Volume 613 Week 43 - Tuesday 18 November 2003 
Volume 613 Week 43 - Tuesday 18 November 2003 
[Volume:613;Page:10055] 
Tuesday 18 November 2003 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Questions to Ministers 
Business—Government Relations 
1. Dr DON BRASH (Leader of the Opposition) 
 to the  
Minister of Finance 
: What initiatives does he intend to take to improve relations with the business community in light of yesterday’s  
New Zealand Herald 
 poll which ranked both him and Labour fifth in understanding the needs of business? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The Government continues to expand on a range of initiatives to support business. Its most important contribution is to provide strong stable leadership which—as I found in Auckland yesterday—is seen as being in stark contrast to the National Party. 
Dr Don Brash 
: Are not the business community’s concerns entirely understandable given the raft of anti-business legislation that has been passed or is now being contemplated by this Government including amendments to the Employment Relations Act changes to occupational safety and health legislation the introduction of 4 weeks’ annual leave and a total failure to address the shortcomings of the Resource Management Act or is it the case that the Minister is simply not interested in the concerns of the business community? 
Hon Dr MICHAEL CULLEN 
: None of the above. I do recall that when the Employment Relations Act was passed the member’s friends in the Auckland Employers Federation predicted that not a single job would be created as a consequence of that Act that there would be no new jobs in the New Zealand economy. We now have a 4.4 percent unemployment rate which is the lowest for 16 years. Of course if the member wants to do something about the fact that New Zealand has one of the worst safety records in the developed world I suggest he talk to those responsible—his friends in the same organisation. 
Clayton Cosgrove 
: Could the Minister outline for the benefit of the House what recent international commentary he has seen on the Government’s economic performance? 
Hon Dr MICHAEL CULLEN 
: By sheer chance the  
Australian Financial Review 
 noted in last weekend’s edition that the economy under the Clark Government was “humming along sweetly with unemployment at an enviable 4.4 per cent.” The same column stated that “New Zealand business leaders must be gluttons for punishment.” for welcoming the change of National leader “Instead of recoiling from Don Brash’s disastrous mistakes while governor of the Reserve Bank of New Zealand”. 
Dail Jones 
: When will the Minister realise that business recognises the falsity of our economic scenario where sectors earning our money are laying off people—primary sector employment is down by 5 percent and manufacturing employment is down by 3.1 percent—and both areas are affected by our high dollar; and what does this Government intend to do about it? 
Hon Dr MICHAEL CULLEN 
: What I will not do is break the law as proposed by the New Zealand First leader—summon the Governor of the Reserve Bank and order him to lower the exchange rate. 
Gordon Copeland 
: Does the Minister foresee a deterioration in the Government’s relationship with the business community if the Government perseveres with its endeavour to have exporters pay for new national security measures; if not why not? 
Hon Dr MICHAEL CULLEN 
: Those measures are a response to demands from the United States. In other countries around the world it has been basically left to the private sector to meet those conditions. In New Zealand the Government is carrying out the requirements and clearly we have a right to expect to be paid in return for that. 
Rodney Hide 
: Is not the real problem this Government confronts the fact that business can see through the spin and the self-congratulatory clapping the Government gives itself; and why does this Government not give some real relief to business in the form of some tax cuts? 
Hon Dr MICHAEL CULLEN 
: The Government is introducing and foreshadowing a number of changes in the tax system that will help the business community. I look forward to the member’s support on those issues. 
Dr Don Brash 
: Did the Minister note that in the  
New Zealand Herald  
poll I quoted a moment ago he was rated fractionally below the Rt Hon Winston Peters and almost dead equal with the Hon John Tamihere; and is the Minister satisfied with that assessment of his performance by New Zealand’s business leaders? 
Hon Dr MICHAEL CULLEN 
: In a poll where the preferred political party of the respondents was ACT which scores less than 5 percent in general polls compared with 45 percent for the Labour Party I think one can say the sample was somewhat biased. 
Tertiary Education Commission—Research 
2.  
LYNNE PILLAY (Labour—Waitakere) 
 to the  
Associate Minister of Education (Tertiary Education) 
): What progress is the Tertiary Education Commission making in improving the quality of information on research output in the tertiary education sector? 
Hon STEVE MAHAREY (Associate Minister of Education (Tertiary Education)) 
: 
 Last year the Government announced the Performance-based Research Fund aimed at allocating $150 million of funding on the basis of research excellence. The Tertiary Education Commission announced on Friday that applications have been received covering almost 6000 researchers for that money. Their work will now be assessed and beginning from next year the new research funding model will be in place. 
Lynne Pillay 
: How is the process run; and how will providers be rewarded? 
Hon STEVE MAHAREY 
: The work of researchers will be peer-assessed by panels of independent New Zealand and international researchers. Excellence will be rewarded—meaning that resources will be allocated in a way that supports New Zealand having world-leading research. 
Nandor Tanczos 
: What is the Government doing to protect public access to research where it is partly funded by the private sector and partly by the public sector? 
Hon STEVE MAHAREY 
: I imagine that the member has a particular case in mind. If he wants to bring it to my attention he should please do so. But he will know that the way contract research runs is that if there is a public provider of funding and a private provider of funding the contract will set out how that research is to be used. 
Deborah Coddington 
: Will the Tertiary Education Commission be measuring the improvement in research excellence as a result of compulsory consultation with iwi groups; if not why not? 
Hon STEVE MAHAREY 
: Yes the Tertiary Education Commission will be measuring the improvement in excellence within research and has already released indicators for how it will do this. I want to say to members in the House that I do not know of a single person in the country who opposes a performance-based research fund and I ask National members if they want to sink even lower to say that they would repeal this. 
Overstayers—Detection and Deporting 
3. DAIL JONES (NZ First) 
 on behalf of  
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Immigration 
: What success has her department had in identifying and deporting overstayers in the last 12 months? 
Hon LIANNE DALZIEL (Minister of Immigration) 
: 
 A total of 1984 overstayers were identified from 1 November 2002 to 31 October 2003; 986 overstayers were removed and 998 left voluntarily after being identified by the New Zealand Immigration Service. On comparing the estimated overstaying numbers with the comparable removal and voluntary departure statistics this year’s figures show a significant improvement on the 1997-98 year. 
Dail Jones 
: Can she explain why the overstaying Hungarian couple Joseph and Theresa Bertalan so easily slipped through the system unnoticed when they were working on visitor permits that expired in June obviously had maternity care during Mrs Bertalan’s pregnancy had access to taxpayer-funded accommodation and have now given birth to a child who is a New Zealand citizen; and why is it that only through Mr Bertalan allegedly breaking the law by shoplifting and giving foulmouthed abuse to the local police has this couple finally been exposed to Immigration Service officials? 
Hon LIANNE DALZIEL 
: I am not at liberty to disclose details of individuals’ cases without their consent or without their waiving their right to privacy. 
Keith Locke 
: Why is the Government trying to deport Mr Abdikarim Ali Haji to Somalia via South Africa when it is known that the safety of such a deportee cannot be guaranteed in Somalia which has no properly functioning Government; and why is the Government not following other Western nations like the United States in not deporting to Somalia at this time? 
Hon LIANNE DALZIEL 
: That particular case has resulted in a High Court intervention. The Government is therefore not removing him at this stage. The Associate Minister has been asked by the court to take into account the United Nations High Commissioner for Refugees guidelines which we are expecting to receive very soon. 
Dail Jones 
: What is the problem on the ministry’s part in failing to give information about these people whose case is well reported in the paper whose permits have well and truly expired who have been using the under-resourced health board who are costing the New Zealand taxpayer thousands of dollars and who are committing crimes here? What is the problem with the Minister telling the House what is going on with her department? 
Hon LIANNE DALZIEL 
: I am perfectly well aware of the details of this particular case but what that member consistently fails to accept is there is an absolute obligation on my part as the Minister of Immigration to respect individuals’ privacy up to the point that they either specifically give permission for their cases to be discussed or waive their right to privacy as some particular individuals have done by making their particular cases public. In this particular case the advice I received was that the individuals did not come to the attention of Immigration Service officials until the police were involved. 
Treaty of Waitangi—Claims Settlements 
4.  
MAHARA OKEROA (Labour—Te Tai Tonga) 
 to the  
Minister in charge of Treaty of Waitangi Negotiations 
: What progress is being made on Treaty of Waitangi settlements? 
Hon MARGARET WILSON (Minister in charge of Treaty of Waitangi Negotiations) 
: 
 I am pleased to announce that the Ngati Tama Claims Settlement Bill will have its second reading today and will be the second treaty settlement bill through the House this year in line with our policy objective to have a settlement every 6 months. 
Mahara Okeroa 
: What other progress has been made by the Government in treaty settlements? 
Hon MARGARET WILSON 
: This Government has been making very good progress in settling historical treaty claims in a relatively short time. We have signed five settlements with Te Uri o Hau Ngati Ruanui Ngati Tama Ngati Awa and Ngati Tuwharetoa in the Bay of Plenty. We will also be shortly signing another deed of settlement with Nga Rauru. We have also passed three treaty settlement bills—those relating to Pouakani Te Uri o Hau and Ngati Ruanui—and we will of course be passing through this House the Ngati Tama Claims Settlement Bill this week. We are also currently engaged with five different groups at various stages of negotiations. 
Dr Wayne Mapp 
: How many sets of legislation will the Minister introduce into the House before the next election or will she continue boasting about settlements that have been negotiated by her predecessor Sir Douglas Graham? 
Hon MARGARET WILSON 
: It is true that some of those settlements were started by the National Government. It is also true that that Government failed to settle them and to bring them to finality. That is what this Government does; it actually gets the job done. 
Bill Gudgeon 
: In recent Treaty of Waitangi claims there has been disagreement on who should be the mandated personnel to represent iwi negotiating teams and that this has been a stumbling block that has created disharmony and distrust amongst— 
Mr SPEAKER 
: The member has not yet started to ask the question. He must use a question word. Please commence. 
Bill Gudgeon 
: What is the Office of Treaty Settlements doing about those claimants not happy with the mandated personnel? 
Hon MARGARET WILSON 
: The Office of Treaty Settlements with Te Puni Kokiri has a process to ensure that all claimants involved in a claim do have an opportunity to be represented. It is true as the member said that in just about every settlement there will be someone who is unhappy with that process. The way we intend to deal with that—and do deal with that—is to make sure that there is always a place at the table for those who do not want to participate at that time and frequently by the end of the negotiations they do. 
Metiria Turei 
: When will the Minister undertake a comprehensive review of the Office of Treaty Settlements and the treaty settlement policy in line with restorative justice principles so that hapu affected by settlements have some control over the process of restitution for the heinous crimes committed against them? 
Hon MARGARET WILSON 
: The treaty settlement process is intended to address the heinous crimes the member referred to. What I think the member is getting at is that the policy of the office and the Crown is to have large natural groupings in negotiations as opposed to individual whanau and hapu on every occasion. The reason for this is simply that all those parties have an interest in the settlement. Also it is important that the settlement process be undertaken in an appropriate time. To have every hapu have an individual settlement would mean there would probably be no end. 
Child Youth and Family Services Department—Masterton Office 
5.  
KATHERINE RICH (National) 
 to the  
Associate Minister for Social Development and Employment (CYF) 
: What specific concerns did the supervisor of the social worker involved with Saliel Aplin and Olympia Jetson raise with the Chief Executive of Child Youth and Family Services and how were those concerns addressed? 
Hon RUTH DYSON (Associate Minister for Social Development and Employment (CYF)) 
: 
 I understand that the supervisor raised concerns about the Masterton site manager’s position being disestablished. The department’s response was that the change to split the business and practice management functions into two positions with the business manager being based in Wellington and the practice manager being based in Masterton would strengthen on-site management of social work practice. 
Katherine Rich 
: In light of the Commissioner for Children’s finding that there was a “failure of the decision makers in Wellington to respond adequately and promptly to the unique situation developing in Masterton” how does that finding illustrate that the national office was adequately supporting the Masterton office? 
Hon RUTH DYSON 
: I would also like the member to reflect on the response from the chief social worker given in her report which questioned the degree of effect that changes to management lines and accountabilities have on professional practice. She also noted that social work standards should be maintained regardless of reporting lines. 
Georgina Beyer 
: What initiatives has the department implemented to better support supervisors and social workers including front-line staff in the Masterton office? 
Hon RUTH DYSON 
: The department has initiated a number of new programmes including the establishment of 38 new practice manager positions across the country to oversee practice quality and to assist in resolving difficulties or uncertainties within casework. Two of these new positions are in the Wellington region with one specifically in Masterton. 
Barbara Stewart 
: In taking note of the Minister’s previous answers and given the number of currently unallocated cases—including those that have been notified to the Department of Child Youth and Family Services more than once—is she confident that the systems within the department are adequate to ensure the safety of at-risk children; if not what specific changes are planned to improve these systems? 
Hon RUTH DYSON 
: I am confident that with the new initiatives and additional support that the department has been given over the last 4 years and with the implementation of the recommendations of the baseline review team we can have that confidence. 
Dr Muriel Newman 
: What specifically did the Minister mean in her statement last week when asked whether she accepted responsibility for the failure of the Labour Government’s Department of Child Youth and Family Services that: “That is an agreement I signed with the chief executive. It is her responsibility to deliver on that agreement.”; and can she clarify for the House whether she as Minister will accept responsibility for any child who is harmed under the care of the department? 
Hon RUTH DYSON 
: The statement meant exactly what it said. I am happy to be accountable for the responsibilities that the privilege of my ministerial portfolios accord. 
Judy Turner 
: In light of the fact that the social work supervisor’s concerns were not perceived to be addressed in this case is the Minister concerned by Charlene Aplin’s intention to proceed with legal action against the department; does she intend to fight that action vigorously; if not why not? 
Hon RUTH DYSON 
: Any individual including Charlene Aplin is entitled to take legal action if he or she considers it appropriate. 
Katherine Rich 
: If the Minister is trying to convince the House that major positive changes have occurred at the Masterton office of Child Youth and Family Services after the girls were murdered why in an answer to a parliamentary question about the changes that had been made 1 year after their deaths did then Minister Steve Maharey say: “There were no specific practices put in place regarding the social workers involved with Olympia Jetson and Saliel Aplin.”; that “the department is satisfied with its social work policies”; and that “there have been no changes in procedure following the deaths of the two girls.”? 
Hon RUTH DYSON 
: As that member well knows the policies and procedures were confirmed by the Commissioner for Children as being entirely appropriate. They were not followed. 
Georgina Beyer 
: What support has the department given to the Masterton office since 2001? 
Hon RUTH DYSON 
: A new manager appointed in mid-2001 increased resources to the office by employing a new team of social workers. The department has also strengthened on-site management during 2003 provided additional support and practice advice provided additional social work resources from the Wellington office strengthened collaboration with other key agencies worked closely with community partners on initiatives to address family violence and contracted an additional “social workers in school” position in Masterton. 
Katherine Rich 
: If the Minister is convinced that she has given due attention to factors raised by the Commissioner for Children why did Trish Grant of the Office of the Commissioner for Children say that such factors “haven’t been given the attention they should have by the department or in fact the Minister”? 
Hon RUTH DYSON 
: Clearly because that was her view. 
Prisons—Management 
6.  
MARC ALEXANDER (United Future) 
 to the  
Minister of Corrections 
: Is he satisfied with the management of prisons in New Zealand; if so why? 
Hon PAUL SWAIN (Minister of Corrections) 
: 
 Generally yes. The department’s primary job is to keep the public safe and it has consistently performed well compared with other jurisdictions. 
Marc Alexander 
: Will the Minister review the security classification system in light of the recent escapes of Andrew Rogers a murderer and child sex offender and Grant Simon a brutal serial rapist who is still at large after 11 days both of whom were on minimum security work programmes outside their State-managed prisons; if not why not? 
Hon PAUL SWAIN 
: Investigations are under way into both those circumstances. The security classification and the conditions surrounding the fact that at least one of those persons walked away are part of those investigations. 
Martin Gallagher 
: How do New Zealand’s prisons compare internationally? 
Hon PAUL SWAIN 
: Very well indeed. The total inmate cost per day is lower than in Australia England Wales and Canada. New Zealand fares very favourably on measures such as staff-to-inmate ratios and the department’s integrated offender management system is considered to be a world leader. Prison managers are making very good progress and they should be congratulated on that. 
Ron Mark 
: Does the Minister have confidence in and is he happy with the management of the Auckland remand prison; if so what lessons does he feel the Department of Corrections could take from the success of that operation? 
Hon PAUL SWAIN 
: As the member knows the issue of private prisons is now under consideration by the select committee. Of course it is Government policy to have that private prison returned to the public prison system. We consider the incarceration of people is duly the responsibility of the State. 
Ron Mark 
: I raise a point of order Mr Speaker. I specifically asked the Minister whether he has confidence in and is happy with the management of that prison. I did not ask him about the Government’s proposals about bills that may be before the House or the ideology behind that. I specifically asked whether he had confidence in and was happy with that prison. I would like him to answer the question. 
Mr SPEAKER 
: I will ask him to comment a little further. 
Hon PAUL SWAIN 
: I have not seen any issues about the management of the prison but I have seen some figures being used by Business Roundtable and others that do not compare apples with apples. If we look at the public prison system in New Zealand and compare its management of remand prisons with private prisons we see that the public prison service is on average $7000 cheaper than the private prison. 
Nandor Tanczos 
: Is the Minister aware of some of the very serious allegations made against Australasian correctional management in Australia and notwithstanding the considerable advances made by them in things like access to mental health services and relationships with local iwi is he of the opinion that their activities here in Aotearoa are in the nature of a loss-leader? 
Mr SPEAKER 
: The Minister is not responsible for Australian prisons but he can answer the question in relation to his responsibility. 
Hon PAUL SWAIN 
: I have seen a number of comparisons. I think it is fair to say that some good progress has been made in that area particularly as the member rightly says in relation to iwi relationships—something that is now being considered within the public prison system. But I think it is fair to say as I said before that the incarceration of people in New Zealand should be the responsibility of the State not of private companies trying to make money out of it. 
Hon Tony Ryall 
: Why does the Government maintain its policy to cancel the private prison in Auckland when even the Minister’s own chief executive has advised a parliamentary select committee that the private prison is cheaper than the public prison by several thousand dollars; and if he does not want prisoners to be in the custody of the private sector why then have the police and the prison service put out the custody and transportation of prisoners to the private sector? 
Hon PAUL SWAIN 
: Well there are actually three questions there. Firstly the Government makes the decision— 
Opposition Members 
: Answer the question. 
Mr SPEAKER 
: The Minister does have the opportunity to answer. He had not got many more than two words into his answer. 
Hon PAUL SWAIN 
: There were three questions there and I am happy to answer them all. Firstly the Government makes the decisions not officials. Secondly the member’s figures are not right. Thirdly contracting out escort services is not at all comparable with the management of private prisons. 
Stephen Franks 
: Did he fail to answer Mr Ron Mark’s question about his opinion of Auckland remand prison management because he has made sure that he has never accepted any of its repeated invitations to visit in case it might upset his prejudiced determination to close the prison and it is easier to do that in ignorance? 
Hon PAUL SWAIN 
: No. 
Marc Alexander 
: Why is the Government happy to allow the Department of Corrections to tender out to private companies for the transportation of prisoners and provision for those on parole yet through the Corrections Bill wants to stop them from running prisons when surely if they are good enough to keep prisoners secure while they are out in public they can manage to keep them safely behind the stone walls and bars of a prison? 
Hon PAUL SWAIN 
: The Government considers the two things not comparable at all. For example the police used to be sitting in cars and vans monitoring speed cameras. They do not do it any more because we think they should be doing other things. Similarly we think corrections officers should be doing other things than sitting in vans going up and down between courts and prisons. 
Marc Alexander 
: Can the Minister confirm that although the privately run Auckland remand prison has achieved the New Zealand quality health accreditation the public prisons have failed to do so and instead require exemptions; and does that not make it even more untenable for the Government to squash private prisons under the Corrections Bill? 
Hon PAUL SWAIN 
: No I cannot confirm that. 
Sentencing Parole and Victims' Rights—Outcomes 
7.  
RON MARK (NZ First) 
 to the  
Minister of Justice 
: Is he confident that major changes in sentencing laws parole laws and victims’ rights laws have improved outcomes for society? 
Hon PHIL GOFF (Minister of Justice) 
: 
 Yes the Victims’ Rights Act for example has been strongly endorsed as a major step forward by victims groups and specifically by Victim Support. The tougher stance taken against the worst offenders under the Sentencing Act and the Parole Act such as the longest ever non-parole periods—25 years and 30 years respectively—for Howse and Bell have also been widely welcomed across the community. 
Ron Mark 
: What undertaking and assurances can he give that individual security officers charged with the responsibility of responding to alarm activations and checking home detainees are not suddenly being confronted and endangered by armed and violent home detainees under the influence of methamphetamine? 
Hon PHIL GOFF 
: If the member wants a specific answer I suggest he puts a specific question and if he has any information about that he should first of all have reported it to the police. But if he reports it to me I would be happy to have it investigated if indeed he has such information. 
Tim Barnett 
: Is the Minister confident that changes relating to preventive detention will allow those who constitute a serious and ongoing risk to society to be given sentences that ensure that society is protected? 
Hon PHIL GOFF 
: Yes preventive detention is being strengthened in three particular ways. Firstly it has been extended to now cover 36 serious violent and sexual offences; secondly it applies from the age of 18 not 21; thirdly it no longer requires the prerequisite of an earlier serious offence. This sentence allows an offender to be detained indefinitely. 
Marc Alexander 
: How can the Minister have confidence in a sentencing and parole regime that continues to fail victims and their expectations of justice given that when sentences are imposed they will by default still allow offenders the very real possibility of serving only one-third of their sentence? 
Hon PHIL GOFF 
: The member will be aware of several Court of Appeal cases that state quite clearly that where a longer minimum period is required for purposes of deterrence and denunciation of a particular offence up to two-thirds can be imposed. The member will also be aware that that is being clarified in current legislation before the House. The member will also be aware that offenders who now constitute an ongoing risk can and will be detained until the very last day of their sentence. 
Stephen Franks 
: How is it a better outcome to have in the first year after the Minister’s new sentencing and parole laws took effect 4500 more people robbed raped or bashed than in the year he first took power? 
Hon PHIL GOFF 
: The member will be aware that sentencing is one factor in terms of crime prevention. We hope it is a deterrent. Unfortunately too many studies around the world show that it is not a major deterrent. If we want to deal with violent offenders the research—equally international—shows that the best way to begin that is by dealing with the environments that create violent offenders particularly poor parenting and the lack of early intervention. Those sorts of factors need to be part of the solution and not simply the tough sentencing regime that this Government has put in place. 
Ron Mark 
: In respect of the Minister’s answer to my first supplementary question can he explain how it is that in the last week two security officers have been hospitalised by armed home detainees who were high on P and how many more children will have to hear that their fathers who work for private security companies checking on criminals living at home have been hospitalised by crazed P-using crims before he admits that home detention has been an abject failure? 
Hon PHIL GOFF 
: It is very easy to raise cases that have never been put before the House or to the best of my knowledge to the police. If they have not been put to the police they should be because a criminal offence has been committed. The member should not come into the House and grandstand; he should report that information to the police so that it can be acted upon. 
Hon Tony Ryall 
: Is it not about time the Minister accepted that every single one of the violent offences that has happened on home detention has been perpetrated by somebody who was on back-end home detention that his Government brought through this House and is it not time that those criminals were kept in jail rather than at home? 
Hon PHIL GOFF 
: I would expect the member as a former Minister of Justice to know that back-end home detention was introduced in 1995. It was kept in place by National for 4 years and then another Minister put in place front-end home detention. That Minister’s name was Tony Ryall. 
Ron Mark 
: I seek the leave of the House to table an email that details the assault on two security officers whilst they were visiting people on secure home detention. 
Mr SPEAKER 
: Leave is sought to table that email. Is there any objection? There is. 
Breast Cancer—Breast-screening Programme 
8.  
Dr LYNDA SCOTT (National—Kaikoura) 
 to the  
Minister of Health 
: Why has the Government decided only to extend the free breast-screening programme “upwards rather than downwards” in light of new scientific evidence which shows that deaths from breast cancer fell significantly in the 40-49 year old age group in those that were screened versus those that were not screened? 
Hon ANNETTE KING (Minister of Health) 
: 
 The Government is considering extending the free breast-screening programme upward to include women up to their 70th birthday as there is substantial scientific evidence of benefit in that age group equating to a 30 percent reduction in breast cancer mortality. Clearly the priority for widening eligibility for free breast-screening is in that age group. In this respect New Zealand is in step with most other developed countries where the most common age range for breast-screening programmes is between 50 and 69. However the national screening unit of the Ministry of Health is reviewing new research on this topic on a weekly basis and any decision to move the age group down will be based on the best possible evidence. 
Dr Lynda Scott 
: As the peak rate for diagnosis of breast cancer is between 45 and 50 years why on earth are we not extending free breast-screening to that age group? 
Hon ANNETTE KING 
: In fact the member is wrong; the peak rate rises with age. The Ministry of Health’s own New Zealand Health Information Service data show that the highest rate occurs after 50 years of age. 
Steve Chadwick 
: What representations have been made to increase the screening age upwards? 
Hon ANNETTE KING 
: I have received many letters—as have most members in this House—from organisations such as Grey Power that are rightly concerned that the highest registration of breast cancer in New Zealand is amongst women over the age of 65. 
Barbara Stewart 
: Is she planning any reconsideration of the Government’s position on the age bracket within which women are entitled to free breast-cancer screening in light of the 125000-signature petition of Debbie and Tim Short received today at Parliament; if so will extensions be made at the lower end of the current age bracket; if not why not? 
Hon ANNETTE KING 
: As I said in my answer to the first question the Government is looking at extending the breast-screening programme. In the first instance we are looking at extending it upward because evidence is very strong that the older one gets the greater the risk of breast cancer. So that is the area we are looking at initially. I do welcome the petition with 120000 signatures brought by the family whom I met with earlier today. I commend them for their passion. In terms of a decision on this I will base it on the best scientific advice I can receive. 
Sue Kedgley 
: What is she doing to reduce women’s exposure to the hundreds of estrogenic hormonally active chemicals in New Zealand that are known to contribute to breast cancer such as bisphenol A commonly used as a flame retardant; and will her ministry be making a submission to the Building Bill to ensure that women are not exposed to such estrogenic chemicals in their own homes that contribute to breast cancer? 
Hon ANNETTE KING 
: No I cannot answer that question. I have no knowledge as to whether any representations are being made on changes to the Building Act. 
Judy Turner 
: Noting that 3.8 percent of all males die from prostate cancer and those deaths represent a quarter of all male cancer deaths what progress has the National Health Committee made in assessing the proposal to provide free screening for prostate cancer? 
Hon ANNETTE KING 
: I would like nothing more than that there be an effective screening programme for prostate cancer for men. In fact more men die of prostate cancer than women die of breast cancer. However no other country is carrying out a screening programme at this stage because there is not an effective one. As the member has already pointed out the National Health Committee has been reviewing all international literature and is due to report in January next year. 
Dr Lynda Scott 
: Why do some Australian women receive free mammography from age 40; and why do New Zealand women continue to die unnecessarily when we know from scientific data that free breast cancer screening in the 40-49 year age group will reduce death rates by up to 44 percent? 
Mr SPEAKER 
: The second part of the question is in order and the Minister may answer that. 
Hon ANNETTE KING 
: I would dispute the figure the member has raised. In fact the figure I have seen is 15 percent. However I would also like to point out that the Australians set up a breast-screening programme considerably before New Zealand did. We did not establish one until 1998 and at that time it was decided that the age group would be 50 to 64 because the data showed that that was the appropriate place—just as the data now is showing that we ought to extend the screening upward as our first priority. 
Dr Lynda Scott 
: Why are New Zealand women still waiting far too long for radiation therapy following breast cancer surgery and still having to travel to Australia which was a short-term solution that this Government still has not solved? 
Hon ANNETTE KING 
: I am pleased to tell the member that in December this year the first graduates out of the new radiation therapy programme we put in place will graduate. So instead of having 16 graduates a year—it takes 3 years to train them and 16 a year were trained until we became the Government—38 a year are trained now. When that happens we will address this problem. I am just sorry that it was not addressed before—and members opposite continue to deny it when they should have done something about it. 
Dr Lynda Scott 
: I seek leave to table the 
 Lancet  
of 26 April 2003 article which clearly indicates from those studies that there is a significant 44 percent reduction in breast-cancer mortality for those aged 40 to 69. 
Document by leave laid on the Table of the House. 
District Health Boards—Elections 
9.  
HEATHER ROY (ACT) 
 to the  
Minister of Health 
: Is she satisfied that the general public has had every opportunity to read and make submissions on the Ministry of Health consultation document entitled  
Constituency Arrangements for DHB Elections under STV 
; if so why? 
Hon ANNETTE KING (Minister of Health) 
: 
 Yes. The change to the single transferable vote (STV) was first announced on 23 November 2000 at which time I stated that the election for district health boards in 2001 would be on a first-past-the-post basis based on wards but in 2004 STV would be introduced using broad representation. 
