,060 more in tax from next April than is currently the case?

Hon GRANT ROBERTSON: They will not be paying any more tax in the future than they do today because that member’s package had not come into force. But what this member seems to believe is that the reward for working people is that their taxes will be cut. On this side of the House, we’re more ambitious than that. We want their wages to rise. We want a productive economy that delivers them higher wages.

Education, National Standards—Removal

5. JAMIE STRANGE (Labour) to the Minister of Education: Does he consider it acceptable that young New Zealanders’ literacy levels have fallen significantly, as measured by the Progress in International Reading Literacy Study; if not, how does the Government propose to turn this around?

Hon CHRIS HIPKINS (Minister of Education): No, I don’t. The average reading score for year 5 children in the Progress in International Reading Literacy Study, or PIRLS, as it is more widely known, has fallen by eight points between 2010 and 2015, and this is just the latest in a series of disturbing trends in international studies. The Government’s agenda will tackle this in a number of ways, from reforming initial teacher education and professional development to a fairer funding system and stronger early learning. But today, I’m starting by clearing away a failed experiment that has wasted enormous amounts of time and energy and produced misleading results. Today, this Government has delivered on its promise and scrapped national standards.

Jamie Strange: Have national standards given parents a reliable indication of their child’s progress; if not, how will he ensure that parents get better information in the future?

Hon CHRIS HIPKINS: No. As Auckland University’s Dr Kane Meissel has said, “There is … clear evidence that the ‘standard’ being applied differs markedly”, with Wellington students needing to have much higher results to be considered “at the standard” than those in the Auckland region—which, of course, is probably true. Parents in 2018 will still receive reports in plain English at least twice a year on maths, literacy, and across the curriculum areas, but I want teachers to be freed up so they can spend more time teaching and less time testing.

Jan Tinetti: What evidence has he received that demonstrates that national standards were neither national nor standard?

Hon CHRIS HIPKINS: A report released by the Ministry of Education found that national standards had incorrectly measured the achievements of around four out of every 10 students. The ministry’s own analysis of 352 children who were judged to have met the maths standard for their age showed that in fact only 28 percent, or less than a third, of them had actually met the standard. National standards were neither national nor standard. [Interruption]

Mr SPEAKER: Order!

Health Services—Dunedin Hospital Rebuild and Mental Health Services

6. Hon Dr JONATHAN COLEMAN (National—Northcote) to the Minister of Health: What measurable outcomes, if any, will his policies deliver?

Hon Dr DAVID CLARK (Minister of Health): Better health for New Zealanders.

Hon Dr Jonathan Coleman: How will the Government afford the cost of the $1.4 billion rebuild of Dunedin Hospital, given that the extra $8 billion for health is, in his words, “pretty much spent”?

Hon Dr DAVID CLARK: From the existing capital allowance.

Hon Dr Jonathan Coleman: Can he confirm that he intends to seek $1.4 billion of capital for the Dunedin Hospital rebuild in Budget 2018; and, if not, where and when will the cost be booked?

Hon Dr DAVID CLARK: Budget processes are under way now, as that member will well know. He was in Government for nine years—surely he understands how this process works.

Hon Dr Jonathan Coleman: If the $8 billion for health is “pretty much spent”, why doesn’t he use a public-private partnership (PPP) to fund Dunedin Hospital so that an extra $1.4 billion could be freed up for more specialist appointments, for more operations, and for the many unfunded promises that he continues to make?

Hon Dr DAVID CLARK: The overseas experience is that those who’ve entered into public-private partnerships have ended up paying many times over for the experience and that the healthcare delivery has been poor. I’m absolutely delighted that we were able to scrap the public-private partnership model for Dunedin Hospital, because it made no sense. The Mayor of London describes their hospitals over there as “a noose around the necks of the citizens”.

Hon Dr Jonathan Coleman: With Pete Hodgson running the Dunedin Hospital rebuild and a PPP being ruled out, does he understand why The Lancet, the world’s oldest medical journal, says in its November editorial that “with Jacinda Ardern, Marxist ideas have re-entered the political debate in health.”?

Mr SPEAKER: Order! The member clearly has no responsibility for either The Lancet or the comment.

Hon Dr Jonathan Coleman: I seek leave to table an article from The Lancet, an editorial—4 November 2017.

Mr SPEAKER: Can I ask whether The Lancet is a widely available journal?

Hon Dr Jonathan Coleman: You probably wouldn’t get it at your local dairy, Mr Speaker.

Mr SPEAKER: I thank the member. Any further supplementaries?

Angie Warren-Clark: Supplementary?

Mr SPEAKER: Question No. 7—oh, sorry. Angie Warren-Clark.

Angie Warren-Clark: What action is the Minister taking to improve outcomes in mental health in New Zealand?

Hon Dr DAVID CLARK: Mental health is a key priority for this Government, as signalled in our 100-day plan. Work is under way to establish a ministerial inquiry into mental health and addictions. I’ve asked that this inquiry be broad and cover a variety of topics. There are three further steps we’ll be taking in the near term to address current shortfalls in mental health provision. We’re progressing work to extend school-based health services—a nurse in every secondary school. We’re also planning on piloting mental health coordinators in GP practices. Finally, we are making primary care more affordable and accessible for New Zealanders.

Mr SPEAKER: Once again, Question No. 7.

School Buildings—Public-private Partnership

7. Hon NIKKI KAYE (National—Auckland Central) to the Minister of Education: Will he scrap all public-private partnership arrangements involving school infrastructure; if so, what is the potential cost of doing this?

Hon CHRIS HIPKINS (Minister of Education): The parties that make up the current Government have all been clear that we don’t support public-private partnerships (PPPs) for the provision of basic core public services like schools and hospitals. I am not currently proposing any changes to existing signed PPP contracts in education. Future projects, including those the previous Government had signalled would be PPPs but aren’t currently subject to signed contracts, will be considered as part of the Budget process.

Hon Nikki Kaye: Is Whangarei Boys High School proceeding as a PPP, and, if not, will he guarantee that their $50 million redevelopment goes ahead?

Hon CHRIS HIPKINS: That would depend on whether or not they are part of a currently signed PPP. They are not on the list of signed PPPs entered into by the previous Government, so that is something that we will be considering. I can give them a reassurance that their building projects will go ahead.

Rt Hon Winston Peters: Can the Minister advise the House as to when this announcement was made at Whangarei Boys High School by the previous administration and what costs they had at that time organised to have planned within the next Budget?

Hon CHRIS HIPKINS: I understand that it is one of the many commitments that the previous Government made during the election campaign that they had not budgeted for.

Hon Nikki Kaye: Will the Pukekohe-Belmont school be proceeding as a PPP; if not, why not?

Hon CHRIS HIPKINS: If a school redevelopment has been part of a signed PPP deal, then it will proceed as planned. If it is not part of a signed PPP deal, it will be considered as part of the Government’s Budget process. However, there was a flurry of announcements under the previous Government for capital works in school buildings that they had not budgeted funding for. That is one of the many challenges this Government faces in filling the hole that Steven Joyce and his colleagues left behind for the incoming Government.

Hon Nikki Kaye: How many schools are currently in negotiations for PPPs, and how many of them will then proceed?

Hon CHRIS HIPKINS: I understand that none of the schools are negotiating PPPs. That work is done by the Ministry of Education.

Hon Nikki Kaye: How many schools have had their PPP arrangements scrapped under his watch?

Hon CHRIS HIPKINS: None.

Health Equipment—Surgical Mesh

8. CHLÖE SWARBRICK (Green) to the Associate Minister of Health: What restrictions on surgical mesh has the Government made, in order to protect women’s health?

Hon JULIE ANNE GENTER (Associate Minister of Health): Tēnā koe, Mr Speaker. The Government has welcomed moves by Medsafe to limit the supply of surgical mesh products as they are used in transvaginal surgeries. Specifically, Medsafe has written to surgical mesh suppliers advising them that if they cannot prove the safety of their products within 45 days, they will no longer be available for use in those transvaginal surgeries. Hundreds of women have experienced debilitating pain as a result of complications from the use of surgical mesh in these surgeries, and we are glad to be acting to protect women’s health.

Chlöe Swarbrick: Is the Minister aware of any previous recommendations about the use of surgical mesh?

Hon JULIE ANNE GENTER: Yes, I am. In 2015, ACC undertook an analysis of surgical injuries resulting from the use of mesh, and that report recommended a full evidence-based review of the safety of the product, which, unfortunately, the Government of the time failed to act upon. This Government is committed to acting on women’s health issues and not ignoring them.

Chlöe Swarbrick: Does the Minister agree with Mesh Down Under advocacy group member Charlotte Korte when she said in the Dominion Post today that the news was like “an early Christmas present. We have been campaigning for so long and the previous Government did nothing”?

Hon JULIE ANNE GENTER: Yes, I do agree with her. This Government is committed to ensuring that women’s voices are heard in the health system and that their concerns are not ignored. As Associate Minister of Health, I have specific delegations for women’s health, and it is my intention to ensure women are well treated in our health system. I’m here to listen to women and act on their health concerns.

Hon Dr Jonathan Coleman: Has the Government started any work on the surgical mesh register, which was promised during the election campaign?

Hon JULIE ANNE GENTER: The announcement today is just the first step in ensuring that all products that are used are as safe as they can be and fit for purpose.

Hon Dr Jonathan Coleman: I raise a point of order, Mr Speaker. I asked a very direct question: have they started work; yes or no?

Mr SPEAKER: I’m considering how to react to the member’s point of order. The member started with quite a good point of order and then he asked for something that you can’t ask for, and that’s a yes or no answer. The Standing Orders clearly rule it out. I am going to ask the Minister, however—we’ll go back to the first part of the point of order.

Hon Tracey Martin: I raise a point of order, Mr Speaker.

Mr SPEAKER: No, we’re going to deal with this one first. We’ll go back to the first part of the point of order, and I will ask the Minister to address that.

Hon JULIE ANNE GENTER: Thank you, Mr Speaker. I would let that member know, and reassure him, that this Government is taking steps to ensure that surgical mesh, as it is used, is safe and that if it is not safe, it won’t be used. So it depends on the results of the steps that have been taken today whether or not the register is needed.

Hon Tracey Martin: I raise a point of order, Mr Speaker. Can a Minister of the Crown be held accountable for an election campaign, because that was what the member asked?

Mr SPEAKER: I listened very carefully to the questions that were asked, and I think that the original answer to, I think, the first or second supplementary broadened it out wide enough for that to be considered.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Things are travelling along quite well today, except that you did rule out a question from the Hon Jonathan Coleman, when he was talking to the Hon David Clark, asking for, effectively, an opinion. Yet in this latest question, we’ve had Ms Swarbrick ask a question of the Hon Julie Anne Genter: if she agreed. That seems to me to be a little inconsistent.

Mr SPEAKER: I thank the member for his view. In my view, there is a difference between an unrelated quote in a magazine, for which there’s no responsibility, and a comment on an announcement that a Minister has made in the last 24 hours. The Lancet comment on an unrelated matter, compared with a comment on a specific announcement that the Minister is responsible for, are different.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. It’s very interesting that you can make that analysis so quickly, given that The Lancet article was not able to be tabled in the House.

Mr SPEAKER: Sorry, I relied on the quote from it from your colleague.

Hon Dr Jonathan Coleman: I raise a point of order, Mr Speaker. As I explained to you, The Lancet comment directly related to, and mentioned, the Prime Minister and health and Marxist ideology.

Mr SPEAKER: Thank you, Mr Coleman—and that adds, what?

Prisons—Prison Population and Public-private Partnership

9. SIMON O’CONNOR (National—Tāmaki) to the Minister of Corrections: Does he stand by all his statements in relation to prison population growth?

Hon KELVIN DAVIS (Minister of Corrections): Yes, in the context they were made. In particular, I stand by my statements that I would like to work with the member and all parties in a bipartisan way, given research says that scaremongering amongst politicians creates fear in the public, which in turn drives policy that increases the prison population.

Mr SPEAKER: Order! Before we go to the supplementary, I would like to remind members on my left that they do not draw me into this discussion.

Simon O’Connor: Is he ruling out a public-private partnership at Waikeria; and, if so, has he talked to the Minister of Finance around extra funding to cover increasing costs in population growth within his corrections portfolio?

Hon KELVIN DAVIS: We are yet to make any final decisions on the rebuild of Waikeria, but we don’t generally do public-private partnerships.

Simon O’Connor: What advice has he received of the impact on prisoner numbers of the 1,800 extra police, and how is he going to manage this?

Hon KELVIN DAVIS: Done correctly, increased police numbers will actually reduce crime, in particular if they have a focus on education.

Simon O’Connor: I raise a point of order, Mr Speaker. I asked what advice he had received. I don’t think that was addressed in the question.

Mr SPEAKER: Well, I think it was. The Minister might not have prefaced it with “The advice I have received”, but I think he indicated what that advice included.

Simon O’Connor: I raise a point of order, Mr Speaker. Am I able, through you, to ask for clarification if that is advice or just an opinion?

Mr SPEAKER: If the member wants to use another supplementary, yes.

Simon O’Connor: Thank you. Can the Minister advise myself and the House if, in the answer to the previous question, that was formal advice that he has received and reviewed?

Hon KELVIN DAVIS: The member is asking whether I’ve received formal advice. The advice I’ve seen from research is that, if done correctly, community policing and education will actually reduce crime and reduce the prison population—that way.

Rt Hon Winston Peters: Has he received any advice that if you get rid of the police force there will then be the case where the prisons will not be required; they’ll be emptied out?

Hon KELVIN DAVIS: No, I haven’t received that advice.

Economy—Employment and Wages

10. Hon PAUL GOLDSMITH (National) to the Minister of Employment: Does he stand by his statement in the Manukau Courier, “for 9 years we’ve had Government policy which has offered up little more than lip service to job creation”; if so, can he confirm that in the past 2 years an average of more than 10,000 jobs a month have been created in this country?

Hon WILLIE JACKSON (Minister of Employment): Absolutely yes, I stand by my statement. And to answer the second part of the question—as the Prime Minister answered so eloquently earlier—that is one interpretation of reports, but what I can confirm is that Statistics New Zealand data shows around 245,000 more people are in some form of employment than two years ago.

Mr SPEAKER: I’ll just let the member the Hon Paul Goldsmith know that his team has another supplementary.

Hon Paul Goldsmith: If 10,000 new jobs a month is not good enough, what target will he commit to?

Hon WILLIE JACKSON: This Government is absolutely committed to real jobs—jobs with dignity, jobs with a future—and we want to lower unemployment for a group of people that the National Party have forgotten all about.

Hon Paul Goldsmith: What is the current average wage?

Hon WILLIE JACKSON: At the moment we know what the average wage is, and that MP needs to do some research.

Hon Paul Goldsmith: I raise a point of order, Mr Speaker.

Mr SPEAKER: Is it a point of order on me for allowing the question?

Hon Paul Goldsmith: No, it’s just I’d like to have an answer. I asked a very simple question and I didn’t get any answer.

Mr SPEAKER: Yes, and I’m not sure of its relationship with the original question.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I assume you are considering whether or not you will act on that point of order? I mean, to—

Mr SPEAKER: I am considering.

Hon Gerry Brownlee: You are? OK. Well, we’ll be quiet until we’ve had a bit of consideration.

Hon Paul Goldsmith: For the Minister’s information, the average wage is nearly 60,000 a year—a 28 percent increase on 9 years ago, which is twice the rate of employment. And so, given that, what would his target be for increasing the average wage?

Mr SPEAKER: I would have given some extra questions if in fact we had a question. We did at the end, so what we’re going to do is we’re going to have the Hon Willie Jackson answer that question, but I do want both sides to settle down, and I especially want questions not to have prefaces.

Hon WILLIE JACKSON: Sorry, Mr Speaker. What was the question again?

Mr SPEAKER: Well, I think if the Hon Paul Goldsmith just does the tail end of what he said before.

Hon Paul Goldsmith: So my question to the Minister is: what is his target for increasing the average wage?

Hon WILLIE JACKSON: Our target is to create real jobs with dignity amongst our communities. This is an Opposition that has forgotten a big group of people in New Zealand: the Māori nation and the Pacific Island nation. Shame on you.

Hon Steven Joyce: I raise a point of order, Mr Speaker. I’m just conscious that the Minister today has answered the question by talking about the importance of certain types of jobs that deliver dignity and so on, and one would have thought that, therefore, as the Minister of Employment, one of the key ways of delivering dignity in employment is the size of the wage that is paid. It’s not the only way, but it is one of the key ways. So it would be fair, surely, to actually have some considered answers to these questions about what sort of average wage the Minister might be looking for, or, indeed, what is the average wage, given that he is the Minister of Employment.

Mr SPEAKER: I thank the member for his point of order, but I am going to be consistent with my predecessors and say that I am not going to take responsibility for the quality of the answers.

Hon Grant Robertson: Speaking to the point of order.

Mr SPEAKER: No, too late.

Hon Grant Robertson: Point of order, then.

Mr SPEAKER: I hope it’s not a related matter, Mr Robertson.

Hon Grant Robertson: It’s a related matter to the nature of supplementary questions, Mr Speaker.

Mr SPEAKER: I have allowed them, and we’ve passed—and I’ve made some rulings pretty clearly on that, thank you.

Paul Eagle: What has the Minister seen that highlights that the creation of jobs for Māori and Pasifika people are lagging behind those of others?

Hon WILLIE JACKSON: I’ve seen the recent unemployment figures that show under the previous Government Māori and Pasifika people were more than two times more likely to be unemployed than others, and that highlights that the job creation under the previous Government left parts of our community unacceptably behind.

Paul Eagle: What other examples has the Minister seen of lip-service to job creation?

Mr SPEAKER: The member will resume his seat. That is not a supplementary question.

Hon Paul Goldsmith: When he wrote “I’m Minister of Employment to make a real difference, not appease easy stereotypes and lazy journalism”, which journalists did he think were being lazy?

Hon WILLIE JACKSON: There are many fine journalists, particularly the ones who write negative articles about the Opposition.

Hon Iain Lees-Galloway: What impact does he anticipate the Government’s plan to progressively raise the minimum wage to $20 per hour and to enhance workers’ bargaining position in the workplace will have on average wages?

Hon WILLIE JACKSON: Huge, huge impact—huge impact. Workers are so happy with the changes at the moment, particularly after being under attack for the last nine years from a disgraceful Government.

Hon Paul Goldsmith: How long will it take to get to that target?

Hon WILLIE JACKSON: If the member’s been reading our press releases, by the year 2020—inscribe it on your forehead: 2020—we’ll get our workers, our people, all people, up to a livable wage: 2020.

Mr SPEAKER: We will now move on to the next question, but I am going to remind the Minister that suggesting that the Speaker get tattoos is not a good thing.

Export Sector—Mānuka Honey

11. KIRITAPU ALLAN (Labour) to the Minister of Agriculture: What is he doing to protect and enhance New Zealand’s trade reputation for agricultural exports?

Hon DAMIEN O’CONNOR (Minister of Agriculture): I’m very pleased to announce today that MPI—the Ministry for Primary Industries—has now finalised a scientifically robust definition for mānuka honey so our export markets can be confident the New Zealand mānuka honey they buy is authentic. This is a positive step forward for our industry, for our trading partners, and for consumers in our export markets.

Kiritapu Allan: How long has it taken to produce a robust, scientific definition for mānuka honey?

Hon DAMIEN O’CONNOR: It has taken some time. As far back as 2013 some honey exporters were concerned that “cowboys”—to use their own words—were trying to sell phoney mānuka honey. Their quote: “If we don’t do something about it, our reputation will be damaged.” It’s taken some time to get to where we are today, but I hope that the decision will reassure our trading partners, our customers, and all those who buy mānuka honey that cowboys will no longer be in the honey business.

Hon David Bennett: In today’s announcement of the test for multi-floral and mono-floral mānuka honey, why hasn’t the Minister included a chemical test for leptosperin, which a unified honey industry uses for its current tests and strongly advocated for inclusion in the ministry test?

Hon DAMIEN O’CONNOR: Some people in the industry put forward leptosperin as being the accurate marker. Unfortunately, over time, leptosperin is diluted into the honey, so honey that can sit on the shelves would no longer be defined as mānuka. So it was not an appropriate marker to give a robust scientific definition to mānuka honey. That’s why we use our definition.

Police Resourcing—Costs

12. CHRIS BISHOP (National—Hutt South) to the Minister of Police: Which of the following statements by Jacinda Ardern does he agree with, “… we already budgeted for an extra 1,000 police so that is just an additional $40 million required”; or “the additional police that’s probably one of the larger figures that’s about an extra $80 million in order to fulfil that one”?

Hon STUART NASH (Minister of Police): I always agree with the Prime Minister, because the costs of this policy have yet to be finalised. I particularly point the member to another part of the Prime Minister’s 30 October statement: “Now that we’re in a position to do so, we’re going to make sure we use our access to officials to cost [the policies].”

Chris Bishop: Will the Half Year Economic and Fiscal Update on Thursday contain the cost of the additional 1,800 police over the next three years?

Hon STUART NASH: No.

Mr SPEAKER: Sorry, I was too slow to stop the Minister answering the question, for which he has no responsibility.

Chris Bishop: I raise a point of order, Mr Speaker.

Mr SPEAKER: No, you’ve had your answer, so I’m not going to retrospectively rule it out.

Chris Bishop: Well, it’s just important for the future. I mean, if the Minister assures—

Mr SPEAKER: No, sorry. We’ve had both a ruling and the fact that it’s too late. I think it’s very important that the announcements to be made in the House by the Minister of Finance can’t be hung on a junior Minister beforehand.

Chris Bishop: Does he seriously expect—[Interruption]

Mr SPEAKER: Order! That’s one fewer supplementary to the National Party.

Chris Bishop: Does he seriously expect New Zealanders to believe that the cost of a thousand extra police is just $40 million or $80 million per year when the National-led Government’s 880 extra police funded in Budget 2017 cost $503 million over four years?

Hon STUART NASH: We are putting 1,800 more police into our communities over the next three years. If the member wants to criticise me for that, go ahead, or if the member actually wants to campaign for less police, be my guest.

Chris Bishop: I raise a point of order, Mr Speaker. I think that was a fairly fair question. All we just got from the Minister was a political flick in response, and I would ask him to address the question.

Mr SPEAKER: I think any question that starts “Does the Minister seriously believe” can have quite a wide response to it. If the member wanted a tight response, he should have asked a tight question.

Chris Bishop: Why will the Minister not just be upfront with the Parliament and the public after 46 days in office and tell us what the cost of this signature part of the coalition agreement between New Zealand First and Labour will cost?

Hon STUART NASH: Someone as intelligent as that member will know there is a Budget process to go through, and the detail, as per usual, will be fashioned as part of the Budget cycle.

Bills

Taxation (Neutralising Base Erosion and Profit Shifting) Bill

First Reading

Hon STUART NASH (Minister of Revenue): I move, That the Taxation (Neutralising Base Erosion and Profit Shifting) Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill.

Mr SPEAKER: The question is that the motion be agreed to.

Hon Stuart Nash: Mr Speaker—

Mr SPEAKER: No, the member sat down. That’s the end of his call. Is there anyone else who wants to speak on it?

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

Mr SPEAKER: A point of order—[Interruption] Can I ask everyone to settle down, please.

Hon CHRIS HIPKINS: Mr Speaker, I think the member may have been confused because of the amount of noise and the number of members moving around the Chamber. I think you should give some leeway for the fact that there were members walking all around the Chamber while he was trying to move the motion.

Mr SPEAKER: I’m going to give some consideration to that. I’m trying very hard not to be influenced by the breaches by at least six members on my left, including the acting shadow Leader of the House, of the very clear rules that members do not interject during points of order. I am reluctant, but members have been in the House long enough, and Ministers should know that when they are moving motions and moving debates, they do not resume their seats, because the Speaker, quite properly, assumes that when a Minister sits, he or she has finished their speech.

Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Mr Speaker. I wonder, as they are two separate items of business—moving the motion and then delivering the speech—could you point to the Standing Order or the Speakers’ ruling that says a member may not sit between those two separate items of business?

Mr SPEAKER: Well, the problem that the Leader of the House has is that after the member sat—the member sat, and I looked at him to ensure that he wasn’t going to go on—I put the question, which then absolutely concludes the original speech. Now, I’m trying to look for a way out of it, and the Minister might want to seek leave—I don’t know what the mood of the House would be for that—but Ministers do have a responsibility for reading the drill sheet and for understanding it. And, as I say, I looked at the Minister and he did not stand up before I put the question.

Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Mr Speaker. It may well be that the Minister did not stand because he could not hear you putting the question. There was such an amount of noise at the end of that; how would he have known?

Mr SPEAKER: Well, of course, Mr Hipkins, by the time that I had put the question, at that point it was too late—all right? It didn’t really matter whether he heard me or not, because we were beyond the point where he could continue.

Rt Hon WINSTON PETERS (Deputy Prime Minister): I raise a point of order, Mr Speaker. Now, the problem with that ruling is that I’m holding here an advice sheet from the Clerk of the House on this very matter, which suggests that the person puts the motion, then seeks your advice as to what happens after that. They can sit down while they’re waiting for you to deliberate on whether they should proceed or not, and then they start their speech. It’s all written out here.

Mr SPEAKER: I also have the drill sheet in front of me, and what it involves is some advice to the member that says not only that he moves the bill the first time and that he nominates a select committee but that he speaks there, and then after that the Speaker says, “The question is that the motion be agreed to.” And we are now past that point.

CLAYTON MITCHELL (NZ First): I raise a point of order, Mr Speaker.

Mr SPEAKER: No. Well, I will hear the Hon Clayton Mitchell, but I just want to—

Hon Gerry Brownlee: He’s not “Hon”.

Mr SPEAKER: Sorry. I will hear Clayton Mitchell. But I want to say that I have now ruled on the matter, and I think we are beyond going backwards. I will point out, of course, that any other member in the House—if the Minister thinks there’s vital information in his speech that needs to go on the record of the House, he can pass the speech to another member to give later in the debate.

CLAYTON MITCHELL: Respectfully, sir, I do understand your ruling, but in light of this being a new bill and there being people back home watching on TV that would like to know the context of this bill, we would seek that the Minister get to articulate this. It’s the one and only time that a Minister can actually read a speech in the House, to articulate all the fine points that are within it, and we ask for your leniency on this so that the Minister can actually read it.

Mr SPEAKER: No. I have ruled on the matter, and I have indicated that if there are matters within the speech that the Minister thinks are important, that need to be outlined, then the next speaker from the Government can, in fact, deliver that speech.

Hon STUART NASH (Minister of Revenue): I seek leave to give a first reading speech on the Taxation (Neutralising Base Erosion and Profit Shifting) Bill.

Mr SPEAKER: Is there any objection to that process? There is objection.

Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Mr Speaker. I wonder whether you could give some consideration, because it is not the first time that we have had a situation after question time where members speaking have been unable to hear themselves speak, to whether in fact you might adopt the practice that has been adopted by previous Speakers of encouraging members who are leaving the House not to have conversations in the House, so that issues like this will not happen again in the future. I think it’s rather unfair to single one member out, when in fact this has happened most days after question time over the last few weeks.

Mr SPEAKER: Yes, I will do that, but I will seek the assistance of the Leader of the House and the Government whips, because if there was any problem with the Minister understanding or being able to hear, it came from members around him.

Hon STUART NASH (Minister of Revenue): I raise a point of order, Mr Speaker.

Mr SPEAKER: Stuart Nash—you are now beginning to try my patience a little bit.

Hon STUART NASH: I understand, Mr Speaker. In my defence, what happened is I could not hear myself think. You looked around—

Mr SPEAKER: No, the member will resume his seat. We’re finished with that matter.

Hon STEVEN JOYCE (National): Thank you very much, Mr Speaker. I rise to speak to the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. This is the first reading of an excellent Government bill, I must say. In fact, it is an excellent bill of the previous Government, so therefore I’m very excited to have the opportunity to speak to it and to also say that I’m assuming that we’ll be referring it to the Finance and Expenditure Committee once the bill has been discussed in this first reading.

This is an excellent bill, and is one of a number of excellent bills that this Parliament has been debating in recent weeks. So far this Parliament has debated 13 pieces of National Government legislation, with just two Government bills from the Labour Party, which were, of course, members’ bills. So I’d like to thank the Labour Government and the Labour-led Government for giving us the opportunity to lead on this bill on this particular day, because it is only fair when the work has been done by the previous Government that the previous Government gets the opportunity to introduce what is a very important bill to this House.

This bill was indeed announced in August of this year by the then Government as part of its final decisions on proposals to address base erosion and profit shifting. Our broad based - low rate tax system continues to perform very well for New Zealand. It is important it keeps evolving, and the previous Government was very focused on that evolution and coming up with the proposals that we see in this House here today—the exact proposals, in fact, of the previous Government. So this bill will target multinational companies that seek to avoid legitimate taxation by the Realm of New Zealand, and its changes are significant, significant strengthenings of our tax rules and our ability to ensure that multinationals are taxed fairly and on the basis of their actual level of activity in this country.

These decisions come into four important areas, and I’m pleased to have the opportunity to share those with the House: firstly, stopping foreign parent-companies charging their New Zealand subsidiaries high interest rates to reduce their taxable profits in New Zealand; stopping multinationals using artificial arrangements to avoid having a taxable presence in New Zealand; ensuring multinational companies are taxed in accordance with the economic substance of their activities in New Zealand; countering strategies that the multinationals have used in the past to exploit gaps and mismatches in different countries’ domestic tax rules to avoid paying tax anywhere in the world; and, finally, making it easier for the Inland Revenue Department to investigate uncooperative multinational companies.