Heather Roy 
: How does she square her quick and dirty consultation with submissions due tomorrow with Prime Minister Helen Clark’s 1999 election promise of wide community consultation? 
Hon ANNETTE KING 
: The Ministry of Health’s consultation document is with district health boards and local government. The public of New Zealand are having an opportunity for input into that because all the consultations are being held in public at district health board meetings. That is something we did not have before actually; all the meetings were held in private under the previous system. 
Jill Pettis 
: Could the Minister please outline to the House some of the benefits of using the at-large STV system? 
Hon ANNETTE KING 
: At-large structures under STV provide greater voter choice and flexibility. It is a fairer system as under STV all candidates would need to attract a minimum of 12.5 percent of the vote—preventing something that happened in the 2001 Whanganui District Health Board election where one member was elected with only 769 votes while in another constituency the highest-polling unsuccessful candidate received over 3000 votes. 
Dr Lynda Scott 
: Is she aware that a system of STV voting for health board members will markedly reduce rural representation on boards and does she support the call by Local Government New Zealand Zone 5 to retain constituencies; if not why not? 
Hon ANNETTE KING 
: The only thing that would restrain rural people under STV at large is not voting and they have a very good record of voting. If there were one member in a ward in a STV election that member would have to get 50 percent of the vote to be elected so one might as well have first past the post. Under this system all rural people across the whole district can vote for other rural people. 
Pita Paraone 
: Notwithstanding the example the Minister has given in support of STV is she confident that should STV proceed membership of district health boards will fairly represent the communities; if so why—given for example the Northland District Health Board where there are three distinct local body districts each with variable population figures the smallest of which is a third of the size of the next largest? 
Hon ANNETTE KING 
: Yes I do believe it will give much fairer representation because people across the whole district can vote for those candidates. They are not confined to a small area. It will certainly be much more advantageous for Maori women and minority groups because all people can vote for those candidates rather than be put into small areas in which they can vote for only a small number. It is a much fairer system which I think is the reason why it is being supported. 
Hon Ken Shirley 
: Does the Minister intend to invoke changes to the district health board election process by Order in Council prior to 30 April next year as provided by section 19 of the Health and Disability Services (Safety) Act or will she use section 20 which involves more public consultation? 
Hon ANNETTE KING 
: There will be no further consultation on the STV at-large issue. I presume that is what the member is talking about. Cabinet has made a decision in principle. We made that in 2000. We have communicated that decision over that time and we have reconfirmed the decision that it will be at large. 
Heather Roy 
: I seek the leave of the House to table the document  
Constituency Arrangements for DHB Elections under STV 
. 
Document by leave laid on the Table of the House. 
Heather Roy 
: I seek leave to table a press release from the  
Southland Times 
 dated 6 November 1999 in which the Prime Minister Helen Clark stated that she would put an end to Wellington bureaucrats deciding what was best. 
Mr SPEAKER 
: Leave is sought to table that newspaper article. Is there any objection? There is. 
Dr Lynda Scott 
: I seek leave to table the Local Government New Zealand Zone 5 report opposing STV. 
Document by leave laid on the Table of the House. 
Food Standards—Protection 
10.  
SUE KEDGLEY (Green) 
 to the  
Minister for Food Safety 
: Does she have confidence that New Zealand’s interests are always able to be protected through Food Standards Australia New Zealand and the Australia and New Zealand Food Regulation Ministerial Council; if so why? 
Hon ANNETTE KING (Minister for Food Safety) 
: 
 Yes I have every confidence in the joint food standards setting system delivering on New Zealand’s interests. That includes the work of Food Safety Australia New Zealand and the decisions of the ministerial council. The joint food standards setting system has delivered New Zealand a comprehensive state-of-the-art food standards code that sets out not only a full range of generic labelling provisions that address both safety and consumer information but also where necessary provides a number of specific standards. 
Sue Kedgley 
: How can New Zealand’s interests always be protected when we have one vote out of 10 on the ministerial council and when the Australian Federal Health Minister can give written directions to Food Standards Australia New Zealand on any matter which the authority must comply with even when New Zealand disagrees with that direction; and can she confirm that the New Zealand Minister of Health has no such powers? 
Hon ANNETTE KING 
: Any food standard is first of all communicated to the public through a discussion document in which consultation must take place. It then goes to the ministerial council for a decision to be made and that decision is made public. New Zealand has the right to call for a review on any standard as does any Minister. We also have the right to set a separate standard. That does give New Zealand a lot of ability to have a very large say. I must say that the member herself has been to my office to congratulate Food Safety Australia New Zealand on setting a new food code that included nutritional labelling so I presume the member was happy with that decision. 
Nanaia Mahuta 
: Can the Minister explain any other advantage for New Zealand from having joint food standards? 
Hon ANNETTE KING 
: Food Standards Australia New Zealand ensures consistent standards and facilitates food trade thus increasing the local New Zealand food trade market from 4 million people to 23 million people. This arrangement also reflects our close relationship with Australia and most people would agree that that is a good thing—except in rugby. 
Sue Kedgley 
: Does the Minister support the statement of her colleague Ruth Dyson who said recently: “This is an open Government that has democracy at the centre of its decision-making procedures.”; if so why did she agree on 4 April this year to keep secret all official advice to the Australia New Zealand Food Regulation Ministerial Council which makes final decisions on matters such as food labelling and other issues of great concern to New Zealanders? 
Hon ANNETTE KING 
: The decision to withhold official information to the council was made a long time ago—before I became the Minister. It was decided that decisions would always be communicated to the public but in terms of discussions that took place within the ministerial council that information would not be made public. I have confirmed only what has been the practice for a number of years. 
Sue Kedgley 
: Why does it say on the website that those procedures were agreed by the ministerial council on 4 April this year; is it not the case that if the Australian Conservative Federal Government decided to change our GE labelling laws as part of its free-trade deal with the US—which of course is under discussion right now—the decision could be discussed in secret at the Australia New Zealand Food Regulation Ministerial Council; and is it not also true that ultimately if the Australian Government did not get its way in the council it could simply direct Food Standards Australia New Zealand to make changes even if the New Zealand Government did not support them? 
Hon ANNETTE KING 
: I think it goes: no no and no. 
Speed Cameras—Waikato Pilot 
11.  
Hon TONY RYALL (National—Bay of Plenty) 
 to the  
Minister of Transport 
: Does he agree with the former Transport Minister Hon Mark Gosche’s reported statement that he had ordered an end to hidden speed cameras because he did not believe the [hidden speed camera] pilot in the Waikato had cut speeding or road deaths; if not why not? 
Hon PAUL SWAIN (Minister of Transport) 
: 
 I am advised by the previous Minister of Transport Mark Gosche that he had actually stated there was a lot of debate about the relationship between speed cameras and police presence. As a result the Government decided to reinstate the highway patrol which has been an outstanding success. 
Hon Tony Ryall 
: Noting that previous Minister Mark Gosche is reported in the  
Waikato Times 
 on 9 June 2000 as saying that hidden speed cameras had proven to be a failure and given that Minister Hawkins in the House last Thursday ruled out lowering speed camera tolerance will this Minister now rule out the introduction of hidden speed cameras? 
Hon PAUL SWAIN 
: The Government is considering a range of new enforcement options to go with its very successful engineering programme. An education programme will be announced next week. We have to bring the road toll down; it is as simple as that. 
Mark Peck 
: What other reports has the Minister seen on the effectiveness of the speed camera trials? 
Hon PAUL SWAIN 
: I have seen a number of reports stating that hidden speed cameras were successful in reducing crashes and fatalities that there were sufficient road-safety gains from their use and that cameras were used for road-safety reasons—not to raise revenue. Those reports are from the former National Prime Minister Jenny Shipley and from former National Minister of Transport Maurice Williamson. They are from the days of course when National had good leaders—not ones like that motley lot over there. 
Mr SPEAKER 
: That last comment the member knows is out of order. He will withdraw and apologise. 
Hon PAUL SWAIN 
: I withdraw and apologise. 
Ron Mark 
: Other than the strategy of concealing speed cameras in wheelie bins—a tactic most New Zealanders would rubbish—what other novel ideas has the Minister considered in his proposal to camouflage and conceal speed cameras? 
Hon PAUL SWAIN 
: Most people would consider those kinds of measures rubbish. As I have said a range of road safety options is being considered. Announcements are hopefully to be made in December. 
Hon Tony Ryall 
: Noting that Mrs Shipley’s and Mr Williamson’s comments were made before the end of the pilot scrapped by Mr Gosche why will this Minister not realise that dead bodies speak louder than officials’ reports which show that in the hidden speed camera area the road toll went up and that is why the trial was cancelled—it did not work? 
Hon PAUL SWAIN 
: That is totally contrary to what the Auditor-General’s report stated in 2002 and I recommend that the member read it. 
Hon Tony Ryall 
: In trying to defend what has become an indefensible position in light of the fact that his own officials’ report showed the road toll went up over the period of the speed camera trial why does the Minister keep quoting the Victorian experience with hidden speed cameras when in fact in the last 10 years the road toll in Victoria has remained virtually unchanged yet here in New Zealand the road toll has gone down 37 percent over the same period without hidden cameras? 
Hon PAUL SWAIN 
: The Victorian situation has reached a plateau and the Victorians are in the same position as us. [ 
Interruption 
] They are in the same position as us which is why we are considering new measures. Instead of quoting transport officials I would rather quote the Auditor-General who said that over the period 1 June 1997 to June 1999 the open road crash rate fell by 11 percent and open road casualties fell by 19 percent which are effects that have been associated with the hidden speed camera trial. So I am happy to table this although there is no need to because it is already a document of Parliament. 
Hon Tony Ryall 
: I seek leave to table a document relating to the official review of the hidden speed camera trial that shows firstly that no conclusions can be drawn on a link between speeds and hidden speed cameras because of the small statistical sample and secondly that the number of deaths went up over the trial period; it did not go down. 
Document by leave laid on the Table of the House. 
Hon PAUL SWAIN 
: I seek leave to table two letters one from Maurice Williamson and one from Jenny Shipley supporting speed camera trials. 
Documents by leave laid on the Table of the House. 
Ron Mark 
: I seek leave to table some photographs of a speed camera hidden in a wheelie bin. 
Mr SPEAKER 
: Leave is sought to table those photographs. Is there any objection? There is. 
Question No. 10 to Minister 
SUE KEDGLEY (Green) 
: 
 I seek leave to table one document from the Australia New Zealand Food Regulation Ministerial Council showing that contrary to what the Minister said the procedures for keeping secret official advice were in fact approved on 4 April of this year. 
Document by leave laid on the Table of the House. 
Hon ANNETTE KING (Minister for Food Safety) 
: 
 I seek leave to table the decisions that were made and made public following that same said meeting. 
Documents not tabled. 
Pathways to Arts and Cultural Employment Scheme—Outcomes 
12.  
DAVID BENSON-POPE (Labour—Dunedin South) 
 to the  
Minister for Social Development and Employment 
: What reports has he received on the outcomes of the Pathways to Arts and Cultural Employment scheme? 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 The Pathways to Arts and Cultural Employment—or “PACE”—scheme has been very successful in assisting job seekers wishing to develop a career in the creative industries to move into paid employment. As at the end of September 2003 1620 people had moved off the unemployment benefit and into paid employment with the assistance of the scheme. 
David Benson-Pope 
: What other reports has the Minister received on the scheme and is he aware of any other taxpayer-supported schemes that offer employment support for people engaged in creative pursuits? 
Hon STEVE MAHAREY 
: I have been informed that the very successful Pathways to Arts and Cultural Employment scheme has been criticised on the grounds that it has “the potential to give people unrealistic expectations”. I have also been informed recently that taxpayers are providing an annual salary of more than $110000 for a budding author to write a children’s book that would make most right-wing people blush. I would observe that both the critic of the Pathways to Arts and Cultural Employment scheme and the budding author of the 
 Little Yellow Duck of Freedom  
are ACT MPs. 
Katherine Rich 
: What does the Minister say to successful independent artists like Grahame Sydney who are not convinced that turning budding artists into welfare dependants does anything to increase the artistic vibrancy of New Zealand? 
Hon STEVE MAHAREY 
: I would say to him that the Pathways to Arts and Cultural Employment programme has been very successful in placing people into long-term stable employment—unlike being a leader of the National Party. 
Ngati Tama Claims Settlement Bill 
Second Reading 
Hon MARGARET WILSON (Minister in charge of Treaty of Waitangi Negotiations) 
: 
 I move  
That the Ngati Tama Claims Settlement Bill be now read a second time 
. Ngati Tama is an iwi in Taranaki and its historical treaty claims cover some of the northernmost part of that region. The claims relate mostly to the Crown’s waging of war in Taranaki in the 1860s the associated loss of life and property and the confiscation of land. The claims also relate to the Crown’s unconscionable actions in its dealings with the Parihaka community and the inadequacy of the west coast reserves. I signed the deed of settlement with Ngati Tama representatives on behalf of the Crown on 20 December 2001 which addressed the longstanding and significant grievances suffered by the iwi. The Ngati Tama Claims Settlement Bill gives effect to certain aspects of the deed of settlement. 
The virtual landlessness of Ngati Tama in Taranaki has hindered its development throughout the past 150 years. This settlement enables the Crown to apologise for its unconscionable and unjust behaviour towards Ngati Tama. The Crown has acknowledged its actions had a prejudicial impact on the people of Ngati Tama. In particular the Crown’s actions impeded the ability of Ngati Tama to exercise control over its taonga and its wahi tapu and to maintain and foster spiritual connections to its ancestral lands. The Crown apologises unreservedly for its actions that breached the Treaty of Waitangi and its principles. As well as an apology this settlement provides for the financial redress of $14.5 million and a variety of cultural redress which aims to recognise and protect the interests of Ngati Tama in sites that are of particular significance to them. This bill makes it clear this is a comprehensive and final settlement of all the historical claims of Ngati Tama in Taranaki. 
This settlement is an important milestone for Ngati Tama and for the Crown. It will enable both parties to move forward and renew our relationship as treaty partners. I know members of Ngati Tama would like this settlement to be finalised as soon as possible to enable them to begin their development plans and look to their future. This settlement is also significant because it is the second treaty settlement to be finalised in the Taranaki region. In that regard I am pleased to advise the Crown will also shortly take a significant step towards the third Taranaki settlement with the signing of the deed of settlement for Nga Rauru. I hope the Ngati Tama settlement will encourage other claimant groups in Taranaki and elsewhere to enter into and complete negotiations with the Crown. 
The Maori Affairs Committee has considered this bill and submitted its commentary on it to the House. The committee has recommended the bill be passed with the proposed minor and technical amendments. I thank the committee for its thorough consideration of the bill and the observations it made on three matters: the overlapping claims of Ngati Maniapoto the mandate of the negotiators and the participation rate of Ngati Tama in the ratification of the governance entity that is to receive the settlement assets. 
The issue of overlapping interests between Ngati Tama and Ngati Maniapoto was considered by the Waitangi Tribunal. The tribunal found the Crown’s approach to addressing Ngati Maniapoto’s overlapping interest with Ngati Tama was sound and the settlement should proceed. With regard to the mandate of Ngati Tama Iwi Development Trust I acknowledge that the trust’s mandate was a contentious one. It was challenged in 1996 and in 1997 by the groups NgaHapu o Mokau and Ngati Tama Whanau Whanui. The Crown at the time continued to recognise the trust’s mandate subject to conditions that it actively encouraged participation by those Ngati Tama who opposed the mandate. However a significant number of Ngati Tama was unwilling to be associated with the trust throughout the negotiating process. I note that Ngati Tama Iwi Development Trust no longer exists. The Crown has approved Te Runanga o Ngati Tama as the governance entity to represent Ngati Tama and receive and manage the settlement redress. My view is that Te Runanga o Ngati Tama is accountable to Ngati Tama and that it has transparent processes and does represent all of Ngati Tama. 
The committee stated its concern at the low participation rate of Ngati Tama voters in ratifying the governance entity. Let me assure the House that this Government is committed to addressing that issue and to finding ways to increase participation rates in the ratification of treaty settlements and governance entities generally. I am therefore pleased to note that there have recently been positive moves by the members of Ngati Tama WhanauWhanui to be involved in Te Runanga o Ngati Tama. I am glad that the committee was satisfied that efforts had been made to assist and encourage Ngati Tama WhanauWhanui and other Ngati Tama people to participate in the affairs of te runanga. I also wish te runanga well in its future and encourage it to continue to provide ways for all Ngati Tama whanau to feel part of and participate in its affairs. This bill ensures all members of Ngati Tama are entitled to benefit from the settlement wherever they may be now living. 
The technical amendment should be noted in this context so I note that the committee has recommended the bill proceed with minor and technical amendments. Those generally reflect the recently approved survey plans for the cultural redress properties that are to be transferred and the changes necessary to reflect the Resource Management Amendment Act of 2003. 
In conclusion it was in November 1996 that the previous Government recognised the mandate of the Ngati Tama negotiators. A heads of agreement was reached in September 1999 and a deed of settlement was then finalised and signed in December 2001. The passage of this bill is the last step required in order for the settlement to become unconditional. It is important we now move to enable Ngati Tama to receive its just redress. I would like to acknowledge the work done by the former Minister in charge of Treaty of Waitangi Negotiations who contributed to this settlement. I also want to thank the other Ministers involved—in particular the Minister of Conservation—who have supported the process throughout. I wish to acknowledge the officials from the Office of Treaty Settlements and other Government departments for their work in seeking a just and fair settlement. Finally I would like to acknowledge and thank the kaumatua members and negotiators of Ngati Tama whose commitment on behalf of their people their ancestors and their descendants has led to this pathway to reconciliation. 
Hon GEORGINA TE HEUHEU (National) 
: 
 I am pleased to rise in the second reading of this bill and I am pleased we on the Maori Affairs Committee have seen fit to report the bill back. National supports the second reading and the report back of the bill and we certainly join with the Minister in hoping to see the swift passage of this settlement through the House. We support the settlement on a number of fronts not the least of which is that it was largely negotiated by Sir Douglas Graham. That is shown to be the case by the signing of the heads of agreement in 1999. While it is acknowledged that that was just the beginning of a process of negotiation none the less the redress elements of the settlement package mirror those that were established in previous settlements in the early 1990s—in particular the Ngai Tahu settlement—and the settlement that is the subject of this bill today survives largely intact from the original heads of agreement signed in 1999. 
Ngati Tama from northern Taranaki is one of the eight Taranaki iwi whose claims were investigated and reported on by the Waitangi Tribunal in 1996. The background to those claims is the Taranaki land wars of the 1860s and the loss of lives that resulted and the destruction of property the land confiscations the sacking of Parihaka and the imprisonment of Taranaki people in caves in Dunedin some of whom never returned to their homeland. That is the sad background to this settlement. Fortunately in our time we are moving to address the injustices that occurred and I say—and have said so many times before in this House when we have had debates on settlement bills—that Parliament should always take some pride in the fact that it seeks to have these settlements concluded so that the tribes concerned are able to remove the burden of injustice from their shoulders and move forward. 
The Minister made reference to two issues that occupied the time of the select committee. They certainly were not anything to do with the settlement package itself but I think it is proper for us to devote some thought to the issues of mandating and overlapping claims. I do so in the knowledge that the framework for mandating was also set by the previous National Government under the guidance of Sir Douglas Graham and that the issue of overlapping claims has been an ongoing issue as well. 
The select committee found some difficulty in the fact that while the settlement itself had significant participation and sign-up by Ngati Tama the ratification and mandating processes did not. The concern of the select committee as far as I could tell was that if we want treaty settlements to be durable then it behoves us as a House of Representatives to make sure that we get optimum buy-in for them. All of us on the select committee were united in our desire to see whether through the Office of Treaty Settlements there could be some further interaction with the Ngati Tama leadership to find out whether those who felt sidelined by what was happening could be brought into the process. I certainly acknowledge the fact that the personnel from the Office of Treaty Settlements took our concerns on board and very readily went back to the Ngati Tama rununga representatives to see whether those who felt sidelined namely whanau whanui from other parts of the tribe could be brought into the governance structures. 
 I acknowledge the efforts that were made to get greater participation in the governance structures but none the less the fact remains that the mandating processes that have been established for some years now may need to be revised. We still have a significant number of claims to go and I think we would get better progress if the mandating and ratification processes were looked at. Perhaps that is something we could work on. The Opposition may be willing to work with the Government on that matter because it is important. If there is buy-in for a settlement then it is disappointing for the settlement to be held up because of prior processes that people are unhappy with. When we are approaching the passage of legislation in this House and there is still unhappiness then I do think—and I am sure that all members of the select committee would say the same thing—we must develop some revision of the processes to make the passage of settlements a lot faster. 
We need to think about the fact that the Taranaki claims were heard by the Waitangi Tribunal back in the 1990s that the Taranaki report was issued in 1996 and it is now 2003. Ngati Tama is the second of the Taranaki iwi to have its settlement reach the stage of legislation and we do need to see better progress. I know that there are two settlements per year on the Minister’s programme but given that a lot of the negotiation with the Taranaki tribes has been done at an earlier stage we need to see whether we can progress the time frame a bit better than we have been doing. There is no doubt particularly when we look at a tribe like Ngai Tahu and see the significant progress it is making in terms of itself as a collective and also at family whanau and hapu levels that the settlement process is the right thing to do. It is the right thing to do for Parliament to progress the historic claims as quickly as we can so that iwi whanau and hapu can get on with their lives creating a future on the basis of the reparation that has been made with the transfer of assets and determining their own future. That is what we all want to see. The Government should continually be making sure it is doing everything it can to move that process along. 
I want to raise one last issue. The Waitangi Tribunal remains severely under-resourced and I urge the Minister to use her best influences and her authority to see whether the tribunal can be better resourced. It does need an injection of funding. We know that $6.5 million was put into a treaty education programme. In my view that funding should have gone to the Waitangi Tribunal. There is no doubt that tribes want to have at least a tribunal casebook—a historical record—on the basis of which they can negotiate with the Crown. That gives them a better bargaining position. As I say the tribunal can only inch its way along with the hearing of claims and on that we are not doing the best we can to get the settlements through. I urge the Minister to use her very best endeavours to see whether the Waitangi Tribunal funding can be sufficiently boosted so that the tribunal can meet its own timetable and at least get the historical casebooks on the record so that tribes are in a much better position to move into negotiations with the Crown. 
Hon TARIANA TURIA (Associate Minister of Maori Affairs (Social Development)) 
: 
 I stand today to acknowledge the tragic history that has seen the Crown profoundly regret and unreservedly apologise to Ngati Tama for its actions. In speaking of profound regret the Crown recognises the intense impact felt by the people of Ngati Tama of a history that has been described by the Waitangi Tribunal in the Taranaki report and formally recognised in the acknowledgment and apology given by the Crown to Ngati Tama in the deed of settlement. The historical claims of Ngati Tama relate to the proclamation of martial law throughout Taranaki on 22 February 1860. Within 3 years Ngati Tama had 74000 acres of land confiscated. Every acre that could be taken was taken. A mere 3458 acres of this land—one-twentieth of what was taken—was returned some 20 years later but it was in individual title and perpetually leased to settlers. In 1882 a Native Land Court ruling cost Ngati Tama two further large blocks that had not been confiscated. 
One cannot help but wonder whether this was punishment for Ngati Tama’s support for the passive resistance campaign based at Parihaka. The people of Ngati Tama had witnessed and experienced suffering when Parihaka was sacked and looted by Crown troops in 1881 and the people imprisoned and dispersed. Ngati Tama has borne the burden of this history for over 150 years now and this bill acknowledges the wrongs that were done—the sufferings that Taranaki peoples encountered as a result of colonial contact and behaviour. 
The campaign of alienation assimilation and deculturation launched against the people of Taranaki well over a century ago must not be forgotten or filed away in our collective memories as a historic grievance. The suffering caused by the confiscation of the tribal lands and the invasion of Parihaka and imprisonment of the men—some were held for up to 18 years without trial—remain a painful legacy for our nation. This bill recognises that the treatment of Ngati Tama people was unconscionable and unjust and that these actions constituted a breach of the Treaty of Waitangi. We must not allow our knowledge of these actions to sink into collective amnesia. 
I commend this bill to the House as a further step towards recognising the status and rights of Ngati Tama. A settlement such as this marks a beginning not the end. The recitals of history—the apology and the transfer of assets—are first and foremost an official acknowledgment of the status and rights of Ngati Tama as tangata whenua. Within this bill there is a statutory acknowledgment of areas in which Ngati Tama has particular cultural spiritual historical and traditional association including parts of the Pukearuhe site the Tongaporutu conservation area and the PouTehia historic reserve and others. They also include the coastal marine area in Ngati Tama’s area of interest and marginal strips swamps and rivers. The schedules of the bill acknowledge Ngati Tama’s links with these areas which are part of the identity and the mana of the iwi. The purpose of this acknowledgment is to assist Ngati Tama to participate in decision making on these areas by local bodies and resource management consent agencies. 
The recovery of lost property is an important part of a treaty settlement. The return of land reverses previous losses through confiscation or the operations of the Native Land Court and the Native Trustee. Loss of land leads to social and cultural breakdown of whanau and hapu and impoverishment of the people. The settlement of claims and return of property are intended to be part of a process of community rebuilding of whanau hapu and iwi development and empowerment. That is why I am pleased the Government has noted the concerns of the Maori Affairs Committee over the mandating process. 
Whanau and hapu support for the governance entity is a critical element of of whanau hapu and iwi reconstruction. The fact that about 60 percent of Ngati Tama supported the settlement while only 30 percent supported the Government’s arrangements for the settlement is evidence there are concerns about the claims settlement process and these may need reviewing. The Ngati Tama Iwi Development Trust was initially approved by the Office of Treaty Settlements without enough collaboration with the people of Ngati Tama. The trust’s mandate regarding the governance arrangement was opposed by 435 iwi members who signed form letters—around 40 percent of Ngati Tama. The allegations that members of one family dominated the trust are very serious. Ngati Tama has taken steps to address these concerns by forming Te Runanga o Ngati Tama and winding up the trust. Elections for trustees of the runanga are due to be held this coming January. 
 I urge all the members of the iwi to use the elections as an opportunity to build an inclusive and representative organisation that has a clear and strong mandate to carry forward its development plans. This is a time for all the members of the iwi to look to the long-term interests of the iwi as a whole. The importance of inclusive organisations and constructive relationships also arises in the matter of overlapping claims by Ngati Maniapoto. There is history here too in that Ngati Tama claimed interests in two large blocks north of the confiscation line at Mokau. The Native Land Court awarded the exclusive title to Ngati Maniapoto. This bill offers exclusive redress to Ngati Tama in an area that Ngati Maniapoto claims interest. The Government believes that NgatiManiapoto’s claims have not been sustained by independent research and the Waitangi Tribunal has endorsed the Crown’s policy. Just as the settlement is a serious attempt by Ngati Tama and the Crown to resolve long-outstanding issues there is also work to be done by Ngati Tama and Ngati Maniapoto to come to terms with their history and to look for a way to move forward together. The vast legacy of Ngati Tama must not be allowed to sink as I said before into our collective amnesia. As Te Whiti said: “Those who are bent by the wind shall rise again when the wind softens.” Let us hope and believe that with this bill the wind has softened to ensure that we all face the future with the insights of history informing our every move. 
BILL GUDGEON (NZ First) 
: 
 New Zealand First confirms its support for this bill. The Maori Affairs Committee received 10 submissions and of those six raised concerns as to the settlements. The historical claims of Ngati Tama were heard by the tribunal between 1990 and 1995. It behoves me at this stage to add that from here on in the question of who held the mandate began its course of rumblings amongst the hapu rank and file. Why is this a factor in treaty claims? Common sense tells me that it is imperative that proper research and clearer understanding of iwi and hapu protocol be in place and that the decisions made today will have an effect on generations to come. 
The Office of Treaty Settlements must be made aware that most Maori if not all have a genealogical link to more than one iwi and that entitles individuals because of whakapapa to the right to register as claimants. In the eyes of Maoridom the word “primary” is foreign because that negates the individual’s right to identify his or her claim to other iwi affiliations and this is not the accepted practice of tikanga unless the individual chooses to do so. The select committee was concerned and still is about the mandating processes and the level of dissension that has occurred within Ngati Tama over these issues and its thinking is that the mandating process has to improve greatly to ensure that settlements are fair. 
I put these thoughts to Ngati Tama and for that matter all future claimants. There is a need to address the areas that I have touched on—that is mandating etc. The Office of Treaty Settlements needs to facilitate more positive detail that will ensure a smoother pathway that is not time-wasting but in effect will give the claimants a fair result as to their claim and that history will not repeat itself. The word “primary” again does not lend itself to the vocabulary of Maoridom because blood ties cannot be separated as in other cultures. When business is conducted in the spirit of integrity and honour the result will be to strengthen our nation. 
New Zealand First will work towards doing all it can to promote claims amicably and as it travels down the pathway it will always be its intention to support claims that identify our history and how these matters can be organised in such a way that mana has the respect it deserves. 
If one goes back in history and looks at the Treaty of Waitangi the articles in that treaty were important in the eyes of Maoridom as well as its partners. It created a partnership and that partnership is the reason we are where we are today. 