This bill has been developed thoroughly over a period of time by the previous Government. It was put together very carefully and supported by Inland Revenue Department officials, but it has to be said that it didn’t meet with universal acclaim immediately. In fact, I have a number of people who were concerned about this bill when the announcements were made in terms of what would be in it. For example, this particular individual said, “This is unambitious at the very least, and a double-standard that will cost Kiwi taxpayers.” This particular person was Michael Wood of the Labour Party, and now of the Labour Government. [Interruption] Well, I go on, actually.

The Labour Party had decided—are there any Ministers in the House?

Hon Gerry Brownlee: Keep going.

Hon STEVEN JOYCE: The Labour Party had decided they weren’t going to support this in Opposition. They said that they wanted a diverted profits tax, which taxes any profits a multinational has avoided reporting. This was to be called a “Google tax”, like the one introduced in Britain and Australia, but it’s not in this bill. They haven’t put it in the bill, after railing that this was something that they were going to do. Then they accused the then Government of a “sluggish vein of Government inaction, still selling New Zealand taxpayers and companies short by $100 million a year” when this bill was announced by the previous Government.

So this bill we have is an excellent bill that was done by the previous Government, which the current Government opposed, and then introduced, and allowed the Opposition to lead off on debating. So if you’re at home, I imagine you’ll be a bit concerned by all of that, but it is a very good bill and I am pleased to say that National will support it and commends it to the House.

MICHAEL WOOD (Labour—Mt Roskill): I’m very delighted to have been provided the opportunity by the Minister of Revenue to deliver his opening remarks on the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. As I open up my comments, I want to thank and acknowledge the National Party for their new-found enthusiasm for cracking down on multinational tax avoidance. It’s taken only nine years of avoidance and delay to get to this point, but better late than never.

It’s my great pleasure to make comments on this bill, which is coming before the House today, and it’s the first bill containing the Government’s proposed measures to address the issue of base erosion and profit shifting in New Zealand.

Jami-Lee Ross: I raise a point of order, Madam Speaker. There’s leeway in the Standing Orders for a Minister giving a first reading speech, when they’ve moved the motion, to read a speech, but there is no such leeway for members that wish to read another member’s speech.

Madam DEPUTY SPEAKER: Yes, but it is in the Speaker’s ambit to decide how strictly those rules are applied.

Hon Dr Megan Woods: I raise a point of order, Madam Speaker. I didn’t want to disrupt my colleague when he was speaking, but I just seek your clarification on the interjections that were being received from the Opposition benches about the presence or otherwise of a member in this House.

Madam DEPUTY SPEAKER: I apologise. I didn’t hear that.

MICHAEL WOOD: Thank you, Madam Deputy Speaker. Base erosion and profit shifting is a challenge for tax systems around the world. It has received wide media coverage, particularly overseas, and it’s often referred to by the acronym “BEPS”. It’s a 21st century problem, arising as it does out of the ease with which business can be transacted across borders today. It used to be that in order to begin trading in New Zealand, a business would need to open a shop or a factory, or have some other kind of physical presence in the country in which they were carrying out that business. But now, due to global supply chains, distribution models, and, in particular, digital technologies, it’s possible for multinational corporations to generate significant sales from New Zealand customers and book those in an offshore company that does not have a taxable presence in New Zealand.

In addition, some multinationals have entered into increasingly complex and aggressive taxation arrangements to shift profits and to minimise their global tax liabilities. These include using related-party transactions and royalties and interest deductions to shift profits into low-tax countries, and exploiting hybrid mismatches that arise due to technical differences in different countries’ tax laws. The overall result of these BEPS strategies is that some large multinational companies are paying little or no tax anywhere in the world. This weakens the integrity of our tax system, and it weakens our tax base.

New Zealand has been part of the OECD’s global response to BEPS, but it’s long been conscious of the international taxation issues, and consequently our tax rules in this regard are generally very strong. However, the measures contained in this bill target specific base erosion and profit shifting strategies that IRD believes are being used by some multinationals in New Zealand. These are the use of excessive debt and interest paid to parent companies to shift profits out of the country; the exploitation of differences between countries’ tax rules to achieve an advantageous tax position; steps taken to avoid having a permanent establishment, and therefore a taxable presence, in New Zealand; and transfer pricing transactions between related parties to shift profits offshore. These are areas where we need to strengthen our rules.

These are complex issues and, for the benefit of members, I want to give a brief overview of each issue and our proposed response. Interest payments on debt are an expense to a company that is deductible; thus, a New Zealand - based, foreign-owned company can reduce its taxable income by borrowing from its foreign owner. If the interest paid to the foreign owner is exorbitant, then it becomes an easy way for the company to shift profits into a parent or holding company offshore. The unusually high interest rates are often justified by debt funding the New Zealand subsidiary more heavily than the rest of the group, making it appear to be a risky investment. The bill proposes to counteract this strategy with new rules that limit the interest paid on a related-party debt. It does this by setting specific rules and parameters so that the credit rating of New Zealand borrowers at high risk of BEPS will typically be set one notch below the ultimate parent company’s credit rating, and also so that any features not typically found in third-party debt are removed in order to calculate, in combination with the credit-rating rule, the correct amount of interest that is deductible on the debt.

The second component in this bill addresses what are known as hybrid mismatch arrangements, where differences between two countries’ tax rules are exploited to achieve complete non-taxation of income, which is generally not intended by either country. Non-taxation is achieved because differences in countries’ tax rules allow payments to be made that are either deductible in one country, but taxable nowhere, or deductible in two countries against different outcomes. The bill proposes a comprehensive adoption of the OECD recommendations on hybrid mismatch arrangements, with suitable modifications for the New Zealand context. The measures in the bill will ensure that where these arrangements involve New Zealand, deductions are denied, or payments are taxed in a way that prevents double non-taxation without giving rise to double taxation. Similar measures have already been adopted by the United Kingdom and announced in Australia and the EU.

Moving on to the third major focus of the bill, the issue of permanent establishment, and therefore a taxable presence, is one I alluded to earlier. The problem is that some multinationals are now able to structure their operations so that their New Zealand sales and associated profits are all booked offshore, despite the fact that, in substance, the sales are generated by New Zealand - based salespeople. The old rules of permanent establishment are no longer meeting our needs. The bill therefore proposes a new anti-avoidance rule that will expand the criteria for a multinational to be considered to have a permanent establishment in New Zealand. The proposals are similar to anti-avoidance rules already implemented in Australia and the UK.

The final major item in the bill focuses on transfer pricing. Transfer pricing involves the pricing of cross-border payments between related parties, but sometimes the price setting can become a means for shifting taxable income out of the country. The transfer pricing rules limit the ability to shift New Zealand profits offshore by requiring the related-party price to match the arm’s-length price that unrelated parties could agree to. The bill proposes various measures to strengthen our current rules that will bring them more into alignment with the OECD’s transfer pricing guidelines, and Australia’s transfer pricing guidelines, too. These are the main features of the bill.

The Government is focused on improving fairness in the tax system. The objective of the bill is to address a source of unfairness in the tax system, and, if I may just take a couple of moments to expand on that question of unfairness, this goes to the heart of the Government’s tax reform agenda. A tax system must have integrity because we ask, from this House, the ordinary taxpayers, the ordinary small-business owners, the ordinary investor in New Zealand, the mums and dads, and the ordinary Kiwis who are doing their bit to pay their fair share of tax to fund our schools, our hospitals, our transport system, our judicial system, and the running of our democratic institutions. And, by and large, most New Zealanders accept that bargain. They know that tax, as has been said, is the price that we pay for civilisation. But the fundamental integrity of our system becomes undermined when we ask some people to make that contribution, and they do, but others who operate in our country, and indeed who profit from their operations in our country, shirk their obligations.

That is the great concern that many of us have in this House: that, over a number of years, a situation has arisen in which large multinational corporations—not all of them, but some of them—use sharp tax practice to avoid those legitimate tax expectations. Make no mistake—these are companies that benefit from their operations in New Zealand, that derive profit from their operations in New Zealand. The estimates of the potential tax forgone because of multinational tax-avoidance range from around $200 million to $300 million to over $500 million. The Tax Justice Network has estimated a potential loss of between $500 million and $1 billion. That is serious money—serious money—that could be funding our schools, our hospitals, our infrastructure, and all of those things that are so important to living in a just and decent and prosperous New Zealand.

So it is the intention of this Government, through its tax programme, to ensure that our tax system does have integrity, that it is fair, that—as Mr Joyce said before—we have a broad, low-based system. A broad, low-based system relies on everyone paying their fair share, and we cannot allow a situation to carry on in which a small number of multinational companies shirk that obligation. This won’t necessarily be the only set of measures that this Government undertakes in pursuit of that objective, but it is an important set of measures. These are complex and often technical rules, and I think it is very appropriate that when this bill comes to select committee they give real scrutiny to the detail and listen closely to submitters. This is an important bill to ensure the integrity of our tax system and I commend it to the House. Thank you.

Madam DEPUTY SPEAKER: Just before I call the next speaker, this is an unusual circumstance we’ve had, and it may never happen again, but I refer members to Speaker’s ruling 46/5, whereby the Speaker can decide to let members read a speech under certain circumstances.

Rt Hon DAVID CARTER (National): I’d like to start by congratulating Michael Wood, the chair of the Finance and Expenditure Committee, for a beautifully read speech. He did that extremely well, and I hope by the time this legislation’s gone through the Finance and Expenditure Committee he understands the complexity around this legislation substantially more. I also want to congratulate the Government for presenting this legislation to the House—of course, not the current Labour - Greens - “Mr 7 Percent” Government, but, of course, the former National Government, for the work it did in putting this on to the Order Paper. Yet again, we stand in this House progressing National Government legislation as this shambolic Government gets its Order Paper ready for some real action.

I do want to acknowledge the contribution by the Minister of Revenue, Stuart Nash. This is difficult stuff, and I can understand why he moved the motion to refer the bill to the select committee and then decided not to make a further contribution, because his record around taxation and the complexity of taxation is not something that he’s shown a huge ability with. I recall on one occasion, as you will, indeed, Madam Deputy Speaker, Mr Nash, as then the Opposition revenue spokesperson, having a real crack at New Zealand’s largest company, Fonterra, suggesting that company should be taxed on revenue and not on profitability. That is sort of a basic lack of understanding that Mr Nash has shown to date, and I’m sure that’s the very reason why he decided not to make a substantial contribution to this piece of legislation. But I assure Mr Nash, as the current Minister of Revenue, that when this work goes to the Finance and Expenditure Committee, the Opposition will cooperate completely to make sure this legislation hears the very valued submissions that come forward—

Hon Shane Jones: Why?

Rt Hon DAVID CARTER: Oh, Mr Shane Jones interjects and says: why would we cooperate? There’s another member who doesn’t understand the complexity around this legislation. It is critical that we get it right, because if we get it wrong—

Hon Shane Jones: Best chairman ever of the finance committee.

Rt Hon DAVID CARTER: —if we get it wrong, Mr Jones, we potentially chase international companies away from New Zealand when they look for other opportunities to operate somewhere else in the world in this global environment. Mr Jones will come to realise that when he starts spending a billion dollars, I assure you. But the world is a competitive place, and if we manage to muck this legislation up because as a select committee we’re not prepared to listen to submissions, then what it will do is give these international companies an opportunity to go elsewhere, and I for one, Mr Shane Jones, do not want to see that happen.

Our tax system is renowned around the world for its fairness. It is a broad based - low rate taxation system. It is fair, but this is a problem around base erosion and profit sharing that is occurring all around the world. We’re finding that all developed countries are facing the same challenge with how we deal with companies like Facebook, like Google, etc., where they are looking for their opportunities to operate and, obviously, to pay as little tax as possible. That is a legitimate minimisation technique, but where I object, and where the former National Government completely objects, is when these countries take the opportunity not to use it for minimisation of tax but to use the opportunity for straight evasion and avoidance of tax—and that shouldn’t happen.

I can understand Mr Nash’s enthusiasm to get this National legislation into the House, off to the select committee, and passed as quickly as possible. Mr Nash is certainly a very enthusiastic Minister of Revenue. He had been in the job a matter of a week or two and he was proposing to change the legislation to make sure we tax all internet purchases from anywhere in the world as they come across our border. A wonderful idea—currently we tax anything that’s over $400—and then Mr Nash was beaten down by the Minister of Finance, Grant Robertson, and told that while his idea was enthusiastic and we should develop it over time, it was not something that was going to happen in the first three years of this current Labour Government. So I congratulate Mr Nash for his enthusiasm. I can assure him that as this particular base erosion and profit sharing legislation goes towards the select committee, we will do our very best, our level best, to bring it back in a shape that delivers potential—

Hon Shane Jones: Average, very average.

Rt Hon DAVID CARTER: Well, Mr Jones interjects again, saying we’ll do an average job. I refer Mr Jones to Labour’s fiscal plan, post - Pre-election Economic and Fiscal Update revision, which points out that they will collect $200 million more a year going forward than National was budgeting to do under the very same legislation. I say to Mr Jones we’ll be doing more than an average job if we can increase tax revenue for his high-spending Government by over $200 million more than National had budgeted, even though the legislation is exactly the same. It’s no different, Mr Jones, from what National was proposing.

Which brings me to my final point: I think we need to be very, very careful about this Government and where it proposes to spend this extra revenue. A Government has a duty—and I think Mr Wood said this—to tax and tax fair. We have a duty to tax in an international scene, and that means cooperating with other international tax jurisdictions. As I’ve pointed out—laboriously, I think—to Mr Jones, if we don’t get that right, and then Google and Facebook manage to go somewhere else to operate, who’s the loser then, Mr Shane Jones, but National? So what we’re going to see is making sure we get this legislation right, but then there is a duty for the then Government to spend that money wisely. What I’m seeing so far is nothing more than the cynical attempt it made last time it was in Government to take taxpayers’ money, target particular voting areas—last time it was interest-free student loans—

Hon Shane Jones: Relevance?

Rt Hon DAVID CARTER: —this time it’s—well, I’m sure even the Hon Shane Jones understands that when you pass legislation, you raise revenue. When you raise revenue, you have the opportunity to spend it, the Hon Shane Jones. Nothing has changed in the three or four years that member was outside this place. That is basic about tax revenue. But there is then a duty and a responsibility to make sure that revenue is spent wisely, and not in any attempt to go and buy particular sectors of voters to attempt to ensure the return of a Labour - Greens - “7 percenter” - type Government after the next election.

Madam Deputy Speaker, thank you for the opportunity to say a few words on this legislation. I look forward to it coming to the select committee, and if it’s based on the type of submissions we had in the time that I chaired the Finance and Expenditure Committee—now many years ago, I do admit—then those submissions are of immense value in making sure we tidy this legislation up and get it right, so that it works to protect the New Zealand tax base, to work in cooperation with similar regimes right around the world to make sure that these companies, whatever their name is, whatever their industry is, pay a fair and legitimate portion of tax from their legitimately gained profits.

FLETCHER TABUTEAU (NZ First): Thank you, Madam Deputy Speaker. It’s a pleasure to rise on behalf of the Labour - New Zealand First Government. What I’d like to do, with your forbearance, Madam Deputy Speaker, is just address some of the comments put forward from the previous speaker, the Rt Hon David Carter, who—dare I say it, I actually enjoy and acknowledge that he can now be part of the debate. As much as I disagreed with perhaps about 95 percent of what he said, at least it was an enjoyable contribution that at least added something of vigour to the House.

Hon Shane Jones: Noise, noise, noise.

FLETCHER TABUTEAU: Ha, ha! Others may call it noise, and I would be hard-pressed to argue.

The member who made the first contribution, Mr Joyce, spoke about his party claiming success for this bill. He claimed that they had done the work. I stand here to say that this has been a problem for New Zealand for—I think my learned colleague Mr Woods used “nine years” as a specific number. But let’s agree in the House that it’s been nearly a decade that we have been dealing with this problem, which that party over there, now in Opposition, knew was a problem. Mr McClay was told that this was a problem when he was the Minister of Revenue, and he sat on his hands. Mr Woodhouse was told that this was a problem, and he sat on his hands. This took nine years—those members sat on their hands.

As we progressed to an election period, the previous Minister of Revenue decided that action was required. Actually, it is an opportunity to acknowledge the work of the officials and the previous Minister for the work that was undertaken in this space. But let’s be perfectly clear that for nearly eight years those members stood up and said that nothing could be done, and that we have to wait for an international solution, primarily from the OECD, they said. We have to wait for an international solution from the OECD.

This is where I have a problem with where we are today, because this is a Government that is standing up in the House actually presenting legislation. Let’s bear in mind that this is the first reading—

Hon Dr Nick Smith: National’s legislation.

FLETCHER TABUTEAU: Which you said for eight—sorry, Madam Deputy Speaker; which Mr Smith said for eight years didn’t need addressing, but last year there’s a problem. That’s the record that you come into this debate with, Mr Smith: eight years, “Not a problem.”; a year ago, “We’ve got a problem, we better do something about it.” That is that party’s record.

So I am proud to be standing here today on behalf of New Zealand First and this coalition Government to say that the former Government’s apathy or non-action—non-action—was an indictment on that party. New Zealanders had been standing up, standing strong—

Madam DEPUTY SPEAKER: Order! Would you come to the bill? Would you debate the bill, please? You’ve had almost 3½ minutes now on general debate. I would like the speaker to come and discuss the bill. This is a first reading of a bill.

Hon Shane Jones: Broad preamble.

Madam DEPUTY SPEAKER: It’s not a broad preamble; we’ve had that.

FLETCHER TABUTEAU: I apologise, Madam Deputy Speaker, if I have not worked within the purview of the first reading. It comes from frustration—my apologies.

Madam DEPUTY SPEAKER: Generally politics, I find.

FLETCHER TABUTEAU: I will try and use words carefully so as not to repeat what has been said before, but what we’re talking about is the neutralising of base erosion and profit shifting. Now, what multinationals in particular have been able to do for, I’ve just argued, nearly a decade is that they have been able to use four different mechanisms, which this bill addresses, by which they can avoid, we argue, their commitment to their tax obligations here in New Zealand. New Zealanders have consistently called, as has this Government, for those multinationals to pay their fair share.

So what we are talking about is what, essentially, has become an acronym of the 21st century, BEPS, or base erosion and profit shifting, an issue that the world, admittedly, is having to deal with. It relates to the ability of these multinationals in particular to avoid their tax commitments, and there are examples, which I would highlight to the Opposition on the other side, of New Zealand businesses who are working under New Zealand legislation, who are compelled to work within the confines that this House gives them in terms of their obligations of tax, which their competitors, who are international, have been able to avoid by means outlined in this legislation, which the House is seeking to address now. So it has not only been a question of those multinationals paying their fair share but of New Zealand businesses being able to compete on an even playing field. New Zealand businesses have missed out on large contracts because multinationals have been able to cost out their long-term commitments in terms of cost and pricing, such that they know that they haven’t been required to pay their tax. Now, that’s an immediate advantage that New Zealand businesses have been crying out about, for a long period of time.

It is important to address these BEPS activities without reducing the attractiveness of New Zealand, and the members spoke of that with reasonable fairness—that it is a matter of making sure we do move down a path that is a mechanism by which these multinationals cannot avoid their obligations. But, yes, we do need international business. There are great businesses around the world that New Zealand would encourage to be here, but, as I just said in that previous statement, let’s ensure that New Zealand and multinational businesses are competing on an even playing field.

The measures in this bill will prevent the four main methods that multinationals use to allow them to take advantage of this uneven playing field. One method is their use of parent companies being able to charge artificially high interest rates. We have seen examples of that. There’s an example, which I won’t name specifically, here in Wellington where that has been exactly the case. The parent company has charged the local branch, as it were, for want of a better word, artificially high interest so that what we would otherwise have called profits have been committed offshore in terms of interest commitments to a parent company. Now, what this legislation seeks to do is acknowledge and ensure that these companies recognise that a commitment to a parent company is not a true cost in terms of returns to shareholders. What the bill is arguing is that those returns will remain neutral. You can’t artificially manage the interest rates up so that those profits can be shifted offshore.

The next methods multinationals use are the hybrid mismatch arrangements that exploit differences between countries, which is to say different tax rates in different regions—and I think, with the time I have left, I will take that as read—and the artificial arrangements to avoid having a taxable presence or permanent establishment in New Zealand. So, again, I think Mr Woods spoke about the good old days of having a big factory here and setting up shop, as it were. Now, that’s not necessarily the case in services industries nowadays, so it becomes very difficult to manage and track these kinds of interactions—spending, revenues, costs—so that those companies can be held to account in terms of what is fair, in terms of their commitment to the New Zealand taxpayer.

The last one is the related-parties transactions, or transfer pricing, which shifts profits into offshore group members in a manner that does not reflect the actual economic activities undertaken in New Zealand and offshore.

So, with 20 seconds to go, may I please say to the House that it is a pleasure to stand in support of this legislation. I do look forward to the work in the select committee. It is populated by a good group of people, and I look forward to that work. Thank you.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Deputy Speaker. It took a while, and I did wonder whether Mr Tabuteau actually had any idea, for the first eight minutes and 30 seconds of that speech, what it was all about, but at the end of it he started to make some progress on the points. Then he referred to Michael Wood’s comments about the good old days. Well, the good old days were when a good old Government called National, in the 51st Parliament, actually put some legislation on the table.

If I look to some comments back from Michael Wood when the previous Government launched this piece of legislation, he said, “However, the changes announced today continue the same sluggish vein of Government inaction”. Well, I have to say, the fact that this new Government has actually picked up this piece of legislation proves that it can’t have been so sluggish at all, because you’re happy to put it in the House, and you’re happy to—almost—speak to it, Mr Tabuteau. Michael Wood also referred in that same comment to “baby steps”. Well, “baby steps” is actually better than crawling, so we’re proud to at least have put some steps on the table.

So, getting to the bill, this whole bill, the Taxation (Neutralising Base Erosion and Profit Shifting) Bill, yes, it is designed to even the playing field and give New Zealand companies the opportunity, because there are things out there happening with companies that are coming into New Zealand. Most of the companies will pay their fair share of tax, but there are others who don’t, and a lot of it is related to either hybrid mismatching—and that description explains where they take what they perceive to be the best rules of one country and they take the best rules of another country and they put them together and they try to make a model that gives them the best tax advantage without actually paying their fair share of tax in the country where it’s earned. The transfer pricing that often happens with these kinds of arrangements means that it doesn’t reflect the actual economic activities in the country where the work was done.

So it’s really important that we get this right. A previous speaker, the Rt Hon David Carter, talked about getting this right, because we are a trading nation who works with the world. Of course we want people to work with us, but we don’t want them to come and work with us and take their profits out of the country so that they disadvantage our country, because we need the tax take to be able to provide our current services. What I hope from the somewhere $200 million upwards that we’re going to achieve from putting this legislation in place is that we’ll be able to use that money for some worthwhile projects.

It’s been a pleasure to take a call in the House today, and, with that, I commend this bill to the House. Thank you.

Hon James Shaw: Madam Deputy Speaker.

Madam DEPUTY SPEAKER: Oh—

Hon James Shaw: James Shaw, Madam Deputy Speaker.

Madam DEPUTY SPEAKER: James Shaw—I do apologise. I call the Hon James Shaw.

Hon JAMES SHAW (Associate Minister of Finance): I have days like that too, Madam Deputy Speaker. Honestly, there are days when I struggle to remember my own name, so that’s fair enough.

It’s a pleasure to rise on this bill, the Taxation (Neutralising Base Erosion and Profit Shifting) Bill, which the Green Party also supports. I just wanted to start with a bit of a discussion about the history of this bill and the history that led into this bill, in reference to some of the points that were made by Barbara Kuriger and Steven Joyce about the pace at which it had been introduced. It was actually in the year 2013 that the Inland Revenue Department officials first started flagging, to the Ministers of both finance and revenue, that multinationals were avoiding paying tax by profit shifting and that work to protect the New Zealand tax base was actually quite an urgent, and ought to be a key, area of focus for tax policy over the course of the 18 months from when inland revenue started raising that flag. Of course, that was prior to the 2014 general election, and then it took another few years before—actually, the New Zealand Herald reporter Matt Nippert, along with some other great investigative reporters as well, got some explosive headlines that exposed the extent of the potential tax evasion that was at stake.

As I understand it, as I remember it, the Herald’s analysis then showed that foreign multinationals could be avoiding as much as $500 million a year in tax take. My office’s calculation is that that’s enough for about 9,259 nurses, 7,601 police, and 10,498 primary school teachers.

So, in December of that year—2016—the then National Government decided that perhaps it was time to do something about this. When members of New Zealand First, the Labour Party, and the Green Party referred to the sluggish pace of reform, that is, essentially, what we were referring to—the fact that it took three years and some fairly explosive investigative reporting to actually get the then Government to do something about it.

The problem has been discussed in a number of speeches on this bill already, and in various other debates in this House and in the media. But it is worth noting that in New Zealand, for example, there are about $4.2 billion worth of sales to the Apple company, but they pay virtually no tax. Google booked something like $14.9 million of revenue, at a cost of goods charge of 97 percent of their revenue, which means that their profits before tax were merely just over $500,000, and they had a tax bill of $361,000, on revenues of $14.9 million. When you look at those kinds of numbers, you have to say that, while these companies are obeying the law—and they’ve got very good accountants and lawyers to make sure that they do obey the law—the question therefore has to be asked: is the law adequate? It clearly isn’t, particularly when those companies are competing with New Zealand service providers and companies, who actually do have to pay tax because they are New Zealand residents and they don’t have anywhere to shift their profits to. So this is an important bill in terms of starting to try and recoup some of that base.

I mentioned that the Herald had said that they thought the estimates of lost revenues were about $500 million. Professor Craig Elliffe, a tax expert, told Radio New Zealand National that he thought it could be as much as a billion dollars, and a UK-based organisation, the Tax Justice Network, found earlier this year that the likely losses were about $700 million. When the Government introduced this legislation in Budget 2017, they thought that the changes that are outlined in it would recover something along the lines of $100 million a year.

So the amounts that we’re talking about—there’s some pretty huge variances in both what we think lost revenues may be and also the amount that may be recoverable through changes like the ones that are outlined in this bill. But, having said that—and I know some of the criticisms about this in the past have been that, well, no one really seems to be able to put a hard number on it, or we can’t agree on a hard number about it, but, actually, that shouldn’t stop us from rolling it forward. Even at the low end, at $100 million, that’s still a lot of teachers and nurses and doctors that that would pay for. But if it is as high as the high-end estimates of Professor Craig Elliffe—well, you know, a billion dollars here, a billion dollars there, and sooner or later you’re talking about real money.

The bill does a number of things that should prevent multinational companies from using high interest rates on loans between their external to New Zealand bodies to New Zealand bodies. Just to be clear about what that means, it does seem that some multinational companies—one of the facilities that they’re legally able to use is that, in order to help finance either expansion or products and services into New Zealand, they provide the New Zealand operator with a loan and then charge themselves, essentially—the New Zealand operation—an extremely high interest rate on that loan, meaning that it then subtracts from the profitability of the New Zealand operation, meaning that it doesn’t have to pay as much tax. But the cash, of course, gets retained in the parent body, and that is, frankly, a rort. It might be legal, but it shouldn’t be, and so one of the really good things about this particular bill is that it helps to start to constrain that kind of activity.

Another one, of course—and this is increasingly true in the internet age and with e-commerce—is that it is pretty easy for multinational companies to actually have very large presences in New Zealand in terms of bookable revenue. The kinds of internet companies like Google and others are the obvious ones, where they’re selling services into New Zealand at many tens or hundreds, or more, of millions of dollars. But they don’t actually have a physical, permanent presence in this country, so then it does become difficult to be able to say, “Well, if that revenue is gathered here, what is the tax take on it if the company isn’t technically operating here, even though they’ve got hundreds of millions of dollars’ worth of sales?” So having a permanent establishment is one of the measures that this bill goes to.

Transfer pricing received a lot of coverage during the media storm that kind of led to the introduction of this bill. Companies are able to shift profits into offshore companies, where they’re taxed at a much lower rate in a manner that doesn’t reflect the actual kinds of economic activities that are taking place here in New Zealand. A number of people who are interested in this kind of thing will remember, of course, that the European Union has recently forced Ireland to set up accounts because it believes that Ireland has been, essentially, subsidising multinational companies based in Ireland, when they should have been paying tax elsewhere. It’s saying, actually, “No, you need to be taxing them at a reasonable rate.”

And then, of course, the fourth thing that this bill does is cut down on the ability of multinational companies to exploit the differences between different jurisdictions’ tax regimes in order to get an advantageous tax position through hybrid and branch mismatches.

These are all moves that the Green Party, when in Opposition, supported. There are a number of other things that other jurisdictions, particularly the United Kingdom and Australia, have introduced that we feel look pretty successful and that we think ought to be considered. We’ll be hoping, at the select committee, to be able to advance some of those other things. I guess we should never look a gift horse in the mouth, but when we finally do get some progress on something that we’ve been campaigning on for a number of years, even if it doesn’t go as far as we’d like—we think that, actually, the measures in here are all pretty sensible and very well thought through by officials. They do match what a number of other jurisdictions around the world are doing, and we want to encourage them.

I do want to note that one of New Zealand’s leading tax experts, Andrea Black, has said that these measures are pretty good—that it’s not a full-blown diverted profit tax, but it is a sensible step in the right direction. On that basis, we commend this bill to the House.

ANDREW BAYLY (National—Hunua): Thank you, Madam Deputy Speaker. It’s a pleasure to be talking on this first reading of the Taxation (Neutralising Base Erosion and Profit Shifting) Bill.

Madam Deputy Speaker, I’ve got to say I’m feeling positively sorry for you. We have heard some very boring and tedious speeches. Of course I can understand why the Minister abrogated his responsibility and passed his speech on to Michael Wood, who had that dreary, unenviable task of delivering that boring speech. And then, of course, we’ve had Mr Fletcher Tabuteau. I do agree. I thought he lost his way, but right towards the end he came right. And then we’ve just had the speech from the leader of the Greens, who has got such a perverse sense of history, and I will talk more about that.

But, of course, this is a good piece of legislation. This is what our Government, when we were in power—this is the type of thing we were doing and this is the type of thing that you guys want to nick. And when I say “you”, I’m talking about the current Government. But, of course, when we were trying to do this in the select committee, and talking about it, all we heard from you was the bleating that went on—

Madam DEPUTY SPEAKER: You didn’t hear it from me.

ANDREW BAYLY: That’s right, Madam Deputy Speaker. But I think it’s rather rich that the Opposition are now standing up and claiming credit for this bill. As the Rt Hon Mr Carter said, we have got a beautiful tax system; it has a lot of simplicity. But we were aware of this issue. In 2013—which is what the previous speaker, James Shaw, spoke of—the OECD started doing its investigation into this issue, because it is a worldwide issue. And, of course, the people opposite all thought that we could just unilaterally impose some changes in our tax system and that would make it fine for New Zealand, which, of course, it wouldn’t.

This is the difference about understanding tax. The issue about this is that we have had to work with the OECD, and we have. The OECD presented its report at the end of 2015. In the middle of June 2016, we, as a country, presented our own inquiries and we’ve been working through that, and this bill represents the fruition of this. There are some very good aspects of this bill. I’ve missed this. I am very much looking forward to talking about the elements of this bill, because there’s a whole stack of good stuff. I’ve heard the four mentioned, but the fifth one, which everyone seems to forget, is that there is an increased power of the IRD to seek information from multinationals, which no one yet has spoken about, but you will find it at the tail end of this bill if you get the final part of it. Thank you, Madam Deputy Speaker.

Madam DEPUTY SPEAKER: I call Willow-Jean Prime. This is a split call—five minutes.

WILLOW-JEAN PRIME (Labour): Thank you, Madam Deputy Speaker. I’m pleased to speak to this bill on behalf of the Labour Party. The essence of the bill is that the bill is to deliver on our Government’s vision of a better, fairer New Zealand by ensuring that multinational enterprises pay their fair share of tax too.

So we need to go back to what the problem is. What we know is that some multinationals are using aggressive strategies to pay little or no tax, known as base erosion and profit sharing, or BEPS, and permanent establishment avoidance, or PE avoidance. What we know from the reports that we’ve been given is that the IRD brought this to the attention of the previous National Government. Back in 2012-13, they went through three Ministers of Revenue and didn’t address the issue. I am pleased that we are here today for the first reading of this bill to address this issue, because what we can see is that there is an unfairness in the system.

Sixteen multinationals have been identified as using strategies like transfer of pricing and PE avoidance, and, potentially, we have about $100 million of tax being disputed, but we also heard that the figures range from somewhere between $50 million, $100 million, $200 million, $500 million, and $1 billion. While the amounts vary, the fundamental point is that we want to ensure that we have a fair and just and equitable tax system, and that everybody is paying their fair share.

The problem is also that we don’t know how many more there might be. It is estimated that there may be up to 6,000 multinationals globally that could come within this problem. The cases show our existing rules are vulnerable, and the IRD considers that this could increase if weaknesses in the current rules are not strengthened. So a discussion document was developed and 16 submissions from key stakeholders were received. Submitters were met with, and some were opposed—as you can imagine. Some argued that the proposals could have a detrimental effect on New Zealand being an attractive investment destination and should not be implemented.

Multinational companies, of course, are a welcome part of our economy, but they must abide by the rules, and they must pay their fair share of tax. Most submitters accepted the need for measures to address the transfer pricing and PE avoidance issues identified in the discussion document. New Zealanders expect every company to pay its share of tax, no matter how big or powerful that company may be. So I am pleased that this legislation is being introduced. It will bring fairness and equity back into the tax system. There was an OECD and G20 15-point action plan developed in 2015 to combat BEPS. It recognises that the issue is multifaceted and that there is no single silver bullet.

To remain effective, the tax settings must constantly evolve to keep abreast of changes in the economic environment, interpretation of the law, and businesses’ practices. The Taxation (Neutralising Base Erosion and Profit Shifting) Bill contains proposals to ensure that large multinationals will pay their fair share of tax by the following four matters: strengthening the interest limitation rules, addressing permanent establishment avoidance, strengthening and transferring pricing rules, and addressing hybrid mismatch arrangements.

In terms of the strengthening and interest-limitation rules, that is about multinational companies providing loans and charging massive interest costs, which are considered a business expense. It is an easy way for a company to shift its profits from New Zealand to overseas and, therefore, not paying their fair share of tax on those. The changes in the proposed—

Madam DEPUTY SPEAKER: Your five minutes are finished. I do apologise.

WILLOW-JEAN PRIME: It is a split call. Thank you very much, I’ll conclude there. Thank you.

LAWRENCE YULE (National—Tukituki): It gives me great pleasure to speak to the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. This is all about multinational companies. This is about them ripping us off.

Hon Shane Jones: What about the water?

LAWRENCE YULE: There’s some in front of you, sir. It’s probably got chlorine in it. You want to try some! Anyway, this is really good. This is really good legislation and other members of this House—the only criticism I’ve heard is that it’s taken too long. And do you know why it’s taken too long? From 2013, when this was identified by the Inland Revenue Department, and at the G20, we worked in a multinational environment to sort this out. And the former National Government had all this sorted and has brought it to this House. It’s a rare feature I might say—it’s a rare feature—that everybody in this House, despite the interjections, actually agrees with this bill, and yet we’re taking our time to get through it. Members on the other side are taking their total time, when we actually all agree that this is a good bill and it should go to select committee. There are a number of members on the select committee sitting opposite me, and we will look at that, when it gets to that point.

This is all about fairness: how we treat people, how we look after people, and how taxpayers that we represent, when working really hard and who pay their fair dues, are actually treated fairly with others. I looked up this morning—Facebook. They gave an example: $5.8 million in 2014 was the amount of earnings they were predicted to have earned. They didn’t have exactly the numbers, but that was predicted on the Asian experience. They declared income of $1.19 billion, and then had costs of $1.187 billion. Their taxable income was around $12,000. Now where you’re talking mum and “Joe Public” working hard at home and looking at Facebook and those sort of numbers, it is patently unfair. And this whole House is agreed to that.

Secondly, the “Netflix legislation” that the last Government brought in—started in October 2017; became effective—is poised to save $300 million. As in, it will bring $300 million of new revenue. And I look at Mr Jones over there, who’s trying to spend a billion dollars a year—a billion dollars a year, he tells us; $300 million is a great start, Mr Jones. So I am thrilled that the whole House is in support of this. Actually, what I think we need to do, instead of wasting time on unnecessary calls, is put it to the vote, and the whole House can get on and get it done. Thank you.

KIRITAPU ALLAN (Labour): Unlike the opposite side of this House, Madam Assistant Speaker, I believe that it’s an obligation we owe our citizens to duly stand and speak to these issues of substance that are going through this House, because these are, in fact, the issues that shape our nation.

Before I turn to commence my more formal remarks, I did just want to pick up on a couple of points. I notice that the Opposition—or some of the Opposition—keep erroneously referring to the bill as the Taxation (Neutralising Base Erosion and Profit “Sharing”) Bill. But if these multinational corporations were actually sharing the profits domestically, there would actually be no need for this bill at all. Sir—Madam Assistant Speaker; my apologies, Madam Assistant Speaker, you don’t look anything like a sir. You know, the issue here is that there has been no sharing by these multinational corporations of the fair, just, and equitable input that there should have been into our local economy, because it is, in fact, being shifted, and shifted overseas.

Reflecting on the actual real-life implications of this type of legislation for folks up in the regions, I saw there was a chap by the name of John Russell, from my friend Willow-Jean’s electorate, up there in Kawakawa—81 years old, he’s been taxed about 40 million bucks per annum. He’s doing great things up there. In contrast, you have multinational corporations, like that of Apple, as my colleague the Hon James Shaw mentioned before. Their sales exceed 550 million bucks here domestically, but they’re paying less than 10 million bucks to the taxman, and the taxman indeed makes sure that we have the things that we need as communities to thrive and survive, like schools and healthcare systems and whatnot—but when they don’t pay their fair share, and it’s lumped on the guys like Mr John Russell, who is 81 years old, up there in Kawakawa, to come up with these gross amounts of tax, when there hasn’t been a real contribution by all of those that, I guess, are taking the liberties of operating their companies within our domestic economy, that is indeed a cause of concern.

The debate around profit shifting is a global debate. This Taxation (Neutralising Base Erosion and Profit Shifting) Bill is New Zealand’s domestic remedy to, I guess, give effect to the multilateral agreement that was signed earlier this year. I do want to just commend the intentions of both sides of the House for trying to get our tax system right. I think we can all agree—whatever side of the House you’re on—that whoever is operating their company that is not necessary domicile but is operating and is taking a fair chunk of New Zealand residents’ cash, they too should actually be required to pay their fair share. The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, the multilateral instrument signed earlier this year, was indeed, I guess, the global solution that this bill then gives the domestic effect to.

If you go to the guts of it, this bill’s all about fairness—it’s just basic stuff. Yeah, it’s just about fairness. We know that right now—I mean, there are different numbers that have been cited. Globally, they’re saying that there’s in excess of about 770 billion bucks—that is tax moneys that are not being appropriately accorded to the right domestic residence. Locally, the figure domestically ranges anywhere from a couple of hundred million through to the $1 billion figure that’s been cited previously in this House. A billion bucks gives my colleague here, the Hon Shane Jones, $1 billion to plant his one billion trees and—

Hon Shane Jones: Trees! Trees! Mānuka!

KIRITAPU ALLAN: Mānuka, which creates jobs, and so on and so forth. This bill—this tax bill—is not a demonstrable reform of our entire tax system, but we’re seeing a number of reforms across the bridge. Madam Assistant Speaker, I believe this is a split call, so I’d better not go on and on, but I just do want to say—

Hon Dr Megan Woods: Go on.

Hon Kris Faafoi: Keep going.

KIRITAPU ALLAN: I will keep on going, because that is important that I keep on going—it is. All right, excellent. There we go, all right. So not only does this bill increase fairness—

Hon Kris Faafoi: You’ve only just started.

KIRITAPU ALLAN: That’s right. I’m just winding up. Just you guys wait. Ha! This is about protecting our tax base—about strengthening our tax base. Unlike the previous Government—I think, in the period of 2013 to 2014, the Ministry of Social Development spent over $40 million hounding down those deviant dole bludgers that had not paid their tax—and I think they recouped about 20 million bucks. Meanwhile, you had multinational corporations that we knew were rorting the system for over a billion dollars in revenue that wasn’t coming back to New Zealand domestically. I mean, it’s tricky. We know it’s hard. We know it’s hard to trace multinational corporation dollars. But this Government, they decided to pursue the little guys, pursue the poor guys—pursue the guys that were on the edge, barely making ends meet. Meanwhile, multinational corporations are operating domestically and completely rorting us while we all sort of sat on our hands, and we knew it.

So yeah, the debate around profit shifting: it has been globally recognised since 2012. I just want to say—and the prior speaker, the member Lawrence Yule, he’ll know this, having been in local government for many, many years—that when issues are raised, it’s only good government to act. Now, this Government had five years and sat on their hands—five years since 2012; 2012 was when the debate started. In 2013, the report came out. Five years sitting on your hands; meanwhile, we’re letting the multinational corporations run a rort and do what they do. This Government was actively pursuing the beneficiaries, trying to recoup some cash and to sell it to the general populace that you’re doing a great thing because you’re chasing down those law breakers. But the reality is it’s just easier—it’s easier—to chase down the little guys that are breaking the law for, you know, not paying their fair share when it comes to being on a benefit, but it’s a lot tougher tracing down multinational corporations that have sophisticated global operations

Lawrence Yule: You have to change the law.

KIRITAPU ALLAN: Yeah, and, collectively, I’m really proud that the Hon Stuart Nash from your region—must be a Hawke’s Bay thing to be very impassioned about tax and revenue. It’s impressive. I’m really fortunate and glad that the Hon Stuart Nash is actually introducing the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. In effect, it does require four things from multinational corporations: that they pay their fair share of tax, by strengthening the interest limitation rules—and those are, effectively, interest payments on debt as an expense to a company, which is deductible, therefore a New Zealand - based foreign-owned company can reduce its taxable income by borrowing from its foreign owner rather than issuing shares.

The second thing that this bill does that we’re really proud of is that it addresses permanent establishment avoidance. Other proposals in the bill address the ability for multinationals to structure their operations to avoid having a taxable presence—a permanent establishment, if you will—so that they’re not taxed on their sales in New Zealand. Well, this bill proposes a new anti-avoidance rule for large multinationals. With over ₤750 million in EU turnover, that will expand the criteria for a multinational to be considered to have a permanent establishment here in New Zealand.

The third thing, in terms of addressing permanent establishment avoidance: this bill also contains administrative measures that strengthen the Inland Revenue Department’s powers to investigate those large multinationals that do not cooperate with a tax investigation. That’s really been an issue for IRD, and I think that we expect to hear substantive submissions on that in the Finance and Expenditure Committee.

The third thing that this bill does is it strengthens the transfer pricing rules. Now, transfer pricing involves the pricing of cross-border payments between related parties. Parties can shift taxable profits out of New Zealand—[Bell rung] Oh, Madam Assistant Speaker, look, I was getting so riveted into the nuances and the effects of this bill that I just lost the time. I commend this bill to the House.

HAMISH WALKER (National—Clutha-Southland): It’s an absolute honour to rise for the Taxation (Neutralising Base Erosion and Profit Shifting) Bill—better known as BEPS—and when I read this bill a few hours ago, it actually reminded me about beep tests in my former life as a rugby referee. You get to a certain stage and you just get out of breath, you try and keep going, and then you just can’t go more. That sort of feeling—I look across the room here and I get that feeling when I look at the current Government. But one person that certainly isn’t out of breath is Kiri Allan—ka pai. Five minutes to go and you thought you were done, and you got back up—what a great speech. So well done, Kiri.

This is yet another excellent piece of National Government legislation being picked up by a new Government already out of ideas. To date in the 52nd Parliament, the House has debated 13 pieces of National legislation, with just two—yes, two—Government bills from Labour, and they were members’ bills. That’s about, what, 10 or 15 percent. So if you want to talk about a Government out of breath, you only need to look at this.

The other thing I’m learning pretty quick here is—I’ve only been here two or three months; since 23 September—talk is cheap. Someone wise once told me that actions speak louder than words. I just googled a few of the Labour press release statements from the last six months. The first one, by Michael Wood, is from 21 June: “Government’s multinational tax measures weak. The Government’s proposals to crack down on multinational tax avoidance, by its own admission only recovering one third of the missing money, means hardworking Kiwis will bear more of the tax burden, says … [Mr] Wood … It’s time for a fresh approach. A Labour-led Government will establish a new Tax Working Group of experts”—not to mention self-appointed—“to examine how best to deliver tax changes that are positive for the economy”. Well, it’s great to see that actions speak louder than words and they are picking up our bill, which was first introduced a few months ago.

What’s this one here? From 20 June: “Labour labels Government action on multinational tax [weak]”, and it goes on to say: “Labour revenue spokesman Michael Wood questioned whether proposals put forward by Collins in March to tighten multinational tax rules were a little [weak] at a select committee meeting on Tuesday.” The one I got a bit of a laugh out of—the one I enjoyed the most—was on 3 August from Michael Wood: “Government’s Johnny-come-lately approach to multinational tax won’t wash … The Government’s response remains unfair to all New Zealand taxpayers and the multinationals that pay their fair share, and the response is years overdue. You’ve got to question National’s credibility”. Well, if this is such a bad bill, why on earth are they putting it forward? So I commend Minister Nash for putting this bill through. Well done.

TAMATI COFFEY (Labour—Waiariki): I’m happy to take a call on this particular bill, the old Taxation (Neutralising Base Erosion and Profit Shifting) Bill—this wee bit of light reading right here. I am happy and also sad too. I am sad because I look up to the gallery and I see some of our members of the public—young people—sitting there wondering, “What the heck is going on down here? What are they talking about?” I feel for you as I look up there, and I think to myself that you’ve been sitting there patiently now for nearly an hour and a bit, trying to wrap your head around what this bill is all about, so my kōrero today is directed to you, to try and help you to understand what it is that we are talking about down here.

I too am a simple Māori boy from the Bay of Plenty, so when I got presented with this Taxation (Neutralising Base Erosion and Profit Shifting) Bill, I was a little bit daunted by the fact, you see—because it hasn’t actually come from us, and if you haven’t heard it already a hundred times from the other side of the House, they are the ones that came up with this. But, you see, the thing is they had nine years to actually do this—to get this bill through the House. They had nine long years to do it, and what they did was that they kind of introduced this bill in that Parliament’s dying days, which is why we’re standing here right now, doing the first reading of this particular bill. They could have done it sooner, but they chose not to, and—you know, I don’t want to speculate as to why they dragged their feet so much on it.

It isn’t an easy bill to get your head around. You see, if you’re not a financial adviser and if you’re not an expert in taxation, you probably won’t get it that easily. But all you need to know is that we’re down here, perusing it, looking through it, grafting over it, and trying to get to the bottom of it, and at the end of the day this is a bill that is about fairness, as some of the other speakers have talked about. You see, it’s about fairness, because we have this taxation system in New Zealand, and it really rarks people up when some people are paying tax and some people aren’t.

You see, it’s kind of a contract that we enter into. There are two certain things, they say, in this world: one is death; the other is tax. You see, when young people that I speak to get their first job and they see the amount of tax that they have to pay—they first of all see the amount that they get, and then they see a little chunk taken out as tax—they say, “Hey, that’s kind of the deal.” We all pay tax, you know? It really rarks people up when they hear stories about these big companies—big companies—that are earning lots and lots and lots of money and aren’t actually paying any tax. Well, when I say “not much tax”, they’re paying tax, but it’s a tiny bit of tax.

Figure this one out: in 2014, Facebook paid $43,000 in tax. There are plenty of small businesses all around the country—small and medium sized businesses—that pay way over that, all right. Google paid $233,000 worth of tax. It really rarks people up.

You see, I’m a small-business owner in provincial New Zealand. It’s really, really hard. What we do every week is we take our balance sheet and we enter in the totals that we’ve made for that week, we take out our expenses, and we take out our tax as well. Well, you know, when you start aggregating that and you have a look at your annual report at the end of the year, you notice just how much tax you actually have paid. So when you compare the amount of tax that we pay as a small business in provincial New Zealand when times are really tough—and we think that we’re doing an honest service for people in our community by providing jobs and by providing a service—it grates on me that companies like Facebook—

Barbara Kuriger: I raise a point of order, Madam Speaker. I think it’s in line with being in this House that we actually speak to the House, and the current speaker is actually spending most of his time speaking to the gallery.

The ASSISTANT SPEAKER (Poto Williams): I would have to agree with that.

TAMATI COFFEY: That’s OK.

The ASSISTANT SPEAKER (Poto Williams): Please, if you would direct your debate to the House.

TAMATI COFFEY: To you; to Madam Assistant Speaker? I will do that—to the whole House. There we go. As a small-business owner, as I was saying, in provincial New Zealand, it really gets on my goat that companies like Facebook pay $43,000 in tax every year, and we, as a small business, pay quite a bit. We pay quite a bit. It’s unfair, and so what we want to do is try and balance things out.

When I say that I’m a simple boy from the Bay of Plenty, I had no idea that there were all of these measures that companies—big multinationals—were embarking on, and were doing, that were allowing them to get off scot-free. Now, in an article that was published by Stuff on 3 March 2017—this is such a highbrow conversation that they actually had to, at the bottom of the article, put in the jargon; they had to translate exactly what it was that they were talking about.

There are four things that this bill will change in terms of making sure that multinationals pay their fair share. One of them is transfer pricing. Now, I’ll spell that out just a little bit. According to their definition, it refers to “the prices multinationals set when they charge their local subsidiaries for centrally-provided services such as accounting and marketing. Multinationals can divert money to lower-tax jurisdictions by overcharging for such services.”

There’s also this other thing that big multinationals use: permanent establishment. According to this particular definition, it says that they are “rules [which] determine whether a company has a taxable presence in a country. Changes may make it harder for foreign firms to claim that they don’t have a permanent presence in New Zealand if they use intermediaries to enter into contracts here on their behalf.” It’s a little bit to wrap your head around. “Hybrid mismatches relate to rorts, such as the ‘double Irish’ that involve companies exploiting differences between countries’ tax laws—often differences in semantics—to avoid a profit being taxed in either country.”

The final one to wrap your head around is around interest deductions, which “can be used to channel profits from New Zealand subsidiaries to multinational parents. Unnecessarily large loans, or loans at artificially high interest rates, can mean cash is unfairly transferred through untaxed interest payments, rather than through dividends on locally-taxed profits.”

Now, these are all of the things that the previous Government went through in terms of trying to figure out how we were going to approach this issue of multinationals paying their fair share. But there were a few questions that arose out of this. There was a fear that maybe if we entered into this arrangement, if we made multinationals pay their fair share, then maybe what it would do is discourage them from investing or doing business here in New Zealand. Now, don’t get me wrong: I quite like my Apple iPhone. I quite like Google. I use it probably every day, and I would be pretty miffed if they decided to walk. But it was decided that in terms of firms that operate here we need to stick true to our values and actually ensure that a fair amount is paid in terms of tax.

A multinational should not be allowed to achieve a competitive advantage over other businesses by exploiting loopholes in our tax system. Now, as I said, as a small-business owner, we’re always looking for an even playing field; making sure that everybody is on the same level. When you think of companies getting a competitive advantage because they know how to speak like a tax expert and a financial adviser, it really rarks you up.

Also, the question was raised about how much additional revenue the Government would actually raise from putting in these particular measures. Well, it was estimated that the current measure would raise approximately $200 million per annum. Let’s just think about that for a second, and the kind of services, the kind of things, that we could spend that money on, whether it’s in health, in education, and in housing. That money would go a great way. You could have four flag referendums for that price—no, you probably need a few more. Anyway, my point is that $200 million extra in the Government purse would, I’m sure, do a lot for New Zealand and the kinds of changes that we could make in our communities.

This is a great bill, albeit a little bit heavy on the jargon and a little bit specialised in terms of kinds of advice it offers. But if there’s one bit of assurance I can give out there to mums, to dads, to working-class people that pay their tax and pay it diligently every year, and another piece of advice that I could give out there for small businesses—and when I gave my maiden speech I actually stood here and I said that I would be a voice for small businesses—it is that this particular bill is a good thing for us. It is going to even out the playing field. It is going to take away some of these very jargonistic, very highbrow, ways for big companies to avoid having to pay their taxes. For that reason, Madam Assistant Speaker and members of the House, I commend this bill.

Bill read a first time.

Bill referred to the Finance and Expenditure Committee.

Bills

Maritime Transport Amendment Bill

Third Reading

Debate resumed from 7 December.

Hon JULIE ANNE GENTER (Associate Minister of Transport): Tēnā koe, Madam Assistant Speaker. Tēnā koutou e Te Whare. When I was so unfortunately interrupted on the last sitting day while giving the first speech of the third reading of the Maritime Transport Amendment Bill, I was saying that I was so pleased to be seeing this bill through the House with substantial improvements that were made by the current Government in the recent weeks. Although many of the speakers from the Opposition today have been claiming that the Government is simply putting through bills that were introduced by the last Government, this bill in fact has been substantially improved thanks to the agreement of the New Zealand First Party, the Labour Party, and the Green Party.

Now, when this bill was originally introduced, under the former Government, the Green Party voted for it at its first reading. Largely, that was because we agreed with the overall aims of the bill and, in particular, the increase to oil pollution compensation. The bill gives effect to the “Supplementary Fund Protocol”, under which an additional tier of compensation is available to deal with the damage caused by oil spill damage from tankers. This will increase the compensation potentially available in the event of a tanker spill from around $411 million to just over $1.5 billion. The Green Party absolutely applauds this increase. It’s about time that we should be able to access greater compensation when there is damage from tanker spills.

There are other miscellaneous amendments introduced by the bill that will improve the operation of existing provisions in the Act and address minor anomalies by way of amendments. That includes improving the flexibility of empowering provisions for the making of rules under the Act; allowing regional councils to retain fees from infringement offence notices issued for breaches of maritime rules; enabling territorial authorities to transfer responsibilities for harbour works and maritime activity, and clarifying that powers transferred to a public authority can be varied or withdrawn; clarifying that the director of Maritime New Zealand may issue guidelines consistent with ballast water convention requirements and procedures; clarifying the definition of “marine protection product” for the purpose of marine protection rules; and extending on-board limitation of liability provisions to remote pilotage. The “Miscellaneous amendments”, in Part 3, also include clause 30A, an amendment to “Section 33M … (Navigation bylaws)”, to facilitate space launch activities. This will enable launches over water to be carried out safely, from a maritime standpoint.

There are two other aspects to the bill. In Part 1 of the bill as introduced, there were provisions around managing the risks and drug and alcohol management within the maritime sector. This is one area in which the Green Party, along with support from the coalition Government, was able to make substantial improvements to the bill. During the select committee process, we heard from a wide range of submitters who expressed concern about the cost implications and practicality of mandatory drug testing for the small and often remote businesses that make up the majority of the maritime sector.

It was also noted that existing legislative mechanisms already provide for the management of drug and alcohol risks. There was virtually no evidence presented by the Government of the day—the National Government—that requiring mandatory drug and alcohol testing from all operators was going to improve safety or reduce impairment on the job. In fact, during the submissions, we did hear a good deal of advice that simply empowering the director of Maritime New Zealand to carry out non-notified drug and alcohol testing of maritime personnel in safety-sensitive positions when there is reason to believe there is a risk would be sufficient, and that a number of large operators are already employing drug and alcohol management plans.

So, quite simply, the proposal from the previous Government was so poorly researched, so poorly thought through, and so substantially lacking in evidence that the Green Party was forced to change its vote, from supporting it at the first reading to opposing it at the second reading, simply because of just how abysmal the provisions were around random drug and alcohol testing for everyone.

But, luckily, there was a change of Government, and the three parties of the Government agreed to amend the bill to remove the requirement for mandatory drug and alcohol testing for small operators. I’m sure the many small businesses who would have had huge costs imposed on them that had not even been investigated by that previous Government will be extremely grateful that we are taking a much more pragmatic and effective approach, which is aimed at actually improving safety, not simply generating work for drug-and-alcohol-testing outfits.

The third aspect of the bill, of course, in the miscellaneous provisions, was a proposed change around coastal cargo, which the three parties of the current Government also opposed, after the submissions process let us know that changing and opening up the possibility of foreign-flagged cargo shipping to the Chatham Islands and other New Zealand offshore islands would be very problematic for those communities. In fact, all of the submissions we heard stated that the people most affected by the change were not in support of that change. So this Government has also removed those provisions that would have allowed foreign-flagged vessels to engage in shipping, and that will protect the current service, which is very adequately serving the Chatham Islands, and ensure the ongoing sustainability of that service.

I want to thank officials and members of the Transport and Industrial Relations Committee for their work on this bill. I also want to thank Parliament for backing this bill. Taken together, the changes proposed by this bill demonstrate the Government’s commitment to improving the efficiency, the effectiveness, and the safety of the maritime sector here in New Zealand, and I commend this bill to the House.

The ASSISTANT SPEAKER (Poto Williams): I call Tim van de Molen.

Chris Penk: It’s Chris Penk, ma’am.

The ASSISTANT SPEAKER (Poto Williams): Oh, I’m so sorry, Christopher. I call Chris Penk.

CHRIS PENK (National—Helensville): I think it’s the other member whom you should apologise to, Madam Assistant Speaker. In any case, thank you.

It’s a pleasure to rise to speak regarding Maritime Transport Amendment Bill. It’s been noted already that my party, having had some history with this particular piece of legislation in Government—namely, having introduced it, but not having supported Supplementary Order Paper (SOP) 6 introduced by the Minister in the new Government. I’d like to make a couple of comments along those lines.

First, in a previous life, I spent some years at sea as a naval officer. So I note that while the term “safety-sensitive activity” is a defined one within the legislation, it could be regarded as a pretty nice distinction in the sense that all activities—indeed, the very activity of being at sea—are somewhat safety sensitive. So it seems to me that we should err on the side of measures that promote safety for those who are maritime operators, again, as defined by the legislation.

The Minister has spoken regarding the amount of compensation that will be available—increasing that—and that seems to me very sensible. The double negative—that is, excluding the limitation of liability in the event of claims relating to wreck removal, and so on—seems to us positive, and so I don’t wish to traverse that subject any further. Instead, I wish to focus on the area of the drug testing, the randomness of which is a key element and not something that can be removed lightly, notwithstanding some submissions that were made at the select committee along those lines—noting, of course, that other select committee submissions have been very much in favour of the bill as it then was.