If we look back to 1835—the Declaration of Independence—how did that start? It was the beginning so that a treaty could be made between two nations. That treaty signified that all hapu regardless of where they came from and who they were were sovereign nations because the treaty was signed between the leaders of those hapu and the Crown. Our history is the reason we are sitting here today to try to amicably settle these claims. 
I acknowledge the work of those who have worked here previously and also members of the select committee. The select committee was burdened with how to sort out this mandate problem. Our people came to us and tapped us on the shoulders and said: “You know what is right. Do it. How come we are not heard?” and all that and the pressure was placed upon us. So I accept the work that the select committee was involved in but we need to look ahead and work in the future. Hopefully Ngati Tama with what it receives from these claims will do the right thing. If it says that it has its people at heart we need to see those results. 
The strength of the result of these claims will lie in the hands of those who have been endowed with leadership and accountability. How is it that Maori may be struggling today? I am not saying “are” but “may be”. In looking towards the future there is a bright future outside the square not only of Maori but of this world. 
Ngati Tama has had a sad history. It even tried to settle the matter peacefully. But I will not dwell on that any more because we need to look to the future. I go back to my previous words about the Office of Treaty Settlements and the word “primary”. We cannot separate our blood ties. We are affiliated to other tribes because of intermarriage and that gives us the mandate to make a claim regardless of who we are. But if we do not register that will never happen. So I tell the Office of Treaty Settlements to ensure that its views are heard and that the people out there understand what it is all about. Otherwise we will get these mandate claims coming before the select committee time and time again. We really need to work on these issues ensure that the programme is in place and that the people understand so that there is no come-back to the office or the select committee. We will endorse and tackle those things that are amicably settled. I encourage those people of Ngati Tama who may be listening to do the things that its people will benefit by. 
METIRIA TUREI (Green) 
: 
 The Greens will abstain on this reading of the bill and during the Committee stage tomorrow will put up a number of amendments that outline our concerns. I first want to say: tena koutou katoa he mihi nui ki a Ngati Tama. The Greens want to acknowledge Ngati Tama in their successful negotiation of this settlement within the very restricted confines of the Government’s treaty settlement framework. We also want to acknowledge the comparatively high level of support for the deed of settlement at just over 50 percent support from eligible members. 
We believe that the restoration to the iwi of land particularly of wahi tapu and the ability to enhance and advance Ngati Tama hapu through this settlement are significant gains and we acknowledge Ngati Tama’s efforts to achieve some form of justice and restitution for the grave losses suffered by the mana whenua. However we also recognise that no amount of financial redress will truly compensate for the loss of life the loss of ancestral land and the vicious attempt to entirely undermine the sovereignty of this iwi. The history of Taranaki iwi and their continual struggle to retain their lands and sovereignty is a terrible and brutal history and one that every person in this country should know about. 
It seems that with each new settlement comes a new example of how the treaty settlement policy of this and previous Governments is failing Maori. This settlement raises serious issues about the process by which the Office of Treaty Settlements supports a mandated negotiating group its failure to deal effectively with strong legitimate consistent and persistent objections from Ngati Tama WhanauWhanui and its subsequent acceptance of a very low ratification rate for Te Runanga o Ngati Tama. The whanauwhanui includes a number of highly respected kaumatua and represented over 400 members of the iwi—that is well over one-third of the eligible members of Ngati Tama. Their concern about and challenge to the mandate of the runanga began back in 1996. This group has struggled to have its challenge recognised as legitimate by the Office of Treaty Settlements and its mandating processes. 
While the Office of Treaty Settlements was dealing with this challenge it was also funding the runanga then known as the trust to defend itself against that very challenge. This is a very serious problem for the Office of Treaty Settlements and reflects very poorly on its ability to effectively manage legitimate mandate issues. It suggests that the political timetable for settlements takes precedence over empowering iwi to engage effectively in this process. 
We accept that the Office of Treaty Settlements later tried to include a requirement that the runanga engage in a constructive process with the whanau whanui but this did not and could not resolve the difficulties because the structural inequities in the process remain firmly in place. We hold the office responsible for its failure to manage these issues effectively to review and to reconsider its own processes in a timely and responsive fashion and to ensure that both groups were treated with equal and serious consideration. 
We also recognise that the runanga are responsible for their part in accepting such an appallingly low ratification of themselves as the governance entity and not considering that the future stability of the settlement would be ensured if they entered into a good-faith process to resolve the outstanding concerns. In my view that is a demonstrable failure of leadership at a time when leadership is most crucial. 
During the submission process the select committee heard serious issues about the exclusion of eligible members and obstructive practices to undermine their ability to register and to participate with the runanga. For example the select committee heard that some eligible members were told that they could not register unless they were shareholders in land or could register only if their tipuna was a landowner in a particular block. The select committee was profoundly concerned about these issues. We were later advised that the runanga is to hold elections for the trustees of the runanga the governance entity in January of next year. This is the first time that an election has been held for the runanga or the trust. The select committee recognised this opportunity to resolve some issues and endeavoured through the Office of Treaty Settlements to facilitate the participation of the whanau whanui in registration and the nomination for trustees. However that process has not been particularly successful due to a failure of goodwill on the part of the runanga to take extra steps to be inclusive of the people it purports to represent. 
The settlement has highlighted the severe limitation of the settlement process to ensure that the process is inclusive and protects all the members of the hapu and iwi. We believe that it is a perpetuation of the grievance to require Maori who are excluded by the process to be left without effective restitution. We remain deeply dissatisfied with the fundamental policy behind the current treaty settlement process as well as critical of its effectiveness and durability. The focus of the treaty settlement process on the restoration of land and economic well-being is an important step but will not by itself resolve the fundamental constitutional and structural problems that result in Maori being effectively excluded from decision-making processes that involve them. This settlement process is a prime example of that exclusion and that failure. 
It is imperative that the treaty settlement process is reviewed where previous claimants current and future claimants and all those Maori who are genuinely affected by this process are able to contribute. As with any restorative justice process Maori as the victim in this process must be able to have some control over how the restoration and restitution is brought about. We must remember that the fact that Maori engage in the treaty settlement process does not mean that they endorse it. It is after all the only game in town. 
The Green Party supports the resolution of and the restitution for all outstanding historical and contemporary breaches. We will however continue to raise our concerns over the injustices of the Crown-designed framework and work towards promoting and supporting an ongoing forum for dialogue on current treaty issues. 
Finally the Greens recognise Te Tiriti o Waitangi the legitimacy of the Maori test that was signed by the hapu signatories. Te tiriti is an agreement between hapu and the Crown. It is a solemn pact and the treaty settlement process is designed to provide some redress for the historical grievances that arose out of the Crown’s failure to adhere to it. We look to the settlement process for justice and as with all those excluded and disenfranchised we find it wanting. 
STEPHEN FRANKS (ACT) 
: 
 When this bill was introduced I spoke for the ACT party to welcome it and to acknowledge that foul deeds were done in the name of the Crown by the Governor in 1860 and in the years thereafter. What was done dishonoured the Crown and the energy and the demand for redress should be fully understood by every New Zealander who has a sense of fairness. I also said that ACT not being represented on the Maori Affairs Committee would be looking to the select committee to deal with a number of concerns we had about the bill in the form that it appeared. 
In particular we wanted the committee to reassure us that it did not take the self-denying restrictions that are commonly applied to a review of a treaty as excusing it from looking properly at the substance of this agreement and whether Parliament should approve the Crown entering into it. I am sorry to say that the select committee’s report repeats what has been a pattern for other bills. Indeed it states that the rules relating to legislation to confirm agreements “mean that we cannot substantively amend this bill in a manner that is not acceptable to the parties to the deed being implemented.” What the committee does not tell us and what the Minister in charge of Treaty of Waitangi Negotiations has made no attempt to explain is whether the committee thought that things should have been changed whether it had considered that that was appropriate. Did the committee take account of the possibility that it could go back to the parties? I imagine that the Crown was represented before the select committee by the officials as it usually is. It perhaps was possible for Ngati Tama to be persuaded that some clarification might be desirable. 
 I mention that because when I was speaking in this House just before the Hon Dover Samuels who followed me representatives of Ngati Tama were in the gallery. I believe that I heard murmurs of agreement or approbation about some of the concerns I raised at the time the bill was referred to the select committee. I was concerned that the bill sets Ngati Tama Maori the Crown—in other words all of us as represented by the Crown—on a collision course yet again. It may not be in the near future. It may be that the value of the settlement and the internal strife that it appears likely to extend will more than distract the claimants for a generation or so. 
But what I am concerned about is what I raised in my first reading speech—that throughout this bill there are weasel words. There are words that appear to me to be deliberately intended to mean more to each party than they are intended to mean to the opposite side. There are acknowledgments recognitions references to principles and references to consideration or taking account by official bodies that appear intended to mean that Ngati Tama have a privileged status in relation to land that is not their own or that they have a privileged status in relation to the democratically appointed bodies that will exercise powers under the Resource Management Act and other local government powers but in fact the Crown has no intention of really delivering on them. The bill is full of the sorts of weasel words that have already got New Zealand into a great deal of trouble over the last two decades and have got this Government into more political trouble than it will be able to handle. 
For example in my opinion the bill quite gratuitously recites the words “the principles of the Treaty of Waitangi” in a whole range of places most of them completely unnecessarily. The bill has a sort of mantra phrase “the principles of the Treaty of Waitangi”. Everyone in this House including New Zealand First whose members have spoken in favour of and will vote for this bill has acknowledged that no one knows what those principles are. Why are they there? Why did the committee not decide to clarify or remove those words when they add nothing? The breaches that affected Ngati Tama were so egregious and so obvious the property rights that had been assured under article 2 of the treaty were so plainly ignored and overridden that there was no need to put in the words “the principles of the Treaty of Waitangi”—words the meaning of which no one knows. The committee sat on the bill and we found when it reported back that it had not addressed that issue or any of the other obscurities and uncertainties that we still find in the bill. 
For example are Ngati Tama supposed to feel that their preferential right in terms of coastal tendering means more than their having the first chance to tender? If it is a tendering process how do they match the price? If it is a tendering process and they cannot afford it what is their preference worth? Is it being held out to parties that fully understand it? 
I am also concerned that with this bill the Crown may well face a claim in 25 years’ time. When a new generation is looking at this issue the same sense of grievance may be felt as is felt by the people who look back on what the Sim Commission did. From the select committee report on the face of it it appears that 40 percent of the potential or intended beneficiaries of this settlement did not confirm the mandate. Worse it appears that that reflects a dynastic division or a family division within the entity that is to hold the rights and the assets. So what does this House do and what does the Crown do when a settlement is made that could mean that 40 percent of the intended beneficiaries representatives of a family that I assume is in the minority can come back in 20 or 30 years’ time or maybe in 5 years’ time and say to this House and to the Crown that when the resources were put into a box at Rugby League Park they did not agree no attention was paid to them and the Crown knew that no mechanism was in place to ensure that attention was paid to all the intended beneficiaries? 
Settlements should be negotiated. Settlements should be dealt with by this House as being the best that can be achieved by people dealing in good faith but I fear we are looking at a deal that is not being done in good faith on at least one side. I fear we are seeing a Crown that is desperate to put a nominal close to an issue and to look as if it is making progress. It should not say things to a temporarily befuddled generation that it knows the next generation will have to ask what those words could possibly have meant. What was intended by “consultation”? Obviously there is a likely mismatch of desires and even with the best goodwill and honesty in the world people who have competing desires soon generate the doctrine the words and the justification to make their desires a mismatch of expectation. 
It is nearly 3 years since the treaty agreement was first reached and a whole lot of things could have been settled and dealt with. For example the explanatory note of the bill as introduced stated that the Crown will “consult with the advisory committee concerning proposals for the commercial taking of [certain fish] species and that in considering any such proposals the Minister of Fisheries will ensure that the customary non-commercial interests of Ngati Tama are recognised and provided for:”. What has happened in the time since? Has any more light been cast on that? No. This Government has now put us deeper into confusion and far deeper into conflicting expectations irreconcilable conflicting expectations with many Maori people solemnly believing that they own the seabed the foreshore and all within it and that anything less than outright ownership is expropriation. Of course in that time this House could have said that it did not want to confirm future consultation that it wanted to know the effect of the law it was passing and that therefore it would wait until that consultation had occurred so that when a law was passed it would know that the settlement was permanent. 
The New Zealanders who have supported the treaty settlement process have been decent and well meaning. They have believed that it would actually settle treaty grievances. A bill like this does not settle anything and on the face of it shows that it expects uncertainty to continue. 
MURRAY SMITH (United Future) 
: 
 United Future is very pleased for Ngati Tama that it has reached the point of the second reading of its bill and the finalisation of its grievances. I begin by paying respect to the history of Ngati Tama as outlined by the Hon Tariana Turia. It was very appropriate that as a member of the executive as well as tangata whenua she should outline the Crown apology and the history that has led to the necessity for recompense on behalf of the Crown and for the apology that has been given. 
Many times United Future has expressed concern at the slowness in resolving treaty issues and the importance of resolving those issues with some speed. It is with great concern that we note that it is now 6 months since the first reading of the bill and that in that 6-month period no other bills have been tabled by the Government in furtherance of the treaty settlement process. Of course that 6-month delay really comes down to the slowness of the Maori Affairs Committee process in bringing this bill back to the House. I have a lot of respect for the select committee and its members welcome me there when I turn up but I think 6 months was far too long. I would recommend that the select committee push matters through a great deal faster than it has been doing in order to have these processes go through. I note that the Hon Georgina te Heuheu commented that there was a need for speed. She is on the select committee and should push these matters along as well. 
The bill was referred to the select committee on 15 April. Submissions closed on 30 June. Now 4½ months further on the bill has come back to the House. There were 10 submissions and the committee spent some 6½ hours on consideration—that is approximately 2 days. In my view 4½ months was far too long even given that the committee was questioning the issue of mandating. But if the select committee which is primarily comprised of Maori members really wants the grievance process to be dealt with and resolved urgently it needs to demonstrate that it is committed to that by getting through its part of the process as quickly as it can and getting bills reported back quickly so that they can be progressed quickly. 
It is not as though the committee is overworked. I have respect for the chairman Mahara Okeroa and I have a good friendship with him. I know that he may consider these criticisms as being criticisms of him but I think the committee itself has to bear responsibility. I could also say that I think there is room for the Maori Affairs Committee to be more proactive because of the time it has available. For example I note that there is a hold-up in the Rangitane o Manawatu claim. There is meant to be a formal review going on. There is no reason why the select committee should not be looking at that proactively or even initiating an inquiry if appropriate and trying to move some of these procedures along. There are things it could do things it could initiate in order to help the settlement process. 
But we have not seen new legislation either. The Office of Treaty Settlements had a funding increase at United Future’s push in order to get a second claims development team. The office had an extra $895000 provided to it. The Government at United Future’s push has now made a commitment to have 90 percent of claims go through by 2015. When that came through I indicated that rather than our dealing with one bill every 6 months—which even today the Minister in charge of Treaty of Waitangi Negotiations said was the target—we should really be looking at having five to six bills go through in a year. I note that we have had three bills over the 2002-03 period; why can we not increase that? 
There is plenty of scope for doing so. For example the Ngati Awa deed of settlement was signed on 27 March and we are waiting for the legislation and for the mandating of the governance entity. Where is that legislation? We are dealing with the Ngati Tama one now but where is the Ngati Tuwharetoa one? That deed of settlement was signed on 6 June and we are waiting for that legislation. There are other matters. I think it is quite tenable to have four to five pieces of legislation go through this House in the next 12 months. I note that the deed of settlement for Nga Rauru was signed on 4 October 2003 so it seems to me that there is no reason why we should not be able to have that legislation go through next year. The Ngati Mutunga heads of agreement was signed on 24 September 1999. Just what is stalling that? I notice that a deed of settlement is meant to be signed in December 2003 so maybe we can progress that one. The Te Rarawa terms of negotiation should be able to come into the House next year. The Ngati Kahu terms of negotiation were signed in May 2003 the Te Arawa lakes terms of negotiation were signed in July 2001 and the Whanganui River terms of negotiation were signed in March 2003. Those are all matters that I would expect the Office of Treaty Settlements to be progressing so that we can get the legislation into the House and passed. The Office of Treaty Settlements does need to be more proactive than reactive. I notice that it significantly underspent its budget last year even without the increased funding it now has. On that basis there seems to be a lot of scope for it to do more work. 
Turning to this bill in particular I note that two particular matters were of concern to the select committee and are fetters on this bill going through. One is the Ngati Tama WhanauWhanui claim. I note that they have whakapapa links to both Ngati Tama and Ngati Maniapoto and are concerned about the lack of democracy and transparency in the trust structure that has developed. The select committee with some concern notes: “We respect the concerns and arguments that Whanau Whanui raise. At the hearing we had clear evidence from Whanau Whanui and other Ngati Tama iwi living outside the tribal area that the mandating process by the Ngati Tama Trust was inadequate. We are concerned about the level of dissention that has occurred within Ngati Tama over these issues. We consider it essential that the mandating process be improved to ensure that Treaty settlements are fair and durable.” That gives some concern in terms of the way that the process has gone ahead. However I am very pleased to have read and to have heard today that effectively there have been positive moves to be more inclusive of the whanauwhanui people—in particular the restructuring and the elections that are due to take place in January. The fact that 40 percent failed to respond seems to suggest there is quite a strong element within whanauwhanui who can use the democratic process to their advantage and I would really encourage them to do so. 
In terms of Ngati Maniapoto I note the overlap of claims but independent research and the Waitangi Tribunal do not support their position. I would like to strongly encourage Ngati Maniapoto to reach their own settlement with the Crown as soon as possible. It concerns me that they are not yet even on the Office of Treaty Settlements radar screen. I understand that they are wanting to pursue matters through the Waitangi Tribunal. However Maori are the third party to these negotiations and the third party needs to take responsibility for its own sake if not for the sake of New Zealand as a whole for having these treaty grievances resolved. So I would strongly encourage Ngati Maniapoto to go into direct negotiations. They seem to me to be a prime candidate for that. There could be a speedy resolution and they could have considerable money in their own hands to benefit their own people a lot more quickly than if they go through the much more arduous and under-resourced Waitangi Tribunal process. 
As I said United Future is very pleased to see the second reading go through. We look forward to the Committee stage and the third reading going through with speed so that at least we can tick off this grievance and can get on to having legislation go through on other grievances as well. 
MITA RIRINUI (Labour—Waiariki) 
: 
 Tu tautoko anaiteneipireahakoangaporarurarutanga kei waenganuii a Ngati Tama. Kei a ratauano te huarahi ki mua. I stand to support the Ngati Tama Claims Settlement Bill and I say so knowing that a number of issues have arisen during the settlement process. I want to say that the resolution of those issues lies with Ngati Tama. This is its bill. 
Ngati Tama is a North Taranaki iwi. Its historical claims relate mostly to the loss of life and destruction of property during the Taranaki wars and the loss of land later on. The Crown recognises that the confiscation of lands and other resources that have made a significant contribution to the wealth and development of this country left Ngati Tama virtually landless. The bill makes it clear that this is a comprehensive and full and final settlement of all historical claims relating to Ngati Tama in Taranaki. 
I know that Ngati Tama has been waiting a long time for the Crown to apologise. It is right and just that the Crown apologises for the breaches of the treaty. I also say that before 1860 Ngati Tama was prosperous and economically successful. However the widespread loss of Ngati Tama land as a result of the Crown’s waging of war and subsequent confiscations hindered the economic social and cultural development of Ngati Tama throughout the 19th and 20th centuries. The Crown has acknowledged that it breached the Treaty of Waitangi and its principles. The Crown regrets and unreservedly apologises to Ngati Tama for its actions that resulted in loss of life during the Taranaki wars and the virtual landlessness of Ngati Tama in Taranaki. Those actions have caused suffering and hardship for Ngati Tama over the generations to the present day. 
This settlement is a milestone for Ngati Tama and the Crown. It will allow Ngati Tama to begin its development plans and look ahead to a brighter future full of opportunities. The settlement will also help restore the honour of the Crown and will help both parties to move forward together as treaty partners. The settlement is very significant. It is the second Taranaki treaty settlement to be finalised. It will be followed shortly by a third with the signing of the Nga Rauru deed of settlement. We hope this settlement will encourage other iwi from Taranaki and indeed from around the motu to enter into negotiations with the Crown. 
I was a member of the Maori Affairs Committee which considered the bill and that committee went through a thorough process that involved a day of hearing oral submissions from a range of interested parties. We listened to the korero of the people on the contents of the bill and on the settlement generally. 
As is the case with most settlements there were some people who raised significant concerns about the mandate of the negotiators. We the members of the Maori Affairs Committee feel that the answers to their concerns can be found in their participation in Te Rununga o Ngati Tama. We encourage them to involve themselves in the future of Ngati Tama by actively participating in the rununga’s elections and other post-settlement asset management processes. 
I will comment briefly on the criticisms of the Office of Treaty Settlements. We the members of the Maori Affairs Committee did ask the Office of Treaty Settlements officials to approach Ngati Tama negotiators in order to talk through a number of issues. They did the best they could as instructed by our committee. As it was they were unable to resolve those issues adequately and we felt that it was important to move on. 
I also want to respond to Mr Stephen Frank’s comments about the contents of the bill. He described its words as weasel words. If one looks at a bill in isolation from the discussions with the people involved in that particular settlement then one has no idea about the issues it is attempting to address. Ngati Tama wants to move on and we want to help it to do that. It may be that Ngati Tama will come back to the Crown in the future to relitigate the issues but so might Ngai Tahu Tainui or many others. This Government is doing the best it can to help them move forward. 
I have gained the impression throughout this debate that many of the previous speakers have no appreciation of what 160 years of grievance can do to a people. It is time to move on. [ 
Interruption 
] Mr Franks obviously does. As I said in the beginning the Ngati Tama iwi has been waiting a very long time to see its historical treaty claims acknowledged and resolved by the Crown. I wish the people of Ngati Tama all the best for moving forward and rapid development and full expression of their tino rangatiratanga or self-development. Kia ora. 
Dr WAYNE MAPP (National—North Shore) 
: 
 First I want to pick up a point that was raised by the previous speaker—a member of the Labour administration no less—Mr Mita Ririnui. The importance of what he said is that Ngati Tama may come back to the Crown seeking further redress. One of the principles of the treaty settlement process has always been that settlements are full and final yet we now hear a member of the Government saying that perhaps they are not. Perhaps the country will fully relitigate not just settlements where there are specific escalation clauses which apply to Tainui and Ngai Tahu but the totality of all settlements. 
I ask the next speaker for the Government to reflect on that issue. I do that because part of the compact that the Crown through successive Governments has with the people of New Zealand is to address historical grievances in a just and fair way so that people are able to move on. That is apparently no longer the case if one listens to the previous speaker. We could be in an endless cycle of redress further compensation and further negotiation—not just of an ongoing relationship but of all historic grievances. That is a very serious matter and I believe the Government owes it to the people of New Zealand to be honest and upfront. Are those settlements full and final or are they just some form of interim redress so that the country goes on an endless loop of claim counter-claim redress payment and further negotiation that locks it into a spiral of discontent? Because that is what that would do. I draw that issue to the attention of the Government because I think it has set a serious and potentially dangerous precedent. 
Mr Mita Ririnui might say it was just an off-the-cuff comment but I do not believe that. I believe that in his heart he actually believes that that is precisely what will happen. 
Stephen Franks 
: Tariana Turia said the same in the first reading. 
Dr WAYNE MAPP 
: There we are. As has been pointed out she said the same thing. We now are in a cycle in which settlements are not full and final in which people are being trapped and not able to move on. That can hardly be good for the unity of the country. 
I was also a bit surprised to hear the Minister effectively ask herself a question during question time so that she could boast about the enormous progress the Government was making. Unfortunately the other questioning that the Minister was subject to revealed precisely the opposite. Far from progressing those things expeditiously the Government is dragging them out. Even the United Future party which is supporting the Government by way of a confidence motion seemed to be conscious of that fact. 
I turn now to this particular settlement. The negotiations started back in 1996 and the heads of agreement were signed by Sir Douglas Graham in 1999. Some 4 years later we are now at the second reading stage with the bill presumably to be passed into law by the end of this week. The settlement process in respect of all historic claims is a long and slow one. The Government itself has admitted that it will take until 2013 at least. Based on its progress that is what it says now but it simply will not be the case. Realistically taking the Government’s progress into account we are probably talking 2020. That is simply too long. Effectively that would be a 35-year process for the settling of historic grievances. I believe this country is capable of doing that sort of thing in a proper way more quickly than that. 
I just want to go back to some of the precedent issues of the settlement process. Tainui was settled for $170 million. They were the first settlement; they set the benchmark; they have an escalation clause in case total future settlements go above $170 million. Three years later Ngai Tahu also received $170 million. The aggregate of the Taranaki iwi is also supposed to be $170 million. This particular settlement which is one of eight iwi settlements is $14.5 million but the aggregate of all the Taranaki settlements should be $170 million. All of that is supposed to be a symmetrical framework. But we all know that that symmetrical framework has been long since abandoned partly because of lack of knowledge and partly because this Government has failed to get a real sense of the dimensions of the process. It is now raising expectations through the speeches of its own members that that is just the first bite of the cherry. I am very concerned about that. 
I would also like to raise another issue that shows the dimensions of the problem. The Maori Affairs Committee is currently investigating an issue around the Crown Forestry Rental Trust and there will be a report on it shortly. I obviously cannot speak too much about that but I can say that according to the public record that trust has so far funded 600 research reports. Not one settlement has come from those 600 research reports. One has to ask oneself who is doing well out of that. Is it the people of the central North Island iwi? The answer is no. Is it the lawyers? Some people would say yes. Is it the historians and indeed that whole industry of people who see an opportunity to partake of that beneficence in doing huge amounts of research? 
I would have to say that the practice of the Government so far is very disquieting as are the statements of Government representatives in the House. Some very serious concerns are being raised. The mandating issues are there and are real but I am much more concerned about the wider implications of the issues. For instance within the settlement there is the prospect that 10 percent of all aquaculture permits in the area will be granted to the iwi. 
National has specifically put a rider on that point saying we note that it is part of it but that it should not be part of a general precedent. I know and members of this House will know full well that a global settlement of aquaculture and other tenders of that nature in the sea space will not settle the matter but create further division. We have only to look at the trauma over what was the Sealord’s settlement which has had over 14 years of litigation. There was a promise yesterday to introduce a bill which has been stalled already because the Government is unable apparently to reach the appropriate levels of resolution. 
So whilst National supports this settlement we raise these very serious issues about firstly the ability of the Government to progress matters in a timely fashion and secondly its commitment to finality. We question the Government’s commitment to this nation—to Maori Pakeha and new immigrant alike—to close this chapter of our history and move on as a united nation; a nation with a unity of purpose whilst respecting diversity. Everything I have heard from the Government today tells me that that important goal is now in jeopardy. 
DAVID BENSON-POPE (Labour—Dunedin South) 
: 
 I would like to rise briefly to support the comments made by my colleagues and a large number of other members of the House and to congratulate those who have been involved in the development and passage of this settlement. 
I make one other small contribution in relation to a comment made by one of the earlier speakers Georgina te Heuheu. In terms of setting the historical record straight the comment was made that during the aftermath of the Parihaka incidents prisoners were kept in caves. I know the history of this matter because it is on my patch. I want to put on the written record that while I am in no way undervaluing or understating the injustices done to those people—who were in fact kept in Dunedin Prison—the caves were used for shelter and cooking while the causeway was being constructed at Andersons Bay. I am sure that even Dr Mapp would be interested in an accurate historical record being developed around this matter. 
EDWIN PERRY (NZ First) 
: 
 I want to take a short call on this bill. New Zealand First supports this treaty settlement namely the Ngati Tama Claims Settlement Bill and when we look at the documentation available and at the preamble to the bill we see nobody should be against the bill’s passing. I want to cover some aspects of the information in the preamble to the bill which is a written document that points out a lot of the disharmony in terms of what happened to Ngati Tama as a people. There are some disturbing aspects set out in the preamble. Obviously the bill records an acknowledgement of and an apology given by the Crown to Ngati Tama and when we read the preamble document we see that the apology is deserved. I wish Ngati Tama all the best in the processing of this bill. What a great day this is for Ngati Tama—for its representatives to be able to come into the House and then go back to their people and discuss the settlement due to them after all the difficulties they have had. 
I want to read out part of the “Background to negotiation process” from the commentary on the bill. It states: “The historical claims of Ngati Tama were heard by the Waitangi Tribunal between 1990 and 1995. In 1996 as part of the process for achieving a mandate from Ngati Tama to negotiate their Treaty claims in Taranaki the proposal for the mandate to be held by the Ngati Tama Iwi Development Trust … was publicised.” Obviously there were some concerns with regard to the mandate. That has happened not only in Taranaki but also in the Wairarapa where currently a claim is being put together. But I believe that the mandating issue there has come to a conclusion now with the two factions having decided to make sure the claim goes through without any hold-ups. I wish them the best as well. In one part of the “Background to negotiation process” the commentary on the bill states: “The Crown received submissions from the Nga Hapu o Mokau Claims Committee objecting to the proposed mandating of the Trust. The vice-chairman and the treasurer of this committee are also members of Ngati Tama Whanau Whanui ...  the major group opposing the Trust’s mandate.” 