It seems to me that the Supplementary Order Paper, or SOP, might be read alternatively as a “sop”, as written—that is, something to placate persons. In this case, it was the unions that opposed the alcohol and drug randomness testing regime. No doubt in their minds they were promoting the interests of workers by doing that—to avoid the imposition of non-notified testing. However, I would urge all those in the House to consider that the interests of workers at sea, and indeed elsewhere, are most robustly promoted when the safety of those who are involved in the activities is promoted. Specifically, in the case of a testing regime, it is best to test in a way that is most likely to catch out illicit activity as opposed to merely shutting the stable door after the horse has bolted, as the regime of testing following an incident would indicate.

So that’s the position of the side of the House, and I look forward to others’ comments on this bill. Thank you.

Hon MEKA WHAITIRI (Minister of Customs): E Te Māngai o Te Whare, tēnā koe, otirā, e ngā mema o Te Whare nei, tēnā tātou katoa. Well, Madam Assistant Speaker, you can’t have it both ways. I’ve heard comments made on that side that this side isn’t bringing enough bills through to the House, and then when we do take a bill that was introduced by that side of the House and improve it, we still can’t get any sense from that side.

Can I say that I’m pleased to speak in support of the third reading of the Maritime Transport Amendment Bill and want to commend Minister Genter for bringing it to the House. As she said, there are three parts to this bill, and I want to make this opening comment, to say that all commercial maritime operators that travel in our waters should not only operate legally but should also operate without risk of drug and alcohol impairment. This is what this bill is doing. So I do want to acknowledge that we need legislation that is going to enable it.

Like the Minister said, there are three parts to this bill. The first part, obviously, covers the drug and alcohol testing, and I will come back and make some comments around that; also the oil pollution and limitation of liability part of the bill; and, of course, the last part is “Miscellaneous Amendments”. This bill, just to remind us, is to manage the risk associated with drug and alcohol use in the commercial maritime sector, by requiring maritime operators to have drug and alcohol management plans or, in other words, DAMPs.

The bill also aims to increase the amount of compensation available to meet the costs of major spills from oil tankers in New Zealand waters, and we only have to look at our recent Rena disaster on, may I say, Mōtītī Island, which I fortunately have the ministerial delegations for, as part of my associate local government delegations, in that respect.

Then the bill also aims to allow New Zealand to exercise its right as a party of the 1996 Protocol to the Convention on Limitation of Liability for Maritime Claims, to make reservations that exclude limitation of liability for claims relating to wreck removal, cargo removal, and damage caused by hazardous and noxious substances. The bill also aims to allow foreign registered ships to carry freight to non-mainland ports, including the Chatham Islands. It also aims to add flexibility to the Minister of Transport’s maritime rule-making powers, to make minor amendments to the Act in relation to local regulation of maritime activity, and the availability of documents incorporated in maritime and marine protection rules. Finally, the bill aims to clarify the Act’s definition and words.

There have been many comments in this debate in the committee stage around how we make the drug testing mandatory. I’m pleased to say that the Supplementary Order Paper (SOP)—again, introduced by the Minister—removes that. There is a really good reason why we’re doing that. If you look at the regulatory impact statement of the officials who supported the introduction of this bill, they could not find any evidence. In fact, what they said was, “This regulatory impact statement has made a number of assumptions. This is because we do not know the true extent of any problem with alcohol and drug impairment in the aviation, maritime, or rail sectors.” So their own officials were saying that there wasn’t any research to justify compulsory drug and alcohol. So, unfortunately, under the former Government, they didn’t do their homework well enough, and that’s been exposed by Minister Genter in terms of the SOP.

So I do want to acknowledge that the reading and research in this particular part of the drug and alcohol testing is the practical logistics side of many smaller cargo operators throughout New Zealand. The concern that I believe was expressed at the select committee was around logistically, for the smaller maritime operators, actually allowing them to have the ability to drug and alcohol test their own operators. The assertion here was that it was just practically, logistically untenable for some of the smaller operators.

Just for the House’s information, most of our maritime operators in New Zealand are quite small. They’re not large companies. They’re small and often self-owners in this space. So to put extra cost on some of our smaller operators, I think, would lead to a whole lot of financial hardship. So in terms of Part 1, around the drug and alcohol testing, I think we’ve got it just right in this bill. In terms of the oil pollution and limitation of liability, as the Minister said, the intention behind the bill is around introducing the supplementary fund protocol. She mentioned the additional tier of compensation, raising the compensation potential in the event of tanker spills from $411 million to $1.54 billion dollars. Again, goodness help us that we never have a Rena disaster in this country, but that lifting of compensation will allow true compensation for the damage that may occur going forward. So I do want to support that particular part of the bill.

In terms of the third part of the bill, where we talk about the miscellaneous amendments, I’m not going to read them all. The Minister did canvass them in her contribution, but I do want to pick up on one particular point in the miscellaneous amendments of this Bill, and that’s the miscellaneous measures that include the amendments to section 33M, “Navigation bylaws”, to facilitate space launch activities. This part will enable launches over water to be carried out safely from a maritime standpoint. The amendment will allow regional councils to make navigation by-laws to control the use of ships in the areas affected by space activities and was prompted by the submission on the Outer Space and High-altitude Activities Bill.

The reason why I raise that is, in my electorate of Ikaroa-Rāwhiti, we’ve got a place called Rocket Launch, which is on the Māhia Peninsula, just north of Wairoa. We see that as an economic opportunity, but this bill ensures that those around that are also practising in a safe and lawful manner. So I wanted to raise that acknowledgment to Rocket Launch and the economic benefits that the regions like Wairoa and South Gisborne are going to gain from that particular initiative that’s happened in my electorate.

In the last couple of minutes, I do want to acknowledge the work of the select committee. I myself was not on the select committee, but I want to acknowledge the membership of it. It almost reads like a National Party departure list, the list is so long in terms of those that have contributed to the bill. I do want to acknowledge the many submitters that came. The bill was referred to the Transport and Industrial Relations Committee on 16 November last year, and the submissions were held in February 2017. There were 25 submitters, and oral evidence from 11 submitters. So I want to acknowledge the work of the select committee in its thorough investigation of this particular bill. I want to acknowledge the Minister for bringing the bill and for the SOP that she’s introduced to ensure that the self-regulation of the maritime operators is acknowledged and that we eliminate any undue logistical burdens on the small operators throughout Aotearoa New Zealand. I commend the bill to the house.

JONATHAN YOUNG (National—New Plymouth): Thank you, Madam Assistant Speaker, and can I just acknowledge the previous speaker, Meka Whaitiri, and some of her comments. Regarding the officials who reported to the Transport and Industrial Relations Committee, of which I was the chair, they stated that there wasn’t that evidence. We asked them why not, in terms of the data. They came back to us and said there is limited evidence about the scale of drug and alcohol use by people in the maritime sector, reflecting in part that, historically, in the absence of a testing regime, such data was not collected. So we need to understand that the context of the lack of data is because there wasn’t a collecting regime.

We support this bill. However, I’d like to say that I am disappointed that the Supplementary Order Paper 6 has come through that removes mandatory drug and alcohol testing. We need to understand where this recommendation for mandatory drug and alcohol testing came from, and that is, essentially, based on the tragedy that happened at Carterton, where 11 people lost their lives in a ballooning accident. It was investigated by the Transport Accident Investigation Commission (TAIC), and they concluded that the balloon pilot made an error of judgment when contact with the power lines became imminent and he tried to out-climb the power lines rather than using the rapid descent system to drop the balloon quickly to the ground below. Toxicology analysis of the pilot after the accident tested positive for THC, suggesting that he may have been under the influence of cannabis at the time. So they recommended to the Government that maximum alcohol levels for aviation, maritime, and rail be put in place, that post-incident drug and alcohol be put in place, and the introduction of legislation to require aviation, maritime, and rail operators to implement drug and alcohol detection and deterrent programmes, including random testing. That was the recommendation of the Transport Accident Investigation Commission.

So in 2012, following that accident, the Ministry of Transport commissioned the New Zealand Institute of Economic Research to estimate the size of the problem in New Zealand, based on international evidence, because we lacked it here. Their research looked at the impact of alcohol and drug use in aviation, maritime, and rail sectors in other countries. The overseas data on fatalities linked to impairment from alcohol or drugs shows that approximately 12 percent of all fatalities in the aviation, maritime, and rail sectors were due to impairment. Applied to New Zealand’s fatality data for the last 10 years, this equated to 61 preventable deaths over that time. For the same period of time, TAIC investigations found that drug and alcohol impairment may have been a contributing factor in eight accidents involving 41 fatalities.

This is the issue: that we do not have the data that members on the opposite side of the House have stated—

Hon Shane Jones: I raise a point of order, Madam Speaker. During the course of earlier debates, we had Deputy Speaker Tolley direct people back to the relevance of the certain stage of the parliamentary debate. Can I direct your attention to Speakers’ rulings 121/4-6, and can you give some guidance, Madam Assistant Speaker, as to how that recitation of international drug stats is in any way relevant.

The ASSISTANT SPEAKER (Poto Williams): I thank the member for your intervention, and I would encourage the member currently on the debate to stay close to the provisions of the third reading, which is, really, a summation of the bill thus far.

JONATHAN YOUNG: Thank you, Madam Assistant Speaker, and I’m about to conclude. I would just like to say that the third reading has always been a broad-ranging debate, encapsulating many aspects that have been debated, and we have heard today from a number of speakers reference to this mandatory drug and alcohol testing. So I’m bringing some context, as the chair of the committee that did this work, to this Parliament and to the people of New Zealand. Thank you very much, Madam Assistant Speaker.

Hon SHANE JONES (Minister of Forestry): Just before I continue, I raise a point of order, Madam Speaker. I am quite serious that Speaker’s ruling 121, which is often shoved—not at members of the vintage of my honourable colleague on the other side of the House there but at younger, newer members. If I could seek some clarification: you cannot bring into the third reading stage references to what did not happen; you cannot bring into the third reading stage references to international drug testing data that did not actually feature as a part of the Supplementary Order Paper that he is referring to?

The ASSISTANT SPEAKER (Poto Williams): I have to commend the member; you are correct in outlining that. However, that member has concluded his speech, and I would encourage the member, if he is wanting to take a call on this third reading that he do so.

Hon SHANE JONES: Thank you for those words of clarification. That is a great way to learn. I want to acknowledge the Chair of the committee. In having provided that latitude, I shall now exercise that entitlement. What I think is very important, when we look at this bill—which will pass, and I acknowledge the chair of the select committee saying that, despite his misgivings, they will vote for it, given the latitude that you visited upon him—this bill is in response to an original set of provisions that reflected unrealistic red tape. It also reflected a very complicated and bureaucratic approach to deal with an issue that requires not only focus but as few cobwebs as possible.

What does this bill actually do, now that it’s been improved through the committee stage? It provides a regime for the testing of people who may or may not be impaired. A critical point that possibly divides this side of the House from our friends in Opposition is the morality associated with compulsion. Now, although I never sat through any of the select committee proceedings, I do acknowledge, having had some experience in the fishing industry, that rooting out the usage of mind-altering drugs, etc. is something of great concern to any industry. But such are the drugs that are available and are used, unfortunately, it is well beyond the ability of a lot of drug testing to actually detect what is flowing through the system.

Therein lies an inordinately big difficulty, but you have to measure the handicaps of our drug-testing regime against the ability of an employee to assert their entitlements, which they do have the ability to draw down on by dint of the law. Now you’ve got one side of the House who actually believes that employees have significant and honourable entitlements; you’ve got another side of the House, as reflected in the divide in this debate, who believes that they don’t. I think that’s an incredibly important principle, and—as, Madam Assistant Speaker, you indicated—if you look at those Speakers’ rulings, principles are important in the development of the speeches in the peroration period of these bills.

Now, what else does this bill actually do? This bill provides for a regulatory framework enabling some national level of government, otherwise known as a regional council, to generate regulations to either assist or oblige—once they’re enforced—craft to keep clear of when a rocket goes into outer space. I’ll resist the opportunity to talk about the Opposition being lost in space because that will cause you to caution me and to go back and study the Speakers’ rulings, so I’ll avoid that temptation. But the point that needs to be made is that we need to be passing provisions and regulations that do not thwart the ability of firms, the ability of employees, and the ability of businesses to go about their lawful duties.

Now the reason—and I agree with the Minister promoting, or shepherding, the bill through the House that we cannot have a situation that we have in another maritime sector, i.e., the fishing industry, where inordinate levels of bureaucracy are visited upon them, which is why my colleague has stood back and said, “Let’s have another look at that.” I think that was a problem with the original version, prior to the refinement process during the committee stage of this bill. Do not overload, do not threaten, and do not squeeze out the initiative of businesses by an unnecessarily heavy and burdensome level of regulation, which is why, as Minister Whaitiri pointed out, for smaller operators we need a fit for purpose regulation.

I want to go on and talk for a moment about what’s an incredibly important point for New Zealand, which is our ability to access international funds, or a fund, to cope with the sad and woeful experience we had here in New Zealand when the vessel ran ashore, as she said, near Mōtītī Island. That shocked New Zealanders, but I think what shocked us more was the inability to completely hold, other than through a long protracted litigation process, the shadowy forces behind these international shipping interests. We got the chap who was nominally in charge of the vessel and he served time, but it took a great deal of effort, and, indeed, some people are, to this day, deeply disappointed that the full cost was not borne by the shadowy interest behind a number of these international shipping lines. And not only are there lawyers, but the manner in which they structure their affairs in international jurisdictions makes it extremely difficult. So this bill is an improvement in that sense; it enables our regulators, it enables our Government to actually join others in litigation and a fund will exist.

But if I can just come back to the main point of whether or not we are creating a system that is safe for the men and women—and I would say that I know a wee bit about it, having a family member who is a young bosun on an oil boat, so this is often a regular feature of discussion, shall I say, amongst that generation. I must confess, while one shouldn’t bring family members up in the House etc., he’s 6 foot 5, 115 kilograms, better looking than his father, if I can put it to you like that. A major challenge in a vessel of that nature, obviously, is safety and processes that ensure that no one is bucking the system and endangering the lives of their fellow crew members, and I think the National Party member—I’m still learning his name but he came from a naval background—made a fair point, and obviously he’s got the bragging rights because he was the captain of a vessel. But I do think that at all times he wasn’t a captain of the vessel—OK, he’s a backbencher today then, sorry about that.

But the point I would make is that on this side of the House and in New Zealand First, naturally we’re voting for this bill but we never lose sight—and a third reading opportunity is a great place to say it—of the balancing act needed in coming up with a regulation that will outlive us as politicians. We’ll have come and gone coming up with a regulation that can be imposed or can be invoked to go ahead and exercise an entitlement in law to go ahead with a test but never ever in this House should we agree to testing regimes that become so burdensome we actually end up thwarting the initiative of many directors, many business owners, and, indeed, operators of these vessels.

It’s been a matter of considerable disappointment to me that a lot of the rhetoric that has come from our friends on the other side of the House—at one superficial level it’s been pro-enterprise, but when you look at how burdensome their regulation has actually turned out to be in practice, they’ve said one thing but it’s led to another. I think that’s a salutary reminder for those of us parliamentarians when we pass legislation that then leads to delegated legislation in the form of regulation that we don’t, as we leave this place, leave a legacy where businesses are drowning in very seriously burdensome levels of regulation.

I can’t help but conclude that the other side of the House, despite having talked a big game in many cases, have not left a legacy of fit for purpose regulation. Now, through the committee stage, with the introduction of a Supplementary Order Paper, there’s a sharper clarity around the importance of testing, but there is an acceptance that employees have rights in law and those rights should not be just smudged out in order to suit ideological proclivities, which from time to time are on full display on the other side of the House.

So, naturally, I join with Jonathan Young and I acknowledge the work that the officials have done. I acknowledge the work that he and his committee members put up with in order to bring the bill here, but I close this speech with a warning: do not introduce regulatory regimes that have the perverse effect of making it harder for businesses to flourish and maintain jobs. Thank you very much, Madam Assistant Speaker.

ALASTAIR SCOTT (National—Wairarapa): Thank you for the opportunity, Madam Assistant Speaker. I’d also like to pick up where the previous speaker, Shane Jones, left off and talk about initiative. I also agree with that speaker that most people do the right thing: most people do show initiative; most people are concerned for the health and safety of their colleagues, whether it’s in a car, or on a boat, or in aviation—or a balloon, as my colleague Jonathan Young mentioned. But there are idiots out there. There are a few bad apples that rot the rest of the cart and these are the people that we are concerned about. These are the people that cause the damage. These are the people that cause death, at the end of the day.

There is nothing like compulsory, random drug-testing to put the fear of God, if you like, into those. It is a very good disincentive to participate in sly drinking or casual pot-smoking before they wish to go in their balloon or their aircraft or, in this case, in their boat, conducting safety-sensitive activities. By not allowing random drug-testing, the Government is putting at risk those others on board—those other seafarers on board with the numbskull, with the idiot, with the sly drinker. I’m disappointed that they’ve removed the compulsory nature of the random drug-testing. They say they can test after the event; well, it’s too late—it’s too late after the event. The damage has been done. As I say, there’s nothing to disincentivise bad behaviour like a compulsory random test. We do it on our roads.

We do it already on our roads when we can randomly be pulled up by the police to test for alcohol, and that has brought about a culture that has seen a dramatic change in fatalities on our roads. We know, looking at our parents and grandparents and at our children, that the culture has certainly changed for the better. Random drug-testing, random alcohol-testing, is part of the reason that it has been so successful. We do it with the balloons, after the Carterton event, which Jonathan Young mentioned—so that’s covered. The roads are covered. Why is there inconsistency with the maritime seafarers of our communities? Why are they able to not be put under the barrel, if you like? As I say, it’s only a few, so if there’s no problem then there should be no issue.

Don’t give me this excuse that it’s a whole layer of bureaucracy that needs to take place to make sure that this occurs. That’s not the case—that’s not the case; that’s just an excuse to allow this piece of legislation to be propped up. With that, though we do support the bill, I’m disappointed that that drug and alcohol management plan aspect has been removed.

PAUL EAGLE (Labour—Rongotai): Thank you, Mr Assistant Speaker, and it’s a pleasure to take the call on this—a very important bill, in my view, for the people of the Chatham Islands. Before I start, I’d like to commend the Associate Minister of Transport for getting it to the stage that it is, but more so commending her for proposing to remove the amendment to section 198 of the principal Act. That was, essentially, to introduce competition to shipping in the Chatham Islands. So I’m very thankful for Supplementary Order Paper (SOP) 4, which came through.

I know, for those who have been to the Chathams, that it’s a 1½ hour trip approximately from Wellington to halfway between Christchurch and Wellington, and a whole lot of kilometres out that way, and, voila, you land in a part of New Zealand that really takes you back to the 1960s. When I first got on the plane back in June or July, the Hon Annette King, the former member for Rongotai, said to me, “You can turn that off.” It was my cell phone, and I thought, “Well, I was going to, Annette.” She said, “No, no. You can turn that off for the whole trip.” It sparked then that I thought, “Wow, the infrastructure and the know-how in a part of New Zealand that, dare I say it, has almost been forgotten, is limited.”

But the journey continued. We landed without fuss. I did note, though, that the plane was modified to have freight, because getting goods and services out of there and back in there are real problems. So it was pretty noticeable first up, from my first ever trip, that there were issues with infrastructure.

I want to acknowledge the Hon Christopher Finlayson, who has spent many a month working on a wharf—a $58 million wharf. The locals will tell you that once concrete and tools and machinery land on that island, they probably would have liked to have spent half that and spent the rest of it on doing other things. But you get a picture now of how important this SOP is, and the reason why the amendment needed to happen.

I met with the Chatham Islands Enterprise Trust. You can barely get them on a website, but when you find out who they are and what they do, you’ll find that they are actually the owners, the guardians, the administrators of most of the island’s infrastructure. Here’s an island with 650 people, and some more during tourism time, Christmas time. I do want to talk to the Minister for Regional Development about an airport extension, but that’s for another time, and he’s left the room so I won’t engage with him here and now.

The Enterprise Trust, established back in 1981, has invested over $5 million into establishing the island’s first 100 percent community owned and operated shipping service, purchasing its own ship. So allowing foreign vessels to visit the Chathams to pick up, to choose freight and selected revenue, endangers the economic viability of that community shipping service.

I think when you look back at the rationale that they presented—and can I acknowledge the chair of the Transport and Industrial Relations Committee—there have been 15 years’ worth of reports. This reminds me of local government, actually; they keep just doing reports. Since 2002, there have been one, two, three, four, five reports looking at shipping needs. That’s probably four reports too many, considering they all really said the same thing. When I looked at the summaries and their conclusions, they talked about things needing to be reliable, frequency, minimising freight rates, and the security of service.

It’s a history there. They’ve had shipping there for over a century, but they had good rationale in there about their history around what competition did. They had two ships, there was intense competition, the market prevailed, and you were meant to get everything delivered on a platter, but instead both operators failed over competition.

Also, if you look at the 650 people who live there and do business there, the rates for freight were far too high. Dare I say it, the residents really don’t have a good understanding—or, to be kinder, they have little understanding about what effort and skills were required to run and manage a shipping service. However, they trusted their own Enterprise Trust to deliver a reliable service, something that they knew was going to run on the same day at the same time, and deliver what goods they had—billions of dollars’ worth of freight, really.

Once this wharf is opened, there will be several Ministers competing, on this side of the House, for the opening rights; MPs diving for those 40 seats on Air Chathams to get down there for it, probably in March, to be part of what will be a successful enterprise that gets built.

I want to just comment on the concerns with section 198. When Chatham Islands Shipping purchased a boat back in 2012, there were several issues that came from that, but what they did manage to do was say that if that was what was being proposed, then they wanted to be heard by the select committee and ensure that their opinions were given due reason. One thing they did was say that because of the small size and scale of the island, they know that experience and history showed them that there was a high probability that no private entity would invest into a sustainable and affordable shipping service.

They also noted that many shippers have come and gone over the last century. The boom, the bust; they come, they go—no one stayed around. But what they also noticed was that the potential is unbounded in terms of livestock, fish, and tourism, and this is why they set up their own community shipping service. It almost seems old-fashioned and outdated. It almost takes you back to municipal electricity departments, water services run by in-house units rather than council-controlled organisations, but in the Chathams it works, and that’s what’s most valuable.

They also talked about the significant investment that would be required—and that’s happened, and that’s the wharf. In conclusion to what they wanted to put together in terms of their amendment, they talked about a request. I think they were very polite in terms of saying to the committee that they didn’t support the amendment, that they wanted something that acknowledged that they already had the know-how to run their own shipping service, and they wanted to make sure, when the decision was made around coastal cargo, that although the intention was to enable a greater surety of shipping services, it didn’t, in fact, do the opposite.

So thank you to all of those who have put in the work required. I’m proud to see that the Supplementary Order Paper will ensure that the section will be amended. Thank you, Mr Assistant Speaker.

IAN McKELVIE (National—Rangitīkei): Thank you, Mr Assistant Speaker. It might be surprising to you, I guess, to know that this is the first time someone of my eloquence has had the opportunity to speak in this House in this term. I thought I was going to get to Christmas-time without getting there. First of all, I want to congratulate you on your appointment as Assistant Speaker. Of course, we’re very fortunate to both live in the same electorate, the very good electorate of the Rangitīkei, which, of course, you represent a good piece of as well. So thank you for that, Mr Assistant Speaker.

I want to comment very briefly on this bill, the Maritime Transport Amendment Bill, in its third reading. I want to comment very briefly on it. Just to make a couple of comments about some comments Minister Jones made earlier on, when he talked about relieving business of the burden of bureaucracy: I guess that when sitting in a Government that surrounds itself with bureaucracy, it’s very refreshing to hear that. I also thought he made an interesting point: that whilst it is a burden on business, very few businesses actually commented on the issue of compulsory drug testing and the course of that.

I also want to make a bit of a comment on the previous speaker, Paul Eagle’s, talk about the Chathams. I’ve never been to the Chathams myself, and I’d welcome a trip with him anytime he wants to take me.

Just briefly, on the bill—

Hon Kris Faafoi: That’s 38 seats left.

IAN McKELVIE: Ha, ha! It’s quite extraordinary, I think, that in this day and age we’re talking about a bill that deals with everything from what is, I guess, a monopoly on shipping to the Chatham Islands to the launching of space rockets—and things that are probably a little bit beyond my generation even to think about—on the East Coast of the North Island of New Zealand. That’s the nature of legislation we put through this House, and that’s the complication of legislation that the chair of the Transport and Industrial Relations Committee at the time, Jonathan Young, talked about when he made his speech on the third reading of this bill. It is pretty interesting that we can get into things as diverse as that, in a bill like this.

I just want to make two other points. One is that whilst this bill, I guess, came into being initially around oil spills and things like that, it also deals with some pretty significant factors that have a big impact on the perception of New Zealand internationally. One of them is the tourism industry, and one or two of my colleagues have talked about that. We cannot afford to take risks with these industries. This bill to some extent protects the tourism industry, but I think that will be where the risks, in my view, are: in not making compulsory drug testing part of this game, and things like that. But I also understand the reasons for that, because I do think that, at the end of the day, personal responsibility comes into a whole lot of things, and those people that are involved in those industries—whilst they work in them, they also have a responsibility to themselves and their fellow workers to make sure that they do behave in a rational manner.

I don’t want to add anything further on the bill. I think that most things have been said. I think it is a good piece of legislation, on the whole, and I commend it to the House.

The ASSISTANT SPEAKER (Adrian Rurawhe): I call Marja Lubeck—five-minute call.

MARJA LUBECK (Labour): I’m rising to take a call for the third reading of the Maritime Transport Amendment Bill. It’s a real privilege to talk to this important bill. There are several good improvements in this particular version of the bill, and it’s important to make that comment, because we’ve heard a lot of feedback from the other side of the House today that we are debating previous Government bills, and while, indeed, many of these bills are an exercise of cross-party work, some of these bills have been transformed quite significantly and are actually a very different version from the bill as it was first introduced.

This bill, in particular, was introduced without the support of the industries and the population it would affect, but our MMP Government has made important changes to reflect the submissions that were made, and I would like to thank Minister Julie Anne Genter for driving this important bill to completion.

We’ve already heard from previous speakers about the importance of increasing the amount of compensation that New Zealand’s Government can seek in case of a major oil disaster, so that it puts the responsibility for cleaning up the mess back to the owner or owners of the vessel that caused it—so a really important change.

My previous colleague Paul Eagle has spoken quite eloquently on the removal of the contentious provisions that would have allowed foreign operators to compete unfairly with our domestic vessels on the Chatham Islands route—so also a really good change to this bill.

So, I guess, what we now see is that these two sides of the House seem to disagree on the mandatory testing aspects of this version of the bill. I’d like to talk a little bit about what this bill actually does with regard to testing—in particular, the director testing regime that is contained in this bill. This bill gives certain powers to the director of Maritime New Zealand, and these powers do allow for carrying out non-notified drug and alcohol testing of maritime staff in safety-sensitive positions. Maritime rules set the requirements under which this testing will be carried out, and it can be either randomly or for reasonable cause, when there is suspected impairment. Also, in many instances, operators may already have non-mandatory drug and alcohol testing in place through their in-house scheme.

Therefore, in this version of the bill, the amendment that would have provided for mandatory drug and alcohol tests has rightly been removed, and I believe that is a good thing for several reasons. As stated by many submitters during the select committee stage, a compulsory scheme is difficult to comply with and very costly for many of the small operators that make up the maritime sector. But, added to that, the very important point that hasn’t really been made yet is that with compulsory testing comes division in the workplace, and when you have division between an employer and employees, that is very likely to result in a decline in work culture and a decline in engagement, which can have real negative impacts. I’m not talking only about productivity; I’m talking about a decline of culture that actually hinders safety. So these amendments for compulsory testing were really counter-productive. Twenty-five submitters commented on this bill, and 18 submitters actually said that alcohol and drug testing provisions were unnecessary. They said that impairment was already addressed by health and safety at work as well as maritime safety system requirements.

Now, I’m a little bit disappointed with some of the comments that have been made on our working people in New Zealand. I’ve heard comments like “rotten apples”, I’ve heard things like “let’s put the fear of God in them”, and I think that’s really, really unacceptable. As the New Zealand Council of Trade Unions put in their submission, workers should not lose their human rights at the door of the workplace. We need safe workplaces—absolutely—but we need to also retain people’s right to dignity and privacy at work, and this bill in its current form does exactly that.

There is a fine line between the need for random testing and invasion of privacy. I used to work in an industry where safety was regarded as the cornerstone of the workplace, and I know about random testing. I had the experience myself of being randomly picked for testing, and it does leave you feeling kind of uncomfortable, even from the perceptions of your colleagues. So when there’s no need for it, and all it does, as a previous speaker has said, is increase red tape and cumbersome processes, I could only think it must be put in place for political reasons rather than for impact on safety.

So, in short, to conclude I would like to thank the Minister, the officials, and members of the Transport and Industrial Relations Committee for all they work they’ve done on this bill. It’s a necessary, overdue bill that we support. I commend it to the House.

STUART SMITH (National—Kaikōura): Thank you, Mr Assistant Speaker. It’s a pleasure to speak on the Maritime Transport Amendment Bill. As my colleague said a little earlier, it’s quite strange that this bill covers things from a monopoly on the shipping service to the Chatham Islands to space launches—one of which has just occurred today, I understand—across the water. You did mention that it was perhaps not your generation, but I will point out that it was in 1969 that man walked on the moon; so space launches over water are not that new.

The bill itself covers a lot of things, and I will come back to the Chathams in a minute. The drug and alcohol thing’s been fairly well explored but, really, in the mining industry in Australia it’s mandatory to be tested, breathalysed, every day when you go to work. It’s about people’s safety. I think that while the risks might be relatively low, the consequences of something going wrong at sea can be massive, not only for safety but also for the environment. I think that’s all I’ll say on that matter, but I think it’s very important.

It’s quite interesting—the Rt Hon Winston Peters has just entered the House and I acknowledge him. When I was researching this, I looked up how it might impact on my electorate. Of course, the sinking of the Mikhail Lermontov in 1986, which I’m sure you’ll remember very well, Mr Peters—in fact, I see you’ve been quoted a few times about advising the foreign policy arm of the Government to look at Jane’s Fighting Ships, to see what sort of equipment might have been carried on board the Mikhail Lermontov, and Russian spies, etc. Unfortunately, there was the loss of one life on that ship but fortunately there was no environmental disaster, because the oil was got off. But I’m sure some of the provisions in this bill—were they being carried out, that accident would have been avoided.

Going back to the Chatham Islands—I’d also like a trip over there, by the way, if Paul Eagle is listening.

Hon Member: 36.

STUART SMITH: It’s filling up. It’s going to be a big aircraft. Mr Faafoi, are you on that trip?

Hon Kris Faafoi: No. I’ve got other things to do, sorry.

STUART SMITH: Well, we’d quite enjoy your company, I’m sure. But it’s interesting, talking about that, because one of the things about coastal shipping and the challenge that coastal shipping faces is competition. Its main competitor is heavily subsidised, and that’s not, of course, road transport; it’s actually rail. How the shipping industry can survive and have an adequately provisioned and provided-for service by coastal ships requires them being a viable business. But, unfortunately, rail and coastal shipping are competing directly, head to head, against one another and unfortunately, in the end, the end result is that neither one is actually particularly viable. So that’s something that I thought might have been attacked by the incoming Government in this bill, but unfortunately it has not been addressed. Anyway, I’ll leave it there, and I commend the bill to the House. Thank you.

GREG O’CONNOR (Labour—Ōhāriu): It gives me pleasure to speak to the Maritime Transport Amendment Bill 2016. I am privileged to represent an electorate not far from here. If you look up when you’re leaving here, you’ll see the summit of Mount Kaukau. When you stand on that summit, you look out on to Cook Strait, you look out on to the harbour, and it would be a very, very rare time you would be there that you wouldn’t see considerable shipping activity around this area. When I stand there—it’s a very attractive and pretty part of what is probably one of the most underrated electorates in New Zealand—and when I look at this bill, I see how important it is that we actually ensure that we get it right.

Many of the speakers here have talked about the issue of drug testing. What was originally proposed, of course, was the drug and alcohol management plan (DAMP). I’m surprised no one else has been “dad jokey” enough to talk about how we were going to take the “damp” out of the maritime industry, but it would appear we have actually done that very thing.

On a more serious note, when I look at the whole question of drug testing I’m very pleased that what again on the surface of it—and I commend the select committee that looked at this and probably thought, “Well, yes, this is a logical thing to do, when we have a look at some of the disasters.” However, what is incredibly important, as we now look at the issue of drug testing, as it becomes more important—and so many of the issues we’ll be dealing with in this country relate to drugs. We’ve just seen this morning the police seizure—the civil action against the leader of a major gang in Auckland, seizing property that may or may not be tainted property from drug transacting. This gives some idea, when you look at the millions involved in that, just how much drugs are an important—how much it’s part of the lifestyle of New Zealand. So we do need to address that.

But we always have to be aware of the law of unintended consequences in doing so. I’ve seen that where we do introduce stringent regimes, we actually can bring about behaviour that is—if we’re not actually going to address what we intended to do, we can actually end up with perverse outcomes. I talk about things like synthetic cannabis and the prevailing use of it. It’s come back into use because one of the problems is that the drug-testing regime around it is very inaccurate. People can actually still—and I should be careful, saying this and giving people ideas. But I’ll just say that the testing regime around that is a little inaccurate, and if we’re not careful we just encourage what is actually more dangerous behaviour.

So I’m pleased that a provision that was relatively thrown into the bill—it made sense, but cooler heads have prevailed. What we’ve asked the employers to do, the shipping owners to do, and the companies to do is to take a broader look at this, at their whole policies, and bring in what should always be testing or bring in regimes around dealing with these issues, that take into account the broad issues involved, so that we don’t take a narrow approach that could actually end up making our industries more unsafe because those involved may end up in alternative activities that are actually more dangerous.

We have seen, and we don’t need to look far to see, the effect on our shipping and what can go wrong in shipping. The Rena has been spoken about many times, and the Mikhail Lermontov also. New Zealand became the first country since the Cold War to actually sink a Russian ship at the time. But our levity around that should be—obviously we should be careful around the fact that a man did lose his life in relation to that.

The Rena also was something that occupied all our attention. Again, it was an act of crazy shipping where someone decided basically to take a short cut into Tauranga Harbour and ended up on the Astrolabe Reef. I know I was in Waihī after a major storm, and a lot of the cargo that had been on board, a lot of the shipping containers, broke open and ended up on Waihī Beach. Again, I’m reminded of my mother, who was from a dairy farm up there. She saw all these bags of skim-milk powder on the beach and was wondering how she could get them back to my brother’s farm in Westport. She couldn’t stand to see the waste, like a very good farmer’s wife.

But, again, we saw the result of what can go wrong in shipping. So I’d hate to think, when we seek to address it, that we sort of think that by introducing a drug-testing regime somehow we’re going to fix it. So this really does put it back now on the shipping owners to make sure that they have got a regime in place that ensures that their employees are safe; that it’s not just a narrow provision being used, because if they don’t get it right—and this is the message I like to see going out to so many groups before we do embark on regulation—and if you don’t self-regulate, then we will be forced, as a Government, as a State, to do this. So this does give the opportunity.

As I look through the submissions that were made to the select committee by various groups, it’s not selfishness in there; as I read through those submissions, it’s people who actually understand the implications of legislation like this. So, again, I think those who may find the fact that those DAMP provisions have been removed could gain some comfort from the fact that the industry has now been alerted to what will happen if they don’t take some sort of action themselves.

Moving on to other provisions of the bill, of course we have the oil spills. Actually, now, this bill really does give us the opportunity to make sure, through the insurance, that we actually have funding that goes from $411 million to $1.5 billion, which we can actually now ensure is available through the insurance scheme. We can make access to that to fix up these spills. Again, I go back to the beginning of my speech when I talked about the amount of shipping that goes through the relatively narrow Cook Strait, and Wellington Harbour, and I’m sure that the near misses are reported, but I do fear that one day we may—my colleague Mr Eagle talked about the fantastic fishing and diving, and the blue cod and the crayfish down at the Chatham Islands, but a much better-kept secret is the south coast of Wellington where, once one is outside the rāhui, or the reserve, there is a great amount of crayfish, blue cod, and other delicacies to be found in that area. So I would hate to think that an oil spill—however far away such an oil spill might occur—and the fact that we didn’t have the funding to actually stop it from coming ashore, would prevent those lucky Wellingtonians from being able to avail themselves of that very lucrative, fertile, and tasty produce from that part of the coast, and that that would be lost. So, again, I think that’s another great provision of this bill.

I was going to talk about the Chatham Islands, but I think, again, after my colleague Mr Eagle spoke, there is not much left to say. I think they’re small islands—and, again, I wouldn’t put my name forward to be on that plane, because I think, already, with the number of people who’d be interested, I’d hate to think that this country could be at the mercy of some of the brightest minds in New Zealand perhaps not making it out there. I’d hate to think what might happen.

Just, finally, I think that one of the provisions of the bill—the Rocket Lab. Again, it’s hard when you speak this late into a debate, to actually find something new—and already I think one of my colleagues across the House has referred to it, but I have to inform him that one of the provisions of this bill is to ensure that, basically, ships stay out of the way when rockets are being launched. I see that the rocket launch that was to take place today has been aborted. I’d hate to think that it did actually make it and there was one of these massive passenger ships that we’re seeing—passenger liners; the one that I walked past today was one of the bigger ones I’ve seen—and I’d hate to think that one of them happened to be sailing past, oblivious to the danger, when the rocket came down on it. So, again, it just shows that there is quite a bit of sense to this, so I commend this bill to the House.

JAMIE STRANGE (Labour): It’s with a great sense of honour that I rise to support the Maritime Transport Amendment Bill. We’re an island nation. We certainly rely upon maritime transport for many aspects of our economy, and it’s very important that we absolutely get this right. Before I begin my speech, though, I’d just like to defend God for a moment here. The Opposition member Alastair Scott talked about putting the fear of God into people, into employees. Now, I’m sure God appreciates being brought into this debate. I’ve heard he avidly watches Parliament TV—religiously—but the key thing the member needs to remember is that man was made in God’s image. There’s an aspect there around respect for people and dignity. Genesis 1:27: “… God created man in his own image … male and female created he them.” However, possibly some more in his image than others, but that’s not for me to judge. But it is about—

Rt Hon Winston Peters: What about the Hon Steven Joyce section of that—Genesis—“The seventh day I rested.”

JAMIE STRANGE: Ha, ha! Yes, indeed. There seems to be a lot of resting going on there, Mr Peters, but I won’t talk about that.

So this is yet another example of an improved bill that was brought to the House by the National Party. Labour, New Zealand First, and the Greens have made amendments and improved the bill. And it’s good that we have, because, as I said, we’re an island nation and it’s important that we get this part of our policy correct. There are key areas here around efficiency, effectiveness, and safety. Now, as a child, I used to go on the interisland ferry quite a bit. Every Christmas time, we’d get up at 2 a.m. in Hamilton, drive to Wellington, hop on the ferry, and head across to have Christmas in Collingwood. We certainly relied upon the staff doing a good job.

The background information to this bill here, the Maritime Transport Amendment Bill, is it amends the Maritime Transport Act 1994 to improve, like I said, the efficiency, effectiveness, and safety of the maritime transport system. Proposed changes to drug and alcohol management and coastal shipping provisions of the bill were identified through the select committee process. As the final speaker on this bill, I would just like to summarise some of the key points here that have come forward. We heard from Julie Anne Genter, who is the Minister who put this bill forward. She spoke about increasing compensation around oil spills. All of us will remember what happened with the Rena disaster, and it’s important that we are compensated for these disasters as a country. She spoke about some miscellaneous amendments that I’ll get to soon. She spoke about drug and alcohol aspects, about removing the requirement for mandatory drug and alcohol testing, and these amendments she talked about, they certainly improve safety. We heard from another member about the drug and alcohol testing after our amendments being just right. She believes the balance is correct, and I believe that, too—the oil spill compensation increasing from $411 million to $1.45 billion in order to adequately compensate our country.

We heard from Mr Jones about the removal of some of the red tape, which is something this Government is committed to—morality associated with compulsion. He spoke about treating employees with dignity. Employees have rights under the law, and, like I said, we’re all created in God’s image—that aspect of respect. Small operators need a fit-for-purpose law. Mr Jones spoke about the Rena, around the full costs not being borne by the shipping company at fault, and how this bill enables us to act in the best interests of all New Zealanders. Regulation can be burdensome. Compulsory random tests—small operators will struggle with this, as we’ve heard from the submissions.

We also heard from my colleague Paul Eagle, who’s left the building, about the Chatham Island amendment—about the importance of this amendment and the fact that allowing foreign vessels to visit the Chatham Islands created an uneven competitive environment. We heard from another colleague, particularly from an employee point of view, around mandatory compulsory testing creating division in the workplace between employees and employers. Now, just picking up on the Chatham Island aspect again—see, this bill in its original form sought to amend the definition of “coastal cargo” in section 198 of the Maritime Transport Act in order to ease restrictions on the carriage of coastal cargo between mainland New Zealand and non-mainland locations, including the Chatham Islands. The operation of section 198 for shipping between mainland ports will be unaffected.

With respect to the proposal to amend section 198, Chatham Islands and coastal shipping interests noted that foreign vessels are not subject to a number of compliance requirements that domestic vessels are subject to, such as GST and New Zealand labour law, thereby creating an uneven competitive environment. Coastal shipping interests were also concerned that the amendment could be a forerunner to a general liberalisation of coastal shipping regulation. Evidence to the Transport and Industrial Relations Committee from the Chatham Islands Enterprise Trust and Chatham Islands Shipping Ltd supported the contention that such competition could compromise plans to commission the building of a replacement vessel for the one currently operating between the Chatham Islands and the mainland. Such an outcome would run contrary to the intention of the amendment, which was to provide greater surety of service provision to the Chatham Islands and offshore islands.

I’d like to close by just going through some of the miscellaneous amendments that the Associate Minister of Transport brought up. One of those is around improving the flexibility of empowering provisions for the making of rules under the Maritime Transport Act. The second one talks about allowing regional councils to retain fees from infringement offence notices issued for breaches of maritime rules, and I know the regional councils support this. It gives them a certain amount of autonomy in order to redirect the funds in the way that they see fit. An amendment enables territorial authorities to transfer responsibilities for harbour works and maritime activity and clarifies that powers transferred to a public authority can be varied or withdrawn. Another key amendment here is around clarifying that the director of Maritime New Zealand may issue guidelines consistent with ballast water convention requirements and procedures. An amendment clarifies the definition of marine protection product for the purposes of marine protection rules and extends on-board limitation of liability provisions to remote pilotage.

This is certainly a significant piece of legislation that will support maritime safety and tackle pollution. The bill will ensure that, in the event of an oil spill from a tanker, there is significantly more compensation made available to deal with any clean-up. This is about ensuring that those responsible for oil spills cover the cost, not the New Zealand taxpayer. The bill increases the potential compensation from around $411 million to just over $1.5 billion.

The new Government made some changes to the bill to reflect feedback during what we heard in the select committee process. That includes removing proposed amendments that would have allowed foreign-flagged vessels to start carrying cargo to the Chatham Islands, which, as I said before, would have created unfair competition. We know that the industry is already undertaking drug and alcohol testing where this is an identified risk, but forcing all small businesses to undertake testing would have been costly and impractical.

Hon Shane Jones: Red tape.

JAMIE STRANGE: As a member of Government who looks to reduce red tape rather than tie businesses up in red tape, I absolutely commend this bill to the House. Thank you.

JAMI-LEE ROSS (National—Botany): Mr Assistant Speaker, thank you very much. I wasn’t going to take a call in this debate, but I saw the Labour whips flurrying and Mr Faafoi was looking like he was preparing to get up and speak, and I wanted to save him the hassle of doing so.

This is a National Party bill that was put together, and we are going to be supporting it. I have to say, though, in this brief contribution that I’ll make, that we are disappointed that the important drug and alcohol management provisions that were in the bill have been gutted from it. I want to say, when members like Jamie Strange stand up and say it’s his great honour to speak on this bill, I want to ask: is it their great honour to strip from this bill important safety measures that will assist in ensuring that there’s greater maritime safety in that transport sector, because that’s, effectively, what they’re doing?

It was a National Government bill, put together. It’s fairly perfunctory and it puts through a range of measures that will be important for the industry. But the key change that they’ve made—in fact, the first maritime transport change that this new Government is putting in place—has been a Supplementary Order Paper (SOP), which has gone through the committee stage, that will gut from the bill the important safety measures around drug and alcohol management. So I ask them, if they really do care about safety in the maritime transport industry, why are they doing that; why did they do it? Why has the committee of the whole House, based on their SOP, delivered back to the House a bill, which we’re now debating in the third reading, that previously had important safety measures around drug and alcohol management that have now been gutted from the bill.

Don’t they care about that? Do they not care about the people out there whose lives are involved in the shipping industry? Do they not care about those operators who, under the previous bill, as it came from select committee, would have had the ability to have the people involved in operating those vessels to have random drug and alcohol testing? That no longer will be the case. Safety provisions have been ripped from it.

Hon Shane Jones: I raise a point of order, Mr Speaker. Sir, I don’t want to test your forbearance, but can I invite you, yet again, to look at Speakers’ rulings 121/4-6. Now, that’s not a junior member of the House. He knows as well as I do that those denunciatory remarks, ad hominem attacks on this side of the House, do not fall within the parameters of what you should expect from a senior member on the other side of the House in relation to the third reading. You are allowed to talk about principles, you’re allowed to sum up, but I think it’s a rather dim part in the day’s proceedings, so I invite you to counsel the man.

The ASSISTANT SPEAKER (Adrian Rurawhe): I thank the honourable member for his intervention. I just want to say to both sides of the House that this has been a good debate, and whilst there has been a little bit of straying outside of the parameters of the bill, both sides have been guilty of that. I call Jami-Lee Ross—and come back to the bill.

JAMI-LEE ROSS: I didn’t realise Shane Jones was such a delicate petal! We’ve learnt something new today. He’s not talking about “A billion trees” any more; there’s only “half a billion trees”, and they won’t be transported on safe maritime vessels, because there will be no drug and alcohol management plan through this bill.

Mr Assistant Speaker, I was talking about the bill that’s been delivered back from the committee of the whole House, which is perfectly relevant to discuss. Under that bill, those members over there have delivered and ripped out of that bill important safety measures, and I think this House needs to know that this bill is no longer delivering the safety that the bill otherwise would have as it previously was written. I know that they’ve made some changes that their union friends wanted and demanded, but I have to say they have dampened the safety mechanisms, and that’s appalling.

Bill read a third time.

Bills

Maritime Crimes Amendment Bill

Third Reading

Rt Hon WINSTON PETERS (Minister of Foreign Affairs): I move, That the Maritime Crimes Amendment Bill be now read a third time.

This bill demonstrates New Zealand’s continuing commitment to the fight against terrorism by enhancing New Zealand’s ability to respond to threats to maritime security. It will bring our domestic legislation into line with the current international legal framework related to maritime terrorism.

Now, this bill came to the House 18 months ago, and it was stalled around here even though it’s a critical matter to do with our international safety, and after 42 devastating days of vision and activity it is going to pass through this House this evening. It’s just like the last bill: it staggered around here for weeks and years as well, but in came a Government with drive and unction and commitment and youth and energy, and, as a consequence, like lightning, it’s going through the House.

This bill was introduced into the House on 2 May 2016, a year and a half ago. Now, the Foreign Affairs, Defence and Trade Committee reported it to the House over a year ago—over a year ago.

Kieran McAnulty: What have they been doing?

Rt Hon WINSTON PETERS: What have they been doing? Well, that’s a question I’d love to answer—but heaven knows. Heaven knows what these people have been doing with their time, because running the country, economically and socially, in a sound way is what they have most definitely not been doing.

It’ll implement two maritime counter terrorism treaties into our law: the Protocol of 2005 to the Rome Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation and the Protocol of 2005 to the Rome Protocol for the Suppression of Unlawful Acts Against the Safety of Fixed Platforms Located on the Continental Shelf and the 2005 protocol to introduce new offences relating to misuse of ships and fixed platforms. This bill will add these new offences to the Maritime Crimes Act 1999 and relate to—I just want to outline these five things—the commission of serious offences against ships or using ships; the illicit trafficking by ships of weapons of mass destruction, their delivery systems, and related material; the transportation of fugitives by ship; fourth, the commission of serious offences against fixed platforms or using fixed platforms; and, fifth, intentionally causing death or injury in connection with these offences.

The bill introduces a maritime boarding regime consistent with the existing international law, which clarifies enforcement officers’ powers when taking action in relation to offences under the Maritime Crimes Act 1999. It gives New Zealand courts extraterritorial jurisdiction over an offence if there is a New Zealand link—for example, if it takes place on board a New Zealand ship.

I could deal with all the rest of the matters, but it’s pretty self-explanatory. As they say, the 2005 protocols—and according to the bill—have a counter terrorism context. The enactment of this bill will enable New Zealand to ratify the 2005 protocols, thereby becoming party to all 16 of the core international counter terrorism instruments. This is consistent with our commitment to the global fight against terrorism and to ensuring that we have the legal framework in place to deter and to react decisively to terrorism.

Now, I want to say to the Foreign Affairs, Defence and Trade Committee that they deserve our gratitude for their careful consideration of the bill, which they got back to the House a long, long time ago. And then, like so much of what was going on under that previous administration, it hit a roadblock—a detour. It just stalled and nothing happened. We’ve got a serious matter of international security, maritime security, and here we’ve got a Government over there, in Opposition now—and it looks like it’ll be there for a long, long time, because, as I warned those gentlemen and ladies over there, their front bench weren’t up to it, and they’re not. If you could take a serious matter like this and be so dilatory about it, then you’re not serious about being in the Government.

What it reminded me about the last bill that just went through the House is it’s got a similar—in terms of urgency—ring to it. In fact, they had no sense of urgency at all. The Rena had happened—an absolute disaster. They all knew about the maritime event of the Mikhail Lermontov, of which they were warned by a then younger National Party backbencher of the circumstances that they were inviting. They decided to ignore that, and 31 years later, somebody gets up from the Kaikōura electorate and says he’s read it. Well, he read it, but what did he do about it? It’s the reason why we’re over here—because in this coalition Government, there’s energy and drive, and you can see it. We ooze it. We ooze the sense of crisis that besets this country. That’s why I commend this bill to the House at its third reading. Thank you very much.

Hon MARK MITCHELL (National—Rodney): Mr Assistant Speaker, thank you very much. It’s a pleasure to take a call. To the Rt Hon Winston Peters, I know he’s heard this term: explaining is losing—explaining is losing. Can I just acknowledge him because I know that he’s used his considerable influence to get this bill into the House. It is a very good bill, and I appreciate the fact that he’s acknowledged that. Can I just say that the one thing I was very disappointed about in all the statements that the Rt Hon Winston Peters made during the campaign period and after the campaign period was that he never restated his commitment to be the outstanding media liaison officer for the Parliamentary Rugby Team. That’s one thing that we’re still waiting to hear; we want to hear that restated commitment. He’s an outstanding media liaison officer. We never get any media.

Hon Kris Faafoi: No coverage.

Hon MARK MITCHELL: No coverage—zero. You know, “Faaf”, there’s no coverage.

But, anyway, I just wanted to say that this is a very good bill. In all seriousness, when you look around the world and you see the types of terror attacks that we see, almost on a daily basis, and when you see the threat that’s actually got closer to home, with Abu Sayyaf, which are now really trying to establish themselves in a caliphate in the Philippines, you actually realise that this is serious business. I am sure that the Rt Hon Winston Peters has had briefings as the incoming Minister of Foreign Affairs. He understands this. I’d just like to say, as the outgoing Minister of Defence, that it’s going to be critically important that our New Zealand Defence Force maintains the level of investment that it currently has to make sure that it’s able to continue to operate at optimal levels and to have us actually going out and doing our bit in making sure that we address what is a growing terrorism threat around the world. So I am very happy to stand in support of this bill. Thank you.

Hon ANDREW LITTLE (Minister of Justice): Thank you, Mr Assistant Speaker. It’s a pleasure to take a call on the Maritime Crimes Amendment Bill and to acknowledge—as, indeed, the Rt Hon Winston Peters did—that this is actually a very important piece of legislation. It does a number of very important things, not the least of which is that it enables us to ratify a protocol to a very important international treaty that we first signed up to in 2005. Having now got our ducks in a row—in fact, we got our ducks in a row some time ago—it is a bit of a surprise that this legislation wasn’t passed under the previous Government when it had ample time to do so.

This deals with threats posed by the potential for terrorism activity at sea against ships and also platforms, as well. In this day and age, every nation State has to be getting itself prepared and alert to the varied and increasing threats of terrorism being expressed, whether on the high seas or on things like oil-drilling platforms and the like. So this bill is very important and will play a very important function in terms of New Zealand being able to provide protection to itself, to its citizens, and, indeed, to visitors to these shores.

We know that it also makes it very clear—and this is one of the things that came out of the earlier consideration of the bill—that legitimate protest activity is fully protected. So I can say to those who were concerned that the provisions of this bill, consistent with the international treaty that we’d signed up to and the convention that we’d signed up to, would be used against those who were expressing their opposition to the activities of corporates or activities at sea—whether it was drilling or whether it was in whatever form—that those protest activities continue to be not only legitimate but protected in this legislation. This is aimed at activities or threats—for example, the carriage of arms or of nuclear, chemical, or biological weapons by vessels at sea—that can be used to threaten a nation State, its population, or, indeed, innocent seagoing citizens around the world. We must have legislation that affords that protection.

One of the other important things it does is—in order to be effective, it does a very unusual thing for us, but it is allowed under the treaty—to extend New Zealand’s jurisdiction beyond its conventional 12-mile limit. So the enforcement of New Zealand law—specifically, this law, which is about protecting vessels and fixed platforms—is permitted as a result of this bill and as a result of ratifying the treaty that it’s part of, so that we can provide proper enforcement against the threats of terrorist activity that might be waged through ocean-going vessels.

So it is right that those sorts of measures are given appropriate scrutiny in this House, and this—the final opportunity for this House to give that scrutiny—is our chance to draw attention to those very important aspects, and also then to highlight just the important role that this country will play in this neck of the global woods to make sure that every effort towards counter-terrorism is being taken.

We have seen activities on the high seas. We’ve seen piracy off the coast of Somalia, which was actually some years ago—that is, I echo the sentiments of the Rt Hon Winston Peters, who said, “Look, we know what’s been going on in other parts of the world. Why would we not have acted earlier? Why would this not have been given a level of urgency as it passes through all stages of this House to here—the third reading?” So I’m very proud to be part of a Government that has stepped up, has seen the importance of this legislation, and knows how important it is. The Government of the day provides security and protection to its citizens and to those innocent overseas citizens who visit our shores, and we take every step we can to make sure that that security and protection is in place. So this bill is very important in that regard.

I want to refer specifically to a couple of provisions that this bill covers off. One is that it, of course, not only relates to actions—for example, the actual carriage of biological, chemical, and nuclear weapons, or the threat to use a ship in a violent way—but also covers the threat to use a vessel in that sort of way.

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

Hon ANDREW LITTLE: Thank you, Madam Deputy Speaker, and it is a great pleasure to return to the House to continue, hopefully, where I left off.

As I was saying before we were interrupted, this bill is important because it allows us now to ratify international treaties that were signed in 2005, and in the obvious circumstances of the growing incidences of terrorism on the high seas. We saw the acts of piracy, usually off the coast of Somalia, and other parts of the world as well. The world community got together and said, “We have to have better protection and better laws to do this.” So in 2005, the relevant international treaties were signed. For some mysterious reason, it has taken us this long to pass the legislation that enables us to ratify that treaty so that we can take the remedial measures and the active measures that provide the protection to those in or near New Zealand waters that they need against terrorism.

As I said before the dinner break, one of the interesting aspects of this legislation is it will enable New Zealand effectively to extend its jurisdiction beyond the 12-mile limit and have a law that applies for the protection of people on vessels, or, at least, use the law to stretch out to people with a nefarious intent who are motoring their way through the waters that we don’t presently have territorial jurisdiction over. So it has that important aspect to it.

What it allows New Zealand to do is to extend its jurisdiction beyond those outer limits, providing that there is an offence that is committed against or on board a New Zealand ship—or on a fixed platform, like a drilling rig, or it could be some of the production vessels that are sitting off the coast of Taranaki at the moment—and where the alleged offender is a New Zealand citizen or a New Zealand resident or a Stateless person, but who has a plan to act improperly towards New Zealanders and their interests. So that’s an important thing that ought to be brought to the attention of the House on this final occasion that this bill passes through the House.

As I said, the bill implements the obligations that we’ve already signed up to in the 2005 protocol to the Rome Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation—don’t ask what the anagram for that one is, Madam Deputy Speaker, because that will be horrifying.

The other thing that I think is important to it, because it was one of the fears expressed by many people, is that this type of counter-terrorism protection could be used to suppress legitimate, justified protest activity. On this side of the House, we would not pass a piece of legislation that allowed that to happen. Fortunately, as this bill has passed through all stages of the House, there has been a consensus between members of the House that that is also a protection that ought properly to appear in this bill, and it does, very much so, to ensure that someone undertaking a legitimate protest activity—which will be noticeable, which will be visible, which may be seen by some as aggressive—is not captured by the crimes and offences spelt out in this piece of legislation.

It is, of course, the case that this bill provides offences not just in relation to the doing of particular acts—the carrying of biological, chemical, and nuclear weapons at sea, or using a vessel to cause harm—but actually merely threatening to do those things is an offence under the Act, and we want those things to be caught, because that will help the enforcement agencies to do that. Of course, the other thing it allows is for the authorities to go after fugitives who have committed offences against the particular Rome convention that I talked about. All those things are covered by the legislation as well.

This is important legislation. It allows New Zealand to hold its head up high in the community of nations that are serious about counter-terrorism measures on land but also, under this bill, at sea.

Hon TODD McCLAY (National—Rotorua): Madam Deputy Speaker, thank you very much. I am pleased to speak on this bill, but, golly gee, I didn’t think I would be here in the first 100 days of a new Government talking about this. Don’t get me wrong, there is nothing wrong with this legislation—of course, we’re here in the third reading. But the last speaker, the honourable Minister Little—by golly, haven’t things changed. He used to be known as “Angry Andy”. Well, now he’s “Apologetic Andy”, because he’s—

Madam DEPUTY SPEAKER: Order! Order!