I want to talk quickly about the “Mandate to represent Ngati Tama” in the commentary on the bill. It states: “We were told by the Office of Treaty Settlements that in early June 1997 it received a challenge to the mandate of the Ngati Tama Iwi Development Trust from Ngati Tama Whanau Whanui. … The challenge consisted of over 435 form letters which represents about 40 percent of Ngati Tama. The letters were written by individuals who affirm Ngati Tama affiliation revoke any other mandate and nominate one person to establish a mandate to represent their interests in the negotiations of Ngati Tama’s Treaty claim.” I want to read one further part under that heading: “We hope that Whanau Whanui and others who feel disenfranchised will make the most of the opportunity to fully participate in the first election of Runanga trustees on 31 January 2004.” I think that that is an important part of settling the mandating issue. 
There is another part of the commentary headed “Overlapping claim of Ngati Maniapoto” and I note that issue has been addressed. As well I would like to thank Mahara Okeroa for allowing me as the associate spokesperson in New Zealand First on Maori affairs to participate in the Maori Affairs Committee’s process of considering the bill. 
I want now to move on to the preamble to the bill. There are some important issues in there that disturb me and there is no doubt that if the public are listening today and hear me read these written words they will be disturbed by them: “(1) The Treaty of Waitangi as set out in English and in Maori in the First Schedule to the Treaty of Waitangi Act 1975 was signed in 1840:”. Under the heading “ 
Taranaki Wars” 
 the preamble states: “(3) The Crown proclaimed martial law throughout Taranaki on 22 February 1860. The Taranaki wars of 1860-61 and 1863-69 followed. During the course of the wars the Crown built redoubts at Pukearuhe and Waiiti to secure military occupation of the land. These also provided security for military settlements that were established on confiscated land. Both redoubts were built on wahi tapu” which I find quite offensive. Under the heading “ 
Confiscation 
” the preamble reads: “(4) In 1863 the New Zealand Settlements Act 1863 was enacted. This Act provided for the confiscation by the Crown of lands of Maori whom the Crown assessed to have been in ‘rebellion’ against the authority of the Queen. On 30 January 1865 the Governor declared ‘Middle Taranaki’ to be a confiscation district and set aside blocks at Oakura and Waitara South as ‘eligible Sites for settlements for colonisation’. On 2 September 1865 the Governor declared 2 further confiscation districts ‘Ngatiawa’ and ‘Ngatiruanui’. The Governor also designated ‘Ngatiawa Coast’ and ‘Ngatiruanui Coast’ as eligible sites for settlement.” 
The preamble then turns to the issue of compensation. It states: “(5) A Compensation Court was set up under the New Zealand Settlements Act 1863 to compensate some of those whose land was confiscated by the Crown. … All of the Compensation Court awards within the rohe of Ngati Tama were based on out-of-court settlements. By the time these were made most of the readily usable land in the north had already been disposed of by the Crown.” Today Ngati Tama will get their settlement on those issues and I applaud that being part of the bill that is being enacted. The preamble goes on to state: “Out of some 74 000 acres confiscated from Ngati Tama 3 458 acres were awarded to Ngati Tama individuals. By 1888 title had not been issued to that land. Some claimants were informally aware of the location of their awards and believed they had a right to occupy the land only to find that it was classified as Crown land. In 1867 the Crown promised awards of land to the absentee owners from each iwi. By 1880 these awards were still undefined on the ground:” and this is what this claim is all about. 
Let us talk about Parihaka. I can remember as a child at primary school Parihaka was one of the subjects that we studied—it was not very often that that happened but it did happen in my case. Paragraph 6 of the preamble to the bill states: “The prophets Te Whiti o Rongomai and Tohu Kakahi introduced a policy of passive resistance to the surveyors and European settlers who followed. Prior to the Crown’s attack on Parihaka this policy was supported by the people of Ngati Tama and other iwi. Such resistance in 1879-80 led to more than 420 ‘ploughmen’ and 216 ‘fencers’ being arrested. Most were denied a trial and many prisoners were held in the South Island.” Obviously my fellow member from National said they were held in caves but we have been told that that was not the case. Paragraph 6 goes on to state: “Prison conditions were harsh and included hard labour”. 
To finish off my reading of the preamble paragraph 7 states: “On 5 November 1881 more than 1 500 Crown troops invaded and occupied the settlement of Parihaka. Over the following days some 1 600 Maori were forcibly expelled from Parihaka and made to return to their own settlements. Houses and crops were systematically destroyed”—shameful—“and stock was driven away or killed. Taranaki Maori report that women were raped and otherwise molested by soldiers:”—shame on the Crown! Paragraph 8 of the preamble then states: “The leaders of Parihaka Te Whiti o Rongomai and Tohu Kakahi were arrested and special legislation provided for their imprisonment”. 
New Zealand First supports this bill and I wish Ngati Tama all the best with regard to the future of this settlement. 
A party vote was called for on the question  
That the Ngati Tama Claims Settlement Bill be now read a second time. 
Ayes 101 
New Zealand Labour 52; New Zealand National 27; New Zealand First 13; United Future 8; Independent: Awatere Huata. 
Noes 8 
ACT New Zealand 8. 
Abstentions 9 
Green Party 9. 
Bill read a second time. 
Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill 
Instruction to CommitteeCWH 
Hon DAVID CUNLIFFE (Associate Minister of Revenue) 
 on behalf of the 
 Minister of Revenue 
: I move  
That it be an instruction to the Committee of the whole House on the Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill that it take the bill part by part 
. There are no schedules to this bill. 
Motion agreed to. 
In Committee 
Clause 1 Title 
PANSY WONG (National) 
: 
 This title is more reflective of the substance of the bill than are the titles of most of the bills that come before the House. At least we know that this legislation is about confirming a new taxation rate GST trans-Tasman imputation and miscellaneous provisions. But I would still like to point out that the minority Labour Government could have done better with the description if it had been even more upfront and transparent and had stated that the bill confirms the high annual income tax rate. I think we now have a halfway house. This minority Labour Government which always says it believes in transparency has failed to convey such an obvious factor in the title as the high annual income tax rate. I have brought that point up in this debate on the title because it is important to highlight it. Later on when we start to debate the various parts of the bill we will find that the high personal income tax marginal rate—increased from 33 to 39 percent—has led to many complications requiring adjustments to the Income Tax Act. So it has quite serious implications. 
I think the Minister may like to take a call to explain to the poor taxation petitioner and to people who file their own taxation returns why this legislation has 15 commencement dates. I ask the Minister to stand up take a call and explain to all accountants and more important to small-business people and individuals who file their taxation returns how they are supposed to comprehend legislation that has 15 commencement dates. There are 159 pages of this legislation— 
The CHAIRPERSON (Ann Hartley) 
: I am sorry to interrupt the member but clause 1 is not the commencement date clause. 
PANSY WONG 
: I will come back to the title because we will take up the debate on the commencement dates later. The title when I think about it—apart from the issue of the high income tax rate complicating the taxation legislation—is also complicated because of the many commencement dates which will certainly confuse everybody. If this minority Labour Government had not instigated that high personal income tax rate we would be debating a much simpler bill today. 
Apart from that the National Party wants to demonstrate to the public that we are constructive about the parts of the bill that relate to the GST provisions for imports and also to the harmonisation of taxation treatment and income tax dividend imputation between us and Australia. We are in agreement with those parts of the bill. 
 In terms of the title I feel that it is does a better job of reflecting the contents of and the types of issues that this bill tackles than the titles of some other bills do. It does not do too bad a job of highlighting for the benefit of any tax petitioner or business person who wants to know what is in the bill that it does cover the GST issue and the issue of trans-Tasman imputation. But I think the title does a very poor job by just simply describing the annual taxation rates without highlighting the difficulties caused by the varying personal tax rates and the high income tax rate which cause a lot of complications amendments and adjustments that people have to face every year. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 In speaking to the title of the Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill I guess that is a classic example of a title that tries to cover what is in the bill but actually misses the boat quite badly. Let me point out why that is so. 
The first problem with the title is the “Taxation (Annual Rates” bit because the bill does not spell out the rates that people do have to pay. The legislation is very poor at doing that. The Minister in the chair may choose to take a call on this. There are people in this country who pay effective marginal taxation rates that are far higher than this legislation implies. It is kind of misleading to refer to what this legislation specifies in the law as being the annual rates because they bear no relationship to the actual rates some people pay. We will get on to Part 1 which covers the annual rates but it does not really tell us the taxation rates that people face. It spells out a statutory taxation system if one likes. That is why the words “Annual Rates” in the title are misleading. The title implies that this legislation should tell people what they are to pay. The legislation does not do that. Some people in this country face effective marginal taxation rates of over 90 percent on a lot of the income they earn and this title does not give any indication that that is what is going on at all. 
For this title to be a fairer title it should specify “Taxation (Statutory Tax Rates GST” etc. rather than “Annual Rates”. The words “Annual Rates” imply that this legislation somehow gives people guidance as to the tax they pay when it does not do that in any way at all. Sooner or later the Government has to become much more upfront with people about the effective marginal taxation rates they are paying in this country. That is what is implied by annual rates and this legislation does not do that. That is my first concern. I think that rather than the present title of the bill the title should be “Taxation (Confirmation of Statutory Rates” etc. There is a huge difference between the statutory taxation rates and the effective marginal taxation rates that people face in this country today and “Annual Rates” fudges that because it implies that that is the actual rate people pay when it is not. This legislation simply confirms the statutory rates and does not spell out what people face. 
My second concern is this: why just pick the first four issues and then state “and Miscellaneous Provisions)”? That seems to be what the Government has done. I recognise there has to be some limit perhaps to how long a title is but there are other important issues in this bill. OK the confirmation of the statutory taxation rates is the first issue and there are a number of GST issues included in the bill. We have the zero rating of business-to-business supplies of financial services for GST purposes and the reverse charge mechanism to impose GST on imported services. That is all good stuff and it can be covered by “GST” in the title. “Trans-Tasman Imputation” is one very good thing in this bill that the National Party applauds totally and that is identified in the title. 
But there are also one or two other good measures in this bill. Although we are totally opposed to the confirmation of the current high taxation rates the introduction of progressive rates of specified superannuation contribution withholding tax on an employer’s contribution to match the employer’s marginal taxation rate is an important measure in this bill. It is too important to be just covered by “Miscellaneous Provisions”. I think an important provision like that should be identified in the title. So there is another problem. We have a problem over the annual rates not being a proper descriptor and a problem over the fact that the title does not cover something as important as the issue of progressive rates of specified superannuation contribution withholding tax. 
Finally I would also like to add that another important issue in this legislation is the removal of the double incidence for shortfall penalties for attributing qualifying companies and their shareholders. That is an important issue but the title misses it out completely. 
CRAIG McNAIR (NZ First) 
: 
 I take pleasure in speaking on behalf of New Zealand First on the title of this bill which is a bit of a mouthful. In speaking to the title clause I want to briefly come up with some different names that could be used in relation to this bill. 
We could call this bill the “Predominantly Sensible Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill”. I have two reasons for suggesting that as a new name. The first reason is that this bill changes the imputation laws to address the problem of triangular taxation which involves the double-taxation of certain trans-Tasman investments and it allows Australian companies to allocate imputation credits for New Zealand tax paid to their shareholders in proportion to their ownership of the company. I note that that arrangement is reciprocal and requires both countries to pass the relevant legislation. The necessary legislation was introduced in Australia—to recap a little on why we are doing this—on 29 May as the Taxation Laws Amendment Bill (No 6). The bill also seeks to mitigate a problem that imputation credits cannot pass through companies resident in neither Australia nor New Zealand by introducing a new form of grouping for imputation purposes that Australian companies may also join. 
Secondly I suggest “Predominantly Sensible” be added to the beginning of the title “Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill” because of the annual income tax rates. This legislation confirms the annual income tax rates for the 2003-04 year. In light of that issue we could even call this bill the “Taxation (Misuse of Taxpayers’ Money GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill”. New Zealand First believes that this Government should reprioritise its social spending so as to place greater focus on the real needs of New Zealanders. It should do that rather than spend its income from taxpayers on its politically correct agenda which includes as I mentioned earlier on in the second reading prostitution reform and abolishing the Privy Council. Those are both examples of that agenda. 
 Another title that we could use which relates to the annual taxation part of the bill—and as I said in the second reading New Zealand First supports all the other parts of this bill—could be the “Taxation (Lack of Vision for Taxes GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill”. I say that because I feel very strongly that there is a lack of vision on the Government’s behalf in the way it addresses taxation. In the run-up to the general election in 2002 we in New Zealand First talked about how we could make and produce a stronger economy by addressing the taxation area—not so much by addressing the annual income tax rates but by addressing taxation incentives for exporters for research and development and so on to really produce a strong economy. 
ROD DONALD (Co-Leader—Green) 
: 
 It is not often that I agree with Dr Lockwood Smith but on this occasion I entirely concur with his point of view that the Government should have included in the title of this bill the section on specified superannuation contribution withholding tax. That is one part of this bill for which I believe there is universal support around this Chamber. It is a part that I would have thought the Government would be making a big deal about. The Government is finally doing the right thing for those New Zealand workers earning less than $38000 a year who are trying to save for their retirement through a subsidised employer superannuation scheme. The title should have reflected that by including before “Miscellaneous” the phrase: “SSCWT: Removal of Tax Penalties”. That would have encapsulated what this bill is going to achieve. 
This Government is making a very important step forward by removing those tax penalties and it is a step we support but we would have much preferred the title to include “SSCWT: Extending the Superannuation Withholding Tax Concession to All Workers”. Unfortunately this Government has signalled that it wants to preserve a 6 percent concession or tax break for those workers earning more than $60000 a year and receiving an employer subsidy. It wants to preserve that concession for wealthy wage and salary earners but not extend that same 6 percent concession to heartland Labour Party voters who are the very workers in this country who need an incentive to save for their retirement. It is disappointing that the Government is not prepared to contemplate it would seem amendments along those lines. I am however looking for support from all the other parties in the Chamber and if those parties that support family-friendly policies can see their way to supporting my amendments we will have the majority. Then the title of the bill could be changed to refer to extending superannuation withholding tax concessions to all workers. 
Another change to the title we would like to see would be to incorporate the words “Tax Relief for Struggling Kiwi Families” after the words “Annual Rates”. That is something I think every member of this Committee would surely support including the Minister in charge of the bill Hon Dr Michael Cullen who I am pleased to see is just joining us. To that end I will be moving an amendment at the appropriate time to make the first $5000 of income tax-free. That would have across-the-board benefits for all New Zealanders but proportionately greater benefits for people struggling at the bottom. Whether they are beneficiaries or workers that would put more money in their pockets and therefore it would be important to add that to the title after the words “Annual Rates”. 
Straight after that it would also have been ideal if this bill had incorporated in the title “Carbon Taxes and Other Eco-taxes” because that is the Green strategy to pay for the tax cuts we want to offer New Zealanders across the board. Unfortunately again the Minister has signalled that carbon taxes are still way off in 2007 and other eco-taxes are not quite yet a twinkle in his eye but we will continue to encourage the Minister in that regard. But in the meantime I think this bill would have been more rounded if the Government—indeed the Minister—had taken credit for the excellent initiative on removing the tax penalties from the specified superannuation contribution withholding tax. In an ideal world he would have gone further and extended that as a tax concession as well as bringing in tax relief and eco-taxes. 
Clause 1 agreed to. 
Clause 2 Commencement 
The CHAIRPERSON (Ann Hartley) 
: I inform members that the Government has issued two veto certificates in respect of amendments in the name of Rod Donald set out on Supplementary Order Paper 171. The amendments are therefore out of order and no question will be put on them. However the certificates may be debated in the context of the debate on the provisions to which the vetoes relate. The certificates are available on the Table for inspection. 
PANSY WONG (National) 
: 
 When I took my first call I was slightly ahead of time in commenting on the wide range of commencement dates. In effect there are 15 commencement dates and I wonder whether the Minister in the chair the Hon Dr Cullen would take this opportunity to enlighten tax consultants petitioners and small-business people as to how they could comprehend and understand this bill when there are about 15 implementation dates. 
When I look at clause 2 “Commencement” it is interesting to note the schedule of commencement dates and while I may be ahead of time I can see that the Government is very much behind time. For example some of the commencement dates go back to 1994. In the latest Supplementary Order Paper there are amendments to the commencement dates that go back to 1994. Clause 2(2) on Supplementary Order Paper 169 states: “Section 103 is treated as coming into force on 1 July 1994.” Subclause (3) is treated as coming into force in December 1994. Subclause (4) states: “Section 75 is treated as coming into force on 1 April 1995.”; and subclause (5) states: “Sections 52(1) and 54(1) are treated as coming into force on 26 July 1996.” The references in the clauses refer to 1998 and 1999 and it is only halfway through those 15 implementation dates that I read that something will come into force in the year 2003. 
Maybe the Minister should take a call and explain all these complications and reassure taxpayers. Should taxpayers be panicking? Should they worry about the Inland Revenue Department knocking on their doors wondering what happened 6 7 or 8 years ago when they might not have filed a tax return correctly? Overall in this Parliament we treat retrospective legislation very seriously. It is bad enough for most people who are quite panicky about what the impact of changes to taxation bills might be but we are now facing a bill that not only includes changes but has 15 implementation dates. Half of those dates date back to before 2003 so how many tax consultants and accountants will have to go back to their clients’ files and make sure they are not caught inadvertently? 
Out of courtesy to the public I think the Minister should take a call to explain why we have a Supplementary Order Paper dated Tuesday 18 November 2003 when most of the dates we are looking at are between 1994 and 2000. I think catch-up legislation might be necessary but this bill seems to go back quite a few years. I think business people and tax accountants will be seeking guidance and reassurance from the Government that this bill is not looking to catch people up in these provisions without them even knowing that quite a few of those provisions have been backdated. 
People might think that a taxation bill is a dry piece of legislation but it has consequences even for small-business people because a lot of the issues we are looking at relate to GST. The threshold for GST registration is quite low and we are looking at some of the provisions relating to exempt income to see which part of the income might be subject to tax and which part might not be. But it is complicated in that one of the sections of the Act I was looking at—for example the definition of “financial services”—might be backdated to 1994. 
Hon Dr MICHAEL CULLEN (Minister of Revenue) 
: 
 To be very brief I thank the member for her second contribution in the debate as Opposition spokesperson on revenue. Where they are backdated the great majority of these commencement dates are beneficial to the taxpayer and are sometimes consequential on other structural changes so we need to carry the provisions back over the period to ensure that no harm is done. I think the one area where there will be a question is around GST in relation to some local body purposes where the ruling has changed. In order not to create the risk of a very substantial back-tax liability the law is being confirmed as it was originally intended to be and understood to be. The Inland Revenue Department itself actually changed its interpretation. 
So there is nothing terribly strange about any of these provisions. The bill is not in the usual sense retrospective legislation or in the vast majority of cases a matter for concern. The change is beneficial. It will suit tax accountants and lawyers who will be well aware of these changes as a result of the way the process of consultation occurred. Indeed one or two of the changes have been made at the request of the tax profession. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I appreciate the Minister of Revenue’s explanation but what troubles me somewhat over the commencement clause is that as a member of the Finance and Expenditure Committee I have checked back over my notes that I took during the hearings and I find that the committee did not focus particularly on the issue of the commencement dates. What worries me somewhat is that an amendment on Supplementary Order Paper 169—that is clause 2(5) amending clauses 52(1) and 54(1)—changes one particular aspect with regard to commencement dates. In the bill as introduced that commencement date of 26 July 1996 applied to clauses 52(2)(i) and 54(2)(i). What I have been trying to check in haste is whether the two references in the original bill and the two on the Supplementary Order Paper are identical—whether clauses 52(2)(i) and 54(2)(i) in the bill as introduced are the same as clauses 52(1) and 54(1) mentioned in the amendment on the Supplementary Order Paper. It would seem to me that in fact they are not the same because clause 52(1) is a new provision inserted by the select committee as distinct from the previous reference to clause 52(2)(i). Whether clause 52(2)(i) was simply an error— 
Hon Dr Michael Cullen 
: It was taken out. 
Dr the Hon LOCKWOOD SMITH 
: But when one looks at— 
Hon Dr Michael Cullen 
: It’s been replaced by clause 52(1). 
Dr the Hon LOCKWOOD SMITH 
: The Minister says it was taken out but when I look at what was struck out I cannot see mention of clause 52(2)(i). I see clause 52(2)(ii) but I do not see clause 52(2)(i). Likewise in the bill as introduced I do not see clause section 54(2)(i)— 
Hon Dr Michael Cullen 
: If I could help the member. It was 52(2). The committee changed it to 52(1) because of the change to the clause. It’s just a technical change which does exactly what was previously intended given the fact the number has now changed on the clause itself. 
Dr the Hon LOCKWOOD SMITH 
: But the thing is though the bill that the Committee is working off should show what the select committee did. If the committee struck out clause 52(2)(i) that should be evident on the face of the bill. Yet I cannot see where the committee has done that. I can see where the committee has struck out clause 52(1) and clause 52(2) but the bit of subclause (2) that is struck out is paragraph (ii) not paragraph (i). 
Hon Dr Michael Cullen 
: Because there was no clause 52(2)(i). It was meant to be 52(2). 
Dr the Hon LOCKWOOD SMITH 
: I appreciate the Minister’s explanation. So the bill as introduced was actually wrong in that regard. 
Hon Dr Michael Cullen 
: Yes. 
Dr the Hon LOCKWOOD SMITH 
: OK. I accept the Minister’s explanation that the bill as introduced was actually wrong. 
Then we come to the substance of that issue. What is being referred to in those clauses is the branch-equivalent tax account of a company which is quite complex tax law. I would not mind betting that 99 percent of members do not understand it and I do not claim—I have to be quite honest here—to understand exactly what this new clause 52(1) does. That provision is being backdated to 26 July 1996. The select committee did not particularly focus on this issue. I want the Minister’s absolute assurance that what is now spelt out in the amended legislation before the Committee with reference to new clauses 52(1) and 54(1) contains nothing that will in any way be negative for a company that falls into the branch-equivalent tax accounting system. The measures are obviously retrospective. I accept the Minister’s argument that retrospective measures are normally considered satisfactory if they are favourable for taxpayers but there are a number of them; we do not often see as many retrospective measures in a taxation bill as there are in this one. It worries me but I guess I have some comfort in that if there were too much in the bill that was negative that would have been drawn to the attention of the select committee. The committee did not particularly focus on it and I want to be absolutely satisfied that none of these retrospective measures especially those relating to international taxation are negative in any way at all because our reputation with international companies is hugely important. We must not be passing retrospective legislation that has negative elements in it. 
Hon Dr Michael Cullen 
: I can assure the member on that. 
The CHAIRPERSON (Ann Hartley) 
: I need to rule that the amendment put forward by Rod Donald is out of order. 
Clause 2 agreed to. 
Part 1 Annual Rates of Income Tax for 2003-04 
The CHAIRPERSON (Ann Hartley) 
: I remind members that there is a veto on Rod Donald’s amendment set out on Supplementary Order Paper 171. 
Hon Dr MICHAEL CULLEN (Minister of Revenue) 
: 
 I will take the first call on this part as I will have to go in a short period of time I am afraid to another meeting but my able colleague the Hon David Cunliffe will take over again. 
I want to comment briefly on the reasons why I have vetoed the amendment in the name of Mr Donald. The amendment has two problems—one relatively minor because it could perhaps be fixed with further conversation and one relatively major. The relatively minor one is that we cannot just create a $5000 tax-free zone and just shift the 19.5 percent boundary and keep it at $38000 and not address the structure of the tax system within that range. There is a whole set of issues around low-income earner rebates etc. In fact the veto certificate says between $1.7 billion and $2 billion cost because it is not quite clear what the amendment means in terms of some of the consequentials that would need to be moved to make the system actually work. On the face of it the amendment actually makes a nonsense of the current income tax rates. 
The second and more substantive—because we could try to work out the first one over some period of time—reason is that I feel it is fundamentally wrong to do as the member suggests. It is commonly suggested by people that if one makes a certain area free from income tax at the start somehow or other one is helping people on low incomes and people living in poor circumstances. There are a number of things wrong with that. The first might not appear on the face of it to be a sensible comment but it is true. Many people with low taxable incomes are not necessarily poor for a number of reasons. Some people are very good at reducing their actual income to a low taxable income. They tend to be called accountants and lawyers. 
Secondly many people who are on low incomes are second third fourth or fifth income earners within a family where the total structure of the family income is quite high so one is giving a tax break to perhaps the third income earner in a household with income of $200000 a year. That is particularly so because as we found when we had those kinds of exemptions at the front end it is remarkable how many children in better-off families manage to earn $5000 a year if $5000 a year is tax-free. The effort that goes into those young people at that point is quite remarkable. A cynic might suggest it has something to do with rearrangement of income within the family as opposed to actually representing a valid approach to the income tax system. 
So the proposal introduces a layer of unnecessary complexity in the tax system with very very little social benefit. For those on pensions and those on benefits in effect their levels are set in relation to net incomes in any case. New Zealand superannuation is related to the net average wage so if one changes the tax rates there is an automatic benefit to superannuitants. The gross simply changes to reflect the same net at the end of the day so all of that group of people who dominate people with low household incomes actually are not affected by this sort of change in any case. It is far better in fact as the Government proposes to deal with this issue through mechanisms such as family support which is targeted to people on low incomes with family responsibilities as opposed to perhaps a 17-year-old person with an income of $15000 or $20000 a year who is an awful lot better off than a household on $30000 a year and supporting three or four kids. 
So the amendment would not address social equity issues terribly well it would create tax compliance issues and avoidance opportunities and as cast it would actually create a nonsense of the current scales in any case. 
JOHN KEY (National—Helensville) 
: 
 On those comments we agree with the Minister of Revenue. I want to address Part 1 which National strongly opposes. It sets the annual tax rates in train for a further year. When the Government raised the top personal tax rate to 39c in the dollar it told the people that it would affect only 5 percent of all taxpayers. Well that is not correct at all. In fact one in five full-time taxpayers now pay the top personal tax rate—one in five. 
Lindsay Tisch 
: That is 20 percent. 
JOHN KEY 
: Yes a touch under 20 percent—one in five full-time taxpayers. One in two full-time taxpayers pay the next rate down—between 33c and 39c. 
Hon Dr Michael Cullen 
: Not quite— 
JOHN KEY 
: Well in totality. There is no logic in a top personal tax rate being raised from 33c to 39c. It creates a huge number of costs for the industry and a huge number of compliance issues. It was simply as we know it to be an envy tax—a disincentive for hard-working New Zealanders to go the extra mile to work hard and to create incentives. 
Mark Peck 
: Oh! 
JOHN KEY 
: The member for Invercargill does not seem to think that entrepreneurs and risk takers are worth supporting but on this side of the Committee we applaud those people. 
Hon Dr Michael Cullen 
: It costs me $190 per week. 
JOHN KEY 
: Well the Minister should look at his own tax plan then. I want to raise that issue for a second because the Inland Revenue Department actually tracks individual sector groups and it looks at the total amount of average tax paid by those groups. 
Mark Peck 
: What’s the member’s income? 
JOHN KEY 
: Reasonable. If the Minister would like to refer to those particular sector groups he would find that architects’ average income has gone up and average tax has gone up and plumbers’ average income has gone up and average tax has gone up but that is not so for accountants or lawyers because they have re-arranged their financial affairs to allow themselves to be earning more income and to be paying less tax. So what is the logic behind the increase? It does not work for hard-working New Zealanders who work for companies because they cannot pay themselves in that manner. It works for certain groups it is an envy tax and it is a particularly poor piece of legislation that this Government has saddled New Zealand with. It is one of the reasons why this Government is not a pro-growth Government. 
Hon Dr Michael Cullen 
: We’re doing all right! 
JOHN KEY 
: During 1983 and 1993 New Zealand grew at about 1.8 percent and between 1993 and 2003 it grew at about 3.3 percent. For every year of the last two decades our growth was under Australia’s by about 1 percent. New Zealand will have to perform better if it wants to outperform Australia and if it wants to narrow the gap between what New Zealand families are earning and what Australian families are earning. 
Dr the Hon Lockwood Smith 
: We could pay our rugby players more! 
JOHN KEY 
: That is right. Anti-growth policies like progressive tax rates are not an incentive for hard-working New Zealanders to go forward. 
This part also sets company tax rates in New Zealand. Company tax rates here will be set 10 percent higher than company tax rates in Australia as a result of this bill. The Minister could have sent a very strong message to companies all across New Zealand that he wanted them to compete head-on with Australia that he wanted them to be successful and that for $420 million the Government was prepared to let them do that. The Government could have pre-funded it because part of this legislation attacks aggressive tax planning and it is estimated that the Inland Revenue Department will net between $400 million and $450 million as a result of those schemes being closed down. The Government could have self-funded a wonderful bonus a wonderful Christmas present and a wonderful incentive for the businesses of New Zealand but no it does not want to do that. It wants to rely on its good luck and its good fortune and what has been a competitive exchange rate—and the Minister with his open-mouth policies is trying unsuccessfully to get it back to being competitive. That is what the Government is relying on. It is not sending a hard and fast message and we think that is a complete sham and a complete disgrace. 