Hon TODD McCLAY: —going backwards as quickly—

Madam DEPUTY SPEAKER: Order!

Hon TODD McCLAY: —as he can. You see, not a single member on the other side of this House—not in the Green Party, not in New Zealand First, certainly not in the Labour Party—campaigned on this bill. Not a single one of them said, “We must do this within the first 100 days that we are in Government.” Whilst I’m pleased to speak on it, because it is a very important piece of legislation, it is important that we meet our obligations internationally, and that’s why the previous Government brought it to the House and will see it through. But surely there are much more important things for this brand new Government to do—

Hon Chris Hipkins: Ah, just you wait—just you wait.

Hon TODD McCLAY: —in their first 100 days in office. And they’re saying we should wait. Well, if I listened to them during the campaign, they thought people had been waiting too long. But, again, not a single member of the Green Party, of the New Zealand First Party, or of the Labour Party campaigned on this piece of legislation. They say there’s something more important to do; well, let’s get on with it.

LOUISA WALL (Labour—Manurewa): Tēnā koe e Te Māngai o Te Whare. I think this is the first opportunity that I’ve had to congratulate you on your election as Deputy Speaker in this House. I look forward to working with you, and I hope you’re enjoying your new role.

As a member of the Foreign Affairs, Defence and Trade Committee, I didn’t have a chance to be part of the process that has brought this piece of legislation to this House at this, the third reading. The Maritime Crimes Amendment Bill was a piece of legislation that was overseen by the last committee. I would like to acknowledge Mark Mitchell, who was the chairperson at that time, and he remains a member of the committee. This bill was referred on 15 July 2016. It had 151 submissions and the committee heard from 23 submitters. This is also the Rt Hon Winston Peters’ first bill in this Parliament, so I’d like to acknowledge him.

I found it quite interesting just reading the history of this piece of legislation. Essentially, it’s two of 16 international conventions related to terrorism and counter-terrorism. When I look at the history of the agenda around terrorism and counter-terrorism, it actually goes back to 1934. These are parts of the 2006 UN global counter-terrorism strategy. So that’s the context of this piece of legislation.

We have a protocol that was updated in 2005 to the Rome Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation. I’ll just focus on that for a bit. I wanted to really understand the whole context of this law, and so I looked at maritime law, and it was very much about trade. It was about the governing of the relationships between private entities that operate vessels on the oceans. So, initially, it was really about commerce, and it was quite interesting looking at, particularly, some of the US politicians who were, I think they called them, admiralty lawyers. They were involved in this sector, because that was the industry that they came from. So it was about navigating. It was about salvaging. It was about shipping, sailors, but mostly it was about transportation of passengers and goods by sea.

This whole area was initially founded on the International Maritime Committee, which was founded in 1897. They had responsibility for the drafting of numerous international conventions, including the Hague Rules. Then, in 1958, that kind of morphed into the UN International Maritime Organization, and their primary function was to prepare conventions such as the ones that we are debating tonight.

They call it the Suppression of Unlawful Acts (SUA) Convention, and my colleague Aupito William Sio isn’t in the House, but we’re used to calling him Su’a and then we had to call him Aupito, so for me this is the “Su’a bill”, and I hope he appreciates that. It’s quite a term of endearment. The SUA Convention—so you have the protocol and then the convention, and it was adopted in Rome on 10 March 1988. Then the protocol, which is what we are, in fact, passing in the House tonight—the enactment of this bill will enable New Zealand to ratify the 2005 protocol. That protocol—it’s full title is the Rome Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation.

Now what does this all mean? Well, what it actually means is the fact that ships will be designated a weapon of terrorism, and it also criminalises the use of ships that transfer or discharge biological, chemical, or nuclear weapons. The other substances that are noted are discharges that have got oil in them, liquefied gas, radioactive material, hazardous or noxious substances that can lead to death, serious injury, or damage.

Then the second convention that we’re looking at is the Protocol for the Suppression of Unlawful Acts Against the Safety of Fixed Platforms Located on the Continental Shelf. Now these ones, I had to look up. These are about the prohibition and punishing of behaviour that threatens the safety of, for example, offshore fixed platforms, including oil platforms. It’s the same thing. It criminalises the use of fixed platforms to discharge those things that I’ve read out: biological, chemical, or nuclear weapons, oil, liquefied gas, radioactive materials, etc.

What I found really interesting in the process of this bill going through the House is some of the amendments that the Foreign Affairs, Defence and Trade Committee made, and I’d like to focus on two in particular. One is around protest activity. I think it’s quite significant to focus on protest activity, because the select committee, I think, did a great job in differentiating between Greenpeace, for example, who have a ship and they end up in situations where possibly there is a discharge of oil, liquefied gas, etc., etc. But what they said was that this bill is not intended to criminalise peaceful protest. I think that’s really significant, actually, because there could have been an ability—if Greenpeace, for example, ended up engaging in a situation where for whatever reason oil was discharged, they could have possibly been caught under the ambit of this legislation. So to avoid doubt, the select committee, through their deliberations, were really clear that a peaceful act of protest or industrial action would not be by itself a sufficient basis for criminal liability under the Act.

There’s a relationship between protest activity, which is contained in the select committee report, and clarification of requirement for intent. So the select committee was also really clear that they didn’t want to make an offence where, as I’ve just outlined, there may be a ship on a protest that—just say it collided with another ship and somebody was seriously injured or it caused damage. What they were saying was it had to be the intent of the action. Obviously, when people are protesting in certain circumstances they’re not doing it to crash or to cause damage. What they’re actually doing is highlighting a particular political issue or a point.

So, from my perspective and that of the select committee, it was really important for us to protect the integrity of those who use protest as a political discourse. For the select committee to actually distil from those submissions that particular point, I think we should be really proud about, because our democracy functions when people have the ability to have their say, and the people who end up on vessels such as Greenpeace and go out into the middle of the ocean, I’ve got to say I’ve got a lot of admiration for them, because they are people who believe in what they’re doing and they’re incredibly passionate.

So I think that this piece of legislation, although the Opposition are kind of, you know—I think there’s huge merit in it, and for us to prioritise it shouldn’t be something that we dispel or criticise, because this needs to happen. In doing this we will become, I think, the 41st country in the world to actually ratify these 2005 protocols, and that’s quite significant, because let’s remember what the context of this piece of legislation is. It is to ensure the international conventions related to terrorism and counter-terrorism, which New Zealand now has ratified, that are part of our global agenda. So that means we join—I haven’t actually looked who the other 40 countries are. Maybe somebody else could look at that in a future call, but it means we’re one of the leaders, I believe, in the world, across all the other nations, in doing everything that we can in the protection and promotion of peace. Fundamentally, conventions like this are actually about peace.

So it’s been my pleasure to speak in this, the third reading, of this piece of legislation, and I commend this bill to the House. Kia ora.

SIMON O’CONNOR (National—Tāmaki): Thank you, Madam Deputy Speaker. I’m delighted to take a call on this Maritime Crimes Amendment Bill in its third reading. I didn’t have the good fortune of sitting on the Foreign Affairs, Defence and Trade Committee at the time, but, as has been well articulated in the House, this is bringing into effect two pieces of international treaty, effectively. It’s nothing overly unusual. In fact, some members of the House remember us bringing the bunker oil convention in, a few months back—not one of the great highlights of the House per se, but this is a fairly standard procedure, including the select committee working through a number of issues, including those being referenced by the last member who’s just taken her seat, Louisa Wall, around protest. But it’s very clear that this bill is talking about serious crimes on the sea and is not actually including protest vessels and the like.

What I do find striking, though, and others have mentioned it, is we’re a few days into this Parliament, and this is a previous Government bill, which is being adopted by the new Government. It’s relatively minor. It is a concern, certainly to me, that maritime crimes are, sort of, top of the agenda, when you think of all the other issues facing New Zealand. I am concerned that this is one of many pieces of legislation we’ve been debating that is, effectively, legislation from the previous Government, legislation worked on by the previous Parliament, and, as far as I understand, supported by all the House. So in terms of this being a Maritime Crimes Amendment Bill, I don’t think the current Government are—well, wasting almost the time of the House is a crime, but in a maritime context it certainly shows that they’re up the creek without a paddle.

GOLRIZ GHAHRAMAN (Green): Tēnā koutou. I am as delighted as everyone else to speak to this, the Maritime Crimes Amendment Bill. Essentially, as others have said, the bill before us goes back some 30 years, and it recalls initially the sinking of the Achille Lauro, but I think, to New Zealanders, it might also recall the bombing and sinking of the Rainbow Warrior, which we all might remember as one of the most serious terror crimes committed in New Zealand. And we might also as a nation who remembers that maritime act of terror welcome a new regime, or a strengthened regime, to bring the rule of law as a means to remedy or to react to that kind of crime at sea.

Effectively, the initial Act, the Maritime Crimes Act 1999, implements the initial Rome convention, which was to suppress unlawful acts against the safety of maritime navigation, but also its immediate protocol, the Rome protocol, which related to fixed platforms at sea on the continental shelf. But the two 2005 protocols seek to bring that initial regime, and so thereby our initial implementation of it through our legislation, to better react to modern transnational maritime crimes. So New Zealand signed those two protocols two years after they were introduced in 2007, but it’s taken us to this day to finally enact the enabling legislation.

To focus on the 2005 protocols, which are, essentially, before the House via this bill, they seek to ensure maritime security framework is established under the parent treaties, and to introduce very serious crimes: illicit trafficking by ship of weapons of mass destruction, transportation by ship of fugitives, intentionally causing death in connection with those offences, and maritime terror.

The initial Foreign Affairs, Defence and Trade Committee report identified this bill, or legislative means of implementing those protocols and the treaty, as the only way of really ratifying and implementing those treaties, so the bill before us is essential. The Green Party initially expressed grave concern, and our concern was related—although we supported the bill as a means of bringing international rule of law to our reaction to maritime terror, we did express concern because of the broadness of the term “terrorism” that was included in the initial draft bill. As the select committee process revealed, the term “terrorism” was never, in fact, even defined in the initial bill, so our concerns were very valid.

The public consultation process revealed that the public, in fact, was also very concerned about this, and the fact that the term “terror” was used without definition, meaning that certain peaceful acts of protest at sea would also be caught. Now, we’re a proud nation in terms of protest movements as well, and especially protests at sea, so to think that a law like this could catch, inadvertently or deliberately, movements such as the one that the Rainbow Warrior was in fact a part of, would be somewhat perverse. The public reaction as the select committee process went through also reflected this.

The select committee’s recommendations—in identifying that terror was not defined and that that was unacceptable—were satisfactory to us. The new draft bill has, in fact, removed all reference to terrorism from the proposed legislation. Instead, each crime is simply defined. So, to give effect to each of the crimes identified and defined in the 2005 protocols, this bill simply identifies acts and mental elements of each crime, without reference to terror. Although it has come about in the context of the global war against terror and modern terrorism, there’s, in fact, no need to place these crimes in the context of terrorism at all. If they’ve been committed—if the act from the mental elements are present, the crimes are identified and prosecutable.

We’re satisfied with that and, in fact, the bill goes further. The bill expressly excludes peaceful protest, labour movements, and other such activity at sea, which is, of course, very welcome by the Green Party. Overall, the bill enables New Zealand to meet its obligations as an international citizen, and it is in line with our principle of non-violence. Hence, we are now very proud to support the bill. Thank you.

HARETE HIPANGO (National—Whanganui): As I rise to speak to the third reading of the Maritime Crimes Amendment Bill, I address this House again in terms of the sheer coincidence and similarities as to aspects around the bill and, specifically, counter-terrorism. The bill is premised on maritime counter-terrorism. This bill strengthens New Zealand’s ability to deter and react decisively to terrorism on the high seas.

This morning at 7.17 a.m., I received a message from my son, who, after spending three weeks back here at home in Aotearoa New Zealand, had returned to New York and, on his first day commuting to work at the United Nations via subway, the text said, “FYI, I’m all good—if you haven’t seen the news already, Mum.” I hadn’t seen the news, and, immediately, I reacted and replied—bearing in mind that I’d received a similar text earlier this year from him in New York around a terrorist incident—“Bub, what’s happened?” He replied, saying, “Bomb, subway, Manhattan, New York City.”

As a nation, we here in New Zealand Aotearoa are not immune to the threats posed by international crime and terrorism. That’s why this bill is important. It’s a lot closer to home than many of us would think, and it’s not until one has really been in the personal situation to experience such acts, that you really realise how much it can impact on your life, personally, but also as a nation.

New Zealand has a reputation as a good global citizen. We were a founding member of the United Nations and have recently served with distinction on the Security Council. New Zealand doesn’t shirk from its global responsibilities. We are an outward-looking country, whether it be serving on the Security Council, forging trade deals, or sending peacekeeping troops across the world. Again, personally, I relate to this. I had a deceased brother, Lieutenant Colonel Hipango, who served with the United Nations peacekeeping forces in the Sinai in the late 1980s and early 1990s.

We know that the risks facing the world are many: economic conflict and terror-related. That’s why this Government is keen to forge international trade links and, more importantly in relation to this bill, to ensure that there are the safe mechanisms in place to deal with anti-terrorism. So, in conclusion, I commend this bill to the House, noting that other speakers this evening have addressed the detailed aspects and elements of it. Thank you.

Madam DEPUTY SPEAKER: The next call is a split call. I call Jo Luxton.

JO LUXTON (Labour): Thank you, Madam Deputy Speaker. I am pleased to have the opportunity to take a call on this, the third reading of the Maritime Crimes Amendment Bill. This bill was introduced to the House in May 2016, received 151 submissions, and oral evidence was heard from 23 submitters. It’s great to see so many people wanting to be involved, having a say with regard to the bill, and engaging in the process.

Initially, many were concerned with parts of the bill that related to offences regarding ships and terrorism. The bill was reported back to the House on 7 December 2016, then proceeded with some minor amendments, and was then read a second time on 16 February. I must say that I find it concerning that our previous speaker, Mr Simon O’Connor, is implying that we are wasting time with this bill.

Simon O’Connor: Ipso facto.

JO LUXTON: Well, I have to absolutely disagree with you there. It completely shows the previous Government’s lack of priority around our safety, clearly, in these times we face with terrorism getting ever closer to our own doorstep. Anyway, I am concerned that the previous Government sat on this bill for so long, given its huge importance to our security. But now, luckily—luckily—we have a new Government, which is ready to get things moving along at a progressive pace, because we find that we are now having to tidy up all the previous Government’s loose ends.

We are a small island nation. By definition, we are surrounded by water on all sides and are therefore susceptible to acts of terrorism. This bill will be to protect New Zealand. When we look at the many different ways that terrorism is making its way into people’s everyday lives, this piece of legislation is very timely, and, whilst there haven’t been too many incidents of maritime terrorism, we should in no way be complacent around this issue. We have seen bombs, mass shootings. There are vehicles being used as weapons of terrorism. So the amendments in this bill are essential to bring this legislation up to date.

Much of what is in the amendments really makes the bill clearer and more consolidated. By amending the Maritime Crimes Act 1999, it will enable us to implement obligations under two maritime counter-terrorism treaties: the Protocol of 2005 to the Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation and the Protocol of 2005 to the Protocol for the Suppression of Unlawful Acts Against the Safety of Fixed Platforms Located on the Continental Shelf.

But what does that really mean? It means that when there is suspicion that a vessel is suspected in involvement in maritime terrorism activities, we will have a regime for boarding that vessel. The amended Acts will now include new offences, such as using a ship or fixed platform so as to commit a serious offence, or a ship is used to illegally transport biological, chemical, or nuclear weapons or materials. Transporting fugitives by ship is also included here. In short, this bill will make it an offence to use a ship or fixed platform for terror acts or for enabling terror acts. Clearly, we are facing ever-changing threats with the increasing volatility of, and terrorism in, the world, and this legislation will enable better protection for us and will ensure that our maritime security framework reflects best practice.

Prior to this, the use of ships or fixed platforms for either enabling terrorist acts or committing terror acts had not been properly or adequately addressed. Many of the submitters were concerned that there could be a potential for peaceful protests or engaging in strikes, lockouts, or other industrial action to be prosecuted as terrorism. It is certainly not the intention of this bill for this to happen, so, as a consequence, a new section 3B, set out in clause 7, makes it clear that people can engage in these types of activity without the worry of prosecution. These types of activities by themselves are not considered a basis for criminal liability under the legislation. It is pleasing to see that people’s rights to peaceful protest have been protected and that submitters have been listened to.

New Zealand’s maritime safety framework must be consistent with international best practice, and this bill will help to achieve that, so I have pleasure in commending this bill to the House.

Madam DEPUTY SPEAKER: My apologies to the member for ringing the bell at two minutes and not one minute.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Deputy Speaker. Can I start by making an observation. It’s fascinating how interested the new Government has suddenly become in the former Government’s legislation. They’re deep diving into all these pieces, doing an amazing amount of research on all our former legislation. It’s incredible. Thank you very much. Please progress it. Look, it is great to see your enthusiasm for this because these are important pieces and, as we heard, it’s not a waste of time. Any time you choose to debate a former piece of our legislation, we welcome it. By all means, continue. But I would suggest, perhaps, it’s a lost opportunity. You have a 100-day plan, and yet here we are debating the former Government’s legislation—again—during this window, so perhaps something for the new Government to review.

I note that, actually, this item never appeared in a campaign recently from any of the Government parties. It hasn’t been discussed at all. In fact, the closest we got to anything maritime—and I’m happy to be corrected on this—was actually the Kermadec Ocean Sanctuary Bill. So perhaps we could be debating that one instead. I would welcome the debate on that and encourage the Government to do so, although I suspect what we might see is disagreement from either side of the Government.

Of course, we don’t shirk our responsibilities here in New Zealand. That’s why this bill is important. We need to make sure that we are meeting our international treaty obligations given the size of our exclusive economic zone—over 4 million square kilometres, one of the largest in the world. That’s why these changes are important, and I commend the bill to the House.

Hon WILLIE JACKSON (Minister of Employment): Kia ora, Madam Deputy Speaker, he tika me mihi ki a koe! I tēnei wā, e tika ana ki te maumaharaki ki tō tātau rangatira, a, Mattie Blackburn, kātahi anō kua hinga. Nō reira, e te tikitiki o Te Rangi, e taku tere kawetia, e taku rata tūtahi, ngaro atu rā ki Te Kāhui Toa o Te Ao Whutupōro kua riro atu nei, haere atu ki a Alby Pryor, ki a Maunga Emery, Manu Maniapoto, rātau katoa o Te Ao Wairua, haere, haere, haere atu rā, ā, ka nui tēnā! Ki a tātau i tēnei pō, tika me mihi ki a kōtou i tēnei wā, ā, e tika ana ki te kōrero e pā ana ki tēnei kaupapa whakahirahira, ā, nō reira tēnā koutou!

[Thank you, Madam Deputy Speaker; it is fitting that I acknowledge you. At this point in time it is apt that our esteemed one Mattie Blackburn, who has just passed away, be remembered. Therefore, oh topknot of the day, my one that has been taken so swiftly, my independent and likeable one, disappear indeed into the company of world rugby champions who have gone before you: Alby Pryor, Maunga Emery, Manu Maniapoto, and them all of the spiritual world. Depart, go forth, and farewell indeed, enough! To us here this evening, it is proper that you are acknowledged at this moment, and that contributions relating to this matter of significance are made, so salutations to you collectively!]

Madam Deputy Speaker, first of all I was just doing a little acknowledgment to one of our great Māori rugby managers, who was buried yesterday, Mattie Blackburn. He was a former Māori All Black and had a great interest in politics—not particularly interested in the other side, but certainly interested in a lot of the work that this coalition Government is doing. He certainly would have been interested in this bill because this is another great example of the progress of this Government. Despite all the defence and all the bravado from the other side in terms of holding up things, we just get on with things. The Rt Hon Winston Peters deserves the utmost credit for rolling this bill out—something that the former Government couldn’t do, wouldn’t do, and decided not to do. But Winston Peters, despite being under attack from the—yes, Madam Deputy Speaker, I am trying to broaden this as much as I can.

Madam DEPUTY SPEAKER: I’m trying to get you to narrow it and talk about the bill.

Hon WILLIE JACKSON: I’m trying to support our Deputy Prime Minister and leader of New Zealand First, who—

Madam DEPUTY SPEAKER: This is a third reading speech.

Hon WILLIE JACKSON: I realise that, Madam Deputy Speaker; that’s why I’m talking about the Rt Hon Winston Peters, who rolled this—

Madam DEPUTY SPEAKER: I’d prefer the member to come and talk about the bill.

Hon WILLIE JACKSON: Absolutely—absolutely, I’m talking about the leader of New Zealand First, who is rolling out this bill, Madam Deputy Speaker, despite what the Opposition tried to do to him during the election campaign, which was disgraceful, really. They tried to take him out and, of course, it backfired and we all know where they are now.

Madam DEPUTY SPEAKER: Order! Would you come to the bill, please? We have had 2½ minutes.

Hon WILLIE JACKSON: Absolutely, Madam Deputy Speaker. I was always coming to the bill. That’s why I was talking about the Rt Hon Winston Peters. But the purpose of the bill—

Madam DEPUTY SPEAKER: Thank you.

Hon WILLIE JACKSON: Yes, Madam Deputy Speaker; I was going to get to it. This is an important bill, and so I have to express an appreciation to the Foreign Affairs, Defence and Trade Committee—which is a committee I’m involved with now—for doing the work around this bill. Obviously, the recommendation is that it proceed with a number of amendments.

The purpose of the bill, as I was getting to, is to amend the Maritime Crimes Act of 1999 to implement two maritime counter-terrorism conventions: the Protocol of 2005 to the Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation, and the Protocol of 2005 to the Protocol for the Suppression of Unlawful Acts Against the Safety of Fixed Platforms Located on the Continental Shelf. So it is just appropriate to remind the House, and yourself, Madam Deputy Speaker, that these protocols were adopted to take account of the increasing risk to maritime navigation by acts of terrorism. It amends the protocols of the 1988 Rome convention and the Rome protocol to introduce new offences relating to the use of ships and fixed platforms.

It is appropriate to acknowledge also, tonight, the reference to the Rainbow Warrior and that shocking part of New Zealand history and what happened there, and this is all particularly relevant, so I acknowledge what our earlier speaker said in the Green Party. But this bill is necessary to implement the 2005 protocols into New Zealand law, and once enacted it enables New Zealand to ratify the protocols. The changes reflect international best practice and provide law enforcement agencies with clarity and effective tools to respond to contemporary threats to maritime security.

At the second reading of the bill a number of amendments were presented to the House. Considering these amendments, I commend the work, as I said earlier, of the Foreign Affairs, Defence and Trade Committee and the 150 submitters—150 submitters on the bill—for, without doubt, their impeccable work. A lot of that work will be continued by our Foreign Affairs, Defence and Trade Committee, who are committed to making a difference, and we have a fascinating committee at the moment that is just drawing up its plans for the next 12 months.

But coming back to the amendments, I want to draw particular attention to the amendment that includes a safeguard for the prosecution of any offences under the Act. That is a requirement for the Attorney-General to consent to the proceedings, and the bill is not intended to criminalise peaceful protest activity and could not do so in practice. That’s particularly important given the amount of peaceful protests that New Zealanders engage in, and given that we value that particular area as a vital part of, and an example of, New Zealand democracy. So it’s important—absolutely imperative—that we do not find any criminality in that area.

Nevertheless, it establishes serious offences relating to the use of ships or fixed platforms either to commit terrorist acts or in enabling terrorist acts. The avoidance of doubt clause introduced at the select committee stage, which is new section 3B, in clause 7, makes it completely clear that peaceful acts of protest or industrial action would not by themselves be a basis for criminal liability under the Act. The bill captures only very serious offending, which is its intent and purpose, and in the view of this Government it does this well, so well done to us again there.

On the issue of terrorism, the offences in the bill are designed to implement the offences created by the Protocol of 2005 to the Convention for the Suppression of Unlawful Acts Against the Safety of Maritime Navigation, and the Protocol of 2005 to the Protocol for the Suppression of Unlawful Acts Against the Safety of Fixed Platforms Located on the Continental Shelf. Although the bill has a terrorism context, the offences do not need to be stated to be terrorism offences to meet their legislative objectives, nor to meet their obligations to the two maritime counter-terrorism treaties the bill implements.

On the matter of nuclear weapons, the bill will not limit in any way the provisions of the New Zealand Nuclear Free Zone, Disarmament, and Arms Control Act 1987, which prohibits the entry of nuclear weapons into New Zealand’s internal waters, which New Zealand is entitled to prohibit under international law. Any other relevant offences or requirements under the 1987 Act will continue to apply.

This bill I commend to the House because it is a bill that is an example, again, of how focused and how coordinated this Government is in terms of getting legislation through. Despite provocation from the other side, despite continual antics all the time, this bill is just another example of the unity, the coordination, and the strength of this Government. It will strengthen New Zealand’s support for global counter-terrorism and non-proliferation efforts, and it ensures that our domestic maritime security framework is consistent with international best practice.

Again, I commend the Rt Hon Winston Peters for being so focused in terms of bringing this bill forward. I believe the bill provides the most robust legal framework that it can, and is in line with international law. Therefore, I’m happy to make a call in support of this bill being enacted. Kia ora.

Madam DEPUTY SPEAKER: Kia ora. Nice reading.

MELISSA LEE (National): Thank you, Madam Deputy Speaker. It is a great pleasure to rise to take a brief call on the Maritime Crimes Amendment Bill. I’d like to commend that member who just took his seat, Willie Jackson—10 minutes is actually a long time to fill when there’s a lot of bluster, but I’m not going to go there; I’m just going to rise above it. I’m going to just rise above it, but I just could not help myself. I will stop right there.

The bill creates new criminal offences regarding maritime terrorism—the illicit trafficking of weapons of mass destruction, their delivery systems, and materials—as well as criminalises the transportation of fugitives by ship and intentionally causing any death or injury in relation to the offences outlined. These new laws will give law enforcement more tools to do their job in the interest of New Zealand and the global community.

Talking about the global community, I’d like to reflect on some of the comments that my learned colleague Harete Hipango talked about—that international events actually affect us here in New Zealand. As you know, I was born in a country that is technically still at war, in Korea, and every time a ballistic missile goes up the worries about the world are on my shoulder. I’m always worrying about the family that’s over there. I have a brother who lives in New York, and every time there’s some sort of a news item that happens, we worry about our friends and family who are all over. Today, in New Zealand, we are families, we are global citizens, and we are impacted by things that happen in a global community now.

The bill also underpins New Zealand’s commitment to strong international diplomacy and dialogue by implementing the counter-terrorism treaties that New Zealand signed in 2007 and that came into force in 2010. New Zealand has always played its part, as other members have said, to combat terror on the high seas and to fight violence and intimidation wherever it rears its ugly head—sometimes in this House as well. The bill strengthens New Zealand’s ability to deal with acts of violence and atrocities around the world, and continues to serve our role as a good international security partner.

It’s also in the interests of not just New Zealand but all humanity to eliminate terrorism and maritime crime. It is a blight on the vulnerable of our global society. Many of us have actually read stories about the terrible human trafficking that happens, and I hope that this goes some way to alleviating some of those issues that we face. Whether it’s from Iraq to Somalia, from North Korea to the Sudan, we see acts of terror, and New Zealand works our bit to stamp it out.

I’d like to take this opportunity to acknowledge the work of the Royal New Zealand Navy. Many years ago, I had the opportunity to celebrate one of their anniversaries and had the pleasure of being on board the Endeavour, where I actually got to see the work that they do and many of the frigates that came. I ended up refuelling some of them, and saw the tremendous work that they do—not just the navy but all of our armed forces personnel, the men and women who serve in our armed forces; but in this instance, particularly for the navy, who have for many years now been part of the ongoing operations to end criminal activities at sea, including their involvement in Operation Ocean Shield, fighting piracy off the Horn of Africa; supporting famine relief efforts in the regions; protecting our national economic interests by uncovering illegal trading in fishing in the Asia-Pacific Rim. Their work on the front lines of our borders defending our shores, and the shores of other nations, is truly commendable. On that note, I commend this bill to the House.

Dr LIZ CRAIG (Labour): Thank you, Madam Deputy Speaker.

Kieran McAnulty: Good on ya, Lizzie.

Dr LIZ CRAIG: Thanks, Kieran. It’s an absolute privilege to take a call on the third reading of the Maritime Crimes Amendment Bill. As a lot of the other speakers have talked about, this bill amends the Maritime Crimes Act 1999 so that New Zealand can ratify two maritime counter-terrorism conventions: the 2005 Rome Convention, which relates to unlawful acts against marine navigation, and the Rome Protocol, which deals with unlawful acts against fixed platforms. Both of these protocols were adopted to address the increasing risks of terrorism at sea around the world.

So what this bill does is it adds new offences that relate to things like the illicit transport of weapons of mass destruction, nuclear material, and the transport of fugitives. It also sets a relatively high bar, because, to actually have an offence under the Act, you have to have a very serious offence: things like bodily injury that is severe, extensive destruction of property that results in major economic losses, and substantial damage to the environment.

It’s notable, though, that the bill doesn’t apply to situations of armed conflict—so it’s relating to those in peacetime. During the select committee process, there was a lot of concern that what this bill would do would be that it would stifle peaceful protest, and so during that process extra clarity was added to make sure that peaceful protests in themselves—it was very clear that that would be insufficient for prosecution under the Act. That’s why that bar has been set very high in terms of the consequences of such acts and what they are defined as under the Act.