We believe that a progressive tax system such as the one we have here is not creating efficiency in the economy is not driving economic growth and will not take New Zealand back into the top half of the OECD. 
ROD DONALD (Co-Leader—Green) 
: 
 Unlike National the Green Party does support progressive taxation but we would like it to be more progressive than it currently is and combined with a suite of eco-taxes. I am disappointed that the Minister of Revenue has exercised his financial veto on my amendment but I do thank him for engaging in the debate on how to help those people who are struggling on low incomes in our community. I hope he will find the heart to offer them something generous before Christmas so that the tag of “Scrooge” no longer applies to him. Perhaps he is trying to model himself after Arnold Nordmeyer—as a famous person once said to me after a Budget a couple of years ago. Although he has pointed out some flaws in the amendment we have put up what we are trying to achieve is an outcome that will benefit all New Zealanders particularly those at the bottom on middle and low incomes who genuinely are struggling and particularly the children of those people. 
In case anyone was thinking the Greens were being fiscally imprudent can I say we would recover the cost of our proposed tax cuts as referred to on our Supplementary Order Paper from a suite of eco-taxes. The first would be a carbon tax. We would also want to end the exemption from taxation that diesel currently enjoys to bring it into line with petrol and we would bring in other eco-taxes on a range of areas such as Crown resource rentals toxics and waste. Our whole philosophy is to cut tax on work and enterprise and also to use tax to discourage waste and pollution. I do not have the resources that Dr Cullen has to calculate that the cost would be between $1.7 billion and $2 billion; our own estimates are around $1 billion. Be that as it may we think making the first $5000 of income tax-free would be a step in the right direction and we note and appreciate the support from Grey Power in a press release from its National President Graham Stairmand for our proposal. 
My challenge to Dr Cullen is that if he does not like it I would like him to offer something better—something that at least matches what we are putting up. Our amendment would put $18.70 into the pockets of most New Zealanders—that is what it would work out as on a weekly basis—and $18.70 a week for a struggling family would make a real difference. Imagine the difference it would make to a one-income family with two children on the average wage! It would certainly help to address the level of child poverty in this country which is something the Minister should not be smiling about. Child poverty is one of the indictments on this Labour Government. I thank the Minister; that is much better. The Minister is now praying that we can solve child poverty. I hope he uses the power that is in his hands through the taxation system and the benefit system to address that very real concern. Any surplus is not real if it is built on the backs of children living in poverty. 
RODNEY HIDE (ACT) 
: 
 The ACT party will oppose this bill but I should point out that we certainly disagree with Mr Rod Donald’s analysis of the issue. I fear— 
Hon Harry Duynhoven 
: Rod’s feeling better already! 
RODNEY HIDE 
: Well the National Party ACT and New Zealand First are feeling pretty good because we like the thought of Dr Cullen campaigning at the next election on what Rod Donald is proposing for tax and economic policy in this country. 
However let me cut to the chase on the issue of annual rates. Why did this Government put the tax rate up to 39c in the dollar? The National Party ACT and New Zealand First opposed it. Why? Because we said it was not necessary. Can anyone remember that Dr Cullen said he needed the money said how much he was going to get and said he would spent it—$400 million? 
Hon Dr Michael Cullen 
: We got $500 million. 
RODNEY HIDE 
: He got $500 million. Does he need it? No. It was a cheap election ploy that he felt honour-bound to implement. We should ask ourselves this: was putting the top tax rate up to 39c good for the economy or bad for it? 
Hon Dr Michael Cullen 
: Look at the growth. 
RODNEY HIDE 
: Michael Cullen thinks it was good for the economy. My goodness no wonder he is not rated in the business world or around the world. Everyone knows that to put up taxes is bad for the economy—except Michael Cullen. He has spent too long in Parliament because he stands up and says: “But I pay the 39c rate.” But the Government pays his pay; the taxpayer pays his pay— 
Hon Member 
: And yours! 
RODNEY HIDE 
: Yes and mine. But I do not get up here and pretend that I am somehow equivalent to a person who is a wealth creator—who is investing risking and in business. Michael Cullen says that it makes no difference to him whether he pays tax at a rate of 39c or 33c. That is true. Why? Because we are paid by the taxpayer. Those in business those working and those who invest actually have to create the wealth. We put taxes up and we reduce the return on their working hard we reduce the return on their investing and we reduce the return on their being entrepreneurial. I know that Dr Cullen is shaking his head trying to get his head around that because he has never been any one of those three. But that is what provides the wealth for this country which this Government is grabbing through this tax take and distributing willy-nilly. 
We say as we said in 1999 that the tax increase to 39c in the dollar was wrong. We should be going to a low flat tax not to a more disproportionate tax. I say “Shame on Dr Cullen!”. He did not need the 39c rate. I think he knows that that is bad for the economy. He shakes his head and does not agree. Why does he not put the rate up to 99c? He cannot work that out. If a rate of 39c is such a good thing for the economy what about a rate of 40c? I had better not give the Minister of Finance ideas. If putting up taxes is not bad how come it is bad to have the rate at 66c or 75c as Jim Anderton and Rod Donald would have? Dr Cullen is not that silly; a rate of 39c does not do anything but a rate of 45c or 99c would be silly. The lower we can have taxes the better it is in terms of the productivity of our nation. Of course we need a Government and of course we have to fund it but we certainly do not need taxes at 39c in the dollar—especially when we see how this Government wastes and spends the hard-earned money produced by working New Zealand. 
Hon David Cunliffe 
: What rot! 
David Benson-Pope 
: Yes what rot! 
RODNEY HIDE 
: It is clear that those members are out of touch. They do not know where taxpayers’ money comes from. I doubt whether David Benson-Pope has ever worked in his life. If he did he would be cheerful instead of a miserable old grump sitting here in Parliament. If we look at David Cunliffe we can see that he has never worked in his life. We can tell. I say to this Government: remember where the money comes from. 
Hon Dr MICHAEL CULLEN (Minister of Revenue) 
: 
 I want to respond by saying that David Cunliffe spent a lot more time in the private sector than Mr Hide ever did. Mr Hide started off as some kind of scientist then pretended to become an economist who taught I think part-time at Lincoln University where nobody could tell the difference between whether he was teaching science or economics. 
However let me respond to him. We heard all this garbage back in 1999—that is: “If we put the top tax rate up to 39c everybody will go overseas nobody will work and economic growth will stop.” But what have we seen? Firstly net migration has reduced every year under the Labour-led Government. It is now much lower than it was under the National Government. Secondly economic growth has been above the OECD average in all but one of those years. Indeed this year we will be above the OECD average again. For the first time that I can remember for a very long time we will be above the OECD average for at least 3 years in a row. Thirdly there is no demonstrated connection at all between average tax rates or marginal tax rates and productivity. 
If we had had German productivity growth—because the member confuses gross domestic product growth with productivity growth—for the last 20 years now we would have been at least as rich as Australia. Australia’s problem is its sclerotic labour market; it is nothing to do with productivity growth which has been averaging 2 percent or so per annum. We have averaged about 1 percent or so growth per annum. If we could double that we would be doing fine as a country. President Clinton put up tax rates at the top end in his first year and had the longest successful boom in United States post-war history. It took a Republican president to manage to turn that around and generate massive federal deficits. 
I want to talk about the logic because Mr Hide really thinks that the well-off are really really stupid. 
Hon David Cunliffe 
: Do they vote ACT? 
Hon Dr MICHAEL CULLEN 
: Some of them do vote ACT and they are really really stupid if they do that. But members should listen to what Mr Hide says: if one’s tax rate goes up so that one’s net income goes down one will work less hard so one’s net income will go down even further. That is Mr Hide’s logic. We are supposed to believe that someone sitting up there in Paratai Drive is saying: “Oh goodness me they have just put my tax rate up so my income’s come down so I think I’ll do a lot less work so that my income drops even further.” That argument is really really stupid but it is put up almost every time by people in favour of somehow lowering that top tax rate. Equally we could argue that if people’s net income goes down they need to work harder to get their net income back up to where it was. The only survey I have ever seen on these matters—done years ago in the UK—asked: “If the top rate went up would you work less hard work the same or work harder?”. One third said “less hard” one-third said “the same” and one-third said “harder.” Nobody actually knew. 
We do know that when we have the kinds of stupid tax rates National used to have—at 66c in the dollar—then it is worth our while spending a dollar to avoid more than a dollar’s worth of tax. That rate is such that people can actually make money by spending money under that tax system. At a rate of 39c people cannot do that. Indeed even all of these famous schemes people use at best may defer their tax liability because at the end of the day the money has to come out go back into their own hands and be taxed at their individual rates. 
 What they are really saying now is that given $1 billion $2 billion or $700 million to spend—and this is Dr Brash’s argument—we put it at the top end with nothing for the bottom. Why? Because those at the top end are the only people who create wealth. In other words according to the National Party and the ACT party only those people on high incomes create wealth. That is utter garbage and an insult to every ordinary Kiwi out there who is battling away working for this country creating wealth and producing goods and services. Wealth is not created in Paratai Drive alone I tell Mr Hide. When that member wakes up to that fact his party might get more than 4.5 percent in the polls and perhaps something a bit more approaching the 45 percent that this party gets—this party that recognises who creates wealth in this country. And that is everybody who contributes in terms of working. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 What a bitter tirade from the Minister! The Minister said that the tax burden does not affect the economy and that putting up tax rates improves the performance of the economy. He said that Clinton put up tax rates and the economy went better. That shows the appalling economic ignorance of Dr Michael Cullen. He might have been a good academic historian but he sure ain’t an economist. All the research shows us that an economy carrying the total tax burden that New Zealand is currently carrying which is in the order of 40 percent of GDP has never succeeded in sustaining 4 percent GDP growth. Nowhere in the world has a developed economy carrying that tax burden ever succeeded in sustaining 4 percent growth which we must achieve if we are to close the gap with Australia. Dr Cullen thinks that he knows better than all the history of the last 50 years of the world. He thinks he knows better in saying that putting up tax rates improves the economy. 
First I endorse the comments made by my good colleague John Key about how there is a critical need to get down our corporate tax rate to make us competitive with Australia. The tax burden our economy is carrying is too high and the best research I have seen covering the last 50 years across the developed world shows an almost linear relationship between tax burden and economic growth. 
However I shall focus on another issue. Dr Cullen talks about the needs of the lower-income people of this country. I challenge him to do something about that instead of just blathering on about it. I want Dr Cullen to do that or his ministerial helper who I note is wearing an identical tie shirt and suit to Dr Cullen. I note that the Hon David Cunliffe so admires Dr Cullen that he is wearing an identical tie shirt and suit. I guess that crawling around the Minister like that may help with promotion but he has to wait a little bit of time yet. 
However the issue of substance I want to raise is this. If Dr Cullen and the Hon David Cunliffe are concerned about lower-income people what will they do about this issue? At the moment in New Zealand people with limited skills trying to get off benefits and improve their lives earning say $10 an hour as they seek to work under David Cunliffe’s taxation scheme in this country once those people have worked 8 hours a week at $10 an hour they earn a certain amount of money for their family. Does David Cunliffe know how many hours more than 8 they have to work to earn another dollar for their family? I want the Minister to indicate whether he knows the answer. 
Jill Pettis 
: He’s working on it. 
Dr the Hon LOCKWOOD SMITH 
: I shall help him. I would not mind betting that not one Government member knows. Does one think that if those people doubled their hours of work they might be a dollar better off? If they worked 16 hours a week instead of 8 might they be better off? Does any member know? I can tell members that they will not be better off. What if those people trebled their hours of work and went from 8 hours to 24 hours a week? Surely they would be better off. But I tell the Minister in the chair that they will not be. Under his taxation regime that family after trebling their hours of work will not have a dollar more in the pocket. Does that Minister know how many hours that family would have to work to be a dollar better off? They would have to work 50 hours a week to be a dollar better off in the pocket than they would be after they worked 8 hours a week. 
That is because of the way the benefit abatement system the tax credit system and the progressive tax system work that Rod Donald and the Greens like so much. If the Minister bothered to do the work instead of parroting nonsense he would see the way the poverty trap in this country works. I want the Minister in the chair to acknowledge that Labour is presiding over a huge poverty trap for our low-income lesser-skilled people. It is an indictment on this Government that after 4 years it has done nothing for the family I described—that is mum dad and two kids—trying to get off the benefit system working 8 hours a week to get a certain amount of income and as they seek to gain more income through work to try to improve their livelihoods they will have to work 50 hours a week before they get another dollar in their pocket. The Minister should be ashamed of what they are doing to our low-income people. 
MARK PECK (Labour—Invercargill) 
: 
 What an extraordinary speech from a man who was a Minister in a Government that cut benefits increased State house rentals presided over exactly that particular marginal tax rate and did nothing about it! When those members get into Opposition they become the job delegates for the low paid. I tell them that I saw that back in the 1980s up to 1990 before they were re-elected. However I have to say that they are hardly likely to get re-elected at the moment with the sort of shambles that they are in. I saw that then and I recognise it for what it was. It is so much cant. The only people who would be better off under a National Government and its tax policy would be the people on $70000-plus. If members know anything that is the only place they are polling any better and who are they getting the votes from? Rodney Hide! 
I tell the Committee that nobody is fooled by the protestations of the National Party—not a person. They know that Dr Brash will take something. He will take their holidays. That is what he will do. Dr Brash will take their pension. This is what he will do. Dr Brash will take their schools and hospitals. He will make them pay for them. Even worse than that Dr Brash will make sure that prisoners have to pay to go to jail. There will be private jails and prisoners will have to pay for the pleasure of going there. That is what they will do. That particular party should grow up and start to learn about economics. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I raise a point of order Madam Chairperson. I have no problem with what the member is saying—it is so ridiculous—apart from the fact that it has nothing whatsoever to do with the bill. There is nothing in Part 1 about pensions schools holidays or whatever he was rabbiting on about. 
The CHAIRPERSON (Ann Hartley) 
: The member is correct. Obviously the bill is about revenue income tax and I would ask members to keep to that. 
CRAIG McNAIR (NZ First) 
: 
 I shall speak briefly to Part 1 to state New Zealand First’s view. New Zealand’s First’s view on this very important part is clearly that the money collected from taxpayers as stated in this bill should be reprioritised by this Government with regard to social spending so as to place greater focus on the real needs of New Zealanders. The Government should do that rather than spend its income on the different social policy that it is spending it on. 
New Zealand First calls on this Government—and I call on the Minister as well to speak to this if he can—to provide more economic leadership with regard to this part of the bill and to focus less on other legislation like the Smoke-free Environments Bill. I believe that the lack of an export policy providing tax incentives for exporters research and development and so on and the continued running down of the country’s infrastructure is very unfortunate. 
Jill Pettis 
: For goodness’ sake! Where have you been for the last 5 years? 
CRAIG McNAIR 
: New Zealand First believes that the Government should be working on an economic vision that will help to lift living standards and provide some sort of future for our young people—and I just had to throw in the “young people” since I am spokesperson on youth affairs for the party. 
Jill Pettis 
: We can work that out. 
CRAIG McNAIR 
: I thank the member. But on a positive note I want to say that providing income tax exemptions for community trusts is a very positive move and that move is set out in clauses 5 and 17. There are provisions giving community trusts that are established under the Trustee Banks Restructuring Act of 1988 an exemption from income tax. So New Zealand First does support the other parts of this bill but we feel we have to oppose this part for the reasons I have just given. This Government is showing a lack of vision in the area of taxation not so much for income tax but for— 
Jill Pettis 
: That’s a very profound reason. 
CRAIG McNAIR 
: It is a very very profound reason. This Government needs to provide vision for exporters because it will be exports that will grow our economy. 
Hon DAVID CUNLIFFE (Associate Minister of Revenue) 
: 
 This debate reminds me a little of the ghosts of Christmases past; although perhaps we should call it the ghosts of decades past. This debate is all about tax rates and it reminds one of the early days of the 1990s. Let us recall some of the myths that have been sadly trotted out again today. 
John Key 
: What was the average growth rate in 1990? 
Hon DAVID CUNLIFFE 
: Let us start with that member—that newly ebullient deputy deputy deputy spokesperson on finance the man whom Merrill built the man who says that 20 percent of taxpayers are currently earning over $60000. 
John Key 
: They are. 
Hon DAVID CUNLIFFE 
: No I am afraid they are not. At the time this Government took office we upheld our promise. It was 5 percent. Now as a result of the growth in the economy and incomes that might have crept up a percentage or two but I would eat my hat if it were more than 7 percent. 
Rodney Hide 
: I raise a point of order Madam Chairperson. I am pushing it a little bit here but it is for the benefit of the new Minister. It was 7.2 percent at the time that this Government came in. Official records show that. It was not 5 percent. 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. 
Rodney Hide 
: I am trying to save the Minster from his own ignorance. 
The CHAIRPERSON (Ann Hartley) 
: Please be seated. That is not a point of order. It is a debating point. 
Hon DAVID CUNLIFFE 
: It is good that the honourable member has become so self-aware. Mr Key also said that company tax rates were now 10 percent higher than in Australia. Well pinch me I must be dreaming because I just cannot calculate how that could be true. Our basic company tax rate is 33c; theirs is reduced to 30c. Let us look at some of the associated costs. In Australia they abolished accelerated depreciation rates when they reduced their company tax rate. We still have them. In Australia there is a payroll tax of 6 percent for large employers. In New Zealand we have none. The top personal rate in Australia is 47 percent. In New Zealand it is 39 percent. As far as paying for one’s health is concerned in Australia there is a compulsory Medicare charge of 1.5 percent. We have none. They have a compulsory superannuation charge of 9 percent of one’s salary. We have none. They have a house-purchase stamp duty which is 6.5 percent of the house price. We have none. They have a land tax which is set at 1.5 percent of land value. We have none. And here is the biggie—they have a capital gains tax and we have none. So when I hear people say they want to pack up their business and jump across the ditch to the land of milk honey and wallabies because they want lower tax rates I say: “Mate good on you! Go for it cos you could be just a bit disappointed when you get there.” 
Mr Hide talks about 20 percent tax rates. That is really a blast from the past is it not? He said that if we reduce tax rates we will always get increases in productivity. “Reduce them how far?” I ask. Should we reduce them to zero? How good would productivity look? 
Hon Maurice Williamson 
: Very good idea! 
Hon DAVID CUNLIFFE 
: That has Maurice Williamson excited. That got two thumbs up from him. But how would we go with no education system? How would we go with no police? How would we go with no judges to enforce contracts? The proposition is patently absurd. I could go on and on but I think that tells us that what we are encountering is simply the ghosts of decades past. 
PANSY WONG (National) 
: 
 If that is the type of reply speech we get from the Minister in the chair Mr Cunliffe I think we should be spared. That was a very tiring speech—one that is always being trotted out. Without the 1990s the Government would not have got the gains it is getting in 2003. The National Party is definitely voting against Part 1 and the reason is very simple. I am an accountant by qualification. When we have a company that reports and says: “Wonderful! We have had a great year. We have sales and profits exceeding our budget.” everybody is overjoyed because the company earns its way and provides employment. The minority Labour Government announced that it has a bigger surplus than it had last year. Maybe that Minister can take a call and explain how the minority Labour Government earned a surplus that was bigger than budgeted for last year. It was achieved largely through taxation. Tax is not something that individuals and companies can volunteer and say: “Well because I think this Government provides a better service so we volunteer to pay more.” 
No it was compulsory. It is as my honourable colleague Dr Lockwood Smith said. It was statutory—it was achieved by legislation. People had no choice. They had to pay that tax. So in effect the minority Labour Government overtaxed people. Largely that surplus has come from business. Some people may argue that they are happy to pay more tax if the Government provides more services and they may say that the extra services are a justification. 
I want to come back to a tragic incident that the public can relate to. Miss Trish Grant who wrote the report on the latest tragedy from the Office of the Commissioner for Children—the tragic deaths of the two girls—asked why the priority for Government spending is on setting up a database for dogs and not a database for children at risk. That is a very sad reflection on this minority Labour Government. It is actually celebrating the overtaxing of our very hardworking small-business owners and it is upsetting the public in terms of how it is spending that money. 
So before that Minister gives us a lecture on how we are doing better than Australia he should reflect on the fact that the average income for an Australian is $200 per week more than it is for a New Zealander. He has given misleading quotations about the taxation rates of Australia. He has not told the New Zealand public the full story which is that although the top personal income tax rate in Australia may be higher they have a higher threshold. 
I think everybody owes it to the public to tell the truth. Members should give the public the whole picture and not mislead them. If anybody would buy into that argument of the Minster of Finance and say that higher taxation is good for the economy I wonder why he has stopped at 39 percent. 
The truth is that when this minority Labour Government put up the taxation rate it sent a very clear message to New Zealanders: “The more you earn the more you will be taxed.” The underlying assumption is to say that if people earn more and become well-off if they become high-income earners somehow they are doing something wrong and because they are doing something wrong the Government—[ 
Interruption 
] Rod Donald says that people who are hard-working are not contributing to society. When people earn more they can discretionally spend more and thus contribute to society. 
JOHN KEY (National—Helensville) 
: 
 What a woeful bunch of speeches from the Minister the mini-Minister and whatever Mark Peck calls himself! They need a good economic speaker. If I were any of those three I would go over to Treasury I would sit down and I would say: “Help! Shut the door don’t tell anyone we’re over here we don’t know anything we’re totally clueless. Could you possibly give us a hand?”. There are some very intelligent people in Treasury who will help and will keep it confidential. Those members have spent 15 minutes of our day in the Chamber today declaring to the people of New Zealand in their speeches that they are absolutely clueless. They do not know what drives the economy what takes things forward or how to build a growth economy. Why do we know that? It is because this is a Government that will not declare to the people whether its surpluses are structural or cyclical. 
Why will it not do that? It is because the Government knows they are not structural. It knows it has not done anything since it has been in power that has been pro-growth. It will not tell people when we are to go back into the top half of the OECD because it cannot work that out and every time Government members go over to Treasury the boys and girls there tell them that their policy and planning systems are so anti-growth that we will not get back into the top half of the OECD any time in our lifetime. 
The Minister in the chair David Cunliffe stood up—and misquoted me might I say: he said that I said that the top rate would affect 5 percent. What I said was that one in five—19 percent—full-time taxpayers now pay the top tax rate in New Zealand. That is a statement of fact. 
What a hopeless situation we have when somehow people think it is OK to increase the top rate because it affects 5 percent only—people earning NZ$60000. We think it is OK to increase the top rate to penalise those people and to tell them not to go out there and work harder. We do not want to give them incentives because they are rich by virtue of earning $60000! Do members know what the top tax rate in America is? People who pay that tax rate are earning US$500000. If we want to create incentives in this country and get people going they will have to have some real incentives. 
I refer to the Minister trying to tell us that the Paritai Drive sector were not the only people creating wealth. Members should think about this for just a moment. Maybe the Minister can pay some serious attention because clearly Labour Party members need an economics lesson. If the average growth rate can grow by just 1 percent more than Treasury’s long-term forecast which is currently set at about 2 percent—and we will be lucky if we can achieve that with this Government in action—the average income of all New Zealanders would double in 30 years. If we do not grow by 1 percent more it will double in 50 years. 
What do New Zealanders want? Do they want to double their income in 30 years or in 50 years? The Government thinks that putting in a progressive tax system that discourages entrepreneurs risk-taking and making the economy go faster is a really good thing to do. Why do we not put up the top tax rate to 95c in the dollar and while we are doing that why do we not bring in 4 weeks’ holiday in a couple of weeks’ time because that sounds like a really good idea as well. If we really get the boat rocking and rolling we will see how many people leave and get on those 747s. The Minister cannot tell us that we have positive migration that is a result of the Government’s pro-growth economy either because we all know that what is actually happening is that natural New Zealanders are leaving and going to Australia America and the United Kingdom and that we are letting a whole load of other people come down here. 
Frankly the whole population of the country could leave if it wanted to and we could still replace it with net migration. The Government may not have noticed but there are a billion people living in China. If China wanted to send 10 million of them down here we could have a population that is 2.5 times the size of the current one. No one should be fooled by thinking that we have positive net migration so that somehow this is a pro-growth economy. There is nothing pro-growth about this Government. If we can get growth out of the economy it will be superannuitants who will benefit. The people who will benefit are the very people Rod Donald was talking about. 
If Mark Peck does not know that—which he does not—maybe he should go up to Auckland and ask the average plumber what he or she is earning. The answer will be that it is double what he or she was earning before the growth rate happened in Auckland. That is what growth does. Growth needs economic incentives. Let people work hard enjoy those rewards and be investors and entrepreneurs. That is what we have to do if we want to get the country going forward. We will not get it by putting up an envy tax for no good reason. 
Hon DAVID CUNLIFFE (Associate Minister of Revenue) 
: 
 I take a very brief call to attempt to insert a few facts into this increasingly rhetorical discussion. Both Ms Wong and Mr Key—deputy deputyDawg—have argued about the level of the surpluses. Let us strip it down. 
The CHAIRPERSON (Ann Hartley) 
: The member cannot use that term. He will withdraw and apologise. 
Hon DAVID CUNLIFFE 
: I withdraw and apologise. The operating balance excluding revaluations and accounting changes is $5.6 billion. From that we must subtract $800 million for retained earnings after dividends of trading activities. 
Rodney Hide 
: I raise a point of order Madam Chairperson. This debate is actually on part of this bill. I ask the Chair to reflect on what the hell the definition of the operating balance excluding revaluations and accounting changes etc. etc. has to do with this bill. 
The CHAIRPERSON (Ann Hartley) 
: I remind the member that clause 3 is about rates of income tax. I ask the Minister to keep to the rates of income tax as I have reminded others. 
Hon DAVID CUNLIFFE 
: Very briefly other members have referred to the level of surpluses that have been generated by those rates and I am simply trying to explain the composition of those surpluses. 
Rodney Hide 
: I raise a point of order Madam Chairperson. That was a direct challenge by the Minister to the Chair after you had ruled. 
Jill Pettis 
: Oh sit down. 
Rodney Hide 
: Now I have the fishwife complaining and interjecting while I am on my feet on a point of order and the Chair does not seem to mind. 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. Please be seated. The member will continue and stick to the rates of income tax. 
Rodney Hide 
: I raise a point of order Madam Chairperson. 
The CHAIRPERSON (Ann Hartley) 
: I have ruled on the point of order Mr Hide. 
Rodney Hide 
: This is a new one. 
Hon DAVID CUNLIFFE 
: Madam Chair I fully accept your ruling. 
The CHAIRPERSON (Ann Hartley) 
: Mr Hide has another point of order. 
Rodney Hide 
: Speakers have instantly thrown members out of this Chamber for interjecting on a point of order—I think I myself may have suffered that indignity—but I notice that when the member opposite interjected you clearly heard her. You refused to comment and discipline that member. She should be gone. She is the whip—she should know better. 
The CHAIRPERSON (Ann Hartley) 
: Several members have interrupted this afternoon. I have not given a warning but I will certainly give a warning now. 
Hon DAVID CUNLIFFE 
: Very briefly to conclude the point at issue— 
Hon Judith Tizard 
: I raise a point of order Madam Chairperson. In that exchange an extremely unparliamentary term was used about a respected colleague. All members are honourable members and I ask that the offending member withdraw and apologise for that expression. 
The CHAIRPERSON (Ann Hartley) 
: I am sorry I did not catch that. Did the member— 
Rodney Hide 
: I wasn’t offended. 
Hon Judith Tizard 
: In his purported points of order Rodney Hide used an expression about the Government whip that is extremely unparliamentary. All members are honourable members and I find that term deeply offensive. 
The CHAIRPERSON (Ann Hartley) 
: The member used an unparliamentary description of a member. He will withdraw and apologise. 
Rodney Hide 
: I withdraw and apologise. 
Hon DAVID CUNLIFFE 
: Very briefly to conclude the point—and I fully accept your ruling—the implication of the rates as they currently stand with the economy growing as strongly as it is is that a cash surplus of some $5.6 billion translates to an available surplus after adjustments of around $1 billion which must be apportioned between debt repayment and new spending. The Opposition has called for tax cuts. That must be seen in the context of the available surplus of the day. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 In addressing Part 1 I endorse what my colleague John Key has again said about it. I was recently overseas and for the Minister to claim that these tax rates have not driven New Zealanders off shore is simply arrant nonsense. I met taxation refugees from New Zealand around the world who were escaping from— 
Sitting suspended from 6 p.m. to 7.30 p.m. 
DIANNE YATES (Labour—Hamilton East) 
: 
 I move  
That the question be now put 
. 