The bill also defines a maritime boarding regime that is consistent with international law. That aspect is what I want to focus on for most of my call, because if you actually distil this bill out, what it’s talking about is it’s talking about extremely rare acts, but it’s very rare acts where minutes count, so you have to make absolute snap decisions and you need to act very, very quickly. The other thing with this is that the consequences of getting it wrong are potentially catastrophic.

The closest analogy I can think of is in my own field of health, where we tend to have a lot of protocols for dealing with situations that are very, very rare but, nevertheless, you have to have an immediate coordinated action. I think the closest analogy I can think of is that of cardiac arrest in the hospital setting, because what happens there, every second counts. When you get a code that’s called, staff come from all over the hospital. Someone, a senior staff member, takes charge, and then everybody starts working to a pre-agreed protocol: someone takes the airway, someone does the chest compressions, somebody else does the drugs, and someone does the defibrillator. Basically, all these protocols are agreed in advance, and so staff are trained in this use. We don’t spend a lot of time mucking about, having a committee discussion about what needs to happen; what happens is everything falls into line and action, and the patient receives optimal care very, very quickly.

I think, in the same way, what this bill does is it sets out a protocol for action when an enforcement officer decides that they have to board a ship because they’ve got reasonable grounds to suspect that someone on board has committed an offence under the Act or they believe the ship is about to be used to commit such an act. So, even more than in the situation with cardiac arrests, these situations are incredibly, incredibly rare, and the consequences of getting it wrong are potentially extreme.

The other thing with this is that enforcement officers aren’t likely to have a heck of a lot of experience in dealing with terrorist acts, so it’s not the time for a committee decision to make up the protocol; it’s the time to enact something that’s previously agreed. So that is exactly what this bill provides, because what this bill specifies is on what grounds those enforcing officers can board a ship and what they have to do when they get there. For example, the enforcing officer has to be the first person that boards that ship, and, on boarding, what they have to do is arrange for notice that they’re boarding to be given to the authorities of the flag State from where the ship came. It also states that the enforcing officer must not interfere with any attempt of the master of that ship to communicate with their own authorities. If the enforcing officer has reasonable grounds to suspect someone on board has committed an offence under the Act, they can arrest somebody without a warrant, but only if the flag State of that foreign ship agrees and consents to that arrest. So it’s all laid out.

Also, if they decide that they want to board a ship but the ship fails to stop when it’s been signalled, there’s a clear protocol for that, so it tells you exactly what you need to do: when they can chase the ship, when they can fire a warning shot, or, in the last resort, when they can fire on the ship.

In the select committee process, there was also greater clarity added about who was an enforcing officer, to make it absolutely clear that it was the officer in charge of the ship or a constable that could act as that enforcing officer.

So, just summing up what this bill is doing, it’s a very, very essential bill that will allow New Zealand to ratify the 2005 Rome Convention and the Protocol, lining us up with international law. Many of those earlier concerns about the impacts this bill would have on people’s ability to protest peacefully have been dealt with in the select committee process, because what we’ve done is specified that there’s a relatively high bar about what this bill is talking about. It’s talking about serious injury, it’s talking about extensive destruction of property, and it’s talking about substantial environmental damage, and those have been dealt with.

So, while all of us hope there will be very few situations where this bill is applied, it’s absolutely essential that we have clear protocols in place for when such rare, high-impact situations occur, because those enforcing officers, as I said, aren’t going to have a lot of experience to draw on and they need a very, very clear protocol for when they move into that ship. So all those concerns that’ve been brought into the select committee process have been addressed in some way within this bill, and therefore I commend this bill to the House. Thank you.

Bill read a third time.

Bills

Electronic Interactions Reform Bill

Third Reading

Hon TRACEY MARTIN (Minister of Internal Affairs): Kia ora, Madam Deputy Speaker. Thank you very much. I move, That the Electronic Interactions Reform Bill be now read a third time.

The Electronic Interactions Reform Bill amends and modernises 17 pieces of legislation—

Hon Peeni Henare: How many?

Hon TRACEY MARTIN: —17—and contributes to the efforts to meet New Zealanders’ expectations to interact with Government digitally. As a brief summary, the bill comprises four parts. Part 1 amends the Births, Deaths, Marriages, and Relationships Registration Act 1995—the core of what New Zealanders use as their identifiers—the Marriage Act 1955, and the Civil Union Act 2004 to allow individuals to apply electronically for certain services, such as applying for a marriage or civil union licence. This would provide an alternative to physically going to an office to complete a statutory declaration.

Part 2 of the bill amends the Electronic Identity Verification Act 2012 to allow consent-based use of an individual’s photograph. This photograph is collected as part of the application process for a RealMe-verified identity.

Part 3 of the bill amends 11 Acts relating to the commerce and consumer affairs portfolio to expressly allow certain types of notices to be served by email. Part 3 also makes amendments to the current requirements for an individual or business to appear before Government agencies for an interview. These amendments will allow the requirements to be met using an audio or video link to conduct these interactions remotely, where both the individual and the agency agree.

Part 4 of the bill amends the Conservation Act 1987 to ensure that fishing and game-hunting licence holders can vote online in Fish & Game council elections if they wish. Part 4 of the bill also amends the Wildlife Act 1953 to allow the image of the game bird habitat stamp to be incorporated within a game-hunting licence. This would instead require a physical stamp to be adhered to each licence. This change will help the online sale of licences and respond to anticipated future demand for digital licences. This may even become accessible through portable electronic devices.

The bill was introduced to the House on 21 September 2016, and referred to the Government Administration Committee on 13 October 2016. I thank the members of that committee for their careful consideration of the bill and the submissions made on it, and for the constructive amendments they made, which have certainly improved the bill.

The committee reported back to the House on 12 April 2017, and the bill had its second reading on 28 November 2017. I am very pleased that this bill has been able to move through its remaining stages rapidly, so that we can soon put the bill into effect and begin to realise the benefits it will bring.

I welcome members’ active engagement in debating the bill’s provisions during the committee of the whole House. Members quite rightly noted that the bill makes a number of important changes that will affect how New Zealanders interact with Government, using modern digital tools. I thank the Government members particularly for the number of questions, the probing that they did, during the committee stage so that all the concerns of New Zealanders could be voiced and articulated and answered during that period of time.

In particular, members debated the use of email notices, enabled by the amendments in Part 3 of the bill. Members of the Government discussed the potential impact of the changes on recipients of these notices and the circumstances in which agencies could use email notices. I would like to reiterate that the select committee recommended an important change to the provisions in Part 3, so that agencies needed to prove that an email notice was properly sent to an email address that is actively used by an intended recipient. This clarifies that agencies have obligations when sending their communications, instead of just placing the burden on the recipient to prove they did not receive the email.

Even if an agency can prove that the email address is actively used, the recipient will still be able to rebut the presumption of receipt by providing the relevant agency with appropriate evidence. Providing evidence may involve the recipient making a statutory declaration making it clear that the email was not received. This aligns with the current legal position that applies to non-electronic methods of sending these types of notices.

But I do acknowledge the points made in the House that, for example, many people have multiple email addresses and may not check their accounts every day. So I expect that responsible departments, such as the Ministry of Business, Innovation and Employment, will develop policies and guidelines on the use of email notices, to help ensure recipients are made aware of the relevant notifications. These policies may cover aspects such as ensuring the email is marked as being important so that it is not lost among recipients’ other emails, the frequency of sending reminder notices before compliance action is taken, and using emails along with other service methods.

Hon Peeni Henare: Common sense.

Hon TRACEY MARTIN: Absolutely, common sense. The members also discussed online voting in Fish & Game council elections. I agree about the importance of ensuring the integrity of the voting system—and this was mentioned on a number of occasions. It will be critical that careful consideration is given to security and assurance matters. Appropriate requirements will be set in place by updating the regulations that govern Fish & Game council elections. I anticipate that these requirements will be informed by any wider developments with online voting in New Zealand.

More broadly, I am pleased that Government members noted the importance of ensuring a wide range of New Zealanders can access the digital services enabled by the bill. One of the Government’s priorities is to take action to expand digital inclusion, to ensure all New Zealanders can take advantage of the digital technologies that are playing an increasingly important role in their lives.

To conclude, I would like to acknowledge those individuals who took the time to make submissions on the bill, the members of the former Government Administration Committee for their efforts in considering the bill, and those members of the House that constructively engaged in conversation and debate on this bill at all its stages, particularly the committee of the whole House.

The passing of this bill will benefit New Zealand because it will enable New Zealanders to complete more interactions with the Government digitally. It is an important contribution to the ongoing efforts across Government to provide better services to the people of New Zealand—something this Government is committed to. I commend the Electronic Interactions Reform Bill to the House.

BRETT HUDSON (National): Thank you, Madam Deputy Speaker. It is a pleasure to rise in support of this, the Electronic Interactions Reform Bill, and I would like to thank the Minister of Internal Affairs for lauding this bill, which was, of course, introduced and stewarded by the previous National-led Government.

In many respects, it puts in place some pretty small changes but those changes are particularly important if we all—and I think we all do—want to transform particularly our public services into a more digital era. There is simply no way that we could hope to achieve that if the likes of issuing notices and other things could be done only by traditional mail, or what is often now referred to as snail mail. So we are making some changes to now enable these to be done via email.

Actually, I was reflecting this evening as to why this is so important. Right next door in the Grand Hall, I’m hosting a year 8 leavers’ dinner for students from St Brigid’s School in Ōhāriu. Let me tell you, those boys and girls are digital natives. To them, the idea of notices from the Government or interactions with a Government through postal mail is anathema. They have grown up in a world where digital devices, the internet, are the norm. So we are slowly but surely helping to bring the Government and government processes into the world which they have inhabited. I’m taking this opportunity just to talk, if I may, seeing as they are here.

I would just like to point out that Ōhāriu is the number one of all the electorates for internet connectivity. So it’s not just the year 8s out there in the Grand Hall; it’s actually the voters, the constituents, from across the electorate who are very strong internet users. I would just make the point, for those of us that actually live in Ōhāriu, we know the majesty, the industry, the beauty of the electorate. We would never underrate or undervalue it, because we know that it is chief amongst all electorates. It is appropriate that we also, as an electorate, as a people, lead internet use across New Zealand.

This is a good bill for New Zealand. It’s bringing us closer towards the 21st century for our Government services, and I hope we’ll continue to accelerate them through. I commend this bill to the House.

Hon PEENI HENARE (Minister for the Community and Voluntary Sector): Tēnā koe, Madam Deputy Speaker. Thank you very much for this opportunity. If I can take some of the claims made by the member who’s just finished his contribution in the House tonight, Brett Hudson, one of the sad statistics around the Māori uptake of the internet is actually in a recent report, which has it at only 38 percent of Māori having access to fast broadband—only 38 percent. So while that side of the House might talk about how great this bill of theirs is, they’ve also failed and let our people down—38 percent in this modern era. He mentioned digital natives. Well, with the Māori population being predominantly a young population, we are just natives; we’re not digital natives, according to the statistics of 38 percent uptake or access to fast broadband.

It is actually a pleasure to rise and speak to the Electronic Interactions Reform Bill. If I can endorse the words of the Minister in thanking the former Government Administration Committee and, of course, the submitters on this particular bill. I wasn’t a member on that select committee in the 51st Parliament but I am proud to say I am a member of the Governance and Administration Committee in the 52nd and I look forward to making meaningful contributions to the bills that pass through that particular select committee, just as the select committee did for this particular bill.

We heard that there were eight quality submissions that actually made pragmatic, sensible, common-sense submissions to this particular bill. It’s not because it’s about scoring kudos, not because we want to put runs on the board on who got there faster or who got there first, but actually because it makes the lives of ordinary New Zealanders better—ordinary New Zealanders. Whether you live in Ōhāriu, whether you live in Tāmaki Makaurau, it doesn’t matter; it makes it easier for New Zealanders.

Some of the changes in this particular bill are really common sense, sensible. But, also, there are some technical aspects to this particular bill, and one of the changes that is technical in nature but makes the lives of New Zealanders just a bit easier is, of course, the amendments made to the Civil Union Act. I think that’s a sensible one where people from overseas can apply for a licence, and they can actually have faith and also believe that, having gone through that process, when it comes time for them to get married, they will be able to have that licence locked and loaded.

The Minister—the new Minister, the good, sensible Minister the Hon Tracey Martin—talked about the 17 pieces of legislation that this particular bill does seek to amend, and they span wide and far. I want to touch on a couple of those. Why? Because they are close to my heart. One of those is, of course—the Minister mentioned the hunting licences and how I, a keen hunter, always moaned, actually, if I’m honest, that the process to get a licence was actually quite difficult. It actually required heading into a hunting and fishing store.

Quite regularly I’d head into the hunting and fishing store in Warkworth where I would apply for a licence, and it would usually be a long line because everyone’s trying to head north to try and do a bit of hunting, or to head out towards the East Coast towards Pākiri beach and other places to partake in some hunting. But the process, without a word of a lie, would often take approximately six hours—six hours simply to get a paper licence in Warkworth. It was the cause of much frustration for a lot of hunters, and if there’s one thing I know about the hunting fraternity: don’t make a man with a weapon angry. So it’s a sensible amendment that’ll make sure that people like myself—and it is a large hunting fraternity—will have the ability to simply go online.

They’ll be able to vote online. The image that’s been put on to the voting papers is just common sense. But it also—and I’m glad Hon Christopher Finlayson is in the House—challenges iwi. It challenges iwi. As Māori, we always moan that the mandate for speaking for iwi or tribal entities never really has a strong mandate. That’s a common argument amongst tribes. One of the reasons for that is because they still do postal voting. So let this be a challenge to all of the large iwi out there, that it’s a brave new world. It’s a brave new world and we want to see if—as I mentioned at the beginning, the majority of the Māori population are young, under the age of 24. If we want to engage these people, then it’s about time that iwi actually dragged themselves into the modern time.

I also want to mention Part 1, the amendments to clause 14 and—sorry, sorry I’ve covered those ones. The other one is the problems with RealMe applications and how I think it’s important in this particular bill to look at an integrated service, or to make sure that all of the services that are available have this integrated mechanism that allows New Zealanders to walk only one avenue to achieve multiple outcomes.

In the 51st Parliament, there was a challenge to the Justice and Electoral Committee to go and actually register for a RealMe profile—a RealMe profile—something I thought the very intelligent Justice and Electoral Committee could do quite easily. We discovered, upon trying to apply for a RealMe profile, that it actually was quite difficult. Not only did you have to go online, after you went online you actually had to go into a post office, and you had to confirm it there. Then you needed to make sure you had the right email address—a functioning email address. That is hardly making things easier for average the New Zealander. Let’s face it, the results of that select committee trying to get a RealMe profile proved that we are just average New Zealanders. But these kinds of amendments will actually make it easier for people out there, and I think those are sensible moves.

Another one that’s always been a head scratcher for most New Zealanders is the old notion of heading into a pharmacy to take a photo to apply for your passport—to apply for your passport. Just recently, I renewed my passport and simply had the ability to submit an iPhone selfie that met all of the requirements—that met all of the requirements—

Hon Ruth Dyson: For 10 years.

Hon PEENI HENARE: That’s right, and now my passport is valid for 10 years, which is fantastic. But the selfie allowed me to submit it online and within a matter of days, about 10 working days, I had my new passport—common sense, simple, making things easier.

While that side of the House might bemoan the fact that this particular bill started under their watch, the bottom line is that, on this side of the House, we don’t go for sixes all the time; we play a smart game. Sometimes you’ve got to score singles. Sometimes you play with a straight bat. If you’re gung-ho and you swing for sixes all the time, more than likely you’ll miss. So that’s why these are common-sense steps, simple single runs on the board. We are proud on this side of the House to ensure that we are making the lives of New Zealanders better.

I want to finish, just in the last lot of time allocated to me—

Simeon Brown: You’re almost there, Peeni.

Hon PEENI HENARE: —and I want to say that, once again, it is a brave new world. It’s quite easy for the member for Pakuranga to listen to this, claiming to be so young. In fact, we all know he is quite young, and I don’t know about a native but certainly digital—certainly digital. We want to make sure that members on that side of the House are up with the play. So it is a brave new world. Some of the big challenges, and I want to say this and I’ll quote my grandfather: “We’ve come too far not to go further.”—we’ve come too far not to go further. Let this particular bill be a great start—be a great start.

So, on this bill, we’re going to score singles—we’re going to score singles. But when we close the digital divide, I can tell that side of the House, the Opposition, that we’re going to be hitting boundaries, fours and sixes, because there is so much more work to be done to make sure there is a digital integrated service across the entire public sector—the entire public sector; one that actually makes it easier for all Kiwis, regardless of whether you’re young, old, Māori, Pākehā, it doesn’t matter.

Finally, I want to finish by saying 38 percent of Māori have ready access to fast broadband internet—38 percent—and I can say that is an absolute blight on the record of that side of the House.

KANWALJIT SINGH BAKSHI (National): Thank you, Mr Assistant Speaker for the opportunity to stand and support the Electronic Interactions Reform Bill at its third reading. We heard from the Hon Tracey Martin what this bill does, a bill that was introduced by the National Government, and it does a lot.

When we came to Parliament in 2008 most of the things were paper based, but today most of the things are online. Similarly, this bill also helps the public of New Zealand to work online, like applying for a passport, death and birth certificates, and marriage certificates. This bill is the result of the Department of Conservation, the Department of Internal Affairs, as well as the Ministry of Business, Innovation and Employment together contributing on this bill, and this is the result of it.

We heard from the Hon Peeni Henare about common sense. And common sense says that this bill is a very good bill. Both sides are supporting this; why are we wasting the time of this House? Conclude this debate and move further. I commend this bill to the House.

VIRGINIA ANDERSEN (Labour): Thank you for the opportunity to stand to speak to the Electronic Interactions Reform Bill. I take great pleasure in having the opportunity to watch this bill proceed quickly through the House. There are two main opportunities that come through this bill. The first is better services for New Zealanders, and the second one is a more efficient Government.

Having better services for New Zealanders is part of the digital transformation that the Government is currently going through in order to be able to move with the times. The preferred channel of interaction or access to the Government for the average person is the internet. It’s easier, it’s more convenient, and it’s mobile—it’s able to be accessed far more easily. Time has become far more precious to us as we work longer hours and have busier family lives, and we are far less able to take time out through working hours to visit a Government department, whether you want to lodge a form or complete some necessity for a passport, or for births, deaths, and marriages. Also, this bill takes into account student IDs in being able to use RealMe for online. So it’s about making people’s lives easier in a very busy and modern environment.

When you think of someone working in an office, your average 9 to 5 or a daily working job, where is the opportunity there to be able to take time out and visit to lodge an application and wait in line for that to happen? It often means taking time off work, or it means trying to visit in your lunch hour and queuing up with everybody else who’s got the same idea. So by being able to do it from home or, God forbid, even at your coffee break at work, you can lodge your applications and have access to those services far more frequently and far more easily.

For those that aren’t at work, it also makes it a lot easier. I can think back to being a parent at home and dreading the idea of having to queue up in a Government department with two toddlers in tow, while one wipes stuff on the walls and the other one’s running around and you’re trying to wait for an hour to get your form filled out. So for mums and dads, for people at home, if it’s hard to go out with young children, having easy access to Government services and applications is a far better way to be moving. It makes the Government far more accessible, and it makes life easier.

There are also big benefits on the other side for the Government in terms of efficiency. When you think about the lifespan of a piece of paper within a Government department and the cost every time someone picks that up, stamps it, reviews it, looks at it, checks it, puts it on a trolley, and goes to the next part to get it looked at—to have easy access through the internet will improve Government flows, will improve services, and will make Government channels far more efficient. It does save time and it does save hours, which will make things far faster.

It’s also important in terms of storage costs. When you think of the amount of filing, filing cabinets, and storage that is required with paper in the average Government department to make sure all of these things are retained—if we are moving towards a digital age where storage is no longer an issue, that is also a big saving for the Government and efficiency.

We want to move to a future where the Government is fast, smooth, and streamlined, and this bill enables those efficiencies to kick in by amending 17 pieces of legislation.

The big caution that we have in this space is that it’s well and good moving towards this new digitally smooth world but we need to be sure that people are all taken with us in this transformation. This is one of the key areas that have been highlighted by the select committee process, by looking at the digital divide. Those who are not accessing the internet are a concern. We’ve already heard tonight that 38 percent of Māori are not accessing fast internet.

Well, let’s take a look at the statistics in terms of each age group. For 15- to 24-year-olds, we see 93 percent of those accessing the internet. For 25- to 34-year-olds, 94 percent are accessing the internet—it peaks there. Then it tracks down. For 35- to 44-year-olds, 91 percent are accessing the internet; and right down to 75-plus at 32 percent currently. So that’s a worry. That’s a concern for the older generation of New Zealanders who aren’t accessing the internet readily, and who also aren’t as mobile and able to get to Government departments at times. So this is an area where we also need to make sure we take people with us.

One of the things I’ve heard about in my movements within Hutt South, in the electorate, is the disappearance of night classes, where older New Zealanders, in particular, were able to get extra access to things like internet training and internet information—how to use the computer for internet banking, and how to access things that were unknown to them when they don’t have someone to help them in that space. So I’m heartened to see, under Labour, the reinstatement of access of those night classes so we can see people who aren’t able to access those areas once again feeling confident and competent in that space.

The other point that I would like to touch on, which is really revolutionary, in some ways, for this bill, is the online voting process that it introduces. It’s quite an exciting phase to look at. While it’s quite a small area in terms of the licensing area it’s looking at, it is a new thing for New Zealanders to be able to use that voting mechanism online. It will be exciting to see how that goes. Let’s see how well it’s used and how well it is being adapted for that purpose, to see if it is able to be spun out to wider areas. It’s really encouraging to see a new thing being tried in order for us to see.

One of the things that have also been included is that there are a number of areas that will be ongoing to make sure that the digital divide does not disenfranchise New Zealanders. I note that there is a series of work programmes ongoing to make sure that we do include those people who may not be able to access the internet or to be accessing fast internet. For that reason, it’s good to see that the Government Administration Committee highlighted clear areas where there will be ongoing work in that space to ensure that we don’t forget and simply move forward.

The streamlined application processes for student identification cards is included, which I’ve mentioned briefly. The Department of Internal Affairs is engaging with organisations in the tertiary education sector about using the RealMe identity verification service in their enrolment process, something that will speed up what can, again, be a lengthy process of queues and waiting in line on enrolment day to get in that space. So if students also are able to have faster access to getting identity cards approved, it will also be a saving in time.

So while this bill is amending 17 pieces of legislation, it touches on people right throughout New Zealand, from early students at the beginning of their tertiary education right through to those people over 75 who need to still access the internet. I am proud to see New Zealand moving with the times and updating our technology within the Government to give people full access to the benefits that modern technology offers, and I wish to commend this bill to the House.

Dr JIAN YANG (National): I rise to take a brief call on the third reading of the Electronic Interactions Reform Bill. This is a cross-agency omnibus bill, and the purpose of the bill is to enable digital interactions between individuals, businesses, and the Government.

We are living in a digital world, and we need to adapt to this fast-evolving world. I still remember the Hon Paul Goldsmith’s bill, the Electronic Transactions (Contract Formation) Amendment Bill, which was passed in 2014. That bill has enabled us to accept offers via email. We need to provide better digital services, because we need to increase our productivity and also to provide convenience to various groups of people, such as disabled people. So this bill is a good bill. I commend it to the House.

CHLÖE SWARBRICK (Green): It is with great delight that I rise to speak on this third reading of the Electronic Interactions Reform Bill. I know that we spent quite a while traversing it in the committee of the whole House stage, and I very much enjoyed that very thorough process in which we, with a fine-tooth comb, went over every single clause and all of the impacts that we will see in our society as a result. There was a lot of discussion about email—

Erica Stanford: And kererū.

CHLÖE SWARBRICK: —and the mighty kererū, which, I note, Erica Stanford, should have been the winner of our Forest & Bird Bird of the Year competition for 2017. But we’ll be back. We’ll be back in 2018. We will win and we will rebuild—we will survive. So all of that talk of emails, and all of the different emails that people have accumulated over their lives, had me thinking about all of the different forms of technology that I’ve used growing up as a digital native, as they call those of my generation—the likes of—

Simeon Brown: I’m a digital native.

CHLÖE SWARBRICK: Yes, that’s you, Simeon Brown. It had me wondering about all of my Neopets and whether they had passed on, and whether I should be checking in on them—you know, such it is that technology moves along, and sometimes we not along with it.

In this third reading, I’d like to touch on some of those submissions made at the select committee stage. If I’m correct, there were eight submissions, and there are a few here that I think it’s really crucial that we point out some of the more substantive and interesting or salient points that those submissions had to offer.

The first one that we’ll consider here is the New Zealand Law Society’s submission. They noted some concerns about Part 3 with regard to the sending of documents by email, particularly around the consent of the recipient. They identified that the use of the terminology “at an address used by this person” is a little bit problematic because—as was well traversed in the committee of the whole House stage—it could be interpreted to be very broad and very wide. But the Minister of Internal Affairs, the Hon Tracey Martin, made it clear in the committee of the whole House stage that the burden of proof will be on those actually sending those emails, so I think that this very much clarifies and, hopefully, solves those issues that the New Zealand Law Society had.

Further, there was the Royal Federation of New Zealand Justices’ Associations, which noted their support for the general thrust and intention of the legislation, but were concerned about a few things. Perhaps most notably in the context of the debate that we have had so far, it is the inequitable connectivity that we have—still—with the digital divide in Aotearoa New Zealand.

I’ll note that I recently had a meeting with the Hon Clare Curran, where she told me that a major priority of this Government is to ensure that we are bridging that digital divide, because it is almost as such that access to the internet in the 21st century is akin to or, at the very least, showing itself to be close to a nigh on human right. My 20-year-old little sister would have to agree.

There was also the submission of John Edwards, the Privacy Commissioner, particularly with regard to Part 2, where he noted a little bit of concern perhaps around electronic identification and its use thereof. However, he noted that his office was consulted during the development of the bill, and didn’t need any additional safeguards to be implemented. He said, and I quote, that this “will enable the expanded use of electronic identity photographs, with the consent of the individual involved, without posing an undue risk to personal privacy.” This is something that I would like to note in relation to the submission of one individual, who, for the sake of not needing to mention their name, I won’t. The rest of the submissions were those of organisations, but this individual noted a concern around privacy, and with regard to the submission of John Edwards, the Privacy Commissioner, I hope that her concerns are satisfied.

Another incredibly notable submission, I believe, was made in the name of the Blind Foundation. They noted that the updating of technology has of course improved the access to information and to communications, but they still had issues with accessing RealMe, which is, of course, the identification system used by individuals and citizens when accessing Government services online. In response to that concern, this bill, obviously, does not require that all interactions by citizens are made by way of RealMe; it is simply another tool in the tool kit to allow people greater accessibility to the Government.

But this submission, I believe, highlights a bit of an oversight that I think is perhaps all too frequent in this House on the rights of our disabled community, in particular, in the drafting of legislation. I will remind all in the House that New Zealand is a signatory to the United Nations Convention on the Rights of Persons with Disabilities. Article 9(2) of that convention on accessibility reads, and I quote: “(a) To develop, promulgate and monitor the implementation of minimum standards and guidelines for the accessibility of facilities and services open or provided to the public;”. I very much think that that is something that all members in this House will continue to have to bear in mind as we hope to make our democracy all the more accessible. If I may deviate slightly, I would like to say that this is the very point of my member’s bill, which I lodged into the ballot just last week. It was originally drafted by the first disabled member of this Parliament, the incredible Mojo Mathers, a previous Green Party MP.

Another submission was made in the name of the Commerce Commission, and it broadly just commended those updates regarding email and the ability to provide evidence by audio or audiovisual link. They sought to take it a step further and require that the giving of evidence could be made compulsory. Personally, and to communicate the position of the Green Party, we don’t believe that people should be compelled to provide evidence by such technological means when they may not have access to such technological means, so we are glad to see that is not reflected in the final legislation.

Another submission, made in the name of the Library and Information Association of New Zealand Aotearoa, saw concerns around the serving of notice and wanted some safeguards, but supported, broadly, the intention and thrust of the bill. Again, I would like to point out that these concerns were, hopefully, mitigated by the Minister, the Hon Tracey Martin, in her noting that the burden of proof lay on those who sent those emails in the first place.

The final submission that I would like to touch on is one that I find the most interesting personally. It is that of the New Zealand Fish & Game Council, which noted their absolute elation at the opportunity to garner greater public participation in their elections. They noted that—such is the plight of far too many small authorities in this great country—the turnout, currently, for those elections of theirs averages 24 to 25 percent of those on their electoral rolls, which is absolutely abysmal. Absolutely abysmal. So we are hoping to see a growth in turnout for the New Zealand Fish & Game Council, and I hope that they are leading by example.

The most recent election that I was involved in prior to this general election of 2017 was, of course, the Auckland Council’s local body elections, where the turnout was just less than 40 percent, which was significantly greater, I might add, than it was in the previous election of 2013, at 34.7 percent—which was, indeed, the catalyst for my becoming involved in politics in the first place. In summary, I would commend this bill to the House.