LINDSAY TISCH (National—Piako) 
: 
 We had an interesting debate prior to the dinner break. We saw the Government defending a high rate of taxation even though other countries in the world have actually reduced their rates. The OECD group of countries has reduced taxation over the last few years yet this Government has increased the tax rate from 33 percent to 39 percent for those earning over $60000. The Government said when it was planning to do that that only 5 percent of the population would be affected by it. That was on the Government’s credit card pledge which stated that only 5 percent of New Zealanders would be affected by an increase in the taxation rate. It was shown before the dinner break that in fact that rate has gone up to 19 percent. Nineteen percent of New Zealanders now fall into the category of paying the higher rate of tax. If we look at other countries around the world— 
Dail Jones 
: How many percent? 
LINDSAY TISCH 
: It is 19 percent. It has gone from 5 percent to 19 percent—20 percent or thereabouts—which is a fourfold increase. 
When we look at other countries’ tax rates we see they are coming down because it is a disincentive to have high tax rates. Any Government worth its salt will look very closely at investment growth and the incentive to invest. Where there are high tax rates there is a disincentive. Even countries like Russia have moved to a flat tax. It states here that Russia’s flat tax works. Well well! 
Hon Dr Michael Cullen 
: Zero! 
LINDSAY TISCH 
: No no. Russia’s flat tax is 13 percent. What is our corporate tax rate? Our corporate rate is 33 percent which is 10 percent higher than that of Australia. Why would anyone want to invest in New Zealand at a 33 percent corporate tax rate when Australia’s rate is 30 percent? We are seeing already that businesses are going off shore and putting their money in offshore investments because there will be more incentive there. 
In any country—[ 
Interruption 
] I was in the Chamber before dinner and I heard the Minister’s comments then that tax rates do not matter. I can tell him that if he were in business and paying those high tax rates he would be in for a big shock. Tax is the biggest compliance cost that businesses have to face. Numerous surveys have been done that state that the No. 1 compliance cost facing businesses is the higher tax rate. 
As well there are those on wages and salaries. Members may recall that it was National that reduced the tax figure and increased the threshold for tax. Back in the early 1990s when we had the higher tax figure the threshold was $30875. 
Hon Dr Michael Cullen 
: You didn’t change the tax rates in 7 years. 
LINDSAY TISCH 
: It was $30875 and National took it up to $38000. 
Hon Dr Michael Cullen 
: Rubbish! 
LINDSAY TISCH 
: I tell the Minister that the threshold was $30875 and National took the threshold for the 19.5c rate up to $38000. The rate was 19.5c up to $60000 when the rate changed to 33 percent. Under this Government the rate above $60000 has now gone up to 39 percent. 
There is no incentive for sole trader businesses to pay those high taxes. What are they doing? I will tell members what they are doing. Those sole traders are forming companies because as directors of companies they will be treated as employees of that company and will pay the personal tax rate on income up to $60000. Those earning over and above a taxable income of $60000 will pay a corporate rate of 33 percent only. That is a lot less and that is where the incentive comes in. A lot of small businesses and sole traders are forming companies—a company needs only one person—in order to reduce their rate of taxation from that 39 percent rate which is applied to income over $60000 to 33 percent which is the corporate rate. 
Hon Lianne Dalziel 
: Nonsense. What do you mean— 
LINDSAY TISCH 
: That is what is happening. I ask what the member knows about business. When businesses are being restructured one of the things looked at is how to reduce liabilities and those huge compliance costs. The No. 1 problem that businesses are facing is high taxation rates. That is identified in compliance cost surveys. 
NANAIA MAHUTA (Labour—Tainui) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 68 
New Zealand Labour 52; Green Party 9; United Future 7. 
Noes 44 
New Zealand National 25; New Zealand First 13; ACT New Zealand 5; Independent: Awatere Huata. 
Motion agreed to. 
The CHAIRPERSON (Ann Hartley) 
: As I have advised the amendment to Part 1 in the name of Rod Donald on Supplementary Order Paper 171 has been vetoed. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 68 
New Zealand Labour 52; Green Party 9; United Future 7. 
Noes 44 
New Zealand National 25; New Zealand First 13; ACT New Zealand 5; Independent: Awatere Huata. 
Part 1 agreed to. 
Part 2 Amendments to Income Tax Act 1994 
BRIAN CONNELL (National—Rakaia) 
: 
 I am delighted to be able to take a call on the Taxation (Annual Rates GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill. If we factor in time I suppose there are compliance costs in all those matters. I have not had the opportunity to take part in the debate on this bill but I would like to say for other than Part 1 that I commend the people who worked on the bill. I think that they have put together something that is very worthwhile and well considered so I am sending out bouquets to those people. 
I would like to concentrate in Part 2 on trans-Tasman imputation and credits and for the sake of accuracy I would like to read a bit of the commentary on the bill which states: “The bill changes the imputation laws to address the problem of triangular tax which involves the double-taxation of certain trans-Tasman investments. It allows Australian companies to allocate imputation credits (for New Zealand tax paid) to their shareholders in proportion to their ownership of the company. This arrangement is reciprocal and requires both countries to pass the relevant legislation.” It goes on to state that the amendments permit a new form of grouping for imputation purposes only which Australian companies can also join. That attempts to mitigate the problem that imputation credits cannot be passed through intermediate companies that are not resident in New Zealand or Australia. I say that that is sensible and closes that loophole. As I said the Finance and Expenditure Committee has worked on something that is rather complex and has come up with what I believe is a first-class solution. I have to say that attracting investment to this country is something that is desperately needed. I do not say this legislation in itself will do everything that is required but I think it is a step in the right direction. 
Yesterday I met with the executives of a multinational company called Weyerhaeuser. It is an international forestry organisation with a turnover of something like US$22 billion. They were out here looking at some of their investments in Nelson and the conversation that I had with them was very constructive. One of the things that the executives of that company were doing here was looking for opportunities to invest further but one of their concerns was the compliance regime that New Zealand is working under. They cited—the Minister may be interested in this—the Resource Management Act as the biggest turn-off to business investment in this country. Now in a constructive way I said that is something that everyone in this Committee has to get their heads around and try to do something about because it is clear that those executives are sending signals to us as are other international investors that we just have to address the compliance regime. 
I believe the Government has started down the right track with this legislation. I have been on record as saying that I think some of the work that the Government has done in some of its recent legislation is anti-business but I think this bill is a step in the right direction. It is critical that one of the things that we look at addressing beyond the Resource Management Act is our occupational safety and health legislation. Before anyone jumps on me I say I am the first person to accept that we need to do something about our safety record but I do not want that to go to the point where it distracts businesses from their core business. I think we have to look at our accident compensation legislation particularly as it relates to small business and what I sincerely believe to be just nonsense around the issue of 4 weeks’ holiday is something that we also should look at. 
So having tabled those views I would like to conclude by saying that this part is a step in the right direction. I think the select committee has worked well together to bring something to the Committee that is sensible. That demonstrates that when we put our collective will together to do something that is constructive we can come out with something that is to the betterment of this country. I commend the work that has been done thus far. 
ROD DONALD (Co-Leader—Green) 
: 
 I am delighted to speak to this part of the bill because this is the good-news part of the bill. I can see from Dr Cullen’s smile that he agrees with me on that. This is the part of the bill where the Government has finally succumbed to pressure from the Greens and others to end the taxation penalties on low and middle income workers who are saving for their retirement. I think all parties in the House would applaud that because it is totally unfair that anyone earning less than $38000 a year who is a member of an employer-subsidised superannuation fund should be faced with the employer component of that fund being taxed at a higher rate than the marginal tax rate of the employee. So I give a big tick to the Government for removing the tax penalties and also an acknowledgement and a note of gratitude to the Government for supporting the further Green Party initiative to include a 15 percent rate for those earning less than $9500 a year. I know that not many people are affected by that that it will cost the Minister only $1 million a year and that he is very cash-rich at the moment. But it does make this a genuinely progressive specified superannuation contribution withholding tax and that is a good thing. 
I would also like to acknowledge that the Government is prepared to back something that was I think originally a United Future initiative to ensure that the taxation rate on superannuation is set at the level of a person’s salary rather than his or her salary plus superannuation. That measure helps those people earning just under $38000 who are currently receiving superannuation or who may be eligible for it. Those are very important steps in the right direction and I would like to hear from the Minister to make sure that he is in planning to take a lead by ensuring that the superannuation contributions to Government employees will be taxed at the lower rate. He may be able to clarify whether that will apply to anyone in GSF New Zealand given its defined benefit scheme. Certainly for anyone in the National Provident Fund I hope the Government will opt to make sure that those employees are taxed at the lower rate. I hope that the Government will provide a lead to all employers to opt to pass on the tax savings to their staff. What is in this bill is optional; it is not compulsory. So I hope that employers will take that option will be generous and will give their staff an early Christmas present even though that measure does not kick in until some time in the future. 
That is end of the good news. The bad news is that Dr Cullen is keeping the taxation penalty in place. My amendment in Supplementary Order Paper 171 addresses that issue and it is unfortunate that the Minister has invoked the financial veto provision in order to stop my amendment proceeding. All that it would have done was to simply extend the current 6 percent specified superannuation contribution withholding tax rate concession enjoyed by employees earning over $60000 to low and middle income earners. In practice that would have reduced the 15 percent rate to 9 percent the 21 percent rate to 15 percent and for those earning between $38000 and $60000 the 33 percent rate to 27 percent. It would have cost the Minister and this Government only $77 million a year—a fraction of the $1.88 billion that the Minister wants to put into the Superannuation Fund which in turn will be gambled on the overseas sharemarket. 
I would like to thank the officials at this point for their drafting assistance with regard to my amendment. They did a sterling job and I am grateful for that. I would like to thank National members for supporting my amendment at the Finance and Expenditure Committee and I would have hoped that they could support me here in the Committee had the Minister not vetoed my amendment. I was disappointed that ACT United Future and New Zealand First did not support me at the select committee. I thought they were all family-friendly parties but never mind that. 
I do challenge Dr Cullen having vetoed my amendment to propose an alternative because New Zealand is in the grip of a savings crisis at the moment. The number of Kiwi workers in employer-subsidised superannuation schemes has plummeted from just over 310000 in 1990 to a mere 246946 as at 30 June this year. That is an indictment on employers but it is also an indictment on the Government for not providing an incentive to employers to provide subsidised superannuation to their staff. I believe my proposal was a serious solution to that problem and it was a solution that should have been adopted. 
GORDON COPELAND (United Future) 
: 
 I would like to speak briefly about three items in Part 2 of this bill. The first one concerns the large-budget screen production grants which are set out in Supplementary Order Paper 170 in the name of the Hon Dr Michael Cullen. United Future has signalled its support for those grants to proceed but we do so with a number of reservations. Although that particular scheme seems to have been well-thought-through and well costed and I am assured by the officials that it will result in net gains for the New Zealand economy instinctively in a way I think I still feel uneasy about the fact that it does involve a process of picking winners. We do open ourselves up to the criticism that if grants should be made for movies then why not for building luxury yachts for example? If the idea is to attract movie business to New Zealand through those grants then why not say that we can also bid into New Zealand the construction for example of luxury yachts that might otherwise be built somewhere else? So I think that we will get on to a slippery slope. 
The point I would like to make is that United Future for that reason would support a general decrease in the corporate tax rate itself. In that regard we are all square with the National Party in saying that we believe the corporate rate should be reduced from 33c to 30c in the dollar. However some of my reasoning is a little different from that advanced by John Key. He simply mentioned that that would bring the headline rate between Australia and New Zealand to a comparable level and that is a very valid point. But I think there are some more important issues than that. 
The first issue I would like to mention is that lowering the taxation rate would actually reduce the cost of capital for New Zealand companies. All companies assess the cost of capital after taxation and if the taxation rate is lowered to 30c in the dollar New Zealand would be brought back into a much more competitive situation with regard to the cost of capital if for nothing else than because normally we run a higher interest rate than virtually anyone else in the world. So I see that as very much a business-friendly thing that would reduce the cost of capital and encourage investment in this country. That is the first point I wanted to make. 
The second point is that by reducing the company tax rate to 30c in the dollar—when the personal tax rate remains at 39c in the dollar and the trustee rate stays at 33c in the dollar—we would increase the incentive for people to leave money in their businesses and capitalise them because if they withdrew money from their businesses then their tax would go up. If they went through a trust then they would go from a rate of 30c to one of 33c in the dollar. At the moment a lot of people go through a trust in order to avoid the 39c in the dollar rate. The gap becomes bigger if the company rate is reduced to 30c in the dollar and we create an incentive for people to leave money in their businesses. That would be good for business and good for saving and I believe it would unleash a dynamic scoring effect in our economy in the sense that the flow-on would be an increase in job creation and in wealth for all New Zealanders. Those are United Future’s reasons for supporting the bill but in our view not doing so at the cost of continuing to examine the possibility of lowering the corporate tax rate. 
The second matter I will mention in brief is Subpart S “Arrangements involving money not at risk” which is to be inserted in Part E of the Act by clause 14. I am delighted this action has been taken to sew up the blatant tax avoidance schemes that have been going on. In particular I congratulate the Inland Revenue Department on its recent success in the Advanced Communication Technologies of New Zealand case which involved hundreds of millions of dollars. When I look at tax avoidance arrangements I always keep something very simple in my mind. We have nurses for example who work very hard in the intensive care ward at Wellington Hospital and do fantastic work paying tax on every single cent they earn. I do not think it is acceptable that when some clever dick comes up with a so-called “smart” scheme for avoiding tax we should let him or her get away with it. Anybody who walks into an office and says that if we put $1000 into a scheme that will save us $2000 or $3000 against our tax bill—” 
John Key 
: Where do I sign? 
GORDON COPELAND 
: I say to John Key that if he buys into that and wants to sign up for it then he has succumbed to—[ 
Interruption 
] I was going to say avarice one of the seven deadly sins. It is avaricious to enter into schemes like that because at the end of the day all the other people of New Zealand pay the bill. 
RODNEY HIDE (ACT) 
: 
 I rise in support of my colleague Mr Copeland. He has absolutely hit the nail on the head because in New Zealand the more capital we have in our country the more productive we are. The more productive we are the more we produce and the higher our income. I see the Minister of Finance is shaking his head in disbelief. 
Hon Dr Michael Cullen 
: It’s crude but it’s roughly true. 
RODNEY HIDE 
: It is roughly true. Perfect! One of the things we can influence in New Zealand is the cost of capital and as my new-found friend and colleague Mr Copeland pointed out one of the things we can influence regarding the cost of capital in New Zealand is the tax rate on income. I know that Dr Cullen sat there and said: “If we lower the tax rate what can people do? A third will work hard and a third—well it will all balance out.” That was what we heard before tea. But we should think about it in terms of capital because people make decisions about where they invest their money. 
Hon Dr Michael Cullen 
: What has this got to do with Part 2? 
RODNEY HIDE 
: I am commenting on Mr Copeland’s speech. I know that Dr Cullen does not like to hear this. He would rather get up and give a stage I history lecture confuse the income effect with the price effect and then say that when it comes to tax the income effect always overwhelms the price effect because that is what he said before tea. He is certainly wrong on that in terms of the work-leisure trade-off and he is absolutely wrong in terms of capital because we live in a free world. I know that Dr Cullen would like to put an end to it but people choose where they invest their money. They decide whether to invest in New Zealand Hong Kong Japan the United States South Korea or Timbuctoo. 
What do people look at when investing? They look at two things: expected return and risk. After adjusting for risk they look at the expected return. I ask Mr Copeland what that is. It is the expected return after tax. So when we try to raise capital in New Zealand—Mr John Key from the National Party knows this and Mr Rod Donald from the Green Party knows this—the tax on capital income in New Zealand grosses up the cost of capital. It has to. So the higher the tax on income in New Zealand—including capital income—the higher the cost of capital in New Zealand the less capital we have to work with the less productive we are and the smaller our income is in consequence. I wish we had a Minister of Finance who understood that. Mr Copeland understands it and John Key and the National Party understand it. 
Hon Lianne Dalziel 
: What about secret commissions? 
RODNEY HIDE 
: I know that Lianne Dalziel the Minister of Immigration does not have a clue what we are talking about. I cannot help that—she is a member of the Labour Party. Labour members were too busy studying what was happening to the Sandinistas in Nicaragua to learn any basics about how to work or earn an income—basic economics. No they were into world-saving theories. I wish Mr Copeland would say: “Actually I am right”. 
David Benson-Pope 
: Taint. Smells doesn’t it? 
RODNEY HIDE 
: David Benson-Pope sits over there. Has anyone ever heard Mr Benson-Pope say anything positive in this Chamber other than growl and grumble? What a miserable life he must have. I say to Mr Copeland that he is absolutely right and that he should get rid of this rotten Government. He should not vote for this bill; he should vote for lower taxes more capital and a more productive and prosperous New Zealand. I ask him please to stop his support for this mad Labour Government because we can have— 
Hon Lianne Dalziel 
: The ACT party stands for secret commissions unpaid bills— 
RODNEY HIDE 
: Do members not love Lianne Dalziel? Has anyone heard Lianne Dalziel being positive? This is the most negative Government I have ever seen in my short time in Parliament; it has nothing positive to say. It starts from the Prime Minister and goes all the way down to David Benson-Pope who has never smiled in his life and never had a happy day in his life. 
ROD DONALD (Co-Leader—Green) 
: 
 I will return to Part 2 if I may. As I said when I last spoke— 
Hon Dr Michael Cullen 
: That was Part 1 we were just discussing. 
ROD DONALD 
: Yes I know. I did not want to point that out to Mr Hide because he might have delayed things even more. We are actually dealing with Part 2. 
Hon Dr Michael Cullen 
: Your responses slow down under certain conditions. 
ROD DONALD 
: Far be it from me to comment. As I said when I last spoke on this part employers deserve—I would say need—an incentive to provide subsidised superannuation to their employees. There are some good measures in the Business Law Reform Bill to reduce compliance costs and I see that as an indirect incentive. Obviously I see the good news in this part about eliminating the tax penalty as something of an incentive. But employers need a real incentive which is what my amendment is all about. It says to employers that if they give their staff subsidised superannuation the staff will get an extra 6 percent added to their savings which they would not get if employers paid it in the form of salaries. Surely that is a good thing because we need to shift money away from consumption and into saving. 
I believe that that is one of the major problems the country is facing. It is confirmed when we look for example at net household wealth which has declined 33 percent in the last decade in terms of personal disposable income. So while the value of our financial assets has gone up 39 percent in that period our household financial liabilities have gone up 146 percent and I think that points to a real problem. 
It is a dramatic and disastrous trend that this Government I believe has the opportunity to reverse. Yes the Government is shuffling in the right direction but it should be taking positive steps by providing employers and employees with real tax incentives to encourage people to save for the future. I know that the Government is looking at the “t’s” and the “e’s” and where they should go and I will wait for the Minister to make some announcements in that regard. But it certainly makes sense to me to defer some of the revenue the Government is currently making—at the point where people are making a contribution to their savings and employers are making a contribution—and to pick that up at the point where people are drawing down on that contribution when they retire. 
That would help solve two problems. It would reduce the embarrassingly large surplus the Minister is currently facing and it would also lead to more Government revenue being available in 20 30 or 40 years’ time when he is going to need it. Whatever the Minister does it is time for the Government to face up to the savings crisis. It is time we tackled the problems I was outlining. The Government claims with one breath that it needs to put money into the New Zealand Superannuation Fund but it is not doing enough to change the tax structure to encourage more second-tier saving. That is certainly what we want the Government to be doing. There are a lot of benefits in addition to that deferred income: the Government would help to facilitate households to get their net debt down; if more money is going into superannuation schemes there would be less need—hopefully no need—for foreign investment; and people would be more comfortable in their retirement. They are all good steps that I hope this Government will give serious consideration to now that it has exercised— 
John Key 
: What is our savings rate compared with Australia? 
ROD DONALD 
: I do not know but perhaps we could ask the Minister to comment on that. Certainly our savings rate is not good because if we look at the last Reserve Bank of New Zealand figures for the 2003 year we see that not only did we have negative savings of 4.5 percent I think but our household savings rate was minus 4.25 percent. But wait the news only gets worse. The rate is projected to be minus 7 percent for 2004 minus 6 percent for 2005 and minus 5.5 percent for 2006. It is time for the Government to reverse those disastrous trends. 
John Key 
: Our debt levels are the same as every English-speaking country. 
ROD DONALD 
: That may well be but I would still say to the Government: let us not follow the sheep let us plot our own path let us shift from consumption to savings and let us shift from speculative investment to productive investment. 
DIANNE YATES (Labour—Hamilton East) 
: 
 I move  
That the question be now put 
. 
GORDON COPELAND (United Future) 
: 
 I would like to take a brief call concerning Dr Cullen’s amendments to the specified superannuation contribution withholding tax on Supplementary Order Paper 170 which is being considered with Part 2 of this bill. 
I am delighted that the Minister of Finance has decided to introduce this important Supplementary Order Paper. I think it will give a very very fair outcome to taxpayers. Over 70 percent of all New Zealand taxpayers pay tax at a marginal rate of 21c in the dollar which is something that we frequently overlook. That is by far the overwhelming majority of taxpayers. For those people around the margin at the $38000 threshold it is important that this Supplementary Order Paper will determine that as long as their wages or salary in the previous year—or in the current year if that information is not available—are below $38000 they will in respect of the whole of the employer’s contribution enjoy that 21 percent rate. As it was originally introduced the bill provided that the whole of the amount in those circumstances was taxed at 33c in the dollar which would have been a clear case of overtaxation. 
Initially Dr Michael Cullen looked at a truly progressive rate—part of that amount being taxed at 21c and the other part at 33c—and there is now a move to tax the whole amount at 21c in the dollar. 
That is a great step forward. For once we are giving the benefit if one likes of that threshold-bracket situation to the taxpayer instead of to the consolidated account. It is a big step forward and I agree with Rod Donald that it sends a very important message to New Zealanders about the need for us to encourage private savings. Like Rod Donald I call on the Minister of Finance Dr Cullen to continue to work in this area because it is a step in the right direction. However on its own it will not get the job done. 
The next thing that needs to be tackled is the taxation rate on earnings derived from superannuation funds where again we have a flat rate of 33c in the dollar. As I have mentioned given that over 70 percent of taxpayers pay tax at 21c in the dollar they are clearly overtaxed in that regard. I think the solution to that is not difficult. I have had extensive discussions with the Investment Savings and Insurance Association and others who have expressed a willingness to undertake at their end—the investment end—the kind of compliance costs involved in allocating the earnings of the fund to each individual member and then deducting tax and sending a cheque to the Inland Revenue Department at the marginal tax rate of the employee. I would like to see that work move in that direction and I would like to see it pursued within the next year as well. 
I must say though that even then—like Rod Donald—I harbour some doubts as to whether that will be enough. We have a “taxed/taxed/exempt” superannuation regime in place at present. I sometimes wonder whether the overriding solution ultimately will be to grandfather the present scheme—I think we are one of the very very few nations in the world that has that approach—and go back to an “exempt/exempt/taxed” superannuation regime approach like most other nations in the world. I very much encourage the Government to keep working in that area because the stakes are high and we need to encourage more private savings in this country. 
Finally I say to Rod Donald that I am unable to support the amendments to Part 2 on his Supplementary Order Paper—which are now vetoed anyway—that would bring the rate back down by 6 percent to the lower tax bracket. The argument he put forward is actually based on a fallacy. He seems to think that the 33c rate for people on the 39c in the dollar rate is some sort of concession. The reality is simply that the Government increased the rate from 33c to 39c for people in the upper income bracket but at the same time it said that if people decide to contribute or have their employers contribute some of that into long-term savings for superannuation they would be taxed at only 33 percent. That is not really a concession in favour of high-income earners because they are already paying so much more tax than the people further down the chain. I do not think it is logical to say that because we are not taxing the people who are paying most—even in real dollar terms—of the tax in this country quite as much as we could be we should therefore give some relief to people down the chain. To me the logic of that does not stack up. Furthermore the officials advised the Finance and Expenditure Committee that that sort of system has been tried elsewhere notably in the USA and it was not successful. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I move  
That the question be now put 
. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 170 in the name of the Hon Dr Michael Cullen to Part 2 be agreed to. 
Amendments agreed to. 
The CHAIRPERSON (Ann Hartley) 
: The amendments to Part 2 in the name of Rod Donald on Supplementary Order Paper 171 have been vetoed. 
Part 2 as amended agreed to. 
Part 3 Amendments to Tax Administration Act 1994 
BRIAN CONNELL (National—Rakaia) 
: 
 I am just going to practise my Government speeches for 2005. I commend this legislation to the Committee. Part 3 is well-thought-through and very sensible. 
The question was put that the amendments set out on Supplementary Order Paper 170 in the name of the Hon Dr Michael Cullen to Part 3 be agreed to. 
Amendments agreed to and Part 3 as amended agreed to. 
Part 4 Amendments to other Acts 
JOHN KEY (National—Helensville) 
: 
 I rise to comment briefly on the importance of the zero rating of GST in financial services and just to say this: the financial services sector has produced some of the finest people in New Zealand! Their contribution has been absolutely incredible. It has been wonderful to see the way they have been distributed throughout sport culture arts and of course politics although I know not many! I believe that zero rating of GST will make this industry even more successful and more profitable and will add to the woes of the Green Party—that is their worries about New Zealand’s savings ratio. Even if we had the same savings ratio as Australia I do accept that reliance on foreign capital is an issue. The National Party will be supporting Part 4 of this very important bill. 
Part 4 agreed to. 
New Schedule 1 
The CHAIRPERSON (Ann Hartley) 
: New schedule 1 set out on Supplementary Order Paper 171 in the name of Rod Donald has been vetoed. 
The Committee divided the bill into the Taxation (GST Trans-Tasman Imputation and Miscellaneous Provisions) Bill the Taxation (Annual Rates of Income Tax 2003-04) Bill the Student Loan Scheme Amendment Bill (No 2) and the Child Support Amendment Bill (No 2) pursuant to Supplementary Order Paper 169. 
Bill reported with amendment. 
Children's Commissioner Bill 
Third Reading 
Hon Dr MICHAEL CULLEN (Leader of the House) 
 on behalf of the Minister for Social Development and Employment: I move  
That the Children's Commissioner Bill be now read a third time 
. I do so very briefly with some considerable pleasure because I was the Minister of Social Welfare responsible for the original creation of the Commissioner for Children. It was created initially by an amendment to the Children Young Persons and Their Families Act and because it had to be created as an amendment to the Act it had to be in effect a subsidiary office of the Department of Social Welfare as it then was. With this legislation we clearly will have a separate Children’s Commissioner who is independent in all forms from any other influence. I think that is a very very good thing indeed. 
We have been well served by the successive commissioners for children who have been appointed. They have reported on issues of great difficulty at times without fear or favour and in almost every case I can think of their suggestions have been useful ones and have been taken up by successive Governments in a variety of forms. I am very pleased to commend this bill to the House. 
KATHERINE RICH (National) 
: 
 I am pleased to stand on behalf of the National Party to speak on the third reading of this bill. It is a bill that we support but in saying that it is a bill that we still have some reservations about. On balance we think it is a bill that it is important to support because of the work that is done by the Commissioner for Children. It is extremely important work as we have seen with a couple of major reports that have been released by the Commissioner for Children over the last couple of years. 
I have to say though it is a shame that the Government has watered down the bill in terms of its original intention. When Labour first decided it was going to make changes to the Office of the Commissioner for Children in 1999 it had a very clear policy to make the Commissioner for Children independent. I will read from Labour’s 1999 election policy for the benefit of listeners at home. One of the objectives was to “make the Commissioner for Children an Officer of Parliament to ensure complete independence”. We have not seen that. The Government has backed away from Labour’s election policy of ensuring complete independence for the Commissioner for Children. It has backed away from allowing the commissioner to have full independence. I think that is one thing we should be very concerned about because if the commissioner is to be a strong advocate for New Zealand children he or she has to be very independent. The commissioner cannot be in a position where the Government can manipulate the message or manipulate the work of that office. 
That is why this side of the House was extremely disconcerted by some last-minute changes that were made to this bill. Some last-minute changes saw the Government increase the amount of control that it has over the commissioner’s office. One thing that very much worried this side of the House was the idea that the Minister could firstly control the output of the Commissioner for Children and secondly direct some of the work that is being done as well. Imagine if that had happened with the work that has just been completed that looked into the report on the investigation into the deaths of Saliel Aplin and Olympia Jetson. Here we have seen how important it is to have an independent office go in do the research and come out with an independent evaluation of what went right but more important in this instance what went wrong. 
It is of great concern that today we saw the Associate Minister for Social Development and Employment (CYF) Ruth Dyson just totally dismiss some of the key recommendations made by the Commissioner for Children in her report. One of the key recommendations was that there be a review of the roopu team. The roopu team was the group that looked after Maori cases in the Masterton office. Unfortunately we found out through this report that that team in particular had a caseload that was 36 percent higher than that of the general team in that office. That is not good enough. We saw in this report that at a key time that office lost staff. The staff felt they were under-resourced and understaffed and unable to do their job. That is why on this side of the House we have argued that those social workers although they are the ones being hung out to dry by this Government were very much on a hiding to nothing given the work pressures in front of them. If mistakes had not been made on those girls’ cases frankly I imagine another Masterton family would have had their children plastered all over a Commissioner for Children’s report. 
The Commissioner for Children can often say things that are unpopular and can often say things that the Government wants to dismiss as not being part of its policy. Today I think we have seen the beginning of what unfortunately might be a difficult time for the Commissioner for Children. I read out to the Minister today a comment made by Trish Grant who works in the Office of the Commissioner for Children. She was talking about some of the concerns she had about some recommendations that had been dismissed outright by the Department of Child Youth and Family Services—in particular the recommendation that the roopu teams be reviewed but also the recommendation that some of the key factors that contributed to some of the social workers making mistakes be evaluated and understood. She said: “I note that they haven’t been given the attention that they should have by the department or in fact the Minister I would suggest.” Clearly she is indicating some dismay at the way the Minister and the department have dismissed some of the key recommendations or have not really taken the time to evaluate those recommendations before deciding they would not be implemented. 
Ruth Dyson said today: “Well that’s just her view. That’s just Trish Grant’s view.” But that is one of the things I think is important to understand. The Commissioner for Children should and must give an independent evaluation of how he or she sees a situation. But the Government should not dismiss outright some of the comments the commissioner makes without fully evaluating some of the concerns. Some of the concerns that were raised were very real ones and they are concerns that the commissioner has raised with the Government in other reports. Up until this point most of the concerns have been taken into account. 
I asked Steve Maharey last year how many of the recommendations from the James Whakaruru report had been implemented. Still to this day all those recommendations have not been implemented. So I am wondering whether this Commissioner for Children’s report will be another one to gather dust. The Commissioner for Children can be a strong advocate only if people listen to his or her reports as they are published. That is why we should do all we can to preserve the strength of that particular role and make sure that that role is as independent as possible. 
That is why some of the changes that were made at the eleventh hour by this Government are quite unacceptable. They do more to dilute the role of the Commissioner for Children as opposed to strengthen it and we gave some pretty strong speeches about that in previous debates. But as I have said on balance it is important to support this bill. At least the direction is right. At least the bill is trying to make the Commissioner for Children a stronger advocate than he or she can be right now. It is important that the Commissioner for Children has the opportunity to give evidence and collect certain amounts of information which previously the office has not been doing. 
It is fascinating I think to see how diluted the Labour Party policy on this issue has been. It is here in black and white—although the Minister says it was not Labour Party policy—that it was the objective of Labour to “make the Commissioner for Children an Officer of Parliament to ensure complete independence”. Well we will not see that election promise come true. This was the one opportunity to keep that election promise. Labour has presented a diluted-down version of what was the original intention. 
This is a very important bill in terms of maintaining the independence of the Commissioner for Children. I would like to think that some of the concerns we have will not come true but it seems to me that the intention is to curb very much some of the comments made by the Commissioner for Children. As we are seeing increasingly the commissioner is starting to criticise some of the Government’s policy. One needs look only as far as some of the commissioner’s comments about the Government’s slow implementation of the Agenda for Children which was the result of a lot of conferencing and speaking. We have actually seen very little develop from that. That is why some of the children’s advocacy groups are getting increasingly agitated and frustrated at the lack of progress that is being made. 
It is important to salute the work that was done by Roger McClay and the work presently being done by Dr Cindy Kiro and her team and in particular Trish Grant the author of what I think is a very thorough report that really deserves to be read by the whole House and not just those members with an interest in social services. 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 I am sorry I was not here for the beginning of the debate to hear what was undoubtedly an outstanding oration by the Opposition spokesperson on this topic. 
Hon Lianne Dalziel 
: It was riveting! 
Hon STEVE MAHAREY 
: I am told from behind me that it was riveting and that members feel riveted as a result. This bill is important legislation as the previous speaker said. It is about children. They are vulnerable. Most of us understand that unless we put in place processes structures and policies that advance the issues around children their vulnerability will be a problem. There is a saying that children are our future. Certainly on this side of the House we would also regard children as our present. We are trying to raise dependable adults by being dependable adults ourselves at this time and providing children with the kind of nurture protection and support that will ensure they can themselves raise the next generation. 
The Commissioner for Children has the responsibility of advocating on behalf of children. This bill will allow the commissioner to exercise that responsibility by investigating decisions or recommendations that have been made around children by having a look at things that should be done but are not and by advocating for them. This is powerful legislation. 
As the House will know one of the driving forces of this Government has been to demonstrate a consistent interest in the issues surrounding children. That is why the Agenda for Children was developed. Its vision is to make Aotearoa New Zealand a great place for children—one where we look after one another. That great place for children is not something all of us would look around and see right now. We know that a lot of things that took place towards the end of the last century in particular meant that children were often placed in very difficult positions because of restructuring unemployment and change. But what we have as an aspiration this century from this Government is to ensure that one of the touchstones of success is whether we can once again say that this is a great place to be a child in and a great place to raise children. This bill will help us achieve that agenda. It is part of the Agenda for Children. We are asking ourselves how we improve the circumstances of children. 
Children themselves have been very much involved in developing our policy that led towards the changes in this bill. Part of the expanded role of the Commissioner for Children is a responsibility to develop a means of consulting with those children. I remember if I can make a quick aside here that one of the most distressing editorials I ever read was when we were developing the Agenda for Children. The  
New Zealand Herald  
asked why on earth we were consulting children. It was an extraordinary comment. I hope the paper now feels embarrassed at saying that. One of the things we found when we consulted children is they have a lot to say. They may not say what adults want to hear but they have a child’s point of view and it is usually a very well-thought-through view. It is a view we often find surprising because they come from a different perspective but it is none the less a valid view and one worth asking about. That consultation has led to important changes in this bill that were recommended to the Social Services Committee. We are very pleased that we will be enabling the commissioner to carry on consulting children and ensuring that what they have to say is heard. 
The legislation provides that the regulations that govern the commissioner will now be in a new separate statute. This strengthens the commissioner’s primary role as an advocate for children. I again want to mention the work of the Social Services Committee. It thoroughly canvassed the advocacy issue in the context of an earlier bill and provided helpful advice on how the independence and powers of the commissioner can be strengthened in order to carry out the advocacy monitoring and advice functions. 
 I want to mention once again Roger McClay who has featured a great deal in the National Party speeches on this topic. I was the Minister who worked with Roger McClay through most of his term. He was appointed by a National Government he had been a National MP but we worked with him very well. He maintained his independence during that period very well and I have no doubt that Cindy Kiro—as I keep saying to the House her name is not “Cairo” but “Kiro”—will be an outstanding commissioner as well and will be an independent one providing advice on advocacy monitoring and those general issues that she will address. I believe that the configuration provided by this bill is the best arrangement and has been informed by the committee’s in-depth consideration of the issue and the interim report of May 2000. I thank the committee for that. 
An additional avenue that this bill makes available is the ability of the commissioner to report to the Prime Minister on matters that affect children’s rights. We should remember that is a major change. I point out to Opposition members who complain about this bill—and I know they are doing so recklessly because I know that no one disagrees with it; those members are just doing what Oppositions do and that is to waste our time arguing about things that we should not be bothered arguing about—that it also adds in the ability for the commissioner to go straight to the Prime Minister about issues that affect children. That is an important development. 
Let me reflect quickly on the United Nations Convention on the Rights of the Child. The commissioner now has explicit new functions that include raising awareness and understanding of children’s interests rights and welfare as well as raising understanding of the United Nations Convention on the Rights of the Child. That convention is one of the United Nations’ core human rights instruments. It has 54 articles that set out a wide range of agreed rights to provision protection and participation. New Zealand ratified the convention in 1993. It is required to report on its progress every 5 years. The convention is included as a schedule to the bill for information and reference purposes in order to increase the general knowledge and understanding of it within this country and to show that the Government is committed to it. 
When we hosted all the other children’s commissioners around the world here in New Zealand a couple of years ago we found that not only the fact that we had one of the first if not the first commissioners for children made us a leading country; we are also leading the world because we have built into our legislation responsibility to comply with the United Nations Convention on the Rights of the Child. We received an enormous amount of praise for doing that. We can say to any criticism from the other side of the House— 
Hon Brian Donnelly 
: Section 59! 
Hon STEVE MAHAREY 
: I can tell that Brian Donnelly is just aching to get up if Barbara Stewart will allow him to say how much he supports this particular bill. I can see him sitting very happily across the other side of the House looking a little like a political Peter Jackson this evening as he smiles across the vista of the House. 
Hon Lianne Dalziel 
: Michael Jackson? 
Hon STEVE MAHAREY 
: No Peter Jackson. He has that same sort of New Zealand shape. We all know that we have a Government committed to the improvement of children’s rights and we have built that into the legislation. I think people right around the world will think that is very very important. 
I conclude by thanking everyone for being involved in this particular bill. It has been a bill that has been around for a wee while. That does not mean it has not been important to the Government. We had an early election during the passage of this bill. That meant reordering the Government’s Order Paper when we came back into the House and thereby slowing down the progress of this bill. I am absolutely delighted with the work that has gone on here. There is consensus about the importance of the commissioner about her role about her independence and about what she must be enabled to do for children. Therefore across this House we do have multi-partisan agreement that we should support this person to do all she can to lead her office to improve the rights and lives of children throughout this country. 
I close by saying that children are not just our future; they are our present. They are with us now from today and from this evening. It is our obligation to create a world for them that allows them to be the kinds of adults that we would aspire them to be. I thank everyone who has helped with this bill and I commend it to the House. 
BARBARA STEWART (NZ First) 
: 
 I am pleased to rise on behalf of New Zealand First to support the Children’s Commissioner Bill. We are very pleased to see it finally being passed. The bill truly seeks to support and enhance the interests of our children. New Zealand First has always said that the quality of our future is determined by the quality of the children we leave to our future and that quality is determined primarily by the way that we treat our children and also by the legislative framework around which we deal with them. 
It is the role of the commissioner to be an advocate for our youngest citizens and to ensure that we are all aware of the issues that affect this group so that appropriate changes can be made. That independent advocacy role is absolutely essential. The recent tragic examples of atrocities committed against children show that for some children New Zealand can be a very dangerous place. It is for these children in particular that the commissioner can speak and has done so on far too many tragic occasions. 
The recent reports by the commissioner into the deaths of some of our youngest citizens ensure that we see an independent assessment of the situation—something that is always needed. The reports we read are always very thorough and a credit to the commissioner. It is absolutely essential to ensure that the commissioner and her office are independent because it is only then that that office can work as an advocate for children—apart from any political pressures and outside of any Government. That has always been one of the strengths of this particular office. 
Inclusion of the text of the United Nations Convention on the Rights of the Child is a precedent-setting approach. New Zealand is one of the very first nations internationally to include the text of the convention with a major piece of legislation. If the Government is committed to this convention being a powerful tool by which children’s rights are protected and promoted in this country then realistic and meaningful ways of increasing New Zealanders’ knowledge and understanding of the convention must also be explored. If we look at the convention we can see that there is one part of our legislation that the United Nations has criticised on more than one occasion. Each of our previous commissioners has said that we must get rid of that part of the law if we are to accord our children reasonable rights—that is the right of parents to beat children. We will be watching with great interest the action that the Government takes on this issue. 
Like the Minister New Zealand First believes that the new clause placing an obligation on the commissioner to consult with children in certain circumstances promotes an approach that empowers children and young people to participate in any decisions that affect them. We must give meaningful consideration to what children feel about their lives. That is absolutely essential. The bill truly seeks to support and enhance the interests of all of our children. It provides a real voice to one of the very few independent advocates speaking for our children and that is absolutely vital. 
This bill contributes to improving the lives of children in New Zealand by improving the ability of the commissioner to protect their rights their welfare and their interests. However a Government truly committed to improving the lives of New Zealand children must also address the wider issues of affordable and accessible health care quality education sustainable employment opportunities for their caregivers and the alleviation of poverty. This bill enables the commissioner to more easily enhance the protection and provision of rights for our New Zealand children. The sentiment is really clear—we value our children. New Zealand First supports this bill. 
SUE BRADFORD (Green) 
: 
 Like other parties in the House tonight I stand to welcome the third reading of this bill. The Green Party is pleased that this rather delayed piece of legislation has finally made it through to its final stage. I am glad that our new commissioner will now have a better legislative framework around her office. It is of course very timely that we are working on this bill just now both in terms of strengthening and clarifying the role of the commissioner and in terms of incorporating the United Nations Convention on the Rights of the Child into New Zealand law. 
 All of us in this House are highly conscious at the moment of some of the events of the last few months including the death of yet another child Coral Burrows the outcomes of the baseline review of the Department of Child Youth and Family Services and the most recent reports into the deaths of Olympia Jetson and Saliel Aplin. We have already had a debate in the House last week about the two Aplin-Howse reports and I do not want to relitigate the content of all those discussions here tonight. However I want to say that the one of the critical things that was revealed in those reports was the way in which the adult world appeared to be simply unwilling and unable to hear the voices of those desperate children. Ultimately the only person to blame for those children’s deaths is their murderer—as a number of commentators have been at pains to point out over the last few days. But that does not mean that all of us should not make a better effort as the Minister has been saying to take the time and be really willing to listen to what children are trying to tell us. 
Whether it is our own children at home and those in our immediate personal lives or whether it is children with whom we work in a professional capacity we all need to do more to understand and act on the clauses of the United Nations Convention on the Rights of the Child. It demands among other things that we should make the best interests of the child a primary consideration in all public and private actions; that we should assure the child who is capable of forming his or her own views the right to express those views freely on all matters affecting that child; and that we should take all appropriate legislative administrative social and educational measures to protect children from all forms of physical and mental violence and abuse. 
Recent events have once again exposed the gaps in our adult systems to brutal scrutiny and shown them to have failed. Once again it is children who have paid the ultimate price for that failure. Indeed it is timely that we are now passing the commitments of the United Nations Convention on the Rights of the Child into law. I just hope that we as legislators take this responsibility very seriously in the years to come no matter what political party we come from. 
Like every other country in the world New Zealand badly needs a place within the bureaucracy where children come first and where the rights of children in all sorts of respects can be advocated for without fear or favour. Our new Commissioner for Children Cindy Kiro and her staff are to be congratulated on the work they have done so far including the Aplin report. I am sure that that augurs well for the future of the office in this new era. It is important that having passed this law we do not try to haul the Commissioner for Children and her colleagues back because we disagree with them over any particular issue politically or tactically. 
It is important that all of us in this House respect the newly strengthened mana of the office and the even greater mana of the United Nations Convention on the Rights of the Child that lies behind it. There will be times when we will disagree with what the commissioner says whether we are in or out of Government. However I hope that MPs public servants and others will make it their responsibility to pay more attention to what comes from that office than perhaps some of us have in the past. Of course that does not mean that we should not critique or debate what comes out of the Office of the Commissioner for Children. In fact quite the opposite; rather we should take the responsibility of engaging in these debates seriously and pay attention to what is happening whether or not we agree with any particular statement or analysis. 
It will be really interesting to see what steps are taken to carry out the new legislation in practice. In particular I am keen to see how the new clause requiring the commissioner to develop appropriate means of consulting with children so that their views can be taken into account is implemented. The Green Party was very keen to support the addition of that clause during the select committee process. We saw it as critical if we were to meld the intentions of the United Nations Convention on the Rights of the Child itself with the purposes of the bill in whose schedule it lies. 
Like other colleagues who sat on the Social Services Committee when we considered this bill in the last Parliament I thank all the individuals and groups who took the time and effort to make submissions on the bill the officials who helped us and our chair at the time Taito Phillip Field. I hope our work all that time ago has sown good seeds that will now be nurtured and grown so that in all sorts of small ways the future of the children of this country will be brighter. I wish the new commissioner and her staff all the best in their mahi and I look forward to the flowering into reality of all those fine intentions. 
JUDY TURNER (United Future) 
: 
 I rise on behalf of United Future to speak in support of the Children’s Commissioner Bill. I shall focus briefly on four particular aspects of the bill for which we are supportive. The first is the improved appointments process for commissioners. We applaud the more transparent process the bill sets in place. This commission does not necessarily need to be led by senior public servants nearing retirement so the ability for the position to be widely advertised so that the most suitable person can be found is vital. Submitters to the bill were very clear that they wanted assurance that people with the relevant skills and experience would not be sidelined by more politically motivated candidates. 
The second area we are pleased about is the strengthened functions of the commissioner. The specific statutory powers that enhance the commissioner’s role in supporting the implementation of the United Nations Convention on the Rights of the Child are great. The recent release from the commission on the report into the Aplin murders demonstrates the effectiveness of the commissioner to examine critically the systems that should serve the needs of New Zealand children. The value of commissioners is that they can always stand in the gap for those they are mandated to advocate for when others fail to. Children should enjoy the support of parents and family educational facilities social services law enforcement agencies neighbours and the like. When that does not happen for whatever reason someone needs to take up the call. 
The value of this commission is not just its advocacy for individual children but the connections it makes between specific cases and trends affecting children in New Zealand. At a time when there is call for greater inter-agency cooperation the Commissioner for Children provides a much-needed umbrella for child-focused organisations to refer to. The inclusion of children’s rights as well as their interests and welfare in the primary function of the commission is a welcome inclusion. Widening the investigative role of the commissioner to issues beyond those that arise through the Department of Child Youth and Family Services is a sensible extension of the important work that the Office of the Commissioner for Children must do. 
Thirdly we are thrilled about the consultation with children provisions. Consulting with children about issues that affect them is also a positive and strengthened role of the Commissioner for Children. Helping children to articulate their concerns without putting words into their mouths is often a specialised field of inquiry. However children do have opinions on most aspects of life and when decisions are being made that have direct ramifications for them they should be consulted. 
Lastly we are pleased about the stronger inter-agency links between the commission and other statutory offices. One of the strengths of any commission is the network it establishes with other agencies. The obligation to refer when there is another more appropriate commission or agency to help a member of the public means that the public is well served and any unnecessary duplication of work is avoided. That provision is particularly important for commissions because of the potential broad base of the work they undertake. United Future is therefore happy to support the passage of this bill and offers its congratulations and best wishes to the new commissioner and her team. 
Dr MURIEL NEWMAN (ACT) 
: 
 I rise on behalf of the ACT party to speak in the debate on the third reading of the Children’s Commissioner Bill. It has a long history in terms of trying to get passed into law. It started out as a member’s bill sponsored by John Wright of the Alliance. It was interesting that the Labour Government promised to rush it through when it took the bill over during the select committee process. It has been a long rush—4 long years—but never mind it is here today. 
The ACT party has opposed this bill. We oppose it for a couple of reasons. Essentially we oppose the idea of commissions. Commissions are basically customer service organisations that take the heat off Ministers. It seems to us that if people have a problem with children and with the system they should be contacting the Minister responsible who can do something about it. The Minister has the discretionary powers. Although the Commissioner for Children does a very good job in his or her advocacy role he or she cannot help individual cases. The commissioner is even excluded under the provisions of the bill from being involved in any issue or case that is in front of a court or a tribunal. 
 Many of us as members of Parliament are written to all the time by parents who are fighting with the Family Court the Department of Child Youth and Family Services and so on. The Commissioner for Children would get many more such letters but unfortunately he or she cannot do anything by law. The commissioner’s office raises expectations that families out there that are struggling with the system will be able to be helped but essentially they cannot be helped. 
There is a second reason ACT does not support this bill. I have been noting tonight in this debate that the Minister Government members and parties that support the Government have been talking about the fact that the commissioner is independent. That is totally wrong. The commissioner’s office is administered by the Ministry of Social Development. It is under the umbrella of the Government’s social welfare agency. Secondly the commissioner is appointed by the Minister. If the commissioner were appointed by a cross-party process or in some independent way then maybe we would have revisited our view on this bill. The point is that it is a political appointment and it is a political office. Because that is the case we know we will never get honest open truth about issues that affect children and families—issues that should be being pushed into the view of Parliament and the wider public in an honest manner. We do not get that here. 
Interestingly the Social Exclusion Unit under Tony Blair’s Government in the United Kingdom performs some of those roles. It actually talks about some of the tough issues that surround child abuse and children who are harmed in their families. The unit is quite fearless in talking about the role that family breakdown and long-term welfare dependency play in child abuse and in being open about the fact that many children in foster care fail to do as well as children who are living in a family whether it be their own family or an adoptive family. Here in this Parliament and this Government we do not talk about those issues. They are all swept under the carpet because it is not seen to be politically correct to do so. 
That is my real worry about the Commissioner for Children. Although the commissioner may want to raise some of the tough issues to do with children and the way we are bringing up kids in New Zealand he or she will be silenced by the fact that the Minister for Social Development and Employment does not want these issues to be put into the public arena. If the Minister did want those issues to be put into the public arena then he would enable it to be well known that child abuse more often occurs in broken families where there is a long history of welfare dependency and he and his Government would do everything they could to reduce long-term welfare dependency in New Zealand which would include helping solo mums to get back into the workforce and get off welfare. 
There is a bizarre situation in this country whereby the Ministry of Social Development has a policy agency that has even published reports stating that long-term welfare damages children and that sole parenthood damages children. Yet this Government passes laws that make both of those situations worse. We now have laws that say essentially that if a mother with a new baby goes on to the domestic purposes benefit she can stay there until her youngest child is 18 years old and she will not be required to take a job. That means that that young woman could be on welfare for life. If she chooses to have another baby at the right time she will have a whole lifetime of being dependent on the taxpayers of New Zealand for her well-being and of being unable to be a working role model for her child. 
One of the most important things parents can do for their children is to teach them the values of hard work and to take responsibility themselves as parents and to teach their children to take personal responsibility. We do not talk about any of those things because the Government does not want those links between family breakdown and welfare dependency to be related back to the growing levels of child abuse in this country. I am not saying that they are the only issues—we all know that child abuse is very complicated—but until we have an open and honest Government that will allow an open and honest debate about these issues we will never start to solve the difficult problems that face us and every child today. 
The Commissioner for Children is excluded from being involved in the Family Court and—[ 
Interruption 
] I raise a point of order Mr Speaker. The level of interjection is such that I cannot even hear myself speak. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I agree. There will be no more interjections that are continuous like that. 
Dr MURIEL NEWMAN 
: The Family Court is an area that the Commissioner for Children should be speaking out clearly on. There was an article in the  
New Zealand Herald 
 just a couple of weeks ago by a Family Court lawyer who identified ways the Department of Child Youth and Family Services fails when it brings cases in front of the Family Court seeking to take a child from the parents’ home or to place a child in care. The article stated that the department often does not turn up on time that it does not have its case organised and that half the time it is a complete and utter shambles. If there is anything the Commissioner for Children could do to help make things better for the department so that it can help solve child abuse in this country that thing should be the commissioner speaking out very strongly about what goes on in the Family Court and lobbying for more openness. If we had an open Family Court the public could judge for themselves and some of these problems would disappear pretty quickly as the Government realised that it had to get its act together. 
I come back to the issue of accountability and responsibility. As I said parents and the public should be going to the Minister rather than having to go to the Commissioner for Children to talk about the difficulties they have with the Department of Child Youth and Family Services. But I have to say that we have a bizarre situation right now. The Minister who was in charge of the department previously Steve Maharey basically ducked away from any responsibility for the department once the baseline review was due to come out. That review has been completed and we now realise just how deep and systemic the problems and failures are within that department. Now there is a new Minister Ruth Dyson who fails to accept responsibility for her department. We cannot get the Minister to accept responsibility in this House and it is that Minister to whom people should be going when they have problems with the department or problems with children in this country. 
The last reason why we do not support this bill—apart from the fact that the commissioner is a political puppet and apart from the fact that it shields the Ministers from true accountability—is that the Labour Government in enacting the United Nations Convention on the Rights of the Child will use the Office of the Commissioner for Children as a back-door way to repeal section 59 of the Crimes Act and thus ban smacking in New Zealand. The Government will use a back-door method—through the Office of the Commissioner for Children—to do that. I warn New Zealanders that that is on the Government’s agenda and it is one other reason why we do not support that office which is a political machine of the Labour Party. 
A party vote was called for on the question  
That the Children's Commissioner Bill be now read a third time. 
Ayes 106 
New Zealand Labour 52; New Zealand National 25; New Zealand First 13; Green Party 9; United Future 7. 
Noes 8 
ACT New Zealand 7; Independent: Awatere Huata. 
Bill read a third time. 
Hazardous Substances and New Organisms (Transitional Provisions and Controls) Amendment Bill 
First Reading 
Hon RICK BARKER (Minister for Courts) 
 on behalf of the 
 Minister for the Environment 
: I move  
That the Hazardous Substances and New Organisms (Transitional Provisions and Controls) Amendment Bill be now read a first time. 
 At the appropriate time I will move that the bill be referred to the Education and Science Committee for consideration that the committee report the bill finally to the House by 13 February 2004 and that the committee have the authority to meet at any time while the House is sitting except during questions for oral answer and during an evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 193 and 196(1)(b) and (c). 
In June the Government announced a strategy to improve the workability of the hazardous substances provisions of the Hazardous Substances and New Organisms Act. This strategy was developed in close consultation with industry leaders and focuses on improving workability to enable the Act to better serve its purpose—that is to protect the environment and the health and safety of people and communities by preventing or managing the adverse effects of hazardous substances. The strategy identified a number of prioritised actions with the most critical actions delivered first. This bill is the first legislative action identified in the strategy. The bill’s primary objectives are to enable the practical application of controls to all hazardous substances and to provide for practical management of the transitional period. 
This bill in providing for those outcomes reduces the cost to the Government and industry reduces barriers to innovation and better protects the environment and the health and safety of people and communities. The bill does not affect the Act’s operation over new organisms at all. 
As I stated earlier the changes in this bill reduce the costs to industry and to Government and will reduce the barriers to innovation. Costs to industry are reduced by providing for cost-effective controls to be assigned to all hazardous substances existing or new regulated under the Hazardous Substances and New Organisms Act whether they are explosives ammunition fuels solvents printing inks window cleaners lubricants poisons or fly sprays. Costs to the Government are reduced by removing unnecessary constraints on the processes of transferring existing hazardous substances. The transfer is the process of assigning each existing hazardous substance a hazard classification and appropriate Hazardous Substances and New Organisms Act controls thereby replacing the controls that previously applied under former laws such as the Explosives Act the Pesticides Act and the Toxic Substances Act. Transfer is primarily a technical process that will bring the regulation of hazardous substances under one statute—the Hazardous Substances and New Organisms Act. 
The bill provides for transfers to be effected by publication of a decision of the Environmental Risk Management Authority as a notice of transfer in the  
New Zealand Gazette 
 rather than by making an Order in Council. That is more efficient and timely with the same health and environmental outcomes as a result. The level of consultation with the community and industry will be the same as for the present day transfer process. Once the existing hazardous substances are transferred they will be used as similar reference substances by applicants when applying to introduce a new hazardous substance. That enables processing via the lower cost lesser information and faster rapid-assessment pathway. Therefore by enabling a transfer to proceed in a more efficient and timely way costs to industry are reduced as approvals for new hazardous substances become faster and more cost-efficient to obtain. 
I stated earlier that the bill provides for protecting the environment and the health and safety of peoples and communities. The level of protection afforded by the Hazardous Substances and New Organisms Act is strengthened by this bill. By enabling faster and more cost-efficient approvals we make the introduction of safer new-generation substances easier thereby helping to reduce the overall level of risk from hazardous substances. This also reduces barriers to innovation and provides greater opportunity for smart economic growth. 
This bill reduces the costs to industry by providing for exemptions that allow the Hazardous Substances and New Organisms Act controls to be phased in as long as the predecessor controls are complied with in the meantime. An example of this is labelling that clearly communicates the hazards of any given substance to all users of that substance. The bill enables the authority to specify that Hazardous Substances and New Organisms Act labelling requirements need not be met until a date specified by the authority provided that in the meantime retail stocks comply with the predecessor requirements. This avoids the costs of relabelling existing retail stock. New retail stock only will require the labelling. This provides legal clarity for business management of risks and cost-effective implementation of change. Hazardous Substances and New Organisms Act controls allow businesses to develop innovative cost-saving measures in managing the risk of substances. That scope for innovation is a significant benefit for business. The bill allows those businesses that wish to take advantage of performance-based Hazardous Substances and New Organisms Act controls to do so proactively prior to the substances they manage being transferred to the Hazardous Substances and New Organisms Act and further removes a dual regulatory regime that would otherwise apply. 
In conclusion this bill includes a number of provisions that though individually modest collectively will provide meaningful reductions in cost to industry and the Government and will reduce barriers to innovation. Importantly the provisions will do so without compromising the level of environmental and health protection afforded by the Hazardous Substances and New Organisms Act. The changes in this bill will ensure that the processes of the Hazardous Substances and New Organisms Act work better without compromising what the Act originally set out to achieve which is a healthy environment for all New Zealanders. I commend the bill to the House. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 It was very interesting to hear the Minister for Courts give a speech on the bill which is very technical and in many respects holds great hope in terms of doing what is needed in New Zealand and that is reducing compliance costs. Unfortunately the Labour Government does not have a legacy of reducing compliance costs but National will be supporting this bill to the select committee because it does hold that hope. The explanatory note states: “The amendments minimise the costs to business and Government and reduce barriers to innovation” and that is exactly what the  
New Zealand Biotechnology Strategy 
 and the Biotechnology Taskforce have pleaded with the Labour Government to implement in order to achieve transparency predictability and best regulatory practice. 