STUART SMITH (National—Kaikōura): Thank you, Mr Assistant Speaker. It’s a great pleasure to speak on the Electronic Interactions Reform Bill. There’s been a lot of talk about the security aspects of this bill and also the access to the internet and good connections, and, with a large rural-based electorate, that is certainly a great concern of many of my constituents, to have fast and affordable—because often they have to access it via satellite, which is quite a lot more expensive.

But I want to touch on the security and also on the aspect of it not always working out. Last year, I travelled through the United States to a conference. One of my colleagues that was travelling with me ended up in a small room with some undesirable people while they were sorting out his access into the country. It turned out that when the digital photograph that is taken when you enter the country was matched against his passport, it didn’t match.

What had happened was, a couple of months earlier he’d travelled through with his family, who had all gone up to the desk at the same time, and someone manually had transposed the wrong photo over on to his passport. It wasn’t physically on the passport; it was digitally on the passport. And he ended up in some rather undesirable company until they got that sorted out. So there are some issues with it. It can actually be sorted in the long run, but that’s what happens.

I think it’s a fantastic bill, and it’s great to see the Government picking this up. I commend it to the House. Thank you.

The ASSISTANT SPEAKER (Adrian Rurawhe): I call Paul Eagle.

Hon Ruth Dyson: Well, this’ll be better.

PAUL EAGLE (Labour—Rongotai): Thank you, Mr Assistant Speaker. Well, it’ll be 10 minutes better—put it that way. Can I just—

Matt King: Bigger isn’t always best.

PAUL EAGLE: Matt, I do the big around here, not you. You’re the “king” not the “big”.

Now, can I just thank the humble Minister Martin for this piecework, taking it through its journey on the third reading and getting it to where it is today. I said when I spoke on this bill a bit earlier that this was the “Making Things a Whole Lot Easier Bill”. There were some things that were hot and things that were not.

But just before I do that, and I want to just divert, if I may: there was this outrageous allegation about a colleague of mine, actually, the member for Ōhāriu, by the National Party list member based in Ōhāriu. The good news for the list member is that I’ve contacted the Electoral Commission for the 2019 review and I’m happy to give Seatoun up! So if the seat becomes not Ōhāriu-Belmont but Ōhāriu-Seatoun, I’m happy. I lose those $2 million homes where the member lives, and he can then be part of the Ōhāriu electorate. So I’m very happy for that to happen. He may have won by 1,051 votes—maybe he’ll win by 3,051 votes—but I’m sure the National Party list member based there can have a wee celebration.

What’s positive about this is what others have already said: this is a modernisation bill. We’ve heard about digital transformation. I’m interested in what others have talked about too, in terms of that digital divide. I’m thankful that we’ve had a local authority in the last nine years who has funded a service for those who are older; those from ethnic communities, new migrants and refugees here in south and east Wellington; and those who are poor and don’t have a lot. The local authority funded a service called Smart Newtown—they’re only metres from my electorate office—where people could go for free and learn about the basics, the 101, of using a computer, whether it was just switching it on, learning how to use a mouse, getting used to a keyboard or a monitor, and just going through the steps of learning the basics to become technologically more advanced in communicating just with the basics of life.

For some, it meant talking to sons and daughters. For some, it meant connecting with home, and that home may be in Somalia, Ethiopia, or further away than that. For others, it was just simply the result of having to do basic things. In a short time in the last couple of years, three bank branches have closed in my electorate, and there’s this assumption, suddenly, that although 91 percent of Kiwis know how to use the internet, that that is actually OK—but that’s actually not OK, and that’s where this is the “what’s not”, because we need to make sure that that piece of work gets done so those 9 percent of people have the same opportunity as everyone else. And I know that, hopefully, that work led by Minister Martin will ensure that the local authority isn’t given another hospital pass to pick up the tab but the Government will.

I also want to talk about the fact that I said in my earlier speech that this was part of the Better Public Services agenda. The previous Government had a 10-point plan. When the member for Ōtaki challenged me when I said it was “almost a failure”, I said, “No. I stand by those words ‘almost’.” And so I did some research. I went back and read it—not that anyone is too interested in it, really—but with the 10 sections there, I managed to find that, actually, the targets haven’t been met. In fact, they’ve changed, because earlier this year the targets were changed.

Mr Assistant Speaker, I thought I was speaking for 10 minutes, but obviously it’s five. I’ll keep going? Keep going, all right? All right. I’ll keep going. Thank you, Mr Assistant Speaker.

Barbara Kuriger: I raise a point of order, Mr Speaker. This is down as a spilt call.

The ASSISTANT SPEAKER (Adrian Rurawhe): Yes, I do know that. The member’s time has expired.

Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Mr Speaker. Where the call is a split call, it does rely on somebody being willing to take the other half of the call. Otherwise, the member who has the call can continue for the full 10 minutes.

The ASSISTANT SPEAKER (Adrian Rurawhe): Yes.

BARBARA KURIGER (National—Taranaki—King Country): I raise a point of order, Mr Speaker. We do have someone.

The ASSISTANT SPEAKER (Adrian Rurawhe): Yes. I take the member’s point, but we have a call.

ERICA STANFORD (National—East Coast Bays): I’m sorry; I didn’t want to be rude. Thank you, Mr Assistant Speaker. I am pleased to take a call on this the third reading of the Electronic Interactions Reform Bill. This really is a “Welcome to the Digital Future Bill”, a sensible bill that helps Kiwis access Government and Government services online. It’s a good bill, introduced by the former National Government, desperately awaiting its turn to be debated, envious of all the other National legislation that got pushed ahead, wondering when it would have its day to shine, and I tell you its time is now, because, clearly, this is a great bill.

This is a classic Mighty Ducks story—the story of the little bill that could. [Interruption] It’s made it to the big time—that is exactly right, Mr Simeon Brown. It’s been elevated to greatness, recognised as a bill of such great significance it’s been included in Labour’s 100-day plan. It is so great, in fact, that last week in the committee stage, members from the Government parties took a whopping 35 calls in the committee stage to speak on this bill, which was over two hours of committee time. It was intense scrutiny from no less than eight Ministers, and I think it’s worthy of summarising some of the contributions of those Ministers that they made in the robust scrutiny of this bill.

Hon Chris Hipkins: Please do.

ERICA STANFORD: Yes, Mr Hipkins. In fact, you’re up first. Mr Hipkins questioned the difference in the definition of “audio links”, “visual links”, and—wait for it—“audiovisual links”.

Hon Chris Hipkins: That’s right. It was an important distinction.

ERICA STANFORD: Ha! If only there was as much scrutiny on what’s replacing national standards, Mr Hipkins. Dr Clark talked about couriers receiving text messages. Mr Robertson wondered about how the Government would make sure that people’s email addresses were kept up to date. We had some outstanding contributions from other Government members I wouldn’t want to overlook. The member from Mt Roskill, Michael Wood, deliberated over the definition of the word “is”, and let’s not—it is a very useful, robust bill.

But I have to give the Government huge credit for their enormous scrutiny they’ve applied to one of their own pieces of legislation. I am looking forward to debating some of the coalition Government’s own original bills. In the meantime, I’d like to commend this bill to the House.

ANAHILA KANONGATA’A-SUISUIKI (Labour): Tēnā koe e Te Māngai o Te Whare. It is my absolute privilege—it’s the first time I’ve spoken in front of you—to share this moment, a page in my life. Ten minutes, all of it, Matt King.

Matt King: Go. Go.

ANAHILA KANONGATA’A-SUISUIKI: A page in my life, and your life, and the lives of all of New Zealanders. So I congratulate you in your post as Te Māngai o Te Whare.

So, like I said, it is a privilege to speak to the third reading of the Electronic Interactions Reform Bill. I would like to extend my thanks to the Government Administration Committee for their careful consideration and, in particular, to the Minister, the Hon Tracey Martin, for her leadership in responding to all our questions in the committee of the whole House, after the second reading. I want to further extend my acknowledgement to the eight submitters who made submissions and voiced their opinions as citizens of our nation, especially to the two oral submitters that attended the select committee. I understand that the main aim of the bill is to amend 17 Acts to enable digital interactions between individuals, businesses, and Government agencies. I’m going to use the “Service of notices” section to demonstrate what it looks like in all the Acts that I’ve come across.

I’ll begin with “Service of notices”, which provides that, for a document or for information that is emailed, it be sufficient to prove that the document or information has been properly addressed and sent to the email address that is used by the person.

I want to quickly go to this section, where it talks about “Service of notices”. I’ll just go to Part 3, “Giving evidence … by electronic means”, even though, in over five of the Acts, it actually refers to that. I bring this as a personal insight into my other life, when I used to be a statutory social worker, and it was for me to serve notices on certain people. I recall some of those experiences with fond memories of trying to stop dogs attacking me and trying to speak in other languages to the dog. But, anyway, I want to explain the difference.

Actually, there is no difference between an email address and a usual physical address. In clause 45, “Section 102 amended (Service of notices)”, relating to the Commerce Act 1986, it says, “(1) A notice or any other document required or authorised to be served … given to a person for the purposes of this Act may be served or given by—(a) delivering it to the person;”—yep, that’s great—“or (b) leaving it at the person’s usual or last known place of residence …” I see that there is no difference between emailing it to a person’s last usual email. So there is no difference between electronically sending it to an email box and physically delivering it to a physical mailbox, which, as we all know now, the postal services are slowly, slowly becoming less used by citizens of this country. Post offices are closing everywhere in New Zealand and we are having to look at other means of how we can utilise the services of the post office.

But I want to reply to the member across the House, where she talks about this being started off by the now Opposition party—that they had run out of gas. It might have been their idea, but, unfortunately, they ran out of gas and didn’t score the try. So I am absolutely honoured to score that try, to be part of the team that actually scores the try and is enabling this bill to become law—to become law in this country.

I want to bring my personal experience in, particularly to the amendments to the Electronic Identity Verification Act 2012, and I just wish the banks were listening. I wish the banks were listening. As the treasurer of two community-organised incorporated societies, I just wish the banks—if you’re listening, banks, please, take note: with bank accounts, if we’re changing signatories, we all live in different parts of the country. Some of us live in the South Island, some of us live in South Auckland, and some of us live in the middle, here in Wellington. So what we have to do, in terms of changing signatories—and I know this because, in this new post that I am now privileged to hold, I have to change the signatories of all the other signatories of the two societies that I am part of—is we all have to attend the bank at the same time. We all have to attend the bank at the same time, and I just wish, in terms of the amendments to the Electronic Identity Verification Act 2012—and I’ll go to that page, if you are reading, Matt King; it is on page 13.

I’ll go to that page, and it talks about using a photograph. We’ve had previous members talking about taking a selfie for their passport. If only we could have copies of officeholders—their photographs—kept by the bank so that when we do change signatories, I and other members of the society don’t need to travel to different parts of the country to contribute to changing our identity with banks. But if we live in Auckland, this would not only contribute to making life easier for New Zealand but it would go some way to reducing traffic congestion in Auckland. It will, it will. And it will reduce traffic congestion in Auckland. Not only that, reducing traffic congestion in Auckland—[Interruption] Let me get to that. I’m almost getting there. This bill would make things a lot easier for New Zealand.

The reason why I’m offering insights is because I am an ordinary Aucklander; I’m an ordinary New Zealander who holds—oh, hang on a minute; I’m a woman, so I’ll talk about all the other roles that I hold. I am a person who has a full-time job and is a member of several community groups that I attend. So, in terms of electronic emailing to addresses, I did say, when I started this speech, that I would demonstrate how this affects 17 Acts. A question posed to me by my 12-year-old, because she’s currently taking a keen interest in listening to the debates in the House, was: “Mum, why is it that everybody gets up and talks about the same thing all the time? Maybe differently, but I’ve noticed that they talk about the same thing all the time.” And I say to her: look, if you listen—if you’re still up. You should be sleeping, malo. But, anyway, if you’re up—and, hopefully, you’re viewing this recorded, tomorrow not tonight—what it means is that if there are 17 Acts, and let’s say I talked about the service of notices, then there are 17 parts of this same service of notices section that would need to be amended in all those 17 Acts. Whether it is conservation law or whether it is the Fair Trading Act, that’s what it means. It affects 17 Acts. In terms of service of notices, what it means is that it has to be changed in all those other Acts. If the member across the House understands what that means, that means that 17 different Acts need to be changed in order for this to happen.

I also want to share, in terms of “Giving evidence … by electronic means”. In my other life—again, as a Government social worker—I used to organise meetings. Sometimes organising what we call a family group conference requires certain members of the whānau, or if the young person who is, let’s say, in youth justice—if a family group conference requires the young person to be present, and sometimes they are unable to travel because there are no flights to Tauranga at that certain time, what we used to do, and I know it’s still current practice, is we would involve the young person in a family group conference by electronically having that person or people that could attend a family group conference be not physically but actually electronically there. So it does work.

So what I want to summarise is that technology is here to make our lives easier. It is here to make the lives of ordinary New Zealanders easier. If it means that we contribute electronically to making it easier for Government workers, in terms of sending paperwork, we’re all about planting those trees. We’re all about that. And, physically, paper contributes to trees being cut down. But, in this Government, I just want to acknowledge that we’ve now got the ball and we’re going to score that try—one billion trees—and I want to commend this common-sense approach. I commend this bill to the house. Malo.

MATT KING (National—Northland): It’s a real privilege to speak on this Electronic Interactions Reform Bill. I just want to let you know that National supports this bill—just in case.

It’s fantastic to hear the commentary from the previous speaker—filled out the 10 minutes really well—and the previous speaker before that, Paul Eagle; great to hear from him as well. I want to commend the Hon Tracey Martin for bringing this great piece of National Party legislation to the House. In this modern age, it makes sense for this Government to be accessible to Kiwis online, and for Government services to be available online.

The National Government had a target of 70 percent of the most common transactions with Government to be digital by 2017. Well, I can tell you 90 percent of births are now registered online, 80 percent of tax returns are completed online, and 50 percent of passport renewals are done online.

Jamie Strange: Fascinating.

MATT KING: Yes, it is. These amendments work hand in hand with the National Government’s game-changing broadband network expansion initiative, begun back in 2011, and it directly benefits the people of Northland—that great electorate of Northland—especially in our numerous rural and isolated parts of this digital network expansion when it reaches them. Government departments that have contributed are DOC, the Department of Internal Affairs, and Ministry of Business, Innovation and Employment, to name a few. This has cross-party, universal support, and it is the third reading, so this matter has been traversed thoroughly.

We at National have taken the minimum time on our speaking slots to speed up this process, and we wonder why this coalition Government is wasting valuable House time debating this bill further. Some Labour MPs have told me they don’t know why they’re doing this. I ask: why is this bill so important that it needs to be in the coalition Government’s first 100-day action plan? So I’ve said enough. I commend this bill to the House.

JAN TINETTI (Labour): Kia ora, Mr Assistant Speaker. I’m delighted to be standing here speaking on the Electronic Interactions Reform Bill, as the last speaker of the night on this bill.

I sat here the other night, and I listened to the debate, and it was the first time that I had actually really, really engaged with this very, very important bill. It is very important, which is why we are taking so much time over this. We are amending an update—to update 17 Acts. That’s not a light piece of legislation. With that I’d like to acknowledge the Minister, the Hon Tracey Martin, for stewarding it to this particular point. And a special thank you to the former Government Administration Committee, because I had a good look over the work that they did, and they really did put a lot of time and effort into this.

The eight submitters took a lot of time, and they need their moment to be heard in the House as well. So it’s not something that we should be taking a short time over. We should be talking about this so that the general public understand what this bill is about. It is good to see the progress of developing digital services. It does make it easier for all New Zealanders to interact with the Government. And, if we don’t get this right—if we don’t help people to understand this—there’s a whole lot of things that don’t happen down the track. With the Electronic Interactions Reform Bill, if we don’t put this through in its entirety now, the initiatives set out in Appendix A of this bill would not proceed as they are written out, and future changes enabled by the bill, which are currently planned, simply won’t happen.

Now, this evening we’ve spoken a lot, or we’ve heard a lot, about digital natives and digital immigrants. I don’t really talk a lot about digital natives and digital immigrants anymore because I believe that the lines are becoming very blurred. What I believe this particular bill sets out, is it sets out for a just-in-time demographic, as opposed to a just-in-case demographic.

So what is that? A just-in-time demographic is those people that are set up and understand when they want to get their marriage licences, or they want to get birth certificates, that they get them just in time, when they need them. We once were a generation of people that were “just in case”. We held on to our documents just in case one day we might need them. But “just in time” is that we’re able to do this by going on electronically and getting these documents just in time—when we need them. This is what this bill sets out: the ability to be able to do that.

An example of this would be when a family needs a birth certificate and, while this may not be the case at the moment, this bill sets this up to be able to do this eventually down the line. So, when children change schools, for example, sometimes going into the new school, they can’t enrol without showing their birth certificate. And if you’ve had to change houses—several times in the lifespan at the last school—you obviously can’t find that birth certificate any more. I’ve seen it heaps and heaps of times.

Just in time means you can get straight online and you can apply for that birth certificate straight away and it will be able to come. That would be much easier for those families than what they’re currently having to put up with. This bill makes it easier for people who struggle to get to offices for making applications: applications for marriage licences, etc., as set out in the bill. It makes it easier for those people to make those applications than to go into the offices. I’ve worked with many people in different demographics, who find it very difficult to go into offices. They’re a bit whakamā—they’re a bit shy about going in. They don’t understand automatically, when they go into those offices, what they need to take with them. And so they often get frustrated when they’re there, and then don’t come back again.

This bill sets out the ability for those people to be able to have a support person with them as they’re working at their computer at home. I think that’s a really positive step for those people. But it’s not just a demographic who are feeling shy, or who are feeling whakamā, it is a demographic of people who are rurally isolated, who can’t easily get to offices.

Now, my wee story goes along the lines of a few years ago, two days before my driver licence expired, I suddenly realised that it was expiring, and I lived in the heart of rural Southland at that point, and I was one hour away from the nearest centre to get my driver licence. I had to make time in my day to go and do that, and I didn’t quite have the right information with me when I actually got there. So my whole experience took about four hours all up to get the driver licence renewed. This actually allows for people to do this online. If they haven’t got the right information, they can access it online, so the bill does make it completely a lot easier and accessible for people to actually go along and get their documents that they need.

The notices being served by email is another interesting point in this particular bill. It is great to see the changes around proving the use of email in this particular bill, but I do wonder at some point that we’re being left behind a little bit as a Government too. We think we’re bringing this into the modern age, but I know that my particular children in their 20s don’t actually use email any more, and maybe that’s something that we need to look at into the future—about how we can look to even modernise our digital reforms even further. I think it’s a good start though. I think it would be good for my particular children. I’m not certain that it’s because they don’t like getting letters, but the fact that all of a sudden their parking fines suddenly turn up at my house rather than their own, I think, probably says more about the fact that they would not check their mailbox but they’d think mum would pay their parking fines for them.

It was good to see the Government Administration Committee acknowledge the digital divide in their work. I think this is a huge issue that does need further work and it was good to see that the committee recommended that there should be more work done around this. The digital divide hits a lot of people. It is not just people in rural areas; it’s not just people from low socio-economic areas. We’ve got age divides in there as well, and these are something that we’ve heard a lot about over the last few times that we’ve talked about this bill.

There are some really good solutions to this though, and we need to look at those solutions, about how we can actually help people to address the digital divide so that they can access this bill really, really well. Things like in schools, in areas that I’ve worked in in the past, having the internet so that it’s available to all people in the community—having a net out so that a lot of people in the low socio-economic communities can access the internet that schools provide. In my particular school that I worked in over the last 11 years, we used to have a lot of people who would come up to our school, access our internet, and they would access it so that they could pay bills—access their documentation online. I could see that this would work in really, really well—this bill—with those people who don’t have access to the internet in any other way. So I think there are a lot of places around where they would be able to do that.

So I believe that this is a really good bill. I’m delighted to see it go through the House. I’m delighted to see it coming into fruition after so long. We, as a Government, are very, very proud that this is a piece of legislation that we are putting through. It is important. It will make a difference to a lot of people, and I look forward to seeing future variations of this bill as they come through the House in future years. So with that, Madam Deputy Speaker, I commend this bill to the House.

Bill read a third time.

Bills

Food Safety Law Reform Bill

In Committee

Debate resumed from 6 December.

Parts 1 to 4, schedules 1 and 2, and clauses 1 and 2 (continued)

The CHAIRPERSON (Adrian Rurawhe): Greg O’Connor had the call, and he has three minutes and 23 seconds remaining should he wish to avail himself of them.

KIERAN McANULTY (Labour): Thank you very much, Mr Chair. I’m sorry to disappoint the committee. I know how much you were looking forward to hearing from Greg O’Connor, the member that won the Ōhāriu seat, and he, of course, takes this bill very seriously—

Hon Nathan Guy: Tell us about Wairarapa.

KIERAN McANULTY: Ha, ha! All right—I’ve been invited to share my thoughts on the Wairarapa electorate. I’m not too sure that’s connected to this bill, given that it is in the committee stage, although I must say I was very pleased to reduce the majority by over 4,000—yes.

So, the Food Safety Law Reform Bill 2016—I share in my colleague Greg O’Connor’s enthusiasm for this bill, because, of course, we all eat. We all eat food and we want it to be safe, and it’s very difficult to argue against that, I must say. The purpose of this bill is quite clear. It is an omnibus bill—an omnibus in that it amends three Acts: the Food Act 2004, the Animal Products Act 1999, and the Wine Act 2003. I do expect there will be many calls on this bill, probably calls that will take the entirety of their allotted time, such is the significance of this bill. I expect that there will be calls on this discussing that wine has been included into this, the Food Safety Law Reform Bill. But there is a very good reason for that: we are a country that, on the whole, relies on primary production and its contribution to our economy. We cannot risk undermining our image as a clean producer of primary production if we were to send something overseas that then did not fit our standards as a producing country and undermining the value that we can extract from those products because it comes from New Zealand.

This bill is needed for a very simple reason and there is one particular event that led to the need for this bill, and that, of course, is the Fonterra botulism false alarm. Praise the Lord that it was a false alarm, but it created a question mark over New Zealand’s reputation both here and abroad as a supplier of safe food. As my colleague the Hon Damien O’Connor stated in this House, it was a massive and hugely expensive mistake for this country. We must learn from that mistake, and this bill goes some way to rectifying that. This bill represents one part of our learning from this mistake and the inquiry that resulted from it, the Government Inquiry into the Whey Protein Concentrate Contamination Incident, as it is known.

The value of New Zealand’s reputation as the supplier of safe food cannot be overstated. You go anywhere in the world and you tell them that you’re from New Zealand, and they will tell you—perhaps you might be in Europe, like I was when I was living in Ireland. You mention New Zealand; they mention New Zealand lamb or New Zealand butter, and that is in a country where they are also known for their lamb and their butter, but New Zealand’s reputation preceded that. By amending the Food Act 2004, the Animal Products Act 1999, and the Wine Act 2003, this Government is committing to ensure that our reputation can remain intact.

In terms of Part 1, the Food Act amendments implementing whey protein concentrate contamination inquiry findings, I address my comments to the work of the committee on that part of the proposed bill dealing with the Food Act. The Food Act, of course, is only one of the three Acts amended by this omnibus bill, but it is the overarching piece of legislation in our food safety system. Animal products and wine, which are covered by the two other Acts amended by this bill, are also food, and are covered by the overarching provisions of the Food Act. So I will speak on Part 1 of the bill.

I note that I am approaching the end of my allotted five-minute time, which is a shame. I would take a second call, but I note that many of my colleagues are desperate to speak on this bill, and I would hate, given that there’s only 15 minutes left this evening, to deprive them of that. But I am looking forward to being able to resume this contribution when I do get the opportunity, which will probably not be for some time, given, as I mentioned, the eagerness of my colleagues to speak on this bill.

MICHAEL WOOD (Labour—Mt Roskill): Thank you very much, Mr Chair.

Hon David Bennett: Great if one came from a farming area.

MICHAEL WOOD: Ha! The Mt Roskill electorate has the largest area of farmed land in the urban part of Auckland City—the old Subritzky estate in Lynfield—

Hon David Bennett: That’s a reserve! And you want to put a train through it!

MICHAEL WOOD: —Ha!—and we’re very proud of it.

But what we’re also very proud of is our status as a nation that produces food that domestic and international consumers can have confidence in, and this bill goes right to the heart of that issue. It addresses the recommendations of the independent Government Inquiry into the Whey Protein Concentrate Contamination Incident, popularly known as “IGAFICA”! And what that went to was the Fonterra false botulism scandal. And it was a scandal—it was a scandal because we had our biggest exporter and one of the biggest carriers of our flag on the international market forced into a position where it had to alert international markets to the potential of a botulism contamination of its product. Actually, what we found out further down the track was that that wasn’t quite right. We have just got to get this stuff right—our economy depends on it, jobs depend on it, our international reputation depends on it.

In my remarks in this committee stage debate, I just want to do a little bit of a deep dive into a few specific issues that were raised at select committee stage by one of my former select committees, the Regulations Review Committee. The reason that feels important to me is that, in the end, a lot of this bill is about process—it’s about having good processes to support food safety. But what the Regulations Review Committee pointed out in its letter to the select committee was that some of the processes in the original bill needed a bit of tweaking to make sure that it was fit for purpose, and I just want to comment on those.

One of the first ones relates to the commencement date of the bill. The Regulations Review Committee has been assiduous in its comments to select committees about needing to be a little bit sharper about this issue. What the Regulations Review Committee points out is that a number of provisions in the bill had an open-ended implementation date.

I do just want to note that, over the course of this evening, we’ve had to put up with insufferable calls from the Opposition about the Government putting up legislation that they seem to think isn’t all that important. Well, this is an important piece of legislation. It goes straight to our food security, it goes straight to a constituency that that party presumes to represent, and yet, here we have a bill that was originally put forward by a former Minister sitting on that side of the House that had an open-ended implementation date and wasn’t passed by that former Government. Well, here we have a Government that is going to pass it, and we’re going to make sure it’s passed with clear implementation dates as well. So instead of having that open-ended implementation date, the select committee, quite wisely—and the Government picks this up—is going to make sure that the implementation date is two years after the date on which it receives Royal assent. That is clause 2(1)(b) of the Food Safety Law Reform Bill. That was a very sensible suggestion of the Regulations Review Committee, and I think it’s appropriate that the House notes that and we support that as this bill passes to the next stage of the legislative process.

The other changes I wanted to touch on in my time are changes to the sections relating to the consultation around the regulations or secondary legislation that might flow out of this bill. This, again, is noted in the comments of the Regulations Review Committee. This is a really important thing: when we in the House pass Acts of Parliament we often give to agencies the ability to put into place secondary legislation—that is, regulations that have a real legal effect on the lives of people and businesses. What was pointed out by the Regulations Review Committee is that a number of the regulations originally in this bill—the regulation-making powers—did not have attached to them any requirement to consult the people who would be affected by them. So those changes, if members want to turn their eyes to them, make changes to section 163(2) to require that the director-general does carry out consultation and take into account the outcomes of that consultation when making a number of regulations under this bill. I think that is a very sensible change. They may seem like some arcane points, but they are important points by the Regulations Review Committee that make this a better bill. Thank you, Mr Chair.

TAMATI COFFEY (Labour—Waiariki): Thank you, Mr Chair. It’s my pleasure to stand up and join my colleagues in speaking on this particular bill, which is a very important bill. As my colleagues have alluded to, if we take our reputation internationally as a good, sound food producer, we actually need to take particular note of this piece of legislation. As my former colleague alluded to, it was the botulism false alarm that questioned New Zealand’s integrity when it came to having a good reputation of safe and suitable food. I guess because we spend so much money on tourism and putting our exports out there, it was a grave concern.

As somebody that wasn’t actually in Parliament at the time, as somebody that just consumed this from the outside as a viewer, as an average New Zealander, there was a lot of concern around it, but, thankfully, it was found to be a bit of a false alarm. Although, as we’ve discovered, the inquiry found that our system was sound and in line with international best practice, but it also suggested some improvements as well that could be made, and I’m going to drill down into some of those in just a moment. All we need to know is that this bill will strengthen the regulatory framework and signals to our trading partners and to the public that we take these matters very, very seriously.

So what does it do? Well, the proposals are mostly enabling or clarifying provisions to strengthen the food safety system. Some of the proposals will permit regulations to be made that will entail separate consultation and impact assessment, but as well as that, we’ll be implementing the recommendations from the WPC, the whey protein concentrate inquiry recommendations, and the bill also includes some other minor enhancements and amendments. The bill in particular will amend three main food safety Acts, so that’s where possible similar provisions apply across the food sectors.

Now, how controversial is this? Well, not very. In fact, I’d put it out there that the policy changes are quite straightforward, and the consultation process has been very thorough as well. It’s a consultation process that’s taken place over a long period of time. There’s been general support for the bill, but the sectors also raised some issues, such as compliance cost, which have to be factored into the equation here. It’s good to note that the changes were made on the recommendation of the select committee and have all been incorporated, so it means this is a solid piece of work. It’s a solid piece of legislation. The public consultation on the initial proposals was conducted from late March to early May 2015, and, as I have said, there was good support from the industry for the bill’s proposals too.

So, big question: what are the financial impacts of the bill? Well, there are no immediate costs from the bill, which you’d be pleased to hear about.

The CHAIRPERSON (Adrian Rurawhe): Sorry to interrupt the member. The time has come for me to report progress.

House resumed.

Progress reported.

Report adopted.

The House adjourned at 9.55 p.m.