As I say I am optimistic that this bill after it has been to the select committee may achieve those things. But what does the Government say about it that gives us some degree of hope? It says that it hopes the amendments will minimise the costs to business and Government and reduce barriers to innovation by five different mechanisms the first of which is “enabling practical controls to be assigned to previously assessed existing hazardous substances by providing the Environmental Risk Management Authority with flexibility when assigning controls:”. There is no doubt that in the old regime there was a real merry-go-round of compliance costs and regulatory requirements that hopefully will be smoothed. 
The second mechanism is “streamlining the transfer process through removing the need to effect transfers by making an Order in Council:”. So again the somewhat cumbersome process of going through an Order in Council for each of these new substances will be circumvented—provided all the checks and balances are in place. Hopefully during the select committee process we will be able to confirm and improve that situation. 
The third mechanism is “providing for a smooth transition by enabling the Authority to grant businesses exemptions from complying with transitional controls to proactively move to the HSNO controls prior to transfer of the substances they use manufacture or import:”. That might seem a somewhat complicated phrase but in essence it means that those businesses that will move to the new Act and the new amendments to the Act will be able to avoid having to have dual compliance with the old regulations as well as with the new and the transitory. One always worries when one sees the term “grant business exemptions” but as far as I can gather in this circumstance it seems reasonable. The fourth mechanism is “providing for a smooth transition by enabling the Authority to allow businesses to continue their compliance with transitional controls and move them to HSNO controls under a staged programme:”. Again that seems sensible. The fifth mechanism is “enabling the assignment of cost-effective controls to all hazardous substances.” 
I hope that is not just Government rhetoric. I hope indeed that there are cost-effective controls for all hazardous substances because certainly when we were dealing with the new organisms part of this bill the controls went to extreme lengths that I believe were totally unnecessary and inappropriate. In many respects they were symptomatic of a Labour Government gone berserk in terms of not understanding risk management. Hopefully the fifth mechanism “enabling the assignment of cost-effective controls to all hazardous substances” will become a reality. 
There are some very interesting statements regarding the regulatory impact and compliance cost statement. It is important to be aware that collectively these problems affect all existing hazardous substances—of which there are about 80000—and an estimated 90 percent of new hazardous substances. It is pointed out that those unintended costs reflect a huge regulatory failure of the past and Government intervention is required to remove those costs. It certainly seems to be extremely reasonable in that respect. 
I note some optimistic predictions that the net benefits to industry will be considerable and obviously it will be important to ensure that submitters are in agreement with what the Government is trying to do here. The net benefits to society the Government says are that improved compliance due to improved understanding will result in health safety and environmental gains. Again it is very useful to have these fine words—I remember one of the submitters to the Hazardous Substances and New Organisms Act saying that fine words do not necessarily butter turnips—but it would also be useful to have an audit to know whether there really are net benefits to society. 
Jeanette Fitzsimons 
: Parsnips. 
Dr PAUL HUTCHISON 
: Parsnips or turnips—I think either would be appropriate. The primary benefit to Government is improved efficiency in assigning controls to all hazardous substances and ensuring compliance with those requirements. There is no doubt that it is important they all come under one bill rather than under the diverse number of bills they have been under for a long period of time. That also is sensible. 
I want to give one other quote from the regulatory impact and compliance cost statement: “… the HSNO controls replace any former controls (under previous legislation). All existing hazardous substances must be transferred by July 2006.” So there is an imperative on the Government to make sure this legislation is worked through and it certainly gives the Government plenty of time. The Act came into force for hazardous substances on 1 July 2001 and these are the amendments that will mean this operation is feasible. 
Finally I want to make a point about new section 95B inserted by clause 6 which creates a licence that authorises the possession of a hazardous substance. A licence under this section is required if the authority makes it a condition of the authority’s approval of a substance and the authority must grant a licence if it is satisfied the applicant is a fit and proper person to possess the substance and meets the relevant test certification requirements. The “fit and proper” test will be prescribed by regulations made under the Act. Once granted the licence authorises the possession of the substance specified in the licence in accordance with the terms and conditions of the holder’s licence and the approval of the substance. As members can see this is a highly technical bill. Hopefully it will achieve what the Government plans. The National Party is supportive of the bill going to the select committee. We will be scrutinising it carefully to ensure we achieve that substance of greater efficiency and cost-effectiveness. 
Debate interrupted. 
Voting 
Correction 
MURRAY SMITH (United Future) 
: 
 On the third reading of the Children’s Commissioner Bill United Future voted 8 in favour. I seek the leave of the House to correct that vote to 7 in favour. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought for that course of action. Is there any objection? There appears to be none. The vote is so amended. 
Hazardous Substances and New Organisms (Transitional Provisions and Controls) Amendment Bill 
First Reading 
Debate resumed. 
Hon BRIAN DONNELLY (NZ First) 
: 
 In rising to speak on behalf of New Zealand First on this bill I note how amazingly responsibilities seem to grow around this place. When the royal commission reported back and New Zealand First had only five members I put up my hand and volunteered that I would go through the issues and report back to our caucus about the position we should take on GE vis-à-vis the royal commission report. Now every time we get a bill that has anything to do with hazardous substances I get: “That’s yours Brian. You’ve got to look after that Brian.” 
Nevertheless this is the other side of the hazardous substances and new organisms equation. It is not to do with GE but to do with hazardous substances. It is about protecting our environment and our people so it really is worthwhile getting one’s mind around the issues. They are far too important to get wrong because they will affect our lives our people and our country. That is why I am somewhat concerned about the report-back date being 13 February 2004. The Education and Science Committee certainly took the attitude towards the New Organisms and Other Matters Bill that we wanted to do our very very best to get it right and sometimes it takes some time to hear all the submissions. I raise that in relation to this particular issue at this point in time. 
Whilst we are talking about the very important issues of the future the safety and the health of our nation I say that it is possible to have paralysis by fear. In other words we do nothing because we are too scared of making some mistakes that might affect our environment or anything else. That is certainly what Dr Hutchison was alluding to in his speech concerning the New Organisms and Other Matters Bill. I think we had the balance right in that case and we have to make sure we have the balance right with this bill. 
There is a simple way to ensure there is no danger from hazardous substances. All we have to do is ban them completely from our borders and not have anything to do with any substances that have hazards attached to them. But the stupidity of that proposal is obvious. We have some 80000 hazardous substances in New Zealand at this time and while most of them—in fact all of them—bring benefits to the nation they also bring risks. The answer therefore has to be to establish a system that will manage the risk. One way of doing that is to have the Government set all the rules and regulations. It can look at each hazardous substance and decide whether we can have it and under what conditions. Once again such a bureaucratic system would atrophy the country and its operation. 
 Or we can set up a process a system to ensure that we progress the benefits and also that we manage the risks as best as possible. It is the latter course that New Zealand is pursuing and has been pursuing since the establishment of the Hazardous Substances and New Organisms Act. This bill is really a further step down the track. Previously existing hazardous substances were subject to controls under separate Acts and some transitional approaches had to be made. What this bill does is streamline the approach to move from the transitional period into a permanent new period for the future. 
There have been complaints that risk management processes have set up artificial barriers artificial hurdles that cost but do not actually make the system safer. The purported intention of this bill is to reduce those particular barriers and to reduce some of the costs involved. It unashamedly sets out to minimise costs to business and to Government. That objective is to be applauded but it should not be gained at the cost of safety. It really is necessary that the Environmental Risk Management Authority is able to ensure that the appropriate controls are imposed. 
The bill will provide the authority with greater flexibility. That is also fine as long as the authority has a robust methodology to assess risk. It removes the need to effect transfers of previous provisions from the Hazardous Substances and New Organisms Act to the new regime through continual Orders in Council so it is a “be good to the Governor-General” sort of bill. It moves matters from transitional controls to the principal Act. In doing so it empowers the authority to impose its own controls. It delegates many of those decisions to the body that is supposed to be the risk-management expert in such matters and is supposed to have the expertise. It will be successful depending on the quality of both the authority and the agency Environmental Risk Management Authority 1 and Environmental Risk Management Authority 2 because if we do not have those bodies working with real quality then mistakes will be made. 
One of the interesting things about legislation around hazardous substances and new organisms is the quaint terminology that seems to be attached to it. Our select committee visited the Australian gene technology regulator earlier this year. There was a quaint expression which they continued to refer to called “a dealing” and that was in the Australian legislation. We did not quite know what this “dealing” was but it referred to any activity related to GE. That was the generic term used for it in their legislation and in their processes. 
There is also some quaint language in this bill. For example there is the term “a permission”. The authority will be able to give a permission to a particular body. A permission in this particular case is defined in this legislation as an authorisation to allow a general or a particular use of a substance. So if the authority says that such and such a body has a permission to use a particular substance it can establish certain conditions around that but it will be part of the authorisation or as referred to here the permission. 
The other somewhat new concept although it has been used in other parts of the law is the creation of a “fit and proper person” test. The decisions that the authority makes will have to be around some form or some concept of a “fit and proper person”. 
R Doug Woolerton 
: Does Helen Clark still make the decision? 
Hon BRIAN DONNELLY 
: I do not know. Certainly we would have some difficulty with her signing off certain things but other than that maybe she would—I am not too certain. 
R Doug Woolerton 
: What about Dr Don Brash? 
Hon BRIAN DONNELLY 
: We will come to that one later on. But the issue around the “fit and proper person” test is that there will be regulations to prescribe the criteria to define who a “fit and proper person” actually is. It will be interesting to see what this particular minority Labour Government comes up with in terms of its criteria of a “fit and proper person”. 
The other aspect of this bill that New Zealand First would like to note at this time is that the explanatory note has a list of the bodies and agencies that were consulted in the preparation of the bill and it is very extensive. It covers all sides of the argument from private companies to Government agencies to agencies involved in the environment to the New Zealand Chemical Industry Council to the Ministry of Justice and to the Ministry of Health. It is a wide-ranging group. I believe it is a very constructive approach to put within the text of the explanatory note those bodies that have been formally consulted on the preparation of a bill because it certainly gives us some insight into how extensively it has been done. 
As far as New Zealand First is concerned—as we did with the New Organisms and Other Matters Bill—we will be voting for this bill to proceed to the select committee. We believe it is timely. Certain processes have to be achieved by July 2006 so we have to move the process on its way. However we will be scrutinising the bill very carefully when it is at the select committee. We will finalise our position once we have heard the submissions and looked through all the issues. We will make our decision as we always do in the best interests of New Zealand and its people. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 No one could possibly disagree with the purpose of this bill. It is clearly in everybody’s interests to facilitate the smooth transfer of hazardous substances from the transitional controls to the new regime and it is clearly beneficial to enable the authority to assign cost-effective controls to hazardous substances. So the Greens will be supporting this bill going to the Education and Science Committee. We believe there are a number of technical issues about the bill that need careful scrutiny at the select committee but at this stage we are supporting it. 
We are not however supporting the February reporting date. That given the summer break—even given a very modest summer break—gives us less than 2 months to get the bill back to the House. That means that either the phase of public consultation will be severely truncated or the select committee will have to work overtime at the end of January in order to do a decent job and it seems to me that neither of those are entirely reasonable things to expect. With a bill like this there are a great many users out there and a great many safety authorities and councils—all of which have an interest in the management of hazardous substances. We believe that they ought to have an appropriate time in which to make their submissions and have them properly considered by the committee. We do not believe that allowing committees to sit all week when the House is sitting and when it is not makes up for the lack of elapsed time from the closing of submissions until the reporting back. 
We support a case by case consideration of hazardous substances and the imposition of controls on a case by case basis. It is interesting to draw a comparison between hazardous substances and new organisms—where we do not support a case by case assessment of release—because there is an underlying unpredictability and risk running through all genetically engineered organisms that means they should not be let out of the laboratory at all. With hazardous substances however there is no such underlying risk. They are all subject to quite different risk assessments and we support those being done on a case by case basis. 
It is sensible to allow controls to be put on the use of hazardous substances. I understand that the reconsideration of 1080 poison has been deferred until that tool is available because there may well be some places where it should not be used and other places where it is perfectly appropriate. It is good if the Environmental Risk Management Authority has the flexibility to consider it carefully. 
There are five issues I think the select committee needs to look at in relation to this bill. The first one is cost-effective controls. Nobody could object to the idea that controls must be as cost effective as possible for both the authority and for industry but I do not believe that the bill at the moment makes it clear enough that cost effectiveness is still subject to the overall goal of the legislation which is the protection of health and the environment. If it is not all that cost effective to protect health and the environment it does not mean we should throw away the primary goal. 
Secondly there needs I think to be some limit now on the transitional period which is still totally open-ended. I think everyone is very keen to see us get through the transitional period for hazardous substances and fully into the new regime. The transitional period should not be allowed to go on for ever. 
Thirdly we need to look at the concept of rapid assessment. It is already well established under the Act for other matters. Certainly I would like to hear how “similar” will be defined. Two chemical substances with only one atom’s difference in their chemical formulation can be vastly different. I do not think that that is what “similar” is meant to indicate but I would be very interested to hear what definition the authority intends to use in interpreting it so that we do not inadvertently allow things through the net that should not get through. 
Fourthly the Minister of Defence and defence activities are exempt from the Act. I think we need to look at whether that is an historical anachronism we need to fix. There may be some good reasons in a few cases but I think a general exemption for the Minister of Defence is surely no longer warranted. That exemption needs to be reviewed—if not in this bill then at some stage soon. 
Finally I think the select committee will need to look carefully at the delegation powers and restrictions on the delegation powers so that decisions are made by people who are properly qualified in a properly accountable way with public scrutiny. Having said that I say to the House that the Greens support the bill at this stage. 
GERRARD ECKHOFF (ACT) 
: 
 I rise with some trepidation to speak about the bill. It has some perfectly sound and valid points and by the sound of things is likely to go to the Education and Science Committee. My great concern surrounds the huge amount of restriction and control that it seems to me will almost become some sort of Clayton’s system. So when organisations companies individuals or whatever apply for consents to use a so-called hazardous substance the controls and especially the cost structures will be so great that in a small country like New Zealand where the market is relatively limited the individuals or companies concerned will say that it is not worth the effort. They could make some money in particular areas by ensuring their products are better than those they were using in the past but to spend what essentially could well run into millions of dollars will not be worth the effort. 
The impact of that will be that young—and perhaps not so young—members of our science community will decide there are better opportunities beckoning. They beckon almost daily from Australia from America and from the European Union. Those countries of course have hazardous substances—or what are determined by our society to be hazardous substances. As the Green Party pointed out this bill is not just about genetically modified product; it is also about the use of products like 1080 poison which Mrs Fitzsimons mentioned before. That is a substance the world says we should ban and New Zealand says we should not. 
R Doug Woolerton 
: Great stuff. 
GERRARD ECKHOFF 
: Well we need to keep 1080 poison in New Zealand because it is the most sensible logical way of controlling the possum and rat populations etc. that are decimating our environment. On the one hand the world is saying to us it does not like the use of this hazardous substance in New Zealand and on the other hand many in New Zealand are saying we should ban the use of technology or biotechnology surrounding the genetically modified product the world by and large accepts. Despite the rhetoric we hear from the anti-GM lobby the world accepts it. Gracious me there are so many products coming out of South America that are genetically modified—fed to cattle in Europe for example—and then put on the European market and nobody complains. It is a perfectly understandable and acceptable commercial practice but it is not occurring—it is not even on the radar screen—in New Zealand. 
As a farmer I know of no people in this country who are breaking their necks to grow GM crops. Just recently a group of onion growers said that until they see relevance around the situation they do not want to grow GM crops. Everybody else in this country it seems to me seems to be an expert on the subject of what farmers should grow and the poor old agrarian is left down at the bottom of the heap being told by everybody else. I know that people out on the land who will or will not decide to grow whatever crops they wish will make decisions based on science on sound common sense on reasons of practicality and also on the price they will receive for those products. If producers have been shown that genetically modified products will not reach the sorts of levels required to enable producers to sustain their properties themselves and their families then they will not grow those products. It is as simple as that. Yet the farming community seems to have been pushed aside in this whole debate because “politicians know best”. Pardon? Since when has that been the case on anything? 
In the explanatory note of this bill it seems to me that the salient words used are the words about managing risk—not having open slather—and the word “practical”. That is hugely important. “Practical application” and “practical use” are hopefully what this bill will be about especially once it has gone to the select committee. This bill is about the practical and common-sense use of technologies and biotechnologies and that is all this country seeks. It is not about some sort of pie-in-the-sky requirement of the Green Party; it is about the sound practical management of hazardous substances. We manage that extremely well with products like 1080 poison and our products of wool meat beef or whatever are not banned by European communities because they find that 1080 poison is an outdated or impractical solution to our environmental problems. 
As I mentioned earlier one of the great concerns I have is with regard to the biotechnology that surrounds a whole host of products but that especially relates to the genetic modification debate. There is a huge amount of hysteria—and that is the only word that can be used—surrounding that technology. One could be forgiven for believing that this country of ours is the first to try that new technology. Absolute rubbish! It has been around in the world for 15 years and virtually every First World country utilises the benefits of genetic modification or GM technology. For example our near neighbour Australia has very substantial areas planted in genetically modified cotton and I have no doubt that most members—including probably the Greens—are wearing genetically modified cotton right now. GM is a reality. It is part of our world and we will not change that regardless of what New Zealand does. 
I have heard Ian Ewen-Street and the Greens talk about their great concern over the problem of what they call “contamination” or what I would call “cross-pollination”. Well we cannot stop it. It is a mere 1200 miles across the ditch—a couple of thousand kilometres across to Australia. Pollen gets into the atmosphere and comes to New Zealand anyway. We will not stop that— 
Jeanette Fitzsimons 
: I raise a point of order Mr Speaker. No clause in this bill has anything whatsoever to do with genetic modification. Could you ask the speaker to stick to the bill he is debating? 
GERRARD ECKHOFF 
: Speaking to the point of order I say that this bill is all about supposedly hazardous substances. There is no question that many people in New Zealand today see GM technology as being concerned with a hazardous substance. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I thought that what Mr Eckhoff was saying was both interesting and relevant. 
GERRARD ECKHOFF 
: Thank you very much for your endorsement Mr Assistant Speaker. 
Utilising the experience of scientists is surely the way New Zealand should proceed. Science has developed to a level in First World countries where we do not rely on hocus-pocus or the technology of the Middle Ages. Indeed some believe in organic concepts and they believe that if we all went back to them our environment would be so much the better. But we know that science has moved us forward and has done so with great caution. Yes there have always been problems with new concepts and new technologies. We recognise that and we have heard about the problems we had in the past with things like DDT. Although those products were of great benefit to our society many today say they are hazardous substances and we should move to ban them from New Zealand. The reality today is that our society has moved on from the Middle Ages where witchcraft and hocus-pocus were problems. We now understand through the benefit of science just how our society can progress. Science can advance our causes whether in the field of crops or in the field of medicines. It seems to me we have great opportunities in the field of medicines especially even though in inappropriate doses some substances may be hugely hazardous. But the opportunities that are advanced to our society are huge. 
LARRY BALDOCK (United Future) 
: 
 The member who spoke before me gave us a very interesting and eloquent speech. I think it would have been more appropriate on the New Organisms and Other Matters Bill which we have passed as although the title of this bill is the Hazardous Substances and New Organisms (Transitional Provisions and Controls) Amendment Bill it really does deal with hazardous substances not new organisms. I think it is stretching it a little to suggest that genetically modified organisms are hazardous substances. 
 The bill deals with the hazardous substances component of the Hazardous Substances and New Organisms Act and it is largely technical in nature. It amends the Hazardous Substances and New Organisms Act in order to facilitate the transfer of hazardous substances from a transitional control regime to the official Hazardous Substances and New Organisms Act control regime. 
The bill includes amendments that will implement recommendations from the hazardous substances strategy to address areas where the Hazardous Substances and New Organisms Act as enacted was not working efficiently. This will provide for a smooth transition between the two regimes and enable cost-effective controls to be assigned to all hazardous substances. The Hazardous Substances and New Organisms Act was passed in 1996 but a long transition period has been needed due to the large number and complexity of hazardous substances registered in New Zealand. It is important for the new regime to be sufficiently robust to keep track of all hazardous substances used in New Zealand because of the very real risk they pose to the environment if used improperly. 
The cost-effectiveness of the controls is also important because many of these substances are used in manufacturing and agriculture and could therefore result in significant extra compliance costs and barriers to innovation for New Zealand businesses if the regulatory regime is unnecessarily cumbersome. The controls the Hazardous Substances and New Organisms Act places on hazardous substances include labelling packaging and storage requirements as well as requirements for licensing regimes and because of its very common-sense and practical nature United Future is pleased to support its first reading and see it go to a select committee. 
A party vote was called for on the question  
That the Hazardous Substances and New Organisms (Transitional Provisions and Controls) Amendment Bill be now read a first time. 
Ayes 107 
New Zealand Labour 52; New Zealand National 25; New Zealand First 13; Green Party 9; United Future 8. 
Noes 7 
ACT New Zealand 7. 
Bill read a first time. 
Hon RICK BARKER (Minister for Courts) 
 on behalf of the 
 Minister for the Environment 
: I move  
That the Hazardous Substances and New Organisms (Transitional Provisions and Controls) Amendment Bill be referred to the Education and Science Committee for consideration that the committee report the bill finally to the House by 13 February 2004 and that the committee have the authority to meet at any time while the House is sitting except during questions for oral answer and during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 193 and 196(1)(b) and (c) 
. 
A party vote was called for on the question  
That the motion be agreed to 
. 
Ayes 60 
New Zealand Labour 52; United Future 8. 
Noes 56 
New Zealand National 27; New Zealand First 13; Green Party 9; ACT New Zealand 7. 
Motion agreed to. 
DAVID BENSON-POPE (Senior Whip—Labour) 
: 
 I understand that my colleague has had discussion with the other whips. The House has made good progress and I seek leave for the House to rise at this time. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Leave has been sought for that course of action. Is there any objection? There is objection. 
Sale of Liquor Amendment Bill (No 2) 
First Reading 
Hon RICK BARKER (Associate Minister of Justice) 
: 
 I move  
That the Sale of Liquor Amendment Bill (No 2) be now read a first time. 
 This bill started off its life as the Sale of Liquor Amendment Bill (No 3) and it was originally a National Party bill. Its primary purpose was to deregulate licensing trusts. Fortunately there was a change of Government in 1999; common sense prevailed and the Labour-Alliance Government brought forward a Supplementary Order Paper to take out of the No. 3 bill those provisions that sought to deregulate licensing trusts. That No. 3 bill was making adequate progress through the House until several Supplementary Order Papers were moved in the Committee stage. The first was in my name and it was to enable wineries to be able to sell liquor on Easter Sunday. This had previously been in the Sale of Liquor Act but had been knocked out accidentally when we made the changes to that legislation in 1999. 
 That came to light only after the Sale of Liquor Act had been amended. It was my view that Parliament having accidentally taken this provision out of law should restore it. I campaigned around this Parliament to have everybody agree that this would be the case. So with the leave of the House I moved to introduce a Supplementary Order Paper to have it amended even though it was outside the scope of the bill. The House agreed to this. 
Following that Mr Goff moved a Supplementary Order Paper No. 139 from memory which was to make changes to the Sale of Liquor Bill (No 3) to introduce transitional provisions for training of managers. This had not had tick-off by the industry and there was no consent. The National Party then started to filibuster the bill. With pressure on the time of the House the bill was then discharged back to the Commerce Committee and sat on the Order Paper for some time. 
Following that I became the Associate Minister of Justice responsible for the sale of liquor. I went around the parties to see what could be done. The parties agreed that they would like to see some progress on the bill but we had to resolve the transitional provisions. I consulted the Hotel Association licensing trusts and clubs and we got an agreement on a new provision. This was to be incorporated in Supplementary Order Paper 139. At this stage we had Supplementary Order Papers to remove sections Supplementary Order Papers to put new sections in and Supplementary Order Papers to substitute new sections. It became very complicated. So in consultation with other parties in the House I withdrew the Sale of Liquor Amendment Bill (No 3) and replaced it with the Sale of Liquor Amendment Bill (No 2). 
The No. 2 bill is exactly the same as the No. 3 bill with a number of exceptions. The first is that those provisions in the original No. 3 bill seeking to deregulate licensing trusts have been removed. In addition to this the transitional provisions which have been agreed to by the industry and with the Ministry of Justice have been put into the No. 2 bill and do not require a Supplementary Order Paper. 
The third aspect of this bill is that those provisions will allow wineries to sell at their cellars on Easter Sunday. That is also written into the No. 2 bill. The rest of the bill has been through the select committee. There are changes about accountability and transparency. There are provisions to allow trusts to become community trusts and so on. They are all in the bill and there has been no change to that. The bill has been through the Commerce Committee before subject to consultation subject to discussions with parties and all the rest of it so it is all agreed. There is no controversy. 
But there is one additional item that I have advised all other parties of in the Sale of Liquor Amendment Bill (No 2) which was not in the Sale of Liquor Amendment Bill (No 3). That is to allow for controlled-purchase operations. A recent judgment criticised the police actions in having control of purchase operations. In the control of purchase operation the police have someone who is under age—16 or 17 or whatever—to go into a particular establishment and seek to purchase alcohol. If the proprietor sells alcohol to the young person the police then prosecute. 
The court has criticised the police because they say that there is no provision for this as there is in the smoke-free legislation. The defence lawyers raised the case of the prospect that the police by encouraging people to purchase alcohol when they are under the age of 18 are in actual fact aiding and abetting the commission of a crime. So I think it is very important that we have these protections to enforce the legal age—18 years of age—in the selling of alcohol. I am very keen for an official provision to have controlled-purchase operations so this has been included in the bill. Being a very consultative person I have ensured that this has been advised to all the political parties in advance and I am sure every individual in this Parliament would agree with that provision. 
It is my intention to move that this bill go to the Commerce Committee. That is where all the submissions on the Sale of Liquor Amendment Bill (No 3) were heard. It is only appropriate that it go back to that committee. 
I also intend to move that the Commerce Committee report this bill back by 12 February. I do not think it needs the full time. It has been through and all the parties have heard it. All that needs to be done in the Commerce Committee is to ask for people to check that what the Sale of Liquor Amendment Bill (No 2) states is the same as what the Sale of Liquor Amendment Bill (No 3) stated beforehand and to deal with those issues. It is only a matter of clarification and checking. 
Having said that I have a small confession to make. This strategy of dealing with it has been hatched by none other than Mr Roger Sowry. He thought that to consolidate the bill into one was a good idea and thought also that it did not require the select committee to have a lot of time. I expect that all parties in this House will agree with it because it is such a sensible thing to do. 
I have gone over the provisions of the Sale of Liquor Amendment Bill (No 2) to say that it is a morph of the Sale of Liquor Amendment Bill (No 3) Bill with several additions all of which have been agreed by industry with the exception of the controlled-purchase operations. I am sure every member of this House would wish to ensure that the police have all the necessary tools that they desire to have to enforce the liquor legislation particularly about under-age drinking. I expect 100 percent support from this House for the bill. I commend the bill to the House. 
PANSY WONG (National) 
: 
 The Minister has given us once-over-lightly the difference between the Sale of Liquor Amendment Bill (No 3) and the Sale of Liquor Amendment Bill (No 2). I was on the Commerce Committee that heard submissions on the Sale of Liquor Amendment Bill (No 3). Indeed there is a very significant difference between the Sale of Liquor Amendment Bill (No 3) and the Sale of Liquor Amendment Bill (No 2). In the Sale of Liquor Amendment Bill (No 3) one of the major provisions was to remove the exclusive trading rights of the seven licensing trusts. At that stage members of the Commerce Committee heard extensive submissions from people who argued whether the monopoly trading rights enjoyed by the seven licensing trusts should continue and because of that the report back for that bill clearly stated that the committee could not agree that the bill be passed as amended. 
I cannot see how the Minister can try to mislead the House and also the public by saying that the Sale of Liquor Amendment Bill (No 2) is substantially the same as the Sale of Liquor Amendment Bill (No 3). If this bill gets past the first reading the Commerce Committee should revisit the submission process. The hearings that the committee originally heard are on a very different aspect of that legislation. 
The reason the committee was split was that the original bill included the term of removing the monopoly right and that was upon the recommendation of the 1997 report of the Alcoholic Liquor Advisory Council. It said that maintaining monopoly trading rights of the licensing trusts does not actually contribute to the purpose of the Sale of Liquor Act which is to establish a reasonable system of control over the sale and supply of liquor to the public with the aim of contributing to the reduction of liquor abuse. 
Jill Pettis 
: This is a good impromptu speech from Pansy Wong. 
PANSY WONG 
: If the junior whip kept quiet she might learn something instead of babbling away as she always does. It seems to me that in his introduction speech the Minister has given a very misleading impression of the relationship of the Sale of Liquor Amendment Bill (No 3) being likened to the current Sale of Liquor Amendment Bill (No 2). We intend to draw that to the attention of the public. 
Debate interrupted. 
The House adjourned at 10 p.m.